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DISCONTINUED OPERATIONS | 9 Months Ended
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Jun. 30, 2025
Discontinued Operations and Disposal Groups [Abstract] |
DISCONTINUED OPERATIONS | 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 were to be paid in installments on the following schedule: $200,000 on May 15, 2025; and $150,000 on June 16, 2025, July 15, 2025, August 15, 2025, and September 15, 2025. The Promissory Note is secured by certain specified assets of Water Resources and personal guarantees of the purchasers. As of June 30, 2025, the balance of the Promissory Note was $450,000. In August 2025, the Promissory Note was amended to change the due date of the $150,000 installments due on August 15, 2025 and September 15, 2025 to the following schedule: $100,000 on December 15, 2025; $50,000 on February 15, 2026; and $150,000 on March 15, 2026 and to increase the annual interest rate on the Promissory Note from zero to 12% beginning August 15, 2025 and to 18% beginning December 15, 2025. 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 nine months ended June 30, 2025. There was no impact from the sale of Water Resources on the provision for income taxes. The following table presents the financial results from discontinued operations presented in the Condensed Consolidated Statements of Operations.
| Three months ended June 30, |  | Nine months ended June 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Revenues: |  |  |  |  |  |  |
Contract drilling | $ | — |  |  | $ | 1,021,000 |  |  | $ | 1,156,000 |  |  | $ | 3,084,000 |
Other | — |  |  | — |  |  | — |  |  | 26,000 |
| — |  |  | 1,021,000 |  |  | 1,156,000 |  |  | 3,110,000 |
Costs and expenses: |  |  |  |  |  |  |
Contract drilling operating | — |  |  | 1,092,000 |  |  | 1,239,000 |  |  | 3,648,000 |
General and administrative | — |  |  | 129,000 |  |  | 209,000 |  |  | 338,000 |
Depreciation and amortization | — |  |  | 28,000 |  |  | 40,000 |  |  | 130,000 |
Interest expense | — |  |  | — |  |  | 1,000 |  |  | 2,000 |
Gain on sale of assets (1) | — |  |  | — |  |  | (538,000) |  |  | — |
| — |  |  | 1,249,000 |  |  | 951,000 |  |  | 4,118,000 |
(Loss) earnings from discontinued operations before income taxes | — |  |  | (228,000) |  |  | 205,000 |  |  | (1,008,000) |
Loss on sale of discontinued operations | — |  |  | — |  |  | (193,000) |  |  | — |
Income tax provision | — |  |  | — |  |  | — |  |  | — |
Net (loss) earnings from discontinued operations | $ | — |  |  | $ | (228,000) |  |  | $ | 12,000 |  |  | $ | (1,008,000) |
________________________ (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 nine months ended June 30, 2025 which was recorded in discontinued operations. The following table presents the carrying amounts of the assets and liabilities of discontinued operations on the Condensed Consolidated Balance Sheets.
| June 30, 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 June 30, 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 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 360 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/360/tableOfContent + Details
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