The Mint Corporation
TSX VENTURE : MIT

The Mint Corporation

April 28, 2017 06:44 ET

Mint Enters into Debt Restructuring Agreement in Principle

TORONTO, ONTARIO--(Marketwired - April 28, 2017) - The Mint Corporation (TSX VENTURE:MIT) ("Mint" or the "Company") announces that it has entered into a non-binding term sheet (the "Term Sheet") with Gravitas Financial Inc. ("GFI") and the holders (the "Senior Debentureholders") of substantially all its Series A debentures and all of its Series C debentures. The Term Sheet provides for a restructuring of the debt owing to the Senior Debentureholders, and that restructuring is conditional upon the holders of the Series B debentures agreeing to the terms of a proposed restructuring of their debentures on substantially similar economic terms (pro rata) as the restructuring agreed with the Senior Debentureholders.

Background

Mint has three outstanding debenture series. The amount owing on the Series A debentures is $49,019,962 in principal plus accrued interest (of which, $48,979,520 in principal plus accrued interest is owed to the Senior Debentureholders). The amount owing on the Series B debentures is $3,452,000 in principal, plus accrued interest and bonus interest totalling $1,170,464 as of the maturity date. The amount owing on the Series C debentures is $10,000,000 in principal plus accrued interest.

The Series A debentures were issued under a trust indenture secured by a security interest in the assets of Mint and its 51% subsidiary Mint Middle East LLC ("MME"). That security interest ranks in priority to the Series B and Series C security against those assets. The Series B debentures were issued under a trust indenture secured by a security interest in the assets of Mint and MME ranking in priority to the Series C security against those assets. The Series C debentures are secured against the assets of Mint and by a first position security interest in the assets of Mint Capital LLC (including its 49% legal interest in Mint Gateway for Electronic Services LLC ("Mint Gateway")).

Mint has announced its inability to make payments on the Series A, Series B and Series C debentures.

Series A and Series C Debt Restructuring

Under the Term Sheet, the debt under the Series A and Series C debentures owed to the Senior Debentureholders is to be replaced by $20 million of debt (the "New Debt") secured by a first position security interest in the assets of Mint, MME and Mint Capital LLC. The Senior Debentureholders will also receive (a) 17,300,000 common shares of Mint, (b) 11,700,000 common share purchase warrants of Mint, and (c) subscription receipts to acquire 16,000,000 common shares of Mint for no additional consideration. Each warrant will be exercisable after two years and on or before the maturity date of the New Debt for one common share of Mint at an exercise price of $0.10. The subscription receipts will automatically convert into 2,000,000 common shares of Mint, without payment of additional consideration, at the end of each of the first eight three-month periods following the issuance of the New Debt (subject to adjustment if any of the New Debt is prepaid prior to that conversion date).

The New Debt is to mature on December 31, 2021 and bear interest at 10% per annum, commencing on the 2nd anniversary of the issuance of the New Debt, and payable quarterly thereafter. If Mint does not have sufficient funds to pay cash interest when required, the shortfall will be paid by the issuance of common shares of Mint, priced at the greater of a 5% discount to the 10 day volume-weighted average price of Mint's common shares and the minimum price permitted by the TSX Venture Exchange. The New Debt and any accrued interest will become due and payable in cash within 30 days following a change of control of Mint (other than through a treasury issuance).

Series B Debt Restructuring

The restructuring of the Series A and Series C debentures held by the Senior Debentureholders is conditional upon a restructuring of the Series B debentures on the following terms, which reflect substantially similar economic terms (pro rata) as the restructuring agreed with the Senior Debentureholders:

a) For every $1,000 of principal and interest (including bonus interest) owing to a holder when the Series B debentures matured on March 7, 2017, the holder will receive $340 principal amount of new Series B debentures (the "New Series B Debentures") and 750 common shares of Mint.

b) The New Series B Debentures will mature on December 31, 2021. The New Series B Debentures will become due and payable within 30 days following a change of control of Mint (other than through a treasury issuance).

c) The New Series B Debentures will bear interest at 10% per annum, commencing on the 2nd anniversary of the issuance of the New Series B Debentures, and payable quarterly thereafter. If Mint does not have sufficient funds to pay cash interest when required, the shortfall will be paid by the issuance of common shares of Mint, priced at the greater of a 5% discount to the 10 day volume-weighted average price of Mint's common shares and the minimum price permitted by the TSX Venture Exchange.

