Financial Analysis

Note 17 Commitments and contingencies As of December 31, 2025, and 2024, the Company had certain commitments and contingencies related to collections. Chief among these are legal expenses and costs that may be associated with opportunistic collections, such as the collection of a $ 180,000 receivable that the Company is pursuing in the Superior Court of California, County of Fresno, in an interpleader action. Management estimates that the ratio of committed estimated legal fees to expected recovery may be about ten percent. Such is not expected to be material enough to report on and will not be certain until the Company makes a business judgment on legal involvement, as it continues to monitor the potential for collection feasibility. The Company is also monitoring the potential of its collection on a $ 2,539,597 Judgment plus $ 628,985 interest from the G Farma Settlors. Managements approach toward collection from the G Farma Settlors is similar, though of larger magnitude, but with a smaller probability. Due to the uncertainty of collection, the receivable is fully impaired, and the Judgment is fully reserved. See Notes 5, 8, and 9. Mentor Capital, Inc. Notes to Consolidated Financial Statements December 31, 2025 and 2024 …

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Note 7 Convertible notes receivable converted into SAFEs Prior to 2024, the Company exchanged two convertible notes purchased at cost for a Simple Agreement For Future Equity (SAFE) pursuant to a July 15, 2022, convertible note exchange agreement for SAFE Purchase Agreement between NeuCourt, Inc. (NeuCourt) and the Company. The SAFEs were converted at cost, based on the original dollar amount the Company paid, at an aggregate face amount of $ 86,030 (the Purchase Amount). Thereafter, the Company sold $ 2,247 of the SAFE Purchase amount to a third party, and on January 20, 2023, the Company and NeuCourt entered into a $ 10,000 SAFE Purchase Agreement under the same terms as the July 15, 2022, SAFE Purchase Agreement, which resulted in the Companys aggregate SAFE Purchase Amount totaling $ 93,756 . Mentor Capital, Inc. Notes to Consolidated Financial Statements December 31, 2025 and 2024 The valuation cap of the SAFE is $ 3,000,000 (Valuation Cap), and the discount rate is 75 % (Discount Rate). If, prior to termination, conversion, or expiration of the SAFE, NeuCourt sells a series of preferred stock (Equity Preferred Stock) to investors in an equity financing raising not less than $ 500,000 , Mentors SAFE shall be converted into shares equal to the Purchase Amount divided by the lesser of (x) the price per share of the Equity Preferred Stock multiplied by the Discount Rate and (y) the price per share equal to the Valuation Cap divided by the number of outstanding shares of Neu …

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Note 12 Common Stock warrants As of December 31, 2025 and 2024, there were 4,250,000 Series D warrants outstanding with an exercise price of $ 0.02 per share plus a $ 0.10 per warrant redemption fee, if applicable. Mentor Capital, Inc. Notes to Consolidated Financial Statements December 31, 2025 and 2024 If the called warrants are not exercised, the Company has the right to designate the warrants to a new holder in return for a $ 0.10 per share redemption fee payable to the original warrant holders. All such changes in the exercise price of warrants were provided for by the court in the Plan of Reorganization to provide a mechanism for all debtors to receive value even if they could not or did not exercise their warrants. The Series D warrants expire on May 11, 2038. As of December 31, 2025 and 2024, there were 413,512 Series H ($ 7 ) warrants outstanding. The warrants are subject to cashless exercise based upon the ten-day trailing closing bid price preceding the exercise as interpreted by the Company. The Series H warrants expire on November 8, 2039. As of December 31, 2025, and 2024, the weighted average contractual life for all Mentor warrants was 12.5 years and 13.5 years, respectively, and the weighted average outstanding warrant exercise price was $ 0.64 and $ 0.64 per share, respectively. During the years ended December 31, 2025 and 2024, 0 and 0 Mentor warrants were exercised, and no warrants were issued. The intrinsic value of outstanding warrants at December 31, 20 …

