Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited financial statements and related notes included in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto as of and for the year ended December 31, 2025 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on March 31, 2026.

Cautionary Statement

This Management's Discussion and Analysis includes a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like "believe," "expect," "plan," "estimate," "anticipate," "intend," "project," "will," "predicts," "seeks," "may," "would," "could," "potential," "continue," "ongoing," "should" and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this Form 10-Q. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or from our predictions, including those risks described in our Annual Report on Form 10-K, this Form 10-Q and in our other public filings. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise.

Overview

CKX Lands, Inc., a Louisiana corporation, began operations in 1930 under the name Calcasieu Real Estate & Oil Co., Inc. It was originally organized as a spin-off by a bank operating in southwest Louisiana. The purpose of the spin-off was to form an entity to hold non-producing mineral interests which regulatory authorities required the bank to charge off. Over the years, as some of the mineral interests began producing, the Company used part of the proceeds to acquire land. In 1990, the Company made its largest acquisition when it was one of four purchasers who bought a fifty percent undivided interest in approximately 35,575 acres in southwest Louisiana.

Today the Company's income is derived from mineral royalties, timber sales and surface payments from its lands. CKX receives income from royalty interests and mineral leases related to oil and gas production, timber sales, land sales and surface rents. Although CKX is active in the management of its land and planting and harvesting its timber, CKX is passive in the production of income from oil and gas production in that CKX does not explore for oil and gas or operate wells. These oil and gas activities are performed by unrelated third parties.

CKX leases its property to oil and gas operators and collects income through its land ownership in the form of oil and gas royalties and lease rentals and geophysical revenues. The Company's oil and gas income fluctuates as new oil and gas production is discovered on Company land and then ultimately depletes or becomes commercially uneconomical to produce. The volatility in the daily commodity pricing of a barrel of oil or a thousand cubic feet, or "MCF," of gas will also cause fluctuations in the Company's oil and gas income. These commodity prices are affected by numerous factors and uncertainties external to CKX's business and over which it has no control, including the global supply and demand for oil and gas, and domestic and global economic conditions, among other factors.

CKX has small royalty interests in 20 different producing oil and gas fields. The size of each royalty interest is determined by the Company's net ownership in the acreage unit for the well. CKX's royalty interests range from 0.0045% for the smallest to 7.62% for the largest. As the Company does not own or operate the wells, it does not have access to any reserve information. Eventually, the oil and gas reserves under the Company's current land holdings will be depleted.

Timber income is derived from sales of timber on Company lands. The Company's timber income will fluctuate depending on our ability to secure stumpage agreements in the regional markets, timber stand age, and/or stumpage commodity prices. Timber is a renewable resource that the Company actively manages.

Surface income is earned from various recurring and non-recurring sources. Recurring surface income is earned from lease arrangements for farming, recreational and commercial uses. Non-recurring surface income can include such activities as pipeline right of ways, and temporary worksite rentals.

In managing its lands, the Company relies on and has established relationships with real estate, forestry, environmental and agriculture consultants as well as attorneys with legal expertise in general corporate matters, real estate, and minerals.

The Company actively searches for additional real estate for purchase in Louisiana with a focus on southwest Louisiana and on timberland and agricultural land. When evaluating unimproved real estate for purchase, the Company will consider numerous characteristics including but not limited to, timber fitness, agriculture fitness, future development opportunities and/or mineral potential. When evaluating improved real estate for purchase, the Company will consider characteristics including, but not limited to, geographic location, quality of existing revenue streams, and/or quality of the improvements.

The Company's Board of Directors regularly evaluates a range of strategic alternatives that could increase shareholder value, and the Board and management conduct due diligence activities in connection with such alternatives. These include opportunities for growth though the acquisitions of land or other assets, business combinations, dispositions of assets and reinvestment of the proceeds, and other alternatives.

On August 21, 2023, the Company announced that the Board had determined to initiate a formal process to evaluate strategic alternatives for the Company to enhance value for stockholders and had retained a financial advisor in connection with the process.

On April 18, 2024, the Company provided an update on the process, noting that it had received preliminary indications of interest from multiple parties related to the potential acquisition of the Company or its assets, and that the Company and its advisors were working with a select group of these parties to provide them with additional information. The Board has formed a subcommittee to provide oversight and management of the process.

Since the April 18, 2024 update, management and the Board subcommittee, together with the Company's financial advisors, continue to engage with interested parties.

On November 18, 2025, the Company sold to Southern Pine Plantations of Georgia, Inc. approximately 6,548 acres of land wholly-owned by the Company in Allen, Beauregard, Calcasieu, Cameron, Jefferson Davis, Natchitoches, Rapides and Sabine Parishes of the State of Louisiana. The Company disclosed the completion of the transaction on its Current Report on Form 8-K filed November 20, 2025. The adjusted purchase price was $8,618,021.70, paid in cash. The transaction was executed pursuant to an Agreement of Purchase and Sale effective August 14, 2025, as amended, that contemplated the sale of approximately 7,014 acres. Certain portions of the originally contemplated property were excluded from the sale in accordance with the Agreement, resulting in a reduction of the original purchase price equal to $1,316.05 per excluded acre. The completion of this transaction represents a significant step in the Company's ongoing evaluation of strategic alternatives.

As part of management's efforts to maximize value for shareholders through the strategic alternative evaluation process, the Company expects to seek to partition, in kind or by sale, ownership of its undivided interests in lands co-owned with others. There can be no assurance that such efforts will result in a negotiated partition of the Company's co-owned acreage and that the Company can avoid a court-ordered partition.

