Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 17, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | BLUE DOLPHIN ENERGY CO | |
Entity Central Index Key | 0000793306 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE | |
Entity File Number | 0-15905 | |
Entity Common Stock, Shares Outstanding | 12,693,514 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 521 | $ 549 |
Restricted cash | 48 | 48 |
Accounts receivable, net | 170 | 214 |
Prepaid expenses and other current assets | 1,060 | 3,564 |
Deposits | 110 | 124 |
Inventory | 1,099 | 1,062 |
Total current assets | 3,008 | 5,561 |
LONG-TERM ASSETS | ||
Total property and equipment, net | 61,856 | 62,497 |
Operating lease right-of-use assets, net | 458 | 498 |
Restricted cash, noncurrent | 0 | 514 |
Surety bonds | 230 | 230 |
Total long-term assets | 62,544 | 63,739 |
Total assets | 65,552 | 69,300 |
CURRENT LIABILITIES | ||
Long-term debt less unamortized debt issue costs, current portion (in default) | 33,724 | 33,692 |
Line of credit payable less unamortized debt issue costs (in default) | 7,169 | 8,042 |
Long-term debt, related party, current portion (in default) | 16,351 | 16,010 |
Interest payable (in default) | 7,001 | 6,408 |
Interest payable, related party (in default) | 2,974 | 2,814 |
Accounts payable | 2,689 | 3,274 |
Accounts payable, related party | 155 | 155 |
Current portion of lease liabilities | 199 | 194 |
Asset retirement obligations, current portion | 2,370 | 2,370 |
Accrued expenses and other current liabilities | 4,689 | 4,882 |
Total current liabilities | 77,321 | 77,841 |
LONG-TERM LIABILITIES | ||
Long-term operating leases, net of current | 319 | 370 |
Deferred revenues | 1,523 | 1,520 |
Long-term debt, net of current portion | 349 | 355 |
Total long-term liabilities | 2,191 | 2,245 |
Total liabilities | 79,512 | 80,086 |
Commitments and contingencies (Note 16) | ||
STOCKHOLDERS' DEFICIT | ||
Common stock ($0.01 par value, 20,000,000 shares authorized; 12,693,514 shares issued and outstanding at both March 31, 2021 and December 31, 2020) | 127 | 127 |
Additional paid-in capital | 38,457 | 38,457 |
Accumulated deficit | (52,544) | (49,370) |
Total stockholders' deficit | (13,960) | (10,786) |
Total liabilities and stockholders' equity (deficit) | $ 65,552 | $ 69,300 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
STOCKHOLDERS' DEFICIT | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 12,693,514 | 12,693,514 |
Common stock, shares outstanding | 12,693,514 | 12,693,514 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
REVENUE FROM OPERATIONS | ||
Refinery operations | $ 58,483 | $ 60,897 |
Tolling and terminaling | 930 | 1,103 |
Total revenue from operations | 59,413 | 62,000 |
COST OF GOODS SOLD | ||
Crude oil, fuel use, and chemicals | 57,783 | 59,720 |
Other conversion costs | 1,840 | 2,368 |
Total cost of goods sold | 59,623 | 62,088 |
Gross deficit | (210) | (88) |
COST OF OPERATIONS | ||
LEH operating fee | 124 | 147 |
Other operating expenses | 54 | 59 |
General and administrative expenses | 658 | 644 |
Depletion, depreciation and amortization | 693 | 633 |
Total cost of operations | 1,529 | 1,483 |
Loss from operations | (1,739) | (1,571) |
OTHER INCOME (EXPENSE) | ||
Easement, interest and other income | 2 | 20 |
Interest and other expense | (1,480) | (1,774) |
Gain on extinguishment of debt | 43 | 0 |
Total other expense | (1,435) | (1,754) |
Loss before income taxes | (3,174) | (3,325) |
Income tax expense | 0 | (15) |
Net loss | $ (3,174) | $ (3,340) |
Loss per common share: | ||
Basic | $ (0.25) | $ (0.27) |
Diluted | $ (0.25) | $ (0.27) |
Weighted average number of common shares outstanding: | ||
Basic | 12,693,514 | 12,327,365 |
Diluted | 12,693,514 | 12,327,365 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
OPERATING ACTIVITIES | ||
Net income (loss) | $ (3,174) | $ (3,340) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depletion, depreciation and amortization | 693 | 633 |
Deferred income tax | 0 | 15 |
Amortization of debt issue costs | 32 | 220 |
Guaranty fees paid in kind | 152 | 153 |
Related-party interest expense paid in kind | 225 | 68 |
Deferred revenues and expenses | 3 | (122) |
Gain on extinguishment of debt | (43) | 0 |
Changes in operating assets and liabilities | ||
Accounts receivable | 44 | (879) |
Accounts receivable, related party | 0 | 1,364 |
Prepaid expenses and other current assets | 2,504 | 1,496 |
Deposits and other assets | 14 | (16) |
Inventory | (37) | 832 |
Accounts payable, accrued expenses and other liabilities | (40) | (683) |
Net cash provided by (used in) operating activities | 373 | (259) |
INVESTING ACTIVITIES | ||
Capital expenditures | 0 | (198) |
Net cash used in investing activities | 0 | (198) |
FINANCING ACTIVITIES | ||
Proceeds from debt | 0 | (696) |
Payments on debt | (879) | 0 |
Net activity on related-party debt | (36) | 1,350 |
Net cash provided by (used in) financing activities | (915) | 654 |
Net change in cash, cash equivalents, and restricted cash | (542) | 197 |
Cash, cash equivalents and restricted cash at beginning of period | 1,111 | 668 |
Cash, cash equivalents and restricted cash at end of period | 569 | 865 |
Non-cash investing and financing activities: | ||
Interest paid | 287 | 361 |
Income taxes paid (refunded) | $ 0 | $ 0 |
1. Organization
1. Organization | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Overview Blue Dolphin is an independent downstream energy company operating in the Gulf Coast region of the United States. Our subsidiaries operate a light sweet-crude, 15,000-bpd crude distillation tower with approximately 1.2 million bbls of petroleum storage tank capacity in Nixon, Texas. Blue Dolphin was formed in 1986 as a Delaware corporation and is traded on the OTCQX under the ticker symbol “BDCO”. Our assets are primarily organized in two segments: refinery operations (owned by LE) and tolling and terminaling services (owned by LRM and NPS). Subsidiaries that are reflected in corporate and other include BDPL (inactive pipeline and facilities assets), BDPC (inactive leasehold interests in oil and gas wells), and BDSC (administrative services). See “Note (4)” to our consolidated financial statements for more information about our business segments. Unless the context otherwise requires, references in this report to “we,” “us,” “our,” or “ours,” refer to Blue Dolphin, one or more of its consolidated subsidiaries or all of them taken as a whole. Affiliates Affiliates controlled approximately 82% of the voting power of our Common Stock as of the filing date of this report. An Affiliate operates and manages all Blue Dolphin properties and funds working capital requirements during periods of working capital deficits, and an Affiliate is a significant customer of our refined products. Blue Dolphin and certain of its subsidiaries are currently parties to a variety of agreements with Affiliates. See “Note (3)” to our consolidated financial statements for additional disclosures related to Affiliate agreements, arrangements, and risks associated with working capital deficits. Going Concern Management has determined that certain factors raise substantial doubt about our ability to continue as a going concern. As discussed more fully below, these factors include inadequate liquidity to sustain operations due to defaults under our secured loan agreements, margin deterioration and volatility, and historic net losses and working capital deficits. Our consolidated financial statements assume we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. Our ability to continue as a going concern depends on sustained positive operating margins and having working capital for, amongst other requirements, purchasing crude oil and condensate and making payments on long-term debt. Without positive operating margins and working capital, our business will be jeopardized, and we may not be able to continue. If we are unable to make required debt payments, we would likely have to consider other options, such as selling assets, raising additional debt or equity capital, cutting costs or otherwise reducing our cash requirements, or negotiating with our creditors to restructure our applicable obligations, including a potential bankruptcy filing. Defaults Under Secured Loan Agreements Third-Party Defaults ● Veritex Loans – Defaults under the LE Term Loan Due 2034 and LRM Term Loan Due 2034 permit Veritex to declare the amounts owed under these loan agreements immediately due and payable, exercise its rights with respect to collateral securing obligors’ obligations under these loan agreements, and/or exercise any other rights and remedies available. Any exercise by Veritex of its rights and remedies under our secured loan agreements would have a material adverse effect on our business operations, including crude oil and condensate procurement and our customer relationships; financial condition; and results of operations. Veritex exercising its rights would also adversely impact the trading price of our common stock and the value of an investment in our common stock, which could lead to holders of our common stock losing their investment in its entirety. We can provide no assurance that: (i) our assets or cash flow will be sufficient to fully repay borrowings under our secured loan agreements with Veritex, either upon maturity or if accelerated, (ii) LE and LRM will be able to refinance or restructure the payments of the debt, and/or (iii) Veritex, as first lien holder, will provide future default waivers. The borrowers continue in active dialogue with Veritex. As of the filing date of this report, payments under the Veritex loans were current, but other defaults remained outstanding. ● Amended Pilot Line of Credit – Upon maturity of the Pilot Line of Credit in May 2020, Pilot sent NPS, as borrower, and LRM, LEH, LE and Blue Dolphin, each a guarantor and collectively guarantors, a notice demanding the immediate payment of the unpaid principal amount and all interest accrued and unpaid, and all other amounts owing or payable (the “Pilot Obligations”). Pursuant to the Amended Pilot Line of Credit, commencing on May 4, 2020, the Pilot Obligations began to accrue interest at a default rate of fourteen percent (14%) per annum. Failure of the borrower or any guarantor of paying the past due Pilot Obligations constituted an event of default. Pilot expressly retained and reserved all its rights and remedies available to it at any time, including without limitation, the right to exercise all rights and remedies available to Pilot under the Amended Pilot Line of Credit or applicable law or equity. Pursuant to a June 1, 2020 notice, Pilot began applying Pilot’s payment obligations to NPS under each of (a) the Terminal Services Agreement (covering Tank Nos. 67, 71, 72, 73, 77, and 78), dated as of May 2019, between NPS and Pilot, and (b) the Terminal Services Agreement (covering Tank No. 56), dated as of June 1, 2019, between NPS and Pilot, against NPS’ payment obligations to Pilot under the Amended Pilot Line of Credit. Such tank lease setoff amounts only partially satisfy NPS’ obligations under the Amended Pilot Line of Credit, and Pilot expressly retained and reserved all its rights and remedies available to it at any time, including, without limitation, the right to exercise all rights and remedies available to Pilot under the Amended Pilot Line of Credit or applicable law or equity. For the three-month periods ended March 31, 2021 and 2020, the tank lease setoff amounts totaled $0.6 million and $0, respectively. For the three-month periods ended March 31, 2021 and 2020, the amount of interest NPS incurred under the Amended Pilot Line of Credit totaled $0.3 million and $0.4 million, respectively. On November 23, 2020, NPS and guarantors received notice from Pilot that the entry into the SBA EIDLs was a breach of the Amended Pilot Line of Credit and Pilot demanded full repayment of the Pilot Obligations, including through use of the proceeds of the SBA EIDLs. Pilot also notified the SBA that the liens securing the SBA EIDLs are junior to those securing the Pilot Obligations. While the SBA acknowledged this point and indicated a willingness to subordinate the SBA EIDLs, no further action has been taken by Pilot as of the filing date of this report. Any exercise by Pilot of its rights and remedies under the Amended Pilot Line of Credit would have a material adverse effect on our business operations, including crude oil and condensate procurement and our customer relationships; financial condition; and results of operations. NPS and guarantors continue in active dialogue with Pilot to reach a negotiated settlement, and we believe that Pilot hopes to continue working with NPS to settle the Pilot Obligations. NPS and guarantors are also working on the possible refinance of amounts owing and payable under the Amended Pilot Line of Credit. However, progress with potential lenders has been slow due to the ongoing COVID-19 pandemic. NPS’s ability to repay, refinance, replace or otherwise extend this credit facility is dependent on, among other things, business conditions, our financial performance, and the general condition of the financial markets. Given the current financial markets, we could be forced to undertake alternate financings, including a sale of additional common stock, negotiate for an extension of the maturity, or sell assets and delay capital expenditures in order to generate proceeds that could be used to repay such indebtedness. We can provide no assurance that we will be able to consummate any such transaction on terms that are commercially reasonable, on terms acceptable to us or at all. If new debt or other liabilities are added to the Company’s current consolidated debt levels, the related risks that it now faces could intensify. In the event we are unsuccessful in such endeavors, NPS may be unable to pay the amounts outstanding under the Amended Pilot Line of Credit, which may require us to seek protection under bankruptcy laws. In such a case, the trading price of our common stock and the value of an investment in our common stock could significantly decrease, which could lead to holders of our common stock losing their investment in our common stock in its entirety. ● Notre Dame Debt – Pursuant to a 2015 subordination agreement, the holder of the Notre Dame Debt agreed to subordinate their right to payments, as well as any security interest and liens on the Nixon facility’s business assets, in favor of Veritex as holder of the LE Term Loan Due 2034. To date, no payments have been made under the subordinated Notre Dame Debt and the holder of the Notre Dame Debt has taken no action as a result of the non-payment. Our financial health could be materially and adversely affected by defaults in our secured loan agreements, margin deterioration and volatility, historic net losses and working capital deficits, as well as termination of the crude supply agreement or terminal services agreement with Pilot, which could impact our ability to acquire crude oil and condensate. In addition, sustained periods of low crude oil prices due to market volatility associated with the COVID-19 pandemic has resulted in significant financial constraints on producers, which in turn has resulted in long term crude oil supply constraints and increased transportation costs. A failure to acquire crude oil and condensate when needed will have a material effect on our business results and operations. During the three-month period ended March 31, 2021, our refinery experienced 1 day of downtime as a result of lack of crude due to cash constraints. Related-Party Defaults Affiliates controlled approximately 82% of the voting power of our Common Stock as of