The Mint Corporation
TSX VENTURE : MIT

The Mint Corporation

November 11, 2013 06:00 ET

Mint Announces Restructured Financing Options

TORONTO, ONTARIO--(Marketwired - Nov. 11, 2013) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

The Mint Corporation (TSX VENTURE:MIT) ("Mint" or the "Company") announced today that further to its announcement on April 9, 2013, the Company will no longer seek to raise funds through the announced "Series X" and "Series Y" placements. Mint will, however, seek to restructure its outstanding debentures and raise new funds through a new private placement offering of subscription receipts for Series A debentures (the "Subscription Receipts") and a new private placement of units (the "Units") consisting of Series B debentures and common share purchase warrants. The Company is seeking to consolidate its secured debt into two series of debentures as opposed to the current seven series of debentures (the "Old Debentures").

Series A Debentures (Subscription Receipts)

The Company has engaged Portfolio Strategies Securities Inc. (the "Agent") to act as agent, on a best efforts brokered private placement basis, to raise gross proceeds of a minimum of $10,000,000 and a maximum of $45,000,000 through the sale of Subscription Receipts at a price of $1,000 per Subscription Receipt. Each Subscription Receipt will automatically convert (the "Conversion") into a $1,000 secured debenture of the Company (a "Series A Debenture") upon the satisfaction of the Escrow Release Conditions (as hereinafter defined) for no additional consideration and without any further action by the holder.

Subscribers may pay for the Subscription Receipts in cash or by transferring Old Debentures; provided that (a) at least 50% of the subscription price must be paid in cash, and (b) the total Old Debentures accepted as payment under the Subscription Receipt offering shall not exceed $15,000,000. Old Debentures will be valued at the amount of principal and interest owing under those debentures on the date of Conversion and no interest will be paid on the Old Debentures while they form part of the Escrowed Proceeds (defined below).

The closing of the Subscription Receipt offering is conditional upon various conditions set out in the subscription agreement, including the requirement that Old Debentures representing at least 94% of the principal amount of the Old Debentures shall have been delivered in payment for Subscription Receipts or shall be subordinate 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 gross proceeds from the sale of Subscription Receipts (the "Escrowed Proceeds"), including both cash and Old Debentures, will be held in escrow by an escrow agent acceptable to the Agent and, in the case of cash proceeds, in an interest bearing account. The Escrowed Proceeds will be released on the earlier of:

  1. the date the Escrow Release Conditions are satisfied or waived, in which case, (i) interest earned in the interest bearing account will be paid from the Escrow Proceeds to the subscribers in the offering pro rata with the amount of their cash investment, (ii) the Agent's commission and any reasonable costs and expenses of the Agent payable by the Company will be paid to the Agent from the Escrow Proceeds, and (iii) the balance of the Escrow Proceeds will be paid to the Company, or
  1. four months and 10 days following the closing of the Series A Debenture offering or such other date as may be agreed to by the Company and the Agent (the "Escrow Release Deadline"), in which case, if the Escrow Release Conditions have not been satisfied or waived the Escrow Proceeds plus interest earned in the interest bearing account will be released from escrow to the Agent for payment to the subscribers in the Subscription Receipt offering.

The Escrowed Proceeds will be released to the Company (subject to the entitlement of the subscribers and the Agent as described above) if certain conditions are met (the "Escrow Release Conditions") on or before the Escrow Release Deadline, including:

  1. Conditional approval from the Canadian National Stock Exchange ("CNSX") of the listing on the CNSX of the Series A Debentures;
  1. The receipt of all required third party consents, stock exchange approvals and regulatory approvals for the Subscription Receipt Offering and the Unit Offering and the listing of the Series A Debentures issuable upon conversion of the Subscription Receipts;
  1. There shall have been no material adverse change in the financial condition, business or operations of the Company, and its subsidiaries or affiliates, taken as a whole;
  1. Neither the Company nor any of its subsidiaries is in breach or material default of any of its covenants or obligations under the Agency Agreement or the Subscription Agreements that are to be entered into in connection with the Subscription Receipt Offering and the Unit Offering, except those breaches or defaults that have been waived by the Agent;
  1. The Company and the Agent will have agreed upon a use of proceeds for the capital from the Subscription Receipt Offering;

The net cash proceeds of the offering of Series A Debentures will be used for working capital, to repay the bridge financing referred to below and for stabilization and organic growth of existing subsidiaries. The Company is seeking to arrange bridge financing until the release of the cash proceeds upon Conversion.

The Series A Debentures will have a term expiring 5 years after Conversion, may be prepaid at any time on a quarterly interest payment date following the third anniversary of Conversion and shall bear an interest rate of 10% per annum. Interest on the Series A Debentures for the period from Conversion until the first anniversary of Conversion will be added to the principal amount of the Series A Debentures. After the first anniversary of Conversion, interest will be paid in cash, quarterly in arrears. The Company may, at the time of any quarterly interest payment which occurs on or after the third anniversary of Conversion prepay all or any portion of the principal outstanding on the Series A Debentures.

