Investment in account receivable |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment in account receivable |
Note 4 – 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 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.
Mentor Capital, Inc. Notes to Consolidated Financial Statements December 31, 2023 and 2022
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 or net present value of $ per share, the then current share price closing. 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, 2020. The Company reevaluated estimated collections and recorded a loss on this investment of ($41,930) for the year ended December 31, 2022 and a gain of $22,718 in the year ended December 31, 2021 in other income on the consolidated income statement.
On January 10, 2023, the Company received the 2022 annual installment payment of $117,000. Three additional $117,000 annual installment payments are due for 2023, 2024, and 2025. The Company has retained its impairment reserves and recorded losses on investment due to a history of uncertain payments.
The April 10, 2015 account receivable is supported by an exchange agreement and consisted of the following at December 31, 2023 and 2022:
For the years ended December 31, 2023 and 2022, $41,741 and $56,806 of discount amortization are included in interest income.
Subsequent to year-end, the Company did not receive the 2023 annual installment payment of $117,000 that is due in or around January or February 2024. In March 2024, the Company retained counsel to begin the process of collecting the past due amounts and explore whether the Company should file suit. See Note 21.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||