Quarterly Report for Quarter Ending June 30, 2026 (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 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.

Corporate Background

The Company's common stock trades publicly under the trading symbol OTCQB: 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 is opportunistic and maintains diverse operating and 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 and is utilizing gold as a placeholder until new energy investments are arranged.

Acquisitions and investments

Mentor Capital, Inc.

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.

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:

	○	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.
	○	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.
	○	On 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. See Note 8.

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. See Note 9.

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. MCIP is a wholly-owned subsidiary of the Company that could facilitate future mergers and acquisitions.

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 June 30, 2026 and December 31, 2025, the SAFE Purchase Amount was $93,756.

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.

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 $2,539,591 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.

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. Partner II is a wholly-owned subsidiary of the Company that could facilitate future mergers and acquisitions.

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 modification agreement performance obligations related to installment payments the Company receives from a non-affiliated party. TWG is a wholly-owned subsidiary of the Company that could facilitate future mergers and acquisitions.

Waste Consolidators, Inc.

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 aligned 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.

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 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.

Business Approach

The Company's primary aim has been 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. The Company is moving further to integrate commodities and precious metals trading into this mix. 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.

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.

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 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.

Results of Operations

Three Months Ended June 30, 2026, compared to Three Months Ended June 30, 2025

Revenues

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").

Gross profit

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.

Selling, general and administrative expenses

Our selling, general and administrative expenses for the three months ended June 30, 2026 were $197,439 compared to $201,733 for the prior year period, a decrease of ($7,558) or (3.75%). We experienced a $4,375 increase in board of directors fees, a $3,264 increase in severance taxes, a $1,371 increase in depreciation expense, a $429 increase in professional fees, a $102 increase in insurance expense, a $39 increase in employee salary and benefits, and a $33 increase in advertising expense, offset by a ($11,741) decrease in officer salary and benefits, a ($1,126) decrease in travel related expenses, and a ($1,040) decrease in administrative fees, resulting in a decrease in other selling, general and administrative expenses of (3.75%), for the three months ended June 30, 2026 as compared to the prior year period.

Other income (expense)

Other income (expense), net, totaled ($70,486) for the three months ended June 30, 2026, compared to ($106,969) for the prior year period, a decrease of $36,483 or (34.11%). The decrease is due to a $49,886 increase in gain on the sale of investment in gold, a $116 increase in gain on the sale of investment in futures, and a $61 increase in interest income, offset by a ($120,549) decrease in unrealized gain (loss) on investment in securities for the three months ended June 30, 2026.

Net results

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.

Six Months Ended June 30, 2026, compared to Six Months Ended June 30, 2025

Revenues

Accrued revenue for the six months ended June 30, 2026 was $108,363 compared to $77,000 for the six months ended June 30, 2025 ("the prior year period").

Gross profit

Gross profit for the six months ended June 30, 2026 was $108,363 compared to $77,000 for the prior year period. The Company's cost of goods sold for the six months ended June 30, 2026 were $0 and $0 for the prior year period.

Selling, general and administrative expenses

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 annual ad 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.

Other income and expense

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.

Net results

The net result for the six months ended June 30, 2026 was a net loss of ($375,454) or ($0.016) per Mentor common share compared to a net loss in the prior year period of ($445,460) or ($0.021) 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. As of June 30, 2026, we had cash and cash equivalents of $47,693 and working capital of $1,113,162.

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).

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).

Net cash outflows from financing activities for the six months ended June 30, 2026 were $0.

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.

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 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.

Disclosure About Off-Balance Sheet Arrangements

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