BARNWELL INDUSTRIES INC 10-Q

ITEM 1. FINANCIAL STATEMENTS BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) December 31, 2025 September 30, 2025 ASSETS Current assets: Cash and cash equivalents $ 3,622,000 $ 2,886,000 Accounts and other receivables, net of allowance for credit losses of: $ 50,000 at December 31, 2025; $ 49,000 at September 30, 2025 1,411,000 1,621,000 Note receivable 200,000 300,000 Other current assets 594,000 423,000 Total current assets 5,827,000 5,230,000 Asset for retirement benefits 6,056,000 5,928,000 Operating lease right-of-use assets 120,000 145,000 Other non-current assets 380,000 347,000 Property and equipment: Proved oil and natural gas properties (full cost method) 75,952,000 74,511,000 Other property and equipment 504,000 500,000 Total property and equipment 76,456,000 75,011,000 Accumulated depletion, impairment, depreciation, and amortization ( 67,372,000 ) ( 65,849,000 ) Total property and equipment, net 9,084,000 9,162,000 Total assets $ 21,467,000 $ 20,812,000 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 1,935,000 $ 2,182,000 Accrued capital expenditures 270,000 185,000 Accrued compensation 262,000 264,000 Accrued operating and other expenses 628,000 1,022,000 Current portion of asset retirement obligation 615,000 613,000 Other current liabilities 291,000 460,000 Total current liabilities 4,001,000 4,726,000 Operating lease liabilities 82,000 93,000 Liability for retirement benefits 1,776,000 1,791,000 Asset retirement obligation 7,404,000 7,162,000 Deferred income tax liabilities 18,000 18,000 Total liabilities 13,281,000 13,790,000 Commitments and contingencies (Note 16) Equity: Common stock, par value $ 0.50 per share; authorized, 40,000,000 shares: 12,705,964 issued at December 31, 2025; 10,241,434 issued at September 30, 2025 6,353,000 5,121,000 Additional paid-in capital 9,410,000 8,039,000 (Accumulated deficit) retained earnings ( 7,934,000 ) ( 6,508,000 ) Accumulated other comprehensive income, net 2,615,000 2,642,000 Treasury stock, at cost: 167,900 shares at December 31, 2025 and September 30, 2025 ( 2,286,000 ) ( 2,286,000 ) Total stockholders’ equity 8,158,000 7,008,000 Non-controlling interests 28,000 14,000 Total equity 8,186,000 7,022,000 Total liabilities and equity $ 21,467,000 $ 20,812,000 See Notes to Condensed Consolidated Financial Statements 3 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended December 31, 2025 2024 Revenues: Oil and natural gas $ 2,630,000 $ 3,897,000 Sale of interest in leasehold land 70,000 — Gas processing and other 46,000 37,000 2,746,000 3,934,000 Costs and expenses: Oil and natural gas operating 2,071,000 2,496,000 General and administrative 1,616,000 1,163,000 Depletion, depreciation, and amortization 592,000 904,000 Impairment of assets — 613,000 Foreign currency (gain) loss ( 47,000 ) 351,000 4,232,000 5,527,000 Loss from continuing operations before income taxes ( 1,486,000 ) ( 1,593,000 ) Income tax (benefit) provision ( 74,000 ) 7,000 Net loss from continuing operations ( 1,412,000 ) ( 1,600,000 ) Net (loss) from discontinued operations — ( 319,000 ) Net loss ( 1,412,000 ) ( 1,919,000 ) Less: Net earnings (loss) attributable to non-controlling interests 14,000 ( 2,000 ) Net loss attributable to Barnwell Industries, Inc. $ ( 1,426,000 ) $ ( 1,917,000 ) Basic and diluted loss per common share attributable to Barnwell Industries, Inc. stockholders: Net loss from continuing operations attributable to Barnwell Industries, Inc. $ ( 0.13 ) $ ( 0.16 ) Net loss from discontinued operations — ( 0.03 ) Net loss attributable to Barnwell Industries, Inc. $ ( 0.13 ) $ ( 0.19 ) Weighted-average number of common shares outstanding: Basic and diluted 11,070,498 10,047,173 See Notes to Condensed Consolidated Financial Statements 4 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) Three months ended December 31, 2025 2024 Net loss $ ( 1,412,000 ) $ ( 1,919,000 ) Other comprehensive (loss) income: Foreign currency translation adjustments, net of taxes of $ 0 ( 27,000 ) 93,000 Total other comprehensive (loss) income ( 27,000 ) 93,000 Total comprehensive loss ( 1,439,000 ) ( 1,826,000 ) Less: Comprehensive (income) loss attributable to non-controlling interests ( 14,000 ) 2,000 Comprehensive loss attributable to Barnwell Industries, Inc. $ ( 1,453,000 ) $ ( 1,824,000 ) See Notes to Condensed Consolidated Financial Statements 5 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY Three months ended December 31, 2025 and 2024 (Unaudited) Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income Treasury Stock Non-controlling Interests Total Equity Balance at September 30, 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 — — — ( 1,917,000 ) — — ( 2,000 ) ( 1,919,000 ) Foreign currency translation adjustments, net of taxes of $ 0 — — — — 93,000 — — 93,000 Share-based compensation — — 69,000 — — — — 69,000 Issuance of common stock for restricted stock units vested 25,444 13,000 ( 13,000 ) — — — — — Balance at December 31, 2024 10,053,534 $ 5,111,000 $ 7,746,000 $ ( 1,322,000 ) $ 2,036,000 $ ( 2,286,000 ) $ 20,000 $ 11,305,000 Balance at September 30, 2025 10,073,534 $ 5,121,000 $ 8,039,000 $ ( 6,508,000 ) $ 2,642,000 $ ( 2,286,000 ) $ 14,000 $ 7,022,000 Net loss — — — ( 1,426,000 ) — — 14,000 ( 1,412,000 ) Foreign currency translation adjustments, net of taxes of $ 0 — — — — ( 27,000 ) — — ( 27,000 ) Share-based compensation — — 94,000 — — — — 94,000 Issuance of common stock for services 83,207 42,000 59,000 — — — — 101,000 Issuance of common stock for restricted stock units vested 160,182 80,000 ( 80,000 ) — — — — — Issuance of common stock, net of costs 2,221,141 1,110,000 1,298,000 — — — — 2,408,000 Balance at December 31, 2025 12,538,064 $ 6,353,000 $ 9,410,000 $ ( 7,934,000 ) $ 2,615,000 $ ( 2,286,000 ) $ 28,000 $ 8,186,000 See Notes to Condensed Consolidated Financial Statements 6 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three months ended December 31, 2025 2024 Cash flows from operating activities of continuing operations: Net loss $ ( 1,412,000 ) $ ( 1,919,000 ) Net loss from discontinued operations — ( 319,000 ) Net loss from continuing operations ( 1,412,000 ) ( 1,600,000 ) Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities: Depletion, depreciation, and amortization 592,000 904,000 Impairment of assets — 613,000 Retirement benefits income ( 102,000 ) ( 79,000 ) Non-cash rent income ( 7,000 ) — Accretion of asset retirement obligation 183,000 196,000 Deferred income tax (benefit) expense — ( 9,000 ) Asset retirement obligation payments ( 411,000 ) ( 101,000 ) Share-based compensation expense 94,000 69,000 Common stock issued for services 101,000 — Retirement plan contributions and payments ( 140,000 ) ( 1,000 ) Credit loss (reversal) expense ( 3,000 ) ( 14,000 ) Foreign currency loss ( 47,000 ) 351,000 (Decrease) increase from changes in current assets and liabilities ( 615,000 ) ( 881,000 ) Net cash (used in) provided by operating activities from continuing operations ( 1,767,000 ) ( 552,000 ) Cash flows from investing activities of continuing operations: Proceeds from the sale of oil and natural gas assets — 282,000 Capital expenditures - oil and natural gas ( 28,000 ) ( 2,529,000 ) Dividend received from discontinued operations — 250,000 Payments received on note receivable related to the sale of discontinued operations 100,000 — Net cash provided by (used in) investing activities from continuing operations 72,000 ( 1,997,000 ) Cash flows from financing activities of continuing operations: Proceeds from issuance of stock, net