brn-20241231

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 December 31, 2024

☐ 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 February 10, 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 - December 31, 2024 and September 30, 2024	3
	Condensed Consolidated Statements of Operations - three months ended December 31, 2024 and 2023	4
	Condensed Consolidated Statements of Comprehensive Loss - three months ended December 31, 2024 and 2023	5
	Condensed Consolidated Statements of Equity - three months ended December 31, 2024 and 2023	6
	Condensed Consolidated Statements of Cash Flows - three months ended December 31, 2024 and 2023	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 4.	Controls and Procedures	32
PART II.	OTHER INFORMATION:
Item 1A.	Risk Factors	33
Item 5.	Other Information	34
Item 6.	Exhibits	34
	Signature	35
	Index to Exhibits	36

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	December 31, 2024		September 30, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	1,957,000	$	4,505,000

Accounts and other receivables, net of allowance for credit losses of: $350,000 at December 31, 2024; $375,000 at September 30, 2024	2,403,000		2,770,000

Assets held for sale	69,000		69,000
Other current assets	1,547,000		1,539,000
Total current assets	5,976,000		8,883,000


Asset for retirement benefits	5,002,000		4,899,000

Operating lease right-of-use assets	153,000		39,000
Property and equipment:
Proved oil and natural gas properties (full cost method)	79,081,000		83,557,000
Drilling rigs and other property and equipment	3,660,000		3,679,000
Total property and equipment	82,741,000		87,236,000
Accumulated depletion, impairment, depreciation, and amortization	(67,862,000)		(70,388,000)
Total property and equipment, net	14,879,000		16,848,000
Total assets	$	26,010,000	$	30,669,000

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	1,319,000	$	1,822,000
Accrued capital expenditures	105,000		2,407,000
Accrued compensation	609,000		650,000
Accrued operating and other expenses	1,575,000		1,834,000



Current portion of asset retirement obligation	938,000		798,000

Other current liabilities	788,000		301,000
Total current liabilities	5,334,000		7,812,000

Operating lease liabilities	122,000		7,000
Liability for retirement benefits	1,921,000		1,898,000
Asset retirement obligation	7,237,000		7,790,000
Deferred income tax liabilities	91,000		100,000
Total liabilities	14,705,000		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 December 31, 2024; 10,195,990 issued at September 30, 2024	5,111,000		5,098,000
Additional paid-in capital	7,746,000		7,690,000
(Accumulated deficit) retained earnings	(1,322,000)		595,000
Accumulated other comprehensive income, net	2,036,000		1,943,000
Treasury stock, at cost: 167,900 shares at December 31, 2024 and September 30, 2024	(2,286,000)		(2,286,000)
Total stockholders' equity	11,285,000		13,040,000
Non-controlling interests	20,000		22,000
Total equity	11,305,000		13,062,000
Total liabilities and equity	$	26,010,000	$	30,669,000

See Notes to Condensed Consolidated Financial Statements

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended December 31,
	2024		2023
Revenues:
Oil and natural gas	$	3,897,000	$	5,130,000
Contract drilling	543,000		993,000

Gas processing and other	37,000		32,000
	4,477,000		6,155,000
Costs and expenses:
Oil and natural gas operating	2,496,000		2,791,000
Contract drilling operating	720,000		1,169,000
General and administrative	1,281,000		1,404,000
Depletion, depreciation, and amortization	928,000		1,511,000
Impairment of assets	613,000		—
Foreign currency loss (gain)	351,000		(126,000)
Interest expense	—		2,000

	6,389,000		6,751,000
Loss before equity in income of affiliates and income taxes	(1,912,000)		(596,000)
Equity in income of affiliates	—		—
Loss before income taxes	(1,912,000)		(596,000)
Income tax provision	7,000		66,000
Net loss	(1,919,000)		(662,000)
Less: Net (loss) earnings attributable to non-controlling interests	(2,000)		2,000
Net loss attributable to Barnwell Industries, Inc.	$	(1,917,000)	$	(664,000)
Basic and diluted net loss per common share attributable to Barnwell Industries, Inc. stockholders	$	(0.19)	$	(0.07)
Weighted-average number of common shares outstanding:
Basic and diluted	10,047,173		9,996,760

See Notes to Condensed Consolidated Financial Statements

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)


