Company: MNTR
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010157
Chunk: 17

Company: Mentor Capital, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 17
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 loss based on the excess of the carrying
amount over the fair value of the assets. See Note 6.

    -14-

Note 2 - Summary of significant
accounting policies (continued)

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
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. The Company’s royalty interests are analyzed in comparison to net present value calculated using a 10% discount
rate ceiling for impairment a least annually or if events or changes in circumstances indicate the asset may be significantly
impaired. As of March 31, 2025, the total carrying value of all royalty interests taken together was $1,369,391,
which was calculated as the beginning balance of our royalty interests of $1,369,899
less accumulated amortization of $508 at March 31, 2025.
No indicators of impairment were identified during the three months ended March 31, 2025. See Note 9.

The Company reviews intangible assets subject to amortization
quarterly to determine if any adverse conditions exist or if a change in circumstances has occurred that would indicate impairment or
a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse
change in legal factors or business climate that could affect the value of an asset, or an adverse action or assessment by a regulator.
If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group
our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset
does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group)
exceeds the undiscounted