What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-12-23 compared with 2024-12-17 · 453 added, 379 removed, 1118 unchanged (43% of the section changed)

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Report of Independent Registered Public Accounting Firm

To the Board of Stockholders and Board of Directors of

To the Board of Directors and Shareholders of

Barnwell Industries, Inc.

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We have audited the accompanying consolidated balance sheets of Barnwell Industries, Inc.

and subsidiaries (the Company) as of September 30, 2024 and 2023, and the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the two years in the period ended September 30, 2024, and the related notes (collectively referred to as the “financial statements”).

and subsidiaries (collectively, the Company) as of September 30, 2025 and 2024, and the related consolidated statements of operations, comprehensive loss, equity, and cash flows for each of the two years in the period ended September 30, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

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Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Estimation of proved reserves impacting the recognition and valuation of depletion expense and

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As described in Note 1 to the financial statements, the Company accounts for its oil and gas properties using the full cost method of accounting which requires management to make estimates of proved reserve volumes and future revenues and expenses to calculate depletion expense and measure its oil and gas properties for potential impairment.

To estimate the volume of proved reserves and future revenues, management makes significant estimates and assumptions, including forecasting the production decline rate of producing properties and forecasting the timing and volume of production associated with the Company’s development plan for proved undeveloped properties.

To estimate the volume of proved reserves and future revenues, management makes significant estimates and assumptions, including forecasting the production decline rate of producing properties.

In addition, the estimation of proved reserves is also impacted by management’s judgments and estimates regarding the financial performance of wells associated with proved reserves to determine if wells are expected, with reasonable certainty, to be economical under the appropriate pricing assumptions required in the estimation of depletion expense and potential impairment measurements.

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• Evaluated the working and net revenue interests used in the reserve report by inspecting a sample of ownership interests;

◦ Evaluated the Company’s evidence supporting the amount of proved undeveloped properties reflected in the reserve report by examining support for the Company’s or the operator’s ability and intent to develop the proved undeveloped properties;

• Applied analytical procedures to the reserve report by comparing to historical actual results and to the prior year reserve report.

Revenue recognition based on the percentage of completion method

Critical Accounting Matter Description

As described further in Note 1 to the financial statements, revenues derived from contract drilling contracts are recognized over time, as performance obligations are satisfied, due to the continuous transfer of control to the customer, using the percentage-of-completion method of accounting, based primarily on contract cost incurred to date compared to total estimated contract cost.

Revenue recognition under this method is judgmental, particularly on lump-sum contracts, as it requires the Company to prepare estimates of total contract revenue and total contract costs, including costs to complete in-process contracts.

Auditing the Company’s estimates or total contract revenue and costs used to recognize revenue on contract drilling contracts involved significant auditor judgment, as it required the evaluation of subjective factors such as assumptions related to project schedule and completion, forecasted labor, and material and subcontract costs.

These assumptions involved significant management judgment, which affects the measurement of revenue recognized by the Company.

How the Critical Audit Matter was Addressed in the Audit

We obtained an understanding of the design and implementation of management’s controls and our audit procedures related to the estimation of proved reserves included the following, among others.

• We obtained an understanding of the Company’s estimation process that affected revenue recognized on engineering and construction contracts.

This included controls over management’s monitoring and review of project costs, including the Company’s procedures to validate the completeness and accuracy of data used to determine the estimates;

• We selected a sample of projects and, among other procedures, obtained and inspected the contract agreements, amendments and change orders to test the existence of customer arrangements and understand the scope of pricing of the related contracts;

• Evaluated the Company’s estimated revenue and costs to complete by obtaining and analyzing supporting documentation of management’s estimates of variable consideration and contract costs;

• Compared contract profitability estimates in the current year to historical estimates and actual performance.

/s/ WEAVER AND TIDWELL, L.L.P.

We have served as the Company’s auditor since 2020.

Little Falls, New Jersey

Dallas, Texas

December 22, 2025

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1,621,000 2,190,000

Assets held for sale 69,000 —

Note receivable 300,000 —

Other current assets 423,000 873,000

Current assets of discontinued operations — 1,535,000

Total current assets 5,230,000 8,883,000

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Operating lease right-of-use assets 145,000 39,000

Other non-current assets 347,000 —

Property and equipment:

Proved oil and natural gas properties, net (full cost method) 9,153,000 16,554,000

Drilling rigs and other property and equipment, net 294,000 509,000

Other property and equipment, net 9,000 12,000

Total property and equipment, net 9,162,000 16,566,000

Non-current assets of discontinued operations — 282,000

Total assets $ 20,812,000 $ 30,669,000

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Other current liabilities 460,000 301,000

Current liabilities of discontinued operations — 530,000

Total current liabilities 4,726,000 7,812,000

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Additional paid-in capital 8,039,000 7,690,000

Retained earnings 595,000 6,160,000

(Accumulated deficit) retained earnings ( 6,508,000 ) 595,000

Accumulated other comprehensive income, net 2,642,000 1,943,000

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Oil and natural gas $ 13,563,000 $ 17,396,000

Contract drilling 3,612,000 5,427,000

Sale of interest in leasehold land — 500,000

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Oil and natural gas operating 8,966,000 9,849,000

Contract drilling operating 4,483,000 5,669,000

General and administrative 6,937,000 5,130,000

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Impairment of assets 865,000 2,885,000

Foreign currency gain ( 10,000 ) ( 76,000 )

Foreign currency loss (gain) 192,000 ( 10,000 )

Interest expense 7,000 —

Gain on sale of assets — ( 551,000 )

Loss on sale of assets 636,000 —

20,749,000 22,804,000

Loss before equity in income of affiliates and income taxes ( 6,189,000 ) ( 1,622,000 )

Loss from continuing operations before equity in income of affiliates and income taxes ( 7,052,000 ) ( 4,729,000 )

Equity in income of affiliates — 1,071,000

Loss before income taxes ( 5,118,000 ) ( 864,000 )

Income tax provision (benefit) 213,000 ( 53,000 )

Loss from continuing operations before income taxes ( 7,052,000 ) ( 3,658,000 )

Income tax provision 71,000 213,000

Net loss from continuing operations ( 7,123,000 ) ( 3,871,000 )

Net earnings (loss) from discontinued operations 12,000 ( 1,460,000 )

Net loss ( 7,111,000 ) ( 5,331,000 )

Net earnings attributable to non-controlling interests 234,000 150,000

Net (loss) earnings attributable to non-controlling interests ( 8,000 ) 234,000

Net loss attributable to Barnwell Industries, Inc.

stockholders $ ( 7,103,000 ) $ ( 5,565,000 )

Basic net loss per common share

attributable to Barnwell Industries, Inc.

stockholders $ ( 0.56 ) $ ( 0.10 )

Diluted net loss per common share

attributable to Barnwell Industries, Inc.

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

stockholders:

Net loss from continuing operations attributable to Barnwell Industries, Inc.

$ ( 0.71 ) $ ( 0.41 )

Net loss from discontinued operations — ( 0.15 )

Net loss attributable to Barnwell Industries, Inc.

$ ( 0.71 ) $ ( 0.56 )

Weighted-average number of common shares outstanding:

Basic 10,017,997 9,969,856

Diluted 10,017,997 9,969,856

Basic and diluted 10,056,479 10,017,997

See Notes to Consolidated Financial Statements

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Net loss $ ( 7,111,000 ) $ ( 5,331,000 )

Other comprehensive (loss) income:

Other comprehensive income (loss):

Foreign currency translation adjustments, net of taxes of $ 0

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

( 85,000 ) ( 79,000 )

Net actuarial (loss) gain arising during the period, net of taxes of $ 0

Net actuarial gain (loss) arising during the period, net of taxes of $ 0

624,000 ( 76,000 )

Total other comprehensive (loss) income ( 161,000 ) 810,000

Total other comprehensive income (loss) 699,000 ( 161,000 )

Total comprehensive loss ( 6,412,000 ) ( 5,492,000 )

Comprehensive income attributable to non-controlling interests ( 234,000 ) ( 150,000 )

Comprehensive loss (income) attributable to non-controlling interests 8,000 ( 234,000 )

Comprehensive loss attributable to Barnwell Industries, Inc.

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Capital Retained

Earnings Accumulated

(Accumulated Deficit) Accumulated

Comprehensive Income Treasury

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Net (loss) earnings — — — ( 5,565,000 ) — — 234,000 ( 5,331,000 )

Foreign currency translation adjustments, net of taxes of $ 0

— — — — ( 2,000 ) — — ( 2,000 )

Distributions to non-controlling interests — — — — — — ( 226,000 ) ( 226,000 )

Acquisition of non-controlling interest — — ( 186,000 ) — — — 1,000 ( 185,000 )

Share-based compensation — — 208,000 — — — — 208,000

Issuance of common stock for services 34,091 17,000 73,000 — — — — 90,000

Dividends declared, $ 0.060 per share

— — — ( 599,000 ) — — — ( 599,000 )

Issuance of common stock for restricted stock units vested 37,312 19,000 ( 19,000 ) — — — — —

Retirement plans:

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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) earnings — — — ( 5,565,000 ) — — 234,000 ( 5,331,000 )

Distributions to non-controlling interests — — — — — — ( 226,000 ) ( 226,000 )

Acquisition of non-controlling interest ( 186,000 ) 1,000 ( 185,000 )

Net loss — — — ( 7,103,000 ) — — ( 8,000 ) ( 7,111,000 )

Foreign currency translation adjustments, net of taxes of $ 0

— — — — 75,000 — — 75,000

Share-based compensation — — 372,000 — — — — 372,000

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Retirement plans:

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

— — — — ( 85,000 ) — — ( 85,000 )

Net actuarial loss arising during the period, net of taxes of $ 0

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Year ended September 30,

Cash flows from operating activities:

Cash flows from operating activities of continuing operations:

Net loss $ ( 7,111,000 ) $ ( 5,331,000 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Equity in income of affiliates ( 1,071,000 ) ( 758,000 )

Net earnings (loss) from discontinued operations 12,000 ( 1,460,000 )

Net loss from continuing operations ( 7,123,000 ) ( 3,871,000 )

Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities:

Depletion, depreciation, and amortization 3,146,000 4,950,000

Impairment of assets 865,000 2,885,000

Gain on sale of assets — ( 551,000 )

Loss on sale of oil and natural gas properties

Sale of interest in leasehold land, net of fees paid — ( 439,000 )

Distributions of income from equity investees — 1,071,000

Equity in income of affiliates — ( 1,071,000 )

