Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S 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 Quarterly Report on Form 10-Q, including 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 reliance 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, our Current Reports on Form 8-K (including our Form 8-K filed November 9, 2026), and in our other public filings. These risks and uncertainties also include, but are not limited to, risks relating to our recently-announced entry into an investment agreement on November 8, 2026 with Jacobs Private Equity II, LLC ("JPE") and the other investors party thereto (the "Investment Agreement"), including: (1) risks related to the satisfaction of the conditions to closing the proposed transaction and the other transactions contemplated by the Investment Agreement (including the failure to obtain necessary regulatory approvals or the approval of the Company's stockholders), in the anticipated timeframe or at all; (2) the risk that any announcements relating to the proposed transactions could have adverse effects on the market price of our common stock; (3) disruption from the proposed transactions making it more difficult to maintain business and operational relationships, including maintaining relationships with our business partners and stakeholders; (4) the occurrence of any event, change or other circumstances that could give rise to the termination of the Investment Agreement; (5) risks related to disruption of management's attention from our ongoing business operations due to the proposed transactions; (6) the costs, fees and expenses of the contemplated transactions; (7) the risk of litigation related to the proposed transactions; (8) risks related to the proposed conversion, holding company reorganization and reverse stock split, including their effects on the rights of our stockholders and the liquidity and trading price of our common stock; and (9) the effects of the proposed transactions on our existing stockholders if they are completed, including substantial dilution and JPE's control of the Company. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise, except as required by applicable law.

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, 18 of which generated royalty revenue during the nine months ended September 30, 2026. 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 0.0092% 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 through 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 formed a subcommittee to provide oversight and management of the process.

After the April 18, 2024 update, management and the Board subcommittee, together with the Company's financial advisors, continued 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 represented a significant step in the Company's evaluation of strategic alternatives.

Following the November 2025 land sale, the Company continued to explore with interested parties a range of options to maximize value for shareholders. As disclosed in the Company's Current Reports on Form 8-K filed with the SEC on November 9, 2026, and November 10, 2026, the Company entered into the Investment Agreement with JPE and other investors on November 8, 2026, providing for a $1.0 billion cash investment in exchange for convertible perpetual preferred stock and warrants to purchase shares of the Company's common stock (the "Equity Investment"). Upon completion, JPE will become the Company's controlling stockholder, Brad Jacobs will become Chairman and Chief Executive Officer, and the Board of Directors will be reconstituted. The investment is expected to close in early 2027, subject to approval by the Company's stockholders, receipt of necessary antitrust approvals and other customary closing conditions. Following the closing of the Equity Investment, JPE and the other investors will own approximately 99.78% of the Company's common stock on an as-converted, as-exchanged basis, before giving effect to the exercise of the warrants.

Prior to the closing of the Equity Investment, the Company will convert from a Louisiana corporation into a Delaware corporation pursuant to a plan of domestication (the "conversion"), effect a 4.1744380:1 reverse stock split with respect to the Company's common stock and, following the conversion, will effect a holding company reorganization pursuant to which a newly formed Delaware corporation ("NewCo") will become the parent company of the Company and the publicly traded company, and each outstanding share of the Company's common stock will be converted into one equivalent share of NewCo common stock (the "holding company reorganization"). NewCo will be the issuer of the preferred stock and warrants, and references in this Quarterly Report on Form 10-Q to the Company with respect to periods following the holding company reorganization refer to NewCo. Also pursuant to the Investment Agreement, the Company's stockholders as of the date on which the holding company reorganization becomes effective will be entitled to receive an aggregate cash dividend of $20,800,660, to be paid seven days after such date (the "Cash Dividend"). The Cash Dividend will not be paid unless the Equity Investment is consummated.

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 identified demand in those areas for ranchette-style lots, which consist of more than three acres each, and the Board of Directors and management believed the project would allow the Company to realize a return on its investment in the applicable lands after payment of expenses. The Company 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 contained an aggregate of 39 lots. The Company closed on the sale of 29 of the 39 lots. In November 2025, the Company sold the remaining acreage on which the subdivisions were located, including the remaining 10 lots, as part of the transaction with Southern Pine Plantations of Georgia, Inc. As a result, the Company no longer owns any lots in these subdivisions and does not expect any further lot sales.

