Company: MNTR
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001493152-25-011889
Chunk: 17

Company: Mentor Capital, Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 17
---
 term, (ii) the lease contains an option to purchase the
asset that is reasonably certain to be exercised, and (iii) the lease term is for a significant part of the remaining useful life of
the asset or the present value of the lease payments equals or exceeds substantially all of the fair value of the asset. A lease is classified
as an operating lease if it does not meet any one of these criteria.

Our
discontinued operation’s operating leases were comprised of office space leases and office equipment. Costs associated with operating
lease assets were recognized on a straight-line basis over the term of the lease, within cost of goods sold for vehicles used in direct
servicing of our discontinued operation customers and in operating expenses for costs associated with all other operating leases. Finance
lease assets were amortized within the cost of goods sold for vehicles used in direct servicing of our discontinued operation customers
and within operating expenses for all other finance lease assets on a straight-line basis over the shorter of the estimated useful lives
of the assets or the lease term. The interest component of a finance lease was included in interest expense and recognized using the
effective interest method over the lease term.

    -15-

Property
and equipment

Property
and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the declining balance method over
the estimated useful lives of various classes of property. The estimated lives of the property and equipment are generally as
follows: computer equipment, 3
years to 5
years; furniture and equipment, 7
years; and vehicles and trailers, 4
years to 5
years. Depreciation on vehicles used by our discontinued operation to service its customers was included in the cost of goods sold in the Company’s Annual Report for the period ended December 31, 2023 on Form 10-K as filed with the Securities
and Exchange Commission on April 1, 2024.
All other depreciation is included in selling, general, and administrative costs in the consolidated income statements.

Expenditures
for major renewals and improvements are capitalized, while minor replacements, maintenance, and repairs, which do not extend the asset
lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from
the accounts, and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that
could indicate that the carrying balances of its property and equipment may not be recoverable in accordance with the provisions