The Mint Corporation

The Mint Corporation

November 25, 2013 05:00 ET

Mint Announces Financing

TORONTO, ONTARIO--(Marketwired - Nov. 25, 2013) -


The Mint Corporation (TSX VENTURE:MIT) ("Mint" or the "Company") announced today that it has reached an agreement in principle to borrow up to $1,500,000. The proceeds from the loan will be used to pay certain creditors, suppliers and employees and to provide the Company with working capital. Mint continues to need considerable amounts of money for working capital, debt servicing and repayment. It will continue to seek to raise these funds in the financial markets. The company currently does not have any sustainable long term financing available.

The loan is for a 12 month period and may be extended by the parties on mutual agreement for a further 12 month period. All amounts advanced by the Lender bear interest at 12% per annum, payable monthly. The loan may be prepaid at any time on 30 days notice but the Lender may exercise its conversion right described below during that notice period. The loan will be secured against the assets of Mint and its subsidiary, Mint Middle East LLC. That security will be subordinate to the security to be provided to the holders of the proposed Series A Debentures and Series B Debentures, described in the Company's press release of November 11, 2013. It is a condition of any advances under the loan agreement that substantially all of the existing secured debt of the Company must agree to convert to Series A Debentures or Series B Debentures. A first advance of $950,000 against this amount occurred on November 22, 2013 and future advances are at the discretion of Gravitas Financial Inc. (the "Lender").

The principal amount of the loan and any accrued interest thereon is convertible into common shares of Mint at $0.05 per common share during the first 12 months following the execution of the loan agreement and at $0.10 per common share during the 12 months thereafter. The exercise of the conversion right at $0.05 per common share would result in the issuance of 30,000,000 common shares by the Company to the Lender assuming that the loan is fully advanced. These common shares would be subject to a regulatory resale restriction of 4 months and 1 day from the date of issue.

There are approximately 26,826,951 common shares of the Company currently issued and outstanding. Under the rules of the TSXV, the Lender may not become a Control Person by exercising the conversion right, unless shareholder approval is obtained (the "Shareholder Approval"). The Lender will be deemed to be a Control Person if it owns more than 20% of the common shares and the Lender has agreed not to exercise the conversion right to the extent that, in so doing, it will become a Control Person. Mint has agreed to seek Shareholder Approval by no later than July 31, 2014 and the failure to obtain the Shareholder Approval would be an event of default under the loan agreement. Mint has also agreed to use its best efforts to obtain voting agreements from shareholders holding at least 25% of the common shares, in support of the Shareholder Approval.

Mint has also agreed to the appointment of a nominee of the Lender to the board of directors, and to include a nominee of the Lender among the management nominees at future shareholder meetings, so long as any part of the loan from the Lender is outstanding.

Mint has agreed to pay the Lender a consulting fee of $250,000 for services and expenses previously expended by the Lender during the previous 6 months prior to the loan advance. This fee will be paid out of the proceeds from the prospective financing that is escrowed in connection with the subscription receipts (the "Subscription Receipts") which are convertible into Series A Debentures. Note that Series A financing has not commenced, there is no firm commitment, and there is no assurance that it will happen. Mint has also agreed that Subscription Receipts will also be used in part to repay approximately $2.8 million of bridge loans which have been provided by the Lender and Ubika Corp., a subsidiary of the Lender.

The Lender shall have a pre-emptive right to participate in any future issuances of securities, subject to certain exceptions, by Mint while amounts remain owing under the loan agreement. This pre-emptive right will allow the Lender to purchase its pro rata share of the securities being offered, that share being equal to the proportion of the outstanding shares owned by the Lender on a fully-converted basis.

As a result of discussions with certain shareholders (the "Supporting Shareholders"), who have been asked to support the vote for Shareholder Approval, Mint has agreed to conduct a further private placement to raise $750,000 on similar terms to those obtained by the Lender. The details of that private placement have not been finalized and the private placement would be subject to TSX-V approval. The intention is to allow holders of Mint debentures, and others, to subscribe under the proposed private placement.

The Supporting Shareholders have also requested a nominee on the board of directors and they have indicated that Nabil Bader, who is already a director, would be acceptable as their nominee. The Supporting Shareholders have also requested that the Lender enter into a standstill agreement with Mint. Under this agreement, the Lender will agree not to exercise its conversion option, until the earlier of 18 months from execution of that agreement or the occurrence of an event of default under the loan agreement with the Lender, to the extent that this will result in the Lender and any of its associates and affiliates owning more than 50.1% of the then outstanding common shares.

