BARNWELL INDUSTRIES INC 10-Q

ITEM 1. FINANCIAL STATEMENTS BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, 2025 September 30, 2024 ASSETS Current assets: Cash and cash equivalents $ 1,432,000 $ 4,285,000 Accounts and other receivables, net of allowance for credit losses of: $ 48,000 at March 31, 2025; $ 141,000 at September 30, 2024 1,773,000 2,190,000 Note receivable 800,000 — Other current assets 790,000 873,000 Current assets of discontinued operations — 1,535,000 Total current assets 4,795,000 8,883,000 Asset for retirement benefits 5,104,000 4,899,000 Operating lease right-of-use assets 190,000 39,000 Other non-current assets 265,000 — Property and equipment: Proved oil and natural gas properties (full cost method) 79,402,000 83,557,000 Other property and equipment 490,000 509,000 Total property and equipment 79,892,000 84,066,000 Accumulated depletion, impairment, depreciation, and amortization ( 65,869,000 ) ( 67,500,000 ) Total property and equipment, net 14,023,000 16,566,000 Non-current assets of discontinued operations — 282,000 Total assets $ 24,377,000 $ 30,669,000 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 1,833,000 $ 1,785,000 Accrued capital expenditures 61,000 2,407,000 Accrued compensation 258,000 526,000 Accrued operating and other expenses 1,104,000 1,465,000 Current portion of asset retirement obligation 1,079,000 798,000 Other current liabilities 517,000 301,000 Current liabilities of discontinued operations — 530,000 Total current liabilities 4,852,000 7,812,000 Operating lease liabilities 112,000 7,000 Liability for retirement benefits 1,944,000 1,898,000 Asset retirement obligation 7,248,000 7,790,000 Deferred income tax liabilities 66,000 100,000 Total liabilities 14,222,000 17,607,000 Commitments and contingencies Equity: Common stock, par value $ 0.50 per share; authorized, 40,000,000 shares: 10,221,434 issued at March 31, 2025; 10,195,990 issued at September 30, 2024 5,111,000 5,098,000 Additional paid-in capital 7,806,000 7,690,000 (Accumulated deficit) retained earnings ( 2,529,000 ) 595,000 Accumulated other comprehensive income, net 2,033,000 1,943,000 Treasury stock, at cost: 167,900 shares at March 31, 2025 and September 30, 2024 ( 2,286,000 ) ( 2,286,000 ) Total stockholders’ equity 10,135,000 13,040,000 Non-controlling interests 20,000 22,000 Total equity 10,155,000 13,062,000 Total liabilities and equity $ 24,377,000 $ 30,669,000 See Notes to Condensed Consolidated Financial Statements 3 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended March 31, Six months ended March 31, 2025 2024 2025 2024 Revenues: Oil and natural gas $ 3,543,000 $ 4,144,000 $ 7,440,000 $ 9,274,000 Sale of interest in leasehold land — 500,000 — 500,000 Gas processing and other 26,000 34,000 63,000 66,000 3,569,000 4,678,000 7,503,000 9,840,000 Costs and expenses: Oil and natural gas operating 1,986,000 2,330,000 4,482,000 5,121,000 General and administrative 2,162,000 1,256,000 3,325,000 2,576,000 Depletion, depreciation, and amortization 754,000 1,342,000 1,658,000 2,801,000 Impairment of assets 52,000 1,677,000 665,000 1,677,000 Foreign currency (gain) loss ( 10,000 ) 128,000 341,000 2,000 Interest expense 1,000 — 1,000 — 4,945,000 6,733,000 10,472,000 12,177,000 Loss from continuing operations before equity in income of affiliates and income taxes ( 1,376,000 ) ( 2,055,000 ) ( 2,969,000 ) ( 2,337,000 ) Equity in income of affiliates — 1,071,000 — 1,071,000 Loss from continuing operations before income taxes ( 1,376,000 ) ( 984,000 ) ( 2,969,000 ) ( 1,266,000 ) Income tax provision 162,000 100,000 169,000 166,000 Net loss from continuing operations ( 1,538,000 ) ( 1,084,000 ) ( 3,138,000 ) ( 1,432,000 ) Net earnings (loss) from discontinued operations 331,000 ( 466,000 ) 12,000 ( 780,000 ) Net loss ( 1,207,000 ) ( 1,550,000 ) ( 3,126,000 ) ( 2,212,000 ) Less: Net earnings (loss) attributable to non-controlling interests — 222,000 ( 2,000 ) 224,000 Net loss attributable to Barnwell Industries, Inc. $ ( 1,207,000 ) $ ( 1,772,000 ) $ ( 3,124,000 ) $ ( 2,436,000 ) Basic and diluted (loss) earnings per common share attributable to Barnwell Industries, Inc. stockholders: Net loss from continuing operations attributable to Barnwell Industries, Inc. $ ( 0.15 ) $ ( 0.13 ) $ ( 0.31 ) $ ( 0.16 ) Net earnings (loss) from discontinued operations 0.03 ( 0.05 ) — ( 0.08 ) Net loss attributable to Barnwell Industries, Inc. $ ( 0.12 ) $ ( 0.18 ) $ ( 0.31 ) $ ( 0.24 ) Weighted-average number of common shares outstanding: Basic and diluted 10,053,534 10,019,172 10,050,319 10,007,905 See Notes to Condensed Consolidated Financial Statements 4 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) Three months ended March 31, Six months ended March 31, 2025 2024 2025 2024 Net loss $ ( 1,207,000 ) $ ( 1,550,000 ) $ ( 3,126,000 ) $ ( 2,212,000 ) Other comprehensive (loss) income: Foreign currency translation adjustments, net of taxes of $ 0 ( 3,000 ) ( 22,000 ) 90,000 8,000 Retirement plans: Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $ 0 — ( 22,000 ) — ( 43,000 ) Total other comprehensive (loss) income ( 3,000 ) ( 44,000 ) 90,000 ( 35,000 ) Total comprehensive loss ( 1,210,000 ) ( 1,594,000 ) ( 3,036,000 ) ( 2,247,000 ) Less: Comprehensive (income) loss attributable to non-controlling interests — ( 222,000 ) 2,000 ( 224,000 ) Comprehensive loss attributable to Barnwell Industries, Inc. $ ( 1,210,000 ) $ ( 1,816,000 ) $ ( 3,034,000 ) $ ( 2,471,000 ) See Notes to Condensed Consolidated Financial Statements 5 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY Three months ended March 31, 2025 and 2024 (Unaudited) 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 December 31, 2023 10,000,106 $ 5,084,000 $ 7,747,000 $ 5,496,000 $ 2,113,000 $ ( 2,286,000 ) $ 11,000 $ 18,165,000 Net (loss) earnings — — — ( 1,772,000 ) — — 222,000 ( 1,550,000 ) Foreign currency translation adjustments, net of taxes of $ 0 — — — — ( 22,000 ) — — ( 22,000 ) Distributions to non-controlling interests — — — — — — ( 219,000 ) ( 219,000 ) Share-based compensation — — 46,000 — — — — 46,000 Issuance of common stock for restricted stock units vested 27,984 14,000 ( 14,000 ) — — — — — Retirement plans: Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $ 0 — — — — ( 22,000 ) — — ( 22,000 ) Balance at March 31, 2024 10,028,090 $ 5,098,000 $ 7,779,000 $ 3,724,000 $ 2,069,000 $ ( 2,286,000 ) $ 14,000 $ 16,398,000 Balance at December 31, 2024 10,053,534 $ 5,111,000 $ 7,746,000 $ ( 1,322,000 ) $ 2,036,000 $ ( 2,286,000 ) $ 20,000 $ 11,305,000 Net loss — — — ( 1,207,000 ) — — — ( 1,207,000 ) Foreign currency translation adjustments, net of taxes of $ 0 — — — — ( 3,000 ) — — ( 3,000 ) Share-based compensation — — 60,000 — — — — 60,000 Balance at March 31, 2025 10,053,534 $ 5,111,000 $ 7,806,000 $ ( 2,529,000 ) $ 2,033,000 $ ( 2,286,000 ) $ 20,000 $ 10,155,000 See Notes to Condensed Consolidated Financial Statements 6 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY Six months ended March 31, 2025 and 2024 (Unaudited) 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 — — — ( 2,436,000 ) — — 224,000 ( 2,212,000 ) Foreign currency translation adjustments, net of taxes of $ 0 — — — — 8,000 — — 8,000 Distributions to non-controlling interests — — — — — — ( 223,000 ) ( 223,000 ) Share-based compensation — — 111,000 — — — — 111,000 Issuance of common stock for restricted stock units vested 37,312 19,000 ( 19,000 ) — — — — — Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $ 0 — — — — ( 43,000 ) — — ( 43,000 ) Balance at March 31, 2024 10,028,090 $ 5,098,000 $ 7,779,000 $ 3,724,000 $ 2,069,000 $ ( 2,286,000 ) $ 14,000 $ 16,398,000 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 — — — ( 3,124,000 ) — — ( 2,000 ) ( 3,126,000 ) Foreign currency translation adjustments, net of taxes of $ 0 — — — — 90,000 — — 90,000 Share-based compensation — — 129,000 — — — — 129,000 Issuance of common stock for restricted stock units vested 25,444 13,000 ( 13,000 ) — — — — — Balance at March 31, 2025 10,053,534 $ 5,111,000 $ 7,806,000 $ ( 2,529,000 ) $ 2,033,000 $ ( 2,286,000 ) $ 20,000 $ 10,155,000 See Notes to Condensed Consolidated Financial Statements 7 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended March 31, 2025 2024 Cash flows from operating activities of continuing operations: Net loss $ ( 3,126,000 ) $ ( 2,212,000 ) Net earnings (loss) from discontinued operations 12,000 ( 780,000 ) Net loss from continuing operations ( 3,138,000 ) ( 1,432,000 ) Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities: Equity in income of affiliates — ( 1,071,000 ) Depletion, depreciation, and amortization 1,658,000 2,801,000 Impairment of assets 665,000 1,677,000 Sale of interest in leasehold land, net of fees paid — ( 439,000 ) Distributions of income from equity investees — 1,071,000 Retirement benefits income ( 