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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 2025
or
☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number 1-5103
BARNWELL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)

Delaware |  | 72-0496921
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
1100 Alakea Street, Suite 500, Honolulu, Hawaii |  | 96813
(Address of principal executive offices) |  | (Zip code)
(808) 531-8400
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common Stock, $0.50 par value | BRN | NYSE American
Common Stock Purchase Rights | N/A | NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

| Large accelerated filer | ☐ |  | Accelerated filer | ☐
| Non-accelerated filer | ☒ |  | Smaller reporting company | ☒
|  |  |  | Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of May 12, 2025 there were 10,053,534 shares of common stock, par value $0.50, outstanding.

BARNWELL INDUSTRIES, INC.
AND SUBSIDIARIES
INDEX

PART I. | FINANCIAL INFORMATION: |
Item 1. | Financial Statements (Unaudited) |
| Condensed Consolidated Balance Sheets - March 31, 2025 and September 30, 2024 | 3
| Condensed Consolidated Statements of Operations - three and six months ended March 31, 2025 and 2024 | 4
| Condensed Consolidated Statements of Comprehensive Loss - three and six months ended March 31, 2025 and 2024 | 5
| Condensed Consolidated Statements of Equity - three and six months ended March 31, 2025 and 2024 | 6
| Condensed Consolidated Statements of Cash Flows - six months ended March 31, 2025 and 2024 | 8
| Notes to Condensed Consolidated Financial Statements | 9
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 28
Item 4. | Controls and Procedures | 41
PART II. | OTHER INFORMATION: |
Item 1A. | Risk Factors | 43
Item 5. | Other Information | 44
Item 6. | Exhibits | 45
| Signature | 46
| Index to Exhibits | 47

PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

| March 31, 2025 |  | September 30, 2024
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | 1,432,000 |  |  | $ | 4,285,000 |
Accounts and other receivables, net of allowance for credit losses of: $48,000 at March 31, 2025; $141,000 at September 30, 2024 | 1,773,000 |  |  | 2,190,000 |
Note receivable | 800,000 |  |  | — |
Other current assets | 790,000 |  |  | 873,000 |
Current assets of discontinued operations | — |  |  | 1,535,000 |
Total current assets | 4,795,000 |  |  | 8,883,000 |
Asset for retirement benefits | 5,104,000 |  |  | 4,899,000 |
Operating lease right-of-use assets | 190,000 |  |  | 39,000 |
Other non-current assets | 265,000 |  |  | — |
Property and equipment: |  |  |
Proved oil and natural gas properties (full cost method) | 79,402,000 |  |  | 83,557,000 |
Other property and equipment | 490,000 |  |  | 509,000 |
Total property and equipment | 79,892,000 |  |  | 84,066,000 |
Accumulated depletion, impairment, depreciation, and amortization | (65,869,000) |  |  | (67,500,000) |
Total property and equipment, net | 14,023,000 |  |  | 16,566,000 |
Non-current assets of discontinued operations | — |  |  | 282,000 |
Total assets | $ | 24,377,000 |  |  | $ | 30,669,000 |
LIABILITIES AND EQUITY |  |  |
Current liabilities: |  |  |
Accounts payable | $ | 1,833,000 |  |  | $ | 1,785,000 |
Accrued capital expenditures | 61,000 |  |  | 2,407,000 |
Accrued compensation | 258,000 |  |  | 526,000 |
Accrued operating and other expenses | 1,104,000 |  |  | 1,465,000 |
Current portion of asset retirement obligation | 1,079,000 |  |  | 798,000 |
Other current liabilities | 517,000 |  |  | 301,000 |
Current liabilities of discontinued operations | — |  |  | 530,000 |
Total current liabilities | 4,852,000 |  |  | 7,812,000 |
Operating lease liabilities | 112,000 |  |  | 7,000 |
Liability for retirement benefits | 1,944,000 |  |  | 1,898,000 |
Asset retirement obligation | 7,248,000 |  |  | 7,790,000 |
Deferred income tax liabilities | 66,000 |  |  | 100,000 |
Total liabilities | 14,222,000 |  |  | 17,607,000 |
Commitments and contingencies |  |  |
Equity: |  |  |
Common stock, par value $0.50 per share; authorized, 40,000,000 shares: 10,221,434 issued at March 31, 2025; 10,195,990 issued at September 30, 2024 | 5,111,000 |  |  | 5,098,000 |
Additional paid-in capital | 7,806,000 |  |  | 7,690,000 |
(Accumulated deficit) retained earnings | (2,529,000) |  |  | 595,000 |
Accumulated other comprehensive income, net | 2,033,000 |  |  | 1,943,000 |
Treasury stock, at cost: 167,900 shares at March 31, 2025 and September 30, 2024 | (2,286,000) |  |  | (2,286,000) |
Total stockholders’ equity | 10,135,000 |  |  | 13,040,000 |
Non-controlling interests | 20,000 |  |  | 22,000 |
Total equity | 10,155,000 |  |  | 13,062,000 |
Total liabilities and equity | $ | 24,377,000 |  |  | $ | 30,669,000 |

See Notes to Condensed Consolidated Financial Statements
3

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Revenues: |  |  |  |  |  |  |
Oil and natural gas | $ | 3,543,000 |  |  | $ | 4,144,000 |  |  | $ | 7,440,000 |  |  | $ | 9,274,000 |
Sale of interest in leasehold land | — |  |  | 500,000 |  |  | — |  |  | 500,000 |
Gas processing and other | 26,000 |  |  | 34,000 |  |  | 63,000 |  |  | 66,000 |
| 3,569,000 |  |  | 4,678,000 |  |  | 7,503,000 |  |  | 9,840,000 |
Costs and expenses: |  |  |  |  |  |  |
Oil and natural gas operating | 1,986,000 |  |  | 2,330,000 |  |  | 4,482,000 |  |  | 5,121,000 |
General and administrative | 2,162,000 |  |  | 1,256,000 |  |  | 3,325,000 |  |  | 2,576,000 |
Depletion, depreciation, and amortization | 754,000 |  |  | 1,342,000 |  |  | 1,658,000 |  |  | 2,801,000 |
Impairment of assets | 52,000 |  |  | 1,677,000 |  |  | 665,000 |  |  | 1,677,000 |
Foreign currency (gain) loss | (10,000) |  |  | 128,000 |  |  | 341,000 |  |  | 2,000 |
Interest expense | 1,000 |  |  | — |  |  | 1,000 |  |  | — |
| 4,945,000 |  |  | 6,733,000 |  |  | 10,472,000 |  |  | 12,177,000 |
Loss from continuing operations before equity in income of affiliates and income taxes | (1,376,000) |  |  | (2,055,000) |  |  | (2,969,000) |  |  | (2,337,000) |
Equity in income of affiliates | — |  |  | 1,071,000 |  |  | — |  |  | 1,071,000 |
Loss from continuing operations before income taxes | (1,376,000) |  |  | (984,000) |  |  | (2,969,000) |  |  | (1,266,000) |
Income tax provision | 162,000 |  |  | 100,000 |  |  | 169,000 |  |  | 166,000 |
Net loss from continuing operations | (1,538,000) |  |  | (1,084,000) |  |  | (3,138,000) |  |  | (1,432,000) |
Net earnings (loss) from discontinued operations | 331,000 |  |  | (466,000) |  |  | 12,000 |  |  | (780,000) |
Net loss | (1,207,000) |  |  | (1,550,000) |  |  | (3,126,000) |  |  | (2,212,000) |
Less: Net earnings (loss) attributable to non-controlling interests | — |  |  | 222,000 |  |  | (2,000) |  |  | 224,000 |
Net loss attributable to Barnwell Industries, Inc. | $ | (1,207,000) |  |  | $ | (1,772,000) |  |  | $ | (3,124,000) |  |  | $ | (2,436,000) |
Basic and diluted (loss) earnings per common share attributable to Barnwell Industries, Inc. stockholders: |  |  |  |  |  |  |
Net loss from continuing operations attributable to Barnwell Industries, Inc. | $ | (0.15) |  |  | $ | (0.13) |  |  | $ | (0.31) |  |  | $ | (0.16) |
Net earnings (loss) from discontinued operations | 0.03 |  |  | (0.05) |  |  | — |  |  | (0.08) |
Net loss attributable to Barnwell Industries, Inc. | $ | (0.12) |  |  | $ | (0.18) |  |  | $ | (0.31) |  |  | $ | (0.24) |
Weighted-average number of common shares outstanding: |  |  |  |  |  |  |
Basic and diluted | 10,053,534 |  |  | 10,019,172 |  |  | 10,050,319 |  |  | 10,007,905 |

See Notes to Condensed Consolidated Financial Statements
4

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Net loss | $ | (1,207,000) |  |  | $ | (1,550,000) |  |  | $ | (3,126,000) |  |  | $ | (2,212,000) |
Other comprehensive (loss) income: |  |  |  |  |  |  |
Foreign currency translation adjustments, net of taxes of $0 | (3,000) |  |  | (22,000) |  |  | 90,000 |  |  | 8,000 |
Retirement plans: |  |  |  |  |  |  |
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0 | — |  |  | (22,000) |  |  | — |  |  | (43,000) |
Total other comprehensive (loss) income | (3,000) |  |  | (44,000) |  |  | 90,000 |  |  | (35,000) |
Total comprehensive loss | (1,210,000) |  |  | (1,594,000) |  |  | (3,036,000) |  |  | (2,247,000) |
Less: Comprehensive (income) loss attributable to non-controlling interests | — |  |  | (222,000) |  |  | 2,000 |  |  | (224,000) |
Comprehensive loss attributable to Barnwell Industries, Inc. | $ | (1,210,000) |  |  | $ | (1,816,000) |  |  | $ | (3,034,000) |  |  | $ | (2,471,000) |

See Notes to Condensed Consolidated Financial Statements
5

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Three months ended March 31, 2025 and 2024
(Unaudited)

| Shares Outstanding |  | Common Stock |  | Additional Paid-In Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Income |  | Treasury Stock |  | Non-controlling Interests |  | Total Equity
Balance at December 31, 2023 | 10,000,106 |  |  | $ | 5,084,000 |  |  | $ | 7,747,000 |  |  | $ | 5,496,000 |  |  | $ | 2,113,000 |  |  | $ | (2,286,000) |  |  | $ | 11,000 |  |  | $ | 18,165,000 |
Net (loss) earnings | — |  |  | — |  |  | — |  |  | (1,772,000) |  |  | — |  |  | — |  |  | 222,000 |  |  | (1,550,000) |
Foreign currency translation adjustments, net of taxes of $0 | — |  |  | — |  |  | — |  |  | — |  |  | (22,000) |  |  | — |  |  | — |  |  | (22,000) |
Distributions to non-controlling interests | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (219,000) |  |  | (219,000) |
Share-based compensation | — |  |  | — |  |  | 46,000 |  | — |  |  | — |  |  | — |  |  | — |  |  | 46,000
Issuance of common stock for restricted stock units vested | 27,984 |  |  | 14,000 |  |  | (14,000) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Retirement plans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0 | — |  |  | — |  |  | — |  |  | — |  |  | (22,000) |  |  | — |  |  | — |  |  | (22,000) |
Balance at March 31, 2024 | 10,028,090 |  |  | $ | 5,098,000 |  |  | $ | 7,779,000 |  |  | $ | 3,724,000 |  |  | $ | 2,069,000 |  |  | $ | (2,286,000) |  |  | $ | 14,000 |  |  | $ | 16,398,000 |
Balance at December 31, 2024 | 10,053,534 |  |  | $ | 5,111,000 |  |  | $ | 7,746,000 |  |  | $ | (1,322,000) |  |  | $ | 2,036,000 |  |  | $ | (2,286,000) |  |  | $ | 20,000 |  |  | $ | 11,305,000 |
Net loss | — |  |  | — |  |  | — |  |  | (1,207,000) |  |  | — |  |  | — |  |  | — |  |  | (1,207,000) |
Foreign currency translation adjustments, net of taxes of $0 | — |  |  | — |  |  | — |  |  | — |  |  | (3,000) |  |  | — |  |  | — |  |  | (3,000) |
Share-based compensation | — |  |  | — |  |  | 60,000 |  | — |  |  | — |  |  | — |  |  | — |  |  | 60,000
Balance at March 31, 2025 | 10,053,534 |  |  | $ | 5,111,000 |  |  | $ | 7,806,000 |  |  | $ | (2,529,000) |  |  | $ | 2,033,000 |  |  | $ | (2,286,000) |  |  | $ | 20,000 |  |  | $ | 10,155,000 |

