Company: MNTR
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001493152-25-011889
Chunk: 18

Company: Mentor Capital, Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 18
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 of ASC
360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses
the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted
expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes
an impairment loss based on the excess of the carrying amount over the fair value of the assets. See Note 6.

Intangible
assets

In
March 2025, the Company acquired three fractional, non-operating royalty interests in oil and gas properties covering approximately
one-hundred twenty-one (121) wells in the Spraberry Field of the Permian Basin in West Texas, through related public auctions for a
total consideration of $1,369,899.
The Company’s ownership in various non-operating royalty interests that result in a future economic benefit in the form of
royalty payments following production are classified as intangible assets in accordance with ASC 350, “Intangibles –
Goodwill and Other.” The Company determined that the royalty interests have an estimated useful life of ten years which is
not uncommon in the oil and gas industry. Our royalty interests are amortized on a straight-line basis over an estimated useful life
of ten years. The Company’s royalty interests are analyzed in comparison to net present value calculated using a 10% discount
rate ceiling for impairment at least annually or if events or changes in circumstances indicate the asset may be significantly
impaired. As of June 30, 2025, the total carrying value of all royalty interests taken together was $1,335,143,
which was calculated as the beginning balance of our royalty interests of $1,369,899
less accumulated amortization of $34,756
at June 30, 2025. No indicators of impairment were identified during the three and six months ended June 30, 2025. See Note
9.

The
Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or if a change in circumstances
has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include,
but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, or
an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability.