Note 11 - Lease Obligations

9 Months Ended

Sep. 30, 2025

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.

An Affiliate, LEH, sub-leases a portion of the Houston office space. BDSC received sub-lease income from LEH totaling $0.02 million and $0.01 million for the  three months ended September 30, 2025 and 2024, respectively, and $0.05 million and $0.02 for the  nine months ended September 30, 2025 and 2024, respectively. 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 Second Amended and Restated Master Services Agreement. Lease expense associated with the Second Amended and Restated Master Services Agreement totaled $0.3 million for both the  three months ended September 30, 2025 and 2024, respectively, and $0.9 million for both the  nine months ended September 30, 2025 and 2024, 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 Second 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	2025			2024
		(in thousands)
Assets
Operating lease ROU assets	Operating lease ROU assets	$	497		$	497
Less: Accumulated amortization on operating lease assets	Operating lease ROU assets		(238	)		(41	)
Total lease assets			259			456
Liabilities
Current
Operating lease	Current portion of lease liabilities		286			264
Noncurrent
Operating lease	Long-term lease liabilities, net of current		-			191
Total lease liabilities		$	286		$	455

Weighted average remaining lease term in years
Operating lease	0.92
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,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Operating lease costs	$	74	$	41	$	221	$	165
Short-term lease expense, related party		300		300		900		900
Total lease cost	$	374	$	341	$	1,121	$	1,065

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating lease	$	73	$	38	$	217	$	147

As of September 30, 2025, maturities of lease liabilities and future minimum annual lease commitments that are non-cancelable for the periods indicated was as follows:

September 30,	Operating Lease
	(in thousands)
2025	$	286
2026		-
	$	286