Georgi Kamburov

Mentor Capital, Inc. (OTCMKTS:MNTR) Spikes at the End of the Week

by Georgi Kamburov August 11, 2014

Last Friday the stock of Mentor Capital, Inc. (OTCMKTS:MNTR, MNTR message board) seemed to be following its negative trend as it dropped to a low of 70 cents in early trading but around noon the company published an official PR. In it they announced a second stock buyback but this time the amount of shares to be repurchased was increased from 100 thousand to 300 thousand. The news managed to attract the attention of the market almost immediately and as a result the stock closed the day 22% in the green at $0.95.

The announcement was certainly positive but unfortunately it is rather doubtful if it alone can support a more prolonged run up the chart when the company is simply surrounded by red flags. Back in March MNTR were able to reach a high of $8.99 while less than five months later they are now sitting close to 90% lower. Although the disappearance of the hype around the marijuana industry certainly played a role in the depressing performance of the stock it is far from the only reason for it.

Let’s start with the first company that was supposed to receive funding from MNTR. The PR was issued on January 17 and it stated that HempCon, Inc. will receive $7 million. Just eleven days later though the deal was terminated after inconclusive negotiations. If you read our article from back then you would have known that six days earlier HempCon had already denied the information posted in the PR.

MNTR were not going to give up so easily and in March announced that they were going to provide $39 million funding to Bhang Chocolate. Many investors doubted that the company could provide such a vast sum of money but in a following press release Mentor stated that they are calling their 15 million D warrants with an exercise price of $7 resulting in over $100 million of funds for marijuana investments. This was not the first time the company had made the same statement though. Back in 2002 MNTR claimed that they will raise over $150 million through the exercise of the same $7 D warrants.

They couldn’t do it back then and it seems that they failed to do it now as well. In the first 90 days of the agreement MNTR were supposed to provide $9 million but they only managed to gather $1.5 million. The rest of the sum could have been given in the form of free trading shares but apparently Bhang were not satisfied with the arrangement and are now rejecting the whole deal. For now the situation remains rather complex and only time will tell what its resolution will be.

Meanwhile on June 18 MNTR decided to lower the exercise price of the warrants from $7 to $1.6. There was no official press release though and investors found out about it close to month and half later through the quarterly report filed on August 1. The report also revealed that the financial state of the company is actually not that bad when compared to most of the other pennystocks. Mentor finished the period with $900 thousand in cash and revenues just short of $1 million. They are still far away from being profitable though registering a net loss of $413 thousand.

MNTR remains an extremely risky choice for investment. Plan your position accordingly and attempt trades only after doing extensive due diligence.

Comments 0

Type the characters that you see in the box (5 characters).