EDGAR 10-K Filing

Company CIK: 10048
Filing Year: 2025
Filename: 10048_10-K_2025_0001628280-25-058738.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
Overview
Barnwell was incorporated in Delaware in 1956 and fiscal 2025 represented Barnwell’s 69th year of operations. Barnwell operates in the following two principal business segments:
•Oil and Natural Gas Segment - Barnwell engages in oil and natural gas development, production, acquisitions and sales in Canada and in the U.S.
•Land Investment Segment - Barnwell owns land interests in the State of Hawaii.
Discontinued Operations
On March 14, 2025, the Company entered into and completed the sale of its wholly-owned subsidiary, Water Resources International, Inc. (“Water Resources”). Water Resources drills water wells and installs and repairs water pumping systems in the State of Hawaii and represented Barnwell's contract drilling segment. As a result of the sale, the Company has classified the related assets, liabilities and the results of its contract drilling business as discontinued operations in the consolidated financial statements for all periods presented. Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur. Unless otherwise noted, the discussions throughout Part I of this Form 10-K pertains only to Barnwell’s continuing operations. For information on discontinued operations, refer to Note 3 “Discontinued Operations” in the Notes to Consolidated Financial Statements in Item 8 of this report.
Oil and Natural Gas Segment
Overview
Barnwell acquires and develops crude oil and natural gas assets in the province of Alberta, Canada via two corporate entities, Barnwell of Canada, Limited and Octavian Oil Limited. Barnwell of Canada is a U.S. incorporated company that has been active in Canada for over 50 years, primarily as a non-operator participating in exploration projects operated by others. Octavian Oil is a Canadian company incorporated in 2016 to achieve growth through the acquisition and development of crude oil reserves in the field of Twining, Alberta. Additionally, through its wholly-owned subsidiaries BOK Drilling, LLC (“BOK”), established in February 2021, and Barnwell Texas, LLC (“Barnwell Texas”), established in November 2022, Barnwell was, until August 8, 2025, involved in oil and natural gas investments in Oklahoma and Texas, respectively.
Strategy
The Twining field, in Alberta, Canada represents 86% of Barnwell’s fiscal 2025 production. These assets were acquired in August 2018 and subsequently expanded through smaller acquisitions of various partner interests. These assets are partially operated by the Company and partially operated by Pine Cliff Energy Ltd. The majority of Barnwell's operated oil wells have annual decline rates below 15%, which supports lower capital investment requirements to maintain production levels. This lower capital
requirement to maintain production, in addition to the land being largely continued with no expiries, allows Barnwell to drill opportunistically when commodity prices are favorable.
Since entering the Twining area, Barnwell has participated in drilling 12 gross (5.6 net) horizontal development wells using multi-stage sand fracturing. Of these, 3 wells are 100%-owned and operated and 9 (2.6 net) are non-operated. These wells have all either been profitable or are forecasted to be profitable, and Barnwell intends to continue development of the pool with more horizontal wells as commodity prices permit.
Barnwell also holds minor legacy assets throughout Alberta, Canada representing 3% of Barnwell’s fiscal 2025 production. These non-operated oil and natural gas assets produce shallow gas or conventional oil from a varying interest in a variety of pools and have been accumulated over decades. In fiscal 2024 and 2025, Barnwell has divested many of these properties to reduce operational risk and increase strategic focus in the Twining area. Barnwell remains active in evaluating market opportunities to further divest remaining legacy assets along with acquisition opportunities to expand our production and development portfolio.
The Company had non-operated working interests in seven wells in Oklahoma ranging from 1.2% to 4.2%, along with a 0.07% overriding royalty interest in one well. Our interests in Oklahoma produced 4% of Barnwell’s fiscal 2025 production. Our interests in Oklahoma were sold on August 8, 2025.
The Company had a 15.4% non-operated working interest in two wells in the Permian Basin in Texas. Our interests in Texas produced 7% of Barnwell’s fiscal 2025 production. Our interests in Texas were sold on August 8, 2025.
Operations
Our oil and natural gas segment revenues, profitability, and future growth potential are closely tied to commodity prices and the Company’s ability to fund reserves development through cashflow or external financing. In recent years, the industry has experienced volatile oil and natural gas prices, and when these prices are in low cycle they negatively impact our operating results, cash flows and liquidity. Credit and capital markets for oil and natural gas investments have been tight recently, but as capital becomes more available we may seek to raise additional capital when market conditions are favorable and aligned with our growth strategy.
Barnwell's oil and natural gas unit sales are based on production from operated and non-operated properties. In Canada, oil prices received are influenced by differentials to West Texas Intermediate (“WTI”). Historically, these differentials resulted in significant discounts due to limited export capacity and transportation bottlenecks. In 2025, improved pipeline egress contributed to more favorable realized pricing for Barnwell's Canadian oil production. Oil prices received from our Texas and Oklahoma properties were generally in line with WTI pricing.
Natural gas prices continues to show seasonal strength during the winter months, driven by increased heating demand. In Canada, gas prices are based on AECO hub benchmark prices, which typically trade at a discount to U.S. Henry Hub pricing due to regional supply dynamics and infrastructure constraints.
While our Oklahoma and Texas interests were sold in the fourth quarter of 2025, in Oklahoma, the pricing of our natural gas reflected prices close to Henry Hub pricing. In Texas, our natural gas was sold at
the Waha Hub, where prices were significantly discounted to Henry Hub pricing due to limited gas egress from the Permian Basin and excess supply in the area.
Preparation of Reserve Estimates
Barnwell’s reserves are estimated by our independent petroleum reserve engineers, InSite Petroleum Consultants Ltd. (“InSite”), in accordance with generally accepted petroleum engineering and evaluation principles and techniques and rules and regulations of the SEC. All information with respect to the Company’s reserves in this Form 10-K is derived from the report of InSite, which is filed with this Form 10-K as Exhibit 99.1.
The preparation of data used by the independent petroleum reserve engineers to compile our oil and natural gas reserve estimates was completed in accordance with various internal control procedures which include verification of data input into reserves evaluation software, reconciliations and reviews of data provided to the independent petroleum reserve engineers to ensure completeness, and management review controls, including an independent internal review of the final reserve report for completeness and accuracy.
Barnwell has a Reserves Committee consisting of three directors, two of which are independent directors and the third is Barnwell's Chief Executive Officer. The Reserves Committee was established to ensure the independence of the Company’s petroleum reserve engineers. The Reserves Committee is responsible for reviewing the annual reserve evaluation reports prepared by the independent petroleum reserve engineering firms and ensuring that the reserves are reported fairly in a manner consistent with applicable standards. The Reserves Committee meets annually to discuss reserve issues and policies and to meet with Company personnel and the independent petroleum reserve engineers.
The President and Chief Operating Officer of Barnwell of Canada and Octavian Oil, who also serves as the President and Chief Executive Officer of Barnwell effective April 1, 2024, is a professional engineer with over 25 years of relevant experience in the oil and natural gas industry in Canada and is a member of the Association of Professional Engineers and Geoscientists of Alberta.
Reserves
At September 30, 2025, Barnwell’s reserves were approximately 66% operated and consisted of 47% conventional oil, 12% conventional natural gas liquids, and 41% natural gas. At September 30, 2024, Barnwell’s reserves were approximately 52% operated and consisted of 41% conventional oil, 15% conventional natural gas liquids, and 44% natural gas.
The amounts set forth in the following table, based on our independent reserve engineers’ evaluation of our reserves, summarize our estimated proved reserves of oil, natural gas liquids, and natural gas as of September 30, 2025 for all properties located in Canada in which Barnwell has an interest. All of our oil and natural gas reserves are based on constant dollar price and cost assumptions. The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries and undeveloped locations are more imprecise than estimates of established proved producing oil and natural gas properties. Accordingly, these estimates are expected to change as future information becomes available. Proved oil and natural gas reserves are the estimated quantities of oil and natural gas that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions (i.e., prices and costs) existing at the time the estimate is made. Proved developed oil and natural gas reserves are proved reserves that can be
expected to be recovered through existing wells and equipment in place and under operating methods being utilized at the time the estimates were made. No estimates of total proved net oil or natural gas reserves have been filed with, or included in reports to, any federal authority or agency, other than the SEC, since October 1, 2024.
As of September 30, 2025
Estimated Net Proved Developed Reserves Estimated Net Proved Undeveloped Reserves Estimated Net Proved Reserves
Oil (Bbls)
643,000 - 643,000
Natural gas liquids (Bbls)
165,000 - 165,000
Natural gas (Mcf) 3,429,000 - 3,429,000
Total (Boe) 1,380,000 - 1,380,000
During fiscal 2025, Barnwell’s total net proved reserves of oil and natural gas liquids decreased by 339,000 Bbls (35%) and 198,000 Bbls (55%), respectively, and total net proved reserves of natural gas decreased by 3,026,000 Mcf (47%), for a combined decrease of 1,043,000 Boe (43%). The decrease in proved reserves were due to the sale of U.S. oil and natural gas interests which was completed on August 8, 2025 and amounted to 425,000 Boe. The remaining decrease in reserves were a result of production and the removal of a proved undeveloped well which was represented as 239,000 Boe in the prior year’s balance due to a significant portion of the Company's capital resources being devoted to a proxy contest and consent election.
The following tables set forth Barnwell’s oil and natural gas net reserves at September 30, 2025, by location and property name, based on information prepared by InSite, as well as net production and net revenues by location and property name for the year ended September 30, 2025. The reserve data in these tables are based on constant dollars where reserve estimates are based on sales prices, costs and statutory tax rates using a historical average price of the first day pricing of the last 12-months ending with September 2025.
As of September 30, 2025
Net Proved Producing Reserves Net Proved Reserves
Property Name Oil
(MBbls) NGL (MBbls) Gas
(MMcf) Oil
(MBbls) NGL (MBbls) Gas
(MMcf)
Canada:
Twining 631 163 3,326 641 165 3,376
Thornbury - - 23 - - 51
Other properties 1 - 1 2 - 2
Total 632 163 3,350 643 165 3,429
For the year ended September 30, 2025
Net Production Net Revenues
Property Name Oil
(MBbls) NGL (MBbls) Gas
(MMcf) Oil NGL Gas
Canada:
Twining 159 40 911 $ 9,610,000 $ 1,216,000 $ 1,218,000
Medicine River 3 3 9 194,000 74,000 16,000
Thornbury - - 35 - - 37,000
Other properties 2 - 11 19,000 - 8,000
United States:
Oklahoma 3 5 55 149,000 152,000 157,000
Texas 7 8 84 504,000 146,000 63,000
Total 174 56 1,105 $ 10,476,000 $ 1,588,000 $ 1,499,000
Net proved reserves that are attributable to existing producing wells are primarily determined using decline curve analysis. Net proved reserves attributable to producing wells with limited production history and for undeveloped locations are estimated using performance from analogous wells in the surrounding area and geologic data to assess the reservoir continuity.
Standardized Measure of Discounted Future Net Cash Flows
The following table sets forth Barnwell’s “Estimated Future Net Revenues” from total proved oil, natural gas and natural gas liquids reserves located in Canada and the present value of Barnwell’s “Estimated Future Net Revenues” (discounted at 10%) as of September 30, 2025. Estimated future net revenues for total proved reserves are net of estimated future expenditures of developing and producing the proved reserves, and assume the continuation of existing economic conditions. Net revenues have been calculated using the average first-day-of-the-month price during the 12-month period ending as of the balance sheet date and current costs, after deducting all royalties, operating costs, future estimated capital expenditures (including abandonment costs), and income taxes. The amounts below include future cash flows from reserves that are currently proved undeveloped reserves and do not deduct general and administrative or interest expenses.
Year ending September 30,
2026 $ 4,457,000
2027 2,675,000
2028 1,739,000
Thereafter (10,243,000)
Undiscounted future net cash flows, after income taxes $ (1,372,000)
Standardized measure of discounted future net cash flows $ 6,670,000 *
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* This amount does not purport to represent, nor should it be interpreted as, the fair value of Barnwell’s oil and natural gas reserves. An estimate of fair value would also consider, among other items, the recovery of reserves not presently classified as proved, anticipated future changes in oil and natural gas prices (these amounts were based on a natural gas price of $1.09 per Mcf and an oil price of $60.92 per Bbl) and costs, and a discount factor more representative of the time value of money and the risks inherent in reserve estimates.
Barnwell has included all abandonment, decommissioning and reclamation costs and inactive well costs into the Company’s reserve reports in accordance with best practice recommendations.
Oil and Natural Gas Production
The following table summarizes (a) Barnwell’s net production for the last three fiscal years, based on sales of natural gas, oil and natural gas liquids, from all wells in which Barnwell has or had an interest, and (b) the average sales prices and average production costs for such production during the same periods. Production amounts reported are net of royalties. All of Barnwell’s net production in fiscal 2025, 2024 and 2023 was derived in Alberta, Canada and in the U.S. states of Oklahoma and Texas. For a discussion regarding our total annual production volumes, average sales prices, and related production costs, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Year ended September 30,
2025 2024 2023
Annual net production:
Natural gas (Mcf) 1,105,000 1,344,000 1,263,000
Oil (Bbls) 174,000 203,000 204,000
Natural gas liquids (Bbls) 56,000 64,000 52,000
Total (Boe) 414,000 491,000 467,000
Total (Mcfe) 2,484,000 2,946,000 2,799,000
Annual average sales price per unit of production:
Mcf of natural gas* $1.27 $1.41 $2.64
Bbl of oil** $60.49 $66.49 $69.77
Bbl of natural gas liquids** $28.38 $29.38 $32.24
Annual average production cost per Boe produced*** $21.45 $19.82 $22.10
Annual average production cost per Mcfe produced*** $3.58 $3.30 $3.68
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* Calculated on revenues net of pipeline charges before royalty expense divided by gross production.
** Calculated on revenues before royalty expense divided by gross production.
*** Calculated on production costs, excluding natural gas pipeline charges, divided by the combined total production of natural gas liquids, oil and natural gas.
Capital Expenditures and Acquisitions
Barnwell invested $939,000 in oil and natural gas properties during fiscal 2025, including accrued capital expenditures and acquisitions of oil and natural gas properties and excluding additions and revisions to estimated asset retirement obligations. Barnwell's capital expenditures were primarily related to equipment, facility upgrades and well workovers.
Barnwell invested $4,805,000 in oil and natural gas properties during fiscal 2024, including accrued capital expenditures and acquisitions of oil and natural gas properties and excluding additions and revisions to estimated asset retirement obligations. Barnwell’s capital expenditures were primarily for the drilling of a new well and for equipment and upgrades to facilities, all of which were in the Twining area.
Well Drilling Activities
The Company did not drill or participate in the drilling of wells during the year ended September 30, 2025.
In fiscal 2024, the Company drilled one gross (1.0 net) operated development oil well in the Twining area which started producing in mid-September 2024. Capital expenditures incurred by the Company for this well totaled approximately $3,183,000. The Company did not drill or participate in the drilling of wells in Texas or in Oklahoma during the year ended September 30, 2024.
In fiscal 2023, the Company participated in the drilling of three gross (0.9 net) non-operated development wells in the Twining area of Alberta, Canada. Total capital expenditures for the year ended September 30, 2023 totaled approximately $4,770,000 and included the drilling, completion and equipping of the three gross (0.9 net) wells along with various upgrades to the Twining facilities. Additionally, the Company participated in the drilling of two gross (0.3 net) non-operated development oil wells in Texas. Capital expenditures incurred for the drilling of these two wells totaled approximately $4,293,00 during the year ended September 30, 2023. The Company did not drill or participate in the drilling of wells in Oklahoma during the year ended September 30, 2023.
Producing Wells
As of September 30, 2025, Barnwell has interests in 109 gross (62.9 net) producing wells in Alberta, Canada, of which 76 gross (58.2 net) were oil wells and 33 gross (4.7 net) were natural gas wells.
Developed Acreage and Undeveloped Acreage
The following table sets forth the gross and net acres of both developed and undeveloped oil and natural gas leases in the province of Alberta, Canada which Barnwell held as of September 30, 2025.
Developed Acreage* Undeveloped Acreage* Total
Location Gross Net Gross Net Gross Net
Alberta, Canada 117,244 29,149 22,506 7,741 139,750 36,890
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* “Developed Acreage” includes the acres covered by leases upon which there are one or more producing wells. “Undeveloped Acreage” includes acres covered by leases upon which there are no producing wells and which are maintained by the payment of delay rentals or the commencement of drilling thereon.
Eighty-one percent of Barnwell’s undeveloped acreage is not subject to expiration at September 30, 2025. Nineteen percent of Barnwell’s leasehold interests in undeveloped acreage is subject to expiration and may expire over the next five fiscal years, if not developed, as follows: 9% expire during fiscal 2026; 6% expire during fiscal 2027; 4% expire during fiscal 2028; and no expirations during fiscal 2029 and fiscal 2030. There can be no assurance that Barnwell will be successful in renewing its leasehold interests in the event of expiration.
Barnwell’s undeveloped acreage includes a significant concentration in the Twining area (3,707 net acres). The remaining undeveloped acreage is at non-operated properties over which we do not have control, and the value of such acreage is not estimated to be significant at current commodity prices.
Marketing of Oil and Natural Gas
Barnwell sells its Canadian oil, natural gas, and natural gas liquids production under short-term contracts between itself and two main oil purchasers, one natural gas purchaser, and one natural gas liquids purchaser. The prices received are freely negotiated between buyers and sellers and are determined from transparent posted prices adjusted for quality and transportation differentials.
In February 2025, the Company amended certain of its Canadian purchase and sales contracts to change the sales price on 1,055 gross Mcf per day of the Canadian natural gas it will sell during the period from April 1, 2025 to October 31, 2025 to a fixed index price before differentials of $1.95 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of natural gas under this fixed index price contract was equivalent to approximately 38% of Canadian natural gas gross production per day for the year ended September 30, 2025. Additionally, in September 2025, the Company amended the sales price on 1,583 gross Mcf per day of the Canadian natural gas it will sell during the period from November 1, 2025 to March 31, 2026 to a fixed index price before differentials of $3.03 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of natural gas under this fixed index price contract that will affect the period from November 1, 2025 to March 31, 2026, is equivalent to approximately 58% of Canadian natural gas gross production per day for the year ended September 30, 2025. These natural gas contracts were eligible for and elected as normal purchase and normal sales exception contracts and were thus excluded from derivative accounting.
In June 2025, the Company amended the sales price on 100 gross barrels per day of the Canadian oil that it will sell during the period from July 1, 2025 to December 31, 2025 to a fixed index price before differentials of $70.35 per net barrel, with remaining volumes continuing to be sold at spot prices. This per day volume of oil under this fixed index price was equivalent to approximately 19% of Canadian oil gross production per day for the year ended September 30, 2025. These oil contracts were eligible for and elected as normal purchase and normal sales exception contracts and were thus excluded from derivative accounting.
Subsequent to fiscal 2025, the Company amended the sales price on 1,055 gross Mcf per day of the Canadian natural gas it will sell during the period from April 1, 2026 to October 31, 2026 to a fixed index price before differentials of $2.94 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of natural gas under this fixed index price contract that will affect the period from April 1, 2026 to October 31, 2026, is equivalent to approximately 38% of Canadian natural gas gross production per day for the year ended September 30, 2025.
In fiscal 2025 and 2024, Barnwell took most of its Canadian oil, natural gas liquids and natural gas “in kind” where Barnwell markets the products instead of having the operator of a producing property market the products on Barnwell’s behalf. We sell oil, natural gas and natural gas liquids to a variety of energy marketing companies. Because our products are commodities for which there are numerous marketers, we are not dependent upon one purchaser or a small group of purchasers.
Governmental Regulation
The jurisdictions in which the oil and natural gas properties of Barnwell are located have regulatory provisions relating to permits for the drilling of wells, the spacing of wells, the prevention of oil and natural gas waste, allowable rates of production, environmental protection, and other matters. The amount of oil and natural gas produced is subject to control by regulatory agencies in each province. The province of Alberta and the Government of Canada also monitor the volume of natural gas that may be removed from the province and the conditions of removal; currently all our Canadian natural gas is sold within Alberta.
All of Barnwell’s Canadian gross revenues were derived from properties located within Alberta, which charges oil and natural gas producers a royalty for production within the province. Provincial royalties are calculated as a percentage of revenue and vary depending on production volumes, selling
prices and the date of discovery. Barnwell also pays gross overriding royalties and leasehold royalties on a portion of its oil and natural gas sales to parties other than the province of Alberta.
Under the current royalty framework for newly drilled wells, the same royalty calculation applies to both oil and natural gas wells and royalties are determined on a revenue minus cost basis where producers pay a flat royalty rate of 5% of gross revenues until a well reaches payout after which an increased post-payout royalty applies. Post payout royalties vary with commodity prices and well production rates.
In fiscal 2025, 72% of total Canadian royalties were related to Alberta government charges and 28% of royalties were related to freehold, overriding royalties and other charges.
In fiscal 2025, the weighted-average royalty rate paid on all of Barnwell’s Canadian natural gas was 4%, and the weighted-average royalty rate paid on oil was 16%.
Under Canadian oil and gas law and regulations, in order for the Company to retain the right to acquire, transfer, or drill well licenses, Barnwell must maintain a favorable Licensee Capability Assessment (“LCA”) with the Alberta Energy Regulator (“AER”). The LCA is intended to be a comprehensive assessment of corporate health and considers a wide variety of factors and establishes guidelines for the industry with regards to the management of liabilities throughout the entire lifecycle of oil and gas projects. Factors considered by the AER are combined into six groups, these being current financial distress, liability magnitude, resources lifespan, operations compliance, closure efficiency, and administrative compliance. These factors are compared to peer operators and ranked into three “Tiers.” Barnwell’s assessment under the LCA Program is currently favorable with Tier 1 or Tier 2 overall rankings in the six factor groups. Barnwell believes it can continue to manage its operations to maintain a favorable ranking.
A program has also been implemented by the AER which requires mandatory annual minimum expenditures towards outstanding decommissioning and reclamation obligations in accordance with AER targets which are adjusted by the AER on an annual basis. The target for calendar 2026 is 6.5% of an individual company’s inactive liability. This amount for Barnwell is approximately $237,000. Barnwell believes the targets assessed by the AER are within estimated forecasts for Barnwell’s future ARO spending and therefore the Company expects to be in compliance with AER spending targets under their mandatory spend requirements.
In instances where Barnwell is a non-operating partner of a company which has become insolvent, Barnwell and any remaining partners are responsible for administering site closure. This is achieved in one of two ways. First, either Barnwell or the other partners proceed with closure, and then make a claim for the costs attributed to the insolvent entity from the Orphan Well Association (“OWA”) after the abandonment work has been certified complete by the AER. Alternatively, Barnwell may pay a deposit to the OWA for its net share of the estimated closure costs, plus contingency as determined by the OWA. This allows the OWA to proceed with closure work on behalf of all partners. As of September 2025, Barnwell had provided $975,000 in cash deposits to the OWA, and $462,000 of the deposit has been spent on closure activities as at September 30, 2025. If the amount of deposit proves larger than that required by the OWA to complete the estimated work, Barnwell will receive a refund on the excess after sites are certified by the AER. These deposits do not earn interest. Asset retirement obligations of Barnwell’s net share of sites operated by all partners are included in “Asset retirement obligation”, current and long-term, in the Consolidated Balance Sheets.
Over the past nine years, the Company has worked to reduce its abandonment and reclamation obligations associated with its oil and natural gas segment, both by divesting low-productivity assets and actively closing wells and sites. Twenty-five Barnwell-operated sites have been certified as fully reclaimed or exempt since 2016.
Competition
Barnwell competes in the sale of oil and natural gas mainly on the ability to deliver products. The oil and natural gas industry is intensely competitive in all phases, including the acquisition and development of new production and reserves and the acquisition of equipment and labor necessary to conduct drilling activities. The competition comes from numerous major oil companies as well as numerous other independent operators. There also is competition between the oil and natural gas industry and other industries in supplying the energy and fuel requirements of industrial, commercial and individual consumers. Barnwell is a minor participant in the industry and competes in its oil and natural gas activities with many other companies having far greater financial, technical and other resources.
Land Investment Segment
Overview
Barnwell owns a 77.6% interest in Kaupulehu Developments, a Hawaii general partnership (“Kaupulehu Developments”) that has the right to receive payments from KD I and KD II resulting from the sale of lots and/or residential units by KD I and KD II within the approximately 870 acres of the Kaupulehu Lot 4A area in two increments (“Increment I” and “Increment II”), located approximately six miles north of the Kona International Airport in the North Kona District of the island of Hawaii. Kaupulehu Developments also holds an interest in approximately 1,000 acres of vacant leasehold land zoned conservation located adjacent to Lot 4A under a lease that terminates in December 2025, which currently has no development potential without both a development agreement with the lessor and zoning reclassification.
Barnwell, through two limited liability limited partnerships, KD Kona and KKM Makai (“KKM”), holds a non-controlling ownership interest in the Kukio Resort Land Development Partnerships comprised of KD Kukio Resorts, KD Maniniowali, and KDK. The Kukio Resort Land Development Partnerships own certain real estate and development rights interests in the Kukio, Maniniowali and Kaupulehu portions of Kukio Resort, a private residential community on the Kona coast of the island of Hawaii, as well as Kukio Resort’s real estate sales office operations. KDK holds interests in KD I and KD II. KD I is the developer of Increment I, and KD II is the developer of Increment II. Barnwell's ownership interests in the Kukio Resort Land Development Partnerships are accounted for using the equity method of accounting.
In November 2025, Kaupulehu Developments entered into an agreement with Mr. David Johnston, the son of Mr. Terry Johnston, a partner in Kaupulehu Developments, to surrender any and all remaining rights for Increment II for $2,000,000 of which $70,000 was received. Additionally, the purchaser has the right to extend the closing by up to two years by making a $70,000 payment in each of the next two years, with those payments applied against the $2,000,000 purchase price. The closing of this transaction is entirely dependent on the purchaser and therefore may not happen.
Subsequent to fiscal 2025, pursuant to a unit purchase agreement KDK, of which Barnwell holds a 19.6% interest, agreed to sell KDK’s interests in Increment II to Mr. David Johnston for $2,109,000. The unit purchase agreement is subject to due diligence, and there is no certainty that the transaction will close. Furthermore, there is also no assurance on the timing or amounts that the general partner of KDK would distribute upon a closing.
Operations
Increment I is an area of 80 single-family lots, all of which were sold from 2006 to 2024, and a beach club on the portion of the property bordering the Pacific Ocean. Increment II is the remaining portion of the approximately 870-acre property and is zoned for single-family and multi-family residential units and a golf course and clubhouse. Two residential lots of approximately two to three acres in size fronting the ocean were developed within Increment II and sold by KD II, and the remaining acreage within Increment II is not yet under development. It is uncertain when or if KD II will develop the other areas of Increment II, and there is no assurance with regards to the amounts of future sales from Increment II. The remaining 420 developable acres at Increment II are entitled for up to 350 homesites. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.
Kaupulehu Developments was entitled to receive payments from KD I based on 10% of the gross receipts from KD I's sales of single-family residential lots in Increment I. In fiscal 2024, the last two remaining single-family lots of the 80 lots developed within Increment I were sold.
In March 2019, KD II admitted a new development partner, Replay Kaupulehu Development, LLC (“Replay”), a party unrelated to Barnwell, in an effort to move forward with development of the remainder of Increment II at Kaupulehu. KDK and Replay hold ownership interests of 55% and 45%, respectively, of KD II and Barnwell has a 10.8% indirect non-controlling ownership interest in KD II through KDK, which is accounted for using the equity method of accounting. Barnwell continues to have an indirect 19.6% non-controlling ownership interest in KD Kukio Resorts, KD Maniniowali, and KD I.
Under the terms of the Increment II agreement with KD II, Kaupulehu Developments is entitled to 15% of the distributions of KD II, the cost of which is to be solely borne by KDK out of its 55% ownership interest in KD II, plus a priority payout of 10% of KDK’s cumulative net profits derived from Increment II sales subsequent to Phase 2A, up to a maximum of $3,000,000 as to the priority payout. Such interests are limited to distributions or net profits interests and Barnwell does not have any partnership interests in KD II or KDK through its interest in Kaupulehu Developments. The arrangement also gives Barnwell rights to three single-family residential lots in Phase 2A of Increment II, and four single-family residential lots in phases subsequent to Phase 2A when such lots are developed by KD II, all at no cost to Barnwell. Barnwell is committed to commence construction of improvements within 90 days of the transfer of the four lots in the phases subsequent to Phase 2A as a condition of the transfer of such lots. Also, in addition to Barnwell’s existing obligations to pay professional fees to certain parties based on percentages of its gross receipts, Kaupulehu Developments is obligated to pay an amount equal to 0.72% and 0.2% of the cumulative net profits of KD II to KD Development and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell, in compensation for the agreement of these parties to admit the new development partner, Replay, for Increment II. Such compensation will be reflected as the obligation becomes probable and the amount of the obligation can be reasonably estimated. As stated above, Increment II is not yet under development and it is uncertain when or if KD II will develop the other areas of Increment II, and there is no assurance with regards to the amounts of future sales from Increment II.
In fiscal 2024, the Kukio Resort Land Development Partnerships sold the last two remaining lots in Increment I and as a result of the lot sales, made cash distributions to its partners of which Barnwell received $1,071,000 resulting in a net amount of $953,000, after distributing $118,000 to non-controlling interests.
Competition
Barnwell’s land investment segment is subject to intense competition in all phases of its operations including the acquisition of new properties, the securing of approvals necessary for land rezoning, and the search for potential buyers of property interests presently owned. The competition comes from numerous independent land development companies and other industries involved in land investment activities. The principal factors affecting competition are the location of the project and pricing. Barnwell is a minor participant in the land development industry and competes in its land investment activities with many other entities having far greater financial and other resources.
Financial Information About Industry Segments and Geographic Areas
Note 11 in the “Notes to Consolidated Financial Statements” in Item 8 contains information on our segments and geographic areas.
Employees
At December 1, 2025, Barnwell employed 18 individuals; 16 on a full time basis and 2 on a part-time basis.
Environmental Costs
Barnwell is subject to extensive environmental laws and regulations. U.S. Federal and state and Canadian Federal and provincial governmental agencies issue rules and regulations and enforce laws to protect the environment which are often difficult and costly to comply with and which carry substantial penalties for failure to comply, particularly in regard to the discharge of materials into the environment. These laws, which are constantly changing, regulate the discharge of materials into the environment and maintenance of surface conditions and may require Barnwell to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites where it has a working interest.
For further information on environmental remediation, see the Contingencies section included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our consolidated financial statements included in Item 8, “Financial Statements and Supplementary Data.”
Available Information
We maintain a website at www.brninc.com. We make available on our website free of charge our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports as soon as practicable after we electronically file such reports with, or furnish them to, the SEC. The contents of our website are not part of this Annual Report on Form 10-K and are not incorporated by reference into this document. Our filings with the SEC are available to the public
through the SEC’s website at www.sec.gov. The Company’s references to URLs for these websites are intended to be textual references only.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
The business of Barnwell and its subsidiaries face numerous risks, including those set forth below or those described elsewhere in this Form 10-K or in Barnwell’s other filings with the SEC. The risks described below are not the only risks that Barnwell faces. If any of the following risk factors should occur, our profitability, financial condition or liquidity could be materially negatively impacted.
Entity-Wide Risks
The Company faces issues that could impair our ability to continue as a going concern in the future.