Retirement benefits income ( 315,000 ) ( 345,000 )

Accretion of asset retirement obligation 808,000 900,000

Deferred income tax expense (benefit) 42,000 ( 130,000 )

Deferred income tax (benefit) expense ( 82,000 ) 42,000

Asset retirement obligation payments ( 483,000 ) ( 1,139,000 )

Share-based compensation expense 372,000 208,000

Common stock issued for services — 90,000

Non-cash rent income ( 8,000 ) ( 28,000 )

Retirement plan contributions and payments ( 3,000 ) ( 4,000 )

Credit loss expense 85,000 38,000

Foreign currency gain ( 10,000 ) ( 76,000 )

Gain on debt extinguishment — ( 15,000 )

Increase (decrease) from changes in current assets and liabilities 2,780,000 ( 393,000 )

Net cash provided by operating activities 4,710,000 1,943,000

Cash flows from investing activities:

Credit loss (reversal) expense ( 2,000 ) 85,000

Foreign currency loss (gain) 192,000 ( 10,000 )

Increase from changes in current assets and liabilities 224,000 2,100,000

Net cash (used in) provided by operating activities from continuing operations ( 1,773,000 ) 5,334,000

Cash flows from investing activities of continuing operations:

Acquisition of non-controlling interest — ( 185,000 )

Distributions from equity investees in excess of earnings — 219,000

Proceeds from sale of interest in leasehold land, net of fees paid — 439,000

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Capital expenditures - oil and natural gas ( 3,074,000 ) ( 3,514,000 )

Capital expenditures - all other ( 13,000 ) ( 328,000 )

Net cash used in investing activities ( 2,832,000 ) ( 11,180,000 )

Cash flows from financing activities:

Repayment of long-term debt

Net cash used in investing activities from continuing operations ( 352,000 ) ( 2,819,000 )

Cash flows from financing activities of continuing operations:

Repayments for insurance premium financing ( 168,000 ) —

Distributions to non-controlling interests — ( 226,000 )

Payment of dividends — ( 599,000 )

Net cash used in financing activities from continuing operations ( 168,000 ) ( 226,000 )

Cash flows from discontinued operations:

Net cash used in operating activities ( 95,000 ) ( 624,000 )

Net cash provided by (used in) investing activities 1,125,000 ( 13,000 )

Net cash used in financing activities ( 250,000 ) —

Net cash provided by (used in) discontinued operations 780,000 ( 637,000 )

Effect of exchange rate changes on cash and cash equivalents ( 106,000 ) 23,000

Net increase (decrease) in cash and cash equivalents 1,675,000 ( 9,974,000 )

Net (decrease) increase in cash and cash equivalents ( 1,619,000 ) 1,675,000

Cash and cash equivalents at beginning of year 4,505,000 2,830,000

Cash and cash equivalents at end of year $ 4,505,000 $ 2,830,000

Cash and cash equivalents of discontinued operations at end of year — ( 220,000 )

Cash and cash equivalents of continuing operations at end of year $ 2,886,000 $ 4,285,000

See Notes to Consolidated Financial Statements

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Description of Business

Barnwell is engaged in the following lines of business:

1) acquiring, developing, producing and selling oil and natural gas in Canada and the U.S., 2) leasehold land interests in Hawaii, and 3) drilling wells and installing and repairing water pumping systems in Hawaii.

Barnwell’s continuing operations is engaged in the following lines of business:

1) acquiring, developing, producing and selling oil and natural gas in Canada and the U.S.

and 2) leasehold land interests in Hawaii.

Principles of Consolidation

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Actual results could differ significantly from those estimates.

Significant assumptions are required in the valuation of deferred tax assets, asset retirement obligations, contract drilling estimated costs to complete, and proved oil and natural gas reserves, 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, and proved oil and natural gas reserves, and such assumptions may impact the amount at which such items are recorded.

Discontinued Operations

On March 14, 2025, the Company entered into and completed the sale of its wholly-owned subsidiary, Water Resources International, Inc.

(“Water Resources”).

Water Resources drills water wells and installs and repairs water pumping systems in Hawaii and represented our contract drilling segment.

As a result of the sale, the Company has classified the related assets and liabilities and the results of its contract drilling business as discontinued operations in the consolidated financial statements for all periods presented.

Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur.

See Note 3 “Discontinued Operations” for further discussion and additional disclosures related to discontinued operations.

Unless otherwise noted, the discussions in the Notes to Consolidated Financial Statements refers to the Company’s continuing operations.

Revenue Recognition

Barnwell operates in and derives revenue from the following three principal business segments:

Barnwell operates in and derives revenue from the following two principal business segments:

• Oil and Natural Gas Segment - Barnwell engages in oil and natural gas development, production, acquisitions and sales in Canada and the U.S.

• Land Investment Segment - Barnwell owns land interests in Hawaii.

• Contract Drilling Segment - Barnwell provides well drilling services and water pumping system installation and repairs in Hawaii.

Oil and Natural Gas - Barnwell’s investments in oil and natural gas properties are located in Alberta, Canada, Oklahoma, and Texas.

Oil and Natural Gas - Barnwell’s investments in oil and natural gas properties are located in Alberta, Canada.

These property interests are principally held under governmental leases or licenses.

Barnwell sells the large majority of its oil, natural gas and natural gas liquids production under short-term contracts between itself and marketers based on prices indexed to market prices and recognizes revenue at a point in time when the oil, natural gas and natural gas liquids are delivered, as this is where Barnwell’s performance obligation is satisfied and title has passed to the customer.

Barnwell’s investments in oil and natural gas properties in Oklahoma and Texas were sold on August 8, 2025.

Land Investment - Barnwell is entitled to receive contingent residual payments from the entities that previously purchased Barnwell’s land investment interests under contracts entered into in prior years.

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The residual payments received by Barnwell are recognized as revenue when it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

Contract Drilling - Through contracts which are normally less than twelve months in duration, Barnwell drills water and water monitoring wells and installs and repairs water pumping systems in Hawaii.

Barnwell recognizes revenue from well drilling or the installation of pumps over time based on total costs incurred on the projects relative to the total expected costs to satisfy the performance obligation as management believes this is an accurate representation of the percentage of completion as control is continuously transferred to the customer.

Uninstalled materials, which typically consists of well casing or pumps, are excluded in the costs-to-costs calculation for the duration of the contract as including these costs would result in a distortion of progress towards satisfaction of the performance obligation due to the resulting cumulative catch-up in margin in a single period.

An equal amount of cost and revenue is recorded when uninstalled materials are controlled by the customer, which is typically when Barnwell has the right to payment for the materials and when the materials are delivered to the customer’s site or location and such materials have been accepted by the customer.

Uninstalled materials are held in inventory and included in “Other current assets” on the Company’s Consolidated Balance Sheets until control is transferred to the customer.

When the estimate on a contract indicates a loss, Barnwell records the entire estimated loss in the period the loss becomes known.

The contract price may include variable consideration, which includes such items as increases to the transaction price for unapproved change orders and claims for which price has not yet been agreed by the customer.

The Company estimates variable consideration using either the most likely amount or expected value method, whichever is a more appropriate reflection of the amount to which it expects to be entitled based on the characteristics and circumstances of the contract.

Variable consideration is included in the estimated transaction price to the extent it is probable that a significant reversal of cumulative recognized revenue will not occur.

Contract price and cost estimates are reviewed periodically as work progresses and adjustments proportionate to the costs incurred to date to total estimated costs at completion are reflected in contract revenues in the reporting period when such estimates are revised.

The nature of accounting for these contracts is such that refinements of the estimated costs to complete may occur and are characteristic of the estimation process due to changing conditions and new developments.

Many factors and assumptions can and do change during a contract performance obligation period which can result in a change to contract profitability including unforeseen underground geological conditions (to the extent that contract remedies are unavailable), the availability and costs of skilled contract labor, the performance of major material suppliers, the performance of major subcontractors, unusual weather conditions and unexpected changes in material costs, changes in the scope and nature of the work to be performed, and unexpected construction execution errors, among others.

These factors may result in revisions to costs and income and

are recognized in the period in which the revisions become known.

Revenue and profit in future periods of contract performance are recognized using the adjusted estimate.

Management evaluates the performance of contracts on an individual basis.

In the ordinary course of business, but at least quarterly, we prepare updated estimates that may impact the cost and profit or loss for each contract based on actual results to date plus management's best estimate of costs to be incurred to complete each performance obligation.

The cumulative effect of revisions in estimates of the total forecasted revenue and costs, including any unapproved change orders and claims, during the course of the contract is reflected in the accounting period in which the facts that caused the revision become known.

Changes in the cost estimates can have a material impact on our consolidated financial statements and are reflected in the results of operations when they become known.

Unexpected significant inefficiencies that were not considered a risk at the time of entering into the contract, such as design or construction execution errors that result in significant wasted resources, are excluded from the measure of progress toward completion and the costs are expensed as incurred.

To the extent a contract is deemed to have multiple performance obligations, the Company allocates the transaction price of the contract to each performance obligation using its best estimate of the standalone selling price of each distinct good or service in the contract.

When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability.

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

Contract liabilities are included in “Other current liabilities” on the Company’s Consolidated Balance Sheets.

Costs and estimated earnings in excess of billings represent certain amounts under customer contracts that were earned and billable, but yet not invoiced, and are included in contract assets and reported in “Other current assets” on the Company’s Consolidated Balance Sheets.

Cash and Cash Equivalents

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Barnwell does not have any off-balance sheet credit exposure related to its customers.

Insurance Recoveries

The Company maintains directors and officers liability insurance coverage.

Receipts from insurance claim reimbursements under the liability coverage, up to the amount of costs recognized are considered recoveries.

These recoveries are accounted for when they are probable of receipt.

Insurance recoveries are not recognized prior to the recognition of the related costs incurred.

Any insurance receivable for recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.

Investments in Real Estate

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Barnwell classifies distributions received from equity method investments using the cumulative earnings approach in the Consolidated Statements of Cash Flows.

Under the cumulative earnings approach, distributions received up to the amount of cumulative equity in earnings recognized are treated as returns on investment and are classified within operating cash flows and those in excess of that amount are treated as returns of investment and are classified within investing cash flows.

Under the cumulative earnings approach, distributions received up to the amount of cumulative equity in earnings recognized are treated as returns

on investment and are classified within operating cash flows and those in excess of that amount are treated as returns of investment and are classified within investing cash flows.