During the nine months ended September 30, 2026, the Company closed on the sale of one 225-acre tract in Jefferson Davis parish in which it had a one-sixth ownership interest for net proceeds of $243,664, resulting in a gain on the sale of $235,326. During the nine months ended September 30, 2025, the Company closed on the sale of two 25-acre lots and one 53-acre lot in Calcasieu parish in which it had a 100% ownership interest for net proceeds to the Company of $499,228, resulting in a gain on the sales of $275,399.

Results of Operations

Summary of Results

The Company's results of operations for the three months ended September 30, 2026 were driven primarily by a gain on the sale of land of $235,326 and higher surface revenues of $193,582, partially offset by decreases in timber revenues of $91,085 and oil and gas revenues of $21,063. The decrease in total revenues for the nine months ended September 30, 2026, was driven primarily by lower oil and gas revenues of $300,214 and timber revenues of $88,418, partially offset by higher surface revenues of $324,920. The decrease in oil and gas revenues in both periods was due to a decline in net oil and gas produced, which reflects in part the sale of producing lands in November 2025 that reduced the Company's oil and gas interests.

Revenue -Three Months Ended September 30, 2026

Total revenues for the three months ended September 30, 2026 were $314,073, an increase of approximately 35% 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 September 30, 2026 as compared to 2025, are as follows:

		Three Months Ended September 30,
		2026				2025				Change from Prior Year				Percent Change from Prior Year
Revenues:
Oil and gas		$	26,072			$	47,135			$	(21,063	)			(44.7	)%
Timber sales			3,740				94,825				(91,085	)			(96.1	)%
Surface revenue			284,261				90,679				193,582				213.5	%
Total revenues		$	314,073			$	232,639			$	81,434				35.0	%

Oil and Gas

Oil and gas revenues were 8% and 20% of total revenues for the three months ended September 30, 2026 and 2025, respectively.

CKX received oil and/or gas revenues from 35 and 65 wells during the three months ended September 30, 2026 and 2025, respectively.

Oil and gas revenues decreased for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, by $21,063. The decrease was due to a decrease in net oil and gas produced, which partially resulted from the sale of producing lands in November 2025.

Timber

Timber revenue was $3,740 and $94,825 for the three months ended September 30, 2026 and 2025, respectively. The decrease in timber revenues was due to normal business variations in timber customers' harvesting.

Surface

Surface revenues increased for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, by $193,582. The increase in surface revenue was due primarily to a one-time payment of $223,664 received from Marais Pipeline, LLC for the grant of a permanent pipeline right-of-way servitude. Right-of-way payments totaled $223,789 for the three months ended September 30, 2026, compared to $5,672 for the three months ended September 30, 2025. Right-of-way payments arise regularly, and the Company is not entitled to any further payments under this servitude. The increase was partially offset by decreases in delay rentals, hunting lease income, and surface lease income.

Revenue -Nine Months Ended September 30, 2026

Total revenues for the nine months ended September 30, 2026 were $653,047, a decrease of approximately 9% when compared with the same period in 2025. Total revenue consists of oil and gas, timber, and surface revenues. Components of revenues for the nine months ended September 30, 2026 as compared to 2025, are as follows:

		Nine Months Ended September 30,
		2026				2025				Change from Prior Year				Percent Change from Prior Year
Revenues:
Oil and gas		$	72,917			$	373,131			$	(300,214	)			(80.5	)%
Timber sales			6,407				94,825				(88,418	)			(93.2	)%
Surface revenue			573,723				248,803				324,920				130.6	%
Total revenues		$	653,047			$	716,759			$	(63,712	)			(8.9	)%

Oil and Gas

Oil and gas revenues were 11% and 52% of total revenues for the nine months ended September 30, 2026 and 2025, respectively.

CKX received oil and/or gas revenues from 50 and 78 wells during the nine months ended September 30, 2026 and 2025, respectively.

Oil and gas revenues decreased for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, by $300,214. The decrease was due to a decrease in net oil and gas produced, which partially resulted from the sale of producing lands in November 2025.