Our ability to sustain our business in the future will depend on sufficient oil and natural gas operating cash flows which are dependent on oil and natural gas prices, which can and in the past have fluctuated significantly, and on oil and natural gas operating expenses which are both variable and fixed. A sufficient level of oil and natural gas operating cash flows are necessary to fund discretionary oil and natural gas capital expenditures which must be economically successful to provide sufficient returns to grow reserves and production or at a minimum replace declining production from aging wells. Such a level of oil and natural gas capital expenditures will require funding from external debt and/or equity sources that are not currently in place, but those sources may not be feasible or sufficient. In addition, we will need sufficient cash flows to fund our non-discretionary outflows such as oil and natural gas asset retirement obligations, ongoing oil and natural gas operating expenses and general and administrative expenses, both those related to our oil and natural gas operations and those related to our being a public company.
Continued actions by an activist shareholder have had, and may continue to have, a significant negative impact on our ability to execute our business strategies and have had, and may continue to have, an adverse affect on our results of operations and financial condition.
In response to various actions of Mr. Ned L. Sherwood and certain affiliated shareholders (collectively, the “Sherwood Group”), the Board of Directors appointed an Executive Committee comprised of Messrs. Kinzler, Grossman and Horowitz and this Executive Committee retained the services of various professionals, including attorneys, proxy solicitors, proxy advisors, and public relations and financial advisors. We have incurred substantial legal, public relations and other advisory fees and proxy solicitation expenses, and we currently expect those costs and expenses may continue. In addition, continuing perceived uncertainties as to our future direction, strategy or leadership created as a consequence may result in the loss of potential business opportunities, harm our ability to attract new or retain existing directors and employees, disrupt relationships with the Company, and the market price of our common stock could also experience periods of increased volatility as a result.
Stockholders may be diluted significantly through our efforts to obtain financing, satisfy obligations through the issuance of securities or use our stock as consideration in certain transactions.
Our Board of Directors has authority, without action or vote of the stockholders, subject to the requirements of the NYSE American stock exchange and applicable law, to issue all shares of our common stock or other debt or equity instruments to purchase such shares of our common stock. In addition, we may raise capital by selling shares of our common stock, possibly at a discount to market in the future. These actions would result in dilution of the ownership interests of existing stockholders and may further dilute common stock book value, and that dilution may be material. A related effect of such
issuances may enhance existing large stockholders’ influence on the Company, including that of Alexander Kinzler, our General Counsel and Secretary.
A small number of stockholders, including our General Counsel and Secretary, own a significant amount of our common stock and may have influence over the Company.
As of September 30, 2025, our General Counsel and Secretary and two other stockholders hold approximately 48% of our outstanding common stock. The interests of one or more of these stockholders may not always coincide with the interests of other stockholders. These stockholders have significant influence over all matters submitted to our stockholders, including the election of our directors, and could accelerate, delay, deter or prevent a change of control of the Company.
Our operations are subject to currency rate fluctuations.
Our operations are subject to fluctuations in foreign currency exchange rates between the U.S. dollar and the Canadian dollar. Our financial statements, presented in U.S. dollars, may be affected by foreign currency fluctuations through both translation risk and transaction risk. Volatility in exchange rates may adversely affect our results of operations, particularly through the weakening of the U.S. dollar relative to the Canadian dollar which may affect the relative prices at which we sell our oil and natural gas and may affect the cost of certain items required in our operations. To date, we have not entered into foreign currency hedging transactions to control or minimize these risks.
Adverse changes in actuarial assumptions used to calculate retirement plan costs due to economic or other factors, or lower returns on plan assets could adversely affect Barnwell’s results and financial condition.
Retirement plan cash funding obligations and plan expenses and obligations are subject to a high degree of uncertainty and could increase in future years depending on numerous factors, including the performance of the financial markets, specifically the equity markets and levels of interest rates.
Declines in the price of our common stock could adversely affect the value of an asset on our balance sheet and our stockholders’ equity.
Currently, Barnwell’s pension plan is overfunded, meaning that the current fair value of the assets held by the pension plan exceeds the estimated current accumulated benefit obligation of the pension plan. The overfunded amount is included on our balance sheet as an asset titled “Asset for retirement benefits.” As of September 30, 2025, the value of that asset was $5,928,000, which represented 28% of the Company’s total assets of $20,812,000 and 85% of our stockholders’ equity. A decline in the value of our pension plan’s investments overall, or of any one investment, could reduce the value of “Asset for retirement benefits.”
A portion of the pension plan’s investments is in publicly traded stocks, one of which is Barnwell’s common stock. As of September 30, 2025, the value of the Barnwell common stock held by the pension plan was $866,000, representing approximately 6% of the fair market value of the pension plan’s assets. A decline in the price of our common stock would also have the effect of reducing the value of our “Asset for retirement benefits,” total assets and our stockholders’ equity.
The price of our common stock has been volatile and could continue to fluctuate substantially.
The market price of our common stock has been volatile and could fluctuate based on a variety of factors, including:
•fluctuations in commodity prices;
•variations in results of operations;
•announcements by us and our competitors;
•legislative or regulatory changes;
•general trends in the industry;
•general market conditions;
•litigation; and
•other events applicable to our industries.
Failure to retain key personnel could hurt our operations.
We require highly skilled and experienced personnel to operate our business. In addition to competing in highly competitive industries, we compete in a highly competitive labor market. Our business could be adversely affected by an inability to retain personnel or upward pressure on wages as a result of the highly competitive labor market. Further, there are significant personal liability risks to Barnwell of Canada's individual officers and directors related to well clean-up costs that may affect our ability to attract or retain the necessary people.
We are a smaller reporting company and benefit from certain reduced governance and disclosure requirements, including that our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting. We cannot be certain if the omission of reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.
Currently, we are a “smaller reporting company,” meaning that our outstanding common stock held by nonaffiliates had a value of less than $250 million at the end of our most recently completed second fiscal quarter. As a smaller reporting company, we are not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, meaning our auditors are not required to attest to the effectiveness of the Company’s internal control over financial reporting. As a result, investors and others may be less comfortable with the effectiveness of the Company’s internal controls and the risk that material weaknesses or other deficiencies in internal controls go undetected may increase. In addition, as a smaller reporting company, we take advantage of our ability to provide certain other less comprehensive disclosures in our SEC filings, including, among other things, providing only two years of audited financial statements in annual reports and simplified executive compensation disclosures. Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects, as the information we provide to stockholders may be different from what one might receive from other public companies in which one hold shares. As a smaller reporting company, we are not required to provide this information.
Risks Related to Oil and Natural Gas Segment
Acquisitions or discoveries of additional reserves are needed to increase our oil and natural gas segment operating results and cash flow.
In August 2018, Barnwell made a significant reinvestment into its oil and natural gas segment with the acquisition of the Twining property in Alberta, Canada. The Company believes there are potential undeveloped reserves for which significant future capital expenditures will be needed to convert those potential undeveloped reserves into developed reserves. If future circumstances are such that we are not able to make the capital expenditures necessary to convert potential undeveloped reserves to developed reserves, we will not replace the amount of reserves produced and sold and our reserves and oil and natural gas segment operating results and cash flows will decline accordingly, and we may be forced to sell some of our oil and natural gas segment assets under untimely or unfavorable terms. Any such curtailment or sale could have a material adverse effect on our business, financial condition and results of operations.
Future oil and natural gas operating results and cash flow are highly dependent upon our level of success in acquiring or finding additional reserves on an economic basis. We cannot guarantee that we will be successful in developing or acquiring additional reserves and our current financial resources may be insufficient to make such investments. Furthermore, if oil or natural gas prices increase, our cost for additional reserves also could increase.
We may not realize an adequate return on oil and natural gas investments.
Drilling for oil and natural gas involves numerous risks, including the risk that we will not encounter commercially productive oil or natural gas reservoirs. The wells we drill or participate in may not be productive, and we may not recover all or any portion of our investment in those wells. If future oil and natural gas segment acquisition and development activities are not successful it could have an adverse effect on our future results of operations and financial condition.
Oil and natural gas prices are highly volatile and further declines, or extended low prices will significantly affect our financial condition and results of operations.
Much of our revenues and cash flow are greatly dependent upon prevailing prices for oil and natural gas. Lower oil and natural gas prices not only decrease our revenues on a per unit basis, but also reduce the amount of oil and natural gas we can produce economically, if any. Prices that do not produce sufficient operating margins will have a material adverse effect on our operations, financial condition, operating cash flows, borrowing ability, reserves, and the amount of capital that we are able to allocate for the acquisition and development of oil and natural gas reserves.
Various factors beyond our control affect prices of oil and natural gas including, but not limited to, changes in supply and demand, market uncertainty, weather, worldwide political instability, foreign supply of oil and natural gas, the level of consumer product demand, government regulations and taxes, the price and availability of alternative fuels and the overall economic environment. Energy prices also are subject to other political and regulatory actions outside our control, which may include changes in the policies of the Organization of the Petroleum Exporting Countries or other developments involving or affecting oil-producing countries, or actions or reactions of the government of the U.S. in anticipation of or in response to such developments.
The inability of one or more of our working interest partners to meet their obligations may adversely affect our financial results.
For our operated properties, we pay expenses and bill our non-operating partners for their respective shares of costs. Some of our non-operating partners may experience liquidity problems and may not be able to meet their financial obligations. Nonperformance by a non-operating partner could result in significant financial losses.
Liquidity problems encountered by our working interest partners or the third party operators of our non-operated properties also may result in significant financial losses as the other working interest partners or third party operators may be unwilling or unable to pay their share of the costs of projects as they become due. In the event a third party operator of a non-operated property becomes insolvent, it may result in increased operating expenses and cash required for abandonment liabilities if the Company is required to take over operatorship.
We may incur material costs to comply with or as a result of health, safety, and environmental laws and regulations.
The oil and natural gas industry is subject to extensive environmental regulation pursuant to local, provincial and federal legislation. A violation of that legislation may result in the imposition of fines or the issuance of “clean up” orders. Legislation regulating the oil and natural gas industry may be changed to impose higher standards and potentially more costly obligations. Although we have recorded a provision in our financial statements relating to our estimated future environmental and reclamation obligations that we believe is reasonable, we cannot guarantee that we will be able to satisfy our actual future environmental and reclamation obligations.
Barnwell's oil and natural gas segment is subject to the provisions of the Alberta Energy Regulator’s (“AER”) Licensee Life-Cycle Management Program via a Licensee Capability Assessment (“LCA”). Under this program the AER assesses the corporate health of the Company and considers a wider variety of factors than those considered under the previous program. The LCA establishes clear expectations for industry with regards to the management of liabilities throughout the entire lifecycle of oil and gas projects. Factors considered are grouped into six factor groups, these being current financial distress, liability magnitude, resources lifespan, operations compliance, closure efficiency and administrative compliance. These factors are compared to peer operators and ranked into three “Tiers”. Under the AER, an inventory reduction program has also been implemented which requires mandatory annual minimum expenditures towards outstanding decommissioning and reclamation obligations in accordance with AER targets which are adjusted by the AER on an annual basis. The target for 2026 is 6.5% of an individual company’s inactive liability. These targets became effective January 1, 2022.
The AER may require purchasers of AER licensed oil and natural gas assets to be within Tiers 1 or 2 overall rankings in the six factors group. This requirement for well transfers hinders our ability to generate capital by selling oil and natural gas assets as there are less qualified buyers.
The AER may require the Company to provide a security deposit if assessed at Tier 3. Diverting funds to the AER in the future would result in the diversion of cash on hand and operating cash flows that could otherwise be used to fund oil and natural gas reserve replacement efforts, which could in turn have a material adverse effect on our business, financial condition and results of operations. If Barnwell fails to comply with the requirements of the LCA program, Barnwell's oil and natural gas subsidiary would be subject to the AER's enforcement provisions which could include suspension of operations and non-
compliance fees and could ultimately result in the AER serving the Company with a closure order to shut-in all operated wells. Additionally, if Barnwell is non-compliant, the Company would be prohibited from transferring well licenses which would prohibit us from selling any oil and natural gas assets until the required cash deposit is made with the AER.
We are not fully insured against certain environmental risks, either because such insurance is not available or because of high premium costs. In particular, insurance against risks from environmental pollution occurring over time, as opposed to sudden and catastrophic damages, is not available on economically reasonable terms. Accordingly, any site reclamation or abandonment costs actually incurred in the ordinary course of business in a specific period could negatively impact our cash flow. Should we be unable to fully fund the cost of remedying an environmental problem, we might be required to suspend operations or enter into interim compliance measures pending completion of the required remedy.
We may fail to fully identify potential problems related to acquired reserves or to properly estimate those reserves.
We periodically evaluate acquisitions of reserves, properties, prospects and leaseholds and other strategic transactions that appear to fit within our overall business strategy. Our evaluation includes an assessment of reserves, future oil and natural gas prices, operating costs, potential for future drilling and production, validity of the seller’s title to the properties and potential environmental issues, litigation and other liabilities.
In connection with these assessments, we perform a review of the subject properties that we believe to be generally consistent with industry practices. Our review will not reveal all existing or potential problems nor will it permit us to become sufficiently familiar with the properties to fully assess their deficiencies and potential recoverable reserves. Inspections may not always be performed on every well, and environmental problems are not necessarily observable even when an inspection is undertaken. Even when problems are identified, the seller of the properties may be unwilling or unable to provide effective contractual protection against all or part of the problems. We often are not entitled to contractual indemnification for environmental liabilities or title defects in excess of the amounts claimed by us before closing and acquire properties on an “as is” basis.
There are numerous uncertainties inherent in estimating quantities of proved oil and gas reserves and future production rates and costs with respect to acquired properties, and actual results may vary substantially from those assumed in the estimates.
If oil and natural gas prices decline and remain low, we may be required to take write-downs of the carrying values of our oil and natural gas properties.
Oil and natural gas prices affect the value of our oil and natural gas properties as determined in our full cost ceiling calculation. Any future ceiling test write-downs will result in reductions of the carrying value of our oil and natural gas properties and an equivalent charge to earnings.
The oil and natural gas industry is highly competitive.
We compete for capital, acquisitions of reserves, undeveloped lands, skilled personnel, access to drilling rigs, service rigs and other equipment, access to processing facilities, pipeline capacity and in many other respects with a substantial number of other organizations, most of which have greater technical and financial resources than we do. Some of these organizations explore for, develop and produce oil and natural gas, carry on refining operations and market oil and other products on a worldwide basis. As a result of these complementary activities, some of our competitors may have competitive resources that are greater and more diverse than ours. Furthermore, many of our competitors may have a competitive advantage when responding to factors that affect demand for oil and natural gas production, such as changing prices and production levels, the cost and availability of alternative fuels and the application of government regulations. If our competitors are able to capitalize on these competitive resources, it could adversely affect our revenues and profitability.
We are not the operator and have limited influence over the operations of certain of our oil and natural gas properties.
We hold minority interests in certain of our oil and natural gas properties. As a result, we cannot control the pace of exploration or development, major decisions affecting the drilling of wells, the plan for development and production at non-operated properties, or the timing and amount of costs related to abandonment and reclamation activities although contract provisions give Barnwell certain consent rights in some matters. The operator’s influence over these matters can affect the pace at which we incur capital expenditures. Additionally, as certain underlying joint venture data is not accessible to us, we depend on the operators at non-operated properties to provide us with reliable accounting information. We also depend on operators and joint operators to maintain the financial resources to fund their share of all abandonment and reclamation costs.
Actual reserves will vary from reserve estimates.
Estimating reserves is inherently uncertain and the reserves estimation process involves significant decisions and assumptions in the evaluation of available geological, geophysical, engineering and economic data. The reserve data and standardized measures set forth herein are only estimates. Ultimately, actual reserves attributable to our properties will vary from estimates, and those variations may be material. The estimation of reserves involves a number of factors and assumptions, including, among others:
•oil and natural gas prices as prescribed by SEC regulations;
•historical production from our wells compared with production rates from similar producing wells in the area;
•future commodity prices, production and development costs, royalties and capital expenditures;
•initial production rates;
•production decline rates;
•ultimate recovery of reserves;
•success of future development activities;
•marketability of production;
•effects of government regulation; and
•other government levies that may be imposed over the producing life of reserves.
If these factors, assumptions and prices prove to be inaccurate, actual results may vary materially from reserve estimates.
Part of our strategy involves using some of the latest available horizontal drilling and completion techniques. The results of our drilling are subject to drilling and completion technique risks, and results may not meet our expectations for reserves or production.
Many of our operations involve, and are planned to utilize, the latest drilling and completion techniques as developed by our service providers in order to maximize production and ultimate recoveries and therefore generate the highest possible returns. Risks we face while completing our wells include, but are not limited to, the inability to fracture the planned number of stages, the inability to run tools and other equipment the entire length of the well bore during completion operations, the inability to recover such tools and other equipment, and the inability to successfully clean out the well bore after completion of the final fracture stimulation. Ultimately, the success of these drilling and completion techniques can only be evaluated over time as more wells are drilled and production profiles are established over a sufficiently long time period. If our drilling results are less than anticipated or we are unable to execute our drilling program because of capital constraints, lease expirations, limited access to gathering systems and takeaway capacity, and/or prices for crude oil, natural gas, and natural gas liquids decline, then the return on our investment for a particular project may not be as attractive as we anticipated and we could incur material write-downs of oil and gas properties and the value of our undeveloped acreage could decline in the future.
Production and reserves, if any, attributable to the use of enhanced recovery methods are inherently difficult to predict. If our enhanced recovery methods do not allow for the extraction of crude oil, natural gas, and associated liquids in a manner or to the extent that we anticipate, we may not realize an acceptable return on our investments in such projects.
Delays in business operations could adversely affect the amount and timing of our cash inflows.
In addition to the usual delays in payment by purchasers of oil and natural gas to the operators of our properties, and the delays of those operators in remitting payment to us, payments between any of these parties may also be delayed by:
•restrictions imposed by lenders;
•accounting delays;
•delays in the sale or delivery of products;
•delays in the connection of wells to a gathering system;
•blowouts or other accidents;
•adjustments for prior periods;
•recovery by the operator of expenses incurred in the operation of the properties; and
•the establishment by the operator of reserves for these expenses.
Any of these delays could expose us to additional third party credit risks.
The oil and natural gas market in which we operate exposes us to potential liabilities that may not be covered by insurance.
Our operations are subject to all of the risks associated with the operation and development of oil and natural gas properties, including the drilling of oil and natural gas wells, and the production and
transportation of oil and natural gas. These risks include encountering unexpected formations or pressures, premature declines of reservoirs, blow-outs, equipment failures and other accidents, cratering, sour gas releases, uncontrollable flows of oil, natural gas or well fluids, adverse weather conditions, pollution, other environmental risks, fires and spills. A number of these risks could result in personal injury, loss of life, or environmental and other damage to our property or the property of others.
While we carry various levels of insurance, we could be affected by civil, criminal, regulatory or administrative actions, claims or proceedings. We cannot fully protect against all of the risks listed above, nor are all of these risks insurable. There is no assurance that any applicable insurance or indemnification agreements will adequately protect us against liability for the risks listed above. We could face substantial losses if an event occurs for which we are not fully insured or are not indemnified against or a customer or insurer fails to meet its indemnification or insurance obligations. In addition, there can be no assurance that insurance will continue to be available to cover any or all of these risks, or, even if available, that insurance premiums or other costs will not rise significantly in the future, so as to make the cost of such insurance prohibitive.
Deficiencies in operating practices and record keeping, if any, may increase our risks and liabilities relating to incidents such as spills and releases and may increase the level of regulatory enforcement actions.
Our operations are subject to domestic and foreign government regulation and other risks, particularly in Canada and the U.S.
Barnwell’s oil and natural gas operations are affected by political developments and laws and regulations, particularly in Canada and the U.S., such as restrictions on production, restrictions on imports and exports, the maintenance of specified reserves, tax increases and retroactive tax claims, expropriation of property, cancellation of contract rights, environmental protection controls, environmental compliance requirements and laws pertaining to workers’ health and safety. Further, the right to explore for and develop oil and natural gas on lands in Alberta is controlled by the government of that province. Changes in royalties and other terms of provincial leases, permits and reservations may have a substantial effect on Barnwell’s operations. We derive a significant portion of our revenues from our operations in Canada; 91% in fiscal 2025.
Additionally, our ability to compete in the Canadian oil and natural gas industry may be adversely affected by governmental regulations or other policies that favor the awarding of contracts to contractors in which Canadian nationals have substantial ownership interests. Furthermore, we may face governmentally imposed restrictions or fees from time to time on the transfer of funds to the U.S.
Government regulations control and often limit access to potential markets and impose extensive requirements concerning employee safety, environmental protection, pollution control and remediation of environmental contamination. Environmental regulations, in particular, prohibit access to some markets and make others less economical, increase equipment and personnel costs and often impose liability without regard to negligence or fault. In addition, governmental regulations may discourage our customers’ activities, reducing demand for our products and services.
Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, could adversely affect our business, prospects, financial condition, and operating results.
There is currently significant uncertainty about the future relationship between the United States and Canada, including potential changes with respect to trade policies, treaties, tariffs, taxes, and other limitations on cross-border operations. Because all our oil and natural gas production is in Canada, changes in tariffs, trade barriers, and other regulatory requirements could have an adverse effect on our business, prospects, financial condition and operating results, the extent of which cannot be predicted with certainty at this time.
Legislation, regulation, and other government actions and shifting customer preferences and other private efforts related to greenhouse gas (“GHG”) emissions and climate change could increase our operational costs and reduce demand for our oil and natural gas, resulting in a material adverse effect on the Company’s results of operations and financial condition.
Barnwell may experience challenges from the impacts of international and domestic legislation, regulation, or other government actions relating to GHG emissions (e.g., carbon dioxide and methane) and climate change. International agreements and national, regional, and state legislation and regulatory measures that aim to directly or indirectly limit or reduce GHG emissions are in various stages of implementation. Many of these actions, as well as customers’ preferences and use of oil and natural gas or substitute products, are beyond the Company’s control. Similar to any significant changes in the regulatory environment, GHG emissions and climate change-related legislation, regulation, or other government actions may curtail profitability in the oil and gas sector, or render the extraction of the Company’s hydrocarbon resources economically infeasible. In particular, GHG emissions-related legislation, regulations, and other government actions and shifting consumer preferences and other private efforts aimed at reducing GHG emissions may result in increased and substantial capital, compliance, operating, and maintenance costs and could, among other things, reduce demand for the Company’s oil and natural gas; adversely affect the economic feasibility of the Company’s resources; impact or limit our business plans; and adversely affect the Company’s sales volumes, revenues, margins and reputation.
The ultimate impact of GHG emissions and climate change-related agreements, legislation, regulation, and government actions on the Company’s financial performance is highly uncertain because the Company is unable to predict with certainty, the outcome of political decision-making processes, including the actual laws and regulations enacted, the variables and tradeoffs that inevitably occur in connection with such processes, and market conditions.
Compliance with foreign tax and other laws may adversely affect our operations.
Tax and other laws and regulations are not always interpreted consistently among local, regional and national authorities. Income tax laws, other legislation or government incentive programs relating to the oil and natural gas industry may in the future be changed or interpreted in a manner that adversely affects us and our stockholders. It also is possible that in the future we will be subject to disputes concerning taxation and other matters in Canada, including the manner in which we calculate our income for tax purposes, and these disputes could have a material adverse effect on our financial performance.
Unforeseen title defects may result in a loss of entitlement to production and reserves.
Although we conduct title reviews in accordance with industry practice prior to any purchase of resource assets or property, such reviews do not guarantee that an unforeseen defect in the chain of title will not arise and defeat our title to the purchased assets. If such a defect were to occur, our entitlement to the production from such purchased assets could be jeopardized.
Risks Related to Land Investment Segment
Receipt of future payments from KD II and cash distributions from the Kukio Resort Land Development Partnerships is dependent upon the developer’s continued efforts and ability to develop the property.
We hold investment interests in unconsolidated land development partnerships, which are accounted for using the equity method of accounting, in which we do not have a controlling interest. These investments involve risks and are highly illiquid.
These investments involve risks which include:
•the lack of a controlling interest in these partnerships and, therefore, the inability to require that the entities sell assets, return invested capital or take any other action without obtaining the majority vote of partners;
•potential for future additional capital contributions to fund operations and development activities;
•the adverse impact on overall profitability if the entities do not achieve the financial results projected;
•the reallocation of amounts of capital from other operating initiatives and/or an increase in indebtedness to pay potential future additional capital contributions, which could in turn restrict our ability to access additional capital when needed or to pursue other important elements of our business strategy;
•undisclosed, contingent or other liabilities or problems, unanticipated costs, and an inability to recover or manage such liabilities and costs and which could delay or prevent development of the real estate held by the land development partnerships; and
•certain underlying partnership data is not accessible to us, therefore we depend on the general partner to provide us with reliable accounting information.
Our land investment business is concentrated in the state of Hawaii. As a result, our financial results are dependent on the economic growth and health of Hawaii, particularly the island of Hawaii.
Barnwell’s land investment segment is impacted by the condition of Hawaii’s real estate market, which is affected by Hawaii’s economy and Hawaii’s tourism industry, as well as the U.S. and world economies in general. Any future cash flows from Barnwell’s land development activities are subject to, among other factors, the level of real estate activity and prices, the demand for new housing and second homes on the island of Hawaii, the rate of increase in the cost of building materials and labor, the introduction of building code modifications, changes to zoning laws, and the level of confidence in Hawaii’s economy.
The occurrence of natural disasters in Hawaii could adversely affect our business.
The occurrence of a natural disaster in Hawaii such as, but not limited to, earthquakes, landslides, hurricanes, tornadoes, tsunamis, volcanic activity, droughts and floods, could have a material adverse effect on our land investments. The occurrence of a natural disaster could also cause property and flood insurance rates and deductibles to increase, which could reduce demand for real estate in Hawaii.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
Oil and Natural Gas and Land Investment Properties
The location and character of Barnwell’s oil and natural gas properties and its land investment properties, are described above under Item 1, “Business.”
Corporate Offices
Barnwell's corporate headquarters is located in Honolulu, Hawaii, in a commercial office building under a lease that expires in February 2026.
Subsequent to fiscal 2025, Barnwell made the decision to relocate its corporate headquarters to co-head offices in Houston, Texas and Calgary, Alberta. The closure of the Hawaii office is scheduled to occur in early calendar year 2026. This decision reflects the Company’s ongoing efforts to streamline operations and reduce general and administrative expenses.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
On March 26, 2025, the Company commenced a lawsuit against the Sherwood Group in the Delaware Chancery Court, seeking, among other remedies, declaratory judgment that the Sherwood Group’s purported notice to nominate certain individuals for election to the Company’s board of directors at the 2025 Annual Meeting of stockholders was invalid and injunctive relief to enjoin the Sherwood Group from presenting its slate of nominees at the 2025 Annual Meeting due to the failure of the Sherwood Group to comply with the advance notice provisions of the Company’s Bylaws.
On April 21, 2025, the Sherwood Group filed an answer to the Company’s complaint, counterclaims against the Company and a third-party complaint against Alexander Kinzler, Kenneth Grossman and Joshua Horowitz in the Delaware Chancery Court, seeking, amongst other things, dismissal of all claims brought by the Company against the Sherwood Group, declaratory judgment that the Company’s directors breached their fiduciary duties, and injunctive relief to enjoin the Company from (i) applying the Company’s Bylaws to prevent the Sherwood Group from nominating its slate of nominees set forth in the defective Sherwood nomination notice for election at the 2025 Annual Meeting and (ii) filing or distributing further proxy solicitation materials for the 2025 Annual Meeting until the Delaware Chancery Court issued a ruling determining whether the Sherwood Group complied with the advance notice provisions of the Company’s Bylaws.
After a trial, on May 21, 2025, the Delaware Chancery Court ruled in favor of the Company and the Board of Directors, and held that the defective Sherwood nomination notice was invalid and the Board properly applied the Bylaws in response to the defective Sherwood nomination notice and found that Mr. Kinzler, Mr. Grossman and Mr. Horowitz did not breach their fiduciary duties. The Sherwood Group chose not to appeal the Court’s decision. Accordingly, the Board did not permit the Sherwood nominees to be presented for election at the 2025 Annual Meeting, which was held in September 2025.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Disclosure is not applicable to Barnwell.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
The principal market on which Barnwell’s common stock is being traded is the NYSE American under the ticker symbol “BRN.” The following tables present the quarterly high and low sales prices, on the NYSE American, for Barnwell’s common stock during the periods indicated:
Quarter Ended High Low Quarter Ended High Low
December 31, 2023 $2.78 $2.06 December 31, 2024 $2.40 $1.31
March 31, 2024 $2.53 $2.15 March 31, 2025 $2.17 $1.27
June 30, 2024 $3.20 $2.30 June 30, 2025 $2.28 $1.13
September 30, 2024 $2.53 $2.12 September 30, 2025 $1.37 $1.08
Holders
As of December 8, 2025, there were 12,538,064 shares of common stock, par value $0.50, outstanding. As of December 8, 2025, there were approximately 99 shareholders of record and approximately 1,000 beneficial owners.
Dividends
No dividends were declared or paid during fiscal years 2025 or 2024. The payment of future cash dividends will depend on, among other things, our financial condition, operating cash flows, and the level of our oil and natural gas capital expenditures and any other investments.
Stock Performance Graph and Cumulative Total Return
Disclosure is not required as Barnwell qualifies as a smaller reporting company.
Securities Authorized for Issuance Under Equity Compensation Plans
See information included in Part III, Item 12, under the caption “Equity Compensation Plan Information.”
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
In the quarter ended June 30, 2025, the Barnwell Industries, Inc. Employees’ Pension Plan Trust Pension Plan purchased shares of Barnwell common stock which resulted in the Pension Plan owning more than 5% of the Company's common shares outstanding. The Pension Plan has filed Schedule 13Ds with the Securities and Exchange Commission reporting its beneficial ownership of Barnwell common stock.
The following table provides information regarding purchases of Barnwell common stock by the Pension Plan during the three months ended September 30, 2025:
(a) (b) (c) (d)
Period Total number
of shares purchased (1)
Average price paid per
share (1)
Total number
of shares purchased as part of publicly announced plans or programs (2)
Maximum number of shares that may yet be purchased under the plans or programs (2)
July 1 - July 31, 2025
76,085 $1.20 - -
August 1 - August 31, 2025
1,689 $1.13 - -
September 1 - September 30, 2025
67,953 $1.15 - -
Total 145,727
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(1) Represents shares of common stock purchased by the Barnwell Pension Plan, an affiliated purchaser, and the transactions were all made in the open market.
(2) The Company does not have a publicly announced plan or program to purchase shares of our common stock. Accordingly, there were no shares purchased as part of a publicly announced plan or program.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. [RESERVED]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is intended to assist in the understanding of the Consolidated Balance Sheets of Barnwell Industries, Inc. and subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us” or the “Company”) as of September 30, 2025 and 2024, and the related Consolidated Statements of Operations, Comprehensive Loss, Equity, and Cash Flows for the years ended September 30, 2025 and 2024. This discussion should be read in conjunction with the consolidated financial statements and related Notes to Consolidated Financial Statements included in this report.
On March 14, 2025, the Company entered into and completed the sale of its wholly-owned subsidiary, Water Resources. Water Resources drills water wells and installs and repairs water pumping systems in Hawaii and represented our contract drilling segment. As a result of the sale, the Company has classified the related assets and liabilities and the results of its contract drilling business as discontinued operations in the consolidated financial statements for all periods presented. Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur. Unless otherwise noted, the discussions below pertains only to Barnwell’s continuing operations. For information on discontinued operations, refer to Note 3 “Discontinued Operations” in the Notes to Consolidated Financial Statements in Item 8 of this report.
Critical Accounting Policies and Estimates
The Company considers an accounting estimate to be critical if the accounting estimate requires the Company to make assumptions that are difficult or subjective about matters that were highly uncertain at the time that the accounting estimate was made, and changes in the estimate that are reasonably likely to occur in periods subsequent to the period in which the estimate was made, or use of different estimates that the Company could have used in the current period, would have a material impact on the Company’s financial condition or results of operations. The most critical accounting policies inherent in the preparation of the Company’s consolidated financial statements are described below. We continue to monitor our accounting policies to ensure proper application of current rules and regulations.