Investments in equity method investees are evaluated for impairment as events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

If the carrying amounts of the assets exceed their respective fair values, additional impairment tests are performed to measure the amounts of the impairment losses, if any.

When an impairment test demonstrates that the fair value of an investment is less than its carrying value, management will determine whether the impairment

is either temporary or other-than-temporary.

When an impairment test demonstrates that the fair value of an investment is less than its carrying value, management will determine whether the impairment is either temporary or other-than-temporary.

Examples of factors which may be indicative of an other-than-temporary impairment include (a) the length of time and extent to which fair value has been less than carrying value, (b) the financial condition and near-term prospects of the investee, and (c) the intent and ability to retain the investment in the investee for a period of time sufficient to allow for any anticipated recovery in fair value.

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Under the full cost method of accounting, we review the carrying value of our oil and natural gas properties, on a country-by-country basis, each quarter in what is commonly referred to as the ceiling test.

Under the ceiling test, capitalized costs, net of accumulated depletion and oil and natural gas related deferred income taxes, may not exceed an amount equal to the sum of 1) the discounted present value (at 10 %), using average first-day-of-the-month prices during the 12-month period ending as of the balance sheet date held constant over the life of the reserves (except where prices are defined by contractual arrangements), of Barnwell’s estimated future net cash flows from estimated production of proved oil and natural gas reserves as determined by independent petroleum reserve engineers, less estimated future expenditures to be incurred in developing and producing the proved reserves but excluding future cash outflows associated with settling asset retirement obligations with the exception of those associated with proved undeveloped reserves from wells that are to be drilled in the future;

plus 2) the cost of major

development projects and unproven properties not subject to depletion, if any;

Under the ceiling test, capitalized costs, net of accumulated depletion and oil and natural gas related

deferred income taxes, may not exceed an amount equal to the sum of 1) the discounted present value (at 10 %), using average first-day-of-the-month prices during the 12-month period ending as of the balance sheet date held constant over the life of the reserves (except where prices are defined by contractual arrangements), of Barnwell’s estimated future net cash flows from estimated production of proved oil and natural gas reserves as determined by independent petroleum reserve engineers, less estimated future expenditures to be incurred in developing and producing the proved reserves but excluding future cash outflows associated with settling asset retirement obligations with the exception of those associated with proved undeveloped reserves from wells that are to be drilled in the future;

plus 2) the cost of major development projects and unproven properties not subject to depletion, if any;

plus 3) the lower of cost or estimated fair value of unproven properties included in costs subject to depletion;

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Barnwell does not have transportation volume commitments with pipelines and does not have natural gas imbalances related to natural gas balancing arrangements with its partners.

In accordance with the guidance for business combinations, Barnwell determines whether an acquisition is a business combination, which requires that the assets acquired and liabilities assumed constitute a business.

Each business combination is then accounted for by applying the acquisition method of accounting.

If the assets acquired are not a business, the Company accounts for the transaction as an asset acquisition.

Under both methods purchase prices are allocated to acquired assets and assumed liabilities based on their estimated fair value at the time of the acquisition.

For transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.

The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations.

Long-lived Assets

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Long-lived assets to be disposed of by sale are classified as held for sale and are reported at the lower of the asset carrying value or fair value, less cost to sell.

Water well drilling rigs, office and other property and equipment are depreciated using the straight-line method based on estimated useful lives.

Other property and equipment is depreciated using the straight-line method based on estimated useful lives.

Share-based Compensation

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The estimated rate of return on plan assets is based on an estimate of future experience for plan asset returns, the mix of plan assets, current market conditions, and expectations for future market conditions.

A decrease (increase) of 50 basis points in the expected return

on assets assumption would increase (decrease) pension expense by approximately $ 64,000 based on the assets of the plan at September 30, 2024.

A decrease (increase) of 50 basis points in the expected return on assets assumption would increase (decrease) pension expense by approximately $ 69,000 based on the assets of the plan at September 30, 2025.

The effects of changing assumptions are included in unamortized net gains and losses, which directly affect accumulated other comprehensive income.

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Recently Adopted Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments,” which replaces the incurred loss model with an expected loss model referred to as the current expected credit loss (“CECL”) model.

The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including but not limited to trade receivables.

The FASB has subsequently issued other related ASUs which amend ASU 2016-13 to provide clarification and additional guidance.

The Company adopted the provisions of this ASU effective October 1, 2023.

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No.

2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” which expands reportable segment disclosure requirements on an annual and interim basis, primarily through enhanced disclosures about significant segment expenses.

The Company adopted the provisions of this ASU in the annual reporting period for fiscal year ended September 30, 2025.

The adoption of this update did not have an impact on Barnwell’s consolidated financial statements.

GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the twelve-month period following the date of issuance of these consolidated financial statements.

Our ability to sustain our business in the future will depend on sufficient oil and natural gas operating cash flows which are dependent on oil and natural gas prices, which can and in the past have fluctuated significantly, and on oil and natural gas operating expenses which are both variable and fixed.

A sufficient level of oil and natural gas operating cash flows are necessary to fund discretionary oil and natural gas capital expenditures which must be economically successful to provide sufficient returns to grow reserves and production or at a minimum replace declining production from aging wells.

Such a level of oil and natural gas capital expenditures will require funding from external debt and/or equity sources that are not currently in place, but those sources may not be feasible or sufficient.

In addition, we will need sufficient cash flows to fund our non-discretionary outflows such as oil and natural gas asset retirement obligations, ongoing oil and natural gas operating expenses and general and administrative expenses, both those related to our oil and natural gas operations and those related to our being a public company.

In the quarters ended March 31, 2025 and June 30, 2025, continuing uncertainties regarding the sufficiency of our cash balances and future cash inflows due largely to a reduction in oil and natural gas prices and recent shareholder consent solicitation and proxy contest costs incurred, raised substantial doubt about our ability to meet our estimated cash outflows or continue as a going concern.

However, due to the gross proceeds of $ 2,443,000 raised in the private placement offering in November 2025,

management has determined that there is no longer substantial doubt regarding the Company's ability to continue as a going concern for one year from the filing of this Annual Report on Form 10-K.

DISCONTINUED OPERATIONS

Sale of Water Resources

On March 14, 2025, the Company entered into a Stock Purchase Agreement with three unrelated individuals (collectively, the “Buyer”) whereby the Buyer acquired all of the shares of capital stock of Water Resources (the “Shares”) owned by the Company (the “Purchase Agreement”).

The sale and purchase of the Shares closed (the “Closing”) simultaneously with the execution and delivery of the Purchase Agreement by each of the parties thereto on March 14, 2025.

The aggregate purchase price for the Shares was $ 1,050,000 , which was paid at Closing by the Buyer as follows:

an initial aggregate cash payment of $ 250,000 and the delivery of a non-interest bearing promissory note with a principal amount of $ 800,000 (the “Promissory Note”).

The principal payments on the Promissory Note were to be paid in installments on the following schedule:

$ 200,000 on May 15, 2025;

and $ 150,000 on June 16, 2025, July 15, 2025, August 15, 2025, and September 15, 2025.

The Promissory Note is secured by certain specified assets of Water Resources and personal guarantees of the purchasers.

In August 2025, the Promissory Note was amended to the following schedule:

$ 100,000 on December 15, 2025;

$ 50,000 on February 15, 2026;

and $ 150,000 on March 15, 2026 and to increase the annual interest rate on the Promissory Note from zero to 12 % beginning August 15, 2025 and to 18 % beginning December 15, 2025.

As of September 30, 2025, the balance of the Promissory Note was $ 300,000 and is presented as “Note receivable” on the Consolidated Balance Sheets.

Water Resources drills water wells and installs and repairs water pumping systems in Hawaii and represented our contract drilling segment.

Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur.

The Company recorded a loss of $ 193,000 on the sale of Water Resources, which was included in the results from discontinued operations for the year ended September 30, 2025.

There was no impact from the sale of Water Resources on the provision for income taxes.

The following table presents the financial results from discontinued operations presented in the Consolidated Statements of Operations.

Year ended September 30,

Contract drilling $ 1,156,000 $ 3,612,000

Other — 37,000

1,156,000 3,649,000

Costs and expenses:

Contract drilling operating 1,239,000 4,483,000

General and administrative 209,000 468,000

Depletion, depreciation, and amortization 40,000 156,000

Interest expense 1,000 2,000

Gain on sale of assets (1)

( 538,000 ) —

951,000 5,109,000

Earnings (loss) from discontinued operations before income taxes 205,000 ( 1,460,000 )

Loss on sale of discontinued operations ( 193,000 ) —

Income tax provision — —

Net earnings (loss) from discontinued operations $ 12,000 $ ( 1,460,000 )

________________________

(1) In February 2025, the Company completed the sale of a contract drilling segment drilling rig and related ancillary equipment to an independent third party for proceeds of $ 538,000 , net of related costs.

The drilling rig and related ancillary equipment were fully depreciated and had a net book value of zero and as a result of the sale, the Company recognized a $ 538,000 gain during the the year ended September 30, 2025 which was recorded in discontinued operations.

The following table presents the carrying amounts of the assets and liabilities of discontinued operations on the Consolidated Balance Sheets.

September 30,

Current assets:

Cash and cash equivalents $ — $ 220,000

Accounts and other receivables, net of allowance for credit losses of:

$ 0 at September 30, 2025;

$ 234,000 at September 30, 2024

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

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

LOSS PER COMMON SHARE

6 unchanged sentences

Year ended September 30,

Net Loss Shares Per-Share

(Numerator) (Denominator) Amount

Basic $ ( 5,565,000 ) 10,017,997 $ ( 0.56 )

Effect of dilutive securities - common stock options and restricted stock units — —

Diluted $ ( 5,565,000 ) 10,017,997 $ ( 0.56 )

Year ended September 30, 2023

Net Loss Shares Per-Share

(Numerator) (Denominator) Amount

Basic $ ( 961,000 ) 9,969,856 $ ( 0.10 )

Net loss from continuing operations $ ( 7,123,000 ) $ ( 3,871,000 )

Net (loss) earnings attributable to non-controlling interests of continuing operations ( 8,000 ) 234,000

Net loss from continuing operations attributable to Barnwell Industries, Inc.

( 7,115,000 ) ( 4,105,000 )

Net earnings (loss) from discontinued operations 12,000 ( 1,460,000 )

Net loss attributable to Barnwell Industries, Inc.

