Annual report pursuant to Section 13 and 15(d)

Subsequent events

Subsequent events
12 Months Ended
Dec. 31, 2015
Subsequent events:  
Subsequent events

Note 24 - Subsequent events


On March 1, 2016, the Company entered into a Mutual Termination Agreement and General Release in which the certain Investor Webcast – Mentor Capital Cannabis Owners Public Liquidity Agreement effective April 20, 2015 (the “Purchase Agreement”) and the Convertible Security Agreement with the prior owner of CAST were cancelled and terminated, resulting in a spinoff of CAST from the Company. Pursuant to Section 3 of the Purchase Agreement, the CAST owner was to receive Mentor shares according to Mentor’s conversion formula specified in the agreement. However, the CAST business has not evolved as quickly as CAST owners expected and the result of the conversion formula is currently a negative number less than zero. Therefore, the parties by mutual consent dissolved their relationship. CAST received assets valued at $7,408 and assumed liabilities of $17,587. Mentor forgave an intercompany note receivable from CAST of $22,825 and $14,142 of intercompany overhead receivable from CAST.


Subsequent to year-end the first installment payment of $117,000 on the investment in account receivable was due. Mentor received a cash payment of $26,000 and entered into an agreement to loan $91,000 back to the counterparty of the installment agreement. The loan bears interest at the minimum federal rate of 0.75% per annum, simple interest, with principal and interest due and payable in full 180 days following the demand thereof.


In March 2016, Mentor designated an individual to be able to redeem 120,000 already outstanding unexercised Series D warrants. Under the Plan of Reorganization referred to in Note 10, the Company or its designee may redeem warrants that are not exercised timely. These warrants may be exercised at the $1.60 per warrant exercise price plus a $0.10 warrant redemption fee. The individual designated had previously invested in Mentor’s to-be-created Series C convertible preferred shares. The convertible security was tied to the operations of CCH which has been disbanded, see description under Current Business in Note 1. The designation of the investor to redeem warrants gives the investor the future potential to recover a portion or all of the amount invested in CCH operations.


If any called warrants are not exercised, the Company has the duty to eventually designate the warrants to new holders who pay a $0.10 per warrant redemption fee as discussed further in Note 10. During the period from January 1, 2016 through March 10, 2016, the Company received $56,350 in warrant redemption fees from designees for 563,500 warrants.