Vertex Energy Inc. (Form: 8-K, Received: 01/25/2022 09:08:12)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): January 24, 2022

VERTEX ENERGY, INC.

(Exact name of registrant as specified in its charter)

Nevada	001-11476	94-3439569
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1331 Gemini Street

Suite 250

Houston,Texas

77058

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (866) 660-8156

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock,

$0.001 Par Value Per Share

VTNR

The NASDAQ
Stock Market LLC

(Nasdaq Capital Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01.

Entry Into a Material Definitive Agreement.

The information set forth in Item 1.02 below is hereby incorporated by reference into this Item 1.01.

Item 1.02.

Termination of a Material Definitive Agreement.

As previously disclosed in the Current Report on Form 8-K filed by Vertex Energy, Inc. (the “Company”, “we”, or “us”) with the Securities and Exchange Commission on June 29, 2021, on June 29, 2021, the Company entered into an Asset Purchase Agreement (the “Sale Agreement”) with Vertex Energy Operating, LLC, our wholly-owned subsidiary (“Vertex Operating”) and our direct or indirect subsidiaries, Vertex Refining LA, LLC (“Vertex LA”), Vertex Refining OH, LLC (“Vertex OH”), Cedar Marine Terminals, L.P. (“CMT”), H & H Oil, L.P. (“H&H”), and Vertex Recovery, L.P. (“Vertex LP”, and together with the Company, Vertex Operating, Vertex LA, Vertex OH, CMT and H&H, the “Company Parties”), and Safety-Kleen Systems, Inc. (“Safety-Kleen”).

Pursuant to the Sale Agreement, Safety-Kleen agreed to acquire the Company’s Marrero used oil refinery in Louisiana (currently owned by Vertex LA); our Heartland used oil refinery in Ohio (currently owned by Vertex OH); our H&H and Heartland used motor oil collections business; our oil filters and absorbent materials recycling facility in East Texas; and the rights CMT holds to a lease on the Cedar Marine terminal in Baytown, Texas.

On January 24, 2022, each of the Company Parties and Safety-Kleen entered into an Asset Purchase Termination Agreement (the “Termination Agreement”) pursuant to which the Sale Agreement was terminated. Pursuant to the terms of the Termination Agreement, the Company agreed to pay a termination fee to Safety-Kleen of $3,000,000. Immediately upon receipt of such termination fee, which the Company paid simultaneously with the execution of the Termination Agreement, the Sale Agreement was terminated and is of no further force or effect, and with no further liability to any party thereunder, other than certain confidentiality obligations of the parties and ongoing liability for any willful or intentional breach of, or non-compliance with, the Sale Agreement.

The description of the Termination Agreement in this Current Report on Form 8-K does not purport to be complete and is qualified in its entirety by reference to the full text of the Termination Agreement, which is filed as Exhibit 10.1 hereto and incorporated into this Item 1.02 by reference in its entirety.

Item 7.01.

Regulation FD Disclosure.

On January 25, 2022, the Company issued a press release announcing the termination of the Sale Agreement. A copy of the press release is attached hereto as Exhibit 99.1, and is incorporated in this Item 7.01 by reference.

The information responsive to Item 7.01 of this Form 8-K and Exhibit 99.1, attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended or the Exchange Act, except as expressly set forth by specific reference in such a filing.

The press release furnished as Exhibit 99.1 to this Current Report on Form 8-K, contains forward-looking statements within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and assumptions. These forward-looking statements relate to the Company’s current expectations and are subject to the limitations and qualifications set forth in the press release as well as in the Company’s other filings with the Securities and Exchange Commission, including, without limitation, that actual events and/or results may differ materially from those projected in such forward-looking statements. These statements also involve known and unknown risks, which may cause the results of the Company, its divisions and concepts to be materially different than those expressed or implied in such statements. Accordingly, readers should not place undue reliance on any forward-looking statements. Forward-looking statements may include comments as to the Company’s beliefs and expectations as to future financial performance, events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside the Company’s control. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Cautionary Statement Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s periodic and current filings with the SEC, including the Form 10-Qs and Form 10-Ks, filed with the SEC and available at www.sec.gov. Forward-looking statements speak only as of the date they are made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date, except as otherwise provided by law.

