Company: MNTR
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001493152-25-011889
Chunk: 16

Company: Mentor Capital, Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 16
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0, we were notified that due to the effect of
COVID-19 on the estimated receivable, we may not receive the 2020 installment payment or the full 2021 installment payment. Due to a
reduction 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.

Credit
quality of notes receivable and finance leases receivable, and credit loss reserve

As
our notes receivable and finance leases receivable are expected to be 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