	Three months ended December 31,
	2024		2023
Net loss	$	(1,919,000)	$	(662,000)
Other comprehensive income (loss):
Foreign currency translation adjustments, net of taxes of $0	93,000		30,000
Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0	—		(21,000)


Total other comprehensive income	93,000		9,000
Total comprehensive loss	(1,826,000)		(653,000)
Less: Comprehensive loss (income) attributable to non-controlling interests	2,000		(2,000)
Comprehensive loss attributable to Barnwell Industries, Inc.	$	(1,824,000)	$	(655,000)

See Notes to Condensed Consolidated Financial Statements

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three months ended December 31, 2024 and 2023

(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	—	—		—		(664,000)		—		—		2,000		(662,000)
Foreign currency translation adjustments, net of taxes of $0	—	—		—		—		30,000		—		—		30,000
Distributions to non-controlling interests	—	—		—		—		—		—		(4,000)		(4,000)
Share-based compensation	—	—		65,000		—		—		—		—		65,000

Issuance of common stock for restricted stock units vested	9,328	5,000		(5,000)		—		—		—		—		—

Retirement plans:
Amortization of accumulated other comprehensive gain into net periodic benefit cost, net of taxes of $0	—	—		—		—		(21,000)		—		—		(21,000)


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

Balance at September 30, 2024	10,028,090	$	5,098,000	$	7,690,000	$	595,000	$	1,943,000	$	(2,286,000)	$	22,000	$	13,062,000
Net loss	—	—		—		(1,917,000)		—		—		(2,000)		(1,919,000)
Foreign currency translation adjustments, net of taxes of $0	—	—		—		—		93,000		—		—		93,000

Share-based compensation	—	—		69,000		—		—		—		—		69,000

Issuance of common stock for restricted stock units vested	25,444	13,000		(13,000)		—		—		—		—		—



Balance at December 31, 2024	10,053,534	$	5,111,000	$	7,746,000	$	(1,322,000)	$	2,036,000	$	(2,286,000)	$	20,000	$	11,305,000

See Notes to Condensed Consolidated Financial Statements

BARNWELL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three months ended December 31,
	2024		2023
Cash flows from operating activities:
Net loss	$	(1,919,000)	$	(662,000)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Depletion, depreciation, and amortization	928,000		1,511,000

Impairment of assets	613,000		—



Retirement benefits income	(79,000)		(86,000)
Accretion of asset retirement obligation	196,000		200,000

Non-cash rent income	—		(7,000)
Deferred income tax benefit	(9,000)		(2,000)
Asset retirement obligation payments	(101,000)		(160,000)
Share-based compensation expense	69,000		65,000

Retirement plan contributions and payments	(1,000)		(1,000)
Credit loss (reversal) expense	(14,000)		37,000
Foreign currency loss (gain)	351,000		(126,000)
(Decrease) increase from changes in current assets and liabilities	(793,000)		606,000
Net cash (used in) provided by operating activities	(759,000)		1,375,000
Cash flows from investing activities:




Proceeds from sale of oil and natural gas assets	282,000		—
Deposit for sale of contract drilling assets	585,000		—

Capital expenditures - oil and natural gas	(2,529,000)		(1,018,000)
Capital expenditures - all other	—		(1,000)

Net cash used in investing activities	(1,662,000)		(1,019,000)
Cash flows from financing activities:




Distributions to non-controlling interests	—		(4,000)

Net cash used in financing activities	—		(4,000)
Effect of exchange rate changes on cash and cash equivalents	(127,000)		41,000
Net (decrease) increase in cash and cash equivalents	(2,548,000)		393,000
Cash and cash equivalents at beginning of period	4,505,000		2,830,000
Cash and cash equivalents at end of period	$	1,957,000	$	3,223,000

See Notes to Condensed Consolidated Financial Statements

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 December 31, 2024, results of operations, comprehensive loss, equity and cash flows for the three months ended December 31, 2024 and 2023, have been made. The results of operations for the period ended December 31, 2024 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 valuation of deferred tax assets, asset retirement obligations, contract drilling estimated costs to complete,

proved oil and natural gas reserves, and such assumptions may impact the amount at which such items are recorded.

Significant Accounting Policies

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.

2. 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 216,712 restricted stock units were excluded from the computation of diluted shares for the three months ended December 31, 2024, as their inclusion would have been anti-dilutive. 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 months ended December 31, 2023, as their inclusion would have been anti-dilutive.