of costs 2,426,000 — Net cash provided by financing activities from continuing operations 2,426,000 — Cash flows from discontinued operations: Net cash used in operating activities — ( 207,000 ) Net cash provided by investing activities — 585,000 Net cash used in financing activities — ( 250,000 ) Net cash provided by discontinued operations — 128,000 Effect of exchange rate changes on cash and cash equivalents 5,000 ( 127,000 ) Net (decrease) increase in cash and cash equivalents 736,000 ( 2,548,000 ) Cash and cash equivalents at beginning of period 2,886,000 4,505,000 Cash and cash equivalents of continuing operations at end of period $ 3,622,000 $ 1,957,000 See Notes to Condensed Consolidated Financial Statements 7 BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The condensed consolidated financial statements include the accounts of Barnwell Industries, Inc. and all majority-owned subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us,” or the “Company”), including a 77.6 %-owned land investment general partnership ("Kaupulehu Developments") and a 75 %-owned land investment partnership (KD Kona 2013 LLLP). All significant intercompany accounts and transactions have been eliminated. Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in variable interest entities in which the Company is not deemed to be the primary beneficiary are accounted for by the equity method. Unless otherwise indicated, all references to “dollars” in this Form 10-Q are to U.S. dollars. Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements and notes have been prepared by Barnwell in accordance with the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in Barnwell’s September 30, 2025 Annual Report on Form 10-K (our “2025 Annual Report”). The Condensed Consolidated Balance Sheet as of September 30, 2025 has been derived from audited consolidated financial statements. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at December 31, 2025, results of operations, comprehensive loss, equity and cash flows for the three months ended December 31, 2025 and 2024, have been made. The results of operations for the period ended December 31, 2025 are not necessarily indicative of the operating results for the full year. Use of Estimates in the Preparation of Condensed Consolidated Financial Statements The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management of Barnwell to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ significantly from those estimates. Significant assumptions are required in the 8 valuation of deferred tax assets, asset retirement obligations, proved oil and natural gas reserves, and such assumptions may impact the amount at which such items are recorded. Significant Accounting Policies Other than as set forth below, there have been no changes to Barnwell's significant accounting policies as described in the Notes to Consolidated Financial Statements included in Item 8 of the Company's 2025 Annual Report. 2. GOING CONCERN The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the twelve-month period following the date of issuance of these condensed consolidated financial statements. 3. DISCONTINUED OPERATIONS On March 14, 2025, the Company entered into a Stock Purchase Agreement with three unrelated individuals (collectively, the “Buyer”) whereby the Buyer acquired all of the shares of capital stock of Water Resources (the “Shares”) owned by the Company (the “Purchase Agreement”). The sale and purchase of the Shares closed (the “Closing”) simultaneously with the execution and delivery of the Purchase Agreement by each of the parties thereto on March 14, 2025. The aggregate purchase price for the Shares was $ 1,050,000 , which was paid at Closing by the Buyer as follows: an initial aggregate cash payment of $ 250,000 and the delivery of a non-interest bearing promissory note with a principal amount of $ 800,000 (the “Promissory Note”). As of December 31, 2025, the balance of the Promissory Note was $ 200,000 and is presented as “Note receivable” on the Condensed Consolidated Balance Sheets ($ 300,000 as at September 30, 2025) with the remaining payments scheduled for $ 50,000 on February 15, 2026 and $ 150,000 on March 15, 2026. The annual interest rate on the Promissory Note increased from zero to 12 % beginning August 15, 2025 and to 18 % beginning December 15, 2025. The $ 100,000 was paid on December 15, 2025 as scheduled, as well as the $ 50,000 on February 13, 2026. Water Resources drilled water wells and installed and repaired water pumping systems in Hawaii and represented our contract drilling segment. As a result of the sale, the Company has classified the related assets and liabilities and the results of its contract drilling business as discontinued operations in the condensed consolidated financial statements for all periods presented. Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur. The Company recorded a loss of $ 193,000 on the sale of Water Resources, which was included in the results from discontinued operations for the year ended September 30, 2025. There was no impact from the sale of Water Resources on the provision for income taxes. 9 The following table presents the financial results from discontinued operations presented in the Condensed Consolidated Statements of Operations. Three months ended December 31, 2025 2024 Revenues: Contract drilling $ — $ 543,000 — 543,000 Costs and expenses: Contract drilling operating — 720,000 General and administrative — 118,000 Depreciation and amortization — 24,000 — 862,000 Loss from discontinued operations before income taxes — ( 319,000 ) Net loss from discontinued operations $ — $ ( 319,000 ) There are no assets or liabilities of discontinued operations included in the Condensed Consolidated Balance Sheets. 4. LOSS PER COMMON SHARE Basic loss per share is computed using the weighted-average number of common shares outstanding for the period. Diluted loss per share is calculated using the treasury stock method to reflect the assumed issuance of common shares for all potentially dilutive securities, which consist of outstanding stock options and nonvested restricted stock units. Potentially dilutive shares are excluded from the computation of diluted loss per share if their effect is anti-dilutive. Warrants to purchase 369,135 shares of common stock, options to purchase 544,301 shares of common stock and 365,142 restricted stock units, on a weighted average basis, were excluded from the computation of diluted shares for the three months ended December 31, 2025, as their inclusion would have been anti-dilutive. Options to purchase 465,000 shares of common stock and 216,712 restricted stock units were excluded from the computation of diluted shares for the three months ended December 31, 2024, as their inclusion would have been anti-dilutive. 10 Reconciliations between net loss attributable to Barnwell stockholders and common shares outstanding of the basic and diluted net loss per share computations are detailed in the following table: Three months ended December 31, 2025 2024 Numerator: Net loss from continuing operations $ ( 1,412,000 ) $ ( 1,600,000 ) Less: Net earnings (loss) attributable to non-controlling interests of continuing operations 14,000 ( 2,000 ) Net loss from continuing operations attributable to Barnwell Industries, Inc. ( 1,426,000 ) ( 1,598,000 ) Net loss earnings from discontinued operations — ( 319,000 ) Net loss attributable to Barnwell Industries, Inc. $ ( 1,426,000 ) $ ( 1,917,000 ) Denominator: Basic weighted-average number of common shares outstanding 11,070,498 10,047,173 Effect of dilutive securities - common stock options and restricted stock units — — Diluted weighted-average number of common shares outstanding 11,070,498 10,047,173 Basic and diluted loss per common share: Net loss per common share from continuing operations attributable to Barnwell Industries, Inc. stockholders $ ( 0.13 ) $ ( 0.16 ) Net loss per common share from discontinued operations — ( 0.03 ) Net loss per common share attributable to Barnwell Industries, Inc. stockholders $ ( 0.13 ) $ ( 0.19 ) 11 5. ACCOUNTS AND OTHER RECEIVABLES AND ALLOWANCE FOR CREDIT LOSSES Insurance Recovery Receivable In the quarter ended June 30, 2025, the Company filed an insurance claim for $ 348,000 with our insurance carrier for the reimbursement of certain legal fees incurred that are covered under our directors and officers’ liability insurance policies. In November 2025, $ 250,000 was received, leaving a $ 98,000 receivable. At December 31, 2025, the Company determined that an additional insurance recovery from our insurance carrier was probable and reasonably estimable and therefore recorded a total remaining estimated accrued insurance recovery receivable of $ 150,000 , resulting in a gain of $ 52,000 recognized during the three months ended December 31, 2025. The insurance recovery receivable is included in "Accounts and other receivables, net of allowance for credit losses" in the accompanying Condensed Consolidated Balance Sheets and the related gain was recorded in “General and administrative” expenses in the accompanying Condensed Consolidated Statements of Operations. The estimated insurance recovery receivable amount is management's best estimate of the probable recoverable amount under the insurance policies. The amount ultimately recoverable through insurance is dependent upon the insurer's completion of their review of eligible legal costs incurred. As such, the recoverable amount may differ from management's estimate. Allowance for Credit Losses The following table summarizes the activity in the balance of allowance for credit losses related to accounts and other receivables: Three months ended December 31, 2025 2024 Allowance for credit losses at beginning of period $ 49,000 $ 375,000 (Reversal of) provision for expected credit losses — ( 14,000 ) Write-offs charged against the allowance — ( 2,000 ) Recoveries of amounts previously written off — — Foreign currency translation adjustment 1,000 ( 9,000 ) Allowance for credit losses at end of period $ 50,000 $ 350,000 6. INVESTMENTS Investment in Kukio Resort Land Development Partnerships On November 27, 2013, Barnwell, through a wholly-owned subsidiary, entered into two limited liability limited partnerships, KD Kona 2013 LLLP (“KD Kona”) and KKM Makai, LLLP (“KKM”), and indirectly acquired a 19.6 % non-controlling ownership interest in each of KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD Kaupulehu, LLLP (“KDK”) for $ 5,140,000 . These entities, collectively referred to hereinafter as the “Kukio Resort Land Development Partnerships,” own certain real estate and development rights interests in the Kukio, Maniniowali and Kaupulehu portions of Kukio Resort, a private residential community on the Kona coast of the island of Hawaii, as well as Kukio Resort’s real estate sales office operations. KDK holds interests in KD Acquisition, LLLP (“KD I”) and KD Acquisition II, LP, formerly KD Acquisition II, LLLP (“KD II”). KD I is the developer of Kaupulehu Lot 4A Increment I (“Increment I”), and KD II is the developer of Kaupulehu Lot 4A Increment II (“Increment II”). 12 Barnwell’s ownership interests in the Kukio Resort Land Development Partnerships is accounted for using the equity method of accounting. In March 2019, KD II admitted a new development partner, Replay Kaupulehu Development, LLC (“Replay”), a party unrelated to Barnwell, in an effort to move forward with development of the remainder of Increment II at Kaupulehu. KDK and Replay hold ownership interests of 55 % and 45 %, respectively, of KD II and Barnwell has a 10.8 % indirect non-controlling ownership interest in KD II through KDK, which is accounted for using the equity method of accounting. Barnwell continues to have an indirect 19.6 % non-controlling ownership interest in KD Kukio Resorts, LLLP, KD Maniniowali, LLLP, and KD I. The Kukio Resort Land Development Partnerships derive income from the sale of residential parcels in Increment I, which is now completely sold, as well as from commissions on real estate sales by the real estate sales office and revenues resulting from the sale of private club memberships. The last two single-family lots of the 80 lots developed within Increment I were sold in the quarter ended March 31, 2024. Increment II is not yet under development, and there is no assurance that development of such acreage will in fact occur. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report. Barnwell has the right to receive distributions from the Kukio Resort Land Development Partnerships via its non-controlling interest in KD Kona and KKM, based on its respective partnership sharing ratios of 75 % and 34.45 %, respectively. No cash distributions were received during the three months ended December 31, 2025 and 2024, after distributing $ 0 to non-controlling interests from the Kukio Resort Land Development Partnerships. Equity in income of affiliates was nil for the three months ended December 31, 2025 and 2024. Summarized financial information for the Kukio Resort Land Development Partnerships is as follows: Three months ended December 31, 2025 2024 Revenue $ 1,046,000 $ 1,299,000 Gross profit $ 424,000 $ 479,000 Net loss $ ( 47,000 ) $ ( 48,000 ) In the quarter ended June 30, 2021, the Company received cumulative distributions from the Kukio Resort Land Development Partnerships in excess of our investment balance and in accordance with applicable accounting guidance, the Company suspended its equity method earnings recognition and the Kukio Resort Land Development Partnerships investment balance was reduced to zero with the distributions received in excess of our investment balance recorded as equity in income of affiliates because the distributions are not refundable by agreement or by law and the Company is not liable for the obligations of or otherwise committed to provide financial support to the Kukio Resort Land Development Partnerships. The Company will record future equity method earnings only after our share of the Kukio Resort Land Development Partnerships’ cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnerships’ income recognized for the excess distributions, and during this suspended period any distributions received will be 13 recorded as equity in income of affiliates. Accordingly, no equity in income of affiliates was recognized in the three months ended December 31, 2025. Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $ 116,000 at December 31, 2025 and $ 106,000 at September 30, 2025. Sale of Interest in Leasehold Land Kaupulehu Developments holds rights to receive payments from KD I and KD II resulting from the sale of lots and/or residential units within Increment I, which is now fully sold, and within Increment II, which is not yet developed (see Note 18). With respect to Increment I, Kaupulehu Developments was entitled to receive payments from KD I based on 10 % of the gross receipts from KD I’s sales of single-family residential lots in Increment I. The last two single-family lots of the 80 lots developed within Increment I were sold in the quarter ended March 31, 2024. Under the terms of the Increment II agreement with KD II, Kaupulehu Developments is entitled to 15 % of the distributions of KD II, the cost of which is to be solely borne by KDK out of its 55 % ownership interest in KD II, plus a priority payout of 10 % of KDK’s cumulative net profits derived from Increment II sales subsequent to Phase 2A, up to a maximum of $ 3,000,000 as to the priority payout. Such interests are limited to distributions or net profits interests and Barnwell does not have any partnership interests in KD II or KDK through its interest in Kaupulehu Developments. The arrangement also gives Barnwell rights to three single-family residential lots in Phase 2A of Increment II, and four single-family residential lots in phases subsequent to Phase 2A when such lots are developed by KD II, all at no cost to Barnwell. Barnwell is committed to commence construction of improvements within 90 days of the transfer of the four lots in the phases subsequent to Phase 2A as a condition of the transfer of such lots. Also, in addition to Barnwell’s existing obligations to pay professional fees to certain parties based on percentages of its gross receipts, Kaupulehu Developments is obligated to pay an amount equal to 0.72 % and 0.20 % of the cumulative net profits of KD II to KD Development and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell, in compensation for the agreement of these parties to admit the new development partner for Increment II. Such compensation will be reflected as the obligation becomes probable and the amount of the obligation can be reasonably estimated. There is no assurance with regards to any payments in the future from Increment II to be received or that the remaining acreage within Increment II will be developed. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report. 14 Contracts to Sell Interests in Increment II 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 of Kaupulehu Developments for Increment II for the total consideration of $ 2,000,000 . The purchaser paid an initial $ 70,000 which was recognized as revenue during the three months ended December 31, 2025. Additionally, the purchaser has the right to extend the closing by up to 2 years by making a $ 70,000 payment in each of the next 2 years, with those payments applied against the $ 2,000,000 purchase price. The transaction remains subject to the purchaser's election to proceed and other closing conditions. Because the agreement is subject to substantive contingencies and closing conditions that has not been satisfied, the criteria for revenue recognition under ASC 606 have not been met. Accordingly, no additional revenue has been recognized in the financial statements. Also in November 2025, pursuant to a unit purchase agreement, KDK 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. Again, there are substantive contingencies and closing conditions that has not been satisfied, and in turn no revenue has been recognized in the financial statements. Investment in Leasehold Land Interest - Lot 4C Kaupulehu Developments held an interest in an area of approximately 1,000 acres of vacant leasehold land zoned conservation located adjacent to Lot 4A, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. The lease expired by its terms in December 2025. 15 7. OIL AND NATURAL GAS PROPERTIES AND ASSET RETIREMENT OBLIGATIONS Oil and Natural Gas Property Dispositions There were no significant oil and natural gas property dispositions during the three months ended December 31, 2025. The $ 282,000 of proceeds from the sale of oil and natural gas properties included in the Condensed Consolidated Statement of Cash Flows for the three months ended December 31, 2024 represents proceeds that were credited to our cash in October 2024 from a sale of properties that closed in late September 2024. 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 U.S. oil and natural gas assets were located in the states of Texas and Oklahoma and were owned by wholly-owned subsidiaries of Barnwell. As a result of the sale, the Company no longer owns any oil and natural gas assets in the U.S., however, the Company will continue to explore for oil and natural gas opportunities in the U.S. On August 28, 2025, Barnwell entered into and completed a purchase and sale agreement with an independent third party and sold its interests in certain oil and natural gas properties located in the Medicine River area of Alberta, Canada. The sales price per the agreement was adjusted for customary purchase price adjustments to $ 288,000 in order to, among other things, reflect an economic closing date of September 30, 2025. The final determination of the customary adjustments to the purchase price has not yet been made; however, it is not expected to result in a material adjustment. The proceeds were credited to the full cost pool, with no gain or loss recognized, as the sale did not result in a significant alteration of the relationship between capitalized costs and proved reserves. Impairment of Oil and Natural Gas Properties Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices (except where prices are defined by contractual arrangements), the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties. During the three months ended December 31, 2025, there was no ceiling test impairment. During the three months ended December 31, 2024, the Company incurred a non-cash ceiling test impairment for its U.S. operations oil and natural gas properties of $ 613,000 . Asset Retirement Obligations In 2021, the Company entered into an agreement with Canada’s Orphan Well Association (“OWA”), where the Company was required to pay abandonment and reclamation costs for certain properties in advance through two cash deposits, one for abandonment and one for reclamation. Barnwell has provided $ 975,000 in cumulative cash deposits to the OWA since the program began in the fall of 2021, and any amount remaining after completion of the abandonments was to be refunded to the Company, and then upon commencement of the reclamation program a new deposit was to be made for 16 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 $ 111,000 and $ 173,000 at December 31, 2025 and September 30, 2025, respectively, and is included in “Other current assets” on the Company’s Condensed Consolidated Balance Sheets. The non-current portion of the unused deposit of $ 237,000 along with $ 143,000 of non-current receivables at December 31, 2025, is included in “Other non-current assets” on the Company’s Condensed Consolidated Balance Sheets at December 31, 2025 (September 30, 2025 - $ 222,000 and $ 61,000 , respectively). 8. RETIREMENT PLANS Barnwell sponsors a noncontributory defined benefit pension plan (“Pension Plan”) covering substantially all of its U.S. employees and a noncontributory Supplemental Executive Retirement Plan (“SERP”), which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan. Effective December 31, 2019, the accrual of benefits for all participants in the Pension Plan and SERP was frozen and the plans were closed to new participants from that point forward. The following tables detail the components of net periodic benefit (income) cost for Barnwell’s retirement plans: Pension Plan SERP Three months ended December 31, 2025 2024 2025 2024 Interest cost $ 102,000 $ 98,000 $ 26,000 $ 23,000 Expected return on plan assets ( 230,000 ) ( 200,000 ) — — Amortization of net actuarial gain — — — — Net periodic benefit (income) cost $ ( 128,000 ) $ ( 102,000 ) $ 26,000 $ 23,000 The net periodic benefit (income) cost is included in “General and administrative” expenses in the Company's Condensed Consolidated Statements of Operations. Currently, no contributions are planned to be made to the Pension Plan during fiscal 2026. The SERP plan is unfunded and Barnwell funds benefits when payments are made. Expected payments under the SERP for fiscal 2026 are expected to be $ 270,000 . Fluctuations in actual equity market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefits costs and contributions in future periods. A portion of the Pension Plan’s investments is in publicly traded stocks, one of which is Barnwell’s common stock. At December 31, 2025 and September 30, 2025, the Pension Plan held 676,296 and 666,077 shares, respectively, of Barnwell common stock (see Note 18 for additional details). 