Note 12 - Lease Obligations

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

(12) Lease Obligations

Lease Obligations

Office Lease.  We maintain our corporate headquarters in Houston, Texas.  In May 2023, BDSC signed a 12-month extension to its existing operating lease. The extended term commenced on September 1, 2023 and expires on August 31, 2024. Under the amended agreement, the annual rent was reduced from $31.00 per square foot to $30.00 per square foot, resulting in a monthly base rental amount of $0.02 million.  Management is currently exploring leasing options.

An Affiliate, LEH, subleases a portion of the Houston office space. BDSC received sublease income from LEH totaling $0.01 million for both three-month periods ended March 31, 2024 and 2023. See “Note (3)” to our consolidated financial statements for additional disclosures related to the Affiliate sub-lease.

Tank Lease. LE leases tanks from Ingleside under the LE Amended and Restated Master Services Agreement. Lease expense associated with the LE Amended and Restated Master Services Agreement totaled $0.3 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively. Due to its one-year term, the lease is being treated as short term.  As a result, the lease was not recorded on our balance sheet. See “Note (3)” to our consolidated financial statements for additional disclosures related to the LE Amended and Restated Master Services Agreement.

The following table presents the lease-related assets and liabilities recorded on the consolidated balance sheet:

		March 31,			December 31,
	Balance Sheet Location	2024			2023
		(in thousands)
Assets
Operating lease ROU assets	Operating lease ROU assets	$	994		$	787
Less: Accumulated amortization on operating lease assets	Operating lease ROU assets		(894	)		(629	)
Total lease assets			100			158
Liabilities
Current
Operating lease	Current portion of lease liabilities		93			147
Noncurrent
Operating lease	Long-term lease liabilities, net of current		-			-
Total lease liabilities		$	93		$	147

Weighted average remaining lease term in years
Operating lease	0.42
Weighted average discount rate
Operating lease	8.25	%

The following table presents information related to lease costs incurred for operating and finance leases:

	Three Months Ended
	March 31,
	2024		2023
	(in thousands)
Operating lease costs	$	62	$	51
Short-term lease expense, related party		300		100
Total lease cost	$	362	$	151

The table below presents supplemental cash flow information related to leases as follows:

	Three Months Ended
	March 31,
	2024		2023
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating lease	$	54	$	57

As of March 31, 2024, maturities of lease liabilities for the periods indicated were as follows:

	Operating
March 31,	Lease
	(in thousands)
2025	$	93
	$	93

Future minimum annual lease commitments that are non-cancelable:

	Operating
March 31,	Lease
	(in thousands)
2025	$	96
	$	96