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 tables:


	Three months ended December 31, 2024
	Net Loss (Numerator)		Shares (Denominator)	Per-Share Amount
Basic	$	(1,917,000)	10,047,173	$	(0.19)
Effect of dilutive securities -
common stock options and restricted stock units	—		—
Diluted	$	(1,917,000)	10,047,173	$	(0.19)


	Three months ended December 31, 2023
	Net Loss (Numerator)		Shares (Denominator)	Per-Share Amount
Basic	$	(664,000)	9,996,760	$	(0.07)
Effect of dilutive securities -
common stock options and restricted stock units	—		—
Diluted	$	(664,000)	9,996,760	$	(0.07)

3. ALLOWANCE FOR CREDIT LOSSES

The following table summarizes the activity in the balance of allowance for credit losses related to accounts and other receivables:


	Three months ended December 31,
	2024		2023
Allowance for credit losses at beginning of period	$	375,000	$	284,000
(Reversal of) provision for expected credit losses	(14,000)		37,000
Write-offs charged against the allowance	(2,000)		(4,000)
Recoveries of amounts previously written off	—		15,000
Foreign currency translation adjustment	(9,000)		2,000
Allowance for credit losses at end of period	$	350,000	$	334,000

4. 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 resales by the real estate sales office and revenues resulting from the sale of a few remaining 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 interests in KD Kona and KKM, based on its respective partnership sharing ratios of 75% and 34.45%, respectively. No cash distributions were received during the three months ended December 31, 2024 and 2023.

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


	Three months ended December 31,
	2024		2023
Revenue	$	1,299,000	$	1,886,000
Gross profit	$	479,000	$	817,000
Net (loss) earnings	$	(48,000)	$	354,000

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 Partnership 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 Partnership’s cumulative earnings in excess of distributions during the suspended period exceeds our share of the Kukio Resort Land Development Partnership’s 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 during the three months ended December 31, 2024.

Cumulative distributions received from the Kukio Resort Land Development Partnerships in excess of our investment balance was $382,000 at December 31, 2024 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 16).

With respect to Increment I, Kaupulehu Developments was entitled to receive payments from KD I based on 10% of the gross receipts from KD I’s sales of single-family residential lots in Increment I. The last two single-family lots of the 80 lots developed within Increment I were sold in the quarter ended March 31, 2024. There is no assurance with regards to the amounts of future payments 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.

5. ASSETS HELD FOR SALE

In the quarter ended March 31, 2024, the Company commenced the marketing of a portion of the contract drilling segment's property and equipment, the majority of which was already fully depreciated. There was no impairment related to the classification change from held and used to held for sale as the fair value, less estimated selling costs, of the disposal group exceeded its carrying value. The carrying value of these assets was recorded as “Assets held for sale” in the accompanying Condensed Consolidated Balance Sheets. The property and equipment deemed necessary to complete the contract drilling segment's contracts in backlog continue to be classified as held and used as of December 31, 2024. At December 31, 2024, a sale of the remainder of the contract drilling segment's property and equipment or the contract drilling segment as a whole was not estimated to be probable due to the lack of any definitive sale opportunities at that date.

In December 2024, the Company entered into an agreement with an independent third party for the sale of a contract drilling segment drilling rig and related ancillary equipment and received a payment of $585,000 from the buyer. At December 31, 2024, the delivery of the drilling rig and the transfer of the legal title to the buyer had not yet occurred, and therefore, the Company did not record a sale during the three months ended December 31, 2024. The payment received from the buyer was recognized as a deposit and recorded in “Other current liabilities” on the Company's Condensed Consolidated Balance Sheet at December 31, 2024. This drilling rig and related ancillary equipment was included in assets held for sale at December 31, 2024, and had a net book value of zero as the assets were already fully depreciated.

In February 2025, the drilling rig and ancillary equipment was delivered and the legal title was transferred to the buyer, and as a result, the Company will recognize a gain, net of costs, on the sale of the drilling rig and ancillary equipment in the quarter ending March 31, 2025.

6. OIL AND NATURAL GAS PROPERTIES

Oil and Natural Gas Property Dispositions

There were no significant oil and natural gas property dispositions during the three months ended December 31, 2024 and 2023. The $282,000 of proceeds from sale of oil and natural gas properties included in the Condensed Consolidated Statement of Cash Flows for the three months ended December 31, 2024 represents proceeds that were credited to our cash in October 2024 from a sale of properties that closed in late September 2024.

