Mentor Capital, Inc.

Previous wording

The following discussion will assist in the understanding of our financial position at March 31, 2026 and the results of operations for the three months ended March 31, 2026 and 2025. 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, 2026 and 2025 and our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

The following discussion will assist in the understanding of our financial position at June 30, 2026 and the results of operations for the three and six months ended June 30, 2026 and 2025. 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 six months ended June 30, 2026 and 2025 and our Annual Report on Form 10-K for the year ended December 31, 2025.

Previous wording

The Company’s target industry focus includes the classic energy sectors of oil, gas, coal, uranium, and related ventures, with gold investment first serving as a placeholder while new energy positions are arranged. Although the energy sector declined, the gold investment did extraordinarily well. As a result, the Company progressively shifted to emphasize gold investment for profit and has begun to shift toward precious metals-oriented trading as a more profitable approach, including bullion, securities, and futures. Additionally, the Company has residual investments in an alternative dispute resolution platform, collecting on an annuity-like financing, and the collection of a judgment that it intends to continue to pursue. In 2023, the Company initially signaled a substantial return to its energy roots, starting with a tracking investment in New York Stock Exchange energy companies in the oil and gas, coal, and uranium industries.

Current wording

The Company’s target industry focus includes the classic energy sectors of oil, gas, coal, uranium, and related ventures, with gold investment first serving as a placeholder while new energy positions are arranged. Although the energy sector declined, the gold investment did well. As a result, the Company progressively shifted to emphasize gold investment for profit and has begun to shift toward precious metals-oriented trading as a more profitable approach, including bullion, securities, and futures. Additionally, the Company has residual investments in an alternative dispute resolution platform, collecting on an annuity-like financing, and the collection of a judgment that it intends to continue to pursue. In 2023, the Company initially signaled a substantial return to its energy roots, starting with a tracking investment in New York Stock Exchange energy companies in the oil and gas, coal, and uranium industries.

Previous wording

On December 21, 2018, the Company purchased 500,000 shares of NeuCourt Common Stock, approximately 6.13% of the issued and outstanding NeuCourt shares at March 31, 2026.

Current wording

On December 21, 2018, the Company purchased 500,000 shares of NeuCourt Common Stock, which is approximately 6.13% of the issued and outstanding NeuCourt shares at June 30, 2026.

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 $691,605 at March 31, 2026 in favor of the Company and Partner I. Partner I is a wholly-owned subsidiary of the Company that could facilitate future mergers and acquisitions.

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 $2,539,591 judgment receivable plus interest receivable of $754,921 at June 30, 2026 in favor of the Company and Partner I. Partner I is a wholly-owned subsidiary of the Company that could facilitate future mergers and acquisitions.

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. 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. The Company is expanding its involvement in the trading of commodities.

Current 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. 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

The Company’s future success is dependent upon its ability to make a return on its acquisitions and investments to generate positive cash flow and to obtain sufficient capital from non-portfolio-related sources. The Company currently has enough cash to effectuate its business plans for the next four years. Management believes they can raise additional funds to support their business plan and develop a successful operating company.

Current wording

The Company’s future success is dependent upon its ability to make a return on its acquisitions and investments to generate positive cash flow and to obtain sufficient capital from non-portfolio-related sources. The Company currently has enough cash to effectuate its business plans for the next three years. Management believes they can raise additional funds to support their business plan and develop a successful operating company.

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 then commenced on April 1, 2025. Accrued revenue for the three months ended March 31, 2026 was $23,600 compared to $2,000 for the three months ended March 31, 2025 (“the prior year period”).

Current wording

Accrued revenue for the three months ended June 30, 2026 was $65,595 compared to $75,000 for the three months ended June 30, 2025 (“the prior year period”).

Previous wording

Gross profit for the three months ended March 31, 2026 was $42,767 compared to $2,000 for the prior year period. The Company’s cost of goods sold for the three months ended March 31, 2026 were $0 and $0 for the prior year period.

Current wording

Gross profit for the three months ended June 30, 2026 was $65,595 compared to $75,000 for the prior year period. The Company’s cost of goods sold for the three months ended June 30, 2026 were $0 and $0 for the prior year period.

Previous wording

The net result for the three months ended March 31, 2026 was a net loss attributable to Mentor of ($173,124) or ($0.008) per Mentor common share compared to a net loss attributable to Mentor in the prior year period of ($211,758) or ($0.010) 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, 2026 was a net loss attributable to Mentor of ($202,330) or ($0.008) per Mentor common share compared to a net loss attributable to Mentor in the prior year period of ($233,702) or ($0.011) 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

Our selling, general and administrative expenses, including severance andad valorem taxes, for the three months ended March 31, 2026 was $303,149 compared to $195,975 for the prior year period, an increase of $107,174. We experienced a $45,112 increase in officer salary and benefits, a $33,739 increase in accumulated amortization expense, a $9,487 increase in employee salary and benefits, a $8,750 increase in board of directors fees, a $4,750 increase in annualad valorem taxes, a $3,304 increase in professional fees, a $2,085 increase in severance taxes, a $763 increase in depreciation expense, a $102 increase in insurance expense, and a $57 increase in advertising expense, offset a ($895) decrease in administrative fees, anda ($80) decrease in travel related expenses resulting in an increase in other selling, general and administrative expenses of 54.69%, for the three months ended March 31, 2026 as compared to the prior year period.