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Note 19 Income tax The Company operates solely within the United States and is subject to U.S. federal income tax, and franchise tax in Delaware and Texas. Schedule of loss before income tax 2025 2024 Components of loss before income tax consists of the following: Domestic $ (574,119 ) $ (824,176 ) Foreign - - Loss before income tax $ (574,119 ) $ (824,176 ) Income tax benefit for the years ended December 31, 2025 and 2024 consists of the following: Schedule of components of income tax expense (benefit) 2025 2024 Current taxes from continuing operations: Federal $ - $ - State 4,442 15,329 Total current expense 4,442 15,329 Deferred tax asset: Federal 138,400 98,300 State of California - (156,600 ) Change in valuation (138,400 ) 58,300 Total provision (benefit) $ 4,442 $ 15,329 During the fiscal year ended December 31, 2025, the Company adopted ASU 2023-09 to enhance the disclosures regarding income taxes paid and the rate reconciliation disclosure. The income taxes paid by the Company are as follows for the years ended December 31, 2025 and 2024: Schedule of Income Tax Paid and Rate Reconciliation Disclosure 2025 2024 Federal $ - $ - State Franchise Texas 4,442 10,079 Delaware - 5,250 Total income tax $ 4,442 $ 15,329 The Company has net deferred tax assets resulting from a timing difference in recognition of unrealized losses and from net operating loss carryforwards. At December 31, 2025, the Company had approximately $ 7,300,000 of federal net operating loss carryforwards, …

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Recent Accounting Standards From time to time, the Financial Standards Accounting Board (FASB), or other standards-setting bodies, issue new accounting pronouncements. Updates to the FASB Accounting Standard Codifications (ASCs) are communicated through the issuance of an Accounting Standards Update (ASU). Unless otherwise discussed, we believe that the impact of recently issued guidance, whether adopted or to be adopted in the future, is not expected to have a material impact on our consolidated financial statements upon adoption. Mentor Capital, Inc. Notes to Consolidated Financial Statements December 31, 2025 and 2024 Accounting pronouncements recently adopted Income Taxes: Improvements to Income Tax Disclosures - In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures , which updates ASC 740 to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. We adopted ASU 2023-09 in fiscal year 2025. Accounting pronouncements to be adopted Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses - In November 2024, the FASB issued ASU 2024-03 Income Statement: Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40) which adds ASC 220-40 to expand disclosure requirements related …

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Note 16 Related party transactions Between April 29, 2025 and December 31, 2025, our Chief Executive Officer, Chet Billingsley, purchased 1,030,000 shares of the Companys common stock on the open market at an average price of $ 0.074 per share. Such share purchases are reported on Form 4s filed with the Securities and Exchange Commission within two business days of the transaction date in accordance with Section 16(a) of the Securities and Exchange Act of 1934. Subsequent to the year-end on January 12, 2026, our Chief Executive Officer, Chet Billingsley, purchased 11 Series Q Convertible Preferred Shares of the Company from a third party in a private transaction for a total of $ 204,488 at $ 18,590 per share. Subsequent to the year-end, effective April 3, 2026, such 11 Series Q Convertible Preferred Shares were elected to be converted into 5,906,107 shares of the Companys Common Stock at the Series Q Conversion Value of $ 347,279 at a Common Stock conversion price of $ 0.0588 per Common Share. The purchase and conversion were reported on Form 4s filed with the Securities and Exchange Commission within two business days of the transaction date in accordance with Section 16(a) of the Securities and Exchange Act of 1934. See Note 21. Subsequent to year-end, between January 1, 2026, and April 10, 2026, our Chief Executive Officer, Chet Billingsley, purchased an additional 49,000 shares of the Companys common stock on the open market at an average price of $ 0.082 per share. Such …

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Note 18 Segment information The Company is an operating, acquisition, and investment business. Subsidiaries in which the Company has a controlling financial interest are consolidated. The Company generally has two reportable segments. The first reportable segment is its classic energy segment, which consists of the Companys operations and investment in the classic energy space, including its oil and gas royalty interests. The classic energy segment includes the fair value of securities investments in (i) oil and gas through Exxon Mobil Corp. (XOM) stock, Occidental Petroleum Corp. (OXY) stock, and Chevron Corp. (CVX) stock, (ii) uranium through Cameco Corp. (CCJ) stock, and (iii) coal through Core Natural Resources, Inc. (CNR) stock, plus the Companys March 2025 acquisition of 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 for total consideration of $ 1,369,899 . The Companys primary aim for its classic energy segment 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. The second reportable segment consists of the Companys historic residual operations, which include the fully impaired settlement payments receivable from G Farma and its co-defendants in the amount of $ 2,539, …

