Filing identity and reporting period
The supplied filing is BioFuel Energy Corp.’s unaudited Form 10-Q for the quarter ended March 31, 2014—not a Green Brick Partners, Inc. filing. The company reported as a shell company after transferring its ethanol plants in November 2013; its remaining activity was limited to consulting services.
Financial results and liquidity
| Metric | Q1 2014 | Q1 2013 / comparison |
|---|---|---|
| Revenue | $0.1 million | None |
| General and administrative expense | $0.9 million | $1.3 million |
| Loss from continuing operations | $0.8 million | $1.3 million |
| Loss from discontinued operations | None | $4.0 million |
| Net loss attributable to common stockholders | $0.7 million; $0.13 per share | $4.6 million; $0.87 per share |
| Cash used in operating activities | $2.8 million | Cash provided of $0.8 million |
At March 31, 2014, cash and cash equivalents were $10.1 million on the balance sheet, versus $12.6 million at December 31, 2013. The cash-flow statement reports period-end cash of $10.1 million including $24,000 classified as assets held for sale. Current assets were $10.3 million and current liabilities $0.1 million. Total liabilities were $0.1 million; the filing says the ethanol facilities were transferred to lender designees in full satisfaction of the senior debt obligations. No material debt balance is reported.
The company reported no income-tax provision and a $179.0 million federal net operating loss carryforward, fully reserved against. No meaningful margin measure is provided for the continuing consulting activity.
Material changes and unusual items
- Compared with Q1 2013, revenue reflects consulting services rather than ethanol operations. The prior-year quarter included $89.0 million of ethanol-plant sales and a $4.0 million discontinued-operations loss; the plants had been disposed of in November 2013.
- Q1 2014 operating cash use included a $4.2 million severance payment under the change-of-control plan, partly offset by $2.2 million of cash sources from collecting deposits.
- On March 28, 2014, Greenlight Capital and the Brickman parties submitted a preliminary, non-binding proposal for BioFuel Energy to acquire JBGL real-estate and homebuilding entities for $275 million in cash and stock. An independent special committee was evaluating the proposal and alternatives; completion was not assured.
- The board adopted a shareholder rights plan with a 4.99% ownership trigger, citing protection of tax attributes, including NOLs. Rights were scheduled to expire no later than March 27, 2017.
Outlook, risks, and controls
Management expected consulting revenue to be negligible in 2014 and identified general corporate expenses as the principal liquidity need. The filing provides no earnings or cash-flow guidance. Risks include uncertainty over the proposed transaction, limited operating revenue and ongoing cash use, and potential limits on realizing tax assets. The company also disclosed that its $10.1 million cash balance was held at two financial institutions in amounts exceeding FDIC insurance limits. Management reported effective disclosure controls and no material change in internal control over financial reporting during the quarter.
Investor facts to verify
- Confirm the intended issuer: this filing is for BioFuel Energy Corp., not Green Brick Partners, Inc.
- Check subsequent filings for the outcome and final terms, if any, of the JBGL proposal and the special committee’s review.
- Review later disclosures on cash consumption, consulting revenue, and the company’s liquidity needs.
- Verify the status and potential usability of the $179.0 million NOL carryforward, including any ownership-change limitations.