Item 9.01.

Financial Statements and Exhibits.

Exhibit No.		Description

10.1*		Asset Purchase Termination Agreement among Vertex Energy, Inc., Vertex Energy Operating, LLC, Vertex Refining LA, LLC, Vertex Refining OH, LLC, Cedar Marine Terminals, L.P., H & H Oil, L.P., Vertex Recovery, L.P., and Safety-Kleen Systems, Inc. dated as of January 24, 2022
99.1**		Press release dated January 25, 2022
104		Inline XBRL for the cover page of this Current Report on Form 8-K

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	VERTEX ENERGY, INC.

Date: January 25, 2022	By:	/s/ Chris Carlson
		Chris Carlson
		Chief Financial Officer

Vertex Energy Form 8-K

Exhibit 10.1

Asset Purchase Termination Agreement

This Asset Purchase Termination Agreement (this “Agreement”), dated as of January 24, 2022, is entered into by and among Safety-Kleen Systems, Inc., a Wisconsin corporation (“Buyer”), Vertex Energy, Inc., a Nevada corporation (“Vertex Energy”), Vertex Energy Operating, LLC, a Texas limited liability company (“Parent”), Vertex Refining LA, LLC, a Louisiana limited liability company (“VRLA”), Vertex Refining OH, LLC, an Ohio limited liability company (“VROH”), Cedar Marine Terminals, L.P., a Texas limited partnership (“CMT”), H & H Oil, L.P., a Texas limited partnership (“H&H”), Vertex Recovery, L.P., a Texas limited partnership (“VRLP”, and, together with Vertex Energy, Parent, VRLA, VROH, CMT and H&H, each a “Seller Party” and, collectively, the “Seller Parties”). Buyer and the Seller Parties are referred to each as a “Party” and collectively as the “Parties”.

WHEREAS, the Parties are party to that certain Asset Purchase Agreement dated as of June 29, 2021 (the “Purchase Agreement”);

WHEREAS, pursuant to Section 9.01(a) of the Purchase Agreement, the Purchase Agreement may be terminated at any time prior to the Closing by the mutual written consent of Parent and Buyer; and

WHEREAS, the Parties desire to terminate the Purchase Agreement, subject to the terms contained herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

Simultaneously with the execution hereof, Parent agrees to pay Buyer, via wire transfer to an account specified in advance by Buyer, a termination fee in the amount of Three Million Dollars ($3,000,000).

Immediately upon receipt by Buyer of the foregoing amount, the Purchase Agreement shall terminate, and be of no further force or effect, and there shall be no liability thereunder on the part of any Party hereto or thereto or any of their respective Affiliates, successors and assigns, except to the extent provided in Section 9.02 of the Purchase Agreement (it being acknowledged and agreed that clause (b) of Section 9.02 is not applicable in connection with the termination contemplated herein).

Each Party hereby represents and warrants to the other Parties hereto that such party (a) has not assigned or otherwise transferred any of its rights or interests in the Purchase Agreement, and (b) has the full right and authority to execute and deliver this Agreement, and each person signing on behalf of such Party is authorized to do so.

This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction). This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

[remainder of page left intentionally blank]

IN WITNESS WHEREOF, the Parties hereto have caused this Asset Purchase Termination Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

SELLER PARTIES:

VERTEX ENERGY, INC.

By: /s/ Benjamin P. Cowart

Name: Benjamin P. Cowart

Title: President and Chief Executive Officer

VERTEX ENERGY OPERATING, LLC

By: /s/ Benjamin P. Cowart

Name: Benjamin P. Cowart

Title: President and Chief Executive Officer

VERTEX REFINING LA, LLC

By: /s/ Benjamin P. Cowart

Name: Benjamin P. Cowart

Title: President and Chief Executive Officer

VERTEX REFINING OH, LLC

By: /s/ Benjamin P. Cowart

Name: Benjamin P. Cowart

Title: President and Chief Executive Officer

CEDAR MARINE TERMINALS, L.P.