See Notes to Condensed Consolidated Financial Statements
6

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Six months ended March 31, 2025 and 2024
(Unaudited)

| Shares Outstanding |  | Common Stock |  | Additional Paid-In Capital |  | Retained Earnings (Accumulated Deficit) |  | Accumulated Other Comprehensive Income |  | Treasury Stock |  | Non-controlling Interests |  | Total Equity
Balance at September 30, 2023 | 9,990,778 |  |  | $ | 5,079,000 |  |  | $ | 7,687,000 |  |  | $ | 6,160,000 |  |  | $ | 2,104,000 |  |  | $ | (2,286,000) |  |  | $ | 13,000 |  |  | $ | 18,757,000 |
Net (loss) earnings | — |  |  | — |  |  | — |  |  | (2,436,000) |  |  | — |  |  | — |  |  | 224,000 |  |  | (2,212,000) |
Foreign currency translation adjustments, net of taxes of $0 | — |  |  | — |  |  | — |  |  | — |  |  | 8,000 |  |  | — |  |  | — |  |  | 8,000 |
Distributions to non-controlling interests | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (223,000) |  |  | (223,000) |
Share-based compensation | — |  |  | — |  |  | 111,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 111,000 |
Issuance of common stock for restricted stock units vested | 37,312 |  |  | 19,000 |  |  | (19,000) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0 | — |  |  | — |  |  | — |  |  | — |  |  | (43,000) |  |  | — |  |  | — |  |  | (43,000) |
Balance at March 31, 2024 | 10,028,090 |  |  | $ | 5,098,000 |  |  | $ | 7,779,000 |  |  | $ | 3,724,000 |  |  | $ | 2,069,000 |  |  | $ | (2,286,000) |  |  | $ | 14,000 |  |  | $ | 16,398,000 |
Balance at September 30, 2024 | 10,028,090 |  |  | $ | 5,098,000 |  |  | $ | 7,690,000 |  |  | $ | 595,000 |  |  | $ | 1,943,000 |  |  | $ | (2,286,000) |  |  | $ | 22,000 |  |  | $ | 13,062,000 |
Net loss | — |  |  | — |  |  | — |  |  | (3,124,000) |  |  | — |  |  | — |  |  | (2,000) |  |  | (3,126,000) |
Foreign currency translation adjustments, net of taxes of $0 | — |  |  | — |  |  | — |  |  | — |  |  | 90,000 |  |  | — |  |  | — |  |  | 90,000 |
Share-based compensation | — |  |  | — |  |  | 129,000 |  | — |  |  | — |  |  | — |  |  | — |  |  | 129,000
Issuance of common stock for restricted stock units vested | 25,444 |  |  | 13,000 |  |  | (13,000) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Balance at March 31, 2025 | 10,053,534 |  |  | $ | 5,111,000 |  |  | $ | 7,806,000 |  |  | $ | (2,529,000) |  |  | $ | 2,033,000 |  |  | $ | (2,286,000) |  |  | $ | 20,000 |  |  | $ | 10,155,000 |

See Notes to Condensed Consolidated Financial Statements
7

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

| Six months ended March 31,
| 2025 |  | 2024
Cash flows from operating activities of continuing operations: |  |  |
Net loss | $ | (3,126,000) |  |  | $ | (2,212,000) |
Net earnings (loss) from discontinued operations | 12,000 |  |  | (780,000) |
Net loss from continuing operations | (3,138,000) |  |  | (1,432,000) |
Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities: |  |  |
Equity in income of affiliates | — |  |  | (1,071,000) |
Depletion, depreciation, and amortization | 1,658,000 |  |  | 2,801,000 |
Impairment of assets | 665,000 |  |  | 1,677,000 |
Sale of interest in leasehold land, net of fees paid | — |  |  | (439,000) |
Distributions of income from equity investees | — |  |  | 1,071,000 |
Retirement benefits income | (158,000) |  |  | (173,000) |
Non-cash rent expense (income) | 1,000 |  |  | (13,000) |
Accretion of asset retirement obligation | 391,000 |  |  | 434,000 |
Deferred income tax (benefit) expense | (34,000) |  |  | 51,000 |
Asset retirement obligation payments | (275,000) |  |  | (396,000) |
Share-based compensation expense | 129,000 |  |  | 111,000 |
Retirement plan contributions and payments | (1,000) |  |  | (2,000) |
Credit loss (reversal) expense | (10,000) |  |  | 46,000 |
Foreign currency loss | 341,000 |  |  | 2,000 |
(Decrease) increase from changes in current assets and liabilities | (423,000) |  |  | 333,000 |
Net cash (used in) provided by operating activities from continuing operations | (854,000) |  |  | 3,000,000 |
Cash flows from investing activities of continuing operations: |  |  |
Proceeds from sale of interest in leasehold land, net of fees paid | — |  |  | 439,000 |
Proceeds from the sale of oil and natural gas assets | 282,000 |  |  | — |
Capital expenditures - oil and natural gas | (2,641,000) |  |  | (1,624,000) |
Dividend received from discontinued operations | 250,000 |  |  | — |
Cash divested from the sale of discontinued operations, net of proceeds | (163,000) |  |  | — |
Net cash used in investing activities from continuing operations | (2,272,000) |  |  | (1,185,000) |
Cash flows from financing activities of continuing operations: |  |  |
Repayments for insurance premium financing | (15,000) |  |  | — |
Distributions to non-controlling interests | — |  |  | (223,000) |
Net cash used in financing activities from continuing operations | (15,000) |  |  | (223,000) |
Cash flows from discontinued operations: |  |  |
Net cash used in operating activities | (95,000) |  |  | (738,000) |
Net cash provided by (used in) investing activities | 538,000 |  |  | (1,000) |
Net cash used in financing activities | (250,000) |  |  | — |
Net cash provided by (used in) discontinued operations | 193,000 |  |  | (739,000) |
Effect of exchange rate changes on cash and cash equivalents | (125,000) |  |  | 2,000 |
Net (decrease) increase in cash and cash equivalents | (3,073,000) |  |  | 855,000 |
Cash and cash equivalents at beginning of period | 4,505,000 |  |  | 2,830,000 |
Less: Cash and cash equivalents of discontinued operations at end of period | — |  |  | (118,000) |
Cash and cash equivalents of continuing operations at end of period | $ | 1,432,000 |  |  | $ | 3,567,000 |

See Notes to Condensed Consolidated Financial Statements
8

BARNWELL INDUSTRIES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Barnwell Industries, Inc. and all majority-owned subsidiaries (collectively referred to herein as “Barnwell,” “we,” “our,” “us,” or the “Company”), including a 77.6%-owned land investment general partnership (Kaupulehu Developments) and a 75%-owned land investment partnership (KD Kona 2013 LLLP). All significant intercompany accounts and transactions have been eliminated.
Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis. Barnwell’s investments in both unconsolidated entities in which a significant, but less than controlling, interest is held and in variable interest entities in which the Company is not deemed to be the primary beneficiary are accounted for by the equity method.
Unless otherwise indicated, all references to “dollars” in this Form 10-Q are to U.S. dollars.
Unaudited Interim Financial Information
The accompanying unaudited condensed consolidated financial statements and notes have been prepared by Barnwell in accordance with the rules and regulations of the United States (“U.S.”) Securities and Exchange Commission. Accordingly, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in Barnwell’s September 30, 2024 Annual Report on Form 10-K, as amended by our Form 10-K/A Amendment No. 1 (our “2024 Annual Report”). The Condensed Consolidated Balance Sheet as of September 30, 2024 has been derived from audited consolidated financial statements.
In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at March 31, 2025, results of operations, comprehensive loss, and equity for the three and six months ended March 31, 2025 and 2024, and cash flows for the six months ended March 31, 2025 and 2024, have been made. The results of operations for the period ended March 31, 2025 are not necessarily indicative of the operating results for the full year.
Use of Estimates in the Preparation of Condensed Consolidated Financial Statements
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management of Barnwell to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ significantly from those estimates. Significant assumptions are required in the
9

valuation of deferred tax assets, asset retirement obligations, proved oil and natural gas reserves, and such assumptions may impact the amount at which such items are recorded.
Significant Accounting Policies
Other than as set forth below, there have been no changes to Barnwell's significant accounting policies as described in the Notes to Consolidated Financial Statements included in Item 8 of the Company's 2024 Annual Report.
Discontinued Operations
On March 14, 2025, the Company entered into and completed the sale of its wholly-owned subsidiary, Water Resources International, Inc. (“Water Resources”). Water Resources drilled water wells and installed and repaired water pumping systems in Hawaii and represented our contract drilling segment. As a result of the sale, the Company has classified the related assets and liabilities and the results of its contract drilling business as discontinued operations in the condensed consolidated financial statements for all periods presented. Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur. See Note 3 “Discontinued Operations” for further discussion and additional disclosures related to discontinued operations. Unless otherwise noted, the discussions in the notes to the condensed consolidated financial statements refers to the Company’s continuing operations.
2. GOING CONCERN
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the twelve-month period following the date of issuance of these condensed consolidated financial statements.
Our ability to sustain our business in the future will depend on sufficient oil and natural gas operating cash flows, which are highly sensitive to potentially volatile oil and natural gas prices, timely repayment of the note receivable from the buyers of our contract drilling segment, and the amount and timing of costs incurred related to the shareholder consent solicitation and ongoing proxy contest. A sufficient level of such cash inflows are necessary to fund discretionary oil and natural gas capital expenditures, which must be economically successful to provide sufficient returns to grow reserves and production or at a minimum replace declining production from aging wells. Such a level of oil and natural gas capital expenditures may require funding from external debt or equity sources that are not currently in place, but those sources may not be feasible or sufficient. In addition, we will need sufficient cash flows to fund our non-discretionary outflows such as oil and natural gas asset retirement obligations and ongoing operating and general and administrative expenses.
Due to the recent shareholder consent solicitation and the ongoing proxy contest costs incurred and estimated to be incurred and the impacts of recently imposed tariffs which have caused a reduction in oil prices and have had an impact on the U.S. economy as a whole, we now face a greater uncertainty about our oil and natural gas operating cash inflows as described above, which in turn limits our ability to make the required discretionary cash outflows for the capital expenditures necessary to convert our proved undeveloped reserves to proved developed reserves. Furthermore, because of the greater uncertainty about our cash inflows described above, there is substantial doubt about our ability to fund our non-discretionary cash outflows and thus substantial doubt about our ability to continue as a going concern for one year from the date of the filing of this report.
10

The Company is investigating potential sources of funding, including debt financing, non-core oil and natural gas property sales and the partial or complete sale of its remaining interests in the Kukio Resort Land Development Partnerships, however, no probable timing or amounts of such funding have yet been secured. Because of this uncertainty as well as uncertainties regarding the potential duration and depth of the impacts of recently legislated tariffs on the economy as a whole, which in turn affects oil prices and our business as described above, substantial doubt about our ability to continue as a going concern for one year from the date of the filing of this report exists. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.
3. DISCONTINUED OPERATIONS
On March 14, 2025, the Company entered into a Stock Purchase Agreement with three unrelated individuals (collectively, the “Buyer”) whereby the Buyer acquired all of the shares of capital stock of Water Resources (the “Shares”) owned by the Company (the “Purchase Agreement”). The sale and purchase of the Shares closed (the “Closing”) simultaneously with the execution and delivery of the Purchase Agreement by each of the parties thereto on March 14, 2025. The aggregate purchase price for the Shares was $1,050,000, which was paid at Closing by the Buyer as follows: an initial aggregate cash payment of $250,000 and the delivery of a non-interest bearing promissory note with a principal amount of $800,000 (the “Promissory Note”). The principal payments on the Promissory Note are to be paid in installments on the following schedule: $200,000 on May 15, 2025; and $150,000 on June 16, 2025, July 15, 2025, August 15, 2025, and September 15, 2025. The Promissory Note is secured by certain specified assets of Water Resources and personal guarantees of the purchasers.
Water Resources drilled water wells and installed and repaired water pumping systems in Hawaii and represented our contract drilling segment. As a result of the sale, the Company has classified the related assets and liabilities and the results of its contract drilling business as discontinued operations in the condensed consolidated financial statements for all periods presented. Prior to the sale, the Company did not have any assurances that a sale of Water Resources was likely to occur. The Company recorded a loss of $193,000 on the sale of Water Resources, which was included in the results from discontinued operations for the three and six months ended March 31, 2025. There was no impact from the sale of Water Resources on the provision for income taxes.
11

