Frequently Asked Questions

Q: I have a lot of warrants, will I be able to do a cashless exercise?

A: Later, probably Yes. Now, probably No. Asking your broker to do a cashless exercise is like asking your bank to cash a large out-of-state check. In theory he can, but he only will if you are a great client, and it is a check from a known entity. We aren't established, so you will need to be a really great client for your broker to work with you. In practice, it is no risk for your broker. You present a warrant. He calls the Company or transfer agent to ensure it is valid. The broker checks to see he can sell shares. He exercises the warrant and you have three (3) days to settle what you owe. He sells the shares 10 seconds later. He settles your account with the proceeds of the sale. You retain the excess earned on the sale as cash in your account. If you have large balances in your account, and if MNTR shares trade for over $5 per share, your broker will have less resistance from his back office to completing a cashless transaction.

Q: When can I exercise my warrants? Do I have to wait until they are called?

A: You can always exercise your warrants at any time. Some folks did even before trading started. There are two competing forces that you would naturally consider. First, if you exercise a rapidly gaining stock right at the strike price (e.g. at $1 on the $1 warrants) then you pay no taxes. If instead, you wait to exercise, and it rises to, say $4, then the $3 gain is short-term capital gain at the time of exercise, even if you never sell. In the example, by paying the same $1 earlier, rather than later, approximately $1 in taxes are permanently shielded. The second case is if taxes are not an issue. Then you would want to wait until the call to exercise. In that way, you keep your money working for you earning interest as long as possible.

Q: Do I have to exchange my old MFIT warrants for new MNTR warrants? How about my pre-split shares?

A: No, the warrants do not need to be exchanged. An old warrant works the same as a new warrant. The shares do not need to be exchanged. 1,000 old Main Street AC, Inc. shares (MFIT) is equal to 1 new Mentor Capital, Inc. share (MNTR). If you exercise your warrants directly with the company, you can send in your old shares at the same time and they will be added to the shares issued to you. This saves a $20 transfer agent fee, and blends your old tax basis in with the newly issued shares which could save you on taxes.