{"url_path":"/sec/voc/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 ****Financial Statements.**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-13","source_url":"https://www.sec.gov/Archives/edgar/data/1505413/0001104659-26-060266-index.html","accession_number":"0001104659-26-060266","cik":"0001505413","ticker":"VOC","issuer_name":"VOC Energy Trust","edgar_url":"https://www.sec.gov/Archives/edgar/data/1505413/0001104659-26-060266-index.html","primary_entity_key":"0001505413","primary_entity_name":"VOC Energy Trust"},"word_count":2579,"has_tables":true,"body_markdown":"**Item 1.****Financial Statements.**\n\n**VOC ENERGY TRUST**\n\n**STATEMENTS OF DISTRIBUTABLE INCOME**\n\n**(Unaudited)**\n\nThree months ended\nMarch 31,\n\n2026\n2025\n\nIncome from net profits interest\n$1,586,124\n$1,898,820\n\nCash on hand used (withheld) for Trust expenses\n255,526\n(41,299)\n\nGeneral and administrative expenses (1)\n(311,650)\n(412,521)\n\nDistributable income\n$1,530,000\n$1,445,000\n\nDistributions per Trust unit (17,000,000 Trust units issued and outstanding at March 31, 2026 and 2025)\n$0.090\n$0.085\n\n(1)Includes $32,464 and $31,215 paid to VOC Brazos Energy Partners, LP (“VOC\nBrazos”) during the three months ended March 31, 2026 and 2025, respectively,\nand $37,500 paid to The Bank of New York Mellon Trust Company, N.A. during each of the three-month\nperiods ended March 31, 2026 and 2025.\n\n**STATEMENTS OF ASSETS AND TRUST CORPUS**\n\nMarch 31,\n2026\nDecember 31,\n2025\n\n(Unaudited)\n\nASSETS\n\nCash and cash equivalents\n$1,771,113\n$2,026,639\n\nInvestment in net profits interest\n140,591,606\n140,591,606\n\nAccumulated amortization and impairment\n(132,643,644)\n(132,218,252)\n\nTotal assets\n$9,719,075\n$10,399,993\n\nTRUST CORPUS\n\nTrust corpus, 17,000,000 Trust units issued and outstanding at March 31, 2026 and December 31, 2025\n$9,719,075\n$10,399,993\n\n**STATEMENTS OF CHANGES IN TRUST CORPUS**\n\n**(Unaudited)**\n\nThree months ended\nMarch 31,\n\n2026\n2025\n\nTrust corpus, beginning of period\n$10,399,993\n$11,871,877\n\nIncome from net profits interest\n1,586,124\n1,898,820\n\nCash distributions\n(1,530,000)\n(1,445,000)\n\nTrust expenses\n(311,650)\n(412,521)\n\nAmortization of net profits interest\n(425,392)\n(441,769)\n\nTrust corpus, end of period\n$9,719,075\n$11,471,407\n\nThe accompanying notes are an integral part of\nthese financial statements.\n\n2\n\n**VOC ENERGY TRUST**\n\n**NOTES TO FINANCIAL STATEMENTS**\n\n**(Unaudited)**\n\n**Note 1.**     **Organization of\nthe Trust**\n\nVOC Energy Trust (the “Trust”) is\na statutory trust formed on November 3, 2010 (capitalized on December 17, 2010), under the Delaware Statutory Trust Act pursuant\nto a Trust Agreement dated November 3, 2010 (as amended and restated on May 10, 2011, the “Trust Agreement”) among\nVOC Brazos Energy Partners, L.P., a Texas limited partnership (“VOC Brazos”), as trustor, The Bank of New York Mellon Trust\nCompany, N.A., as Trustee (the “Trustee”), and Wilmington Trust Company, as Delaware Trustee (the “Delaware Trustee”).\nThe Trust was created to acquire and hold a term net profits interest for the benefit of the Trust unitholders.\n\nVOC Brazos is a privately held limited partnership\nengaged in the production and development of oil and natural gas from properties located in Texas. VOC Kansas Energy Partners, L.L.C.,\na Kansas limited liability company (“VOC Kansas”), is a privately held limited liability company engaged in the production\nand development of oil and natural gas from properties primarily located in Kansas along with a limited number of Texas properties. In\nconnection with the closing of the initial public offering of units of beneficial interest in the Trust (“Trust Units”) in\nMay 2011, VOC Brazos acquired all of the membership interests in VOC Kansas in exchange for newly issued limited partner interests\nin VOC Brazos pursuant to a Contribution and Exchange Agreement, dated August 30, 2010, as amended, by and between VOC Brazos\nand VOC Kansas. This resulted in VOC Kansas becoming a wholly-owned subsidiary of VOC Brazos.