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Item 1. Financial Statements

2026-08-14 compared with 2026-05-15 · 488 added, 368 removed, 277 unchanged (76% of the section changed)

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Cash and cash equivalents

Net profits interest in oil and natural gas properties, net

Net profits interest in oil and natural

gas properties, net

LIABILITIES AND TRUST CORPUS

Trust corpus (33,000,000 units issued and outstanding)

Total liabilities and Trust corpus

Advances from Sponsor

Total liabilities

Trust corpus (33,000,000 units issued

and outstanding)

Total liabilities

and Trust corpus

The accompanying notes are an integral part of

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Statements of Distributable

Three Months Ended March 31,

Ended June 30,

Income from net profits interest

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General and administrative expenses

Cash reserves (withheld) used for Trust expenses

Cash reserves (withheld) used for Trust

Distributable income

Distributable income per unit (33,000,000 units)

Distributable income per unit (33,000,000

The accompanying notes are an integral part of

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Statements of Changes in Trust Corpus

Three Months Ended March 31,

Ended June 30,

Trust corpus, beginning of period

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Trust corpus, end of period

Distributions per unit (33,000,000 units)

Distributions per unit (33,000,000

The accompanying notes are

an integral part of these financial statements.

PERMIANVILLE ROYALTY

PERMIANVILLE ROYALTY TRUST

NOTES TO FINANCIAL STATEMENTS

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as Delaware Trustee.

The Trust was created to acquire and hold for the

benefit of the Trust unitholders a net profits interest representing the right to receive 80% of the net profits from the sale of oil

and natural gas production from certain properties in the states of Texas, Louisiana and New Mexico held by Enduro as of the date of the

conveyance of the net profits interest to the Trust (the “Net Profits Interest”).

The properties in which the Trust holds

the Net Profits Interest are referred to as the “Underlying Properties.”

In connection with the closing of the initial public

offering in November 2011, Enduro contributed the Net Profits Interest to the Trust in exchange for 33,000,000 units of beneficial

The Trust was created to acquire and hold for

the benefit of the Trust unitholders a net profits interest representing the right to receive 80% of the net profits from the sale of

oil and natural gas production from certain properties in the states of Texas, Louisiana and New Mexico held by Enduro as of the date

of the conveyance of the net profits interest to the Trust (the “Net Profits Interest”).

The properties in which the Trust

holds the Net Profits Interest are referred to as the “Underlying Properties.”

In connection with the closing of the initial

public offering in November 2011, Enduro contributed the Net Profits Interest to the Trust in exchange for 33,000,000 units of beneficial

interest in the Trust (the “Trust Units”).

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to which Enduro and the Trustee were parties.

As of March 31, 2026, the Sponsor owned 7,363,961 Trust Units, or 22% of the issued

As of June 30, 2026, the Sponsor owned 7,363,961 Trust Units, or 22% of the issued

and outstanding Trust Units.

The Net Profits Interest is passive in nature and

neither the Trust nor the Trustee has any management control over or responsibility for costs relating to the operation of the Underlying

The Net Profits Interest is passive in nature

and neither the Trust nor the Trustee has any management control over or responsibility for costs relating to the operation of the Underlying

The Trust Agreement provides, among other provisions, that:

the Trust’s business activities are limited to owning the Net Profits

Interest and any activity reasonably related to such ownership, including activities required or permitted by the terms of the Conveyance

of Net Profits Interest, dated effective as of July 1, 2011 (as supplemented and amended to date, the “Conveyance”).

As a result, the Trust is not permitted to acquire other oil and natural gas properties or net profits interests or otherwise to engage

in activities beyond those necessary for the conservation and protection of the Net Profits Interest;

the Trust may dispose of all or any material part of the assets of the Trust

(including the sale of the Net Profits Interest) if approved by at least 75% of the outstanding Trust Units;

the Sponsor may sell a divided or undivided portion of its interests in the

Underlying Properties, free from and unburdened by the Net Profits Interest, if approved by at least 50% of the outstanding Trust Units

at a meeting of Trust unitholders;

the Trustee will make monthly cash distributions to unitholders (Note 5);

the Trustee may create a cash reserve to pay for future liabilities of the

the Trustee may authorize the Trust to borrow money to pay administrative

or incidental expenses of the Trust that exceed its cash on hand and available reserves.

No further distributions will be made to Trust

unitholders until such amounts borrowed are repaid;

the Trust is not subject to any pre-set termination provisions based on a

maximum volume of oil or natural gas to be produced or the passage of time;

however, the Trust will dissolve upon the earliest to occur

of the following:

the Trust, upon approval of the holders of at least 75% of the outstanding

Trust Units, sells the Net Profits Interest;

the annual cash proceeds received by the Trust attributable to the Net Profits

Interest are less than $2 million for each of any two consecutive years;

the holders of at least 75% of the outstanding Trust Units vote in favor

of dissolution;

the Trust is judicially dissolved.

Trust’s business activities are limited to owning the Net Profits Interest and any

activity reasonably related to such ownership, including activities required or permitted

by the terms of the Conveyance of Net Profits Interest, dated effective as of July 1,

2011 (as supplemented and amended to date, the “Conveyance”).

As a result, the

Trust is not permitted to acquire other oil and natural gas properties or net profits interests

or otherwise to engage in activities beyond those necessary for the conservation and protection

of the Net Profits Interest;

Trust may dispose of all or any material part of the assets of the Trust (including the sale

of the Net Profits Interest) if approved by at least 75% of the outstanding Trust Units;

Sponsor may sell a divided or undivided portion of its interests in the Underlying Properties,

free from and unburdened by the Net Profits Interest, if approved by at least 50% of the

outstanding Trust Units at a meeting of Trust unitholders;

Trustee will make monthly cash distributions to unitholders (Note 5);

Trustee may create a cash reserve to pay for future liabilities of the Trust;

Trustee may authorize the Trust to borrow money to pay administrative or incidental expenses

of the Trust that exceed its cash on hand and available reserves.

No further distributions

will be made to Trust unitholders until such amounts borrowed are repaid;

Trust is not subject to any pre-set termination provisions based on a maximum volume of oil

or natural gas to be produced or the passage of time;

however, the Trust will dissolve upon

the earliest to occur of the following:

Trust, upon approval of the holders of at least 75% of the outstanding Trust Units, sells

the Net Profits Interest;

annual cash proceeds received by the Trust attributable to the Net Profits Interest are less

than $2 million for each of any two consecutive years;

holders of at least 75% of the outstanding Trust Units vote in favor of dissolution;

Trust is judicially dissolved.

BASIS OF PRESENTATION

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Corpus as of December 31, 2025, which has been derived from audited financial statements, and the unaudited interim financial statements

as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 have been prepared pursuant to the rules and

as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025 have been prepared pursuant to the rules and

regulations of the Securities and Exchange Commission (“SEC”).

Accordingly, certain information and disclosures normally included

in annual financial statements have been condensed or omitted pursuant to those rules and regulations.

