What changed in this filing

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Item 1. Financial Statements

2023-05-15 compared with 2023-02-13 · 251 added, 136 removed, 427 unchanged (48% of the section changed)

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2022 September 30, 2022

2023 September 30,

Current assets:

1 unchanged sentence

Accounts and other receivables, net of allowance for doubtful accounts of:

$ 249,000 at December 31, 2022;

$ 249,000 at March 31, 2023;

$ 231,000 at September 30, 2022

2,965,000 4,361,000

Income taxes receivable 13,000 —

Other current assets 3,043,000 2,932,000

9 unchanged sentences

Total property and equipment 83,584,000 74,806,000

Accumulated depletion, depreciation, and amortization ( 62,712,000 ) ( 61,205,000 )

Accumulated depletion, impairment, depreciation, and amortization ( 63,494,000 ) ( 61,205,000 )

Total property and equipment, net 20,090,000 13,601,000

18 unchanged sentences

authorized, 40,000,000 shares:

10,124,587 issued at December 31, 2022 and September 30, 2022

10,124,587 issued at March 31, 2023 and September 30, 2022

5,062,000 5,062,000

3 unchanged sentences

Treasury stock, at cost:

167,900 shares at December 31, 2022 and September 30, 2022

167,900 shares at March 31, 2023 and September 30, 2022

( 2,286,000 ) ( 2,286,000 )

Total stockholders’ equity

18,846,000 19,141,000

Non-controlling interests 18,000 20,000

6 unchanged sentences

Three months ended

March 31, Six months ended

2023 2022 2023 2022

Oil and natural gas $ 3,686,000 $ 5,133,000 $ 8,912,000 $ 9,053,000

11 unchanged sentences

6,477,000 5,903,000 13,238,000 11,112,000

Earnings before equity in income of affiliates and income taxes 750,000 245,000

(Loss) earnings before equity in income of affiliates and income taxes ( 1,238,000 ) 776,000 ( 488,000 ) 1,021,000

Equity in income of affiliates — 1,760,000 538,000 2,967,000

Earnings before income taxes 1,288,000 1,452,000

Income tax provision 79,000 112,000

Net earnings 1,209,000 1,340,000

(Loss) earnings before income taxes ( 1,238,000 ) 2,536,000 50,000 3,988,000

Income tax (benefit) provision ( 3,000 ) 138,000 76,000 250,000

Net (loss) earnings ( 1,235,000 ) 2,398,000 ( 26,000 ) 3,738,000

Net earnings attributable to non-controlling interests 2,000 346,000 122,000 613,000

Net earnings attributable to Barnwell Industries, Inc.

Net (loss) earnings attributable to Barnwell Industries, Inc.

$ ( 1,237,000 ) $ 2,052,000 $ ( 148,000 ) $ 3,125,000

Basic and diluted net earnings per common share attributable to Barnwell Industries, Inc.

Basic and diluted net (loss) earnings per common share attributable to Barnwell Industries, Inc.

stockholders $ ( 0.12 ) $ 0.21 $ ( 0.01 ) $ 0.33

4 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

Three months ended

Net earnings $ 1,209,000 $ 1,340,000

March 31, Six months ended

2023 2022 2023 2022

Net (loss) earnings $ ( 1,235,000 ) $ 2,398,000 $ ( 26,000 ) $ 3,738,000

Other comprehensive (loss) income:

3 unchanged sentences

Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $ 0

Total other comprehensive loss ( 18,000 ) ( 25,000 )

Total comprehensive income 1,191,000 1,315,000

( 20,000 ) — ( 40,000 ) —

Total other comprehensive (loss) income ( 20,000 ) 12,000 ( 38,000 ) ( 13,000 )

Total comprehensive (loss) income ( 1,255,000 ) 2,410,000 ( 64,000 ) 3,725,000

Comprehensive income attributable to non-controlling interests ( 2,000 ) ( 346,000 ) ( 122,000 ) ( 613,000 )

Comprehensive income attributable to Barnwell Industries, Inc.

Comprehensive (loss) income attributable to Barnwell Industries, Inc.

$ ( 1,257,000 ) $ 2,064,000 $ ( 186,000 ) $ 3,112,000

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three months ended December 31, 2022 and 2021

Three months ended March 31, 2023 and 2022

Outstanding Common

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income Treasury

Capital Retained Earnings Accumulated

Comprehensive Income Treasury

Stock Non-controlling

Interests Total

Balance at September 30, 2021 9,445,625 $ 4,807,000 $ 4,590,000 $ 2,356,000 $ 32,000 $ ( 2,286,000 ) $ 8,000 $ 9,507,000

Balance at December 31, 2021 9,446,783 $ 4,807,000 $ 4,846,000 $ 3,429,000 $ 7,000 $ ( 2,286,000 ) $ 24,000 $ 10,827,000

Net earnings — — — 2,052,000 — — 346,000 2,398,000

4 unchanged sentences

Issuance of common stock for services 437 — 1,000 — — — — 1,000

Issuance of common stock, net of costs 509,467 255,000 2,101,000 — — — — 2,356,000

Balance at March 31, 2022 9,956,687 $ 5,062,000 $ 7,121,000 $ 5,481,000 $ 19,000 $ ( 2,286,000 ) $ 64,000 $ 15,461,000

Balance at December 31, 2022 9,956,687 $ 5,062,000 $ 7,466,000 $ 8,660,000 $ 1,276,000 $ ( 2,286,000 ) $ 32,000 $ 20,210,000

Net (loss) earnings — — — ( 1,237,000 ) — — 2,000 ( 1,235,000 )

Distributions to non-controlling interests — — — — — — ( 16,000 ) ( 16,000 )

Share-based compensation — — 75,000 — — — — 75,000

Dividends declared, $ 0.015 per share

— — — ( 150,000 ) — — — ( 150,000 )

Retirement plans:

Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $ 0

— — — — ( 20,000 ) — — ( 20,000 )

Balance at March 31, 2023 9,956,687 $ 5,062,000 $ 7,541,000 $ 7,273,000 $ 1,256,000 $ ( 2,286,000 ) $ 18,000 $ 18,864,000