$ ( 7,103,000 ) $ ( 5,565,000 )

Basic weighted-average number of common shares outstanding 10,056,479 10,017,997

Effect of dilutive securities - common stock options and restricted stock units — —

Diluted $ ( 961,000 ) 9,969,856 $ ( 0.10 )

Diluted weighted-average number of common shares outstanding 10,056,479 10,017,997

Basic and diluted loss per common share:

Net loss per common share from continuing operations attributable to Barnwell Industries, Inc.

stockholders $ ( 0.71 ) $ ( 0.41 )

Net loss per common share from discontinued operations — ( 0.15 )

Net loss per common share attributable to Barnwell Industries, Inc.

stockholders $ ( 0.71 ) $ ( 0.56 )

ACCOUNTS AND OTHER RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES

Insurance Recovery Receivable

In the quarter ended June 30, 2025, the Company filed an insurance claim for $ 348,000 with our insurance carrier for the reimbursement of certain legal fees incurred that are covered under our directors and officers’ liability insurance policies.

Accordingly, the Company determined that an insurance recovery from our insurance carrier was probable and reasonably estimable and therefore recorded an estimated accrued insurance recovery receivable of $ 348,000 at June 30, 2025 and no subsequent revision to the accrual has been recorded as of September 30, 2025.

The insurance recovery receivable is included in "Accounts and other receivables, net of allowance for credit losses," in the accompanying Consolidated Balance Sheet and the related legal expense recovery was recorded in “General and administrative” expenses in the accompanying Consolidated Statements of Operations.

The estimated accrued insurance recovery receivable amount is management's best estimate of the probable recoverable amount under the insurance policies.

While the insurer has confirmed that certain costs incurred by the Company are eligible for claim under the Company's insurance policies, the amount ultimately recoverable through insurance is dependent upon the insurer's completion of their review of eligible legal costs incurred and the recoverable amount may differ from management's estimate.

Allowance for Credit Losses

1 unchanged sentence

Year ended September 30,

Allowance for credit losses as of beginning of year $ 284,000 $ 231,000

Provision for expected losses 85,000 38,000

Allowance for credit losses at beginning of period $ 141,000 $ 50,000

(Reversal of) provision for expected losses ( 2,000 ) 85,000

Write-offs charged against the allowance ( 84,000 ) ( 10,000 )

Recoveries of amounts previously written off

16,000 34,000

Foreign currency translation adjustment ( 6,000 ) —

Allowance for credit losses as of end of year $ 375,000 $ 284,000

Allowance for credit losses at end of period $ 49,000 $ 141,000

Investment in Kukio Resort Land Development Partnerships

8 unchanged sentences

The partnerships derive income from the sale of residential parcels in Increment I, which is now completely sold, as well as from commissions on real estate resales by the real estate sales office and revenues resulting from the sale of a few remaining private club memberships.

In the quarter ended March 31, 2024, the last two remaining single-family lots of the 80 lots developed within Increment I were sold.

The last two remaining single-family lots of the 80 lots developed within Increment I were sold in the quarter ended March 31, 2024.

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

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

In November 2025, Kaupulehu Developments entered into an agreement with Mr.

David Johnston, the son of Mr.

Terry Johnston, a partner in Kaupulehu Developments, to surrender any and all remaining rights for Increment II for $ 2,000,000 of which $ 70,000 was received.

Additionally, the purchaser has the right to extend the closing by up to two years by making a $ 70,000 payment in each of the next two years,

with those payments applied against the $ 2,000,000 purchase price.

The closing of this transaction is entirely dependent on the purchaser and therefore may not happen.

Subsequent to fiscal 2025, pursuant to a unit purchase agreement KDK, of which Barnwell holds a 19.6 % interest, agreed to sell KDK’s interests in Increment II to Mr.

David Johnston for $ 2,109,000 .

The unit purchase agreement is subject to due diligence, and there is no certainty that the transaction will close.

Furthermore, there is also no assurance on the timing or amounts that the general partner of KDK would distribute upon a closing.

Barnwell has the right to receive distributions from the Kukio Resort Land Development Partnerships via its non-controlling interests in KD Kona and KKM, based on its respective partnership sharing ratios of 75 % and 34.45 %, respectively.

No cash distributions were received during the year ended September 30, 2025.

During the year ended September 30, 2024, Barnwell received cash distributions of $ 1,071,000 (resulting in a net amount of $ 953,000 , after distributing $ 118,000 to non-controlling interests) from the Kukio Resort Land Development Partnerships.

During the year ended September 30, 2023, Barnwell received cash distributions of $ 758,000 from the Kukio Resort Land Development Partnerships resulting in a net amount of $ 674,000 , after distributing $ 84,000 to non-controlling interests.

Equity in income of affiliates was $ 1,071,000 for the year ended September 30, 2024, as compared to equity in income of affiliates of $ 758,000 for the year ended September 30, 2023.

Equity in income of affiliates was nil for the year ended September 30, 2025, as compared to equity in income of affiliates of $ 1,071,000 for the year ended September 30, 2024.

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

5 unchanged sentences

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 year ended September 30, 2024 was equivalent to the $ 1,071,000 of distributions received in that period.

Accordingly, no equity in income of affiliates was recognized in the year ended September 30, 2025.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $ 106,000 at September 30, 2025 and $ 373,000 at September 30, 2024.

2 unchanged sentences

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.

The last two single-family lots of the 80 lots developed within Increment I were sold in the quarter ended March 31, 2024.

Under the terms of the Increment II agreement with KD II, Kaupulehu Developments is entitled to 15 % of the distributions of KD II, the cost of which is to be solely borne by KDK out of its 55 % ownership interest in KD II, plus a priority payout of 10 % of KDK’s cumulative net profits derived from Increment II sales subsequent to Phase 2A, up to a maximum of $ 3,000,000 as to the priority payout.

2 unchanged sentences

Barnwell is committed to commence construction of improvements within 90 days of the transfer of the four lots in the phases subsequent to Phase 2A as a condition of the transfer of such lots.

Also, in addition to Barnwell’s existing obligations to pay professional fees to certain parties based on percentages of its gross receipts, Kaupulehu Developments is also obligated to pay an amount equal to 0.72 % and 0.20 % of the cumulative net profits of KD II to KD Development and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell, in compensation for the agreement of these parties to admit the new development partner for Increment II.

Also, in addition to Barnwell’s existing obligations to pay professional fees to certain parties based on percentages of its gross receipts, Kaupulehu Developments is obligated to pay an amount equal to 0.72 % and 0.20 % of the cumulative net profits of KD II to KD Development and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell, in compensation for the agreement of these parties to admit the new development partner for Increment II.

Such compensation will be reflected as the obligation becomes probable and the amount of the obligation can be reasonably estimated.

10 unchanged sentences

The lease terminates in December 2025.

CONSOLIDATED VARIABLE INTEREST ENTITY

In February 2021, Barnwell Industries, Inc.

established a wholly-owned subsidiary named BOK Drilling, LLC (“BOK”) for the purpose of indirectly investing in oil and natural gas exploration and development in Oklahoma.

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 were split between BOK and Gros Ventre at 98 % and 2 %, respectively, and as the manager of Teton Barnwell, Gros Ventre was 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 was responsible for 100 % of the capital contributions made to Teton Barnwell.

Teton Barnwell was a variable interest entity for which the Company was deemed the primary beneficiary and thus, was consolidated by the Company.

In the quarter ended June 30, 2024, BOK acquired Gros Ventre’s 2 % non-controlling interest in Teton Barnwell for $ 185,000 and following the acquisition, BOK now owns 100 % interest in Teton Barnwell.

As such, although Teton Barnwell is no longer a variable interest entity as of the acquisition date, it will continue to be consolidated by the Company.

This transaction was accounted for as an equity transaction with no gain or loss recognized and the difference between the carrying amount of Gros Ventre’s non-controlling interest and the consideration given for the acquisition of the additional equity interest was recorded as a reduction in additional paid-in capital in the accompanying Consolidated Balance Sheets and Consolidated Statements of Equity.

ASSETS HELD FOR SALE

Contract Drilling Segment Property and Equipment

In the quarter ended March 31, 2024, the Company commenced the marketing of a portion of the contract drilling segment's property and equipment, the majority of which was already fully depreciated.

There was no impairment related to the classification change from held and used to held for sale as the fair value, less estimated selling costs, of the disposal group exceeded its carrying value.

The property and equipment deemed necessary to complete the contract drilling segment's contracts in backlog continue to be classified as held and used as of September 30, 2024.

At September 30, 2024, a sale of the remainder of the contract drilling segment's property and equipment or the contract drilling segment as a whole was not estimated to be probable due to the lack of any definitive sale opportunities at that date.

OIL AND NATURAL GAS PROPERTIES

Oil and Natural Gas Property Dispositions

In the quarter ended June 30, 2024, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Kaybob area of Alberta, Canada.

The sales price per the agreement was adjusted for customary purchase price adjustments to $ 441,000 in order to, among other things, reflect an economic effective date of May 1, 2024.

Fiscal 2025 Oil and Natural Gas Property Dispositions

On August 8, 2025, Barnwell entered into an agreement with an independent third party to sell all of its working interests in its U.S.

oil and natural gas assets for a sales price of $ 2,300,000 .

The sales price per the agreement was adjusted for customary purchase price adjustments to reflect the economic activity from the effective date of July 1, 2025 to the closing date August 8, 2025.

The Company recognized a loss on the sale of $ 636,000 before related income taxes in the year ended September 30, 2025.

oil and natural gas assets were located in the states of Texas and Oklahoma and were owned by wholly-owned subsidiaries of Barnwell.

As a result of the sale, the Company no longer owns any oil and natural gas assets in the U.S., however, the Company will continue to explore for oil and natural gas opportunities in the U.S.

On August 28, 2025, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Medicine River area of Alberta, Canada.

The sales price per the agreement was adjusted for customary purchase price adjustments to $ 288,000 in order to, among other things, reflect an economic closing date of September 30, 2025.

The final determination of the customary adjustments to the purchase price has not yet been made;

1 unchanged sentence

The proceeds were credited to the full cost pool, with no gain or loss recognized, as the sale did not result in a significant alteration of the relationship between capitalized costs and proved reserves.

Fiscal 2024 Oil and Natural Gas Property Dispositions

In April 2024, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Kaybob area of Alberta, Canada.

The sales price per the agreement was adjusted for customary purchase price adjustments to $ 441,000 in order to, among other things, reflect an economic effective date of May 1, 2024.

In July 2024, Barnwell entered into and completed an agreement with an independent third party to convey interests in certain oil and natural gas properties located in the Bonanza and Balsam areas of Alberta, Canada.

