In addition to the other information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in Part I, “Item 1A.
−Removed: Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024.
−Removed: There have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024, except for the items listed below.
+Added: Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024 and Barnwell’s Quarterly Reports on Form 10-Q for the quarters ending March 31, 2025, and December 31, 2024.
+Added: There have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024, except for those included in Barnwell’s Quarterly Reports on Form 10-Q for the quarters ending March 31, 2025, and December 31, 2024, and the items listed below.
Entity-Wide Risks
Continued actions by an activist shareholder have had, and are expected to continue to have, a significant negative impact on our ability to execute our business strategies and have had, and are expected to continue to have, an adverse affect on our results of operations and financial condition.
−Removed: In March 2025, Ned L.
−Removed: Sherwood (“Sherwood”) and certain of his affiliates (collectively, the “Sherwood Group”) commenced a consent solicitation of Barnwell’s shareholders for the primary purpose of removing all of the current directors on Barnwell’s Board of Directors and replacing them with individuals proposed by the Sherwood Group.
−Removed: In addition, the Sherwood Group has filed a proxy statement with the Securities and Exchange Commission for the purpose of soliciting proxies from the Company’s shareholders to vote their shares of Barnwell’s common stock at the Company’s 2025 annual meeting of shareholders in favor of a slate of directors proposed by the Sherwood Group.
−Removed: The Company recommended that shareholders not provide their consent to remove the current Barnwell directors, and, with respect the proxy consent, in March 2025, the Company commenced a lawsuit against the Sherwood Group in the Delaware Chancery Court, seeking, among other remedies, declaratory judgment that the Sherwood Group’s purported advance notice with respect to the nomination of directors at the 2025 annual meeting of shareholders was invalid and injunctive relief to enjoin the Sherwood Group from presenting its slate of nominees at the 2025 annual meeting due to the failure of the Sherwood Group to comply with the advance notice provisions of the Company’s bylaws.
−Removed: In response to the actions of the Sherwood Group, the Board of Directors appointed an Executive Committee comprised of Messrs.
+Added: In response to various actions of the Sherwood Group, the Board of Directors appointed an Executive Committee comprised of Messrs.
Kinzler, Grossman and Horowitz and this Executive Committee retained the services of various professionals, including attorneys, proxy solicitors, proxy advisors, and public relations and financial advisors.
−Removed: We have incurred substantial legal, public relations and other advisory fees and proxy solicitation expenses, both pre and post our most recent balance sheet date, March 31, 2025, and we currently expect those costs and expenses to continue.
+Added: We have incurred substantial legal, public relations and other advisory fees and proxy solicitation expenses and we currently expect those costs and expenses to continue.
In addition, continuing perceived uncertainties as to our future direction, strategy or leadership created as a consequence may result in the loss of potential business opportunities, harm our ability to attract new or retain existing directors and employees, disrupt relationships with the Company, and the market price of our common stock could also experience periods of increased volatility as a result.
The Company faces issues that could impair our ability to continue as a going concern in the future.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Due to the recent shareholder consent solicitation and the ongoing proxy contest costs incurred and anticipated 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.
+Added: Our ability to sustain our business in the future will depend on sufficient oil and natural gas operating cash flows which are dependent on oil and natural gas prices, which can and in the past have fluctuated significantly, and on oil and natural gas operating expenses which are both variable and fixed.
+Added: A sufficient level of oil and natural gas operating cash flows are necessary to fund discretionary oil and natural gas capital expenditures which must be economically successful to provide sufficient returns to grow reserves and production or at a minimum replace declining production from aging wells.
+Added: Such a level of oil and natural gas capital expenditures will require funding from external debt and/or equity sources that are not currently in place, but those sources may not be feasible or sufficient.
+Added: In addition, we will need sufficient cash flows to fund our non-discretionary outflows such as oil and natural gas asset retirement obligations, ongoing oil and natural gas operating expenses and general and administrative expenses, both those related to our oil and natural gas operations and those related to our being a public company such as costs incurred related to the shareholder consent solicitation and proxy contest.
+Added: Due to the recent shareholder consent solicitation and the proxy contest costs incurred and anticipated 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 future operating cash inflows, 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.
1 unchanged sentence
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.