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Note 2 - Summary of significant accounting policies Revision of previously issued financial statements (unaudited) During the preparation of the Companys consolidated financial statements for the year ended December 31, 2025, management identified an error (i.e. valuing gold at fair market value, rather than cost) related to the valuation method used for its investment position in gold that affected certain previously issued interim unaudited financial statements included in the Companys quarterly reports on Form 10-Q for the periods ended March 31, 2025, June 30, 2025 and September 30, 2025. The error did not affect any previously issued audited annual financial statements because the Company did not hold an investment position in gold prior to March 17, 2025. The Company evaluated the materiality of the error in accordance with the guidance in ASC 250, Accounting Changes and Error Corrections, and Staff Accounting Bulletin No. 99, Materiality , and concluded that the impacts were not material, individually or in the aggregate, to our previously issued Consolidated Financial Statements for any of the prior quarters in which they occurred for the periods ended for the periods ended March 31, 2025, June 30, 2025 and September 30, 2025, but that correcting the error in the current period would be material to our results of operations for fiscal year 2025 if it was not corrected. Accordingly, the Company has corrected the error by revising the prior period financial information. …

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Note 14 Stockholders equity Common Stock The Company was incorporated in California in 1994 and was redomiciled as a Delaware corporation, effective September 24, 2015. There are 75,000,000 authorized shares of Common Stock at $ 0.0001 par value. The holders of Common Stock are entitled to one vote per share on all matters submitted to a vote of the stockholders. Issuer Purchases of Equity Securities On October 14, 2023, the Board of Directors of the Company approved an additional stock repurchase plan authorizing the Company to repurchase up to 3,000,000 shares of the Companys common stock (approximately 12 % of the Companys common shares outstanding at that time) at a total repurchase amount not to exceed $ 200,000 . During the period January 1, 2024 through December 31, 2024 a total of 3,000,000 shares were repurchased and effectively retired. The total stock repurchase amount, including commissions and fees, was $ 183,993 . For the twelve months ended December 31, 2025, no shares of the Companys common stock were repurchased, and no authorized repurchase plan was in effect. Mentor Capital, Inc. Notes to Consolidated Financial Statements December 31, 2025 and 2024 Preferred Stock Mentor has 5,000,000 preferred shares authorized at a $ 0.0001 par value. The Company filed a Certificate of Designation of Rights, Preferences, Privileges and Restrictions of Series Q Preferred Stock (Certificate of Designation) with the Delaware Secretary of State to designate 200,000 preferred …

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Note 21 Subsequent events Management evaluated subsequent events through the date these financial statements were issued and concluded that no events subsequent to December 31, 2025 have occurred that would require recognition or disclosure, except as noted below. Subsequent to the year-end on January 12, 2026, our Chief Executive Officer, Chet Billingsley, purchased 11 Series Q Convertible Preferred Shares of the Company from a third party in a private transaction for a total of $ 204,488 at $ 18,590 per share. Subsequent to the year-end, effective April 3, 2026, such 11 Series Q Convertible Preferred Shares were elected to be converted into 5,906,107 shares of the Companys Common Stock at the Series Q Conversion Value of $ 347,279 at a Common Stock conversion price of $ 0.0588 per Common Share. The purchase and conversion were reported on Form 4s filed with the Securities and Exchange Commission within two business days of the transaction date in accordance with Section 16(a) of the Securities and Exchange Act of 1934. Subsequent to year-end, between January 1, 2026, and April 10, 2026, our Chief Executive Officer, Chet Billingsley, purchased an additional 49,000 shares of the Companys common stock on the open market at an average price of $ 0.082 per share. Such share purchases are reported on Form 4s filed with the Securities and Exchange Commission within two business days of the transaction date in accordance with Section 16(a) of the Securities and Exchange Act of 1934 …

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