Note 4 – Investment in account receivable

On April 10, 2015, the Company entered into an exchange agreement whereby the Company received an investment in an account receivable with annual installment payments of $117,000 for 11 years through 2026, totaling $1,287,000 in exchange for 757,059 shares of Mentor Common Stock obtained through the exercise of 757,059 Series D warrants at $1.60 per share plus a $0.10 per warrant redemption price.

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 annual installment payment has not been received. At June 11, 2024, the receivable was fully impaired as a recordation of expected credit loss due to a history of uncertain payments. Under ASC 326, “Current Expected Credit Loss” the Company’s impairment of its investment account receivable involved estimating losses based on historical data, current conditions, and reasonable forecasts. The Company’s investment in accounts receivable was evaluated for impairment because, collectively, there were risk characteristics that created an allowance for expected credit losses on its collection of future annual installment payments

The April 10, 2015 account receivable is supported by an exchange agreement and consisted of the following at December 31, 2025 and 2024:

 Schedule of receivables with imputed interest

On June 11, 2024, our investment in account receivable was impaired as a recordation of expected credit loss by $250,208. The $250,208 impairment consisted of the Company’s estimate of the reduction of $287,200 purchased receivable offset by a ($36,992) purchased receivable discount. 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 has been notified by the originating third-party payor of the $1,287,000 account receivable which the Company purchased from the former payee that in or about December 2025 the third-party payor intends to deposit a $180,000 payment with the Superior Court of California, County of Fresno, in an interpleader action through which Mentor and the former payee can resolve ownership of the $180,000. The Company has retained legal representation in the County of Fresno to pursue the collection of the $180,000 payment.

For the years ended December 31, 2025 and 2024, $0 and $9,559 of discount amortization are included in interest income.

Mentor Capital, Inc.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024