BRN 10-K & 10-Q changes, risk factors and insider trading

Our Board of Directors has authority, without action or vote of the stockholders, subject to the requirements of the NYSE American stock exchange and applicable law, to issue all shares of our common stock or warrantsother debt or otherequity instruments to purchase such shares of our common stock. In addition, we may raise capital by selling shares of our common stock, possibly at a discount to market in the future. These actions would result in dilution of the ownership interests of existing stockholders and may further dilute common stock book value, and that dilution may be material. A related effect of such issuances may enhance existing large stockholders’ influence on the Company, including that of Alexander Kinzler, our General Counsel and Secretary.

As of September 30, 2024,2025, our General Counsel and Secretary, who is the Executive Chairman of the Board of Directors,Secretary and two other stockholders hold approximately 48% of our outstanding common stock. The interests of one or more of these stockholders may not always coincide with the interests of other stockholders. These stockholders have significant influence over all matters submitted to our stockholders, including the election of our directors, and could accelerate, delay, deter or prevent a change of control of the Company.

Barnwell's oil and natural gas segment is subject to the provisions of the Alberta Energy Regulator’s (“AER”) Licensee Life-Cycle Management Program via a Licensee Capability Assessment (“LCA”). Under this program the AER assesses the corporate health of the Company and considers a wider variety of factors than those considered under the previous program. The LCA establishes clear expectations for industry with regards to the management of liabilities throughout the entire lifecycle of oil and gas projects. Factors considered are grouped into six factor groups, these being current financial distress, liability magnitude, resources lifespan, operations compliance, closure efficiency and administrative compliance. These factors are compared to peer operators and ranked into three “Tiers”. Under the LCA Program,AER, an inventory reduction program has also been implemented which requires mandatory annual minimum expenditures towards outstanding decommissioning and reclamation obligations in accordance with AER targets which are adjusted by the AER on an annual basis. The target for 20252026 is 6.2%6.5% of an individual company’s inactive liability. These targets became effective January 1, 2022.

There is currently significant uncertainty about the future relationship between the United States and Canada, including potential changes with respect to trade policies, treaties, tariffs, taxes, and other limitations on cross-border operations. Because most ofall our oil and natural gas production is in Canada, changes in tariffs, trade barriers, and other regulatory requirements could have an adverse effect on our business, prospects, financial condition and operating results, the extent of which cannot be predicted with certainty at this time.

If reported reserve volumes were revised downward by 5% at the end of fiscal 2024,2025, the ceiling limitation for Canada would have decreased approximately $906,000$636,000 which would not have resulted in a ceiling impairment before income taxes due to sufficient room between the ceiling and the carrying value of Canadian oil and natural gas properties at the end of fiscal 20242025 of approximately $4,658,000. However, an additional $197,000 impairment would be recorded for U.S. oil and gas properties at the end of fiscal 2024 as there is no room between the ceiling and the carrying value of U.S. oil and natural gas properties at the end of fiscal 2024.$2,949,000.

Barnwell is engaged in the following lines of business: 1) acquiring, developing, producing and selling oil and natural gas in Canada and the U.S. (oil and natural gas segment), and 2) leasehold land interests in Hawaii (land investment segment), and 3) drilling wells and installing and repairing water pumping systems in Hawaii (contract drilling segment).

Barnwell is involved in the acquisition and development of oil and natural gas properties primarily in the Twining area of Alberta, 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 such exploratory and developmental operations elsewhere. Additionally, through its wholly-owned subsidiaries BOK and Barnwell Texas, Barnwell iswas, until August 8, 2025, involved in non-operated oil and natural gas investments in Oklahoma and Texas, respectively.

•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 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.

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 September 30, 20242025 for the Kukio Resort Land Development Partnerships as a whole was approximately $4,500,000; 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 $3,000,000. 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.

Our operations are located in Canada and in the statesstate of Hawaii, Oklahoma,Hawaii and Texas. Accordingly, our business performance is directly affected by macroeconomic conditions in those areas, as well as general economic conditions of the U.S. domestic and world economies.