Mint also announces that it has amended the terms of the Series A Debentures described in its November 11, 2013 press release. The term of the Series A Debentures will be 5 years, with the option on the part of Mint to extend the term for another 2 years. If the 2 year extension is exercised, the interest rate will be 12%.

Mint has been in discussions with its secured creditors concerning the restructuring of its debt described in Mint's November 11, 2013 press release. Mint believes that it will be able to obtain the support of holders of approximately 90% of its secured debt and discussions are ongoing with holders of that secured debt, including holders who are undecided. It is a condition of the closing of the Subscription Receipts offering that at least 94% of the principal amount of the secured debt of Mint shall have been delivered in payment for Subscription Receipts or shall have been subordinated to the security in favour of the Series A Debentures outstanding from time to time, unless otherwise agreed by subscribers for Subscription Receipts investing a majority of the cash for the purchase of Subscription Receipts. The Subscription Receipts are to be paid for with at least 50% in cash and that offering will, if it closes, raise money required for the future operation and expansion of Mint.


Investors are encouraged to read the most recent Management Discussion and Analysis Documents filed on SEDAR for a description of additional risks associated with investing in the Company. The following statement is only intended to inform investors on certain of the many risks associated with investing in the Company. The Company operates predominantly in the Middle East and North Africa ("MENA"). It is accordingly exposed to significant political, legal and regulatory risks associated with operating in these emerging and volatile markets. The key management personnel and operations of the Company are based in countries which do not have strong and reliable judicial enforcement. This results directly in additional risk with respect to the enforcement of legal and contractual rights, including, for example but without limitation, the enforcement of the rights of creditors, the protection of intellectual property rights, the enforcement of joint venture arrangements, and binding key employees with non-compete agreements. Since inception, the Company has not reached profitability. The Company relies heavily on high-cost, debt financing to fund its business plan. This has exposed the Company to unique financial risks associated with significantly higher than normal debt levels. Investors in the company are strongly encouraged to be aware of the significant risks of the company, to conduct additional due diligence and to seek the help of a licensed investment advisor before considering to invest in securities of the Company. Moreover, investors must be aware that the purchase of the Company's securities involves a number of additional significant risks and uncertainties, as disclosed in the Management Discussion and Analysis reports filed on SEDAR by the Company. Investors considering purchasing securities of the Company should be able to bear the economic risk of total loss of such investment.


Certain statements in this news release constitute "forward-looking" statements. These statements relate to future events or Mint's future performance and include the amount of the advances to be made under the loan agreement. All such statements involve substantial known and unknown risks, uncertainties and other factors which may cause the actual results to vary from those expressed or implied by such forward-looking statements. In addition to other risks, the Company might not receive advances under the loan agreement if the lender, in its discretion, elects not to advance any amount or if the Company is unable to obtain agreement from a sufficient number of its holders of secured debt to exchange that debt for Series A Debentures or Series B Debentures. Forward-looking statements involve significant risks and uncertainties, they should not be read as guarantees of future performance or results, and they will not necessarily be accurate indications of whether or not such results will be achieved. Actual results could differ materially from those anticipated due to a number of factors and risks. Although the forward-looking statements contained in this news release are based upon what management of Mint believes are reasonable assumptions on the date of this news release, Mint cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements contained in this press release are made as of the date hereof and Mint disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.


Established in 2004, Mint is the world's first vertically integrated prepaid card and payroll services provider with its own ATM network, payment processing platform and proprietary branded card product delivered to workers in the United Arab Emirates and expanding to other parts of the Middle East. Mint operates through 4 subsidiaries, Mint Middle East LLC, a payroll card services provider; Mint Capital LLC, a financial products distribution company; Mint Global Processing Inc., a fully integrated third party processing platform; and MEPS, a mobile airtime POS and Merchant network solutions business.


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Contact Information

  • The Mint Corporation
    Nabil Bader
    President & CEO
    Tel: +971 506457719

    The Mint Corporation
    Nicole Souadda
    Head of Compliance and Investor Relations
    Tel: 610-647-7882