See Notes to Condensed Consolidated Financial Statements

BARNWELL INDUSTRIES, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Six months ended March 31, 2023 and 2022

Outstanding Common

Stock Additional

Capital Retained Earnings Accumulated

Comprehensive Income Treasury

Stock Non-controlling

Interests Total

Balance at September 30, 2021 9,445,625 $ 4,807,000 $ 4,590,000 $ 2,356,000 $ 32,000 $ ( 2,286,000 ) $ 8,000 $ 9,507,000

4 unchanged sentences

Share-based compensation — — 427,000 — — — — 427,000

Issuance of common stock for services 1,595 — 3,000 — — — — 3,000

Issuance of common stock, net of costs 509,467 255,000 2,101,000 — — — — 2,356,000

Balance at March 31, 2022 9,956,687 $ 5,062,000 $ 7,121,000 $ 5,481,000 $ 19,000 $ ( 2,286,000 ) $ 64,000 $ 15,461,000

Balance at September 30, 2022 9,956,687 $ 5,062,000 $ 7,351,000 $ 7,720,000 $ 1,294,000 $ ( 2,286,000 ) $ 20,000 $ 19,161,000

Net (loss) earnings — — — ( 148,000 ) — — 122,000 ( 26,000 )

Foreign currency translation adjustments, net of taxes of $ 0

— — — — 2,000 — — 2,000

Distributions to non-controlling interests — — — — — — ( 124,000 ) ( 124,000 )

Share-based compensation — — 190,000 — — — — 190,000

Dividends declared, $ 0.030 per share

3 unchanged sentences

— — — — ( 40,000 ) — — ( 40,000 )

Balance at December 31, 2022 9,956,687 $ 5,062,000 $ 7,466,000 $ 8,660,000 $ 1,276,000 $ ( 2,286,000 ) $ 32,000 $ 20,210,000

Balance at March 31, 2023 9,956,687 $ 5,062,000 $ 7,541,000 $ 7,273,000 $ 1,256,000 $ ( 2,286,000 ) $ 18,000 $ 18,864,000

See Notes to Condensed Consolidated Financial Statements

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

Six months ended

Cash flows from operating activities:

Net earnings $ 1,209,000 $ 1,340,000

Adjustments to reconcile net earnings to net cash

Net (loss) earnings $ ( 26,000 ) $ 3,738,000

Adjustments to reconcile net (loss) earnings to net cash

provided by operating activities:

5 unchanged sentences

Retirement benefits income ( 126,000 ) ( 136,000 )

Accretion of asset retirement obligation 194,000 159,000

Non-cash rent income ( 12,000 ) —

Deferred income tax (benefit) expense ( 12,000 ) 32,000

Accretion of asset retirement obligation 395,000 351,000

Deferred income tax benefit ( 57,000 ) ( 2,000 )

Asset retirement obligation payments ( 529,000 ) ( 363,000 )

4 unchanged sentences

Foreign currency gain ( 80,000 ) —

Decrease from changes in current assets and liabilities ( 241,000 ) ( 682,000 )

Increase (decrease) from changes in current assets and liabilities 365,000 ( 2,096,000 )

Net cash provided by operating activities 734,000 1,699,000

7 unchanged sentences

Advances to operators for capital expenditures ( 481,000 ) —

Net cash (used in) provided by investing activities ( 6,891,000 ) 194,000

Issuance of note receivable — ( 400,000 )

Net cash used in investing activities ( 7,370,000 ) ( 5,141,000 )

Cash flows from financing activities:

Distributions to non-controlling interests ( 124,000 ) ( 557,000 )

Net cash used in financing activities ( 108,000 ) ( 251,000 )

Payment of dividends ( 299,000 ) —

Proceeds from issuance of stock, net of costs — 2,356,000

Net cash (used in) provided by financing activities ( 423,000 ) 1,799,000

Effect of exchange rate changes on cash and cash equivalents 34,000 ( 10,000 )

Net (decrease) increase in cash and cash equivalents ( 6,068,000 ) 863,000

Net decrease in cash and cash equivalents ( 7,025,000 ) ( 1,653,000 )

Cash and cash equivalents at beginning of period 12,804,000 11,279,000

19 unchanged sentences

The Condensed Consolidated Balance Sheet as of September 30, 2022 has been derived from audited consolidated financial statements.

In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at December 31, 2022, results of operations, comprehensive income, equity and cash flows for the three months ended December 31, 2022 and 2021, have been made.

The results of operations for the period ended December 31, 2022 are not necessarily indicative of the operating results for the full year.

In the opinion of management, all adjustments (which include only normal recurring adjustments, with the exception of an out-of-period adjustment for the six months ended March 31, 2023 as described below) necessary to present fairly the financial position at March 31, 2023, results of operations, comprehensive (loss) income, and equity for the three and six months ended March 31, 2023 and 2022, and cash flows for the six months ended March 31, 2023 and 2022, have been made.

The results of operations for the period ended March 31, 2023 are not necessarily indicative of the operating results for the full year.

Out-of-Period Adjustment

During the three months ended December 31, 2022, errors were identified related to estimates of accrued oil and natural gas sales and accrued professional fees for the year ended September 30, 2022.

Accordingly, the Company recorded out-of-period adjustments in the three months ended December 31, 2022 for the rollover effect of those differences which were immaterial to the results of that quarter.

For the six months ended March 31, 2023, the rollover effect of those out-of-period adjustments both decreased oil and natural gas revenues and increased general and administrative expenses by a total of $ 147,000 , which accordingly increased our net loss before income taxes and net loss for the six months ended March 31, 2023 by the same amount.

The net earnings per basic and diluted share attributable to Barnwell stockholders would have been $ 0.02 lower for the year ended September 30, 2022 and the net loss per basic and diluted share attributable to Barnwell stockholders would have been $ 0.01 lower for the six months ended March 31, 2023 had the amounts been reflected in the periods to which they relate.

Based upon an evaluation of all relevant quantitative and qualitative factors, and after considering the provisions of Staff Accounting Bulletin (SAB) No.