By: Vertex II GP, LLC

Its: General Partner

By: /s/ Benjamin P. Cowart

Name: Benjamin P. Cowart

Title: President and Chief Executive Officer

H & H OIL, L.P.

By: Vertex Recovery LP, its general partner

By: Vertex II GP, LLC, its general partner

By: Vertex Energy Operating LLC, its Managing Member

By: /s/ Benjamin P. Cowart

Name: Benjamin P. Cowart

Title: President and Chief Executive Officer

VERTEX RECOVERY, L.P.

By: Vertex II GP, LLC, its general partner

By: Vertex Energy Operating LLC, its Managing Member

By: /s/ Benjamin P. Cowart

Name: Benjamin P. Cowart

Title: President and Chief Executive Officer

BUYER:

SAFETY-KLEEN SYSTEMS, INC.

By: /s/ Eric W. Gerstenberg

Name: Eric W. Gerstenberg

Title: President

Vertex Energy Form 8-K

Exhibit 99.1

VERTEX ENERGY ANNOUNCES VOLUNTARY TERMINATION OF

ASSET DIVESTITURE AGREEMENT WITH SAFETY-KLEEN SYSTEMS

HOUSTON, TX., January 25, 2022 -- Vertex Energy, Inc. (NASDAQ: VTNR, “Vertex” or the “Company”), a leading specialty refiner and marketer of high-quality refined products, today announced that the Company has entered into a mutual agreement with Safety-Kleen Systems, Inc. ("Safety-Kleen"), a subsidiary of Clean Harbors, Inc. ("Clean Harbors"), to terminate the previously announced planned divestiture of its used motor oil collection and recycling assets.

Following a prolonged period of regulatory review with the U.S. Federal Trade Commission, which both companies were actively engaged in, Vertex has determined that it is no longer in its best interest to pursue the transaction further, and Safety-Kleen has agreed to the termination.

“Given the considerable time and resources required to support what has become a costly and time consuming regulatory review of our planned asset divestiture to Safety-Kleen, we have decided to terminate the sale,” stated Benjamin P. Cowart, President and CEO of Vertex.

“Following the recent, successful completion of our convertible senior notes offering, and together with a planned future working capital facility, we expect to be sufficiently capitalized to fund both the previously announced planned acquisition of the Mobile refinery, together with expected capital improvements to the facility, all without the net cash proceeds that would have resulted from our asset divestiture to Safety-Kleen.”

“Currently, our used motor oil (UMO) and re-refining assets are performing well ahead of prior-year levels, given improved product spreads and margin realization. At a strategic level, these assets complement our planned entry into renewable diesel production at the Mobile refinery, consistent with our long-term commitment to a lower-carbon future. From here, the collective focus of our entire management team will be on a timely close of the Mobile refinery acquisition which is expected to close during the first quarter of 2022,” continued Mr. Cowart.

ABOUT VERTEX ENERGY

Houston-based Vertex Energy, Inc. (NASDAQ: VTNR) is a specialty refiner of alternative feedstocks and marketer of high-quality refined products. Vertex is one of the largest processors of used motor oil in the U.S., with operations located in Houston and Port Arthur (TX), Marrero (LA) and Heartland (OH). Vertex also co-owns a facility, Myrtle Grove, located on a 41-acre industrial complex along the Gulf Coast in Belle Chasse, LA, with existing hydro-processing and plant infrastructure assets, that include nine million gallons of storage. The Company has built a reputation as a key supplier of Group II+ Base Oils to the lubricant manufacturing industry throughout North America.

FORWARD-LOOKING STATEMENTS

Certain of the matters discussed in this communication which are not statements of historical fact constitute forward-looking statements that involve a number of risks and uncertainties and are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”). Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements, but are not the exclusive means of identifying these statements and are subject to the safe harbor created by the Act. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements.

