Quarterly report pursuant to Section 13 or 15(d)

Note 8 - Convertible notes receivable

v3.8.0.1
Note 8 - Convertible notes receivable
3 Months Ended
Mar. 31, 2018
Notes  
Note 8 - Convertible notes receivable

Note 8 - Convertible notes receivable

 

Convertible notes receivable consists of the following:

 

 

 

March 31, 2018

 

December 31, 2017

April 28, 2017 Electrum convertible note receivable bearing interest at 10% and maturing May 12, 2022, with monthly principal and interest payments of $2,290 beginning June 12, 2017.  The Company may request that any residual principal and unpaid interest be converted into an equity investment in Electrum based upon a fixed equity conversion rate of $164 per interest.  The note is collateralized by cannabis equity securities owned by Electrum.

$

86,591

$

90,731

 

 

 

 

 

NeuCourt, Inc. convertible note receivable including accrued interest of $1,757 and $1,430 at March 31, 2018 and December 31, 2017.  The note bears interest at 5% per annum and matures November 8, 2018.  Principal and accrued interest are due at maturity.  Principal and unpaid interest may be converted into a blend of shares of a to-be-created series of Preferred Stock and Common Stock of NeuCourt (i) on closing of a future financing round of at least $750,000, (ii) on the election of NeuCourt on maturity of the Note, or (iii) on election of Mentor following NeuCourt’s election to prepay the Note. *

 

       26,757

 

26,430

 

 

 

 

 

NeuCourt, Inc. convertible note receivable including accrued interest of $442 and $135 at March 31, 2018 and December 31, 2017.  The note bears interest at 5% per annum and matures October 25, 2019.  Principal and accrued interest are due at maturity.  Principal and unpaid interest may be converted into a blend of shares of a to-be-created series of Preferred Stock and Common Stock of NeuCourt (i) on closing of a future financing round of at least $750,000, (ii) on the election of NeuCourt on maturity of the Note, or (iii) on election of Mentor following NeuCourt’s election to prepay the Note. *

 

25,442

 

25,135

          Total convertible notes receivable

 

       138,790

 

       142,296

          Less current portion

 

(44,388)

 

(43,628)

          Long term portion

$

       94,402

$

       98,668

 

*

The Conversion Price for the Note is the lower of (i) 75% of the price paid in the Next Equity Financing, or the price obtained by dividing a $3,000,000 valuation cap by the fully diluted number of shares.  The number of Conversion Shares issued on conversion shall be the quotient obtained by dividing the outstanding principal and unpaid accrued interest on a Note to be converted on the date of conversion by the Conversion Price (the “Total Number of Shares”). The Total Number of Shares shall consist of Preferred Stock and Common Stock as follows: (i) That number of shares of Preferred Stock obtained by dividing (a) the principal amount of each Note and all accrued and unpaid interest thereunder by (b) the price per share paid by other purchasers of Preferred Stock in the Next Equity Financing (such number of shares, the "Number of Preferred Stock") and (ii) that number of shares of Common Stock equal to the Total Number of Shares minus the Number of Preferred Stock.  Using the valuation cap of $3,000,000, the Note would today convert into 126,752 Conversion Shares.  In the event of a Corporate Transaction prior to repayment or conversion of the Note, the Company shall receive back two times its investment, plus all accrued unpaid interest.