Annual report pursuant to Section 13 and 15(d)

Investment in account receivable

v3.22.1
Investment in account receivable
12 Months Ended
Dec. 31, 2021
Receivables [Abstract]  
Investment in account receivable

Note 3 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, totalling $1,287,000 in exchange for 757,059 shares of Mentor Common Stock obtained through the exercise of 757,059 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. In the fourth quarter of 2020, we were notified that due to the effect of COVID-19, we might not receive the 2020 installment or the full 2021 installment. Based on management’s collection estimates, we recorded an investment loss of ($139,148) on the investment in account receivable at December 31, 2021. In 2021, the Company reevaluated estimated collections and recorded an investment gain of $22,718. The gain of $22,718 and loss of ($139,148) are reflected in other income on the consolidated income statement for the years ended December 31, 2021 and 2020, respectively

 

 

Mentor Capital, Inc.

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

 

The April 10, 2015 account receivable is supported by an exchange agreement and consisted of the following at December 31, 2021 and 2020:

 

    2021     2020  
Face value   $ 585,000     $ 702,000  
Impairment     (116,430 )     (139,148 )
Unamortized discount     (167,137 )     (232,794 )
Net balance     301,433       330,058  
Current portion     -       (26,162 )
Long term portion   $ 301,433     $ 303,896  

 

For the years ended December 31, 2021 and 2020, $65,657 and $87,694 of discount amortization is included in interest income.