News

Mint Acquires Option Rights for U.S. and Mexico

Monday 19 April 2004 10:00 CET | News

Mint has obtained an option from Sunset Marketing Limited to acquire the rights to use the payment technology of Mint AB in the United States and Mexico. Mint currently holds a license to use that technology in Canada. Under the terms of the option, Mint may exercise the option at any time within 120 days.

Upon exercising the option, Mint is required to pay a license fee of $6 million, $3 million of which will be paid in cash and $3 million of which will be paid in common shares of Mint Technology Corp. The cash consideration is to be paid 50% at the time the option is exercised, and the balance in five semi-annual installments of $300,000 each. Of the common shares issued at closing, 50% will be placed in escrow and released in five semi-annual installments. The purchase price for the issuance of the shares will be the greater of $0.53 per share or the average closing price of Mints common shares during the period from the date of the option agreement to the date on which that option is exercised. In addition to the fee, the license for the United States and Mexico requires payment of a royalty of 2.5% of net income from the use of the Mint AB technology in the United States and Mexico. Mint Technology Corp. currently operates exclusively in Canada. If the option is exercised, Mint will have the opportunity to expand its mobile payment business into the United States and Mexico. If Mint does not exercise the option, Mint will have a ten year right of first refusal to acquire the rights to use the Mint AB technology in the United States and Mexico. The exercise of the option is subject to regulatory approval. The common shares which form part of the license fee payable to Sunset will ultimately be held by members of the management of Mint Technology Corp. and others. The exercise of the option will constitute a related party transaction under Rule 61-501 adopted by the Ontario Securities Commission. Although the exercise of the option qualifies as such, it is expected that the transaction will be exempt from the valuation requirement and from the requirement for minority approval by the shareholders of Mint. Any exercise of the option will be subject to review and approval by an independent committee of the board of directors.


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Categories: Payments & Commerce | Mobile Payments
Countries: World
This article is part of category

Payments & Commerce