\n\nThe Trust was created to acquire and hold a term\nnet profits interest representing the right to receive 80% of the net proceeds (calculated as described below in Note 5) from production\nfrom the underlying properties (as defined below). The net profits interest consists of working interests in substantially all of the\noil and natural gas properties held by VOC Brazos and VOC Kansas in the States of Kansas and Texas as of the date of the conveyance of\nthe net profits interest to the Trust. We refer to the properties in which the Trust holds the net profits interest as the “underlying\nproperties.”\n\nThe net profits interest is passive in nature,\nand the Trustee has no management control over and no responsibility relating to the operation of the underlying properties. The net\nprofits interest entitles the Trust to receive 80% of the net proceeds attributable to VOC Brazos’ interest from the sale of production\nfrom the underlying properties during the term of the Trust. The net profits interest will terminate on the later to occur of (1) December 31,\n2030 or (2) the time when 10.6 million barrels of oil equivalent (“MMBoe”) (which is the equivalent of 8.5 MMBoe\nin respect of the net profits interest) have been produced from the underlying properties and sold, and the Trust will soon thereafter\nwind up its affairs and terminate.\n\nAs of March 31, 2026, cumulatively, since\ninception, the Trust has received payment for 80% of the net proceeds attributable to VOC Brazos’ interest from the sale of 9.8\nMMBoe of production from the underlying properties (which is the equivalent of 7.8 MMBoe (unaudited) in respect of the net profits\ninterest).\n\nThe Trustee can authorize the Trust to borrow\nmoney to pay administrative or incidental expenses of the Trust that exceed cash held by the Trust. The Trustee may authorize the Trust\nto borrow from the Trustee or the Delaware Trustee as a lender provided the terms of the loan are similar to the terms it would grant\nto a similarly situated commercial customer with whom it did not have a fiduciary relationship. The Trustee may also deposit funds awaiting\ndistribution in an account with itself and make other short-term investments with the funds distributed to the Trust.\n\n**Note 2.**        **Basis of Presentation**\n\nThe accompanying Statement of Assets and Trust\nCorpus as of December 31, 2025, which has been derived from audited financial statements, and the unaudited interim financial statements\nas of March 31, 2026 and for the three-month periods ended March 31, 2026 and 2025, have been prepared pursuant to the rules and\nregulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and note disclosures\nnormally included in annual financial statements have been omitted pursuant to those rules and regulations.\n\n3\n\nThe preparation of financial statements requires\nthe Trust to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets\nand liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.\nActual results could differ from those estimates. The Trustee believes such information includes all the disclosures necessary to make\nthe information presented not misleading. The information furnished reflects all adjustments that are, in the opinion of the Trustee,\nnecessary for a fair presentation of the results of the interim period presented. The financial information should be read in conjunction\nwith the financial statements and notes thereto included in the Trust’s Annual Report on Form 10-K for the year ended December 31,\n2025.\n\n**Note 3.**        **Trust Accounting\nPolicies**\n\nThe Trust uses the modified cash basis of accounting\nto report receipts of the net profits interest and payments of expenses incurred. The net profits interest represents the right to receive\nrevenues (oil and natural gas sales), less direct operating expenses (lease operating expenses, lease maintenance, lease overhead, and\nproduction and property taxes) and an adjustment for lease equipment costs and lease development expenses (which are capitalized in financial\nstatements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”))\nof the underlying properties, times 80%. Actual cash receipts may vary due to timing delays of actual cash receipts from the property\noperators or purchasers and due to wellhead and pipeline volume balancing agreements or practices. Cash distributions of the Trust will\nbe made based on the amount of cash received by the Trust