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

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Revenues: |  |  |  |  |  |  |
Contract drilling | $ | 613,000 |  |  | $ | 1,070,000 |  |  | $ | 1,156,000 |  |  | $ | 2,063,000 |
Other | — |  |  | 26,000 |  |  | — |  |  | 26,000 |
| 613,000 |  |  | 1,096,000 |  |  | 1,156,000 |  |  | 2,089,000 |
Costs and expenses: |  |  |  |  |  |  |
Contract drilling operating | 519,000 |  |  | 1,387,000 |  |  | 1,239,000 |  |  | 2,556,000 |
General and administrative | 91,000 |  |  | 125,000 |  |  | 209,000 |  |  | 209,000 |
Depreciation and amortization | 16,000 |  |  | 50,000 |  |  | 40,000 |  |  | 102,000 |
Interest expense | 1,000 |  |  | — |  |  | 1,000 |  |  | 2,000 |
Gain on sale of assets (1) | (538,000) |  |  | — |  |  | (538,000) |  |  | — |
| 89,000 |  |  | 1,562,000 |  |  | 951,000 |  |  | 2,869,000 |
Earnings (loss) from discontinued operations before income taxes | 524,000 |  |  | (466,000) |  |  | 205,000 |  |  | (780,000) |
Loss on sale of discontinued operations | (193,000) |  |  | — |  |  | (193,000) |  |  | — |
Income tax provision | — |  |  | — |  |  | — |  |  | — |
Net earnings (loss) from discontinued operations | $ | 331,000 |  |  | $ | (466,000) |  |  | $ | 12,000 |  |  | $ | (780,000) |

________________________
(1) In February 2025, the Company completed the sale of a contract drilling segment drilling rig and related ancillary equipment to an independent third party for proceeds of $538,000, net of related costs. The drilling rig and related ancillary equipment were fully depreciated and had a net book value of zero and as a result of the sale, the Company recognized a $538,000 gain during the three and six months ended March 31, 2025 which was recorded in discontinued operations.
12

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

| March 31, 2025 |  | September 30, 2024
ASSETS |  |  |
Current assets: |  |  |
Cash and cash equivalents | $ | — |  |  | $ | 220,000 |
Accounts and other receivables, net of allowance for credit losses of: $0 at March 31, 2025; $234,000 at September 30, 2024 | — |  |  | 580,000 |
Assets held for sale | — |  |  | 69,000 |
Other current assets | — |  |  | 666,000 |
Total current assets of discontinued operations | $ | — |  |  | $ | 1,535,000 |
Non-current assets: |  |  |
Property and equipment: |  |  |
Drilling rigs and other property and equipment | $ | — |  |  | $ | 3,170,000 |
Accumulated depreciation, impairment, and amortization | — |  |  | (2,888,000) |
Total non-current assets of discontinued operations | $ | — |  |  | $ | 282,000 |
LIABILITIES |  |  |
Current liabilities: |  |  |
Accounts payable | $ | — |  |  | $ | 37,000 |
Accrued compensation | — |  |  | 124,000 |
Accrued operating and other expenses | — |  |  | 369,000 |
Total current liabilities of discontinued operations | $ | — |  |  | $ | 530,000 |

4. LOSS PER COMMON SHARE
Basic loss per share is computed using the weighted-average number of common shares outstanding for the period. Diluted loss per share is calculated using the treasury stock method to reflect the assumed issuance of common shares for all potentially dilutive securities, which consist of outstanding stock options and nonvested restricted stock units. Potentially dilutive shares are excluded from the computation of diluted loss per share if their effect is anti-dilutive.
Options to purchase 465,000 shares of common stock and 258,699 restricted stock units were excluded from the computation of diluted shares for the three months ended March 31, 2025, as their inclusion would have been anti-dilutive. Options to purchase 465,000 shares of common stock and 237,475 restricted stock units were excluded from the computation of diluted shares for the six months ended March 31, 2025, as their inclusion would have been anti-dilutive.
Options to purchase 465,000 shares of common stock and 76,336 restricted stock units were excluded from the computation of diluted shares for the three and six months ended March 31, 2024, as their inclusion would have been anti-dilutive.
13

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

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Numerator: |  |  |  |  |  |  |
Net loss from continuing operations | $ | (1,538,000) |  |  | $ | (1,084,000) |  |  | $ | (3,138,000) |  |  | $ | (1,432,000) |
Less: Net earnings (loss) attributable to non-controlling interests of continuing operations | — |  |  | 222,000 |  |  | (2,000) |  |  | 224,000 |
Net loss from continuing operations attributable to Barnwell Industries, Inc. | (1,538,000) |  |  | (1,306,000) |  |  | (3,136,000) |  |  | (1,656,000) |
Net earnings (loss) from discontinued operations | 331,000 |  |  | (466,000) |  |  | 12,000 |  |  | (780,000) |
Net loss attributable to Barnwell Industries, Inc. | $ | (1,207,000) |  |  | $ | (1,772,000) |  |  | $ | (3,124,000) |  |  | $ | (2,436,000) |
Denominator: |  |  |  |  |  |  |
Basic weighted-average number of common shares outstanding | 10,053,534 |  | 10,019,172 |  | 10,050,319 |  | 10,007,905
Effect of dilutive securities - common stock options and restricted stock units | — |  | — |  | — |  | —
Diluted weighted-average number of common shares outstanding | 10,053,534 |  | 10,019,172 |  | 10,050,319 |  | 10,007,905
Basic and diluted (loss) earnings per common share: |  |  |  |  |  |  |
Net loss per common share from continuing operations attributable to Barnwell Industries, Inc. stockholders | $ | (0.15) |  |  | $ | (0.13) |  |  | $ | (0.31) |  |  | $ | (0.16) |
Net earnings (loss) per common share from discontinued operations | 0.03 |  |  | (0.05) |  |  | — |  |  | (0.08) |
Net loss per common share attributable to Barnwell Industries, Inc. stockholders | $ | (0.12) |  |  | $ | (0.18) |  |  | $ | (0.31) |  |  | $ | (0.24) |

5. ALLOWANCE FOR CREDIT LOSSES
The following table summarizes the activity in the balance of allowance for credit losses related to accounts and other receivables:

| Six months ended March 31,
| 2025 |  | 2024
Allowance for credit losses at beginning of period | $ | 141,000 |  |  | $ | 50,000 |
(Reversal of) provision for expected credit losses | (10,000) |  |  | 46,000 |
Write-offs charged against the allowance | (75,000) |  |  | (6,000) |
Recoveries of amounts previously written off | — |  |  | 15,000 |
Foreign currency translation adjustment | (8,000) |  |  | — |
Allowance for credit losses at end of period | $ | 48,000 |  |  | $ | 105,000 |

14

6. INVESTMENTS
Investment in Kukio Resort Land Development Partnerships
On November 27, 2013, Barnwell, through a wholly-owned subsidiary, entered into two limited liability limited partnerships, KD Kona 2013 LLLP (“KD Kona”) and KKM Makai, LLLP (“KKM”), and indirectly acquired a 19.6% non-controlling ownership interest in each of KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD Kaupulehu, LLLP (“KDK”) for $5,140,000. These entities, collectively referred to hereinafter as the “Kukio Resort Land Development Partnerships,” own certain real estate and development rights interests in the Kukio, Maniniowali and Kaupulehu portions of Kukio Resort, a private residential community on the Kona coast of the island of Hawaii, as well as Kukio Resort’s real estate sales office operations. KDK holds interests in KD Acquisition, LLLP (“KD I”) and KD Acquisition II, LP, formerly KD Acquisition II, LLLP (“KD II”). KD I is the developer of Kaupulehu Lot 4A Increment I (“Increment I”), and KD II is the developer of Kaupulehu Lot 4A Increment II (“Increment II”). Barnwell’s ownership interests in the Kukio Resort Land Development Partnerships is accounted for using the equity method of accounting.
In March 2019, KD II admitted a new development partner, Replay Kaupulehu Development, LLC (“Replay”), a party unrelated to Barnwell, in an effort to move forward with development of the remainder of Increment II at Kaupulehu. KDK and Replay hold ownership interests of 55% and 45%, respectively, of KD II and Barnwell has a 10.8% indirect non-controlling ownership interest in KD II through KDK, which is accounted for using the equity method of accounting. Barnwell continues to have an indirect 19.6% non-controlling ownership interest in KD Kukio Resorts, LLLP, KD Maniniowali, LLLP, and KD I.
The partnerships derive income from the sale of residential parcels in Increment I, which is now completely sold, as well as from commissions on real estate sales by the real estate sales office and revenues resulting from the sale of private club memberships. The last two single-family lots of the 80 lots developed within Increment I were sold in the quarter ended March 31, 2024.
Increment II is not yet under development, and there is no assurance that development of such acreage will in fact occur. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.
Barnwell has the right to receive distributions from the Kukio Resort Land Development Partnerships via its non-controlling interest in KD Kona and KKM, based on its respective partnership sharing ratios of 75% and 34.45%, respectively. No cash distributions were received during the three and six months ended March 31, 2025. During the three and six months ended March 31, 2024, Barnwell received cash distributions of $1,071,000 (resulting in a net amount of $953,000, after distributing $118,000 to non-controlling interests) from the Kukio Resort Land Development Partnerships.
Equity in income of affiliates was nil for the three and six months ended March 31, 2025, as compared to equity in income of affiliates of $1,071,000 for the three and six months ended March 31, 2024.
15

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

| Three months ended March 31,
| 2025 |  | 2024
Revenue | $ | 4,293,000 |  |  | $ | 10,153,000 |
Gross profit | $ | 2,179,000 |  |  | $ | 7,329,000 |
Net earnings | $ | 1,599,000 |  |  | $ | 6,658,000 |

| Six months ended March 31,
| 2025 |  | 2024
Revenue | $ | 5,592,000 |  |  | $ | 12,039,000 |
Gross profit | $ | 2,658,000 |  |  | $ | 8,146,000 |
Net earnings | $ | 1,551,000 |  |  | $ | 7,012,000 |

In the quarter ended June 30, 2021, the Company received cumulative distributions from the Kukio Resort Land Development Partnerships in excess of our investment balance and in accordance with applicable accounting guidance, the Company suspended its equity method earnings recognition and the Kukio Resort Land Development Partnerships investment balance was reduced to zero with the distributions received in excess of our investment balance recorded as equity in income of affiliates because the distributions are not refundable by agreement or by law and the Company is not liable for the obligations of or otherwise committed to provide financial support to the Kukio Resort Land Development Partnerships. The Company will record future equity method earnings only after our share of the Kukio Resort Land Development Partnerships’ cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnerships’ income recognized for the excess distributions, and during this suspended period any distributions received will be recorded as equity in income of affiliates. Accordingly, no equity in income of affiliates was recognized in the six months ended March 31, 2025.
Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $31,000 at March 31, 2025 and $373,000 at September 30, 2024.
Sale of Interest in Leasehold Land
Kaupulehu Developments holds rights to receive payments from KD I and KD II resulting from the sale of lots and/or residential units within Increment I, which is now fully sold, and within Increment II, which is not yet developed (see Note 18).
With respect to Increment I, Kaupulehu Developments was entitled to receive payments from KD I based on 10% of the gross receipts from KD I’s sales of single-family residential lots in Increment I. In the quarter ended March 31, 2024, the last two single-family lots of the 80 lots developed within Increment I were sold.
16

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

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Sale of interest in leasehold land: |  |  |  |  |  |  |
Revenues - sale of interest in leasehold land | $ | — |  |  | $ | 500,000 |  |  | $ | — |  |  | $ | 500,000 |
Fees - included in general and administrative expenses | — |  |  | (61,000) |  |  | — |  |  | (61,000) |
Sale of interest in leasehold land, net of fees paid | $ | — |  |  | $ | 439,000 |  |  | $ | — |  |  | $ | 439,000 |

There is no assurance with regards to any payments in the future from Increment II to be received or that the remaining acreage within Increment II will be developed. No definitive development plans have been made by KD II, the developer of Increment II, as of the date of this report.
Investment in Leasehold Land Interest - Lot 4C
Kaupulehu Developments holds an interest in an area of approximately 1,000 acres of vacant leasehold land zoned conservation located adjacent to Lot 4A, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. The lease terminates in December 2025.
7. OIL AND NATURAL GAS PROPERTIES AND ASSET RETIREMENT OBLIGATIONS
Oil and Natural Gas Property Dispositions
There were no significant oil and natural gas property dispositions during the six months ended March 31, 2025 and 2024. The $282,000 of proceeds from the sale of oil and natural gas properties included in the Condensed Consolidated Statement of Cash Flows for the six months ended March 31, 2025 represents proceeds that were credited to our cash in October 2024 from a sale of properties that closed in late September 2024.
Impairment of Oil and Natural Gas Properties
Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices (except where prices are defined by contractual arrangements), the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties.
During the three and six months ended March 31, 2025, the Company incurred a non-cash ceiling test impairment for our U.S. oil and natural gas properties of $52,000 and $665,000, respectively. During the three and six months ended March 31, 2024, the Company incurred a non-cash ceiling test impairment for our Canadian oil and natural gas properties of $1,677,000.
17

