Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 13, 2017 | Jun. 30, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | Vertex Energy Inc. | ||
Entity Central Index Key | 890,447 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 26,171,510 | ||
Entity Common Stock, Shares Outstanding | 33,258,027 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 1,701,435 | $ 765,364 |
Escrow - current restricted cash | 1,504,723 | 0 |
Accounts receivable, net | 10,952,219 | 6,315,414 |
Inventory | 4,357,958 | 3,548,311 |
Prepaid expenses | 2,669,117 | 1,367,442 |
Assets being held for sale | 0 | 11,170,243 |
Total current assets | 21,185,452 | 23,166,774 |
Non-current assets | ||
Fixed assets, at cost | 62,316,808 | 60,846,824 |
Less accumulated depreciation | (12,286,874) | (7,818,217) |
Net fixed assets | 50,029,934 | 53,028,607 |
Intangible assets, net | 15,252,332 | 16,967,985 |
Other assets | 518,250 | 481,450 |
Total non-current assets | 65,800,516 | 70,478,042 |
TOTAL ASSETS | 86,985,968 | 93,644,816 |
Current liabilities | ||
Accounts payable and accrued expenses | 9,440,696 | 13,244,388 |
Dividends payable | 504,474 | 376,571 |
Capital leases | 133,153 | 186,948 |
Current portion of long-term debt, net of unamortized finance costs | 9,649,282 | 17,789,491 |
Revolving note | 2,726,039 | 1,744,122 |
Deferred revenue | 0 | 323,891 |
Total current liabilities | 22,453,644 | 33,665,411 |
Long-term liabilities | ||
Long-term debt, net of unamortized finance costs | 1,848,111 | 5,539,659 |
Derivative liability | 4,365,992 | 1,548,604 |
Total liabilities | 28,667,747 | 40,753,674 |
Commitments and Contingencies | 0 | 0 |
EQUITY | ||
Common stock, $0.001 par value per share; 750,000,000 shares authorized; 33,151,391 and 28,239,276 issued and outstanding at December 31, 2016 and 2015, respectively, with 1,108,928 shares held in escrow at December 31, 2016. | 33,151 | 28,239 |
Additional paid-in capital | 69,051,124 | 53,014,054 |
Accumulated deficit | (27,958,578) | (12,106,971) |
Total Vertex Energy, Inc. stockholders' equity | 41,126,222 | 40,935,935 |
Non-controlling interest | 103,897 | 0 |
Total Equity | 41,230,119 | 40,935,935 |
TOTAL LIABILITIES, TEMPORARY EQUITY AND EQUITY | 86,985,968 | 93,644,816 |
Series B Preferred Stock | ||
Long-term liabilities | ||
Derivative liability | 1,952,565 | 1,548,604 |
TEMPORARY EQUITY | ||
Series B and B-1 preferred shares | 3,331,918 | 11,955,207 |
Series B-1 Preferred Stock | ||
Long-term liabilities | ||
Derivative liability | 2,413,427 | |
TEMPORARY EQUITY | ||
Series B and B-1 preferred shares | 13,756,184 | 0 |
Series A Preferred Stock | ||
EQUITY | ||
Preferred stock, 50,000,000 shares authorized, Series A Convertible Preferred stock, $0.001 par value, 5,000,000 authorized and 612,943 and 630,419 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively, with a liquidation preference of $913,285 and $939,324 at December 2015 and December 2014, respectively | 493 | $ 613 |
Series C Preferred Stock | ||
EQUITY | ||
Preferred stock, 50,000,000 shares authorized, Series A Convertible Preferred stock, $0.001 par value, 5,000,000 authorized and 612,943 and 630,419 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively, with a liquidation preference of $913,285 and $939,324 at December 2015 and December 2014, respectively | $ 32 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Preferred stock, par value (in USD per share) | $ 0.001 | |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 33,151,391 | 28,239,276 |
Common stock, shares outstanding | 33,151,391 | 28,239,276 |
Common stock, shares held in escrow | 1,108,928 | |
Series A Preferred Stock | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 492,716 | 612,943 |
Preferred stock, shares outstanding | 492,716 | 612,943 |
Preferred stock, liquidation preference | $ 734,147 | $ 913,285 |
Series B Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary equity, shares authorized | 10,000,000 | 10,000,000 |
Temporary equity, shares issued | 3,229,409 | 8,160,809 |
Temporary equity, shares outstanding | 3,229,409 | 8,160,809 |
Temporary equity, liquidation preference | $ 10,011,168 | $ 25,298,508 |
Preferred stock, shares authorized | 10,000,000 | |
Series B-1 Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary equity, shares authorized | 17,000,000 | |
Temporary equity, shares issued | 12,282,638 | 0 |
Temporary equity, shares outstanding | 12,282,638 | 0 |
Temporary equity, liquidation preference | $ 19,160,915 | $ 0 |
Preferred stock, shares authorized | 17,000,000 | |
Preferred stock, shares issued | 12,282,638 | 0 |
Series C Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary equity, shares authorized | 44,000 | |
Temporary equity, shares issued | 31,568 | 0 |
Temporary equity, shares outstanding | 31,568 | 0 |
Temporary equity, liquidation preference | $ 3,156,800 | $ 0 |
Preferred stock, shares authorized | 44,000 | |
Preferred stock, shares issued | 31,568 | 0 |
Preferred stock, shares outstanding | 31,568 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | ||
Revenues | $ 98,078,914 | $ 146,942,461 |
Cost of revenues (exclusive of depreciation shown separately below) | 81,759,814 | 136,246,273 |
Gross profit | 16,319,100 | 10,696,188 |
Reduction of contingent liability | 0 | (6,069,000) |
Selling, general and administrative expenses | 19,966,426 | 24,046,464 |
Depreciation and amortization | 6,277,215 | 6,636,593 |
Acquisition related expenses | 187,973 | 175,172 |
Total selling, general and administrative expenses | 26,431,614 | 24,789,229 |
Loss from operations | (10,112,514) | (14,093,041) |
Other income (expense): | ||
Provision for doubtful accounts | 0 | (654,820) |
Goodwill impairment | 0 | (4,922,353) |
Other income (expense) | 5,974 | (4,446) |
Gain (loss) on sale of assets | 9,631,712 | 13,944 |
Gain on change in value of derivative liability | 49,876 | 5,479,463 |
Realized gain (loss) on futures contracts | (548,380) | 551,090 |
Interest expense | (3,094,956) | (3,580,726) |
Total other income (expense) | 6,044,226 | (3,117,848) |
Loss before income taxes | (4,068,288) | (17,210,889) |
Income tax benefit (expense) | 117,646 | (5,306,000) |
Net loss | (3,950,642) | (22,516,889) |
Net income attributable to non-controlling interest | 2,179 | 0 |
Net loss attributable to Vertex Energy, Inc. | (3,952,821) | (22,516,889) |
Accretion of discount on series B and B-1 Preferred Stock | (1,762,378) | (805,742) |
Accrual of dividends on series B and B-1 Preferred Stock and retirement of a portion of Series B and B-1 Preferred discount | (9,822,196) | (780,069) |
Net loss available to common shareholders | $ (15,537,395) | $ (24,102,700) |
Earnings per common share | ||
Basic (in USD per share) | $ (0.51) | $ (0.86) |
Diluted (in USD per share) | $ (0.51) | $ (0.86) |
Shares used in computing earnings per share | ||
Basic (in shares) | 30,520,820 | 28,181,096 |
Diluted (in shares) | 30,520,820 | 28,181,096 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Non-controlling Interest | Series A Preferred StockPreferred Stock | Series C Preferred StockPreferred Stock |
Balance at beginning, shares at Dec. 31, 2014 | 28,108,105 | 630,419 | |||||
Balance at beginning, value at Dec. 31, 2014 | $ 58,619,972 | $ 28,109 | $ 46,595,472 | $ 11,995,761 | $ 0 | $ 630 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share based compensation expense, total | $ 423,910 | 423,910 | |||||
Exercise of stock options and warrants (shares) | 25,000 | 25,000 | |||||
Exercise of stock options and warrants | $ 11,250 | $ 25 | 11,225 | ||||
Issuance of restricted common stock (shares) | 56,180 | ||||||
Issuance of restricted common stock | 200,000 | $ 56 | 199,944 | ||||
Conversion of preferred A stock to common, shares | 17,476 | (17,476) | |||||
Conversion of preferred A stock to common | 0 | $ 17 | $ (17) | ||||
Conversion of preferred B stock to common, (shares) | 32,515 | ||||||
Conversion of preferred B stock to common | 100,795 | $ 32 | 100,763 | ||||
Beneficial conversion feature on Preferred B | 5,682,740 | 5,682,740 | |||||
Dividends declared on Preferred B shares | (780,101) | (780,101) | |||||
Non-controlling interest related acquisition | (805,742) | (805,742) | |||||
Net loss | (22,516,889) | (22,516,889) | |||||
Balance at end, shares at Dec. 31, 2015 | 28,239,276 | 612,943 | |||||
Balance at end, value at Dec. 31, 2015 | $ 40,935,935 | $ 28,239 | 53,014,054 | (12,106,971) | 0 | $ 613 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Exercise of stock options and warrants (shares) | 100,000 | 53,271 | |||||
Exercise of stock options and warrants | $ 0 | $ 53 | (53) | ||||
Issuance of common stock to pay rent prior to Bango Sale (shares) | 244,000 | ||||||
Issuance of common stock to pay rent prior to Bango Sale | 244,000 | $ 244 | 243,756 | ||||
Issuance of restricted common stock (shares) | 1,108,928 | ||||||
Issuance of restricted common stock | 0 | $ 1,109 | (1,109) | ||||
Issuance of common stock options and warrants - Compensation Expense | 527,869 | 527,869 | |||||
Conversion of preferred A stock to common, shares | 120,227 | (120,227) | |||||
Conversion of preferred A stock to common | 0 | $ 120 | $ (120) | ||||
Beneficial conversion feature on Preferred B | 4,887,252 | 4,887,252 | |||||
Issuance of Series C Preferred stock (shares) | 44,000 | ||||||
Issuance of Series C Preferred stock | 4,000,000 | 3,999,956 | $ 44 | ||||
Conversion of Preferred C Stock to Common, Shares | 1,243,200 | (12,432) | |||||
Conversion of Preferred C Stock to Common, Value | 0 | $ 1,243 | (1,231) | $ (12) | |||
Series B Preferred Buy Back | (5,408,131) | (5,408,131) | |||||
Series B & B-1 Preferred stock - Dividends declared | (3,397,665) | (3,397,665) | |||||
Series B & B-1 Preferred stock - accretion of redemption discount | (1,762,378) | (1,762,378) | |||||
Conversion of Series B & B-1 Preferred stock to common (shares) | 2,142,489 | ||||||
Conversion of Series B & B-1 Preferred stock to common | 5,104,881 | $ 2,143 | 6,119,138 | (1,016,400) | |||
Reclass Non-controlling interest | 51,177 | 261,492 | (314,212) | 103,897 | |||
Net loss | (3,952,821) | (3,952,821) | |||||
Balance at end, shares at Dec. 31, 2016 | 33,151,391 | 492,716 | 31,568 | ||||
Balance at end, value at Dec. 31, 2016 | $ 41,230,119 | $ 33,151 | $ 69,051,124 | $ (27,958,578) | $ 103,897 | $ 493 | $ 32 |
CONSOLIDATED STATEMENTS OF EQU6
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Common stock, par value (in USD per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, par value (in USD per share) | 0.001 | ||
Series A Preferred Stock | |||
Preferred stock, par value (in USD per share) | 0.001 | 0.001 | |
Preferred Stock | Series A Preferred Stock | |||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 | $ 0.001 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (3,952,821) | $ (22,516,889) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Stock-based compensation expense | 527,869 | 423,911 |
Depreciation and amortization | 6,277,215 | 6,636,593 |
Bad debt expense | 0 | 654,820 |
Rent paid by common stock | 244,000 | 0 |
Gain on sale of assets | (9,631,712) | 0 |
Deferred financing costs write off | 1,390,727 | 0 |
Deferred federal income tax | 5,306,000 | |
Increase in fair value of derivative liability | (49,876) | (5,479,463) |
Reduction in contingent consideration | 0 | (6,069,000) |
Impairment of goodwill | 0 | 4,922,353 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,636,805) | 1,929,871 |
Inventory | (809,647) | 9,072,305 |
Prepaid expenses | (1,250,496) | 48,438 |
Costs in excess of billings | 0 | 779,285 |
Accounts payable and accrued expenses | (1,893,370) | (8,539,803) |
Deferred revenue | (323,891) | (139,319) |
Other | (36,800) | |
Net cash used in operating activities | (14,145,607) | (12,970,898) |
Cash flows from investing activities | ||
Note receivable | 0 | 2,495,180 |
Payments on capital leases | 0 | (172,654) |
Proceeds from sale of assets | 29,788,114 | 0 |
Costs related to sale of assets | (10,792,446) | 0 |
Establish escrow account - restricted cash | (1,504,723) | 0 |
Proceeds from the sale of assets | 20,900 | 92,271 |
Acquisitions | 0 | (1,082,649) |
Purchase of fixed assets | (1,628,859) | (1,811,653) |
Net cash provided by (used in) investing activities | 15,882,986 | (479,505) |
Cash flows from financing activities | ||
Line of credit proceeds (payments), net | 981,918 | 1,744,122 |
Proceeds from exercise of common stock options and warrants | 11,306 | |
Proceeds from sale of Series C Preferred Stock | 4,000,000 | 0 |
Purchase/buy back/sale/conversion Series B and B-1 Preferred Stock | (11,189,849) | 0 |
Proceeds from issuance of Series B Preferred stock | 19,349,757 | 23,557,553 |
Issuance costs of Series B and B-1 Preferred Stock | (607,890) | 0 |
Proceeds from notes payable | 7,650,819 | 2,305,277 |
Payments made on notes payable | (20,986,063) | (19,419,567) |
Net cash provided by (used in) financing activities | (801,308) | 8,198,691 |
Net change in cash and cash equivalents | 936,071 | (5,251,712) |
Cash and cash equivalents at beginning of the period | 765,364 | 6,017,076 |
Cash and cash equivalents at end of period | 1,701,435 | 765,364 |
SUPPLEMENTAL INFORMATION | ||
Cash paid for interest during the year | 1,688,628 | 3,563,145 |
Cash paid for income taxes during the year | 0 | |
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Common shares issued as payment | 244,000 | 200,000 |
E-Source Holdings, LLC | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Fair value of warrants issued with Series B and B-1 Preferred Stock | 2,867,264 | 0 |
Series A Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Preferred Stock into common stock | 120 | 17 |
Series B Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Preferred Stock into common stock | 5,104,881 | 100,795 |
Series B and Series B1 Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Dividends-in-Kind accrued on Series B and B-1 Preferred Stock and retirement of a portion of the Series B Preferred Stock | 9,822,196 | 779,310 |
Beneficial conversion feature | 4,887,252 | 5,682,741 |
Accretion of discount on Series B and B-1 Preferred Stock | $ 1,762,378 | $ 1,585,843 |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) | 12 Months Ended |
Dec. 31, 2015shares | |
Heartland Group Holdings, LLC and Omega Refining | |
Number of shares issued as part of acquisition | 2,701,601 |
BASIS OF PRESENTATION AND NATUR
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Basis Of Presentation And Nature Of Operations | |
