Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

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.

Corporate Background

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

The Company was originally founded as an investment partnership in Silicon Valley, by the current CEO in 1985. The partnership acquired a salsa factory, bakery, trucking company, tortilla chip plant, and an athletic club chain. The former investment partnership was incorporated under the laws of the State of California on July 29, 1994 and on September 12, 1996, the Company's offering statement was qualified under Regulation A of the Securities Act of 1933 and began to trade its shares publicly. The Company relocated to San Diego, California, and contracted to provide financial assistance and investment in small businesses. On September 24, 2015, the Company redomiciled from California to Delaware by merging the California Mentor Capital, Inc. corporation into a newly formed Delaware entity, Mentor Capital, Inc. Following the merger, the Company is governed under the laws of the State of Delaware. In September 2020, Mentor relocated its corporate office from San Diego, California, to Plano, Texas.

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.

Acquisitions and investments

Discontinued Operation - Facilities Operations Segment

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.

Mentor Capital, Inc.

The Company's target industry focus includes the classic energy sectors of oil, gas, coal, uranium, and related ventures. Additionally, the Company has residual investments in legal dispute resolution services, 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.

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 as follows:

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On March 20, 2025, Mentor Capital, Inc. purchased an average of 0.0332439% oil and gas royalty interests in seven (7) producing horizontal wells and a royalty interest of approximately 0.15625% in two (2) non-producing mineral wells located in the Permian Basin situated in Howard County, Texas from Bluestem Royalty Partners, LP, a Texas limited partnership, for a total acquisition cost of $60,980. Prior to the Company's purchase, average daily production in the last six months was approximately 5,252 BBLs and 5,580 MCF. Transfer of title to oil, gas, and mineral royalty interests and other interests in the name of Mentor Capital, Inc. was recorded on April 3, 2025 in Howard County, Texas by a certain Mineral and Royalty Deed effective March 1, 2025. Therefore, royalty payments owed to the Company commenced and were recognized as of March 1, 2025.

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On March 25, 2025, Mentor Capital, Inc. purchased an overriding royalty interest of approximately 0.06% in seventy-one (71) producing oil and gas wells in a nearly 3.5 square mile pooled horizontal drilling project located in the Permian Basin situated in Martin County, Texas from Gatorex Holdings, LLC, a Texas limited liability company, for a total acquisition cost of $720,690. Prior to the Company's purchase, average daily production in the last six months was approximately 16,572 BBLs and 37,496 MCF. Transfer of title to overriding royalty interests together with all interests in any units, bonuses, rents, royalties, and other benefits which may accrue in the name of Mentor Capital, Inc. was recorded on April 9, 2025 in Martin County, Texas by a certain Assignment of Overriding Royalty Interests effective April 1, 2025. Royalty payments owed to the Company commenced and were recognized effective April 1, 2025.

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As of March 31, 2025, Mentor Capital, Inc. purchased royalty interests of approximately 0.050099% in forty-one (41) producing oil and gas wells in the Permian Basin situated in Martin County, Texas from Maven Royalty 2, LP, a Delaware limited partnership, for $588,229. Prior to the Company's purchase, average daily production in the last six months was approximately 15,734 BBLs and 20,645 MCF. Transfer of title to all oil, gas, and associated liquid or liquefiable hydrocarbons, including royalty, overriding royalty, unit interest and mineral interests of whatever nature, in, on, and under that may be produced from or attributable to the property including royalty interests in the name of Mentor Capital, Inc. was recorded on April 9, 2025 in Martin County, Texas by a certain Mineral and Royalty Deed effective April 1, 2025. Therefore, royalty payments owed to the Company commenced and were recognized on April 1, 2025.

The Company's three (3) fractional 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 of our royalty interests operating the wells will participate in and bear the costs of operation and development.

Royalty revenue was $40,430 and $0 for the three months ended September 30, 2025 and 2024, and $117,430 and $0 for the nine months ended September 30, 2025 and 2024, respectively.

Accrued royalty income and incurred severance taxes are estimated and recognized in the month oil is produced, when royalty income is earned. The difference between accrued royalty income and the amount received is adjusted when royalty payments are received.

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.

The Company anticipates incurring annual ad valorem tax liability for its royalty interests in Texas. This liability would be assessed according to value by the county assessor in the locality where our royalty interests are located, in accordance with local and state law. Ad valorem tax liability was $0 and $0 for the three months and nine months ended September 30, 2025, and 2024.

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.

Mentor IP, LLC (MCIP)

On April 18, 2016, the Company formed Mentor IP, LLC ("MCIP"), a South Dakota limited liability company and wholly owned subsidiary of Mentor, to hold interests related to patent rights. On October 24, 2023, the Company divested Mentor IP, LLC's intellectual property and licensing rights related to a certain United States and Canadian patent. The Company received no payment for its divestment. Patent application and maintenance fees have been expensed when paid and there were no assets related to the MCIP patents represented on the condensed consolidated financial statements at September 30, 2025 and December 31, 2024.

NeuCourt, Inc.