the filing date of this report, an Affiliate operates and manages all Blue Dolphin properties, an Affiliate is a significant customer of our refined products, and we borrow from Affiliates during periods of working capital deficits. Replated party debt, which is currently in default, represents such working capital borrowings. Margin Deterioration and Volatility Historic Net Losses and Working Capital Deficits Net Losses Working Capital Deficits March 31, December 31, 2021 2020 (in thousands) Cash and cash equivalents $ 521 $ 549 Restricted cash (current portion) 48 48 Restricted cash, noncurrent - 514 Total $ 569 $ 1,111 Operating Risks Successful execution of our business strategy depends on several key factors, including, having adequate working capital to meet operational needs and regulatory requirements, maintaining safe and reliable operations at the Nixon facility, meeting contractual obligations, and having favorable margins on refined products. We are currently unable to estimate the impact the COVID-19 pandemic will have on our future financial position and results of operations. Under earlier state and federal mandates that regulated business closures, our business was deemed as an essential business and, as such, remained open. As U.S. federal, state, and local officials roll out COVID-19 vaccines, we expect to continue operating. Any governmental mandates, while necessary to address the virus, will result in further business and operational disruptions, including demand destruction, liquidity strains, supply chain challenges, travel restrictions, controls on in-person gathering, and workforce availability. Management believes that it has taken all prudent steps to mitigate risk, avoid business disruptions, manage cash flow, and remain competitive in a low oil price environment. We are managing cash flow by optimizing receivables and payables by prioritizing payments, managing inventory to avoid buildup, monitoring discretionary spending, and delaying capital expenditures. At the Nixon facility, w e adjust throughput and production based on prevailing market conditions. With regard to personnel, we have adopted remote working where possible. Where on-site operations are required, personnel are required to wear masks and practice social distancing. We also implemented other site-specific precautionary measures to reduce the risk of exposure and have restricted non-essential business travel. Personnel, customers, and partners are also encouraged to collaborate virtually. There can be no assurance that our business strategy will be successful, that Affiliates will continue to fund our working capital needs when we experience working capital deficits, that we will meet regulatory requirements to provide additional financial assurance (supplemental pipeline bonds) and decommission offshore pipelines and platform assets, that we will be able to obtain additional financing on commercially reasonable terms or at all, or that margins on our refined products will be favorable. Further, if Veritex and/or Pilot exercise their rights and remedies under our secured loan agreements, our business, financial condition, and results of operations will be materially adversely affected. |
2. Principles of Consolidation
2. Principles of Consolidation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Significant Accounting Policies | Basis of Presentation The accompanying unaudited consolidated financial statements, which include Blue Dolphin and its subsidiaries, have been prepared in accordance with GAAP for interim consolidated financial information pursuant to the rules and regulations of the SEC under Article 10 of Regulation S-X and the instructions to Form 10-Q. Accordingly, certain information and footnote disclosures normally included in our audited financial statements have been condensed or omitted pursuant to the SEC’s rules and regulations. Significant intercompany transactions have been eliminated in the consolidation. In management’s opinion, all adjustments considered necessary for a fair presentation have been included, disclosures are adequate, and the presented information is not misleading. The consolidated balance sheet as of December 31, 2020 was derived from the audited financial statements at that date. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 Significant Accounting Policies The summary of significant accounting policies of Blue Dolphin is presented to assist in understanding our consolidated financial statements. Our consolidated financial statements and accompanying notes are representations of management, who is responsible for their integrity and objectivity. These accounting policies conform to GAAP and have been consistently applied in the preparation of our consolidated financial statements. Use of Estimates Cash and Cash Equivalents Restricted Cash Accounts Receivable and Allowance for Doubtful Accounts Inventory Property and Equipment Refinery and Facilities Pipelines and Facilities Oil and Gas Properties CIP Leases. We recognize ROU assets and lease liabilities for leasing arrangements with terms greater than one year. We account for lease and non-lease components in a contract as a single lease component for all classes of underlying assets. We allocate the consideration in these contracts based on pricing information contained in the lease. Expense for an operating lease is recognized as a single lease cost on a straight-line basis over the lease term and is reflected in the appropriate income statement line item based on the leased asset’s function. Amortization expense of a finance lease ROU asset is recognized on a straight-line basis over the lesser of the useful life of the leased asset or the lease term. However, if the lease transfers ownership of the finance lease ROU asset to us at the end of the lease term, the finance lease ROU asset is amortized over the useful life of the leased asset. Amortization expense is reflected in ‘depreciation and amortization expense.’ Interest expense is incurred based on the carrying value of the lease liability and is reflected in ‘interest and other expense. Revenue Recognition Refinery Operations Revenue We consider a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the refined product, the transfer of significant risks and rewards, our rights to payment, and transfer of legal title. In each case, the term between the sale and when payment is due is not significant. Transportation, shipping, and handling costs incurred are included in cost of goods sold. Excise and other taxes that are collected from customers and remitted to governmental authorities are not included in revenue. Tolling and Terminaling Revenue We typically satisfy performance obligations for tolling and terminaling operations with the passage of time. We determine the transaction price at agreement inception based on the guaranteed minimum amount of revenue over the term of the agreement. We allocate the transaction price to the single performance obligation that exists under the agreement, and we recognize revenue in the amount for which we have a right to invoice. Generally, payment terms do not exceed 30 days. Revenue from tank storage customers may, from time to time, include fees for ancillary services, such as in-tank and tank-to-tank blending. These services are considered optional to the customer, and the price we charge for such services is not included in the fixed cost under the customer’s tank storage agreement. Ancillary services are considered a separate performance obligation by us under the tank storage agreement. The performance obligation is satisfied when the requested service has been performed in the applicable period. Deferred Revenue Income Taxes Significant judgment is required in evaluating uncertain tax positions and determining its provision for income taxes. As of each reporting date, we consider new evidence, both positive and negative, to determine the realizability of deferred tax assets. We consider whether it is more likely than not that a portion or all the deferred tax assets will be realized, which is dependent upon the generation of future taxable income prior to the expiration of any NOL carryforwards. When we determine that it is more likely than not that a tax benefit will not be realized, a valuation allowance is recorded to reduce deferred tax assets. A significant piece of objective negative evidence evaluated was cumulative losses incurred over the three-year period ended March 31, 2021. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. Based on this evaluation, we recorded a valuation allowance against the deferred tax assets for which realization was not deemed more likely than not as of March 31, 2021 and December 31, 2020. In addition, we have NOL carryforwards that remain available for future use. The benefit of an uncertain tax position is recognized in the financial statements if it meets a minimum recognition threshold. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more-likely-than-not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At March 31, 2021 and December 31, 2020, there were no uncertain tax positions for which a reserve or liability was necessary. See “Note (14)” to our consolidated financial statements for more information related to income taxes. Impairment or Disposal of Long-Lived Assets The market volatility of commodity prices as a result of the ongoing COVID-19 pandemic could affect the value of certain of our long-lived assets. Management evaluated our refinery and facilities assets for impairment as of March 31, 2021. No impairment was deemed necessary based upon this testing, and we did not record any impairment of our refinery and facilities assets for the periods presented. Asset Retirement Obligations We have concluded that there is no legal or contractual obligation to dismantle or remove the refinery and facilities assets. Further, we believe that these assets have indeterminate lives because dates or ranges of dates upon which we would retire these assets cannot reasonably be estimated at this time. When a legal or contractual obligation to dismantle or remove the refinery and facilities assets arises and a date or range of dates can reasonably be estimated for the retirement of these assets, we will estimate the cost of performing the retirement activities and record a liability for the fair value of that cost using present value techniques. We recorded an ARO liability related to future asset retirement costs associated with dismantling, relocating, or disposing of our offshore platform, pipeline systems, and related onshore facilities, as well as for plugging and abandoning wells and restoring land and sea-beds. Cost estimates for each of our assets were developed based upon regulatory requirements, structural makeup, water depth, reservoir characteristics, reservoir depth, equipment demand, current retirement procedures, and construction and engineering consultations. Estimating future costs are difficult and require management to make judgments that are subject to future revisions based upon numerous factors, including changing technology, political, and regulatory environments. We review our assumptions and estimates of future abandonment costs on an annual basis. See “Note (12)” to our consolidated financial statements for additional information related to AROs. Computation of Earnings Per Share New Pronouncements Adopted Codification Improvements. New Pronouncements Issued, Not Yet Effective . Other new pronouncements issued but not yet effective are not expected to have a material impact on our financial position, results of operations, or liquidity. |
3. Related-Party Transactions
3. Related-Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Affiliate Operational Agreements Summary Blue Dolphin and certain of its subsidiaries are party to several operational agreements with Affiliates. Management believes that these related-party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions. Related-party agreements related to Blue Dolphin’s operations consist of the following: Agreement/Transaction Parties Effective Date Key Terms Jet Fuel Sales Agreement LEH - LE 04/01/2021 1-year term expiring earliest to occur of 03/31/2022 plus 30-day carryover or delivery of maximum jet fuel quantity; LEH bids on jet fuel contracts under preferential pricing terms due to a HUBZone certification Office Sub-Lease Agreement LEH - BDSC 01/01/2018 68-month term expiring 08/31/2023; office lease Houston, Texas; includes 6-month rent abatement period; rent approximately $0.02 million per month Amended and Restated Operating Agreement LEH – Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC 04/01/2020 3-year term; expires 04/01/2023 or notice by either party at any time of material breach or 90 days Board notice; LEH receives management fee of 5% of all consolidated operating costs, excluding crude costs, depreciation, amortization and interest, of Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC Working Capital We have historically depended on Affiliates for financing when revenue from operations and borrowings under bank facilities are insufficient to meet our liquidity and working capital needs. Such borrowings are reflected in our consolidated balance sheets in accounts payable, related party, and/or long-term debt, related party. Related-Party Long-Term Debt Loan Description Parties Maturity Date Interest Rate Loan Purpose March Carroll Note (in default) Jonathan Carroll – Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital; reflects amounts owed to Jonathan Carroll under the guaranty fee agreements March Ingleside Note (in default) Ingleside – Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital June LEH Note (in default) LEH – Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital; reflects amounts owed to LEH under the Amended and Restated Operating Agreement BDPL-LEH Loan Agreement (in default) LEH - BDPL Aug 2018 16.00% Blue Dolphin working capital Amended and Restated Guaranty Fee Agreement(2) Jonathan Carroll - LE -- 2.00% Tied to payoff of LE $25 million Veritex loan Amended and Restated Guaranty Fee Agreement(2) Jonathan Carroll - LRM -- 2.00% Tied to payoff of LRM $10 million Veritex loan (1) The original principal amount of the BDPL-LEH Loan Agreement was $4.0 million. (2) As a condition for our secured loan agreements with Veritex, Jonathan Carroll was required to personally guarantee repayment of borrowed funds and accrued interest. Under the guaranty fee agreements, Mr. Carroll is entitled to receive guaranty fees. The fees are payable 50% in cash and 50% in Common Stock. The Common Stock portion is paid quarterly. For the foreseeable future, management does not intend to pay Mr. Carroll the cash portion due to Blue Dolphin’s working capital deficits. The cash portion will continue to accrue and be added to the outstanding principal balance owed to Mr. Carroll under the March Carroll Note. Guarantees, Security and Defaults Loan Description Guarantees Security Event(s) of Default March Carroll Note (in default) --- --- Failure of borrower to pay past due obligations; loan matured January 2019 March Ingleside Note (in default) --- --- Failure of borrower to pay past due obligations; loan matured January 2019 June LEH Note (in default) --- --- Failure of borrower to pay past due obligations; loan matured January 2019 BDPL-LEH Loan Agreement --- Secured by certain BDPL property Failure of borrower to pay past due obligations; loan matured August 2018 Covenants The BDPL-LEH Loan Agreement contains representations and warranties, affirmative and negative covenants, and events of default that we consider usual and customary for a credit facility of this type. There are no covenants associated with the March Carroll Note, March Ingleside Note, or June LEH Note. Related-Party Financial Impact Consolidated Balance Sheets Accounts payable, related party Long-term debt, related party, current portion (in default) and accrued interest payable, related party. March 31, December 31, 2021 2020 (in thousands) LEH June LEH Note (in default) $ 9,588 $ 9,446 BDPL-LEH Loan Agreement 6,974 6,814 LEH Total 16,562 16,260 Ingleside March Ingleside Note (in default) 1,031 1,013 Jonathan Carroll March Carroll Note (in default) 1,732 1,551 19,325 18,824 Less: Long-term debt, related party, current portion, in default (16,351 ) (16,010 ) Less: Accrued interest payable, related party (in default) (2,974 ) (2,814 ) $ - $ - Consolidated Statements of Operations Total revenue from operations. Three Months Ended March 31, 2021 2020 (in thousands, except percents) Refinery operations LEH $ 16,080 27.1 % $ 17,715 28.6 % Third-Parties 42,403 71.3 % 43,182 69.6 % Tolling and terminaling Third-Parties 930 1.6 % 1,103 1.8 % $ 59,413 100.0 % $ 62,000 100.0 % Interest expense. Three Months Ended March 31, 2021 2020 (in thousands) Jonathan Carroll Guaranty Fee Agreements First Term Loan Due 2034 $ 108 $ 108 Second Term Loan Due 2034 45 45 March Carroll Note (in default) 29 23 LEH BDPL-LEH Loan Agreement (in default) 160 160 June LEH Note (in default) 182 25 Ingleside March Ingleside Note (in default) 14 20 $ 538 $ 381 Other. |
