Company: MNTR
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001620
Chunk: 169

Company: Mentor Capital, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 169
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. See Note
3.

Revenue
recognition

The
Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers,” and FASB ASC Topic
842, “Leases.” Revenue is recognized net of allowances for returns and any taxes collected from customers, which are
subsequently remitted to government authorities.

The
discontinued operation that we sold on October 4, 2023, worked with business park owners, governmental centers, and apartment
complexes to reduce facilities-related costs. Our discontinued operation performed monthly services pursuant to agreements with
customers. Customer monthly service fees were based on our discontinued operation’s assessment of the amount and frequency of
monthly services requested by a customer. Our discontinued operation may have also provided additional services, such as apartment
cleanout services, large item removals, or similar services, on an as-needed basis at an agreed-upon rate as requested by customers.
All services were invoiced and recognized as revenue in the month the agreed-on services were performed. Our discontinued operation
was deconsolidated and presented as a “discontinued operation” at December 31, 2023 and at December 31, 2022 in the
Company’s Form 10-K filed with the Securities and Exchange Commission on April 1, 2024. Our discontinued operation is
deconsolidated throughout this report and it is presented as a “discontinued operation” at December 31, 2024 and
2023 , respectively.

For
each finance lease, the Company recognized as a gain the amount equal to (i) the net investment in the finance lease less (ii) the net
book value of the equipment at the inception of the applicable lease. At lease inception, we capitalized the total minimum finance lease
payments receivable from the lessee, the estimated unguaranteed residual value of the equipment at lease termination, if any, and the
initial direct costs related to the lease, less unearned income. Unearned income was recognized as finance income over the term of the
lease using the effective interest rate method.

The
Company, through its subsidiaries Mentor Partner I, LLC and Mentor Partner II, LLC, was the lessor of manufacturing equipment subject
to leases under master leasing agreements. The leases contained an element of dealer profit, and the lessee bargained 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