Company: MNTR
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001641172-25-010157
Chunk: 15

Company: Mentor Capital, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 1
Chunk 15
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 in expected collections, the collectability
of our investment in account receivable was impaired by $116,430 on February 15, 2022 and the terms of the investment were modified, resulting
in an additional loss of $41,930.

On January 10, 2023, the Company received the 2023
annual installment payment of $117,000. Three additional $117,000 annual installment payments were due in early 2024, 2025, and 2026.
The 2024 and 2025 annual installment payments have not been received. At June 11, 2024, the receivable was fully impaired due to a history
of uncertain payments. The Company’s recognition of an impairment loss due to the uncertainty of collection does not diminish its
contractual rights to collect the full amounts due pursuant to the contract. The Company intends to continue to pursue the payment of
the amounts owed by available legal means. See Note 4.

    -13-

Note 2 - Summary of significant
accounting policies (continued)

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.

Lessee Leases

We determine whether an arrangement is a lease at
inception under ASC 842 “Leases.” This includes general descriptions of leases and various details regarding terms
and conditions, such as the basis that variable lease payments are determined. Lessee leases are classified as either finance leases or
operating leases. A lease is classified as a finance lease if any one of the following criteria is met: (i) the lease transfers ownership
of the asset by the end of the lease term, (ii) the lease contains an option to purchase the asset that is reasonably certain to be exercised,
and (iii) the lease term