Therefore, these financial

statements should be read in conjunction with the financial statements and notes thereto included in the Trust’s Annual Report on

Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”).

Accordingly, certain information and disclosures normally

included in annual financial statements have been condensed or omitted pursuant to those rules and regulations.

Therefore, these

financial statements should be read in conjunction with the financial statements and notes thereto included in the Trust’s Annual

Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”).

In the opinion of the Trustee, the accompanying

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Monthly operating expenses

and capital expenditures represent estimated incurred expenses and, as a result, represent accrued expenses as well as expenses paid during

and capital expenditures represent estimated incurred expenses and, as a result, represent accrued expenses as well as expenses paid

during the period.

The financial statements of the Trust are prepared

on the following basis:

(a) Income from Net Profits Interest is recorded when distributions are received by the Trust;

(a) Income from Net Profits Interest is recorded when distributions are

received by the Trust;

(b) Distributions to Trust unitholders are recorded when paid by the Trust;

(c) Trust general and administrative expenses (which includes the Trustee’s fees as well as accounting, engineering, legal, and

other professional fees) are recorded when paid;

(d) Cash reserves for Trust expenses may be established by the Trustee for certain future expenditures that would not be recorded as contingent

liabilities under accounting principles generally accepted in the United States of America (“GAAP”);

(e) Amortization of the Net Profits Interest in oil and natural gas properties is calculated on a unit-of-production basis and is charged

directly to the Trust corpus;

(f) The Net Profits Interest in oil and natural gas properties is periodically assessed whenever events or circumstances indicate that

the aggregate value may have been impaired below its total capitalized cost based on the Underlying Properties.

If an impairment loss

is indicated by the carrying amount of the assets exceeding the sum of the undiscounted expected future net cash flows of the Net Profits

Interest, then an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its estimated fair value

fees as well as accounting, engineering, legal, and other professional fees) are recorded

(d) Cash reserves for Trust expenses may be established by the Trustee for

certain future expenditures that would not be recorded as contingent liabilities under accounting

principles generally accepted in the United States of America (“GAAP”);

(e) Amortization of the Net Profits Interest in oil and natural gas properties

is calculated on a unit-of-production basis and is charged directly to the Trust corpus;

(f) The Net Profits Interest in oil and natural gas properties is periodically

assessed whenever events or circumstances indicate that the aggregate value may have been

impaired below its total capitalized cost based on the Underlying Properties.

If an impairment

loss is indicated by the carrying amount of the assets exceeding the sum of the undiscounted

expected future net cash flows of the Net Profits Interest, then an impairment loss is recognized

for the amount by which the carrying amount of the asset exceeds its estimated fair value

determined using discounted cash flows.

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financial statements prepared in accordance with GAAP because revenues are not accrued;

certain cash reserves may be established for contingencies

which would not be accrued in financial statements prepared in accordance with GAAP;

general and administrative expenses are recorded

when paid instead of when incurred;

amortization of the net profits interest calculated on a unit-of-production basis is charged directly

to Trust Corpus instead of as an expense;

the Trust does not record a liability or repay any overpayment received as these will be deducted

from future payments;

certain cash reserves may be established for

contingencies which would not be accrued in financial statements prepared in accordance with GAAP;

general and administrative expenses

are recorded when paid instead of when incurred;

amortization of the net profits interest calculated on a unit-of-production basis is

charged directly to Trust Corpus instead of as an expense;

the Trust does not record a liability or repay any overpayment received as

these will be deducted from future payments;

and impairment is charged directly to the Trust Corpus.

While these statements differ from financial statements

prepared in accordance with GAAP, the modified cash basis of reporting is considered to be the most meaningful because monthly distributions

to the Trust unitholders are based on net cash receipts.

While these statements differ from

financial statements prepared in accordance with GAAP, the modified cash basis of reporting is considered to be the most meaningful because

monthly distributions to the Trust unitholders are based on net cash receipts.

This comprehensive basis of accounting other than

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Statements of Royalty Trusts .

NET PROFITS INTEREST IN OIL AND NATURAL GAS PROPERTIES

INTEREST IN OIL AND NATURAL GAS PROPERTIES

The Net Profits Interest in oil and natural gas

properties was recorded at its fair value on the date of conveyance.

Amortization of the Net Profits Interest in oil and natural gas properties

is calculated on a unit-of-production basis based on the Underlying Properties’

Amortization of the Net Profits Interest in oil and natural gas

properties is calculated on a unit-of-production basis based on the Underlying Properties’

production and reserves.

The reserves upon which

the amortization rate is based are quantity estimates that are subject to numerous uncertainties inherent in the estimation of proved

upon which the amortization rate is based are quantity estimates that are subject to numerous uncertainties inherent in the estimation

of proved reserves.

The volumes considered to be commercially recoverable fluctuate with changes in commodity prices and operating costs.

estimates are expected to change as additional information becomes available in the future.

Downward revisions in proved reserves may

result in an increased rate of amortization.

Amortization is charged directly to the Trust corpus balance and does not affect the distributable

income of the Trust.

Accumulated amortization as of March 31, 2026 and December 31, 2025 was $318,068,024 and $316,693,065,

These estimates are expected to change as additional information becomes available in the future.

Downward revisions in proved reserves

may result in an increased rate of amortization.

Amortization is charged directly to the Trust corpus balance and does not affect the

distributable income of the Trust.

Accumulated amortization as of June 30, 2026 and December 31, 2025 was $319,870,480 and

$316,693,065, respectively.

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While the Trust did not record an impairment during the three

months ended March 31, 2026 or 2025, future downward revisions in actual production volumes relative to current forecasts, higher

than expected operating costs, or lower than anticipated commodity prices could result in recognition of impairment in future periods.

and six months ended June 30, 2026 or 2025, future downward revisions in actual production volumes relative to current forecasts,

higher than expected operating costs, or lower than anticipated commodity prices could result in recognition of impairment in future

Federal Income Taxes

For federal income tax purposes, the Trust is a

grantor trust and therefore is not subject to tax at the trust level.

Trust unitholders are treated as owning a direct interest in the

assets of the Trust, and each Trust unitholder is taxed directly on his or her pro rata share of the income and gain attributable to the

assets of the Trust and entitled to claim his or her pro rata share of the deductions and expenses attributable to the assets of the Trust.

The income of the Trust is deemed to have been received or accrued by each unitholder at the time such income is received or accrued by

the Trust rather than when distributed by the Trust.

For federal income tax purposes, the Trust is

a grantor trust and therefore is not subject to tax at the trust level.

Trust unitholders are treated as owning a direct interest in

the assets of the Trust, and each Trust unitholder is taxed directly on his or her pro rata share of the income and gain attributable

to the assets of the Trust and entitled to claim his or her pro rata share of the deductions and expenses attributable to the assets

of the Trust.

The income of the Trust is deemed to have been received or accrued by each unitholder at the time such income is received

or accrued by the Trust rather than when distributed by the Trust.