NetThe net loss from continuing operations attributable to Barnwell for fiscal 20242025 totaled $5,565,000,$7,115,000, a $4,604,000$3,010,000 increase in net loss from a net loss from continuing operations attributable to Barnwell of $961,000$4,105,000 in fiscal 2023.2024. The following factors affected the results of operations for the current fiscal year as compared to the prior fiscal year:

•Results improved as generalGeneral and administrative expenses decreasedincreased $1,358,000 primarily$1,807,000 due to decreases$1,958,000 in stockholdernew fees and costs incurred, net of $348,000 of estimated accrued insurance recoveries, related to a shareholder consent solicitation, various legal actions between the Sherwood Group and professionalthe feesCompany and certain of its directors, and a proxy contest in the current year period as compared to the same period in the prior year.year;

The average exchange rate of the Canadian dollar to the U.S. dollar decreased 1%3% in fiscal 2024,2025, as compared to fiscal 20232024 and the exchange rate of the Canadian dollar to the U.S. dollar remaineddecreased unchanged3% at September 30, 2024,2025, as compared to September 30, 2023.2024. 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 lossincome due to foreign currency translation adjustments, net of taxes, for fiscal 20242025 was nil,$75,000, a $2,000$75,000 change from other comprehensive loss due to foreign currency translation adjustments, net of taxes, of $2,000nil in fiscal 2023.2024. There were no taxes on other comprehensive lossincome due to foreign currency translation adjustments in fiscal 20242025 and 20232024 due to a full valuation allowance on the related deferred tax assets.

The oil and natural gas segment generated a $285,000$588,000 operating lossprofit in fiscal 20242025 before general and administrative expenses, aan decreaseincrease in operating results of $4,958,000$873,000 as compared to $4,673,000a of$285,000 operating profitloss in fiscal 2023.2024.

The following table sets forth Barnwell’s oil and natural gas segment operating profit (loss) profit before general and administrative expenses by geographic location:

(2) The operating (loss) profit for the United States for yearthe years ended September 30, 2025 and 2024 includes a non-cash ceiling test impairmentimpairments of $721,000.$865,000 and $721,000, respectively.

Oil and natural gas revenues decreased $1,980,000$3,833,000 (10%22%) from $19,376,000 in fiscal 2023 to $17,396,000 in fiscal 2024,2024 to $13,563,000 in fiscal 2025, primarily due primarily due to significant decreases in natural gas, oil, and natural gas liquidliquids prices,production, which decreased 47%,18%, 5%,14%, and 9%,13%, respectively, in the current year period as compared to the same period in the prior year. The decrease in production was partiallyprimarily offsetthe byresult 6%of natural declines in production from wells in the Company's Twining area as the wells age, and 23%to increasesa lesser extent due to properties sold in naturalthe gasprior andyear. naturalRevenues gasalso liquiddecreased production,due respectively,to a decrease in oil prices which decreased 9% as compared to the same period in the prior year.

In theFebruary quarter ended December 31, 2023,2025, the Company amended certain of its Canadian purchase and sales contracts to change the sales price on 2251,055 gross barrelsMcf per day of the Canadian oilnatural forgas saleit forwill sell during the period from JanuaryApril 1, 20242025 to JuneOctober 30,31, 20242025 to a fixed index price before differentials of $69.46$1.95 Canadian dollars per net barrel,Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of oilnatural gas under this fixed index price contract was equivalent to approximately 35%38% of Canadian oilnatural gas gross production per day for the year ended September 30, 2024.2025. InAdditionally, Julyin 2024,September 2025, the Company amended the sales price on 1001,583 gross barrelsMcf per day of the Canadian oilnatural thatgas it sellswill sell during the period from AugustNovember 1, 20242025 to DecemberMarch 31, 20242026 to a fixed index price before differentials of $79.00$3.03 Canadian dollars per net barrel,Mcf, with remaining volumes continuing to be sold at spot prices. This per day volume of oilnatural gas under this fixed index price contract that will affect the period from November 1, 2025 to March 31, 2026, is equivalent to approximately 16%58% of Canadian oilnatural gas gross production per day for the year ended September 30, 2024.2025. These oilnatural 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 $585,000$883,000 (6%9%) from $10,434,000 in fiscal 2023 to $9,849,000 in fiscal 2024,2024 to $8,966,000 in fiscal 2025, primarily due to decreases in repairs, electricity and chemical costsproduction in the current year period as compared to the same period in the prior year and due to optimization as a result of certain capital expenditures made earlier in the current year. The decrease in oil and natural gas operating expenses wasyear, partially offset by an increase in costs due to higher production and an increase in workovers and maintenance costs in the current year periodyear, as compared to the same period in the prior year.