As discussed above, the ceiling test uses a 12-month historical rolling average first-day-of-the-month prices. As such, declines in the 12-month historical rolling average first-day-of-the-month prices used in our ceiling test calculation in future periods could result in impairment write-downs in future periods in the absence of any offsetting factors that are not currently known or projected. Based on the oil and gas prices for April 1 and May 1 of 2025, the oil prices and natural gas prices used in the 12-month historical rolling first-day-of-the-month average oil price for the ceiling test at June 30, 2025 will be lower than at March 31, 2025. Whereas we believe our Canadian full cost pool is below the ceiling limit, our U.S. full cost pool had no ceiling excess at March 31, 2025, and thus a further impairment charge is more likely than not for our U.S full cost pool in the quarter ending June 30, 2025. The Company is currently unable to estimate a range of the amount of any potential future impairment write-downs as variables that impact the ceiling limitation are dependent upon actual results of activity through the end of June 2025.
Asset Retirement Obligations
In 2021 the Company entered into an agreement with Canada’s Orphan Well Association (“OWA”), where the Company was required to pay abandonment and reclamation costs for certain properties in advance through two cash deposits, one for abandonment and one for reclamation. Barnwell has provided $975,000 in cumulative cash deposits to the OWA since the program began in the fall of 2021, and any amount remaining after completion of the abandonments was to be refunded to the Company, and then upon commencement of the reclamation program a new deposit was to be made for those estimated costs. To date, the excess deposits that relate to abandonment work have not yet been refunded but have been used to fund the reclamation part of the program and the Company now estimates that a portion of the unused deposit will instead be applied to future reclamation work over the next several years. The estimated current portion of the unused deposit was $226,000 and $527,000 at March 31, 2025 and September 30, 2024, respectively, and is included in “Other current assets” on the Company’s Condensed Consolidated Balance Sheets. The non-current portion of the unused deposit of $215,000 along with $50,000 of non-current receivables at March 31, 2025, is included in “Other non-current assets” on the Company’s Condensed Consolidated Balance Sheet at March 31, 2025.
8. RETIREMENT PLANS
Barnwell sponsors a noncontributory defined benefit pension plan (“Pension Plan”) covering substantially all of its U.S. employees and a noncontributory Supplemental Executive Retirement Plan (“SERP”), which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan. Effective December 31, 2019, the accrual of benefits for all participants in the Pension Plan and SERP was frozen and the plans were closed to new participants from that point forward.
18

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

| Pension Plan |  | SERP
| Three months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Interest cost | $ | 97,000 |  |  | $ | 102,000 |  |  | $ | 24,000 |  |  | $ | 24,000 |
Expected return on plan assets | (200,000) |  |  | (191,000) |  |  | — |  |  | — |
Amortization of net actuarial gain | — |  |  | — |  |  | — |  |  | (22,000) |
Net periodic benefit (income) cost | $ | (103,000) |  |  | $ | (89,000) |  |  | $ | 24,000 |  |  | $ | 2,000 |

| Pension Plan |  | SERP
| Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Interest cost | $ | 195,000 |  |  | $ | 205,000 |  |  | $ | 47,000 |  |  | $ | 48,000 |
Expected return on plan assets | (400,000) |  |  | (383,000) |  |  | — |  |  | — |
Amortization of net actuarial gain | — |  |  | — |  |  | — |  |  | (43,000) |
Net periodic benefit (income) cost | $ | (205,000) |  |  | $ | (178,000) |  |  | $ | 47,000 |  |  | $ | 5,000 |

The net periodic benefit (income) cost is included in “General and administrative” expenses in the Company's Condensed Consolidated Statements of Operations.
Currently, no contributions are planned to be made to the Pension Plan during fiscal 2025. The SERP plan is unfunded and Barnwell funds benefits when payments are made. Expected payments under the SERP for fiscal 2025 are expected to be $76,000. Fluctuations in actual equity market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefits costs and contributions in future periods.
9. INCOME TAXES
The components of loss from continuing operations before income taxes, after adjusting the loss for non-controlling interests, are as follows:

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
United States | $ | (1,526,000) |  |  | $ | 1,004,000 |  |  | $ | (2,673,000) |  |  | $ | 629,000 |
Canada | 150,000 |  |  | (2,210,000) |  |  | (294,000) |  |  | (2,119,000) |
| $ | (1,376,000) |  |  | $ | (1,206,000) |  |  | $ | (2,967,000) |  |  | $ | (1,490,000) |

19

The components of the income tax provision from continuing operations are as follows:

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Current | $ | 187,000 |  |  | $ | 47,000 |  |  | $ | 203,000 |  |  | $ | 115,000 |
Deferred | (25,000) |  |  | 53,000 |  |  | (34,000) |  |  | 51,000 |
| $ | 162,000 |  |  | $ | 100,000 |  |  | $ | 169,000 |  |  | $ | 166,000 |

Consolidated taxes do not bear a customary relationship to pretax results due primarily to the fact that the Company is taxed separately in Canada based on Canadian source operations and in the U.S. based on consolidated operations, and essentially all deferred tax assets, net of relevant offsetting deferred tax liabilities, are not estimated to have a future benefit as tax credits or deductions. The Company operates two subsidiaries in Canada, one of which is a U.S. corporation operating as a branch in Canada that is treated as a non-resident for Canadian tax purposes and thus has operating results that cannot be offset against or combined with the other Canadian subsidiary that files as a resident for Canadian tax purposes. Income from our non-controlling interest in the Kukio Resort Land Development Partnerships is treated as non-unitary for state of Hawaii unitary filing purposes, thus unitary Hawaii losses provide limited sheltering of such non-unitary income. Income from our investment in the Oklahoma oil venture is 100% allocable to Oklahoma. As such, Barnwell receives no benefit from consolidated or unitary losses and, therefore, is subject to Oklahoma state taxes. Our operations in Texas are subject to a franchise tax assessed by the state of Texas, however no significant amounts have been incurred to date.
10. SEGMENT INFORMATION
As disclosed in Note 3 “Discontinued Operations,” on March 14, 2025, the Company completed the sale of Water Resources, which represented the Company’s contract drilling segment. The financial results of the Company’s contract drilling business has been presented as discontinued operations and therefore is excluded from segment reporting. Accordingly, Barnwell’s continuing operations include the following two principal business segments:
Oil and Natural Gas Segment - Barnwell engages in oil and natural gas development, production, acquisitions and sales in Canada and in the U.S. states of Oklahoma and Texas.
Land Investment Segment - Barnwell owns leasehold land interests in Hawaii.
20

The following table presents certain financial information related to Barnwell’s reporting segments. All revenues reported are from external customers with no intersegment sales or transfers.

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Revenues: |  |  |  |  |  |  |
Oil and natural gas | $ | 3,543,000 |  |  | $ | 4,144,000 |  |  | $ | 7,440,000 |  |  | $ | 9,274,000 |
Land investment | — |  |  | 500,000 |  |  | — |  |  | 500,000 |
Other | 22,000 |  |  | 16,000 |  |  | 33,000 |  |  | 33,000 |
Total before interest income | 3,565,000 |  |  | 4,660,000 |  |  | 7,473,000 |  |  | 9,807,000 |
Interest income | 4,000 |  |  | 18,000 |  |  | 30,000 |  |  | 33,000 |
Total revenues | $ | 3,569,000 |  |  | $ | 4,678,000 |  |  | $ | 7,503,000 |  |  | $ | 9,840,000 |
Depletion, depreciation, and amortization: |  |  |  |  |  |  |
Oil and natural gas | $ | 753,000 |  |  | $ | 1,342,000 |  |  | $ | 1,657,000 |  |  | $ | 2,800,000 |
Other | 1,000 |  |  | — |  |  | 1,000 |  |  | 1,000 |
Total depletion, depreciation, and amortization | $ | 754,000 |  |  | $ | 1,342,000 |  |  | $ | 1,658,000 |  |  | $ | 2,801,000 |
Impairment: |  |  |  |  |  |  |
Oil and natural gas | $ | 52,000 |  |  | $ | 1,677,000 |  |  | $ | 665,000 |  |  | $ | 1,677,000 |
Total impairment | $ | 52,000 |  |  | $ | 1,677,000 |  |  | $ | 665,000 |  |  | $ | 1,677,000 |
Operating profit (loss) (before general and administrative expenses): |  |  |  |  |  |  |
Oil and natural gas | $ | 752,000 |  |  | $ | (1,205,000) |  |  | $ | 636,000 |  |  | $ | (324,000) |
Land investment | — |  |  | 500,000 |  |  | — |  |  | 500,000 |
Other | 21,000 |  |  | 16,000 |  |  | 32,000 |  |  | 32,000 |
Total operating profit (loss) | 773,000 |  |  | (689,000) |  |  | 668,000 |  |  | 208,000 |
Equity in income of affiliates: |  |  |  |  |  |  |
Land investment | — |  |  | 1,071,000 |  |  | — |  |  | 1,071,000 |
General and administrative expenses | (2,162,000) |  |  | (1,256,000) |  |  | (3,325,000) |  |  | (2,576,000) |
Foreign currency gain (loss) | 10,000 |  |  | (128,000) |  |  | (341,000) |  |  | (2,000) |
Interest expense | (1,000) |  |  | — |  |  | (1,000) |  |  | — |
Interest income | 4,000 |  |  | 18,000 |  |  | 30,000 |  |  | 33,000 |
Loss from continuing operations before income taxes | $ | (1,376,000) |  |  | $ | (984,000) |  |  | $ | (2,969,000) |  |  | $ | (1,266,000) |

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11. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue
The following tables provide information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition based upon continuing operations for the three and six months ended March 31, 2025 and 2024.

|  | Three months ended March 31, 2025
|  | Oil and natural gas |  |  |  | Land investment |  | Other |  | Total
Revenue streams: |  |  |  |  |  |  |  |  |
| Oil | $ | 2,601,000 |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | 2,601,000 |
| Natural gas | 488,000 |  |  |  |  | — |  |  | — |  |  | 488,000 |
| Natural gas liquids | 454,000 |  |  |  |  | — |  |  | — |  |  | 454,000 |
| Other | — |  |  |  |  | — |  |  | 22,000 |  |  | 22,000 |
| Total revenues before interest income | $ | 3,543,000 |  |  |  |  | $ | — |  |  | $ | 22,000 |  |  | $ | 3,565,000 |
Geographical regions: |  |  |  |  |  |  |  |  |
| United States | $ | 376,000 |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | 376,000 |
| Canada | 3,167,000 |  |  |  |  | — |  |  | 22,000 |  |  | 3,189,000 |
| Total revenues before interest income | $ | 3,543,000 |  |  |  |  | $ | — |  |  | $ | 22,000 |  |  | $ | 3,565,000 |
Timing of revenue recognition: |  |  |  |  |  |  |  |  |
| Goods transferred at a point in time | $ | 3,543,000 |  |  |  |  | $ | — |  |  | $ | 22,000 |  |  | $ | 3,565,000 |

|  | Three months ended March 31, 2024
|  | Oil and natural gas |  |  |  | Land investment |  | Other |  | Total
Revenue streams: |  |  |  |  |  |  |  |  |
| Oil | $ | 2,985,000 |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | 2,985,000 |
| Natural gas | 678,000 |  |  |  |  | — |  |  | — |  |  | 678,000 |
| Natural gas liquids | 481,000 |  |  |  |  | — |  |  | — |  |  | 481,000 |
| Contingent residual payments | — |  |  |  |  | 500,000 |  |  | — |  |  | 500,000 |
| Other | — |  |  |  |  | — |  |  | 16,000 |  |  | 16,000 |
| Total revenues before interest income | $ | 4,144,000 |  |  |  |  | $ | 500,000 |  |  | $ | 16,000 |  |  | $ | 4,660,000 |
Geographical regions: |  |  |  |  |  |  |  |  |
| United States | $ | 674,000 |  |  |  |  | $ | 500,000 |  |  | $ | — |  |  | $ | 1,174,000 |
| Canada | 3,470,000 |  |  |  |  | — |  |  | 16,000 |  |  | 3,486,000 |
| Total revenues before interest income | $ | 4,144,000 |  |  |  |  | $ | 500,000 |  |  | $ | 16,000 |  |  | $ | 4,660,000 |
Timing of revenue recognition: |  |  |  |  |  |  |  |  |
| Goods transferred at a point in time | $ | 4,144,000 |  |  |  |  | $ | 500,000 |  |  | $ | 16,000 |  |  | $ | 4,660,000 |