Oil and Natural Gas Properties - full cost ceiling calculation and depletion
Policy Description
We use the full cost method of accounting for our oil and natural gas properties under which we are required to conduct quarterly calculations of a “ceiling,” or limitation, on the carrying value of oil and natural gas properties . The ceiling limitation is the sum of 1) the discounted present value (at 10%), using average first-day-of-the-month prices during the 12-month period ending as of the balance sheet date held constant over the life of the reserves (except where prices are defined by contractual arrangements), of Barnwell’s estimated future net cash flows from estimated production of proved oil and natural gas reserves, less estimated future expenditures to be incurred in developing and producing the proved reserves but excluding future cash outflows associated with settling asset retirement obligations with the exception of those associated with proved undeveloped reserves from wells that are to be drilled in the future; plus 2) the cost of major development projects and unproven properties not subject to depletion, if any; plus 3) the lower of cost or estimated fair value of unproven properties included in costs subject to depletion; less 4) related income tax effects. If net capitalized costs exceed this limit, the excess is expensed.
All items classified as unevaluated and unproved properties are assessed on a quarterly basis for possible impairment or reduction in value. Properties are assessed on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of various factors, including, but not limited to, the following: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; assignment of proved reserves; and economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and become subject to amortization.
Judgments and Assumptions
The estimate of our oil and natural gas reserves is a major component of the ceiling calculation and represents the component that requires the most subjective judgments. Estimates of reserves are forecasts based on engineering data, historical data, projected future rates of production and the timing of future expenditures. The process of estimating oil and natural gas reserves requires substantial judgment, resulting in imprecise determinations, particularly for new discoveries. Our reserve estimates are prepared at least annually by independent petroleum reserve engineers. The passage of time provides more quantitative and qualitative information regarding estimates of reserves, and revisions are made to prior estimates to reflect updated information. A portion of the revisions are attributable to changes in the rolling 12-month average first-day-of-the-month prices, which impact the economics of producible reserves. In the last three fiscal years, annual revisions to our reserve volume estimates have averaged 18% of the previous year’s estimate, due in large part to the impacts of volatile oil and natural gas prices which change the economic viability of producing such reserves and changes in estimated proved undeveloped reserves which can fluctuate from year to year depending upon the Company's plans and ability to fund the capital expenditures necessary to develop such reserves. There can be no assurance that more significant revisions will not be necessary in the future. If future significant revisions are necessary that reduce previously estimated reserve quantities, such revisions could result in a write-down of oil and natural gas properties.
If reported reserve volumes were revised downward by 5% at the end of fiscal 2025, the ceiling limitation for Canada would have decreased approximately $636,000 which would not have resulted in a ceiling impairment before income taxes due to sufficient room between the ceiling and the carrying value of Canadian oil and natural gas properties at the end of fiscal 2025 of approximately $2,949,000.
In addition to the impact of the estimates of proved reserves on the calculation of the ceiling, estimated proved reserves are also a significant component of the quarterly calculation of depletion expense. The lower the estimated reserves, the higher the depletion rate per unit of production. Conversely, the higher the estimated reserves, the lower the depletion rate per unit of production. If reported reserve volumes were revised downward by 5% as of the beginning of fiscal 2025, depletion for fiscal 2025 would have increased by approximately $122,000.
While the quantities of proved reserves require substantial judgment, the associated prices of oil, natural gas and natural gas liquids reserves are the average first-day-of-the-month prices during the 12-month period ending in the reporting period on a constant basis as prescribed by SEC regulations. Additionally, the applicable discount rate that is used to calculate the discounted present value of the reserves is mandated at 10%. Costs included in future net revenues are determined in a similar manner. As such, the future net revenues associated with the estimated proved reserves are not based on an assessment of future prices or costs.
Income Taxes
Policy Description
Income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax impacts of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Deferred income tax assets are routinely assessed for realizability. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax asset will not be realized.
Barnwell recognizes the financial statement effects of tax positions when it is more likely than not that the position will be sustained by a taxing authority.
Judgments and Assumptions
We make estimates and judgments in determining our income tax expense for each reporting period. Significant changes to these estimates could result in an increase or decrease in our tax provision in future periods. We are also required to make judgments about the recoverability of deferred tax assets and when it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is provided. We consider available positive and negative evidence and available tax planning strategies when assessing the realizability of deferred tax assets. Accordingly, changes in our business performance and unforeseen events could require a further increase in the valuation allowance or a reversal in the valuation allowance in future periods. This could result in a charge to, or an increase in, income in the period such determination is made, and the impact of these changes could be material.
In addition, Barnwell operates within the U.S. and Canada and is subject to audit by taxing authorities in these jurisdictions. Barnwell records accruals for the estimated outcomes of these audits, and the accruals may change in the future due to new developments in each matter. Tax benefits are recognized when we determine that it is more likely than not that such benefits will be realized. Management evaluates its potential exposures from tax positions taken that have or could be challenged by taxing authorities. These potential exposures result because taxing authorities may take positions that differ from those taken by management in the interpretation and application of statutes, regulations and rules. Management considers the possibility of alternative outcomes based upon past experience, previous actions by taxing authorities (e.g., actions taken in other jurisdictions) and advice from tax experts. Where uncertainty exists due to the complexity of income tax statutes and where the potential tax amounts are significant, we generally seek independent tax opinions to support our positions. If our evaluation of the likelihood of the realization of benefits is inaccurate, we could incur additional income tax and interest expense that would adversely impact earnings, or we could receive tax benefits greater than anticipated which would positively impact earnings, either of which could be material.
Overview
Barnwell is engaged in the following lines of business: 1) acquiring, developing, producing and selling oil and natural gas in Canada and the U.S. (oil and natural gas segment) and 2) leasehold land interests in Hawaii (land investment segment).
Oil and Natural Gas Segment
Barnwell is involved in the acquisition and development of oil and natural gas properties primarily in the Twining area of Alberta, Canada, where we initiate and participate in acquisition and developmental operations for oil and natural gas on properties in which we have an interest, and evaluate proposals by third parties with regard to participation in such exploratory and developmental operations elsewhere. Additionally, through its wholly-owned subsidiaries BOK and Barnwell Texas, Barnwell was, until August 8, 2025, involved in non-operated oil and natural gas investments in Oklahoma and Texas, respectively.
Barnwell sells all of its Canadian and U.S. oil and natural gas under short-term contracts with marketers based on prices indexed to market prices. The price of natural gas, oil and natural gas liquids is freely negotiated between the buyers and sellers. Oil and natural gas prices are determined by many factors that are outside of our control. Market prices for oil and natural gas products are dependent upon factors such as, but not limited to, changes in market supply and demand, which are impacted by overall economic activity, changes in weather, pipeline capacity constraints, inventory storage levels, and output. Oil and natural gas prices are very difficult to predict and fluctuate significantly. Natural gas prices tend to be higher in the winter than in the summer due to increased demand, although this trend has become less pronounced due to the increased use of natural gas to generate electricity for air conditioning in the summer and increased natural gas storage capacity in North America.
Oil and natural gas exploration, development and operating costs generally follow trends in product market prices, thus in times of higher product prices the cost of exploring, developing and operating the oil and natural gas properties will tend to escalate as well. Capital expenditures are required to fund the exploration, development, and production of oil and natural gas. Cash outlays for capital expenditures are largely discretionary, however, a minimum level of capital expenditures is required to replace depleting reserves. Due to the nature of oil and natural gas exploration and development, significant uncertainty exists as to the ultimate success of any drilling effort.
Land Investment Segment
Through Barnwell’s 77.6% interest in Kaupulehu Developments, 75% interest in KD Kona, and 34.45% non-controlling interest in KKM Makai, the Company’s land investment interests include the following:
•The right to receive percentage of sales payments from KD I resulting from the sale of single-family residential lots by KD I, within Increment I of the Kaupulehu Lot 4A area located in the North Kona District of the island of Hawaii. However, in the quarter ended March 31, 2024, the last two remaining single-family lots in Increment I were sold and there are no more lots available for sale in Increment I. Kaupulehu Developments was entitled to receive payments from KD I based on 10% of the gross receipts from KD I’s sales at Increment I. Increment I is an area zoned for approximately 80 single-family lots.
•The right to receive 15% of the distributions of KD II, the cost of which is to be solely borne by KDK out of its 55% ownership interest in KD II, plus a priority payout of 10% of KDK's cumulative net profits derived from Increment II sales subsequent to Phase 2A, up to a maximum of $3,000,000. Such interests are limited to distributions or net profits interests and Barnwell does not have any partnership interest in KD II or KDK through its interest in Kaupulehu Developments. Barnwell also has rights to three single-family residential lots in Phase 2A of Increment II, and four single-family residential lots in phases subsequent to Phase 2A when such lots are developed by KD II, all at no cost to Barnwell. Barnwell is committed to commence construction of improvements within 90 days of the transfer of the four lots in the phases subsequent to Phase 2A as a condition of the transfer of such lots. Also, in addition to Barnwell's existing obligations to pay professional fees to certain parties based on percentages of its gross receipts, Kaupulehu Developments is obligated to pay an amount equal to 0.72% and 0.20% of the cumulative net profits of KD II to KD Development, LLC and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell. The remaining acreage within Increment II is not yet under development, and there is no assurance that development of such acreage will in fact occur. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.
•An indirect 19.6% non-controlling ownership interest in KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD I and an indirect 10.8% non-controlling ownership interest in KD II through KDK. These entities own certain real estate and development rights interests in the Kukio, Maniniowali and Kaupulehu portions of Kukio Resort, a private residential community on the Kona coast of the island of Hawaii, as well as Kukio Resort’s real estate sales office operations. KDK was the developer of Kaupulehu Lot 4A Increments I and II. The partnerships derive income from the sale of residential parcels in Increment I, which is now completely sold, as well as from commissions on real estate resales by the real estate sales office and revenues resulting from the sale of private club memberships, a few of which remain available for sale.
The Kukio Resort Land Development Partnerships have remaining Increment I obligations to complete project amenities, infrastructure, beautification, and restoration of certain areas and therefore has yet to fully recognize its deferred profit on the Increment I project as a whole. The Increment I deferred profit at September 30, 2025 for the Kukio Resort Land Development Partnerships as a whole was approximately $4,500,000; the recognition of which is dependent upon the completion of the Increment I obligations. The Kukio Resort Land Development Partnerships have accrued estimated costs of these obligations of approximately $3,000,000. The Kukio Resort Land Development Partnerships currently appears to have the ability to fund those obligations but there are no assurances that it can ultimately do so in the future if unforeseen events occur. The Kukio Resort Land Development Partnerships will recognize the Increment I deferred revenue and costs of sales on a percentage completion basis as the cash outlays to complete the remaining project obligations are made. The Kukio Resort Land Development Partnerships’ deferred profit and accrued costs to complete are not reflected in Barnwell’s Consolidated Balance Sheets as we account for our investment in the Kukio Resort Land Development Partnerships under the equity method of accounting. No percentage of sales payments will be earned by Barnwell on any future recognition of Increment I deferred profit as such payments were already fully earned and received based on cash received by the Kukio Resort Land Development Partnerships as the Increment I lots were sold.
•Approximately 1,000 acres of vacant leasehold land zoned conservation in the Kaupulehu Lot 4C area, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. The lease terminates in December 2025.
In November 2025, Kaupulehu Developments entered into an agreement with Mr. David Johnston, the son of Mr. Terry Johnston, a partner in Kaupulehu Developments, to surrender any and all remaining rights for Increment II for $2,000,000 of which $70,000 was received. Additionally, the purchaser has the right to extend the closing by up to two years by making a $70,000 payment in each of the next two years, with those payments applied against the $2,000,000 purchase price. The closing of this transaction is entirely dependent on the purchaser and therefore may not happen.
Subsequent to fiscal 2025, pursuant to a unit purchase agreement KDK, of which Barnwell holds a 19.6% interest, agreed to sell KDK’s interests in Increment II to Mr. David Johnston for $2,109,000. The unit purchase agreement is subject to due diligence, and there is no certainty that the transaction will close. Furthermore, there is also no assurance on the timing or amounts that the general partner of KDK would distribute upon a closing.
Business Environment
Our operations are located in Canada and in the state of Hawaii and Texas. Accordingly, our business performance is directly affected by macroeconomic conditions in those areas, as well as general economic conditions of the U.S. domestic and world economies.
Oil and Natural Gas Segment
Barnwell realized an average price for oil of $60.49 per barrel during the year ended September 30, 2025, a decrease of 9% from $66.49 per barrel realized during the prior year and realized an average price for natural gas of $1.27 per Mcf during the year ended September 30, 2025, a decrease of 10% from $1.41 per Mcf realized during the prior year. Oil and natural gas prices continue to be volatile over time and thus, the Company is unable to reasonably predict future prices and the impacts future prices will have on the Company.
Land Investment Segment
Future revenues from the sale of interest in leasehold land and any future cash distributions from our investment in the Kukio Resort Land Development Partnerships are dependent upon the potential future development or sale of the remaining portion of Increment II by KD II of Kaupulehu Lot 4A. The amount and timing of future land investment segment proceeds from percentage of sales payments and cash distributions from the Kukio Resort Land Development Partnerships are highly uncertain and out of our control, and there is no assurance with regards to the amounts of future payments from Increment II to be received or that the remaining acreage within Increment II will be developed. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.
Results of Operations
Summary of Results From Continuing Operations
The net loss from continuing operations attributable to Barnwell for fiscal 2025 totaled $7,115,000, a $3,010,000 increase from a net loss from continuing operations attributable to Barnwell of $4,105,000 in fiscal 2024. The following factors affected the results of operations for the current fiscal year as compared to the prior fiscal year:
•General and administrative expenses increased $1,807,000 due to $1,958,000 in new fees and costs incurred, net of $348,000 of estimated accrued insurance recoveries, related to a shareholder consent solicitation, various legal actions between the Sherwood Group and the Company and certain of its directors, and a proxy contest in the current year period as compared to the same period in the prior year;
•Equity in income from affiliates decreased $1,071,000 and land investment segment operating results, before non-controlling interests’ share of such profits, decreased $500,000 due to the Kukio Resort Land Development Partnerships' sale of two lots in the prior year period, whereas there was no lots sold in the current year period;
•A $636,000 loss recognized in the current year period from the sale of all of the U.S. oil and natural gas properties, whereas there was no such loss in the prior year period; and
•A $192,000 foreign currency loss recorded in the current year period due to the effects of the foreign exchange rate changes on intercompany loans and advances as a result of the strengthening of the U.S. dollar against the Canadian dollar.
General
Barnwell conducts operations in the U.S. and Canada. Consequently, Barnwell is subject to foreign currency translation and transaction gains and losses due to fluctuations of the exchange rates between the Canadian dollar and the U.S. dollar. Barnwell cannot accurately predict future fluctuations of the exchange rates and the impact of such fluctuations may be material from period to period. To date, we have not entered into foreign currency hedging transactions. Foreign currency gains or losses on intercompany loans and advances that are not considered long-term investments in nature because management intends to settle these intercompany balances in the future are included in our statements of operations.
The average exchange rate of the Canadian dollar to the U.S. dollar decreased 3% in fiscal 2025, as compared to fiscal 2024 and the exchange rate of the Canadian dollar to the U.S. dollar decreased 3% at September 30, 2025, as compared to September 30, 2024. Accordingly, the assets, liabilities, stockholders’ equity and revenues and expenses of Barnwell’s subsidiaries operating in Canada have been adjusted to reflect the change in the exchange rates. Other comprehensive income and losses are not included in net earnings and net loss.
Other comprehensive income due to foreign currency translation adjustments, net of taxes, for fiscal 2025 was $75,000, a $75,000 change from other comprehensive loss due to foreign currency translation adjustments, net of taxes, of nil in fiscal 2024. There were no taxes on other comprehensive
income due to foreign currency translation adjustments in fiscal 2025 and 2024 due to a full valuation allowance on the related deferred tax assets.
Oil and natural gas
Selected Operating Statistics
The following tables set forth Barnwell’s annual average prices per unit of production and annual net production volumes for fiscal 2025 as compared to fiscal 2024. Production amounts reported are net of royalties.
Annual Average Price Per Unit
Increase (Decrease)
2025 2024 $ %
Natural gas (Mcf)* $ 1.27 $ 1.41 $ (0.14) (10)%
Oil (Bbls) $ 60.49 $ 66.49 $ (6.00) (9)%
Natural gas liquids (Bbls) $ 28.38 $ 29.38 $ (1.00) (3)%
Annual Net Production
Increase (Decrease)
2025 2024 Units %
Natural gas (Mcf) 1,105,000 1,344,000 (239,000) (18)%
Oil (Bbls) 174,000 203,000 (29,000) (14)%
Natural gas liquids (Bbls) 56,000 64,000 (8,000) (13)%
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* Natural gas price per unit is net of pipeline charges.
The oil and natural gas segment generated a $588,000 operating profit in fiscal 2025 before general and administrative expenses, an increase in operating results of $873,000 as compared to a $285,000 operating loss in fiscal 2024.
The following table sets forth Barnwell’s oil and natural gas segment operating profit (loss) before general and administrative expenses by geographic location:
Year ended September 30,
2025 2024
Operating profit (loss) (before general and administrative expenses)
Canada (1)
$ 1,045,000 $ (440,000)
United States (2)
(457,000) 155,000
Total operating profit (loss) $ 588,000 $ (285,000)
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(1) The operating loss for Canada for the year ended September 30, 2024 includes a non-cash ceiling test impairment of $2,164,000.
(2) The operating (loss) profit for the United States for the years ended September 30, 2025 and 2024 includes non-cash ceiling test impairments of $865,000 and $721,000, respectively.
Oil and natural gas revenues decreased $3,833,000 (22%) from $17,396,000 in fiscal 2024 to $13,563,000 in fiscal 2025, primarily due primarily due to decreases in natural gas, oil, and natural gas liquids production, which decreased 18%, 14%, and 13%, respectively, in the current year period as compared to the same period in the prior year. The decrease in production was primarily the result of
natural declines in production from wells in the Company's Twining area as the wells age, and to a lesser extent due to properties sold in the prior year. Revenues also decreased due to a decrease in oil prices which decreased 9% as compared to the same period in the prior year.
In February 2025, the Company amended certain of its Canadian purchase and sales contracts to change the sales price on 1,055 gross Mcf per day of the Canadian natural gas it will sell during the period from April 1, 2025 to October 31, 2025 to a fixed index price before differentials of $1.95 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of natural gas under this fixed index price contract was equivalent to approximately 38% of Canadian natural gas gross production per day for the year ended September 30, 2025. Additionally, in September 2025, the Company amended the sales price on 1,583 gross Mcf per day of the Canadian natural gas it will sell during the period from November 1, 2025 to March 31, 2026 to a fixed index price before differentials of $3.03 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of natural gas under this fixed index price contract that will affect the period from November 1, 2025 to March 31, 2026, is equivalent to approximately 58% of Canadian natural gas gross production per day for the year ended September 30, 2025. These natural gas contracts were eligible for and elected as normal purchase and normal sales exception contracts and were thus excluded from derivative accounting.
In June 2025, the Company amended the sales price on 100 gross barrels per day of the Canadian oil that it will sell during the period from July 1, 2025 to December 31, 2025 to a fixed index price before differentials of $70.35 per net barrel, with remaining volumes continuing to be sold at spot prices. This per day volume of oil under this fixed index price was equivalent to approximately 19% of Canadian oil gross production per day for the year ended September 30, 2025. These oil contracts were eligible for and elected as normal purchase and normal sales exception contracts and were thus excluded from derivative accounting.
Subsequently, in October 2025, the Company amended the sales price on 1,055 gross Mcf per day of the Canadian natural gas it will sell during the period from April 1, 2026 to October 31, 2026 to a fixed index price before differentials of $2.94 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of natural gas under this fixed index price contract that will affect the period from April 1, 2026 to October 31, 2026, is equivalent to approximately 38% of Canadian natural gas gross production per day for the year ended September 30, 2025.
Oil and natural gas operating expenses decreased $883,000 (9%) from $9,849,000 in fiscal 2024 to $8,966,000 in fiscal 2025, primarily due to decreases in production in the current year, partially offset by an increase in workovers in the current year, as compared to the prior year.
Oil and natural gas segment depletion decreased $1,803,000 (36%) from $4,947,000 in fiscal 2024 to $3,144,000 in fiscal 2025, primarily due to decreases in the depletion rate and due to decreases in production in the current year as compared to the prior year. The depletion rate decreased as a result of a decrease in the depletable base from significant ceiling test impairments between the prior year period and the current year period.
On August 8, 2025, Barnwell entered into an agreement with an independent third party to sell all of its working interests in its U.S. oil and natural gas assets for a sales price of $2,300,000. The sales price per the agreement was adjusted for customary purchase price adjustments to reflect the economic activity from the effective date of July 1, 2025 to the closing date August 8, 2025. The Company recognized a loss on the sale of $636,000 before related income taxes in the year ended September 30, 2025. The U.S. oil and natural gas assets were located in the states of Texas and Oklahoma and were owned by wholly-
owned subsidiaries of Barnwell. As a result of the sale, the Company no longer owns any oil and natural gas assets in the U.S., however, the Company will continue to explore for oil and natural gas opportunities in the U.S.
Sale of interest in leasehold land
Kaupulehu Developments was entitled to receive a percentage of the gross receipts from the sales of lots and/or residential units in Increment I by KD I.
The following table summarizes the revenues received from KD I and the amount of fees directly related to such revenues:
Year ended September 30,
2025 2024
Sale of interest in leasehold land:
Revenues - sale of interest in leasehold land $ - $ 500,000
Fees - included in general and administrative expenses - (61,000)
Sale of interest in leasehold land, net of fees paid $ - $ 439,000
No lots were sold during the year ended September 30, 2025. During the year ended September 30, 2024, Barnwell received $500,000 in percentage of sales payments from KD I from the sale of the last two single-family lots within Increment I.
There is an Increment II owned by KD II in which the Company has a 10.8% indirect non-controlling ownership interest. There is no assurance with regards to the amounts of future sales from Increment II or that the remaining acreage within Increment II will be developed. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.
In November 2025, Kaupulehu Developments entered into an agreement with Mr. David Johnston, the son of Mr. Terry Johnston, a partner in Kaupulehu Developments, to surrender any and all remaining rights for Increment II for $2,000,000 of which $70,000 was. Additionally, the purchaser has the right to extend the closing by up to two years by making a $70,000 payment in each of the next two years, with those payments applied against the $2,000,000 purchase price. The closing of this transaction is entirely dependent on the purchaser and therefore may not happen.
Subsequent to fiscal 2025, pursuant to a unit purchase agreement KDK, of which Barnwell holds a 19.6% interest, agreed to sell KDK’s interests in Increment II to Mr. David Johnston for $2,109,000. The unit purchase agreement is subject to due diligence, and there is no certainty that the transaction will close. Furthermore, there is also no assurance on the timing or amounts that the general partner of KDK would distribute upon a closing.
General and administrative expenses
General and administrative expenses increased $1,807,000 (35%) to $6,937,000 in fiscal 2025, as compared to $5,130,000 in fiscal 2024. The increase was primarily due to $1,958,000 in new fees and costs incurred, net of $348,000 of estimated accrued insurance recoveries receivable, for legal services, proxy solicitation, proxy advisory, and public relations costs related to a shareholder consent solicitation,
various legal actions between the Sherwood Group and the Company and certain of its directors, and a proxy contest in the current year period as compared to the same period in the prior year.
The amount of estimated accrued insurance recoveries receivable aforementioned above is management's best estimate of the probable recoverable amount under the insurance policies. While the insurer has confirmed that certain costs incurred by the Company are eligible for claim under the Company's insurance policies, the amount ultimately recoverable through insurance is dependent upon the insurer's completion of their review of eligible legal costs incurred and the recoverable amount may differ from management's estimate.
Depletion, depreciation, and amortization
Depletion, depreciation, and amortization decreased $1,804,000 (36%) from $4,950,000 in fiscal 2024 to $3,146,000 in fiscal 2025, primarily due to decreases in the depletion rate and decreases in production, as discussed in the “Oil and natural gas” section above.
Impairment of assets
Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices (except where prices are defined by contractual arrangements), the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties.
During the year ended September 30, 2025, the Company incurred a non-cash ceiling test impairment for our U.S. oil and natural gas properties of $865,000. During the year ended September 30, 2024, the Company incurred a non-cash ceiling test impairment of $2,885,000, which included impairments for our U.S. and Canadian oil and natural gas properties of $721,000 and $2,164,000, respectively.
As discussed above, the ceiling test uses a 12-month historical rolling average first-day-of-the-month prices. As such, declines in the 12-month historical rolling average first-day-of-the-month prices used in our ceiling test calculation in future periods could result in impairment write-downs in future periods in the absence of any offsetting factors that are not currently known or projected. Based on the oil and gas prices for October 1, November 1 and December 1 of 2025, the oil prices used in the 12-month historical rolling first-day-of-the-month average for the ceiling test at December 31, 2025 are likely to be lower than at September 30, 2025. As such, we may incur a further impairment charge in the first quarter of fiscal 2026 ending December 31, 2025. The Company is currently unable to estimate a range of the amount of any potential future impairment write-downs as variables that impact the ceiling limitation are dependent upon actual results of activity through the end of December 2025.
Foreign currency loss (gain)
Foreign currency loss was $192,000 during the year ended September 30, 2025, as compared to a foreign currency gain of $10,000 during the year ended September 30, 2024, due to the effects of foreign exchange rate changes on intercompany loans and advances as a result of changes in the exchange rate between the U.S. dollar against the Canadian dollar. The foreign currency losses or gains from
intercompany balances are included in our Consolidated Statements of Operations as the intercompany balances were not considered long-term in nature because management estimates that these intercompany balances will be settled in the future.
Loss on sale of assets
On August 8, 2025, Barnwell entered into an agreement with an independent third party to sell all of its working interests in its U.S. oil and natural gas assets for a sales price of $2,300,000. The sales price per the agreement was adjusted for customary purchase price adjustments to reflect the economic activity from the effective date of July 1, 2025 to the closing date August 8, 2025. The Company recognized a loss on the sale of $636,000 before related income taxes in the year ended September 30, 2025.
Equity in income of affiliates
Barnwell’s investment in the Kukio Resort Land Development Partnerships is accounted for using the equity method of accounting. Equity in income of affiliates was nil for the year ended September 30, 2025, as compared to equity in income of affiliates of $1,071,000 for the year ended September 30, 2024. The decrease in partnership income is primarily due to the Kukio Resort Land Development Partnerships' sale of the last two lots in Increment I in the prior year period, whereas there were no lots sold in the current year period.
No cash distributions were received during the year ended September 30, 2025. During the year ended September 30, 2024, Barnwell received cash distributions of $1,071,000 (resulting in a net amount of $953,000, after distributing $118,000 to non-controlling interests) from the Kukio Resort Land Development Partnerships.
In the quarter ended June 30, 2021, the Company received cumulative distributions from the Kukio Resort Land Development Partnerships in excess of our investment balance and in accordance with applicable accounting guidance, the Company suspended its equity method earnings recognition and the Kukio Resort Land Development Partnerships’ investment balance was reduced to zero with the distributions received in excess of our investment balance recorded as equity in income of affiliates because the distributions are not refundable by agreement or by law and the Company is not liable for the obligations of or otherwise committed to provide financial support to the Kukio Resort Land Development Partnerships. The Company will record future equity method earnings only after our share of the Kukio Resort Land Development Partnerships’ cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnerships’ income recognized for the excess distributions, and during this suspended period any distributions received will be recorded as equity in income of affiliates. Accordingly, no equity in income of affiliates was recognized in the year ended September 30, 2025.
Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $106,000 at September 30, 2025 and $373,000 at September 30, 2024.
Income taxes
The components of loss from continuing operations before income taxes, after adjusting the loss for non-controlling interests, are as follows:
Year ended September 30,
2025 2024
United States $ (5,980,000) $ (1,360,000)
Canada (1,064,000) (2,532,000)
$ (7,044,000) $ (3,892,000)
Barnwell’s effective consolidated income tax rate from continuing operations for fiscal 2025, after adjusting loss from continuing operations before income taxes for non-controlling interests, was (1)%, as compared to an effective consolidated income tax rate of (5)% for fiscal 2024.
Consolidated taxes do not bear a customary relationship to pretax results due primarily to the fact that the Company is taxed separately in Canada based on Canadian source operations and in the U.S. based on consolidated operations, and essentially all deferred tax assets, net of relevant offsetting deferred tax liabilities, are not estimated to have a future benefit as tax credits or deductions. The Company operates two subsidiaries in Canada, one of which is a U.S. corporation operating as a branch in Canada that is treated as a non-resident for Canadian tax purposes and thus has operating results that cannot be offset against or combined with the other Canadian subsidiary that files as a resident for Canadian tax purposes. Income from our non-controlling interest in the Kukio Resort Land Development Partnerships is treated as non-unitary for state of Hawaii unitary filing purposes, thus unitary Hawaii losses provide limited sheltering of such non-unitary income. Income from our investment in the Oklahoma oil venture is 100% allocable to Oklahoma. As such, Barnwell receives no benefit from consolidated or unitary losses and, therefore, is subject to Oklahoma state taxes. Our operations in Texas are subject to a franchise tax assessed by the state of Texas, however no significant amounts have been incurred to date.
On July 4, 2025, the President of the United States signed into law the One Big Beautiful Bill Act ("OBBBA"). The legislation, among other things, makes permanent, extends or modifies certain provisions under the 2017 Tax Cuts and Jobs Act, including a permanent extension of 100% bonus depreciation for certain capital expenditures. The Company has determined that there are no tax law changes in the OBBBA that significantly impact the Company’s current and deferred income taxes.
Net earnings attributable to non-controlling interests
Earnings and losses attributable to non-controlling interests represent the non-controlling interests’ share of revenues and expenses related to the various partnerships and joint ventures in which Barnwell has controlling interests and consolidates.
Net loss attributable to non-controlling interests totaled $8,000 in fiscal 2025, as compared to net earnings attributable to non-controlling interests of $234,000 in fiscal 2024. The $242,000 (103%) decrease is primarily due to decreases in the amount of equity in income of affiliates and percentage of sales revenue received in the current year period as compared to the same period in the prior year.
Net earnings (loss) from discontinued operations
Net earnings from discontinued operations was $12,000 during the year ended September 30, 2025, as compared to net loss from discontinued operation of $1,460,000 during the year ended September 30, 2024.
On March 14, 2025, the Company completed the sale of Water Resources, which represented the Company’s contract drilling segment. The financial results of the Company’s contract drilling business has been presented as discontinued operations in the consolidated financial statements for all periods presented. See Note 3 “Discontinued Operations” in the Notes to Consolidated Financial Statements in Item 8 of this report for further discussion and additional disclosures related to discontinued operations.
Inflation
The effect of inflation on Barnwell has generally been to increase its cost of operations, general and administrative costs and direct costs associated with oil and natural gas production and contract drilling operations. Oil and natural gas prices realized by Barnwell are essentially determined by world prices for oil and western Canadian/Midwestern U.S. prices for natural gas.
Impact of Recently Issued Accounting Standards on Future Filings
In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires disclosure of incremental income tax information within the tax rate reconciliation and expanded disclosures of income taxes paid both in the U.S. and foreign jurisdiction, among other disclosure requirements. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this standard on Barnwell’s consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03 “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires public companies to disclose specified information about certain costs and expenses in the notes to the financial statements at interim and annual reporting periods. This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on Barnwell’s consolidated financial statements.