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | BASIS OF PRESENTATION AND NATURE OF OPERATIONS Vertex Energy, Inc. (“ Vertex Energy ” or the “ Company ”), provides a range of services designed to aggregate, process and recycle industrial and commercial waste systems. Vertex Energy currently provides these services in 13 states, primarily in the Gulf Coast and Central Midwest Region of the United States. COMPANY OPERATIONS Vertex Energy’s operations are primarily focused on recycling industrial waste streams and off-specification commercial chemical products. The waste streams are purchased from an established network of local and regional collectors and generators. The Company manages the transport, storage and delivery of the aggregated feedstock and product streams to end users. Vertex Energy’s three principal divisions are comprised of Black Oil, Refining and Marketing, and Recovery. After considering the Company’s historical negative cash flow from operating activities as well as its working capital deficit of $1,268,192 at December 31, 2016, it does not appear the Company will meet its obligations as they become due within one year following the date the financial statements are issued. Management evaluated the significance of the potential negative cash flows and determined that borrowing availability under the new Loan Agreement (as described in " Note 19. Subsequent Events ") would be sufficient to alleviate concerns about the Company’s ability to continue as a going concern. The Company entered into a Loan Agreement with Encina Business Credit LLC providing the ability of Management to request up to $30.0 million available under the Loan Agreement if necessary to fund operations through March 31, 2018. Black Oil Through its Black Oil division, which has been operational since 2001, Vertex Energy aggregates and sells used motor oil. The Company has a network of approximately 50 suppliers that collect used oil from businesses such as oil change service stations, automotive repair shops, manufacturing facilities, petroleum refineries, and petrochemical manufacturing operations. The Company procures the used oil from collectors and manages the logistics of transport, storage and delivery to our customers. Typically, the used oil is sold in bulk to ensure the efficient delivery by truck, rail, or barge. In many cases, there are contractual procurement and sale agreements with the suppliers and customers, respectively. These contracts are beneficial to all parties involved because they ensure a minimum volume is procured from collectors, a minimum volume is sold to the customers, and the Company is insulated from inventory risk by a spread between the costs to acquire used oil and the revenues received from the sale and delivery of used oil. In addition, the Company operates its own re-refining operations at the Cedar Marine Terminal, in Baytown, Texas, which uses the Company's proprietary Thermal Chemical Extraction Process (“ TCEP ”) technology to re-refine the used oil into marine fuel cutterstock and a higher-value feedstock for further processing. The finished product is then sold by barge as a fuel oil cutterstock and a feedstock component for major refineries. Although today we are currently utilizing the TCEP technology as a pre-treatment process for the used motor oil feedstock that is being supplied from our CMT facility and delivered to Marrero for further re-refining. Through the operations at our Marrero, Louisiana facility, we produce a Vacuum Gas Oil (VGO) product from used oil re-refining which is then sold via barge to end users to utilize in a refining process or a fuel oil blend. Through the operations at our Columbus, Ohio facility we produce a base oil finished product which is then sold via truck or rail car to end users for blending, packaging and marketing of lubricants. Refining and Marketing Through its Refining and Marketing division, which has been operational since 2004, Vertex Energy aggregates used motor oil, petroleum distillates, transmix and other off-specification chemical products. These feedstock streams are purchased from pipeline operators, refineries, chemical processing facilities and third-party providers. The Company has a toll-based processing agreement in place with KMTEX, LLC. (“ KMTEX ”) to re-refine these feedstock streams, under the Company’s direction, into various end products. KMTEX uses industry standard processing technologies to re-refine the feedstock into pygas, gasoline blendstock and marine fuel cutterstock. The Company sells the re-refined products directly to end customers or to processing facilities for further refinement. Recovery Through its Recovery division, which has been operational since 2002, Vertex Energy generates solutions for the proper recovery and management of hydrocarbon streams. The Company also provides industrial dismantling, demolition, decommissioning, investment recovery, and marine salvage services in industrial facilities. The Company owns and operates a fleet of trucks and heavy equipment used for processing, shipping and handling of reusable process equipment and other scrap. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation. The subsidiaries are as follows: • Cedar Marine Terminals, L.P. (“ CMT ”) operates a 19 -acre bulk liquid storage facility on the Houston Ship Channel. The terminal serves as a truck-in, barge-out facility and provides throughput terminal operations. CMT is also the site of the TCEP. • Crossroad Carriers, L.P. (“ Crossroad ”) is a common carrier that provides transportation and logistical services for liquid petroleum products, as well as other hazardous materials and product streams. • Vertex Recovery, L.P. (“ Vertex Recovery ”) is a generator solutions company for the recycling and collection of used oil and oil-related residual materials from large regional and national customers throughout the U.S. It facilitates its services through a network of independent recyclers and franchise collectors. • H&H Oil, L.P. (“ H&H Oil ”) collects and recycles used oil and residual materials from customers based in Austin, Baytown, Dallas, San Antonio and Corpus Christi, Texas. • E-Source Holdings, LLC (“ E-Source ”) provides dismantling and demolition services at industrial facilities throughout the Gulf Coast. • Vertex Refining, LA, LLC is a used oil re-refinery based in Marrero, Louisiana and also has assets in Belle Chasse, Louisiana. • Vertex Refining, NV, LLC (" Vertex Refining ") is a base oil marketing and distribution company with customers throughout the United States. • Vertex Recovery Management, LLC is currently buying and preparing ferrous and non-ferrous scrap intended for large haul barge sales. • Golden State Lubricant Works, LLC (" Golden State ") previously operated an oil storage and blend facility based in Bakersfield, California. • Vertex Refining, OH, LLC collects and re-refines used oil and residual materials from customers throughout the Midwest. Refinery operations are based in Columbus, Ohio and has collection branches located in Norwalk, Ohio, Zanesville, Ohio, Ravenswood, West Virginia, and Mt. Sterling, Kentucky. • Vertex Energy Operating, LLC (" Vertex Operating "), a holding company for various of the subsidiaries described above. Cash and cash equivalents For purposes of the statement of cash flows, the Company considers all short-term investments purchased with original maturities of three months or less at the date of purchase to be cash equivalents. Accounts receivable Accounts receivable represents amounts due from customers. Accounts receivable are recorded at invoiced amounts, net of reserves and allowances, do not bear interest and are not collateralized. The Company uses its best estimate to determine the required allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, economic trends and conditions affecting its customer base, significant one-time events and historical write-off experience. Specific provisions are recorded for individual receivables when we become aware of a customer’s inability to meet its financial obligations. The Company reviews the adequacy of its reserves and allowances quarterly. Receivable balances greater than 30 days past due are individually reviewed for collectability and if deemed uncollectible, are charged off against the allowance accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance was $1,646,274 and $1,965,335 at December 31, 2016 and 2015 , respectively. Inventory Inventories of products consist of feedstocks and refined petroleum products and are reported at the lower of cost or market. Cost is determined using the first-in, first-out (“ FIFO ”) method. The Company reviews its inventory commodities whenever events or circumstances indicate that the value may not be recoverable. Fixed assets Fixed assets are stated at historical costs. Depreciation of fixed assets placed in operations is provided using the straight-line method over the estimated useful lives of the assets. The policy of the Company is to charge amounts for maintenance and repairs to expenses, and to capitalize expenditures for major replacements and betterments. Asset Retirement Obligations The Company records a liability, which is referred to as an asset retirement obligation, at fair value for the estimated cost to retire a tangible long-lived asset at the time the Company incurs that liability, which is generally when the asset is purchased, constructed, or leased. The Company records the liability when it has a legal obligation to incur costs to retire the asset and when a reasonable estimate of the fair value of the liability can be made. If a reasonable estimate cannot be made at the time the liability is incurred, the Company records the liability when sufficient information is available to estimate the liability’s fair value. Intangible assets Intangible assets are amortized over their estimated useful lives. Amortizable intangible assets are reviewed at least annually to determine whether events and circumstances warrant a revision to the remaining period of amortization. During 2015, the Company recognized there was no remaining useful life for the intangible assets related to our E-Source acquisition and we fully amortized these intangibles, see Note 7. Goodwill Goodwill is the excess of cost of an acquired entity over the amounts assigned to identifiable assets acquired and liabilities assumed in a business combination. In accordance with the FASB ASC 350, “ Intangibles - Goodwill and Other ,” goodwill is not amortized. We periodically, at least on an annual basis, review goodwill, considering factors such as projected cash flows and revenue and earnings multiples, to determine whether the carrying value of the goodwill is impaired. If the goodwill is deemed to be impaired, the difference between the carrying amount reflected in the financial statements and the estimated fair value is recognized as an expense in the period in which the impairment occurs. We define our reportable segments to be the same as our operating segments for purposes of reviewing impairment and the recoverability of goodwill and other intangible assets. See Note 6 for more information on our goodwill impairment assessment. Revenue recognition Revenue for each of the Company’s divisions is recognized when persuasive evidence of an arrangement exists, goods are delivered, sales price is determinable, and collection is reasonably assured. Revenue is recognized upon delivery by truck and railcar of feedstock to its re-refining customers and upon product leaving the Company’s terminal facilities and third party processing facility via barge. Revenue is also recognized as recovered scrap materials are sold. Leases The Company recognizes lease expense on a straight-line basis over the minimum lease terms which expire at various dates through 2032. These leases are for office and storage tank facilities and are classified as operating leases. For leases that contain predetermined, fixed escalations of the minimum rentals, the Company recognizes the rent expense on a straight-line basis and records the difference between the rent expense and the rental amount payable in liabilities. Leasehold improvements made at the inception of the lease are amortized over the shorter of the asset life or the initial lease terms as described above. Leasehold improvements made during the lease term are also amortized over the shorter of the assets life or the remaining lease term. For capital leases assumed as a result of an acquisition, the leased assets owned by the acquiree and financed through a capital lease are measured separately, at fair value, from the underlying lease to which they are subject. The present value of the lease is then calculated using the lease terms and implicit interest rate. For operating leases assumed as a result of an acquisition, the lease terms are measured, at acquisition date, to determine if the terms are favorable or unfavorable when compared to a comparable market lease with similar terms. Business Combinations The Company accounts for business combinations using the acquisition method of accounting. The results of operations for the acquired entities are included in the Company’s consolidated financial results from their associated acquisition dates. The Company allocates the purchase price of acquisitions to the tangible assets, liabilities, and identifiable intangible assets acquired based on their estimated fair values. A portion of purchase price for our acquisitions is contingent upon the realization of certain operating results. The fair values assigned to identifiable intangible assets acquired and contingent consideration were determined by third party specialists engaged by the Company on a case by case basis. The excess of the purchase price over the fair value of the identified assets and liabilities has been recorded as goodwill. If the purchase price is under the fair value of the identified assets and liabilities, a bargain purchase is recognized and included in income from continuing operations. Fair value of financial instruments Under the Financial Accounting Standards Board Accounting Standards Codification (“ FASB ASC ”), we are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Consistent with the Fair Value Measurement Topic of the FASB ASC, we implemented guidelines relating to the disclosure of our methodology for periodic measurement of our assets and liabilities recorded at fair market value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: • Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; • Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Our Level 1 assets primarily include our cash and cash equivalents. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. The carrying amounts of accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the immediate or short-term maturities of these financial instruments. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from these estimates. Any effects on the business, financial position or results of operations from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to estimates and assumptions include the carrying amount and useful lives of property and equipment and intangible assets, impairment assessments, share-based compensation expense, and valuation allowances for accounts receivable, inventories, and deferred tax assets. Impairment of long-lived assets The Company evaluates the carrying value and recoverability of its long-lived assets when circumstances warrant such evaluation by applying the provisions of the FASB ASC regarding long-lived assets. It requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. The Company performed an impairment analysis of these long-lived assets based on undiscounted cash flows and there was no impairment at December 31, 2016 and 2015 . Income Taxes The Company accounts for income taxes in accordance with the FASB ASC Topic 740. The Company records a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and when temporary differences become deductible. The Company considers, among other available information, uncertainties surrounding the recoverability of deferred tax assets, scheduled reversals of deferred tax liabilities, projected future taxable income, and other matters in making this assessment. As part of the process of preparing its consolidated financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process requires the Company to estimate its actual current tax liability and to assess temporary differences resulting from differing book versus tax treatment of items, such as deferred revenue, compensation and benefits expense and depreciation. These temporary differences result in deferred tax assets and liabilities, which are included within the Company’s consolidated statements of financial condition. Significant management judgment is required in determining the Company’s provision for income taxes, its deferred tax assets and liabilities and any valuation allowance recorded against its net deferred tax assets. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized and, when necessary, valuation allowances are established. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. Management considers the level of historical taxable income, scheduled reversals of deferred taxes, projected future taxable income and tax planning strategies that can be implemented by the Company in making this assessment. If actual results differ from these estimates or the Company adjusts these estimates in future periods, the Company may need to adjust its valuation allowance, which could materially impact the Company’s consolidated financial position and results of operations. Tax contingencies can involve complex issues and may require an extended period of time to resolve. Changes in the level of annual pre-tax income can affect the Company’s overall effective tax rate. Significant management judgment is required in determining the Company’s provision for income taxes, its deferred tax assets and liabilities and any valuation allowance recorded against its net deferred tax assets. Furthermore, the Company’s interpretation of complex tax laws may impact its recognition and measurement of current and deferred income taxes. The loss during the quarter ended March 31, 2015 put the Company in an accumulated loss position for the cumulative 12 quarters then ended. The Company did not have sufficient positive evidence to overcome the recent losses and determined it was more likely than not the deferred tax assets would not be realized as of March 31, 2015. As a result, we created a net valuation reserve of $ 5,306,000 to offset our entire balance of deferred tax assets of $11,702,000 less our $6,436,000 balance of deferred tax liabilities. This resulted in a net book tax expense of $ 5,306,000 in 2015. Derivative liabilities The Company, in accordance with ASC 815-40-25 and ASC 815-10-15 Derivatives and Hedging and ASC 480-10-25 Liabilities-Distinguishing from Equity, convertible preferred shares are accounted for net, outside of shareholders' equity and warrants are accounted for as liabilities at their fair value during periods where they can be net cash settled in case of a change in control transaction. The warrants are accounted for as a liability at their fair value at each reporting period. The value of the derivative warrant liability will be re-measured at each reporting period with changes in fair value recorded as earnings. To derive an estimate of the fair value of these warrants, a Dynamic Black Scholes model is utilized that computes the impact of a possible change in control transaction upon the exercise of the warrant shares. This process relies upon inputs such as shares outstanding, estimated stock prices, strike price and volatility assumptions to dynamically adjust the payoff of the warrants in the presence of the dilution effect. Preferred Stock Classification A mandatorily redeemable financial instrument shall be classified as a liability unless the redemption is required to occur only upon the liquidation or termination of the reporting entity. A financial instrument issued in the form of shares is mandatorily redeemable if it embodies an unconditional obligation requiring the issuer to redeem the instrument by transferring its assets at a specified or determinable date (or dates) or upon an event certain to occur. A financial instrument that embodies a conditional obligation to redeem the instrument by transferring assets upon an event not certain to occur becomes mandatorily redeemable-and, therefore, becomes a liability-if that event occurs, the condition is resolved, or the event becomes certain to occur. The Series B preferred stock and Series B1 preferred stock requires the Company to redeem such preferred stock on the fifth anniversary of the issuance of the Series B Preferred stock if the redemption would not be subject to then existing restrictions under the Company's prior senior credit agreement. SEC reporting requirements provide that any possible redemption outside of the control of the Company requires the preferred stock to be classified outside of permanent equity. Stock based compensation The Company accounts for share-based expense and activity in accordance with FASB ASC Topic 718, which establishes accounting for equity instruments exchanged for services. Under this provision, share-based compensation costs are measured at the grant date, based on the calculated fair value of the award, and are recognized as an expense over both the employee and non-employee’s requisite service period, generally the vesting period of the equity grant. The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, expected option term, expected volatility of the stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the expected annual dividend yield. The Company believes that the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the stock options granted. Earnings per share Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common shareholders by the weighted average number of common and common equivalent shares outstanding during the period. Common share equivalents included in the diluted computation represent shares issuable upon assumed exercise of stock options and warrants using the treasury stock and “ if converted ” method. For periods in which net losses are incurred, weighted average shares outstanding is the same for basic and diluted loss per share calculations, as the inclusion of common share equivalents would have an anti-dilutive effect. New Accounting Pronouncements (a) Application of New Accounting Standards On August 27, 2014, the FASB (the “ board ”) issued Accounting Standards Update (" ASU ") No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Before this new standard, there was minimal guidance in U.S. GAAP specific to going concern. Under the new standard, disclosures are required when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. The new standard applies to all companies and is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. The adoption of ASU 2014-15 in fiscal 2016 resulted in no impact to our consolidated financial statements. Effective January 3, 2016, the Company adopted the accounting guidance in Accounting Standards Update (“ ASU ”) No. 2015-16, " Business Combinations: Simplifying the Accounting for Measurement Period Adjustments. " This update simplifies the accounting for measurement-period adjustments in a business combination by requirement the acquirer to recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustments are determined. The acquirer is also required to record in the reporting period in which the adjustments are determined the effect on earnings of changes in depreciation, amortization, and other items resulting from the change to the provisional amounts. The adoption of this ASU 2015-16 did not have an impact on our consolidated financial condition and results of operations. Effective January 1, 2017, the Company adopted the accounting guidance in Accounting Standards Update (“ ASU ”) No. 2015-17, " Balance Sheet Classification of Deferred Taxes. " This ASU requires that deferred tax assets and liabilities be classified as non-current in the statement of financial position. The adoption of ASU 2015-17 in fiscal 2016 resulted in no impact to our consolidated financial statements. See " Note 11. Income Taxes " for a discussion of our income taxes. Effective January 1, 2015, the Company adopted the accounting guidance in Accounting Standards Update (“ ASU ”) No. 2014-08, “ Presentation of Financial Statements and Property, Plant, and Equipment - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ,” which amends the definition of a discontinued operation by raising the threshold for a disposal to qualify as discontinued operations. The ASU also requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. The Company is following this guidance. (b) New Accounting Requirements and Disclosures In February 2016, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2016-02, “Leases.” This update was issued to increase transparency and comparability amount organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations. In March 2016, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” This update addresses the simplification of accounting for employee share-based payment transactions as it pertains to income taxes, the classification of awards as equity or liabilities, accounting for forfeitures, statutory tax withholding requirements, and certain classifications on the statements of cash flows. The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations. In July 2015, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2015-11, “Simplifying the Measurement of Inventory.” This update requires the measurement of inventory at the lower of cost of net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonable predictable costs of completion, disposal and transportation. The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations. In May 2014, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2014-09, “ Revenue from Contracts with Customers .” The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, which deferred the effective date by one year to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted, but not before the original effective date of reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In January 2015, the FASB issued ASU No. 2015-01, “ Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items . ” This ASU eliminates from U.S. GAAP the concept of extraordinary items and the need for an entity to separately classify, present, and disclose extraordinary events and transactions, while retaining certain presentation and disclosure guidance for items that are unusual in nature or occur infrequently. The pronouncement is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period and may be applied retrospectively, with early application permitted. In April 2015, the FASB issued ASU No. 2015-03, “ Simplifying the Presentation of Debt Issuance Costs .” The accounting guidance requires that debt issuance costs related to a recognized debt liability be reported on the Consolidated Statements of Financial Condition as a direct deduction from the carrying amount of that debt liability. The pronouncement is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period with early application permitted for financial statements that have not been previously issued. In August 2015, the FASB issued ASU No. 2015-15, which provides additional guidance related to the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. An entity may present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. Reclassification of Prior Year Presentation Certain prior period amounts have been reclassified to conform to current period presentation. These reclassifications had no effect on the reported results of operations. |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | RELATED PARTIES The Company has a Related Party Transaction committee including at least two independent directors who review and pre-approve any and all related party transactions. On August 6, 2015, the Company acquired a collection route in the state of Louisiana. The President, Chief Executive Officer and owner of which is Dan Cowart, the brother of our Chief Executive Officer and largest stockholder, Benjamin P. Cowart. The total amount paid to this related party at December 31, 2016 was $113,576 for rent, equipment rental and transportation. |
CONCENTRATIONS, SIGNIFICANT CUS
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Concentrations, Significant Customers, Commitments And Contingencies Disclosure [Abstract] | |
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES | CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES The Company has concentrated credit risk for cash by maintaining deposits in one bank. These balances are insured by the Federal Deposit Insurance Corporation up to $250,000 . From time to time during the years ended December 31, 2016 and 2015 , the Company’s cash balances exceeded the federally insured limits. No losses have been incurred relating to this concentration. For the years ended December 31, 2016 and 2015 , the Company’s revenues and receivables were comprised of the following customer concentrations: 2016 2015 % of Revenues % of Receivables % of % of Customer 1 19% —% 24% 11% Customer 2 11% 10% 2% 2% Customer 3 9% 9% 15% 2% Customer 4 8% 4% 8% 16% Customer 5 5% 10% 1% —% At December 31, 2016 and 2015 , and the years then ended, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment 2016 % of Revenue by Segment 2015 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 100 % — % — % 100 % — % — % Customer 2 100 % — % — % 100 % — % — % Customer 3 100 % — % — % 60 % 40 % — % Customer 4 — % 100 % — % — % 100 % — % Customer 5 — % — % 100 % — % — % 100 % The Company’s revenue, profitability and future rate of growth are substantially dependent on prevailing prices for petroleum-based products. Historically, the energy markets have been very volatile, and there can be no assurance that these prices will not be subject to wide fluctuations in the future. A substantial or extended decline in such prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows, and access to capital and on the quantities of petroleum-based products that the Company can economically produce. New business commitment: On June 5, 2016, Vertex Energy and Penthol C.V. (“ Penthol ”) of the Netherlands aka Penthol LLC (a Penthol subsidiary in the United States) reached an agreement for Vertex Energy to act as Penthol’s exclusive agent to provide marketing, sales, and logistical duties of Group III base oil from the United Arab Emirates to the United States. The start-up date was July 25, 2016, with a 5 year term through 2021 and the product will ship via truck, rail and barge. Litigation: The Company, in its normal course of business, is involved in various other claims and legal action. In the opinion of management, the outcome of these claims and actions will not have a material adverse impact upon the financial position of the Company. We are currently party to the following material litigation proceedings: Vertex Refining LA, LLC (" Vertex Refining LA "), the wholly-owned subsidiary of Vertex Operating was named as a defendant, along with numerous other parties, in five lawsuits filed on or about February 12, 2016, in the Second Parish Court for the Parish of Jefferson, State of Louisiana, Case No. 121749, by Russell Doucet et. al., Case No. 121750, by Kendra Cannon et. al., Case No. 121751, by Lashawn Jones et. al., Case No. 121752, by Joan Strauss et. al. and Case No. 121753, by Donna Allen et. al. The suits relate to alleged noxious and harmful emissions from our facility located in Marrero, Louisiana. The suits seek damages for physical and emotional injuries, pain and suffering, medical expenses and deprivation of the use and enjoyment of plaintiffs’ homes. We intend to vigorously defend ourselves and oppose the relief sought in the complaints, provided that at this stage of the litigation, the Company has no basis for determining whether there is any likelihood of material loss associated with the claims and/or the potential and/or the outcome of the litigation. E-Source Holdings, LLC ("E-Source"), the wholly-owned subsidiary of Vertex Operating, was named as a defendant (along with Motiva Enterprises, LLC, ("Motiva") in a lawsuit filed in the Sixtieth (60th) Judicial District, Jefferson County, Texas, on April 22, 2015. Pursuant to the lawsuit, Whole Environmental, Inc. (" Whole "), made certain allegations against E-Source and Motiva. The claims include Breach of Contract and Quantum Meruit actions relating to asbestos abatement and remediation operations performed for defendants at Motiva's facility in Port Arthur, Jefferson County, Texas. The plaintiff alleges it is due monies earned. Defendants have denied any amounts due to plaintiff. The suit seeks damages of approximately $864,000 , along with pre-judgment and post-judgment interest, the fair value of certain property alleged to be converted by defendants and reimbursement of legal fees. . E-Source has asserted a counterclaim against Whole for the filing of a mechanic’s lien in excess of any amount(s) actually due as well as a cross-claim against Motiva. Under the terms of E-Source’s contract with Motiva, Motiva was to pay all sums due to any sub-contractors of E-Source. If any additional monies are owed to Whole, those monies should be paid by Motiva. E-Source seeks to recover the balance due under its contract with Motiva of approximately $1,000,000 . The case is set for trial in the summer of 2017. We intend to vigorously defend ourselves against the allegations made in the complaint. The Company has no basis of determining whether there is any likelihood of material loss associated with the claims and/or the potential and/or the outcome of the litigation. Leases The Company has various leases for office facilities and vehicles which are classified as operating leases, and which expire at various times through 2032. Total rent expense for all operating leases for 2016 and 2015 is summarized as follows: 2016 2015 Office leases $ 875,320 $ 620,219 Plant Leases 4,052,250 3,996,000 Vehicle leases 365,877 326,476 $ 5,293,447 $ 4,942,695 Minimum future lease commitments as of December 31, 2016 , are summarized as follows: Year ending December 31, Office Facilities Vehicles Plant Leases Total 2017 $ 466,266 $ 231,084 $ 3,646,000 $ 4,343,350 2018 391,050 115,665 1,132,000 1,638,715 2019 384,500 57,956 — 442,456 2020 345,000 — — 345,000 2021 342,000 — — 342,000 Thereafter 3,275,000 — — 3,275,000 $ 5,203,816 $ 404,705 $ 4,778,000 $ 10,386,521 |
FIXED ASSETS, NET AND ASSET RET
FIXED ASSETS, NET AND ASSET RETIREMENT OBLIGATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment and Asset Retirement Obligations [Abstract] | |
