CTWOMEDIUM SIGNALFINANCIAL10-Q

CTWO's net assets declined 15.6% to $1.6M while net losses expanded dramatically from -$42 to -$299K, though operating cash flow improved significantly.

The trust is experiencing material financial deterioration with a seven-fold increase in net losses despite holding a relatively stable position in European carbon allowances. The 15.6% decline in net assets suggests either poor performance of the underlying EUA investments or increased operational costs that are eroding shareholder value.

Comparing 2026-04-15 vs 2025-10-15View on EDGAR →
FINANCIAL ANALYSIS

The trust's financial position weakened considerably with total assets and stockholders' equity both declining 15.6% to $1.6M, while net losses exploded from -$42 to -$299K. Operating cash flow dramatically improved from -$2.5M to -$4K, suggesting the trust has moved past its initial capital deployment phase. The overall picture shows a trust struggling with profitability while maintaining its core carbon allowance investment strategy, raising questions about the viability of this specialized investment vehicle.

FINANCIAL STATEMENT CHANGES
Net Income
P&L
-711331%
-42-$299K

Net income declined 711331% — review whether driven by operations, interest costs, or non-recurring items.

Operating Cash Flow
Cash Flow
+99.9%
-$2.5M-$4K

Operating cash flow surged 99.9% — exceptional cash generation, highest quality earnings signal.

Cash & Equivalents
Balance Sheet
-18%
$20K$17K

Cash decreased 18% — monitor burn rate and upcoming capital needs.

Total Assets
Balance Sheet
-15.6%
$1.9M$1.6M

Total assets contracted 15.6% — asset sales, write-downs, or balance sheet optimization underway.

Stockholders Equity
Balance Sheet
-15.6%
$1.9M$1.6M

Equity decreased 15.6% — buybacks or losses reducing book value, monitor solvency ratios.

Total Liabilities
Balance Sheet
-12.6%
$1K$1K

Liabilities reduced 12.6% — deleveraging improves balance sheet strength and financial flexibility.

LANGUAGE CHANGES
NEW — 2026-04-15
PRIOR — 2025-10-15
ADDED
Financial Statements (unaudited) 1 Statements of Financial Condition at February 28, 2026 (unaudited) and November 30, 2025 1 Schedules of Investments at February 28, 2026 (unaudited) and November 30, 2025 2 Statement of Operations for the three months ended February 28, 2026 (unaudited) 3 Statement of Cash Flows for the period December 1, 2025 to February 28, 2026 (unaudited) 4 Statement of Changes in Net Assets for the three months ended February 28, 2026 (unaudited) 5 Notes to the Unaudited Financial Statements (unaudited) 6 Item 2.
1 COTWO ADVISORS PHYSICAL EUROPEAN CARBON ALLOWANCE TRUST Schedules of Investments February 28, 2026 (unaudited) Units Held Cost Fair Value % of Net Assets EUAs 19,700 $ 1,667,361 $ 1,605,267 99.02 % State Street Institutional U.S.
Government Money Market Fund - Premier Class (a) 16,816 16,816 16,816 1.04 % Total Investment $ 1,684,177 $ 1,622,083 100.06 % Liabilities in Excess of Other Assets ( 1,005 ) - 0.06 % Net Assets $ 1,621,078 100.00 % November 30, 2025 Units Held Cost Fair Value % of Net Assets EUAs 19,700 $ 1,667,361 $ 1,900,519 98.99 % State Street Institutional U.S.
Government Money Market Fund - Premier Class (a) 20,497 20,497 20,497 1.07 % Total Investment $ 1,687,858 $ 1,921,016 100.06 % Liabilities in Excess of Other Assets ( 1,137 ) - 0.06 % Net Assets $ 1,919,879 100.00 % (a) The annualized 7-day yields as of February 28, 2026 and November 30, 2025, were 3.63% and 3.94%, respectively.
5 COTWO ADVISORS PHYSICAL EUROPEAN CARBON ALLOWANCE TRUST Notes to the Financial Statements (unaudited) 1.
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REMOVED
Financial Statements (unaudited) 1 Statement of Financial Condition at August 31, 2025 (unaudited) 1 Schedule of Investments at August 31, 2025 (unaudited) 2 Statements of Operations for the periods April 29, 2025 to August 31, 2025 and the three months ended August 31, 2025 (unaudited) 3 Statement of Cash Flows for the period April 29, 2025 to August 31, 2025 (unaudited) 4 Statements of Changes in Net Assets for the periods April 29, 2025 to August 31, 2025 and the three months ended August 31, 2025 (unaudited) 5 Notes to the Unaudited Financial Statements (unaudited) 6 Item 2.
Financial Statements (Unaudited) Statement of Financial Condition (unaudited) (a) At August 31, 2025 ASSETS Investments in European Union Carbon Emission Allowances ( EUAs ), at fair value (cost $ 2,518,608 ) $ 2,516,249 Cash Cash Equivalents 24,327 Interest Receivable 73 Total Assets $ 2,540,649 LIABILITIES Sponsor Fees $ 1,666 Total Liabilities $ 1,666 Net Assets $ 2,538,983 Shares issued and outstanding(1) 150,000 Net asset value per Share $ 16.93 (1) Authorized share capital is unlimited and the par value of the Shares is $0.00.
(a) No comparative financial statements have been provided as the Trust did not have any operations as of November 30, 2024.
1 COTWO ADVISORS PHYSICAL EUROPEAN CARBON ALLOWANCE TRUST Schedule of Investments (unaudited) (a) At August 31, 2025 August 31, 2025 EUAs Held Cost Fair Value % of Net Assets EUAs 29,700 $ 2,518,608 $ 2,516,249 99.10 % Short-Term Investments (b) 24,327 24,327 24,327 0.96 % Total Investment $ 2,542,935 $ 2,540,576 100.06 % Liabilities in Excess of Other Assets ( 1,593 ) - 0.06 % Net Assets $ 2,538,983 100.00 % See notes to the unaudited financial statements.
(a) No comparative financial statements have been provided as the Trust did not hold any EUAs as of November 30, 2024.
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