As of February 2014, the capital structure of Mentor Capital is approximately 14.5 Million shares and 14.5 Million warrants. The proceeds of the warrants at the current strike prices are $23 Million.

The Mentor structure is unique and has extreme flexibility that allows management a number of tools to increase the likelihood of timely funding. Management created the capital structure and received an SEC “no comment” letter and approval under USC 1145. As such, MNTR management is well versed in the nuances of the formation documents that allow MNTR to proceed along funding paths that are most beneficial to all parties.

The warrants are freely tradable and the shares that spring from the warrants are immediately freely trading. The warrants are already in the hands of approximately 1,500 warrant holders. If a warrant is not exercised timely when called, it can be reassigned by the company to another person to be exercised by them. Several hundred shareholders have asked to be designated to redeem warrants if the original holder does not exercise.

Mentor management has been in discussion and plans to file the 15(c)2-11 paperwork to make a market in the warrants, in addition to the market already made in the shares.

Management philosophically opposes the reverse split mechanism, which is nonetheless allowed for any corporation, period. However, in the case of a move to NASDAQ the company may be require to increase its share price to qualify for up listing. The warrants have a non-dilutive quality approved by the courts under 1145, and already subject to historic review by the SEC who issued a no comment letter, FINRA who reviewed and approved trading and DTCC who effected an earlier reverse split. That is, a reverse split of the shares specifically does not affect the exercise price of the warrants. (See footnote page 50, Section 1145 Disclosure Statement). All original shareholders hold warrants. Any new shareholder may become a company designee to act as a substitute exercisor of warrants, by contacting the company with that inquiry, and if such warrants are available under the rules commented on by the SEC and as ruled on by the court in the original warrant formation. For emphasis: NOTE THAT A CONTEMPLATED REVERSE SPLIT OF THE STOCK WILL NOT IMMEDIATELY AFFECT THE PERCENTAGE OF ANY SHAREHOLDER’S HOLDINGS. HOWEVER, THE WARRANT STRIKE PRICE IS SPECIFICALLY NOT AFFECTED BY THE REVERSE. THIS NON-DILUTIVE CHARACTERISTIC WILL BRING OUTSTANDING WARRANTS INTO THE MONEY. THAT WILL EQUALLY SHIFT VALUE FROM SHAREHOLDERS’ SHARES OVER INTO THEIR WARRANTS. ANY SHAREHOLDER THAT DOES NOT HOLD WARRANTS SHOULD CONTACT THE COMPANY BEFORE OR AT THE TIME OF THE REVERSE TO SEE IF THEY MAY ALSO COME TO HOLD WARRANTS AS A COMPANY DESIGNEE AND EQUALLY CAPTURE THIS SHIFT IN VALUE.

The (i) low dilution ratio of shares to warrants, (ii) freely tradable nature of warrants, (iii) possible arbitrage in the market for warrants, (iv) immediate tradability of shares, and (v) reassigning of warrants all are factors that would favor warrant exercise upon accumulation of assets.

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