Mentor Capital, Inc.

Previous 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.

Current wording

The following discussion will assist in the understanding of our financial position at September 30, 2025 and the results of operations for the three and nine months ended September 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 nine months ended September 30, 2025 and 2024 and our Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

The Company’s common stock trades publicly under the trading symbol OTCQB: MNTR.

Current wording

The Company’s common stock is publicly traded on OTC Markets Over-the-Counter Venture Market (“OTCQB”), under the trading symbol: MNTR.

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 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.

Current wording

Accrual of estimated royalty income was $38,456 and $0 for the three months ended September 30, 2025 and 2024, and $38,456 and $0 for the nine months ended September 30, 2025 and 2024, respectively, which represent the Company’s estimated receivables for approximately two and a half months. Royalty payments received were $21,312 and $0 for the three months ended September 30, 2025 and 2024, which represent a portion of the royalty income earned by the Company in July 2025. Royalty payments received were $78,974 and $0, for the nine months ended September 30, 2025 and 2024, respectively, which represent a portion of the royalty income earned by the Company between March 2025 and July 2025. Actual and estimated severance taxes were approximately 5.22% of actual and accrued royalty income at the nine months ended September 30, 2025. The difference between the estimated incurred severance tax liability and the amount paid is adjusted upon the Company’s receipt of royalty statements. 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

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.

Current wording

The Company also maintains a 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

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.

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 $564,973 at September 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 $2,539,597 judgment receivable plus interest receivable of $500,962 at June 30, 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 $564,973 at September 30, 2025 in favor of the Company and Partner I.

Previous 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.

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 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 a gold investment and short-term treasury exchange-traded funds for the purpose of facilitating investments into the Company to support potential future energy acquisitions and to collect low-risk interest to offset inflation, respectively.

Previous 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.

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 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.

Previous wording

The Company’s future success depends upon its ability to make a return on its investments, generate positive cash flow, and obtain sufficient capital from non-portfolio-related sources. Management believes they have approximately four years of operating resources on hand and can raise additional funds as may be needed to support their business plan and develop an operating, cash flow positive company.

Current wording

The Company’s future success depends upon its ability to make a return on its investments, generate positive cash flow, and obtain sufficient capital from non-portfolio-related sources. Management believes they have approximately four years of operating resources on hand and can raise additional funds as needed to support their business plan and develop an operating, cash flow positive company.

Previous 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”).

Current wording

Accrued and actual revenue for the three months ended September 30, 2025 was $40,430 compared to $0 for the three months ended September 30, 2024 (“the prior year period”).

Previous 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.

Current wording

Gross profit for the three months ended September 30, 2025 was $40,430 compared to $0 for the prior year period. The Company’s cost of goods sold for the three months ended September 30, 2025 were $0 and $0 for the prior year period.

Previous wording

We experienced a $106,087 decrease in professional expenses, a $17,500 decrease in board of director fees, a $5,088 decrease in employee salary, benefits, and payroll taxes, and a $368 decrease in depreciation expense offset by a $34,756 increase in amortization expense, a $6,025 increase in officer salary, benefits, and payroll taxes, a $1,880 increase in administrative expenses, a $619 increase in travel related expenses, a $156 increase in insurance expense, and a $25 increase in advertising expenses resulting in a decrease in other selling, general and administrative expenses of 17.71%, for the six months ended June 30, 2025 as compared to the prior year period.

Current wording

We experienced a $1,980 decrease in professional expenses and a $184 decrease in depreciation expense offset by a $34,247 increase in amortization expense, a $6,064 increase in severance taxes, a $3,160 increase in officer salary, benefits, and payroll taxes, a $3,131 increase in employee salary, benefits, and payroll taxes, a $2,285 increase in administrative expenses, a $63 increase in advertising expense, and a $49 increase in insurance expense, resulting in an increase in other selling, general and administrative expenses of 30%, for the three months ended September 30, 2025 as compared to the prior year period.

Previous 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.

Current wording

Other income and expense, net, totaled $163,359 for the three months ended September 30, 2025 compared to ($2,936) for the prior year period, an increase of $166,295 or (5,664%). The increase is due to a $130,083 increase in unrealized gain on investment in securities, and a $71,943 increase in unrealized gain on investment in gold, offset by a $35,731 decrease in interest income for the three months ended September 30, 2025.

Previous 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.