99, “Materiality,” and SAB 108, management believes these out-of-period correcting adjustments were not material to the Company’s results for the six months ended March 31, 2023 or the Company’s trend of operating results.

We evaluated the impact of these out-of-period adjustments on the results of our previously issued financial statements for the year ended September 30, 2022 and first quarter ended December 31, 2022 and concluded that the impact was not material as well.

Use of Estimates in the Preparation of Condensed Consolidated Financial Statements

2 unchanged sentences

Actual results could differ significantly from those estimates.

Significant assumptions are required in the

valuation of deferred tax assets, asset retirement obligations, share-based payment arrangements, obligations for retirement plans, contract drilling estimated costs to complete, proved oil and natural gas reserves, and the carrying value of other assets, and such assumptions may impact the amount at which such items are recorded.

Significant assumptions are required in the valuation of deferred tax assets, asset retirement obligations, share-based payment arrangements, obligations for retirement plans, contract drilling estimated costs to complete, proved oil and natural gas reserves, and the carrying value of other assets, and such assumptions may impact the amount at which such items are recorded.

Significant Accounting Policies

4 unchanged sentences

The Company expects such advances to be applied by working interest partners against joint interest billings for its share of drilling operations within 90 days from when the advance is paid.

EARNINGS PER COMMON SHARE

Basic earnings per share is computed using the weighted-average number of common shares outstanding for the period.

Diluted earnings 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.

Potentially dilutive shares are excluded from the computation of diluted earnings per share if their effect is anti-dilutive.

Options to purchase 615,000 shares of common stock were excluded from the computation of diluted shares for the three months ended December 31, 2022 and 2021, as there inclusion would have been anti-dilutive.

Reconciliations between net earnings attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net earnings per share computations are detailed in the following tables:

Three months ended December 31, 2022

(LOSS) EARNINGS PER COMMON SHARE

Basic (loss) earnings per share is computed using the weighted-average number of common shares outstanding for the period.

Diluted (loss) earnings 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.

Potentially dilutive shares are excluded from the computation of diluted (loss) earnings per share if their effect is anti-dilutive.

Options to purchase 615,000 shares of common stock were excluded from the computation of diluted shares for the three and six months ended March 31, 2023 and 2022, respectively, as their inclusion would have been anti-dilutive.

Reconciliations between net (loss) earnings attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net (loss) earnings per share computations are detailed in the following tables:

Three months ended March 31, 2023

(Numerator) Shares

(Denominator) Per-Share

Basic net loss per share $ ( 1,237,000 ) 9,956,687 $ ( 0.12 )

Effect of dilutive securities -

common stock options — —

Diluted net loss per share $ ( 1,237,000 ) 9,956,687 $ ( 0.12 )

Six months ended March 31, 2023

(Numerator) Shares

(Denominator) Per-Share

Basic net loss per share $ ( 148,000 ) 9,956,687 $ ( 0.01 )

Effect of dilutive securities -

common stock options — —

Diluted net loss per share $ ( 148,000 ) 9,956,687 $ ( 0.01 )

Three months ended March 31, 2022

(Numerator) Shares

(Denominator) Per-Share

Basic net earnings per share $ 2,052,000 9,570,989 $ 0.21

2 unchanged sentences

Diluted net earnings per share $ 2,052,000 9,570,989 $ 0.21

Three months ended December 31, 2021

Net Earnings (Numerator) Shares

Six months ended March 31, 2022

(Numerator) Shares

(Denominator) Per-Share

12 unchanged sentences

Barnwell continues to have an indirect 19.6 % non-controlling ownership interest in KD Kukio Resorts, LLLP, KD Maniniowali, LLLP, and KD I.

The partnerships derive income from the sale of residential parcels in Increment I, of which only one lot remains to be sold as of December 31, 2022, as well as from commissions on real estate sales by the real estate sales office and revenues resulting from the sale of private club memberships.

The partnerships derive income from the sale of residential parcels in Increment I, of which only one lot remains to be sold as of March 31, 2023, as well as from commissions on real estate sales by the real estate sales office and revenues resulting from the sale of private club memberships.

Increment II is not yet under development, and there is no assurance that development of such acreage will occur.

No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.

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.

During the three months ended December 31, 2022, Barnwell received cash distributions of $ 538,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 478,000 , after distributing $ 60,000 to non-controlling interests.

During the three months ended December 31, 2021, Barnwell received cash distributions $ 1,207,000 from the Kukio

Resort Land Development Partnerships resulting in a net amount of $ 1,075,000 , after distributing $ 132,000 to non-controlling interests.

Equity in income of affiliates was $ 538,000 for the three months ended December 31, 2022, as compared to equity in income of affiliates of $ 1,207,000 for the three months ended December 31, 2021.

Barnwell has the right to receive distributions from the Kukio Resort Land Development Partnerships via its non-controlling interest 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 three months ended March 31, 2023.

During the three months ended March 31, 2022, Barnwell received cash distributions of $ 1,760,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 1,568,000 after distributing $ 192,000 to non-controlling interests.

During the six months

ended March 31, 2023, Barnwell received cash distributions of $ 538,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 478,000 , after distributing $ 60,000 to non-controlling interests.

During the six months ended March 31, 2022, Barnwell received cash distributions of $ 2,967,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 2,643,000 after distributing $ 324,000 to non-controlling interests.

Equity in income of affiliates was nil and $ 538,000 for the three and six months ended March 31, 2023, respectively, as compared to equity in income of affiliates of $ 1,760,000 and $ 2,967,000 for the three and six months ended March 31, 2022, respectively.

Summarized financial information for the Kukio Resort Land Development Partnerships is as follows:

Three months ended

Three months ended March 31,

Revenue $ 1,284,000 $ 9,665,000

Gross profit $ 738,000 $ 6,433,000

Net (loss) earnings $ ( 82,000 ) $ 5,673,000

Six months ended March 31,

Revenue $ 4,996,000 $ 18,918,000

Gross profit $ 3,160,000 $ 13,147,000

Net earnings $ 1,225,000 $ 11,636,000

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 Partnership 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 Partnership’s cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnership’s income recognized for the excess distributions, and during this suspended period any distributions received will be recorded as equity in income of affiliates.