4. Revenue and Segment Informat
4. Revenue and Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Revenue and Segment Information | We have two reportable business segments: (i) refinery operations and (ii) tolling and terminaling. Refinery operations relate to the refining and marketing of petroleum products at our 15,000-bpd crude distillation tower. Tolling and terminaling operations relate to tolling and storage terminaling services under third-party lease agreements. Both operations are conducted at the Nixon facility. Corporate and other includes BDSC, BDPL and BDPC. Revenue from Contracts with Customers Disaggregation of Revenue Receivables from Contracts with Customers Contract Liabilities Remaining Performance Obligations Segment Information Three Months Ended March 31, 2021 2020 (in thousands) Net revenue (excluding intercompany fees and sales) Refinery operations $ 58,483 $ 60,897 Tolling and terminaling 930 1,103 Total net revenue 59,413 62,000 Intercompany fees and sales Refinery operations (566 ) (617 ) Tolling and terminaling 566 617 Total intercompany fees - - Operation costs and expenses(1) Refinery operations (59,289 ) (61,833 ) Tolling and terminaling (334 ) (255 ) Corporate and other (54 ) (59 ) Total operation costs and expenses (59,677 ) (62,147 ) Segment contribution margin (deficit) Refinery operations (1,372 ) (1,553 ) Tolling and terminaling 1,162 1,465 Corporate and other (54 ) (59 ) Total segment contribution margin (deficit) (264 ) (147 ) General and administrative expenses(2) Refinery operations (301 ) (304 ) Tolling and terminaling (68 ) (68 ) Corporate and other (413 ) (419 ) Total general and administrative expenses (782 ) (791 ) Depreciation and amortization Refinery operations (302 ) (288 ) Tolling and terminaling (340 ) (294 ) Corporate and other (51 ) (51 ) Total depreciation and amortization (693 ) (633 ) Interest and other non-operating expenses, net Refinery operations (598 ) (741 ) Tolling and terminaling (452 ) (770 ) Corporate and other (385 ) (243 ) Total interest and other non-operating expenses, net (1,435 ) (1,754 ) Income (loss) before income taxes Refinery operations (2,573 ) (2,886 ) Tolling and terminaling 302 333 Corporate and other (903 ) (772 ) Total loss before income taxes (3,174 ) (3,325 ) Income tax expense - (15 ) Net loss $ (3,174 ) $ (3,340 ) (1) Operation costs include cost of goods sold. Also, operation costs within: (a) tolling and terminaling includes terminal operating expenses and an allocation of other costs (e.g., insurance and maintenance) and (b) corporate and other includes expenses related to BDSC, BDPC and BDPL. (2) General and administrative expenses within refinery operations include the LEH operating fee. Three Months Ended March 31, 2021 2020 (in thousands) Capital expenditures Refinery operations $ - $ 6 Tolling and terminaling - 192 Corporate and other - - Total capital expenditures $ - $ 198 March 31, December 31, 2021 2020 (in thousands) Identifiable assets Refinery operations $ 45,186 $ 48,521 Tolling and terminaling 18,527 18,722 Corporate and other 1,839 2,057 Total identifiable assets $ 65,552 $ 69,300 |
5. Concentration of Risk
5. Concentration of Risk | 3 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | Bank Accounts Financial instruments that potentially subject us to concentrations of risk consist primarily of cash, trade receivables and payables. We maintain cash balances at financial institutions in Houston, Texas. The FDIC insures certain financial products up to a maximum of $250,000 per depositor. At March 31, 2021 and December 31, 2020, we had cash balances (including restricted cash) that exceeded the FDIC insurance limit per depositor of approximately $0.3 million and $0.6 million, respectively. Key Supplier Operation of the Nixon refinery depends on our ability to purchase adequate amounts of crude oil and condensate. We have a long-term crude supply agreement in place with Pilot. The crude supply agreement, the initial term of which is volume based, expires when Pilot sells us 24.8 million net bbls of crude oil. Thereafter, the crude supply agreement automatically renews for successive one-year terms (each such term, a “Renewal Term”) unless either party provides the other with notice of nonrenewal at least 60 days prior to expiration of any Renewal Term. Total volume billed under the crude supply agreement totaled approximately 5.8 million bbls as of March 31, 2021. Effective March 1, 2020, Pilot assigned its rights, title, interest, and obligations in the crude supply agreement to Tartan Oil LLC, a Pilot affiliate. Sustained periods of low crude oil prices due to market volatility associated with the COVID-19 pandemic has resulted in significant financial constraints on producers, which in turn has resulted in long term crude oil supply constraints and increased transportation costs. A failure to acquire crude oil and condensate when needed will have a material effect on our business results and operations. During the three-month periods ended March 31, 2021 and 2020, our refinery experienced 1 day and no days, respectively, of downtime as a result of lack of crude due to cash constraints. Pilot also stores crude oil at the Nixon facility under two terminal services agreements. Under the terminal services agreements, Pilot stores crude oil at the Nixon facility at a specified rate per bbl of the storage tank’s shell capacity. Although the initial term of the terminal services agreement expired April 30, 2020, the agreement renewed on a one-year evergreen basis. Either party may terminate the terminal services agreement by providing the other party 60 days prior written notice. However, the terminal services agreement will automatically terminate upon expiration or termination of the crude supply agreement. Beginning on June 1, 2020, Pilot began applying payment obligations owed to NPS under two terminal services agreements against NPS’ payment obligations to Pilot under the Amended Pilot Line of Credit. For the three-month periods ended March 31, 2021 and 2020, the tank lease setoff amounts totaled $0.6 million and $0, respectively. For the three-month periods ended March 31, 2021 and 2020, the amount of interest NPS incurred under the Amended Pilot Line of Credit totaled $0.3 million and $0.4 million, respectively. See “Note (1) Organization – Going Concern” to our consolidated financial statements for additional disclosures related to defaults in our debt obligations. On November 23, 2020, NPS and guarantors received notice from Pilot that the entry into the SBA EIDLs was a breach of the Amended Pilot Line of Credit and Pilot demanded full repayment of the Pilot Obligations, including through use of the proceeds of the SBA EIDLs. Pilot also notified the SBA that the liens securing the SBA EIDLs are junior to those securing the Pilot Obligations. While the SBA acknowledged this point and indicated a willingness to subordinate the SBA EIDLs, no further action has been taken by Pilot as of the filing date of this report. Our financial health could be materially and adversely affected by defaults in our secured loan agreements, margin deterioration and volatility, historic net losses and working capital deficits, as well as termination of the crude supply agreement or terminal services agreement with Pilot, which could impact our ability to acquire crude oil and condensate. In addition, sustained periods of low crude oil prices due to market volatility associated with the COVID-19 pandemic has resulted in significant financial constraints on producers, which in turn has resulted in long term crude oil supply constraints and increased transportation costs. During the three-month period ended March 31, 2021, our refinery experienced 1 day of downtime as a result of lack of crude due to cash constraints. A failure to acquire crude oil and condensate when needed will have a material effect on our business results and operations. Significant Customers We routinely assess the financial strength of our customers and have not experienced significant write-downs in accounts receivable balances. We believe that our accounts receivable credit risk exposure is limited. Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at March 31, March 31, 2021 4 90 % $ 0 March 31, 2020 4 94 % $0.6 million One of our significant customers is LEH, an Affiliate. The Affiliate purchases our jet fuel under a Jet Fuel Sales Agreement and bids on jet fuel contracts under preferential pricing terms due to a HUBZone certification. The Affiliate accounted for 27% and 29% of total revenue from operations in 2021 and 2020, respectively. The Affiliate represented $0 in accounts receivable at both March 31, 2021 and 2020, respectively. Amounts outstanding relating to the Jet Fuel Sales Agreement can significantly vary period to period based on the timing of the related sales and payments received. Amounts we owed to LEH under various long-term debt, related-party agreements totaled $16.6 million and $16.3 million at March 31, 2021 and December 31, 2020, respectively. See “Notes (3) and (16)” to our consolidated financial statements for additional disclosures related to transactions with Affiliates. Concentration of Customers Refined Product Sales Three Months Ended March 31, 2021 2020 (in thousands, except percents) LPG mix $ 6 0.0 % $ - 0 % Naphtha 14,224 24.3 % 11,515 18.9 % Jet fuel 16,080 27.5 % 17,715 29.1 % HOBM 15,663 26.8 % 15,191 24.9 % AGO 12,510 21.4 % 16,476 27.1 % $ 58,483 100.0 % $ 60,897 100.0 % An Affiliate, LEH, purchases all of our jet fuel. See “Notes (3) and (16)” to our consolidated financial statements for additional disclosures related to Affiliate transactions. |
6. Prepaid Expenses and Other C
6. Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets as of the dates indicated consisted of the following: March 31, December 31, 2021 2020 (in thousands) Prepaid insurance $ 556 $ 1,182 Prepaid crude oil and condensate 383 2,249 Prepaid easement renewal fees 93 99 Other prepaids 28 34 $ 1,060 $ 3,564 |
7. Inventory
7. Inventory | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory as of the dates indicated consisted of the following: March 31, December 31, 2021 2020 (in thousands) Crude oil and condensate $ 608 $ 463 Chemicals 175 271 Naphtha 164 120 AGO 121 133 Propane 25 15 LPG mix 6 6 HOBM - 54 $ 1,099 $ 1,062 |
8. Property, Plant and Equipmen
8. Property, Plant and Equipment, Net | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | Property, plant and equipment, net, as of the dates indicated consisted of the following: March 31, December 31, 2021 2019 (in thousands) Refinery and facilities $ 72,184 $ 72,184 Land 566 566 Other property and equipment 903 903 73,653 73,653 Less: Accumulated depletion, depreciation, and amortiation (15,861 ) (15,220 ) 57,792 58,433 CIP 4,064 4,064 $ 61,856 $ 62,497 We capitalize interest cost incurred on funds used to construct property, plant, and equipment. Capitalized interest is recorded as part of the asset it relates to and is depreciated over the asset’s useful life. Capitalized interest cost, which is included in CIP, was $0 at March 31, 2021 and December 31, 2020. Capital expenditures for expansion at the Nixon facility were funded by long-term debt from Veritex, revenue from operations, and working capital from Affiliates. At March 31, 2021 and December 31, 2020, unused amounts for capital expenditures derived from Veritex loans were reflected in restricted cash (current and non-current portions) on our consolidated balance sheets. See “Note (10)” to our consolidated financial statements for additional disclosures related to working capital deficits and borrowings for capital spending. |
9. Accrued Expenses and Other C
9. Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Other Liabilities, Current [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of the dates indicated consisted of the following: March 31, December 31, 2021 2020 (in thousands) Unearned revenue from contracts with customers $ 3,489 $ 3,421 Unearned contract renewal income 400 500 Insurance 181 541 Other payable 176 252 Customer deposits 173 10 Taxes payable 137 58 Board of director fees payable 133 100 $ 4,689 $ 4,882 |
10. Third-Party Long-Term Debt