17 9. INCOME TAXES The components of loss from continuing operations before income taxes, after adjusting the loss for non-controlling interests, are as follows: Three months ended December 31, 2025 2024 United States $ ( 912,000 ) $ ( 1,147,000 ) Canada ( 588,000 ) ( 444,000 ) $ ( 1,500,000 ) $ ( 1,591,000 ) The components of the income tax (benefit) provision from continuing operations are as follows: Three months ended December 31, 2025 2024 Current $ ( 74,000 ) $ 16,000 Deferred — ( 9,000 ) $ ( 74,000 ) $ 7,000 Consolidated taxes do not bear a customary relationship to pretax results due primarily to the fact that the Company is taxed separately in Canada based on Canadian source operations and in the U.S. based on consolidated operations, and essentially all deferred tax assets, net of relevant offsetting deferred tax liabilities, are not estimated to have a future benefit as tax credits or deductions. The Company operates two subsidiaries in Canada, one of which is a U.S. corporation operating as a branch in Canada that is treated as a non-resident for Canadian tax purposes and thus has operating results that cannot be offset against or combined with the other Canadian subsidiary that files as a resident for Canadian tax purposes. Income from our non-controlling interest in the Kukio Resort Land Development Partnerships is treated as non-unitary for state of Hawaii unitary filing purposes, thus unitary Hawaii losses provide limited sheltering of such non-unitary income. 10. SEGMENT INFORMATION As disclosed in Note 3 “Discontinued Operations,” on March 14, 2025, the Company completed the sale of Water Resources, which represented the Company’s contract drilling segment. The financial results of the Company’s contract drilling business has been presented as discontinued operations and therefore is excluded from segment reporting. Accordingly, Barnwell’s continuing operations include the following two principal business segments: Oil and Natural Gas Segment - Barnwell engages in oil and natural gas development, production, acquisitions and sales in Canada. Additionally, through its wholly-owned subsidiaries, Barnwell was, until August 8, 2025, involved in several non-operated oil and natural gas investments in Oklahoma and Texas. Land Investment Segment - Barnwell owns leasehold land interests in Hawaii. 18 The following table presents certain financial information related to Barnwell’s reporting segments. All revenues reported are from external customers with no intersegment sales or transfers. Three months ended December 31, 2025 2024 Revenues: Oil and natural gas $ 2,630,000 $ 3,897,000 Land investment 70,000 — Other 31,000 11,000 Total before interest income 2,731,000 3,908,000 Interest income 15,000 26,000 Total revenues $ 2,746,000 $ 3,934,000 Cost and expenses: Oil and natural gas $ 2,071,000 $ 2,496,000 Depletion, depreciation, and amortization: Oil and natural gas $ 591,000 $ 904,000 Other 1,000 — Total depletion, depreciation, and amortization $ 592,000 $ 904,000 Impairment: Oil and natural gas $ — $ 613,000 Operating profit (before general and administrative expenses): Oil and natural gas $ ( 32,000 ) $ ( 116,000 ) Land investment 70,000 — Other 30,000 11,000 Total operating profit 68,000 ( 105,000 ) General and administrative expenses ( 1,616,000 ) ( 1,163,000 ) Foreign currency gain (loss) 47,000 ( 351,000 ) Interest income 15,000 26,000 Loss from continuing operations before income taxes $ ( 1,486,000 ) $ ( 1,593,000 ) Capital Expenditures: Three months ended December 31, 2025 2024 Oil and natural gas $ 28,000 $ 2,529,000 Other — — Total $ 28,000 $ 2,529,000 Oil and natural gas capital expenditures include acquisitions as well as changes to capitalized asset retirement obligations, including revisions of asset retirement obligations (see Note 7 for additional details). 19 Assets By Segment: December 31, 2025 September 30, 2025 Oil and natural gas (1) Canada $ 11,268,000 $ 11,118,000 Other: Cash and cash equivalents 3,622,000 2,886,000 Asset for retirement benefits 6,056,000 5,928,000 Corporate and other 521,000 880,000 Total $ 21,467,000 $ 20,812,000 ______________ (1) Primarily located in the province of Alberta, Canada . Long-Lived Assets By Geographic Area: December 31, 2025 September 30, 2025 United States $ 6,076,000 $ 5,965,000 Canada 9,564,000 9,617,000 Total $ 15,640,000 $ 15,582,000 Revenue By Geographic Area: Three months ended December 31, 2025 2024 United States $ 70,000 $ 355,000 Canada 2,661,000 3,553,000 Total (before interest income) $ 2,731,000 $ 3,908,000 20 11. REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The following tables provide information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition based upon continuing operations for the three months ended December 31, 2025 and 2024. Three months ended December 31, 2025 Oil and natural gas Land investment Other Total Revenue streams: Oil $ 1,903,000 $ — $ — $ 1,903,000 Natural gas 471,000 — — 471,000 Natural gas liquids 256,000 — — 256,000 Other — 70,000 31,000 101,000 Total revenues before interest income $ 2,630,000 $ 70,000 $ 31,000 $ 2,731,000 Geographical regions: United States $ — $ 70,000 $ — $ 70,000 Canada 2,630,000 — 31,000 2,661,000 Total revenues before interest income $ 2,630,000 $ 70,000 $ 31,000 $ 2,731,000 Timing of revenue recognition: Goods transferred at a point in time $ 2,630,000 $ 70,000 $ 31,000 $ 2,731,000 Three months ended December 31, 2024 Oil and natural gas Land investment Other Total Revenue streams: Oil $ 3,143,000 $ — $ — $ 3,143,000 Natural gas 349,000 — — 349,000 Natural gas liquids 405,000 — — 405,000 Other — — 11,000 11,000 Total revenues before interest income $ 3,897,000 $ — $ 11,000 $ 3,908,000 Geographical regions: United States $ 355,000 $ — $ — $ 355,000 Canada 3,542,000 — 11,000 3,553,000 Total revenues before interest income $ 3,897,000 $ — $ 11,000 $ 3,908,000 Timing of revenue recognition: Goods transferred at a point in time $ 3,897,000 $ — $ 11,000 $ 3,908,000 21 Contract Balances The following table provides the balances of our receivables from contracts with customers which is included in "Accounts and other receivables, net of allowance for credit losses" in the accompanying Condensed Consolidated Balance Sheets. December 31, 2025 September 30, 2025 September 30, 2024 Accounts receivables from contracts with customers $ 908,000 $ 913,000 $ 1,472,000 12. ACCUMULATED OTHER COMPREHENSIVE INCOME The changes in each component of accumulated other comprehensive income were as follows: Three months ended December 31, 2025 2024 Foreign currency translation: Beginning accumulated foreign currency translation $ 295,000 $ 220,000 Change in cumulative translation adjustment ( 27,000 ) 93,000 Net current period other comprehensive (loss) income ( 27,000 ) 93,000 Ending accumulated foreign currency translation 268,000 313,000 Retirement plans: Beginning and ending accumulated retirement plans benefit income 2,347,000 1,723,000 Accumulated other comprehensive income, net of taxes $ 2,615,000 $ 2,036,000 The amortization of net actuarial gain for the retirement plans are included in the computation of net periodic benefit (income) cost which is a component of “General and administrative” expenses on the accompanying Condensed Consolidated Statements of Operations (see Note 8 for additional details). 