Acquisition of a UAE Financial Company

On March 21, 2017, Mint announced that GFI and Global Business Services for Multimedia ("GBS") had each agreed to provide USD $7.5 million to acquire 97.22% of a UAE Central Bank licensed financial company (the "Financial Company Interest") and another USD $7.5 million each to satisfy ongoing UAE Central Bank capital reserve requirements. Ownership of the Financial Company Interest was to be divided 25% to GBS, 25% to GFI (through a subsidiary, the "GFI Subsidiary") and 50% to Mint Gateway. Mint owns, indirectly, a 51% beneficial interest in Mint Gateway and GBS owns the remaining 49% beneficial interest.

Under the Term Sheet, ownership of the GFI Subsidiary is to be transferred to Mint in exchange for a secured promissory note of Mint in the principal amount of up to US$7.5 million bearing interest at a rate of 6% per annum. GFI is a related party of Mint under Multilateral Instrument 61-101 ("MI 61-101"). Mint is exempt from the formal valuation and shareholder approval requirements of MI 61-101.

Conditions

The Term Sheet also provides that ownership of Mint Gateway will be transferred to MME, in order to consolidate all Mint operations under one corporate entity.

The Term Sheet is non-binding and any restructuring of the Series A and Series C debentures held by the Senior Debentureholders is conditional upon entering into a definitive agreement acceptable to Mint, GFI and the Senior Debentureholders.

The restructuring of the Series A and Series C debentures held by the Senior Debentureholders is also conditional upon the holders of Series B debentures approving an amendment to the terms of their debentures as described in this news release. Mint intends to enter immediately into discussions with the holders of Series B debentures for that purpose.

In order to transfer Mint Gateway to MME, Mint will require the agreement of GBS, which Mint expects to receive.

The restructuring of the three series of debentures and the transactions described in this news release will require the approval of the TSX Venture Exchange.

As a result of the issuance of shares, warrants and subscription receipts described in this news release, the Senior Debentureholders, who are acting jointly, will collectively hold approximately 25% of the common shares of Mint, on a partially diluted basis. The TSX Venture Exchange will require approval of this issuance of securities by the holders of a majority of the shares of Mint. GFI has indicated that it will provide written approval, thereby satisfying the stock exchange requirement.

Forward Looking Statements

This news release contains forward-looking statements. More particularly, this press release contains statements which include the terms of the restructuring of the outstanding debentures of Mint and certain transactions described under the heading "Acquisition of a UAE Financial Company". The forward-looking statements are based on certain expectations and assumptions made by the Company. Although the Company believes that those expectations and assumptions are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those anticipated due to a number of factors and risks. Investors should consider the conditions described under the heading "Conditions" as the failure to satisfy those conditions will prevent the debt restructuring from being completed. The forward-looking statements contained in this press release are made as of the date hereof. The Company 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 laws.

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. It is exposed to significant political, legal and regulatory risks associated with operating in this emerging and volatile market. The key management personnel and operations of the Company are based in countries which do not have strong and reliable judicial enforcement. This results 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 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 investing 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.

About The Mint Corporation

Established in 2004, Mint is a vertically integrated prepaid card and payroll services provider with its own processing platform, ATM network and proprietary branded card products delivered to unbanked workers in the United Arab Emirates. Mint operates as a payroll card and processing services provider in the UAE through its ownership in Mint Middle East LLC and Mint Gateway for Electronic Payment Services LLC.

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.

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