We could be affected by higher than anticipated renewable diesel feedstock costs, including but not limited to increased prices for soybeans.

~~such Board of Directors are no longer directors; or a “change of control” or any comparable term under, and as defined in, any other indebtedness exceeding $2 million of the Loan Parties, shall have occurred (each a “Change of Control”).~~

~~As a result of these requirements, covenants and limitations, we may not be able~~In addition to ~~respond to changes in business~~general market fluctuations and economic conditions, ~~and to obtain additional financing, if needed, and~~ we ~~may be prevented from engaging in transactions that might otherwise be beneficial to us. The breach of any of these requirements or covenants~~ could ~~result in a default under~~experience significant cost increases associated with the Loan and Security Agreement or future credit facilities. Upon the occurrence of an event of default, the lenders could elect to declare all amounts outstanding under such Loan and Security Agreement or future debt facilities, including accrued interest or other obligations, to be immediately due and payable. If amounts outstanding under such Loan and Security Agreement or future debt facilities were to be accelerated, our assets might not be sufficient to repay in full that indebtedness and our other indebtedness.

Our Loan and Security Agreement and Supply and Offtake Agreement also contain cross-default and cross-acceleration provisions as may our future debt facilities. Under these provisions, a default or acceleration under one instrument governing our debt will in the case of the Loan and Security Agreement and Supply and Offtake Agreement and may in the case of future indebtedness, constitute a default under our other debt instruments that contain cross-default and cross-acceleration provisions, which could result in the related debt and the debt issued under such other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which funds might not be available to us on favorable terms, on a timely basis or at all. Alternatively, such a default could require us to sell assets and otherwise curtail operations to pay our creditors. The proceeds of such a sale of assets, or curtailment of operations, might not enable us to pay allongoing operation of our ~~liabilities.~~

~~A prolonged period~~renewable diesel refining facility caused by a variety of weak, or a significant decrease in, industry activity and overall markets, due to COVID-19 or otherwise, may make it difficult to comply with our covenants and the other restrictions in the agreements governing our debt and current global and market conditions have increased the potential for that difficulty.

~~Our ability to service our indebtedness will depend on our ability to generate cash in the future.~~

Our ability to make payments on our current (including our Convertible Senior Notes and Term Loan) and future indebtedness will depend on our ability to generate cash in the future. Our ability to generate cash is subject to general economic and market conditions and financial, competitive, legislative, regulatory and other factors, ~~that~~many of which are beyond our control. ~~Our business may~~These cost increases could arise from an inadequate supply of soybeans and a resulting price increase which is not generate sufficient cash to fund our working capital requirements, capital expenditures, debt service and other liquidity needs, which could result in our inability to comply with financial and other covenants contained in our debt agreements, our being unable to repay or pay interest on our indebtedness, and our inability to fund our other liquidity needs. If we are unable to service our debt obligations, fund our other liquidity needs and maintain compliance with our financial and other covenants, we could be forced to curtail our operations, our creditors could accelerate our indebtedness and exercise other remedies and we could be required to pursue one or more alternative strategies, such as selling assets or refinancing or restructuring our indebtedness. However, such alternatives may not be feasible or adequate.

~~Our obligations under the Loan and Security Agreement and Supply and Offtake Agreement are secured~~accompanied by ~~a first priority security interest in substantially all of our assets and various Company guarantees.~~

The amounts borrowed pursuant to the terms of the Loan and Security Agreement are secured by substantially all of the present and after-acquired assets of the Company and its subsidiaries. Additionally, Vertex Refining’s obligations under the Loan and Security Agreement are jointly and severally guaranteed by substantially all of the Company’s subsidiaries and the Company. The amounts owed under the Loan and Security Agreement are also secured by various deeds of trusts and mortgages for the real property(s) described therein, over the Mobile Refinery and substantially all other material owned and leased real property of the Guarantors including properties in Texas and Louisiana. In connection with the entry into the Loan and Security Agreement, Vertex Operating, entered into an Intellectual Property Security Agreement in favor of the Agent, pursuant to which it granted a security interest in substantially all of its intellectual property (including patents and trademarks) in favor of the Lenders to secure the obligations of the Loan Parties under the Loan and Security Agreement. In connection with the entry into the Loan and Security Agreement, the Company, Vertex Refining and each of the Guarantors, entered into a Collateral Pledge Agreement in favor of the Agent, pursuant to which they granted the Agent a security interest in all now owned or hereafter acquired promissory notes and instruments evidencing indebtedness to any Guarantor and all now owned or hereafter acquired equity interests owned by such Guarantor.

The obligations of Vertex Refining and any of its subsidiaries under the Supply and Offtake Agreement and related transaction documents are guaranteed by the Company. The obligations of Vertex Refining and any of its subsidiaries under the Supply and Offtake Agreement and related transaction documents are also secured by a Pledge and Security Agreement in favor

of Macquarie, executed by Vertex Refining. In addition, the Supply and Offtake Agreement also requires that Vertex Refining post and maintain cash collateral (in the form of an independent amount) as security for Vertex Refining’s obligations under the Supply and Offtake Agreement and the related transaction documents. The amount of cash collateral is subject to adjustments during the term.

~~As a result of the above, our creditors and Macquarie,~~increase in the event of the occurrence of a default under the Loan and Security Agreement or Supply and Offtake Agreement, respectively, may enforce their security interests over our assets and/or our subsidiaries which secure such obligations, take control of our assets and operations, force us to seek bankruptcy protection, or force us to curtail or abandon our current business plans and operations. If that were to happen, any investment in the Company (including, but not limited to any investment in our common stock) could become worthless.

~~Our arrangement with Macquarie exposes us to Macquarie-related credit and performance risk as well as potential refinancing risks.~~

In April 2022, we entered into several agreements with Macquarie to support the operations of the Mobile Refinery, including a Supply and Offtake Agreement. Pursuant to the Supply and Offtake Agreement, Macquarie has agreed to intermediate crude oil supplies and refined product inventories at the Mobile Refinery. Macquarie will own all of the crude oil in our tanks and substantially all of our refined product inventories prior to our sale of the inventories.

Should Macquarie terminate the Supply and Offtake Agreement with 180 days written notice, we would need to seek alternative sources of financing, including the requirement upon termination to repurchase the inventory at then current market prices. In addition, the cost of repurchasing the inventory may be at higher prices than we sold the inventory. If theprice for renewable diesel. The price of ~~crude~~soybeans, and therefore soybean oil, ~~is well above the price at~~ which we ~~sold the inventory, we would have~~process into renewable diesel, may increase due to ~~pay more~~alternative uses for ~~the inventory than the~~soybeans, climate change, droughts, adverse weather, insect spoilation, or other events. Changes in price ~~we sold the inventory for. If this is the case at the time~~ of ~~termination, we could suffer significant reductions in liquidity when Macquarie terminates the Supply~~soybeans and ~~Offtake Agreement and we have to repurchase the inventories. We~~therefore soybean oil, may ~~also be unable to enter into a similar relationship with a third party which may impair~~affect our ability to ~~operate the Mobile Refinery~~obtain feedstock for our renewable diesel refining facility and ~~purchase inventory therefore,~~may adversely effect our margins, which could make it non-economical to operate our renewable diesel refining facility and/or may have a material adverse effect on our results of operations and cash flows.

If we are unable to obtain crude oil supplies for our Mobile Refinery without the benefit of certain intermediation agreements, the capital required to finance our crude oil supply could negatively impact our liquidity.

All of the crude oil delivered at our Mobile Refinery is subject to our Supply and Offtake Agreements with Macquarie. If we are unable to obtain our crude oil supply for our refinery under these agreements, our exposure to crude oil pricing risks may increase as the number of days between when we pay for the crude oil and when the crude oil is delivered to us increases. Such increased exposure could negatively impact our liquidity position due to the increase in working capital used to acquire crude oil inventory for our refineries.

~~The Intermediation Agreements expose us to counterparty credit and performance risk.~~

We have Supply and Offtake Agreements with Macquarie, pursuant to which Macquarie will intermediate crude oil supplies and refined product inventories at our Mobile Refinery. Macquarie will own all of the crude oil in our tanks and substantially all of our refined product inventories prior to our sale of the inventories. Upon termination of the Supply and Offtake Agreements, unless extended by mutual agreement for an additional one year term, we are obligated to repurchase all crude oil and refined product inventories then owned by Macquarie and located at the specified storage facilities at then current market prices. This repurchase obligation could have a material adverse effect on our business, results of operations, or financial condition. An adverse change in the business, results of operations, liquidity, or financial condition of our intermediation counterparties could adversely affect the ability of such counterparties to perform their obligations, which could consequently have a material adverse effect on our business, results of operations, or liquidity and, as a result, our business and operating results.

~~Continued increases in interest rates will cause our debt service obligations to increase.~~

The amounts borrowed under the Loan and Security Agreement bear interest at a rate per annum equal to the sum of (i) the greater of (x) the per annum rate publicly quoted from time to time by The Wall Street Journal as the “Prime Rate” in the United States minus 1.50% as in effect on such day and (y) the Federal Funds rate for such day plus 0.50%, subject in the case of this clause (i), to a floor of 1.0%, plus (ii) 9.25%, which rate is currently 14%. Interest rates have recently been increasing and any continued increase in the interest rates associated with our floating-rate debt would increase our debt service costs and affect our results of operations. In addition, a future increase in interest rates could adversely affect our future ability to obtain financing or materially increase the cost of any additional financing.

Economic uncertainty may affect our access to capital and/or increase the costs of such capital.(*)

Global economic conditions continue to be volatile and uncertain due to, among other things, consumer confidence in future economic conditions, fears of recession and trade wars, global conflicts, including the ongoing conflict between Russia and Ukraine and Irael and Hamas, the price of energy, increasing interest rates, the availability and cost of consumer credit, the availability and timing of government stimulus programs, levels of unemployment, increased inflation, and tax rates. These conditions remain unpredictable and create uncertainties about our ability to raise capital in the future. In the event required capital becomes unavailable in the future, or more costly, it could have a material adverse effect on our business, results of operations, and financial condition.

~~Risks Relating~~

The conflicts in Ukraine and Israel and related price volatility and geopolitical instability has negatively impacted and may continue to negatively impact our business.(*)

In late February 2022, Russia launched significant military action against Ukraine. In October 2023, following a series of coordinated attacks, conducted by the Palestinian Islamist militant group Hamas, from the Gaza Strip onto bordering areas in Israel, Israel began air strikes against Hamas, and may in the future begin a ground war. The Israel/Hamas conflict is threatening to spread, and may in the future spread, into other Middle Eastern countries. The conflicts have caused, and could intensify, volatility in natural gas, oil and natural gas liquid prices, and the extent and duration of the military actions, sanctions and resulting market disruptions could be significant and could potentially have a substantial negative impact on the global economy and/or our business for an unknown period of time. We believe that the late 2022 increase in crude oil prices was partially due to the impact of the conflict between Russia and Ukraine on the global commodity and financial markets, and in response to economic and trade sanctions that certain countries have imposed on Russia. Any such volatility and disruptions may also magnify the impact of other risks described herein and in our Annual Report on Form 10-K.

Our ~~Operations, Business~~arrangement with Macquarie exposes us to Macquarie-related credit and ~~Industry~~performance risk as well as potential refinancing risks.(*)

~~Unanticipated problems~~

In April 2022, we entered into several agreements with Macquarie to support the operations of the Mobile Refinery, including a Supply and Offtake Agreement. On May 26, 2023, Vertex Renewables entered into a Supply and Offtake Agreement with Macquarie, pertaining to the supply and financing of renewable biomass feedstocks used for the production of renewable fuels, the offtake and financing of renewable diesel, and the provision of certain financing accommodations with respect to certain agreed environmental attributes at ~~or downtime effecting,~~the Mobile Refinery. Pursuant to the Supply and Offtake Agreements, Macquarie has agreed to intermediate crude oil supplies and refined product inventories, and renewable diesel supplies and product inventories, at the Mobile Refinery. Macquarie will own all of the crude oil and renewable diesel in our ~~facilities~~tanks and ~~those operated by~~substantially all of our refined and finished product inventories prior to our sale of the inventories.