The deductions of the Trust consist of severance

taxes and administrative expenses.

In addition, each unitholder is entitled to depletion deductions because the Net Profits Interest constitutes

“economic interests”

In addition, each unitholder is entitled to depletion deductions because the Net Profits Interest

constitutes “economic interests”

in oil and natural gas properties for federal income tax purposes.

Each unitholder is entitled to amortize

the cost of the Trust Units through cost depletion over the life of the Net Profits Interest or, if greater, through percentage depletion.

Each unitholder is entitled

to amortize the cost of the Trust Units through cost depletion over the life of the Net Profits Interest or, if greater, through percentage

Unlike cost depletion, percentage depletion is not limited to a unitholder’s depletable tax basis in the Trust Units.

unitholder could be entitled to percentage depletion as long as the applicable Underlying Properties generate gross income.

Rather, a unitholder could be entitled to percentage depletion as long as the applicable Underlying Properties generate gross income.

Some Trust Units are held by a middleman, as such

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is also posted by the Trustee at www.permianvilleroyaltytrust.com .

Notwithstanding the foregoing, the middlemen holding units on

behalf of unitholders, and not the Trustee of the Trust, are solely responsible for complying with the information reporting requirements

Notwithstanding the foregoing, the middlemen holding units

on behalf of unitholders, and not the Trustee of the Trust, are solely responsible for complying with the information reporting requirements

under the U.S.

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Texas imposes a franchise tax at a rate of 0.75% on gross

revenues less certain deductions for returns originally due on or after January 1, 2016, as specifically set forth in the Texas franchise

tax statutes.

revenues less certain deductions for returns originally due on or after January 1, 2016, as specifically set forth in the Texas

franchise tax statutes.

Entities subject to tax generally include trusts unless otherwise exempt.

Trusts that receive at least 90% of their federal

gross income from designated passive sources, including royalties from mineral properties and other income from other non-operating mineral

interests, and do not receive more than 10% of their income from operating an active trade or business, generally are exempt from the

Texas franchise tax as “passive entities.”

Although the Trust is intended to be exempt from Texas franchise tax at the trust

level as a passive entity, each unitholder that is considered a taxable entity under the Texas franchise tax would generally be required

to include its portion of Trust net income in its own Texas franchise tax computation.

Each unitholder should consult his or her own tax

advisor regarding state tax requirements, if any, applicable to such person’s ownership of Trust Units.

DISTRIBUTIONS TO UNITHOLDERS

Each month, the Trustee determines the amount of

funds available for distribution to the Trust unitholders.

Available funds are the excess cash, if any, received by the Trust from the

Net Profits Interest and other sources (such as interest earned on any amounts reserved by the Trustee) that month, over the Trust’s

liabilities for that month, subject to adjustments for changes made by the Trustee during the month in any cash reserves established for

future liabilities of the Trust.

No distributions will be made to Trust unitholders until the indebtedness created by such amounts drawn

or borrowed as advances to the Trust have been repaid in full.

Trusts that receive at least 90% of

their federal gross income from designated passive sources, including royalties from mineral properties and other income from other non-operating

mineral interests, and do not receive more than 10% of their income from operating an active trade or business, generally are exempt

from the Texas franchise tax as “passive entities.”

Although the Trust is intended to be exempt from Texas franchise tax

at the trust level as a passive entity, each unitholder that is considered a taxable entity under the Texas franchise tax would generally

be required to include its portion of Trust net income in its own Texas franchise tax computation.

Each unitholder should consult his or her own

tax advisor regarding state tax requirements, if any, applicable to such person’s ownership of Trust Units.

DISTRIBUTIONS

TO UNITHOLDERS

Each month, the Trustee determines the amount

of funds available for distribution to the Trust unitholders.

Available funds are the excess cash, if any, received by the Trust from

the Net Profits Interest and other sources (such as interest earned on any amounts reserved by the Trustee) that month, over the Trust’s

liabilities for that month, subject to adjustments for changes made by the Trustee during the month in any cash reserves established

for future liabilities of the Trust.

No distributions will be made to Trust unitholders until the indebtedness created by such amounts

drawn or borrowed as advances to the Trust have been repaid in full.

Distributions are made to the holders of Trust Units as of the applicable

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Declaration Date

Three Months Ended March 31, 2026:

Six Months Ended June 30, 2026:

December 19, 2025

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March 13, 2026

March 16, 2026

March 31, 2026

April 14, 2026

April 17, 2026

April 30, 2026

June 12, 2026

Year to Date –

Three Months Ended March 31, 2025:

Six Months Ended June 30, 2025:

March 17, 2025 (Special Distribution)

March 31, 2025

April 14, 2025

Year to Date –

During the three months ended March 31, 2025,

direct operating and development expenses exceeded cash receipts, leading to a Net Profits Interest shortfall of approximately $1.4 million

as of March 31, 2025, which was carried forward to be deducted from future net profits generated by the Underlying Properties.

a result, there were no net profits reported or distributed in the first three months of 2025.

During the three months ended

June 30, 2025, the Net Profits Interest generated positive income, which eliminated the cumulative Net Profits Interest shortfall

of $1.4 million that existed as of March 31, 2025;

however, no distributions were made to Trust unitholders because of outstanding

advances from the Sponsor to the Trust for the payment of administrative expenses, which totaled $0.6 million as of June 30, 2025.

On March 17, 2025, the Trustee declared a

special cash distribution of $0.008548 per Trust Unit, which was paid on April 14, 2025 to Trust unitholders of record on March 31,

The special cash distribution reflected the release of the $250,000 withheld from the net proceeds allocable to the Trust from

the August 2023 sale by the Sponsor of certain oil and natural gas properties in the Permian Basin, which amount was intended to

cover possible indemnification obligations arising during the indemnification period following the closing of the sale.

Together with

interest, the amount distributed equated to $282,072.

Under the terms of the Trust Agreement, the Trust

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During each of the

three-month periods ended March 31, 2026 and 2025, the Trust paid $50,000 to the Trustee and $2,010 to the Delaware Trustee pursuant

three-month periods ended June 30, 2026 and 2025, the Trust paid $50,000 to the Trustee and $0 to the Delaware Trustee pursuant

to the terms of the Trust Agreement.

During each of the six-month periods ended June 30, 2026 and 2025, the Trust paid $100,000

to the Trustee and $2,010 to the Delaware Trustee pursuant to the terms of the Trust Agreement.

SUBSEQUENT EVENTS

Distributions Paid or Declared

On April 14, 2026, a

distribution of $0.010000 per unit, which was declared on March 16, 2026, was paid to Trust unitholders of record as of March 31,

On April 17, 2026, the

Trust declared a distribution of $0.010000 per unit to unitholders of record as of April 30, 2026.

On July 15, 2026, a

distribution of $0.017000 per unit, which was declared on June 18, 2026, was paid to Trust unitholders of record as of June 30,

On July 17, 2026, the

Trust declared a distribution of $0.015000 per unit to unitholders of record as of July 31, 2026.