13. FAIR VALUE MEASUREMENTS The carrying values of cash and cash equivalents, accounts and other receivables, note receivable, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The estimated fair values of oil and natural gas properties and the asset retirement obligation incurred in the drilling of oil and natural gas wells or assumed in the acquisitions of additional oil and natural gas working interests are based on an estimated discounted cash flow model and market assumptions. The assumptions used in the calculation of estimated discounted cash flows were primarily Level 3 assumptions; assumptions included future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development, operating and asset retirement costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates. Barnwell estimates the fair value of asset retirement obligations based on the projected discounted 22 future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. Asset retirement obligation fair value measurements in the current period were Level 3 fair value measurements. 14. DEBT Insurance Premium Financing In March 2025, the Company entered into a short-term financing agreement with a third-party to finance the Company’s directors and officers insurance premium in the amount of $ 183,000 , with a term of 11 months and an annual interest rate of 9.4 %. The Company made a down payment of $ 15,000 and 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. 23 15. STOCKHOLDERS' EQUITY Private Placement Offering On November 24, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”), including certain directors of the board of directors of the Company pursuant to which the Company agreed to issue and sell an aggregate of: (i) 2,221,141 shares of its common stock, and (ii) warrants (the “Common Warrants”) to purchase up to 1,029,104 shares of the Company's common stock (the “Warrant Shares”) in a private placement offering of the Company’s securities (the “Offering”). The directors of the Company participating as Purchasers in the Offering and certain other Purchasers did not receive any Common Warrants. The Offering closed on November 28, 2025 (the “Closing Date”) and the gross proceeds received from the Offering were approximately $ 2,443,000 . Net proceeds from the offering were $ 2,408,000 , with $ 35,000 issuance costs incurred to register for resale such common stock and Warrants Shares. The price of the shares of common stock sold in the private placement was $ 1.10 per share. The Common Warrants have an exercise price of $ 1.65 per share, can be exercised starting one hundred eighty ( 180 ) days following the date of closing of the Offering (the “Initial Exercise Date”) and will be exercisable for three years following the Initial Exercise Date. The company estimated the fair value of a Common Warrants on grant date as $ 0.30 , totaling $ 309,000 , using a Black Sholes model. The Company allocated $ 4,000 of issuance costs to the Common Warrants, resulting in a net Common Warrant value of $ 305,000 . In connection with the transaction, and conditioned upon the Closing, one of the Purchasers, Mr. Bradley L. Radoff, had the right to appoint a director to the Company’s board of directors. Accordingly, the Company has appointed Mr. Radoff’s designee, Mr. Joshua E. Schechter, effective November 28, 2025, to the Board of Directors, effective November 28, 2025, to serve until the Company’s next annual meeting of stockholders. Common Stock Issued for Services 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 a stock award of 83,207 shares of the Company’s common stock. The fair value of the share on grant date were $ 101,000 ($ 1.21 per share using the closing price of the Company’s common stock on October 27, 2025). Stock Options On October 27, 2025, Board of Directors of the Company (the "Board") issued 185,000 incentive stock options to Mr. Patman, dated, and effective, as of October 27, 2025 under the Employment Agreement, vesting 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 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). 24 The following assumptions were used in estimating the fair value for equity-classified stock options granted on October 27, 2025: Number of shares 185,000 Expected volatility 62.0 % Expected dividends None Expected term (in years) 6.0 Risk-free interest rate 3.61 % Expected forfeitures None Fair value per share $ 0.73 The application of alternative assumptions could produce significantly different estimates of the fair value of share-based compensation, and consequently, the related costs reported in the “General and administrative” expenses in the Condensed Consolidated Statements of Operations. The following table summarizes Barnwell’s equity-classified stock options activity from October 1, 2025 through December 31, 2025: Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at October 1, 2025 415,000 $ 3.38 Granted 185,000 1.21 Exercised — — Expired/Forfeited — — Outstanding at December 31, 2025 600,000 $ 2.71 6.1 $ — Exercisable at December 31, 2025 415,000 $ 3.38 4.4 $ — 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 three months ended December 31, 2025 and 2024, the Company recognized share-based compensation expense related to stock options of $ 15,000 and nil , respectively. The remaining unrecognized compensation cost related to stock options as of December 31, 2025 was $ 119,000 ( nil - September 30, 2025). Restricted Stock Units On October 8, 2025, the Board 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 dates. On October 27, 2025, the Board granted a total of 83,208 restricted stock unit awards pursuant to the Employment Agreement, vesting 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, subject to the director’s continued service through the applicable vesting dates. 25 On December 3, 2025, the Board granted a total of 43,860 restricted stock units to the appointed independent director of the Board as partial payment of director fees for his service as a member 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 December 10, 2025, the Board granted a total of 28,038 restricted stock units to an officer and several directors of the Board as partial payment of compensation for their service as an officer and members of the Board. The restricted stock units vest over a one year period, subject to the person's continued service through the applicable vesting dates. The following table summarizes Barnwell’s restricted stock unit activity from October 1, 2025 through December 31, 2025: Restricted Stock Units Shares Weighted-Average Grant Date Fair Value Nonvested at October 1, 2025 154,174 $ 2.07 Granted 288,441 1.25 Vested — — Forfeited — — Nonvested at December 31, 2025 442,615 $ 1.54 Compensation cost for restricted stock unit awards is measured at fair value and is recognized as an expense over the requisite service period. During the three months ended December 31, 2025, the Company recognized share-based compensation