Liquidity and Capital Resources
The Company has presented cash flows from discontinued operations in the accompanying Consolidated Statements of Cash Flows separately after the presentation of cash flows from operating, investing, and financing activities of continuing operations. See Note 3 “Discontinued Operations” in the Notes to Consolidated Financial Statements in Item 8 of this report for further discussion and additional disclosures related to discontinued operations. The focus of this section, “Liquidity and Capital Resources,” is on the cash flows from continuing operations, which affects future liquidity and capital resources as the Company no longer has any significant continuing involvement with the discontinued operations after the sale.
At September 30, 2025, Barnwell had $504,000 in working capital. Barnwell’s primary sources of liquidity are cash on hand and cash flow generated by our oil and natural gas operations, as cash flow from our land investment segment, if any, are expected to be intermittent and not significant to our liquidity.
Cash Flows From Continuing Operations
Cash flows used in operating activities totaled $1,773,000 for fiscal 2025, as compared to cash flows provided by operating activities of $5,334,000 for fiscal 2024. This $7,107,000 decrease in operating cash flows was primarily due to lower operating results for the oil and natural gas segment in the current year period as compared to the same period in the prior year, higher general and administrative expenses in the current year period due to the shareholder contests, and a distribution of income from the Kukio Resort Land Development Partnerships in the prior year period as compared to none in the current year period. The change was also due to the effect of changes in current assets and liabilities which was an increase of $2,100,000 in the prior year period as compared to $224,000 in the current year period.
Cash flows used in investing activities totaled $352,000 for fiscal 2025, as compared to cash flows used in investing activities of $2,819,000 for fiscal 2024. This $2,467,000 change in investing cash flows was due to an increase of $2,281,000 in proceeds from the sale of oil and natural gas assets and a decrease of $440,000 in cash paid for oil and natural gas capital expenditures in the current year period as compared to the same period in the prior year, partially offset by $439,000 of proceeds received by the land investment segment in the prior year period, as compared to none in the current year period.
Cash flows used in financing activities totaled $168,000 for fiscal 2025, as compared to cash flows used in financing activities of $226,000 for fiscal 2024. The $58,000 change in financing cash flows was due to a decrease of $226,000 in distributions to non-controlling interests, partially offset by $168,000 in repayments for insurance premium financing in the current year period as compared to none the same period in the prior year.
Going Concern
Our ability to sustain our business in the future will depend on sufficient oil and natural gas operating cash flows which are dependent on oil and natural gas prices, which can and in the past have fluctuated significantly, and on oil and natural gas operating expenses which are both variable and fixed. A sufficient level of oil and natural gas operating cash flows are necessary to fund discretionary oil and natural gas capital expenditures which must be economically successful to provide sufficient returns to grow reserves and production or at a minimum replace declining production from aging wells. Such a level of oil and natural gas capital expenditures will require funding from external debt and/or equity sources that are not currently in place, but those sources may not be feasible or sufficient. In addition, we will need sufficient cash flows to fund our non-discretionary outflows such as oil and natural gas asset retirement obligations, ongoing oil and natural gas operating expenses and general and administrative expenses, both those related to our oil and natural gas operations and those related to our being a public company.
In the quarters ended March 31, 2025 and June 30, 2025, continuing uncertainties regarding the sufficiency of our cash balances and future cash inflows due largely to a reduction in oil and natural gas prices and recent shareholder consent solicitation and proxy contest costs incurred, raised substantial doubt about our ability to meet our estimated cash outflows or continue as a going concern. However, due to the gross proceeds of $2,443,000 raised in the private placement offering in November 2025, management has determined that there is no longer substantial doubt regarding the Company's ability to continue as a going concern for one year from the filing of this Annual Report on Form 10-K.
Oil and Natural Gas Capital Expenditures
Barnwell’s oil and natural gas capital expenditures, including accrued capital expenditures and acquisitions of oil and natural gas properties and excluding additions and revisions to estimated asset retirement obligations, decreased $3,866,000 from $4,805,000 in fiscal 2024 to $939,000 in fiscal 2025.
The Company did not drill or participate in the drilling of wells during the year ended September 30, 2025. In fiscal 2024, the Company participated in the drilling of one gross (1.0 net) operated development oil well in the Twining area. Capital expenditures incurred for the drilling of this well during the year ended September 30, 2024 totaled approximately $3,183,000.
Oil and Natural Gas Property Dispositions
Fiscal 2025
On August 8, 2025, Barnwell entered into an agreement with an independent third party to sell all of its working interests in its U.S. oil and natural gas assets for a sales price of $2,300,000. The sales price per the agreement was adjusted for customary purchase price adjustments to reflect the economic activity from the effective date of July 1, 2025 to the closing date August 8, 2025. The Company recognized a loss on the sale of $636,000 before related income taxes in the year ended September 30, 2025. The U.S. oil and natural gas assets were located in the states of Texas and Oklahoma and were owned by wholly-owned subsidiaries of Barnwell. As a result of the sale, the Company no longer owns any oil and natural gas assets in the U.S., however, the Company will continue to explore for oil and natural gas opportunities in the U.S.
On August 28, 2025, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Medicine River area of Alberta, Canada. The sales price per the agreement was adjusted for customary purchase price adjustments to $288,000 in order to, among other things, reflect an economic closing date of September 30, 2025. The final determination of the customary adjustments to the purchase price has not yet been made; however, it is not expected to result in a material adjustment. The proceeds were credited to the full cost pool, with no gain or loss recognized, as the sale did not result in a significant alteration of the relationship between capitalized costs and proved reserves.
Fiscal 2024
In April 2024, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Kaybob area of Alberta, Canada. The sales price per the agreement was adjusted for customary purchase price adjustments to $441,000 in order to, among other things, reflect an economic effective date of May 1, 2024. The proceeds were credited to the full cost pool, with no gain or loss recognized, as the sale did not result in a significant alteration of the relationship between capitalized costs and proved reserves.
In July 2024, Barnwell entered into and completed an agreement with an independent third party to convey interests in certain oil and natural gas properties located in the Bonanza and Balsam areas of Alberta, Canada. In consideration for the sale of the working interests in these properties, Barnwell retained a 4% overriding royalty on these properties and the buyer assumed the asset retirement obligations associated with these properties. There were no cash proceeds from the sale and no gain or loss was recognized on this conveyance as this did not result in a significant alteration of the relationship
between capitalized costs and proved reserves. With the disposition of the working interest, Barnwell reduced the full cost pool and abandonment liabilities associated with the working interests conveyed by approximately $153,000.
In September 2024, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Wood River area of Alberta, Canada. The sales price per the agreement was adjusted for customary purchase price adjustments to $292,000 in order to, among other things, reflect an economic effective closing date of September 30, 2024. From the sales proceeds, $38,000 was remitted directly to the Canada Revenue Agency by the buyers for potential amounts due for Barnwell’s Canadian income taxes related to the sale. The proceeds from the sale was credited to our cash in October 2024 and is reflected in the Statement of Cash Flows for the year ended September 30, 2025. No gain or loss was recognized on this disposition as the sale proceeds were credited to the full cost pool and did not result in a significant alteration of the relationship between capitalized costs and proved reserves.
Asset Retirement Obligation
In September 2019, the AER issued an abandonment/closure order for all wells and facilities in the Manyberries area which had been largely operated by LGX, an operating company that went into receivership in 2016. The estimated asset retirement obligation for the Company's interest in the wells and facilities in the Manyberries area is included in “Asset retirement obligation” in the Consolidated Balance Sheets.
After the abandonment/closure order was issued for Manyberries, the OWA created a WIP program for specific areas where there are a significant number of orphaned wells to abandon. The OWA has the ability and expertise to abandon wells using its internal resources and network of service providers resulting in efficiencies that companies such as Barnwell would not be able to obtain on its own. Under the WIP program, the Company would be required to provide payment for only Barnwell’s working interest share, however, all WIP’s would have to participate in the program for the OWA to begin its work. In March 2021, the Company was notified by the OWA that Barnwell’s Manyberries wells were confirmed to be in the WIP program.
Under the agreement with the OWA, the Company was required to pay the abandonment and reclamation costs in advance through a cash deposit. Barnwell has provided $975,000 in cumulative cash deposits to the OWA since the program began in the fall of 2021, and any amount remaining after completion of the abandonments was to be refunded to the Company, and then upon commencement of the reclamation program a new deposit was to be made for those estimated costs. To date, the excess deposits that relate to abandonment work have not yet been refunded but have been used to fund the reclamation part of the program and the Company now estimates that a portion of the unused deposit will instead be applied to future reclamation work over the next several years. The estimated current portion of the unused deposit was $173,000 and $527,000 as of September 30, 2025 and 2024, respectively, and is included in “Other current assets” on the Company’s Consolidated Balance Sheets. The non-current portion of the unused deposit of $222,000 along with $61,000 of non-current receivables at September 30, 2025, is included in “Other non-current assets” on the Company’s Consolidated Balance Sheet at September 30, 2025.
Private Placement Offering
On November 24, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”), including certain directors of the board of directors of the Company pursuant to which the Company agreed to issue and sell an aggregate of: (i) 2,221,141 shares of its common stock, par value $0.50 per share (the “Common Stock”), and (ii) warrants (the “Common Warrants”) to purchase up to 1,029,104 shares of Common Stock (the “Warrant Shares”) in a private placement offering of the Company’s securities (the “Offering”). The directors of the Company participating as Purchasers in the Offering and certain other Purchasers did not receive any Common Warrants.
The price of the shares of Common Stock sold in the private placement was $1.10 per share of Common Stock. The Common Warrants have an exercise price of $1.65 per share.
The Offering closed on November 28, 2025 and the gross proceeds received from the Offering was approximately $2,443,000. The proceeds will be used for general corporate purposes. See Note 21 in the Notes to Consolidated Financial Statements in Item 8 of this report for additional disclosures related to the private placement offering.
Contractual Obligations
Disclosure is not required as Barnwell qualifies as a smaller reporting company.
Contingencies
For a detailed discussion of contingencies, see Note 18 in the “Notes to Consolidated Financial Statements” in Item 8 of this report.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Disclosure is not required as Barnwell qualifies as a smaller reporting company.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Barnwell Industries, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Barnwell Industries, Inc. and subsidiaries (collectively, the Company) as of September 30, 2025 and 2024, and the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the two years in the period ended September 30, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Estimation of proved reserves impacting the recognition and valuation of depletion expense and
impairment of oil and gas properties
Critical Accounting Matter Description
As described in Note 1 to the financial statements, the Company accounts for its oil and gas properties using the full cost method of accounting which requires management to make estimates of proved reserve volumes and future revenues and expenses to calculate depletion expense and measure its oil and gas properties for potential impairment. To estimate the volume of proved reserves and future revenues, management makes significant estimates and assumptions, including forecasting the production decline rate of producing properties. In addition, the estimation of proved reserves is also impacted by management’s judgments and estimates regarding the financial performance of wells associated with proved reserves to determine if wells are expected, with reasonable certainty, to be economical under the appropriate pricing assumptions required in the estimation of depletion expense and potential impairment measurements. We identified the estimation of proved reserves of oil and gas properties, due to its impact on depletion expense and impairment evaluation, as a critical audit matter.
The principal consideration for our determination that the estimation of proved reserves is a critical audit matter is that changes in certain inputs and assumptions, which require a high degree of subjectivity necessary to estimate the volume and future revenues of the Company’s proved reserves could have a significant impact on the measurement of depletion expense or the impairment assessment. In turn, auditing those inputs and assumptions required subjective and complex auditor judgement.
How the Critical Audit Matter was Addressed in the Audit
We obtained an understanding of the design and implementation of management’s controls and our audit procedures related to the estimation of proved reserves included the following, among others.
•We evaluated the level of knowledge, skill, and ability of the Company’s reservoir engineering specialists and their relationship to the Company, made inquiries of those reservoir engineers regarding the process followed and judgments made to estimate the Company’s proved reserve volumes, and read the reserve report prepared by the Company’s specialists.
•To the extent key, sensitive inputs and assumptions used to determine proved reserve volumes and other cash flow inputs and assumptions are derived from Company’s accounting records, such as commodity pricing, historical pricing differentials, operating costs, and working and net revenue interests, we tested management’s process for determining the assumptions, including examining the underlying support, on a sample basis. Specifically, our audit procedures involved testing management’s assumptions, to the extent key, as follows:
•Compared the estimated pricing differentials used in the reserve report to realized prices related to revenue transactions recorded in the current year and examined contractual support for the pricing differentials;
•Evaluated the forecasted operating costs at year-end compared to historical operating costs;
•Evaluated the working and net revenue interests used in the reserve report by inspecting a sample of ownership interests;
•Applied analytical procedures to the reserve report by comparing to historical actual results and to the prior year reserve report.
/s/ WEAVER AND TIDWELL, L.L.P.
We have served as the Company’s auditor since 2020.
Dallas, Texas
December 22, 2025
BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30,
2025 2024
ASSETS
Current assets:
Cash and cash equivalents $ 2,886,000 $ 4,285,000
Accounts and other receivables, net of allowance for credit losses of:
$49,000 at September 30, 2025; $141,000 at September 30, 2024
1,621,000 2,190,000
Note receivable 300,000 -
Other current assets 423,000 873,000
Current assets of discontinued operations - 1,535,000
Total current assets 5,230,000 8,883,000
Asset for retirement benefits 5,928,000 4,899,000
Operating lease right-of-use assets 145,000 39,000
Other non-current assets 347,000 -
Property and equipment:
Proved oil and natural gas properties, net (full cost method) 9,153,000 16,554,000
Other property and equipment, net 9,000 12,000
Total property and equipment, net 9,162,000 16,566,000
Non-current assets of discontinued operations - 282,000
Total assets $ 20,812,000 $ 30,669,000
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 2,182,000 $ 1,785,000
Accrued capital expenditures 185,000 2,407,000
Accrued compensation 264,000 526,000
Accrued operating and other expenses 1,022,000 1,465,000
Current portion of asset retirement obligation 613,000 798,000
Other current liabilities 460,000 301,000
Current liabilities of discontinued operations - 530,000
Total current liabilities 4,726,000 7,812,000
Operating lease liabilities 93,000 7,000
Liability for retirement benefits 1,791,000 1,898,000
Asset retirement obligation 7,162,000 7,790,000
Deferred income tax liabilities 18,000 100,000
Total liabilities 13,790,000 17,607,000
Commitments and contingencies (Note 18)
Equity:
Common stock, par value $0.50 per share; authorized, 40,000,000 shares:
10,241,434 issued at September 30, 2025; 10,195,990 issued at September 30, 2024
5,121,000 5,098,000
Additional paid-in capital 8,039,000 7,690,000
(Accumulated deficit) retained earnings (6,508,000) 595,000
Accumulated other comprehensive income, net 2,642,000 1,943,000
Treasury stock, at cost:
167,900 shares at September 30, 2025 and 2024
(2,286,000) (2,286,000)
Total stockholders’ equity 7,008,000 13,040,000
Non-controlling interests 14,000 22,000
Total equity 7,022,000 13,062,000
Total liabilities and equity $ 20,812,000 $ 30,669,000
See Notes to Consolidated Financial Statements
BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended September 30,
2025 2024
Revenues:
Oil and natural gas $ 13,563,000 $ 17,396,000
Sale of interest in leasehold land - 500,000
Gas processing and other 134,000 179,000
13,697,000 18,075,000
Costs and expenses:
Oil and natural gas operating 8,966,000 9,849,000
General and administrative 6,937,000 5,130,000
Depletion, depreciation, and amortization 3,146,000 4,950,000
Impairment of assets 865,000 2,885,000
Foreign currency loss (gain) 192,000 (10,000)
Interest expense 7,000 -
Loss on sale of assets 636,000 -
20,749,000 22,804,000
Loss from continuing operations before equity in income of affiliates and income taxes (7,052,000) (4,729,000)
Equity in income of affiliates - 1,071,000
Loss from continuing operations before income taxes (7,052,000) (3,658,000)
Income tax provision 71,000 213,000
Net loss from continuing operations (7,123,000) (3,871,000)
Net earnings (loss) from discontinued operations 12,000 (1,460,000)
Net loss (7,111,000) (5,331,000)
Less: Net (loss) earnings attributable to non-controlling interests (8,000) 234,000
Net loss attributable to Barnwell Industries, Inc. stockholders $ (7,103,000) $ (5,565,000)
Basic and diluted loss per common share attributable to Barnwell Industries, Inc. stockholders:
Net loss from continuing operations attributable to Barnwell Industries, Inc. $ (0.71) $ (0.41)
Net loss from discontinued operations - (0.15)
Net loss attributable to Barnwell Industries, Inc. $ (0.71) $ (0.56)
Weighted-average number of common shares outstanding:
Basic and diluted 10,056,479 10,017,997
See Notes to Consolidated Financial Statements
BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Year ended September 30,
2025 2024
Net loss $ (7,111,000) $ (5,331,000)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes of $0
75,000 -
Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0
- (85,000)
Net actuarial gain (loss) arising during the period, net of taxes of $0
624,000 (76,000)
Total other comprehensive income (loss) 699,000 (161,000)
Total comprehensive loss (6,412,000) (5,492,000)
Less: Comprehensive loss (income) attributable to non-controlling interests 8,000 (234,000)
Comprehensive loss attributable to Barnwell Industries, Inc. $ (6,404,000) $ (5,726,000)
See Notes to Consolidated Financial Statements
BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
Years ended September 30, 2025 and 2024
Shares
Outstanding Common
Stock Additional
Paid-In
Capital Retained
Earnings
(Accumulated Deficit) Accumulated
Other
Comprehensive Income Treasury
Stock Non-controlling
Interests Total
Equity
Balance at September 30, 2023 9,990,778 $ 5,079,000 $ 7,687,000 $ 6,160,000 $ 2,104,000 $ (2,286,000) $ 13,000 $ 18,757,000
Net (loss) earnings - - - (5,565,000) - - 234,000 (5,331,000)
Distributions to non-controlling interests - - - - - - (226,000) (226,000)
Acquisition of non-controlling interest - - (186,000) - - - 1,000 (185,000)
Share-based compensation - - 208,000 - - - - 208,000
Issuance of common stock for restricted stock units vested 37,312 19,000 (19,000) - - - - -
Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0
- - - - (85,000) - - (85,000)
Net actuarial gain arising during the period, net of taxes of $0
- - - - (76,000) - - (76,000)
Balance at September 30, 2024 10,028,090 5,098,000 7,690,000 595,000 1,943,000 (2,286,000) 22,000 13,062,000
Net loss - - - (7,103,000) - - (8,000) (7,111,000)
Foreign currency translation adjustments, net of taxes of $0
- - - - 75,000 - - 75,000
Share-based compensation - - 372,000 - - - - 372,000
Issuance of common stock for restricted stock units vested 45,444 23,000 (23,000) - - - - -
Retirement plans:
Net actuarial loss arising during the period, net of taxes of $0
- - - - 624,000 - - 624,000
Balance at September 30, 2025 10,073,534 $ 5,121,000 $ 8,039,000 $ (6,508,000) $ 2,642,000 $ (2,286,000) $ 14,000 $ 7,022,000
See Notes to Consolidated Financial Statements
BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended September 30,
2025 2024
Cash flows from operating activities of continuing operations:
Net loss $ (7,111,000) $ (5,331,000)
Net earnings (loss) from discontinued operations 12,000 (1,460,000)
Net loss from continuing operations (7,123,000) (3,871,000)
Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities:
Depletion, depreciation, and amortization 3,146,000 4,950,000
Impairment of assets 865,000 2,885,000
Loss on sale of oil and natural gas properties
636,000 -
Sale of interest in leasehold land, net of fees paid - (439,000)
Distributions of income from equity investees - 1,071,000
Equity in income of affiliates - (1,071,000)
Retirement benefits income (315,000) (345,000)
Accretion of asset retirement obligation 808,000 900,000
Deferred income tax (benefit) expense (82,000) 42,000
Asset retirement obligation payments (483,000) (1,139,000)
Share-based compensation expense 372,000 208,000
Non-cash rent income (8,000) (28,000)
Retirement plan contributions and payments (3,000) (4,000)
Credit loss (reversal) expense (2,000) 85,000
Foreign currency loss (gain) 192,000 (10,000)
Increase from changes in current assets and liabilities 224,000 2,100,000
Net cash (used in) provided by operating activities from continuing operations (1,773,000) 5,334,000
Cash flows from investing activities of continuing operations:
Acquisition of non-controlling interest - (185,000)
Proceeds from sale of interest in leasehold land, net of fees paid - 439,000
Proceeds from the sale of oil and natural gas assets 2,722,000 441,000
Capital expenditures - oil and natural gas (3,074,000) (3,514,000)
Net cash used in investing activities from continuing operations (352,000) (2,819,000)
Cash flows from financing activities of continuing operations:
Repayments for insurance premium financing (168,000) -
Distributions to non-controlling interests - (226,000)
Net cash used in financing activities from continuing operations (168,000) (226,000)
Cash flows from discontinued operations:
Net cash used in operating activities (95,000) (624,000)
Net cash provided by (used in) investing activities 1,125,000 (13,000)
Net cash used in financing activities (250,000) -
Net cash provided by (used in) discontinued operations 780,000 (637,000)
Effect of exchange rate changes on cash and cash equivalents (106,000) 23,000
Net (decrease) increase in cash and cash equivalents (1,619,000) 1,675,000
Cash and cash equivalents at beginning of year 4,505,000 2,830,000
Less: Cash and cash equivalents of discontinued operations at end of year - (220,000)
Cash and cash equivalents of continuing operations at end of year $ 2,886,000 $ 4,285,000
See Notes to Consolidated Financial Statements
BARNWELL INDUSTRIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 2025 AND 2024
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
Barnwell’s continuing operations is engaged in the following lines of business: 1) acquiring, developing, producing and selling oil and natural gas in Canada and the U.S. and 2) leasehold land interests in Hawaii.
Principles of Consolidation
The consolidated financial statements include the accounts of Barnwell Industries, Inc. and all majority-owned subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us,” or the “Company”), including a 77.6%-owned land investment general partnership (Kaupulehu Developments) and a 75%-owned land investment partnership (KD Kona). All significant intercompany accounts and transactions have been eliminated.
Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in VIEs in which the Company is not deemed to be the primary beneficiary are accounted for by the equity method.
Use of Estimates in the Preparation of Consolidated Financial Statements
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management of Barnwell to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ significantly from those estimates. Significant assumptions are required in the valuation of deferred tax assets, asset retirement obligations, and proved oil and natural gas reserves, and such assumptions may impact the amount at which such items are recorded.
Discontinued Operations
On March 14, 2025, the Company entered into and completed the sale of its wholly-owned subsidiary, Water Resources International, Inc. (“Water Resources”). Water Resources drills water wells and installs and repairs water pumping systems in Hawaii and represented our contract drilling segment. As a result of the sale, the Company has classified the related assets and liabilities and the results of its contract drilling business as discontinued operations in the consolidated financial statements for all periods presented. Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur. See Note 3 “Discontinued Operations” for further discussion and additional disclosures related to discontinued operations. Unless otherwise noted, the discussions in the Notes to Consolidated Financial Statements refers to the Company’s continuing operations.
Revenue Recognition
Barnwell operates in and derives revenue from the following two principal business segments:
•Oil and Natural Gas Segment - Barnwell engages in oil and natural gas development, production, acquisitions and sales in Canada and the U.S.
•Land Investment Segment - Barnwell owns land interests in Hawaii.
Oil and Natural Gas - Barnwell’s investments in oil and natural gas properties are located in Alberta, Canada. These property interests are principally held under governmental leases or licenses. Barnwell sells the large majority of its oil, natural gas and natural gas liquids production under short-term contracts between itself and marketers based on prices indexed to market prices and recognizes revenue at a point in time when the oil, natural gas and natural gas liquids are delivered, as this is where Barnwell’s performance obligation is satisfied and title has passed to the customer. Barnwell’s investments in oil and natural gas properties in Oklahoma and Texas were sold on August 8, 2025.
Land Investment - Barnwell is entitled to receive contingent residual payments from the entities that previously purchased Barnwell’s land investment interests under contracts entered into in prior years. The residual payments under those contracts become due when the entities sell lots and/or residential units in the areas that were previously sold under the aforementioned contracts or when a preferred payment threshold is achieved. The residual payments received by Barnwell are recognized as revenue when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and short-term investments with original maturities of three months or less.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. We maintain bank account balances with high quality financial institutions which often exceed insured limits. We have not experienced any losses with these accounts and believe that we are not exposed to any significant credit risk on cash.
Accounts and Other Receivables
Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for credit losses is Barnwell’s best estimate of the amount of current expected credit losses in Barnwell’s existing accounts receivable and is based on the aging of the receivable balances, analysis of historical credit loss rates, and current and future economic conditions affecting collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Barnwell does not have any off-balance sheet credit exposure related to its customers.
Insurance Recoveries
The Company maintains directors and officers liability insurance coverage. Receipts from insurance claim reimbursements under the liability coverage, up to the amount of costs recognized are considered recoveries. These recoveries are accounted for when they are probable of receipt. Insurance recoveries are not recognized prior to the recognition of the related costs incurred. Any insurance receivable for recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.
Investments in Real Estate
Barnwell accounts for sales of Increment I and Increment II leasehold land interests under the full accrual method. Gains from such sales were recognized when the buyer’s investments were adequate to demonstrate a commitment to pay for the property, risks and rewards of ownership transferred to the buyer, and Barnwell did not have a substantial continuing involvement with the property sold. With regard to payments Kaupulehu Developments is entitled to receive from KD I and KD II, the percentage of sales payments from KD I and KD II and percentage of distributions from KD II are contingent future profits which will be recognized when they are realized. All costs of the sales of Increment I and Increment II leasehold land interests were recognized at the time of sale and were not deferred to future periods when any contingent profits will be recognized.
Variable Interest Entities
The consolidation of VIEs is required when an enterprise has a controlling financial interest and is therefore the VIE’s primary beneficiary. A controlling financial interest will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The determination of whether an entity is a VIE and, if so, whether the Company is the primary beneficiary, may require significant judgment.
Barnwell analyzes its entities in which it has a variable interest to determine whether the entities are VIEs and, if so, whether the Company is the primary beneficiary. This analysis includes a qualitative review based on an evaluation of the design of the entity, its organizational structure, including decision making ability and financial agreements, as well as a quantitative review. Our unconsolidated affiliates that have been determined to be VIEs are accounted under the equity method because we do not have a controlling financial interest and are therefore not the VIE’s primary beneficiary (see Note 6).
Equity Method Investments
Affiliated companies, which are limited partnerships or similar entities, in which Barnwell holds more than a 3% to 5% ownership interest and does not control, are accounted for as equity method investments. Equity method investment adjustments include Barnwell’s proportionate share of investee income or loss, adjustments to recognize certain differences between Barnwell’s carrying value and Barnwell’s equity in net assets of the investee at the date of investment, impairments and other adjustments required by the equity method. Gains or losses are realized when such investments are sold. Barnwell classifies distributions received from equity method investments using the cumulative earnings approach in the Consolidated Statements of Cash Flows. Under the cumulative earnings approach, distributions received up to the amount of cumulative equity in earnings recognized are treated as returns
on investment and are classified within operating cash flows and those in excess of that amount are treated as returns of investment and are classified within investing cash flows.
Investments in equity method investees are evaluated for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If the carrying amounts of the assets exceed their respective fair values, additional impairment tests are performed to measure the amounts of the impairment losses, if any. When an impairment test demonstrates that the fair value of an investment is less than its carrying value, management will determine whether the impairment is either temporary or other-than-temporary. Examples of factors which may be indicative of an other-than-temporary impairment include (a) the length of time and extent to which fair value has been less than carrying value, (b) the financial condition and near-term prospects of the investee, and (c) the intent and ability to retain the investment in the investee for a period of time sufficient to allow for any anticipated recovery in fair value. If the decline in fair value is determined by management to be other-than-temporary, the carrying value of the investment is written down to its estimated fair value as of the balance sheet date of the reporting period in which the assessment is made.
Oil and Natural Gas Properties
Barnwell uses the full cost method of accounting under which all costs incurred in the acquisition, exploration and development of oil and natural gas reserves, including costs related to unsuccessful wells and estimated future site restoration and abandonment, are capitalized. We capitalize internal costs that can be directly identified with our acquisition, exploration and development activities and do not include any costs related to production, general corporate overhead or similar activities.
The capitalized costs of oil and gas properties, excluding unevaluated and unproved properties, are amortized as depreciation, depletion and amortization expense using the units-of-production method based on estimated proved recoverable oil and gas reserves.
Costs associated with unevaluated and unproved properties, initially excluded from the amortization base, relate to unproved leasehold acreage, wells and production facilities in progress and wells pending determination of the existence of proved reserves. Unproved leasehold costs are transferred to the amortization base with the costs of drilling the related well once a determination of the existence of proved reserves has been made or upon impairment of a lease. Costs associated with wells in progress and completed wells that have yet to be evaluated are transferred to the amortization base once a determination is made whether or not proved reserves can be assigned to the property. Costs of dry wells are transferred to the amortization base immediately upon determination that the well is unsuccessful.
All items classified as unevaluated and unproved properties are assessed on a quarterly basis for possible impairment or reduction in value. Properties are assessed on an individual basis or as a group if properties are individually insignificant. The assessment includes consideration of various factors, including, but not limited to, the following: intent to drill; remaining lease term; geological and geophysical evaluations; drilling results and activity; assignment of proved reserves; and economic viability of development if proved reserves are assigned. During any period in which these factors indicate an impairment, the cumulative drilling costs incurred to date for such property and all or a portion of the associated leasehold costs are transferred to the full cost pool and become subject to amortization.
Under the full cost method of accounting, we review the carrying value of our oil and natural gas properties, on a country-by-country basis, each quarter in what is commonly referred to as the ceiling test. Under the ceiling test, capitalized costs, net of accumulated depletion and oil and natural gas related
deferred income taxes, may not exceed an amount equal to the sum of 1) the discounted present value (at 10%), using average first-day-of-the-month prices during the 12-month period ending as of the balance sheet date held constant over the life of the reserves (except where prices are defined by contractual arrangements), of Barnwell’s estimated future net cash flows from estimated production of proved oil and natural gas reserves as determined by independent petroleum reserve engineers, less estimated future expenditures to be incurred in developing and producing the proved reserves but excluding future cash outflows associated with settling asset retirement obligations with the exception of those associated with proved undeveloped reserves from wells that are to be drilled in the future; plus 2) the cost of major development projects and unproven properties not subject to depletion, if any; plus 3) the lower of cost or estimated fair value of unproven properties included in costs subject to depletion; less 4) related income tax effects. If net capitalized costs exceed this limit, the excess is expensed. Depletion is computed using the units-of-production method whereby capitalized costs, net of estimated salvage values, plus estimated future costs to develop proved reserves and satisfy asset retirement obligations, are amortized over the total estimated proved reserves on a country-by-country basis. Investments in major development projects are not depleted until either proved reserves are associated with the projects or impairment has been determined. Proceeds from the disposition of oil and natural gas properties are credited to the full cost pool, with no gain or loss recognized, unless such a sale would significantly alter the relationship between capitalized costs and the proved reserves in a particular country.
Given the volatility of oil and gas prices, it is reasonably possible that the estimate of discounted future net cash flows from proved oil and gas reserves could change in the near term. If oil and gas prices decline in the future, even if only for a short period of time, it is possible that impairments of oil and gas properties could occur. In addition, it is reasonably possible that impairments could occur if costs are incurred in excess of any increases in the present value of future net cash flows from proved oil and gas reserves, or if properties are sold for proceeds less than the discounted present value of the related proved oil and gas reserves.
Barnwell’s sales reflect its working interest share after royalties. Barnwell’s production is generally delivered and sold at the plant gate. Barnwell does not have transportation volume commitments with pipelines and does not have natural gas imbalances related to natural gas balancing arrangements with its partners.