Accordingly, the amount of equity in income of affiliates recognized in the three months ended December 31, 2022 was equivalent to the $ 538,000 of distributions received in that period.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $ 1,198,000 at December 31, 2022 and $ 958,000 at September 30, 2022.

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, the amount of equity in income of affiliates recognized in the six months ended March 31, 2023 was equivalent to the $ 538,000 of distributions received in that period.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $ 1,211,000 at March 31, 2023 and $ 958,000 at September 30, 2022.

Sale of Interest in Leasehold Land

1 unchanged sentence

With respect to Increment I, Kaupulehu Developments is 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.

One single-family lot was sold during the three months ended December 31, 2022 and one single-family lot, of the 79 lots developed within Increment I, remained to be sold as of December 31, 2022.

One single-family lot was sold during the six months ended March 31, 2023 and one single-family lot, of the 79 lots developed within Increment I, remained to be sold as of March 31, 2023.

The following table summarizes the Increment I revenues from KD I and the amount of fees directly related to such revenues:

Three months ended

March 31, Six months ended

2023 2022 2023 2022

Sale of interest in leasehold land:

11 unchanged sentences

BOK and Gros Ventre Partners, LLC (“Gros Ventre”) entered into the Limited Liability Agreement (the “Teton Operating Agreement”) of Teton Barnwell Fund I, LLC (“Teton Barnwell”), an entity formed for the purpose of directly entering into such oil and natural gas investments.

Under the terms of the Teton Operating Agreement, the profits of Teton Barnwell are split between BOK and Gros Ventre at 98 % and 2 %, respectively, and as the manager of Teton Barnwell, Gros Ventre is paid an annual asset management fee equal to 1 % of the cumulative capital contributions made to Teton Barnwell as compensation for its management services.

Under the terms of the Teton Operating Agreement, the profits of Teton Barnwell are split between BOK and Gros Ventre at 98 % and 2 %, respectively, and as the manager of Teton Barnwell, Gros Venture is paid an annual asset management fee equal to 1 % of the cumulative capital contributions made to Teton Barnwell as compensation for its management services.

BOK is responsible for 100 % of the capital contributions made to Teton Barnwell.

The Company has determined that Teton Barnwell is a variable interest entity (“VIE”) as the entity is structured with non-substantive voting rights and that the Company is the primary beneficiary.

This is due to the fact that even though Teton Barnwell has a unanimous consent voting structure, BOK is responsible for 100 % of the capital contributions required to fund Teton Barnwell’s future oil exploration and development investments pursuant to the Teton Operating Agreement and thus, BOK has the power to steer the decisions that most significantly impact Teton Barnwell’s economic performance and has the obligation to absorb any potential losses that could be significant to Teton Barnwell.

steer the decisions that most significantly impact Teton Barnwell’s economic performance and has the obligation to absorb any potential losses that could be significant to Teton Barnwell.

As BOK is the primary beneficiary of the VIE, Teton Barnwell’s operating results, assets and liabilities are consolidated by the Company.

15 unchanged sentences

No amount was recorded as assets held for sale at September 30, 2022 as the drilling rig was fully depreciated and therefore had a net book value of zero.

In October 2022, the legal title for the drilling rig was transferred to the buyer and as a result, the Company recognized a $ 551,000 gain on the sale of the drilling rig during the three months ended December 31, 2022.

In October 2022, the legal title for the drilling rig was transferred to the buyer and as a result, the Company recognized a $ 551,000 gain on the sale of the drilling rig during the six months ended March 31, 2023.

OIL AND NATURAL GAS PROPERTIES

1 unchanged sentence

In December 2022, Barnwell Texas, LLC (“Barnwell Texas”), a new wholly-owned subsidiary of the Company, entered into a purchase and sale agreement with an independent third party whereby Barnwell Texas acquired a 22.3 % non-operated working interest in oil and natural gas leasehold acreage in the Permian Basin in Texas for cash consideration of $ 806,000 .

In connection with the purchase of such leasehold interests, Barnwell Texas acquired a 15.4 % non-operated working interest in the planned drilling of two oil wells in the Wolfcamp Formation in Loving and Ward Counties, Texas and made a pre-payment of $ 4,293,000 to pay its share of the estimated costs to drill, complete and equip the wells.

As of December 31, 2022, the total costs incurred for these two oil wells was $ 829,000 and thus, the remaining prepaid balance of $ 3,464,000 was recorded as “Advances to operators for capital expenditures” on the Company's Condensed Consolidated Balance sheet.

In connection with the purchase of such leasehold interests, Barnwell Texas acquired a 15.4 % non-operated working interest in two oil wells in the Wolfcamp Formation in Loving and Ward Counties, Texas and made a pre-payment of $ 4,293,000 to pay its share of the estimated costs to drill, complete and equip the wells.

During the six months ended March 31, 2023, the total costs incurred for the drilling of these two oil wells as of that date was $ 3,812,000 and thus, the remaining prepaid balance of $ 481,000 was recorded as “Advances to operators for capital expenditures” on the Company's Condensed Consolidated Balance sheet as of March 31, 2023.

Additionally, in connection with the agreement, the Company is obligated to pay a broker’s fee of 5.0 % of the capital invested under this arrangement to Four Pines Exploration LLC - Exploration - Series 1 (“Four Pines”).

Four Pines is controlled by Mr.

Colin O’Farrell who is an affiliate of Teton Barnwell

(see Note 17 for additional details).

During the three months ended December 31, 2022, the Company paid $ 255,000 in broker fees to Four Pines related to this arrangement.

Colin O’Farrell who is an affiliate of Teton Barnwell (see Note 17 for additional details).

As of March 31, 2023, the Company has paid $ 255,000 in broker fees to Four Pines related to this arrangement.

Oil and Natural Gas Acquisitions

There were no oil and gas working interest acquisitions during the three months ended December 31, 2022.

There were no oil and natural gas working interest acquisitions during the six months ended March 31, 2023.

In the quarter ended December 31, 2021, Barnwell acquired working interests in oil and natural gas properties located in the Twining area of Alberta, Canada, for cash consideration of $ 317,000 .

