Company: MNTR
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010157
Chunk: 30

Company: Mentor Capital, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 30
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 royalty payments owed to the Company
    commenced and will be recognized April 1, 2025. The Company estimates that the first royalty payment will be physically received by
    the Company on or around August 2025.

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.

The
Company’s ownership in various non-operating royalty interests that result in 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. Therefore, the acquisition purchase price and associated transaction costs of our royalty
interests are amortized on a straight-line basis over an estimated useful life of ten years. In contemplation of the purchase of oil
and gas royalty interests, management studied the historical production curves of the wells individually and in the aggregate, along
with studying its estimated percentage of royalty income based on historical royalty payments in alignment with the percentage it
purchased. The Company’s royalty interests are analyzed in comparison to net present value calculated using a 10% discount
rate (“NPV10”) 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.

    -21-

Note 9 – Interest in
oil and gas royalties (continued)

The following table summarizes activity related to
the royalty interests at March 31, 2025 and December 31, 2024:

 Schedule of activity related to royalty interests 

    Royalty Interest Activity

    Royalty Interest Activity

    Balance at December 31, 2024
     
    $
    -

    Additions

    1,369,899

    Amortization

    (508)

    Impairment

    -