Company: MNTR
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021833
Chunk: 17

Company: Mentor Capital, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1
Chunk 17
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ivable
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 on which 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 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.

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