In January 2022, Barnwell acquired additional working interests in oil and natural gas properties located in the Twining area of Alberta, Canada for consideration of $ 1,246,000 .

The purchase price per the agreement was adjusted for customary purchase price adjustments to reflect the economic activity from the effective date to the closing date.

Barnwell also assumed $ 1,500,000 in asset retirement obligations associated with the acquisition.

RETIREMENT PLANS

1 unchanged sentence

employees and a noncontributory Supplemental Executive Retirement Plan (“SERP”), which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan.

The following table details the components of net periodic benefit (income) cost for Barnwell’s retirement plans:

The following tables detail the components of net periodic benefit (income) cost for Barnwell’s retirement plans:

Pension Plan SERP

Three months ended December 31,

Three months ended March 31,

2023 2022 2023 2022

3 unchanged sentences

Net periodic benefit (income) cost $ ( 65,000 ) $ ( 83,000 ) $ 2,000 $ 15,000

Pension Plan SERP

Six months ended March 31,

2023 2022 2023 2022

Interest cost $ 203,000 $ 145,000 $ 44,000 $ 30,000

Expected return on plan assets ( 333,000 ) ( 311,000 ) — —

Amortization of net actuarial gain — — ( 40,000 ) —

Net periodic benefit (income) cost $ ( 130,000 ) $ ( 166,000 ) $ 4,000 $ 30,000

The net periodic benefit (income) cost is included in “General and administrative” expenses in the Company's Condensed Consolidated Statements of Operations.

3 unchanged sentences

Fluctuations in actual equity 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 components of earnings before income taxes, after adjusting the earnings for non-controlling interests, are as follows:

The components of (loss) earnings before income taxes, after adjusting the (loss) earnings for non-controlling interests, are as follows:

Three months ended

March 31, Six months ended

2023 2022 2023 2022

United States $ ( 1,275,000 ) $ 1,016,000 $ ( 1,257,000 ) $ 1,908,000

1 unchanged sentence

$ ( 1,240,000 ) $ 2,190,000 $ ( 72,000 ) $ 3,375,000

The components of the income tax provision are as follows:

The components of the income tax (benefit) provision are as follows:

Three months ended

March 31, Six months ended

2023 2022 2023 2022

Current $ 42,000 $ 172,000 $ 133,000 $ 252,000

4 unchanged sentences

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, and therefore, receives no benefit from consolidated or unitary losses and, therefore, is subject to Oklahoma state taxes.

In addition, net operating loss carryforwards, all of which had a full valuation allowance at the end of the previous fiscal year, are being partially utilized in the current year to offset taxable income in the U.S.

federal and Canadian jurisdictions.

The net operating loss carryforwards beyond the current year’s utilization continue to have a full valuation allowance as realization of their benefit is not more likely than not.

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.

In addition, net operating loss carryforwards, the benefit of which had not previously been recognized due to the Company's continuing full valuation allowance, are estimated to be partially utilized in the Canadian tax jurisdiction in the current year periods as the recognized benefit is now considered more likely to occur than not.

REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following tables provides information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition for the three months ended December 31, 2022 and 2021.

Three months ended December 31, 2022

The following tables provide information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition for the three and six months ended March 31, 2023 and 2022.

Three months ended March 31, 2023

Oil and natural gas Contract drilling Land investment Other Total

4 unchanged sentences

Drilling and pump — 1,501,000 — — 1,501,000

Other — — — 29,000 29,000

Total revenues before interest income $ 3,686,000 $ 1,501,000 $ — $ 29,000 $ 5,216,000

Geographical regions:

United States $ 309,000 $ 1,501,000 $ — $ 6,000 $ 1,816,000

Canada 3,377,000 — — 23,000 3,400,000

Total revenues before interest income $ 3,686,000 $ 1,501,000 $ — $ 29,000 $ 5,216,000

Timing of revenue recognition:

Goods transferred at a point in time $ 3,686,000 $ — $ — $ 29,000 $ 3,715,000

Services transferred over time — 1,501,000 — — 1,501,000

Total revenues before interest income $ 3,686,000 $ 1,501,000 $ — $ 29,000 $ 5,216,000

Three months ended March 31, 2022

Oil and natural gas Contract drilling Land investment Other Total

Revenue streams:

Oil $ 3,657,000 $ — $ — $ — $ 3,657,000

Natural gas 859,000 — — — 859,000

Natural gas liquids 617,000 — — — 617,000

Drilling and pump — 818,000 — — 818,000

Contingent residual payments — — 695,000 — 695,000

9 unchanged sentences

Total revenues before interest income $ 5,133,000 $ 818,000 $ 695,000 $ 32,000 $ 6,678,000

Three months ended December 31, 2021

Six months ended March 31, 2023

Oil and natural gas Contract drilling Land investment Other Total

15 unchanged sentences

Total revenues before interest income $ 8,912,000 $ 3,449,000 $ 265,000 $ 72,000 $ 12,698,000

Six months ended March 31, 2022

Oil and natural gas Contract drilling Land investment Other Total

Revenue streams:

Oil $ 6,325,000 $ — $ — $ — $ 6,325,000

Natural gas 1,708,000 — — — 1,708,000

Natural gas liquids 1,020,000 — — — 1,020,000

Drilling and pump — 1,694,000 — — 1,694,000

Contingent residual payments — — 1,295,000 — 1,295,000

Other — — — 89,000 89,000

Total revenues before interest income $ 9,053,000 $ 1,694,000 $ 1,295,000 $ 89,000 $ 12,131,000

Geographical regions:

United States $ 1,956,000 $ 1,694,000 $ 1,295,000 $ 4,000 $ 4,949,000

Canada 7,097,000 — — 85,000 7,182,000

Total revenues before interest income $ 9,053,000 $ 1,694,000 $ 1,295,000 $ 89,000 $ 12,131,000

Timing of revenue recognition:

Goods transferred at a point in time $ 9,053,000 $ — $ 1,295,000 $ 89,000 $ 10,437,000

Services transferred over time — 1,694,000 — — 1,694,000

Total revenues before interest income $ 9,053,000 $ 1,694,000 $ 1,295,000 $ 89,000 $ 12,131,000

Contract Balances

The following table provides information about accounts receivables, contract assets and contract liabilities from contracts with customers:

December 31, 2022 September 30, 2022

March 31, 2023 September 30, 2022

Accounts receivables from contracts with customers $ 2,710,000 $ 4,038,000

9 unchanged sentences

Such deferred revenue typically results from billings in excess of costs and estimated earnings on uncompleted contracts.