pursuant to terms of the conveyance that created the Trust’s net profits\ninterest. Expenses of the Trust, which include accounting, engineering, legal and other professional fees, Trustee fees, an administrative\nfee paid to VOC Brazos and out-of-pocket expenses, are recognized when paid. Under U.S. GAAP, revenues and expenses would be recognized\non an accrual basis. Amortization of the investment in net profits interest is recorded on a unit-of-production method in the period\nin which the cash is received with respect to such production. Such amortization does not reduce distributable income, rather it is charged\ndirectly to Trust corpus.\n\nThis comprehensive basis of accounting other than\nU.S. GAAP corresponds to the accounting permitted for royalty trusts by the SEC as specified by Staff Accounting Bulletin Topic 12:E,\nFinancial Statements of Royalty Trusts.\n\nInvestment in the net profits interest was recorded\ninitially at the historical cost of VOC Brazos and is periodically assessed to determine whether its aggregate value has been impaired\nbelow its total capitalized cost based on the underlying properties. The Trust will provide a write-down to its investment in the net\nprofits interest if and when total capitalized costs, less accumulated amortization, exceeds undiscounted future net revenues attributable\nto the proved oil and gas reserves of the underlying properties. There was no impairment of the investment in the net profits interest\nduring the quarters ended March 31, 2026 or 2025.\n\nThe Trust has one business activity as the owner\nof an investment in net profits interest, as reported in accompanying the Statements of Assets and Trust Corpus, and operates in a single\noperating and reportable segment. Operating segments are defined as components of an entity for which separate financial information\nis evaluated regularly by the chief operating decision maker (the “CODM”), which is the Trustee. The segment participates\nin activities and derives its income from net profits interest as reported in the accompanying Statements of Distributable Income, and\nthe CODM uses this in making decisions about the allocation of cash reserves for current and future Trust general and administrative\nexpenses and the ultimate distribution to the Trust unitholders.\n\nNo new accounting pronouncements were adopted\nor issued during the quarter ended March 31, 2026 that would impact the financial statements of the Trust.\n\n4\n\n**Note 4.**     **Investment in Net\nProfits Interest**\n\nThe net profits interest was recorded at the historical\ncost of VOC Brazos on May 10, 2011, the date of the conveyance of the net profits interest to the Trust, and was calculated as follows:\n\nOil and gas properties\n$197,270,173\n\nAccumulated depreciation and depletion\n(17,681,155)\n\nHedge liability\n(1,717,713)\n\n20-year asset retirement liability\n(2,131,797)\n\nNet property to be conveyed\n175,739,508\n\nTimes 80% net profits interest to Trust\n$140,591,606\n\n**Note 5.**      **Income from Net\nProfits Interest**\n\nThree months ended\nMarch 31,\n\n2026\n2025\n\nExcess of revenues over direct operating expenses and lease equipment and development costs (1)\n$1,982,655\n$2,373,525\n\nTimes 80% net profits interest to Trust\n80%\n80%\n\nIncome from net profits interest before reserve adjustments\n1,586,124\n1,898,820\n\nVOC Brazos reserve for future development, maintenance or\noperating expenditures (2)\n\n–\n–\n\nIncome from net profits interest (3)\n$1,586,124\n$1,898,820\n\n(1)Excess of revenues over direct operating expenses and lease equipment\nand development costs reflect expenses and costs incurred by VOC Brazos during the September through\nNovember production period. Pursuant to the terms of the conveyance of the net profits\ninterest, lease equipment and development costs are to be deducted when calculating the distributable\nincome to the Trust.\n\n(2)Pursuant to the terms of the conveyance of the net profits interest,\nVOC Brazos can reserve up to $1.0 million for future development, maintenance or operating\nexpenditures at any time. During the three months ended March 31, 2026 and 2025, VOC\nBrazos did not withhold or release any dollar amounts due to the Trust from the reserve.