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|  | Six months ended March 31, 2025
|  | Oil and natural gas |  |  |  | Land investment |  | Other |  | Total
Revenue streams: |  |  |  |  |  |  |  |  |
| Oil | $ | 5,744,000 |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | 5,744,000 |
| Natural gas | 837,000 |  |  |  |  | — |  |  | — |  |  | 837,000 |
| Natural gas liquids | 859,000 |  |  |  |  | — |  |  | — |  |  | 859,000 |
| Other | — |  |  |  |  | — |  |  | 33,000 |  |  | 33,000 |
| Total revenues before interest income | $ | 7,440,000 |  |  |  |  | $ | — |  |  | $ | 33,000 |  |  | $ | 7,473,000 |
Geographical regions: |  |  |  |  |  |  |  |  |
| United States | $ | 731,000 |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | 731,000 |
| Canada | 6,709,000 |  |  |  |  | — |  |  | 33,000 |  |  | 6,742,000 |
| Total revenues before interest income | $ | 7,440,000 |  |  |  |  | $ | — |  |  | $ | 33,000 |  |  | $ | 7,473,000 |
Timing of revenue recognition: |  |  |  |  |  |  |  |  |
| Goods transferred at a point in time | $ | 7,440,000 |  |  |  |  | $ | — |  |  | $ | 33,000 |  |  | $ | 7,473,000 |

|  | Six months ended March 31, 2024
|  | Oil and natural gas |  |  |  | Land investment |  | Other |  | Total
Revenue streams: |  |  |  |  |  |  |  |  |
| Oil | $ | 6,877,000 |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | 6,877,000 |
| Natural gas | 1,390,000 |  |  |  |  | — |  |  | — |  |  | 1,390,000 |
| Natural gas liquids | 1,007,000 |  |  |  |  | — |  |  | — |  |  | 1,007,000 |
| Contingent residual payments | — |  |  |  |  | 500,000 |  |  | — |  |  | 500,000 |
| Other | — |  |  |  |  | — |  |  | 33,000 |  |  | 33,000 |
| Total revenues before interest income | $ | 9,274,000 |  |  |  |  | $ | 500,000 |  |  | $ | 33,000 |  |  | $ | 9,807,000 |
Geographical regions: |  |  |  |  |  |  |  |  |
| United States | $ | 1,428,000 |  |  |  |  | $ | 500,000 |  |  | $ | — |  |  | $ | 1,928,000 |
| Canada | 7,846,000 |  |  |  |  | — |  |  | 33,000 |  |  | 7,879,000 |
| Total revenues before interest income | $ | 9,274,000 |  |  |  |  | $ | 500,000 |  |  | $ | 33,000 |  |  | $ | 9,807,000 |
Timing of revenue recognition: |  |  |  |  |  |  |  |  |
| Goods transferred at a point in time | $ | 9,274,000 |  |  |  |  | $ | 500,000 |  |  | $ | 33,000 |  |  | $ | 9,807,000 |

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

| March 31, 2025 |  | September 30, 2024 |  | September 30, 2023
Accounts receivables from contracts with customers | $ | 1,240,000 |  |  | $ | 1,472,000 |  |  | $ | 2,344,000 |

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12. ACCUMULATED OTHER COMPREHENSIVE INCOME
The changes in each component of accumulated other comprehensive income were as follows:

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Foreign currency translation: |  |  |  |  |  |  |
Beginning accumulated foreign currency translation | $ | 313,000 |  |  | $ | 250,000 |  |  | $ | 220,000 |  |  | $ | 220,000 |
Change in cumulative translation adjustment before reclassifications | (3,000) |  |  | (22,000) |  |  | 90,000 |  |  | 8,000 |
Income taxes | — |  |  | — |  |  | — |  |  | — |
Net current period other comprehensive (loss) income | (3,000) |  |  | (22,000) |  |  | 90,000 |  |  | 8,000 |
Ending accumulated foreign currency translation | 310,000 |  |  | 228,000 |  |  | 310,000 |  |  | 228,000 |
Retirement plans: |  |  |  |  |  |  |
Beginning accumulated retirement plans benefit income | 1,723,000 |  |  | 1,863,000 |  |  | 1,723,000 |  |  | 1,884,000 |
Amortization of net actuarial gain | — |  |  | (22,000) |  |  | — |  |  | (43,000) |
Income taxes | — |  |  | — |  |  | — |  |  | — |
Net current period other comprehensive loss | — |  |  | (22,000) |  |  | — |  |  | (43,000) |
Ending accumulated retirement plans benefit income | 1,723,000 |  |  | 1,841,000 |  |  | 1,723,000 |  |  | 1,841,000 |
Accumulated other comprehensive income, net of taxes | $ | 2,033,000 |  |  | $ | 2,069,000 |  |  | $ | 2,033,000 |  |  | $ | 2,069,000 |

The amortization of net actuarial gain for the retirement plans are included in the computation of net periodic benefit (income) cost which is a component of “General and administrative” expenses on the accompanying Condensed Consolidated Statements of Operations (see Note 8 for additional details).
13. FAIR VALUE MEASUREMENTS
The carrying values of cash and cash equivalents, accounts and other receivables, note receivable, accounts payable and accrued current liabilities approximate their fair values due to the short-term nature of the instruments.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The estimated fair values of oil and natural gas properties and the asset retirement obligation incurred in the drilling of oil and natural gas wells or assumed in the acquisitions of additional oil and natural gas working interests are based on an estimated discounted cash flow model and market assumptions. The assumptions used in the calculation of estimated discounted cash flows were primarily Level 3 assumptions; assumptions included future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development, operating and asset retirement costs, projections of future rates of production, expected recovery rates and risk adjusted discount rates.
Barnwell estimates the fair value of asset retirement obligations based on the projected discounted future cash outflows required to settle abandonment and restoration liabilities. Such an estimate requires
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assumptions and judgments regarding the existence of liabilities, the amount and timing of cash outflows required to settle the liability, what constitutes adequate restoration, inflation factors, credit adjusted discount rates, and consideration of changes in legal, regulatory, environmental and political environments. Abandonment and restoration cost estimates are determined in conjunction with Barnwell’s reserve engineers based on historical information regarding costs incurred to abandon and restore similar well sites, information regarding current market conditions and costs, and knowledge of subject well sites and properties. Asset retirement obligation fair value measurements in the current period were Level 3 fair value measurements.
14. DEBT
Insurance Premium Financing
In March 2025, the Company entered into a short-term financing agreement with a third-party to finance the Company’s directors and officers insurance premium in the amount of $183,000, with a term of 11 months and an annual interest rate of 9.4%. The Company made a down payment of $15,000 and is required to make monthly principal and interest payments of $16,000 over the term of the agreement, which matures in February 2026. As of March 31, 2025, the insurance premium financing liability was $153,000 and is included in “Other current liabilities” in the accompanying Condensed Consolidated Balance Sheets.
15. STOCKHOLDERS' EQUITY
Restricted Stock Units
On October 24, 2024, the Company’s Board of Directors (the “Board”) granted a total of 105,820 restricted stock units to the independent directors of the Board as partial payment of director fees for their service as members of the Board. The restricted stock units vest ratably over a three-year period, subject to the director’s continued service through the applicable vesting dates.
On January 19, 2025, the Board granted a total of 66,000 restricted stock units to the Company's President and Chief Executive Officer. The restricted stock units vest ratably over a three-year period, subject to the employee’s continued service through the applicable vesting dates.
The following table summarizes Barnwell’s restricted stock unit activity from October 1, 2024 through March 31, 2025:

Restricted Stock Units |  | Shares |  | Weighted-Average Grant Date Fair Value
Nonvested at October 1, 2024 |  | 110,892 |  |  | $ | 2.63 |
Granted |  | 171,820 |  |  | 1.82 |
Vested |  | — |  |  | — |
Forfeited |  | (39,178) |  |  | 2.13 |
Nonvested at March 31, 2025 |  | 243,534 |  |  | $ | 2.14 |

Compensation cost for restricted stock unit awards is measured at fair value and is recognized as an expense over the requisite service period. During the three and six months ended March 31, 2025, the Company recognized share-based compensation expense related to restricted stock units of $60,000 and
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$129,000, respectively. During the three and six months ended March 31, 2024, the Company recognized share-based compensation expense related to restricted stock units of $31,000 and $61,000, respectively. As of March 31, 2025, the total remaining unrecognized compensation cost related to nonvested restricted stock units was $301,000, which is expected to be recognized over the weighted-average remaining requisite service period of 1.7 years.
Limited-Duration Shareholder Rights Plan
On January 26, 2025, the Board adopted a shareholder rights plan and declared a dividend of one right (a “Right”) in respect of each of the Company’s issued and outstanding shares of common stock, par value $0.50 per share (“Common Stock”). The dividend was payable to the shareholders of record at the close of business on February 7, 2025. Each Right initially entitled the registered holder, subject to the terms of the Rights Agreement (as defined below), to purchase from the Company one share of Common Stock, at a price equal to $9.00, subject to certain adjustments (as adjusted from time to time, the “Exercise Price”). The terms of the Rights are set forth in the Rights Agreement, dated as of January 26, 2025 (as it may be amended from time to time, the “Rights Agreement”), by and between the Company and Broadridge Corporate Issuer Solutions, LLC, as rights agent (or any successor rights agent, the “Rights Agent”).
In general terms, the Rights Agreement imposes significant dilution upon any person or group (other than the Company or certain related persons) that is or becomes the beneficial owner of 20% (the “Triggering Percentage”) or more of the Company’s outstanding Common Stock without the prior approval of the Board. A person or group that becomes the beneficial owner of the Triggering Percentage or more is called an “Acquiring Person.” Any Rights held by an Acquiring Person will be null and void and may not be exercised. Shareholders that beneficially own the Triggering Percentage or more of the Company’s outstanding Common Stock on the date the plan is adopted, are not considered Acquiring Persons; however, such Shareholders generally may not acquire, or obtain the right to acquire, beneficial ownership of 0.25% or more additional shares of the Company’s outstanding Common Stock. The term “beneficial ownership” is defined in the Rights Agreement and includes, among other things, certain securities that may be exercised or converted into shares of Common Stock and certain derivative arrangements.
The Rights will expire prior to the earliest of (i) the close of business on January 26, 2026 (subject to the shareholders of the Company approving an extension of the Rights Agreement through a date on or prior to January 26, 2028); (ii) the time at which the Rights are redeemed pursuant to the Rights Agreement; (iii) the time at which the Rights are exchanged pursuant to the Rights Agreement; and (iv) upon the occurrence of certain transactions.
This description of the Rights Agreement herein does not purport to be complete and is qualified in its entirety by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 27, 2025.
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16. CONTINGENCIES
Legal and Regulatory Matters
Barnwell is routinely involved in disputes with third parties that occasionally require litigation. In addition, Barnwell is required to maintain compliance with all current governmental controls and regulations in the ordinary course of business. Barnwell’s management is not aware of any claims or litigation involving Barnwell that are likely to have a material adverse effect on its results of operations, financial position or liquidity.
17. INFORMATION RELATING TO THE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

| Six months ended March 31,
| 2025 |  | 2024
Supplemental disclosure of cash flow information: |  |  |
Cash paid during the year for: |  |  |
Income taxes | $ | 168,000 |  |  | $ | 71,000 |
Supplemental disclosure of non-cash financing activities: |  |  |
Prepaid insurance funded directly by short-term premium financing borrowing | $ | 168,000 |  |  | $ | — |

