Mentor Capital, Inc.

Previous wording

The following discussion will assist in the understanding of our financial position at March 31, 2025 and the results of operations for the three months ended March 31, 2025 and 2024. The information below should be read in conjunction with the information contained in the unaudited Condensed Consolidated Financial Statements and related notes to the financial statements included within this Quarterly Report on Form 10-Q for the three months ended March 31, 2025 and 2024 and our Annual Report on Form 10-K for the year ended December 31, 2024.

Current wording

The following discussion will assist in the understanding of our financial position at June 30, 2025 and the results of operations for the three and six months ended June 30, 2025 and 2024. The information below should be read in conjunction with the information contained in the unaudited Condensed Consolidated Financial Statements and related notes to the financial statements included within this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2025 and 2024 and our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

In the public arena, the Company continues its diverse investment activities. These have included the acquisition of oil and gas partnerships, New York Stock Exchange gas trading company mini-tender offers, ATM ownership, facilities operations investment, cancer immunotherapy investment, equipment financing, intellectual property investment, litigation financing, investment in a dispute resolution company, and discounted funding of annuity-like fund flows. Most recently, from its new Texas base, the Company has signaled a substantial return to its energy roots, starting with stock purchases in several energy companies in the oil and gas, coal, and uranium markets and purchase of fractional, non-operating royalty interests in producing oil and gas properties operating in West Texas.

Current wording

In the public arena, the Company maintains diverse investment activities. These have included the acquisition of oil and gas partnerships, New York Stock Exchange gas trading company mini-tender offers, ATM ownership, facilities operations investment, cancer immunotherapy investment, equipment financing, intellectual property investment, litigation financing, investment in a dispute resolution company, and discounted funding of annuity-like fund flows. Most recently, from its new Texas base, the Company signaled a substantial return to its energy roots, starting with stock purchases in several energy companies in the oil and gas, coal, and uranium markets and purchases of fractional, non-operating royalty interests in producing oil and gas properties operating in West Texas.

Previous wording

On October 4, 2023, we sold and completely divested our majority controlling 51% interest in Waste Consolidators Inc. (“WCI”), our facilities operations segment, that provides waste management and disposal services, including waste consolidation, bulk item pickup, general property maintenance, and one-time clean-up services to business park owners, governmental centers, and apartment complexes in Phoenix, Austin, San Antonio, Houston, and Dallas. Following the sale, the Company received no new income from WCI and had no further involvement or continuing influence over its operations. WCI is now reported as a discontinued operation. WCI had been a long-standing investment, but it no longer aligns with the Company’s central business focus in the energy sector. The $6,000,000 proceeds from the sale of our WCI shares provided the Company with capital to seek out new business opportunities in the classic energy space of oil and gas, coal, uranium, and related businesses which are Mentor Capital, Inc.’s current focus.

Current wording

On October 4, 2023, we sold and completely divested our majority controlling 51% interest in Waste Consolidators Inc. (“WCI”), our facilities operations segment, that provides waste management and disposal services, including waste consolidation, bulk item pickup, general property maintenance, and one-time clean-up services to business park owners, governmental centers, and apartment complexes in Phoenix, Austin, San Antonio, Houston, and Dallas. Following the sale, the Company received no new income from WCI and had no further involvement or continuing influence over its operations. WCI is now reported as a discontinued operation. WCI had been a long-standing investment, but it no longer aligns with the Company’s central business focus in the energy sector. The $6,000,000 proceeds from the sale of our WCI shares provided the Company with capital to seek out new business opportunities in the classic energy space of oil and gas, coal, uranium, and related businesses which are Mentor Capital, Inc.’s focus.

Previous wording

The royalty interests entitle the Company to receive a proportional share of revenues generated from the production of hydrocarbons from the underlying property, without incurring any operating or production costs. Working interest owners operating the wells we participate in bear the costs of operation and development. Accrued royalty income is estimated and recognized in the month it is produced. The difference between accrued royalty income and the amount received is adjusted when royalty payments are paid. Accrual of estimated royalty income was $2,000 and $0, at March 31, 2025 and 2024, respectively. Royalty income received was $0 and $0, at March 31, 2025 and 2024, respectively. The Company monitors changes in market conditions, commodity prices, production volumes, and other factors, which may materially impact the recoverability of our royalty interests.

