Note 17 – Related party transactions

On December 15, 2020, WCI received a $20,000 short term loan, which bore interest at 8% per annum, from an officer of WCI, which was reflected as a related party payable at December 31, 2022. On February 15, 2022, the loan plus accrued interest of $1,950 was paid in full.

On March 12, 2021, Mentor received a $100,000 loan from its CEO, which bore interest at 7.8% per annum, was compounded quarterly, and was due upon demand. On June 17, 2021 and June 5, 2022, Mentor received additional $100,000 and $50,000 loans from its CEO with the same terms as the original loan. On December 1, 2022, the loans plus accrued interest of $28,024 was paid in full.

On August 10, 2023, Mentor received a $50,000 loan from its CEO, which bears interest at 7.8% per annum, is compounded quarterly, and is due upon demand. The loan from the related party and accrued interest was reflected as a long-term liability at September 30, 2023. For the three months ended September 30, 2023 and the nine months ended September 30, 2023, the interest expense on the long-term loan from the related party was $545.

On August 2, 2023, Mentor called a $1,080,000 note receivable from WCI, a related party, plus accrued interest of $3,591. On September 6, 2023 WCI satisfied the note and accrued interest in full. WCI’s payment consisted of $66,712 cash and a $1,016,879 credit from the Company in exchange for surrender of rights to exercise 2,259,732 warrants of the Company at $0.45 per warrant. The Company recorded the $1,016,879 warrant credit as a reduction to additional paid in capital in accordance with ASC 480 “Distinguishing Liabilities from Equity Overall.” WCI recorded the $1,016,879 credit as a capital contribution because it was derived from the surrender of the WCI stockholder’s rights to exercise the Company’s 2,259,732 warrants.

At September 30, 2023 and December 31, 2022, the WCI note consisted of a note at principal face value of $0 and $1,080,000, respectively. The note was payable on demand and the other WCI stockholder was permitted to utilize any of his remaining Mentor warrants as currency to partially repay the loan at a rate of $0.45 per warrant upon the surrender of such remaining unexercised warrants. The note accrued interest at 0.42% per annum with annual interest only payments due. For the three months ended September 30, 2023 and September 30, 2022, the Company recorded interest income of $0 and $1,134 from WCI. For the nine months ended September 30, 2023 and September 30, 2022, the Company recorded interest income of $2,268 and $3,402 from WCI. The note was issued September 13, 2011 as payment for past amounts owed of $380,000 and included prepaid amounts of $700,000 for administrative fees payable to the Company under that certain May 31, 2005 Liquidity Agreement between the Company and WCI. The WCI note receivable and interest on the Company’s financials and the Mentor note payable and interest on WCI’s financials are eliminated in consolidation.

The deferred balances for the three months and nine ended September 30, 2023 and September 30, 2022 were $0 and $345,333, respectively. WCI deferred fees represent deferred administrative fees relating to the paid $1,080,000 note receivable from WCI, the related party. The deferred balances at September 30, 2023 and December 31, 2022 were $0 and $337,333. The Company recognized a total of $337,333 in deferred fees prior to the three months and nine months ended September 30, 2023. The Company recognized $2,667 in deferred fees per month and an additional $318,667 in deferred fees on September 6, 2023, concurrent with WCI’s payment of the note to the Company.

The deferred fees on the Company’s financials and the deferred asset on WCI’s financials are eliminated in consolidation.

Subsequent to quarter end, on October 4, 2023, all of the outstanding shares of WCI stock were sold to Ally Waste Services, LLC. See Note 20.