Should Macquarie terminate the Supply and Offtake Agreements with 180 days written notice, we would need to seek alternative sources of financing, including the requirement upon termination to repurchase the inventory at then current market prices. In addition, the cost of repurchasing the inventory may be at higher prices than we sold the inventory. If this is the case at the time of termination, we could suffer significant reductions in liquidity when Macquarie terminates the Supply and Offtake Agreements and we have to repurchase the inventories. We may also be unable to enter into a similar relationship with a third ~~parties on~~party which ~~we rely,~~may impair our ability to operate the Mobile Refinery and purchase inventory therefore, which could have a material adverse effect on our results of operations.*

~~Our ability to process feedstocks depends on our ability to operate our refining/processing~~ operations and facilities, including our Mobile Refinery, and those operated by third parties on which we rely, including, but not limited to Monument Chemical, and the total time that such facilities are online and operational. The occurrence of significant unforeseen conditions or events in connection with the operation or maintenance of such facilities, such as the need to refurbish such facilities, complete capital projects at such facilities, shortages of workers or materials, adverse weather, including, but not limited to lightning strikes, floods, hurricanes, tornadoes and earthquakes, equipment failures, fires, explosions, oil or other leaks, damage to or destruction of property and equipment associated therewith, environmental releases and/or damage, government regulation changes affecting the use of such facilities, terrorist attacks, mechanical or physical failures of equipment, acts of God, or other conditions or events, could prevent us from operating our facilities, or prevent such third parties from operating their facilities, or could force us or such third parties to shut such facilities down for repairs, maintenance, refurbishment or upgrades for a significant period of time. In the event any of our facilities or those of third parties on which we rely are offline for an extended period of time, it could have a material adverse effect on our results of operations and consequently the price of our securities. For example, on October 7, 2020, we had a fire at our Marrero refinery which took the facility offline for repairs for about two weeks. The refinery suffered some minor structural damage along with piping, valves and instrumentation in the immediate area of the fire, the largest impact was the damage to the electrical conduit that feeds the power to the refinery equipment and was back up October 26, 2020. Additionally, during August and September 2020, two hurricanes brought severe flooding and high winds that adversely impacted operations in the Gulf Coast and, specifically at the Company’s Marrero, Louisiana refinery, while also limiting outbound shipments of finished product along adjacent waterways between Houston and New Orleans for approximately two weeks. Additionally, during August 2021, Hurricane Ida made landfall in southeast Louisiana, approximately 30 miles directly south and west of the Myrtle Grove facility, which resulted in the entire 42 acre Myrtle Grove site to be covered with 4-6 feet of storm surge and thus damages of assets and equipment. The Company reviewed the inspection report and related information from insurance companies and a third party engineer, and determined that there is no 100% certainty around the recoverability of some Construction-In-Progress assets such as fire heaters and pumps and instrumentation. The Company recorded $2.1 million of loss on assets impairment on the Consolidated Statements of Operations in the fourth quarter of 2021, of which the entire amount is related to our Black Oil segment. Subsequent downtime at our facilities, including our newly acquired Mobile Refinery, losses of equipment or use of such facilities may have a material adverse effect on our operations, cash ~~flows or assets. The Company believes that it maintains adequate insurance coverage.~~

~~Unanticipated problems or delays, or increases in costs, in connection with the ongoing capital project at the Mobile Refinery may harm our business and viability.~~flows.

~~We are in the process of completing a $90-100 million capital project designed to modify the Mobile Refinery’s hydrocracking unit to produce renewable diesel fuel on a standalone basis (the “Conversion~~”). The occurrence of significant unforeseen conditions or events in connection with the Conversion may make the Conversion more expensive, prevent us from completing the Conversion, delay the completion of the Conversion or require us to reexamine our business model. Any change to our business model or management’s evaluation of the viability of the Conversion or timing associated therewith may adversely affect our business. Construction costs for the Conversion may also increase to a level that would make such Conversion too expensive to complete or unprofitable to operate, due to increases in material, labor, inflation or otherwise. Contractors, engineering firms, construction firms and equipment suppliers also receive requests and orders from other companies and, therefore, we may not be able to secure their services or products on a timely basis or on acceptable financial terms. We may suffer significant delays or cost overruns as a result of a variety of factors, such as increases in the prices of raw materials, shortages of workers or materials, transportation constraints, adverse weather, equipment failures, fires, damage to or

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destruction of property and equipment, environmental damage, unforeseen difficulties or labor issues, or issues associated with planned capital projects, including cost overruns and unforeseen delays, and have already delayed the completion of the project once due to supply constraints, any of which could prevent us from timely completing the Conversion.

We may be unable to sell our UMO Business and no do not anticipate seeking shareholder approval for such sale.*

Our agreement with Safety-Kleen to acquire our UMO Business was terminated in January 2022. We are continuing to seek sales opportunities relating to such UMO Business, but we may be unable to find a purchaser to purchase such UMO Business on as favorable terms as Safety-Kleen had previously agreed to acquire such assets, such sale may be unable to be completed due to required conditions to closing, including governmental regulations, and the knowledge that we are actively trying to sell our UMO Business may result in depressed prices. As a result, we may not be able to sell our UMO Business on favorable terms, if at all and/or may face termination and other fees in connection with any planned sale which is subsequently abandoned. Additionally, as a result of the acquisition of the Mobile Refinery, we no longer anticipate needing, or obtaining, shareholder approval for the future sale of our UMO Business or our Heartland Business.

Claims above our insurance limits, or significant increases in our insurance premiums, may reduce our profitability.*

~~We currently employ approximately~~ 95 full-time drivers. From time to time, some of these employee drivers are involved in automobile accidents. We currently carry liability insurance of $1,000,000 for our drivers, subject to applicable deductibles, and carry umbrella coverage up to $25,000,000. We currently employ over 500 employees. Claims against us may exceed the amounts of available insurance coverage. If we were to experience a material increase in the fr~~equency or severity of accidents, liability claims or workers’ compensation claims or unfavorable resolutions of claims, our operating results could be materially affected.~~

~~Our hedging activities have in the past and may in the future prevent us from benefiting fully from increases in oil prices and may expose us to other risks, including counterparty risk.~~

We use derivative instruments to hedge the impact of fluctuations in oil and other prices on our results of operations and cash flows and are also required to use such hedges pursuant to the terms of the Loan and Security Agreement. We have in the past, and to the extent that we continue to engage in hedging activities to protect ourselves against commodity price declines, we may be prevented from fully realizing the benefits of increases in oil prices above the prices established by our hedging contracts and/or may result in us paying more for oil feedstocks then we receive upon the sale of finished products as we hedge finished product sales and not feedstock purchases. For example, as of September 30, 2022, our outstanding oil hedges had a fair value of positive $1.2 million. Our hedging activities may expose us to the risk of financial loss in certain circumstances, including instances in which the counterparties to our hedging contracts fail to perform under the contracts. Finally, we are subject to risks associated with the adoption of derivatives legislation and regulations related to derivative contracts which if adopted, could have an adverse impact on our ability to hedge risks associated with our business. If regulations adopted in the future require that we post margin for our hedging activities or require our counterparties to hold margin or maintain capital levels, the cost of which could be passed through to us, or impose other requirements that are more burdensome than current regulations, hedging transactions in the future would become more expensive than we experienced in the past. Our hedges have in the past and may in the future result in significant losses and reduce the amount of revenue we would otherwise obtain upon the sale of finished products and may also increase our margins and decrease our net revenues.

We depend on certain third-party pipelines for transportation of feedstocks and products, and if these pipelines become unavailable to us, our revenues and cash available for payment of our debt obligations could decline.

~~Our Mobile Refinery is interconnected to a pipeline that supplies a portion of its crude oil feedstock.~~ Since we do not own or operate this pipeline, its continuing operation is not within our control. The unavailability of any third-party pipelines for the transportation of crude oil or finished products, because of acts of God, accidents, earthquakes or hurricanes, government regulation, terrorism or other third-party events, could lead to disputes or litigation with certain of our suppliers or a decline in our sales, net income and cash available for payments of our debt obligations.

~~We make capital expenditures in our facilities to maintain their reliability and efficiency.~~ If we are unable to ~~complete~~obtain crude oil supplies, soybean oil and other renewable diesel raw materials, for our Mobile Refinery without the benefit of certain intermediation agreements, the capital ~~projects~~required to finance our crude oil supply could negatively impact our liquidity.(*)

All of the crude oil and all of the soybean oil delivered at ~~their expected costs~~our Mobile Refinery are subject to our Supply and Offtake Agreements with Macquarie. If we are unable to obtain our crude oil supply and/or ~~in a timely manner, or if~~soybean oil supply for our refinery under these agreements, our exposure to crude oil and soybean oil pricing risks may increase as the ~~market conditions assumed in~~number of days between when we pay for the crude oil and soybean oil and when the crude oil and soybean oil is delivered to us increases. Such increased exposure could negatively impact our ~~projected economics deteriorate, results of operations or cash flows could be adversely affected.~~

~~Delays or cost increases related~~liquidity position due to the ~~engineering, procurement~~increase in working capital used to acquire crude oil and ~~construction of new facilities, or improvements and repairs to~~soybean oil inventories for our ~~existing facilities and equipment, could have a material adverse effect on our business, financial condition,~~refineries.

results of operations or our ability to make payments on our debt obligations. Such delays or cost increases may arise as a result of unpredictable factors in the marketplace, many of which are beyond our control, including:

~~• denial or delay in obtaining regulatory approvals and/or permits;~~

~~• changes in government regulations, including environmental and safety regulations;~~

~~• unplanned increases in the cost of equipment, materials or labor;~~

~~• disruptions in transportation of equipment and materials;~~

~~• severe adverse weather conditions, natural disasters or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of our vendors and suppliers;~~

~~• shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages;~~

~~• market-related increases in a project’s debt or equity financing costs; and/or~~

~~• nonperformance or declarations of force majeure by, or disputes with, our vendors, suppliers, contractors or sub-contractors.~~

~~Equipment, even if properly maintained, may require significant capital expenditures and expenses to keep it operating at optimum efficiency.~~

Any one or more of these occurrences noted above could have a significant impact on our business or subject us to significant cost overruns. If we were unable to make up the delays or to recover the related costs, or if market conditions change, we may not realize the anticipated benefits of our capital projects and it could materially and adversely affect our financial position, results of operations or cash flows and, as a result, our ability to make payments of our debt obligations.

~~From time to time, we may seek to divest portions of our business, which could materially affect our results of operations and result in disruption to other parts of the business.~~

We may dispose of portions of our current business or assets (including, but not limited to our UMO Business, which we are actively seeking to divest), based on a variety of factors and strategic considerations, consistent with our strategy of preserving liquidity and streamlining our business to better focus on the advancement of our core business. We expect that any potential divestitures of assets will also provide us with cash to reinvest in our business and repay indebtedness. These dispositions, together with any other future dispositions we make, may involve risks and uncertainties, including disruption to other parts of our business, potential loss of employees, customers or revenue, exposure to unanticipated liabilities or result in ongoing obligations and liabilities to us following any such divestiture. In addition, any such divestitures may not yield the targeted improvements in our business. Any of the foregoing could adversely affect our financial condition and results of operations or cash flows and, as a result, our ability to make payments of our debt obligations.

The prices of crude oil, soybean oil, renewable diesel and refined and finished lubricant products materially affect our profitability, and are dependent upon many factors that are beyond our control, including general market demand and economic conditions, seasonal and weather-related factors, regional and grade differentials and governmental regulations and policies.(*)

Among these factors is the demand for crude oil, soybean oil, renewable diesel and refined and finished lubricant products, which is largely driven by the conditions of local and worldwide economies, as well as by weather patterns, changes in consumer preferences and the taxation of these products relative to other energy sources. Governmental regulations and policies, particularly in the areas of taxation, energy and the environment, and ~~more recently in response to~~ the ~~COVID-19 pandemic, also have a significant impact on our activities.~~setting of interest rates. Operating results can be affected by these industry factors, product and crude pipeline capacities, crude oil differentials (including regional and grade differentials), production of soybeans, changes in transportation costs, accidents or interruptions in transportation, competition in the particular geographic areas that we serve, global market conditions, actions by foreign nations and factors that are specific to us, such as the efficiency of our refinery operations. The demand for crude oil, soybean oil, renewable diesel and refined and finished lubricant products can also be reduced due to a local or national recession or other adverse economic condition, which results in lower spending by businesses and consumers on gasoline and diesel fuel, higher gasoline prices due to higher crude oil prices, a shift by consumers to more fuel-efficient vehicles or alternative fuel vehicles (such as ethanol or wider adoption of gas/electric hybrid vehicles), or an increase in vehicle fuel economy, whether as a result of technological advances by manufacturers, legislation mandating or encouraging higher fuel economy or the use of alternative fuel.

We do not produce crude oil or soybean oil and must purchase all of our crude oil and soybean oil, the price of which fluctuates based upon worldwide and local market conditions. Our profitability depends largely on the spread between market prices for refined petroleum products and crude oil ~~prices. This margin is~~prices and soybean oil and renewable diesel. These margins are continually changing and may fluctuate significantly from time to time. Crude oil and refined products and crude oil prices and soybean oil are commodities whose price levels are determined by market forces beyond our control. For example, the reversal of certain existing pipelines or the construction of certain new pipelines transporting additional crude oil or refined products to markets that serve competing refineries could affect the market dynamic that has allowed us to take advantage of favorable pricing. Additionally, extreme weather conditions may affect the production of soybeans which in turn may affect the price and availability of soybean oil. A deterioration of crack spreads or price differentials between domestic and foreign crude oils, or between the price of soybean oil and renewable diesel, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Additionally, due to the seasonality of refined products markets and refinery maintenance schedules, results of operations for any particular ~~quarter of a~~ fiscal ~~year~~quarter are not necessarily indicative of results for the full year and can vary year to year in the event of unseasonably cool weather in the summer months and/or unseasonably warm weather in the winter months in the markets in which we sell our petroleum products. In general, prices for refined products are influenced by the price of crude oil and the prices of renewable diesel are influenced by the price of renewable diesel feedstock such as soybean oil. Although an increase or decrease in the price for crude oil and/or soybean oil may result in a similar increase or decrease in prices for refined products, there may be a time lag in the realization of the similar increase or decrease in prices for refined products. The effect of changes in crude oil and/or soybean oil prices on operating results, therefore, depends in part on how quickly refined product prices adjust to reflect these changes. A substantial or prolonged increase in crude oil and/or soybean oil prices without a corresponding increase in refined product prices, a substantial or prolonged decrease in refined product prices without a corresponding decrease in crude oil and/or soybean oil prices, or a substantial or prolonged decrease in demand for refined products could have a significant negative effect on our earnings and cash flow. Also, our crude oil, soybean oil and refined products inventories are valued at the lower of cost or market under the ~~last-in,~~first-in, first-out (“~~LIFO”~~FIFO”) inventory valuation methodology, excluding commodity inventories at the Mobile Refinery which use the weighted average inventory accounting method. If the market value of our inventory were to decline to an amount less than our ~~LIFO~~FIFO cost, we would record a write-down of inventory and a non-cash charge to cost of products sold even when there is no underlying economic impact at that point in time. Continued volatility in crude oil and/or soybean oil and refined products prices could result in lower of cost or market inventory charges in the future, or in reversals reducing cost of products sold in subsequent periods should prices recover.

