What changed in CKX LANDS, INC.'s 10-K — 2022 vs 2023

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.

As noted in the announcement, the Board and the management team are considering a broad range of potential options, including continuing to operate CKX as a public, independent company or a sale of all or part of the company, among other potential alternatives.

There is no deadline or definitive timetable set for the completion of the review of strategic alternatives and there can be no assurance that this process will result in CKX pursuing a transaction or any other strategic outcome.

The Company granted awards for all 357,000 shares issuable under the plan on June 13, 2022.

During 2023, the Company received approximately 69.18% of its total revenues from the following customers: Customer Revenue Type % of Total Revenue Venture Global CP Express, LLC Surface Lease 27.20 % New Generation Gas Gathering, LLC Surface Lease 11.78 % Ballard Exploration Company Oil & Gas 9.53 % Bennett Timber Co., LLC Timber 5.29 % Louisiana Timber Procurement Timber 5.12 % Cedar Holdco, LLC Surface Lease 3.71 % Talos Low Carbon Solutions, LLC Oil & Gas 3.67 % Chato Energy, LLC Oil & Gas 2.88 % Loss of cash receipts from any of these customers or revenue streams would have a material adverse effect on the Company. 2 Environmental and Other Governmental Regulations The Company does not need government approval of its principal products or services except that the State of Louisiana must permit the size and location of all oil and gas producing units.

The Company does not believe this would have a material effect on its financial condition.

The process of reviewing strategic alternatives or its conclusion could adversely affect our business and our stockholders. In August 2023, we announced that our Board of Directors had determined to initiate a formal process to evaluate strategic alternatives for the Company to enhance value for stockholders.

We are actively working with financial and legal advisors in this strategic alternative review process. We cannot make any assurances about the timing or outcome of the process, including whether the process will result in a transaction; what the terms, structure, benefits and costs of any transaction will be; or that any transaction that is agreed to will be completed.

Entry into or completion of any potential transaction or other strategic alternatives would depend on a number of factors that may be beyond our control, including, among other things, general economic and market conditions, industry trends, regulatory approvals and the availability of financing for a potential transaction on reasonable terms.

Even if a transaction is entered into, we cannot assure you that it will be successful, achieve our objectives or have a positive effect on stockholder value. Our Board of Directors may also determine that no transaction is in the best interest of our stockholders.

We expect to incur expenses, which could be substantial, associated with identifying, evaluating and negotiating potential strategic alternatives. The process of reviewing potential strategic alternatives may be time-consuming, distracting and disruptive to our business and our management team. We may also incur additional unanticipated expenses in connection with this process.

In addition, we may be subject to costly and time-consuming litigation related to the process. Further, the process may result in the loss of potential business opportunities and have a negative effect on the market price and volatility of our common stock, as well as our ability to retain customers, recruit and retain qualified personnel, and maintain other business relationships.

In addition, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of the Company could cause our stock price to fluctuate significantly. Our operations and properties could be adversely affected by hurricanes or other adverse weather events, natural disasters, or other significant disruptions.

We have less control over the management of lands that we co-own versus lands of which we are the sole owner, which could negatively impact our revenues and financial condition. We co-own approximately 46% of our net acres with other persons.

A majority of our co-owned acres are held in the form of a 1/6 undivided interest in approximately 33,200 acres (5,533 net acres) of predominantly undeveloped land located in Southern Louisiana. There is no formal co-ownership agreement in place with respect to our co-owned lands, so all major decisions concerning these lands require the unanimous agreement of all the co-owners.

As a result, we cannot control these decisions. These decisions include, among other things, whether to sell the property (other than selling our undivided interest in the property), whether to lease the property for surface or mineral income, and whether to harvest timber on the property.

We have historically enjoyed a constructive relationship with our co-owners, and believe all co-owners share a desire to maximize the value of the co-owned lands over the long term.

However, our lack of control over our co-owned lands may prevent us from managing those lands in the manner we think is in the best interest of our company and our shareholders, and could negatively affect our revenues and profitability, and the value of our undivided interests.

Potential environmental liabilities could result in substantial costs to us or cause our land to lose value.

In addition, we could be affected by other significant events in the United States or abroad that could cause similar disruptions in commerce, like future pandemics, the outbreak of war or other hostilities, geopolitical conflicts, cyberattacks affecting infrastructure we depend on, and climate emergencies.

Our overall business is subject to risks associated with the real estate industry.

The costs, time burden and risks associated with being a publicly traded company continue to increase. Because we are a public company filing reports with the SEC, we are subject to regulatory and public scrutiny and extensive and complex regulation.

In addition, we are required to maintain financial accounting controls and comply with rules concerning the accuracy and completeness of our books and records. In addition to regulation by the SEC , we are subject to the listing fees and rules of the NYSE American stock exchange.

The NYSE American rules contain requirements related to corporate governance, communications with shareholders, and various other matters. Compliance with these public company obligations requires significant time and expense. Other expenses associated with being a public company include auditing, accounting and legal fees and expenses, director and officer liability insurance costs, transfer agent fees and other expenses.

The cost of being a publicly traded company is substantial, not only in absolute terms but, more importantly, in relation to the overall scope of the operations of a small company.

Changing laws, regulations and standards relating to corporate governance and public disclosure has created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting.

Over time, as the SEC and NYSE American have adopted new rules, including rules requiring us to make additional public disclosures, the costs and time necessary for us to comply with public company rules has increased.

Failure to comply with these requirements can have numerous adverse consequences, including, but not limited to, our inability to file required periodic reports on a timely basis, loss of market confidence, delisting of our securities and/or governmental or private actions against us.

Our efforts to comply with new and changing regulations are likely to continue to result in increased general and administrative expenses and a diversion of management time and attention. 5 Our common stock may not have an active, liquid, and orderly trading market, and our stock price may be volatile.

Our common stock may not have an active, liquid, and orderly trading market due to the relatively low number of shares that are available for trading, and the spread between the bid and ask prices for shares of our stock may be wide. These conditions may depress the trading price of our stock.

Issuer Purchases of Equity Securities During the fourth quarter of fiscal year 2023, the Company repurchased shares of its common stock as follows: Period (a) Total Number of Shares Purchased(1) (b) Average Price Paid per Share (c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares that May yet Be Purchased under the Plans or Programs Oct. 1 – Oct. 31, 2023 – – Nov. 1 – Nov. 30, 2023 – – Dec. 1 – Dec. 31, 2023 8,672 $ 10.05 – – Total – – (1) All purchases were made pursuant to the Company’s 2021 Stock Incentive Plan under which shares were withheld to satisfy tax withholding obligations.