Current wording

The royalty interests entitle the Company to receive a proportional share of revenues generated from the production of hydrocarbons from the underlying property, without incurring any operating or production costs. Working interest owners operating the wells will participate in and bear the costs of operation and development. Accrued royalty income is estimated and recognized in the month it is produced. The difference between accrued royalty income and the amount received is adjusted when royalty payments are paid. Accrual of estimated royalty income were $75,000 and $0 for the three months ended June 30, 2025 and 2024, and $77,000 and $0 for the six months ended June 30, 2025 and 2024, respectively. Royalty payments actually received were $0 and $0 for the three months ended June 30, 2025 and 2024 and $0 and $0, the six months ended June 30, 2025 and 2024, respectively. The Company monitors changes in market conditions, commodity prices, production volumes, and other factors, which may materially impact the recoverability of our royalty interests.

Previous wording

On July 11, 2023, the Court entered judgment against the G Farma Settlers in favor of the Company and Mentor Partner I, LLC in the amount of $2,539,597. The judgment also accrues post-judgment interest at the rate of 10% from July 11, 2023 until such time as the judgment is paid in full. The judgment and interest receivable of $437,646 at March 31, 2025 is fully reserved pending the outcome of the Company’s collection process. Payments from G Farma and G Farma guarantors will be recognized in Other Income as they are received. The Company has retained the full reserve on the unpaid notes receivable balance and collections of the unpaid lease receivable balance due to the history of uncertain payments from G Farma and the G Farma Settlors.

Current wording

On July 11, 2023, the Court entered judgment against the G Farma Settlers in favor of the Company and Mentor Partner I, LLC in the amount of $2,539,597. The judgment also accrues post-judgment interest at the rate of 10% from July 11, 2023 until such time as the judgment is paid in full. The judgment and interest receivable of $500,962 at June 30, 2025 is fully reserved pending the outcome of the Company’s collection process. Payments from G Farma and G Farma guarantors will be recognized in Other Income as they are received. The Company has retained the full reserve on the unpaid notes receivable balance and collections of the unpaid lease receivable balance due to the history of uncertain payments from G Farma and the G Farma Settlors.

Previous wording

Mentor Partner I, LLC (“Partner I”) was reorganized under the laws of the State of Texas in February 2021. Partner I originally held the contractual rights to lease payments from G Farma and now the related settlement and $2,539,591 judgment receivable plus interest receivable of $437,646 at March 31, 2025 in favor of the Company and Partner I.

Current wording

Mentor Partner I, LLC (“Partner I”) was reorganized under the laws of the State of Texas in February 2021. Partner I originally held the contractual rights to lease payments from G Farma and now the related settlement and $2,539,597 judgment receivable plus interest receivable of $500,962 at June 30, 2025 in favor of the Company and Partner I.

Previous wording

The Company maintains a diverse and opportunistic acquisition focus. It sold its former legacy investment in the former facilities operations segment and continues looking to expand into the classic energy markets of oil, gas, coal, uranium, and related businesses. The Company signaled a substantial return to its energy roots, starting with a tracking investment in six New York Stock Exchange energy companies in the oil and gas, coal, uranium, and pipeline markets. In March 2025, the Company acquired three fractional, non-operating royalty interests in oil and gas properties covering approximately one-hundred twenty-one (121) wells in the Spraberry Field of the Permian Basin in West Texas, through related public auctions for total consideration of $1,369,899. The royalty interests entitle the Company to receive a proportional share of revenues generated from the production of hydrocarbons from the underlying property, without incurring any operating or production costs.

Current wording

The Company maintains an opportunistic acquisition focus. It sold its former legacy investment in the former facilities operations segment and continues looking to expand into the classic energy markets of oil, gas, coal, uranium, and related businesses. In 2023, the Company initially signaled a substantial return to its energy roots, starting with a tracking investment in five New York Stock Exchange energy companies in the oil and gas, coal, and uranium markets. In March 2025, the Company acquired three fractional, non-operating royalty interests in oil and gas properties covering approximately one-hundred twenty-one (121) wells in the Spraberry Field of the Permian Basin in West Texas, through related public auctions for total consideration of $1,369,899. The royalty interests entitle the Company to receive a proportional share of revenues generated from the production of hydrocarbons from the underlying property, without incurring any operating or production costs. The Company also maintains gold investment and short-term treasury exchange traded funds for the purpose of facilitating investment into the Company to support potential future energy acquisitions and to collect low-risk interest to offset inflation, respectively.

