Note 11 - Lease Obligations

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

(11) Lease Obligations

Lease Obligations

Office Lease.  We maintain our corporate headquarters in Houston, Texas.  In October 2024, BDSC signed a new 24-month extension, the sixth amendment, to its operating lease.  The sixth amendment was deemed to be a separate contract and not a lease modification. See "Note (15) to our consolidated financial statements for additional disclosures related to the recently executed BDSC office lease.

An Affiliate, LEH, sub-leases a portion of the Houston office space. BDSC received sub-lease income from LEH totaling $0.01 million for both the three-month periods ended September 30, 2024 and 2023. BDSC received sub-lease income from LEH totaling $0.02 million and $0.03 million for the nine-month periods ended September 30, 2024 and 2023, respectively. See “Notes (3) and (15)” 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 for both the three-month periods ended September 30, 2024 and 2023. Lease expense associated with the LE Amended and Restated Master Services Agreement totaled $0.9 million and $0.7 million for the nine-month periods ended  September 30, 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. 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:

		September 30,		December 31,
	Balance Sheet Location	2024		2023
		(in thousands)
Assets
Operating lease ROU assets	Operating lease ROU assets	$	-	$	787
Less: Accumulated amortization on operating lease assets	Operating lease ROU assets		-		(629	)
Total lease assets			-		158
Liabilities
Current
Operating lease	Current portion of lease liabilities		-		147
Noncurrent
Operating lease	Long-term lease liabilities, net of current		-		-
Total lease liabilities		$	-	$	147

	September 30,		December 31,
	2024		2023
Weighted average remaining lease term in years
Operating lease		-		0.67
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				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(in thousands)
Operating lease costs	$	41	$	55	$	165	$	158
Short-term lease expense, related party		300		300		900		700
Total lease cost	$	341	$	355	$	1,065	$	858

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating lease	$	38	$	57	$	147	$	172

As of September 30, 2024, maturities of lease liabilities for the periods indicated were as follows:

	Operating
September 30,	Lease
	(in thousands)
2025	$	-
	$	-

Future minimum annual lease commitments that are non-cancelable:

	Operating
September 30,	Lease
	(in thousands)
2025	$	-
	$	-