\nThe reserve balance was $1.0 million at March 31, 2026 and 2025.\n\n(3)The income from net profits interest is based upon the cash receipts\nfrom VOC Brazos for the oil and gas production. The revenues from oil production are typically\nreceived by VOC Brazos one month after production; thus, the cash received by the Trust during\nthe three months ended March 31, 2026 substantially represents production by VOC Brazos\nfrom September 2025 through November 2025. The cash received by the Trust during\nthe three months ended March 31, 2025 substantially represents production by VOC Brazos\nfrom September 2024 through November 2024.\n\nFor the three months ended March 31, 2026\nand 2025, MV Purchasing, LLC, an affiliate of VOC Brazos, purchased a significant portion of the production of the underlying properties.\nSales to MV Purchasing, LLC are under short-term arrangements, ranging from one to six months, using market-sensitive pricing.\n\n**Note 6.**     **Income Taxes**\n\nThe Trust is a Delaware statutory trust and is\nnot required to pay federal or state income taxes. Accordingly, no provision for federal or state income taxes has been made.\n\n5\n\n**Note 7.**     **Distributions to\nUnitholders**\n\nVOC Brazos makes quarterly payments of the net\nprofits interest to the Trust. The Trustee determines for each quarter the amount available for distribution to the Trust unitholders.\nThis distribution is expected to be made on or before the 45th day following the end of each quarter to the Trust unitholders of record\non the 30th day of the month following the end of each quarter (or the next succeeding business day). Such amounts will be equal to the\nexcess, if any, of the cash received by the Trust relating to the preceding quarter, over the expenses of the Trust paid for such quarter,\nsubject to adjustments for changes made by the Trustee during such quarter in any cash reserves established for future expenses of the\nTrust. From the first quarter of 2022 to the second quarter of 2023, the Trustee withheld a portion of the proceeds otherwise available\nfor distribution each quarter and built a $1.175 million cash reserve for the payment of future known, anticipated or contingent expenses\nor liabilities of the Trust. The Trustee may increase or decrease this reserve amount at any time and may increase or decrease the rate\nat which it withholds funds to build the cash reserve at any time, without advance notice to the unitholders. Cash held in reserve will\nbe invested as required by the Trust Agreement. Any cash reserved in excess of the amount necessary to pay or provide for the payment\nof future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together with interest\nearned on the funds. This cash reserve is included in cash and cash equivalents on the accompanying Statements of Assets and Trust Corpus.\n\nThe first quarterly distribution during 2026 was\n$1,530,000, or $0.090 per Trust Unit, and was made on February 13, 2026 to Trust unitholders owning Trust Units as of January 30,\n2026. Such distribution included the net proceeds of production collected by VOC Brazos from October 1, 2025 through December 31,\n2025.\n\nThe first quarterly distribution during 2025 was\n$1,445,000, or $0.085 per Trust Unit, and was made on February 13, 2025 to Trust unitholders owning Trust Units as of January 30,\n2025. Such distribution included the net proceeds of production collected by VOC Brazos from October 1, 2024 through December 31,\n2024.\n\n**Note 8.**      **Advance for\nTrust Expenses**\n\nUnder the terms of the Trust Agreement, the Trustee\nis allowed to borrow money to pay Trust expenses. During the three months ended March 31, 2026 and 2025, there were no borrowings\nor amounts owed for money borrowed in previous quarters. Under the terms of the Trust Agreement, VOC Brazos has provided a letter of\ncredit in the amount of $1,700,000 to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay\nfuture expenses.\n\n**Note 9.**     **Subsequent Events**\n\nOn April 20, 2026, the Trust announced a\nTrust distribution of net profits for the quarterly payment period ended March 31, 2026. Unitholders of record on April 30,\n2026 will receive a distribution amounting to $1,615,000, or $0.095 per Trust Unit, which will be paid on May 15, 2026.\n\n6"}