The distribution is expected to

be paid to unitholders on May 15, 2026.

Trustee’s Discussion and Analysis of Financial Condition and Results of Operations.

be paid to unitholders on August 14, 2026.

Trustee’s Discussion and Analysis of Financial Condition

and Results of Operations.

References to the “Trust”

in this document

refer to Permianville Royalty Trust, previously known as Enduro Royalty Trust, while references to “COERT”

or the “Sponsor”

document refer to Permianville Royalty Trust, previously known as Enduro Royalty Trust, while references to “COERT”

“Sponsor”

in this document refer to COERT Holdings 1 LLC.

References to “Enduro”

in this document refer to Enduro Resource Partners

LLC, the original sponsor of the Trust.

The following review of the Trust’s financial condition and results of operations should

be read in conjunction with the financial statements and notes thereto, as well as Management’s Discussion and Analysis of Financial

Condition and Results of Operations contained in the Trust’s Annual Report on Form 10-K for the year ended December 31,

2025 (the “2025 Annual Report on Form 10-K”).

The Trust’s annual reports on Form 10-K, quarterly reports on

Form 10-Q, current reports on Form 8-K and all other filings with the SEC are available on the SEC’s website at www.sec.gov .

in this document refer to Enduro

Resource Partners LLC, the original sponsor of the Trust.

The following review of the Trust’s financial condition and results of

operations should be read in conjunction with the financial statements and notes thereto, as well as Management’s Discussion and

Analysis of Financial Condition and Results of Operations contained in the Trust’s Annual Report on Form 10-K for the year

ended December 31, 2025 (the “2025 Annual Report on Form 10-K”).

The Trust’s annual reports on Form 10-K,

quarterly reports on Form 10-Q, current reports on Form 8-K and all other filings with the SEC are available on the SEC’s

website at www.sec.gov .

Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Form 10-Q”)

includes “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.

All statements other than statements of historical fact included

in this Form 10-Q, including without limitation the statements under this “Trustee’s Discussion and Analysis of Financial

Condition and Results of Operations,”

This Quarterly Report on Form 10-Q (this

“Form 10-Q”) includes “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.

All statements other than statements

of historical fact included in this Form 10-Q, including without limitation the statements under this “Trustee’s Discussion

and Analysis of Financial Condition and Results of Operations,”

are forward-looking statements.

Such statements may be influenced by factors that could cause

actual outcomes and results to differ materially from those projected.

Such expectations may not prove to have been correct.

in this document, the words “will,”

Such statements may be influenced

by factors that could cause actual outcomes and results to differ materially from those projected.

Such expectations may not prove to

have been correct.

When used in this document, the words “will,”

“plans,”

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or similar expressions are intended to identify such forward-looking statements.

The following important factors,

in addition to those discussed elsewhere in this Form 10-Q, in the Trust’s 2025 Annual Report on Form 10-K and the Trust’s

other filings with the SEC could affect the future results of the energy industry in general, and COERT and the Trust in particular, and

could cause actual results to differ materially from those expressed in such forward-looking statements:

risks associated with the drilling and operation of oil and natural gas wells;

the amount of future direct operating expenses and development expenses;

the occurrence or threat of epidemic or pandemic diseases or other public

health event or any government response to such occurrence or threat;

the impact of geopolitical developments and tensions, war and uncertainty

involving or in the geographical region of oil producing countries (including the ongoing wars in Ukraine and the Persian Gulf and any

related political or economic responses and counter-responses or otherwise by various global actors or the general effect on the global

global economic conditions, such as a general slowdown in the global economy,

trade barriers and tariffs, supply chain disruptions, inflationary pressures, currency fluctuations, changes in interest rates, and instability

of financial institutions;

the effects of actions by, or disputes among or between members of the Organization

of Petroleum Exporting Countries (“OPEC”) and other oil-exporting nations with respect to production levels or other matters

related to the prices of oil and natural gas;

the effect of existing and future laws and regulatory actions;

the effect of changes in commodity prices or alternative fuel prices;

the prohibition on the Trust’s entry into any new hedging arrangements

under the terms of the Conveyance;

conditions in the capital markets;

competition from others in the energy industry;

uncertainty of estimates of oil and natural gas reserves and production;

potential impacts on the Sponsor’s business resulting from climate

change, greenhouse gas regulations, and the impact of climate change related changes in the frequency and severity of weather patterns;

other risks described under the caption “Risk Factors”

in Part I, Item

1A of the 2025 Annual Report on Form 10-K.

following important factors, in addition to those discussed elsewhere in this Form 10-Q, in the Trust’s 2025 Annual Report

on Form 10-K and the Trust’s other filings with the SEC could affect the future results of the energy industry in general,

and COERT and the Trust in particular, and could cause actual results to differ materially from those expressed in such forward-looking

associated with the drilling and operation of oil and natural gas wells;

amount of future direct operating expenses and development expenses;

occurrence or threat of epidemic or pandemic diseases or other public health event or any

government response to such occurrence or threat;

impact of geopolitical developments and tensions, war and uncertainty involving or in the

geographical region of oil producing countries (including the ongoing wars in Ukraine and

the Persian Gulf and any related political or economic responses and counter-responses or

otherwise by various global actors or the general effect on the global economy);

economic conditions, such as a general slowdown in the global economy, the impact of new

or additional trade barriers and tariffs, supply chain disruptions, inflationary pressures,

currency fluctuations, changes in interest rates, and instability of financial institutions;

effects of actions by, or disputes among or between members of the Organization of Petroleum

Exporting Countries (“OPEC”) and other oil-exporting nations with respect to

production levels or other matters related to the prices of oil and natural gas;

effect of existing and future laws and regulatory actions;

effect of changes in commodity prices or alternative fuel prices;

prohibition on the Trust’s entry into any new hedging arrangements under the terms

of the Conveyance;

in the capital markets;

from others in the energy industry;

of estimates of oil and natural gas reserves and production;

occurrence of security incidents, including breaches of security, or other attack, destruction,

alteration, corruption, or unauthorized access to the information technology systems of the

Sponsor or the Trustee or destruction, loss, alteration, corruption, or misuse or unauthorized

disclosure of or access to data;

impacts on the Sponsor’s business resulting from climate change, greenhouse gas regulations,

and the impact of climate change related changes in the frequency and severity of weather

risks described under the caption “Risk Factors”

in Part I, Item 1A

of the 2025 Annual Report on Form 10-K.

You should not place undue reliance on these forward-looking

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or to reflect the occurrence of unanticipated events, unless the securities laws require the Trust to do so.

This Form 10-Q describes other important factors

that could cause actual results to differ materially from expectations of the Sponsor and the Trust.

Initial production rates may not

be indicative of future production rates and are not indicative of the amounts of oil and gas that a well may produce.