As of December 31, 2022 and September 30, 2022, the Company had $ 746,000 and $ 1,087,000 , respectively, included in “Other current liabilities” on the balance sheets for those performance obligations expected to be completed in the next twelve months.

During the three months ended December 31, 2022 and 2021, the amount of revenue recognized that was previously included in contract liabilities as of the beginning of the respective period was $ 523,000 and $ 186,000 , respectively.

As of March 31, 2023 and September 30, 2022, the Company had $ 613,000 and $ 1,087,000 , respectively, included in “Other current liabilities” on the balance sheets for those performance obligations expected to be completed in the next twelve months.

During the six months ended March 31, 2023 and 2022, the amount of revenue recognized that was previously included in contract liabilities as of the beginning of the respective period was $ 969,000 and $ 308,000 , respectively.

Contracts are sometimes modified for a change in scope or other requirements.

7 unchanged sentences

Nearly all of the Company's contract drilling segment contracts have original expected durations of one year or less.

At December 31, 2022, the Company had six contract drilling jobs with original expected durations of greater than one year.

For these contracts, approximately 70 % of the remaining performance obligation of $ 4,764,000 is expected to be recognized as revenue in the next twelve months and the remaining, thereafter.

At March 31, 2023, the Company had five contract drilling jobs with original expected durations of greater than one year.

For these contracts, 85 % of the remaining performance obligation of $ 4,292,000 is expected to be recognized in the next twelve months and the remaining, thereafter.

Contract Fulfillment Costs

Preconstruction costs, which include costs such as set-up and mobilization, are capitalized and allocated across all performance obligations and deferred and amortized over the contract term on a progress towards completion basis.

As of December 31, 2022 and September 30, 2022, the Company had $ 717,000 and $ 689,000 , respectively, in unamortized preconstruction costs related to contracts that were not completed.

During the three months ended December 31, 2022 and 2021, the amortization of preconstruction costs related to contracts were not material and were included in the accompanying Condensed Consolidated Statements of Operations.

Additionally, no impairment charges in connection with the Company’s preconstruction costs were recorded during the three months ended December 31, 2022 and 2021.

As of March 31, 2023 and September 30, 2022, the Company had $ 619,000 and $ 689,000 , respectively, in unamortized preconstruction costs related to contracts that were not completed.

During the three and six months ended March 31, 2023 and 2022, the amortization of preconstruction costs related to contracts were not material and were included in the accompanying Condensed Consolidated Statements of Operations.

Additionally, no impairment charges in connection with the Company’s preconstruction costs were recorded during the three and six months ended March 31, 2023 and 2022.

SEGMENT INFORMATION

7 unchanged sentences

Three months ended

March 31, Six months ended

2023 2022 2023 2022

Oil and natural gas $ 3,686,000 $ 5,133,000 $ 8,912,000 $ 9,053,000

22 unchanged sentences

Interest income 23,000 1,000 52,000 2,000

Earnings before income taxes $ 1,288,000 $ 1,452,000

(Loss) earnings before income taxes $ ( 1,238,000 ) $ 2,536,000 $ 50,000 $ 3,988,000

ACCUMULATED OTHER COMPREHENSIVE INCOME

1 unchanged sentence

Three months ended

March 31, Six months ended

2023 2022 2023 2022

Foreign currency translation:

18 unchanged sentences

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.

discount rates, and consideration of changes in legal, regulatory, environmental and political environments.

Asset retirement obligation fair value measurements in the current period were Level 3 fair value measurements.

5 unchanged sentences

If the Company repays 66.7 % of the principal amount prior to December 31, 2023, there will be loan forgiveness of 33.3 % up to a maximum of CAD$ 20,000 .

The current loan balance of $ 44,000 is included in “Other current liabilities” in the Company's Condensed Consolidated Balance sheet at December 31, 2022.

The current loan balance of $ 44,000 is included in “Other current liabilities” in the Company's Condensed Consolidated Balance sheet at March 31, 2023.

STOCKHOLDERS' EQUITY

Cash Dividend

Cash Dividends

In December 2022, the Company's Board of Directors declared a cash dividend of $ 0.015 per share that was paid on January 11, 2023 to stockholders of record on December 27, 2022.

No dividends were declared or paid during the three months ended December 31, 2021.

In February 2023, the Company's Board of Directors declared a cash dividend of $ 0.015 per share that was paid on March 13, 2023 to stockholders of record on February 23, 2023.

No dividends were declared or paid during the six months ended March 31, 2022.

The Tax Benefits Preservation Plan

On October 17, 2022, the Board of Directors of the Company adopted a Tax Benefits Preservation Plan (the “Tax Plan”) designed to protect the availability of the Company’s existing net operating loss carryforwards and certain other tax attributes (collectively, the “Tax Benefits”).

The Company has generated substantial Tax Benefits, which could potentially be used in certain circumstances to reduce its future income tax obligations.

Utilization of these NOLs and other Tax Benefits depends on many factors, including the Company’s future taxable income.

Additionally, the Company’s ability to use its Tax Benefits would be substantially limited if it were to experience an “ownership change,” as defined under Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”).

In general, a corporation would experience an ownership change if the percentage of the corporation’s stock owned by one or more “5% stockholders,” as defined under Section 382, were to increase by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period (or, if a shorter period, since the Company’s last ownership change).

The purpose of the Tax Plan is to reduce the likelihood that the Company will experience an ownership change under Section 382, which would limit the Company’s future use of its Tax Benefits and, in turn, significantly impair the value of such Tax Benefits.

Absent the adoption of the Tax Plan, the Company would be at a greater risk of experiencing an ownership change under Section 382 in the future as a result of certain changes in its investor base and subsequent shifts in its stock ownership that cannot be predicted or controlled.