10. Third-Party Long-Term Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Third-Party Long-Term Debt | Loan Agreements Summary Loan Description Parties Original Principal Amount (in millions) Maturity Date Monthly Principal and Interest Payment Interest Rate Loan Purpose Veritex Loans(1) LE Term Loan Due 2034 ( in default LE-Veritex $25.0 Jun 2034 $0.2 million WSJ Prime + 2.75% Refinance loan; capital improvements LRM Term Loan Due 2034 ( in default LRM-Veritex $10.0 Dec 2034 $0.1 million WSJ Prime + 2.75% Refinance bridge loan; capital improvements Notre Dame Debt ( in default LE-Kissick $11.7 Jan 2018 No payments to date; payment rights subordinated 16.00% Working capital; reduced arbitration award payable to GEL SBA EIDLs LE Term Loan Due 2050(4) LE-SBA $0.15 Aug 2050 $0.0007 million 3.75% Working capital NPS Term Loan Due 2050(4) NPS-SBA $0.15 Aug 2050 $0.0007 million 3.75% Working capital Equipment Loan Due 2025(5) LE-Texas First $0.07 Oct 2025 $0.0013 million 4.50% Equipment Lease Conversion (1) Proceeds were placed in a disbursement account whereby Veritex makes payments for construction related expenses. Amounts held in the disbursement account are reflected on our consolidated balance sheets as restricted cash (current portion) and restricted cash (noncurrent). At March 31, 2021, restricted cash (current portion) was $0.05 million and restricted cash, noncurrent was $0. At December 31, 2020, restricted cash (current portion) was $0.05 million and restricted cash, noncurrent was $0.5 million. (2) LE originally entered into a loan agreement with Notre Dame Investors, Inc. in the principal amount of $8.0 million. The debt is currently held by John Kissick. Pursuant to a 2017 sixth amendment, the Notre Dame Debt was amended to increase the principal amount by $3.7 million; the additional principal was used to reduce the arbitration award payable to GEL by $3.6 million. (3) Pursuant to a 2015 subordination agreement, the holder of the Notre Dame Debt agreed to subordinate their right to payments, as well as any security interest and liens on the Nixon facility’s business assets, in favor of Veritex as holder of the LE Term Loan Due 2034. (4) Payments are deferred for the first twelve (12) months of the loan; the first payment is due August 2021; interest accrues during the deferral period. SBA EIDLs are not forgivable. (5) In May 2019, LE entered into a 12-month equipment rental agreement with the option to purchase the backhoe at maturity. The equipment rental agreement matured in May 2020. In October 2020, LE entered into the Equipment Loan Due 2025 to finance the purchase of the backhoe. The backhoe continues to be used at the Nixon facility. Outstanding Principal, Debt Issue Costs, and Accrued Interest Third-party long-term debt (outstanding principal and accrued interest), as of the dates indicated was as follows: March 31, December 31, 2021 2020 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 23,104 $ 22,840 LRM Term Loan Due 2034 (in default) 9,601 9,473 Notre Dame Debt (in default) 9,613 9,413 SBA EIDLs LE Term Loan 2050 153 152 NPS Term Loan 2050 153 152 Equipment Loan Due 2025 65 71 42,689 42,101 Less: Current portion of long-term debt, net (33,724 ) (33,692 ) Less: Unamortized debt issue costs (1,718 ) (1,749 ) Less: Accrued interest payable (in default) (6,898 ) (6,305 ) $ 349 $ 355 Unamortized debt issue costs associated with the Veritex loans as of the dates indicated consisted of the following: March 31, December 31, 2021 2020 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 1,674 $ 1,674 LRM Term Loan Due 2034 (in default) 768 768 Less: Accumulated amortization (724 ) (693 ) $ 1,718 $ 1,749 Amortization expense was $0.03 million for both three-month periods ended March 31, 2021 and 2020. Accrued interest related to third-party long-term debt, reflected as accrued interest payable in our consolidated balance sheets, as of the dates indicated consisted of the following: March 31, December 31, 2021 2020 (in thousands) Notre Dame Debt (in default) $ 4,635 $ 4,435 Veritex Loans LE Term Loan Due 2034 (in default) 1,559 1,295 LRM Term Loan Due 2034 (in default) 698 571 SBA EIDLs LE Term Loan 2050 3 2 NPS Term Loan 2050 3 2 6,898 6,305 Less: Accrued interest payable (in default) (6,898 ) (6,305 ) Long-term Interest Payable, Net of Current Portion $ - $ - Payment Deferments Veritex Loans SBA EIDLs Guarantees and Security Loan Description Guarantees Security Veritex Loans(1) LE Term Loan Due 2034 ( in default ● ● ● ● ● ● ● ● LRM Term Loan Due 2034 ( in default ● ● ● ● ● ● ● ● Notre Dame Debt ( in default --- ● SBA EIDLs(3) LE Term Loan Due 2050 --- ● NPS Term Loan Due 2050 --- ● Equipment Loan Due 2025 --- ● (1) As a condition of the LE Term Loan Due 2034 and LRM Term Loan Due 2034, Jonathan Carroll was required to personally guarantee repayment of borrowed funds and accrued interest. (2) Pursuant to a 2015 subordination agreement, the holder of the Notre Dame Debt agreed to subordinate their right to payments, as well as any security interest and liens on the Nixon facility’s business assets, in favor of Veritex as holder of the LE Term Loan Due 2034. (3) On November 23, 2020, NPS and guarantors received notice from Pilot that the entry into the SBA EIDLs was a breach of the Amended Pilot Line of Credit and Pilot demanded full repayment of the Pilot Obligations, including through use of the proceeds of the SBA EIDLs. Pilot also notified the SBA that the liens securing the SBA EIDLs are junior to those securing the Pilot Obligations. While the SBA acknowledged this point and indicated a willingness to subordinate the SBA EIDLs, no further action has been taken by Pilot as of the filing date of this report. The USDA, acting through its agencies, administers a federal rural credit program that makes direct loans and guarantees portions of loans made and serviced by USDA-qualified lenders for various purposes. Each USDA guarantee is a full faith and credit obligation of the U.S. with the USDA guaranteeing up to 100% of the principal amount. The lender for a USDA-guaranteed loan, in our case Veritex, is required by regulations to retain both the guaranteed and unguaranteed portions of the loan, to service the entire underlying loan, and to remain mortgage and/or secured party of record. Both the guaranteed and unguaranteed portions of the loan are to be secured by the same collateral with equal lien priority. The USDA-guaranteed portion of a loan cannot be paid later than, or in any way be subordinated to, the related unguaranteed portion. See “Notes (3) and (16)” to our consolidated financial statements for additional disclosures related to Affiliate agreements and transactions, including long-term debt guarantees. Covenants The Veritex loans and SBA EIDLs contain representations and warranties, affirmative and negative covenants, and events of default that we consider usual and customary for credit facilities of this type. There are no covenants associated with the Notre Dame Debt and the Equipment Loan Due 2025. Defaults Loan Description Event(s) of Default Covenant Violations Veritex Loans LE Term Loan Due 2034 ( in default Failure to make required monthly payments; failure to replenish $1.0 million payment reserve account; events of default under other secured loan agreements with Veritex Financial covenants: ● LRM Term Loan Due 2034 ( in default Failure to make required monthly payments; events of default under other secured loan agreements with Veritex Financial covenants: ● Notre Dame Debt ( in default Failure of borrower to pay past due obligations; loan matured January 2019 --- As reflected in the table above and elsewhere in this report, we are in default under the LE Term Loan Due 2034, LRM Term Loan Due 2034, and the Notre Dame Debt. Defaults under the LE Term Loan Due 2034 and LRM Term Loan Due 2034 permit Veritex to declare the amounts owed under these loan agreements immediately due and payable, exercise its rights with respect to collateral securing obligors’ obligations under these loan agreements, and/or exercise any other rights and remedies available. The debt associated with the LE Term Loan Due 2034, LRM Term Loan Due 2034, and the Notre Dame Debt was classified within the current portion of long-term debt on our consolidated balance sheets at March 31, 2021 and December 31, 2020. Any exercise by Veritex of its rights and remedies under our secured loan agreements would have a material adverse effect on our business operations, including crude oil and condensate procurement and our customer relationships; financial condition; and results of operations. In such a case, the trading price of our common stock and the value of an investment in our common stock could significantly decrease, which could lead to holders of our common stock losing their investment in our common stock in its entirety. We can provide no assurance that: (i) our assets or cash flow will be sufficient to fully repay borrowings under our secured loan agreements with Vertitex, either upon maturity or if accelerated, (ii) LE and LRM will be able to refinance or restructure the payments of the debt, and/or (iii) Veritex, as first lien holder, will provide future default waivers. Defaults under our secured loan agreements and any exercise by Veritex of its rights and remedies related to such defaults may have a material adverse effect on the trading prices of our common stock and on the value of an investment in our common stock, and holders of our common stock could lose their investment in our common stock in its entirety. See “Notes (1) and (11)” to our consolidated financial statements for additional information regarding defaults under our secured loan agreements and their potential effects on our business, financial condition, and results of operations. |
11. Line of Credit Payable
11. Line of Credit Payable | 3 Months Ended |
Mar. 31, 2021 | |
Line of Credit Facility [Abstract] | |
Line of Credit Payable | Line of Credit Agreement Summary Line of Credit Description Original Principal Amount (in millions) Maturity Date Monthly Principal and Interest Payment Interest Rate Loan Purpose Amended Pilot Line of Credit ( in default $13.0 May 2020 ---- 14.00% Settlement payment to GEL, NPS purchase of crude oil from Pilot, and working capital Outstanding Principal, Debt Issue Costs, and Accrued Interest Line of credit payable, which represents outstanding principal and accrued interest, as of the dates indicated was as follows: March 31, December 31, 2021 2020 (in thousands) Amended Pilot Line of Credit (in default) $ 7,272 $ 8,145 Less: Interest payable, short-term (103 ) (103 ) $ 7,169 $ 8,042 Guarantees and Security Loan Description Guarantees Security Amended Pilot Line of Credit (in default) ● ● ● ● ● In an Agreement Regarding Attornment of Tank Leases dated April 30, 2019 between Veritex, LE, NPS, and Pilot, Veritex in its capacity as a secured lender of LE and LRM, agreed to permit the continued performance of obligations under a certain tank lease agreement if it were to foreclose on LE property that NPS was leasing from LE so long as certain conditions were met. The effectiveness of the Agreement Regarding Attornment of Tank Leases was subject to certain conditions, including the agreement and concurrence of the USDA that the Agreement Regarding Attornment of Tank Leases does not impair or void the LE Term Loan Due 2034 and LRM Term Loan Due 2034 or any associated guarantees. Veritex used commercially reasonable efforts to obtain such USDA concurrence, however, to date such USDA concurrence has not been provided. Covenants The Amended Pilot Line of Credit contains customary affirmative and negative covenants and events of default. Defaults Loan Description Event(s) of Default Covenant Violations Amended Pilot Line of Credit ( in default Failure of borrower or any guarantor to pay past due obligations; loan matured May 2020 --- As reflected in the table above and elsewhere in this report, we are in default under the Amended Pilot Line of Credit. Upon maturity of the Amended Pilot Line of Credit in May 2020, Pilot sent NPS, as borrower, and LRM, LEH, LE and Blue Dolphin, each a guarantor and collectively guarantors, a notice demanding the immediate payment of the Pilot Obligations. Pursuant to the Amended Pilot Line of Credit, commencing on May 4, 2020, the Pilot Obligations began to accrue interest at a default rate of fourteen percent (14%) per annum. Failure of the borrower or any guarantor of paying the past due Pilot Obligations constituted an event of default. Pilot expressly retained and reserved all its rights and remedies available to it at any time, including without limitation, the right to exercise all rights and remedies available to Pilot under the Amended Pilot Line of Credit or applicable law or equity. Pursuant to a June 1, 2020 notice, Pilot began applying Pilot’s payment obligations to NPS under each of (a) the Terminal Services Agreement (covering Tank Nos. 67, 71, 72, 73, 77, and 78), dated as of May 2019, between NPS and Pilot, and (b) the Terminal Services Agreement (covering Tank No. 56), dated as of June 1, 2019, between NPS and Pilot, against NPS’ payment obligations to Pilot under the Amended Pilot Line of Credit. Such tank lease setoff amounts only partially satisfy NPS’ obligations under the Amended Pilot Line of Credit, and Pilot expressly retained and reserved all its rights and remedies available to it at any time, including, without limitation, the right to exercise all rights and remedies available to Pilot under the Amended Pilot Line of Credit or applicable law or equity. For the three-month periods ended March 31, 2021 and 2020, the tank lease setoff amounts totaled $0.6 million and $0, respectively. For the three-month periods ended March 31, 2021 and 2020, the amount of interest NPS incurred under the Amended Pilot Line of Credit totaled $0.3 million and $0.4 million, respectively. On November 23, 2020, NPS and guarantors received notice from Pilot that the entry into the SBA EIDLs was a breach of the Amended Pilot Line of Credit and Pilot demanded full repayment of the Pilot Obligations, including through use of the proceeds of the SBA EIDLs. Pilot also notified the SBA that the liens securing the SBA EIDLs are junior to those securing the Pilot Obligations. While the SBA acknowledged this point and indicated a willingness to subordinate the SBA EIDLs, no further action has been taken by Pilot as of the filing date of this report. Any exercise by Pilot of its rights and remedies under the Amended Pilot Line of Credit would have a material adverse effect on our business operations, including crude oil and condensate procurement and our customer relationships; financial condition; and results of operations. NPS and guarantors continue in active dialogue with Pilot to reach a negotiated settlement, and we believe that Pilot hopes to continue working with NPS to settle the Pilot Obligations. NPS and guarantors are also working on the possible refinance of amounts owing and payable under the Amended Pilot Line of Credit. However, progress with potential lenders has been slow due to the ongoing COVID-19 pandemic. NPS’s ability to repay, refinance, replace or otherwise extend this credit facility is dependent on, among other things, business conditions, our financial performance, and the general condition of the financial markets. Given the current financial markets, we could be forced to undertake alternate financings, including a sale of additional common stock, negotiate for an extension of the maturity, or sell assets and delay capital expenditures in order to generate proceeds that could be used to repay such indebtedness. We can provide no assurance that we will be able to consummate any such transaction on terms that are commercially reasonable, on terms acceptable to us or at all. If new debt or other liabilities are added to the Company’s current consolidated debt levels, the related risks that it now faces could intensify. In the event we are unsuccessful in such endeavors, NPS may be unable to pay the amounts outstanding under the Amended Pilot Line of Credit, which may require us to seek protection under bankruptcy laws. In such a case, the trading price of our common stock and the value of an investment in our common stock could significantly decrease, which could lead to holders of our common stock losing their investment in our common stock in its entirety. |
12. ARO's
12. ARO's | 3 Months Ended |
Mar. 31, 2021 | |
Asset Retirement Obligation Disclosure [Abstract] | |
ARO's | Refinery and Facilities Management has concluded that there is no legal or contractual obligation to dismantle or remove the refinery and facilities assets. Management believes that the refinery and facilities assets have indeterminate lives under FASB ASC guidance for estimating AROs because dates or ranges of dates upon which we would retire these assets cannot reasonably be estimated at this time. When a legal or contractual obligation to dismantle or remove the refinery and facilities assets arises and a date or range of dates can reasonably be estimated for the retirement of these assets, we will estimate the cost of performing the retirement activities and record a liability for the fair value of that cost using present value techniques. Pipelines and Facilities and Oil and Gas Properties We have AROs associated with the decommissioning of our pipelines and facilities assets, as well as the plugging and abandonment of our oil and gas properties. We recorded a discounted liability for the fair value of an ARO with a corresponding increase to the carrying value of the related long-lived asset at the time the asset was installed or placed in service, and we depreciated the amount added to property and equipment and recognized accretion expense relating to the discounted liability over the remaining life of the asset. At March 31, 2021 and December 31, 2020, the liability was fully accreted. See “Note (16)” to our consolidated financial statements for disclosures related to decommissioning of our offshore pipelines and platform assets and related risks. ARO liability as of the dates indicated was as follows: March 31, December 31, 2021 2020 (in thousands) AROs, at the beginning of the period $ 2,370 $ 2,565 Liabilities settled - (195 ) 2,370 2,370 Less: AROs, current portion (2,370 ) (2,370 ) Long-term AROs, at the end of the period $ - $ - Liabilities settled reflects preparatory costs in the period associated with decommissioning our offshore pipelines and platform assets. |