Previous wording

The Company’s primary aim is to acquire revenue-generating energy assets, such as oil and gas royalties, oil service businesses or other private energy operating companies as viable opportunities for such acquisition(s) become available. Our general headquarters functions are aimed at providing accounting, legal, and general business support for our larger investment targets and our majority-owned subsidiaries. We monitor our smaller and less than majority positions for value and investment security. Management also spends considerable effort reviewing possible acquisition candidates on an ongoing basis.

Current wording

The Company’s primary investment aim is to acquire revenue-generating energy assets, such as oil and gas royalties, oil service businesses or other private energy operating companies as viable opportunities for such acquisition(s) become available. Our general headquarters functions are aimed at providing accounting, legal, and general business support for our larger investment targets and our majority-owned subsidiaries. We monitor our smaller and less than majority positions for value and investment security. Management also spends considerable effort reviewing possible acquisition candidates on an ongoing basis.

Previous wording

Mentor seeks to take significant positions in target companies to provide public market liquidity for founders, protection for investors, funding for the companies, and incubate private companies that Mentor believes to have significant potential. When Mentor takes a major position in its investees, it provides financial management when needed but leaves operating control in the hands of the company founders. Retaining control, receiving greater liquidity, and working with an experienced organization to efficiently develop disclosures and compliance that are similar to what is required of public companies are three potential key advantages to company founders working with Mentor Capital, Inc.

Current wording

When involved in energy company acquisitions, Mentor seeks to take significant positions in these new companies and then seeks to provide public market liquidity for founders, protection for investors, funding for the companies, and to incubate private companies that Mentor believes to have significant potential. When Mentor takes a major position in its investees, it provides financial management when needed but leaves operating control in the hands of the company founders. Retaining control, receiving greater liquidity, and working with an experienced organization to efficiently develop disclosures and compliance that are similar to what is required of public companies are three potential key advantages to company founders working with Mentor Capital, Inc.

Previous wording

On March 1, 2025, only nine (9) of the one hundred twenty-one (121) wells associated with royalty interests that the Company acquired in March 2025 were effective for revenue recognition during the last 30 days of the first quarter of 2025. Royalty revenue for the remaining one hundred twelve (112) wells will commence on April 1, 2025. Accrued revenue for the three months ended March 31, 2025 was $2,000 compared to $0 for the three months ended March 31, 2024 (“the prior year period”).

Current wording

Accrued revenue for the three months ended June 30, 2025 was $75,000 compared to $0 for the three months ended June 30, 2024 (“the prior year period”).

Previous wording

Gross profit for the three months ended March 31, 2025 was $2,000 compared to $0 for the prior year period. The Company’s cost of goods sold for the three months ended March 31, 2025 were $0 and $0 for the prior year period.

Current wording

Gross profit for the three months ended June 30, 2025 was $75,000 compared to $0 for the prior year period. The Company’s cost of goods sold for the three months ended June 30, 2025 were $0 and $0 for the prior year period.

Previous wording

Our selling, general and administrative expenses for the three months ended March 31, 2025 was $195,975 compared to $271,263 for the prior year period, a decrease of $75,288. We experienced a ($68,048) decrease in professional expenses, a ($9,396) decrease in employee salary and benefits, a ($2,475) decrease in officer salary and benefits, and a ($184) decrease in depreciation expense, offset by $3,750 increase in board of director fees, a $508 increase in accumulated amortization expense, a $468 increase in administrative fees, a $78 increase in insurance, and a $11 increase in travel related expenses resulting in an decrease in other selling, general and administrative expenses of 27.75%, for the three months ended March 31, 2025 as compared to the prior year period.

Current wording

Our selling, general and administrative expenses for the three months ended June 30, 2025 was $201,732 compared to $212,027 for the prior year period, a decrease of $10,295 or 4.86%. We experienced a $38,038 decrease in professional expenses, a $21,250 decrease in board of director fees, and a $184 decrease in depreciation expense offset by a $34,247 increase in amortization expense, a $8,500 increase in officer salary, benefits, and payroll taxes, a $4,307 increase in employee salary, benefits, and payroll taxes, a $1,412 increase in administrative expenses, a $608 increase in travel related expenses, a $78 increase in insurance expense, and a $25 increase in advertising expenses resulting in a decrease in other selling, general and administrative expenses of 4.86%, for the three months ended June 30, 2025 as compared to the prior year period.

Previous wording

Other income and expense, net, totaled ($6,297) for the three months ended March 31, 2025 compared to $78,586 for the prior year period, a decrease of ($84,883) or (108.01%). The decrease is due to a $9,547 increase in realized gain on sale of investments, and a $7,043 increase in unrealized gain on investment in gold, offset by a decrease in ($84,025) unrealized gain (loss) on investment in securities plus a ($17,448) decrease in interest income for the three months ended March 31, 2025.