If the Company were to

undergo an ownership change, limitations would be placed on the Company’s ability to utilize the Tax Benefits in future years in which it has taxable income, and the Company would pay more taxes than if it were able to utilize the Tax Benefits fully.

This could result in a negative impact on the Company’s financial position, results of operations, and cash flows.

The Tax Plan is designed to preserve the Tax Benefits by reducing the risk of an ownership change under Section 382.

The Tax Plan adopted by the Board of Directors is similar to plans adopted by other publicly held companies with substantial Tax Benefits and has a limited duration of three years.

The Tax Plan is not designed to prevent any action that the Board of Directors determines to be in the best interest of the Company and its stockholders.

To implement the Tax Plan, the Board of Directors declared a dividend of one right (a “Right”) for each outstanding share of the Company's common stock.

4 unchanged sentences

If the Rights become exercisable, all holders of Rights, other than the person or group of persons triggering the Rights, will be entitled to purchase shares of the Company’s common stock at a 50% discount.

Rights held by the person or group of persons triggering the Rights will become void and will not be exercisable.

The Tax Plan also includes an exchange option.

At any time after any person or group of persons acquires 4.95% or more of the Company’s common stock, but less than 50% or more of the outstanding shares of the Company’s common stock, the Board of Directors, at its option, may exchange the Rights (other than Rights owned by such person or group of persons which will have become void), in whole or in part, at an exchange ratio of three shares of the Company’s common stock per outstanding Right (subject to adjustment).

The Rights will trade with the Company’s common stock and will expire at the close of business on October 17, 2025.

The Rights will expire under other circumstances as described in the Tax Plan, including on the date set by the Board of Directors following a determination that the Tax Plan is no longer necessary or desirable for the preservation of the Tax Benefits or no significant Tax Benefits are available to be carried forward or are otherwise available.

The Board of Directors may terminate the Tax Plan prior to the time the Rights are triggered or may redeem the Rights prior to the Distribution Date, as defined in the Tax Plan.

In January 2023, the Company terminated the Tax Plan (see Note 18 for additional details).

Rights held by the person

or group of persons triggering the Rights will become void and will not be exercisable.

On January 25, 2023, the Tax Plan was terminated by the Board of Directors and as a result, all Rights distributed to holders of the Company's common stock expired at the time of termination.

At The Market Offering

1 unchanged sentence

Sales of our common stock under the ATM, if any, will be made by any methods deemed to be “at the market offerings” as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on the NYSE American, on any other existing trading market for our Common Stock, or to or through a market maker.

Shares of common stock sold under the ATM

are offered pursuant to the Company’s Registration Statement on Form S-3 (File No.

Shares of common stock sold under the ATM are offered pursuant to the Company’s Registration Statement on Form S-3 (File No.

333-254365), filed with the Securities and Exchange Commission on March 16, 2021, and declared effective on March 26, 2021 (the "Registration Statement”), and the prospectus dated March 26, 2021, included in the Registration Statement.

During the six months ended March 31, 2022, the Company sold 509,467 shares of common stock resulting in net proceeds of $ 2,356,000 after commissions and fees of $ 75,000 and ATM-related professional services of $ 22,000 .

In August 2022, the Company’s Board of Directors suspended the sales of our common stock under the ATM until further notice.

8 unchanged sentences

Barnwell’s management believes the plumbness deviation is not impactful to the performance of the submersible pumps that will be installed in the well.

Accordingly, while costs for the centralizers, armored cabling and the pump installation and removal test have been accrued, no accrual has been recorded as of December 31, 2022 for any further costs related to this contract as there is no related probable or estimable contingent liability.

Accordingly, while costs for the centralizers, armored cabling and the pump installation and removal test have been accrued, no accrual has been recorded as of March 31, 2023 for any further costs related to this contract as there is no related probable or estimable contingent liability.

INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Capital expenditure accruals related to oil and natural gas exploration and development decreased $ 1,405,000 during the three months ended December 31, 2022 and increased $ 1,851,000 during the three months ended December 31, 2021.

Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $ 150,000 and $ 304,000 during the three months ended December 31, 2022 and 2021, respectively.

Six months ended

Supplemental disclosure of cash flow information:

Cash paid during the year for:

Income taxes paid, net $ 100,000 $ 302,000

Capital expenditure accruals related to oil and natural gas exploration and development decreased $ 105,000 during the six months ended March 31, 2023 and increased $ 443,000 during the six months ended March 31, 2022.

Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $ 220,000 and $ 2,341,000 during the six months ended March 31, 2023 and 2022, respectively.

RELATED PARTY TRANSACTIONS

3 unchanged sentences

Changes to the arrangement above, effective March 7, 2019, are discussed in Note 3.

During the three months ended December 31, 2022, Kaupulehu Developments received $ 265,000 in percentage of sales payments from KD I from the sale of one single-family lot within Phase II of Increment I.

During the three months ended December 31, 2021, Kaupulehu Developments received $ 600,000 in percentage of sales payments from KD I from the sale of three single-family lots within Phase II of Increment I.

O'Farrell, formerly a member of the Board of Directors of the Company through March 7, 2022, is the sole member of Four Pines Operating LLC which owns a 25 % interest in Gros Ventre.

During the six months ended March 31, 2023, Barnwell received $ 265,000 in percentage of sales payments from KD 1 from the sale of one single-family lot within Increment I.

During the six months ended March 31, 2022, Barnwell received $ 1,295,000 in percentage of sales payments from KD 1 from the sale of six single-family lots within Increment I.

O'Farrell, formerly a member of the Board of Directors of the Company from July 7, 2021 to March 7, 2022, is the sole member of Four Pines Operating LLC which owns a 25 % interest in Gros Ventre.

In February 2021, Gros Ventre and BOK, a wholly-owned subsidiary of Barnwell, entered into the Teton Operating Agreement of Teton Barnwell, an entity formed for the purpose of directly investing in oil and natural gas exploration and development in Oklahoma.