To successfully operate our facilities, we are required to expend significant amounts for capital outlays and operating expenditures. If we are unable to complete capital projects at their expected costs or in a timely manner, or if the market conditions assumed in our project economics deteriorate, our financial condition, results of operations, or cash flows could be materially and adversely affected.

Our facilities consist of many processing units, a number of which have been in operation for many years. One or more of the units may require unscheduled downtime for unanticipated maintenance or repairs that are more frequent than our scheduled turnaround for such units. Scheduled and unscheduled maintenance could reduce our revenues during the period of time that the units are not operating. The installation and redesign of key equipment at our facilities, including the ongoing renewable diesel capital project at the Mobile Refinery, involves significant uncertainties, including the following: our upgraded equipment may not perform at expected levels; operating costs of the upgraded equipment may be higher than expected; the yield and product quality of new equipment may differ from design and/or specifications and redesign, modification or replacement of the equipment may be required to correct equipment that does not perform as expected, which could require facility shutdowns until the equipment has been redesigned or modified. Any of these risks associated with new equipment, redesigned older equipment, or repaired equipment could lead to lower revenues or higher costs or otherwise have a negative impact on our future financial condition and results of operations.

One of the ways we may grow our business is through the construction of new refinery processing units (or the purchase and refurbishment of used units from another refinery) and the conversion or expansion of existing ones, such as the ongoing conversion at the Mobile Refinery to produce renewable biodiesel. Projects are generally initiated to increase the yields of higher-value products, increase the amount of lower cost crude oils that can be processed, increase refinery production capacity, meet new governmental requirements or take advantage of new government incentive programs, or maintain the operations of our existing assets. Additionally, our growth strategy includes projects that permit access to new and/or more profitable markets, including the growing demand for renewable diesel. The construction process involves numerous regulatory, environmental, political, and legal uncertainties, most of which are not fully within our control, including:

•~~third party challenges to, denials, or delays with respect to the issuance of requisite regulatory approvals and/or obtaining or renewing permits, licenses, registrations and other authorizations;~~

•~~societal and political pressures and other forms of opposition;~~

•~~compliance with or liability under environmental regulations;~~

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•The Offtake Agreement wi~~unplanned increases~~th Idemitsu may be terminated prior to the end of the initial term thereof, and we may face termination fees in connection therewith.(*)

On February 14, 2022, Vertex Refining entered into a Master Offtake Agreement dated February 4, 2022 with Idemitsu Apollo Renewable Corp. (“Idemitsu”). Pursuant to the Offtake Agreement, Vertex Refining agreed to sell Idemitsu renewable diesel which is produced by the Mobile Refinery. The initial term of the Offtake Agreement commenced on the date that the conversion was completed (“COD”) and continues for a period of five years thereafter, subject to certain early termination provisions set forth in the ~~cost~~agreement, including, but not limited to, the right of ~~construction materials or labor;~~

•~~disruptions in transportation of modular components and/or construction materials;~~

•severe adverse weather conditions, natural disasters, terror or cyberattacks, vandalism or other events (such as equipment malfunctions, explosions, fires or spills) affecting our facilities, or those of vendors and suppliers;

•~~shortages of sufficiently skilled labor, or labor disagreements resulting in unplanned work stoppages;~~

•~~market-related increases in~~either party to request a ~~project’s debt or equity financing costs; and/or~~

•~~nonperformance or force majeure by, or disputes with, vendors, suppliers, contractors, or sub-contractors involved with a project.~~

~~If we are unable to complete capital projects at their expected costs or in a timely manner our financial condition, results of operations, or cash flows could be materially and adversely affected.~~Delays in making required changes or upgrades to our facilities could subject us to fines or penalties as well as affect our ability to supply certain products we make. In addition, our revenues may not increase immediately upon the expenditure of funds on a particular project. For instance, the construction of our previously announced renewable diesel capital project at the Mobile Refinery will occur over an extended period of time and we will not receive any material increases in revenues until after completionreview of the ~~project. Moreover,~~terms of the agreement prior to the commencement of the 4th and 5th contract years of the agreement, which, if triggered, and if the parties fail to mutually agree in writing to any such requested revisions, will result in the agreement expiring three years or four years after COD, as applicable. The parties may mutually agree to extend the term of the agreement beyond the initial term pursuant to the terms of the Offtake Agreement. The Offtake Agreement may be terminated pursuant to its terms, may be terminated prior to the end of its initial stated term, we may ~~construct facilities to capture anticipated future growth~~face termination fees in ~~demand for refined products or renewable diesel in a region in which~~connection with such ~~growth does not materialize. As a result, new capital investments may not achieve our expected investment return, which could adversely affect our financial condition or results of operations.~~

~~In addition, from time to time, we have,~~termination, and expect in the future to execute turnarounds at our refineries, which involve numerous risks and uncertainties. These risks include delays and incurrence of additional and unforeseen costs. The turnarounds allow us to perform maintenance, upgrades, overhaul and repair of process equipment and materials, during which time all or a portion of the refinery will be under scheduled downtime.

Our forecasted internal rates of return are also based upon our projections of future market fundamentals which are not within our control, including changes in general economic conditions, available alternative supply, global market conditions, actions by foreign nations and customer demand.

~~Competition in the refining industry is intense, and an increase in competition in the markets in which we sell our products could adversely affect our earnings and profitability.~~

We compete with a broad range of refining companies, including certain multinational oil companies. Because of their geographic diversity, larger and more complex refineries, integrated operations and greater resources, some of our competitors may be better able to withstand volatile market conditions, to obtain crude oil in times of shortage and to bear the economic risks inherent in all areas of the refining industry.

~~We are not engaged in petroleum exploration and production activities and do not produce~~ any of the crude oil feedstocks used at our refineries. We do not have a retail business and therefore are dependent upon others for outlets for our refined products. Certain of our competitors, however, obtain a portion of their feedstocks from company-owned production and have retail outlets. Competitors that have their own production or extensive retail outlets, with brand-name recognition, are at times able to offset losses from refining operations with profits from producing or retailing operations, andabove may ~~be better positioned to withstand periods of depressed refining margins or feedstock shortages.~~

In recent years there have been several refining and marketing consolidations or acquisitions between entities competing in our geographic market. These transactions could increase the future competitive pressures on us.

The markets in which we compete may be impacted by competitors’ plans for expansion projects and refinery improvements that could increase the production of refined products in our areas of operation and significantly affect our profitability.

Also, the potential operation of new or expanded refined product transportation pipelines, or the conversion of existing pipelines into refined product transportation pipelines, could impact the supply of refined products to our existing markets and negatively affect our profitability.

In addition, we compete with other industries that provide alternative means to satisfy the energy and fuel requirements of our industrial, commercial and individual consumers. The more successful these alternatives become as a result of governmental regulations, technological advances, consumer demand, improved pricing or otherwise, the greater the impact on pricing and demand for our products and our profitability. There are presently significant governmental and consumer pressures to increase the use of alternative fuels in the United States.

~~The market for our lubricants is highly competitive and requires us to continuously develop and introduce new products and product enhancements.~~

Our ability to grow our lubricants depends, in part, on our ability to continuously develop, manufacture and introduce new products and product enhancements on a timely and cost-effective basis, in response to customers’ demands for higher performance process lubricants and other product offerings. Our competitors may develop new products or enhancements to their products that offer performance, features and lower prices that may render our products less competitive or obsolete, and, as a consequence, we may lose business and/or significant market share. Our efforts to respond to changes in consumer demand in a timely and cost-efficient manner to drive growth could be adversely affected by unfavorable margins or difficulties or delays in product development and service innovation, including the inability to identify viable new products, successfully complete research and development, obtain regulatory approvals, obtain intellectual property protection or gain market acceptance of new products or service techniques. The development and commercialization of new products requires significant expenditures over an extended period of time, and some products that we seek to develop may never become profitable, and ~~we could be required to write-off our investments related to a new product that does not reach commercial viability.~~

A material decrease in the supply, or a material increase in the price, of crude oil or other raw materials or equipment available to our refineries and other facilities could significantly reduce our production levels and negatively affect our operations.

To maintain or increase production levels at our refineries, we must continually contract for crude oil supplies from third parties. There are a limited number of crude oil suppliers in certain geographic regions, and in such cases, we may be required to source from more than one supplier. If we are unable to maintain or extend our existing contracts with any such crude oil suppliers, or enter into new agreements on similar terms, the supply of crude oil could be adversely impacted, or we may incur a higher cost. A material decrease in crude oil production from the fields that supply our refineries, as a result of depressed commodity prices, decreased demand, lack of drilling activity, natural production declines, catastrophic events or otherwise, could result in a decline in the volume of crude oil available to our refineries. In addition, any prolonged disruption of a significant pipeline that is used in supplying crude oil to our refineries or the potential operation of a new, converted or expanded crude oil pipeline that transports crude oil to other markets could result in a decline in the volume of crude oil available to our refineries. Such an event could result in an overall decline in volumes of refined products processed at our refineries and therefore a corresponding reduction in our cash flow. If we are unable to secure additional crude oil supplies of sufficient quality or crude pipeline expansion to our refineries, we will be unable to take full advantage of current and future expansion of our refineries’ production capacities.

For certain raw materials and utilities used by our refineries and other facilities, there are a limited number of suppliers, and, in some cases, we source from a single supplier and/or suppliers in economies that have experienced instability or the supplies are specific to the particular geographic region in which a facility is located. Any significant disruption in supply could affect our ability to obtain raw materials, or increase the cost of such raw materials, which could significantly reduce our production levels or have a material adverse effect on our business, financial condition and results of operations. In addition, certain raw materials that we use are subject to various regulatory laws, and a change in the ability to legally use such raw materials may impact our liquidity, financial position and results of operations.

It is also common in the refining industry for a facility to have a sole, dedicated source for its utilities, such as steam, electricity, water and gas. Having a sole or limited number of suppliers may limit our negotiating power, particularly in the case of rising raw material costs. Any new supply agreements we enter into may not have terms as favorable as those contained in our current supply agreements. Additionally, there is growing concern over the reliability of water sources. The decreased availability or less favorable pricing for water as a result of population growth, drought or regulation could negatively impact our operations.

In addition, periods of disruption in the global supply chain, including as a result of COVID-19, have caused shortages in the equipment and parts necessary to operate our facilities and complete our capital projects. Certain suppliers have experienced, and may continue to experience, delays related to a variety of factors, including logistical delays and component shortages from vendors. We continue to monitor the situation and work closely with our suppliers to minimize disruption to our operations as a result of supply chain interruptions.

If our raw material, utility or water supplies or access to the equipment necessary to operate our facilities were disrupted, our businesses may incur increased costs to procure alternative supplies or equipment or incur excessive downtime, which would have a direct negative impact on our operations.

~~We depend upon Shell for a substantial portion of the crude supply and distribution network that serve our Mobile Refinery.~~

Currently Shell supplies all of the crude oil which we refine at the Mobile Refinery. Shell is subject to its own operating and regulatory risks and the occurrence of any of these risks could directly or indirectly affect Shell’s as well as our financial condition, results of operations and cash flows if Shell is unable to deliver us sufficient crude oil to operate the Mobile Refinery at full capacity. Additionally, these risks could affect Shell’s ability to continue operations which could affect its ability to serve our supply and distribution network needs.

~~We have been and may in the future be negatively impacted by inflation.~~

Increases in inflation have already, and may in the future, have an adverse effect on us. Current and future inflationary effects may be driven by, among other things, supply chain disruptions and governmental stimulus or fiscal policies. Continuing increases in inflation have already, and could in the future, impact the commodity markets generally, the overall demand for our products, our costs for feedstocks, labor, material and services and the margins we are able to realize on our products and services, all of which have already, and could in the future, have an adverse impact on our business, financial position, results of operations and cash flows. Inflation may and has already resulted in higher interest rates, which in turn results in higher interest expense related to our variable rate indebtedness and any borrowings we undertake to refinance existing fixed rate indebtedness.

Large capital projects can take many years to complete, and the political and regulatory environments or other market conditions may change or deteriorate over time, negatively impacting project returns.

We may engage in capital projects based on the forecasted project economics, political and regulatory environments, and the expected return on the capital to be employed in the project, including the in process Mobile Refinery renewal biodiesel capital project. Large-scale projects take many years to complete, during which time the political and regulatory environment or other market conditions may change from our forecast. As a result, we may not fully realize our expected returns, which could negatively impact our business, financial condition, results of operations, and liquidity.

Our industry and the broader US economy have experienced higher than expected inflationary pressures in the first three quarters of 2022, related to continued supply chain disruptions, labor shortages and geopolitical instability. Should these conditions persist our business, results of operations and cash flows could be materially and adversely affected.