Current wording

Our selling, general and administrative expenses for the six months ended June 30, 2026 were $500,588 compared to $397,708 for the prior year period, an increase of $102,879 or 25.87%. We experienced a $33,739 increase in amortization of oil and gas royalty interests, a $33,371 increase in officer salary and benefits, a $13,125 increase in board of directors fees, a $9,526 increase in employee salary and benefits, a $5,348 increase in severance taxes, a $4,750 increase in annualad valorem taxes, a $3,733 increase in professional fees, a $2,134 increase in depreciation expense, a $204 increase in insurance expense, and a $91 increase in advertising expense, offset by a ($1,935) decrease in administrative expenses, and a ($1,206) decrease in travel related expenses, resulting in an increase in other selling, general and administrative expenses of 25.87%, for the six months ended June 30, 2026, as compared to the prior year period.

Previous wording

Other income (expense), net, totaled $91,692 for the three months ended March 31, 2026, compared to ($13,340) for the prior year period, an increase of $105,033 or (787.35%). The increase is due to a $104,944 increase in unrealized gain on investment in securities, a $20,414 increase in other income from a class action settlement payment in re:Electronic Servitor Publication Network Inc. v. BF Borgers and a $9,193 increase in gain on sale of investments, offset by a decrease in ($29,519) decrease in interest income for the three months ended March 31, 2026.

Current wording

Other income and expense, net, totaled $21,205 for the six months ended June 30, 2026 compared to ($120,309) for the prior year period, an increase of $141,514 or (117.63%). The increase is due to a $49,886 increase in gain on the sale of investment in gold, a $18,740 increase in gain on sale of investment in securities, a $20,413 increase in other income from a class action settlement payment in re:Electronic Servitor Publication Network Inc. v. BF Borgers, a $193 increase in interest income, and a $116 increase in gain on the sale of investment in futures offset by a ($68,143) decrease in unrealized gain (loss) on investment in securities for the six months ended June 30, 2026.

Previous wording

Since our reorganization, we have raised capital through warrant holder exercise of warrants to purchase shares of Common Stock. As of March 31, 2026, we had cash and cash equivalents of $60,834 and working capital of $1,322,644.

Current wording

Since our reorganization, we have raised capital through warrant holder exercise of warrants to purchase shares of Common Stock. As of June 30, 2026, we had cash and cash equivalents of $47,693 and working capital of $1,113,162.

Previous wording

Operating cash outflows in the three months ended March 31, 2026 was ($130,038), including ($173,124) of net loss, plus a realized and unrealized loss on investment in securities at fair value of ($71,146), prepaid expenses and other assets of ($11,921), and accrued expenses of ($1,734), offset by an increase in accounts payable of $69,589, non-cash accumulated amortization of royalty interests of $34,247, accrued salary, retirement and benefits to related party of $20,803, royalty income receivable of $2,400, and non-cash depreciation and amortization of $848.

Current wording

Operating cash outflows in the six months ended June 30, 2026 was ($287,512), including ($375,454) of net loss, accounts payable of $69,589, non-cash accumulated amortization of royalty interests of $68,495, realized and unrealized loss on investment in securities at fair value of $49,404, accrued salary, retirement and benefits to related party of $22,838, accounts payable of $5,885, accrued expenses of $3,327, plus non-cash depreciation and amortization of $2,303 offset by an increase in realized gain on sale of investment of gold of ($49,886), royalty income receivable of ($8,582), prepaid expenses and other current assets of ($5,726), plus realized gain on sale of investment in futures of ($116).

Previous wording

Cash outflows from investing activities in the three months ended March 31, 2026, were $141,679, which consisted of $141,679 proceeds from investment in securities sold.

Current wording

Cash outflows from investing activities in the six months ended June 30, 2026, were $286,012, which consisted of $148,329 proceeds from investment in gold sold, $141,679 proceeds from investment in securities sold, plus $116 proceeds from investment in futures sold, offset by purchases of property and equipment of ($4,112).

Previous wording

Net cash outflows from financing activities for the three months ended March 31, 2026 were $0.

Current wording

Net cash outflows from financing activities for the six months ended June 30, 2026 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. We believe our existing available resources and opportunities are sufficient to satisfy our funding requirements for four years. Internal sources of liquidity include our ability to immediately convert to cash some or all of our investment in securities valued at $808,675 at March 31, 2026, and our ability to immediately convert to cash our investment in gold held at cost at a carrying value of $516,346 and estimated at fair value based on quoted market prices at $763,714 as of March 31, 2026. External liquidity sources include royalty revenue from our oil and gas royalty interests in the Permian Basin valued at $1,232,401 at March 31, 2026. Material unused sources of liquid assets are the potential sale of our oil and gas royalty interests held in the Permian Basin.

Current wording

We will seek to raise additional funds through financing, additional collaborative relationships, or other arrangements to increase revenues to support positive cash flow. We believe our existing available resources and opportunities are sufficient to satisfy our funding requirements for three years. Internal sources of liquidity include our ability to immediately convert to cash some or all of our investment in securities valued at $688,125 at June 30, 2026, and our ability to immediately convert to cash our investment in gold held at cost at a carrying value of $417,903 with an estimated fair value based on quoted market prices of $506,686 as of June 30, 2026. External liquidity sources include royalty revenue from our oil and gas royalty interests in the Permian Basin valued at $1,198,153 at June 30, 2026. Material unused sources of liquid assets are the potential sale of our oil and gas royalty interests held in the Permian Basin.

Previous wording

For the three months ended March 31, 2026, there were no redemptions of Series D Warrants. There were no redemptions of Series D Warrants in 2025. 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, 2026, there were no redemptions of Series D Warrants. There were no redemptions of Series D Warrants in 2025. We believe that if warrants are redeemed and exercised, partial warrant redemptions will provide additional monthly cash for monthly operations.