13. Lease Obligations
13. Lease Obligations | 3 Months Ended |
Mar. 31, 2021 | |
Leases, Operating [Abstract] | |
Lease Obligatons | Operating Lease Office Lease An Affiliate, LEH, subleases a portion of the Houston office space. Sublease income received from LEH totaled approximately $0.01 million for both the three months ended March 31, 2021 and 2020. See “Note (3)” to our consolidated financial statements for additional disclosures related to the Affiliate sub-lease. The following table presents the lease-related assets and liabilities recorded on the consolidated balance sheet: March 31, December 31, Balance Sheet Location 2021 2020 (in thousands) Assets Operating lease ROU assets Operating lease ROU assets $ 787 $ 787 Less: Accumulated amortization on operating lease assets Operating lease ROU assets (329 ) (289 ) Total lease assets 458 498 Liabilities Current Operating lease Current portion of lease liabilities 199 194 199 194 Noncurrent Operating lease Long-term lease liabilities, net of current 319 370 Total lease liabilities $ 518 $ 564 Weighted average remaining lease term in years Operating lease 2.42 Weighted average discount rate Operating lease 8.25 % Finance leases 8.25 % The following table presents information related to lease costs for operating and finance leases: Three Months Ended March 31, 2021 2020 (in thousands) Operating lease costs $ 51 $ 51 Finance lease costs: Depreciation of leased assets - 6 Interest on lease liabilities - 2 Total lease cost $ 51 $ 59 The table below presents supplemental cash flow information related to leases as follows: Three Months Ended March 31, 2021 2020 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating lease $ 47 $ 88 Operating cash flows for finance leases $ - $ 2 Financing cash flows for finance leases $ - $ 6 As of March 31, 2021, maturities of lease liabilities for the periods indicated were as follows: March 31, Operating Lease (in thousands) 2021 $ 199 2022 220 2023 99 $ 518 Future minimum annual lease commitments that are non-cancelable: Operating March 31, Lease (in thousands) 2021 $ 233 2022 237 2023 101 $ 571 |
14. Income Taxes
14. Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Tax Provision The provision for income tax expense for the periods indicated was as follows: Three Months Ended March 31, 2021 2020 (in thousands) Current Federal $ - $ (15 ) State - - Deferred Federal 667 698 State - Change in valuation allowance (667 ) (698 ) Total provision for income taxes $ - $ (15 ) The TMT is treated as an income tax for financial reporting purposes. Deferred income taxes as of the dates indicated consisted of the following: March 31, December 31, 2021 2020 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 15,773 $ 15,258 Business interest expense 3,693 3,343 Start-up costs (crude oil and condensate processing facility) 488 509 ARO liability/deferred revenue 498 498 Other 4 3 Total deferred tax assets 20,456 19,611 Deferred tax liabilities: Basis differences in property and equipment (7,409 ) (7,230 ) Total deferred tax liabilities (7,409 ) (7,230 ) 13,047 12,381 Valuation allowance (13,047 ) (12,381 ) Deferred tax assets, net $ - $ - Deferred Income Taxes Deferred income tax balances reflect the effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis, as well as from NOL carryforwards. We state those balances at the enacted tax rates we expect will be in effect when taxes are paid. NOL carryforwards and deferred tax assets represent amounts available to reduce future taxable income. NOL Carryforwards NOL Carryforwards Net Operating Loss Carryforward Pre-Ownership Change Post-Ownership Change Total (in thousands) Balance at December 31, 2019 9,614 43,058 52,672 Net operating losses - 13,305 13,305 Balance at December 31, 2020 $ 9,614 $ 56,363 $ 65,977 Net operating losses (1,718 ) 2,456 738 Balance at March 31, 2021 $ 7,896 $ 58,819 $ 66,715 Valuation Allowance |
15. Earnings Per Share
15. Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | A reconciliation between basic and diluted income per share for the periods indicated was as follows: Three Months Ended March 31, 2021 2020 (in thousands except share and per share amounts) Net loss $ (3,174 ) $ (3,340 ) Basic and diluted income (loss) per share $ (0.25 ) $ (0.27 ) Basic and Diluted Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock 12,693,514 12,327,365 Diluted EPS is computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding. Diluted EPS for the three months ended March 31, 2021 and 2020 was the same as basic EPS as there were no stock options or other dilutive instruments outstanding. |
16. Commitments and Contingenci
16. Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Amended and Restated Operating Agreement See “Note (3)” to our consolidated financial statements for additional disclosures related to operation and management of all Blue Dolphin properties by an Affiliate under the Amended and Restated Operating Agreement. BSEE Offshore Pipelines and Platform Decommissioning BDPL has pipelines and platform assets that are subject to BSEE’s idle iron regulations. Idle iron regulations mandate lessees and rights-of-way holders to permanently abandon and/or remove platforms and other structures when they are no longer useful for operations. Until such structures are abandoned or removed, lessees and rights-of-way holders are required to inspect and maintain the assets in accordance with regulatory requirements. In December 2018, BSEE issued an INC to BDPL for failure to flush and fill Pipeline Segment No. 13101. Management met with BSEE on August 15, 2019 to address BDPL’s plans with respect to decommissioning its offshore pipelines and platform assets. BSEE proposed that BDPL re-submit permit applications for pipeline and platform decommissioning, along with a safe boarding plan for the platform, within six (6) months (no later than February 15, 2020), and develop and implement a safe boarding plan for submission with such permit applications. Further, BSEE proposed that BDPL complete approved, permitted work within twelve (12) months (no later than August 15, 2020). BDPL timely submitted permit applications for decommissioning of the subject offshore pipelines and platform assets to BSEE on February 11, 2020 and the USACOE on March 25, 2020. Although we planned to decommission the offshore pipelines and platform assets during 2020, decommissioning of these assets has been delayed due to cash constraints associated with the ongoing impact of COVID-19 and winter being the offseason for dive operations in the U.S. Gulf of Mexico. We cannot currently estimate when decommissioning may occur. In the interim, BDPL provides BSEE with updates regarding the project’s status. In April 2020, BSEE issued another INC to BDPL for failure to perform the required structural surveys for the GA-288C Platform. BDPL requested an extension to the INC related to the structural platform surveys, and BSEE approved BDPL’s extension request. The required platform surveys were completed, and the INC was resolved in June 2020. Lack of permit approvals does not relieve BDPL of its obligations to remedy the BSEE INCs or of BSEE’s authority to impose financial penalties. If BDPL fails to complete decommissioning of the offshore pipelines and platform assets and/or remedy the INCs within a timeframe determined to be prudent by BSEE, BDPL could be subject to regulatory oversight and enforcement, including but not limited to failure to correct an INC, civil penalties, and revocation of BDPL’s operator designation, which could have a material adverse effect on our earnings, cash flows and liquidity. We are currently unable to predict the outcome of the BSEE INCs. Accordingly, we have not recorded a liability on our consolidated balance sheet as of March 31, 2021. At both March 31, 2021 and December 31, 2020, BDPL maintained $2.4 million in AROs related to abandonment of these assets. Defaults Under Secured Loan Agreements with Third Parties See “Notes (1), (3), (10), and (11)” to our consolidated financial statements for additional disclosures related to defaults under our secured and unsecured debt agreements. Financing Agreements and Guarantees Indebtedness Guarantees Health, Safety and Environmental Matters The operations of certain Blue Dolphin subsidiaries are subject to extensive federal, state, and local environmental, health, and safety regulations governing, among other things, the generation, storage, handling, use and transportation of petroleum products and hazardous substances; the emission and discharge of materials into the environment; waste management; characteristics and composition of jet fuel and other products; and the monitoring, reporting and control of air emissions. These operations also require numerous permits and authorizations under various environmental, health, and safety laws and regulations. Failure to obtain and comply with these permits or environmental, health, or safety laws generally could result in fines, penalties or other sanctions, or a revocation of our permits. Legal Matters BOEM Additional Financial Assurance (Supplemental Pipeline Bonds) BDPL has historically maintained $0.9 million in financial assurance to BOEM for the decommissioning of its trunk pipeline offshore in federal waters. Following an agency restructuring of the financial assurance program, in March 2018 BOEM ordered BDPL to provide additional financial assurance totaling approximately $4.8 million for five (5) existing pipeline rights-of-way within sixty (60) calendar days. In June 2018, BOEM issued BDPL INCs for each right-of-way that failed to comply. BDPL appealed the INCs to the IBLA, and the IBLA granted multiple extension requests that extended BDPL’s deadline for filing a statement of reasons for the appeal with the IBLA. On August 9, 2019, BDPL timely filed its statement of reasons for the appeal with the IBLA. Considering BDPL’s August 2019 meeting with BOEM and BSEE, BDPL requested a stay in the IBLA matter until August 2020. The Office of the Solicitor of the U.S. Department of the Interior was agreeable to a 10-day extension while it conferred with BOEM on BDPL’s stay request. In late October 2019, BDPL filed a motion to request the 10-day extension, which motion was subsequently granted by the IBLA. The solicitor’s office consented to an additional 14-day extension for BDPL to file its reply, and BDPL filed a motion to request the 14-day extension in November 2019. The solicitor’s office indicated that BOEM would not consent to further extensions. However, the solicitor’s office signaled that BDPL’s adherence to the milestones identified in an August 15, 2019 meeting between management and BSEE may help in future discussions with BOEM related to the INCs. Decommissioning of these assets will significantly reduce or eliminate the amount of financial assurance required by BOEM, which may serve to partially or fully resolve the INCs. Although we planned to decommission the offshore pipelines and platform assets during 2020, decommissioning of these assets has been delayed due to cash constraints associated with the ongoing impact of COVID-19 and winter being the offseason for dive operations in the U.S. Gulf of Mexico. We cannot currently estimate when decommissioning may occur. In the interim, BDPL provides BOEM and BSEE with updates regarding the project’s status. BDPL’s pending appeal of the BOEM INCs does not relieve BDPL of its obligations to provide additional financial assurance or of BOEM’s authority to impose financial penalties. There can be no assurance that we will be able to meet additional financial assurance (supplemental pipeline bond) requirements. If BDPL is required by BOEM to provide significant additional financial assurance (supplemental pipeline bonds) or is assessed significant penalties under the INCs, we will experience a significant and material adverse effect on our operations, liquidity, and financial condition. We are currently unable to predict the outcome of the BOEM INCs. Accordingly, we have not recorded a liability on our consolidated balance sheet as of March 31, 2021. At both March 31, 2021 and December 31, 2020, BDPL maintained approximately $0.9 million in credit and cash-backed pipeline rights-of-way bonds issued to BOEM. Other Legal Matters |
17. Subsequent Events
17. Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | On May 11, 2021, BDSC and TR 801 Travis LLC reached an agreement to cure BDSC’s Houston office lease default. Under the terms of the arrangement, BDSC will pay TR 801 Travis LLC past due obligations, including rent installments and other charges totaling approximately $0.1 million (the “Past Due Obligations”), in equal monthly installments beginning June 1, 2021 and continuing through the August 31, 2023 lease expiration date. The Past Due Obligations shall be subject to an annual percentage rate of 4.50%. As revised, BDSC’ monthly base rent plus the prorated portion of the Past Due Obligations will approximate $0.02 million. BDEC EIDL On May 11, 2021, BDEC executed the standard loan documents required to secure an EIDL through the SBA for COVID-19 pandemic relief. The principal amount of the loan is $0.5 million. Proceeds will be used for working capital purposes. Interest on the loan accrues at the rate of 3.75% per annum and will accrue from the date of loan. Installment payments, including principal and interest, total $.003 million per month and will begin eighteen (18) months from the date of the loan. The balance of principal and interest is payable over a 30-year term. SBA EIDLs are not forgivable. Jonathan Carroll and LEH, an affiliate, provided guarantees of the debt. The debt is subject to certain customary covenants and default provisions. |
2. Principles of Consolidatio_2
2. Principles of Consolidation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | The preparation of our financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosures. Actual results could differ from those estimates. The ongoing COVID-19 pandemic and related governmental responses, volatility in commodity prices, and severe weather resulting from climate change have impacted and likely will continue to impact our business. We assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts of COVID-19 as of March 31, 2021 and through the filing date of this report. The accounting matters assessed included, but were not limited to, our allowance for doubtful accounts, inventory and related reserves, and the carrying value of long-lived assets. |
Cash and Cash Equivalents | Cash and cash equivalents represent liquid investments with an original maturity of three months or less. Cash balances are maintained in depository and overnight investment accounts with financial institutions that, at times, may exceed insured deposit limits. We monitor the financial condition of the financial institutions and have experienced no losses associated with these accounts. |