4 unchanged sentences

The sales price per the agreement was adjusted for customary purchase price adjustments to $ 292,000 in order to, among other things, reflect an economic effective closing date of September 30, 2024.

The final determination of the customary adjustments to the purchase price has not yet been made, however, it is not expected to result in a material adjustment.

From the sales proceeds, $ 38,000 was remitted directly to the Canada Revenue Agency by the buyers for potential amounts due for Barnwell’s Canadian income taxes related to the sale.

The proceeds from the sale was credited to our cash in October 2024 and will be reflected in the Statement of Cash Flows for the first quarter of fiscal 2025 ending December 31, 2024.

The proceeds from the sale was credited to our cash in October 2024 and is reflected in the Statement of Cash Flows for the year ended September 30, 2025.

No gain or loss was recognized on this disposition as the sale proceeds were credited to the full cost pool and did not result in a significant alteration of the relationship between capitalized costs and proved reserves.

Investments and Acquisitions

In December 2022, Barnwell Texas, LLC (“Barnwell Texas”), a 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 .

Additionally, 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 paid $ 4,293,000 for its share of the costs to drill, complete and equip the wells during the year ended September 30, 2023.

Impairment of Oil and Natural Gas Properties

1 unchanged sentence

Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices (except where prices are defined by contractual arrangements), the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties.

During the year ended September 30, 2025, the Company incurred a non-cash ceiling test impairment for our U.S.

oil and natural gas properties of $ 865,000 .

During the year ended September 30, 2024, the Company incurred a non-cash ceiling test impairment of $ 2,885,000 , which included impairments for our U.S.

and Canadian oil and natural gas properties of $ 721,000 and $ 2,164,000 , respectively.

The impairment to our U.S.

and Canadian oil and natural gas properties were primarily due to a decline in the historical 12-month rolling average first-day-of-the-month prices.

There was no ceiling test impairment during the year ended September 30, 2023.

As discussed above, the ceiling test uses a 12-month historical rolling average first-day-of-the-month prices.

As such, declines in the 12-month historical rolling average first-day-of-the-month prices used in our ceiling test calculation in future periods could result in impairment write-downs in future periods in the absence of any offsetting factors that are not currently known or projected.

Based on the oil and gas prices for October 1, November 1 and December 1 of 2024, 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 December 31, 2024 will be lower than at September 30, 2024.

Whereas we believe our Canadian full cost pool is sufficiently below the ceiling limit, our U.S.

full cost pool had no ceiling excess at September 30, 2024, and thus a further impairment charge is more likely than not for our U.S full cost pool for the first quarter of fiscal 2025 ending December 31, 2024.

Based on the oil and gas prices for October 1, November 1 and December 1 of 2025, the oil prices used in the 12-month historical rolling first-day-of-the-month average for the ceiling test at December 31, 2025 are likely to be lower than at September 30, 2025.

As such, we may incur a further impairment charge in the first quarter of fiscal 2026 ending December 31, 2025.

The Company is currently unable to estimate a range of the amount of any potential future impairment write-downs as variables that impact the ceiling limitation are dependent upon actual results of activity through the end of December 2025.

7 unchanged sentences

(full cost method) $ 74,511,000 $ ( 65,358,000 ) $ 9,153,000

Drilling rigs and equipment 3 – 10 years

3,103,000 ( 2,823,000 ) 280,000

Other property and equipment 3 – 10 years

6 unchanged sentences

(full cost method) $ 83,557,000 $ ( 67,003,000 ) $ 16,554,000

Drilling rigs and equipment 3 – 10 years

6,618,000 ( 6,127,000 ) 491,000

Other property and equipment 3 – 10 years

16 unchanged sentences

Asset retirement obligation, long-term $ 7,162,000 $ 7,790,000

Asset retirement obligations were reduced by $ 442,000 and nil in fiscal 2024 and 2023, respectively, for those obligations that were assumed by purchasers of Barnwell's oil and natural gas properties (see Note 7 for additional details on dispositions).

Asset retirement obligations were also reduced by $ 614,000 in fiscal 2024 as compared to an increase of $ 1,462,000 in fiscal 2023 primarily due to downward revisions related to deferrals in the estimated timing of future abandonments as a result of changes in the estimated economic lives of certain wells due to improved production performance of many wells in the Twining area as a result of focused attention and investment in optimization to improve well performance and reduce operating costs.

Asset retirement obligations also increased by $ 37,000 and $ 21,000 in fiscal 2024 and 2023, respectively, due primarily to our wells drilled and acquisitions.

Asset retirement obligations were reduced by $ 209,000 and $ 442,000 in fiscal 2025 and 2024, respectively, for those obligations that were assumed by purchasers of Barnwell's oil and natural gas properties (see Note 7 for additional details on dispositions).

Asset retirement obligations were also reduced by $ 694,000 and $ 614,000 in fiscal 2025 and 2024, respectively, primarily due to revisions related to the estimated timing of future abandonments.

Asset retirement obligations also increased by nil and $ 37,000 in fiscal 2025 and 2024, respectively, due primarily to our wells drilled and acquisitions.

The asset retirement obligation reflects the estimated present value of the amount of dismantlement, removal, site reclamation, and similar activities associated with Barnwell's oil and natural gas properties.

7 unchanged sentences

In March 2021, the Company was notified by the OWA that Barnwell’s Manyberries wells were confirmed to be in the WIP program.

Under the agreement with the OWA, the Company is required to pay the abandonment and reclamation costs in advance through a cash deposit.

The total cash deposit amount was calculated to be approximately $ 1,525,000 and the Company paid $ 888,000 of the total deposit in July and August 2021 and may need to pay the remaining balance of $ 637,000 by August 2025.

The Company revised its Manyberries ARO liability based on the OWA’s revised abandonment and reclamation estimates.

Based on a review of the details of the cash deposit calculation provided by the OWA, which includes amounts added for possible contingencies, the Company believes the required cash deposit amount by the OWA is higher than the actual costs of the asset retirement obligation for the Manyberries wells and that any excess of the deposit over actual asset retirement costs for the first phase of the work would be credited toward the second phase of the work.

A remaining excess deposit, if any, would ultimately be refunded to the Company upon completion of all of the work.

As of September 30, 2024, the Company recognized a cumulative reduction in the deposit balance of $ 353,000 for work performed under this program.

Under the agreement with the OWA, the Company was required to pay the abandonment and reclamation costs in advance through a cash deposit.

Barnwell has provided $ 975,000 in cumulative cash deposits to the OWA since the program began in the fall of 2021, and any amount remaining after

completion of the abandonments was to be refunded to the Company, and then upon commencement of the reclamation program a new deposit was to be made for those estimated costs.

To date, the excess deposits that relate to abandonment work have not yet been refunded but have been used to fund the reclamation part of the program and the Company now estimates that a portion of the unused deposit will instead be applied to future reclamation work over the next several years.

The estimated current portion of the unused deposit was $ 173,000 and $ 527,000 as of September 30, 2025 and 2024, respectively, and is included in “Other current assets” on the Company’s Consolidated Balance Sheets.

The non-current portion of the unused deposit of $ 222,000 along with $ 61,000 of non-current receivables at September 30, 2025, is included in “Other non-current assets” on the Company’s Consolidated Balance Sheet at September 30, 2025.

RETIREMENT PLANS

11 unchanged sentences

Interest cost 390,000 411,000 95,000 95,000

Actuarial loss (gain) 520,000 ( 394,000 ) 149,000 ( 66,000 )

Actuarial (gain) loss ( 90,000 ) 520,000 ( 5,000 ) 149,000

Benefits paid ( 394,000 ) ( 247,000 ) ( 3,000 ) ( 4,000 )

24 unchanged sentences

Fluctuations in actual market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefits costs and contributions in future periods.

The Pension Plan actuarial losses in fiscal 2024 were primarily due to a decrease in the discount rate, partially offset by an actuarial gain resulting from actual investment returns that were greater than the assumed rate of return.

The SERP actuarial losses in fiscal 2024 were primarily due to a decrease in the discount rate.

The Pension Plan actuarial gains in fiscal 2025 were primarily due to an increase in the discount rate and actual investment returns that were greater than the assumed rate of return.

The SERP actuarial gains in fiscal 2025 were primarily due to an increase in the discount rate.

The SERP actuarial losses in fiscal 2024 were primarily due to a decrease in the discount rate.

The following table presents the weighted-average assumptions used to determine benefit obligations and net benefit (income) costs:

36 unchanged sentences

and international equities, fixed income securities, other investments, and cash equivalents.

The Pension Plan’s investments in fixed income securities include corporate bonds, U.S.

treasury and government securities, preferred securities, and fixed income exchange-traded funds.

The Pension Plan’s investments in fixed income securities include preferred securities and corporate bonds.

The Pension Plan’s investments in equity securities primarily include domestic companies and is comprised of companies with market capitalization categorized as follows:

1 unchanged sentence

22 % small-cap;

15 % mid-cap;

and 9 % large-cap.

The Pension Plan’s other investment is a short-term note receivable from an unrelated private company.

The Pension Plan’s other investment is a note receivable from an unrelated private company.

A portion of the Pension Plan’s investments is in publicly traded stocks, one of which is Barnwell’s common stock.

As of September 30, 2025 and 2024, the Pension Plan held 666,077 and 413,148 shares, respectively, of Barnwell common stock (see Note 20 for additional details).

The Company’s year-end target allocation, by asset category, and the actual asset allocations were as follows:

6 unchanged sentences

Actual investment allocations may vary from our target allocations from time to time due to prevailing market conditions.

We periodically review our actual investment allocations and rebalance our investments to our target allocations as dictated by current and anticipated market conditions and required cash flows.

The trustees periodically review our actual investment allocations and rebalance our investments to our target allocations as dictated by current and anticipated market conditions and required cash flows.

We categorize plan assets into three levels based upon the assumptions used to price the assets.