Capital expenditure accruals related to oil and natural gas exploration and development decreased $2,259,000 and $569,000 during the six months ended March 31, 2025 and 2024, respectively. Additionally, capital expenditure accruals related to oil and natural gas asset retirement obligations increased $149,000 and $179,000 during the six months ended March 31, 2025 and 2024, respectively.
18. RELATED PARTY TRANSACTIONS
Kaupulehu Developments is entitled to receive payments from the sales of lots and/or residential units by KD I and KD II. KD I and KD II are part of the Kukio Resort Land Development Partnerships in which Barnwell holds indirect 19.6% and 10.8% non-controlling ownership interests, respectively, accounted for under the equity method of investment. The percentage of sales payments are part of transactions which took place in 2004 and 2006 where Kaupulehu Developments sold its leasehold interests in Increment I and Increment II to KD I's and KD II's predecessors in interest, respectively, which was prior to Barnwell’s affiliation with KD I and KD II which commenced on November 27, 2013, the acquisition date of our ownership interest in the Kukio Resort Land Development Partnerships. Changes to the arrangement above, effective March 7, 2019, are discussed in Note 6.
No lots were sold during the six months ended March 31, 2025. During the six months ended March 31, 2024, Barnwell received $500,000 in percentage of sales payments from KD I from the sale of the last two single-family lots within Increment I.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Cautionary Statement Relevant to Forward-Looking Information
For the Purpose Of “Safe Harbor” Provisions Of The
Private Securities Litigation Reform Act of 1995
This Form 10-Q, and the documents incorporated herein by reference, contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). A forward-looking statement is one which is based on current expectations of future events or conditions and does not relate to historical or current facts. These statements include various estimates, forecasts, projections of Barnwell’s future performance, statements of Barnwell’s plans and objectives, and other similar statements. All such statements we make are forward-looking statements made under the safe harbor of the PSLRA, except to the extent such statements relate to the operations of a partnership or limited liability company. Forward-looking statements include phrases such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “predicts,” “estimates,” “assumes,” “projects,” “may,” “will,” “will be,” “should,” or similar expressions. Although Barnwell believes that its current expectations are based on reasonable assumptions, it cannot assure that the expectations contained in such forward-looking statements will be achieved. Forward-looking statements involve risks, uncertainties and assumptions which could cause actual results to differ materially from those contained in such statements. The risks, uncertainties and other factors that might cause actual results to differ materially from Barnwell’s expectations are set forth in the “Forward-Looking Statements” and “Risk Factors” sections of Barnwell’s 2024 Annual Report. Investors should not place undue reliance on these forward-looking statements, as they speak only as of the date of filing of this Form 10-Q, and Barnwell expressly disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein.
Critical Accounting Policies and Estimates
Management has determined that our most critical accounting policies and estimates are those related to the full-cost ceiling calculation and depletion of our oil and natural gas properties and the calculation of our income taxes, all of which are discussed in our 2024 Annual Report. There have been no significant changes to these critical accounting policies and estimates during the three and six months ended March 31, 2025. We continue to monitor our accounting policies to ensure proper application of current rules and regulations.
Current Outlook
Going Concern
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the twelve-month period following the date of issuance of these condensed consolidated financial statements.
Our ability to sustain our business in the future will depend on sufficient oil and natural gas operating cash flows, which are highly sensitive to potentially volatile oil and natural gas prices, timely repayment of the note receivable from the buyers of our contract drilling segment, and the amount and timing of costs incurred related to the shareholder consent solicitation and ongoing proxy contest. A
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sufficient level of such cash inflows are necessary to fund discretionary oil and natural gas capital expenditures, which must be economically successful to provide sufficient returns to grow reserves and production or at a minimum replace declining production from aging wells. Such a level of oil and natural gas capital expenditures may require funding from external debt or equity sources that are not currently in place, but those sources may not be feasible or sufficient. In addition, we will need sufficient cash flows to fund our non-discretionary outflows such as oil and natural gas asset retirement obligations and ongoing operating and general and administrative expenses.
Due to the recent shareholder consent solicitation and the ongoing proxy contest costs incurred and estimated to be incurred and the impacts of recently imposed tariffs which have caused a reduction in oil prices and have had an impact on the U.S. economy as a whole, we now face a greater uncertainty about our oil and natural gas operating cash inflows as described above, which in turn limits our ability to make the required discretionary cash outflows for the capital expenditures necessary to convert our proved undeveloped reserves to proved developed reserves. Furthermore, because of the greater uncertainty about our cash inflows described above, there is substantial doubt about our ability to fund our non-discretionary cash outflows and thus substantial doubt about our ability to continue as a going concern for one year from the date of the filing of this report.
The Company is investigating potential sources of funding, including debt financing, non-core oil and natural gas property sales and the partial or complete sale of its remaining interests in the Kukio Resort Land Development Partnerships, however, no probable timing or amounts of such funding have yet been secured. Because of this uncertainty as well as uncertainties regarding the potential duration and depth of the impacts of recently legislated tariffs on the economy as a whole, which in turn affects oil prices and our business as described above, substantial doubt about our ability to continue as a going concern for one year from the date of the filing of this report exists. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Impact of Recently Issued Accounting Standards on Future Filings
In November 2023, the Financial Accounting Standards Board (“FASB”) 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. This ASU is effective for annual reporting periods beginning after December 15, 2023 (our fiscal 2025) and interim periods within fiscal years beginning after December 15, 2024 (our fiscal 2026), with early adoption permitted. The Company is currently evaluating the impact of this standard on Barnwell’s consolidated financial statements but does not expect that the adoption of this update will have a material impact on Barnwell's consolidated financial statements.
In December 2023, the FASB issued ASU No. 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires disclosure of incremental income tax information within the tax rate reconciliation and expanded disclosures of income taxes paid both in the U.S. and foreign jurisdiction, among other disclosure requirements. This ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this standard on Barnwell’s consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03 “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires public companies to disclose specified information about
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certain costs and expenses in the notes to the financial statements at interim and annual reporting periods. This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this standard on Barnwell’s consolidated financial statements.
Overview
As disclosed in Note 3 “Discontinued Operations,” on March 14, 2025, the Company entered into and completed the sale of its wholly-owned subsidiary, Water Resources. Water Resources drilled water wells and installed and repaired water pumping systems in Hawaii and represented our contract drilling segment. As a result of the sale, the Company has classified the related assets and liabilities and the results of its contract drilling business as discontinued operations in the condensed consolidated financial statements for all periods presented.
Accordingly, 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. (oil and natural gas segment) and 2) leasehold land interests in Hawaii (land investment segment).
Oil and Natural Gas Segment
Barnwell is involved in the acquisition and development of oil and natural gas properties in Canada where we initiate and participate in acquisition and developmental operations for oil and natural gas on properties in which we have an interest, and evaluate proposals by third parties with regard to participation in exploratory and developmental operations elsewhere. Additionally, through its wholly-owned subsidiaries, Barnwell is involved in several non-operated oil and natural gas investments in Oklahoma and Texas.
Land Investment Segment
Through Barnwell’s 77.6% interest in Kaupulehu Developments, 75% interest in KD Kona, and 34.45% non-controlling interest in KKM Makai, the Company’s land investment interests include the following:
•The right to receive percentage of sales payments from KD I resulting from the sale of single-family residential lots by KD I, within Increment I of the Kaupulehu Lot 4A area located in the North Kona District of the island of Hawaii. However, in the quarter ended March 31, 2024, the last two remaining single-family lots of the 80 lots developed within Increment I were sold and there are no more lots available for sale in Increment I. Kaupulehu Developments was entitled to receive payments from KD I based on 10% of the gross receipts from KD I’s sales at Increment I.
•The right to receive 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. Such interests are limited to distributions or net profits interests and Barnwell does not have any partnership interest in KD II or KDK through its interest in Kaupulehu Developments. Barnwell also has 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
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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, LLC and a pool of various individuals, respectively, all of whom are partners of KKM and are unrelated to Barnwell. The remaining acreage within 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.
•An indirect 19.6% non-controlling ownership interest in KD Kukio Resorts, LLLP, KD Maniniowali, LLLP and KD I and an indirect 10.8% non-controlling ownership interest in KD II through KDK. 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 was the developer of Kaupulehu Lot 4A Increments I and II. 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 private club memberships, a few of which remain available for sale.
The Kukio Resort Land Development Partnerships have remaining Increment I obligations to complete project amenities, infrastructure, beautification, and restoration of certain areas and therefore has yet to fully recognize its deferred profit on the Increment I project as a whole. The Increment I deferred profit at March 31, 2025 for the Kukio Resort Land Development Partnerships as a whole was approximately $4,100,000; the recognition of which is dependent upon the completion of the Increment I obligations. The Kukio Resort Land Development Partnerships have accrued estimated costs of these obligations of approximately $2,700,000. The Kukio Resort Land Development Partnerships currently appears to have the ability to fund those obligations but there are no assurances that it can ultimately do so in the future if unforeseen events occur. The Kukio Resort Land Development Partnerships will recognize the Increment I deferred revenue and costs of sales on a percentage completion basis as the cash outlays to complete the remaining project obligations are made. The Kukio Resort Land Development Partnerships’ deferred profit and accrued costs to complete are not reflected in Barnwell’s Condensed Consolidated Balance Sheets as we account for our investment in the Kukio Resort Land Development Partnerships under the equity method of accounting. No percentage of sales payments will be earned by Barnwell on any future recognition of Increment I deferred profit as such payments were already fully earned and received based on cash received by the Kukio Resort Land Development Partnerships as the Increment I lots were sold.
•Approximately 1,000 acres of vacant leasehold land zoned conservation in the Kaupulehu Lot 4C area, which currently has no development potential without both a development agreement with the lessor and zoning reclassification. The lease terminates in December 2025.
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Results of Operations
Summary of Results From Continuing Operations
The net loss from continuing operations attributable to Barnwell for the three months ended March 31, 2025 totaled $1,538,000, a $232,000 increase from a net loss from continuing operations attributable to Barnwell of $1,306,000 for the three months ended March 31, 2024. The following factors affected the results of operations for the three months ended March 31, 2025 as compared to the prior year period:
•General and administrative expenses increased $906,000 due to $978,000 in new fees related to a shareholder consent solicitation and proxy contest in the current year period as compared to the same period in the prior year;
•Equity in income from affiliates decreased $1,071,000 and land investment segment operating results, before non-controlling interests’ share of such profits, decreased $500,000 due to the Kukio Resort Land Development Partnerships' sale of two lots in the prior year period, whereas there were no lots sold in the current year period; and
•A $1,625,000 decrease in the ceiling test impairment which was $1,677,000 in the prior year period compared to a ceiling test impairment of $52,000 in the current year period, and a $589,000 decrease in oil and natural gas depletion in the current year period as compared to the same period in the prior year, partially offset by a decrease in operating results primarily from decreased production.
The net loss from continuing operations attributable to Barnwell for the six months ended March 31, 2025 totaled $3,136,000, a $1,480,000 increase from a net loss from continuing operations attributable to Barnwell of $1,656,000 for the six months ended March 31, 2024. The following factors affected the results of operations for the six months ended March 31, 2025 as compared to the prior year period:
•General and administrative expenses increased $749,000 due to $941,000 in new fees related to a shareholder consent solicitation and proxy contest, partially offset by a reduction in compensation costs in the current year period as compared to the same period in the prior year;
•Equity in income from affiliates decreased $1,071,000 and land investment segment operating results, before non-controlling interests’ share of such profits, decreased $500,000 due to the Kukio Resort Land Development Partnerships' sale of two lots in the prior year period, whereas there was no lots sold in the current year period; and
•A $1,012,000 decrease in the ceiling test impairment which was $1,677,000 in the prior year period compared to a ceiling test impairment of $665,000 in the current year period, and a $1,143,000 decrease in oil and natural gas depletion in the current year period as compared to the same period in the prior year, partially offset by a decrease in operating results primarily from decreased production.
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General
Barnwell conducts operations in the U.S. and Canada. Consequently, Barnwell is subject to foreign currency translation and transaction gains and losses due to fluctuations of the exchange rates between the Canadian dollar and the U.S. dollar. Barnwell cannot accurately predict future fluctuations of the exchange rates and the impact of such fluctuations may be material from period to period. To date, we have not entered into foreign currency hedging transactions. Foreign currency gains or losses on intercompany loans and advances that are not considered long-term investments in nature because management intends to settle these intercompany balances in the future are included in our statements of operations.
The average exchange rate of the Canadian dollar to the U.S. dollar decreased 6% and 4% in the three and six months ended March 31, 2025, respectively, as compared to the same periods in the prior year. The exchange rate of the Canadian dollar to the U.S. dollar decreased 6% at March 31, 2025, as compared to September 30, 2024. Accordingly, the assets, liabilities, stockholders’ equity and revenues and expenses of Barnwell’s subsidiaries operating in Canada have been adjusted to reflect the change in the exchange rates. Other comprehensive income and losses are not included in net earnings and net loss. Other comprehensive loss due to foreign currency translation adjustments, net of taxes, for the three months ended March 31, 2025 was $3,000, a $19,000 change from other comprehensive loss due to foreign currency translation adjustments, net of taxes, of $22,000 for the same period in the prior year. Other comprehensive income due to foreign currency translation adjustments, net of taxes, for the six months ended March 31, 2025 was $90,000, a $82,000 change from other comprehensive income due to foreign currency translation adjustments, net of taxes, of $8,000 for the same period in the prior year. There were no taxes on other comprehensive income (loss) due to foreign currency translation adjustments in the three and six months ended March 31, 2025 and 2024 due to a full valuation allowance on the related deferred tax asset.
Oil and Natural Gas
The following tables set forth Barnwell’s average prices per unit of production and net production volumes. Production amounts reported are net of royalties.

| Average Price Per Unit
| Three months ended |  | Increase
| March 31, |  | (Decrease)
| 2025 |  | 2024 |  | $ |  | %
Natural Gas (Mcf)* | $ | 1.84 |  |  | $ | 1.91 |  |  | $ | (0.07) |  |  | (4 | %)
Oil (Bbls)** | $ | 61.02 |  |  | $ | 60.62 |  |  | $ | 0.40 |  |  | 1 | %
Natural gas liquids (Bbls)** | $ | 32.43 |  |  | $ | 30.06 |  |  | $ | 2.37 |  |  | 8 | %

| Average Price Per Unit
| Six months ended |  | Increase
| March 31, |  | (Decrease)
| 2025 |  | 2024 |  | $ |  | %
Natural Gas (Mcf)* | $ | 1.43 |  |  | $ | 1.87 |  |  | $ | (0.44) |  |  | (24 | %)
Oil (Bbls)** | $ | 63.39 |  |  | $ | 64.09 |  |  | $ | (0.70) |  |  | (1 | %)
Natural gas liquids (Bbls)** | $ | 29.61 |  |  | $ | 29.60 |  |  | $ | 0.01 |  |  | — | %