158,000 ) ( 173,000 ) Non-cash rent expense (income) 1,000 ( 13,000 ) Accretion of asset retirement obligation 391,000 434,000 Deferred income tax (benefit) expense ( 34,000 ) 51,000 Asset retirement obligation payments ( 275,000 ) ( 396,000 ) Share-based compensation expense 129,000 111,000 Retirement plan contributions and payments ( 1,000 ) ( 2,000 ) Credit loss (reversal) expense ( 10,000 ) 46,000 Foreign currency loss 341,000 2,000 (Decrease) increase from changes in current assets and liabilities ( 423,000 ) 333,000 Net cash (used in) provided by operating activities from continuing operations ( 854,000 ) 3,000,000 Cash flows from investing activities of continuing operations: Proceeds from sale of interest in leasehold land, net of fees paid — 439,000 Proceeds from the sale of oil and natural gas assets 282,000 — Capital expenditures - oil and natural gas ( 2,641,000 ) ( 1,624,000 ) Dividend received from discontinued operations 250,000 — Cash divested from the sale of discontinued operations, net of proceeds ( 163,000 ) — Net cash used in investing activities from continuing operations ( 2,272,000 ) ( 1,185,000 ) Cash flows from financing activities of continuing operations: Repayments for insurance premium financing ( 15,000 ) — Distributions to non-controlling interests — ( 223,000 ) Net cash used in financing activities from continuing operations ( 15,000 ) ( 223,000 ) Cash flows from discontinued operations: Net cash used in operating activities ( 95,000 ) ( 738,000 ) Net cash provided by (used in) investing activities 538,000 ( 1,000 ) Net cash used in financing activities ( 250,000 ) — Net cash provided by (used in) discontinued operations 193,000 ( 739,000 ) Effect of exchange rate changes on cash and cash equivalents ( 125,000 ) 2,000 Net (decrease) increase in cash and cash equivalents ( 3,073,000 ) 855,000 Cash and cash equivalents at beginning of period 4,505,000 2,830,000 Less: Cash and cash equivalents of discontinued operations at end of period — ( 118,000 ) Cash and cash equivalents of continuing operations at end of period $ 1,432,000 $ 3,567,000 See Notes to Condensed Consolidated Financial Statements 8 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed 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 2013 LLLP). 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 variable interest entities in which the Company is not deemed to be the primary beneficiary are accounted for by the equity method. Unless otherwise indicated, all references to “dollars” in this Form 10-Q are to U.S. dollars. Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements and notes have been prepared by Barnwell in accordance with the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in Barnwell’s September 30, 2024 Annual Report on Form 10-K, as amended by our Form 10-K/A Amendment No. 1 (our “2024 Annual Report”). The Condensed Consolidated Balance Sheet as of September 30, 2024 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 March 31, 2025, results of operations, comprehensive loss, and equity for the three and six months ended March 31, 2025 and 2024, and cash flows for the six months ended March 31, 2025 and 2024, have been made. The results of operations for the period ended March 31, 2025 are not necessarily indicative of the operating results for the full year. Use of Estimates in the Preparation of Condensed Consolidated Financial Statements The preparation of the condensed 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 9 valuation of deferred tax assets, asset retirement obligations, proved oil and natural gas reserves, and such assumptions may impact the amount at which such items are recorded. Significant Accounting Policies Other than as set forth below, there have been no changes to Barnwell's significant accounting policies as described in the Notes to Consolidated Financial Statements included in Item 8 of the Company's 2024 Annual Report. 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 drilled water wells and installed and repaired 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 condensed 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 the condensed consolidated financial statements refers to the Company’s continuing operations. 