12 unchanged sentences

Cash $ 179,000 $ 179,000 $ — $ —

treasury and government securities 516,000 516,000 — —

Fixed income exchange-traded funds 1,872,000 1,872,000 — —

Preferred securities 2,154,000 2,154,000 — —

13 unchanged sentences

Equities 9,516,000 9,516,000 — —

Note receivable from an unrelated private company 571,000 — — 571,000

Total $ 13,094,000 $ 12,523,000 $ — $ 571,000

The following sets forth a summary of changes in the fair value of the pension plan Level 3 asset:

The following sets forth a summary of changes in the fair value of the pension Level 3 note receivable asset:

Year ended September 30,

Balance at beginning of year

$ 571,000 $ —

Issuance of note receivable from an unrelated private company

Interest income 129,000 —

Payments received ( 205,000 ) —

Balance at end of year

$ 495,000 $ 571,000

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

The components of loss from continuing operations before income taxes, after adjusting the loss for non-controlling interests, are as follows:

Year ended September 30,

2 unchanged sentences

$ ( 7,044,000 ) $ ( 3,892,000 )

The components of the income tax provision (benefit) related to the above losses are as follows:

The components of the income tax provision related to the above losses are as follows:

Year ended September 30,

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Total current 153,000 171,000

Deferred provision (benefit):

Deferred (benefit) provision:

United States – State ( 82,000 ) 42,000

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

Consolidated taxes also include the impacts of favorable state jurisdiction provision to tax return true-ups.

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.

A reconciliation between the reported income tax expense (benefit) and the amount computed by multiplying the loss attributable to Barnwell before income taxes by the U.S.

On July 4, 2025, the President of the United States signed into law the One Big Beautiful Bill Act ("OBBBA").

The legislation, among other things, makes permanent, extends or modifies certain provisions under the 2017 Tax Cuts and Jobs Act, including a permanent extension of 100% bonus depreciation for certain capital expenditures.

The Company has determined that there are no tax law changes in the OBBBA that significantly impact the Company’s current and deferred income taxes.

A reconciliation between the reported income tax expense and the amount computed by multiplying the loss attributable to Barnwell before income taxes by the U.S.

federal tax rate of 21 % is as follows:

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tax law 11,000 11,000

Tax basis of investment in subsidiary in excess of book basis under U.S.

tax law 376,000 —

Property and equipment accumulated book depreciation and depletion in excess of tax under Canadian tax law

Property and equipment accumulated book depreciation and depletion in excess of tax under U.S.

31 unchanged sentences

Net deferred income tax liability $ ( 18,000 ) $ ( 100,000 )

The total valuation allowance increased $ 1,457,000 for the year ended September 30, 2024.

The increase was due to current fiscal year operational activity that resulted in changes in deferred tax asset and liability balances, and there were no changes in judgment about the realizability of related deferred tax assets in future years.

Of the total net increase in the valuation allowance for fiscal 2024, $ 1,392,000 was recognized as an income tax expense and $ 65,000 was charged to accumulated other comprehensive income.

Net deferred tax assets at September 30, 2024 of $ 4,658,000 consists of the portion of deferred tax assets that are estimated to be partially realized through corresponding concurrent reversals of deferred tax liabilities related to the Kukio Resort Land Development Partnerships' excess of book income over taxable income, the book basis of property and equipment in excess of tax basis, foreign branch deferred taxes, asset for retirement benefits accrued for books but not for tax under U.S.

The total valuation allowance decreased $ 1,505,000 for the year ended September 30, 2025.

The decrease was due to current fiscal year operational activity that resulted in changes in deferred tax asset and liability balances, and there were no changes in judgment about the realizability of related deferred tax assets in future years.

Of the total net decrease in the valuation allowance for fiscal 2025, $ 1,354,000 was recognized as an income tax benefit and $ 151,000 was credited to accumulated other comprehensive income.

Net deferred tax assets at September 30, 2025 of $ 3,823,000 consists of the portion of deferred tax assets that are estimated to be partially realized through corresponding concurrent reversals of deferred tax liabilities related to the Kukio Resort Land Development Partnerships' excess of book income over taxable income, foreign branch deferred taxes, asset for retirement benefits accrued for books but not for tax under U.S.

tax law, and certain other minor deferred tax liabilities.

At September 30, 2025, Barnwell had U.S.

federal foreign tax credit carryovers, U.S.

federal net operating loss carryovers, U.S.

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federal net operating loss carryovers generated through September 30, 2018 expire in fiscal years 2032-2038, the U.S.

state unitary net operating loss carryovers generated through September 30, 2017 expire in fiscal years 2033-2037, the Canadian net operating loss carryovers expire in fiscal years 2039-2044, and the foreign tax credit carryover expires in fiscal year 2025.

state unitary net operating loss carryovers generated through September 30, 2017 expire in fiscal years 2033-2037, and the Canadian net operating loss carryovers expire in fiscal years 2039-2045.

federal net operating loss carryovers generated in fiscal years 2019-2025 and the U.S.

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Various Canadian provinces 2017 – 2024

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 for the years ended September 30, 2024 and 2023.

Year ended September 30, 2024

Oil and natural gas Contract drilling Land investment Other Total

Revenue streams:

Oil $ 13,509,000 $ — $ — $ — $ 13,509,000

Natural gas 2,007,000 — — — 2,007,000

Natural gas liquids 1,880,000 — — — 1,880,000

Drilling and pump — 3,612,000 — — 3,612,000

Contingent residual payments — — 500,000 — 500,000

Other — — — 128,000 128,000

Total revenues before interest income $ 17,396,000 $ 3,612,000 $ 500,000 $ 128,000 $ 21,636,000

Geographical regions:

United States $ 2,303,000 $ 3,612,000 $ 500,000 $ 37,000 $ 6,452,000

Canada 15,093,000 — — 91,000 15,184,000

Total revenues before interest income $ 17,396,000 $ 3,612,000 $ 500,000 $ 128,000 $ 21,636,000

Timing of revenue recognition:

Goods transferred at a point in time $ 17,396,000 $ — $ 500,000 $ 128,000 $ 18,024,000

Services transferred over time — 3,612,000 — — 3,612,000

Total revenues before interest income $ 17,396,000 $ 3,612,000 $ 500,000 $ 128,000 $ 21,636,000

Year ended September 30, 2023

Oil and natural gas Contract drilling Land investment Other Total

Revenue streams:

Oil $ 14,259,000 $ — $ — $ — $ 14,259,000

Natural gas 3,441,000 — — — 3,441,000

Natural gas liquids 1,676,000 — — — 1,676,000

Drilling and pump — 5,427,000 — — 5,427,000

Contingent residual payments — — 265,000 — 265,000

Other — — — 114,000 114,000

Total revenues before interest income $ 19,376,000 $ 5,427,000 $ 265,000 $ 114,000 $ 25,182,000

Geographical regions:

United States $ 2,746,000 $ 5,427,000 $ 265,000 $ 10,000 $ 8,448,000

Canada 16,630,000 — — 104,000 16,734,000

Total revenues before interest income $ 19,376,000 $ 5,427,000 $ 265,000 $ 114,000 $ 25,182,000

Timing of revenue recognition:

Goods transferred at a point in time $ 19,376,000 $ — $ 265,000 $ 114,000 $ 19,755,000

Services transferred over time — 5,427,000 — — 5,427,000

Total revenues before interest income $ 19,376,000 $ 5,427,000 $ 265,000 $ 114,000 $ 25,182,000

Contract Balances

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

September 30,

2024 2023 2022

Accounts receivables from contracts with customers $ 2,031,000 $ 2,931,000 $ 4,038,000

Contract assets 267,000 958,000 580,000

Contract liabilities — 377,000 1,087,000

Accounts receivables from contracts with customers are included in “Accounts and other receivables, net of allowance for credit losses,” in the accompanying Consolidated Balance Sheets and contract assets, which includes costs and estimated earnings in excess of billings and retainage, are included in “Other current assets” in the accompanying Consolidated Balance Sheets.

Contract liabilities, which includes billings in excess of costs and estimated earnings are included in “Other current liabilities” in the accompanying Consolidated Balance Sheets.

Retainage, included in contract assets, represents amounts due from customers, but where payments are withheld contractually until certain construction milestones are met.

Amounts retained typically range from 5 % to 10 % of the total invoice, up to contractually-specified maximums.

The Company classifies as a current asset those retainages that are expected to be collected in the next twelve months.

Contract assets represent the Company’s rights to consideration in exchange for services transferred to a customer that have not been billed as of the reporting date.

The Company’s rights are generally unconditional at the time its performance obligations are satisfied.

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

As of September 30, 2024 and 2023, the Company had nil and $ 377,000 , respectively, included in “Other current liabilities” on the Consolidated Balance Sheets for those performance obligations expected to be completed in the next twelve months.

During the years ended September 30, 2024 and 2023, the amount of revenue recognized that was previously included in contract liabilities as of the beginning of the respective period was $ 377,000 and $ 1,015,000 , respectively.

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

The Company considers contract modifications to exist when the modification either creates new or changes the existing enforceable rights and obligations.

Most of the Company’s contract modifications are for goods and services that are not distinct from the existing performance obligations.

The effect of a contract modification on the transaction price, and the measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase or decrease) on a cumulative catchup basis.

Performance Obligations

The Company’s remaining performance obligations for drilling and pump installation contracts (hereafter referred to as “backlog”) represent the unrecognized revenue value of the Company’s contract commitments.

The Company’s backlog may vary significantly each reporting period based on the timing of major new contract commitments.

In addition, our customers have the right, under some infrequent circumstances, to terminate contracts or defer the timing of the Company’s services and their payments to us.

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

At September 30, 2024, the remaining performance obligation for contract drilling jobs with original expected durations greater than one year was not material.

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 September 30, 2024 and 2023, the Company had $ 173,000 and $ 504,000 , respectively, in unamortized preconstruction costs related to contracts that were not completed.

During the years ended September 30, 2024 and 2023, the amortization of preconstruction costs related to contracts was $ 306,000 and $ 326,000 , respectively.

These amounts have been included in “Contract drilling operating” costs and expenses in the accompanying Consolidated Statements of Operations.

Additionally, no impairment charges in connection with the Company’s preconstruction costs were recorded during the years ended September 30, 2024 and 2023.

Uninstalled Materials

As of of September 30, 2024 and 2023, uninstalled materials was $ 65,000 and $ 348,000 , respectively.

Uninstalled materials are held in inventory and included in “Other current assets” on the Company’s Consolidated Balance Sheets.

SEGMENT AND GEOGRAPHIC INFORMATION

Barnwell operates the following segments:

1) acquiring, developing, producing and selling oil and natural gas in Canada and the U.S.

(oil and natural gas);

2) leasehold land interests in Hawaii (land investment);

and 3) drilling wells and installing and repairing water pumping systems in Hawaii (contract drilling).

As disclosed in Note 3 “Discontinued Operations,” on March 14, 2025, the Company completed the sale of Water Resources, which represented the Company’s contract drilling segment.

The financial results of the Company’s contract drilling business has been presented as discontinued operations and therefore is excluded from segment reporting.