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| Net Production
| Three months ended |  | Increase
| March 31, |  | (Decrease)
| 2025 |  | 2024 |  | Units |  | %
Natural Gas (Mcf)* | 253,000 |  |  | 334,000 |  |  | (81,000) |  |  | (24 | %)
Oil (Bbls)** | 43,000 |  |  | 50,000 |  |  | (7,000) |  |  | (14 | %)
Natural gas liquids (Bbls)** | 14,000 |  |  | 16,000 |  |  | (2,000) |  |  | (13 | %)

| Net Production
| Six months ended |  | Increase
| March 31, |  | (Decrease)
| 2025 |  | 2024 |  | Units |  | %
Natural Gas (Mcf)* | 551,000 |  |  | 713,000 |  |  | (162,000) |  |  | (23 | %)
Oil (Bbls)** | 91,000 |  |  | 108,000 |  |  | (17,000) |  |  | (16 | %)
Natural gas liquids (Bbls)** | 29,000 |  |  | 34,000 |  |  | (5,000) |  |  | (15 | %)

_______________________________________
* Mcf = 1,000 cubic feet. Natural gas price per unit is net of pipeline charges.
** Bbl = stock tank barrel equivalent to 42 U.S. gallons
The oil and natural gas segment generated a $752,000 operating profit before general and administrative expenses in the three months ended March 31, 2025, an increase in operating results of $1,957,000 as compared to the $1,205,000 operating loss before general and administrative expenses generated during the same period of the prior year primarily due to a decrease of $1,625,000 in the ceiling test impairment and a $589,000 decrease in oil and natural gas depletion in the current year period, partially offset by a decrease in operating results primarily from decreased production.
The oil and natural gas segment generated a $636,000 operating profit before general and administrative expenses in the six months ended March 31, 2025, an increase in operating results of $960,000 as compared to the $324,000 operating loss before general and administrative expenses generated during the same period of the prior year primarily due to a decrease of $1,012,000 in the ceiling test impairment and a $1,143,000 decrease in oil and natural gas depletion in the current year period, partially offset by a decrease in operating results primarily from decreased production.
The following table sets forth Barnwell’s oil and natural gas segment operating (loss) profit before general and administrative expenses by geographic location:

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Operating profit (loss) (before general and administrative expenses) |  |  |  |  |  |  |
Canada (1) | $ | 653,000 |  |  | $ | (1,511,000) |  |  | $ | 1,055,000 |  |  | $ | (975,000) |
United States (2) | 99,000 |  |  | 306,000 |  |  | (419,000) |  |  | 651,000 |
Total operating profit (loss) | $ | 752,000 |  |  | $ | (1,205,000) |  |  | $ | 636,000 |  |  | $ | (324,000) |

________________________
(1) The operating loss for Canada for the three and six months ended March 31, 2024 includes a non-cash ceiling test impairment of $1,677,000.
(2) The operating profit (loss) for the United States for the three and six months ended March 31, 2025 includes a non-cash ceiling test impairment of $52,000 and $665,000, respectively.
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Oil and natural gas revenues decreased $601,000 (15%) and $1,834,000 (20%) for the three and six months ended March 31, 2025, respectively, as compared to the same periods in the prior year, primarily due to decreases in natural gas, oil, and natural gas liquids production in the current year periods as compared to the same periods in the prior year. The decreases in production are primarily the result of natural declines as the wells age.
In July 2024, the Company amended the sales price on 1,055 gross Mcf per day of the Canadian natural gas it will sell during the period from November 1, 2024 to March 31, 2025 to a fixed index price before differentials of $2.64 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of natural gas under this fixed index price contract was equivalent to approximately 39% of Canadian natural gas gross production per day for the six months ended March 31, 2025.
In February 2025, the Company amended the sales price on 1,055 gross Mcf per day of the Canadian natural gas it will sell during the period from April 1, 2025 to October 31, 2025 to a fixed index price before differentials of $1.95 Canadian dollars per Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of natural gas under this fixed index price contract that will affect the period from April 1, 2025 to June 30, 2025, is equivalent to approximately 39% of Canadian natural gas gross production per day for the six months ended March 31, 2025. These natural gas contracts were eligible for and elected as normal purchase and normal sales exception contracts and were thus excluded from derivative accounting.
Oil and natural gas operating expenses decreased $344,000 (15%) and $639,000 (12%) for the three and six months ended March 31, 2025, respectively, as compared to the same periods in the prior year, primarily due decreases in production in the current year periods as compared to the same periods in the prior year. Additionally, the decrease in oil and natural gas operating expenses for the six months ended March 31, 2025, was partially offset by an increase in workovers in the current year period, as compared to the same period in the prior year.
Oil and natural gas segment depletion decreased $589,000 (44%) and $1,143,000 (41%) for the three and six months ended March 31, 2025, respectively, as compared to the same periods in the prior year. The decreases were due to decreases in the depletion rate and due to decreases in production in the current year periods as compared to the same periods in the prior year. The depletion rate decreased as a result of a decrease in the depletable base from significant ceiling test impairments between the prior year periods and the current year periods.
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Sale of Interest in Leasehold Land
Kaupulehu Developments was entitled to receive a percentage of the gross receipts from the sales of lots and/or residential units in Increment I by KD I.
The following table summarizes the revenues received from KD I and the amount of fees directly related to such revenues:

| Three months ended March 31, |  | Six months ended March 31,
| 2025 |  | 2024 |  | 2025 |  | 2024
Sale of interest in leasehold land: |  |  |  |  |  |  |
Revenues - sale of interest in leasehold land | $ | — |  |  | $ | 500,000 |  |  | $ | — |  |  | $ | 500,000 |
Fees - included in general and administrative expenses | — |  |  | (61,000) |  |  | — |  |  | (61,000) |
Sale of interest in leasehold land, net of fees paid | $ | — |  |  | $ | 439,000 |  |  | $ | — |  |  | $ | 439,000 |