Restricted Cash | Restricted cash, current portion primarily represents a payment reserve account held by Veritex as security for payments under a loan agreement. Restricted cash, noncurrent represents funds held in the Veritex disbursement account for payment of construction related expenses to complete building new petroleum storage tanks. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable are presented net of any necessary allowance(s) for doubtful accounts. Receivables are recorded at the invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, when necessary, based on prior experience and other factors which, in management's judgment, deserve consideration in estimating bad debts. Management assesses collectability of the customer’s account based on current aging status, collection history, and financial condition. Based on a review of these factors, management establishes or adjusts the allowance for specific customers and the entire accounts receivable portfolio. We had an allowance for doubtful accounts of $0.1 million at both March 31, 2021 and December 31, 2020. |
Inventory | Inventory primarily consists of refined products, crude oil and condensate, and chemicals. Inventory is valued at lower of cost or net realizable value with cost determined by the average cost method, and net realizable value determined based on estimated selling prices less associated delivery costs. If the net realizable value of our refined products inventory declines to an amount less than our average cost, we record a write-down of inventory and an associated adjustment to cost of goods sold. See “Note (7)” to our consolidated financial statements for additional disclosures related to inventory. |
Property and Equipment | Refinery and Facilities Pipelines and Facilities Oil and Gas Properties CIP |
Leases | We evaluate if a contract is or contains a lease at inception of the contract. If we determine that a contract is or contains a lease, we recognize ROU asset and lease liability at the commencement date of the lease based on the present value of lease payments over the lease term. The present value of the lease payments is determined by using the implicit rate when readily determinable. If not determinable, we use the incremental borrowing rate to discount lease payments to present value. Lease terms include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. We recognize ROU assets and lease liabilities for leasing arrangements with terms greater than one year. We account for lease and non-lease components in a contract as a single lease component for all classes of underlying assets. We allocate the consideration in these contracts based on pricing information contained in the lease. Expense for an operating lease is recognized as a single lease cost on a straight-line basis over the lease term and is reflected in the appropriate income statement line item based on the leased asset’s function. Amortization expense of a finance lease ROU asset is recognized on a straight-line basis over the lesser of the useful life of the leased asset or the lease term. However, if the lease transfers ownership of the finance lease ROU asset to us at the end of the lease term, the finance lease ROU asset is amortized over the useful life of the leased asset. Amortization expense is reflected in ‘depreciation and amortization expense.’ Interest expense is incurred based on the carrying value of the lease liability and is reflected in ‘interest and other expense. |
Revenue Recognition | Refinery Operations Revenue We consider a variety of facts and circumstances in assessing the point of control transfer, including but not limited to: whether the purchaser can direct the use of the refined product, the transfer of significant risks and rewards, our rights to payment, and transfer of legal title. In each case, the term between the sale and when payment is due is not significant. Transportation, shipping, and handling costs incurred are included in cost of goods sold. Excise and other taxes that are collected from customers and remitted to governmental authorities are not included in revenue. Tolling and Terminaling Revenue We typically satisfy performance obligations for tolling and terminaling operations with the passage of time. We determine the transaction price at agreement inception based on the guaranteed minimum amount of revenue over the term of the agreement. We allocate the transaction price to the single performance obligation that exists under the agreement, and we recognize revenue in the amount for which we have a right to invoice. Generally, payment terms do not exceed 30 days. Revenue from tank storage customers may, from time to time, include fees for ancillary services, such as in-tank and tank-to-tank blending. These services are considered optional to the customer, and the price we charge for such services is not included in the fixed cost under the customer’s tank storage agreement. Ancillary services are considered a separate performance obligation by us under the tank storage agreement. The performance obligation is satisfied when the requested service has been performed in the applicable period. Deferred Revenue |
Income Taxes | Deferred income taxes are determined based on the differences between the financial reporting and tax basis of assets and liabilities, as well as operating losses and tax credit carryforwards using currently enacted tax rates and laws in effect for the year in which the differences are expected to reverse. We record a valuation allowance against deferred income tax assets if it is more likely than not that those assets will not be realized. The provision for income taxes comprises our current tax liability and change in deferred income tax assets and liabilities. Significant judgment is required in evaluating uncertain tax positions and determining its provision for income taxes. As of each reporting date, we consider new evidence, both positive and negative, to determine the realizability of deferred tax assets. We consider whether it is more likely than not that a portion or all the deferred tax assets will be realized, which is dependent upon the generation of future taxable income prior to the expiration of any NOL carryforwards. When we determine that it is more likely than not that a tax benefit will not be realized, a valuation allowance is recorded to reduce deferred tax assets. A significant piece of objective negative evidence evaluated was cumulative losses incurred over the three-year period ended March 31, 2021. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. Based on this evaluation, we recorded a valuation allowance against the deferred tax assets for which realization was not deemed more likely than not as of March 31, 2021 and December 31, 2020. In addition, we have NOL carryforwards that remain available for future use. The benefit of an uncertain tax position is recognized in the financial statements if it meets a minimum recognition threshold. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more-likely-than-not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At March 31, 2021 and December 31, 2020, there were no uncertain tax positions for which a reserve or liability was necessary. See “Note (14)” to our consolidated financial statements for more information related to income taxes. |
Impairment or Disposal of Long-Lived Assets | We periodically evaluate our long-lived assets for impairment. Additionally, we evaluate our long-lived assets when events or circumstances indicate that the carrying value of these assets may not be recoverable. The carrying value is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or group of assets. If the carrying value exceeds the sum of the undiscounted cash flows, an impairment loss equal to the amount by which the carrying value exceeds the fair value of the asset or group of assets is recognized. Significant management judgment is required in the forecasting of future operating results that are used in the preparation of projected cash flows and, should different conditions prevail or judgments be made, material impairment charges could be necessary. The market volatility of commodity prices as a result of the ongoing COVID-19 pandemic could affect the value of certain of our long-lived assets. Management evaluated our refinery and facilities assets for impairment as of March 31, 2021. No impairment was deemed necessary based upon this testing, and we did not record any impairment of our refinery and facilities assets for the periods presented. |
Asset Retirement Obligations | We record a liability for the discounted fair value of an ARO in the period incurred, and we also capitalize the corresponding cost by increasing the carrying amount of the related long-lived asset. The liability is accreted towards its future value each period, and the capitalized cost is depreciated over the useful life of the related asset. If the liability is settled for an amount other than the recorded amount, a gain or loss is recognized. We have concluded that there is no legal or contractual obligation to dismantle or remove the refinery and facilities assets. Further, we believe that these assets have indeterminate lives because dates or ranges of dates upon which we would retire these assets cannot reasonably be estimated at this time. When a legal or contractual obligation to dismantle or remove the refinery and facilities assets arises and a date or range of dates can reasonably be estimated for the retirement of these assets, we will estimate the cost of performing the retirement activities and record a liability for the fair value of that cost using present value techniques. We recorded an ARO liability related to future asset retirement costs associated with dismantling, relocating, or disposing of our offshore platform, pipeline systems, and related onshore facilities, as well as for plugging and abandoning wells and restoring land and sea-beds. Cost estimates for each of our assets were developed based upon regulatory requirements, structural makeup, water depth, reservoir characteristics, reservoir depth, equipment demand, current retirement procedures, and construction and engineering consultations. Estimating future costs are difficult and require management to make judgments that are subject to future revisions based upon numerous factors, including changing technology, political, and regulatory environments. We review our assumptions and estimates of future abandonment costs on an annual basis. See “Note (12)” to our consolidated financial statements for additional information related to AROs. |
Computation of Earnings Per Share | We present basic and diluted EPS. Basic EPS excludes dilution and is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted EPS is computed by dividing net income available to common stockholders by the diluted weighted average number of common shares outstanding, which includes the potential dilution that could occur if securities or other contracts to issue shares of common stock were converted to common stock that then shared in the earnings of the entity. The number of shares related to restricted stock included in diluted EPS is based on the “Treasury Stock Method.” We do not currently have issued options, warrants, or similar instruments. Convertible shares, if granted, are not included in the computation of earnings per share if anti-dilutive. See “Note (15)” to our consolidated financial statements for additional information related to EPS. |
New Pronouncements | New Pronouncements Adopted Codification Improvements. New Pronouncements Issued, Not Yet Effective . Other new pronouncements issued but not yet effective are not expected to have a material impact on our financial position, results of operations, or liquidity. |
1. Organization (Tables)
1. Organization (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Cash and cash equivalents and restricted cash | March 31, December 31, 2021 2020 (in thousands) Cash and cash equivalents $ 521 $ 549 Restricted cash (current portion) 48 48 Restricted cash, noncurrent - 514 Total $ 569 $ 1,111 |
3. Related-Party Transactions (
3. Related-Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Affiliate agreements/transactions | Agreement/Transaction Parties Effective Date Key Terms Jet Fuel Sales Agreement LEH - LE 04/01/2021 1-year term expiring earliest to occur of 03/31/2022 plus 30-day carryover or delivery of maximum jet fuel quantity; LEH bids on jet fuel contracts under preferential pricing terms due to a HUBZone certification Office Sub-Lease Agreement LEH - BDSC 01/01/2018 68-month term expiring 08/31/2023; office lease Houston, Texas; includes 6-month rent abatement period; rent approximately $0.02 million per month Amended and Restated Operating Agreement LEH – Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC 04/01/2020 3-year term; expires 04/01/2023 or notice by either party at any time of material breach or 90 days Board notice; LEH receives management fee of 5% of all consolidated operating costs, excluding crude costs, depreciation, amortization and interest, of Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC Related-Party Long-Term Debt Loan Description Parties Maturity Date Interest Rate Loan Purpose March Carroll Note (in default) Jonathan Carroll – Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital; reflects amounts owed to Jonathan Carroll under the guaranty fee agreements March Ingleside Note (in default) Ingleside – Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital June LEH Note (in default) LEH – Blue Dolphin Jan 2019 8.00% Blue Dolphin working capital; reflects amounts owed to LEH under the Amended and Restated Operating Agreement BDPL-LEH Loan Agreement (in default) LEH - BDPL Aug 2018 16.00% Blue Dolphin working capital Amended and Restated Guaranty Fee Agreement(2) Jonathan Carroll - LE -- 2.00% Tied to payoff of LE $25 million Veritex loan Amended and Restated Guaranty Fee Agreement(2) Jonathan Carroll - LRM -- 2.00% Tied to payoff of LRM $10 million Veritex loan (1) The original principal amount of the BDPL-LEH Loan Agreement was $4.0 million. (2) As a condition for our secured loan agreements with Veritex, Jonathan Carroll was required to personally guarantee repayment of borrowed funds and accrued interest. Under the guaranty fee agreements, Mr. Carroll is entitled to receive guaranty fees. The fees are payable 50% in cash and 50% in Common Stock. The Common Stock portion is paid quarterly. For the foreseeable future, management does not intend to pay Mr. Carroll the cash portion due to Blue Dolphin’s working capital deficits. The cash portion will continue to accrue and be added to the outstanding principal balance owed to Mr. Carroll under the March Carroll Note. |
Accounts payable, related party | March 31, December 31, 2021 2020 (in thousands) LEH June LEH Note (in default) $ 9,588 $ 9,446 BDPL-LEH Loan Agreement 6,974 6,814 LEH Total 16,562 16,260 Ingleside March Ingleside Note (in default) 1,031 1,013 Jonathan Carroll March Carroll Note (in default) 1,732 1,551 19,325 18,824 Less: Long-term debt, related party, current portion, in default (16,351 ) (16,010 ) Less: Accrued interest payable, related party (in default) (2,974 ) (2,814 ) $ - $ - |
Refinery operating expenses | Three Months Ended March 31, 2021 2020 (in thousands, except percents) Refinery operations LEH $ 16,080 27.1 % $ 17,715 28.6 % Third-Parties 42,403 71.3 % 43,182 69.6 % Tolling and terminaling Third-Parties 930 1.6 % 1,103 1.8 % $ 59,413 100.0 % $ 62,000 100.0 % |