Under the terms of the Teton Operating Agreement, Gros Ventre makes no capital contributions and receives 2 % of the profits of Teton Barnwell.

Additionally, as the manager of Teton Barnwell, Gros Ventre is paid an annual asset management fee equal to 1 % of the cumulative capital contributions made to Teton Barnwell as compensation for its management services.

SUBSEQUENT EVENTS

Additionally, as the manager of Teton Barnwell, Gros Venture is paid an annual asset management fee equal to 1 % of the cumulative capital contributions made to Teton Barnwell as compensation for its management services.

Furthermore, as discussed above, Mr.

O'Farrell controls Four Pines, which, as of March 31, 2023, was paid $ 255,000 in broker fees in connection with the oil and natural gas investment discussed in Note 6.

Cooperation and Support Agreement

In January 2023, the Company entered into a cooperation and support agreement (the “Agreement”) with Alexander C.

In January 2023, the Company entered into a cooperation and support agreement (the “Cooperation Agreement”) with Alexander C.

Kinzler , the Company’s CEO and President in his capacity as a stockholder , MRMP-Managers LLC, the Ned L.

Sherwood Revocable Trust, NLS Advisory Group, Inc.

Sherwood (collectively, the “MRMP Stockholders”), with respect to the potential proxy contest pertaining to the election of directors to our Board of Directors (the “Board”).

The Agreement extends for two years the standstill terms of the previous agreement entered into with the MRMP Stockholders in 2021, ending the potential of a proxy contest at the 2023 annual meeting of stockholders (the “2023 Annual Meeting”).

Pursuant to the terms of the Agreement, among other things, the Company has agreed to promptly appoint Joshua S.

Horowitz and Laurance Narbut to serve on the Board, subject to certain customary board procedures (effective February 9, 2023, Mr.

Horowitz and Mr.

Narbut became members of the Board).

In addition, the Company has agreed to nominate a five-person board comprised of Mr.

Sherwood (collectively, the “MRMP Stockholders”), with respect to a potential proxy contest pertaining to the election of directors to our Board of Directors (the “Board”).

The Cooperation Agreement extended for two years the standstill terms of the previous agreement entered into with the MRMP Stockholders in 2021, which ended the potential of a proxy contest at the 2023 annual meeting of stockholders (the “2023 Annual Meeting”), which was held on April 17, 2023.

Pursuant to the terms of the Cooperation Agreement, among other things, the Company agreed to promptly appoint Joshua S.

Horowitz and Laurance Narbut, effective February 9, 2023, to serve on the Board.

In addition, the Company agreed to nominate a five-person board comprised of Mr.

Kinzler, Kenneth Grossman, Douglas Woodrum, and Messrs.

Horowitz and Narbut as candidates for election to the Board at the 2023 Annual Meeting and the 2024 annual meeting of stockholders (the “2024 Annual Meeting”) and Mr.

Kinzler and the MRMP Stockholders have agreed to vote their respective shares of common stock of the Company in favor of the election of the Company’s slate at the 2023 Annual Meeting and 2024 Annual Meeting.

Additionally, pursuant to the terms of the Agreement, the Company has terminated the previously enacted Tax Benefits Preservation Plan, although the MRMP Stockholders have agreed to limit their beneficial and economic ownership of the Company to 28 % of the outstanding common stock of the Company for the next 12 months and 30 % for the subsequent 12-month period.

In exchange for this arrangement, the Company has agreed to reimburse the MRMP Stockholders and Mr.

Kinzler for their reasonable, documented out-of-pocket fees and expenses (including legal expenses) in connection with the negotiation and execution of the Agreement and the transactions contemplated hereby and the proposed nomination of directors by the MRMP Stockholders in connection with the 2023 Annual Meeting.

Cash Dividend

In February 2023, the Company's Board of Directors declared a cash dividend of $ 0.015 per share payable on March 13, 2023 to stockholders of record on February 23, 2023.

Kinzler and the MRMP Stockholders agreed to vote their respective shares of common stock of the Company in favor of the election of the Company’s slate at the 2023 Annual Meeting and the 2024 Annual Meeting.

Additionally, pursuant to the terms of the Cooperation Agreement, the Company terminated the previously adopted Tax Benefits Preservation Plan, although the MRMP Stockholders have agreed to limit their beneficial and economic ownership of the Company to 28 % of the outstanding common stock of the Company for the next 12 months and 30 % for the subsequent 12-month period.

In exchange for this arrangement, the Company agreed to reimburse the MRMP Stockholders and Mr.

Kinzler for their reasonable, documented out-of-pocket fees and expenses (including legal expenses) in connection with the negotiation and execution of the Cooperation Agreement and the transactions contemplated hereby and the proposed nomination of directors at the 2023 Annual Meeting.

In the three and six months ended March 31, 2023, $ 202,000 and $ 149,000 in expenses were recorded for reimbursements to MRMP Stockholders and Mr.

Kinzler, respectively, under the Cooperation Agreement.

In May 2023, the Company’s Board of Directors approved and ratified the payment of one-time special director fees to directors Messrs.

Grossman and Woodrum for their services on behalf of the Company and the Board pertaining to the negotiations of the Cooperation Agreement and the settlement of the potential proxy contest.

Grossman received a one-time special director fee of $ 100,000 to be paid by a cash payment of $ 40,000 and a stock grant of 22,728 shares of Barnwell common stock (valued at $ 60,000 using the closing price of Barnwell's common stock on May 11, 2023, the date of grant).

Woodrum received a one-time special director fee of $ 50,000 to be paid by a cash payment of $ 20,000 and a stock grant of 11,363 shares of Barnwell common stock (valued at $ 30,000 using the closing price of Barnwell's common stock on May 11, 2023, the date of grant).

Accordingly, these special one-time director fees of $ 150,000 were accrued by the Company as of March 31, 2023 and the amount is recorded in “Accounts payable” on the accompanying Condensed Consolidated Balance Sheet.

SUBSEQUENT EVENTS

In May 2023, the Company's Board of Directors declared a cash dividend of $ 0.015 per share payable on June 12, 2023 to stockholders of record on May 25, 2023.

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

What changed 10-Q

Item 1. Financial Statements