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Barnwell (BRN) Risk Analysis
Risk Overview Q3, 2024
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1Declines in the price of our common stock could adversely affect the value of an asset on our balance sheet and our stockholders' equity.
Currently, Barnwell's pension plan is overfunded, meaning that the current fair value of the assets held by the pension plan exceeds the estimated current accumulated benefit obligation of the pension plan. The overfunded amount is included on our balance sheet as an asset titled "Asset for retirement benefits." As of September 30, 2024, the value of that asset was $4,899,000, which represented 16% of the Company's total assets of $30,669,000 and 38% of our stockholders' equity. A decline in the value of our pension plan's investments overall, or of any one investment, could reduce the value of "Asset for retirement benefits." A portion of the pension plan's investments is in publicly traded stocks, one of which is Barnwell's common stock. As of September 30, 2024, the value of the Barnwell common stock held by the pension plan was $934,000, representing approximately 7% of the fair market value of the pension plan's assets. A decline in the price of our common stock would also have the effect of reducing the value of our "Asset for retirement benefits," total assets and our stockholders' equity.
Risk Highlights Q3, 2024
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 39
- Share Price & Shareholder Rights - Risk 1AddedDeclines in the price of our common stock could adversely affect the value of an asset on our balance sheet and our stockholders' equity.
Currently, Barnwell's pension plan is overfunded, meaning that the current fair value of the assets held by the pension plan exceeds the estimated current accumulated benefit obligation of the pension plan. The overfunded amount is included on our balance sheet as an asset titled "Asset for retirement benefits." As of September 30, 2024, the value of that asset was $4,899,000, which represented 16% of the Company's total assets of $30,669,000 and 38% of our stockholders' equity. A decline in the value of our pension plan's investments overall, or of any one investment, could reduce the value of "Asset for retirement benefits." A portion of the pension plan's investments is in publicly traded stocks, one of which is Barnwell's common stock. As of September 30, 2024, the value of the Barnwell common stock held by the pension plan was $934,000, representing approximately 7% of the fair market value of the pension plan's assets. A decline in the price of our common stock would also have the effect of reducing the value of our "Asset for retirement benefits," total assets and our stockholders' equity.
- Share Price & Shareholder Rights - Risk 2ChangedA small number of stockholders, including our General Counsel and Secretary, own a significant amount of our common stock and may have influence over the Company.
As of September 30, 2024, our General Counsel and Secretary, who is the Executive Chairman of the Board of Directors, 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.
- Share Price & Shareholder Rights - Risk 3We are not the operator and have limited influence over the operations of certain of our oil and natural gas properties.
We hold minority interests in certain of our oil and natural gas properties. As a result, we cannot control the pace of exploration or development, major decisions affecting the drilling of wells, the plan for development and production at non-operated properties, or the timing and amount of costs related to abandonment and reclamation activities although contract provisions give Barnwell certain consent rights in some matters. The operator's influence over these matters can affect the pace at which we incur capital expenditures. Additionally, as certain underlying joint venture data is not accessible to us, we depend on the operators at non-operated properties to provide us with reliable accounting information. We also depend on operators and joint operators to maintain the financial resources to fund their share of all abandonment and reclamation costs.
- Share Price & Shareholder Rights - Risk 4We are a smaller reporting company and benefit from certain reduced governance and disclosure requirements, including that our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting. We cannot be certain if the omission of reduced disclosure requirements applicable to smaller reporting companies will make our common stock less attractive to investors.
Currently, we are a "smaller reporting company," meaning that our outstanding common stock held by nonaffiliates had a value of less than $250 million at the end of our most recently completed second fiscal quarter. As a smaller reporting company, we are not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, meaning our auditors are not required to attest to the effectiveness of the Company's internal control over financial reporting. As a result, investors and others may be less comfortable with the effectiveness of the Company's internal controls and the risk that material weaknesses or other deficiencies in internal controls go undetected may increase. In addition, as a smaller reporting company, we take advantage of our ability to provide certain other less comprehensive disclosures in our SEC filings, including, among other things, providing only two years of audited financial statements in annual reports and simplified executive compensation disclosures. Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects, as the information we provide to stockholders may be different from what one might receive from other public companies in which one hold shares. As a smaller reporting company, we are not required to provide this information.
- Share Price & Shareholder Rights - Risk 5The price of our common stock has been volatile and could continue to fluctuate substantially.
The market price of our common stock has been volatile and could fluctuate based on a variety of factors, including: - fluctuations in commodity prices;- variations in results of operations;- announcements by us and our competitors;- legislative or regulatory changes;- general trends in the industry;- general market conditions;- litigation; and - other events applicable to our industries.
- Share Price & Shareholder Rights - Risk 6Stockholders may be diluted significantly through our efforts to obtain financing, satisfy obligations through the issuance of securities or use our stock as consideration in certain transactions.
Our Board of Directors has authority, without action or vote of the stockholders, subject to the requirements of the NYSE American and applicable law, to issue all shares of our common stock or warrants or other 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.
See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.