Accordingly, Barnwell’s continuing operations include the following two principal business segments:

Oil and Natural Gas Segment - Barnwell engages in oil and natural gas development, production, acquisitions and sales in Canada and in the U.S.

Land Investment Segment - Barnwell owns leasehold land interests in Hawaii.

The Company’s Chief Operating Decision Maker is the Chief Executive Officer, who utilizes segment revenues and expenses and segment operating profit or loss to assess performance and allocate resources to each segment.

General and administrative expenses are reviewed on a consolidated basis.

The following table presents certain financial information related to Barnwell’s reporting segments.

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Oil and natural gas $ 13,563,000 $ 17,396,000

Contract drilling 3,612,000 5,427,000

Land investment — 500,000

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Total revenues $ 13,697,000 $ 18,075,000

Cost and expenses:

Oil and natural gas $ 8,966,000 $ 9,849,000

Depletion, depreciation, and amortization:

Oil and natural gas $ 3,144,000 $ 4,947,000

Contract drilling 156,000 186,000

Other 2,000 3,000

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Oil and natural gas $ 865,000 $ 2,885,000

Total impairment $ 2,885,000 $ —

Operating (loss) profit (before general and administrative expenses):

Operating profit (loss) (before general and administrative expenses):

Oil and natural gas $ 588,000 $ ( 285,000 )

Contract drilling ( 1,027,000 ) ( 428,000 )

Land investment — 500,000

Other 78,000 88,000

Gain on sale of assets — 551,000

Total operating (loss) profit ( 687,000 ) 5,173,000

Loss on sale of assets ( 636,000 ) —

Total operating profit 30,000 303,000

Equity in income of affiliates:

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General and administrative expenses ( 6,937,000 ) ( 5,130,000 )

Foreign currency gain 10,000 76,000

Foreign currency (loss) gain ( 192,000 ) 10,000

Interest expense ( 7,000 ) —

Interest income 54,000 88,000

Loss before income taxes $ ( 5,118,000 ) $ ( 864,000 )

Loss from continuing operations before income taxes $ ( 7,052,000 ) $ ( 3,658,000 )

Capital Expenditures:

1 unchanged sentence

Oil and natural gas $ 254,000 $ 4,228,000

Contract drilling 12,000 314,000

Other 1,000 14,000

Total $ 254,000 $ 4,228,000

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United States

4,190,000 5,917,000

Contract drilling (1)

1,597,000 3,100,000

Cash and cash equivalents 2,886,000 4,285,000

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______________

(1) L ocated in Hawaii.

(1) Primarily located in the province of Alberta, Canada .

Long-Lived Assets By Geographic Area:

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Total (before interest income) $ 13,643,000 $ 17,987,000

REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following tables provide information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition based upon continuing operations for the years ended September 30, 2025 and 2024.

Year ended September 30, 2025

Oil and natural gas Land investment Other Total

Revenue streams:

Oil $ 10,476,000 $ — $ — $ 10,476,000

Natural gas 1,499,000 — — 1,499,000

Natural gas liquids 1,588,000 — — 1,588,000

Other — — 80,000 80,000

Total revenues before interest income $ 13,563,000 $ — $ 80,000 $ 13,643,000

Geographical regions:

United States $ 1,171,000 $ — $ 1,000 $ 1,172,000

Canada 12,392,000 — 79,000 12,471,000

Total revenues before interest income $ 13,563,000 $ — $ 80,000 $ 13,643,000

Timing of revenue recognition:

Goods transferred at a point in time $ 13,563,000 $ — $ 80,000 $ 13,643,000

Year ended September 30, 2024

Oil and natural gas Land investment Other Total

Revenue streams:

Oil $ 13,509,000 $ — $ — $ 13,509,000

Natural gas 2,007,000 — — 2,007,000

Natural gas liquids 1,880,000 — — 1,880,000

Contingent residual payments — 500,000 — 500,000

Other — — 91,000 91,000

Total revenues before interest income $ 17,396,000 $ 500,000 $ 91,000 $ 17,987,000

Geographical regions:

United States $ 2,303,000 $ 500,000 $ — $ 2,803,000

Canada 15,093,000 — 91,000 15,184,000

Total revenues before interest income $ 17,396,000 $ 500,000 $ 91,000 $ 17,987,000

Timing of revenue recognition:

Goods transferred at a point in time $ 17,396,000 $ 500,000 $ 91,000 $ 17,987,000

Contract Balances

The following table provides the balances of our receivables from contracts with customers which is included in "Accounts and other receivables, net of allowance for credit losses," in the accompanying Consolidated Balance Sheets.

September 30,

2025 2024 2023

Accounts receivables from contracts with customers $ 913,000 $ 1,472,000 $ 2,344,000

ACCUMULATED OTHER COMPREHENSIVE INCOME

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Income taxes — —

Net current period other comprehensive loss — ( 2,000 )

Net current period other comprehensive income 75,000 —

Ending accumulated foreign currency translation 295,000 220,000

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Amortization of net actuarial gain — ( 85,000 )

Net actuarial (loss) gain arising during the period ( 76,000 ) 891,000

Net actuarial gain (loss) arising during the period 624,000 ( 76,000 )

Income taxes — —

Net current period other comprehensive (loss) income ( 161,000 ) 812,000

Net current period other comprehensive income (loss)

624,000 ( 161,000 )

Ending accumulated retirement plans benefit income 2,347,000 1,723,000

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Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts and other receivables, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments.

The carrying values of cash and cash equivalents, accounts and other receivables, note receivable, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

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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.

See Note 7 for additional information regarding oil and natural gas property acquisitions.

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.

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Asset retirement obligations are not measured at fair value subsequent to initial recognition.

Insurance Premium Financing

In March 2025, the Company entered into a short-term financing agreement with a third-party to finance the Company’s directors and officers insurance premium in the amount of $ 183,000 , with a term of 11 months and an annual interest rate of 9.4 %.

The Company had made a down payment of $ 15,000 and was required to make monthly principal and interest payments of $ 16,000 over the term of the agreement, which was set to mature in February 2026.

The insurance premium financing was repaid in full in September 2025.

The Company’s right-of-use (“ROU”) assets and lease liabilities at September 30, 2025, primarily relate to non-cancelable operating leases for our Hawaii corporate and Canadian office spaces and our leasehold land interest for Lot 4C held by Kaupulehu Developments.

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A ROU asset and corresponding lease liability is not recorded for leases with an initial term of 12 months or less (short-term leases) as the Company recognizes lease expense for these leases as incurred over the lease term.

Leases recorded on the balance sheet consist of the following:

Leases recorded on the consolidated balance sheet consist of the following:

September 30,

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Operating lease cost $ 114,000 $ 87,000

Short-term lease cost 358,000 347,000

Variable lease cost 155,000 142,000

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2018 Equity Incentive Plan

The stockholder-approved 2018 Equity Incentive Plan is administered by the Compensation Committee of the Board of Directors and provides for the issuance of incentive stock options, nonstatutory stock options, stock options with stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards, and stock grants to employees, consultants and

non-employee members of the Board of Directors.

1,600,000 shares of Barnwell common stock have been reserved for issuance and as of September 30, 2024, a total of 925,188 share options remain available for grant.

1,600,000 shares of Barnwell common stock have been reserved for issuance and as of September 30, 2025, a total of 751,724 shares remain available for grant.

Barnwell currently has a policy of issuing new shares to satisfy share option exercises when the optionee requests shares.

In October 2025, the Board of Directors of the Company granted a total of 133,335 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board.

The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting date.

On October 27, 2025, Barnwell Industries, Inc.

appointed Philip Patman, Jr.

as the Company’s Executive Vice President – Finance and in connection with Mr.

Patman’s appointment, the Company entered into an executive employment agreement with Mr.

Patman, dated, and effective, as of October 27, 2025 (the “Employment Agreement”).

Pursuant to the terms of the Employment Agreement, on October 27, 2025, Mr.

Patman received the following awards which were issued pursuant to the Company’s Amended and Restated 2018 Equity Incentive Plan, as amended from time to time:

a stock award of 83,207 shares of the Company’s common stock;

a restricted stock unit award for 83,208 shares of the Company’s common stock (the “Initial RSU Award”);

and an incentive stock option to purchase 185,000 shares of the Company’s common stock (the “Initial Stock Option” and, together with the Initial RSU Award, the “Initial Equity Awards”).

Both Initial Equity Awards vest according to the following schedule:

34 % of the total on October 27, 2026;

33 % of the total on October 27, 2027;

and 33 % of the total on October 27, 2028.

The Initial Stock Option has a term of ten years and an exercise price of $ 1.21 per share (the closing price of the Company’s common stock on October 27, 2025).

As of December 8, 2025, 266,974 shares remain available for grant under the 2018 Equity Incentive Plan.

Stock Options

In February 2021, the Board of Directors of the Company granted options to purchase 665,000 shares of common stock, 310,000 shares to independent directors and 355,000 shares to employees.

In February 2021, the Company’s Board of Directors (the “Board”) granted options to purchase 665,000 shares of common stock, 310,000 shares to independent directors and 355,000 shares to employees.

605,000 shares of the stock options granted have an exercise price equal to the closing market price of Barnwell’s stock on the date of grant of $ 3.33 , vest annually over three years , and expire in ten years from the date of grant.

60,000 shares of the stock options granted have an exercise price of $ 3.66 (110% of the closing market price on the date of grant for options granted to affiliates), vest annually over three years , and expire in five years from the date of grant.

60,000 shares of the stock options granted have an exercise price of $ 3.66 ( 110 % of the closing market price on the date of grant for options granted to affiliates), vest annually over

three years , and expire in five years from the date of grant.

Of the 665,000 shares of common stock granted, 150,000 vested stock options expired and 100,000 shares were forfeited, both of which were as a result of director departures since the date of grant.

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Compensation cost for stock option awards is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period.

During the years ended September 30, 2024 and 2023, the Company recognized share-based compensation expense related to stock options of $ 50,000 and $ 164,000 , respectively.

During the years ended September 30, 2025 and 2024, the Company recognized share-based compensation expense related to stock options of nil and $ 50,000 , respectively.

There was no impact on income taxes for the years ended September 30, 2025 and 2024 due to a full valuation allowance on the related deferred tax asset.

1 unchanged sentence

Restricted Stock Units

On November 2, 2023, the Board of Directors of the Company granted a total of 76,336 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board.

On November 2, 2023, the Board granted a total of 76,336 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board.

