DISCONTINUED OPERATIONS

6 Months Ended

Mar. 31, 2026

Discontinued Operations and Disposal Groups [Abstract]

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”). As of March 31, 2026, the balance of the Promissory Note was $150,000 and is presented as “Note receivable” on the Condensed Consolidated Balance Sheets ($300,000 as at September 30, 2025). The final payment was extended from March 15, 2026 to June 15, 2026. The annual interest rate on the Promissory Note increased from 0% to 12% beginning August 15, 2025 and to 18% beginning December 15, 2025. Beginning March 15, 2026, outstanding interest will be treated as part of the principal, and future interest will compound annually. As of March 31, 2026, the balance of interest was $22,000, and was included in "Accounts and other receivables, net of allowance for credit losses" in the accompanying Condensed Consolidated Balance Sheets (September 30, 2025 - $5,000). $100,000 was paid on December 15, 2025 and $50,000 on February 13, 2026 as scheduled.

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 year ended September 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 March 31,				Six months ended March 31,
	2026		2025		2026		2025
Revenues:
Contract drilling	$	—	$	613,000	$	—	$	1,156,000

	—		613,000		—		1,156,000
Costs and expenses:
Contract drilling operating	—		519,000		—		1,239,000
General and administrative	—		91,000		—		209,000
Depreciation and amortization	—		16,000		—		40,000
Interest expense	—		1,000		—		1,000
Gain on sale of assets (1)	—		(538,000)		—		(538,000)
	—		89,000		—		951,000
Loss from discontinued operations before income taxes	—		524,000		—		205,000
Loss on sale of discontinued operations	—		(193,000)		—		(193,000)

Net loss from discontinued operations	$	—	$	331,000	$	—	$	12,000

(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 three and six months ended March 31, 2025 which was recorded in discontinued operations.

There are no assets or liabilities of discontinued operations included in the Condensed Consolidated Balance Sheets.