Long-lived Assets
Long-lived assets to be held and used, other than oil and natural gas properties, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. Recoverability is measured by comparing the carrying amount of the asset to the future net cash flows expected to result from use of the asset (undiscounted and without interest charges). If it is determined that the asset may not be recoverable, impairment loss is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. Long-lived assets to be disposed of by sale are classified as held for sale and are reported at the lower of the asset carrying value or fair value, less cost to sell.
Other property and equipment is depreciated using the straight-line method based on estimated useful lives.
Share-based Compensation
Share-based compensation cost for Barnwell’s equity-classified stock options, restricted stock units, and common stock issued for services is measured at fair value and is recognized as an expense over the requisite service period. For stock options, Barnwell utilizes a closed-form valuation model to determine the fair value of each option award. Expected volatilities are based on the historical volatility of Barnwell’s stock over a period consistent with that of the expected terms of the options. The expected terms of the options represent expectations of future employee exercise and are estimated based on factors such as vesting periods, contractual expiration dates, historical trends in Barnwell’s stock price, and historical exercise behavior. If the Company does not have sufficient historical data regarding employee exercise behavior, the “simplified method” as permitted by the SEC’s Staff Accounting Bulletin No. 110, Share-Based Payment is utilized to estimate the expected terms of the options. The risk-free rates for periods within the contractual life of the options are based on the yields of U.S. Treasury instruments with terms comparable to the estimated option terms. Expected dividends are based on historical dividend payments. For restricted stock units, Barnwell utilizes the closing market price of the Company’s common stock on the grant date reduced by the present value of the dividends expected to be paid on the underlying shares of common stock during the requisite service period (as these awards are not entitled to receive dividends until vested) to determine the fair value of each restricted stock unit award. For common stock issued for services, Barnwell utilizes the closing market price of the Company’s common stock on the grant date to determine the fair value of the common stock issued for services. The Company's policy is to recognize forfeitures as they occur.
Retirement Plans
Barnwell accounts for its defined benefit pension plan and Supplemental Executive Retirement Plan by recognizing the over-funded or under-funded status as an asset or liability in its Consolidated Balance Sheets and recognizes changes in that funded status in the year in which the changes occur through comprehensive income. See further discussion at Note 9.
The estimation of Barnwell’s retirement plan obligations, costs and liabilities requires management to estimate the amount and timing of cash outflows for projected future payments and cash inflows for maturities and expected returns on plan assets. These assumptions may have an effect on the amount and timing of future contributions.
At the end of each year, Barnwell determines the discount rate to be used to calculate the present value of plan liabilities and the net periodic benefit cost. The discount rate is an estimate of the current interest rate at which the retirement plan liabilities could be effectively settled at the end of the year. In estimating this rate, Barnwell performs a cash-flow matching discount rate analysis developed using high-quality corporate bonds yield. The discount rate used to value the future benefit obligation as of each year-end is the rate used to determine the periodic benefit cost in the following year.
The expected long-term return on assets assumption for the pension plans represents the average rate of return to be earned on plan assets over the period the benefits included in the benefit obligation are to be paid. The actual fair value of plan assets and estimated rate of return is used to determine the expected investment return during the year. The estimated rate of return on plan assets is based on an estimate of future experience for plan asset returns, the mix of plan assets, current market conditions, and expectations for future market conditions. A decrease (increase) of 50 basis points in the expected return on assets assumption would increase (decrease) pension expense by approximately $69,000 based on the assets of the plan at September 30, 2025.
The effects of changing assumptions are included in unamortized net gains and losses, which directly affect accumulated other comprehensive income. These unamortized gains and losses in excess of certain thresholds are amortized and reclassified to (loss) income over the average remaining service life of active employees.
Asset Retirement Obligation
Barnwell accounts for asset retirement obligations by recognizing the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. Barnwell estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. These assumptions represent Level 3 inputs.
Barnwell’s estimated site restoration and abandonment costs of its oil and natural gas properties are capitalized as part of the carrying amount of oil and natural gas properties and depleted over the life of the related reserves. When the assumptions used to estimate a recorded asset retirement obligation change, a revision is recorded to both the asset retirement obligation and the capitalized cost of asset retirements. The liability is accreted at the end of each period through charges to oil and natural gas operating expense.
Income Taxes
Income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax impacts of differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax asset will not be realized.
Management evaluates its potential exposures from tax positions taken that have been or could be challenged by taxing authorities. These potential exposures result because taxing authorities may take positions that differ from those taken by management in the interpretation and application of statutes, regulations and rules. Management considers the possibility of alternative outcomes based upon past experience, previous actions by taxing authorities (e.g., actions taken in other jurisdictions) and advice from tax experts. Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not of being realized upon ultimate settlement with a taxing authority on a jurisdiction-by-jurisdiction basis. Liabilities for unrecognized tax benefits related to such tax positions are included in long-term liabilities unless the tax position is expected to be settled within the upcoming year, in which case the liabilities are included in current liabilities. Interest and penalties related to uncertain tax positions are included in income tax expense.
Our operations in Texas are subject to a franchise tax assessed by the state of Texas which is presented as income tax expense.
Environmental
Barnwell is subject to extensive environmental laws and regulations. These laws, which are constantly changing, regulate the discharge of materials into the environment and maintenance of surface conditions and may require Barnwell to remove or mitigate the environmental effects of the disposal or release of petroleum or chemical substances at various sites. Environmental expenditures are expensed or capitalized depending on their future economic benefit. Expenditures that relate to an existing condition caused by past operations and that have no future economic benefit are expensed. Liabilities for expenditures of a noncapital nature are recorded when environmental assessment and/or remediation is probable, and the costs can be reasonably estimated.
Barnwell recognizes an insurance receivable related to environmental expenditures when collection of the receivable is deemed probable. Any recognition of an insurance receivable is recorded by crediting and offsetting the original charge. Any differential arising between insurance recoveries and insurance receivables is expensed or capitalized, consistent with the original treatment.
Derivative Instruments
Barnwell may utilize physical forward commodity contracts to mitigate market price risk on its oil and natural gas output when deemed appropriate. Purchase and sale contracts with a fixed price determined at inception are recorded on the Consolidated Balance Sheets as derivative financial instruments if such contracts are readily convertible to cash - unless the contracts are eligible for and elected as the normal purchases and normal sales exception (“NPNS”); in which case, the contracts are recorded on an accrual basis and the Company recognizes the amounts relating to such transactions during the period when the commodities are physically delivered. The Company generally applies the NPNS exception to eligible oil and natural gas contracts to purchase or sell quantities it expects to use or sell in the normal course of business. The Company has not traded in any derivative contracts other than where the NPNS exception is applied, and it does not apply hedge accounting.
Foreign Currency Translations and Transactions
Assets and liabilities of foreign subsidiaries are translated at the year-end exchange rate. Operating results of foreign subsidiaries are translated at average exchange rates during the period. Translation adjustments have no effect on net income and are included in “Accumulated other comprehensive income, net” in the accompanying Consolidated Balance Sheets.
Foreign currency gains or losses on intercompany loans and advances that are not considered long-term investments in nature because management intends to settle these intercompany balances in the future are included in our statements of operations.
Fair Value Measurements
Fair value is defined as the amount that would be received from the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date. Fair value measurements are classified and disclosed in one of the following categories:
•Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities in active markets and have the highest priority.
•Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
•Level 3: Unobservable inputs for the financial asset or liability and have the lowest priority.
Recently Adopted Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which expands reportable segment disclosure requirements on an annual and interim basis, primarily through enhanced disclosures about significant segment expenses. The Company adopted the provisions of this ASU in the annual reporting period for fiscal year ended September 30, 2025. The adoption of this update did not have an impact on Barnwell’s consolidated financial statements.
2. GOING CONCERN
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the twelve-month period following the date of issuance of these consolidated financial statements.
Our ability to sustain our business in the future will depend on sufficient oil and natural gas operating cash flows which are dependent on oil and natural gas prices, which can and in the past have fluctuated significantly, and on oil and natural gas operating expenses which are both variable and fixed. A sufficient level of oil and natural gas operating cash flows are necessary to fund discretionary oil and natural gas capital expenditures which must be economically successful to provide sufficient returns to grow reserves and production or at a minimum replace declining production from aging wells. Such a level of oil and natural gas capital expenditures will require funding from external debt and/or equity sources that are not currently in place, but those sources may not be feasible or sufficient. In addition, we will need sufficient cash flows to fund our non-discretionary outflows such as oil and natural gas asset retirement obligations, ongoing oil and natural gas operating expenses and general and administrative expenses, both those related to our oil and natural gas operations and those related to our being a public company.
In the quarters ended March 31, 2025 and June 30, 2025, continuing uncertainties regarding the sufficiency of our cash balances and future cash inflows due largely to a reduction in oil and natural gas prices and recent shareholder consent solicitation and proxy contest costs incurred, raised substantial doubt about our ability to meet our estimated cash outflows or continue as a going concern. However, due to the gross proceeds of $2,443,000 raised in the private placement offering in November 2025,
management has determined that there is no longer substantial doubt regarding the Company's ability to continue as a going concern for one year from the filing of this Annual Report on Form 10-K.
3. DISCONTINUED OPERATIONS
Sale of Water Resources
On March 14, 2025, the Company entered into a Stock Purchase Agreement with three unrelated individuals (collectively, the “Buyer”) whereby the Buyer acquired all of the shares of capital stock of Water Resources (the “Shares”) owned by the Company (the “Purchase Agreement”). The sale and purchase of the Shares closed (the “Closing”) simultaneously with the execution and delivery of the Purchase Agreement by each of the parties thereto on March 14, 2025. The aggregate purchase price for the Shares was $1,050,000, which was paid at Closing by the Buyer as follows: an initial aggregate cash payment of $250,000 and the delivery of a non-interest bearing promissory note with a principal amount of $800,000 (the “Promissory Note”). The principal payments on the Promissory Note were to be paid in installments on the following schedule: $200,000 on May 15, 2025; and $150,000 on June 16, 2025, July 15, 2025, August 15, 2025, and September 15, 2025. The Promissory Note is secured by certain specified assets of Water Resources and personal guarantees of the purchasers.
In August 2025, the Promissory Note was amended to the following schedule: $100,000 on December 15, 2025; $50,000 on February 15, 2026; and $150,000 on March 15, 2026 and to increase the annual interest rate on the Promissory Note from zero to 12% beginning August 15, 2025 and to 18% beginning December 15, 2025. As of September 30, 2025, the balance of the Promissory Note was $300,000 and is presented as “Note receivable” on the Consolidated Balance Sheets.
Water Resources drills water wells and installs and repairs water pumping systems in Hawaii and represented our contract drilling segment. As a result of the sale, the Company has classified the related assets and liabilities and the results of its contract drilling business as discontinued operations in the consolidated financial statements for all periods presented. Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur. The Company recorded a loss of $193,000 on the sale of Water Resources, which was included in the results from discontinued operations for the year ended September 30, 2025. There was no impact from the sale of Water Resources on the provision for income taxes.
The following table presents the financial results from discontinued operations presented in the Consolidated Statements of Operations.
Year ended September 30,
2025 2024
Revenues:
Contract drilling $ 1,156,000 $ 3,612,000
Other - 37,000
1,156,000 3,649,000
Costs and expenses:
Contract drilling operating 1,239,000 4,483,000
General and administrative 209,000 468,000
Depletion, depreciation, and amortization 40,000 156,000
Interest expense 1,000 2,000
Gain on sale of assets (1)
(538,000) -
951,000 5,109,000
Earnings (loss) from discontinued operations before income taxes 205,000 (1,460,000)
Loss on sale of discontinued operations (193,000) -
Income tax provision - -
Net earnings (loss) from discontinued operations $ 12,000 $ (1,460,000)
________________________
(1) In February 2025, the Company completed the sale of a contract drilling segment drilling rig and related ancillary equipment to an independent third party for proceeds of $538,000, net of related costs. The drilling rig and related ancillary equipment were fully depreciated and had a net book value of zero and as a result of the sale, the Company recognized a $538,000 gain during the the year ended September 30, 2025 which was recorded in discontinued operations.
The following table presents the carrying amounts of the assets and liabilities of discontinued operations on the Consolidated Balance Sheets.
September 30,
2025 2024
ASSETS
Current assets:
Cash and cash equivalents $ - $ 220,000
Accounts and other receivables, net of allowance for credit losses of:
$0 at September 30, 2025; $234,000 at September 30, 2024
- 580,000
Assets held for sale - 69,000
Other current assets - 666,000
Total current assets of discontinued operations $ - $ 1,535,000
Non-current assets:
Property and equipment:
Drilling rigs and other property and equipment - 3,170,000
Accumulated depreciation, impairment, and amortization - (2,888,000)
Total non-current assets of discontinued operations $ - $ 282,000
LIABILITIES
Current liabilities:
Accounts payable $ - $ 37,000
Accrued compensation - 124,000
Accrued operating and other expenses - 369,000
Total current liabilities of discontinued operations $ - $ 530,000
4. LOSS PER COMMON SHARE
Basic loss per share is computed using the weighted-average number of common shares outstanding for the period. Diluted loss per share is calculated using the treasury stock method to reflect the assumed issuance of common shares for all potentially dilutive securities, which consist of outstanding stock options and nonvested restricted stock units. Potentially dilutive shares are excluded from the computation of diluted loss per share if their effect is anti-dilutive.
Options to purchase 454,452 shares of common stock and 218,300 restricted stock units were excluded from the computation of diluted shares for the year ended September 30, 2025, as their inclusion would have been anti-dilutive. Options to purchase 465,000 shares of common stock and 98,795 restricted stock units were excluded from the computation of diluted shares for the year ended September 30, 2024, as their inclusion would have been anti-dilutive.
Reconciliations between net loss attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net loss per share computations are detailed in the following tables:
Year ended September 30,
2025 2024
Numerator:
Net loss from continuing operations $ (7,123,000) $ (3,871,000)
Less: Net (loss) earnings attributable to non-controlling interests of continuing operations (8,000) 234,000
Net loss from continuing operations attributable to Barnwell Industries, Inc.
(7,115,000) (4,105,000)
Net earnings (loss) from discontinued operations 12,000 (1,460,000)
Net loss attributable to Barnwell Industries, Inc.
$ (7,103,000) $ (5,565,000)
Denominator:
Basic weighted-average number of common shares outstanding 10,056,479 10,017,997
Effect of dilutive securities - common stock options and restricted stock units - -
Diluted weighted-average number of common shares outstanding 10,056,479 10,017,997
Basic and diluted loss per common share:
Net loss per common share from continuing operations attributable to Barnwell Industries, Inc. stockholders $ (0.71) $ (0.41)
Net loss per common share from discontinued operations - (0.15)
Net loss per common share attributable to Barnwell Industries, Inc. stockholders $ (0.71) $ (0.56)
5. ACCOUNTS AND OTHER RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES
Insurance Recovery Receivable
In the quarter ended June 30, 2025, the Company filed an insurance claim for $348,000 with our insurance carrier for the reimbursement of certain legal fees incurred that are covered under our directors and officers’ liability insurance policies. Accordingly, the Company determined that an insurance recovery from our insurance carrier was probable and reasonably estimable and therefore recorded an estimated accrued insurance recovery receivable of $348,000 at June 30, 2025 and no subsequent revision to the accrual has been recorded as of September 30, 2025. The insurance recovery receivable is included in "Accounts and other receivables, net of allowance for credit losses," in the accompanying Consolidated Balance Sheet and the related legal expense recovery was recorded in “General and administrative” expenses in the accompanying Consolidated Statements of Operations.
The estimated accrued insurance recovery receivable amount is management's best estimate of the probable recoverable amount under the insurance policies. While the insurer has confirmed that certain costs incurred by the Company are eligible for claim under the Company's insurance policies, the amount ultimately recoverable through insurance is dependent upon the insurer's completion of their review of eligible legal costs incurred and the recoverable amount may differ from management's estimate.
Allowance for Credit Losses
The following table summarizes the activity in the balance of allowance for credit losses related to accounts and other receivables:
Year ended September 30,
2025 2024
Allowance for credit losses at beginning of period $ 141,000 $ 50,000
(Reversal of) provision for expected losses (2,000) 85,000
Write-offs charged against the allowance (84,000) (10,000)
Recoveries of amounts previously written off
- 16,000
Foreign currency translation adjustment (6,000) -
Allowance for credit losses at end of period $ 49,000 $ 141,000
6. INVESTMENTS
Investment in Kukio Resort Land Development Partnerships
On November 27, 2013, Barnwell, through a wholly-owned subsidiary, entered into two limited liability limited partnerships, KD Kona and KKM, and indirectly acquired a 19.6% non-controlling ownership interest in each of KD Kukio Resorts, KD Maniniowali, and KDK for $5,140,000. The Kukio Resort Land Development Partnerships own certain real estate and development rights interests in the Kukio, Maniniowali and Kaupulehu portions of Kukio Resort, a private residential community on the Kona coast of the island of Hawaii, as well as Kukio Resort’s real estate sales office operations. KDK holds interests in KD I and KD II. KD I is the developer of Increment I and KD II is the developer of Increment II. Barnwell's ownership interests in the Kukio Resort Land Development Partnerships is accounted for using the equity method of accounting.
In March 2019, KD II admitted a new development partner, Replay, a party unrelated to Barnwell, in an effort to move forward with development of the remainder of Increment II at Kaupulehu. KDK and Replay hold ownership interests of 55% and 45%, respectively, of KD II and Barnwell has a 10.8% indirect non-controlling ownership interest in KD II through KDK, which is accounted for using the equity method of accounting. Barnwell continues to have an indirect 19.6% non-controlling ownership interest in KD Kukio Resorts, KD Maniniowali, and KD I.
The partnerships derive income from the sale of residential parcels in Increment I, which is now completely sold, as well as from commissions on real estate resales by the real estate sales office and revenues resulting from the sale of a few remaining private club memberships. The last two remaining single-family lots of the 80 lots developed within Increment I were sold in the quarter ended March 31, 2024.
Increment II is not yet under development, and there is no assurance that development of such acreage will in fact occur. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.
In November 2025, Kaupulehu Developments entered into an agreement with Mr. David Johnston, the son of Mr. Terry Johnston, a partner in Kaupulehu Developments, to surrender any and all remaining rights for Increment II for $2,000,000 of which $70,000 was received. Additionally, the purchaser has the right to extend the closing by up to two years by making a $70,000 payment in each of the next two years,
with those payments applied against the $2,000,000 purchase price. The closing of this transaction is entirely dependent on the purchaser and therefore may not happen.
Subsequent to fiscal 2025, pursuant to a unit purchase agreement KDK, of which Barnwell holds a 19.6% interest, agreed to sell KDK’s interests in Increment II to Mr. David Johnston for $2,109,000. The unit purchase agreement is subject to due diligence, and there is no certainty that the transaction will close. Furthermore, there is also no assurance on the timing or amounts that the general partner of KDK would distribute upon a closing.
Barnwell has the right to receive distributions from the Kukio Resort Land Development Partnerships via its non-controlling interests in KD Kona and KKM, based on its respective partnership sharing ratios of 75% and 34.45%, respectively. No cash distributions were received during the year ended September 30, 2025. During the year ended September 30, 2024, Barnwell received cash distributions of $1,071,000 (resulting in a net amount of $953,000, after distributing $118,000 to non-controlling interests) from the Kukio Resort Land Development Partnerships.
Equity in income of affiliates was nil for the year ended September 30, 2025, as compared to equity in income of affiliates of $1,071,000 for the year ended September 30, 2024.
Summarized financial information for the Kukio Resort Land Development Partnerships is as follows:
Year ended September 30,
2025 2024
Revenue $ 7,236,000 $ 13,555,000
Gross profit $ 3,234,000 $ 8,651,000
Net earnings $ 1,208,000 $ 6,437,000
In the quarter ended June 30, 2021, the Company received cumulative distributions from the Kukio Resort Land Development Partnerships in excess of our investment balance and in accordance with applicable accounting guidance, the Company suspended its equity method earnings recognition and the Kukio Resort Land Development Partnerships’ investment balance was reduced to zero with the distributions received in excess of our investment balance recorded as equity in income of affiliates because the distributions are not refundable by agreement or by law and the Company is not liable for the obligations of or otherwise committed to provide financial support to the Kukio Resort Land Development Partnerships. The Company will record future equity method earnings only after our share of the Kukio Resort Land Development Partnerships’ cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnerships’ income recognized for the excess distributions, and during this suspended period any distributions received will be recorded as equity in income of affiliates. Accordingly, no equity in income of affiliates was recognized in the year ended September 30, 2025.
Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $106,000 at September 30, 2025 and $373,000 at September 30, 2024.
Sale of Interest in Leasehold Land
Kaupulehu Developments holds rights to receive payments from KD I and KD II resulting from the sale of lots and/or residential units within Increment I, which is now fully sold, and within Increment II, which is not yet developed (see Note 20).
With respect to Increment I, Kaupulehu Developments was entitled to receive payments from KD I based on 10% of the gross receipts from KD I’s sales of single-family residential lots in Increment I. The last two single-family lots of the 80 lots developed within Increment I were sold in the quarter ended March 31, 2024.
Under the terms of the Increment II agreement with KD II, Kaupulehu Developments is entitled to 15% of the distributions of KD II, the cost of which is to be solely borne by KDK out of its 55% ownership interest in KD II, plus a priority payout of 10% of KDK’s cumulative net profits derived from Increment II sales subsequent to Phase 2A, up to a maximum of $3,000,000 as to the priority payout. Such interests are limited to distributions or net profits interests and Barnwell does not have any partnership interests in KD II or KDK through its interest in Kaupulehu Developments. The arrangement also gives Barnwell rights to three single-family residential lots in Phase 2A of Increment II, and four single-family residential lots in phases subsequent to Phase 2A when such lots are developed by KD II, all at no cost to Barnwell. Barnwell is committed to commence construction of improvements within 90 days of the transfer of the four lots in the phases subsequent to Phase 2A as a condition of the transfer of such lots. Also, in addition to Barnwell’s existing obligations to pay professional fees to certain parties based on percentages of its gross receipts, Kaupulehu Developments is obligated to pay an amount equal to 0.72% and 0.20% of the cumulative net profits of KD II to KD Development and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell, in compensation for the agreement of these parties to admit the new development partner for Increment II. Such compensation will be reflected as the obligation becomes probable and the amount of the obligation can be reasonably estimated.
The following table summarizes the Increment I revenues from KD I and the amount of fees directly related to such revenues (see Note 18 “Commitments and Contingencies - Other Matters”):
Year ended September 30,
2025 2024
Sale of interest in leasehold land:
Revenues - sale of interest in leasehold land $ - $ 500,000
Fees - included in general and administrative expenses - (61,000)
Sale of interest in leasehold land, net of fees paid $ - $ 439,000
There is no assurance with regards to the amounts of future payments from Increment II to be received or that the remaining acreage within Increment II will be developed. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.
Investment in Leasehold Land Interest - Lot 4C
Kaupulehu Developments holds an interest in an area of approximately 1,000 acres of vacant leasehold land zoned conservation located adjacent to Lot 4A, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. The lease terminates in December 2025.
7. OIL AND NATURAL GAS PROPERTIES
Fiscal 2025 Oil and Natural Gas Property Dispositions
On August 8, 2025, Barnwell entered into an agreement with an independent third party to sell all of its working interests in its U.S. oil and natural gas assets for a sales price of $2,300,000. The sales price per the agreement was adjusted for customary purchase price adjustments to reflect the economic activity from the effective date of July 1, 2025 to the closing date August 8, 2025. The Company recognized a loss on the sale of $636,000 before related income taxes in the year ended September 30, 2025. The U.S. oil and natural gas assets were located in the states of Texas and Oklahoma and were owned by wholly-owned subsidiaries of Barnwell. As a result of the sale, the Company no longer owns any oil and natural gas assets in the U.S., however, the Company will continue to explore for oil and natural gas opportunities in the U.S.
On August 28, 2025, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Medicine River area of Alberta, Canada. The sales price per the agreement was adjusted for customary purchase price adjustments to $288,000 in order to, among other things, reflect an economic closing date of September 30, 2025. The final determination of the customary adjustments to the purchase price has not yet been made; however, it is not expected to result in a material adjustment. The proceeds were credited to the full cost pool, with no gain or loss recognized, as the sale did not result in a significant alteration of the relationship between capitalized costs and proved reserves.
Fiscal 2024 Oil and Natural Gas Property Dispositions
In April 2024, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Kaybob area of Alberta, Canada. The sales price per the agreement was adjusted for customary purchase price adjustments to $441,000 in order to, among other things, reflect an economic effective date of May 1, 2024. The proceeds were credited to the full cost pool, with no gain or loss recognized, as the sale did not result in a significant alteration of the relationship between capitalized costs and proved reserves.
In July 2024, Barnwell entered into and completed an agreement with an independent third party to convey interests in certain oil and natural gas properties located in the Bonanza and Balsam areas of Alberta, Canada. In consideration for the sale of the working interests in these properties, Barnwell retained a 4% overriding royalty on these properties and the buyer assumed the asset retirement obligations associated with these properties. There were no cash proceeds from the sale and no gain or loss was recognized on this conveyance as this did not result in a significant alteration of the relationship between capitalized costs and proved reserves. With the disposition of the working interest, Barnwell reduced the full cost pool and abandonment liabilities associated with the working interests conveyed by approximately $153,000.
In September 2024, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Wood River area of Alberta, Canada. The sales price per the agreement was adjusted for customary purchase price adjustments to $292,000 in order to, among other things, reflect an economic effective closing date of September 30, 2024. From the sales proceeds, $38,000 was remitted directly to the Canada Revenue Agency by the buyers for potential amounts due for Barnwell’s Canadian income taxes related to the sale. The proceeds from the sale was credited to our cash in October 2024 and is reflected in the Statement of Cash Flows for the year ended September 30, 2025. No gain or loss was recognized on this disposition as the sale proceeds were credited to the full cost pool and did not result in a significant alteration of the relationship between capitalized costs and proved reserves.
Impairment of Oil and Natural Gas Properties
Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices (except where prices are defined by contractual arrangements), the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties.
During the year ended September 30, 2025, the Company incurred a non-cash ceiling test impairment for our U.S. oil and natural gas properties of $865,000. During the year ended September 30, 2024, the Company incurred a non-cash ceiling test impairment of $2,885,000, which included impairments for our U.S. and Canadian oil and natural gas properties of $721,000 and $2,164,000, respectively.
As discussed above, the ceiling test uses a 12-month historical rolling average first-day-of-the-month prices. As such, declines in the 12-month historical rolling average first-day-of-the-month prices used in our ceiling test calculation in future periods could result in impairment write-downs in future periods in the absence of any offsetting factors that are not currently known or projected. Based on the oil and gas prices for October 1, November 1 and December 1 of 2025, the oil prices used in the 12-month historical rolling first-day-of-the-month average for the ceiling test at December 31, 2025 are likely to be lower than at September 30, 2025. As such, we may incur a further impairment charge in the first quarter of fiscal 2026 ending December 31, 2025. The Company is currently unable to estimate a range of the amount of any potential future impairment write-downs as variables that impact the ceiling limitation are dependent upon actual results of activity through the end of December 2025.
8. PROPERTY AND EQUIPMENT AND ASSET RETIREMENT OBLIGATION
Barnwell’s property and equipment is detailed as follows:
Estimated
Useful
Lives Gross
Property and
Equipment Accumulated
Depletion,
Depreciation,
Amortization, and Impairment Net
Property and
Equipment
At September 30, 2025:
Proved oil and natural gas properties
(full cost method) $ 74,511,000 $ (65,358,000) $ 9,153,000
Other property and equipment 3 - 10 years
500,000 (491,000) 9,000
Total $ 75,011,000 $ (65,849,000) $ 9,162,000
Estimated
Useful
Lives Gross
Property and
Equipment Accumulated
Depletion,
Depreciation, Amortization, and Impairment Net
Property and
Equipment
At September 30, 2024:
Proved oil and natural gas properties
(full cost method) $ 83,557,000 $ (67,003,000) $ 16,554,000
Other property and equipment 3 - 10 years
509,000 (497,000) 12,000
Total $ 84,066,000 $ (67,500,000) $ 16,566,000
See Note 7 for discussion of acquisitions and divestitures of oil and natural gas properties in fiscal 2025 and 2024.
Asset Retirement Obligation
Barnwell recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. The following is a reconciliation of the asset retirement obligation:
Year ended September 30,
2025 2024
Asset retirement obligation as of beginning of year $ 8,588,000 $ 9,833,000
Obligations incurred on new wells drilled or acquired - 37,000
Liabilities associated with properties sold (209,000) (442,000)
Revision of estimated obligation (694,000) (614,000)
Accretion expense 808,000 900,000
Payments (483,000) (1,139,000)
Foreign currency translation adjustment (235,000) 13,000
Asset retirement obligation as of end of year 7,775,000 8,588,000
Less current portion (613,000) (798,000)
Asset retirement obligation, long-term $ 7,162,000 $ 7,790,000
Asset retirement obligations were reduced by $209,000 and $442,000 in fiscal 2025 and 2024, respectively, for those obligations that were assumed by purchasers of Barnwell's oil and natural gas properties (see Note 7 for additional details on dispositions). Asset retirement obligations were also reduced by $694,000 and $614,000 in fiscal 2025 and 2024, respectively, primarily due to revisions related to the estimated timing of future abandonments. Asset retirement obligations also increased by nil and $37,000 in fiscal 2025 and 2024, respectively, due primarily to our wells drilled and acquisitions. The asset retirement obligation reflects the estimated present value of the amount of dismantlement, removal, site reclamation, and similar activities associated with Barnwell's oil and natural gas properties. Barnwell estimates the ultimate productive life of the properties, a credit-adjusted risk-free rate, and an inflation factor in order to determine the current present value of this obligation. The credit-adjusted risk-free rate for the entire asset retirement obligation is a blended rate which ranges from 6% to 13.5%.
In September 2019, the AER issued an abandonment/closure order for all wells and facilities in the Manyberries area which had been largely operated by LGX, an operating company that went into receivership in 2016. The estimated asset retirement obligation for the Company's interest in the wells and facilities in the Manyberries area is included in “Asset retirement obligation” in the Consolidated Balance Sheets.
After the abandonment/closure order was issued for Manyberries, the OWA created a WIP program for specific areas where there are a significant number of orphaned wells to abandon. The OWA has the ability and expertise to abandon wells using its internal resources and network of service providers resulting in efficiencies that companies such as Barnwell would not be able to obtain on its own. Under the WIP program, the Company would be required to provide payment for only Barnwell’s working interest share, however, all WIP’s would have to participate in the program for the OWA to begin its work. In March 2021, the Company was notified by the OWA that Barnwell’s Manyberries wells were confirmed to be in the WIP program.
Under the agreement with the OWA, the Company was required to pay the abandonment and reclamation costs in advance through a cash deposit. Barnwell has provided $975,000 in cumulative cash deposits to the OWA since the program began in the fall of 2021, and any amount remaining after
completion of the abandonments was to be refunded to the Company, and then upon commencement of the reclamation program a new deposit was to be made for those estimated costs. To date, the excess deposits that relate to abandonment work have not yet been refunded but have been used to fund the reclamation part of the program and the Company now estimates that a portion of the unused deposit will instead be applied to future reclamation work over the next several years. The estimated current portion of the unused deposit was $173,000 and $527,000 as of September 30, 2025 and 2024, respectively, and is included in “Other current assets” on the Company’s Consolidated Balance Sheets. The non-current portion of the unused deposit of $222,000 along with $61,000 of non-current receivables at September 30, 2025, is included in “Other non-current assets” on the Company’s Consolidated Balance Sheet at September 30, 2025.