FIXED ASSETS, NET AND ASSET RETIREMENT OBLIGATIONS | FIXED ASSETS, NET AND ASSET RETIREMENT OBLIGATIONS Fixed assets consist of the following: Useful Life (in years) December 31, 2016 December 31, 2015 Equipment 7-20 $ 37,260,920 $ 36,540,268 Furniture and fixtures 7 108,896 133,823 Leasehold improvements 15 2,303,156 2,300,207 Office equipment 5 713,095 591,619 Vehicles 5 6,702,093 6,422,531 Construction in progress 12,675,648 12,305,376 Land 2,553,000 2,553,000 Total fixed assets 62,316,808 60,846,824 Less accumulated depreciation (12,286,874 ) (7,818,217 ) Net fixed assets $ 50,029,934 $ 53,028,607 Depreciation expense was $4,502,597 and $4,106,526 for the years ended December 31, 2016 and 2015 , respectively. Equipment under construction in progress is related to TCEP technology improvements, refining equipment at the Marrero and Myrtle Grove facilities in Louisiana. Asset retirement obligations: The Company has asset retirement obligations with respect to certain of its refinery assets due to various legal obligations to clean and/or dispose of various component parts of each refinery at the time they are retired. However, these component parts can be used for extended and indeterminate periods of time as long as they are properly maintained and/or upgraded. It is the Company’s practice and current intent to maintain its refinery assets and continue making improvements to those assets based on technological advances. As a result, the Company believes that its refinery assets have indeterminate lives for purposes of estimating asset retirement obligations because dates, or ranges of dates, upon which the Company would retire refinery assets cannot reasonably be estimated. When a date or range of dates can reasonably be estimated for the retirement of any component part of a refinery, the Company estimates the cost of performing the retirement activities and records a liability for the fair value of that cost using established present value techniques. |
GOODWILL
GOODWILL | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL We perform a goodwill impairment analysis at least annually, unless indicators of impairment exist in interim periods. The goodwill impairment assessment is based on several factors requiring judgment and is based on how our Chief Executive Officer and Chief Financial Officer manage the business. Each of our three operating segments, Black Oil, Refining and Marketing, and Recovery, constitutes a reportable segment for purposes of reviewing impairment and the recoverability of goodwill and other intangible assets. We must make various assumptions in determining their estimated fair values regarding estimated future cash flows and other factors in determining the fair values of the reportable segments. We performed a qualitative assessment (commonly referred to as a " Step 0 " test) to determine if it was more likely than not that the fair value of each of our reportable segments with goodwill exceeded their carrying value. In making this assessment, we evaluated overall business and overall macroeconomic conditions since the date of our last quantitative assessment. We considered in our qualitative assessment, among other things, expectations of projected revenues and cash flows, trends in market multiples, changes in our stock price, changes in the carrying values of our reportable segments with goodwill, and overall market conditions. Based on this evaluation, we concluded that our goodwill was likely impaired and performed a quantitative Step One assessment. A quantitative Step One assessment involves determining the fair value of each reportable segment using market participant assumptions along with a discounted cash flow approach. As we believe that the carrying value of certain reportable segments with goodwill did not exceed their estimated fair value, we performed a quantitative Step Two assessment. A quantitative Step Two assessment compares the carrying value of the reportable segment to the fair value of all of the assets and liabilities of the reportable segment (including any unrecognized intangibles) as if the reportable segment was acquired in a business combination. If the carrying amount of a reportable segment's goodwill exceeds the implied fair value of its goodwill, an impairment loss is recognized in an amount equal to the excess. We recognized a $4,922,353 Goodwill Impairment in 2015, which eliminated the goodwill balance. This result occurred primarily due to the adverse impact of recently declining oil prices on current and anticipated future oil activity. At December 31, 2016 and 2015 , there was no goodwill recorded. Our Refining and Marketing segment did not have any goodwill recorded as of December 31, 2016 or 2015. The following table contains consideration paid in excess of the net assets of the companies acquired, allocated to the respective business segment as of December 31, 2015: Black Oil Refining and Marketing Recovery Total Balance as of December 31, 2014 $ 3,554,515 $ — $ 1,367,838 $ 4,922,353 Less: Impairment (3,554,515 ) — (1,367,838 ) (4,922,353 ) Balance as of December 31, 2015 $ — $ — $ — $ — |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | INTANGIBLE ASSETS, NET Components of intangible assets (all subject to amortization) consist of the following items: December 31, 2016 December 31, 2015 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Net Customer relations 5-8 $ 1,011,000 $ 689,032 $ 321,968 $ 1,011,000 $ 581,321 $ 429,679 Vendor relations 10 6,495,049 2,210,166 4,284,883 6,495,049 1,560,661 4,934,388 H&H Oil Trademark/Trade name 6-16 1,219,000 337,276 881,724 1,219,000 264,639 954,361 TCEP Technology/Patent 15 13,287,000 3,523,243 9,763,757 13,287,000 2,637,443 10,649,557 Non-compete agreements 3 139,000 139,000 — 139,000 139,000 — $ 22,151,049 $ 6,898,717 $ 15,252,332 $ 22,151,049 $ 5,183,064 $ 16,967,985 Intangible assets are amortized on a straight-line basis. We continually evaluate the amortization period and carrying basis of intangible assets to determine whether subsequent events and circumstances warrant a revised estimated useful life or reduction in value. During 2015, the Company recognized there was no remaining useful life for the intangible assets related to our E-Source acquisition and we fully amortized these intangibles resulting in additional amortization expense of $277,450 . Total amortization expense of intangibles was $1,715,653 and $2,032,051 for the years ended December 31, 2016 and 2015 , respectively. Estimated future amortization expense is as follows: 2017 $ 1,698,372 2018 1,646,923 2019 1,646,922 2020 1,646,922 2021 1,646,922 Thereafter 6,966,271 $ 15,252,332 |
ACCOUNTS RECEIVABLE AND NOTES R
ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE | ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE Accounts receivable, net, consists of the following at December 31: 2016 2015 Accounts receivable trade $ 12,598,493 $ 8,280,749 Allowance for doubtful accounts (1,646,274 ) (1,965,335 ) Accounts receivable trade, net $ 10,952,219 $ 6,315,414 Accounts receivable represents amounts due from customers. Accounts receivable are recorded at invoiced amounts, net of reserves and allowances, and do not bear interest. The Company uses its best estimate to determine the required allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, economic trends and conditions affecting its customer base, significant one-time events and historical write-off experience. Specific provisions are recorded for individual receivables when we become aware of a customer’s inability to meet its financial obligations. The Company reviews the adequacy of its reserves and allowances quarterly. Receivable balances greater than 30 days past due are individually reviewed for collectability and if deemed uncollectible, are charged off against the allowance accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any significant off balance sheet credit exposure related to its customers. Notes receivable, net, consists of the following at December 31: 2016 2015 Notes receivable (collateralized by invoiced accounts receivable) $ — $ 5,346,452 Payments received and amounts written off — (3,654,790 ) Allowance for doubtful accounts — — Note receivable (collateralized by invoiced accounts receivable), net $ — $ 1,691,662 The 2015 notes receivable represents amounts due from Omega Holdings, LLC. The total notes receivable balance of $1,691,662 as of December 31,2015 represents invoiced amounts that do not bear interest as of December 31, 2015. The remaining portion of the term notes receivable balance $8,308,000 at December 31, 2015 represents amounts due from Omega Holdings, LLC. The $8,308,000 balance was based on the purchase price allocated to the Nevada facility. The note carried an interest rate of 9.5% per annum and was collateralized by assets at the Nevada facility. The Company sold the Nevada facility in January, 2016 when the note was satisfied in full. The accounts receivable and notes receivable balances of $1,691,662 and $8,308,000 , respectively, were re-classified as " Assets held for sale " on the Balance Sheet at December 31, 2015. |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
ASSETS HELD FOR SALE | ASSETS HELD FOR SALE During 2015 the Company reclassified amounts due from Omega Holdings, LLC to the Company based on the portion of the acquisition purchase price that was allocated to the Bango facility (see " Note 16- Disposition "). The Company sold the Bango facility in January 2016, so the following assets were re-classified as " Assets held for sale " at December 31, 2015. The Balance of " Assets held for sale " at December 31, 2016 is zero. December 31, 2015 Accounts Receivable $ 1,691,662 Note Receivable - Current 8,308,000 Fixed Assets - Construction in Process 1,170,581 Total Assets held for sale at December 31, 2015 11,170,243 January 2016 sale of assets (11,170,243 ) Total Assets held for sale at December 31, 2016 $ — The simultaneous purchase and sale of the Churchill, Nevada facility took place on January 28, 2016. On January 28, 2016, the Company entered into an Asset Purchase Agreement (the “ Sale Agreement ”) with Bango Oil, LLC (“ Bango Oil ”) and Safety-Kleen Systems Inc. (“ Safety-Kleen ”) pursuant to which the Company agreed to sell to Safety-Kleen the used oil re-refining plant on approximately 40 acres in Churchill County, Nevada (the “ Bango Plant ”), which we previously rented, and all equipment, tools and other tangible personal property located at the Bango Plant, which relate to or are used in connection with the operations of the Bango Plant (collectively, the “ Bango Assets ”) for an aggregate purchase price of $35 million . As shown in the table below, a gain on sale of approximately $9.7 million was recorded associated with the sale. The gain on sale is included in the accompanying consolidated statement of operations. Sales price (fair value) $ 35,000,000 Release of lien on certain equipment at the Bango Plant (3,100,000 ) Transaction Fees (2,111,886 ) Net Proceeds 29,788,114 Book Value at January 29, 2016 (date transaction closed) 20,039,553 Gain on Sale $ 9,748,561 Net proceeds were used to pay an aggregate of $16.1 million toward the Credit Agreement with Goldman Sachs Bank (described in " Note 10. Line of Credit and Long-Term Debt "), $9.3 million to exercise the Purchase Option (described below) and $1.5 million for equipment and rail park lease acquisitions subsequently included in the Sale Agreement. Additionally, at the closing, we placed $1.5 million in restricted cash and $1 million worth of our common stock ( 1,108,928 shares) into escrow with 50% of the shares to be released to us 12 months following the closing and such cash and the remainder of the shares held in escrow to be released to us 18 months after the closing, in order to satisfy any indemnification claims made by Safety-Kleen pursuant to the terms of the Sale Agreement. On June 30 and December 31 of each year that any of our shares of common stock are in escrow, in the event the value of the shares held in escrow is less than $1 million , based on the then market price of our common stock, we are required to increase the number of shares of common stock held in escrow to total $1 million in aggregate value (no adjustment was required as of June 30, 2016 or December 31, 2016). Finally, the Sale Agreement required the Company to use sale proceeds to exercise the purchase option set forth in that certain Lease With Option For Membership Interest Purchase (the “ Bango Lease ”) entered into on April 30, 2015, by and between us, Vertex Refining NV and Bango Oil, whereby, we had the option at any time during the term of the lease to purchase all of the equity interests of Bango Oil (the “ Purchase Option ”), effectively acquiring ownership of the Bango Plant for $9.3 million . The Membership Interest Purchase Agreement contains standard and customary representations of the parties and indemnification rights, subject in each case to a $3 million cap on aggregate indemnification. Upon the closing of the Membership Interest Purchase Agreement, we effectively obtained ownership of the Bango Plant, which we then sold to Safety-Kleen, and Bango Oil became a wholly-owned subsidiary of Vertex Refining NV. |
LINE OF CREDIT AND LONG-TERM DE
LINE OF CREDIT AND LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT AND LONG-TERM DEBT | 1 year 2,902,428 1,060,065 515,762 Total 14,600,763 26,954,092 Deferred Finance Costs, Net (244,178 ) (1,693,872 ) Total, Net of Deferred Finance Costs $ 29,152,788 $ 14,356,585 $ 25,260,220 Future maturities of notes payable are summarized as follows: Creditor 2017 2018 2019 2020 2021 Thereafter MidCap Revolving Line of Credit $ 2,726,039 $ — $ — $ — $ — $ — Goldman Sachs USA 3,200,000 800,000 — — — — Fox Encore Note 5,150,000 — — — — — Pacific Western Bank 133,153 — — — — — Texas Citizens Bank 468,225 495,013 523,333 44,935 — — Various institutions 1,060,065 — — — — — Totals 12,737,482 1,295,013 523,333 44,935 — — Deferred Finance Costs, Net (229,008 ) (7,585 ) (7,585 ) — — — Total, Net of Deferred Finance Costs $ 12,508,474 $ 1,287,428 $ 515,748 $ 44,935 $ — $ —" id="sjs-B4">LINE OF CREDIT AND LONG-TERM DEBT In May, 2014, the Company entered into a Credit and Guaranty Agreement with Goldman Sachs Bank USA (as amended, the “ Goldman Credit Agreement ”). Pursuant to the agreement, Goldman Sachs Bank USA loaned the Company $40,000,000 in the form of a term loan. As set forth in the Goldman Credit Agreement, the Company has the option to select whether loans made under the Goldman Credit Agreement bear interest at (a) the greater of (i) the prime rate in effect, (ii) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System plus ½ of 1% , (iii) the sum of (A) the Adjusted LIBOR Rate and (B) 1% , and (iv) 4.5% per annum; or (b) the greater of (i) 1.50% and (ii) the applicable ICE Benchmark Administration Limited interest rate, divided by (x) one minus, (y) the Adjusted LIBOR Rate. Interest on the Goldman Credit Agreement is payable monthly in arrears. The Goldman Credit Agreement is secured by all of the assets of the Company. On March 26, 2015, the Company entered into a Second Amendment with Goldman Sachs Bank USA to amend the Goldman Credit Agreement to among other things, provide for the waiver of the prior defaults and to restructure certain covenants and other financial requirements of the Goldman Credit Agreement and to allow for our entry into the MidCap Loan Agreement (defined and described below). The Goldman Credit Agreement contains customary representations, warranties, and covenants for facilities of similar nature and size as the Goldman Credit Agreement. The Goldman Credit Agreement also includes various covenants binding the Company including limits on indebtedness the Company may incur and maintenance of certain financial ratios relating to consolidated EBITDA and debt leverage. As each credit facility contains cross-default provisions, the default under each lender credit agreement constitutes a default under the agreement with the other lender. On January 29, 2016, we, Vertex Operating, certain of our other subsidiaries, Goldman Sachs Specialty Lending Holdings, Inc., as lender (“ Lender ”) and Goldman Sachs Bank USA, as Administrative Agent, Lead Arranger and Collateral Agent (“ Agent ”) entered into an Amended and Restated Credit and Guaranty Agreement (the “ Restated Goldman Credit Agreement ”). The Restated Goldman Credit Agreement changed the Goldman Credit Agreement to an $8.9 million multi-draw term loan credit facility (of which approximately $6.4 million was outstanding and $2.5 million was available to be drawn pursuant to the terms of the Restated Goldman Credit Agreement on substantially similar terms as the then outstanding amounts owed to the Lender); modified the Goldman Credit Agreement to adjust certain EBITDA calculations in connection with the purchase of Bango Oil and the sale of the Bango Plant (each as described in " Note 16. Disposition "); provided for approval for us to exercise the Purchase Option, enter into and effect the transactions contemplated by a Membership Interest Purchase Agreement, Subscription Agreement, and the Sale Agreement (each as described in " Note 16. Disposition "), and allowed for the issuance of the Fox Note and Open-End Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents agreement (the " Mortgage ") confirmed that we are required to make payments of $800,000 per quarter from June 30, 2016 through maturity (May 2, 2019); provided us a moratorium on the prepayment of amounts owed under the Restated Goldman Credit Agreement as a result of various financial ratios we are required to meet through December 31, 