The first three quarters of 2022 have seen significant increases in the costs of certain materials, including construction material required for our ongoing capital project at our Mobile Refinery and longer lead times for such materials, as a result of availability constraints, supply chain disruption, increased demand, labor shortages associated with a fully employed US labor force, high inflation and other factors. Supply and demand fundamentals have been further aggravated by disruptions in global energy supply caused by multiple geopolitical events, including the ongoing conflict between Russia and Ukraine. During 2022 and 2021, refining margins have experienced significant volatility, resulting in an increase in the first nine months of 2022, in each of the benchmark commodities we track compared to the same period in 2021. The increase in market prices was a result of the ongoing conflict between Russia and Ukraine and increased inflation. The Ukraine conflict coupled with disruptions in supply chain that began with the COVID-19 pandemic in 2020, have resulted in increased inflation and higher market prices in crude oil and refined products. During the twelve months ended September 30, 2022, the Consumer Price Energy Index in the United States increased 19.7% impacting our gross margins. The Consumer Price All Items Index increased 8.2% for the same period impacting our operating expenses and slowing economic growth. Recent supply chain constraints and inflationary pressures have in the past, and may in the future continue to, adversely impact our operating costs and timelines for capital projects and may negatively impact our ability to procure materials and equipment in a timely and cost-effective manner, if at all, which could result in delays in the completion of ongoing and future capital projects, delays in turn-arounds at our facilities, increased down-time, reduced margins and delays and, as a result, our business, financial condition, results of operations and cash flows could be materially and adversely affected.

~~The conflict in Ukraine and related price volatility and geopolitical instability has negatively impacted and may continue to negatively impact our business~~.

In late February 2022, Russia launched significant military action against Ukraine. The conflict has caused, and could intensify, volatility in natural gas, oil and NGL prices, and the extent and duration of the military action, sanctions and resulting market disruptions could be significant and could potentially have a substantial negative impact on the global economy and/or our business for an unknown period of time. We believe that the increase in crude oil prices during the first three quarters of 2022 has partially been due to the impact of the conflict between Russia and Ukraine on the global commodity and financial markets, and in response to economic and trade sanctions that certain countries have imposed on Russia. Any such volatility and disruptions may also magnify the impact of other risks described herein and in our Annual Report on Form 10-K.

Worsening economic recessions and economic conditions and trends and downturns in the business cycles of the industries we serve and which provide services to impact our business and operating results.*

A significant portion of our customer base is comprised of companies in the chemical manufacturing and hydrocarbon recovery industries. The overall levels of demand for our products, refining operations, and future planned re-refined oil products are driven by fluctuations in levels of end-user demand, which depend in large part on general macroeconomic conditions in the U.S., as well as regional economic conditions and many economists are now forecasting the U.S. to enter into a recession in the next several months. For example, many of our principal consumers are themselves heavily dependent on general economic conditions, including the price of fuel and energy, availability of affordable credit and capital, employment levels, interest rates, consumer confidence and housing demand. These cyclical shifts in our customers’ businesses may result in fluctuations in demand, volumes, pricing and operating margins for our services and products.

In addition to our customers, the suppliers of our feedstock are also affected by downturns in the economy and adverse changes in the price of feedstock. For example, we previously experienced difficulty obtaining feedstock from our suppliers who, because of prior sharp downturns in the price of oil (used and otherwise) in 2015-16 saw their margins decrease substantially, which in some cases made it uneconomical for such suppliers to purchase feedstock from their suppliers and/or sell to us at the rates set forth in their contracts. Similarly, the economic slowdown and general market uncertainty caused by the COVID-19 coronavirus outbreak and the steps taken by local, state and federal governments to attempt to reduce the spread of, and effects of, such virus, significantly reduced the demand for, and price of oil (which reached all-time lows during 2020), but has more recently recovered to ~~pre-pandemic levels,~~ and concurrent therewith, the slowdown in the U.S. economy caused by stay-at-home and similar orders during 2020, reduced the amount of feedstock being produced and as a result, our ability to obtain feedstocks, and produce finished products. Future recessions, economic downturns or reduced demand for oil are expected to havecause a material adverse effect on our results of operations ~~cash flows,~~ and ~~as a result~~financial condition and may cause the value of our ~~securities.~~common stock to decline in value.

~~Legal, Environmental, Governmental and Regulatory Risks~~

We are subject to numerous environmental and other laws and regulations and, to the extent we are found to be in violation of any such laws and regulations, or agree that we violated such laws and regulations, our business could be materially and adversely affected.*

~~We are subject to extensive federal, state, and local laws and regulations relating to the protection of the environment which, among other things:~~

•~~regulate the collection, transportation, handling, processing and disposal of hazardous and non-hazardous wastes;~~

•~~impose liability on persons involved in generating, handling, processing, transporting or disposing hazardous materials;~~

•~~impose joint and several liability for remediation and clean-up of environmental contamination;~~

•~~require us to prepare and maintain certain plans and guidelines; and~~

•~~require financial assurance that funds will be available for the closure and post-closure care of sites where hazardous wastes are stored, processed or disposed.~~

The breadth and complexity of all of these laws and regulations impacting us make consistent compliance extremely difficult and often result in increased operating and compliance costs, including requiring the implementation of new programs to promote compliance. Even with these programs, we and other companies in the industry are routinely faced with legal and administrative proceedings which can result in civil and criminal penalties, interruption of business operations, fines or other sanctions and require expenditures.

Our operations involve the risks of fuel spillage or seepage, environmental damage and hazardous waste disposal, among others. If we are involved in a spill or other accident involving hazardous substances, or if we are found to be in violation of applicable environmental laws or regulations, it could significantly increase our cost of doing business.

Additionally, under current law, we may be held liable for damage caused by conditions that existed before we acquired our assets and/or before we took control of our leased properties or if we arranged for the transportation, disposal or treatment of hazardous substances that cause environmental contamination. In the future, we may be subject to monetary fines, civil or criminal penalties, remediation, clean-up or stop orders, injunctions, orders to cease or suspend certain practices or denial of permits required to operate our facilities and conduct our operations. The outcome of any proceeding and associated costs and expenses could have a material adverse impact on our operations and financial condition.

~~Our trucking operations are subject to a number of~~various federal, state, and local rules ~~and regulations generally governing such activities as authorization~~requiring us to ~~engage in motor carrier operations, safety compliance and reporting, contract compliance, insurance requirements, taxation and financial reporting. We could be~~control the release of pollutants into the environment, which may require us to incur material liabilities.

Like other petroleum refiners, we are subject to ~~new or more restrictive regulations, such as regulations relating to engine emissions, drivers’ hours of service, occupational safety~~numerous federal, state, and ~~health, ergonomics or cargo security. Compliance with such regulations could substantially reduce equipment productivity, and the costs of compliance could increase our operating expenses.~~

Environmental laws also govern the presence, maintenance and removal of asbestos-containing building materials, or ACBMs, and may impose fines and penalties for failure to comply with these requirements. Such laws require that owners or operators of buildings containing ACBM (and employers in such buildings) properly manage and maintain the asbestos, adequately notify or train those who may come into contact with asbestos, and undertake special precautions, including removal or other abatement, if asbestos would be disturbed during renovation or demolition of a building or plant. In addition, the presence of ACBM in our properties or plants may expose us to third-party liability (e.g., liability for personal injury associated with exposure to asbestos).

~~We may also be subject to claims from time to time that we have violated certain~~local environmental laws and regulations. ~~For example, during~~These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of hazardous waste disposal. These governmental entities may also propose or assess fines or require corrective actions for these asserted violations. As of September 30, 2023 and December 31, 2022, we ~~entered into a Consent Agreement with~~have $1.4 million recorded in accrued liabilities for anticipated environment clean-up costs. Future environmental clean-up costs, fines or other required corrective actions in the U.S. Environmental Protection Agency (EPA) to settle allegations that we failed to develop and implement an Spill Prevention Control & Countermeasure (SPCC) plan and/or a Facility Response Plan (FRP) for the Cedar Marine Terminal in violation of the Clean Water Act. Pursuant to the Consent Agreement, we agreed to pay $18,600 to the EPA as a penalty in connection therewith and to enter into a Final Order with the EPA. Environmental laws and regulations are subject to change and may become increasingly stringent or relaxed. Interpretation or enforcement of existing laws and regulations, or the adoption of new laws and regulations, may require us to modify or curtail our operations or replace or upgrade our facilities or equipment at substantial costs which we may not be able to pass on to our customers. On the other hand, if new laws and regulations are less stringent, then our customers or competitorsfuture may be ~~able to compete with us more effectively, without reliance on our services, which could decrease the need for our services and/or increase competition which could adversely affect our revenues~~material, and ~~profitability, if any. Our failure to comply with existing laws and regulations could result in penalties, fines, or injunctions, any of which could~~may have a material adverse effect on our ~~reputation,~~cash flows, results of operations, ~~or cash flows,~~ and ~~could further subject us to additional claims or litigation which may be material.~~

We are required to obtain and maintain permits, licenses and approvals to conduct our operations in compliance with such laws and regulations. If we are unable to maintain our currently held permits, licenses and approvals, we may not be able to continue certainthe value of our operations. If we are unable to obtain any additional permits, licenses and approvals which may be required as we expand our operations, we may be forced to curtail or abandon our current and/or future planned business operations.

In addition, mandatory fuel standards have been adopted in many jurisdictions which can be costly to implement and maintain compliance. For example, the International Maritime Organization required, as of January 1, 2020, that ships must comply with new low sulfur fuel oil requirements (“IMO 2020”). Shipping companies were able to comply with this requirement by either using fuel with low sulfur content, which is more expensive than standard marine fuel, or by upgrading vessels to provide cleaner exhaust emissions, such as by installing “scrubbers” or retrofitting vessels to be powered by liquefied natural gas (“LNG”). The continued cost of compliance with these regulatory changes may be significant for shipping companies and it is uncertain how the availability and price of fuel globally will be affected by the implementation of the IMO 2020 regulations as refineries adjust their capacity to increase production of compliant fuels. These and future changes to applicable standards or other more stringent requirements in the industries we serve could reduce our ability to procure feedstocks, reduce our margins, increase our operational expenses, increase fuel prices, require us to incur additional handling costs and/or require the expenditure of capital. To the extent these expenditures, as with all costs, are not ultimately reflected in the prices of our products or we are unable to adequately source compliant fuels, our business and result of operations would be

adversely affected. Furthermore, IMO 2020 and/or other regulations may decrease demand for our products or force us to change the mix of products we offer. With the COVID-19 pandemic during 2020, it has been hard to see the real impact of IMO 2020 on our operations; however, so far, we are seeing strong demand for our finished products.

~~We may incur significant environmental remediation costs and liabilities in the operation of our refineries, facilities, terminals and related facilities.~~

The operation of our refineries, facilities, terminals, and related facilities subject us to the risk of incurring significant environmental remediation costs and liabilities due to our handling of petroleum hydrocarbons and other products, because of air emissions and water discharges related to our operations and activities, and as a result of historical operations and waste disposal practices at our facilities or in connection with our activities, some of which may have been conducted by prior owners or operators. We could incur significant remedial costs in the cleanup of any petroleum hydrocarbons or wastes or hazardous substances or wastes that may have been released on, under or from the properties owned or operated by us.

Some environmental laws may impose joint and several, strict liability for releases of petroleum hydrocarbons and wastes or hazardous substances or wastes, which means in some situations, we could be exposed to liability as a result of our conduct that was lawful at the time it occurred or the conduct of, or conditions caused by, prior operators or other third parties. Private parties, including the owners of properties adjacent to our operations and facilities where our petroleum hydrocarbons or wastes or hazardous substances or wastes are taken for reclamation or disposal, may also have the right to pursue legal actions to enforce compliance as well as to seek damages for non-compliance with environmental laws and regulations or for personal injury or property damage. We may not be able to recover some or any of these costs from insurance or other sources of indemnity. To the extent that the costs associated with meeting any or all of these requirements are significant and not adequately secured or indemnified for, there could be a material adverse effect on our business, financial condition and results of operations or cash flows and, as result, our ability to make payments of our debt obligations.

~~The nature of our operations exposes us, and the communities in which we work, to a wide range of health, safety, security and environment risks.~~

The health, safety, security and environment (HSSE) risks to which we and the communities in which we work are potentially exposed cover a wide spectrum, given the wide geographical area and diversity of our operations. These risks include the effects of natural disasters (including weather events), earthquakes, social unrest, pandemic diseases, criminal actions by external parties, and safety lapses. If a major risk materializes, such as an explosion or hydrocarbon leak or spill, this could result in injuries, loss of life, environmental harm, disruption of business activities, loss or suspension of permits, loss of our licenses to operate. Accordingly, this could have a material adverse effect on our earnings, cash flows and financial condition. Our operations are subject to extensive HSSE regulatory requirements that often change and are likely to become more stringent over time. We could incur significant extra costs in the future because of the need to comply with such requirements. We could also incur significant extra costs due to violations of or liabilities under laws and regulations that involve elements such as fines, penalties, clean-up costs and third-party claims. If HSSE risks materialize, they could have a material adverse effect on our earnings, cash flows and financial condition.