9. RETIREMENT PLANS
Barnwell sponsors a noncontributory defined benefit pension plan (“Pension Plan”) covering substantially all of its U.S. employees, with benefits based on years of service and the employee’s highest consecutive 5 years average earnings. Barnwell’s funding policy is intended to provide for both benefits attributed to service to date and for those expected to be earned in the future. In addition, Barnwell sponsors a Supplemental Executive Retirement Plan (“SERP”), a noncontributory supplemental retirement benefit plan which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan. Effective December 31, 2019, the accrual of benefits for all participants in the Pension Plan and SERP was frozen and the plans were closed to new participants from that point forward.
The following tables detail the changes in benefit obligations, fair values of plan assets and reconciliations of the funded status of the retirement plans:
Pension Plan SERP
September 30,
2025 2024 2025 2024
Change in Projected Benefit Obligation:
Benefit obligation at beginning of year $ 8,195,000 $ 7,511,000 $ 1,974,000 $ 1,734,000
Interest cost 390,000 411,000 95,000 95,000
Actuarial (gain) loss (90,000) 520,000 (5,000) 149,000
Benefits paid (394,000) (247,000) (3,000) (4,000)
Benefit obligation at end of year 8,101,000 8,195,000 2,061,000 1,974,000
Change in Plan Assets:
Fair value of plan assets at beginning of year 13,094,000 11,982,000 - -
Actual return on plan assets 1,329,000 1,359,000 - -
Benefits paid (394,000) (247,000) - -
Fair value of plan assets at end of year 14,029,000 13,094,000 - -
Funded status $ 5,928,000 $ 4,899,000 $ (2,061,000) $ (1,974,000)
Pension Plan SERP
September 30,
2025 2024 2025 2024
Amounts recognized in the Consolidated Balance Sheets:
Noncurrent assets $ 5,928,000 $ 4,899,000 $ - $ -
Current liabilities - - (270,000) (76,000)
Noncurrent liabilities - - (1,791,000) (1,898,000)
Net amount $ 5,928,000 $ 4,899,000 $ (2,061,000) $ (1,974,000)
Amounts recognized in accumulated other comprehensive income before income taxes:
Net actuarial gain $ (1,871,000) $ (1,251,000) $ (100,000) $ (96,000)
Accumulated other comprehensive income $ (1,871,000) $ (1,251,000) $ (100,000) $ (96,000)
The accumulated benefit obligation for the Pension Plan was $8,101,000 and $8,195,000 at September 30, 2025 and 2024, respectively. The accumulated benefit obligation for the SERP was $2,061,000 and $1,974,000 at September 30, 2025 and 2024, respectively. The accumulated benefit obligations are the same as the projected benefit obligations due to the Pension Plan and SERP being frozen as of December 31, 2019.
Currently, no contributions are planned to be made to the Pension Plan during fiscal 2026. The SERP plan is unfunded and Barnwell funds benefits when payments are made. Expected payments under the SERP for fiscal 2026 are expected to be $270,000. Fluctuations in actual market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefits costs and contributions in future periods.
The Pension Plan actuarial gains in fiscal 2025 were primarily due to an increase in the discount rate and actual investment returns that were greater than the assumed rate of return. The SERP actuarial gains in fiscal 2025 were primarily due to an increase in the discount rate.
The Pension Plan actuarial losses in fiscal 2024 were primarily due to a decrease in the discount rate, partially offset by an actuarial gain resulting from actual investment returns that were greater than the assumed rate of return. The SERP actuarial losses in fiscal 2024 were primarily due to a decrease in the discount rate.
The following table presents the weighted-average assumptions used to determine benefit obligations and net benefit (income) costs:
Pension Plan SERP
Year ended September 30,
2025 2024 2025 2024
Assumptions used to determine fiscal year-end benefit obligations:
Discount rate 5.16% 4.88% 5.16% 4.88%
Rate of compensation increase N/A N/A N/A N/A
Assumptions used to determine net benefit costs (years ended):
Discount rate 4.88% 5.62% 4.88% 5.62%
Expected return on plan assets 6.20% 6.50% N/A N/A
Rate of compensation increase N/A N/A N/A N/A
We select a discount rate by reference to yields from the Willis Towers Watson RATE:Link 10-90 yield curve at our consolidated balance sheet date. The expected return on plan assets is based on an actuarial model which takes into consideration our investment mix and market conditions.
The components of net periodic benefit (income) cost are as follows:
Pension Plan SERP
Year ended September 30,
2025 2024 2025 2024
Net periodic benefit (income) cost for the year:
Interest cost $ 390,000 $ 411,000 $ 95,000 $ 95,000
Expected return on plan assets (800,000) (766,000) - -
Amortization of net actuarial gain - - - (85,000)
Net periodic benefit (income) cost $ (410,000) $ (355,000) $ 95,000 $ 10,000
The benefits expected to be paid under the retirement plans as of September 30, 2025 are as follows:
Pension Plan SERP
Expected Benefit Payments:
Fiscal year ending September 30, 2026 $ 424,000 $ 270,000
Fiscal year ending September 30, 2027 $ 592,000 $ 167,000
Fiscal year ending September 30, 2028 $ 630,000 $ 172,000
Fiscal year ending September 30, 2029 $ 666,000 $ 176,000
Fiscal year ending September 30, 2030 $ 656,000 $ 174,000
Fiscal years ending September 30, 2031 through 2035 $ 3,224,000 $ 827,000
Plan Assets
The trustees of the Pension Plan communicate periodically with the Pension Plan’s professional investment advisors to establish investment policies, direct investments and select investment options. The overall investment objective of the Pension Plan is to attain a diversified combination of investments that provides long-term growth in the assets of the plan to fund future benefit obligations while managing risk
in order to meet current benefit obligations. Generally, interest and dividends received provide cash flows to fund current benefit obligations. Longer-term obligations are generally estimated to be provided for by growth in equity securities. The Pension Plan’s investment policy permits investments in a diversified mix of U.S. and international equities, fixed income securities, other investments, and cash equivalents.
The Pension Plan’s investments in fixed income securities include preferred securities and corporate bonds. The Pension Plan’s investments in equity securities primarily include domestic companies and is comprised of companies with market capitalization categorized as follows: 61% micro-cap; 22% small-cap; 8% mid-cap; and 9% large-cap. The Pension Plan’s other investment is a note receivable from an unrelated private company.
A portion of the Pension Plan’s investments is in publicly traded stocks, one of which is Barnwell’s common stock. As of September 30, 2025 and 2024, the Pension Plan held 666,077 and 413,148 shares, respectively, of Barnwell common stock (see Note 20 for additional details).
The Company’s year-end target allocation, by asset category, and the actual asset allocations were as follows:
Target September 30,
Asset Category Allocation 2025 2024
Cash and cash equivalents 0% - 25%
1% 4%
Fixed income securities 15% - 40%
15% 19%
Equity securities 45% - 75%
80% 73%
Other investment 0% - 10%
4% 4%
Actual investment allocations may vary from our target allocations from time to time due to prevailing market conditions. The trustees periodically review our actual investment allocations and rebalance our investments to our target allocations as dictated by current and anticipated market conditions and required cash flows.
We categorize plan assets into three levels based upon the assumptions used to price the assets. Level 1 provides the most reliable measure of fair value, whereas Level 3 requires significant management judgment in determining the fair value. Equity securities and exchange-traded funds are valued by obtaining quoted prices on recognized and highly liquid exchanges. Fixed income securities are valued based upon the closing price reported in the active market in which the security is traded. All of our plan assets, except for the note receivable from a private company, are categorized as Level 1 assets, and as such, the actual market value is used to determine the fair value of assets. The fair value of the note receivable from an unrelated private company is valued based upon the terms of the note receivable’s agreement and unobservable inputs such as management’s consideration of the counterparty’s credit risk and as such, is categorized as a Level 3 asset.
The following tables set forth by level, within the fair value hierarchy, pension plan assets at their fair value:
Fair Value Measurements Using:
September 30, 2025 Carrying
Amount Quoted
Prices in
Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Financial Assets:
Cash $ 179,000 $ 179,000 $ - $ -
Preferred securities 2,154,000 2,154,000 - -
Equities 11,201,000 11,201,000 - -
Note receivable from an unrelated private company 495,000 - - 495,000
Total $ 14,029,000 $ 13,534,000 $ - $ 495,000
Fair Value Measurements Using:
September 30, 2024 Carrying
Amount Quoted
Prices in
Active
Markets
(Level 1) Significant
Other
Observable
Inputs
(Level 2) Significant
Unobservable
Inputs
(Level 3)
Financial Assets:
Cash $ 531,000 $ 531,000 $ - $ -
U.S. treasury and government securities 516,000 516,000 - -
Fixed income exchange-traded funds 1,872,000 1,872,000 - -
Preferred securities 88,000 88,000 - -
Equities 9,516,000 9,516,000 - -
Note receivable from an unrelated private company 571,000 - - 571,000
Total $ 13,094,000 $ 12,523,000 $ - $ 571,000
The following sets forth a summary of changes in the fair value of the pension Level 3 note receivable asset:
Year ended September 30,
2025 2024
Balance at beginning of year
$ 571,000 $ -
Issuance of note receivable from an unrelated private company
- 571,000
Interest income 129,000 -
Payments received (205,000) -
Balance at end of year
$ 495,000 $ 571,000
10. INCOME TAXES
The components of loss from continuing operations before income taxes, after adjusting the loss for non-controlling interests, are as follows:
Year ended September 30,
2025 2024
United States $ (5,980,000) $ (1,360,000)
Canada (1,064,000) (2,532,000)
$ (7,044,000) $ (3,892,000)
The components of the income tax provision related to the above losses are as follows:
Year ended September 30,
2025 2024
Current provision:
United States - State
Before operating loss carryforwards $ 82,000 $ 23,000
Benefit of operating loss carryforwards - -
After operating loss carryforwards 82,000 23,000
Canadian
Before operating loss carryforwards 71,000 148,000
Benefit of operating loss carryforwards - -
After operating loss carryforwards 71,000 148,000
Total current 153,000 171,000
Deferred (benefit) provision:
United States - State (82,000) 42,000
Total deferred (82,000) 42,000
$ 71,000 $ 213,000
Consolidated taxes do not bear a customary relationship to pretax results due primarily to the fact that the Company is taxed separately in Canada based on Canadian source operations and in the U.S. based on consolidated operations, and essentially all deferred tax assets, net of relevant offsetting deferred tax liabilities, are not estimated to have a future benefit as tax credits or deductions. The Company operates two subsidiaries in Canada, one of which is a U.S. corporation operating as a branch in Canada that is treated as a non-resident for Canadian tax purposes and thus has operating results that cannot be offset against or combined with the other Canadian subsidiary that files as a resident for Canadian tax purposes. Income from our non-controlling interest in the Kukio Resort Land Development Partnerships is treated as non-unitary for state of Hawaii unitary filing purposes, thus unitary Hawaii losses provide limited sheltering of such non-unitary income. Income from our investment in the Oklahoma oil venture is 100% allocable to Oklahoma. As such, Barnwell receives no benefit from consolidated or unitary losses and, therefore, is subject to Oklahoma state taxes. Our operations in Texas are subject to a franchise tax assessed by the state of Texas, however no significant amounts have been incurred to date.
On July 4, 2025, the President of the United States signed into law the One Big Beautiful Bill Act ("OBBBA"). The legislation, among other things, makes permanent, extends or modifies certain provisions under the 2017 Tax Cuts and Jobs Act, including a permanent extension of 100% bonus depreciation for certain capital expenditures. The Company has determined that there are no tax law changes in the OBBBA that significantly impact the Company’s current and deferred income taxes.
A reconciliation between the reported income tax expense and the amount computed by multiplying the loss attributable to Barnwell before income taxes by the U.S. federal tax rate of 21% is as follows:
Year ended September 30,
2025 2024
Tax benefit computed by applying statutory rate $ (1,477,000) $ (1,124,000)
Increase in the valuation allowance 1,426,000 1,383,000
Additional effect of the foreign tax provision on the total tax provision (28,000) (129,000)
U.S. state income tax provision (benefit), net of federal effect (16,000) 70,000
U.S. state provision to tax return adjustments (2,000) (12,000)
Other 168,000 25,000
$ 71,000 $ 213,000
The change in the valuation allowance shown in the table above excludes the impact of changes in the valuation allowance of items that are incorporated within the respective reconciliation line items elsewhere in the table.
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
September 30,
2025 2024
Deferred income tax assets:
Foreign tax credit carryover under U.S. tax law $ - $ 916,000
U.S. federal net operating loss carryover 9,463,000 10,382,000
U.S. state unitary net operating loss carryovers 484,000 1,334,000
Canadian net operating loss carryovers 1,490,000 1,331,000
Tax basis of investment in land in excess of book basis under U.S. tax law 11,000 11,000
Tax basis of investment in subsidiary in excess of book basis under U.S. tax law 376,000 -
Property and equipment accumulated book depreciation and depletion in excess of tax under Canadian tax law
123,000 -
Property and equipment accumulated book depreciation and depletion in excess of tax under U.S. tax law 661,000 548,000
Asset retirement obligation accrued for books but not for tax under U.S. tax law 835,000 907,000
Asset retirement obligation accrued for books but not for tax under Canadian tax law 1,941,000 2,141,000
Other liabilities accrued for books but not for tax under U.S. tax law 523,000 669,000
Foreign currency loss under U.S. tax law 76,000 68,000
Foreign currency loss under Canadian tax law 36,000 79,000
Other 195,000 168,000
Total gross deferred income tax assets 16,214,000 18,554,000
Less valuation allowance (12,391,000) (13,896,000)
Net deferred income tax assets 3,823,000 4,658,000
Deferred income tax liabilities:
Property and equipment accumulated tax depreciation and depletion in excess of book under Canadian tax law - (117,000)
Book basis of investment in land development partnerships in excess of tax basis under U.S. tax law (64,000) (282,000)
Book basis of investment in land development partnerships in excess of tax basis under U.S. state non-unitary tax law (19,000) (86,000)
U.S. oil and gas property and equipment accumulated tax depreciation and depletion in excess of book under U.S. tax law - (698,000)
U.S. oil and gas property and equipment accumulated tax depreciation and depletion in excess of book under U.S. state tax law - (16,000)
U.S. tax law impact of foreign branch deferred tax asset under Canadian tax law (2,374,000) (2,215,000)
Asset for retirement benefits
(1,245,000) (1,029,000)
Other (139,000) (315,000)
Total deferred income tax liabilities (3,841,000) (4,758,000)
Net deferred income tax liability $ (18,000) $ (100,000)
Reported as:
Deferred income tax assets $ - $ -
Deferred income tax liabilities (18,000) (100,000)
Net deferred income tax liability $ (18,000) $ (100,000)
The total valuation allowance decreased $1,505,000 for the year ended September 30, 2025. The decrease was due to current fiscal year operational activity that resulted in changes in deferred tax asset and liability balances, and there were no changes in judgment about the realizability of related deferred tax assets in future years. Of the total net decrease in the valuation allowance for fiscal 2025, $1,354,000 was recognized as an income tax benefit and $151,000 was credited to accumulated other comprehensive income.
Net deferred tax assets at September 30, 2025 of $3,823,000 consists of the portion of deferred tax assets that are estimated to be partially realized through corresponding concurrent reversals of deferred tax liabilities related to the Kukio Resort Land Development Partnerships' excess of book income over taxable income, foreign branch deferred taxes, asset for retirement benefits accrued for books but not for tax under U.S. tax law, and certain other minor deferred tax liabilities.
At September 30, 2025, Barnwell had U.S. federal net operating loss carryovers, U.S. state net operating loss carryovers and Canadian net operating loss carryovers totaling $45,063,000, $7,565,000 and $5,551,000, respectively. The U.S. federal net operating loss carryovers generated through September 30, 2018 expire in fiscal years 2032-2038, the U.S. state unitary net operating loss carryovers generated through September 30, 2017 expire in fiscal years 2033-2037, and the Canadian net operating loss carryovers expire in fiscal years 2039-2045. The U.S. federal net operating loss carryovers generated in fiscal years 2019-2025 and the U.S. state net operating loss carryovers generated in fiscal years 2018-2025 have no expiry, however utilization of the U.S. state and U.S. federal net operating loss carryovers generated in these and future years are limited to 80% of taxable income.
FASB ASC Topic 740, Income Taxes, prescribes a threshold for recognizing the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority.
Barnwell files U.S. federal income tax returns, income tax returns in various U.S. states, and Canadian federal and provincial tax returns. A number of years may elapse before an uncertain tax position, for which we have unrecognized tax benefits, is audited and finally resolved. We believe that our unrecognized tax benefits are reflected on a more likely than not basis. We evaluate uncertain tax positions based on ongoing facts and circumstances. Any change in judgment related to the expected resolution of uncertain tax positions is recognized in earnings in the period in which such change occurs. Interest and penalties, if any, related to unrecognized tax benefits are recorded as a component of income tax expense. Settlement of any particular position could require the use of cash. Favorable or unfavorable resolution for an amount less than or greater than the amount estimated by Barnwell will result in a decrease or increase to income tax expense in the period of resolution.
There were no changes in unrecognized tax benefits during the years ended September 30, 2025 or 2024.
Year ended September 30,
2025 2024
Balance at beginning of year $ 62,000 $ 62,000
Effect of tax positions taken in prior years - -
Accrued interest related to tax positions taken - -
Balance at end of year $ 62,000 $ 62,000
Uncertain tax positions at September 30, 2025 are related to the potential assessment of penalties and interest for the failure to file a certain foreign information form with each of our U.S. federal income tax returns for fiscal years 2019, 2020 and 2021. The Company filed amended U.S. federal income tax returns which included the missing form and statement of reasonable cause for these years in September and October 2023 and requested abatement of any potential penalties and interest which could subsequently be assessed. The Company is awaiting a response from the IRS and the probability of success of the abatement request remains uncertain.
Included below is a summary of the tax years, by jurisdiction, that remain subject to examination by taxing authorities at September 30, 2025:
Jurisdiction Fiscal Years Open
U.S. federal 2019 - 2024
Various U.S. states 2022 - 2024
Canada federal 2017 - 2024
Various Canadian provinces 2017 - 2024
11. SEGMENT AND GEOGRAPHIC INFORMATION
As disclosed in Note 3 “Discontinued Operations,” on March 14, 2025, the Company completed the sale of Water Resources, which represented the Company’s contract drilling segment. The financial results of the Company’s contract drilling business has been presented as discontinued operations and therefore is excluded from segment reporting. Accordingly, Barnwell’s continuing operations include the following two principal business segments:
Oil and Natural Gas Segment - Barnwell engages in oil and natural gas development, production, acquisitions and sales in Canada and in the U.S.
Land Investment Segment - Barnwell owns leasehold land interests in Hawaii.
The Company’s Chief Operating Decision Maker is the Chief Executive Officer, who utilizes segment revenues and expenses and segment operating profit or loss to assess performance and allocate resources to each segment. General and administrative expenses are reviewed on a consolidated basis.
The following table presents certain financial information related to Barnwell’s reporting segments. All revenues reported are from external customers with no intersegment sales or transfers.
Year ended September 30,
2025 2024
Revenues:
Oil and natural gas $ 13,563,000 $ 17,396,000
Land investment - 500,000
Other 80,000 91,000
Total before interest income
13,643,000 17,987,000
Interest income 54,000 88,000
Total revenues $ 13,697,000 $ 18,075,000
Cost and expenses:
Oil and natural gas $ 8,966,000 $ 9,849,000
Depletion, depreciation, and amortization:
Oil and natural gas $ 3,144,000 $ 4,947,000
Other 2,000 3,000
Total depletion, depreciation, and amortization $ 3,146,000 $ 4,950,000
Impairment:
Oil and natural gas $ 865,000 $ 2,885,000
Operating profit (loss) (before general and administrative expenses):
Oil and natural gas $ 588,000 $ (285,000)
Land investment - 500,000
Other 78,000 88,000
Loss on sale of assets (636,000) -
Total operating profit 30,000 303,000
Equity in income of affiliates:
Land investment - 1,071,000
General and administrative expenses (6,937,000) (5,130,000)
Foreign currency (loss) gain (192,000) 10,000
Interest expense (7,000) -
Interest income 54,000 88,000
Loss from continuing operations before income taxes $ (7,052,000) $ (3,658,000)
Capital Expenditures:
Year ended September 30,
2025 2024
Oil and natural gas $ 254,000 $ 4,228,000
Other - -
Total $ 254,000 $ 4,228,000
Oil and natural gas capital expenditures include acquisitions as well as changes to capitalized asset retirement obligations, including revisions of asset retirement obligations (see Note 8 for additional details).
Assets By Segment:
September 30,
2025 2024
Oil and natural gas (1)
Canada
$ 11,118,000 $ 15,218,000
United States
- 4,190,000
Other:
Cash and cash equivalents 2,886,000 4,285,000
Asset for retirement benefits
5,928,000 4,899,000
Corporate and other 880,000 260,000
Total $ 20,812,000 $ 28,852,000
______________
(1) Primarily located in the province of Alberta, Canada.
Long-Lived Assets By Geographic Area:
September 30,
2025 2024
United States $ 5,965,000 $ 8,932,000
Canada 9,617,000 12,572,000
Total $ 15,582,000 $ 21,504,000
Revenue By Geographic Area:
Year ended September 30,
2025 2024
United States $ 1,172,000 $ 2,803,000
Canada 12,471,000 15,184,000
Total (before interest income) $ 13,643,000 $ 17,987,000
12. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following tables provide information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition based upon continuing operations for the years ended September 30, 2025 and 2024.
Year ended September 30, 2025
Oil and natural gas Land investment Other Total
Revenue streams:
Oil $ 10,476,000 $ - $ - $ 10,476,000
Natural gas 1,499,000 - - 1,499,000
Natural gas liquids 1,588,000 - - 1,588,000
Other - - 80,000 80,000
Total revenues before interest income $ 13,563,000 $ - $ 80,000 $ 13,643,000
Geographical regions:
United States $ 1,171,000 $ - $ 1,000 $ 1,172,000
Canada 12,392,000 - 79,000 12,471,000
Total revenues before interest income $ 13,563,000 $ - $ 80,000 $ 13,643,000
Timing of revenue recognition:
Goods transferred at a point in time $ 13,563,000 $ - $ 80,000 $ 13,643,000
Year ended September 30, 2024
Oil and natural gas Land investment Other Total
Revenue streams:
Oil $ 13,509,000 $ - $ - $ 13,509,000
Natural gas 2,007,000 - - 2,007,000
Natural gas liquids 1,880,000 - - 1,880,000
Contingent residual payments - 500,000 - 500,000
Other - - 91,000 91,000
Total revenues before interest income $ 17,396,000 $ 500,000 $ 91,000 $ 17,987,000
Geographical regions:
United States $ 2,303,000 $ 500,000 $ - $ 2,803,000
Canada 15,093,000 - 91,000 15,184,000
Total revenues before interest income $ 17,396,000 $ 500,000 $ 91,000 $ 17,987,000
Timing of revenue recognition:
Goods transferred at a point in time $ 17,396,000 $ 500,000 $ 91,000 $ 17,987,000
Contract Balances
The following table provides the balances of our receivables from contracts with customers which is included in "Accounts and other receivables, net of allowance for credit losses," in the accompanying Consolidated Balance Sheets.
September 30,
2025 2024 2023
Accounts receivables from contracts with customers $ 913,000 $ 1,472,000 $ 2,344,000
13. ACCUMULATED OTHER COMPREHENSIVE INCOME
Components of accumulated other comprehensive income, net of taxes, are as follows:
Year ended September 30,
2025 2024
Foreign currency translation:
Beginning accumulated foreign currency translation $ 220,000 $ 220,000
Change in cumulative translation adjustment before reclassifications 75,000 -
Income taxes - -
Net current period other comprehensive income 75,000 -
Ending accumulated foreign currency translation 295,000 220,000
Retirement plans:
Beginning accumulated retirement plans benefit income
1,723,000 1,884,000
Amortization of net actuarial gain - (85,000)
Net actuarial gain (loss) arising during the period 624,000 (76,000)
Income taxes - -
Net current period other comprehensive income (loss)
624,000 (161,000)
Ending accumulated retirement plans benefit income 2,347,000 1,723,000
Accumulated other comprehensive income, net of taxes $ 2,642,000 $ 1,943,000
The amortization of net actuarial gain for the retirement plans are included in the computation of net periodic benefit (income) cost which is a component of “General and administrative” expenses on the accompanying Consolidated Statements of Operations (see Note 9 for additional details).
14. FAIR VALUE MEASUREMENTS
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, accounts and other receivables, note receivable, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The estimated fair values of oil and natural gas properties and the asset retirement obligation incurred in the drilling of oil and natural gas wells or assumed in the acquisitions of additional oil and natural gas working interests are based on an estimated discounted cash flow model and market assumptions. The assumptions used in the calculation of estimated discounted cash flows were primarily Level 3 assumptions; assumptions included future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development, operating and asset retirement costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates.
Barnwell estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. Asset retirement obligation fair value measurements in the current period were Level 3 fair value measurements. As further described in Note 8, the Company recognizes the fair value of a liability for an asset retirement obligation in the period in which it is incurred if a reasonable estimate of fair value can be made. Asset retirement obligations are not measured at fair value subsequent to initial recognition.
15. DEBT
Insurance Premium Financing
In March 2025, the Company entered into a short-term financing agreement with a third-party to finance the Company’s directors and officers insurance premium in the amount of $183,000, with a term of 11 months and an annual interest rate of 9.4%. The Company had made a down payment of $15,000 and was required to make monthly principal and interest payments of $16,000 over the term of the agreement, which was set to mature in February 2026. The insurance premium financing was repaid in full in September 2025.
16. LEASES
The Company’s right-of-use (“ROU”) assets and lease liabilities at September 30, 2025, primarily relate to non-cancelable operating leases for our Hawaii corporate and Canadian office spaces and our leasehold land interest for Lot 4C held by Kaupulehu Developments. Management determines if a contract is or contains a lease at inception of the contract or modification of the contract. A contract is or contains a lease if the contract conveys the right to control the use of the asset for a period in exchange for consideration.
Operating lease ROU assets and liabilities are recognized based on the present value of future minimum lease payments over the expected lease term at commencement date. The Company’s leases do not provide a readily determinable implicit rate; therefore, management uses the Company’s incremental borrowing rate to discount lease payments based on information available at lease commencement. Our lease terms may include options to extend or terminate the lease when it is reasonably certain we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease terms. The Company has lease agreements with lease and non-lease components and the non-lease components are excluded in the calculation of the ROU asset and lease liability and expensed as incurred. None of the Company’s lease agreements contain material residual value guarantees or material restrictions or covenants. A ROU asset and corresponding lease liability is not recorded for leases with an initial term of 12 months or less (short-term leases) as the Company recognizes lease expense for these leases as incurred over the lease term.
Leases recorded on the consolidated balance sheet consist of the following:
September 30,
2025 2024
Assets:
Operating lease right-of-use assets $ 145,000 $ 39,000
Total right-of-use assets $ 145,000 $ 39,000
Liabilities:
Current portion of operating lease liabilities (1)
$ 78,000 $ 68,000
Operating lease liabilities 93,000 7,000
Total lease liabilities $ 171,000 $ 75,000
______________
(1) Amount included in “Other Current Liabilities” in the Consolidated Balance Sheets.
The components of lease expense are as follows:
Year ended September 30,
2025 2024
Operating lease cost $ 114,000 $ 87,000
Variable lease cost 155,000 142,000
Total lease cost $ 269,000 $ 229,000
Supplemental information related to leases is as follows:
September 30,
2025 2024
Cash paid related to operating lease liabilities $ 142,000 $ 114,000
Operating leases:
Weighted-average remaining lease term (in years) 2.2 0.9
Weighted-average discount rate 8.20% 6.99%
The remaining lease payments for our operating leases as of September 30, 2025, are as follows:
Fiscal year ending:
2026 $ 88,000
2027 59,000
2028 36,000
2029 -
2030 -
Thereafter
-
Total lease payments 183,000
Less: amounts representing interest (12,000)
Present value of lease liabilities $ 171,000
The lease payments for the Lot 4C leasehold land zoned conservation were subject to renegotiation as of January 1, 2006. Per the lease agreement, the lease payments will remain unchanged pending an appraisal, whereupon the lease rent could be adjusted to fair market value. Barnwell does not know the amount of the new lease payments which could be effective upon performance of the appraisal; they may remain unchanged or increase, and Barnwell currently expects the adjustment, if any, to not be material.
The future lease payment disclosures above assume the minimum lease payments for leasehold land in effect at December 31, 2005 remain unchanged through December 2025, the end of the lease term.
17. STOCKHOLDERS' EQUITY
Share-based Payment Arrangements
2018 Equity Incentive Plan
The stockholder-approved 2018 Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors and provides for the issuance of incentive stock options, nonstatutory stock options, stock options with stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards, and stock grants to employees, consultants and non-employee members of the Board of Directors. 1,600,000 shares of Barnwell common stock have been reserved for issuance and as of September 30, 2025, a total of 751,724 shares remain available for grant.
Barnwell currently has a policy of issuing new shares to satisfy share option exercises when the optionee requests shares.
In October 2025, the Board of Directors of the Company granted a total of 133,335 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board. The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting date.
On October 27, 2025, Barnwell Industries, Inc. appointed Philip Patman, Jr. as the Company’s Executive Vice President - Finance and in connection with Mr. Patman’s appointment, the Company entered into an executive employment agreement with Mr. Patman, dated, and effective, as of October 27, 2025 (the “Employment Agreement”). Pursuant to the terms of the Employment Agreement, on October 27, 2025, Mr. Patman received the following awards which were issued pursuant to the Company’s Amended and Restated 2018 Equity Incentive Plan, as amended from time to time: a stock award of 83,207 shares of the Company’s common stock; a restricted stock unit award for 83,208 shares of the Company’s common stock (the “Initial RSU Award”); and an incentive stock option to purchase 185,000 shares of the Company’s common stock (the “Initial Stock Option” and, together with the Initial RSU Award, the “Initial Equity Awards”). Both Initial Equity Awards vest according to the following schedule: 34% of the total on October 27, 2026; 33% of the total on October 27, 2027; and 33% of the total on October 27, 2028. The Initial Stock Option has a term of ten years and an exercise price of $1.21 per share (the closing price of the Company’s common stock on October 27, 2025).
As of December 8, 2025, 266,974 shares remain available for grant under the 2018 Equity Incentive Plan.
Stock Options
In February 2021, the Company’s Board of Directors (the “Board”) granted options to purchase 665,000 shares of common stock, 310,000 shares to independent directors and 355,000 shares to employees. 605,000 shares of the stock options granted have an exercise price equal to the closing market price of Barnwell’s stock on the date of grant of $3.33, vest annually over three years, and expire in ten years from the date of grant. 60,000 shares of the stock options granted have an exercise price of $3.66 (110% of the closing market price on the date of grant for options granted to affiliates), vest annually over
three years, and expire in five years from the date of grant. Of the 665,000 shares of common stock granted, 150,000 vested stock options expired and 100,000 shares were forfeited, both of which were as a result of director departures since the date of grant.
The following assumptions were used in estimating the fair value for equity-classified stock options granted in the year ended September 30, 2021:
> 10% Owner-Employee Others
Number of shares 60,000 605,000
Expected volatility 127.4% 105.8%
Expected dividends None None
Expected term (in years) 3.5 6.0
Risk-free interest rate 0.19% 0.82%
Expected forfeitures None None
Fair value per share $2.51 $2.70
The application of alternative assumptions could produce significantly different estimates of the fair value of share-based compensation, and consequently, the related costs reported in the “General and administrative” expenses in the Consolidated Statements of Operations.