NeuCourt, Inc. ("NeuCourt") is a Delaware corporation that is developing a technology that is expected to be useful to the dispute resolution industry.

On July 15, 2022, the Company and NeuCourt entered into an Exchange Agreement whereby the Company's outstanding convertible promissory notes and accrued interest, in an aggregate net amount of $83,756, was exchanged for a Simple Agreement for Future Equity ("SAFE") in equal face value. On January 20, 2023, the Company and NeuCourt entered into a SAFE Purchase Agreement, increasing the Company's aggregate SAFE Purchase Amount to $93,756. At September 30, 2025 and December 31, 2024, the SAFE Purchase Amount was $93,756.

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 September 30, 2025.

G FarmaLabs Limited

On August 27, 2021, the Company and Mentor Partner I entered into a Settlement Agreement and Mutual Release with G FarmaLabs Limited, its affiliated entities, and guarantors ("G Farma Settlors") to resolve and settle all outstanding claims on an unpaid finance lease receivable and notes receivable of balances of $803,399 and $1,045,051, respectively, plus accrued interest ("Settlement Agreement"). On October 12, 2021, the parties filed a Stipulation for Dismissal and Continued Jurisdiction with the Superior Court of California in the County of Marin. The Court ordered that it retain jurisdiction over the parties under Section 664.6 of the California Code of Civil Procedure to enforce the Settlement Agreement until the performance in full of its terms is met.

In August 2022, September 2022, and October 2022, the G Farma Settlors failed to make monthly payments and failed to cure each default within 10 days' notice from the Company pursuant to the Settlement Agreement. As a result, $2,000,000 was added to the amount payable by the G Farma Settlors in accordance with the terms of the Settlement Agreement. The Company and Partner I sought entry of a stipulated judgment against the G Farma Settlors for (1) $494,450, the remaining amount of the $500,000 settlement amount, which has not yet been paid by the G Farma Settlors plus $2,000,000 and all accrued unpaid interest, (2) the Company's incurred costs, and (3) attorneys' fees paid by the Company to obtain the judgment.

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.

Mentor Partner I, LLC

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.

Mentor Partner II, LLC

Mentor Partner II, LLC ("Partner II") was reorganized under the laws of the State of Texas in February 2021. Partner II originally held the contractual rights to lease payments from Pueblo West, which was paid off by a final payment of $245,369 on September 28, 2022.

TWG, LLC

On October 4, 2022, the Company formed TWG, LLC ("TWG"), a Texas limited liability company, as a wholly owned subsidiary of Mentor in order to prepare to fulfill certain February 16, 2022 modification agreement performance obligations related to installment payments the Company receives from a non-affiliated party.

Ally Waste Services, LLC

On October 4, 2023, in connection with the sale of the Company's 51% ownership interest in WCI, the Company received a one-year unsecured, subordinated, promissory note in initial principal face amount of $1,000,000 from Ally Waste Services, LLC ("Ally") at 6% per annum. The $1,000,000 initial principal face amount of the note, plus accrued interest of $60,000, was paid by Ally on October 4, 2024.

Overview

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.

Business Approach

Mentor endeavors to maintain a low overhead operation in order to deliver a higher rate of return on capital to its common and preferred stockholders.

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.

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.

The Company continually works to identify potential acquisitions, investments, and divestitures. While evaluating whether an acquisition or divestiture may be in the best interests of the Company and its shareholders, no transaction will be announced until that transaction is certain.

Liquidity and Capital Resources

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.

Results of Operations

Three Months Ended September 30, 2025, compared to Three Months Ended September 30, 2024

Revenues

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").

Gross profit

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.

Selling, general and administrative expenses

Our selling, general and administrative expenses, with the inclusion of severance taxes, for the three months ended September 30, 2025 were $201,114 compared to $154,279 for the prior year period, an increase of $46,835 or 30%.

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.

Other income and expense

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.

Net results

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.

Nine Months Ended September 30, 2025, compared to Nine Months Ended September 30, 2024

Revenues

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").

Gross profit

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.

Selling, general and administrative expenses

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.

Other income and expense

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.

Net results

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.

Liquidity and Capital Resources

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.

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.

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.

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

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.

In addition, on February 9, 2015, in accordance with Section 1145 of the United States Bankruptcy Code and the Company's court-approved Plan of Reorganization, the Company announced a minimum 30-day partial redemption of up to 1% of the already outstanding Series D warrants to provide for the court specified redemption mechanism for warrants not exercised timely by the original holder or their estates. Company designees that applied during the 30 days paid 10 cents per warrant to redeem the warrant and then exercised the Series D warrant to purchase a share at the court-specified formula of not more than one-half of the closing bid price on the day preceding the 30-day exercise period. The periodic partial redemptions may continue to be recalculated and repeated until such unexercised warrants are exhausted or the partial redemption is otherwise temporarily paused, suspended, or truncated by the Company.

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.

Disclosure About Off-Balance Sheet Arrangements

We do not have any transactions, agreements, or other contractual arrangements that constitute off-balance sheet arrangements.