expense related to restricted stock units of $ 79,000 . During the three months ended December 31, 2024, the Company recognized share-based compensation expense related to restricted stock units of $ 69,000 . As of December 31, 2025, the total remaining unrecognized compensation cost related to nonvested restricted stock units was $ 433,000 , which is expected to be recognized over the weighted-average remaining requisite service period of 1.5 years. Limited-Duration Shareholder Rights Plan On January 26, 2026, the Company’s then-existing shareholder rights plan expired in accordance with its terms. As of January 30, 2026, the Company adopted a new shareholder rights plan (“Rights Plan”) by entering into a Rights Agreement (the “Rights Agreement”), dated as of January 30, 2026, between the Company and Broadridge Corporate Issuer Solutions, LLC, as rights agent. Pursuant to the Rights Plan, the Board authorized and declared a dividend distribution of one right (each, a “Right”) for each outstanding share of common stock, payable to holders of record as of the close of business on February 13, 2026 (the “Record Date”). Each Right entitles the registered holder thereof to purchase from the Company, when exercisable and subject to adjustment, one share of common stock, at a purchase price of $ 7.00 per share, subject to adjustment (the “Purchase Price”). 26 Rights Certificates; Exercise Period; Term Initially, the Rights will be attached to all certificates for shares of common stock then outstanding (or for book entry shares of common stock, the Rights will be represented by notations in the respective book entry accounts), and no separate rights certificates (“Rights Certificates”) will be distributed. Subject to certain exceptions specified in the Rights Agreement, the Rights will separate from the common stock and a distribution date for the Rights (the “Distribution Date”) will occur upon the earlier of the (i) tenth ( 10 th ) business day following a public announcement (or, if the tenth ( 10 th ) business day after such public announcement occurs before the Record Date, the close of business on the Record Date)(or such later date as shall be determined by the Board or a duly authorized committee of the Board) that a person or group of affiliated or associated persons (such person or group being an “Acquiring Person”), other than certain exempt persons, has acquired beneficial ownership of twenty percent ( 20 %) or more of the outstanding shares of common stock (including ownership of derivative securities which have an exercise or conversion privilege or a settlement payment or mechanism at a price related to the common stock or a value determined in whole or part with reference to, or derived in whole or in part from, the market price or value of the common stock), other than as a result of (a) pre-existing beneficial ownership in excess of the applicable threshold (in which case such person shall become an Acquiring Person if they become the beneficial owner of additional shares of common stock representing more than 0.25 % of the outstanding shares of common stock, subject to certain exceptions), (b) repurchases of shares of common stock or securities convertible or exchangeable into shares of common stock by the Company, (c) certain inadvertent acquisitions or (d) certain other situations (as specified in the Rights Agreement) and (ii) tenth ( 10 th ) business day (or such later date as the Board may determine) following the commencement of a tender or exchange offer by any person that would result in a person or group becoming an Acquiring Person. For purposes of the Rights Agreement, beneficial ownership is defined to include derivative securities. Until the Distribution Date, (i) the Rights will be evidenced by the certificates for shares of common stock (or, for book entry shares of common stock, by the notations in the respective book entry accounts) and will be transferred with, and only with, such common stock, (ii) new certificates for shares of common stock issued after the Record Date will contain a notation incorporating the Rights Agreement by reference (for book entry shares of common stock, this legend will be contained in the notations in book entry accounts) and (iii) the surrender for transfer of any outstanding shares of common stock will also constitute the transfer of the Rights associated with such common stock. The Rights are not exercisable until the Distribution Date and will expire at the close of business on July 29, 2026, unless the Rights are earlier redeemed, exchanged or terminated. As soon as practicable after the Distribution Date, Rights Certificates will be mailed to holders of record of shares of common stock (or notices will be provided to holders of book entry shares of common stock) as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will represent the Rights. Except as otherwise determined by the Board, only shares of common stock issued prior to the Distribution Date will be issued with the Rights. Change of Exercise of Rights Following Certain Events The following described events are referred to as “Triggering Events.” (a) Flip-In Event . In the event that a person or group of affiliated or associated persons becomes an Acquiring Person, each holder of a Right will thereafter have the right to receive, upon exercise and 27 payment of the Purchase Price, shares of common stock having a value of two times the then current market price of the common stock. Notwithstanding any of the foregoing, following the occurrence of a person becoming an Acquiring Person, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person (or by certain related parties) will be null and void and any holder of such Rights (including any purported transferee or subsequent holder) will be unable to exercise or transfer any such Rights. However, Rights are not exercisable following the occurrence of a person becoming an Acquiring Person until the Distribution Date. (b) Flip-Over Events . In the event that, at any time after a person has become an Acquiring Person, (i) the Company engages in a merger or other business combination transaction in which the Company is not the continuing or surviving corporation, (ii) the Company engages in a merger or other business combination transaction in which the Company is the continuing or surviving corporation and the shares of common stock of the Company are changed or exchanged, or (iii) fifty percent ( 50 %) or more of the Company’s assets, cash flow, or earning power is sold or transferred, each holder of a Right (except Rights that have previously been voided as set forth above) shall thereafter have the right to receive, upon exercise and payment of the Purchase Price, one share of the common stock (or substantially equivalent voting equity securities) of the acquiring company per Right. Redemption At any time until the earlier of (i) ten ( 10 ) business days following public announcement that an Acquiring Person has become such (the “Stock Acquisition Date”) (or, if the Stock Acquisition Date shall have occurred prior to the Record Date, ten ( 10 ) business days following the Record Date) or (ii) the expiration of the Rights Agreement, the Board may direct the Company to redeem all but not less than all of the then outstanding Rights, at a price of $ 0.001 per Right (payable in cash or other consideration deemed appropriate by the Board), subject to adjustment as provided in the Rights Agreement (the “Redemption Price”). Immediately upon the action of the Board directing the Company