Annual report pursuant to Section 13 and 15(d)

Note 6 - Investment in account receivable

v3.19.1
Note 6 - Investment in account receivable
12 Months Ended
Dec. 31, 2018
Notes  
Note 6 - Investment in account receivable

Note 6 – Investment in account receivable

 

On April 10, 2015, the Company entered into an exchange agreement whereby the Company received an investment in an account receivable with annual installment payments of $117,000 for 11 years, through 2026, totaling $1,287,000 in exchange for 757,059 shares of Mentor Common Stock obtained through exercise of 757,059 of Series D warrants at $1.60 per share plus a $0.10 per warrant redemption price.

 

The Company valued the transaction based on the market value of Company common shares exchanged in the transaction, resulting in a 17.87% discount from the face value of the account receivable. The discount is being amortized monthly to interest over the 11-year term of the agreement. The April 10, 2015 investment in account receivable is supported by an exchange agreement and consisted of the following at December 31, 2018 and 2017:

 

 

 

2018

 

2017

Face value

$

936,000

$

1,053,000

Unamortized discount

 

(400,482)

 

(479,638)

Net balance

 

535,518

 

573,362

Current portion

 

(117,000)

 

(117,000)

Long term portion

$

418,518

$

456,362

 

For the years ended December 31, 2018 and 2017, $79,156 and $91,375 of discount amortization is included in interest income.