Company: MNTR
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010157
Chunk: 20

Company: Mentor Capital, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 20
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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 we
participate in 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.”

    -16-

Note 2 - Summary of significant
accounting policies (continued)

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 to common stockholders for the period by the weighted average number
of shares of Common Stock outstanding during the period. Diluted net income or loss per share takes into consideration shares of Common
Stock outstanding (computed under basic net income or loss per share) and potentially dilutive