No lots were sold during the year ended September 30, 2025. During the year ended September 30, 2024, Barnwell received $500,000 in percentage of sales payments from KD I from the sale of the last two single-family lots within Increment I. During the year ended September 30, 2023, Barnwell received $265,000 in percentage of sales payments from KD I from the sale of one single-family lot within Increment I.

General and administrative expenses decreasedincreased $1,358,000$1,807,000 (20%35%) to $5,598,000$6,937,000 in fiscal 2024,2025, as compared to $6,956,000$5,130,000 in fiscal 2023.2024. The decreaseincrease was primarily due to decreases$1,958,000 in new fees and costs incurred, net of $962,000$348,000 inof professionalestimated feesaccrued primarilyinsurance recoveries receivable, for legal services, proxy solicitation, proxy advisory, and public relations costs related to a shareholder consent solicitation, various legal actions between the Sherwood Group and consultingthe servicesCompany and $533,000certain inof stockholdersits costs primarily attributed to the cooperationdirectors, and supporta agreementproxy and associated fees to certain directorscontest in the priorcurrent year period as compared to the same period in the currentprior year.

Depletion, depreciation, and amortization increaseddecreased $649,000$1,804,000 (15%36%) from $4,457,000$4,950,000 in fiscal 20232024 to $5,106,000$3,146,000 in fiscal 2024,2025, primarily due to increasesdecreases in the depletion rate for Canadian properties and also new production from those properties and due to depletion attributable to productiondecreases in Texasproduction, as discussed in the “Oil and natural gas” section above.

During the year ended September 30, 2025, the Company incurred a non-cash ceiling test impairment for our U.S. oil and natural gas properties of $865,000. During the year ended September 30, 2024, the Company incurred a non-cash ceiling test impairment of $2,885,000, which included impairments for our U.S. and Canadian oil and natural gas properties of $721,000 and $2,164,000, respectively. The impairments to our U.S. and Canadian oil and natural gas properties were primarily due to a decline in the historical 12-month rolling average first-day-of-the-month prices. There was no ceiling test impairment during the year ended September 30, 2023.

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in “Part I, Item 1A. Risk Factors” in the Form2025 10-K.Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

As of the date of this Quarterly Report, there were no material changes to the risks and uncertainties described in the section titled “Risk Factors” in the Form2025 10-KAnnual Report during the sixnine months ended MarchJune 31,30, 2026.

This Form 10-Q,10-Q and the documents incorporated herein by reference, containcontains “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 2025 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.

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 2025 Annual Report. There have been no significant changes to these critical accounting policies and estimates during the three and sixnine months ended MarchJune 31,30, 2026. We continue to monitor our accounting policies to ensure proper application of current rules and regulations.

Accordingly, Barnwell’s continuing operations isare engaged in the following lines of business: 1) acquiring, developing, producing and selling oil and natural gas in Canada (oil and natural gas segment) and 2) leasehold land interests in Hawaii (land investment segment).

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 MarchJune 31,30, 2026 for the Kukio Resort Land Development Partnerships as a whole was approximately $4,000,000$2,600,000; 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 $2,600,000.$1,600,000. The Kukio Resort Land Development Partnerships currently appears to have the ability to fund those obligations but there are no assurances that itthey 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.

