Company: MNTR
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001620
Chunk: 243

Company: Mentor Capital, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1A
Chunk 243
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 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 reports 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 accrues 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.

A
finance receivable is considered impaired, based on current information and events, if it is probable that we will be unable to collect
all amounts due according to contractual terms. Impaired finance receivables include finance receivables that have been restructured
and are troubled debt restructures. See Note 9.

Credit
quality of notes receivable and finance leases receivable and credit loss reserve

As
our notes receivable and finance leases receivable are limited in number, our management is able to analyze estimated credit loss reserves
based on a detailed analysis of each receivable as opposed to using portfolio-based metrics. Our management does not use a system of
assigning internal risk ratings to each of our receivables. Rather, each note receivable and finance lease receivable are analyzed quarterly
and categorized as either performing or non-performing based on certain factors including, but not limited to, financial results, satisfying
scheduled payments and compliance with financial covenants. A note receivable or finance lease receivable will be categorized as non-performing
when a borrower experiences financial difficulty and has failed to make scheduled payments. As part of the monitoring process we may
physically inspect the collateral or a borrower’s facility and meet with a borrower’s management to better understand such
borrower’s financial performance and its future plans on an as-needed basis.

Property
and equipment

Property
and equipment are recorded at cost less accumulated depreciation. Depreciation is computed on the declining balance method over the estimated
useful lives of various classes of property. The estimated lives of the property and equipment are generally as follows: computer equipment,
3 years to 5 years; furniture and equipment, 7 years; and vehicles and trailers,