Company: MNTR
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021833
Chunk: 21

Company: Mentor Capital, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1
Chunk 21
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 element of dealer profit and lessee bargain purchase options at prices substantially below the subject
assets’ estimated residual values at the exercise date for the options. Consequently, the Company classified the leases as sales-type
leases (the “finance leases”) for financial accounting purposes. For such finance leases, the Company reported the discounted
present value of (i) future minimum lease payments (including the bargain purchase option, if any) and (ii) any residual value not subject
to a bargain purchase option as a finance lease receivable on its balance sheet and accrued interest on the balance of the finance lease
receivable based on the interest rate inherent in the applicable lease over the term of the lease. For each finance lease, the Company
recognized revenue in an amount equal to the net investment in the lease and cost of sales equal to the net book value of the equipment
at the inception of the applicable lease. The Mentor Partner I, LLC finance lease is fully impaired, pending collection of the G Farma
judgment. See Notes 8 and 16.

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 total consideration
of $1,369,899. The royalty interests entitle the Company to receive a proportional share of revenues generated from the production of
hydrocarbons from the underlying property, without incurring any operating or production costs. Working interest owners operating the
wells will participate in and bear the costs of operation and development. Accrued royalty income is estimated and recognized in the
month it is produced. The difference between accrued royalty income and the amount received is adjusted when royalty payments are paid.
Therefore, our royalty income accruals are subject to revision. The performance or lack of performance of third-party producers who send
royalty payments to the Company, weather conditions, the accuracy of historical check stub and well volume data from the energy professionals
upon which our estimates rely, production levels and actual volumes, and prices of oil and natural gas sales may materially impact our
royalty income receivable amounts. The Company monitors changes in market conditions, commodity prices, production volumes, and other
factors that may materially impact the recoverability of our royalty interests. Because the Company’s royalty interests are owned
by the Company, it has the right to receive royalty interest payments once production has occurred,