This Form 10-Q describes other important

factors that could cause actual results to differ materially from expectations of the Sponsor and the Trust.

Initial production rates

may not be indicative of future production rates and are not indicative of the amounts of oil and gas that a well may produce.

All forward-looking

statements in this report and all subsequent written and oral forward-looking statements attributable to the Sponsor or the Trust or persons

acting on behalf of the Sponsor or the Trust are expressly qualified in their entirety by such factors.

The Trust assumes no obligation,

and disclaims any duty, to update these forward-looking statements.

Permianville Royalty Trust, a statutory trust created

in May 2011, completed its initial public offering in November 2011.

The Trust’s only asset and source of income is the

net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production from certain

properties in the states of Texas, Louisiana and New Mexico held by Enduro as of the date of the conveyance of the net profits interest

to the Trust (the “Net Profits Interest”).

The properties in which the Trust holds the Net Profits Interest are referred to

as the “Underlying Properties.”

The Net Profits Interest is passive in nature and neither the Trust nor the Trustee has any

management control over or responsibility for costs relating to the operation of the Underlying Properties.

Additionally, third parties

operate substantially all of the wells on the Underlying Properties and, therefore, the Sponsor is not in a position to control the timing

of development efforts, associated costs, or the rate of production of the reserves.

statements in this report and all subsequent written and oral forward-looking statements attributable to the Sponsor or the Trust or

persons acting on behalf of the Sponsor or the Trust are expressly qualified in their entirety by such factors.

The Trust assumes no

obligation, and disclaims any duty, to update these forward-looking statements.

Permianville Royalty Trust, a statutory trust

created in May 2011, completed its initial public offering in November 2011.

The Trust’s only asset and source of income

is the net profits interest representing the right to receive 80% of the net profits from the sale of oil and natural gas production

from certain properties in the states of Texas, Louisiana and New Mexico held by Enduro as of the date of the conveyance of the net profits

interest to the Trust (the “Net Profits Interest”).

The properties in which the Trust holds the Net Profits Interest are

referred to as the “Underlying Properties.”

The Net Profits Interest is passive in nature and neither the Trust nor the Trustee

has any management control over or responsibility for costs relating to the operation of the Underlying Properties.

Additionally, third

parties operate substantially all of the wells on the Underlying Properties and, therefore, the Sponsor is not in a position to control

the timing of development efforts, associated costs, or the rate of production of the reserves.

On August 31, 2018, COERT completed the acquisition

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on, among other things:

oil and natural gas sales prices;

volumes of oil and natural gas produced and sold attributable to the Underlying

production and development costs;

price differentials;

potential reductions or suspensions of production;

the amount and timing of Trust administrative expenses;

the establishment, increase, or decrease of reserves for approved development

expenses or future liabilities of the Trust.

and natural gas sales prices;

of oil and natural gas produced and sold attributable to the Underlying Properties;

and development costs;

differentials;

reductions or suspensions of production;

amount and timing of Trust administrative expenses;

establishment, increase, or decrease of reserves for approved development expenses or future

liabilities of the Trust.

Generally, the Sponsor receives cash payment for

oil production 30 to 60 days after it is produced and for natural gas production 60 to 90 days after it is produced.

The Sponsor has indicated to the Trustee that although

development activity on the Underlying Properties through the first three months of 2026 decreased over 50% compared to the same period

in 2025, the current level of in-progress drilling not yet billed to the Underlying Properties suggests that the forward outlook and indicated

activity from operators appears to be improving.

The Sponsor believes that the activity outlook for the remainder of the year will likely

be weighted towards natural gas drilling in the Haynesville, similar to last year, as seen in the approximately 48% increase in natural

gas production for the Underlying Properties for the first three months of 2026 compared to the same period in 2025.

Given the indicated

activity outlook from the super major oil and gas operator of the Underlying Properties responsible for much of the recent Haynesville

activity, the Sponsor has maintained a cash reserve for near-term capital expenditures, consistent with prior periods in which material

future capital expenditure obligations have been expected.

As of March 31, 2026, the cash reserve balance was $0.9 million.

beginning of the year, based on publicly announced budgets from various operators of the Underlying Properties, oil-weighted capital expenditures

were expected to decrease year-over-year.

However, based on more recent public announcements, prior estimated capital expenditures could

increase but remain subject to substantial volatility given current macro events.

As in prior periods, future capital expenditure expectations

remain subject to revision from the operators of the Underlying Properties.

The Sponsor believes that the outlook for the oil

and gas industry has improved compared to early second quarter of 2025, as recent macro events such as the Persian Gulf conflict have

increased commodity price forecasts and emphasized the importance of North American-based oil and gas operations.

Since the start of the

year, oil prices have ranged from a low of $56 per Bbl to as high as $113 per Bbl, while natural gas prices have also experienced volatility,

ranging from a low of $2.52 per MMBtu to a high of $7.46 per MMBtu over the same period.

Although natural gas prices at the end of the

first quarter of 2026 were lower than at the end of the first quarter of 2025, industry analysts continue to forecast increasing demand

from the buildout of datacenters and the AI ecosystem that are expected to require both renewable energy sources and natural gas-powered

electricity generation.

Meanwhile, the Sponsor continues to believe that consolidation within the oil and gas sector could lead to lower

operating costs given economies of scale, but could also lead to more binary swings in capital spending, as more assets and capital budgets

are set by fewer operators than in years past.

The Sponsor has indicated to the Trustee that

development activity on the Underlying Properties is expected to continue at its elevated pace for the remainder of the year.

Nevertheless,

the commodity mix and forward outlook for that development activity remains highly uncertain, even when compared to prior periods, given

the significant volatility in commodity prices and in the activity plans publicly announced by operators of the Underlying Properties.

The Sponsor believes that the activity outlook for the remainder of the year has shifted to include not only the previously disclosed

natural gas drilling in the Haynesville, but oil-directed activity that has increased in response to the higher crude oil prices seen

thus far in 2026 compared to 2025.

The Sponsor expects that natural gas production from the Underlying Properties, which increased 71%

in the first half of 2026 compared to the same period of 2025, will continue to grow, albeit at more moderated levels.

Although the Sponsor

expects that oil production from the Underlying Properties, which declined 9% in the six-month period ended June 30, 2026 compared

to the same period of 2025, may improve slightly given known oil-directed capital expenditures, oil production is likely to remain at

reduced levels.

Given the indicated activity outlook from public operators as well as some private operators, the Sponsor has maintained

a cash reserve for near-term capital expenditures, consistent with prior periods in which material future capital expenditure obligations

have been expected.

As of June 30, 2026, the cash reserve balance was $1.8 million.

As in prior periods, future capital expenditure

expectations remain subject to revision from the operators of the Underlying Properties.

The Sponsor believes that the outlook for the

oil and gas industry continues to improve.

Recent events such as the Persian Gulf conflict have increased oil price forecasts, while

underscoring the importance of North American-based oil and gas operations.