2016; provided for us to retain any business interruption insurance proceeds received in connection with the Bango Plant; provided for us to pay $16 million received at closing from the sale of the Bango Assets, all amounts released from escrow and any other cash proceeds in excess of $500,000 received from the Sale Agreement after closing to the Lender as prepayment of amounts due under the Restated Goldman Credit Agreement; allowed us the right to make certain permitted acquisitions moving forward, without further consent of the Lender, provided that among other requirements, such acquisitions are in the same business or line of business as the Company, that such acquired businesses have generated consolidated adjusted EBITDA for the four fiscal quarters preceding such acquisition in excess of capital expenditures for such period (taking into account adjustments acceptable to the Agent for synergies expected to be achieved within the 90 days following the closing of such acquisition), and that the funding for such acquisition comes from certain limited sources set forth in greater detail in the Restated Goldman Credit Agreement; adjusted certain fixed charge coverage ratios and leverage ratios we are required to meet on a quarterly basis from September 30, 2016 to maturity; required us to maintain at least $2 million of liquidity at all times; provided that events of default under the Goldman Credit Agreement include events of default under the Fox Note; and made various other updates and changes to take into account transactions which had occurred through the date of such agreement, and to remove expired and non-material terms of the prior Goldman Credit Agreement. The balance under the Goldman Credit Agreement was $4,000,000 at December 31, 2016 and principal payments in the amounts of $3,200,000 and $800,000 are due in 2017 and 2018, respectively. The interest rate at December 31, 2016 was about 11% . As of December 31, 2016, the Company was in compliance with the terms of the Goldman Credit Agreement. The total balance was paid in full on February 1, 2017. Amendment No. 1 to Amended and Restated Credit and Guaranty Agreement On May 9, 2016, we entered into Amendment No. 1 to the Amended and Restated Goldman Credit Agreement (“ Amendment No. 1 ”), which amended the Restated Goldman Credit Agreement. Pursuant to Amendment No. 1, we, Vertex Operating, substantially all of our other wholly-owned subsidiaries, the Lender and the Agent, agreed to amend the Restated Goldman Credit Agreement to (a) change the threshold constituting a change of control under the Restated Credit Agreement, from any time that Benjamin P. Cowart, our Chief Executive Officer, Chairman and largest stockholder, ceases to beneficially own and control at least 20% on a fully diluted basis of the economic and voting interests of our capital stock (“ Fully-Diluted Capital Stock ”), to any time that Mr. Cowart beneficially owns less than 10% of our Fully-Diluted Capital Stock; (b) extend the date that we are required to meet certain fixed charge coverage ratios from the quarter ending September 30, 2016, to the quarter ending March 31, 2017; (c) adjust the calculation of leverage ratio described in the Restated Goldman Credit Agreement; (d) allow for the May 2016 Offering and the required payment of $800,000 to the Lender in connection with the May 2016 Offering (described in " Note 15. Preferred Stock and Temporary Equity ") (representing the payment originally due on June 30, 2016); (e) provide that the financial covenants relating to fixed charge ratios and leverage ratios would not be tested for the quarters ending September 30, 2016 and December 31, 2016; (f) amend the required timing for certain other post-closing events to occur under the terms of the Restated Goldman Credit Agreement; and (g) include a release whereby we (and substantially all of our wholly-owned subsidiaries) released the Investor and Agent for any claims which we had, or could have had, as of the date the parties entered into Amendment No. 1. Effective March 27, 2015, the Company, Vertex Operating and all of the Company’s other subsidiaries other than E-Source and Golden State entered into a Loan and Security Agreement with MidCap Business Credit LLC (“ MidCap ” and the “ MidCap Loan Agreement ”). Pursuant to the MidCap Loan Agreement, MidCap agreed to loan us up to the lesser of (i) $7 million ; and (ii) 85% of the amount of accounts receivable due to us which meet certain requirements set forth in the MidCap Loan Agreement (“ Qualified Accounts ”), plus the lesser of (y) $3 million and (z) 50% of the cost or market value, whichever is lower, of our raw material and finished goods which have not yet been sold, subject to the terms and conditions of the MidCap Loan Agreement (“ Eligible Inventory ”), minus any amount which MidCap may require from time to time in order to over secure amounts owed to MidCap under the MidCap Loan Agreement, as long as no event of default has occurred or is continuing under the terms of the MidCap Loan Agreement. The requirement of MidCap to make loans under the MidCap Loan Agreement is subject to certain standard conditions and requirements. On November 9, 2015, we and certain of our subsidiaries entered into a First Amendment to Loan and Security Agreement (the “ Midcap First Amendment ”). The Midcap First Amendment amended the Midcap Loan Agreement to add Vertex Refining OH, LLC (" Vertex OH ") as a party thereto; remove Vertex OH’s requirement to enter into a negative pledge agreement with MidCap; created separate maximum borrowing base credit limits for Vertex OH’s accounts and customers ( $100,000 maximum per customer, subject to certain exceptions); excluded customers who are based outside of the U.S. or Canada from the credit limits if backed by a bank letter of credit or covered by a foreign receivables insurance policy; removed inventory of Vertex OH from the definition of Eligible Inventory under the Midcap Loan Agreement; and provided that additional affiliates of the Company may become party to the Midcap Loan Agreement by executing an assumption agreement and revolving note in favor of Midcap. As of December 31, 2016, the balance of the note was $2,726,039 . The total balance was repaid in full on February 1, 2017. On January 29, 2016, Vertex OH, borrowed $5.15 million from Fox Encore 05 LLC, the prior owner of Bango Oil (" Fox Encore ") and provided a Promissory Note to Fox Encore to reflect such borrowed funds (the “ Fox Note ”). The Fox Note bears interest at 10% percent per annum ( 15% upon the occurrence of an event of default), payable monthly in arrears beginning on February 29, 2016. The principal and all accrued and unpaid interest on the Fox Note was due on the earlier of (a) July 31, 2016 (as may be extended by Vertex OH as discussed below, the “ Maturity Date ”), or (b) upon acceleration of the Fox Note during the existence of an event of default as discussed therein. Provided that no event of default was then existing on the Fox Note or under any other loan document associated therewith, and certain other requirements as described in the Fox Note are met, Vertex OH had the right to three (3) extension options (each, an “ Extension Option ”) pursuant to which Vertex OH may extend the Maturity Date for six (6) months each. The first extension extends the Maturity Date of the Fox Note until January 31, 2017 and Vertex OH exercised this Extension Option on June 16, 2016. The second extension could extend the Maturity Date of the Fox Note until July 31, 2017, and the third extension could extend the Maturity Date of the Fox Note until January 29, 2018. Upon exercising an Extension Option, Vertex OH was required to pay Fox Encore an extension fee equal to 3% of the then outstanding principal amount of the Fox Note, which amount is separate from, and is not applied toward, the outstanding indebtedness owed under the Fox Note; provided, however, that if Vertex OH elected to exercise the Extension Option to extend the Maturity Date to January 31, 2017, the 3% fee for such extension was not to be paid in cash but instead only resulted in the termination of a prepayment discount described below. The Fox Note could be prepaid in whole or in part at any time without penalty, provided that if repaid in full by July 31, 2016, the amount to be repaid was to be decreased by $150,000 . The Fox Note is secured by the Mortgage described below. The Fox Note includes certain standard and customary financial reporting requirements, notice requirements, indemnification requirements, covenants and events of default. The Fox Note also includes a provision allowing the Lender (or any other lender party to the Restated Goldman Credit Agreement) to purchase the Fox Note upon the occurrence of an event of default under the Restated Goldman Credit Agreement. In July 2016, we exercised the first Extension Option, extending the Maturity Date of the Fox Note to January 31, 2017. As of December 31, 2016, the balance of the note was $5,150,000 . On February 1, 2017, The Fox Note was paid in full. On January 29, 2016, Vertex OH, entered into an Open-End Mortgage, Security Agreement, Fixture Filing and Assignment of Leases and Rents agreement (the “ Mortgage ”) with Fox Encore in order to secure the amount owed under the Fox Note discussed above. Pursuant to the Mortgage, Vertex OH granted Fox Encore a security interest in the Columbus, Ohio refinery owned by Vertex OH. The Company has notes payable to Texas Citizens Bank bearing interest at 5.5% per annum, maturing on January 7, 2020. The balance of the notes payable is $1,531,506 at December 31, 2016. The Company financed insurance premiums through various financial institutions bearing interest rates from 4% to 4.52% . All such premium finance agreements have maturities of less than one year and have a balance of $1,060,065 and $515,762 at December 31, 2016 and December 31, 2015, respectively. On May 2, 2014, in connection with the closing of the Omega Refining acquisition, the Company assumed two capital leases totaling $3,154,860 . Payments made since 2014 have reduced the balance to $133,153 at December 31, 2016. For the year ended December 31, 2016, we reported interest expense of approximately $3.1 million of which $1.7 million is interest expense on our currently outstanding debt and the remaining $1.3 million is a one-time write off of the Goldman Sachs deferred finance costs and one-time interest related expenses of $0.1 million on the Fox Note. The write off of these deferred finance costs was due to the accelerated $16 million payment made on the Goldman Sachs loan as noted above. The Company's total line of credit and long term debt as of December 31, 2016 is as follows: Creditor Loan Type Origination Date Maturity Date Loan Amount Balance on December 31, 2016 Balance on December 31, 2015 MidCap Revolving Line of Credit Revolving Note March, 2015 March, 2017 $ 7,000,000 $ 2,726,039 $ 1,744,122 Goldman Sachs USA Term Loan- Restated Credit Agreement May, 2014 May 2, 2019 8,900,000 4,000,000 22,400,000 Fox Encore Note Promissory Note January 29, 2016 July 31, 2017 5,150,000 5,150,000 — Pacific Western Bank Capital Lease September, 2012 August, 2017 3,154,860 133,153 320,101 Texas Citizens Bank Term Note January, 2015 January, 2020 2,045,500 1,531,506 1,974,107 Various institutions Insurance premiums financed Various > 1 year 2,902,428 1,060,065 515,762 Total 14,600,763 26,954,092 Deferred Finance Costs, Net (244,178 ) (1,693,872 ) Total, Net of Deferred Finance Costs $ 29,152,788 $ 14,356,585 $ 25,260,220 Future maturities of notes payable are summarized as follows: Creditor 2017 2018 2019 2020 2021 Thereafter MidCap Revolving Line of Credit $ 2,726,039 $ — $ — $ — $ — $ — Goldman Sachs USA 3,200,000 800,000 — — — — Fox Encore Note 5,150,000 — — — — — Pacific Western Bank 133,153 — — — — — Texas Citizens Bank 468,225 495,013 523,333 44,935 — — Various institutions 1,060,065 — — — — — Totals 12,737,482 1,295,013 523,333 44,935 — — Deferred Finance Costs, Net (229,008 ) (7,585 ) (7,585 ) — — — Total, Net of Deferred Finance Costs $ 12,508,474 $ 1,287,428 $ 515,748 $ 44,935 $ — $ — |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Income tax expense (benefit) attributable to income from continuing operations differed from the amounts computed by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations as a result of the following for the years ended December 31, 2016 and 2015 : December 31, 2016 December 31, 2015 Statutory tax on book income $ (1,344,000 ) $ (7,656,000 ) Permanent differences 32,000 33,000 Net operating loss utilization — — Change in valuation allowance (9,306,753 ) 13,114,000 Other 10,501,107 (185,000 ) Income tax expense (benefit) $ (117,646 ) $ 5,306,000 The components of income tax (benefit) expense for the years ended December 31, 2016 and 2015 are as follows: December 31, 2016 December 31, 2015 Current federal tax (expense)/benefit $ 117,646 $ — Deferred federal tax (expense)/benefit — (5,306,000 ) Total federal tax (expense)/benefit $ 117,646 $ (5,306,000 ) The cumulative tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2016 and 2015 are presented below: December 31, 2016 December 31, 2015 Deferred tax assets: Alternative minimum tax credits $ — $ — Accrued compensation 464,000 393,000 Intangible Assets 1,990,000 232,000 Bad debt reserve 560,000 668,000 Contribution carryover 67,000 51,000 Net operating loss carry forwards 15,009,000 24,150,000 Less valuation allowance (14,814,000 ) (24,120,753 ) Total deferred tax assets $ 3,276,000 $ 1,373,247 December 31, 2016 December 31, 2015 Deferred tax liabilities: Gain on purchase $ — $ (108,247 ) Contingent liability — — Accelerated tax depreciation (3,276,000 ) (1,265,000 ) Impairment Expense — — Other - income from partnership — — Net deferred tax liabilities $ (3,276,000 ) $ (1,373,247 ) Net Deferred tax assets and liabilities $ — $ — The Company has determined that a valuation allowance of approximately $14,814,000 is necessary at December 31, 2016 to reduce the deferred tax assets to the amount that will more than likely not be realized. The Company is subject to examination by Federal and State tax authorities for fiscal years 2013 through 2016. At December 31, 2016 , the Company had federal net operating loss carry-forwards (" NOLs ") of approximately $44.1 million acquired as part of the Merger between World Waste and the Company's wholly-owned subsidiary Vertex Merger Sub, LLC and subsequent operating losses incurred by the Company. It is possible that the Company may be unable to use these NOLs in their entirety. The history of these NOLs and the related tax laws are complex and the Company is researching the facts and circumstances as to whether the Company will ultimately be able to utilize the benefit from these NOLs. The extent to which the Company will be able to utilize these carry-forwards in future periods is subject to limitations based on a number of factors, including the number of shares issued within a three-year look-back period, whether the merger is deemed to be a change in control, whether there is deemed to be a continuity of World Waste's historical business, and the extent of the Company's subsequent income. The net operating loss carryforward will begin to expire in 2026. Certain tax attributes are subject to an annual limitation as a result of an ownership change triggering event on May 2016 as defined under Internal Revenue Code Section 382. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION The stock based compensation cost that has been charged against income by the Company was $527,869 and $423,910 for the years ended December 31, 2016 and 2015 , respectively, for options previously awarded by the Company. Stock option activity for the years ended December 31, 2016 and 2015 are summarized as follows: OPTIONS ISSUED FOR COMPENSATION: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Grant Date Fair Value Outstanding at December 31, 2014 2,648,583 $ 7.07 5.81 $ 1,654,641 Options granted 525,000 2.23 9.71 1,083,411 Options exercised (25,000 ) (0.45 ) 0.00 (9,000 ) Options cancelled/forfeited/expired (275,001 ) (20.22 ) 0.00 (143,711 ) Outstanding at December 31, 2015 2,873,582 $ 4.99 5.94 $ 2,585,341 Vested at December 31, 2015 1,881,395 $ 5.70 4.55 $ 372,367 Exercisable at December 31, 2015 1,881,395 $ 5.70 4.55 $ 372,367 Outstanding at December 31, 2015 2,873,582 $ 4.99 5.94 $ 2,585,341 Options granted 570,000 1.38 9.72 622,115 Options exercised (100,000 ) (0.50 ) 0.00 (27,753 ) Options cancelled/forfeited/expired (136,666 ) (8.64 ) 0.00 (213,675 ) Outstanding at December 31, 2016 3,206,916 $ 4.33 5.80 $ 2,966,028 Vested at December 31, 2016 2,044,104 $ 4.05 4.29 $ 1,295,727 Exercisable at December 31, 2016 2,044,104 $ 4.05 4.29 $ 1,295,727 On February 5, 2016, the Board of Directors granted an employee options to purchase an aggregate of 100,000 shares of common stock at an exercise price of $1.73 per share, with a ten year term (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first four anniversaries of the grant, under our 2013 Stock Incentive Plan, as amended, in consideration for services rendered and to be rendered to the Company. On June 6, 2016, the Board of Directors granted 10 employees options to purchase an aggregate of 170,000 shares of common stock at an exercise price of $1.39 per share, with a ten year term (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first four anniversaries of the grant, under our 2013 Stock Incentive Plan, as amended, in consideration for services rendered and to be rendered to the Company. A summary of the Company’s stock warrant activity and related information for the years ended December 31, 2016 and 2015 is as follows: WARRANTS ISSUED FOR COMPENSATION AND OTHER THAN SERIES B AND B1 PREFERRED STOCK: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Grant Date Fair Value Outstanding at December 31, 2014 219,868 $ 3.01 5.00 $ 140,249 Warrants granted — $ — — $ — Warrants exercised — — — — Warrants canceled/forfeited/expired — — — — Warrants at December 31, 2015 219,868 $ 3.01 4.00 $ 140,249 Vested at December 31, 2015 219,868 $ 3.01 4.00 $ 140,149 Exercisable at December 31, 2015 219,868 $ 3.01 4.00 $ 140,149 Outstanding at December 31, 2015 219,868 $ 3.01 4.00 $ 140,249 Warrants granted — $ — — $ — Warrants exercised — — — — Warrants canceled/forfeited/expired — — — — Warrants at December 31, 2016 219,868 $ 3.01 3.00 $ 140,249 Vested at December 31, 2016 219,868 $ 3.01 3.00 $ 140,149 Exercisable at December 31, 2016 219,868 $ 3.01 3.00 $ 140,149 See " Note 15. Preferred Stock and Temporary Equity " for a description of the warrants that were granted in conjunction with our Series B and B1 Preferred stock. The following table summarizes the assumptions used in assessing the above described option and warrant valuations: YEAR ENDED DECEMBER 31, 2016 YEAR ENDED DECEMBER 31, 2015 Expected volatility 78-79% 29-69% Expected dividends —% —% Expected term (in years) 0 10 Risk-free rate .91-1.57% .96-1.06% |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share includes no dilution and is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding for the periods presented. The calculation of basic earnings per share for the year ended December 31, 2016 includes the weighted average of common shares outstanding. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity, such as convertible preferred stock, stock options, warrants or convertible securities. The calculation of diluted earnings per share for the year ended December 31, 2016 does not include options to purchase 3,063,852 shares and warrants to purchase 4,252,135 shares due to their anti-dilutive effect. In the event the Preferred B and B1 were to convert, 3,229,409 and 12,285,875 shares, respectively, of common stock would be issuable at December 31, 2016. The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share for the years ended December 31, 2016 and 2015 : 2016 2015 Basic Earnings per Share Numerator: Net income (loss) available to common shareholders $ (15,537,395 ) $ (24,102,700 ) Denominator: Weighted-average common shares outstanding 30,520,820 28,181,096 Basic earnings per share $ (0.51 ) $ (0.86 ) Diluted Earnings per Share Numerator: Net income (loss) available to common shareholders $ (15,537,395 ) $ (24,102,700 ) Denominator: Weighted-average shares outstanding 30,520,820 28,181,096 Effect of dilutive securities Stock options and warrants — — Preferred stock — — Diluted weighted-average shares outstanding 30,520,820 28,181,096 Diluted earnings (loss) per share $ (0.51 ) $ (0.86 ) |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
COMMON STOCK | COMMON STOCK The total number of authorized shares of the Company’s common stock is 750,000,000 shares, $0.001 par value per share. As of December 31, 2016 , there were 33,151,391 common shares issued and outstanding. Each share of the Company's common stock is entitled to equal dividends and distributions per share with respect to the common stock when, as and if declared by the Company's board of directors. No holder of any shares of the Company's common stock has a preemptive right to subscribe for any of the Company's securities, nor are any shares of the Company's common stock subject to redemption or convertible into other securities. Upon liquidation, dissolution or winding-up of the Company and after payment of creditors and preferred shareholders of the Company, if any, the assets of the Company will be divided pro rata on a share-for-share basis among the holders of the Company's common stock. Each share of the Company's common stock is entitled to one vote. Shares of the Company's common stock do not possess any cumulative voting rights. On January 21, 2016, the Company issued 244,000 shares of common stock to pay the January 2016 rent due pursuant to the terms of our lease on our Fallon, Nevada plant. On January 29, 2016, the Company issued 1,108,928 shares of common stock as part of the escrow fulfillment of the sale of the Vertex Refining Nevada assets to Safety-Kleen Systems, Inc. (the " Bango Sale "). On February 4, 2016, the Company issued 53,271 shares of common stock in connection with a former employee's cashless exercise of stock options to purchase 100,000 shares of common stock. On February 5, 2016, the Company issued 120,227 shares of common stock in connection with the conversion of an equal amount of Series A Preferred shares into common stock. On August 2, 2016, the Company issued 1,243,200 shares of common stock in connection with the conversion of 12,432 shares of Series C Preferred stock at par value of $0.001 . On October 31, 2016, a holder of our Series B1 Convertible Preferred Stock converted 403,217 shares of our Series B1 Convertible Preferred Stock into 403,217 shares of our common stock at par value of $0.001 . On November 2, 2016, a holder of our Series B Convertible Preferred Stock converted 1,739,272 shares of our Series B Convertible Preferred Stock into 1,739,272 shares of our common stock at par value of $0.001 . On April 5, 2015, the Company issued 56,180 shares of the Company's restricted common stock at par value of $0.001 in connection with the inventory true up stipulated in the Heartland purchase agreement. On December 13, 2016, the Board of Directors granted our non-executive directors options to purchase an aggregate of 300,000 shares of common stock at an exercise price of $1.26 per share ( 60,000 options per non-executive director), with a ten year term (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first four anniversaries of the grant, under our 2013 Stock Incentive Plan, as amended, in consideration for services rendered and to be rendered to the Company. During the three months ended March 31, 2015, the Company recognized contingently issuable warrants to purchase 1,766,874 shares of our common stock in connection with the amendments to the Credit Agreement with Goldman Sachs Bank USA. Due to the down round feature of the warrant, the Company used the Black-Scholes model to value these warrants and has concluded that these are level 3 inputs. Management determined a discount factor on the grant date and on the balance sheet date based on available projections of cash to be used to make the mandatory repayments which resulted in a fair value derivative liability for the warrants of $577,440 at March 31, 2015. Effective June 29, 2015, we repaid $15.1 million of the amount owed to the lender and as a result, the lender warrants and rights were canceled and terminated. Effective on June 24, 2015, the Compensation Committee of the Board of Directors (the “ Committee ”) granted Chris Carlson, our Chief Financial Officer, options to purchase 75,000 shares of our common stock with an exercise price of $3.15 per share, with a ten year term, vesting at the rate of 1/4th of such options per year on the first four anniversaries of the grant, under our 2013 Stock Incentive Plan. The balance sheet fair value at the date of the grant was $90,462 . On July 7, 2015, the Board of Directors granted (a) our non-executive directors options to purchase an aggregate of 300,000 shares of common stock at an exercise price of $2.08 per share ( 60,000 options per non-executive director); and (b) certain of our non-executive officers, options to purchase an aggregate of 150,000 shares of common stock at an exercise price of $2.08 per share ( 50,000 shares per executive officer), with a ten year term (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first four anniversaries of the grant, under our 2013 Stock Incentive Plan in consideration for services rendered and to be rendered to the Company. On September 30, 2015, one of the non-executive officers resigned from the Company, terminating the 50,000 options granted to this individual which were unvested. The balance sheet fair value at the date of the grant was $478,200 . In August 2015, a holder of our Series B Preferred Stock fully converted all 32,260 of the shares of Series B Preferred Stock which it then held into shares of our common stock on a one -for-one basis. The shares of common stock issuable in connection with such conversion were previously registered by us on a Form S-1 Registration Statement. Additionally, the same holder converted an aggregate of approximately $791 in accrued dividends on such converted Series B Preferred Stock shares into 255 shares of common stock ( $3.10 per share of common stock), which shares of common stock were also previously registered by us on a Form S-1 Registration Statement. During the year ending December 31, 2015, 17,476 shares of the Company's Series A Preferred Stock were converted into 17,476 shares of our common stock on a one -for-one basis. Additionally, options to purchase 25,000 shares of common stock were exercised for 25,000 shares of common stock in consideration for an aggregate exercise price of $11,250 in connection with such exercise. |
PREFERRED STOCK AND TEMPORARY E
PREFERRED STOCK AND TEMPORARY EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
PREFERRED STOCK AND TEMPORARY EQUITY | PREFERRED STOCK AND TEMPORARY EQUITY The total number of authorized shares of the Company’s preferred stock is 50,000,000 shares, $0.001 par value per share. The total number of designated shares of the Company’s Series A Preferred Stock is 5,000,000 (“ Series A Preferred ”). The total number of designated shares of the Company’s Series B Preferred Stock is 10,000,000 . The total number of designated shares of the Company’s Series B1 Preferred Stock is 17,000,000 . The total number of designated shares of the Company's Series C Preferred Stock is 44,000 . As of December 31, 2016 and December 31, 2015 , there were 492,716 shares and 612,943 shares of Series A Preferred Stock issued and outstanding, respectively. As of December 31, 2016 and December 31, 2015 , there were 3,229,409 and 8,160,809 Series B Preferred shares issued and outstanding, respectively. In connection with the May 2016 Purchase Agreement described below under " Series B1 Preferred Stock and Temporary Equity ", 3,575,070 shares of Series B Preferred Stock were repurchased and retired. As of December 31, 2016 and December 31, 2015, there were 12,282,638 and 0 shares of Series B1 Preferred Stock issued and outstanding, respectively. As of December 31, 2016 and December 31, 2015 there were 31,568 and 0 shares of Series C Preferred Stock issued and outstanding, respectively. The 31,568 shares of Series C Preferred Stock would convert into 3,156,800 shares of Common Stock. Series A Preferred Holders of outstanding shares of Series A Preferred are entitled to receive dividends, when, as, and if declared by our Board of Directors. No dividends or similar distributions may be made on shares of capital stock or securities junior to our Series A Preferred until dividends in the same amount per share on our Series A Preferred have been declared and paid. In connection with a liquidation, winding-up, dissolution or sale of the Company, each share of our Series A Preferred is entitled to receive $1.49 prior to similar liquidation payments due on shares of our common stock or any other class of securities junior to the Series A Preferred. Shares of Series A Preferred are not entitled to participate with the holders of our common stock with respect to the distribution of any remaining assets of the Company. Each share of Series A Preferred is entitled to that number of votes equal to the number of whole shares of common stock into which it is convertible. Generally, holders of our common stock and Series A Preferred vote together as a single class. Shares of Series A Preferred automatically convert into shares of our common stock on the earliest to occur of the following: • The affirmative vote or written consent of the holders of a majority of the then-outstanding shares of Series A Preferred; • If the closing market price of our common stock averages at least $15.00 per share over a period of 20 consecutive trading days and the daily trading volume averages at least 7,500 shares over such period; • If we consummate an underwritten public offering of our securities at a price per share not less than $10.00 and for a total gross offering amount of at least $10 million ; or • If a sale of the Company occurs resulting in proceeds to the holders of Series A Preferred of a per share amount of at least $10.00 . Each share of Series A Preferred converts into one share of common stock, subject to adjustment. Series B Preferred Stock and Temporary Equity Dividends on our Series B Preferred Stock accrue at an annual rate of 6% of the original issue price of the preferred stock ( $3.10 per share), subject to increase under certain circumstances, and are payable on a quarterly basis. The dividends are payable by the Company, at the Company’s election, in registered common stock of the Company (if available) or cash. In the event dividends are paid in registered common stock of the Company, the number of shares payable will be calculated by dividing (a) the accrued dividend by (b) 90% of the arithmetic average of the volume weighted average price (VWAP) of the Company’s common stock for the 10 trading days immediately prior to the applicable date of determination (the “ June 2015 Dividend Stock Payment Price ”). Notwithstanding the foregoing, in no event may the Company pay dividends in common stock unless the applicable June 2015 Dividend Stock Payment Price is above $2.91 . If the Company is prohibited from paying or chooses not to pay, the dividend in cash (due to contractual senior credit agreements or other restrictions) or is unable to pay the dividend in registered common stock, the dividend can be paid in kind in Series B Preferred Stock shares at $3.10 per share. The Series B Preferred Stock includes a liquidation preference (in the amount of $3.10 per share) which is junior to the Company’s previously outstanding shares of preferred stock, senior credit facilities and other debt holders as provided in further detail in the designation and senior to the Series C Preferred Stock and pari passu with the Series B1 Preferred Stock. The Series B Preferred Stock (including accrued and unpaid dividends) is convertible into shares of the Company’s common stock at the holder’s option at $3.10 per share (initially a one -for-one basis). If the Company’s common stock trades at or above $6.20 per share for a period of 20 consecutive trading days, the Company may at such time force conversion of the Series B Preferred Stock (including accrued and unpaid dividends) into common stock of the Company. The Series B Preferred Stock votes together with the common stock on an as-converted basis, provided that each holder’s voting rights are subject to and limited by the Series B Beneficial Ownership Limitation described below. The Company has the option to redeem the outstanding shares of Series B Preferred Stock at $3.10 per share, plus any accrued and unpaid dividends on such Series B Preferred Stock redeemed, at any time beginning on June 24, 2017, and the Company is required to redeem the Series B Preferred Stock at $3.10 per share, plus any accrued and unpaid dividends, on June 24, 2020. Notwithstanding either of the foregoing, the Series B Preferred Stock may not be redeemed unless and until amounts outstanding under the Company’s senior credit facility have been paid in full, which has occurred to date. The Series B Preferred Stock contains a provision prohibiting the conversion of such Series B Preferred Stock into common stock of the Company, if upon such conversion, the