The following table summarizes Barnwell’s equity-classified stock options activity from October 1, 2024 through September 30, 2025:
Options Shares Weighted-
Average
Exercise Price Weighted-
Average
Remaining
Contractual Term Aggregate
Intrinsic Value
Outstanding at October 1, 2024 465,000 $ 3.37
Granted - -
Exercised - -
Expired/Forfeited (50,000) 3.33
Outstanding at September 30, 2025 415,000 $ 3.38 4.6 $ -
Exercisable at September 30, 2025 415,000 $ 3.38 4.6 $ -
Compensation cost for stock option awards is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period. During the years ended September 30, 2025 and 2024, the Company recognized share-based compensation expense related to stock options of nil and $50,000, respectively. There was no impact on income taxes for the years ended September 30, 2025 and 2024 due to a full valuation allowance on the related deferred tax asset. There is no remaining unrecognized compensation cost related to stock options as of September 30, 2025.
Restricted Stock Units
On November 2, 2023, the Board granted a total of 76,336 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board. The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting dates; provided that, any unvested restricted stock would vest upon a director’s death, disability, a change in control of the Company resulting in the director not continuing as a
director or the director not being renominated for election even though he was willing to stand for re-election.
On May 16, 2024, the Board granted 60,000 restricted stock units to the Company’s President and Chief Executive Officer. The restricted stock units vest ratably over a three-year period, subject to the employee’s continued service through the applicable vesting dates.
On October 24, 2024, the Board granted a total of 105,820 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board. The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting dates.
On January 19, 2025, the Board granted a total of 66,000 restricted stock units to the Company's President and Chief Executive Officer. The restricted stock units vest ratably over a three-year period, subject to the employee’s continued service through the applicable vesting dates.
The following table summarizes Barnwell’s restricted stock units activity from October 1, 2024 through September 30, 2025:
Restricted Stock Units Shares Weighted-Average
Grant Date
Fair Value
Nonvested at October 1, 2024 110,892 $ 2.63
Granted 171,820 1.82
Vested (1)
(50,182) 2.37
Forfeited (78,356) 2.13
Nonvested at September 30, 2025 154,174 $ 2.07
______________
(1) The underlying common stock for 30,182 vested restricted stock units were not yet issued as of September 30, 2025; in October 2025, the Company issued 30,182 shares of common stock for these vested restricted stock units.
Compensation cost for restricted stock unit awards is measured at fair value and is recognized as an expense over the requisite service period. During the years ended September 30, 2025 and 2024, the Company recognized share-based compensation expense related to vested restricted stock units of $195,000 and $158,000, respectively. There was no impact on income taxes for the years ended September 30, 2025 and 2024 due to a net operating loss and net operating loss carryforwards with a full valuation allowance in the relevant taxing jurisdiction. As of September 30, 2025, the total remaining unrecognized compensation cost related to nonvested restricted stock units was $151,000, which is expected to be recognized over the weighted-average remaining requisite service period of 1.5 years.
Common Stock Issued for Services
On September 29, 2025, the Board approved and ratified a common stock grant to directors Kenneth Grossman and Joshua Horowitz for their services on behalf of the Company and the Board pertaining to the various legal actions between Ned L. Sherwood and certain of his affiliates and the Company and the 2025 shareholder proxy contest. Each director was granted 65,000 shares of Barnwell common stock and the total value of the all the shares granted was $177,000 which was valued using the closing price of Barnwell's common stock on September 29, 2025, the date of grant.
Limited-Duration Shareholder Rights Plan
On January 26, 2025, the Board adopted a shareholder rights plan and declared a dividend of one right (a “Right”) in respect of each of the Company’s issued and outstanding shares of common stock, par value $0.50 per share (“Common Stock”). The dividend was payable to the shareholders of record at the close of business on February 7, 2025. Each Right initially entitled the registered holder, subject to the terms of the Rights Agreement (as defined below), to purchase from the Company one share of Common Stock, at a price equal to $9.00, subject to certain adjustments (as adjusted from time to time, the “Exercise Price”). The terms of the Rights are set forth in the Rights Agreement, dated as of January 26, 2025 (as it may be amended from time to time, the “Rights Agreement”), by and between the Company and Broadridge Corporate Issuer Solutions, LLC, as rights agent (or any successor rights agent, the “Rights Agent”).
In general terms, the Rights Agreement imposes significant dilution upon any person or group (other than the Company or certain related persons) that is or becomes the beneficial owner of 20% (the “Triggering Percentage”) or more of the Company’s outstanding Common Stock without the prior approval of the Board. A person or group that becomes the beneficial owner of the Triggering Percentage or more is called an “Acquiring Person.” Any Rights held by an Acquiring Person will be null and void and may not be exercised. Shareholders that beneficially own the Triggering Percentage or more of the Company’s outstanding Common Stock on the date the plan is adopted, are not considered Acquiring Persons; however, such Shareholders generally may not acquire, or obtain the right to acquire, beneficial ownership of 0.25% or more additional shares of the Company’s outstanding Common Stock. The term “beneficial ownership” is defined in the Rights Agreement and includes, among other things, certain securities that may be exercised or converted into shares of Common Stock and certain derivative arrangements.
The Rights will expire prior to the earliest of (i) the close of business on January 26, 2026 (subject to the shareholders of the Company approving an extension of the Rights Agreement through a date on or prior to January 26, 2028); (ii) the time at which the Rights are redeemed pursuant to the Rights Agreement; (iii) the time at which the Rights are exchanged pursuant to the Rights Agreement; and (iv) upon the occurrence of certain transactions.
This description of the Rights Agreement herein does not purport to be complete and is qualified in its entirety by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 27, 2025.
18. COMMITMENTS AND CONTINGENCIES
Incentive compensation plan
Barnwell established incentive compensation plans to compensate the four oil and natural gas segment Canadian executive officers. The value of the plans are directly related to our oil and natural gas segment's free cash flows from Canadian properties and the divestiture of Canadian oil and natural gas assets. As of September 30, 2025, Barnwell has accrued approximately $118,000 in bonus compensation under these plans and the amount is reported in “Accrued compensation” on the Consolidated Balance Sheet.
Environmental Matters
Because of the inherent uncertainties associated with environmental assessment and remediation activities, future expenses to remediate sites identified in the future, if any, could be incurred. Barnwell's management is not currently aware of any significant environmental contingent liabilities requiring disclosure or accrual.
Legal and Regulatory Matters
Barnwell is routinely involved in disputes with third parties that occasionally require litigation. In addition, Barnwell is required to maintain compliance with all current governmental controls and regulations in the ordinary course of business. Barnwell’s management is not aware of any claims or litigation involving Barnwell that are likely to have a material adverse effect on its results of operations, financial position or liquidity, other than the shareholder contest actions discussed elsewhere in this filing.
Other Matters
Barnwell is obligated to pay Nearco Enterprises Ltd. 10.4%, net of non-controlling interests' share, of Kaupulehu Developments’ gross receipts from real estate transactions. This fee represents compensation for promotion and marketing of Kaupulehu Developments’ property and were determined based on the estimated fair value of such services. These fees are included in general and administrative expenses.
Barnwell is obligated to pay its external real estate legal counsel’s estate 1.2%, net of non-controlling interests' share, of all Increment II payments received by Kaupulehu Developments for services provided by its external real estate legal counsel in the negotiation and closing of the Increment II transaction. These fees are included in general and administrative expenses.
Kaupulehu Developments is also obligated to pay an amount equal to 0.72% and 0.20% of the cumulative net profits of KD II to KD Development and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell, in compensation for the agreement of these parties to admit the new development partner for Increment II. Such compensation will be reflected as the obligation becomes probable and the amount of the obligation can be reasonably estimated.
19. INFORMATION RELATING TO THE CONSOLIDATED STATEMENTS OF CASH FLOWS
The following table details the effect of changes in current assets and liabilities on the Consolidated Statements of Cash Flows, and presents supplemental cash flow information:
Year ended September 30,
2025 2024
Increase (decrease) from changes in:
Receivables $ 191,000 $ 610,000
Income tax receivable 6,000 (3,000)
Other current assets 308,000 155,000
Accounts payable 458,000 1,017,000
Accrued compensation (247,000) (58,000)
Other current liabilities (492,000) 379,000
Increase from changes in current assets and liabilities $ 224,000 $ 2,100,000
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Income taxes paid, net of refunds $ 196,000 $ 71,000
Supplemental disclosure of non-cash financing activities:
Prepaid insurance funded directly by short-term premium financing borrowing $ 168,000 $ -
Capital expenditure accruals related to oil and natural gas acquisition and development decreased $2,136,000 during the year ended September 30, 2025 and increased $1,291,000 during the year ended September 30, 2024. Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations decreased $684,000 and $577,000 during the years ended September 30, 2025 and September 30, 2024, respectively.
20. RELATED PARTY TRANSACTIONS
Kaupulehu Developments is entitled to receive payments from the sales of lots and/or residential units by KD I and KD II. KD I and KD II are part of the Kukio Resort Land Development Partnerships in which Barnwell holds indirect 19.6% and 10.8% non-controlling ownership interests, respectively, accounted for under the equity method of investment. The percentage of sales payments are part of transactions which took place in 2004 and 2006 where Kaupulehu Developments sold its leasehold interests in Increment I and Increment II to KD I's and KD II's predecessors in interest, respectively, which was prior to Barnwell’s affiliation with KD I and KD II which commenced on November 27, 2013, the acquisition date of our ownership interest in the Kukio Resort Land Development Partnerships. Changes to the arrangement above, effective March 7, 2019, are discussed in Note 6.
No lots were sold during the year ended September 30, 2025. During the year ended September 30, 2024, Barnwell received $500,000 in percentage of sales payments from KD I from the sale of the last two single-family lots within Increment I.
On September 29, 2025, the Board approved and ratified a common stock grant to directors Kenneth Grossman and Joshua Horowitz for their services on behalf of the Company and the Board pertaining to the various legal actions between Ned L. Sherwood and certain of his affiliates and the Company and the 2025 shareholder proxy contest. Each director was granted 65,000 shares of Barnwell common stock and the total value of the all the shares granted was $177,000 which was valued using the closing price of Barnwell's common stock on September 29, 2025, the date of grant.
Barnwell Pension Plan
In the quarter ended June 30, 2025, the Pension Plan purchased shares of Barnwell common stock which resulted in the Pension Plan owning more than 5% of the Company's common shares outstanding. The Pension Plan has filed Schedule 13Ds with the Securities and Exchange Commission reporting its beneficial ownership of Barnwell common stock. As of September 30, 2025, the Pension Plan held 666,077 shares of Barnwell common stock. All the shares purchased by the Pension Plan were made on the open market through a brokerage account.
21. SUBSEQUENT EVENTS
Share-based Payment Arrangements
In October 2025, the Board of Directors of the Company granted a total of 133,335 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board. The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting date.
On October 27, 2025, Barnwell Industries, Inc. appointed Philip Patman, Jr. as the Company’s Executive Vice President - Finance and in connection with Mr. Patman’s appointment, the Company entered into an executive employment agreement with Mr. Patman, dated, and effective, as of October 27, 2025 (the “Employment Agreement”). Pursuant to the terms of the Employment Agreement, on October 27, 2025, Mr. Patman received the following awards which were issued pursuant to the Company’s Amended and Restated 2018 Equity Incentive Plan, as amended from time to time: a stock award of 83,207 shares of the Company’s common stock; a restricted stock unit award for 83,208 shares of the Company’s common stock (the “Initial RSU Award”); and an incentive stock option to purchase 185,000 shares of the Company’s common stock (the “Initial Stock Option” and, together with the Initial RSU Award, the “Initial Equity Awards”). Both Initial Equity Awards vest according to the following schedule: 34% of the total on October 27, 2026; 33% of the total on October 27, 2027; and 33% of the total on October 27, 2028. The Initial Stock Option has a term of ten years and an exercise price of $1.21 per share (the closing price of the Company’s common stock on October 27, 2025).
Investment in Kukio Resort Land Development Partnerships
In November 2025, Kaupulehu Developments entered into an agreement with Mr. David Johnston, the son of Mr. Terry Johnston, a partner in Kaupulehu Developments, to surrender any and all remaining rights for Increment II for $2,000,000 of which $70,000 was received. Additionally, the purchaser has the right to extend the closing by up to two years by making a $70,000 payment in each of the next two years, with those payments applied against the $2,000,000 purchase price. The closing of this transaction is entirely dependent on the purchaser and therefore may not happen.
Subsequent to fiscal 2025, pursuant to a unit purchase agreement KDK, of which Barnwell holds a 19.6% interest, agreed to sell KDK’s interests in Increment II to Mr. David Johnston for $2,109,000. The unit purchase agreement is subject to due diligence, and there is no certainty that the transaction will close. Furthermore, there is also no assurance on the timing or amounts that the general partner of KDK would distribute upon a closing.
Private Placement Offering
On November 24, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”), including certain directors of the board of directors of the Company pursuant to which the Company agreed to issue and sell an aggregate of: (i) 2,221,141 shares of its common stock, par value $0.50 per share (the “Common Stock”), and (ii) warrants (the “Common Warrants”) to purchase up to 1,029,104 shares of Common Stock (the “Warrant Shares”) in a private placement offering of the Company’s securities (the “Offering”). The directors of the Company participating as Purchasers in the Offering and certain other Purchasers did not receive any Common Warrants.
The price of the shares of Common Stock sold in the private placement was $1.10 per share of Common Stock. The Common Warrants have an exercise price of $1.65 per share, can be exercised starting one hundred eighty (180) days following the date of closing of the Offering (the “Initial Exercise Date”) and will be exercisable for three years following the Initial Exercise Date.
The Offering closed on November 28, 2025 (the “Closing Date”) and the gross proceeds received from the Offering was approximately $2,443,000.
Pursuant to the terms of the Purchase Agreement, the Company has agreed to register for resale the shares of Common Stock and the Warrant Shares and plans to file an initial registration statement covering such resale no later than forty-five (45) days after the Closing Date.
In connection with the transaction, and conditioned upon the Closing, one of the Purchasers, Mr. Bradley L. Radoff, had the right to appoint a director to the Company’s board of directors. Accordingly, the Company has appointed Mr. Radoff’s designee, Mr. Joshua E. Schechter, effective November 28, 2025, to the Board of Directors to serve until the Company’s next annual meeting of stockholders.
The foregoing descriptions of the Purchase Agreement and the Common Warrants are not complete and are qualified in their entirety by reference to the full text of the Form of Purchase Agreement and the Form of Common Warrant, which are attached as Exhibit 10.1 and 4.1, respectively, to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 26, 2025.
22. SUMMARY OF SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
Disclosure is not required as Barnwell qualifies as a smaller reporting company.
23. SUPPLEMENTARY OIL AND NATURAL GAS INFORMATION (UNAUDITED)
The following tables summarize information relative to Barnwell’s oil and natural gas operations, which are conducted in Canada and was, until August 8, 2025, conducted in the U.S. states of Oklahoma and Texas (see Note 7). Proved reserves are the estimated quantities of oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. Proved producing oil and natural gas reserves are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods. The estimated net interests in total proved and proved producing reserves are based upon subjective engineering judgments and may be affected by the limitations inherent in such estimations. The process of estimating reserves is subject to continual revision as additional information becomes available as a result of drilling, testing, reservoir studies and production history. There can be no assurance that such estimates will not be materially revised in subsequent periods.
(A) Oil and Natural Gas Reserves
The following tables summarizes changes in the estimates of Barnwell’s net interests in total proved reserves of oil and natural gas liquids and natural gas, which are now all located in Canada. All of the information regarding reserves in this Form 10-K is derived from the report of our independent petroleum reserve engineers, InSite, and is included as an Exhibit to this Form 10-K. The Company emphasizes that reserve estimates are inherently imprecise and that estimates of new discoveries and undeveloped locations are more imprecise than estimates of established proved producing oil and natural gas properties. Accordingly, these estimates are expected to change as future information becomes available.
Proved oil and natural gas reserves are the estimated quantities of oil and natural gas that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under economic and operating conditions (i.e., prices and costs) existing at the time the estimate is made.
Oil
(Bbls)
Canada United States Total
Proved reserves:
Balance at September 30, 2023 787,000 112,000 899,000
Revisions of previous estimates 222,000 (3,000) 219,000
Extensions, discoveries and other additions 117,000 - 117,000
Acquisitions of reserves 4,000 - 4,000
Less sales of reserves (54,000) - (54,000)
Less production (184,000) (19,000) (203,000)
Balance at September 30, 2024 892,000 90,000 982,000
Revisions of previous estimates (65,000) (1,000) (66,000)
Less sales of reserves (20,000) (79,000) (99,000)
Less production (164,000) (10,000) (174,000)
Proved Reserves, September 30, 2025 643,000 - 643,000
NGL
(Bbls)
Canada United States Total
Proved reserves:
Balance at September 30, 2023 150,000 177,000 327,000
Revisions of previous estimates 70,000 15,000 85,000
Extensions, discoveries and other additions 15,000 - 15,000
Acquisitions of reserves 2,000 - 2,000
Less sales of reserves (2,000) - (2,000)
Less production (36,000) (28,000) (64,000)
Balance at September 30, 2024 199,000 164,000 363,000
Revisions of previous estimates 44,000 (22,000) 22,000
Less sales of reserves (35,000) (129,000) (164,000)
Less production (43,000) (13,000) (56,000)
Proved Reserves, September 30, 2025 165,000 - 165,000
Natural Gas
(Mcf)
Canada United States Total
Proved reserves:
Balance at September 30, 2023 5,010,000 1,691,000 6,701,000
Revisions of previous estimates 826,000 82,000 908,000
Extensions, discoveries and other additions 313,000 - 313,000
Acquisitions of reserves 16,000 - 16,000
Less sales of reserves (139,000) - (139,000)
Less production (1,085,000) (259,000) (1,344,000)
Balance at September 30, 2024 4,941,000 1,514,000 6,455,000
Revisions of previous estimates (263,000) (66,000) (329,000)
Less sales of reserves (283,000) (1,309,000) (1,592,000)
Less production (966,000) (139,000) (1,105,000)
Proved Reserves, September 30, 2025 3,429,000 - 3,429,000
Total Equivalent Reserves
(Boe)
Canada United States Total
Proved reserves:
Balance at September 30, 2023 1,772,000 571,000 2,343,000
Revisions of previous estimates 430,000 27,000 457,000
Extensions, discoveries and other additions 184,000 - 184,000
Acquisitions of reserves 9,000 - 9,000
Less sales of reserves (79,000) - (79,000)
Less production (401,000) (90,000) (491,000)
Balance at September 30, 2024 1,915,000 508,000 2,423,000
Revisions of previous estimates (65,000) (37,000) (102,000)
Less sales of reserves (102,000) (425,000) (527,000)
Less production (368,000) (46,000) (414,000)
Proved Reserves, September 30, 2025 1,380,000 - 1,380,000
The following tables summarize changes in the estimates of Barnwell’s net interests in total proved undeveloped reserves and presents the balances of total proved developed reserves of oil and natural gas liquids and natural gas, which are now all located in Canada. Proved developed oil and natural gas reserves are proved reserves that can be expected to be recovered through existing wells and equipment in place and under operating methods being utilized at the time the estimates were made.
Oil
(Bbls)
Canada United States Total
Proved undeveloped reserves:
Balance at September 30, 2023 92,000 - 92,000
Conversion to proved developed reserves (98,000) - (98,000)
Revisions of previous estimates 6,000 - 6,000
Additions due to a new well 109,000 - 109,000
Balance at September 30, 2024 109,000 - 109,000
Revisions of previous estimates (109,000) - (109,000)
Proved Undeveloped Reserves, September 30, 2025 - - -
Proved Developed Reserves, September 30, 2024 783,000 90,000 873,000
Proved Developed Reserves, September 30, 2025 643,000 - 643,000
NGL
(Bbls)
Canada United States Total
Proved undeveloped reserves:
Balance at September 30, 2023 18,000 - 18,000
Conversion to proved developed reserves (10,000) - (10,000)
Revisions of previous estimates (8,000) - (8,000)
Additions due to a new well 23,000 - 23,000
Balance at September 30, 2024 23,000 - 23,000
Revisions of previous estimates (23,000) - (23,000)
Proved Undeveloped Reserves, September 30, 2025 - - -
Proved Developed Reserves, September 30, 2024 176,000 164,000 340,000
Proved Developed Reserves, September 30, 2025 165,000 - 165,000
Natural Gas
(Mcf)
Canada United States Total
Proved undeveloped reserves:
Balance at September 30, 2023 608,000 - 608,000
Conversion to proved developed reserves (279,000) - (279,000)
Revisions of previous estimates (330,000) - (330,000)
Additions due to a new well 641,000 - 641,000
Balance at September 30, 2024 640,000 - 640,000
Revisions of previous estimates (640,000) - (640,000)
Proved Undeveloped Reserves, September 30, 2025 - - -
Proved Developed Reserves, September 30, 2024 4,301,000 1,514,000 5,815,000
Proved Developed Reserves, September 30, 2025 3,429,000 - 3,429,000
Total Equivalent Reserves
(Boe)
Canada United States Total
Proved undeveloped reserves:
Balance at September 30, 2023 211,000 - 211,000
Conversion to proved developed reserves (155,000) - (155,000)
Revisions of previous estimates (56,000) - (56,000)
Additions due to a new well 239,000 - 239,000
Balance at September 30, 2024 239,000 - 239,000
Revisions of previous estimates (239,000) - (239,000)
Proved Undeveloped Reserves, September 30, 2025 - - -
Proved Developed Reserves, September 30, 2024 1,676,000 508,000 2,184,000
Proved Developed Reserves, September 30, 2025 1,380,000 - 1,380,000
(B) Capitalized Costs Relating to Oil and Natural Gas Producing Activities
All capitalized costs relating to oil and natural gas producing activities in Canada and the U.S. are summarized as follows:
September 30, 2025
Canada United States Total
Proved properties $ 74,511,000 $ - $ 74,511,000
Unproved properties - - -
Total capitalized costs 74,511,000 - 74,511,000
Accumulated depletion, depreciation, and impairment 65,358,000 - 65,358,000
Net capitalized costs $ 9,153,000 $ - $ 9,153,000
September 30, 2024
Canada United States Total
Proved properties $ 76,963,000 $ 6,594,000 $ 83,557,000
Unproved properties - - -
Total capitalized costs 76,963,000 6,594,000 83,557,000
Accumulated depletion, depreciation, and impairment 64,402,000 2,601,000 67,003,000
Net capitalized costs $ 12,561,000 $ 3,993,000 $ 16,554,000
(C) Costs Incurred in Oil and Natural Gas Property Acquisition, Exploration and Development
Year ended September 30, 2025
Canada United States Total
Acquisition of properties:
Proved $ - $ - $ -
Unproved - - -
Exploration costs 22,000 - 22,000
Development costs 234,000 - 234,000
Total $ 256,000 $ - $ 256,000
Year ended September 30, 2024
Canada United States Total
Acquisition of properties:
Proved $ 146,000 $ - $ 146,000
Unproved - - -
Exploration costs 34,000 - 34,000
Development costs 3,865,000 183,000 4,048,000
Total $ 4,045,000 $ 183,000 $ 4,228,000
(D) Results of Operations for Oil and Natural Gas Producing Activities
Year ended September 30, 2025
Canada United States Total
Net revenues $ 12,392,000 $ 1,171,000 $ 13,563,000
Production costs (8,546,000) (420,000) (8,966,000)
Depletion (2,801,000) (343,000) (3,144,000)
Impairment of assets - (865,000) (865,000)
Pre-tax results of operations (1)
1,045,000 (457,000) 588,000
Estimated income tax expense (2)
214,000 10,000 224,000
Results of operations (1)
$ 831,000 $ (467,000) $ 364,000
Year ended September 30, 2024
Canada United States Total
Net revenues $ 15,093,000 $ 2,303,000 $ 17,396,000
Production costs (9,230,000) (619,000) (9,849,000)
Depletion (4,139,000) (808,000) (4,947,000)
Impairment of assets (2,164,000) (721,000) (2,885,000)
Pre-tax results of operations (1)
(440,000) 155,000 (285,000)
Estimated income tax expense (2)
320,000 20,000 340,000
Results of operations (1)
$ (760,000) $ 135,000 $ (625,000)
_________________
(1) Before general and administrative expenses, interest expense, and foreign exchange gains and losses.
(2) Estimated income tax expense includes changes to the deferred income tax valuation allowance necessary for the portion of Canadian and U.S. federal tax law deferred tax assets that may not be realizable.
(E) Standardized Measure, Including Year-to-Year Changes Therein, of Estimated Discounted Future Net Cash Flows
The following tables utilize reserve and production data estimated by independent petroleum reserve engineers. The information may be useful for certain comparison purposes but should not be solely relied upon in evaluating Barnwell or its performance. Moreover, the projections should not be construed as realistic estimates of future cash flows, nor should the standardized measure be viewed as representing current value.
The estimated future cash flows at September 30, 2025 and 2024 were based on average sales prices in effect on the first day of the month for the preceding twelve month period in accordance with SEC Release No. 33-8995. The future production and development costs represent the estimated future expenditures that we will incur to develop and produce the proved reserves, assuming continuation of existing economic conditions. The future income tax expenses were computed by applying statutory income tax rates in existence at September 30, 2025 and 2024 to the future pre-tax net cash flows relating to proved reserves, net of the tax basis of the properties involved.
Material revisions to reserve estimates may occur in the future, development and production of the oil and natural gas reserves may not occur in the periods assumed and actual prices realized and actual costs incurred are expected to vary significantly from those used. Management does not rely upon this information in making investment and operating decisions; rather, those decisions are based upon a wide range of factors, including estimates of probable reserves as well as proved reserves and price and cost assumptions different than those reflected herein.
Barnwell has included all abandonment, decommissioning and reclamation costs and inactive well costs in accordance with best practice recommendations into the Company’s reserve reports.
Standardized Measure of Discounted Future Net Cash Flows
Year ended September 30, 2025
Canada United States Total
Future cash inflows $ 48,624,000 $ - $ 48,624,000
Future production costs (30,967,000) - (30,967,000)
Future development costs (50,000) - (50,000)
Future income tax expenses (972,000) - (972,000)
Future net cash flows excluding abandonment, decommissioning and reclamation 16,635,000 - 16,635,000
Future abandonment, decommissioning and reclamation (18,007,000) - (18,007,000)
Future net cash flows (1,372,000) - (1,372,000)
10% annual discount for timing of cash flows 8,042,000 - 8,042,000
Standardized measure of discounted future net cash flows $ 6,670,000 $ - $ 6,670,000
Year ended September 30, 2024
Canada United States Total
Future cash inflows $ 75,293,000 $ 12,043,000 $ 87,336,000
Future production costs (42,601,000) (5,080,000) (47,681,000)
Future development costs (2,795,000) - (2,795,000)
Future income tax expenses (2,666,000) (161,000) (2,827,000)
Future net cash flows excluding abandonment, decommissioning and reclamation 27,231,000 6,802,000 34,033,000
Future abandonment, decommissioning and reclamation (18,026,000) (50,000) (18,076,000)
Future net cash flows 9,205,000 6,752,000 15,957,000
10% annual discount for timing of cash flows 2,697,000 (2,804,000) (107,000)
Standardized measure of discounted future net cash flows $ 11,902,000 $ 3,948,000 $ 15,850,000
Changes in the Standardized Measure of Discounted Future Net Cash Flows
Year ended September 30,
2025 2024
Beginning of year $ 15,850,000 $ 19,913,000
Sales of oil and natural gas produced, net of production costs (4,597,000) (7,547,000)
Net changes in prices and production costs, net of royalties and wellhead taxes (2,132,000) (12,201,000)
Extensions and discoveries - 1,725,000
Net change due to purchases and sales of minerals in place (3,715,000) (895,000)
Changes in future development costs 2,610,000 170,000
Revisions of previous quantity estimates (1,618,000) 9,478,000
Net change in income taxes (854,000) 1,786,000
Accretion of discount 1,156,000 3,359,000
Other - changes in the timing of future production and other 354,000 76,000
Other - net change in Canadian dollar translation rate (384,000) (14,000)
Net change (9,180,000) (4,063,000)
End of year $ 6,670,000 $ 15,850,000

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have established disclosure controls and procedures to ensure that material information relating to Barnwell, including its consolidated subsidiaries, is made known to the officers who certify Barnwell’s financial reports and to other members of executive management and the Board of Directors.
As of September 30, 2025, an evaluation was carried out by Barnwell’s Chief Executive Officer and Chief Financial Officer of the effectiveness of Barnwell’s disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that Barnwell’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) were effective as of September 30, 2025 to ensure that information required to be disclosed by Barnwell in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Exchange Act and the rules thereunder.
Management’s Annual Report on Internal Control Over Financial Reporting
Barnwell’s management is responsible for establishing and maintaining adequate internal control over financial reporting for Barnwell, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of Barnwell’s management, including our Chief Executive Officer and Chief Financial Officer, Barnwell conducted an evaluation of the effectiveness of its internal control over financial reporting using criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the report entitled Internal Control - Integrated Framework (2013) (the “COSO Framework”). Based on this evaluation under the COSO Framework, management concluded that its internal control over financial reporting was effective as of September 30, 2025.
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Pursuant to Item 308(b) of Regulation S-K, management’s report is not subject to attestation by our independent registered public accounting firm because the Company is neither an “accelerated filer” nor a “large accelerated filer” as those terms are defined by the SEC.
Changes in Internal Control Over Financial Reporting
There was no change in Barnwell’s internal control over financial reporting during the quarter ended September 30, 2025 that materially affected, or is reasonably likely to materially affect, Barnwell’s internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
During the three months ended September 30, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The table below identifies our current directors.
Name Position Held with the Company Age
Kenneth S. Grossman 1, 2, 3, 4A
Chairman of the Board of Directors, Director 69
Craig D. Hopkins 2
Director, Chief Executive Officer, President 52
Joshua S. Horowitz 1, 3A, 4
Director 48
Philip J. McPherson 1A, 2A
Director 51
Philip F. Patman Director, Executive Vice President - Finance 57
Joshua E. Schechter
Director
1A Chair of the Audit Committee
1 Member of the Audit Committee
2A Chair of the Reserves Committee
2 Member of the Reserves Committee
3A Chair of the Compensation Committee
3 Member of the Compensation Committee
4A Chair of the Nominating Committee
4 Member of the Nominating Committee
Business Experience
Kenneth S. Grossman1 - Director since 2020. Vice Chairman of the Board of the Company since April 1, 2024 and from May 11, 2021 to June 30, 2022. Chairman of the Board of the Company from January 21, 2023 to March 31, 2024 and from April 15, 2020 to May 10, 2021. Investor and attorney specializing in companies undergoing and/or emerging from restructuring or reorganization; Senior Managing Director of Steppingstone Group, LLC. Mr. Grossman has been engaged as a professional investor and the management of capital as a buy-side principal since 1990. Mr. Grossman has served as an independent director of both private and public companies, and as a member of creditor, bank group and shareholder committees for other businesses and has extensive experience in advising investors as well as leading investors and partners with respect to distressed and other capital-challenged “special situation” companies. Mr. Grossman’s experience includes a strong network of relationships and management roles involving large portfolios in this investment sector maintained by multi-strategy and arbitrage firms. Admitted to the New York Bar in 1982, Mr. Grossman practiced law with Shea & Gould until 1989, where he specialized in bankruptcy, creditor’s rights and commercial litigation. More recently, Mr. Grossman utilized that experience in leadership roles and as a Director of Lehman Brothers Special Finance, Inc. and Signature Group Holdings, Inc. (formerly Fremont General Corporation), as they emerged from Chapter 11 bankruptcy. Mr. Grossman is currently a board member and/or special advisor for Concise Capital Management and a director of Performance Sports Group, Inc., Buffalo Armory, LLC and Nebraska Book Co, Inc.