The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting dates;

provided that, any unvested restricted stock would vest upon a director’s death, disability, a change in control of the Company resulting in the director not continuing as a director or the director not being renominated for election even though he was willing to stand for re-election.

On May 16, 2024, the Board of Directors of the Company granted 60,000 restricted stock units to the Company’s President and Chief Executive Officer.

provided that, any unvested restricted stock would vest upon a director’s death, disability, a change in control of the Company resulting in the director not continuing as a

director or the director not being renominated for election even though he was willing to stand for re-election.

On May 16, 2024, the Board granted 60,000 restricted stock units to the Company’s President and Chief Executive Officer.

The restricted stock units vest ratably over a three-year period, subject to the employee’s continued service through the applicable vesting dates.

On October 24, 2024, the Board granted a total of 105,820 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board.

The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting dates.

On January 19, 2025, the Board granted a total of 66,000 restricted stock units to the Company's President and Chief Executive Officer.

The restricted stock units vest ratably over a three-year period, subject to the employee’s continued service through the applicable vesting dates.

The following table summarizes Barnwell’s restricted stock units activity from October 1, 2024 through September 30, 2025:

6 unchanged sentences

______________

(1) The underlying common stock for these vested restricted stock units were not yet issued as of September 30, 2024;

(1) The underlying common stock for 30,182 vested restricted stock units were not yet issued as of September 30, 2025;

in October 2025, the Company issued 30,182 shares of common stock for these vested restricted stock units.

4 unchanged sentences

Common Stock Issued for Services

In May 2023, the Company issued a total of 34,091 shares of Barnwell common stock to certain independent directors for their services on behalf of the Company and the Board of Directors pertaining to the negotiations of the Cooperation Agreement and the settlement of the potential proxy contest (see Note 19 for additional details).

The total value of the shares issued was $ 90,000 which was valued using the closing price of Barnwell's common stock on May 11, 2023, the date of grant.

There was no impact on income taxes for the year ended September 30, 2023 related to the common stock issued for services due to a net operating loss and net operating loss carryforwards with a full valuation allowance in the relevant taxing jurisdiction.

Cash Dividends

No dividends were declared or paid during the year ended September 30, 2024.

The following table sets forth the cash dividends paid per share of common stock during the year ended September 30, 2023.

Record Date Date of Payment Dividend Paid

August 24, 2023 September 11, 2023 $ 0.015

May 25, 2023 June 12, 2023 $ 0.015

February 23, 2023 March 13, 2023 $ 0.015

December 27, 2022 January 11, 2023 $ 0.015

On September 29, 2025, the Board approved and ratified a common stock grant to directors Kenneth Grossman and Joshua Horowitz for their services on behalf of the Company and the Board pertaining to the various legal actions between Ned L.

Sherwood and certain of his affiliates and the Company and the 2025 shareholder proxy contest.

Each director was granted 65,000 shares of Barnwell common stock and the total value of the all the shares granted was $ 177,000 which was valued using the closing price of Barnwell's common stock on September 29, 2025, the date of grant.

Limited-Duration Shareholder Rights Plan

On January 26, 2025, the Board adopted a shareholder rights plan and declared a dividend of one right (a “Right”) in respect of each of the Company’s issued and outstanding shares of common stock, par value $ 0.50 per share (“Common Stock”).

The dividend was payable to the shareholders of record at the close of business on February 7, 2025.

Each Right initially entitled the registered holder, subject to the terms of the Rights Agreement (as defined below), to purchase from the Company one share of Common Stock, at a price equal to $ 9.00 , subject to certain adjustments (as adjusted from time to time, the “Exercise Price”).

The terms of the Rights are set forth in the Rights Agreement, dated as of January 26, 2025 (as it may be amended from time to time, the “Rights Agreement”), by and between the Company and Broadridge Corporate Issuer Solutions, LLC, as rights agent (or any successor rights agent, the “Rights Agent”).

In general terms, the Rights Agreement imposes significant dilution upon any person or group (other than the Company or certain related persons) that is or becomes the beneficial owner of 20 % (the “Triggering Percentage”) or more of the Company’s outstanding Common Stock without the prior approval of the Board.

A person or group that becomes the beneficial owner of the Triggering Percentage or more is called an “Acquiring Person.” Any Rights held by an Acquiring Person will be null and void and may not be exercised.

Shareholders that beneficially own the Triggering Percentage or more of the Company’s outstanding Common Stock on the date the plan is adopted, are not considered Acquiring Persons;

however, such Shareholders generally may not acquire, or obtain the right to acquire, beneficial ownership of 0.25 % or more additional shares of the Company’s outstanding Common Stock.

The term “beneficial ownership” is defined in the Rights Agreement and includes, among other things, certain securities that may be exercised or converted into shares of Common Stock and certain derivative arrangements.

The Rights will expire prior to the earliest of (i) the close of business on January 26, 2026 (subject to the shareholders of the Company approving an extension of the Rights Agreement through a date on or prior to January 26, 2028);

(ii) the time at which the Rights are redeemed pursuant to the Rights Agreement;

(iii) the time at which the Rights are exchanged pursuant to the Rights Agreement;

and (iv) upon the occurrence of certain transactions.

This description of the Rights Agreement herein does not purport to be complete and is qualified in its entirety by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 27, 2025.

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

The value of the plans are directly related to our oil and natural gas segment's free cash flows from Canadian properties and the divestiture of Canadian oil and natural gas assets.

As of September 30, 2024, Barnwell has accrued approximately $ 286,000 in bonus compensation under these plans and the amount is reported in “Accrued compensation” on the Consolidated Balance Sheet at September 30, 2024.

As of September 30, 2025, Barnwell has accrued approximately $ 118,000 in bonus compensation under these plans and the amount is reported in “Accrued compensation” on the Consolidated Balance Sheet.

Environmental Matters

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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.

In fiscal 2020, the Staff of the State of Hawaii’s Commission on Water Resource Management (“Commission”) circulated a draft of a proposed recommendation to the Commission under which the Company, the water utility, the water utility's independent hydrologist firm and the owner of the land on which two water wells were drilled would be assessed penalty fines because each of the wells were calculated to have been drilled beyond the depth permitted by the permit.

The wells were drilled to a depth to penetrate certain layers of impermeable rock necessary to access the aquifer at the instructions and on the advice of the hydrologist hired by the owner of the well.

Subsequently, the Staff of the Commission acknowledged that one well had not been drilled to a depth beyond its permitted depth and the fines on that well were eliminated.

Additionally, the fines applicable to the depth of the second well were dropped in lieu of the parties entering into an agreement to perform a water quality study and repurpose a current well into a monitoring well.

Accordingly, the Company recorded a liability of $ 300,000 to accrue for the costs to drill the monitoring well in the year ended September 30, 2020.

During the year ended September 30, 2024, the liability was reduced to $ 200,000 due to a decrease in the estimated cost of the monitoring well due to reductions in the scope of work from what had been previously estimated.

Barnwell’s management is not aware of any claims or litigation involving Barnwell that are likely to have a material adverse effect on its results of operations, financial position or liquidity, other than the shareholder contest actions discussed elsewhere in this filing.

Other Matters

During the year ended September 30, 2024, one of our water well drilling jobs encountered numerous unforeseen difficulties causing an increase in costs which led to the water well drilling contract becoming a loss job for which the Company had a $ 141,000 remaining loss accrual liability as of September 30, 2024.

Barnwell is obligated to pay Nearco Enterprises Ltd.

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Other current liabilities ( 492,000 ) 379,000

Increase (decrease) from changes in current assets and liabilities $ 2,780,000 $ ( 393,000 )

Increase from changes in current assets and liabilities $ 224,000 $ 2,100,000

Supplemental disclosure of cash flow information:

Cash paid during the year for:

Income taxes paid $ 71,000 $ 100,000

Capital expenditure accruals related to oil and natural gas acquisition and development increased $ 1,291,000 during the year ended September 30, 2024 and decreased $ 575,000 during the year ended September 30, 2023.

Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations decreased $ 577,000 during the year ended September 30, 2024 and increased $ 1,483,000 during the year ended September 30, 2023.

Income taxes paid, net of refunds $ 196,000 $ 71,000

Supplemental disclosure of non-cash financing activities:

Prepaid insurance funded directly by short-term premium financing borrowing $ 168,000 $ —

Capital expenditure accruals related to oil and natural gas acquisition and development decreased $ 2,136,000 during the year ended September 30, 2025 and increased $ 1,291,000 during the year ended September 30, 2024.

Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations decreased $ 684,000 and $ 577,000 during the years ended September 30, 2025 and September 30, 2024, respectively.

RELATED PARTY TRANSACTIONS

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Changes to the arrangement above, effective March 7, 2019, are discussed in Note 6.

No lots were sold during the year ended September 30, 2025.

During the year ended September 30, 2024, Barnwell received $ 500,000 in percentage of sales payments from KD I from the sale of the last two single-family lots within Increment I.

During the year ended September 30, 2023, Barnwell received $ 265,000 in percentage of sales payments from KD I from the sale of one single-family lot within Increment I.

In May 2023, the Company’s Board of Directors approved and ratified the payment of one-time special director fees to directors Kenneth Grossman and Doug Woodrum for their services on behalf of the Company and the Board of Directors pertaining to the negotiations of the cooperation and support agreement and the settlement of the potential proxy contest at the 2023 annual meeting of stockholders.

Grossman received a one-time special director fee of $ 100,000 , which was paid in $ 40,000 cash 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 , which was paid in $ 20,000 cash 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).

Sherwood and certain of his affiliates and the Company and the 2025 shareholder proxy contest.

Barnwell Pension Plan

In the quarter ended June 30, 2025, the Pension Plan purchased shares of Barnwell common stock which resulted in the Pension Plan owning more than 5 % of the Company's common shares outstanding.

The Pension Plan has filed Schedule 13Ds with the Securities and Exchange Commission reporting its beneficial ownership of Barnwell common stock.

As of September 30, 2025, the Pension Plan held 666,077 shares of Barnwell common stock.

All the shares purchased by the Pension Plan were made on the open market through a brokerage account.

SUBSEQUENT EVENTS

Restricted Stock Units

Share-based Payment Arrangements

The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting date.

Contract Drilling Segment Drilling Rig

In December 2024, the Company entered into a purchase agreement with an independent third party for the sale of a contract drilling segment drilling rig and related ancillary equipment.

The sale of these assets will close upon the buyer’s acceptance of the drilling rig and transfer of the legal title at delivery which is expected to occur in our second quarter of fiscal 2025.