2. GOING CONCERN The accompanying condensed 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 condensed 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 highly sensitive to potentially volatile oil and natural gas prices, timely repayment of the note receivable from the buyers of our contract drilling segment, and the amount and timing of costs incurred related to the shareholder consent solicitation and ongoing proxy contest. A sufficient level of such cash inflows 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 may require funding from external debt 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 and ongoing operating and general and administrative expenses. Due to the recent shareholder consent solicitation and the ongoing proxy contest costs incurred and estimated to be incurred and the impacts of recently imposed tariffs which have caused a reduction in oil prices and have had an impact on the U.S. economy as a whole, we now face a greater uncertainty about our oil and natural gas operating cash inflows as described above, which in turn limits our ability to make the required discretionary cash outflows for the capital expenditures necessary to convert our proved undeveloped reserves to proved developed reserves. Furthermore, because of the greater uncertainty about our cash inflows described above, there is substantial doubt about our ability to fund our non-discretionary cash outflows and thus substantial doubt about our ability to continue as a going concern for one year from the date of the filing of this report. 10 The Company is investigating potential sources of funding, including debt financing, non-core oil and natural gas property sales and the partial or complete sale of its remaining interests in the Kukio Resort Land Development Partnerships, however, no probable timing or amounts of such funding have yet been secured. Because of this uncertainty as well as uncertainties regarding the potential duration and depth of the impacts of recently legislated tariffs on the economy as a whole, which in turn affects oil prices and our business as described above, substantial doubt about our ability to continue as a going concern for one year from the date of the filing of this report exists. These financial statements do not include any adjustments that might result from the outcome of these uncertainties. 3. DISCONTINUED OPERATIONS 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 are 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. Water Resources drilled water wells and installed and repaired 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 condensed 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 three and six months ended March 31, 2025. There was no impact from the sale of Water Resources on the provision for income taxes. 11 The following table presents the financial results from discontinued operations presented in the Condensed Consolidated Statements of Operations. Three months ended March 31, Six months ended March 31, 2025 2024 2025 2024 Revenues: Contract drilling $ 613,000 $ 1,070,000 $ 1,156,000 $ 2,063,000 Other — 26,000 — 26,000 613,000 1,096,000 1,156,000 2,089,000 Costs and expenses: Contract drilling operating 519,000 1,387,000 1,239,000 2,556,000 General and administrative 91,000 125,000 209,000 209,000 Depreciation and amortization 16,000 50,000 40,000 102,000 Interest expense 1,000 — 1,000 2,000 Gain on sale of assets (1) ( 538,000 ) — ( 538,000 ) — 89,000 1,562,000 951,000 2,869,000 Earnings (loss) from discontinued operations before income taxes 524,000 ( 466,000 ) 205,000 ( 780,000 ) Loss on sale of discontinued operations ( 193,000 ) — ( 193,000 ) — Income tax provision — — — — Net earnings (loss) from discontinued operations $ 331,000 $ ( 466,000 ) $ 12,000 $ ( 780,000 ) ________________________ (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 three and six months ended March 31, 2025 which was recorded in discontinued operations. 12 The following table presents the carrying amounts of the assets and liabilities of discontinued operations on the Condensed Consolidated Balance Sheets. March 31, 2025 September 30, 2024 ASSETS Current assets: Cash and cash equivalents $ — $ 220,000 Accounts and other receivables, net of allowance for credit losses of: $ 0 at March 31, 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 465,000 shares of common stock and 258,699 restricted stock units were excluded from the computation of diluted shares for the three months ended March 31, 2025, as their inclusion would have been anti-dilutive. Options to purchase 465,000 shares of common stock and 237,475 restricted stock units were excluded from the computation of diluted shares for the six months ended March 31, 2025, as their inclusion would have been anti-dilutive. Options to purchase 465,000 shares of common stock and 76,336 restricted stock units were excluded from the computation of diluted shares for the three and six months ended March 31, 2024, as their inclusion would have been anti-dilutive. 