◦In November 2025, Kaupulehu Developments entered into an agreement with Mr. David Johnston, the son of Mr. Terry Johnston, a partner in Kaupulehu Developments, to surrender any and all remaining rights of Kaupulehu Developments for Increment II for the total consideration of $2,000,000. The purchaser paid an initial $70,000 which was recognized as revenue during the sixnine months ended MarchJune 31,30, 2026. Additionally, the purchaser has the right to extend the closing by up to two years by making a $70,000 payment in each of the next two years, with those payments applied against the $2,000,000 purchase price. The transaction remains subject to the purchaser's election to proceed and other closing conditions. Because the agreement is subject to substantive contingencies and closing conditions that have not been satisfied, the criteria for revenue recognition under ASC 606 have not been met. Accordingly, no additional revenue has been recognized in the financial statements.

The net loss from continuing operations attributable to Barnwell was $440,000 for the three months ended MarchJune 31,30, 20262026, totaledcompared $1,150,000, a $388,000 decrease fromwith a net loss from continuing operations attributable to Barnwell of $1,538,000$1,550,000 for the three months ended MarchJune 31,30, 2025.2025, representing an improvement of $1,110,000. The followingimprovement factors affected thein results ofwas operationsprimarily for the three months ended March 31, 2026 as comparedattributable to the prior year period:

The decrease in oil and natural gas revenues, expenses and depletion was due in part to a decrease in net production resulting from the August 8, 2025 sale of U.S. oil and natural gas assets and the August 28, 2025 sale of Barnwell's interest in certain oil and natural gas properties in Canada. For the three months ended MarchJune 31,30, 2025, the U.S. oil and natural gas assets that were subsequently sold contributed oil and natural gas revenues of $376,000,$347,000, oil and natural gas operating expenses of $139,000,$129,000, depletion expense of $86,000$99,000 and impairments of $52,000.$200,000. For the three months ended March 31, 2025, theThe interest of certain oil and natural gas properties in Canada that were sold contributed oil and natural gas revenues of $84,000,$89,000, oil and natural gas operating expenses of $46,000,$39,000, and depletion expense of $25,000.$26,000.

•General and administrative expenses decreased $188,000by due$459,000 for the three months ended June 30, 2026 compared with the prior-year period. The decrease was primarily attributable to: $642,000$759,000 lessreduction in professional service feesfees, duelargely toreflecting thelower fees for legal services,legal, proxy solicitation, proxy advisory and public relations costs relatedassociated towith athe shareholder consent solicitation and proxy contest in the prior year period; compared$59,000 to the same perioddecrease in theshareholder-related currentexpenses; year,$39,000 anddecrease ain $78,000office insuranceexpenses, recovery. This was partially offset by higher salaries and wages due to bonuses and retirement paymentsprimarily related to the closure of the Company's Hawaii office closure on January 31, 2026; and highera share$21,000 based compensation expensedecrease in theexpenses currentassociated year period as compared towith the samePension periodPlan inand theSupplemental priorExecutive year;Retirement Plan.

The decrease in oil and natural gas revenues, expenses and depletion was due in part to a decrease in net production resulting from the August 8, 2025 sale of U.S. oil and natural gas assets and the August 28, 2025 sale of Barnwell's interest in certain oil and natural gas properties in Canada. For the sixnine months ended MarchJune 31,30, 2025, the U.S. oil and natural gas assets that were subsequently sold contributed oil and natural gas revenues of $731,000,$1,078,000, oil and natural gas operating expenses of $260,000,$389,000, depletion expense of $225,000$324,000 and impairments of $665,000.$865,000. For the six months ended March 31, 2025, theThe interest of certain oil and natural gas properties in Canada that were sold contributed oil and natural gas revenues of $165,000,$254,000, oil and natural gas operating expenses of $135,000,$174,000, and depletion expense of $49,000.$76,000 during the same period.