The important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, certain mandatory redemption provisions of the recently sold senior convertible notes, the conversion rights associated therewith, dilution caused by such conversions, and the Company’s ability to pay interest and other amounts due thereunder; the ability of the Company to retain and hire key personnel; risks associated with the ability of Vertex to complete current plans for expansion and growth, and planned capital projects; the level of competition in our industry and our ability to compete; our ability to respond to changes in our industry; the loss of key personnel or failure to attract, integrate and retain additional personnel; our ability to protect our intellectual property and not infringe on others’ intellectual property; our ability to scale our business; our ability to maintain supplier relationships and obtain adequate supplies of feedstocks; our ability to obtain and retain customers; our ability to

produce our products at competitive rates; our ability to execute our business strategy in a very competitive environment; trends in, and the market for, the price of oil and gas and alternative energy sources; our ability to maintain our relationships with KMTEX and Bunker One (USA), Inc.; the impact of competitive services and products; our ability to integrate acquisitions; our ability to complete future acquisitions; our ability to maintain insurance; the outcome of pending and potential future litigation, judgments and settlements; rules and regulations making our operations more costly or restrictive, including IMO 2020; changes in environmental and other laws and regulations and risks associated with such laws and regulations; economic downturns both in the United States and globally; risk of increased regulation of our operations and products; negative publicity and public opposition to our operations; disruptions in the infrastructure that we and our partners rely on; an inability to identify attractive acquisition opportunities and successfully negotiate acquisition terms; our ability to effectively integrate acquired assets, companies, employees or businesses; liabilities associated with acquired companies, assets or businesses; interruptions at our facilities; unexpected changes in our anticipated capital expenditures resulting from unforeseen required maintenance, repairs, or upgrades; our ability to acquire and construct new facilities; our ability to effectively manage our growth; decreases in global demand for, and the price of, oil, due to COVID-19, state, federal and foreign responses thereto; our ability to acquire sufficient amounts of used oil feedstock through our collection routes, to produce finished products, and in the absence of such internally collected feedstocks, and our ability to acquire third-party feedstocks on commercially reasonable terms; risks associated with COVID-19, the global efforts to stop the spread of COVID-19, potential downturns in the U.S. and global economies due to COVID-19 and the efforts to stop the spread of the virus, and COVID-19 in general; the lack of capital available on acceptable terms to finance the Company’s continued growth; risks associated with the Company’s ability to complete the proposed purchase transaction of the Mobile refinery, as previously disclosed on anticipated terms and timing, if at all, including obtaining regulatory approvals, unforeseen liabilities, future capital expenditures, the ability to recognize synergies, and the ability of Vertex to complete current plans for expansion and growth of the new operations and other conditions to the completion of pending transactions; the expected benefits, output, financial metrics and production of proposed transactions; Vertex’s ability to satisfy closing conditions associated with the previously disclosed Mobile refinery acquisition; the Company’s ability to raise sufficient capital to complete the Mobile refinery acquisition and planned capital projects and the terms of such funding; the occurrence of any event, change or other circumstances that could give rise to the parties failing to complete the Mobile refinery acquisition transaction on the terms disclosed, if at all, the right of one or both of Vertex or the counterparty to the Mobile refinery acquisition agreement to terminate the acquisition agreement and the result of such termination, including a termination fee of $10 million payable by Vertex under certain conditions; the outcome of any legal proceedings that may be instituted against any parties or their respective directors in connection with such planned Mobile Refinery acquisition transaction; difficulties and delays in integrating the Mobile refinery; and the Company’s plans for financing the Mobile refinery acquisition and planned projects. Other important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this communication are described in the Company’s publicly filed reports, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021 and future Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. These reports are available at www.sec.gov.

The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on Vertex’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Vertex cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Vertex undertakes no obligation to update these statements after the date of this release, except as required by law, and takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

CONTACT

Investor Relations

720.778.2415

IR@vertexenergy.com