holder thereof would beneficially own more than 9.999% of the Company’s then outstanding common stock (the “ Series B Beneficial Ownership Limitation ”). The Series B Beneficial Ownership Limitation does not apply to forced conversions undertaken by the Company pursuant to the terms of the designation (summarized above). On June 24, 2015, we closed the transactions contemplated by the June 19, 2015 Unit Purchase Agreement (the “ June 2015 Purchase Agreement ”) we entered into with certain institutional investors (the “ June 2015 Investors ”), pursuant to which the Company sold the June 2015 Investors an aggregate of 8,064,534 units (the “ June 2015 Units ”), each consisting of (i) one share of Series B Preferred Stock and (ii) one warrant to purchase one-half of a share of common stock of the Company (each a “ June 2015 Warrant ” and collectively, the “ June 2015 Warrants ”). The June 2015 Units were sold at a price of $3.10 per June 2015 Unit (the “ June 2015 Unit Price ”) (a 6.1% premium to the closing bid price of the Company’s common stock on the NASDAQ Capital Market on the date the June 2015 Purchase Agreement was entered into which was $2.91 per share (the “ June 2015 Closing Bid Price ”)). The June 2015 Warrants have an exercise price of $2.92 per share ( $0.01 above the June 2015 Closing Bid Price). Total gross proceeds from the offering of the June 2015 Units (the “ June 2015 Offering ”) were $25.0 million . The Placement Agent received a commission equal to 6.5% of the gross proceeds (less $4.0 million raised from certain investors in the June 2015 Offering for which they will receive no fee) from the June 2015 Offering, for an aggregate commission of $1.365 million which was netted against the proceeds. We used the net proceeds from the June 2015 Offering to repay amounts owed under the Goldman Credit Agreement in the amount of $15.1 million . In addition, under the June 2015 Purchase Agreement, the Company agreed to register the shares of common stock issuable upon conversion of the Series B Preferred Stock and upon exercise of the June 2015 Warrants under the Securities Act of 1933, as amended, for resale by the June 2015 Investors. The Company committed to file a registration statement on Form S-1 by the 30th day following the closing of the June 2015 Offering (which filing date was met) and to cause the registration statement to become effective by the 90th day following the closing (or, in the event of a “ full review ” by the Securities and Exchange Commission, the 120th day following the closing), which registration statement was declared effective by the Securities and Exchange Commission on August 6, 2015. The June 2015 Purchase Agreement provides for liquidated damages upon the occurrence of certain events, including, but not limited to, the failure by the Company to cause the registration statement to become effective by the deadlines set forth above. The amount of the liquidated damages is 1.0% of the aggregate subscription amount paid by a June 2015 Investor for the June 2015 Units affected by the event that are still held by the Investor upon the occurrence of the event, due on the date immediately following the event that caused such failure (or the 30th day following such event if the event relates to the suspension of the registration statement as described in the June 2015 Purchase Agreement), and each 30 days thereafter, with such payments to be prorated on a daily basis during each 30 day period, subject to a maximum of an aggregate of 6% per annum. Under the June 2015 Purchase Agreement, the Company agreed to indemnify the June 2015 Investors for liabilities arising out of or relating to (i) any untrue statement of a material fact contained in the registration statement, (ii) any inaccuracy in the representations and warranties of the Company contained in the June 2015 Purchase Agreement or the failure of the Company to perform its obligations under the June 2015 Purchase Agreement and (iii) any failure by the Company to fulfill any undertaking included in the registration statement, subject to certain exceptions. The Investors, severally, and not jointly agreed to indemnify the Company against (i) any failure by such Investor to comply with the covenants and agreements contained in the June 2015 Purchase Agreement and (ii) any untrue statement of a material fact contained in the registration statement to the extent such untrue statement was made in reliance upon and in conformity with written information furnished by or on behalf of that Investor specifically for use in preparation of the registration statement, subject to certain exceptions. The Company agreed pursuant to the June 2015 Purchase Agreement, that until 60 days following effectiveness of the registration statement filed, to register the shares of common stock underlying the Series B Preferred Stock and June 2015 Warrants (the “ June 2015 Lock-Up Period ”), to not offer or sell any common stock or securities convertible or exercisable into common stock, except pursuant to certain exceptions described in the June 2015 Purchase Agreement, and each of the Company’s officers and directors agreed to not sell or offer for sale any shares of common stock until the end of the June 2015 Lock-Up Period, subject to certain exceptions. The June 2015 Warrants were valued using the dynamic Black Scholes Merton formula pricing model that computes the impact of share dilution upon the exercise of the warrant shares at approximately $7,028,067 . The Black-Scholes inputs used were: expected dividend rate of 0% , expected volatility of 70% , risk free interest rate of 1.59% , and expected term of 5.5 years . This valuation resulted in a beneficial conversion feature on the convertible preferred stock of approximately $5,682,741 . This amount, includes the entire discount-warrants and BCF, will be accreted over the term as a deemed dividend. Fees in the amount of $1.4 million relating to the stock placement were netted against proceeds. The warrants are exercisable beginning on December 26, 2015 , and expire December 24, 2020 . In connection with the May 2016 Purchase Agreement described below under " Series B1 Preferred Stock and Temporary Equity ", certain funds received in that offering totaling $11,189,838 were used to immediately repurchase and retire 3,575,070 shares of Series B Preferred Stock and pay the accrued but unpaid dividends due thereon and on certain other shares of Series B Preferred Stock held by those holders (the “ Repurchases ”). In connection with this transaction, $5,408,131 of unaccreted discount on these 3,575,070 shares of Series B Preferred Stock which were retired, was immediately recognized in dividends, which represents the pro-rata portion of the unaccreted discount. The following table represents the carrying amount of the Series B Preferred Stock, classified as Temporary Equity on the Balance Sheet, at inception and as of December 31, 2016 and December 31, 2015 : Temporary Equity: At Inception June 24, 2015 Face amount of Series B Preferred $ 25,000,000 Less: warrant value 7,028,067 Less: beneficial conversion feature 5,737,796 Less: issuance costs and fees 1,442,462 Carrying amount at inception $ 10,791,675 December 31, 2016 December 31, 2015 Face amount of Series B Preferred $ 25,000,000 $ 25,000,000 Less: repurchase of 3,575,070 shares 11,189,838 — Less: conversion of 1,739,272 shares to common stock 5,386,341 — Plus: dividend in kind 1,164,701 — Less: un-accreted discount 6,256,604 13,044,793 Carrying amount $ 3,331,918 $ 11,955,207 In accordance with ASC 815-40-25 and ASC 815-10-15 Derivatives and Hedging and ASC 480-10-25 Liabilities-Distinguishing Liabilities from Equity as approved by shareholders, the convertible preferred shares are accounted for net outside of stockholders’ equity at $3,331,918 with the June 2015 Warrants accounted for as liabilities at their fair value of $1,952,565 and $1,548,604 as of December 31, 2016 and 2015, respectively. The value of the derivative warrant liability will be re-measured at each reporting period with changes in fair value recorded as earnings. To derive an estimate of the fair value of the June 2015 Warrants, the Company utilized a dynamic Black Scholes Merton formula that computes the impact of share dilution upon the exercise of the warrant shares. This process relies upon inputs such as shares outstanding, estimated stock prices, strike price and volatility assumptions to dynamically adjust the payoff of the June 2015 Warrants in the presence of the dilution effect. In the event the convertible preferred shares are redeemed, any redemption price in excess of the carrying amount of the convertible preferred stock would be treated as a dividend. The changes in liabilities measured using significant unobservable inputs for the period ended December 31, 2016 were as follows: Level Three Roll-Forward Item Level 3 Balance at December 31, 2014 $ — Warrants issued June 24, 2015 7,028,067 Change in valuation of warrants (5,479,463 ) Balance at December 31, 2015 1,548,604 May 2016 Series B1 Preferred Warrants (described below) 2,867,264 Change in valuation of warrants (49,876 ) Balance at December 31, 2016 $ 4,365,992 The warrants related to the June 2015 Series B Preferred Stock and the May 2016 Series B1 Preferred Stock were revalued during the year ended December 31, 2016 using the Dynamic Black Scholes model that computes the impact of a possible change in control transaction upon the exercise of the warrant shares at approximately $(49,876) . At December 31, 2016 , the June 2015 Warrants and the May 2016 Warrants were valued at approximately $1,952,565 and $2,413,427 , respectively. The dynamic Black-Scholes inputs used were: expected dividend rate of 0% , expected volatility of 78% - 100% , risk free interest rate of 1.59% to 1.76% , and expected term of 4.54 years (June 2015 Warrants) and 5.11 years (May 2016 Warrants). The Certificate of Designation contains customary anti-dilution protection for proportional adjustments (e.g. stock splits). The beneficial conversion feature (BCF) relates to potential difference between the effective conversion price (measured based on proceeds allocated to the Series B Preferred Stock) and the fair value of the stock into which Preferred B Shares are currently convertible (common stock). If a conversion option embedded in a debt host instrument does not require separate accounting as a derivative instrument under ASC 815, the convertible hybrid instrument must be evaluated under ASC 470-20 for the identification of a possible BCF. The BCF will be initially recognized as an offsetting reduction to Series B Preferred Stock (debit) - Temporary Equity, with the credit being recognized in equity (additional paid-in capital). The resulting debt issuance costs, debt discount, value allocated to warrants, and BCF should be accreted to the Series B Preferred Stock to ensure that the Series B Preferred Stock balance is equal to its face value as of the redemption or conversion date, if conversion is expected earlier. The BCF in June 24, 2015 was determined by calculating the intrinsic value of the conversion feature as follows: Face amount of Series B Preferred Stock $ 25,000,000 Less: allocated value of Warrants 7,028,067 Allocated value of Series B Preferred Stock $ 17,971,933 Shares of Common stock to be converted 8,064,534 Effective conversion price $ 2.23 Market price $ 2.94 Intrinsic value per share $ 0.7115 Intrinsic value of beneficial conversion feature $ 5,737,796 As of December 31, 2016 and December 31, 2015 , a total of $214,227 and $376,571 , respectively, of dividends accrued on our outstanding Series B Preferred Stock (not including shares of Series B Preferred Stock converted into common stock in August 2015, as described above). We were prohibited from paying such dividends in shares of common stock because the applicable June 2015 Dividend Stock Payment Price was below $2.91 . The “ June 2015 Dividend Stock Payment Price ” is calculated by dividing (a) the accrued dividends by (b) 90% of the arithmetic average of the volume weighted average price (VWAP) of the Company’s common stock for the 10 trading days immediately prior to the applicable date of determination. In the event the applicable June 2015 Dividend Stock Payment Price is below $2.91 we are required to pay such dividend in cash or in-kind in additional shares of Series B Preferred Stock. Pursuant to the terms of our Goldman Credit Agreement, we were prohibited from paying the dividend in cash and therefore we paid the accrued dividends in-kind for the year ending December 31, 2016 by way of the issuance of restricted shares of Series B Preferred Stock pro-rata to each of the then holders of our Series B Preferred Stock totaling 263,087 during the year. If converted in full, these dividends issued in kind would convert on a one-for-one basis into shares of our common stock. On November 2, 2016, a holder of our Series B Convertible Preferred Stock converted 1,739,272 shares of our Series B Convertible Preferred Stock into 1,739,272 shares of our common stock. A total of $946,805 was recognized as a dividend to retained earnings. Series B1 Preferred Stock and Temporary Equity Dividends on our Series B1 Preferred Stock accrue at an annual rate of 6% of the original issue price of the preferred stock ( $1.56 per share), subject to increases under certain circumstances, and are payable on a quarterly basis. The dividends are payable by the Company, at the Company’s election, in registered common stock of the Company (if available) or cash. In the event dividends are paid in registered common stock of the Company, the number of shares payable will be calculated by dividing (a) the accrued dividend by (b) 90% of the arithmetic average of the volume weighted average price (VWAP) of the Company’s common stock for the 10 trading days immediately prior to the applicable date of determination (the “ May 2016 Dividend Stock Payment Price ”). Notwithstanding the foregoing, in no event may the Company pay dividends in common stock unless the applicable May 2016 Dividend Stock Payment Price is above $1.52 . If the Company is prohibited from paying, or chooses not to pay, the dividend in cash (due to contractual senior credit agreements or other restrictions) or is unable to pay the dividend in registered common stock, the dividend can be paid in kind in Series B1 Preferred Stock shares at $1.56 per share. The Series B1 Preferred Stock include a liquidation preference (in the amount of $1.56 per share) which is junior to the Company’s previously outstanding shares of preferred stock, except the Series B Preferred Stock, which it is pari passu with, senior credit facilities and other debt holders as provided in further detail in the designation and senior to the Series C Preferred Stock. The Series B1 Preferred Stock (including accrued and unpaid dividends) is convertible into shares of the Company’s common stock at the holder’s option at $1.56 per share (initially a one -for-one basis). If the Company’s common stock trades at or above $3.90 per share for a period of 20 consecutive trading days, after certain triggering events occur, the Company may at such time force conversion of the Series B1 Preferred Stock (including accrued and unpaid dividends) into common stock of the Company. The Series B1 Preferred Stock votes together with the common stock on an as-converted basis, provided that each holder’s voting rights are subject to and limited by the Series B1 Beneficial Ownership Limitation described below. The Company has the option to redeem the outstanding shares of Series B1 Preferred Stock at $1.72 per share, plus any accrued and unpaid dividends on such Series B1 Preferred Stock redeemed, at any time beginning on June 24, 2017, and the Company is required to redeem the Series B Preferred Stock at $1.56 per share, plus any accrued and unpaid dividends, on June 24, 2020. Notwithstanding either of the foregoing, the Series B1 Preferred Stock may not be redeemed unless and until amounts outstanding under the Company’s senior credit facility have been paid in full. The Series B1 Preferred Stock and May 2016 Warrants (defined below) contain provisions prohibiting the conversion of such Series B1 Preferred Stock into common stock of the Company, if upon such conversion, the holder thereof would beneficially own more than 9.999% ( 4.999% for certain holders) of the Company’s then outstanding common stock (the “ Series B1 Beneficial Ownership Limitation ”). The Series B1 Beneficial Ownership Limitation does not apply to forced conversions undertaken by the Company pursuant to the terms of the Designation (summarized above). On May 10, 2016, we entered into a Unit Purchase Agreement (the “ May 2016 Purchase Agreement ”) with certain