Changing Assets & Acquisitions

Over an eighteen month period, in four phases, Mentor Capital has and is rapidly changing its focus to attempt to maximize its investments in the cancer immunotherapy market by acquisitions and stock purchases.

In Phase I, prior to June 2009, Mentor Capital had receivables from operating assets of its consulting efforts and from ownership in Waste Consolidators, a $1.3 Million Phoenix trash related business, and minor S&P 500 related investments that have served as a cash reserve. These legacy operating assets are long-term holdings of Mentor Capital.

Phase II began July 8, 2009, with the right to buy 20% of Quantum Immunologics. The contract talked specifically of "possible merger of the parties" which would leave Mentor Capital as a much larger cancer immunotherapy operating entity. Mentor management would co-ordinate financing for a transition period and Quantum management would operate the company renamed Quantum Immunologics. A number of formal merger agreements were prepared and offered to Quantum and countered. Meetings were held in Florida, New York and California. An initial investment bank was consulted in New York and third party merger candidates were met with to discuss follow-on merger possibilities and management roles. A second New York investment bank was retained and a New York strategic adviser was retained. Meetings and follow-on meetings were held with Quantum, Mentor Capital, the Investment Bank and Adviser together and separately. During all discussions, the legacy operating assets were agreed to be sold or spun-off in some fashion at the time of a merger with the operating cancer immunotherapy company. Because the to-be-sold legacy operating assets were much smaller than the planned Quantum operating acquisition, under the plan they were immaterial to investors beyond their monetized value which was reported properly in posted financials but not emphasized in general discussion of cancer operations. In mid-December 2009 attempts at a friendly merger broke down.

Phase III was initiated in mid-December 2009, and Mentor focused both stock purchases of other cancer immunotherapy companies and a proxy battle for control of Quantum Immunologics. There is significant disagreement between Mentor Capital, and non-founder management on compensation, new insider stock, board composition and a lack of director elections at the annual shareholder meeting, among other things. A QI shareholder committee has also been formed that is collecting proxies. On April 29, 2010, Quantum Immunologics, CEO, Chuck Broes referred to a "hostile takeover" in a QI shareholder call. It is yet unknown if Mentor Capital will end up with a significant operating presence because of the proxy vote, court action or teaming with others. Regardless, Mentor Capital retains the legacy operating assets and has new cancer related investments. In mid-May 2010, the new cancer related and other securities amount to approximately 22% of total assets. 

Phase IV may be thought to begin if the proxy or court contest is unsuccessful. Preparation can be thought to overlap with Phase III. In preparation for other alternatives, Mentor Capital is in discussions to acquire additional consulting and financially oriented operating assets to assist in the completion of its mission to substantially advance a solution to cancer by efficient and effective financing of leading edge cancer companies. The investments in cancer companies may be in the form of acquisitions or stock purchase. Additionally, the legacy operating assets are a long-term holding of Mentor Capital and are still held.

As Mentor Capital advances to execute its financing of the cancer fight it will continue to be aware of regulatory trigger points as it engages in operating acquisitions and stock purchases. It is still unknown how a number of these factors will unfold . Mentor is currently in the middle of a large proxy and legal action that may effectively give it a large acquisition in the cancer immunotherapy sector. Mentor's current regulatory compliance plan is to wrap up the 2009 audit, complete a voluntary self - registration perhaps a year in advance of when one may be required and move off of the Pink Sheets.

Although it is premature to consider and is not being proposed, if additional filings are later projected to become necessary because of changes in the acquisition and stock purchase investment mix, Mentor Capital expects to likewise be pro-active in those filings and has initiated discussions with legal counsel to ensure Mentor Capital is fully compliant in advance of any potential future need.