Chairman's 2009 Recap with $0.91/sh Portfolio Gains

January 25, 2010

2009 has been a breakout year for Mentor Capital, Inc. (MNTR) in terms of financial results, stock gains and cancer fighting progress. 

Financially, on a mark-to-market basis our projected earnings per basic outstanding share for 2009 would be approximately 91 cents per share.  On a fully diluted basis, our mark-to-market earnings would be approximately 29 cents per average share equivalent for the year.  The majority of our mark-to-market gains are in appreciation in our bio-tech stock holdings.  On a GAAP basis these gains will not be recognized until later.  Not counting our portfolio gains, the GAAP earnings per basic share, on a more precise but still not audited basis, would be an 18 cent loss, generally reflecting our operating expenses.  The mark-to-market numbers are what management uses to judge our progress and the GAAP earnings are much more precise, but still subject to adjustment at audit. Importantly, Mentor Capital has the minimal operating expenses typical of a headquarters operation.  That limits our financial risk which is mostly carried by the portfolio companies.  Also, Mentor Capital has and typically maintains cash or access to cash to sustain approximately one year of operation. 

2009 really started for MNTR on July 10, 2009 when we announced taking on our first major position in the cancer immunotherapy sector.  Since that time, the larger bio-tech sector has had a good year and the average of three major bio-tech Indexes has been appreciating at a 52% annualized rate. Doing better yet during that same time period, MNTR's equally weighted Cancer Immunotherapy Index has been appreciating at a 99% annualized rate. By investing in the best companies from this pool that is growing at 99%, MNTR hopes to appreciate at a greater rate yet than that already high average annualized growth.  Mentor Capital has already established a Cancer Immunotherapy Index Fund to channel its investments through and has taken an initial position in all 10 index companies.  MNTR's primary work will now be to ensure the appreciation in the actively managed CII Fund beats the return in the equally weighted unmanaged CI Index.  MNTR will attempt to get a higher return by picking the winners. The approximate 91 cent per basic share non-GAAP portfolio gain (125% annualized) indicates that the potential for such a Fund gain in excess of the Index (99% annualized) is possible.  

All this is underpinned by the solid advances in our Cancer Immunotherapy portfolio companies.  As warrant proceeds are collected from the shareholder exercise of MNTR warrants those monies are passed to the CII Fund so that the Fund may efficiently buy portfolio shares for us and officially track our performance.   Because MNTR management has in depth knowledge in the cancer immunotherapy space we do not have to wait until FDA approval is announced.  Rather, we can independently evaluate the medical science and significantly invest in the cancer fighting winners.  If the public later is assured by positive FDA results of the portfolio company promise, our early investment may profit handsomely. 

Some of the advances and breakthroughs in the portfolio companies are breathtaking.  We are careful to cover the identities and exact procedures of the companies so they do not become crosswise with the FDA.  However, taken together, the portfolio has cancer solutions that, in our medical science analysis, might start with simple benign injections into tumors that kill the cancer cells but not healthy tissue, followed by a vaccine that attacks any cancer that may have metastasized, and capped by a final treatment that prevents the reseeding of the cancer at a later date.  The success on even late or terminal stage cancers is extraordinary and no radiation, surgeries or chemotherapy are part of these regimes. 

As a life-long science fellow, it is unbelievably rewarding to discuss the leading edge medicines and molecular science that are being explored in this advanced cancer fight.  Much of the Billions in dollars that have been spent in trying to find a cancer cure are in essence distilled down to the handful of leading companies we will help bring across the finish line.  2009 has certainly been a very good start. 

Best in Good Health, 

Chet Billingsley, CEO
Mentor Capital, Inc.  (MNTR)
(760) 788 - 4700