Accrued interest expenses | Three Months Ended March 31, 2021 2020 (in thousands) Jonathan Carroll Guaranty Fee Agreements First Term Loan Due 2034 $ 108 $ 108 Second Term Loan Due 2034 45 45 March Carroll Note (in default) 29 23 LEH BDPL-LEH Loan Agreement (in default) 160 160 June LEH Note (in default) 182 25 Ingleside March Ingleside Note (in default) 14 20 $ 538 $ 381 |
4. Revenue and Segment Inform_2
4. Revenue and Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Business segment reporting | Three Months Ended March 31, 2021 2020 (in thousands) Net revenue (excluding intercompany fees and sales) Refinery operations $ 58,483 $ 60,897 Tolling and terminaling 930 1,103 Total net revenue 59,413 62,000 Intercompany fees and sales Refinery operations (566 ) (617 ) Tolling and terminaling 566 617 Total intercompany fees - - Operation costs and expenses(1) Refinery operations (59,289 ) (61,833 ) Tolling and terminaling (334 ) (255 ) Corporate and other (54 ) (59 ) Total operation costs and expenses (59,677 ) (62,147 ) Segment contribution margin (deficit) Refinery operations (1,372 ) (1,553 ) Tolling and terminaling 1,162 1,465 Corporate and other (54 ) (59 ) Total segment contribution margin (deficit) (264 ) (147 ) General and administrative expenses(2) Refinery operations (301 ) (304 ) Tolling and terminaling (68 ) (68 ) Corporate and other (413 ) (419 ) Total general and administrative expenses (782 ) (791 ) Depreciation and amortization Refinery operations (302 ) (288 ) Tolling and terminaling (340 ) (294 ) Corporate and other (51 ) (51 ) Total depreciation and amortization (693 ) (633 ) Interest and other non-operating expenses, net Refinery operations (598 ) (741 ) Tolling and terminaling (452 ) (770 ) Corporate and other (385 ) (243 ) Total interest and other non-operating expenses, net (1,435 ) (1,754 ) Income (loss) before income taxes Refinery operations (2,573 ) (2,886 ) Tolling and terminaling 302 333 Corporate and other (903 ) (772 ) Total loss before income taxes (3,174 ) (3,325 ) Income tax expense - (15 ) Net loss $ (3,174 ) $ (3,340 ) (1) Operation costs include cost of goods sold. Also, operation costs within: (a) tolling and terminaling includes terminal operating expenses and an allocation of other costs (e.g., insurance and maintenance) and (b) corporate and other includes expenses related to BDSC, BDPC and BDPL. (2) General and administrative expenses within refinery operations include the LEH operating fee. Three Months Ended March 31, 2021 2020 (in thousands) Capital expenditures Refinery operations $ - $ 6 Tolling and terminaling - 192 Corporate and other - - Total capital expenditures $ - $ 198 March 31, December 31, 2021 2020 (in thousands) Identifiable assets Refinery operations $ 45,186 $ 48,521 Tolling and terminaling 18,527 18,722 Corporate and other 1,839 2,057 Total identifiable assets $ 65,552 $ 69,300 |
5. Concentration of Risk (Table
5. Concentration of Risk (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Significant customers | Number Significant Customers % Total Revenue from Operations Portion of Accounts Receivable at March 31, March 31, 2021 4 90 % $ 0 March 31, 2020 4 94 % $0.6 million |
Percentages of all refined petroleum products sales to total sales | Three Months Ended March 31, 2021 2020 (in thousands, except percents) LPG mix $ 6 0.0 % $ - 0 % Naphtha 14,224 24.3 % 11,515 18.9 % Jet fuel 16,080 27.5 % 17,715 29.1 % HOBM 15,663 26.8 % 15,191 24.9 % AGO 12,510 21.4 % 16,476 27.1 % $ 58,483 100.0 % $ 60,897 100.0 % |
6. Prepaid Expenses and Other_2
6. Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid balances | March 31, December 31, 2021 2020 (in thousands) Prepaid insurance $ 556 $ 1,182 Prepaid crude oil and condensate 383 2,249 Prepaid easement renewal fees 93 99 Other prepaids 28 34 $ 1,060 $ 3,564 |
7. Inventory (Tables)
7. Inventory (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | March 31, December 31, 2021 2020 (in thousands) Crude oil and condensate $ 608 $ 463 Chemicals 175 271 Naphtha 164 120 AGO 121 133 Propane 25 15 LPG mix 6 6 HOBM - 54 $ 1,099 $ 1,062 |
8. Property, Plant and Equipm_2
8. Property, Plant and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | March 31, December 31, 2021 2019 (in thousands) Refinery and facilities $ 72,184 $ 72,184 Land 566 566 Other property and equipment 903 903 73,653 73,653 Less: Accumulated depletion, depreciation, and amortiation (15,861 ) (15,220 ) 57,792 58,433 CIP 4,064 4,064 $ 61,856 $ 62,497 |
9. Accrued Expenses and Other_2
9. Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Liabilities, Current [Abstract] | |
Accrued expenses and other current liabilities | March 31, December 31, 2021 2020 (in thousands) Unearned revenue from contracts with customers $ 3,489 $ 3,421 Unearned contract renewal income 400 500 Insurance 181 541 Other payable 176 252 Customer deposits 173 10 Taxes payable 137 58 Board of director fees payable 133 100 $ 4,689 $ 4,882 |
10. Third-Party Long-Term Debt
10. Third-Party Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Loan agreements | Loan Description Parties Original Principal Amount (in millions) Maturity Date Monthly Principal and Interest Payment Interest Rate Loan Purpose Veritex Loans(1) LE Term Loan Due 2034 ( in default LE-Veritex $25.0 Jun 2034 $0.2 million WSJ Prime + 2.75% Refinance loan; capital improvements LRM Term Loan Due 2034 ( in default LRM-Veritex $10.0 Dec 2034 $0.1 million WSJ Prime + 2.75% Refinance bridge loan; capital improvements Notre Dame Debt ( in default LE-Kissick $11.7 Jan 2018 No payments to date; payment rights subordinated 16.00% Working capital; reduced arbitration award payable to GEL SBA EIDLs LE Term Loan Due 2050(4) LE-SBA $0.15 Aug 2050 $0.0007 million 3.75% Working capital NPS Term Loan Due 2050(4) NPS-SBA $0.15 Aug 2050 $0.0007 million 3.75% Working capital Equipment Loan Due 2025(5) LE-Texas First $0.07 Oct 2025 $0.0013 million 4.50% Equipment Lease Conversion (1) Proceeds were placed in a disbursement account whereby Veritex makes payments for construction related expenses. Amounts held in the disbursement account are reflected on our consolidated balance sheets as restricted cash (current portion) and restricted cash (noncurrent). At March 31, 2021, restricted cash (current portion) was $0.05 million and restricted cash, noncurrent was $0. At December 31, 2020, restricted cash (current portion) was $0.05 million and restricted cash, noncurrent was $0.5 million. (2) LE originally entered into a loan agreement with Notre Dame Investors, Inc. in the principal amount of $8.0 million. The debt is currently held by John Kissick. Pursuant to a 2017 sixth amendment, the Notre Dame Debt was amended to increase the principal amount by $3.7 million; the additional principal was used to reduce the arbitration award payable to GEL by $3.6 million. (3) Pursuant to a 2015 subordination agreement, the holder of the Notre Dame Debt agreed to subordinate their right to payments, as well as any security interest and liens on the Nixon facility’s business assets, in favor of Veritex as holder of the LE Term Loan Due 2034. (4) Payments are deferred for the first twelve (12) months of the loan; the first payment is due August 2021; interest accrues during the deferral period. SBA EIDLs are not forgivable. (5) In May 2019, LE entered into a 12-month equipment rental agreement with the option to purchase the backhoe at maturity. The equipment rental agreement matured in May 2020. In October 2020, LE entered into the Equipment Loan Due 2025 to finance the purchase of the backhoe. The backhoe continues to be used at the Nixon facility. |
Long term debt | March 31, December 31, 2021 2020 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 23,104 $ 22,840 LRM Term Loan Due 2034 (in default) 9,601 9,473 Notre Dame Debt (in default) 9,613 9,413 SBA EIDLs LE Term Loan 2050 153 152 NPS Term Loan 2050 153 152 Equipment Loan Due 2025 65 71 42,689 42,101 Less: Current portion of long-term debt, net (33,724 ) (33,692 ) Less: Unamortized debt issue costs (1,718 ) (1,749 ) Less: Accrued interest payable (in default) (6,898 ) (6,305 ) $ 349 $ 355 |
Debt issue costs | March 31, December 31, 2021 2020 (in thousands) Veritex Loans LE Term Loan Due 2034 (in default) $ 1,674 $ 1,674 LRM Term Loan Due 2034 (in default) 768 768 Less: Accumulated amortization (724 ) (693 ) $ 1,718 $ 1,749 |
Accrued interest related to our long-term debt, net | March 31, December 31, 2021 2020 (in thousands) Notre Dame Debt (in default) $ 4,635 $ 4,435 Veritex Loans LE Term Loan Due 2034 (in default) 1,559 1,295 LRM Term Loan Due 2034 (in default) 698 571 SBA EIDLs LE Term Loan 2050 3 2 NPS Term Loan 2050 3 2 6,898 6,305 Less: Accrued interest payable (in default) (6,898 ) (6,305 ) Long-term Interest Payable, Net of Current Portion $ - $ - |
11. Line of Credit Payable (Tab
11. Line of Credit Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Line of Credit Facility [Abstract] | |
Line of credit agreement | Line of Credit Description Original Principal Amount (in millions) Maturity Date Monthly Principal and Interest Payment Interest Rate Loan Purpose Amended Pilot Line of Credit ( in default $13.0 May 2020 ---- 14.00% Settlement payment to GEL, NPS purchase of crude oil from Pilot, and working capital |
Line of credit | March 31, December 31, 2021 2020 (in thousands) Amended Pilot Line of Credit (in default) $ 7,272 $ 8,145 Less: Interest payable, short-term (103 ) (103 ) $ 7,169 $ 8,042 |
12. AROs (Tables)
12. AROs (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Asset Retirement Obligation Disclosure [Abstract] | |
Asset retirement obligations | March 31, December 31, 2021 2020 (in thousands) AROs, at the beginning of the period $ 2,370 $ 2,565 Liabilities settled - (195 ) 2,370 2,370 Less: AROs, current portion (2,370 ) (2,370 ) Long-term AROs, at the end of the period $ - $ - |
13. Lease Obligations (Tables)
13. Lease Obligations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lease-related assets and liabilities | March 31, December 31, Balance Sheet Location 2021 2020 (in thousands) Assets Operating lease ROU assets Operating lease ROU assets $ 787 $ 787 Less: Accumulated amortization on operating lease assets Operating lease ROU assets (329 ) (289 ) Total lease assets 458 498 Liabilities Current Operating lease Current portion of lease liabilities 199 194 199 194 Noncurrent Operating lease Long-term lease liabilities, net of current 319 370 Total lease liabilities $ 518 $ 564 Weighted average remaining lease term in years Operating lease 2.42 Weighted average discount rate Operating lease 8.25 % Finance leases 8.25 % |
Lease costs | Three Months Ended March 31, 2021 2020 (in thousands) Operating lease costs $ 51 $ 51 Finance lease costs: Depreciation of leased assets - 6 Interest on lease liabilities - 2 Total lease cost $ 51 $ 59 |
Supplemental cash flow information related to leases | Three Months Ended March 31, 2021 2020 (in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating lease $ 47 $ 88 Operating cash flows for finance leases $ - $ 2 Financing cash flows for finance leases $ - $ 6 |
Maturities of operating lease liabilities | March 31, Operating Lease (in thousands) 2021 $ 199 2022 220 2023 99 $ 518 |
Future minimum annual lease commitments | Operating March 31, Lease (in thousands) 2021 $ 233 2022 237 2023 101 $ 571 |
14. Income Taxes (Tables)
14. Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income tax expense | Three Months Ended March 31, 2021 2020 (in thousands) Current Federal $ - $ (15 ) State - - Deferred Federal 667 698 State - Change in valuation allowance (667 ) (698 ) Total provision for income taxes $ - $ (15 ) |
Deferred tax assets and deferred tax liabilities | March 31, December 31, 2021 2020 (in thousands) Deferred tax assets: NOL and capital loss carryforwards $ 15,773 $ 15,258 Business interest expense 3,693 3,343 Start-up costs (crude oil and condensate processing facility) 488 509 ARO liability/deferred revenue 498 498 Other 4 3 Total deferred tax assets 20,456 19,611 Deferred tax liabilities: Basis differences in property and equipment (7,409 ) (7,230 ) Total deferred tax liabilities (7,409 ) (7,230 ) 13,047 12,381 Valuation allowance (13,047 ) (12,381 ) Deferred tax assets, net $ - $ - |
NOL carryforwards | Net Operating Loss Carryforward Pre-Ownership Change Post-Ownership Change Total (in thousands) Balance at December 31, 2019 9,614 43,058 52,672 Net operating losses - 13,305 13,305 Balance at December 31, 2020 $ 9,614 $ 56,363 $ 65,977 Net operating losses (1,718 ) 2,456 738 Balance at March 31, 2021 $ 7,896 $ 58,819 $ 66,715 |
15. Earnings Per Share (Tables)
15. Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per share | Three Months Ended March 31, 2021 2020 (in thousands except share and per share amounts) Net loss $ (3,174 ) $ (3,340 ) Basic and diluted income (loss) per share $ (0.25 ) $ (0.27 ) Basic and Diluted Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock 12,693,514 12,327,365 |
1. Organization (Details)
1. Organization (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 521 | $ 549 | ||
Restricted cash (current portion) | 48 | 48 | ||
Restricted cash, noncurrent | 0 | 514 | ||
Total | $ 569 | $ 1,111 | $ 865 | $ 668 |
1. Organization (Details Narrat
1. Organization (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net loss | $ (3,174) | $ (3,340) | |
Net loss per common share | $ (0.25) | $ (0.27) | |
Working capital deficit | $ (74,300) | $ (72,300) |
2. Principles of Consolidatio_3
2. Principles of Consolidation and Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Allowance for doubtful accounts | $ 100 | $ 100 |
3. Related-Party Transactions_2
3. Related-Party Transactions (Details) | 3 Months Ended |
Mar. 31, 2021 | |
LEH - LE | |
Type | Jet Fuel Sales Agreement |
Effective date | 4/1/2020 |
Key terms/purpose | 1-year term expiring earliest to occur of 03/31/2022 plus 30-day carryover or delivery of maximum jet fuel quantity; LEH bids on jet fuel contracts under preferential pricing terms due to a HUBZone certification |
LEH - BDSC | |
Type | Office Sub-Lease Agreement |
Effective date | 1/1/2018 |
Key terms/purpose | 68-month term expiring 08/31/2023; office lease Houston, Texas; includes 6-month rent abatement period; rent approximately $0.02 million per month |
LEH - Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC | |
Type | Amended and Restated Operating Agreement |
Effective date | 4/1/2020 |
Key terms/purpose | 3-year term; expires 04/01/2023 or notice by either party at any time of material breach or 90 days Board notice; LEH receives management fee of 5% of all consolidated operating costs, excluding crude costs, depreciation, amortization and interest, of Blue Dolphin, LE, LRM, NPS, BDPL, BDPC and BDSC |
Jonathan Carroll - Blue Dolphin | |
Type | March Carroll Note (in default) |
Maturity date | Jan 2019 |
Interest rate | 8.00% |
Key terms/purpose | Blue Dolphin working capital; reflects amounts owed to Jonathan Carroll under the guaranty fee agreements |
Ingleside - Blue Dolphin | |
Type | March Ingleside Note (in default) |
Maturity date | Jan 2019 |
Interest rate | 8.00% |
Key terms/purpose | Blue Dolphin working capital |
LEH - Blue Dolphin | |
Type | June LEH Note (in default) |
Maturity date | Jan 2019 |
Interest rate | 8.00% |
Key terms/purpose | Blue Dolphin working capital; reflects amounts owed to LEH under the Amended and Restated Operating Agreement |
LEH - BDPL | |
Type | BDPL-LEH Loan Agreement (in default) |
Maturity date | Aug 2018 |
Interest rate | 16.00% |
Key terms/purpose | Blue Dolphin working capital |
Jonathan Carroll - LE | |
Type | Amended and Restated Guaranty Fee Agreement |
Interest rate | 2.00% |
Key terms/purpose | Tied to payoff of LE $25 million Veritex loan |
