Blue Dolphin Energy Co. Files 10-Q for Q1 2024

TL;DR

<b>Blue Dolphin Energy Co. reported its Q1 2024 results, highlighting restricted cash, preferred stock status, and details on various debt obligations.</b>

AI Summary

BLUE DOLPHIN ENERGY CO (BDCO) filed a Quarterly Report (10-Q) with the SEC on May 15, 2024. Restricted cash, noncurrent totaled $1.0 million at March 31, 2024, held in a payment reserve account. Blue Dolphin Energy Co. has 2,500,000 shares of preferred stock authorized, with none issued or outstanding as of March 31, 2024. Fees associated with an intercompany tolling agreement related to naphtha volumes were incurred. General and administrative expenses within refinery operations include the LEH operating fee and other operating expenses. The Kissick Debt principal increased by $3.7 million pursuant to a 2017 sixth amendment, with first payment due November 2024.

Why It Matters

For investors and stakeholders tracking BLUE DOLPHIN ENERGY CO, this filing contains several important signals. The company's financial health is partially indicated by its restricted cash balance and the structure of its preferred stock, which currently has no shares issued. Details on debt modifications and payment schedules, such as the Kissick Debt and Blue Dolphin Term Loan Due 2051, provide insight into future financial commitments.

Risk Assessment

Risk Level: medium — BLUE DOLPHIN ENERGY CO shows moderate risk based on this filing. The company has several debt instruments with complex repayment structures and potential increases in principal, indicating a medium level of financial risk.

Analyst Insight

Monitor the company's cash flow and debt repayment schedules closely, particularly the upcoming payments for the Kissick Debt and Blue Dolphin Term Loan Due 2051.

Key Numbers

• 1.0 — Restricted cash, noncurrent (As of March 31, 2024.)
• 2,500,000 — Authorized preferred stock shares (As of March 31, 2024.)
• 0 — Issued and outstanding preferred stock shares (As of March 31, 2024.)
• 3.7 — Increase in Kissick Debt principal (Million USD, pursuant to a 2017 sixth amendment.)
• 1.5 — Increase in Blue Dolphin Term Loan Due 2051 principal (Million USD.)

Key Players & Entities

• BLUE DOLPHIN ENERGY CO (company) — Filer
• Veritex (company) — Holds restricted cash in a payment reserve account.
• Kissick Debt (dollar_amount) — Principal increased by $3.7 million.
• Blue Dolphin Term Loan Due 2051 (dollar_amount) — Principal increased by $1.5 million.
• LE (company) — Entered into equipment rental and loan agreements.

FAQ

Risk Factors

• Debt Obligations [medium — financial]: The company has multiple debt instruments with varying terms, including principal increases and deferred payments, which could impact future liquidity.
• Tolling Agreement Fees [low — operational]: Fees associated with an intercompany tolling agreement related to naphtha volumes are incurred, impacting operational costs.
• Restricted Cash [low — financial]: A significant portion of cash is held in a restricted payment reserve account, potentially limiting immediate availability.

Glossary

Restricted cash, noncurrent

Cash that is not readily available for general use by the company. (Indicates funds set aside for specific purposes, such as payment reserves.)

Preferred stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock. (Details the authorized but unissued shares, indicating potential future capital structure changes.)

Tolling agreement

An agreement where one party provides raw materials and another processes them for a fee. (Highlights costs associated with processing naphtha volumes.)

Key Financial Figures

• $0.01 — er of shares of common stock, par value $0.01 per share, outstanding as of May 15, 20
• $5.0 million — ing capital purposes up to a maximum of $5.0 million in the aggregate; initial term expires
• $4.0 million — LEH in the original principal amount of $4.0 million; interest accrues at 16.00% annually; g
• $0.003 million — ing August 31, 2024; rent approximately $0.003 million per month; management is currently expl
• $0.5 million — SBA in the original principal amount of $0.5 million; the note was modified in February 2022
• $1.5 million — 022 to increase the principal amount by $1.5 million to $2.0 million; additional principal u
• $2.0 million — the principal amount by $1.5 million to $2.0 million; additional principal used for working
• $0.01 million — monthly principal and interest payment $0.01 million; payments deferred first thirty (30) mo
• $0.7 million — rst in the original principal amount of $0.7 million; loan represents conversion of prior eq
• $0.0013 million — monthly principal and interest payment $0.0013 million; security includes first priority lien
• $8.0 million — nc. in the original principal amount of $8.0 million; debt held by John Kissick (the "Kissic
• $3.7 million — ded to increase the principal amount by $3.7 million; the additional principal was used to r
• $11.2 million — he Kissick Debt to satisfy in full LE's $11.2 million obligation to Kissick Noteholder under
• $0.50 — by barge; three-year term; tank rental $0.50 per bbl per month. LE Term Loan Due 20
• $25.0 million — ors in the original principal amount of $25.0 million; Jonathan Carroll required to provide p