Impairment of Oil and Natural Gas Properties

Under the full cost method of accounting, the Company performs quarterly oil and natural gas ceiling test calculations. Changes in the 12-month rolling average first-day-of-the-month prices for oil, natural gas and natural gas liquids prices (except where prices are defined by contractual arrangements),

the value of reserve additions as compared to the amount of capital expenditures to obtain them, and changes in production rates and estimated levels of reserves, future development costs and the market value of unproved properties, impact the determination of the maximum carrying value of oil and natural gas properties.

During the three months ended December 31, 2024, the Company incurred a non-cash ceiling test impairment for our U.S. oil and natural gas properties of $613,000. There was no ceiling test impairment during the three months ended December 31, 2023.

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

7. RETIREMENT PLANS

Barnwell sponsors a noncontributory defined benefit pension plan (“Pension Plan”) covering substantially all of its U.S. employees and a noncontributory Supplemental Executive Retirement Plan (“SERP”), which covers certain current and former employees of Barnwell for amounts exceeding the limits allowed under the Pension Plan. Effective December 31, 2019, the accrual of benefits for all participants in the Pension Plan and SERP was frozen and the plans were closed to new participants from that point forward.

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


	Pension Plan				SERP
	Three months ended December 31,
	2024		2023		2024		2023

Interest cost	$	98,000	$	103,000	$	23,000	$	24,000
Expected return on plan assets	(200,000)		(192,000)		—		—

Amortization of net actuarial gain	—		—		—		(21,000)

Net periodic benefit (income) cost	$	(102,000)	$	(89,000)	$	23,000	$	3,000

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.

8. INCOME TAXES

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


	Three months ended December 31,
	2024		2023
United States	$	(1,466,000)	$	(689,000)
Canada	(444,000)		91,000
	$	(1,910,000)	$	(598,000)

The components of the income tax provision are as follows:


	Three months ended December 31,
	2024		2023
Current	$	16,000	$	68,000
Deferred	(9,000)		(2,000)
	$	7,000	$	66,000

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.

9. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following tables provides information about disaggregated revenue by revenue streams, reportable segments, geographical region, and timing of revenue recognition for the three months ended December 31, 2024 and 2023.


		Three months ended December 31, 2024
		Oil and natural gas		Contract drilling		Land investment		Other		Total
Revenue streams:
	Oil	$	3,143,000	$	—	$	—	$	—	$	3,143,000
	Natural gas	349,000		—		—		—		349,000
	Natural gas liquids	405,000		—		—		—		405,000
	Drilling and pump	—		543,000		—		—		543,000

	Other	—		—		—		11,000		11,000
	Total revenues before interest income	$	3,897,000	$	543,000	$	—	$	11,000	$	4,451,000
Geographical regions:
	United States	$	355,000	$	543,000	$	—	$	—	$	898,000
	Canada	3,542,000		—		—		11,000		3,553,000
	Total revenues before interest income	$	3,897,000	$	543,000	$	—	$	11,000	$	4,451,000
Timing of revenue recognition:
	Goods transferred at a point in time	$	3,897,000	$	—	$	—	$	11,000	$	3,908,000
	Services transferred over time	—		543,000		—		—		543,000
	Total revenues before interest income	$	3,897,000	$	543,000	$	—	$	11,000	$	4,451,000


		Three months ended December 31, 2023
		Oil and natural gas		Contract drilling		Land investment		Other		Total
Revenue streams:
	Oil	$	3,892,000	$	—	$	—	$	—	$	3,892,000
	Natural gas	712,000		—		—		—		712,000
	Natural gas liquids	526,000		—		—		—		526,000
	Drilling and pump	—		993,000		—		—		993,000

	Other	—		—		—		17,000		17,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000
Geographical regions:
	United States	$	754,000	$	993,000	$	—	$	1,000	$	1,748,000
	Canada	4,376,000		—		—		16,000		4,392,000
	Total revenues before interest income	$	5,130,000	$	993,000	$	—	$	17,000	$	6,140,000
Timing of revenue recognition:
	Goods transferred at a point in time	$	5,130,000	$	—	$	—	$	17,000	$	5,147,000
	Services transferred over time	—		993,000		—		—

SEC Form 10-Q filed by Barnwell Industries Inc.