13 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 table: Three months ended March 31, Six months ended March 31, 2025 2024 2025 2024 Numerator: Net loss from continuing operations $ ( 1,538,000 ) $ ( 1,084,000 ) $ ( 3,138,000 ) $ ( 1,432,000 ) Less: Net earnings (loss) attributable to non-controlling interests of continuing operations — 222,000 ( 2,000 ) 224,000 Net loss from continuing operations attributable to Barnwell Industries, Inc. ( 1,538,000 ) ( 1,306,000 ) ( 3,136,000 ) ( 1,656,000 ) Net earnings (loss) from discontinued operations 331,000 ( 466,000 ) 12,000 ( 780,000 ) Net loss attributable to Barnwell Industries, Inc. $ ( 1,207,000 ) $ ( 1,772,000 ) $ ( 3,124,000 ) $ ( 2,436,000 ) Denominator: Basic weighted-average number of common shares outstanding 10,053,534 10,019,172 10,050,319 10,007,905 Effect of dilutive securities - common stock options and restricted stock units — — — — Diluted weighted-average number of common shares outstanding 10,053,534 10,019,172 10,050,319 10,007,905 Basic and diluted (loss) earnings per common share: Net loss per common share from continuing operations attributable to Barnwell Industries, Inc. stockholders $ ( 0.15 ) $ ( 0.13 ) $ ( 0.31 ) $ ( 0.16 ) Net earnings (loss) per common share from discontinued operations 0.03 ( 0.05 ) — ( 0.08 ) Net loss per common share attributable to Barnwell Industries, Inc. stockholders $ ( 0.12 ) $ ( 0.18 ) $ ( 0.31 ) $ ( 0.24 ) 5. ALLOWANCE FOR CREDIT LOSSES The following table summarizes the activity in the balance of allowance for credit losses related to accounts and other receivables: Six months ended March 31, 2025 2024 Allowance for credit losses at beginning of period $ 141,000 $ 50,000 (Reversal of) provision for expected credit losses ( 10,000 ) 46,000 Write-offs charged against the allowance ( 75,000 ) ( 6,000 ) Recoveries of amounts previously written off — 15,000 Foreign currency translation adjustment ( 8,000 ) — Allowance for credit losses at end of period $ 48,000 $ 105,000 14 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 2013 LLLP (“KD Kona”) and KKM Makai, LLLP (“KKM”), and indirectly acquired a 19.6 % non-controlling ownership interest in each of KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD Kaupulehu, LLLP (“KDK”) for $ 5,140,000 . These entities, collectively referred to hereinafter as 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 Acquisition, LLLP (“KD I”) and KD Acquisition II, LP, formerly KD Acquisition II, LLLP (“KD II”). KD I is the developer of Kaupulehu Lot 4A Increment I (“Increment I”), and KD II is the developer of Kaupulehu Lot 4A Increment II (“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 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, LLLP, KD Maniniowali, LLLP, 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 sales by the real estate sales office and revenues resulting from the sale of private club memberships. The last two 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. 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 and six months ended March 31, 2025. During the three and six months ended March 31, 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 three and six months ended March 31, 2025, as compared to equity in income of affiliates of $ 1,071,000 for the three and six months ended March 31, 2024. 15 Summarized financial information for the Kukio Resort Land Development Partnerships is as follows: Three months ended March 31, 2025 2024 Revenue $ 4,293,000 $ 10,153,000 Gross profit $ 2,179,000 $ 7,329,000 Net earnings $ 1,599,000 $ 6,658,000 Six months ended March 31, 2025 2024 Revenue $ 5,592,000 $ 12,039,000 Gross profit $ 2,658,000 $ 8,146,000 Net earnings $ 1,551,000 $ 7,012,000 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 six months ended March 31, 2025. Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $ 31,000 at March 31, 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 18). 