~~The availability and cost of renewable identification numbers could have an adverse effect on our financial condition and results of operations.~~

~~Pursuant to the Energy Policy Act of 2005, Congress established a Renewable Fuel Standard (“RFS”) program that requires annual volumes of renewable fuel be blended into domestic transportation fuel. A Renewable Identification Number (“RIN~~”) is assigned to each gallon of renewable fuel produced in, or imported into, the United States. We are exposed to the volatility in the market price of RINs. We cannot predict the future prices of RINs. RINs prices are dependent upon a variety of factors, including EPA regulations, the availability of RINs for purchase, and levels of transportation fuels produced, which can vary significantly from quarter to quarter. Additionally, the status of EPA RFS exemptions may impact the price of RINs. EPAs policy on granting certain RFS exemptions has changed under the Biden administration, and some previously granted exemptions have been the subject of legal proceedings that may ultimately result in the reversal of past exemptions. The occurrence of any one or more of these events may increase our operating expenses or make it more difficult for us to operate.securities.

~~Risks Related to Our Securities~~

Our outstanding options and convertible securities may adversely affect the trading price of our common stock.*(*)

As of the date of the filing, we had (i) outstanding stock options to purchase an aggregate of ~~3.6~~3.4 million shares of common stock at a weighted average exercise price of ~~$1.87~~$3.08 per share; (ii) outstanding warrants to purchase 2.6 million shares

of common stock at an exercise price of $4.50 per share and 0.2 million shares of common stock at an exercise price of $9.25 per share; and (iii) outstanding Convertible Senior Notes which may be converted into a maximum of ~~22.2~~3.6 million shares of common stock, based on the initial maximum conversion rate of 233.6449 shares of the Company’s common stock per $1,000 principal amount of Convertible Senior Notes, which isare subject to customary and other adjustments described in the ~~Indenture.~~Indenture governing the Convertible Senior Notes. For the life of the options and warrants, the holders have the opportunity to profit from a rise in the market price of our common stock without assuming the risk of ownership. The issuance of shares upon the exercise of outstanding securities will also dilute the ownership interests of our existing stockholders.

The availability of these shares for public resale, as well as any actual resales of these shares, could adversely affect the trading price of our common stock. We cannot predict the size of future issuances of our common stock pursuant to the exercise of outstanding options or warrants or conversion of other securities, or the effect, if any, that future issuances and sales of shares of our common stock may have on the market price of our common stock. Sales or distributions of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may cause the market price of our common stock to decline.

In addition, the common stock issuable upon exercise/conversion of outstanding convertible securities may represent overhang that may also adversely affect the market price of our common stock. Overhang occurs when there is a greater supply of a company’s stock in the market than there is demand for that stock. When this happens the price of our stock will decrease, and any additional shares which stockholders attempt to sell in the market will only further decrease the share price. If the share volume of our common stock cannot absorb shares sold by holders of our outstanding convertible securities, then the value of our common stock will likely decrease.

~~A significant number of our shares of common stock are eligible for sale and their sale or potential sale may depress the market price of our common stock.~~

Sales of a significant number of shares of our common stock in the public market could harm the market price of our common stock. Most of our common stock is available for resale in the public market, and if sold would increase the supply of our common stock, thereby causing a decrease in its price. Some or all of our shares of common stock may be offered from time to time in the open market pursuant to effective registration statements and/or compliance with Rule 144, which sales could have a depressive effect on the market for our shares of common stock. Subject to certain restrictions, a person who has held restricted shares for a period of six months may generally sell common stock into the market. The sale of a significant portion of such shares when such shares are eligible for public sale may cause the value of our common stock to decline in value.

The Warrants have certain anti-dilutive rights, put and call rights upon the occurrence of a fundamental transaction, and include a limitation on the number of shares of common stock which may be issued upon exercise thereof without shareholder approval.

A total of 2,584,900 of the Warrants have a term through April 1, 2027 and a $4.50 per share exercise price and a total of 235,000 of the Warrants have a term through November 26, 2027 and a $9.25 exercise price. All of the Warrants include weighted average anti-dilutive rights in the event any shares of common stock or other equity or equity equivalent securities payable in common stock are granted, issued or sold (or the Company enters into any agreement to grant, issue or sell), or in accordance with the terms of the Warrant Agreements, are deemed to have granted, issued or sold, in each case, at a price less than the exercise price, which automatically decreases the exercise price of the Warrants upon the occurrence of such event, as described in greater detail in the Warrant Agreements, and increases the number of shares of common stock issuable upon exercise of the Warrants, such that the aggregate exercise price of all Warrants remains the same before and after any such dilutive event. Such anti-dilution rights, if triggered, could result in a significant decrease in the exercise price of the Warrants combined with a significant increase in the number of shares of common stock issuable upon exercise thereof, which could result in significant dilution to existing shareholders.

Upon the occurrence of a fundamental transaction (as described in the Warrant Agreements) the Warrant Agreements (a) provide each holder a put right and (b) provide the Company with a call right in respect of the Warrants. Upon the exercise of a put right by the holder or a call right by the Company, the Company is obligated to repurchase the Warrants for the Black Scholes Value of the Warrants repurchased, as calculated in the Warrant Agreements. Such Black Scholes value may be significant and the requirement to pay such amount may prohibit us from completing a transaction which would otherwise be accretive to shareholders or make such transaction more costly.

Additionally, until or unless the Company receives shareholder approval under applicable Nasdaq listing rules for the issuance of more than 19.9% of the Company’s outstanding shares of common stock on the date the Warrant Agreements were

~~entered into (i.e., more than 12,828,681 shares of common stock)(the “Share Cap~~”), the Company may not issue more shares of common stock upon exercise of the Warrants than totals the Share Cap, and is required to pay the Lenders cash, based on the fair market value of any shares required to be issued upon exercise of the Warrants (as calculated in the Warrant Agreements), which would exceed the Share Cap. In the event the anti-dilutive rights of the Warrants result in more than 12,828,681 shares of common stock being issuable upon exercise of the Warrants, we could be required to pay cash to the holders of the Warrants in the amount equal to such excess shares, which could have a significant adverse effect on our available funds and liquidity.

~~The Warrants also include cashless exercise rights. As a result, we may not receive any cash upon the exercise of the Warrants.~~

We face significant penalties and damages in the event a registration statement registering the resale of the shares of common stock issuable upon exercise of the Warrants is not available for the sale of such shares.

In connection with the grant of the Warrants, the Company and the holders of such Warrants entered into a Registration Rights Agreement. Under the Registration Rights Agreement, the Company agreed to use commercially reasonable efforts to file a registration statement (the “~~Registration Statement~~”) with the SEC, for purposes of registering the resale of the shares of common stock issuable upon exercise of the Warrants no later than July 1, 2022. The Company also agreed to use commercially reasonable efforts to cause the SEC to declare the Registration Statement effective as soon as practicable and no later than 45 days following the filing of the Registration Statement; provided, that such date is extended until 75 days after the filing date if the Initial Registration Statement is reviewed by the staff of the Commission. The Registration Statement was filed with the SEC and became effective on July 8, 2022. The Registration Rights Agreement also provides the holders of the Warrants certain piggyback and demand registration rights (including pursuant to an underwritten offering, in the event the gross proceeds from such underwritten offering are expected to exceed $35 million).

If, subject to certain limited exceptions described in the Registration Rights Agreement, during the period commencing on the effective date of the Registration Statement and ending on the earlier of the date when there are no registrable securities or the third anniversary of the effective date of the Registration Statement, a registration statement is not continuously effective to allow the sale of the shares underlying the Warrants, for more than 10 consecutive calendar days or more than an aggregate of 15 calendar days (which need not be consecutive) during any 12-month period, then, in addition to any other rights such holder of Warrants may have under the Registration Rights Agreement or applicable law, (x) on the first such applicable default date, the Company is required to pay to such holder of a Warrant an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.0% of the fair market value (such fair market value calculated as required under the Registration Rights Agreement) of the registrable securities held by such holder (the “~~1% Penalty~~”), and (y) on each monthly anniversary of such default date until all applicable defaults have been cured, shall pay the 1% Penalty, subject to a maximum penalty of 10% of the fair market value of the registrable securities held by each applicable holder of Warrants (such fair market value calculated as required under the Registration Rights Agreement).

The Company has agreed, among other things, to indemnify the holders of the Warrants and their affiliates with respect to certain liabilities and to pay all fees and expenses incident to the Company’s obligations under the Registration Rights Agreement.

In the event the Registration Statement is suspended or terminated, or we otherwise fail to meet certain requirements set forth in the Registration Rights Agreement, we could be required to pay significant penalties which could adversely affect our cash flow and cause the value of our securities to decline in value.

We have established preferred stock which can be designated by the Board of Directors without shareholder approval.*

We have 50 million shares of preferred stock authorized of which no shares are currently designated and no shares are issued and outstanding. Our directors, within the limitations and restrictions contained in our Articles of Incorporation and without further action by our shareholders, have the authority to issue shares of preferred stock from time to time in one or more series and to fix the number of shares and the relative rights, conversion rights, voting rights, and terms of redemption, liquidation preferences and any other preferences, special rights and qualifications of any such series. Any issuance of shares of preferred stock could adversely affect the rights of holders of our common stock. Should we issue additional shares of our common stock at a later time, each investor’s ownership interest in our stock would be proportionally reduced. Because our board of directors is entitled to designate the powers and preferences of the preferred stock without a vote of our shareholders, subject to Nasdaq rules and regulations, our shareholders will have no control over what designations and preferences our future preferred stock, if any, will have.

9077

Item 2. Recent Sales of Unregistered Securities

There have been no sales of unregistered securities during the quarter ended September 30, ~~2022~~2023, and ~~from~~for the period from October 1, ~~2022,~~2023, to the filing date of this report ~~which~~that have not previously been disclosed in a Current Report on Form ~~8-K, except as set forth below:~~

In July 2022, warrants to purchase 100 shares of common stock with an exercise price of $4.50 per share were exercised by a holder thereof in consideration for $450 and we issued 100 shares of common stock.

In July 2022, warrants to purchase an aggregate of 165,000 shares of common stock with an exercise price of $4.50 per share were exercised by two holders thereof via cashless exercises, and were issued a net of an aggregate of 95,974 shares of common stock. Additionally, in July 2022, warrants to purchase an aggregate of 15,000 shares of common stock with an exercise price of $9.25 per share were exercised by a holder thereof in a cashless exercise, pursuant to which the holder was due a net of 2,101 shares of common stock in connection therewith, which shares have not been issued to date, or included in the number of issued and outstanding shares disclosed throughout this report.

~~The above exercises were exempt from registration pursuant to Section 4(a)(2) of the Securities Act because they did not involve a public offering.~~8-K.

Use of Proceeds from Sale of Registered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliate Purchasers

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

a) Clawback Policies. Effective on November 6, 2023, the Board of Directors of the Company approved the adoption of a Policy for the Recovery of Erroneously Awarded Incentive Based Compensation (the “Clawback Policy”), with an effective date of October 2, 2023, in order to comply with the final clawback rules adopted by the Securities and Exchange Commission under Section 10D and Rule 10D-1 of the Securities Exchange Act of 1934, as amended (“Rule 10D-1”), and the listing standards, as set forth in the Nasdaq Listing Rule 5608 (the “Final Clawback Rules”).

The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from current and former executive officers as defined in Rule 10D-1 (“Covered Officers”) of the Company in the event that the Company is required to prepare an accounting restatement, in accordance with the Final Clawback Rules. The recovery of such compensation applies regardless of whether a Covered Officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement. Under the Clawback Policy, the Board of Directors may recoup from the Covered Officers erroneously awarded incentive compensation received within a lookback period of the three completed fiscal years preceding the date on which the Company is required to prepare an accounting restatement.

Also effective on November 6, 2023, the Board of Directors approved a First Amendment to the Company’s prior Clawback and Forfeiture Policy, to remove prior language about that Clawback and Forfeiture Policy being the applicable plan under Rule 10D-1 (the “First Amendment to Policy”).

The foregoing summary of the Clawback Policy and First Amendment to Policy does not purport to be complete and is qualified in its entirety by reference to the full text of the Clawback Policy and First Amendment to Policy, copies of which are attached hereto as Exhibits 10.2 and 10.3, to this Report.

(b) None.

(c) Rule 10b5-1 Trading Plans. During the quarter ended September 30, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f)) adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

9178

Item 6. Exhibits

9279

Incorporated by Reference
Exhibit Number Description of Exhibit Filed or Furnished Herewith Form Exhibit Filing Date/Period End Date File No.
3.1
Certificate, Amendment or Withdrawal of Designation, relating to the Series A Convertible Preferred Stock, filed with the Secretary of State of Nevada on August 24, 2022
8-K 3.1 8/25/2022 001-11476
3.2
Certificate, Amendment or Withdrawal of Designation, relating to the Series B Preferred Stock, filed with the Secretary of State of Nevada on August 24, 2022
8-K 3.2 8/25/2022 001-11476
3.3
Certificate, Amendment or Withdrawal of Designation, relating to the Series B1 Preferred Stock, filed with the Secretary of State of Nevada on August 23, 2022
8-K 3.3 8/25/2022 001-11476
3.4
Certificate, Amendment or Withdrawal of Designation, relating to the Series C Convertible Preferred Stock, filed with the Secretary of State of Nevada on August 23, 2022
8-K 3.4 8/25/2022 001-11476
4.1
Indenture, dated as of November 1, 2021, by and between Vertex Energy, Inc. and U.S. Bank National Association, as Trustee.
8-K 4.1 11/2/2021 001-11476
4.2
Form of Global Note, representing Vertex Energy, Inc.’s 6.25% Convertible Senior Notes due 2027 (included as Exhibit A to the Indenture incorporated by reference as Exhibit 4.1).
8-K 4.2 11/2/2021 001-11476
4.3
Warrant Agreement dated April 1, 2022, by and among Vertex Energy, Inc. and Continental Stock Transfer & Trust Company, as warrant agent
8-K 4.1 4/7/2022 001-11476
4.4
Warrant Agreement dated May 26, 2022, by and among Vertex Energy Inc. and Continental Stock Transfer & Trust Company, as warrant agent
8-K 4.1 5/27/2022 001-11476
10.1#
Loan and Security Agreement dated April 1, 2022, by and among Vertex Refining Alabama LLC, as borrower, Vertex Energy, Inc., as parent and as a guarantor, certain direct and indirect subsidiaries of Vertex Energy, Inc., as guarantors, the lenders party thereto, and Cantor Fitzgerald Securities, as administrative agent and collateral agent for the lenders
8-K 10.1 4/7/2022 001-11476
10.2#
Amendment Number One to Loan and Security Agreement dated May 26, 2022, by and among Vertex Refining Alabama LLC, as borrower, Vertex Energy Inc., as parent and as a guarantor, certain direct and indirect subsidiaries of Vertex Energy Inc., as guarantors, the lenders party thereto, and Cantor Fitzgerald Securities, as administrative agent and collateral agent for the lenders
8-K 10.1 5/27/2022 001-11476
10.3#
Amendment Number Two to Loan and Security Agreement dated September 30, 2022, by and among Vertex Refining Alabama LLC, as borrower, Vertex Energy, Inc., as parent and as a guarantor, certain direct and indirect subsidiaries of Vertex Energy, Inc., as guarantors, the lenders party thereto, and Cantor Fitzgerald Securities, as administrative agent and collateral agent for the lenders
8-K 10.1 10/5/2022 001-11476

10.4
Guarantor Joinder dated September 30, 2022, relating to that certain Loan and Security Agreement dated April 1, 2022, as amended from time to time, by and among Vertex Refining Alabama LLC, as borrower, Vertex Energy, Inc., as parent and as a guarantor, certain direct and indirect subsidiaries of Vertex Energy, Inc., as guarantors, the lenders party thereto, and Cantor Fitzgerald Securities, as administrative agent and collateral agent for the lenders
8-K 10.2 10/5/2022 001-11476
31.1
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act*
X
31.2
Certification of Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act*
X
32.1
Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act**
X
32.2
Certification of Principal Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act**
X
101* Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q X
101.INS* Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. X
101.SCH* Inline XBRL Taxonomy Extension Schema Document X
101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document X
101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document X
101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document X
101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document X
104* Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set X

Incorporated by Reference

Exhibit Number

Description of Exhibit

Filed or Furnished Herewith

Form

Exhibit

Filing Date/Period End Date

File No.

10.1+

Amendment No. 2 to Supply and Offtake Agreement dated September 1, 2023, and effective September 14, 2023, between Vertex Refining Alabama LLC and Macquarie Energy North America Trading Inc.

8-K

10.1

9/19/2023

001-11476

10.2#

Vertex Energy, Inc., Policy for the Recovery of Erroneously Awarded Incentive-Based Compensation

10.3

First Amendment to Clawback and Forfeiture Policy

31.1*

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act*

31.2*

Certification of Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act*

32.1**

Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act**

32.2**

Certification of Principal Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act**

101*

Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q

101.INS*

Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*

Inline XBRL Taxonomy Extension Schema Document

101.CAL*

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104*

Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set

* Filed herewith.

** Furnished herewith.

~~***~~# Indicates management contract or compensatory plan or arrangement.

#+ Certain schedules, annexes and ~~exhibits~~similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that Vertex Energy, Inc. may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule or exhibit so furnished.

9480

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: November ~~7, 2022~~6, 2023			By: /s/ Benjamin P. Cowart
			Benjamin P. Cowart
			Chief Executive Officer
			(Principal Executive Officer)


Date: November ~~7, 2022~~6, 2023			By: /s/ Chris Carlson
			Chris Carlson
			Chief Financial Officer
			(Principal Financial/Accounting Officer)

9581


Nevada			94-3439569
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


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 company	☐


		Page
Glossary of Terms		4
	PART I
Item 1.	Financial Statements

	Consolidated Balance Sheets (unaudited)	78

	Consolidated Statements of Operations (unaudited)	910

	Consolidated Statements of Stockholders' Equity (unaudited)	11

	Consolidated Statements of Cash Flows (unaudited)	13

	Notes to Consolidated Financial Statements (unaudited)	1615

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4840

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6968

Item 4.	Controls and Procedures	7069


	PART II
Item 1.	Legal Proceedings	7170

Item 1A.	Risk Factors	7271

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9178

Item 3.	Defaults Upon Senior Securities	9178

Item 4.	Mine Safety Disclosures	9178

Item 5.	Other Information	9178

Item 6.	Exhibits	9279


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	117,464	$	36,130	Cash and cash equivalents	$	75,705	$	141,258
Restricted cash	Restricted cash	4,929		100,497		Restricted cash	3,605		4,929
Accounts receivable, net	Accounts receivable, net	51,830		14,880		Accounts receivable, net	36,816		34,548

Inventory	Inventory	169,772		8,031		Inventory	222,685		135,473
Derivative commodity asset	Derivative commodity asset	1,219		96		Derivative commodity asset	4,991		—
Prepaid expenses and other current assets	Prepaid expenses and other current assets	33,337		4,567		Prepaid expenses and other current assets	57,315		36,660
Assets held for sale, current	Assets held for sale, current	11,651		10,070		Assets held for sale, current	—		20,560
Total current assets	Total current assets	390,202		174,271		Total current assets	401,117		373,428

Fixed assets, at cost		198,088		62,196
Less accumulated depreciation		(33,371)		(26,043)
Fixed assets, net	Fixed assets, net	164,717		36,153		Fixed assets, net	321,314		201,749
Finance lease right-of-use assets	Finance lease right-of-use assets	43,649		377		Finance lease right-of-use assets	65,317		44,081
Operating lease right-of use assets	Operating lease right-of use assets	33,960		33,272		Operating lease right-of use assets	90,413		53,557
Intangible assets, net	Intangible assets, net	12,803		6,652		Intangible assets, net	11,207		11,827

Deferred taxes assets						Deferred taxes assets	—		2,498
Other assets	Other assets	2,246		15,335		Other assets	3,310		2,245

TOTAL ASSETS	TOTAL ASSETS	$	647,577	$	266,060	TOTAL ASSETS	$	892,678	$	689,385

LIABILITIES, TEMPORARY EQUITY, AND EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY						LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	70,906	$	11,980	Accounts payable	$	63,628	$	20,997
Accrued expenses	Accrued expenses	42,650		4,942		Accrued expenses	69,315		81,711

Finance lease liability-current	Finance lease liability-current	1,155		342		Finance lease liability-current	2,297		1,363
Operating lease liability-current	Operating lease liability-current	6,421		5,849		Operating lease liability-current	26,047		9,012
Current portion of long-term debt, net	Current portion of long-term debt, net	16,637		2,413		Current portion of long-term debt, net	18,321		13,911
Obligations under inventory financing agreements, net	Obligations under inventory financing agreements, net	134,244		—		Obligations under inventory financing agreements, net	182,487		117,939

Derivative commodity liability						Derivative commodity liability	—		242
Liabilities held for sale, current						Liabilities held for sale, current	—		3,424
Total current liabilities	Total current liabilities	272,013		25,526		Total current liabilities	362,095		248,599

Long-term debt, net	Long-term debt, net	167,665		64,131		Long-term debt, net	125,010		170,010
Finance lease liability-long-term	Finance lease liability-long-term	44,339		256		Finance lease liability-long-term	66,751		45,164

Operating lease liability-long-term	Operating lease liability-long-term	27,539		27,423		Operating lease liability-long-term	64,367		44,545

Deferred tax liabilities						Deferred tax liabilities	1,257		—
Derivative warrant liability	Derivative warrant liability	14,303		75,211		Derivative warrant liability	9,234		14,270
Other liabilities	Other liabilities	1,378		—		Other liabilities	1,377		1,377
Total liabilities	Total liabilities	527,237		192,547		Total liabilities	630,091		523,965

COMMITMENTS AND CONTINGENCIES (Note 4)	COMMITMENTS AND CONTINGENCIES (Note 4)	—		—		COMMITMENTS AND CONTINGENCIES (Note 4)	—		—


	September 30, 2022		December 31, 2021

TEMPORARY EQUITY




Redeemable non-controlling interest	—		43,447
Total temporary equity	—		43,447
EQUITY
50,000,000 of total Preferred shares authorized:
Series A Convertible Preferred Stock, $0.001 par value; zero and 5,000,000 shares designated, zero and 385,601 shares issued and outstanding at September 30, 2022 and December 31, 2021, with a liquidation preference of $0 and $574,545 at September 30, 2022 and December 31, 2021.	—		—



Common stock, $0.001 par value per share; 750,000,000 shares authorized; 75,608,826 and 63,287,965 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively.	76		63
Additional paid-in capital	278,930		138,620
Accumulated deficit	(160,354)		(110,614)
Total Vertex Energy, Inc. shareholders' equity	118,652		28,069
Non-controlling interest	1,688		1,997
Total equity	120,340		30,066
TOTAL LIABILITIES, TEMPORARY EQUITY, AND EQUITY	$	647,577	$	266,060


	September 30, 2023		December 31, 2022
STOCKHOLDERS' EQUITY





Common stock, $0.001 par value per share; 750,000,000 shares authorized; 93,514,346 and 75,668,826 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively.	94		76
Additional paid-in capital	382,849		279,552
Accumulated deficit	(123,588)		(115,893)
Total Vertex Energy, Inc. stockholders' equity	259,355		163,735
Non-controlling interest	3,232		1,685
Total equity	262,587		165,420
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	892,678	$	689,385


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Revenues	$	810,208	$	50,982	$	1,915,423	$	147,807
Cost of revenues (exclusive of depreciation and amortization shown separately below)	750,463		46,142		1,819,757		127,986
Depreciation and amortization attributable to costs of revenues	4,050		1,028		9,144		3,002
Gross profit	55,695		3,812		86,522		16,819

Operating expenses:
Selling, general and administrative expenses	36,978		8,177		89,934		21,742
Depreciation and amortization attributable to operating expenses	1,120		420		2,656		1,260


Total operating expenses	38,098		8,597		92,590		23,002

Income (loss) from operations	17,597		(4,785)		(6,068)		(6,183)

Other income (expense):


Other income (expenses)	417		(3)		1,060		4,220

Gain (loss) on change in value of derivative warrant liability	12,312		11,907		7,788		(11,380)

Interest expense	(13,131)		(455)		(65,083)		(919)
Total other income (expense)	(402)		11,449		(56,235)		(8,079)
Income (loss) from continuing operations before income tax	17,195		6,664		(62,303)		(14,262)
Income tax benefit (expense)	—		—		—		—
Income (loss) from continuing operations	17,195		6,664		(62,303)		(14,262)
Income from discontinued operations, net of tax (see note 23)	4,975		3,981		19,882		11,915
Net income (loss)	22,170		10,645		(42,421)		(2,347)
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest from continuing operations	(64)		(115)		33		511
Net income attributable to non-controlling interest and redeemable non-controlling interest from discontinued operations	—		2,400		6,829		7,183
Net income (loss) attributable to Vertex Energy, Inc.	22,234		8,360		(49,283)		(10,041)

Accretion of redeemable noncontrolling interest to redemption value from continued operations	—		(415)		(428)		(1,177)
Accretion of discount on Series B and B1 Preferred Stock	—		—		—		(507)


Net income (loss) attributable to common shareholders from continuing operations	17,259		6,364		(62,764)		(16,457)
Net income attributable to common shareholders from discontinued operations, net of tax	4,975		1,581		13,053		4,732
Net income (loss) attributable to common shareholders	$	22,234	$	7,945	$	(49,711)	$	(11,725)


Basic income (loss) per common share
Continuing operations	$	0.23	$	0.10	$	(0.91)	$	(0.31)
Discontinued operations, net of tax	0.07		0.03		0.19		0.09
Basic income (loss) per common share	$	0.30	$	0.13	$	(0.72)	$	(0.22)

Diluted income (loss) per common share
Continuing operations	$	0.22	$	0.10	$	(0.91)	$	(0.31)
Discontinued operations, net of tax	0.06		0.02		0.19		0.09
Diluted income (loss) per common share	$	0.28	$	0.12	$	(0.72)	$	(0.22)

Shares used in computing earnings per share
Basic	75,591		61,349		69,007		53,964
Diluted	79,638		64,605		69,007		53,964


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues	$	1,018,407	$	809,529	$	2,444,442	$	1,913,435
Cost of revenues (exclusive of depreciation and amortization shown separately below)	925,542		749,654		2,274,543		1,817,787
Depreciation and amortization attributable to costs of revenues	7,896		4,049		18,863		9,139
Gross profit	84,969		55,826		151,036		86,509

Operating expenses:
Selling, general and administrative expenses (exclusive of depreciation and amortization shown separately below)	43,137		37,142		127,715		90,039
Depreciation and amortization attributable to operating expenses	1,033		1,119		3,077		2,655

Total operating expenses	44,170		38,261		130,792		92,694
Income (loss) from operations	40,799		17,565		20,244		(6,185)
Other income (expense):


Other income (loss)	(133)		416		1,023		1,059

Gain on change in value of derivative warrant liability	4,621		12,312		5,036		7,788

Interest expense	(13,523)		(13,028)		(103,536)		(64,961)
Total other expense	(9,035)		(300)		(97,477)		(56,114)
Income (loss) from continuing operations before income tax	31,764		17,265		(77,233)		(62,299)
Income tax benefit (expense)	(12,231)		—		15,445		—
Income (loss) from continuing operations	19,533		17,265		(61,788)		(62,299)
Income from discontinued operations, net of tax (see note 23)	—		4,905		53,680		19,878
Net income (loss)	19,533		22,170		(8,108)		(42,421)
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest from continuing operations	(310)		(49)		(413)		15
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest from discontinued operations	—		(15)		—		6,847
Net income (loss) attributable to Vertex Energy, Inc.	19,843		22,234		(7,695)		(49,283)

Accretion of redeemable noncontrolling interest to redemption value from continued operations	—		—		—		(428)

Net income (loss) attributable to common stockholders from continuing operations	19,843		17,314		(61,375)		(62,742)
Net income attributable to common stockholders from discontinued operations, net of tax	—		4,920		53,680		13,031
Net income (loss) attributable to common shareholders	$	19,843	$	22,234	$	(7,695)	$	(49,711)

Basic loss per common share
Continuing operations	$	0.21	$	0.23	$	(0.74)	$	(0.91)
Discontinued operations, net of tax	—		0.07		0.65		0.19
Basic loss per common share	$	0.21	$	0.30	$	(0.09)	$	(0.72)

Diluted income (loss) per common share
Continuing operations	$	0.17	$	0.10	$	(0.74)	$	(0.91)
Discontinued operations, net of tax	—		0.05		0.65		0.19
Diluted income (loss) per common share	$	0.17	$	0.15	$	(0.09)	$	(0.72)

Shares used in computing earnings per share
Basic	93,381		75,591		82,928		69,007
Diluted	100,427		97,126		82,928		69,007


Nine Months Ended September 30, 2022
	Common Stock			Series A Preferred
	Shares	$0.001 Par		Shares	$0.001 Par		Additional Paid-In Capital		Retained Earnings		Non-controlling Interest		Total Equity
Balance on January 1, 2022	63,288	$	63	386	$	—	$	138,620	$	(110,614)	$	1,997	$	30,066
Exercise of options	60	—		—	—		76		—		—		76
Exercise of warrants	1,113	1		—	—		(1)		—		—		—
Share based compensation expense	—	—		—	—		250		—		—		250
Conversion of Series A Preferred stock to common	5	—		(5)	—		—		—		—		—
Reclassification of derivative liabilities	—	—		—	—		78,789		—		—		78,789
Accretion of redeemable non-controlling interest to redemption value	—	—		—	—		—		(422)		—		(422)
Net income (loss)	—	—		—	—		—		(4,547)		3,739		(808)
Less: amount attributable to redeemable non-controlling interest	—	—		—	—		—		—		(3,769)		(3,769)
Balance on March 31, 2022	64,466	64		381	—		217,734		(115,583)		1,967		104,182
Exercise of options to common	498	1		—	—		553		—		—		554
Exercise of options to common- unissued	—	—		—	—		3		—		—		3
Distribution to noncontrolling shareholder	—	—		—	—		—		—		(380)		(380)
Adjustment of redeemable non controlling interest	—	—		—	—		29		(29)		—		—
Conversion of Convertible Senior Notes to common	10,165	10		—	—		59,812		—		—		59,822
Share based compensation expense	—	—		—	—		324		—		—		324
Conversion of Series A Preferred stock to common	381	1		(381)	—		—		—		—		1
Accretion of redeemable non-controlling interest to redemption value	—	—		—	—		—		(6)		—		(6)
Net income (loss)	—	—		—	—		—		(66,970)		3,188		(63,782)
Less: amount attributable to redeemable non-controlling interest	—	—		—	—		—		—		(3,023)		(3,023)
Balance on June 30, 2022	75,510	76		—	—		278,455		(182,588)		1,752		97,695
Exercise of options to common	4	—		—	—		—		—		—		—
Exercise of options to common- unissued	—	—		—	—		97		—		—		97
Exercise of warrants	96	—		—	—		—		—		—		—




Share based compensation expense	—	—		—	—		378		—		—		378






Net income (loss)	—	—		—	—				22,234		(64)		22,170

Balance on September 30, 2022	75,610	$	76	—	$	—	$	278,930	$	(160,354)	$	1,688	$	120,340


Nine Months Ended September 30, 2021
	Common Stock			Series A Preferred
	Shares	$0.001 Par		Shares	$0.001 Par		Additional Paid-In Capital		Retained Earnings		Non-controlling Interest		Total Equity
Balance on January 1, 2021	45,555	$	46	420	$	—	$	94,570	$	(90,009)	$	1,318	$	5,925
Exercise of options	23	—		—	—		—		—		—		—
Exercise of B1 warrants	1,080	1		—	—		2,757		—		—		2,758
Exchanges of Series B Preferred stock to common	2,359	2		—	—		4,114		630		—		4,746
Share based compensation expense	—	—		—	—		150		—		—		150

Conversion of Series B Preferred stock to common	638	1		—	—		1,978		—		—		1,979
Conversion of Series B1 Preferred stock to common	2,087	2		—	—		3,254		—		—		3,256
Dividends on Series B and B1	—	—		—	—		—		(372)		—		(372)
Accretion of discount on Series B and B1	—	—		—	—		—		(224)		—		(224)
Accretion of redeemable non-controlling interest to redemption value	—	—		—	—		—		(373)		—		(373)
Net income	—	—		—	—		—		974		1,991		2,965
Less: amount attributable to redeemable non-controlling interest	—	—		—	—		—		—		(1,542)		(1,542)
Balance on March 31, 2021	51,742	52		420	—		106,823		(89,374)		1,767		19,268
Exercise of options to common	505	—		—	—		229		—		—		229
Exercise of options to common- unissued	—	—		—	—		475		—		—		475
Leverage Lubricants contribution	—	—		—	—		—		—		(13)		(13)
Exercise of B1 warrants	157	—		—	—		1,634		—		—		1,634
Exercise of B1 warrants-unissued	—	—		—	—		1,186		—		—		1,186
Share based compensation expense	—	—		—	—		205		—		—		205
Conversion of Series A Preferred stock to common	28	—		(28)	—		—		—		—		—
Conversion of Series B Preferred stock to common	1,842	2		—	—		5,707		—		—		5,709
Conversion of Series B Preferred stock to common-unissued	—	—		—	—		760		—		—		760
Conversion of Series B1 Preferred stock to common	5,635	6		—	—		8,785		—		—		8,791

Accretion of discount on Series B and B1	—	—		—	—		—		(284)		—		(284)

Accretion of redeemable non-controlling interest to redemption value	—	—		—	—		—		(387)		—		(387)
Net income (loss)	—	—		—	—		—		(19,375)		3,418		(15,957)
Less: amount attributable to redeemable non-controlling interest	—	—		—	—		—		—		(3,113)		(3,113)
Balance on June 30, 2021	59,909	60		392	—		125,804		(109,420)		2,059		18,503
Exercise of options to common	1,267	1		—	—		1,481		—		—		1,482
Exercise of options to common- unissued	—	—		—	—		3		—		—		3
Exercise of B1 warrants	1,576	2		—	—		9,361		—		—		9,363
Conversion of Series B Preferred stock to common	245	—		—	—		—		—		—		—
Conversion of Series A Preferred stock to common	6	—		(6)	—		—		—		—		—
Leverage Lubricants contribution	—	—		—	—		—		—		2		2
Distribution from VRM LA	—	—		—	—		—		—		(169)		(169)
Share based compensation expense	—	—		—	—		257		—		—		257



Accretion of redeemable non-controlling interest to redemption value	—	—		—	—		—		(415)		—		(415)


Net income	—	—		—	—		—		8,360		2,285		10,645
Less: amount attributable to redeemable non-controlling interest	—	—		—	—		—		—		(2,329)		(2,329)
Balance on September 30, 2021	63,003	$	63	386	$	—	$	136,906	$	(101,475)	$	1,848	$	37,342


	Nine Months Ended
	September 30, 2022		September 30, 2021
Cash and cash equivalents	$	117,464	$	12,113
Restricted cash	4,929		$	100
Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows	$	122,393	$	12,213



SUPPLEMENTAL INFORMATION
Cash paid for interest	$	20,191	$	844
Cash paid for taxes	$	—	$	—
NON-CASH INVESTING AND FINANCING TRANSACTIONS
Equity component of the convertible note issuance	$	78,789	$	—

Conversion of Series B Preferred Stock into common stock	$	—	$	8,447
Conversion of Series B1 Preferred Stock into common stock	$	—	$	12,046
Exchanges of Series B Preferred Stock into common stock	$	—	$	4,747
Accretion of discount on Series B and B1 Preferred Stock	$	—	$	507
Dividends-in-kind accrued on Series B and B1 Preferred Stock	$	—	$	(258)

Conversion of Convertible Senior Notes to common stock	$	59,822	$	—
Equipment acquired (disposed) under leases	$	45,096	$	174
Accretion of redeemable noncontrolling interest to redemption value	$	428	$	1,177


Nine Months Ended September 30, 2023
	Common Stock			Series A Preferred
	Shares	$0.001 Par		Shares	$0.001 Par		Additional Paid-In Capital		Accumulated Deficit		Non-controlling Interest		Total Equity
Balance on January 1, 2023	75,669	$	76	—	$	—	$	279,552	$	(115,893)	$	1,685	$	165,420
Exercise of options	166	—		—	—		209		—		—		209

Stock based compensation expense	—	—		—	—		365		—		—		365
Non controlling shareholder contribution	—	—		—	—		—		—		980		980
Net income (loss)	—	—		—	—		—		53,863		(50)		53,813

Balance on March 31, 2023	75,835	76		—	—		280,126		(62,030)		2,615		220,787
Exercise of options	195	—		—	—		169		—		—		169

Stock based compensation expense	—	—		—	—		368		—		—		368
Senior Note Converted	17,207	17		—	—		101,113		—		—		101,130
Non-controlling shareholder contribution	—	—		—	—		—		—		490		490
Net loss	—	—		—	—		—		(81,401)		(53)		(81,454)

Balance on June 30, 2023	93,237	93		—	—		381,776		(143,431)		3,052		241,490
Exercise of options	165	1		—	—		304		—		—		305

Stock based compensation expense	—	—		—	—		769		—		—		769
Issue of restricted common stock	113	—		—	—		—		—		—		—
Non-controlling shareholder contribution	—	—		—	—		—		—		490		490
Net income (loss)	—	—		—	—		—		19,843		(310)		19,533

Balance on September 30, 2023	93,515	$	94	—	$	—	$	382,849	$	(123,588)	$	3,232	$	262,587


	Financing agreement		Vertex acquisition		Total
Inventory	$	124,311	$	5,909	$	130,220
Prepaid assets	—		147		147
Fixed assets	—		97,158		97,158
Total purchase price	$	124,311	$	103,214	$	227,525


	Three Months Ended September 30, 2023
	Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Consolidated
Primary Geographical Markets


Gulf Coast	$	978,712	$	44,327	$	(4,632)	$	1,018,407
Sources of Revenue
Refined products:
Gasolines	$	199,768	$	—	$	—	$	199,768
Jet Fuels	188,791		—		—		188,791
Diesel	194,564		—		—		194,564
Renewable	142,195		—		—		142,195
Other refinery products (1)	241,487		38,642		(4,632)		275,497
Re-refined products:
Pygas	3,898		—		—		3,898
Metals (2)	—		1,965		—		1,965
Other re-refined products (3)	611		1,001		—		1,612
Services and credits:
Terminalling	7,398		—		—		7,398
Oil collection services	—		2,719		—		2,719

Total revenues	$	978,712	$	44,327	$	(4,632)	$	1,018,407


		Three Months Ended September 30, 2022				Three Months Ended September 30, 2022
		Black Oil* & Recovery		Refining & Marketing			Consolidated			Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Consolidated
Primary Geographical Markets	Primary Geographical Markets								Primary Geographical Markets

Southern United States		$	43,439	$	766,769		$	810,208
Gulf Coast									Gulf Coast	$	766,768	$	42,761	$	—	$	809,529
Sources of Revenue	Sources of Revenue								Sources of Revenue
Refined products:	Refined products:								Refined products:
Gasolines	Gasolines	$	—	$	171,023		$	171,023	Gasolines	$	171,023	$	—	$	—	$	171,023
Jet Fuels	Jet Fuels	—		138,962			138,962		Jet Fuels	138,962		—		—		138,962
Diesel	Diesel	—		276,355			276,355		Diesel	276,355		—		—		276,355
Other refinery products (1)	Other refinery products (1)	37,607		108,337			145,944		Other refinery products (1)	161,850		37,607		—		199,457
Re-refined products:	Re-refined products:								Re-refined products:
Pygas	Pygas	—		15,285			15,285		Pygas	15,285		—		—		15,285
Metals (2)	Metals (2)	4,060		—			4,060		Metals (2)	—		4,060		—		4,060
Other re-refined products (3)	Other re-refined products (3)	1,490		54,663			56,153		Other re-refined products (3)	1,149		527		—		1,676
Services:	Services:								Services:
Terminalling	Terminalling	—		2,144			2,144		Terminalling	2,144		—		—		2,144
Oil collection services	Oil collection services	282		—			282		Oil collection services	—		567		—		567

Total revenues	Total revenues	$	43,439	$	766,769		$	810,208	Total revenues	$	766,768	$	42,761	$	—	$	809,529


		Three Months Ended September 30, 2021				Nine Months Ended September 30, 2023
		Black Oil* & Recovery		Refining & Marketing			Consolidated			Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Consolidated
Primary Geographical Markets	Primary Geographical Markets								Primary Geographical Markets

Southern United States		$	26,410	$	24,572		$	50,982
Gulf Coast									Gulf Coast	$	2,349,459	$	104,758	$	(9,775)	$	2,444,442
Sources of Revenue	Sources of Revenue								Sources of Revenue
Refined products:	Refined products:								Refined products:
Gasolines	Gasolines	$	—	$	6,674		$	6,674	Gasolines	$	517,875	$	—	$	—	$	517,875
Jet Fuels	Jet Fuels	—		—			—		Jet Fuels	437,640		—		—		437,640
Diesel	Diesel	—		13,745			13,745		Diesel	535,839		—		—		535,839
Renewable									Renewable	197,498		—		—		197,498
Other refinery products (1)	Other refinery products (1)	20,339		—			20,339		Other refinery products (1)	633,600		89,863		(9,775)		713,688
Re-refined products:	Re-refined products:								Re-refined products:
Pygas	Pygas	—		3,736			3,736		Pygas	12,745		—		—		12,745
Metals (2)	Metals (2)	4,328		—			4,328		Metals (2)	—		8,404		—		8,404
Other re-refined products (3)	Other re-refined products (3)	909		417			1,326		Other re-refined products (3)	1,129		2,508		—		3,637
Services:							—
Services and credits:									Services and credits:
Terminalling									Terminalling	13,133		—		—		13,133
Oil collection services									Oil collection services	—		3,983		—		3,983

Oil collection services		834		—			834
Total revenues	Total revenues	$	26,410	$	24,572		$	50,982	Total revenues	$	2,349,459	$	104,758	$	(9,775)	$	2,444,442


		Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2022
		Black Oil* & Recovery		Refining & Marketing			Consolidated			Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Consolidated
Primary Geographical Markets	Primary Geographical Markets								Primary Geographical Markets

Southern United States		$	147,545	$	1,767,878		$	1,915,423
Gulf Coast									Gulf Coast	$	1,767,877	$	145,558	$	—	$	1,913,435
Sources of Revenue	Sources of Revenue								Sources of Revenue
Refined products:	Refined products:								Refined products:
Gasolines	Gasolines	$	—	$	432,173		$	432,173	Gasolines	$	432,173	$	—	$	—	$	432,173
Jet Fuels	Jet Fuels	—		282,650			282,650		Jet Fuels	282,650		—		—		282,650
Diesel	Diesel	—		620,580			620,580		Diesel	620,580		—		—		620,580
Other refinery products (1)	Other refinery products (1)	129,078		259,667			388,745		Other refinery products (1)	385,641		129,078		—		514,719
Re-refined products:	Re-refined products:								Re-refined products:
Pygas	Pygas	—		40,661			40,661		Pygas	40,660		—		—		40,660
Metals (2)	Metals (2)	13,080		—			13,080		Metals (2)	—		13,080		—		13,080
Other re-refined products (3)	Other re-refined products (3)	4,111		127,695			131,806		Other re-refined products (3)	1,721		1,780		—		3,501
Services:	Services:						—		Services:
Terminalling	Terminalling	—		4,452			4,452		Terminalling	4,452		—		—		4,452
Oil collection services	Oil collection services	1,276		—			1,276		Oil collection services	—		1,620		—		1,620
Total revenues	Total revenues	$	147,545	$	1,767,878		$	1,915,423	Total revenues	$	1,767,877	$	145,558	$	—	$	1,913,435


							For Three Months Ended September 30,			For Nine Months Ended September 30,
		For Three Months Ended September 30, 2022		For Six Months Ended September 30, 2022				2022			2022
Revenue	Revenue	$	733,521	$	1,655,717	Revenue		$	733,521		$	1,655,717
Net Income (loss)		$	18,370	$	(5,592)
Net income (loss)						Net income (loss)		$	18,370		$	(5,592)


AS OF SEPTEMBER 30, 2022
	Black Oil & Recovery		Refining & Marketing		Corporate and Eliminations		Consolidated
Total assets	$	123,808	$	395,692	$	128,077	$	647,577

AS OF SEPTEMBER 30, 2021
	Black Oil & Recovery		Refining & Marketing		Corporate and Eliminations		Consolidated
Total assets	$	101,461	$	4,775	$	38,414	$	144,650


As of September 30, 2023
	Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Consolidated
Total assets	$	697,129	$	115,820	$	79,729	$	892,678

As of December 31, 2022
	Refining & Marketing		Black Oil & Recovery		Corporate and Eliminations		Consolidated
Total assets	$	410,975	$	105,109	$	173,301	$	689,385


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Accounts receivable trade	Accounts receivable trade	$	52,338	$	16,302	Accounts receivable trade	$	38,220	$	36,098
Allowance for doubtful accounts	Allowance for doubtful accounts	(1,509)		(1,422)		Allowance for doubtful accounts	(1,404)		(1,550)
Accounts receivable trade, net		50,829		14,880
Accounts receivable other		1,001		—

Accounts receivable, net	Accounts receivable, net	$	51,830	$	14,880	Accounts receivable, net	$	36,816	$	34,548


		As of and for the Nine Months Ended					As of and for the Nine Months Ended
		September 30, 2022		September 30, 2021			September 30, 2023		September 30, 2022
		% of Revenues	% of Receivables	% of Revenues	% of Receivables		% of Revenues	% of Receivables	% of Revenues	% of Receivables
Customer 1	Customer 1	40%	2%	34%	11%	Customer 1	35%	2%	40%	2%
Customer 2	Customer 2	22%	45%	12%	6%	Customer 2	33%	25%	22%	50%
Customer 3		10%	7%	9%	5%


	% of Revenue by Segment		% Revenue by Segment
	Nine Months Ended September 30, 2022		Nine Months Ended September 30, 2021
	Black Oil and Recovery	Refining		Black Oil and Recovery	Refining
Customer 1	—%	43%		—%	27%
Customer 2	—%	24%		—%	20%
Customer 3	83%	4%		64%	—%



		As of September 30, 2022		As of December 31, 2021			As of September 30, 2023		As of December 31, 2022
Crude oil	Crude oil	$	60,504	$	926	Crude oil	$	75,303	$	59,131
Renewable feedstocks						Renewable feedstocks	41,316		—
Refined products	Refined products	97,568		4,729		Refined products	104,042		74,311
Re-refined products	Re-refined products	6,590		2,376		Re-refined products	2,024		2,031
Total hydrocarbon inventories	Total hydrocarbon inventories	164,662		8,031		Total hydrocarbon inventories	$	222,685	$	135,473
Other inventories		5,110		—
Total inventories		$	169,772	$	8,031


	~~September 30, 2022~~
~~Obligations under inventory financing agreement~~	$	~~135,744~~
~~Unamortized financing cost~~	~~(1,500)~~
~~Obligations under inventory financing agreement, net~~	$	~~134,244~~


	As of September 30, 2022		As of December 31, 2021
Prepaid insurance	$	15,168	$	2,638
Commodity derivative advance	12,468		556
Renewable volume obligation (RVO) assets	1,389		—
Other prepaid expenses	4,312		1,373
Total prepaid expenses	$	33,337	$	4,567


		Useful Life (in years)	September 30, 2022		December 31, 2021			Useful Life (in years)	September 30, 2023		December 31, 2022
Equipment	Equipment	10	$	116,370	$	38,682	Equipment	7	$	269,640	$	97,120
Furniture and fixtures	Furniture and fixtures	7	106		106		Furniture and fixtures	7	55		86
Leasehold improvements	Leasehold improvements	15	2,779		2,473		Leasehold improvements	15	2,852		2,852
Office equipment	Office equipment	5	1,433		1,183		Office equipment	5	1,476		1,433
Vehicles	Vehicles	5	8,168		6,999		Vehicles	5	15,004		9,212
Building	Building	20	2,334		274		Building	20	3,658		2,334
Land improvements		20	158		—
Turnarounds							Turnarounds	4	21,170		18,964
Construction in progress	Construction in progress		57,730		10,484		Construction in progress		48,596		96,765
Land	Land		9,010		1,995		Land		9,768		9,168
Total fixed assets	Total fixed assets		198,088		62,196		Total fixed assets		372,219		237,934
Less accumulated depreciation	Less accumulated depreciation		(33,371)		(26,043)		Less accumulated depreciation		(50,905)		(36,185)
Net fixed assets	Net fixed assets		$	164,717	$	36,153	Net fixed assets		$	321,314	$	201,749


~~Year 1~~	$	~~4,061~~
~~Year 2~~	~~4,005~~
~~Year 3~~	~~2,549~~
~~Year 4~~	~~950~~
~~Year 5~~	~~948~~
~~Thereafter~~	~~290~~
	$	~~12,803~~


September 30,	Balance
2024	$	4,125
2025	2,596
2026	1,034
2027	1,031
2028	284
Thereafter	2,137
	$	11,207


Creditor	Loan Type	Balance on September 30, 2022		Balance on December 31, 2021
Senior Convertible Note	Convertible note	$	95,178	$	155,000
Term Loan 2025	Loan	165,000		—
John Deere Note	Note	—		94
SBA Loan	SBA Loan	59		59

Various institutions	Insurance premiums financed	10,449		2,375
Principal amount of long-term debt		270,686		157,528
Less: unamortized discount and deferred financing costs		(86,384)		(90,984)
Total debt, net of unamortized discount and deferred financing costs		184,302		66,544
Less: current maturities, net of unamortized discount and deferred financing costs		(16,637)		(2,413)
Long term debt, net of current maturities		$	167,665	$	64,131


Period Ended September 30,	Period Ended September 30,	Amount Due		Period Ended September 30,	Amount Due
2023		$	16,637
2024	2024	8,252		2024	$	18,321
2025	2025	150,563		2025	139,763
2026	2026	1		2026	—
2027	2027	95,180		2027	—
Thereafter		53
2028				2028	15,230

Total	Total	$	270,686	Total	$	173,314


	~~September 30, 2022~~
~~Principal Amounts~~	$	~~155,000~~
~~Conversion of principal into common stock~~	~~(59,822)~~
~~Outstanding principal amount~~	~~95,178~~
~~Unamortized discount and issuance costs~~	~~(52,362)~~
~~Net Carrying Amount~~	$	~~42,816~~


	September 30, 2023		December 31, 2022
Principal amounts at beginning of period	$	95,178	$	155,000
Conversion of principal into common stock	(79,948)		(59,822)
Outstanding principal amount	15,230		95,178
Unamortized discount and issuance costs	(7,437)		(51,005)
Net carrying amount at end of period	$	7,793	$	44,173


	Three Months Ended September 30,				Nine Months Ended September 30,
Lease Cost Type	2023		2022		2023		2022
Amortization of finance lease ROU assets	$	984	$	723	$	2,753	$	1,531
Interest on lease liabilities	1,540		1,364		4,474		2,741
Net finance lease costs	$	2,524	$	2,087	$	7,227	$	4,272


September 30, 2022
	Facilities		Equipment		Plant		Railcar		Total
Year 1	$	715	$	262	$	4,111	$	1,333	$	6,421
Year 2	495		262		4,111		1,437		6,305
Year 3	394		259		4,111		489		5,253
Year 4	306		259		4,111		305		4,981
Year 5	300		234		4,111		181		4,826
Thereafter	1,550		—		22,482		—		24,032
Total lease payments	3,760		1,276		43,037		3,745		51,818
Less: interest	(1,139)		(218)		(15,728)		(773)		(17,858)
Present value of operating lease liabilities	$	2,621	$	1,058	$	27,309	$	2,972	$	33,960


For the period ending September 30,	Facilities		Equipment		Plant		Railcar		Total
2024	$	626	$	16,776	$	8,007	$	638	$	26,047
2025	535		10,637		7,667		506		19,345
2026	452		5,058		7,553		389		13,452
2027	448		4,859		7,586		123		13,016
2028	451		1,110		7,609		—		9,170
Thereafter	1,520		—		82,913		—		84,433
Total lease payments	4,032		38,440		121,335		1,656		165,463
Less: interest	(1,257)		(5,025)		(68,654)		(113)		(75,049)
Present value of operating lease liabilities	$	2,775	$	33,415	$	52,681	$	1,543	$	90,414


Remaining lease term and discount rate:	September 30, ~~2022~~2023
Weighted average remaining lease terms (years)
Finance lease	14.32
Lease facilities	~~4.79~~5.86
Lease equipment	~~10.69~~3.24
Lease plant	~~10.47~~16.19
Lease railcar	~~3.22~~1.65
Weighted average discount rate
Finance lease	8.86	%
Lease facilities	~~9.13~~10.23	%
Lease equipment	~~7.97~~11.90	%
Lease plant	~~9.37~~12.28	%
Lease railcar	~~8.00~~10.07	%