Timber

Timber revenue was $6,407 and $94,825 for the nine months ended September 30, 2026 and 2025, respectively. The decrease in timber revenues was due to normal business variations in timber customers' harvesting.

Surface

Surface revenues increased $324,920 for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. The increase was due primarily to right-of-way payments of $361,549, including two payments from Marais Pipeline, LLC totaling $324,086, compared to $6,608 for the nine months ended September 30, 2025. The increase was partially offset by decreases in delay rentals and surface lease income, while hunting lease income increased modestly.

Costs and Expenses - Three and Nine Months Ended September 30, 2026

Oil and gas costs decreased for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025 by $2,951 and $31,286, respectively. Oil and gas costs fluctuate proportionately with increased or decreased production.

Timber costs decreased for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025 by $4,820 and $9,487, respectively. 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 decreased for the three and nine months ended September 30, 2026 as compared to the three and nine months ended September 30, 2025 by $73,640 and $50,627, respectively. This is primarily due to a decrease in legal fees.

Gain on Sale of Land - Three and Nine Months Ended September 30, 2026

Gain on sale of land was $235,326 for the three and nine months ended September 30, 2026, and $86,188 and $275,399 for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2026, this consisted of the sale of one 225-acre tract in Jefferson Davis parish. For the three months ended September 30, 2025, this consisted of the sale of one 25-acre lot in Calcasieu parish. For the nine months ended September 30, 2025, this consisted of the sale of two 25-acre ranchette lots and one 53-acre lot in Calcasieu parish.

Income Tax Expense -Three and Nine Months Ended September 30, 2026

Income tax expense was $117,167 for the three months ended September 30, 2026, compared to an income tax benefit of $2,550 for the three months ended September 30, 2025. Income tax expense was $161,526 and $160,799 for the nine months ended September 30, 2026 and 2025, respectively. The Company's effective tax rate was 20.9% and (1.6)% for the three months ended September 30, 2026 and 2025, respectively, and 20.6% and 26.6% for the nine months ended September 30, 2026 and 2025, respectively. The increase in income tax expense for the three months ended September 30, 2026 was primarily due to higher pretax income ($561,187 compared to $163,754). The change in the effective tax rate was primarily due to the deferred income tax benefit of $30,098 recognized in the three months ended September 30, 2025 from a change in the estimated utilization of the net operating loss carryover and, for the nine-month period, the absence in 2026 of the stock-based compensation effect that increased the 2025 effective tax rate.

Liquidity and Capital Resources

Sources of Liquidity

Current assets totaled $18,187,708 and current liabilities equaled $232,829 at September 30, 2026.

As of September 30, 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 through 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 $(125,047) and $336,296 for the nine months ended September 30, 2026 and 2025, respectively. The decrease in cash provided by operating activities was primarily attributable to a decrease in current liabilities, which resulted in an unfavorable impact on operating cash flows.

Net cash used in investing activities was $(2,005,260) for the nine months ended September 30, 2026, while net cash provided by investing activities was $4,241,631 for the nine months ended September 30, 2025. For the nine months ended September 30, 2026, this resulted from purchases of certificates of deposits and securities of $4,478,158 and $3,015,990, respectively, offset by the maturity of certificates of deposits and the maturity of securities of $2,229,234 and $3,015,990, respectively, and proceeds from the sale of fixed assets of $243,664. For the nine months ended September 30, 2025, this resulted from purchases of certificates of deposits of $6,750,837, offset by the maturity of certificates of deposit of $10,493,240 and proceeds from the sale of fixed assets of $499,228.

Net cash used in financing activities was $0 and $147,614 for the nine months ended September 30, 2026 and 2025, respectively. For the nine months ended September 30, 2025, this resulted from repurchases of common stock from the withholding of shares to pay taxes upon the vesting of stock awards under the stock incentive plan.

Significant Accounting Policies

There were no changes in our significant accounting policies and estimates during the nine months ended September 30, 2026 from those set forth in "Significant Accounting Policies" in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

See Note 1, Significant Accounting Policies and Recent Accounting Pronouncements, to our unaudited 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 nine months ended September 30, 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).