Since the start of 2026, oil prices have ranged from a low

of $56 per Bbl to as high as $113 per Bbl, while natural gas prices also have experienced volatility, ranging from a low of $2.52 per

MMBtu to a high of $7.46 per MMBtu over the same period.

Unlike oil, average natural gas prices experienced a decline in the second quarter

of 2026 compared to the start of the year;

however, the Sponsor expects the observed rig count and activity levels, as estimated by industry

analysts, to remain elevated given the forecast for increasing natural gas demand from the buildout of data centers and the AI ecosystem

that are expected to require both renewable energy sources and natural gas-powered electricity generation.

Despite this volatility, given the pace of capital

expenditures during the first three months of 2026, the Sponsor is reaffirming its 2026 capital spending outlook of $9.0 million to $15.0

million, or $7.2 million to $12.0 million net to the Trust’s Net Profits Interest, but currently expects those expenditures to trend

toward the higher end of the range given current expectations and guidance from the operators of the Underlying Properties.

expects a majority of the remaining anticipated capital expenditures in 2026 to be focused on the Haynesville area, given known projects

currently in process.

The Sponsor believes that any further increases to the expected capital expenditure budget likely would come from

oil-weighted projects by operators in the Permian region adding near-term activity in response to the recent oil price increases driven

by the ongoing Persian Gulf conflict.

As in prior periods, however, the outlook for capital expenditures remains subject to change, as

operators are expected to continue to reevaluate their planned capital expenditures, particularly given volatile capital markets and an

uncertain geopolitical situation.

Over the first three months of 2026, the Sponsor

expenditures during the first six months of 2026 and the known in-process activity of certain operators of the Underlying Properties,

the Sponsor is reaffirming its 2026 capital spending outlook of $9.0 million to $15.0 million, or $7.2 million to $12.0 million net to

the Trust’s Net Profits Interest.

The Sponsor expects a majority of the remaining anticipated capital expenditures in 2026 to be

focused on the Haynesville area.

As in prior periods, however, the outlook for capital expenditures remains subject to change, as operators

are expected to continue to reevaluate their planned capital expenditures, particularly given volatile capital markets and an uncertain

geopolitical situation.

Over the first six months of 2026, the Sponsor

continued to see a reduction in operating costs on a per unit basis for the Underlying Properties compared to prior periods, due in part

to the higher total production for the first quarter of 2026 compared to the same period last year.

The Sponsor indicates that this increase

in production has come predominately from natural gas production growth in the Haynesville region, which generally features lower operating

costs compared to legacy production areas within the Underlying Properties.

The Sponsor expects this trend to continue given the near-term

outlook for natural-gas-weighted capital expenditure activity.

According to the Sponsor, this decline in operating costs per unit has

been partially offset by ongoing operational issues and cost overruns at some of the legacy, marginal oil-weighted assets on the Underlying

Properties, which the Sponsor indicates it is continuing to proactively address through joint interest billing audits among other avenues

afforded to non-operating working interest partners.

the commodity markets remain volatile, and there remains an inherent delay in cash flows given the non-operated nature of the Underlying

Properties, the Sponsor indicates that it continues to have access to adequate capital and liquidity to fund such operating and capital

expenditures as they come due.

Furthermore, the Sponsor believes additional opportunities could arise in the coming quarters for

potential divestitures and/or leasing of some or all of the Underlying Properties, subject to the Trust’s Net Profits Interest,

as certain operators of the Underlying Properties may look to acquire assets.

to the higher total production for the first six months of 2026 compared to the same period last year, in addition to the shift in production

mix towards a higher weighting of natural gas compared to oil production.

The Sponsor indicates that this increase in production has

come predominately from natural gas production growth in the Haynesville region, which generally features lower operating costs compared

to legacy production areas within the Underlying Properties.

The Sponsor expects this trend to continue given the near-term outlook for

natural gas-weighted capital expenditure activity, but could moderate in the coming quarters to the extent that the operators of the

Underlying Properties shift spending away from natural gas and toward oil production.

According to the Sponsor, this decline in operating

costs per unit has been partially offset by ongoing operational issues and cost overruns at some of the legacy, marginal oil-weighted

assets on the Underlying Properties.

The Sponsor indicates it is continuing to proactively address these issues through joint interest

billing audits among other avenues afforded to non-operating working interest partners.

Although the commodity markets remain volatile,

and there remains an inherent delay in cash flows given the non-operated nature of the Underlying Properties, the Sponsor indicates that

it continues to have access to adequate capital and liquidity to fund such operating and capital expenditures as they come due.

the Sponsor believes additional opportunities could arise in the coming quarters for potential divestitures and/or leasing of some or

all of the Underlying Properties, subject to the Trust’s Net Profits Interest, as certain operators of the Underlying Properties

may look to acquire assets.

Capex Drilling Activity Update

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D&C New Drills

6 Drilling in Process

awaiting first revenue

Large Cap E&P 3

D&C New Drills

19 Pre Drills

Large Cap E&P 4

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D&C New Drills

2 Producing awaiting first revenue

awaiting first revenue

PE-Backed Private 2

D&C New Drills

7 Drilling in Process

awaiting first revenue

PE-Backed Private 3

D&C New Drills

The projects identified above are still in process

or awaiting first revenues, and the Sponsor expects a majority of those projects to be completed and to begin producing during the second

half of 2026.

or awaiting first revenues, and the Sponsor expects a majority of the projects that are in the process of drilling or pre-drilling to

be completed and to begin producing during the second half of 2026 and the first half of 2027.

Results of Operations

Three Months Ended March 31, 2026 Compared to Three Months

Ended March 31, 2025

The Trust’s net profits income consists of

monthly net profits attributable to the Net Profits Interest, which was determined as shown in the following table:

Three Months Ended

Three Months Ended June 30, 2026 Compared to Three Months

Ended June 30, 2025

The Trust’s net profits income consists

of monthly net profits attributable to the Net Profits Interest, which was determined as shown in the following table:

Gross profits:

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Percentage allocable to Net Profits Interest

Net profits allocable to Net Profits Interest

Net profits allocable to Net Profits

Negative Net Profits Carryforward

Capex Reserve –

Release for anticipated 2025-2026 capital expenditures

Trust general and administrative expenses and cash withheld for expenses net of interest income

Release for anticipated 2025-2026 capital

Release of Escrow

Repayment of COERT Loan

Trust general and administrative

expenses and cash withheld for expenses net of interest income

Distributable income

During the three months ended March 31, 2025,

direct operating and development expenses exceeded cash receipts, leading to a Net Profits Interest shortfall of approximately $1.4 million

as of March 31, 2025, which was carried forward to be deducted from future net profits generated by the Underlying Properties.

a result, there were no net profits reported or distributed in the first three months of 2025.