Current wording

Other income and expense, net, totaled ($89,973) for the three months ended June 30, 2025 compared to ($209,649) for the prior year period, a decrease of $119,676 or 57.08%. The decrease is due to a $250,208 decrease in loss on investment in account receivable, a $89,181 increase in unrealized gain on investment in securities, and a $16,996 increase in unrealized gain on investment in gold offset by a $194,639 increase on loss on sale of investments plus a $42,016 decrease in interest income for the three months ended June 30, 2025.

Previous wording

The net result for the three months ended March 31, 2025 was a net loss attributable to Mentor of ($204,715) or ($0.009) per Mentor common share compared to a net loss attributable to Mentor in the prior year period of ($208,006) or ($0.008) per Mentor common share. The Company will continue to look for acquisition opportunities to expand its portfolio in companies that are positive for operating revenue or have the potential to become positive for operating revenue.

Current wording

The net result for the three months ended June 30, 2025 was a net loss of ($216,705) or ($0.010) per Mentor common share compared to a net loss in the prior year period of ($421,676) or ($0.017) per Mentor common share. The Company will continue to look for acquisition opportunities to expand its portfolio in companies that are positive for operating revenue or have the potential to become positive for operating revenue.

Previous wording

Since our reorganization, we have raised capital through warrant holder exercise of warrants to purchase shares of Common Stock. At March 31, 2025 we had cash and cash equivalents of $450,504 and working capital of $1,679,058.

Current wording

Since our reorganization, we have raised capital through warrant holder exercise of warrants to purchase shares of Common Stock. At June 30, 2025 we had cash and cash equivalents of $713,424 and working capital of $1,509,018.

Previous wording

Operating cash outflows in the three months ended March 31, 2025 was ($148,528), including ($204,715) of net income, increased by an unrealized loss on investment in securities at fair value of $42,991, increase in accounts payable of $71,976, non-cash depreciation and amortization of $85, and non-cash accumulated amortization of royalty interests of $508, offset by unrealized gain on an investment position in gold at fair value of ($7,043), royalty income receivable of ($2,000), other receivable of escrow funds of ($11,242), prepaid expenses and other assets of ($11,770), accrued expenses of ($16,549), and accrued salary, retirement and benefits to related party of ($10,769).

Current wording

Operating cash outflows in the six months ended June 30, 2025 was ($338,147), including ($421,420) of net income, increased by non-cash depreciation and amortization of $170, and non-cash accumulated amortization of royalty interests of $34,756, increased by loss on investments at fair value of $157,353, offset by unrealized gain on an investment position in gold at fair value of ($24,040), royalty income receivable of ($77,000), prepaid expenses and other assets of ($5,862), accounts payable of $3,936, accrued expenses of ($7,603), and accrued salary, retirement and benefits to related party of $1,563.

Previous wording

Cash outflows from investing activities in the three months ended March 31, 2025 were ($1,583,089) which included $82,138 proceeds from investment in securities sold, less ($295,328) purchase of a gold position, and ($1,369,899) purchase of three separate royalty interests in the Permian Basin.

Current wording

Cash outflows from investing activities in the six months ended June 30, 2025 were ($1,130,550) which included $835,209 proceeds from investment in securities sold, offset by ($300,532) purchase of investment securities, ($295,328) purchase of a gold position, and ($1,369,899) purchase of three separate royalty interests in the Permian Basin.

Previous wording

Net cash outflows from financing activities for the three months ended March 31, 2025 were $0.

Current wording

Net cash outflows from financing activities for the six months ended June 30, 2025 were $0.

Previous wording

We will seek to raise additional funds through financing, additional collaborative relationships, or other arrangements to increase revenues to support positive cash flow.

Current wording

We will seek to raise additional funds through gold-backed preferred share sales, general debt financing, additional collaborative relationships, and other arrangements to increase revenues to support positive cash flow.

Previous wording

For the three months ended March 31, 2025, there were no redemptions of Series D Warrants. There were no redemptions of Series D Warrants in 2024. We believe that if warrants are redeemed and exercised, partial warrant redemptions will provide additional monthly cash for monthly operations.

Current wording

For the six months ended June 30, 2025, there were no redemptions of Series D Warrants. There were no redemptions of Series D Warrants in 2024. We believe that if warrants are redeemed and exercised, partial warrant redemptions will provide additional monthly cash for monthly operations.