Additionally, a sale of the Company or all or substantially all of its assets would be subject to a number of conditions and contingencies, including the approval of the Company's shareholders. There can be no assurance that this process will result in the successful negotiation of a definitive agreement for a transaction or any other strategic outcome, or that the Board will recommend that CKX's shareholders approve any transaction.

Recent Developments

In 2019, the Company began developing several ranchette-style subdivisions on certain of its lands in Calcasieu and Beauregard Parishes using existing road rights of way. The Company has identified demand in those areas for ranchette-style lots, which consist of more than three acres each, and the Board of Directors and management believe this project will allow the Company to realize a return on its investment in the applicable lands after payment of expenses. The Company has completed and recorded plans for three subdivisions. The three subdivisions are located on approximately 415 acres in Calcasieu Parish and approximately 160 acres in Beauregard Parish and contain an aggregate of 39 lots. As of March 31, 2026, the Company has closed on the sale of 29 of the 39 lots. A portion of the acreage associated with these subdivisions was sold in November 2025, as part of the transaction with Southern Pine Plantations of Georgia, Inc.

There were no sales of land during the three months ended March 31, 2026 and 2025.

Results of Operations

Summary of Results

The Company's results of operations for the three months ended March 31, 2026 were driven primarily by decreases in oil and gas revenues, partially offset by increases in surface revenues. The decrease in oil and gas revenue is due to a decline in net oil and gas produced as well as a decline in average oil sales price. In addition, prior-period results included one-time revenue from a single customer, Riceland Petroleum Company, which did not recur in the current period. The decrease in revenues also reflects the sale of producing lands completed in November 2025, which reduced the Company's oil and gas interests.

Revenue -Three Months Ended March 31, 2026

Total revenues for the three months ended March 31, 2026 were $170,660, a decrease of approximately 51.0% when compared with the same period in 2025. Total revenue consists of oil and gas, timber, and surface revenues. Components of revenues for the three months ended March 31, 2026 as compared to 2025, are as follows:

		Three Months Ended March 31,
		2026				2025				Change from Prior Year				Percent Change from Prior Year
Revenues:
Oil and gas		$	9,292			$	268,508			$	(259,216	)			(96.5	)%
Timber sales			2,667				-				2,667				100.0	%
Surface revenue			158,701				79,676				79,025				99.2	%
Total revenues		$	170,660			$	348,184			$	(177,524	)			(51.0	)%

Oil and Gas

Oil and gas revenues were 5% and 77% of total revenues for the three months ended March 31, 2026 and 2025, respectively.

CKX received oil and/or gas revenues from 48 and 71 wells during the three months ended March 31, 2026 and 2025, respectively.

Oil and gas revenues decreased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, by $259,216. The decrease was due to a decrease in the average oil sales and average gas sales prices as well as a decrease in net oil and gas produced, which partially resulted from the sale of producing lands in November 2025.

Timber

Timber revenue was $2,667 and $0 for the three months ended March 31, 2026 and 2025, respectively. The increase in timber revenues was due to normal business variations in timber customers' harvesting.

Surface

Surface revenues increased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, by $79,025. The increase in surface revenue was due to higher oil and gas delay rental income and higher surface lease income, as well as one small right of way payment received in the current quarter.

Costs and Expenses - Three Months Ended March 31, 2026

Oil and gas costs decreased for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 by $17,997. Oil and gas costs fluctuated proportionately with increased or decreased production.

Timber costs decreased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025 by $3,695. Timber costs are related to general management of the Company's timberland. The decrease is primarily due to decreased timber management costs.

General and administrative expenses increased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025 by $31,589. This is primarily due to an increase in professional expenses and salaries and wages.

Liquidity and Capital Resources

Sources of Liquidity

Current assets totaled $18,084,585 and current liabilities equaled $705,188 at March 31, 2026.

As of March 31, 2026 and December 31, 2025, the Company had no outstanding debt.

In the opinion of management, cash and cash equivalents are adequate for projected operations and possible land acquisitions.

The Company's Board of Directors regularly evaluates a range of strategic alternatives that could increase shareholder value, and the Board and management conduct due diligence activities in connection with such alternatives. These include opportunities for growth though the acquisitions of land or other assets or business combinations, dispositions of assets and reinvestment of the proceeds, and other alternatives. The cost and terms of any financing to be raised in conjunction with any growth opportunity, including the Company's ability to raise debt or equity capital on terms and at costs satisfactory to the Company, and the effect of such opportunities on the Company's balance sheet, are critical considerations in any such evaluation.

Analysis of Cash Flows

Net cash provided by (used in) operating activities was $(52,331) and $118,664 for the three months ended March 31, 2026 and 2025, respectively. The decrease in cash provided by operating activities was attributable to a decrease in net income as well as a greater increase in current assets and greater decrease in current liabilities, which both resulted in an unfavorable impact on operating cash flows.

Net cash used in investing activities was $(5,245,224) for the three months ended March 31, 2026, while net cash provided by investing activities was $172,243 for the three months ended March 31, 2025. For the three months ended March 31, 2026, this resulted from purchases of certificates of deposits and securities of $2,229,234 and $3,015,990, respectively. For the three months ended March 31, 2025, this resulted from purchases of certificates of deposits of $6,502,665, offset by the maturity of certificates of deposit of $6,674,908.

Net cash used in financing activities was $0 for the three months ended March 31, 2026 and 2025.

Significant Accounting Polices and Estimates

There were no changes in our significant accounting policies and estimates during the three months ended March 31, 2026 from those set forth in "Significant Accounting Policies and Estimates" in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

See Note 1, Basis of Presentation and Recent Accounting Pronouncements, to our condensed financial statements included in this report for information regarding recently issued accounting pronouncements that may impact our financial statements.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2026, we did not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs).