Nevada
|
94-3439569
|
(State or other jurisdiction of
|
(I.R.S. Employer Identification No.)
|
incorporation or organization)
|
|
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)
|
Large accelerated filer
|
☐
|
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☒
|
|
Smaller reporting company
|
☒
|
Emerging growth
|
☐
|
|
|
|
|
|
|
Page
|
|
|
PART I
|
|
Item 1.
|
|
|
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Item 2
|
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Item 3.
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Item 4.
|
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||
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|
PART II
|
|
Item 1.
|
|
||
|
|
|
|
Item 1A.
|
|
||
|
|
|
|
Item 2.
|
|
||
|
|
|
|
Item 3.
|
|
||
|
|
|
|
Item 4.
|
|
||
|
|
|
|
Item 5.
|
|
||
|
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|
|
Item 6.
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
17,754,312
|
|
|
$
|
4,099,655
|
|
Restricted cash
|
100,125
|
|
|
100,170
|
|
||
Accounts receivable, net
|
9,163,208
|
|
|
12,138,078
|
|
||
Federal income tax receivable
|
—
|
|
|
68,606
|
|
||
Inventory
|
3,812,752
|
|
|
6,547,479
|
|
||
Prepaid expenses and other current assets
|
2,499,104
|
|
|
4,452,920
|
|
||
Total current assets
|
33,329,501
|
|
|
27,406,908
|
|
||
|
|
|
|
||||
Noncurrent assets
|
|
|
|
|
|
||
Fixed assets, at cost
|
70,977,927
|
|
|
69,469,548
|
|
||
Less accumulated depreciation
|
(26,992,136
|
)
|
|
(24,708,151
|
)
|
||
Fixed assets, net
|
43,985,791
|
|
|
44,761,397
|
|
||
Finance lease right-of-use assets
|
1,613,661
|
|
|
851,570
|
|
||
Operating lease right-of use assets
|
34,739,105
|
|
|
35,586,885
|
|
||
Intangible assets, net
|
10,363,179
|
|
|
11,243,800
|
|
||
Deferred income taxes
|
—
|
|
|
68,605
|
|
||
Other assets
|
1,219,301
|
|
|
840,754
|
|
||
TOTAL ASSETS
|
$
|
125,250,538
|
|
|
$
|
120,759,919
|
|
|
|
|
|
|
June 30,
2020 |
|
December 31,
2019 |
||||
LIABILITIES, TEMPORARY EQUITY, AND EQUITY
|
|
|
|
|
|
||
Current liabilities
|
|
|
|
|
|
||
Accounts payable
|
$
|
8,373,449
|
|
|
$
|
7,620,098
|
|
Accrued expenses
|
2,950,439
|
|
|
5,016,132
|
|
||
Dividends payable
|
360,203
|
|
|
389,176
|
|
||
Finance lease liability-current
|
450,835
|
|
|
217,164
|
|
||
Operating lease liability-current
|
6,004,500
|
|
|
5,885,304
|
|
||
Current portion of long-term debt, net of unamortized finance costs
|
2,814,306
|
|
|
2,017,345
|
|
||
Derivative commodity liability
|
538,297
|
|
|
375,850
|
|
||
Revolving note
|
—
|
|
|
3,276,230
|
|
||
Total current liabilities
|
21,492,029
|
|
|
24,797,299
|
|
||
Long-term liabilities
|
|
|
|
|
|
||
Long-term debt, net of unamortized finance costs
|
7,440,308
|
|
|
12,433,000
|
|
||
Finance lease liability-long-term
|
1,103,231
|
|
|
610,450
|
|
||
Operating lease liability-long-term
|
28,734,605
|
|
|
29,701,581
|
|
||
Derivative warrant liability
|
381,434
|
|
|
1,969,216
|
|
||
Total liabilities
|
59,151,607
|
|
|
69,511,546
|
|
||
|
|
|
|
||||
COMMITMENTS AND CONTINGENCIES (Note 3)
|
—
|
|
|
—
|
|
||
|
|
|
|
||||
TEMPORARY EQUITY
|
|
|
|
||||
Series B Convertible Preferred Stock, $0.001 par value per share;
10,000,000 shares designated, 3,941,704 and 3,826,055 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively with a liquidation preference of $12,219,282 and $11,860,771 at June 30, 2020 and December 31, 2019, respectively. |
12,219,282
|
|
|
11,006,406
|
|
||
|
|
|
|
||||
Series B1 Convertible Preferred Stock, $0.001 par value per share;
17,000,000 shares designated, 7,109,305 and 9,028,085 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively with a liquidation preference of $11,090,516 and $14,083,813 at June 30, 2020 and December 31, 2019, respectively. |
10,366,624
|
|
|
12,743,047
|
|
||
|
|
|
|
||||
Redeemable non-controlling interest
|
28,334,401
|
|
|
4,396,894
|
|
||
Total Temporary Equity
|
50,920,307
|
|
|
28,146,347
|
|
||
EQUITY
|
|
|
|
|
|
||
50,000,000 of total Preferred shares authorized:
|
|
|
|
|
|
||
Series A Convertible Preferred Stock, $0.001 par value;
5,000,000 shares designated, 419,859 shares issued and outstanding at June 30, 2020 and December 31, 2019, with a liquidation preference of $625,590 at June 30, 2020 and December 31, 2019. |
420
|
|
|
420
|
|
||
|
|
|
|
||||
Series C Convertible Preferred Stock, $0.001 par value;
44,000 shares designated, no shares issued or outstanding. |
—
|
|
|
—
|
|
||
|
|
|
|
||||
Common stock, $0.001 par value per share;
750,000,000 shares authorized; 45,554,841 and 43,395,563 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively. |
45,555
|
|
|
43,396
|
|
||
Additional paid-in capital
|
94,233,371
|
|
|
81,527,351
|
|
||
Accumulated deficit
|
(79,979,484
|
)
|
|
(59,246,514
|
)
|
||
Total Vertex Energy, Inc. stockholders' equity
|
14,299,862
|
|
|
22,324,653
|
|
||
Non-controlling interest
|
878,762
|
|
|
777,373
|
|
||
Total Equity
|
15,178,624
|
|
|
23,102,026
|
|
||
TOTAL LIABILITIES, TEMPORARY EQUITY, AND EQUITY
|
$
|
125,250,538
|
|
|
$
|
120,759,919
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||||
Revenues
|
|
$
|
21,374,127
|
|
|
$
|
43,657,292
|
|
|
$
|
57,577,556
|
|
|
$
|
82,978,004
|
|
Cost of revenues (exclusive of depreciation and amortization shown separately below)
|
|
22,197,805
|
|
|
36,515,421
|
|
|
49,034,659
|
|
|
71,359,770
|
|
||||
Gross profit (loss)
|
|
(823,678
|
)
|
|
7,141,871
|
|
|
8,542,897
|
|
|
11,618,234
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses
|
|
6,030,560
|
|
|
6,028,859
|
|
|
12,731,078
|
|
|
11,376,600
|
|
||||
Depreciation and amortization
|
|
1,713,461
|
|
|
1,780,890
|
|
|
3,348,008
|
|
|
3,517,903
|
|
||||
Total operating expenses
|
|
7,744,021
|
|
|
7,809,749
|
|
|
16,079,086
|
|
|
14,894,503
|
|
||||
Loss from operations
|
|
(8,567,699
|
)
|
|
(667,878
|
)
|
|
(7,536,189
|
)
|
|
(3,276,269
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other income
|
|
20
|
|
|
1,918
|
|
|
100
|
|
|
1,918
|
|
||||
Gain on sale of assets
|
|
12,344
|
|
|
29,150
|
|
|
12,344
|
|
|
31,443
|
|
||||
Gain (loss) on change in value of derivative warrant liability
|
|
(110,965
|
)
|
|
746,017
|
|
|
1,587,782
|
|
|
(959,077
|
)
|
||||
Interest expense
|
|
(222,173
|
)
|
|
(738,972
|
)
|
|
(562,259
|
)
|
|
(1,496,775
|
)
|
||||
Total other income (expense)
|
|
(320,774
|
)
|
|
38,113
|
|
|
1,037,967
|
|
|
(2,422,491
|
)
|
||||
Loss before income tax
|
|
(8,888,473
|
)
|
|
(629,765
|
)
|
|
(6,498,222
|
)
|
|
(5,698,760
|
)
|
||||
Income tax benefit (expense)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss
|
|
(8,888,473
|
)
|
|
(629,765
|
)
|
|
(6,498,222
|
)
|
|
(5,698,760
|
)
|
||||
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest
|
|
109,165
|
|
|
(202,329
|
)
|
|
(289,444
|
)
|
|
(307,760
|
)
|
||||
Net loss attributable to Vertex Energy, Inc.
|
|
(8,997,638
|
)
|
|
(427,436
|
)
|
|
(6,208,778
|
)
|
|
(5,391,000
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Accretion of redeemable noncontrolling interest to redemption value
|
|
(1,381,889
|
)
|
|
—
|
|
|
(12,348,238
|
)
|
|
—
|
|
||||
Accretion of discount on Series B and B1 Preferred Stock
|
|
(539,235
|
)
|
|
(532,925
|
)
|
|
(1,471,238
|
)
|
|
(1,093,600
|
)
|
||||
Dividends on Series B and B1 Preferred Stock
|
|
(360,217
|
)
|
|
(412,875
|
)
|
|
(704,716
|
)
|
|
(819,670
|
)
|
||||
Net loss available to common shareholders
|
|
$
|
(11,278,979
|
)
|
|
$
|
(1,373,236
|
)
|
|
$
|
(20,732,970
|
)
|
|
$
|
(7,304,270
|
)
|
Loss per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
(0.25
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.18
|
)
|
Diluted
|
|
$
|
(0.25
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.18
|
)
|
Shares used in computing earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
45,554,841
|
|
|
40,294,870
|
|
|
45,463,600
|
|
|
40,245,671
|
|
||||
Diluted
|
|
45,554,841
|
|
|
40,294,870
|
|
|
45,463,600
|
|
|
40,245,671
|
|
Six Months Ended June 30, 2020
|
|||||||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Series A Preferred
|
|
Series C Preferred
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
|
Shares
|
|
$0.001 Par
|
|
Shares
|
|
$0.001 Par
|
|
Shares
|
|
$0.001 Par
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Non-controlling Interest
|
|
Total Equity
|
||||||||||||||||||
Balance on January 1, 2020
|
43,395,563
|
|
|
$
|
43,396
|
|
|
419,859
|
|
|
$
|
420
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
81,527,351
|
|
|
$
|
(59,246,514
|
)
|
|
$
|
777,373
|
|
|
$
|
23,102,026
|
|
|
Purchase of shares of consolidated subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(71,171
|
)
|
|
—
|
|
|
—
|
|
|
(71,171
|
)
|
||||||||
Adjustment of carrying mount of non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,091,068
|
|
|
—
|
|
|
—
|
|
|
9,091,068
|
|
||||||||
Share based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
163,269
|
|
|
—
|
|
|
—
|
|
|
163,269
|
|
||||||||
Conversion of Series B1 Preferred stock to common
|
2,159,278
|
|
|
2,159
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,366,315
|
|
|
—
|
|
|
—
|
|
|
3,368,474
|
|
||||||||
Dividends on Series B and B1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(344,499
|
)
|
|
—
|
|
|
(344,499
|
)
|
||||||||
Accretion of discount on Series B and B1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(932,003
|
)
|
|
—
|
|
|
(932,003
|
)
|
||||||||
Accretion of redeemable non-controlling interest to redemption value
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,966,349
|
)
|
|
—
|
|
|
(10,966,349
|
)
|
||||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,788,860
|
|
|
119,268
|
|
|
2,908,128
|
|
||||||||
Balance on March 31, 2020
|
45,554,841
|
|
|
$
|
45,555
|
|
|
419,859
|
|
|
$
|
420
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
94,076,832
|
|
|
$
|
(68,700,505
|
)
|
|
$
|
896,641
|
|
|
$
|
26,318,943
|
|
Share based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
156,539
|
|
|
—
|
|
|
—
|
|
|
156,539
|
|
||||||||
Dividends on Series B and B1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(360,217
|
)
|
|
—
|
|
|
(360,217
|
)
|
||||||||
Accretion of discount on Series B and B1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(539,235
|
)
|
|
—
|
|
|
(539,235
|
)
|
||||||||
Accretion of redeemable non-controlling interest to redemption value
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,381,889
|
)
|
|
—
|
|
|
(1,381,889
|
)
|
||||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,997,638
|
)
|
|
(17,879
|
)
|
|
(9,015,517
|
)
|
||||||||
Balance on June 30, 2020
|
45,554,841
|
|
|
$
|
45,555
|
|
|
419,859
|
|
|
$
|
420
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
94,233,371
|
|
|
$
|
(79,979,484
|
)
|
|
$
|
878,762
|
|
|
$
|
15,178,624
|
|
Six Months Ended June 30, 2019
|
||||||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Series A Preferred
|
|
Series C Preferred
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
|
Shares
|
|
$0.001 Par
|
|
Shares
|
|
$0.001 Par
|
|
Shares
|
|
$0.001 Par
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Non-controlling Interest
|
|
Total Equity
|
|||||||||||||||||
Balance on January 1, 2019
|
40,174,821
|
|
|
$
|
40,175
|
|
|
419,859
|
|
|
$
|
420
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
75,131,122
|
|
|
$
|
(47,800,886
|
)
|
|
$
|
1,438,213
|
|
|
$
|
28,809,044
|
|
Share based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143,063
|
|
|
—
|
|
|
—
|
|
|
143,063
|
|
|||||||
Conversion of Series B1 Preferred stock to common
|
96,160
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149,914
|
|
|
—
|
|
|
—
|
|
|
150,010
|
|
|||||||
Dividends on Series B and B1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(406,795
|
)
|
|
—
|
|
|
(406,795
|
)
|
|||||||
Accretion of discount on Series B and B1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(560,675
|
)
|
|
—
|
|
|
(560,675
|
)
|
|||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,963,564
|
)
|
|
(105,431
|
)
|
|
(5,068,995
|
)
|
|||||||
Balance on March 31, 2019
|
40,270,981
|
|
|
$
|
40,271
|
|
|
419,859
|
|
|
$
|
420
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
75,424,099
|
|
|
$
|
(53,731,920
|
)
|
|
$
|
1,332,782
|
|
|
$
|
23,065,652
|
|
Exercise of options to common
|
75,925
|
|
|
76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,424
|
|
|
—
|
|
|
—
|
|
|
4,500
|
|
|||||||
Share based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
171,002
|
|
|
—
|
|
|
—
|
|
|
171,002
|
|
|||||||
Distribution to noncontrolling
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(285,534
|
)
|
|
(285,534
|
)
|
|||||||
Dividends on Series B and B1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(412,875
|
)
|
|
—
|
|
|
(412,875
|
)
|
|||||||
Accretion of discount on Series B and B1
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(532,925
|
)
|
|
—
|
|
|
(532,925
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(427,436
|
)
|
|
(202,329
|
)
|
|
(629,765
|
)
|
|||||||
Balance on June 30, 2019
|
40,346,906
|
|
|
$
|
40,347
|
|
|
419,859
|
|
|
$
|
420
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
75,599,525
|
|
|
$
|
(55,105,156
|
)
|
|
$
|
844,919
|
|
|
$
|
21,380,055
|
|
|
Six Months Ended
|
||||||
|
June 30,
2020 |
|
June 30,
2019 |
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(6,498,222
|
)
|
|
$
|
(5,698,760
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities
|
|
|
|
|
|
||
Stock based compensation expense
|
319,809
|
|
|
314,065
|
|
||
Depreciation and amortization
|
3,348,008
|
|
|
3,517,903
|
|
||
Gain on sale of assets
|
(12,344
|
)
|
|
(31,443
|
)
|
||
Contingent consideration reduction
|
—
|
|
|
(15,564
|
)
|
||
Bad debt and reduction in allowance for bad debt
|
65,443
|
|
|
(360,926
|
)
|
||
(Decrease) increase in fair value of derivative warrant liability
|
(1,587,782
|
)
|
|
959,077
|
|
||
(Gain) loss on commodity derivative contracts
|
(4,484,798
|
)
|
|
1,069,778
|
|
||
Net cash settlements on commodity derivatives
|
4,781,183
|
|
|
(967,708
|
)
|
||
Amortization of debt discount and deferred costs
|
47,826
|
|
|
286,954
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable
|
4,986,003
|
|
|
(2,111,591
|
)
|
||
Inventory
|
3,711,239
|
|
|
2,338,814
|
|
||
Prepaid expenses
|
1,834,361
|
|
|
1,948,771
|
|
||
Accounts payable
|
(269,740
|
)
|
|
(518,050
|
)
|
||
Accrued expenses
|
(2,150,272
|
)
|
|
(187,349
|
)
|
||
Other assets
|
(378,547
|
)
|
|
—
|
|
||
Net cash provided by operating activities
|
3,712,167
|
|
|
543,971
|
|
||
Cash flows from investing activities
|
|
|
|
|
|
||
Acquisition
|
(1,822,690
|
)
|
|
—
|
|
||
Internally developed software
|
(49,229
|
)
|
|
—
|
|
||
Purchase of fixed assets
|
(1,526,379
|
)
|
|
(2,419,599
|
)
|
||
Proceeds from sale of fixed assets
|
22,844
|
|
|
86,846
|
|
||
Net cash used in investing activities
|
(3,375,454
|
)
|
|
(2,332,753
|
)
|
||
Cash flows from financing activities
|
|
|
|
|
|
||
Payments on finance leases
|
(162,312
|
)
|
|
(61,638
|
)
|
||
Proceeds from exercise of stock options
|
—
|
|
|
4,500
|
|
||
Distribution VRM LA
|
—
|
|
|
(285,534
|
)
|
||
Contributions received from redeemable noncontrolling interest
|
21,000,000
|
|
|
—
|
|
||
Line of credit (payments) proceeds, net
|
(3,276,230
|
)
|
|
1,235,251
|
|
||
Proceeds from note payable (includes proceeds from PPP note)
|
4,374,643
|
|
|
187,501
|
|
||
Payments on note payable
|
(8,618,202
|
)
|
|
(1,542,903
|
)
|
||
Net cash provided by (used in) financing activities
|
13,317,899
|
|
|
(462,823
|
)
|
||
Net change in cash, cash equivalents and restricted cash
|
13,654,612
|
|
|
(2,251,605
|
)
|
||
Cash, cash equivalents, and restricted cash at beginning of the period
|
4,199,825
|
|
|
2,849,831
|
|
||
Cash, cash equivalents, and restricted cash at end of period
|
$
|
17,854,437
|
|
|
$
|
598,226
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION
|
|
|
|
||||
Cash paid for interest
|
$
|
562,259
|
|
|
$
|
1,221,363
|
|
Cash paid for taxes
|
$
|
—
|
|
|
$
|
—
|
|
NON-CASH INVESTING AND FINANCING TRANSACTIONS
|
|
|
|
||||
Conversion of Series B1 Preferred Stock into common stock
|
$
|
3,368,474
|
|
|
$
|
150,010
|
|
Accretion of discount on Series B and B1 Preferred Stock
|
$
|
1,471,238
|
|
|
$
|
1,093,600
|
|
Dividends-in-kind accrued on Series B and B1 Preferred Stock
|
$
|
704,716
|
|
|
$
|
819,670
|
|
Equipment acquired under finance leases
|
$
|
888,764
|
|
|
$
|
621,000
|
|
Initial adjustment of carrying amount redeemable noncontrolling interest
|
$
|
9,091,068
|
|
|
$
|
—
|
|
Accretion of redeemable noncontrolling interest to redemption value
|
$
|
12,348,238
|
|
|
$
|
—
|
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Cash and cash equivalents
|
$
|
17,754,312
|
|
|
$
|
498,219
|
|
Restricted cash
|
100,125
|
|
|
100,007
|
|
||
Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows
|
$
|
17,854,437
|
|
|
$
|
598,226
|
|
|
Six Months Ended June 30, 2020
|
|
Six Months Ended
June 30, 2019 |
||||
|
% of
Revenues
|
|
% of
Receivables
|
|
% of
Revenues
|
|
% of
Receivables
|
Customer 1
|
38%
|
|
7%
|
|
31%
|
|
20%
|
Customer 2
|
12%
|
|
16%
|
|
7%
|
|
14%
|
Customer 3
|
3%
|
|
—%
|
|
11%
|
|
8%
|
Customer 4
|
2%
|
|
2%
|
|
4%
|
|
10%
|
Customer 5
|
—%
|
|
—%
|
|
17%
|
|
—%
|
|
% of Revenue by Segment
|
|
% Revenue by Segment
|
||||||||
|
Six Months Ended June 30, 2020
|
|
Six Months Ended June 30, 2019
|
||||||||
|
Black Oil
|
|
Refining
|
|
Recovery
|
|
Black Oil
|
|
Refining
|
|
Recovery
|
Customer 1
|
53%
|
|
—%
|
|
—%
|
|
36%
|
|
—%
|
|
—%
|
Customer 2
|
17%
|
|
—%
|
|
—%
|
|
8%
|
|
—%
|
|
—%
|
Customer 3
|
4%
|
|
—%
|
|
—%
|
|
12%
|
|
—%
|
|
—%
|
Customer 4
|
2%
|
|
—%
|
|
—%
|
|
4%
|
|
—%
|
|
—%
|
Customer 5
|
—%
|
|
—%
|
|
—%
|
|
20%
|
|
—%
|
|
—%
|
|
Three Months Ended June 30, 2020
|
||||||||||||||
|
Black Oil
|
|
Refining & Marketing
|
|
Recovery
|
|
Total
|
||||||||
Primary Geographical Markets
|
|
|
|
|
|
|
|
||||||||
Northern United States
|
$
|
6,167,062
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,167,062
|
|
Southern United States
|
5,376,073
|
|
|
6,297,328
|
|
|
3,533,664
|
|
|
15,207,065
|
|
||||
|
$
|
11,543,135
|
|
|
$
|
6,297,328
|
|
|
$
|
3,533,664
|
|
|
$
|
21,374,127
|
|
Sources of Revenue
|
|
|
|
|
|
|
|
||||||||
Petroleum products
|
$
|
11,543,135
|
|
|
$
|
6,297,328
|
|
|
$
|
553,783
|
|
|
$
|
18,394,246
|
|
Metals
|
—
|
|
|
—
|
|
|
2,979,881
|
|
|
2,979,881
|
|
||||
Total revenues
|
$
|
11,543,135
|
|
|
$
|
6,297,328
|
|
|
$
|
3,533,664
|
|
|
$
|
21,374,127
|
|
|
Six Months Ended June 30, 2020
|
||||||||||||||
|
Black Oil
|
|
Refining & Marketing
|
|
Recovery
|
|
Total
|
||||||||
Primary Geographical Markets
|
|
|
|
|
|
|
|
||||||||
Northern United States
|
$
|
15,725,631
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,725,631
|
|
Southern United States
|
25,348,876
|
|
|
8,807,921
|
|
|
7,695,128
|
|
|
41,851,925
|
|
||||
|
$
|
41,074,507
|
|
|
$
|
8,807,921
|
|
|
$
|
7,695,128
|
|
|
$
|
57,577,556
|
|
Sources of Revenue
|
|
|
|
|
|
|
|
||||||||
Petroleum products
|
$
|
41,074,507
|
|
|
$
|
8,807,921
|
|
|
$
|
1,306,564
|
|
|
$
|
51,188,992
|
|
Metals
|
—
|
|
|
—
|
|
|
6,388,564
|
|
|
6,388,564
|
|
||||
Total revenues
|
$
|
41,074,507
|
|
|
$
|
8,807,921
|
|
|
$
|
7,695,128
|
|
|
$
|
57,577,556
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||
|
Black Oil
|
|
Refining & Marketing
|
|
Recovery
|
|
Total
|
||||||||
Primary Geographical Markets
|
|
|
|
|
|
|
|
||||||||
Northern United States
|
$
|
9,880,565
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,880,565
|
|
Southern United States
|
28,027,246
|
|
|
3,277,402
|
|
|
2,472,079
|
|
|
33,776,727
|
|
||||
|
$
|
37,907,811
|
|
|
$
|
3,277,402
|
|
|
$
|
2,472,079
|
|
|
$
|
43,657,292
|
|
Sources of Revenue
|
|
|
|
|
|
|
|
||||||||
Petroleum products
|
$
|
37,907,811
|
|
|
$
|
3,277,402
|
|
|
$
|
642,596
|
|
|
$
|
41,827,809
|
|
Metals
|
—
|
|
|
—
|
|
|
1,829,483
|
|
|
1,829,483
|
|
||||
Total revenues
|
$
|
37,907,811
|
|
|
$
|
3,277,402
|
|
|
$
|
2,472,079
|
|
|
$
|
43,657,292
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
|
Black Oil
|
|
Refining & Marketing
|
|
Recovery
|
|
Total
|
||||||||
Primary Geographical Markets
|
|
|
|
|
|
|
|
||||||||
Northern United States
|
$
|
19,204,348
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,204,348
|
|
Southern United States
|
51,518,650
|
|
|
6,136,023
|
|
|
6,118,983
|
|
|
63,773,656
|
|
||||
|
$
|
70,722,998
|
|
|
$
|
6,136,023
|
|
|
$
|
6,118,983
|
|
|
$
|
82,978,004
|
|
Sources of Revenue
|
|
|
|
|
|
|
|
||||||||
Petroleum products
|
$
|
70,722,998
|
|
|
$
|
6,136,023
|
|
|
$
|
1,854,113
|
|
|
$
|
78,713,134
|
|
Metals
|
—
|
|
|
—
|
|
|
4,264,870
|
|
|
4,264,870
|
|
||||
Total revenues
|
$
|
70,722,998
|
|
|
$
|
6,136,023
|
|
|
$
|
6,118,983
|
|
|
$
|
82,978,004
|
|
|
June 30, 2020
|
|
December 31, 2019
|
||||
Accounts receivable trade
|
$
|
9,548,277
|
|
|
$
|
12,540,553
|
|
Allowance for doubtful accounts
|
(385,069
|
)
|
|
(402,475
|
)
|
||
Accounts receivable trade, net
|
$
|
9,163,208
|
|
|
$
|
12,138,078
|
|
Creditor
|
Loan Type
|
|
Origination Date
|
|
Maturity Date
|
|
Loan Amount
|
|
Balance on June 30, 2020
|
Balance on December 31, 2019
|
||||||
Encina Business Credit, LLC
|
Term Loan
|
|
February 1, 2017
|
|
February 1, 2022
|
|
$
|
20,000,000
|
|
|
$
|
5,883,000
|
|
$
|
13,333,000
|
|
Encina Business Credit SPV, LLC
|
Revolving Note
|
|
February 1, 2017
|
|
February 1, 2022
|
|
$
|
10,000,000
|
|
|
—
|
|
3,276,230
|
|
||
Wells Fargo Equipment Lease-Ohio
|
Finance Lease
|
|
April-May, 2019
|
|
April-May, 2024
|
|
$
|
621,000
|
|
|
494,573
|
|
551,260
|
|
||
AVT Equipment Lease-Ohio
|
Finance Lease
|
|
April 2, 2020
|
|
April 2, 2023
|
|
$
|
337,155
|
|
|
313,272
|
|
—
|
|
||
AVT Equipment Lease-HH
|
Finance Lease
|
|
May 22, 2020
|
|
May 22, 2023
|
|
$
|
551,609
|
|
|
520,191
|
|
—
|
|
||
John Deere Note
|
Note
|
|
May 27, 2020
|
|
June 24, 2024
|
|
$
|
152,643
|
|
|
149,613
|
|
—
|
|
||
Tetra Capital Lease
|
Finance Lease
|
|
May, 2018
|
|
May, 2022
|
|
$
|
419,690
|
|
|
218,896
|
|
264,014
|
|
||
Well Fargo Equipment Lease-VRM LA
|
Finance Lease
|
|
March, 2018
|
|
March, 2021
|
|
$
|
30,408
|
|
|
7,135
|
|
12,341
|
|
||
Texas Citizens Bank
|
PPP Loan
|
|
May 5, 2020
|
|
April 28, 2022
|
|
$
|
4,222,000
|
|
|
4,222,000
|
|
—
|
|
||
Various institutions
|
Insurance premiums financed
|
|
Various
|
|
< 1 year
|
|
$
|
2,902,428
|
|
|
—
|
|
1,165,172
|
|
||
Total
|
|
|
|
|
|
|
|
|
11,808,680
|
|
18,602,017
|
|
||||
Deferred finance costs, net
|
|
|
|
|
|
|
|
|
—
|
|
(47,826
|
)
|
||||
Total, net of deferred finance costs
|
|
|
|
|
|
|
|
|
$
|
11,808,680
|
|
$
|
18,554,191
|
|
Creditor
|
Year 1
|
|
Year 2
|
|
Year 3
|
|
Year 4
|
|
Year 5
|
|
Thereafter
|
||||||||||||
Encina Business Credit, LLC
|
$
|
900,000
|
|
|
$
|
4,983,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Encina Business Credit SPV, LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
John Deere Note
|
36,845
|
|
|
37,759
|
|
|
38,695
|
|
|
36,313
|
|
|
—
|
|
|
—
|
|
||||||
Well Fargo Equipment Lease- Ohio
|
117,834
|
|
|
124,039
|
|
|
130,574
|
|
|
122,127
|
|
|
—
|
|
|
—
|
|
||||||
AVT Equipment Lease-Ohio
|
88,689
|
|
|
96,512
|
|
|
128,071
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
AVT Equipment Lease-HH
|
142,258
|
|
|
154,805
|
|
|
223,128
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tetra Capital Lease
|
94,920
|
|
|
123,976
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Well Fargo Equipment Lease- VRM LA
|
7,135
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Texas Citizens Bank
|
1,877,461
|
|
|
2,344,539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Various institutions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Totals
|
$
|
3,265,142
|
|
|
$
|
7,864,630
|
|
|
$
|
520,468
|
|
|
$
|
158,440
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2020
|
|
2019
|
||||
Balance at beginning of period
|
$
|
11,006,406
|
|
|
$
|
8,900,208
|
|
Plus: discount accretion
|
854,364
|
|
|
666,048
|
|
||
Plus: dividends in kind
|
358,512
|
|
|
337,798
|
|
||
Balance at end of period
|
$
|
12,219,282
|
|
|
$
|
9,904,054
|
|
|
2020
|
|
2019
|
||||
Balance at beginning of period
|
$
|
12,743,047
|
|
|
$
|
13,279,755
|
|
Less: conversions of shares to common
|
(3,368,474
|
)
|
|
(119,768
|
)
|
||
Plus: discount accretion
|
616,874
|
|
|
472,000
|
|
||
Plus: dividends in kind
|
375,177
|
|
|
397,310
|
|
||
Balance at end of period
|
$
|
10,366,624
|
|
|
$
|
14,029,297
|
|
Level Three Roll-Forward
|
|
|
|
||||
|
|
2020
|
2019
|
||||
Balance at beginning of period
|
|
$
|
1,969,216
|
|
$
|
1,481,692
|
|
Change in valuation of warrants
|
|
(1,587,782
|
)
|
959,077
|
|
||
Balance at end of period
|
|
$
|
381,434
|
|
$
|
2,440,769
|
|
THREE MONTHS ENDED JUNE 30, 2020
|
||||||||||||||||
|
|
Black Oil
|
|
Refining &
Marketing |
|
Recovery
|
|
Total
|
||||||||
Revenues
|
|
$
|
11,543,135
|
|
|
$
|
6,297,328
|
|
|
$
|
3,533,664
|
|
|
$
|
21,374,127
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
|
$
|
(6,504,341
|
)
|
|
$
|
(459,243
|
)
|
|
$
|
(1,604,115
|
)
|
|
$
|
(8,567,699
|
)
|
THREE MONTHS ENDED JUNE 30, 2019
|
||||||||||||||||
|
|
Black Oil
|
|
Refining &
Marketing |
|
Recovery
|
|
Total
|
||||||||
Revenues
|
|
$
|
37,907,811
|
|
|
$
|
3,277,402
|
|
|
$
|
2,472,079
|
|
|
$
|
43,657,292
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from operations
|
|
$
|
125,851
|
|
|
$
|
(132,408
|
)
|
|
$
|
(661,321
|
)
|
|
$
|
(667,878
|
)
|
SIX MONTHS ENDED JUNE 30, 2020
|
||||||||||||||||
|
|
Black Oil
|
|
Refining &
Marketing |
|
Recovery
|
|
Total
|
||||||||
Revenues
|
|
$
|
41,074,507
|
|
|
$
|
8,807,921
|
|
|
$
|
7,695,128
|
|
|
$
|
57,577,556
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
|
$
|
(3,722,434
|
)
|
|
$
|
(1,343,257
|
)
|
|
$
|
(2,470,498
|
)
|
|
$
|
(7,536,189
|
)
|
SIX MONTHS ENDED JUNE 30, 2019
|
||||||||||||||||
|
|
Black Oil
|
|
Refining &
Marketing |
|
Recovery
|
|
Total
|
||||||||
Revenues
|
|
$
|
70,722,998
|
|
|
$
|
6,136,023
|
|
|
$
|
6,118,983
|
|
|
$
|
82,978,004
|
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from operations
|
|
$
|
(2,166,354
|
)
|
|
$
|
(535,422
|
)
|
|
$
|
(574,493
|
)
|
|
$
|
(3,276,269
|
)
|
As of June 30, 2020
|
|||||||||
Contract Type
|
Contract Period
|
Weighted Average Strike Price (Barrels)
|
Remaining Volume (Barrels)
|
Fair Value
|
|||||
|
|
|
|
|
|||||
Futures
|
Jun. 2020- Oct. 2020
|
$
|
50.57
|
|
108,000
|
|
(538,297
|
)
|
|
|
|
|
|
$
|
(538,297
|
)
|
As of December 31, 2019
|
|||||||||
Contract Type
|
Contract Period
|
Weighted Average Strike Price (Barrels)
|
Remaining Volume (Barrels)
|
Fair Value
|
|||||
|
|
|
|
|
|||||
Swap
|
Dec. 2019-Mar. 2020
|
$
|
40.88
|
|
130,000
|
|
$
|
539,800
|
|
Swap
|
Dec. 2019-Mar. 2020
|
$
|
81.19
|
|
130,000
|
|
(673,428
|
)
|
|
Futures
|
Dec. 2019-Mar. 2020
|
$
|
84.53
|
|
105,000
|
|
(242,222
|
)
|
|
|
|
|
|
$
|
(375,850
|
)
|
Balance Sheet Classification
|
Contract Type
|
2020
|
2019
|
||||
|
|
|
|
||||
|
Crude oil swaps
|
$
|
—
|
|
$
|
(133,628
|
)
|
|
Crude oil futures
|
(538,297
|
)
|
(242,222
|
)
|
||
|
|
|
|
||||
Derivative commodity liability
|
|
$
|
(538,297
|
)
|
$
|
(375,850
|
)
|
June 30, 2020
|
|||||||||||||||||||
|
Facilities
|
|
Equipment
|
|
Plant
|
|
Railcar
|
|
Total
|
||||||||||
Year 1
|
$
|
750,108
|
|
|
$
|
161,539
|
|
|
$
|
4,060,417
|
|
|
$
|
1,032,436
|
|
|
$
|
6,004,500
|
|
Year 2
|
496,361
|
|
|
107,723
|
|
|
4,060,417
|
|
|
328,416
|
|
|
4,992,917
|
|
|||||
Year 3
|
375,507
|
|
|
—
|
|
|
4,060,417
|
|
|
93,846
|
|
|
4,529,770
|
|
|||||
Year 4
|
300,000
|
|
|
—
|
|
|
4,060,417
|
|
|
—
|
|
|
4,360,417
|
|
|||||
Year 5
|
300,000
|
|
|
—
|
|
|
4,060,417
|
|
|
—
|
|
|
4,360,417
|
|
|||||
Thereafter
|
2,225,000
|
|
|
—
|
|
|
31,494,699
|
|
|
—
|
|
|
33,719,699
|
|
|||||
Total lease payments
|
$
|
4,446,976
|
|
|
$
|
269,262
|
|
|
$
|
51,796,784
|
|
|
$
|
1,454,698
|
|
|
$
|
57,967,720
|
|
Less: interest
|
(1,573,677
|
)
|
|
(13,675
|
)
|
|
(21,557,397
|
)
|
|
(83,866
|
)
|
|
(23,228,615
|
)
|
|||||
Present value of lease liabilities
|
$
|
2,873,299
|
|
|
$
|
255,587
|
|
|
$
|
30,239,387
|
|
|
$
|
1,370,832
|
|
|
$
|
34,739,105
|
|
Remaining lease term and discount rate:
|
|
June 30, 2020
|
|
Weighted average remaining lease terms (years)
|
|
|
|
Lease facilities
|
|
5.78
|
|
Lease equipment
|
|
1.67
|
|
Lease plant
|
|
12.76
|
|
Lease railcar
|
|
1.36
|
|
Weighted average discount rate
|
|
|
|
Lease facilities
|
|
9.15
|
%
|
Lease equipment
|
|
8.00
|
%
|
Lease plant
|
|
9.37
|
%
|
Lease railcar
|
|
8.00
|
%
|
|
June 30, 2020
|
|
|
Beginning balance
|
$
|
4,396,894
|
|
Net loss attributable to redeemable non-controlling interest
|
(82,401
|
)
|
|
Change in ownership
|
71,171
|
|
|
Accretion of non-controlling interest to redemption value
|
519,792
|
|
|
Ending balance
|
$
|
4,905,456
|
|
|
June 30, 2020
|
|
|
Cash and cash equivalents
|
$
|
8,407,926
|
|
Accounts receivable, net
|
3,031,746
|
|
|
Inventory
|
457,119
|
|
|
Prepaid expense and other current assets
|
439,702
|
|
|
Total current assets
|
12,336,493
|
|
|
|
|
||
Fixed assets, net
|
5,719,408
|
|
|
Finance lease right-of-use assets
|
1,050,973
|
|
|
Operating lease right-of-use assets
|
437,716
|
|
|
Intangible assets, net
|
1,190,080
|
|
|
Other assets
|
108,643
|
|
|
Total assets
|
$
|
20,843,313
|
|
|
|
||
Accounts payable
|
$
|
1,247,601
|
|
Accrued expenses
|
288,694
|
|
|
Finance lease liability-current
|
301,443
|
|
|
Operating lease liability-current
|
285,837
|
|
|
Total current liabilities
|
2,123,575
|
|
|
|
|
||
Finance lease liability-long term
|
725,298
|
|
|
Operating lease liability-long term
|
151,879
|
|
|
Total liabilities
|
$
|
3,000,752
|
|
|
June 30, 2020
|
|
|
Beginning balance
|
$
|
—
|
|
Initial adjustment of carrying amount of non-controlling interest
|
11,908,932
|
|
|
Net loss attributable to redeemable non-controlling interest
|
(308,432
|
)
|
|
Accretion of non-controlling interest to redemption value
|
11,828,445
|
|
|
Ending balance
|
$
|
23,428,945
|
|
•
|
risks associated with our outstanding credit facilities, including amounts owed, restrictive covenants, security interests thereon and our ability to repay such facilities and amounts due thereon when due;
|
•
|
risks associated with our outstanding preferred stock, including redemption obligations in connection therewith, restrictive covenants and our ability to redeem such securities when required pursuant to the terms of such securities and applicable law;
|
•
|
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 relationship with KMTEX;
|
•
|
the impact of competitive services and products;
|
•
|
our ability to integrate acquisitions;
|
•
|
our ability to complete future acquisitions;
|
•
|
our ability to maintain insurance;
|
•
|
potential future litigation, judgments and settlements;
|
•
|
rules and regulations making our operations more costly or restrictive, including IMO 2020 (defined below);
|
•
|
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;
|
•
|
certain events of default which have occurred under our debt facilities and previously been waived;
|
•
|
prohibitions on borrowing and other covenants of our debt 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;
|
•
|
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 our continued growth; and
|
•
|
other risk factors included under “Risk Factors” in our latest Annual Report on Form 10-K and set forth below under “Risk Factors”.
|
|
Three Months Ended June 30,
|
|
$ Change - Favorable (Unfavorable)
|
|
% Change - Favorable (Unfavorable)
|
|||||||||
|
2020
|
|
2019
|
|||||||||||
Revenues
|
$
|
21,374,127
|
|
|
$
|
43,657,292
|
|
|
$
|
(22,283,165
|
)
|
|
(51
|
)%
|
Cost of revenues (exclusive of depreciation and amortization shown separately below)
|
22,197,805
|
|
|
36,515,421
|
|
|
14,317,616
|
|
|
39
|
%
|
|||
Gross profit (loss)
|
(823,678
|
)
|
|
7,141,871
|
|
|
(7,965,549
|
)
|
|
(112
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Selling, general and administrative expenses
|
6,030,560
|
|
|
6,028,859
|
|
|
(1,701
|
)
|
|
—
|
%
|
|||
Depreciation and amortization
|
1,713,461
|
|
|
1,780,890
|
|
|
67,429
|
|
|
4
|
%
|
|||
Total operating expenses
|
7,744,021
|
|
|
7,809,749
|
|
|
65,728
|
|
|
1
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Loss from operations
|
(8,567,699
|
)
|
|
(667,878
|
)
|
|
(7,899,821
|
)
|
|
(1,183
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other income (expense):
|
|
|
|
|
|
|
|
|||||||
Interest income
|
20
|
|
|
1,918
|
|
|
(1,898
|
)
|
|
(99
|
)%
|
|||
Gain on asset sales
|
12,344
|
|
|
29,150
|
|
|
(16,806
|
)
|
|
(58
|
)%
|
|||
Gain (loss) on change in value of derivative liability
|
(110,965
|
)
|
|
746,017
|
|
|
(856,982
|
)
|
|
(115
|
)%
|
|||
Interest expense
|
(222,173
|
)
|
|
(738,972
|
)
|
|
516,799
|
|
|
70
|
%
|
|||
Total other income (expense)
|
(320,774
|
)
|
|
38,113
|
|
|
(358,887
|
)
|
|
(942
|
)%
|
|||
|
|
|
|
|
|
|
|
|
||||||
Loss before income tax
|
(8,888,473
|
)
|
|
(629,765
|
)
|
|
(8,258,708
|
)
|
|
(1,311
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Income tax benefit (expense)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|||
|
|
|
|
|
|
|
|
|||||||
Net Loss
|
(8,888,473
|
)
|
|
(629,765
|
)
|
|
(8,258,708
|
)
|
|
(1,311
|
)%
|
|||
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest
|
109,165
|
|
|
(202,329
|
)
|
|
311,494
|
|
|
154
|
%
|
|||
Net loss attributable to Vertex Energy, Inc.
|
$
|
(8,997,638
|
)
|
|
$
|
(427,436
|
)
|
|
$
|
(8,570,202
|
)
|
|
(2,005
|
)%
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
$ Change - Favorable (Unfavorable)
|
|
% Change - Favorable (Unfavorable)
|
|||||||||
Black Oil Segment
|
2020
|
|
2019
|
|||||||||||
Total revenue
|
$
|
11,543,135
|
|
|
$
|
37,907,811
|
|
|
$
|
(26,364,676
|
)
|
|
(70
|
)%
|
Total cost of revenue (exclusive of depreciation and amortization shown separately below)
|
11,848,334
|
|
|
31,368,939
|
|
|
19,520,605
|
|
|
62
|
%
|
|||
Gross profit (loss)
|
(305,199
|
)
|
|
6,538,872
|
|
|
(6,844,071
|
)
|
|
(105
|
)%
|
|||
Selling general and administrative expense
|
4,869,391
|
|
|
5,037,708
|
|
|
168,317
|
|
|
3
|
%
|
|||
Depreciation and amortization
|
1,329,751
|
|
|
1,375,313
|
|
|
45,562
|
|
|
3
|
%
|
|||
Income (loss) from operations
|
$
|
(6,504,341
|
)
|
|
$
|
125,851
|
|
|
$
|
(6,630,192
|
)
|
|
(5,268
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Refining and Marketing Segment
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total revenue
|
$
|
6,297,328
|
|
|
$
|
3,277,402
|
|
|
$
|
3,019,926
|
|
|
92
|
%
|
Total cost of revenue (exclusive of depreciation and amortization shown separately below)
|
5,958,778
|
|
|
2,705,031
|
|
|
(3,253,747
|
)
|
|
(120
|
)%
|
|||
Gross profit
|
338,550
|
|
|
572,371
|
|
|
(233,821
|
)
|
|
(41
|
)%
|
|||
Selling general and administrative expense
|
578,027
|
|
|
459,600
|
|
|
(118,427
|
)
|
|
(26
|
)%
|
|||
Depreciation and amortization
|
219,766
|
|
|
245,179
|
|
|
25,413
|
|
|
10
|
%
|
|||
Loss from operations
|
$
|
(459,243
|
)
|
|
$
|
(132,408
|
)
|
|
$
|
(326,835
|
)
|
|
(247
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Recovery Segment
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total revenue
|
$
|
3,533,664
|
|
|
$
|
2,472,079
|
|
|
$
|
1,061,585
|
|
|
43
|
%
|
Total cost of revenue (exclusive of depreciation and amortization shown separately below)
|
4,390,693
|
|
|
2,441,451
|
|
|
(1,949,242
|
)
|
|
(80
|
)%
|
|||
Gross profit (loss)
|
(857,029
|
)
|
|
30,628
|
|
|
(887,657
|
)
|
|
(2,898
|
)%
|
|||
Selling general and administrative expense
|
583,142
|
|
|
531,551
|
|
|
(51,591
|
)
|
|
(10
|
)%
|
|||
Depreciation and amortization
|
163,944
|
|
|
160,398
|
|
|
(3,546
|
)
|
|
(2
|
)%
|
|||
Loss from operations
|
$
|
(1,604,115
|
)
|
|
$
|
(661,321
|
)
|
|
$
|
(942,794
|
)
|
|
(143
|
)%
|
|
|
Six Months Ended June 30,
|
|
$ Change - Favorable (Unfavorable)
|
|
% Change - Favorable (Unfavorable)
|
|
|||||||||
|
|
2020
|
|
2019
|
||||||||||||
Revenues
|
|
$
|
57,577,556
|
|
|
$
|
82,978,004
|
|
|
$
|
(25,400,448
|
)
|
|
(31
|
)%
|
|
Cost of Revenues (exclusive of depreciation shown separately below)
|
|
49,034,659
|
|
|
71,359,770
|
|
|
22,325,111
|
|
|
31
|
%
|
|
|||
Gross Profit
|
|
8,542,897
|
|
|
11,618,234
|
|
|
(3,075,337
|
)
|
|
(26
|
)%
|
|
|||
Selling, general and administrative expenses
|
|
12,731,078
|
|
|
11,376,600
|
|
|
(1,354,478
|
)
|
|
(12
|
)%
|
|
|||
Depreciation and amortization
|
|
3,348,008
|
|
|
3,517,903
|
|
|
169,895
|
|
|
5
|
%
|
|
|||
Loss from operations
|
|
(7,536,189
|
)
|
|
(3,276,269
|
)
|
|
(4,259,920
|
)
|
|
(130
|
)%
|
|
|||
Interest Income
|
|
100
|
|
|
1,918
|
|
|
(1,818
|
)
|
|
(95
|
)%
|
|
|||
Gain on sale of assets
|
|
12,344
|
|
|
31,443
|
|
|
(19,099
|
)
|
|
(61
|
)%
|
|
|||
Gain (loss) on change in value of derivative liability
|
|
1,587,782
|
|
|
(959,077
|
)
|
|
2,546,859
|
|
|
266
|
%
|
|
|||
Interest expense
|
|
(562,259
|
)
|
|
(1,496,775
|
)
|
|
934,516
|
|
|
62
|
%
|
|
|||
Total other income (expense)
|
|
1,037,967
|
|
|
(2,422,491
|
)
|
|
3,460,458
|
|
|
143
|
%
|
|
|||
Loss before income taxes
|
|
(6,498,222
|
)
|
|
(5,698,760
|
)
|
|
(799,462
|
)
|
|
(14
|
)%
|
|
|||
Income tax (expense) benefit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
%
|
|
|||
Net loss
|
|
(6,498,222
|
)
|
|
(5,698,760
|
)
|
|
(799,462
|
)
|
|
(14
|
)%
|
|
|||
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest
|
|
(289,444
|
)
|
|
(307,760
|
)
|
|
18,316
|
|
|
6
|
%
|
|
|||
Net loss attributable to Vertex Energy, Inc.
|
|
$
|
(6,208,778
|
)
|
|
$
|
(5,391,000
|
)
|
|
$
|
(817,778
|
)
|
|
(15
|
)%
|
|
|
|
Six Months Ended June 30,
|
|
$ Change - Favorable (Unfavorable)
|
|
% Change - Favorable (Unfavorable)
|
|
|||||||||
Black Oil Segment
|
|
2020
|
|
2019
|
||||||||||||
Total revenue
|
|
$
|
41,074,507
|
|
|
$
|
70,722,998
|
|
|
$
|
(29,648,491
|
)
|
|
(42
|
)%
|
|
Total cost of revenue (exclusive of depreciation and amortization shown separately below)
|
|
31,914,575
|
|
|
60,710,464
|
|
|
28,795,889
|
|
|
47
|
%
|
|
|||
Gross profit
|
|
9,159,932
|
|
|
10,012,534
|
|
|
(852,602
|
)
|
|
(9
|
)%
|
|
|||
Selling, general and administrative expense
|
|
10,280,614
|
|
|
9,459,534
|
|
|
(821,080
|
)
|
|
(9
|
)%
|
|
|||
Depreciation and amortization
|
|
2,601,752
|
|
|
2,719,354
|
|
|
117,602
|
|
|
4
|
%
|
|
|||
Loss from operations
|
|
$
|
(3,722,434
|
)
|
|
$
|
(2,166,354
|
)
|
|
$
|
(1,556,080
|
)
|
|
(72
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Refining Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total revenue
|
|
$
|
8,807,921
|
|
|
$
|
6,136,023
|
|
|
$
|
2,671,898
|
|
|
44
|
%
|
|
Total cost of revenue (exclusive of depreciation and amortization shown separately below)
|
|
8,554,830
|
|
|
5,256,568
|
|
|
(3,298,262
|
)
|
|
(63
|
)%
|
|
|||
Gross profit
|
|
253,091
|
|
|
879,455
|
|
|
(626,364
|
)
|
|
(71
|
)%
|
|
|||
Selling, general and administrative expense
|
|
1,170,416
|
|
|
929,791
|
|
|
(240,625
|
)
|
|
(26
|
)%
|
|
|||
Depreciation and amortization
|
|
425,932
|
|
|
485,086
|
|
|
59,154
|
|
|
12
|
%
|
|
|||
Loss from operations
|
|
$
|
(1,343,257
|
)
|
|
$
|
(535,422
|
)
|
|
$
|
(807,835
|
)
|
|
(151
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Recovery Segment
|
|
|
|
|
|
|
|
|
|
|||||||
Total revenue
|
|
$
|
7,695,128
|
|
|
$
|
6,118,983
|
|
|
$
|
1,576,145
|
|
|
26
|
%
|
|
Total cost of revenue (exclusive of depreciation and amortization shown separately below)
|
|
8,565,254
|
|
|
5,392,738
|
|
|
(3,172,516
|
)
|
|
(59
|
)%
|
|
|||
Gross profit (loss)
|
|
(870,126
|
)
|
|
726,245
|
|
|
(1,596,371
|
)
|
|
(220
|
)%
|
|
|||
Selling, general and administrative expense
|
|
1,280,048
|
|
|
987,275
|
|
|
(292,773
|
)
|
|
(30
|
)%
|
|
|||
Depreciation and amortization
|
|
320,324
|
|
|
313,463
|
|
|
(6,861
|
)
|
|
(2
|
)%
|
|
|||
Loss from operations
|
|
$
|
(2,470,498
|
)
|
|
$
|
(574,493
|
)
|
|
$
|
(1,896,005
|
)
|
|
(330
|
)%
|
|
2019
|
|
|
|
|
|
|
|
|
||||
Benchmark
|
|
High
|
|
Date
|
|
Low
|
|
Date
|
||||
U.S. Gulfcoast No. 2 Waterborne (dollars per gallon)
|
|
$
|
2.05
|
|
|
April 23
|
|
$
|
1.53
|
|
|
January 2
|
U.S. Gulfcoast Unleaded 87 Waterborne (dollars per gallon)
|
|
$
|
2.08
|
|
|
April 10
|
|
$
|
1.31
|
|
|
January 2
|
U.S. Gulfcoast Residual Fuel No. 6 3% (dollars per barrel)
|
|
$
|
68.54
|
|
|
April 25
|
|
$
|
49.82
|
|
|
January 2
|
NYMEX Crude oil (dollars per barrel)
|
|
$
|
66.30
|
|
|
April 23
|
|
$
|
46.54
|
|
|
January 2
|
Reported in Platt's US Marketscan (Gulf Coast)
|
|
|
|
|
|
|
|
Creditor
|
Loan Type
|
|
Origination Date
|
|
Maturity Date
|
|
Loan Amount
|
|
Balance on June 30, 2020
|
Balance on December 31, 2019
|
||||||
Encina Business Credit, LLC
|
Term Loan
|
|
February 1, 2017
|
|
February 1, 2022
|
|
$
|
20,000,000
|
|
|
$
|
5,883,000
|
|
$
|
13,333,000
|
|
Encina Business Credit SPV, LLC
|
Revolving Note
|
|
February 1, 2017
|
|
February 1, 2022
|
|
$
|
10,000,000
|
|
|
—
|
|
3,276,230
|
|
||
Wells Fargo Equipment Lease-Ohio
|
Finance Lease
|
|
April-May, 2019
|
|
April-May, 2024
|
|
$
|
621,000
|
|
|
494,573
|
|
551,260
|
|
||
AVT Equipment Lease-Ohio
|
Finance Lease
|
|
April 2, 2020
|
|
April 2, 2023
|
|
$
|
337,155
|
|
|
313,272
|
|
—
|
|
||
AVT Equipment Lease-HH
|
Finance Lease
|
|
May 22, 2020
|
|
May 22, 2023
|
|
$
|
551,609
|
|
|
520,191
|
|
—
|
|
||
John Deere Note
|
Note
|
|
May 27, 2020
|
|
June 24, 2024
|
|
$
|
152,643
|
|
|
149,613
|
|
—
|
|
||
Tetra Capital Lease
|
Finance Lease
|
|
May, 2018
|
|
May, 2022
|
|
$
|
419,690
|
|
|
218,896
|
|
264,014
|
|
||
Well Fargo Equipment Lease-VRM LA
|
Finance Lease
|
|
March, 2018
|
|
March, 2021
|
|
$
|
30,408
|
|
|
7,135
|
|
12,341
|
|
||
Texas Citizens Bank
|
PPP Loan
|
|
May 5, 2020
|
|
April 28, 2022
|
|
$
|
4,222,000
|
|
|
4,222,000
|
|
—
|
|
||
Various institutions
|
Insurance premiums financed
|
|
Various
|
|
< 1 year
|
|
$
|
2,902,428
|
|
|
—
|
|
1,165,172
|
|
||
Total
|
|
|
|
|
|
|
|
|
|
11,808,680
|
|
18,602,017
|
|
|||
Deferred finance costs, net
|
|
|
|
|
|
|
|
|
—
|
|
(47,826
|
)
|
||||
Total, net of deferred finance costs
|
|
|
|
|
|
|
|
|
$
|
11,808,680
|
|
$
|
18,554,191
|
|
Creditor
|
Year 1
|
|
Year 2
|
|
Year 3
|
|
Year 4
|
|
Year 5
|
|
Thereafter
|
||||||||||||
Encina Business Credit, LLC
|
$
|
900,000
|
|
|
$
|
4,983,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Encina Business Credit SPV, LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
John Deere Note
|
36,845
|
|
|
37,759
|
|
|
38,695
|
|
|
36,313
|
|
|
—
|
|
|
—
|
|
||||||
Well Fargo Equipment Lease- Ohio
|
117,834
|
|
|
124,039
|
|
|
130,574
|
|
|
122,127
|
|
|
—
|
|
|
—
|
|
||||||
AVT Equipment Lease-Ohio
|
88,689
|
|
|
96,512
|
|
|
128,071
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
AVT Equipment Lease-HH
|
142,258
|
|
|
154,805
|
|
|
223,128
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Tetra Capital Lease
|
94,920
|
|
|
123,976
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Well Fargo Equipment Lease- VRM LA
|
7,135
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Texas Citizens Bank
|
1,877,461
|
|
|
2,344,539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Various institutions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Totals
|
$
|
3,265,142
|
|
|
$
|
7,864,630
|
|
|
$
|
520,468
|
|
|
$
|
158,440
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
actual or anticipated variations in our results of operations;
|
(2)
|
the market for, and volatility in, the market for oil and gas;
|
(3)
|
our ability or inability to generate new revenues; and
|
(4)
|
the number of shares in our public float.
|
|
|
Six Months Ended June 30,
|
||||||
|
|
2020
|
|
2019
|
||||
Beginning cash, cash equivalents and restricted cash
|
|
$
|
4,199,825
|
|
|
$
|
2,849,831
|
|
Net cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
3,712,167
|
|
|
543,971
|
|
||
Investing activities
|
|
(3,375,454
|
)
|
|
(2,332,753
|
)
|
||
Financing activities
|
|
13,317,899
|
|
|
(462,823
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
|
13,654,612
|
|
|
(2,251,605
|
)
|
||
Ending cash, cash equivalents and restricted cash
|
|
$
|
17,854,437
|
|
|
$
|
598,226
|
|
|
VERTEX ENERGY, INC.
|
|
|
Date: August 10, 2020
|
By: /s/ Benjamin P. Cowart
|
|
Benjamin P. Cowart
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
|
Date: August 10, 2020
|
By: /s/ Chris Carlson
|
|
Chris Carlson
|
|
Chief Financial Officer
|
|
(Principal Financial/Accounting Officer)
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
X
|
|
|
|
|
|
|
|
|
||
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
X
|
|
|
|
|
|
|
|
|
(a)
|
Section 1.01 of the Credit Agreement is hereby amended by (i) adding the following new defined terms in their proper alphabetical order and (ii) amending and restating certain existing defined terms as set forth below:
|
(b)
|
Section 2.01(b) of the Credit Agreement is hereby amended by adding a new subsection 2.01(b)(iv) immediately after Section 2.01(b)(iii) to read as follows:
|
(c)
|
Section 2.02(a) of the Credit Agreement is hereby amended and restated to read as follows:
|
(d)
|
Section 2.02(c) of the Credit Agreement is hereby amended and restated to read as follows:
|
(e)
|
Section 2.04(b) of the Credit Agreement is hereby amended by adding the following new sentence to the end thereof to read as follows:
|
(f)
|
Section 2.04(c) of the Credit Agreement is hereby amended and restated to read as follows:
|
(g)
|
Section 2.06(a) of the Credit Agreement is hereby amended and restated to read as follows:
|
(h)
|
Section 2.07(a) of the Credit Agreement is hereby amended and restated to read as follows:
|
(i)
|
Section 2.09 of the Credit Agreement is hereby amended by adding the following new sentences to the end thereof to read as follows:
|
(j)
|
Sections 3.02, 3.03 and 3.04(a) of the Credit Agreement are hereby amended and restated to read as follows:
|
(k)
|
The Credit Agreement is hereby amended by adding a new Section 3.04(e) to the end thereof to read as follows:
|
(l)
|
The Credit Agreement is hereby amended by adding a new Section 4.03 to the end thereof to read as follows:
|
(m)
|
Section 7.11 of the Credit Agreement is hereby amended by adding the following new sentence to the end thereof to read as follows:
|
(n)
|
Section 11.01 of the Credit Agreement is hereby amended by adding a new subsection 11.01(o) to the end thereof to read as follows:
|
(o)
|
Schedule 2.01 of the Credit Agreement is amended by adding the following line items to the end thereof:
|
Additional Borrowers:
BANGO OIL LLC
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
VERTEX RECOVERY MANAGEMENT LA, LLC
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
VERTEX REFINING NV, LLC
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
VERTEX REFINING LA, LLC
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
|
VERTEX II GP, LLC
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
VERTEX MERGER SUB, LLC
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
VERTEX ACQUISITION SUB, LLC
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
CEDAR MARINE TERMINALS, LP
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
CROSSROAD CARRIERS, L.P.
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
VERTEX RECOVERY, L.P.
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
H&H OIL, L.P.
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
|
VERTEX RECOVERY MANAGEMENT, LLC
By: /s/ Chris Carlson
Chris Carlson
Chief Financial Officer |
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Vertex Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of a Quarterly Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 10, 2020
|
By:
|
/s/ Benjamin P. Cowart
|
|
|
Benjamin P. Cowart
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Vertex Energy, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of a Quarterly Report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 10, 2020
|
By:
|
/s/ Chris Carlson
|
|
|
Chris Carlson
Chief Financial Officer
(Principal Financial/Accounting Officer)
|
Date: August 10, 2020
|
By:
|
/s/ Benjamin P. Cowart
|
|
|
Benjamin P. Cowart
Chief Executive Officer
(Principal Executive Officer)
|
Date: August 10, 2020
|
By:
|
/s/ Chris Carlson
|
|
|
Chris Carlson
Chief Financial Officer
(Principal Financial/Accounting Officer)
|