Quarterly report pursuant to Section 13 or 15(d)

Note 6 - Investment in account receivable

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Note 6 - Investment in account receivable
9 Months Ended
Sep. 30, 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 Series D warrants at $1.60 per share.

 

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:

 

 

 

September 30,

2018

 

December 31,

2017

Face value

$

936,000

$

1,053,000

Unamortized discount

 

(421,883)

 

(479,638)

Net balance

 

514,117

 

573,362

Current portion

 

(95,599)

 

(117,000)

Long term portion

$

418,518

$

456,362

 

For the three months ended September 30, 2018 and 2017, $21,401 and $22,591 of discount amortization is included in interest income, respectively. For the nine months ended September 30, 2018 and 2017, $57,754 and $68,784 of discount amortization is included in interest income, respectively.