Company: MNTR
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001493152-25-011889
Chunk: 21

Company: Mentor Capital, Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 21
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 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 to 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 which 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, at which point payment is unconditional. The Company’s receipt of royalty interest payments is not attached to
any performance obligation that the Company must perform, such as the delivery of goods or services in order to receive payment from
a customer. Therefore, the Company’s ownership of royalty interests are not contractual assets or liabilities under ASC 606,
“Revenue from Contracts with Customers.”

    -17-

Basic
and diluted income (loss) per common share

We
compute net income (loss) per share in accordance with ASC 260, “Earnings Per Share.” Under the provisions of ASC
260, basic net income or loss per share includes no dilution and is computed by dividing the net income or loss available