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. In the quarter ended March 31, 2024, the last two single-family lots of the 80 lots developed within Increment I were sold. 16 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 March 31, 2025 2024 2025 2024 Sale of interest in leasehold land: Revenues - sale of interest in leasehold land $ — $ 500,000 $ — $ 500,000 Fees - included in general and administrative expenses — ( 61,000 ) — ( 61,000 ) Sale of interest in leasehold land, net of fees paid $ — $ 439,000 $ — $ 439,000 There is no assurance with regards to any payments in the future 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 AND ASSET RETIREMENT OBLIGATIONS Oil and Natural Gas Property Dispositions There were no significant oil and natural gas property dispositions during the six months ended March 31, 2025 and 2024. The $ 282,000 of proceeds from the sale of oil and natural gas properties included in the Condensed Consolidated Statement of Cash Flows for the six months ended March 31, 2025 represents proceeds that were credited to our cash in October 2024 from a sale of properties that closed in late September 2024. 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 three and six months ended March 31, 2025, the Company incurred a non-cash ceiling test impairment for our U.S. oil and natural gas properties of $ 52,000 and $ 665,000 , respectively. During the three and six months ended March 31, 2024, the Company incurred a non-cash ceiling test impairment for our Canadian oil and natural gas properties of $ 1,677,000 . 17 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 April 1 and May 1 of 2025, the oil prices and natural gas prices used in the 12-month historical rolling first-day-of-the-month average oil price for the ceiling test at June 30, 2025 will be lower than at March 31, 2025. Whereas we believe our Canadian full cost pool is below the ceiling limit, our U.S. full cost pool had no ceiling excess at March 31, 2025, and thus a further impairment charge is more likely than not for our U.S full cost pool in the quarter ending June 30, 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 June 2025. Asset Retirement Obligations In 2021 the Company entered into an agreement with Canada’s Orphan Well Association (“OWA”), where the Company was required to pay abandonment and reclamation costs for certain properties in advance through two cash deposits, one for abandonment and one for reclamation. 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 $ 226,000 and $ 527,000 at March 31, 2025 and September 30, 2024, respectively, and is included in “Other current assets” on the Company’s Condensed Consolidated Balance Sheets. The non-current portion of the unused deposit of $ 215,000 along with $ 50,000 of non-current receivables at March 31, 2025, is included in “Other non-current assets” on the Company’s Condensed Consolidated Balance Sheet at March 31, 2025. 8. RETIREMENT PLANS Barnwell sponsors a noncontributory defined benefit pension plan (“Pension Plan”) covering substantially all of its U.S. 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. 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. 18 The following tables detail the components of net periodic benefit (income) cost for Barnwell’s retirement plans: Pension Plan SERP Three months ended March 31, 2025 2024 2025 2024 Interest cost $ 97,000 $ 102,000 $ 24,000 $ 24,000 Expected return on plan assets ( 200,000 ) ( 191,000 ) — — Amortization of net actuarial gain — — — ( 22,000 ) Net periodic benefit (income) cost $ ( 103,000 ) $ ( 89,000 ) $ 24,000 $ 2,000 Pension Plan SERP Six months ended March 31, 2025 2024 2025 2024 Interest cost $ 195,000 $ 205,000 $ 47,000 $ 48,000 Expected return on plan assets ( 400,000 ) ( 383,000 ) — — Amortization of net actuarial gain — — — ( 43,000 ) Net periodic benefit (income) cost $ ( 205,000 ) $ ( 178,000 ) $ 47,000 $ 5,000 The net periodic benefit (income) cost is included in “General and administrative” expenses in the Company's Condensed Consolidated Statements of Operations. Currently, no contributions are planned to be made to the Pension Plan during fiscal 2025. The SERP plan is unfunded and Barnwell funds benefits when payments are made. Expected payments under the SERP for fiscal 2025 are expected to be $ 76,000 . 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. 