Current wording

The net result for the three months ended September 30, 2025 was a net gain of $2,675 or $0.0001 per Mentor common share compared to a net loss in the prior year period of ($157,215) or ($0.007) 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

Accrued revenue for the six months ended June 30, 2025 was $77,000 compared to $0 for the six months ended June 30, 2024 (“the prior year period”).

Current wording

Accrued and actual revenue for the nine months ended September 30, 2025 was $117,430 compared to $0 for the nine months ended September 30, 2024 (“the prior year period”).

Previous wording

Gross profit for the six months ended June 30, 2025 was $77,000 compared to $0 for the prior year period. The Company’s cost of goods sold for the six months ended June 30, 2025 were $0 and $0 for the prior year period.

Current wording

Gross profit for the nine months ended September 30, 2025 was $117,430 compared to $0 for the prior year period. The Company’s cost of goods sold for the nine months ended September 30, 2025 were $0 and $0 for the prior year period.

Previous 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.

Current wording

Our selling, general and administrative expenses, with the inclusion of severance taxes, for the nine months ended September 30, 2025 was $598,821 compared to $637,571 for the prior year period, a decrease of $38,750 or (6.08%). We experienced a $108,068 decrease in professional expenses, a $17,500 decrease in board of director fees, a $1,957 decrease in employee salary, benefits, and payroll taxes, and a $552 decrease in depreciation expense offset by a $69,003 increase in amortization expense, a $6,064 increase in severance taxes, a $9,185 increase in officer salary, benefits, and payroll taxes, a $4,164 increase in administrative expenses, a $619 increase in travel related expenses, a $205 increase in insurance expense, and a $87 increase in advertising expenses resulting in a decrease in other selling, general and administrative expenses of (6.08%), for the nine months ended September 30, 2025 as compared to the prior year period.

Previous wording

Other income and expense, net, totaled ($96,269) for the six months ended June 30, 2025 compared to ($131,062) for the prior year period, a decrease of $34,793 or 26.55%. The decrease is due to a $250,208 decrease in loss on investment in account receivable, a $24,040 increase in unrealized gain on investment in gold, and a $5,156 increase in unrealized gain on investment in securities offset by a $185,147 increase in loss on sale of investments plus a $59,465 decrease in interest income for the six months ended June 30, 2025.

Current wording

Other income and expense, net, totaled $67,089 for the nine months ended September 30, 2025 compared to ($133,997) for the prior year period, an increase of $201,086 or (150.07%). The increase is due to a $250,208 loss on investment in account receivable, a $95,982 increase in unrealized gain on investment in gold, and a $135,239 increase in unrealized gain on investment in securities offset by a $185,147 loss on sale of investments plus a $95,196 decrease in interest income for the nine months ended September 30, 2025.

Previous wording

The net result for the six months ended June 30, 2025 was a net loss of ($421,420) or ($0.019) per Mentor common share compared to a net loss in the prior year period of ($629,681) or ($0.026) 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 nine months ended September 30, 2025 was a net loss of ($418,745) or ($0.019) per Mentor common share compared to a net loss in the prior year period of ($786,897) or ($0.033) 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 June 30, 2025 we had cash and cash equivalents of $713,424 and working capital of $1,509,018.

Current wording

Since our reorganization, we have raised capital through warrant holder exercise of warrants to purchase shares of Common Stock. At September 30, 2025 we had cash and cash equivalents of $109,914 and working capital of $1,549,892.

Previous 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.

Current wording

Operating cash outflows in the nine months ended September 30, 2025 was ($397,876), including ($418,745) of net loss, increased by non-cash depreciation and amortization of $255, and non-cash accumulated amortization of royalty interests of $69,003, increased by loss on investments at fair value of $69,833, offset by unrealized gain on an investment position in gold at fair value of ($95,982), royalty income receivable of ($38,456), prepaid expenses and other assets of ($7,127), accounts payable of $12,459, accrued expenses of ($3,011), and accrued salary, retirement and benefits to related party of $13,895.

Previous 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.

Current wording

Cash outflows from investing activities in the nine months ended September 30, 2025 were ($1,674,331) which included $835,209 proceeds from investment in securities sold, offset by ($614,830) purchase of investment securities, ($516,346) purchase of a gold position, ($1,369,899) purchase of three separate royalty interests in the Permian Basin, and ($8,465) purchases of property and equipment.

Previous wording

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

Current wording

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

Previous 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.

Current wording

For the nine months ended September 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.