1 This director is independent as defined in Section 803(A) of the NYSE American listing standards.
Joshua S. Horowitz2 - Portfolio Manager at Palm Management (US) LLC. Mr. Horowitz has held senior positions at Inverlochy Capital, an asset management firm, and Berggruen Holdings, the family office of Nicolas Berggruen. He began his career at Crossway Partners, a value strategy investment partnership. Mr. Horowitz holds a BS in Management, magna cum laude, from Binghamton University and also studied at the Bath School of Management in the United Kingdom. Mr. Horowitz also earned a NACD CERT Certificate in Cyber-Risk Oversight, issued by Carnegie Mellon University. Mr. Horowitz previously served as a Director of The Lincoln General Insurance Company (private), as well as 1347 Capital Corp (Nasdaq: TFSC), and is currently Chairman of the Board of Limbach Holdings (Nasdaq: LMB), a leading mechanical engineering concern. Since December 2023, he has served as Chairman of the Board of BK Technologies Corporation (NYSE: BKTI), a wireless communications company focused on the public safety market. He has also served on the Board of NeuroMetrix (Nasdaq: NURO), a non-invasive medical device concern since April 2024. Mr. Horowitz formerly served on the Board of 1347 Property Insurance Holdings, Inc. (Nasdaq: PIH) and Minim, Inc. (Nasdaq: MINM), and was Interim Chairman of the Board of Birner Dental Management Services, Inc. (OTC: BDMS), where he led the Company’s sale to Mid Atlantic Dental Partners. Mr. Horowitz also was a Board Observer at Biomerica, Inc. (Nasdaq: BMRA). Mr. Horowitz’s background in management and the investment community gives him significant insight into corporate operations, investment opportunities, commodities and business issues facing the Company and his experience on numerous boards bring significant strategic, consensus-building and management skills to the Company.
Philip J. McPherson2 - Director since 2025. Director from April 2020 to April 2023. Director from April 2020 to April 2023. Vice President of Capital Markets, Riot Blockchain, Inc. since March 1, 2021. Chief Financial Officer, Secretary, Treasurer and a director of Citadel Exploration, Inc. (OTCMKTS: COIL), a publicly traded energy company engaged in the exploration and development of oil and natural gas properties, from September 2012 to March 1, 2021, with nearly two decades of experience in the capital markets and financial services sectors. Mr. McPherson was also appointed as Interim Chief Executive Officer of Citadel Exploration in May 2019. He started his career as a retail stockbroker with Mission Capital in 1997 and became partner before it was acquired by oil and gas boutique C. K. Cooper & Company. At C.K. Cooper, Mr. McPherson was a research analyst specializing in small cap exploration and production companies. In 2007, he joined Global Hunter Securities as a partner and managing director of the energy research group. During his Wall Street career, Mr. McPherson was presented the Wall Street Journal “Best on the Street” Award and was named a Zack’s 5-Star Analyst for three consecutive years. He is a recognized expert on California E&P firms. Mr. McPherson received his Bachelors Degree in Economics from East Carolina University.
Philip F. Patman, Jr. - Director since 2025. Licensed attorney in the State of Texas with more than two decades of global finance, operations, and capital markets leadership across oil and gas, power and renewables, industrial technology, and digital infrastructure. His background includes public and private company CFO roles, board-level advisory work, execution of equity and debt financings, restructurings, asset sales, joint ventures, and cross-border M&A. He has built and led finance organizations, overseen FP&A, treasury, investor relations, risk management, and multi-jurisdictional reporting, and has partnered with operating teams to drive cost discipline and cash-flow generation. Mr. Patman’s background includes senior roles at Pantheon Resources plc, MacroFab, Soluna Holdings, VAALCO Energy, PTT Exploration & Production, Ameresco, earlier work in independent power and project finance, and private equity/infrastructure investing. Mr. Patman holds a B.A. from the University of Texas at Austin Plan II Honors program, and a Juris Doctor from the University of Houston Law Center.
2 This director is independent as defined in Section 803(A) of the NYSE American listing standards.
Joshua E. Schechter3 - Director since 2025. Private Investor. Mr. Schechter serves as a director of Pursuit Attractions and Hospitality, Inc., where he is chairman of the board, and Lifecore Biomedical, Inc., where he is chairman of the nominating and governance committee. Mr. Schechter also served as a director of Bed Bath & Beyond Inc. (formerly NASDAQ: BBBY), a retailer of domestic merchandise and home furnishings, from May 2019 through June 2023, as well as being a member of its Audit Committee. Mr. Schechter earned a Master of Public Administration in Professional Accounting and a Bachelor of Business Administration from The University of Texas at Austin.
Named Executive Officers of the Company
The following table sets forth the names and ages of all Named Executive Officers of the Company during fiscal 2025, their positions and offices with the Company and the period during which each has served.
Name Age Position with the Company
Craig D. Hopkins 52 Director since September 2025. Chief Executive Officer and President since April 1, 2024. President of Octavian Oil, Ltd. since March 1, 2017, President and Chief Operating Officer of Barnwell of Canada, Limited since July 1, 2020. Octavian Oil, Ltd. and Barnwell of Canada, Limited are wholly-owned subsidiaries of Barnwell Industries, Inc.
Russell M. Gifford 71 Executive Vice President since December 1997, Treasurer since November 1986 and Chief Financial Officer since August 1985. Secretary from December 2002 to March 31, 2024. President of Water Resources International, Inc., a previously wholly-owned subsidiary of the Company, December 1999 to March 2025.
Board Meetings
The Board of Directors held fourteen meetings during the fiscal year ended September 30, 2025, all directors attended at least 75% of the meetings of the Board of Directors and of the committees of the Board of Directors on which each director served. The independent directors met on six occasions out of the presence of management during the fiscal year ended September 30, 2025.
Audit Committee
The members of the Audit Committee are Mr. McPherson, Chairman, and Messrs. Grossman and Horowitz. All of the members of the Audit Committee are independent (as independence is defined in Section 803(A) of the NYSE American listing standards). The Board of Directors has determined that the Audit Committee has an audit committee financial expert, Mr. McPherson, is a financial expert based on his experience as Chief Financial Officer of a public company. Mr. McPherson, while not a CPA, has in-depth financial and accounting expertise and has been determined by the Board of Directors to qualify as an Audit Committee financial expert. The Board of Directors has adopted a written charter for the Audit Committee, a copy of which is available on our website. The Audit Committee reviews the services of the independent accountants employed by the Company to audit the consolidated financial statements of the Company. The Audit Committee periodically reviews major issues regarding accounting and auditing principles and practices, the adequacy of internal controls that could affect the consolidated financial
3 This director is independent as defined in Section 803(A) of the NYSE American listing standards.
statements as well as all related party transactions and potential conflicts of interest. During the fiscal year ended September 30, 2025, the Audit Committee held four meetings.
Nominating Committee
The Board of Directors has a standing Nominating Committee which has a nominating committee charter, a copy of which is available on our website. The members of the Nominating Committee are Mr. Grossman, Chairman, and Mr. Horowitz. During the fiscal year ended September 30, 2025, the Nominating Committee held one meeting. The purpose of the Nominating Committee is to identify and select or recommend qualified nominees to be elected to the Board of Directors at the annual meeting of stockholders (consistent with criteria approved by the Board of Directors), identify, select or recommend qualified nominees to fill any vacancies on the Board of Directors or a committee thereof (consistent with criteria approved by the Board of Directors) and undertake such other duties and responsibilities as may from time to time be delegated by the Board of Directors to the Nominating Committee.
The Company does not have a specific policy regarding the diversity of the Board. Instead, the Board considers its overall composition when considering director candidates, including whether the Board has an appropriate combination of professional experience, skills, knowledge and variety of viewpoints and backgrounds in light of the Company’s current and expected future needs. The Board also believes that it is desirable for new candidates to contribute to a variety of viewpoints on the Board, which may be enhanced by a mix of different professional and personal backgrounds and experiences.
Reserves Committee
The members of the Reserves Committee are Mr. McPherson, Chairman, and Messrs. Grossman and Hopkins. During the fiscal year ended September 30, 2025, the Reserves Committee held one meeting.
Compensation Committee
The members of the Compensation Committee are Mr. Horowitz, Chairman, and Mr. Grossman. The Compensation Committee (i) determines the annual compensation of the Company’s Executive Officers; (ii) recommends, if appropriate, new employee benefit plans to the Board of Directors; (iii) administers all employee benefit plans; and (iv) makes such other determinations regarding compensation or benefits as may be necessary or advisable. The Compensation Committee held one meeting during the fiscal year ended September 30, 2025. The Board of Directors has adopted a written charter for the Compensation Committee, a copy of which is available on our website.
Executive Committee
The members of the Executive Committee are Mr. Horowitz, Chairman, and Mr. Grossman. During the fiscal year ended September 30, 2025, the Executive Committee held six meetings.
Code of Ethics
The Company has adopted a code of ethics that applies to all of our executive and non-executive employees. The code of ethics contains certain additional terms applicable to our Chief Executive Officer and Chief Financial Officer. The Company’s code of ethics may be found on the Company’s website at: www.brninc.com/ethics0304.pdf.
Beneficial Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires the Company’s officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file certain reports of beneficial ownership with the SEC. Based solely on the Company’s review of the copies of such forms it has received and written representations from certain reporting persons, the Company believes that all of its officers, directors and greater than 10% beneficial owners, complied with all Section 16(a) filing requirements applicable to them during the Company’s most recently completed fiscal year, except as noted below:
•Philip McPherson inadvertently filed a late Form 3 with respect to his initial statement of beneficial ownership. This report has since been filed.
•Kenneth Grossman inadvertently filed one late Form 4 reporting a common stock award granted on September 29, 2025. This report has since been filed.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The Summary Compensation Table below sets forth certain information regarding compensation paid during the fiscal years ended September 30, 2025 and September 30, 2024 to (1) Craig D. Hopkins, our Chief Executive Officer and President as of April 1, 2024 (2) Russell M. Gifford, our Executive Vice President, Chief Financial Officer and Treasurer, and who was our Secretary until March 31, 2024 and (3) Alexander C. Kinzler, our Secretary and General Counsel and who was our Chief Executive Officer, President and Chief Operating Officer until March 31, 2024.
No Named Executive Officer was granted an option award or non-equity incentive plan compensation in fiscal year 2025 or 2024 or received above-market or preferential earnings on compensation that was deferred on a basis that was not tax-qualified. As a result, such columns have been omitted.
Name and
Principal Position Year Salary ($) Bonus ($) Stock Awards
($) All Other Compensation
(s)4 Total ($)
Craig D. Hopkins
Chief Executive Officer and President5 2025 189,502 - 113,5206 - 303,022
2024 180,075 35,270 157,8007
- 373,145
Russell M. Gifford
Executive Vice President, Chief Financial Officer and Treasurer 2025 280,000 36,250 - - 316,250
2024 280,000 22,500 - - 302,500
Alexander C. Kinzler
Secretary and General Counsel8 2025 175,000 37,500 - 13,631 226,131
2024 175,000 22,500 - 11,361 208,861
Grants of Plan-Based Awards
Name Grant Date Number of Units (#)
Craig D. Hopkins May 16, 2024 60,000
4 This amount represents perquisites received with respect to medical insurance.
5 All ($) amounts with respect to Mr. Hopkins are the U.S. Dollar equivalent of compensation paid in Canadian Dollars. Mr. Hopkins became a Named Executive Officer as of April 1, 2024 when he was appointed as the Company’s Chief Executive Officer and President. Mr. Hopkins’s salary as Chief Executive Officer of the Company, effective April 1, 2024, is $188,945 which is the U.S. Dollar equivalent of C$265,000. His 2025 bonus is expected to be paid in restricted stock units.
6 Mr. Hopkins received a grant of 66,000 restricted stock units on January 9, 2025.
7 Mr. Hopkins received a grant of 60,000 restricted stock units on May 16, 2024.
8 Mr. Kinzler was Chief Executive Officer and President until March 31, 2024.
Outstanding Equity Awards at Fiscal Year-End 2025
The following Outstanding Equity Awards At Fiscal Year-End 2025 tables sets forth grants of stock options and grants of unvested stock awards outstanding on the last day of the fiscal year ended September 30, 2025 to each Named Executive Officer.
Option Awards
Name Number of Securities Underlying Unexercised Options
(#) Exercisable Number of Securities Underlying Unexercised Options
(#) Unexercisable Option Exercise
Price ($) Option Expiration
Date
Craig D. Hopkins 60,000 shares
of Common Stock - 3.33 02/2031
Russell M. Gifford 60,000 shares
of Common Stock - 3.33 02/2031
Alexander C. Kinzler 60,000 shares
of Common Stock - 3.66 02/2026
Stock Awards
Name Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($)
Craig D. Hopkins 60,0009 135,600
Russell M. Gifford - -
Alexander C. Kinzler - -
The Company maintains a defined benefit pension plan (“Pension Plan”) for its eligible U.S.-based employees to provide annual benefits payable on retirement. Eligibility is based upon attainment of age 21 and completion of one year of service. Benefits are calculated under a formula based upon years of service and the participant’s highest average annual compensation over 60 consecutive months of service. Since December 31, 2019, future benefit accruals for all participants under the Pension Plan have been frozen. Consequently, current participants in the Pension Plan no longer accrue new benefits under the Pension Plan and new employees of the Company are no longer eligible to enter the Pension Plan as participants. Mr. Kinzler and Mr. Gifford are participants in the Pension Plan.
The Company also has a Supplemental Executive Retirement Plan (“SERP”) in order to provide an additional incentive to the Company’s U.S.-based executive officers to remain with the Company. Since December 31, 2019, future benefit accruals for all participants under the SERP have been frozen. Consequently, current participants in the SERP no longer accrue new benefits under the SERP and new employees of the Company are no longer eligible to enter the SERP as participants. Mr. Kinzler and Mr. Gifford are participants in the SERP.
9 Mr. Hopkins received a grant of 60,000 restricted stock units on May 16, 2024. Such restricted stock units vest as follows: 20,000 on May 16, 2025; 20,000 on May 16, 2026; and 20,000 on May 16, 2027.
Director Compensation
Our non-employee directors receive cash compensation and equity compensation for their service on the Board of Directors. The compensation committee reviews the compensation of our non-employee directors periodically and recommends changes to the Board of Directors when it deems appropriate.
The following Director Compensation table sets forth information with regard to the Board of Directors (other than Mr. Hopkins, an officer of the Company), with regard to compensation paid to them during the fiscal year ended September 30, 2025.
No non-employee members of the Board of Directors earned any non-equity incentive plan compensation or nonqualified deferred compensation earnings in fiscal year 2024. As a result, the relevant columns have been omitted.
Name Fees Earned or Paid in Cash ($) Stock Awards ($) All Other Compensation Total ($)
Kenneth S. Grossman 50,000 134,80010 - 184,800
Joshua S. Horowitz 50,000 134,80010
- 50,000
Philip J. McPherson - - - -
Laurance E. Narbut11 20,533 - - 20,533
Douglas N. Woodrum12 31,250 - - 31,250
10 Represents a grant by the Board of Directors on October 24, 2024 of 26,455 restricted stock units valued at $50,000 to the independent directors of the Board of Directors as partial payment of fiscal 2025 director fees for their service as members of the Board of Directors from the period of October 1, 2024 to September 30, 2025 and a grant by the Board of Directors on September 29, 2025 of 65,000 shares of common stock to Messrs. Grossman and Horowitz in recognition of their extraordinary efforts with respect to various legal matters addressed by the Company during Fiscal 2025.
11 Laurance Narbut resigned from the Board of Directors effective as of February 19, 2025.
12 Douglas N. Woodrum was removed from the Board of Directors and all committees on which he served as a result of the Sherwood Group Consent Solicitation on May 16, 2025.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth information as of December 15, 2025, with respect to the beneficial ownership of the Common Stock, the sole voting security of the Company, by (i) each person known to the Company who beneficially owns more than 5% of the Common Stock, (ii) each director and nominee of the Company, (iii) the Named Executive Officers, and (iv) all directors and executive officers of the Company as a group.
Name and Address
of Beneficial Owner Amount and Nature of Beneficial Ownership13 Percent
Of Class
Joseph E. Magaro 401 Riversville Road
Greenwich, Connecticut 867,544 6.9%
Ned L. Sherwood 4731 North Highway A1A, Ste 213
Vero Beach, Florida 2,685,79214 24.1%
Bradley L. Radoff 272 Kirby Drive
Houston, Texas 1,120,18115 8.9%
Barnwell Industries, Inc. Employee Pension Plan Trust 1100 Alakea Street, Ste 500
Honolulu, Hawaii 629,525 5.0%
Alexander C. Kinzler 1100 Alakea Street, Ste 500
Honolulu, Hawaii 999,50016 8.0%
Joshua S. Horowitz 1100 Alakea Street, Ste 500
Honolulu, Hawaii 439,61917 3.5%
Joshua E. Schechter 1100 Alakea Street, Ste 500
Honolulu, Hawaii 39,84918 *
Russell M. Gifford 1100 Alakea Street, Ste 500
Honolulu, Hawaii 160,00019 1.3%
13 A person is deemed to be the beneficial owner of securities that such person can acquire as of and within the 60 days following the date of this table upon the exercise of options or the vesting of restricted stock units. Each beneficial owner’s percentage of ownership is determined by assuming that options and/or restricted stock units that are held by such person (but not those held by any other person) and which are exercisable or vest as of and within 60 days following the date of this table have been exercised or have vested. Except as indicated in the footnotes that follow, shares listed in the table are held with sole voting and investment power.
14 Represents shares held as of December 4, 2025, as reported on Schedule 13D filed by Ned L. Sherwood. According to such filing, Mr. Sherwood may be deemed to beneficially own 2,685,792 shares of Common Stock, which includes (i) 2,461,497 shares of Common Stock held by MRMP Managers LLC, of which Mr. Sherwood is the chief investment officer, and (ii) 224,295 shares of Common Stock held by Ned L. Sherwood Revocable Trust, of which Mr. Sherwood is the beneficiary and trustee.
15 Represents shares held as of November 24, 2025, as reported on Schedule 13D filed by Bradley L. Radoff. According to such filing, Mr. Radoff may be deemed to beneficially own 1,120,181 shares of Common Stock, which includes (i) 560,090 shares of Common Stock held by the Radoff Family Foundation, of which Mr. Radoff is a director, and (ii) 560,091 shares of Common Stock held by Mr. Radoff.
16 Includes 60,000 shares of Common Stock underlying stock options, all of which are currently exercisable.
17 Includes 315,276 shares held by Palm Global Small Cap Master Fund LP (“Palm Global”) and 124,343 shares held directly by Mr. Horowitz. Palm Management (US) LLC, who, as the investment manager of Palm Global, may be deemed to be a beneficial owner of the shares of Common Stock disclosed as directly owned by Palm Global. Due to his position with Palm Global and Palm Management (US) LLC, Mr. Horowitz may be deemed to be a beneficial owner of the shares of Common Stock disclosed as directly owned by Palm Global. Mr. Horowitz has expressly disclaimed such beneficial ownership except to the extent of his pecuniary interest therein. Mr. Horowitz also has restricted stock units representing a total of 77,878 shares of Common Stock, none of which vest within 60 days of the date of this table, and, as such, those restricted stock units are excluded from the share count.
18 Mr. Schechter also has restricted stock units representing a total of 43,860 shares of Common Stock, none of which vest within 60 days of the date of this table, and, as such, those restricted stock units are excluded from the share count.
19 Includes 60,000 shares of Common Stock underlying stock options, all of which are currently exercisable.
Kenneth S. Grossman 1100 Alakea Street, Ste 500
Honolulu, Hawaii 262,97120 2.1%
Philip F. Patman, Jr. 1100 Alakea Street, Ste 500
Honolulu, Hawaii 127,00321 1.0%
Craig D. Hopkins 1100 Alakea Street, Ste 500
Honolulu, Hawaii 127,00022 1.0%
Philip J. McPherson 1100 Alakea Street, Ste 500
Honolulu, Hawaii -23 *
All directors and executive officers as a group (6 persons) 1,155,94214
16.9%
________________________
* Represents less than 1% of the outstanding shares of Common Stock of the Company.
20 Includes 60,000 shares of Common Stock underlying stock options, all of which are currently exercisable. Mr. Grossman also has restricted stock units representing a total of 77,878 shares of Common Stock, none of which vest within 60 days of the date of this table, and, as such, those restricted stock units are excluded from the share count.
21 Mr. Patman also has restricted stock units representing a total of 92,554 shares of Common Stock, none of which vest within 60 days of the date of this table, and, as such, those restricted stock units are excluded from the share count. Mr. Patman also has stock options for 185,000 shares of Common Stock, none of which exercisable within 60 days of the date of this table, and, as such, those stock options are excluded from the share count.
22 Includes 60,000 shares of Common Stock underlying stock options, all of which are currently exercisable and restricted stock units representing a total of 22,000 shares of Common Stock which vest within 60 days of the date of this table. Mr. Hopkins also has restricted stock units representing a total of 84,000 shares of Common Stock, none of which vest within 60 days of the date of this table, and, as such, those restricted stock units are excluded from the share count.
23 Mr. McPherson has restricted stock units representing a total of 44,445 shares of Common Stock, none of which vest within 60 days of the date of this table, and, as such, those restricted stock units are excluded from the share count.
Equity Compensation Plan Information
The following table provides information about Barnwell's common stock that may be issued upon exercise of options and rights under Barnwell's existing equity compensation plan as of September 30, 2025:
(a) (b) (c)
Plan Category Number of
securities
to be issued
upon exercise
of outstanding options, warrants
and rights (1)
Weighted-
average
price of
outstanding
options,
warrants
and rights Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
Equity compensation plans approved by security holders 569,174 $3.38 751,724
Equity compensation plans not approved by security holders - - -
Total 569,174 $3.38 751,724
________________
(1) In addition to shares issuable upon exercise of stock options, includes 154,174 restricted stock units, issuable under the 2018 Equity Incentive Plan at a rate of one share for each restricted stock unit. The restricted stock units do not have an exercise price. Therefore, these awards are not included in the calculation of weighted average exercise price in column (b).

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
There were no transactions that occurred during fiscal years 2023 and 2024 in which, to our knowledge, the Company was or is a party, in which the amount involved exceeded the disclosure thresholds set forth in the applicable SEC rules and regulations, and in which any director, director nominee, executive officer, person known by us to be a holder of more than 5% of our Common Stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Report of the Audit Committee
The Audit Committee has reviewed and discussed the audited consolidated financial statements with management, and the Audit Committee has discussed with Weaver and Tidwell, L.L.P., the independent registered public accounting firm, the matters required to be discussed by PCAOB Auditing Standard No. 16, “Communications with Audit Committee; Related Amendments to PCAOB Standards; and Transitional Amendments to PCAOB AU Section 380.”, as such may be modified or supplemented. Weaver and Tidwell, L.L.P. has provided to the Company the written disclosures and the letter required by applicable PCAOB requirements regarding their communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Weaver and Tidwell, L.L.P. its independence. The committee also concluded that Weaver and Tidwell, L.L.P.’s performance of tax services to us and our affiliates, as pre-approved by the committee and described in the next section, does not impair Weaver and Tidwell, L.L.P.’s independence. Based upon its discussions with management and with Weaver and Tidwell, L.L.P., the Audit Committee has recommended to the Board of Directors that the audited
consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025.
Audit Fees
The aggregate fees billed to the Company by Weaver and Tidwell, L.L.P., the Company’s independent registered public accounting firm for professional services rendered in connection with the audit of the annual financial statements included in the Company’s Annual Report on Form 10-K, review of financial statements included in the Company’s Quarterly Reports on Form 10-Q and services to the Company in connection with statutory or regulatory filings or engagements for the fiscal year ended September 30, 2025 totaled $343,795. For the comparable services provided for the fiscal year ended September 30, 2024, the aggregate fees billed to the Company totaled $367,264.
Audit-Related Fees
For the fiscal years ended September 30, 2025 and September 30, 2024 the Company did not incur and Weaver and Tidwell, L.L.P., the Company’s independent registered public accounting firm, did not bill the Company for assurance and related services that are not reasonably related to the performance of the audit or review of the Company’s financial statements and classified above with audit fees.
Tax Fees
For the fiscal years ended September 30, 2025 and September 30, 2024 the Company did not incur and Weaver and Tidwell, L.L.P., the Company’s independent registered public accounting firm, did not bill the Company for professional services rendered in connection with tax compliance, tax advice and tax planning services.
All Other Fees
For the fiscal years ended September 30, 2025 and September 30, 2024 the Company did not incur and Weaver and Tidwell, L.L.P., the Company’s independent registered public accounting firm, did not bill the Company for fees other than Audit Fees.
Pre-approval Policies and Procedures
The Audit Committee pre-approves all services provided to the Company by the independent registered public accounting firm through the following policies and procedures: (1) the Audit Committee reviews with the Company’s independent registered public accounting firm its audit plan and report thereon, including estimated Audit Fees, Audit-Related Fees, Tax Fees and Other Fees; (2) upon review of such audit plan and estimated fees, the Audit Committee may pre-approve the provision of such products and services and the payment therefor; and (3) at subsequent meetings of the Audit Committee, the Audit Committee reviews the status of the provision of all products and services from the Company’s independent registered public accounting firm to the Company and payment therefor, and may pre-approve the provision of additional products and services as necessary.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
The following consolidated financial statements of Barnwell Industries, Inc. and its subsidiaries are included in Part II, Item 8:
Report of Independent Registered Public Accounting Firm - WEAVER AND TIDWELL, L.L.P. (PCAOB ID: 410)
Consolidated Balance Sheets - September 30, 2025 and 2024
Consolidated Statements of Operations - for the years ended September 30, 2025 and 2024
Consolidated Statements of Comprehensive Loss - for the years ended September 30, 2025 and 2024
Consolidated Statements of Equity - for the years ended September 30, 2025 and 2024
Consolidated Statements of Cash Flows - for the years ended September 30, 2025 and 2024
Notes to Consolidated Financial Statements
Schedules have been omitted because they were not applicable, not required, or the information is included in the consolidated financial statements or notes thereto.
(b) Exhibits
Exhibit
Number Description
3.1 Certificate of Incorporation, as amended (1)
3.2 Amended and Restated By-Laws (2)
4.1 Form of the Registrant’s certificate of common stock, par value $.50 per share (3)
4.2*
Description of Securities Registered Pursuant to Section 12 of The Securities Exchange Act of 1934
4.3 Rights Agreement, dated as of January 26, 2025, by and between Barnwell Industries, Inc. and Broadridge Corporate Issuer Solutions, LLC, as rights agent, which includes as Exhibit A the Form of Right Certificate. (22)
4.4 Amendment No. 1 to the Rights Agreement, dated as of February 6, 2025, by and between Barnwell Industries, Inc. and Broadridge Corporate Issuer Solutions, LLC, as Rights agent.(23)
4.5 Form of Common Warrant (26)
10.1 The Barnwell Industries, Inc. Employees’ Pension Plan (restated as of October 1, 1989) (4)
10.2 Form of Purchase and Sale Agreement dated February 13, 2004 by and between Kaupulehu Developments and WB KD Acquisition, LLC (5)
10.3 Agreement dated May 27, 2009 which became effective June 23, 2009 by and between Kaupulehu Developments and WB KD Acquisition, LLC and WB KD Acquisition II, LLC (6)
10.4 Limited Liability Limited Partnership Agreement of KD Kona 2013 LLLP dated November 27, 2013 (7)
10.5 Limited Liability Limited Partnership Agreement of KKM Makai, LLLP dated November 27, 2013 (8)
10.6 Agreement with KD Kaupulehu, LLLP to Release Retained Rights, dated as of March 7, 2019, between Kaupulehu Developments and KD Kaupulehu, LLLP (9)
10.7 Agreement with Respect to Retained Rights, dated as of March 7, 2019 between Kaupulehu Developments and KD Acquisition II, LP (10)
10.8#
Form of Option Agreement under Barnwell Industries, Inc. 2018 Equity Incentive Plan, as amended (11)
10.9 Asset Purchase and Sale Agreement, dated July 8, 2021, between Barnwell of Canada, Limited and Tourmaline Oil Corp. (12)
10.10 Cooperation and Support Agreement, dated January 27, 2021 (14)
10.11#
Amended and Restated 2018 Equity Incentive Plan (15)
10.12 Sales Agent Agreement, dated March 16, 2021 (16)
10.13 Purchase and Sale Agreement, dated as of December 12, 2022, between Barnwell Texas, LLC and Alchemist Energy LeaseCo, LP (17)
10.14#
Form of Stock Grant Award Agreement under Barnwell Industries, Inc. 2018 Equity Incentive Plan, as amended (18)
10.15#
Form of Director Restricted Stock Unit Award under Barnwell Industries, Inc. 2018 Equity Incentive Plan, as amended (19)
10.16#
Form of Employee Restricted Stock Unit Award under Barnwell Industries, Inc. 2018 Equity Incentive Plan, as amended (13)
10.17 Stock Purchase Agreement, dated March 14, 2025 (24)
10.18^
Purchase and Sale Agreement, dated August 8, 2025 (25)
10.19 Form of Securities Purchase Agreement (20)
19.1*
Statement of Company Policy on Insider Trading
21*
List of Subsidiaries
23.1*
Consent of InSite Petroleum Consultants Ltd.
23.2*
Consent of Weaver and Tidwell, L.L.P.
24.1*
Power of Attorney (included on signature page of this Annual Report on Form 10-K)
31.1*
Certification of Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certification of Chief Financial Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002
32**
Certification Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002
97 Barnwell Industries, Inc. Clawback Policy (21)
99.1*
Reserve Report Summary prepared by InSite Petroleum Consultants Ltd.
101.INS*
XBRL Instance Document
101.SCH*
XBRL Taxonomy Extension Schema Document
101.CAL*
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
__________________________________________________
* Filed herewith.
** Furnished herewith.
# Management contract or compensatory plan or arrangement.
^ Certain confidential information has been omitted from a portion of this exhibit..
(1) Incorporated by reference to Exhibit 3.1 to Registrant’s Form 10-Q for the quarterly period ended June 30, 2022.
(2) Incorporated by reference to Exhibit 3.2 to Registrant’s Form 8-K filed on September 15, 2025.
(3) Incorporated by reference to the registration statement on Form S-1 originally filed by the Registrant January 29, 1957 and as amended February 15, 1957 and February 19, 1957.
(4) Incorporated by reference to Registrant’s Form 10-K for the year ended September 30, 1989.
(5) Incorporated by reference to Exhibit 2.1 to Registrant’s Form 8-K filed on February 13, 2004.
(6) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q for the quarterly period ended June 30, 2009.
(7) Incorporated by reference to Exhibit 10.7 to Registrant’s Form 10-Q for the quarterly period ended December 31, 2013.
(8) Incorporated by reference to Exhibit 10.8 to Registrant’s Form 10-Q for the quarterly period ended December 31, 2013
(9) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q for the quarterly period ended March 31, 2019.
(10) Incorporated by reference to Exhibit 10.2 to Registrant’s Form 10-Q for the quarterly period ended March 31, 2019. Certain confidential information has been omitted from a portion of this exhibit.
(11) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q for the quarterly period ended March 31, 2021.
(12) Incorporated by reference to Exhibit 10.9 to Registrant’s Form 10-K for the year ended September 30, 2021.
(13) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on May 22, 2024.
(14) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on February 1, 2021.
(15) Incorporated by reference from Definitive Proxy 2022 Appendix A filed by the Registrant on March 24, 2022.
(16) Incorporated by reference to Exhibit 1.1 to Registrant’s Form 8-K filed on March 16, 2021.
(17) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed on February 13, 2023.
(18) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed on May 15, 2023.
(19) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on June 15, 2023.
(20) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed on November 26, 2025.
(21) Incorporated by reference to Exhibit 97 to Registrant’s Form 10-K for the year ended September 30, 2023.
(22) Incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed on January 27, 2025.
(23) Incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed on February 7, 2025.
(24) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed on May 15, 2025.
(25) Incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed on August 13, 2025.
(26) Incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed on November 26, 2025.