Filing Documents

• bdco20230930_10q.htm (10-Q) — 1867KB
• ex_618276.htm (EX-31.1) — 13KB
• ex_618277.htm (EX-32.1) — 6KB
• pic01.jpg (GRAPHIC) — 3KB
• 0001437749-24-017113.txt (&nbsp;) — 9420KB
• bdco-20240331.xsd (EX-101.SCH) — 88KB
• bdco-20240331_cal.xml (EX-101.CAL) — 56KB
• bdco-20240331_def.xml (EX-101.DEF) — 547KB
• bdco-20240331_lab.xml (EX-101.LAB) — 394KB
• bdco-20240331_pre.xml (EX-101.PRE) — 583KB
• bdco20230930_10q_htm.xml (XML) — 1785KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION ITEM 1.

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 13 Consolidated Balance Sheets (Unaudited) 13 Consolidated Statements of Income (Unaudited) 14 Consolidated Statements of Stockholders ' Equity (Unaudited) 15 Consolidated Statements of Cash Flows (Unaudited) 16

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 17 ITEM 2. MANAGEMENT ' S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 40 ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 57 ITEM 4.

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 57

- OTHER INFORMATION

PART II - OTHER INFORMATION ITEM 1.

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 58 ITEM 1A.

RISK FACTORS

RISK FACTORS 59 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 60 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 60 ITEM 4. MINE SAFETY DISCLOSURES 60 ITEM 5. OTHER INFORMATION 60 ITEM 6. EXHIBITS 61

SIGNATURES

SIGNATURES 62 Blue Dolphin Energy Company March 31, 2024 Page 2 Table of Contents Glossary of Terms Throughout this Quarterly Report on Form 10-Q, we have used the following terms: Affiliate . Refers, either individually or collectively, to certain related parties including Jonathan Carroll, Chairman and Chief Executive Officer of Blue Dolphin, and his affiliates (including Ingleside and Lazarus Capital) and/or LEH and its affiliates (including LMT and LTRI). Together, Jonathan Carroll and LEH owned 83% of the Common Stock as of the filing date of this report. Affiliate Revolving Credit Agreement . A credit agreement between LEH and its affiliates and Blue Dolphin and its subsidiaries effective April 1, 2024; extends credit to Blue Dolphin and its subsidiaries, at LEH's sole discretion, for working capital purposes up to a maximum of $5.0 million in the aggregate; initial term expires on April 30, 2025; automatically renews for one year periods unless sooner terminated by the parties; interest accrues at the WSJ Prime rate plus 2.00%, compounded annually, and paid quarterly. AMT . Alternative Minimum Tax. Amended and Restated Jet Fuel Sales Agreement . Product agreement for the sale of jet fuel by LE to LEH; effective April 1, 2023; one-year automatic renewals; currently renewed through March 31, 2025; LEH purchases all jet fuel produced by LE; LEH sells the jet fuel to the DLA under preferential pricing terms due to its HUBZone certification. ARO . Asset retirement obligations. ASU . Accounting Standards Update. AGO . Atmospheric gas oil (also known as atmospheric tower bottoms) is the heaviest product boiled by a crude distillation tower operating at atmospheric pressure. This fraction ordinarily sells as distillate fuel oil, either in pure form or blended with cracked stocks. Certain ethylene plants, called heavy oil crackers, can take AGO as feedstock. bbl . Barrel; a unit of volume equal to 42 U.S. gallons. BDEX . Blue Dolphin Exploration Com

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