The following table displays reported oil and natural

gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the net profits calculation

for distributions paid or payable during the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

During the three months ended June 30, 2025,

the Net Profits Interest generated positive income, which eliminated the cumulative Net Profits Interest shortfall of approximately $1.4

million that existed as of March 31, 2025;

however, no distributions were made to Trust unitholders during the period because of

outstanding advances from the Sponsor to the Trust for the payment of administrative expenses, which totaled $0.6 million as of June 30,

The Trust is not permitted to make distributions to Trust unitholders until any Net Profits Interest shortfall has been recouped

and outstanding advances from the Sponsor have been repaid.

The following table displays reported oil and

natural gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the net profits calculation

for distributions paid or payable during the three months ended June 30, 2026 and 2025:

Underlying Properties Production Volumes:

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Net profits attributable to the Underlying Properties

for the three months ended March 31, 2026 were $1.3 million compared to a net profits deficit of $3.0 million for the three

months ended March 31, 2025.

The $4.3 million increase in net profits attributable to the Underlying Properties from the 2025

period to the 2026 period was primarily due to the following items:

Oil sales decreased $2.3 million due to lower produced volumes and lower

realized prices.

The 9% reduction in produced volumes decreased revenues by $0.8 million.

Realized oil sales prices decreased 20% in the

2026 period compared to the 2025 period, which decreased revenues by $1.5 million.

Natural gas sales increased $2.8 million compared to the 2025 period, reflecting

a $1.8 million increase due to higher realized prices.

The 48% increase in produced volumes increased revenues by $1.0 million.

natural gas price received increased 59% primarily due to the increase in the average realized natural gas price for the relevant production

Lease operating expenses during the three months ended March 31, 2026

decreased $0.1 million compared to the three months ended March 31, 2025.

Compression, gathering and transportation costs increased $1.2 million, primarily

due to higher sales volumes from three new Haynesville wells included in the three months ended March 31, 2026 compared to the three

months ended March 31, 2025.

Production, ad valorem and other taxes remained consistent at $0.7 million

during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Development expenses decreased $4.9 million during the three months ended

March 31, 2026 compared to the same period in 2025.

For the three months ended March 31, 2026,

for the three months ended June 30, 2026 were $3.5 million compared to $1.9 million for the three months ended June 30,

The $1.5 million increase in net profits attributable to the Underlying Properties from the 2025 period to the 2026 period

was primarily due to the following items:

sales decreased $2.4 million due to lower produced volumes and lower realized prices.

8% reduction in produced volumes decreased revenues by $0.7 million.

Realized oil sales prices

decreased 23% in the 2026 period compared to the 2025 period, which decreased revenues by

$1.7 million.

gas sales increased $6.0 million compared to the 2025 period, reflecting a $3.0 million increase

due to higher realized prices.

The 92% increase in produced volumes, which is primarily attributable

to the three new Haynesville wells included in the 2026 period, increased revenues by $3.0

The average natural gas price received increased 48% primarily due to the increase

in the average realized natural gas price for the relevant production months.

operating expenses during the three months ended June 30, 2026 increased $0.9 million

compared to the three months ended June 30, 2025.

gathering and transportation costs increased $0.9 million, primarily due to higher sales

volumes from three new Haynesville wells included in the three months ended June 30,

2026 compared to the three months ended June 30, 2025.

ad valorem and other taxes remained consistent at $0.7 million during the three months ended

June 30, 2026 compared to the three months ended June 30, 2025.

expenses increased $0.2 million during the three months ended June 30, 2026 compared

to the same period in 2025.

For the three months ended June 30, 2026,

the Trust withheld $0.5 million and paid $0.5 million for general and administrative expenses.

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Exchange listing fees.

For the three months ended March 31, 2025, the Trust withheld $0.0 million and paid $0.2 million for general

For the three months ended June 30, 2025, the Trust withheld $0.0 million and paid $0.3 million for general

and administrative expenses.

Six Months Ended June 30, 2026 Compared to Six Months Ended

June 30, 2025

The Trust’s net profits income consists

of monthly net profits attributable to the Net Profits Interest, which was determined as shown in the following table:

Gross profits:

Natural gas sales

Direct operating expenses:

Lease operating expenses

Compression, gathering and transportation

Production, ad valorem and other taxes

Development expenses

Percentage allocable to Net Profits Interest

Net profits allocable to Net Profits

Capex Reserve –

Release for anticipated 2025-2026 capital

Release of escrow

Repayment of COERT Loan

Trust general and administrative

expenses and cash withheld for expenses net of interest income

Distributable income

During the six months ended June 30, 2025,

although the Net Profits Interest shortfall that existed throughout the first five months of the period was eliminated by the end of

the period, no distributions were made to Trust unitholders during the period because of outstanding advances from the Sponsor to the

Trust for the payment of administrative expenses, which totaled $0.6 million as of June 30, 2025.

The Trust is not permitted to

make distributions to Trust unitholders until any Net Profits Interest shortfall has been recouped and outstanding advances from the

Sponsor have been repaid.

The following table displays reported oil and

natural gas sales volumes and average prices from the Underlying Properties, representing the amounts included in the net profits calculation

for distributions paid or payable during the six months ended June 30, 2026 and 2025:

Underlying Properties Production Volumes:

Natural Gas (Mcf)

Combined (Boe)

Average Prices:

Oil - NYMEX (applicable NPI period) ($/Bbl)

Oil prices realized ($/Bbl)

Natural gas - NYMEX (applicable NPI period) ($/Mcf)

Natural gas prices realized ($/Mcf)

Net profits attributable to the Underlying Properties

for the six months ended June 30, 2026 were $4.8 million compared to a net profits deficit of $1.1 million for the six months

ended June 30, 2025.

The $5.9 million increase in net profits attributable to the Underlying Properties from the 2025 period

to the 2026 period was primarily due to the following items:

sales decreased $4.7 million due to lower produced volumes and lower realized prices.

9% reduction in produced volumes decreased revenues by $1.4 million.

Realized oil sales prices

decreased 22% in the 2026 period compared to the 2025 period, which decreased revenues by

$3.3 million.

gas sales increased $8.7 million compared to the 2025 period, reflecting a $5.0 million increase

due to higher realized prices.

The 71% increase in produced volumes, which is primarily attributable

to the three new Haynesville wells included in the 2026 period, increased revenues by $3.7

The average natural gas price received increased 55% primarily due to the increase

in the average realized natural gas price for the relevant production months.

operating expenses during the six months ended June 30, 2026 decreased $0.8 million

compared to the six months ended June 30, 2025.

gathering and transportation costs increased $2.0 million, primarily due to higher sales

volumes from three new Haynesville wells included in the six months ended June 30, 2026

compared to the six months ended June 30, 2025.

ad valorem and other taxes remained consistent at $1.4 million during the six months ended

June 30, 2026 compared to the six months ended June 30, 2025.

expenses decreased $4.6 million during the six months ended June 30, 2026 compared to

the same period in 2025.

For the six months ended June 30, 2026, the

Trust withheld $1.0 million and paid $0.6 million for general and administrative expenses.

