BARNWELL INDUSTRIES INCBRN
BARNWELL INDUSTRIES INC Stock Compensation Disclosure
SHARE-BASED PAYMENTS
The Company’s share-based compensation benefit and related income tax effects are as follows:
| Year ended September 30, | |||||||||||
| 2020 | 2019 | ||||||||||
| Share-based benefit | $ | — | $ | (42,000) | |||||||
| Income tax effect | $ | — | $ | — | |||||||
There was no share-based compensation expense or benefit recognized for the year ended September 30, 2020. The share-based compensation benefit recognized for the year ended September 30, 2019 is reflected in “General and administrative” expenses in the Consolidated Statements of Operations. There was no impact on income taxes for the years ended September 30, 2020 and 2019 due to a full valuation allowance on the related deferred tax asset. As of September 30, 2020, there was no unrecognized compensation cost related to non-vested share options.
Description of Share-Based Payment Arrangements
The Company’s stock option plans are administered by the Compensation Committee of the Board of Directors.
2008 Equity Incentive Plan: Under the stockholder-approved 2008 Stock Option Plan (the "2008 Plan"), Barnwell was authorized to grant up to 800,000 shares of common stock to employees. A total of 737,500 share options were granted under this plan; as the 2008 Plan previously reached its tenth anniversary, option shares are no longer available for grant. Stock options grants included nonqualified stock options that had exercise prices equal to Barnwell’s stock price on the date of grant, vested annually over a service period of four years commencing one year from the date of grant and expired ten years from the date of grant. Certain options had stock appreciation rights that permitted the holder to receive stock, cash or a combination thereof equal to the amount by which the fair market value, at the time of exercise of the option, exceeded the option price. All of the outstanding share options under the plan expired
unexercised during the year ended September 30, 2020.
2018 Equity Incentive Plan: The stockholder-approved 2018 Equity Incentive Plan provides for the issuance of incentive stock options, nonstatutory stock options, stock options with stock appreciation rights, restricted stock, restricted stock units and performance units, qualified performance-based awards, and stock grants to employees, consultants and non-employee members of the Board of Directors. 800,000 shares of Barnwell common stock have been reserved for issuance and as of September 30, 2020, a total of 800,000 share options remain available for grant as no options have yet been issued under this plan.
Barnwell currently has a policy of issuing new shares to satisfy share option exercises when the optionee requests shares.
Equity-classified Awards
Compensation cost for equity-classified awards is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service period.
A summary of the activity in Barnwell’s equity-classified share options from October 1, 2019 through September 30, 2020 is presented below:
| Options | Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||||||||
| Outstanding at October 1, 2019 | 30,000 | $ | 3.01 | ||||||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Exercised | — | — | |||||||||||||||||||||
| Expired/Forfeited | (30,000) | 3.01 | |||||||||||||||||||||
| Outstanding at September 30, 2020 | — | $ | — | — | $ | — | |||||||||||||||||
| Exercisable at September 30, 2020 | — | $ | — | — | $ | — | |||||||||||||||||
There was no shared-based compensation expense for equity-classified awards vested in the years ended September 30, 2020 and 2019.
Liability-classified Awards
Compensation cost for liability-classified awards is remeasured to current fair value using a closed-form valuation model based on current values at each period end with the change in fair value recognized as an expense or benefit until the award is settled.
The following assumptions were used in estimating fair value for all liability-classified share options outstanding:
| Year ended September 30, | |||||||||||
| 2020 | 2019 | ||||||||||
| Expected volatility range | — | 87.8% to 91.1% | |||||||||
| Weighted-average volatility | — | 90.8% | |||||||||
| Expected dividends | — | None | |||||||||
| Expected term (in years) | — | 0.2 to 0.5 | |||||||||
| Risk-free interest rate | — | 1.8% to 1.9% | |||||||||
| Expected forfeitures | — | None | |||||||||
The application of alternative assumptions could produce significantly different estimates of the fair value of share-based compensation, and consequently, the related costs reported in the Consolidated Statements of Operations.
A summary of the activity in Barnwell’s liability-classified share options from October 1, 2019 through September 30, 2020 is presented below:
| Options | Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term | Aggregate Intrinsic Value | |||||||||||||||||||
| Outstanding at October 1, 2019 | 288,750 | $ | 4.18 | ||||||||||||||||||||
| Granted | — | — | |||||||||||||||||||||
| Exercised | — | — | |||||||||||||||||||||
| Expired/Forfeited | (288,750) | 4.18 | |||||||||||||||||||||
| Outstanding at September 30, 2020 | — | $ | — | — | $ | — | |||||||||||||||||
| Exercisable at September 30, 2020 | — | $ | — | — | $ | — | |||||||||||||||||
The following table summarizes the components of the total share-based compensation for liability-classified awards:
| Year ended September 30, | |||||||||||
| 2020 | 2019 | ||||||||||
| Due to vesting | $ | — | $ | — | |||||||
| Due to remeasurement | — | (42,000) | |||||||||
| Total share-based compensation benefit for liability-based awards | $ | — | $ | (42,000) | |||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2020 | Dec 16, 2020 | Showing above |
| 2019 | Dec 23, 2019 | |
| 2018 | Dec 20, 2018 | |
| 2017 | Dec 21, 2017 | |
| 2016 | Dec 20, 2016 | |
| 2015 | Dec 16, 2015 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.