Jonathan Carroll - LRM | |
Type | Amended and Restated Guaranty Fee Agreement |
Interest rate | 2.00% |
Key terms/purpose | Tied to payoff of LRM $10 million Veritex loan |
3. Related-Party Transactions_3
3. Related-Party Transactions (Details 1) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Prepaid operating expenses, related party | $ 19,325 | $ 18,824 |
Less: Long-term debt, related party, current portion, in default | (16,351) | (16,010) |
Less: Interest payable, related party, in default | (2,974) | (2,814) |
Long-term debt - net of current portion, related party | 0 | 0 |
LEH | ||
Prepaid operating expenses, related party | 16,562 | 16,260 |
LEH | June LEH Note (in default) | ||
Prepaid operating expenses, related party | 9,588 | 9,446 |
LEH | BDPL Loan Agreement (in default) | ||
Prepaid operating expenses, related party | 6,974 | 6,814 |
Ingleside | March Ingleside Note (in default) | ||
Prepaid operating expenses, related party | 1,031 | 1,013 |
Jonathan Carroll | March Carroll Note (in default) | ||
Prepaid operating expenses, related party | $ 1,732 | $ 1,551 |
3. Related-Party Transactions_4
3. Related-Party Transactions (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total revenues | $ 59,413 | $ 62,000 |
Total revenues, percent | 100.00% | 100.00% |
LEH | ||
Refinery operations revenues | $ 16,080 | $ 17,715 |
Refinery operations revenues, percent | 27.10% | 28.60% |
Third Parties | ||
Refinery operations revenues | $ 42,403 | $ 43,182 |
Tolling and terminaling revenues | $ 930 | $ 1,103 |
Refinery operations revenues, percent | 71.30% | 69.60% |
Tolling and terminaling revenues, percent | 1.60% | 1.80% |
3. Related-Party Transactions_5
3. Related-Party Transactions (Details 3) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Interest expenses under loan and guarantee, related party | $ 538 | $ 381 |
Jonathan Carroll | First Term Loan Due 2034 | ||
Interest expenses under loan and guarantee, related party | 108 | 108 |
Jonathan Carroll | Second Term Loan Due 2034 | ||
Interest expenses under loan and guarantee, related party | 45 | 45 |
Jonathan Carroll | March Carroll Note (in default) | ||
Interest expenses under loan and guarantee, related party | 29 | 23 |
LEH | BDPL Loan Agreement (in default) | ||
Interest expenses under loan and guarantee, related party | 160 | 160 |
LEH | June LEH Note (in default) | ||
Interest expenses under loan and guarantee, related party | 182 | 25 |
Ingleside | March Ingleside Note (in default) | ||
Interest expenses under loan and guarantee, related party | $ 14 | $ 20 |
3. Related-Party Transactions_6
3. Related-Party Transactions (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |||
Accounts payable, related party | $ 155 | $ 155 | |
Lease payments received under the office sub-lease agreement with LEH | 10 | $ 10 | |
LEH operating fee | $ 100 | $ 100 |
4. Revenue and Segment Inform_3
4. Revenue and Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Net revenues (excluding intercompany fees and sales) | $ 59,413 | $ 62,000 | |
General and administrative expenses | 658 | 644 | |
Net loss | (3,174) | (3,340) | |
Identifiable assets | 65,552 | $ 69,300 | |
Refinery Operations | |||
Net revenues (excluding intercompany fees and sales) | 58,483 | 60,897 | |
Intercompany fees and sales | (566) | (617) | |
Operation costs and expenses | (59,289) | (61,833) | |
Segment contribution margin (deficit) | (1,372) | (1,553) | |
General and administrative expenses | (301) | (304) | |
Depreciation and amortization | (302) | (288) | |
Interest and other non-operating expenses, net | (598) | (741) | |
Income (loss) before income taxes | (2,573) | (2,886) | |
Capital expenditures | 0 | 6 | |
Identifiable assets | 45,186 | 48,521 | |
Tolling and Terminaling | |||
Net revenues (excluding intercompany fees and sales) | 930 | 1,103 | |
Intercompany fees and sales | 566 | 617 | |
Operation costs and expenses | (334) | (255) | |
Segment contribution margin (deficit) | 1,162 | 1,465 | |
General and administrative expenses | (68) | (68) | |
Depreciation and amortization | (340) | (294) | |
Interest and other non-operating expenses, net | (452) | (770) | |
Income (loss) before income taxes | 302 | 333 | |
Capital expenditures | 0 | 192 | |
Identifiable assets | 18,527 | 18,722 | |
Corporate & Other | |||
Operation costs and expenses | (54) | (59) | |
Segment contribution margin (deficit) | (54) | (59) | |
General and administrative expenses | (413) | (419) | |
Depreciation and amortization | (51) | (51) | |
Interest and other non-operating expenses, net | (385) | (243) | |
Income (loss) before income taxes | (903) | (772) | |
Capital expenditures | 0 | 0 | |
Identifiable assets | 183 | 2,057 | |
Total | |||
Net revenues (excluding intercompany fees and sales) | 59,413 | 62,000 | |
Intercompany fees and sales | 0 | 0 | |
Operation costs and expenses | (59,677) | (62,147) | |
Segment contribution margin (deficit) | (264) | (147) | |
General and administrative expenses | (782) | (791) | |
Depreciation and amortization | (693) | (633) | |
Interest and other non-operating expenses, net | (1,435) | (1,754) | |
Income (loss) before income taxes | (3,174) | (3,325) | |
Income tax expense | 0 | (15) | |
Net loss | (3,174) | (3,340) | |
Capital expenditures | 0 | $ 198 | |
Identifiable assets | $ 65,552 | $ 69,300 |
5. Concentration of Risk (Detai
5. Concentration of Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Concentration of risk | 100.00% | 100.00% |
4 Significant Customers | ||
Concentration of risk | 90.00% | 94.00% |
Portion of accounts receivable | $ 0 | $ 600 |
5. Concentration of Risk (Det_2
5. Concentration of Risk (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Total refined petroleum product sales | $ 58,483 | $ 60,897 |
Concentration risk | 100.00% | 100.00% |
LPG Mix | ||
Total refined petroleum product sales | $ 6 | $ 0 |
Concentration risk | 0.00% | 0.00% |
Naphtha | ||
Total refined petroleum product sales | $ 14,224 | $ 11,515 |
Concentration risk | 24.30% | 18.90% |
Jet Fuel | ||
Total refined petroleum product sales | $ 16,080 | $ 17,715 |
Concentration risk | 27.50% | 29.10% |
HOBM | ||
Total refined petroleum product sales | $ 15,663 | $ 15,191 |
Concentration risk | 26.80% | 24.90% |
AGO | ||
Total refined petroleum product sales | $ 12,510 | $ 16,476 |
Concentration risk | 21.40% | 27.10% |
5. Concentration of Risk (Det_3
5. Concentration of Risk (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Risks and Uncertainties [Abstract] | ||
Balances in excess of FDIC insurance limit | $ 300 | $ 300 |
6. Prepaid Expenses and Other_3
6. Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 556 | $ 1,182 |
Prepaid crude oil and condensate | 383 | 2,249 |
Prepaid easement renewal fees | 93 | 99 |
Other prepaids | 28 | 34 |
Total | $ 1,060 | $ 3,564 |
7. Inventory (Details)
7. Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Inventories, net | $ 1,099 | $ 1,062 |
Crude Oil and Condensate | ||
Inventories, net | 608 | 463 |
Chemicals | ||
Inventories, net | 175 | 271 |
Naphtha | ||
Inventories, net | 164 | 120 |
AGO | ||
Inventories, net | 121 | 133 |
Propane | ||
Inventories, net | 25 | 15 |
LPG Mix | ||
Inventories, net | 6 | 6 |
HOBM | ||
Inventories, net | $ 0 | $ 54 |
8. Property, Plant and Equipm_3
8. Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Abstract] | ||
Refinery and facilities | $ 72,184 | $ 72,184 |
Land | 566 | 566 |
Other property and equipment | 903 | 903 |
Total | 73,653 | 73,653 |
Less: accumulated depletion, depreciation and amortization | (15,861) | (15,220) |
Property, plant and equipment, gross | 57,792 | 58,433 |
Construction in progress | 4,064 | 4,064 |
Property, plant and equipment, net | $ 61,856 | $ 62,497 |
8. Property, Plant and Equipm_4
8. Property, Plant and Equipment, Net (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Interest cost capitalized | $ 0 | $ 0 |
9. Accrued Expenses and Other_3
9. Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Other Liabilities, Current [Abstract] | ||
Unearned revenue from contracts with customers | $ 3,489 | $ 3,421 |
Unearned contract renewal income | 400 | 500 |
Insurance | 181 | 541 |
Other payable | 176 | 252 |
Customer deposits | 173 | 10 |
Taxes payable | 137 | 58 |
Board of director fees payable | 133 | 100 |
Total | $ 4,689 | $ 4,882 |
10. Third-Party Long-Term Deb_2
10. Third-Party Long-Term Debt (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
LE Term Loan Due 2034 | |
Original principal amount | $ 25,000 |
Maturity date | Jun 2034 |
Interest rate | WSJ Prime + 2.75% |
LRM Term Loan Due 2034 | |
Original principal amount | $ 10,000 |
Maturity date | Dec 2034 |
Interest rate | WSJ Prime + 2.75% |
Notre Dame Debt (in default) | |
Original principal amount | $ 11,700 |
Maturity date | Jan 2018 |
Interest rate | 16.00% |
LE Term Loan Due 2050 | |
Original principal amount | $ 150 |
Maturity date | Aug 2050 |
Interest rate | 3.75% |
NPS Term Loan Due 2050 | |
Original principal amount | $ 150 |
Maturity date | Aug 2050 |
Interest rate | 3.75% |
Equipment Loan Due 2025 | |
Original principal amount | $ 70 |
Maturity date | Oct 2025 |
Interest rate | 4.50% |
10. Third-Party Long-Term Deb_3
10. Third-Party Long-Term Debt (Details 1) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Principal balance outstanding | $ 42,689 | $ 42,101 |
Less: current portion of long-term debt, net | (33,724) | (33,692) |
Less: unamortized debt issue costs | (1,718) | (1,749) |
Less: accrued interest payable (in default) | (6,898) | (6,305) |
Long term debt | 349 | 355 |
LE Term Loan Due 2034 | ||
Principal balance outstanding | 23,104 | 22,840 |
Less: accrued interest payable (in default) | (1,559) | (1,295) |
LRM Term Loan Due 2034 | ||
Principal balance outstanding | 9,601 | 9,473 |
Less: accrued interest payable (in default) | (698) | (571) |
Notre Dame Debt (in default) | ||
Principal balance outstanding | 9,613 | 9,413 |
Less: accrued interest payable (in default) | (4,635) | (4,435) |
LE Term Loan Due 2050 | ||
Principal balance outstanding | 153 | 152 |
Less: accrued interest payable (in default) | (3) | (2) |
NPS Term Loan Due 2050 | ||
Principal balance outstanding | 153 | 152 |
Less: accrued interest payable (in default) | (3) | (2) |
Equipment Loan Due 2025 | ||
Principal balance outstanding | $ 65 | $ 71 |
10. Third-Party Long-Term Deb_4
10. Third-Party Long-Term Debt (Details 2) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Less: accumulated amortization | $ (724) | $ (693) |
Unamortized debt issue costs, net | 1,718 | 1,749 |
LE Term Loan Due 2034 | ||
Unamortized debt issue costs, gross | 1,674 | 1,674 |
LRM Term Loan Due 2034 | ||
Unamortized debt issue costs, gross | $ 768 | $ 768 |
10. Third-Party Long-Term Deb_5
10. Third-Party Long-Term Debt (Details 3) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Accrued interest | $ 6,898 | $ 6,305 |
Less: accrued interest payable (in default) | (6,898) | (6,305) |
Long-term interest payable, net of current portion | 0 | 0 |
Notre Dame Debt (in default) | ||
Accrued interest | 4,635 | 4,435 |
LE Term Loan Due 2034 | ||
Accrued interest | 1,559 | 1,295 |
LRM Term Loan Due 2034 | ||
Accrued interest | 698 | 571 |
LE Term Loan Due 2050 | ||
Accrued interest | 3 | 2 |
NPS Term Loan Due 2050 | ||
Accrued interest | $ 3 | $ 2 |
11. Line of Credit Payable (Det
11. Line of Credit Payable (Details) - Amended Pilot Line Of Credit (in default) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Principal amount | $ 13,000 |
Maturity date | May 2020 |
Interest rate | 14.00% |
11. Line of Credit Payable (D_2
11. Line of Credit Payable (Details 1) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Line of credit, gross | $ 42,689 | $ 42,101 |
Less: interest payable, short term | (6,898) | (6,305) |
Amended Pilot Line Of Credit (in default) | ||
Line of credit, gross | 7,272 | 8,145 |
Less: interest payable, short term | (103) | (103) |
Line of credit | $ 7,169 | $ 8,042 |
12. ARO'S (Details)
12. ARO'S (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Asset Retirement Obligation Disclosure [Abstract] | ||
AROs, at the beginning of the period | $ 2,370 | $ 2,565 |
Liabilities settled | 0 | (195) |
Asset retirement obligations | 2,370 | 2,370 |
Less: asset retirement obligations, current portion | (2,370) | (2,370) |
Long-term asset retirement obligations, at the end of the period | $ 0 | $ 0 |
13. Lease Obligations (Details)
13. Lease Obligations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease right-of-use assets, gross | $ 787 | $ 787 |
Less: accumulated amortization on operating lease assets | (329) | (289) |
Operating lease right-of-use assets, net | 458 | 498 |
Current portion of operating lease | 199 | 194 |
Total current lease liability | 199 | 194 |
Long-term portion of operating lease | 319 | 370 |
Total lease liabilities | $ 518 | $ 564 |
Weighted average remaining lease term in years - operating lease | 2 years 5 months 1 day | |
Weighted average discount rate - operating lease | 8.25% | |
Weighted average discount rate - finance lease | 8.25% |
13. Lease Obligations (Details
13. Lease Obligations (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease costs | $ 51 | $ 51 |
Depreciation of leased assets | 0 | 6 |
Interest on lease liabilities | 0 | 2 |
Total lease cost | $ 51 | $ 59 |
13. Lease Obligations (Detail_2
13. Lease Obligations (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating cash flows for operating lease | $ 47 | $ 88 |
Operating cash flows for finance leases | 0 | 2 |
Financing cash flows for finance leases | $ 0 | $ 6 |
13. Lease Obligations (Detail_3
13. Lease Obligations (Details 3) $ in Thousands | Mar. 31, 2021USD ($) |
Operating Lease | |
2021 | $ 199 |
2022 | 220 |
2023 | 99 |
Total minimum rental payments | $ 518 |
13. Lease Obligations (Detail_4
13. Lease Obligations (Details 4) $ in Thousands | Mar. 31, 2021USD ($) |
Leases [Abstract] | |
2021 | $ 233 |
2022 | 237 |
2023 | 101 |
Total | $ 571 |
14. Income Taxes (Details)
14. Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Current federal | $ 0 | $ (15) |
Current state | 0 | 0 |
Deferred federal | 667 | 698 |
Deferred state | 0 | 0 |
Change in valuation allowance | (667) | (698) |
Total provision for income taxes | $ 0 | $ (15) |
14. Income Taxes (Details 1)
14. Income Taxes (Details 1) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
NOL and capital loss carryforwards | $ 15,773 | $ 15,258 |
Business interest expense | 3,693 | 3,343 |
Start-up costs (crude oil and condensate processing facility) | 488 | 509 |
ARO liability/deferred revenue | 498 | 498 |
Other | 4 | 3 |
Total deferred tax assets | 20,456 | 19,611 |
Deferred tax liabilities: | ||
Basis differences in property and equipment | (7,409) | (7,230) |
Total deferred tax liabilities | (7,409) | (7,230) |
Deferred tax assets, net | 13,047 | 12,381 |
Valuation allowance | (13,047) | (12,381) |
Deferred tax assets, net | $ 0 | $ 0 |
14. Income Taxes (Details 2)
14. Income Taxes (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Beginning balance | $ 65,977 | $ 52,672 |
Net operating losses | 738 | 13,305 |
Ending balance | 66,715 | 65,977 |
Pre-Ownership Change | ||
Beginning balance | 9,614 | 9,614 |
Net operating losses | (1,718) | 0 |
Ending balance | 7,896 | 9,614 |
Post-Ownership Change | ||
Beginning balance | 56,363 | 43,058 |
Net operating losses | 2,456 | 13,305 |
Ending balance | $ 58,819 | $ 56,363 |
15. Earnings per share (Details
15. Earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (3,174) | $ (3,340) |
Basic and diluted income (loss) per share | $ (.25) | $ (.27) |
Basic and Diluted | ||
Weighted average number of shares of common stock outstanding and potential dilutive shares of common stock | 12,693,514 | 12,327,365 |