Expenses paid during the period primarily

consisted of fees for the preparation of the Trust’s monthly press releases, insurance expense, Trustee fees, and New York Stock

Exchange listing fees.

For the six months ended June 30, 2025, the Trust withheld $0.0 million and paid $0.5 million for general

and administrative expenses.

Liquidity and Capital Resources

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future liabilities of the Trust.

In February 2022, the Trustee began withholding $37,833 from the funds otherwise available for distribution

each month to gradually build a cash reserve of approximately $2.3 million for the payment of future known, anticipated or contingent

expenses or liabilities of the Trust.

Commencing with the distribution to Trust unitholders payable in April 2023, the Trustee has

been withholding, and in the future intends to withhold, $50,000 from the funds otherwise available for distribution each month to gradually

build the reserve.

The Trustee may increase or decrease the targeted cash reserve amount at any time, and may increase or decrease the

rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the Trust unitholders.

in reserve will be invested as required by the Trust Agreement.

Any cash reserved in excess of the amount necessary to pay or provide

for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to Trust unitholders,

together with interest earned on the funds.

As of March 31, 2026, the Trustee has withheld $1,692,534 toward this cash reserve.

In February 2022, the Trustee began withholding $37,833 from the funds otherwise available for

distribution each month to gradually build a cash reserve of approximately $2.3 million for the payment of future known, anticipated

or contingent expenses or liabilities of the Trust.

Commencing with the distribution to Trust unitholders payable in April 2023,

the Trustee has been withholding, and in the future intends to withhold, $50,000 from the funds otherwise available for distribution

each month to gradually build the reserve.

The Trustee may increase or decrease the targeted cash reserve amount at any time, and may

increase or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the Trust

Cash held in reserve will be invested as required by the Trust Agreement.

Any cash reserved in excess of the amount necessary

to pay or provide for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to

Trust unitholders, together with interest earned on the funds.

As of June 30, 2026, the Trustee has withheld $1,842,534 toward this

cash reserve.

If the Trustee determines that the cash on hand

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In addition, COERT has provided the Trust

with a $1.2 million letter of credit to be used by the Trust if its cash on hand (including available cash reserves) is insufficient to

pay ordinary course administrative expenses.

Further, if the Trust requires more than the $1.2 million under the letter of credit to pay

administrative expenses, COERT has agreed to loan funds to the Trust necessary to pay such expenses.

Any loan made by COERT to the Trust

would be evidenced by a written promissory note, be on an unsecured basis, and have terms that are no less favorable to COERT than those

that would be obtained in an arm’s length transaction between COERT and an unaffiliated third party.

If the Trust borrows funds

or draws on the letter of credit, no further distributions will be made to Trust unitholders until such amounts borrowed or drawn are

with a $1.2 million letter of credit to be used by the Trust if its cash on hand (including available cash reserves) is insufficient

to pay ordinary course administrative expenses.

Further, if the Trust requires more than the $1.2 million under the letter of credit

to pay administrative expenses, COERT has agreed to loan funds to the Trust necessary to pay such expenses.

Any loan made by COERT to

the Trust would be evidenced by a written promissory note, be on an unsecured basis, and have terms that are no less favorable to COERT

than those that would be obtained in an arm’s length transaction between COERT and an unaffiliated third party.

If the Trust borrows

funds or draws on the letter of credit, no further distributions will be made to Trust unitholders until such amounts borrowed or drawn

Except for the foregoing, the Trust has no source of liquidity or capital resources.

The Trustee has no current plans to authorize

the Trust to borrow any funds.

As of March 31, 2026 and December 31, 2025, including the aggregate amounts withheld as of such

dates toward the approximately $2.3 million cash reserve discussed above, the Trust had cash of $3,186,425 and $2,733,791, respectively,

to be used towards future Trust expenses.

Since its formation, the Trust has not borrowed any funds and no amounts have been drawn on

the letter of credit.

The Trustee has no current plans to

authorize the Trust to borrow any funds.

As of June 30, 2026 and December 31, 2025, including the aggregate amounts withheld

as of such dates toward the approximately $2.3 million cash reserve discussed above, the Trust had cash of $3,346,992 and $2,733,791,

respectively, to be used towards future Trust expenses.

Since its formation, the Trust has not borrowed any funds and no amounts have

been drawn on the letter of credit.

From time to time, if the Trust’s cash on

hand (including available cash reserves, if any) is not sufficient to pay the Trust’s ordinary course administrative expenses that

are due prior to the monthly payment to the Trust of proceeds from the Net Profits Interest, COERT may advance funds to the Trust to pay

such expenses.

At March 31, 2026 and December 31, 2025, there were no outstanding advances.

Any advances to the Trust will be

carried forward to be repaid out of future net profits generated by the Underlying Properties.

Cash held by the Trustee as a reserve against future

liabilities or for distribution at the next distribution date may be held in a noninterest-bearing account or may be invested in:

interest-bearing obligations of the United States government;

money market funds that invest only in United States government securities;

repurchase agreements secured by interest-bearing obligations of the United

States government;

bank certificates of deposit.

are due prior to the monthly payment to the Trust of proceeds from the Net Profits Interest, COERT may advance funds to the Trust to

pay such expenses.

At June 30, 2026 and December 31, 2025, there were no outstanding advances.

Any advances to the Trust will

be carried forward to be repaid out of future net profits generated by the Underlying Properties.

Cash held by the Trustee as a reserve against

future liabilities or for distribution at the next distribution date may be held in a noninterest-bearing account or may be invested

interest-bearing

obligations of the United States government;

market funds that invest only in United States government securities;

agreements secured by interest-bearing obligations of the United States government;

certificates of deposit.

The Trust pays the Trustee an annual administrative

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The Trust also is responsible for paying other expenses incurred as a result of being a publicly traded

entity, including costs associated with annual and quarterly reports to Trust unitholders, tax return and Form 1099 preparation and

distribution, NYSE listing fees, independent auditor fees and registrar and transfer agent fees.

entity, including costs associated with annual and quarterly reports to Trust unitholders, tax return and Form 1099 preparation

and distribution, NYSE listing fees, independent auditor fees and registrar and transfer agent fees.

The Trust does not have any transactions, arrangements

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The Trust has no off-balance sheet arrangements.

The Trust has not guaranteed the debt of any other party, nor does the Trust have any other arrangements or relationships with other entities

that could potentially result in unconsolidated debt, losses or contingent obligations.

The Trust has not guaranteed the debt of any other party, nor does the Trust have any other arrangements or relationships with other

entities that could potentially result in unconsolidated debt, losses or contingent obligations.

Critical Accounting Policies and Estimates

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2025 Annual Report on Form 10-K for additional information regarding the Trust’s critical accounting policies and estimates.

There were no material changes to the Trust’s critical accounting policies or estimates during the three months ended March 31,

There were no material changes to the Trust’s critical accounting policies or estimates during the six months ended June 30,

Quantitative and Qualitative Disclosures About Market Risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements