mint The Mint Corporation (OTCPK:MITJF) (MIT.V) was the first company to present. Vishy Karamadam, CEO of MIT, did an excellent job of summarizing the investment opportunity in a flawless presentation. Up until now I have been reluctant to make MIT a top pick of mine because the balance sheet looks like a complete dumpster fire. But after seeing this presentation and knowing that Mr. Karamadam is the Executive Vice President of Gravitas Financial and Co-Founder of Ubika Research, I believe that there will be deep pockets and brokerage house support on it despite the ugly balance sheet.
Part of the reason why MIT's balance sheet looks so bad (over $60 million in liabilities and only $4 million in assets) is that the company has spent millions in building out its platform in the U.A.E., a value which cannot be captured solely by looking at a line item on a balance sheet where conservative accounting policies rule.
MIT currently provides licensed payroll disbursement services to over 800 corporations in the U.A.E. and their 400,000 unbanked employees. But more importantly, MIT believes it is now ready to offer a full suite of banking services, including remittance services, to those employees. Dubai is tourist city with a lot of menial services jobs available and the U.A.E. is in fairly close proximity to developing nations like India and Bangladesh. Therefore it attracts millions of unbanked migrant employees whose primary motivation to work there is to earn a decent income to support their family back home. Mr. Karamadam explained that in the current process, those 400,000 workers must bus, bike or walk to the nearest location that offers remittance services once getting their pay. MIT wants to be able to eliminate this step where not only can these workers remit payments back home through MIT's platform, they can do pretty much any type of financial service. MIT's payroll disbursement card will essentially become the unbanked employee's "bank account".
At a $0.325 stock price, MIT's market cap is $55 million. With debt less cash being around $60 million, the enterprise value is $115 million. So with 400,000 workers already on the platform, MIT is valued at close to $300 per user. This is a fairly aggressive valuation for users primarily from developing nations with low per capita incomes. However, one must consider that unlike a Facebook or even a TD or CIBC app, MIT hopes to become the financial lifeblood for its users. If everything goes to plan, MIT's users will use this card for everything outside of pure cash transactions, unlike in the first world where people have access to a myriad of debit and credit cards as well as mobile and online payments services. The addressable market is 5 million workers in the UAE, and MIT believes that it is well set up to target the rest of the Middle East and its couple dozen million more migrant workers where similar licensing processes exist. So MIT has a ton of upside, though it must continue to execute in order to be a successful speculative investment.
There were four other companies that presented at the event. Two private companies - ePIC Blockchain Technologies (focused on developing ASIC chips specifically designed for cryptomining) and Bullet ID (plans to use the blockchain for authenticated ammunition tracking) both sounded interesting, but are looking for private investors. I think Bullet ID will have some military applications, but will be hard-pressed to find their technology hit the mainstream in the United States as it would very likely be met with opposition from the NRA.