Company: MNTR
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021833
Chunk: 18

Company: Mentor Capital, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1
Chunk 18
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depreciation is included in selling, general, and administrative costs in the consolidated income statements.

Expenditures
for major renewals and improvements are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset
lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from
the accounts, and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that
could indicate that the carrying balances of its property and equipment may not be recoverable in accordance with the provisions 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.

    -15-

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. Undiscounted cash flows are used for the recoverability test. Discounted cash flows are used to determine fair
value if impairment is triggered. The Company’s royalty interests are analyzed in comparison to net present value calculated
by 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 September 30, 2025, the total carrying value of all royalty interests taken together was $1,300,896,
which was calculated as the beginning balance of our royalty interests