Convertible notes receivable converted into SAFEs |
12 Months Ended |
|---|---|
Dec. 31, 2025 | |
| Debt Disclosure [Abstract] | |
| Convertible notes receivable converted into SAFEs |
Note 7 – Convertible notes receivable converted into SAFEs
Prior to 2024, the Company exchanged two convertible notes purchased at cost for a Simple Agreement For Future Equity (“SAFE”) pursuant to a July 15, 2022, convertible note exchange agreement for SAFE Purchase Agreement between NeuCourt, Inc. (“NeuCourt”) and the Company. The SAFEs were converted at cost, based on the original dollar amount the Company paid, at an aggregate face amount of $86,030 (the “Purchase Amount”). Thereafter, the Company sold $2,247 of the SAFE Purchase amount to a third party, and on January 20, 2023, the Company and NeuCourt entered into a $10,000 SAFE Purchase Agreement under the same terms as the July 15, 2022, SAFE Purchase Agreement, which resulted in the Company’s aggregate SAFE Purchase Amount totaling $93,756.
Mentor Capital, Inc. Notes to Consolidated Financial Statements December 31, 2025 and 2024
The valuation cap of the SAFE is $3,000,000 (“Valuation Cap”), and the discount rate is 75% (“Discount Rate”).
If, prior to termination, conversion, or expiration of the SAFE, NeuCourt sells a series of preferred stock (“Equity Preferred Stock”) to investors in an equity financing raising not less than $500,000, Mentor’s SAFE shall be converted into shares equal to the Purchase Amount divided by the lesser of (x) the price per share of the Equity Preferred Stock multiplied by the Discount Rate and (y) the price per share equal to the Valuation Cap divided by the number of outstanding shares of NeuCourt on a fully diluted, as-converted basis (“Conversion Shares”). The Conversion Shares shall consist of (a) the number of shares of Equity Preferred Stock equal to the Purchase Amount divided by the price per share of the Equity Preferred Stock (“Preferred Stock”) and (b) the number of shares of common stock equal to the Conversion Shares minus the Preferred Stock.
The SAFE will expire and terminate upon the earlier to occur of (i) conversion and (ii) repayment. The SAFE may be repaid by NeuCourt upon sixty (60) days prior notice (“Repayment Notice”) to the Company unless the Company elects during that period to convert the SAFE.
If NeuCourt does not close an equity financing round raising $500,000 or more prior to expiration or termination of the SAFE, the Company may elect to convert the SAFE into the number of shares of a to-be-created series of preferred stock equal to the (x) Purchase Amount divided by (y) the Valuation Cap divided by the number of outstanding shares of NeuCourt on a fully diluted, as-converted basis (“Default Conversion”). Additionally, if NeuCourt experiences a change of control, initial public offering, ceases operations, or enters into a general assignment for the benefit of its creditors prior to conversion, termination, or expiration of the SAFE, the Company will receive the greater of (a) a cash payment equal to the Purchase Amount and (b) the value of the shares issuable on Default Conversion.
At December 31, 2025, and 2024, the SAFE Purchase Amount was $93,756. See Note 7 to the consolidated financial statements and the Company’s Annual Report for the period ended December 31, 2024, on Form 10-K as filed with the Securities and Exchange Commission on March 31, 2025, for further information related to NeuCourt, the convertible notes, and the SAFEs.
Ms. Lori Stansfield, the Company’s Audit Committee Chair and Treasurer of the Board of Directors of the Company, is the Chief Financial Officer of NeuCourt, Inc.
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