9. INCOME TAXES The components of loss from continuing operations before income taxes, after adjusting the loss for non-controlling interests, are as follows: Three months ended March 31, Six months ended March 31, 2025 2024 2025 2024 United States $ ( 1,526,000 ) $ 1,004,000 $ ( 2,673,000 ) $ 629,000 Canada 150,000 ( 2,210,000 ) ( 294,000 ) ( 2,119,000 ) $ ( 1,376,000 ) $ ( 1,206,000 ) $ ( 2,967,000 ) $ ( 1,490,000 ) 19 The components of the income tax provision from continuing operations are as follows: Three months ended March 31, Six months ended March 31, 2025 2024 2025 2024 Current $ 187,000 $ 47,000 $ 203,000 $ 115,000 Deferred ( 25,000 ) 53,000 ( 34,000 ) 51,000 $ 162,000 $ 100,000 $ 169,000 $ 166,000 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. 10. SEGMENT 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. states of Oklahoma and Texas. Land Investment Segment - Barnwell owns leasehold land interests in Hawaii. 20 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. Three months ended March 31, Six months ended March 31, 2025 2024 2025 2024 Revenues: Oil and natural gas $ 3,543,000 $ 4,144,000 $ 7,440,000 $ 9,274,000 Land investment — 500,000 — 500,000 Other 22,000 16,000 33,000 33,000 Total before interest income 3,565,000 4,660,000 7,473,000 9,807,000 Interest income 4,000 18,000 30,000 33,000 Total revenues $ 3,569,000 $ 4,678,000 $ 7,503,000 $ 9,840,000 Depletion, depreciation, and amortization: Oil and natural gas $ 753,000 $ 1,342,000 $ 1,657,000 $ 2,800,000 Other 1,000 — 1,000 1,000 Total depletion, depreciation, and amortization $ 754,000 $ 1,342,000 $ 1,658,000 $ 2,801,000 Impairment: Oil and natural gas $ 52,000 $ 1,677,000 $ 665,000 $ 1,677,000 Total impairment $ 52,000 $ 1,677,000 $ 665,000 $ 1,677,000 Operating profit (loss) (before general and administrative expenses): Oil and natural gas $ 752,000 $ ( 1,205,000 ) $ 636,000 $ ( 324,000 ) Land investment — 500,000 — 500,000 Other 21,000 16,000 32,000 32,000 Total operating profit (loss) 773,000 ( 689,000 ) 668,000 208,000 Equity in income of affiliates: Land investment — 1,071,000 — 1,071,000 General and administrative expenses ( 2,162,000 ) ( 1,256,000 ) ( 3,325,000 ) ( 2,576,000 ) Foreign currency gain (loss) 10,000 ( 128,000 ) ( 341,000 ) ( 2,000 ) Interest expense ( 1,000 ) — ( 1,000 ) — Interest income 4,000 18,000 30,000 33,000 Loss from continuing operations before income taxes $ ( 1,376,000 ) $ ( 984,000 ) $ ( 2,969,000 ) $ ( 1,266,000 ) 21 11. 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 three and six months ended March 31, 2025 and 2024. Three months ended March 31, 2025 Oil and natural gas Land investment Other Total Revenue streams: Oil $ 2,601,000 $ — $ — $ 2,601,000 Natural gas 488,000 — — 488,000 Natural gas liquids 454,000 — — 454,000 Other — — 22,000 22,000 Total revenues before interest income $ 3,543,000 $ — $ 22,000 $ 3,565,000 Geographical regions: United States $ 376,000 $ — $ — $ 376,000 Canada 3,167,000 — 22,000 3,189,000 Total revenues before interest income $ 3,543,000 $ — $ 22,000 $ 3,565,000 Timing of revenue recognition: Goods transferred at a point in time $ 3,543,000 $ — $ 22,000 $ 3,565,000 Three months ended March 31, 2024 Oil and natural gas Land investment Other Total Revenue streams: Oil $ 2,985,000 $ — $ — $ 2,985,000 Natural gas 678,000 — — 678,000 Natural gas liquids 481,000 — — 481,000 Contingent residual payments — 500,000 — 500,000 Other — — 16,000 16,000 Total revenues before interest income $ 4,144,000 $ 500,000 $ 16,000 $ 4,660,000 Geographical regions: United States $ 674,000 $ 500,000 $ — $ 1,174,000 Canada 3,470,000 — 16,000 3,486,000 Total revenues before interest income $ 4,144,000 $ 500,000 $ 16,000 $ 4,660,000 Timing of revenue recognition: Goods transferred at a point in time $ 4,144,000 $ 500,000 $ 16,000 $ 4,660,000 22 Six months ended March 31, 2025 Oil and natural gas Land investment Other Total Revenue streams: Oil $ 5,744,000 $ — $ — $ 5,744,000 Natural gas 837,000 — — 837,000 Natural gas liquids 859,000 — — 859,000 Other — — 33,000 33,000 Total revenues before interest income $ 7,440,000 $ — $ 33,000 $ 7,473,000 Geographical regions: United States $ 731,000 $ — $ — $ 731,000 Canada 6,709,000 — 33,000 6,742,000 Total revenues before interest income $ 7,440,000 $ — $ 33,000 $ 7,473,000 Timing of revenue recognition: Goods transferred at a point in time $ 7,440,000 $ — $ 33,000 $ 7,473,000 Six months ended March 31, 2024 Oil and natural gas Land investment Other Total