to redeem the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. The Rights may only be exercised once the Company’s right to redeem the Rights has expired. Exchange of Rights At any time after a person or group of affiliated or associated persons becomes an Acquiring Person but before any person acquires beneficial ownership of fifty percent ( 50 %) or more of the outstanding shares of common stock, the Board may direct the Company to exchange the Rights (other than Rights owned by such person or certain related parties, which will have become null and void and non-transferable as described above), in whole or in part, at an exchange ratio of one share of common stock per Right (subject to adjustment). If there are insufficient authorized shares of common stock to effect an exchange of the Rights, the Company may substitute cash, other securities having equivalent rights, preferences, and privileges to the shares of common stock, debt securities, other assets or any combination of the foregoing having a value equal to one share of common stock in lieu of shares of common stock. Immediately upon the action of the Board directing the Company to exchange the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the number of shares of common stock (or cash, other equivalent securities, debt securities or other assets) equal to the number of Rights held by such holder multiplied by the exchange ratio. 28 Certain Adjustments In order to preserve the actual or potential economic value of the Rights, the number of shares of common stock or other securities issuable upon exercise of the Rights and the number of Rights associated with each outstanding share of common stock are all subject to adjustment by the Board pursuant to certain customary anti-dilution provisions. No Shareholder Rights Prior to Exercise Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. Amendment of Rights Agreement Subject to certain exceptions specified in the Rights Agreement, for so long as the Rights are then redeemable, the terms of the Rights and the Rights Agreement may be amended without the approval of any holders of Rights. Subject to certain exceptions specified in the Rights Agreement, after the Rights are no longer redeemable, the provisions of the Rights Agreement may be amended by the Company, without the approval of any holder of Rights, including to shorten or lengthen any time period under the Rights Agreement, so long as no such amendment (a) adversely affects the interests of the holders of the Rights as such, (b) causes the Rights Agreement to become amendable other than as already provided in the Rights Agreement or (c) causes the Rights to again become redeemable. Certain Anti-Takeover Effects; Miscellaneous The Rights are not intended to prevent a takeover of the Company and should not interfere with any merger or other business combination approved by the Board. However, the Rights may cause substantial dilution to a person or group of affiliated or associated persons that acquires beneficial ownership of twenty percent ( 20 %) or more of the outstanding shares of common stock (existing holders owning twenty percent ( 20 %) or more of the outstanding shares of common stock will only trigger the rights plan if they become the beneficial owner of additional shares of common stock following the date of adoption that represent more than 0.25 % of the outstanding shares of common stock, subject to certain exceptions). As a result, the overall effect of the Rights may be to render more difficult or discourage a change of the Company’s investment advisor or a merger, tender offer, or other business combination involving the Company that is not supported by the Board. The preceding summary of the material terms of the Rights Agreement is qualified in its entirety by reference to the full text of the Rights Agreement, a copy of which has been filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K that was filed with the Securities and Exchange Commission (the “SEC”) on January 30, 2026. 29 16. CONTINGENCIES Legal and Regulatory Matters Barnwell is routinely involved in disputes with third parties that occasionally require litigation. In addition, Barnwell is required to maintain compliance with all current governmental controls and regulations in the ordinary course of business. Barnwell’s management is not aware of any claims or litigation involving Barnwell that are likely to have a material adverse effect on its results of operations, financial position or liquidity, other than the shareholder contest actions discussed elsewhere in this filing. 17. INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended December 31, 2025 2024 Supplemental disclosure of cash flow information: Cash paid during the period for: Income taxes, net of refunds $ — $ 136,000 Capital expenditure accruals related to oil and natural gas exploration and development decreased $ 82,000 and $ 2,215,000 during the three months ended December 31, 2025 and 2024, respectively. Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $ 360,000 and $ 32,000 during the three months ended December 31, 2025 and 2024, respectively. 18. RELATED PARTY TRANSACTIONS Kaupulehu Developments is entitled to receive payments from the sales of lots and/or residential units by KD I and KD II. KD I and KD II are part of the Kukio Resort Land Development Partnerships in which Barnwell holds indirect 19.6 % and 10.8 % non-controlling ownership interests, respectively, accounted for under the equity method of investment. The percentage of sales payments are part of transactions which took place in 2004 and 2006 where Kaupulehu Developments sold its leasehold interests in Increment I and Increment II to KD I's and KD II's predecessors in interest, respectively, which was prior to Barnwell’s affiliation with KD I and KD II which commenced on November 27, 2013, the acquisition date of our ownership interest in the Kukio Resort Land Development Partnerships. Changes to the arrangement above, effective March 7, 2019, are discussed in Note 6. Barnwell Pension Plan Effective June 2025, the Pension Plan owned more than 5 % of the Company's common shares outstanding. On July 3, 2025, the Barnwell Industries, Inc. Employees’ Pension Plan Trust filed a Schedule 13D with the Securities and Exchange Commission, reporting beneficial ownership of 520,350 shares of Barnwell common stock representing more than 5 % of the Company’s common shares outstanding. As of September 30, 2025, the Pension Plan held 666,077 shares of Barnwell common stock. As of December 31, 2025, the Pension Plan held 676,296 shares of Barnwell common stock. All the shares purchased by the Pension Plan were made on the open market through a brokerage account. 30 19. SUBSEQUENT EVENTS Shareholder Rights Plan As of January 30, 2026, the Company adopted a shareholder rights plan (see Note 15 for additional details). Registration Statement The Company filed a registration statement on Form S-3 (File No. 333-292684) with the SEC on January 12, 2026, which was declared effective on January 30, 2026. The registration statement includes a “shelf prospectus” pursuant to which the Company may offer and sell up to $ 50,000,000 in securities, in aggregate, and a “selling stockholder prospectus” pursuant to which 3,250,245 shares of the Company’s common stock may be offered from time to time by the selling stockholders named therein, which shares were acquired by such selling stockholders in the private placement offering that closed on November 28, 2025 (see Note 15). 31