The Series A Debentures will be issued under a trust indenture and secured by a security interest on all of the undertaking, property and assets of the Company, both present and future (the "Canadian Assets"); and a security interest on all of the undertaking, property and assets of Mint Middle East LLC, both present and future (the "MME Assets"). The security for the Series A Debentures will rank ahead of the security for the Series B Debentures and, with respect to the Canadian Assets, behind the Old Debentures.

The Agent will receive a cash commission equal to 5% of the gross cash proceeds received by the Company from the sale of Subscription Receipts. As additional compensation, the Agent will receive that number of broker warrants (the "Broker Warrants") which is equal to 10% of the total cash subscription proceeds for the Subscription Receipts raised pursuant to the offering, each Broker Warrant entitling the Agent to purchase one common share of the Company for $0.15 per share. The Broker Warrants will be exercisable for a four year period from Conversion. No cash commission will be paid or Broker Warrants issued with respect to Old Debentures which are transferred in payment for Subscription Receipts.

The Offering of Subscription Receipts is expected to closing on or about November 15, 2013 or such other date as is agreed to by the Company and the Agent.

Series B Debentures (Units)

The issuance of Units will occur on a non-brokered private placement basis. Units will consist of (i) $1,000 principal amount of Series B Debentures, plus (ii) 1,250 common share purchase warrants (the "Warrants"). Units may only be purchased by exchanging Old Debentures on the basis of $1,250 of Old Debentures for each Unit. Old Debentures will be valued at the amount of principal and interest owing under those debentures on the date of closing the Unit offering.

If the amount owing under the Old Debentures delivered in payment for Units is not a whole multiple of $1,250, the number of Units issued to the subscriber will be rounded down to the nearest whole number and the subscriber will not receive any cash payment or fractional Unit with respect to the balance remaining (the "Excess Amount"). However, the Corporation will issue the Subscriber one additional Warrant for each $1.00 of Excess Amount, rounded up to the nearest whole number.

The Series B Debentures will have a term of 3 years; provided that the term of Series B Debentures may be extended for another 2 years at the option of the Company. Interest on Series B Debentures will be at the rate of 2% per annum during the three years of the original term; provided that the Company will pay bonus interest on the last day of the 3rd year equal to 30% of the principal amount. If the term of the Series B Debentures is extended, interest shall be at the rate of 12% per annum during years 4 and 5 of that term. The Company shall pay interest quarterly in arrears on the principal amount outstanding. The Company may, at the time of any quarterly interest payment, prepay all or any portion of the principal outstanding on the Series B Debentures; provided that at the time of prepayment the Company shall pay an interest bonus equal to (i) the interest payments which would have been received on that prepaid principal amount if the interest rate on the Series B Debentures had been 12% per annum throughout the period preceding redemption, minus (ii) the interest payments actually received in respect of that prepaid amount.

The Series B Debentures will be issued under a trust indenture and secured by a security interest on the Canadian Assets and the MME Assets. The security for the Series B Debentures will rank behind the security for the Series A Debentures and, with respect to the Canadian Assets, behind the Old Debentures.

Each Warrant is exercisable for one common share of the Company at any time during the 3 years following the first closing of Series B Debentures at an exercise price of $0.25.

The Unit offering is expected to close in one or more closings commencing on or about November 15, 2013 but may be changed to a later date by the Company.

General

The closing of the Subscription Receipt offering and the Unit offering is conditional upon receipt of all required regulatory approvals (including approval of the TSX Venture Exchange) and the appointment of a new CEO of the Company.

The issuance of securities under any of the two offerings described above will be a related party transaction under Multilateral Instrument 61-101 ("MI 61-101") if any of the Company's insiders subscribe under the offering. The Company is exempt from the formal valuation requirement and shareholder approval requirement of MI 61-101, as described in more detail in the material change report to be filed in connection with this private placement. The expected date of closing is less than 21 days from the date of this press release and that shorter period is desirable and necessary because the Company requires working capital and cannot raise bridge financing needed to provide that working capital until the closing of the two offerings has occurred.

GENERAL DISCLOSURE STATEMENT

Investors are encouraged to read the 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.

FORWARD-LOOKING STATEMENTS

Certain statements in this news release constitute "forward-looking" statements. These statements relate to future events or Mint's future performance and include the closing of the offering of Subscription Receipts and Units and the satisfaction of the Escrow Release Conditions necessary for Conversion. 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 could be unable to complete the offering of Subscription Receipts and Units if the Company does not receive stock exchange approval or, in the case of the offering of Subscription Receipts, Old Debentures representing at least 94% of the principal amount of the Old Debentures do not either deliver those Old Debentures in payment for Subscription Receipts under the Subscription Receipt Offering or subordinate those Old Debentures to the security in favour of the Series A Debentures outstanding from time to time. 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.

ABOUT THE MINT CORPORATION

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.

NEITHER TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

For additional information please visit www.mintinc.com.

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