Revenue streams: Oil $ 6,877,000 $ — $ — $ 6,877,000 Natural gas 1,390,000 — — 1,390,000 Natural gas liquids 1,007,000 — — 1,007,000 Contingent residual payments — 500,000 — 500,000 Other — — 33,000 33,000 Total revenues before interest income $ 9,274,000 $ 500,000 $ 33,000 $ 9,807,000 Geographical regions: United States $ 1,428,000 $ 500,000 $ — $ 1,928,000 Canada 7,846,000 — 33,000 7,879,000 Total revenues before interest income $ 9,274,000 $ 500,000 $ 33,000 $ 9,807,000 Timing of revenue recognition: Goods transferred at a point in time $ 9,274,000 $ 500,000 $ 33,000 $ 9,807,000 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 Condensed Consolidated Balance Sheets. March 31, 2025 September 30, 2024 September 30, 2023 Accounts receivables from contracts with customers $ 1,240,000 $ 1,472,000 $ 2,344,000 23 12. ACCUMULATED OTHER COMPREHENSIVE INCOME The changes in each component of accumulated other comprehensive income were as follows: Three months ended March 31, Six months ended March 31, 2025 2024 2025 2024 Foreign currency translation: Beginning accumulated foreign currency translation $ 313,000 $ 250,000 $ 220,000 $ 220,000 Change in cumulative translation adjustment before reclassifications ( 3,000 ) ( 22,000 ) 90,000 8,000 Income taxes — — — — Net current period other comprehensive (loss) income ( 3,000 ) ( 22,000 ) 90,000 8,000 Ending accumulated foreign currency translation 310,000 228,000 310,000 228,000 Retirement plans: Beginning accumulated retirement plans benefit income 1,723,000 1,863,000 1,723,000 1,884,000 Amortization of net actuarial gain — ( 22,000 ) — ( 43,000 ) Income taxes — — — — Net current period other comprehensive loss — ( 22,000 ) — ( 43,000 ) Ending accumulated retirement plans benefit income 1,723,000 1,841,000 1,723,000 1,841,000 Accumulated other comprehensive income, net of taxes $ 2,033,000 $ 2,069,000 $ 2,033,000 $ 2,069,000 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 Condensed Consolidated Statements of Operations (see Note 8 for additional details). 13. FAIR VALUE MEASUREMENTS 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 24 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. 14. 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 made a down payment of $ 15,000 and is required to make monthly principal and interest payments of $ 16,000 over the term of the agreement, which matures in February 2026. As of March 31, 2025, the insurance premium financing liability was $ 153,000 and is included in “Other current liabilities” in the accompanying Condensed Consolidated Balance Sheets. 15. STOCKHOLDERS' EQUITY Restricted Stock Units On October 24, 2024, the Company’s Board of Directors (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 unit activity from October 1, 2024 through March 31, 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 — — Forfeited ( 39,178 ) 2.13 Nonvested at March 31, 2025 243,534 $ 2.14 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 three and six months ended March 31, 2025, the Company recognized share-based compensation expense related to restricted stock units of $ 60,000 and 25 $ 129,000 , respectively. During the three and six months ended March 31, 2024, the Company recognized share-based compensation expense related to restricted stock units of $ 31,000 and $ 61,000 , respectively. As of March 31, 2025, the total remaining unrecognized compensation cost related to nonvested restricted stock units was $ 301,000 , which is expected to be recognized over the weighted-average remaining requisite service period of 1.7 years. 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. 26 16. CONTINGENCIES 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. 17. INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Six months ended March 31, 2025 2024 Supplemental disclosure of cash flow information: Cash paid during the year for: Income taxes $ 168,000 $ 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 exploration and development decreased $ 2,259,000 and $ 569,000 during the six months ended March 31, 2025 and 2024, respectively. Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $ 149,000 and $ 179,000 during the six months ended March 31, 2025 and 2024, respectively. 18. 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 six months ended March 31, 2025. During the six months ended March 31, 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. 27