No lots were sold during the three and six months ended March 31, 2025. During the three and six months ended March 31, 2024, Barnwell received $500,000 in percentage of sales payments from KD I from the sale of the last two single-family lots within Increment I.
There is an Increment II owned by KD II in which the Company has a 10.8% indirect non-controlling ownership interest. There is no assurance with regards to the amounts of future sales from Increment II 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.
General and Administrative Expenses
General and administrative expenses increased $906,000 (72%) for the three months ended March 31, 2025 as compared to the same period in the prior year. The increase was due to $978,000 in new fees for legal services, proxy solicitation, proxy advisory, and public relations costs related to a shareholder consent solicitation and proxy contest in the current year period as compared to the same period in the prior year. The increase was partially offset by decreases in compensation and other costs in the current year period as compared to the same period in the prior year.
General and administrative expenses increased $749,000 (29%) for the six months ended March 31, 2025 as compared to the same period in the prior year. The increase was due to $941,000 in new fees for legal services, proxy solicitation, proxy advisory, and public relations costs related to a shareholder consent solicitation and proxy contest in the current year period as compared to the same period in the prior year. The increase was partially offset by decreases in compensation and other costs in the current year period as compared to the same period in the prior year.
The aforementioned shareholder proxy contest is continuing as of the date of this report and thus related costs will continue to be incurred until the matter is resolved. Accordingly, general and administrative expenses will continue to be affected by this matter beyond March 31, 2025. The Company is unable to estimate the amount of such future costs as the matter is ongoing and such costs will depend upon the future actions to be taken, which are yet to be determined.
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Depletion, Depreciation, and Amortization
Depletion, depreciation, and amortization decreased $588,000 (44%) and $1,143,000 (41%) for the three and six months ended March 31, 2025, respectively, as compared to the same periods in the prior year, primarily due to decreases in the depletion rate and decreases in production, as discussed in the “Oil and natural gas” section above.
Impairment of Assets
Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices (except where prices are defined by contractual arrangements), the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties.
During the three and six months ended March 31, 2025, the Company incurred a non-cash ceiling test impairment for our U.S. oil and natural gas properties of $52,000 and $665,000, respectively. During the three and six months ended March 31, 2024, the Company incurred a non-cash ceiling test impairment for our Canadian oil and natural gas properties of $1,677,000.
As discussed above, the ceiling test uses a 12-month historical rolling average first-day-of-the-month prices. As such, declines in the 12-month historical rolling average first-day-of-the-month prices used in our ceiling test calculation in future periods could result in impairment write-downs in future periods in the absence of any offsetting factors that are not currently known or projected. Based on the oil and gas prices for April 1 and May 1 of 2025, the oil prices and natural gas prices used in the 12-month historical rolling first-day-of-the-month average oil price for the ceiling test at June 30, 2025 will be lower than at March 31, 2025. Whereas we believe our Canadian full cost pool is below the ceiling limit, our U.S. full cost pool had no ceiling excess at March 31, 2025, and thus a further impairment charge is more likely than not for our U.S full cost pool in the quarter ending June 30, 2025. The Company is currently unable to estimate a range of the amount of any potential future impairment write-downs as variables that impact the ceiling limitation are dependent upon actual results of activity through the end of June 2025.
Foreign Currency (Gain) Loss
During the three and six months ended March 31, 2025, there was a $10,000 foreign currency gain and a $341,000 foreign currency loss, respectively, as compared to foreign currency losses of $128,000 and $2,000 during the three and six months ended March 31, 2024, respectively, due to the effects of foreign exchange rate changes on intercompany loans and advances as a result of changes in the exchange rate between the U.S. dollar against the Canadian dollar. The foreign currency losses or gains from intercompany balances are included in our condensed consolidated statement of operations as the intercompany balances were not considered long-term in nature because management estimates that these intercompany balances will be settled in the future.
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Equity in Income of Affiliates
Equity in income of affiliates was nil for the three and six months ended March 31, 2025, as compared to equity in income of affiliates of $1,071,000 for the three and six months ended March 31, 2024. The decrease in partnership income is primarily due to the Kukio Resort Land Development Partnerships' sale of the last two lots in Increment I in the prior year period, whereas there were no lots sold in the current year period.
No cash distributions were received during the three and six months ended March 31, 2025. During the three and six months ended March 31, 2024, Barnwell received cash distributions of $1,071,000 (resulting in a net amount of $953,000, after distributing $118,000 to non-controlling interests) from the Kukio Resort Land Development Partnerships.
In the quarter ended June 30, 2021, the Company received cumulative distributions from the Kukio Resort Land Development Partnerships in excess of our investment balance and in accordance with applicable accounting guidance, the Company suspended its equity method earnings recognition and the Kukio Resort Land Development Partnerships investment balance was reduced to zero with the distributions received in excess of our investment balance recorded as equity in income of affiliates because the distributions are not refundable by agreement or by law and the Company is not liable for the obligations of or otherwise committed to provide financial support to the Kukio Resort Land Development Partnerships. The Company will record future equity method earnings only after our share of the Kukio Resort Land Development Partnerships’ cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnerships’ income recognized for the excess distributions, and during this suspended period any distributions received will be recorded as equity in income of affiliates. Accordingly, no equity in income of affiliates was recognized in the six months ended March 31, 2025.
Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $31,000 at March 31, 2025 and $373,000 at September 30, 2024.
Income Taxes
Barnwell’s effective consolidated income tax rate from continuing operations, after adjusting loss from continuing operations before income taxes for non-controlling interests, was (12)% and (6)% for the three and six months ended March 31, 2025, respectively, as compared to (8)% and (11)% for the three and six months ended March 31, 2024, respectively.
Consolidated taxes do not bear a customary relationship to pretax results due primarily to the fact that the Company is taxed separately in Canada based on Canadian source operations and in the U.S. based on consolidated operations, and essentially all deferred tax assets, net of relevant offsetting deferred tax liabilities, are not estimated to have a future benefit as tax credits or deductions. The Company operates two subsidiaries in Canada, one of which is a U.S. corporation operating as a branch in Canada that is treated as a non-resident for Canadian tax purposes and thus has operating results that cannot be offset against or combined with the other Canadian subsidiary that files as a resident for Canadian tax purposes. Income from our non-controlling interest in the Kukio Resort Land Development Partnerships is treated as non-unitary for state of Hawaii unitary filing purposes, thus unitary Hawaii losses provide limited sheltering of such non-unitary income. Income from our investment in the Oklahoma oil venture is 100% allocable to Oklahoma. As such, Barnwell receives no benefit from consolidated or unitary losses
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and, therefore, is subject to Oklahoma state taxes. Our operations in Texas are subject to a franchise tax assessed by the state of Texas, however no significant amounts have been incurred to date.
Net Earnings Attributable to Non-controlling Interests
Earnings and losses attributable to non-controlling interests represent the non-controlling interests’ share of revenues and expenses related to the various partnerships and joint ventures in which Barnwell has controlling interests and consolidates.
Net loss attributable to non-controlling interests totaled nil and $2,000 for the three and six months ended March 31, 2025, respectively, as compared to net earnings attributable to non-controlling interests of $222,000 and $224,000 for the same periods in the prior year. The changes of $222,000 (100%) and $226,000 (101%) for the three and six months, respectively, are primarily due to decreases in the amount of equity in income of affiliates and percentage of sales revenues received in the current year periods as compared to the same periods in the prior year.
Net Earnings (Loss) From Discontinued Operations
Net earnings from discontinued operations was $331,000 and $12,000 during the three and six months ended March 31, 2025, respectively, as compared to net loss from discontinued operations of $466,000 and $780,000 during the three and six months ended March 31, 2024, respectively.
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 in the condensed consolidated financial statements for all periods presented. See Note 3 “Discontinued Operations” for further discussion and additional disclosures related to discontinued operations.
Liquidity and Capital Resources
The Company has presented cash flows from discontinued operations in the accompanying Condensed Consolidated Statement of Cash Flows separately after the presentation of cash flows from operating, investing, and financing activities of continuing operations. See Note 3 “Discontinued Operations” for further discussion and additional disclosures related to discontinued operations. The focus of this section, “Liquidity and Capital Resources,” is on the cash flows from continuing operations, which affects future liquidity and capital resources as the Company no longer has any significant continuing involvement with the discontinued operations after the sale.
At March 31, 2025, Barnwell had a working capital deficit of $57,000. Barnwell’s primary sources of liquidity are cash on hand and cash flow generated by our oil and natural gas operations, as cash flow from our land investment segment, if any, are expected to be intermittent and not significant to our liquidity.
Cash Flows From Continuing Operations
Cash flows used in continuing operations totaled $854,000 for the six months ended March 31, 2025, as compared to cash flows provided by continuing operations of $3,000,000 for the same period in the prior year. This $3,854,000 decrease in operating cash flows was primarily due to lower operating results for the oil and natural gas segment in the current year period as compared to the same period in the
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prior year, and a distribution of income from the Kukio Resort Land Development Partnerships in the prior year period as compared to none in the current year period. The change was also due to the effect of changes in current assets and liabilities, which was a decrease in operating cash flows of $423,000 in the current year period as compared to an increase of $333,000 in the prior year period.
Cash flows used in investing activities from continuing operations totaled $2,272,000 during the six months ended March 31, 2025, as compared to cash flows used in investing activities from continuing operations of $1,185,000 during the same period of the prior year. This $1,087,000 change in investing cash flows was due to $1,017,000 more in cash paid for investments in oil and natural gas properties and $163,000 in cash divested from the sale of discontinued operations, net of proceeds, in the current year as compared to the same period in the prior year, partially offset by a $250,000 dividend received from discontinued operations and $282,000 of proceeds from the sale of oil and natural gas properties in Canada in the current year period; there were no such amounts in the same period of the prior year. In addition, there was $439,000 of proceeds received by the land investment segment in the prior year period, as compared to none in the current year period.
Cash flows used in financing activities from continuing operations totaled $15,000 for the six months ended March 31, 2025, as compared to cash flows used in financing activities from continuing operations of $223,000 for the six months ended March 31, 2024. The $208,000 change in financing cash flows was due to a decrease of $223,000 in distributions to non-controlling interests, partially offset by $15,000 in repayments for insurance premium financing in the current year period as compared to none the same period in the prior year.
Going Concern
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business for the twelve-month period following the date of issuance of these condensed consolidated financial statements.
Our ability to sustain our business in the future will depend on sufficient oil and natural gas operating cash flows, which are highly sensitive to potentially volatile oil and natural gas prices, timely repayment of the note receivable from the buyers of our contract drilling segment, and the amount and timing of costs incurred related to the shareholder consent solicitation and ongoing proxy contest. A sufficient level of such cash inflows are necessary to fund discretionary oil and natural gas capital expenditures, which must be economically successful to provide sufficient returns to grow reserves and production or at a minimum replace declining production from aging wells. Such a level of oil and natural gas capital expenditures may require funding from external debt or equity sources that are not currently in place, but those sources may not be feasible or sufficient. In addition, we will need sufficient cash flows to fund our non-discretionary outflows such as oil and natural gas asset retirement obligations and ongoing operating and general and administrative expenses.
Due to the recent shareholder consent solicitation and the ongoing proxy contest costs incurred and estimated to be incurred and the impacts of recently imposed tariffs which have caused a reduction in oil prices and have had an impact on the U.S. economy as a whole, we now face a greater uncertainty about our oil and natural gas operating cash inflows as described above, which in turn limits our ability to make the required discretionary cash outflows for the capital expenditures necessary to convert our proved undeveloped reserves to proved developed reserves. Furthermore, because of the greater uncertainty about our cash inflows described above, there is substantial doubt about our ability to fund our non-discretionary
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cash outflows and thus substantial doubt about our ability to continue as a going concern for one year from the date of the filing of this report.
The Company is investigating potential sources of funding, including debt financing, non-core oil and natural gas property sales and the partial or complete sale of its remaining interests in the Kukio Resort Land Development Partnerships, however, no probable timing or amounts of such funding have yet been secured. Because of this uncertainty as well as uncertainties regarding the potential duration and depth of the impacts of recently legislated tariffs on the economy as a whole, which in turn affects oil prices and our business as described above, substantial doubt about our ability to continue as a going concern for one year from the date of the filing of this report exists. These financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Oil and Natural Gas Capital Expenditures
Barnwell’s oil and natural gas capital expenditures, including accrued capital expenditures and excluding acquisitions and additions and revisions to estimated asset retirement obligations, totaled $68,000 and $382,000 for the three and six months ended March 31, 2025, respectively, as compared to $560,000 and $1,055,000 for the same periods in the prior year.
Barnwell estimates that investments in oil and natural gas properties for fiscal 2025 will range from $500,000 to $1,000,000. This estimated amount may increase or decrease as dictated by cash flows and management's assessment of the oil and natural gas environment and prospects.
Oil and Natural Gas Property Dispositions
There were no significant oil and natural gas property dispositions during the six months ended March 31, 2025. The $282,000 of proceeds from sale of oil and natural gas properties included in the Condensed Consolidated Statement of Cash Flows for the six months ended March 31, 2025 represents proceeds that were credited to our cash in October 2024 from a sale of properties that closed in late September 2024.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We have established disclosure controls and procedures to ensure that material information relating to Barnwell, including its consolidated subsidiaries, is made known to the officers who certify Barnwell’s financial reports and to other members of executive management and the Board of Directors.
As of March 31, 2025, an evaluation was carried out by Barnwell’s Chief Executive Officer and Chief Financial Officer of the effectiveness of Barnwell’s disclosure controls and procedures. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that Barnwell’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of March 31, 2025 to ensure that information required to be disclosed by Barnwell in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Act of 1934 and the rules thereunder.
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Changes in Internal Control Over Financial Reporting
There was no change in Barnwell’s internal control over financial reporting during the quarter ended March 31, 2025 that materially affected, or is reasonably likely to materially affect, Barnwell’s internal control over financial reporting.
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PART II - OTHER INFORMATION
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024. There have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024, except for the items listed below.
Entity-Wide Risks
Continued actions by an activist shareholder have had, and are expected to continue to have, a significant negative impact on our ability to execute our business strategies and have had, and are expected to continue to have, an adverse affect on our results of operations and financial condition.
In March 2025, Ned L. Sherwood (“Sherwood”) and certain of his affiliates (collectively, the “Sherwood Group”) commenced a consent solicitation of Barnwell’s shareholders for the primary purpose of removing all of the current directors on Barnwell’s Board of Directors and replacing them with individuals proposed by the Sherwood Group. In addition, the Sherwood Group has filed a proxy statement with the Securities and Exchange Commission for the purpose of soliciting proxies from the Company’s shareholders to vote their shares of Barnwell’s common stock at the Company’s 2025 annual meeting of shareholders in favor of a slate of directors proposed by the Sherwood Group.
The Company recommended that shareholders not provide their consent to remove the current Barnwell directors, and, with respect the proxy consent, in March 2025, the Company commenced a lawsuit against the Sherwood Group in the Delaware Chancery Court, seeking, among other remedies, declaratory judgment that the Sherwood Group’s purported advance notice with respect to the nomination of directors at the 2025 annual meeting of shareholders was invalid and injunctive relief to enjoin the Sherwood Group from presenting its slate of nominees at the 2025 annual meeting due to the failure of the Sherwood Group to comply with the advance notice provisions of the Company’s bylaws.
In response to the actions of the Sherwood Group, the Board of Directors appointed an Executive Committee comprised of Messrs. Kinzler, Grossman and Horowitz and this Executive Committee retained the services of various professionals, including attorneys, proxy solicitors, proxy advisors, and public relations and financial advisors. We have incurred substantial legal, public relations and other advisory fees and proxy solicitation expenses, both pre and post our most recent balance sheet date, March 31, 2025, and we currently expect those costs and expenses to continue. In addition, continuing perceived uncertainties as to our future direction, strategy or leadership created as a consequence may result in the loss of potential business opportunities, harm our ability to attract new or retain existing directors and employees, disrupt relationships with the Company, and the market price of our common stock could also experience periods of increased volatility as a result.
The Company faces issues that could impair our ability to continue as a going concern in the future.
Our ability to sustain our business in the future will depend on sufficient oil and natural gas operating cash flows, which are highly sensitive to potentially volatile oil and natural gas prices, timely repayment of the note receivable from the buyers of our contract drilling segment, and the amount and timing of costs incurred related to the shareholder consent solicitation and ongoing proxy contest. A
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sufficient level of such cash inflows are necessary to fund discretionary oil and natural gas capital expenditures, which must be economically successful to provide sufficient returns to grow reserves and production or at a minimum replace declining production from aging wells. Such a level of oil and natural gas capital expenditures may require funding from external debt or equity sources that are not currently in place, but those sources may not be feasible or sufficient. In addition, we will need sufficient cash flows to fund our non-discretionary outflows such as oil and natural gas asset retirement obligations and ongoing operating and general and administrative expenses.
Due to the recent shareholder consent solicitation and the ongoing proxy contest costs incurred and anticipated to be incurred and the impacts of recently imposed tariffs which have caused a reduction in oil prices and have had an impact on the U.S. economy as a whole, we now face a greater uncertainty about our future operating cash inflows, which in turn limits our ability to make the required discretionary cash outflows for the capital expenditures necessary to convert our proved undeveloped reserves to proved developed reserves. Furthermore, because of the greater uncertainty about our cash inflows, there is substantial doubt about our ability to fund our non-discretionary cash outflows and thus substantial doubt about our ability to continue as a going concern for one year from the date of the filing of this report.
ITEM 5. OTHER INFORMATION
During the three months ended March 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
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ITEM 6. EXHIBITS

Exhibit Number |  | Description
10.1* |  | Stock Purchase Agreement, dated March 14, 2025
31.1* |  | Certification of Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002
31.2* |  | Certification of Chief Financial Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002
32** |  | Certification Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002
101.INS* |  | Inline XBRL Instance Document
101.SCH* |  | Inline XBRL Taxonomy Extension Schema Document
101.CAL* |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* |  | Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* |  | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE* |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 |  | Cover Page Interactive Data File (embedded within the Inline XBRL document)

__________________________________________________
* Filed herewith.
** Furnished herewith.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

|  | BARNWELL INDUSTRIES, INC.
|  | (Registrant)
Date: | May 15, 2025 | /s/ Russell M. Gifford
|  | Russell M. Gifford
|  | Executive Vice President,
|  | Chief Financial Officer, and Treasurer

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INDEX TO EXHIBITS

Exhibit Number |  | Description
10.1* |  | Stock Purchase Agreement, dated March 14, 2025
31.1* |  | Certification of Chief Executive Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002
31.2* |  | Certification of Chief Financial Officer Pursuant To Section 302 of the Sarbanes-Oxley Act of 2002
32** |  | Certification Pursuant To Section 906 of the Sarbanes-Oxley Act of 2002
101.INS* |  | Inline XBRL Instance Document
101.SCH* |  | Inline XBRL Taxonomy Extension Schema Document
101.CAL* |  | Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF* |  | Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB* |  | Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE* |  | Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 |  | Cover Page Interactive Data File (embedded within the Inline XBRL document)

__________________________________________
* Filed herewith.
** Furnished herewith.
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