institutional investors (the “ May 2016 Investors ”), pursuant to which, on May 13, 2016, the Company sold the May 2016 Investors an aggregate of 12,403,683 units (the " May 2016 Units ”), each consisting of (i) one share of Series B1 Preferred Stock and (ii) one warrant to purchase one-quarter of a share of common stock of the Company (each a “ May 2016 Warrant ” and collectively, the " May 2016 Warrants ”). The Units were sold at a price of $1.56 per Unit (the “ May 2016 Unit Price ”) (a 2.6% premium to the closing bid price of the Company’s common stock on the NASDAQ Capital Market on the date the May 2016 Purchase Agreement was entered into which was $1.52 per share (the “ May 2016 Closing Bid Price ”)). The May 2016 Warrants have an exercise price of $1.53 per share ( $0.01 above the May 2016 Closing Bid Price). Total gross proceeds from the offering of the Units (the “ May 2016 Offering ”) were $19.4 million. A total of $18,649,738 of the securities sold in the May 2016 Offering were purchased by investors who participated in the Company’s prior June 2015 offering of Series B Preferred Stock and warrants to purchase shares of common stock. A total of 60% of the funds received from such investors were used to immediately repurchase such investors’ Series B Preferred Stock. As a result, a total of $11,189,838 of the proceeds raised in the May 2016 Offering were used to immediately repurchase and retire 3,575,070 shares of Series B Preferred Stock (the “ Repurchases ”). Leaving net proceeds of approximately $8.1 million , before deducting placement agents’ fees and estimated offering expenses. The Placement Agent in the offering received a commission equal to 6.5% of the net proceeds from the May 2016 Offering, after affecting the Repurchases described above, for an aggregate commission of $0.53 million which was netted against the proceeds raised. We used the net proceeds from the May 2016 Offering to repay amounts owed under the Credit Agreement in the amount of $0.8 million and the remaining proceeds were used for working capital purposes and potential acquisitions. In addition, under the May 2016 Purchase Agreement, the Company agreed to register the shares of common stock issuable upon conversion of the Series B1 Preferred Stock and upon exercise of the May 2016 Warrants under the Securities Act of 1933, as amended, for resale by the May 2016 Investors. The Company committed to file a registration statement on Form S-1 by the 30th day following the closing of the May 2016 Offering (which filing date was met) and to cause the registration statement to become effective by the 90th day following the closing (or, in the event of a “ full review ” by the Securities and Exchange Commission, the 120th day following the closing), which registration statement was declared effective by the SEC on August 10, 2016. The May 2016 Purchase Agreement provides for liquidated damages upon the occurrence of certain events, including, but not limited to, the failure by the Company to cause the registration statement to become effective by the deadlines set forth above. The amount of the liquidated damages is 1.0% of the aggregate subscription amount paid by a May 2016 Investor for the May 2016 Units affected by the event that are still held by the May 2016 Investor upon the occurrence of the event, due on the date immediately following the event that caused such failure (or the 30th day following such event if the event relates to the suspension of the registration statement as described in the May 2016 Purchase Agreement), and each 30 days thereafter, with such payments to be prorated on a daily basis during each 30 day period, subject to a maximum of an aggregate of 6% per annum. Under the May 2016 Purchase Agreement, the Company agreed to indemnify the May 2016 Investors for liabilities arising out of or relating to (i) any untrue statement of a material fact contained in the registration statement, (ii) any inaccuracy in the representations and warranties of the Company contained in the May 2016 Purchase Agreement or the failure of the Company to perform its obligations under the May 2016 Purchase Agreement and (iii) any failure by the Company to fulfill any undertaking included in the registration statement, subject to certain exceptions. The Investors, severally, and not jointly agreed to indemnify the Company against (i) any failure by such Investor to comply with the covenants and agreements contained in the May 2016 Purchase Agreement and (ii) any untrue statement of a material fact contained in the registration statement to the extent such untrue statement was made in reliance upon and in conformity with written information furnished by or on behalf of that Investor specifically for use in preparation of the registration statement, subject to certain exceptions. The Company agreed pursuant to the May 2016 Purchase Agreement, that until 60 days following effectiveness of the registration statement filed, to register the shares of common stock underlying the Series B1 Preferred Stock and May 2016 Warrants (the “ May 2016 Lock-Up Period ”), to not offer or sell any common stock or securities convertible or exercisable into common stock, except pursuant to certain exceptions described in the May 2016 Purchase Agreement, and each of the Company’s officers and directors agreed to not sell or offer for sale any shares of common stock until the end of the May 2016 Lock-Up Period, subject to certain exceptions. The May 2016 Warrants were valued using the dynamic Black Scholes Merton formula pricing model that computes the impact of share dilution upon the exercise of the May 2016 Warrant shares at approximately $2,867,264 . The dynamic Black Scholes Merton inputs used were: expected dividend rate of 0% , expected volatility of 70% - 100% , risk free interest rate of 1.22% , and expected term of 5.5 years. This valuation resulted in a beneficial conversion feature on the convertible preferred stock of approximately $2,371,106 . This amount will be accreted over the term as a deemed dividend. Fees in the amount of $0.6 million relating to the stock placement were netted against proceeds. The May 2016 Warrants are exercisable beginning on November 14, 2016, and expire on November 14, 2021. The following table represents the carrying amount of the Series B1 Preferred Stock, classified as Temporary Equity on the Balance Sheet, at inception (May 13, 2016) and as of December 31, 2016 : Temporary Equity: At Inception May 13, 2016 Face amount of Series B1 Preferred $ 19,349,745 Less: May 2016 Warrant value 2,867,264 Less: May 2016 Beneficial Conversion Feature 2,371,106 Less: May 2016 issuance costs and fees 607,880 Carrying amount at inception $ 13,503,495 December 31, 2016 Face amount of Series B1 Preferred $ 19,349,745 Less: conversion of 403,217 shares to common 628,866 Plus: dividends-in-kind 435,369 Less: unaccreted discount 5,400,064 Carrying amount $ 13,756,184 In accordance with ASC 815-40-25 and ASC 815-10-15 Derivatives and Hedging and ASC 480-10-25 Liabilities-Distinguishing Liabilities from Equity, the convertible Series B1 Preferred Stock shares are accounted for net outside of stockholders’ equity at $13,756,184 with the May 2016 Warrants accounted for as liabilities at their fair value of $2,413,427 as of December 31, 2016 . The value of the derivative warrant liability will be re-measured at each reporting period with changes in fair value recorded as earnings. To derive an estimate of the fair value of these warrants, the Company utilized a dynamic Black Scholes Merton formula that computes the impact of share dilution upon the exercise of the May 2016 Warrants. This process relies upon inputs such as shares outstanding, estimated stock prices, strike price and volatility assumptions to dynamically adjust the payoff of the warrants in the presence of the dilution effect. In the event the convertible Series B1 Preferred Stock shares are redeemed, any redemption price in excess of the carrying amount of the convertible Series B1 Preferred Stock would be treated as a dividend. The changes in liabilities measured using significant unobservable inputs for the year ended December 31, 2016 are described above within the Level Three Roll-Forward table under Series B Preferred Stock and Temporary Equity. The Certificate of Designation of the Series B1 Preferred Stock contains customary anti-dilution protection for proportional adjustments (e.g. stock splits). The May 2016 beneficial conversion feature (BCF) relates to the potential difference between the effective conversion price (measured based on proceeds allocated to the Series B1 Preferred Stock) and the fair value of the stock into which Series B1 Preferred Stock shares are currently convertible (common stock). If a conversion option embedded in a debt host instrument does not require separate accounting as a derivative instrument under ASC 815, the convertible hybrid instrument must be evaluated under ASC 470-20 for the identification of a possible BCF. The May 2016 BCF will be initially recognized as an offsetting reduction to Series B1 Preferred Stock (debit) - Temporary Equity, with the credit being recognized in equity (additional paid-in capital). The resulting May 2016 debt issuance costs, debt discount |
DISPOSITION
DISPOSITION | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSITION | ASSETS HELD FOR SALE During 2015 the Company reclassified amounts due from Omega Holdings, LLC to the Company based on the portion of the acquisition purchase price that was allocated to the Bango facility (see " Note 16- Disposition "). The Company sold the Bango facility in January 2016, so the following assets were re-classified as " Assets held for sale " at December 31, 2015. The Balance of " Assets held for sale " at December 31, 2016 is zero. December 31, 2015 Accounts Receivable $ 1,691,662 Note Receivable - Current 8,308,000 Fixed Assets - Construction in Process 1,170,581 Total Assets held for sale at December 31, 2015 11,170,243 January 2016 sale of assets (11,170,243 ) Total Assets held for sale at December 31, 2016 $ — The simultaneous purchase and sale of the Churchill, Nevada facility took place on January 28, 2016. On January 28, 2016, the Company entered into an Asset Purchase Agreement (the “ Sale Agreement ”) with Bango Oil, LLC (“ Bango Oil ”) and Safety-Kleen Systems Inc. (“ Safety-Kleen ”) pursuant to which the Company agreed to sell to Safety-Kleen the used oil re-refining plant on approximately 40 acres in Churchill County, Nevada (the “ Bango Plant ”), which we previously rented, and all equipment, tools and other tangible personal property located at the Bango Plant, which relate to or are used in connection with the operations of the Bango Plant (collectively, the “ Bango Assets ”) for an aggregate purchase price of $35 million . As shown in the table below, a gain on sale of approximately $9.7 million was recorded associated with the sale. The gain on sale is included in the accompanying consolidated statement of operations. Sales price (fair value) $ 35,000,000 Release of lien on certain equipment at the Bango Plant (3,100,000 ) Transaction Fees (2,111,886 ) Net Proceeds 29,788,114 Book Value at January 29, 2016 (date transaction closed) 20,039,553 Gain on Sale $ 9,748,561 Net proceeds were used to pay an aggregate of $16.1 million toward the Credit Agreement with Goldman Sachs Bank (described in " Note 10. Line of Credit and Long-Term Debt "), $9.3 million to exercise the Purchase Option (described below) and $1.5 million for equipment and rail park lease acquisitions subsequently included in the Sale Agreement. Additionally, at the closing, we placed $1.5 million in restricted cash and $1 million worth of our common stock ( 1,108,928 shares) into escrow with 50% of the shares to be released to us 12 months following the closing and such cash and the remainder of the shares held in escrow to be released to us 18 months after the closing, in order to satisfy any indemnification claims made by Safety-Kleen pursuant to the terms of the Sale Agreement. On June 30 and December 31 of each year that any of our shares of common stock are in escrow, in the event the value of the shares held in escrow is less than $1 million , based on the then market price of our common stock, we are required to increase the number of shares of common stock held in escrow to total $1 million in aggregate value (no adjustment was required as of June 30, 2016 or December 31, 2016). Finally, the Sale Agreement required the Company to use sale proceeds to exercise the purchase option set forth in that certain Lease With Option For Membership Interest Purchase (the “ Bango Lease ”) entered into on April 30, 2015, by and between us, Vertex Refining NV and Bango Oil, whereby, we had the option at any time during the term of the lease to purchase all of the equity interests of Bango Oil (the “ Purchase Option ”), effectively acquiring ownership of the Bango Plant for $9.3 million . The Membership Interest Purchase Agreement contains standard and customary representations of the parties and indemnification rights, subject in each case to a $3 million cap on aggregate indemnification. Upon the closing of the Membership Interest Purchase Agreement, we effectively obtained ownership of the Bango Plant, which we then sold to Safety-Kleen, and Bango Oil became a wholly-owned subsidiary of Vertex Refining NV. |
NEW JOINT VENTURE
NEW JOINT VENTURE | 12 Months Ended |
Dec. 31, 2016 | |
Equity Method Investments and Joint Ventures [Abstract] | |
NEW JOINT VENTURE | NEW JOINT VENTURE On May 25, 2016, Vertex Recovery Management, LLC, our wholly-owned subsidiary (" VRM ") and Industrial Pipe, Inc. (" Industrial Pipe "), formed a joint venture Louisiana limited liability company, Vertex Recovery Management LA, LLC (" VRMLA "). VRM owns 51% and Industrial Pipe owns 49% of VRMLA. VRMLA is currently buying and preparing ferrous and non-ferrous scrap intended for large haul barge sales. We consolidated 100% of VRMLA's operating income of $4,447 for the year ended December 31, 2016 and then added the 49% or $2,179 income attributable to the non-controlling interest back to the Company's " Net income (loss) attributable to Vertex Energy, Inc. " in the Balance Sheet. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company’s reportable segments include the Black Oil, Refining and Marketing and Recovery divisions. Segment information for the years ended December 31, 2016 and 2015 are as follows: YEAR ENDED DECEMBER 31, 2016 Black Oil Refining and Marketing Recovery Total Revenues $ 76,634,940 $ 13,154,777 $ 8,289,197 $ 98,078,914 Net loss from operations $ (8,849,055 ) $ (402,317 ) $ (861,142 ) $ (10,112,514 ) Total Assets $ 80,774,533 $ 1,573,395 $ 4,638,040 $ 86,985,968 YEAR ENDED DECEMBER 31, 2015 Black Oil Refining and Marketing Recovery Total Revenues $ 103,890,188 $ 31,154,066 $ 11,898,207 $ 146,942,461 Net loss from operations $ (15,957,969 ) $ 363,708 $ 1,501,220 $ (14,093,041 ) Total Assets $ 87,326,506 $ 1,845,669 $ 4,472,641 $ 93,644,816 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Credit and Guaranty Agreement Effective February 1, 2017, Vertex Energy, Vertex Operating, LLC and substantially all of Vertex Energy’s other operating subsidiaries, other than E-Source, entered into a Credit Agreement (the “ EBC Credit Agreement ”) with Encina Business Credit, LLC as agent (the “ Agent ” or “ EBC ”) and Encina Business Credit SPV, LLC and CrowdOut Capital LLC as lenders thereunder (the “ EBC Lenders ”). Pursuant to the EBC Credit Agreement, and the terms thereof, the EBC Lenders agreed to loan us up to $20 million . A total of $12 million was loaned to us by the EBC Lenders on February 1, 2017 pursuant to the terms of the EBC Credit Agreement, and a total of an additional $8 million in funding may be requested by us from the EBC Lenders, from time to time, subject to the terms of the EBC Credit Agreement, and the conditions for lending set forth therein. Amounts borrowed under the EBC Credit Agreement bear interest at 12% , 13% or 14% per annum, based on the ratio of (a) (i) consolidated EBITDA for such applicable period minus (ii) capital expenditures made during such period, minus (iii) the aggregate amount of income taxes paid in cash during such period (but not less than zero) to (b) the sum of (i) debt service charges plus (ii) the aggregate amount of all dividend or other distributions paid on capital stock in cash for the most recently completed 12 month period (which ratio falls into one of the three following tiers: less than 1 to 1; from 1 to 1 to less than 1.45 to 1; or equal to or greater than 1.45 to 1, which together with the value below, determines which interest rate is applicable) and average availability under the Revolving Credit Agreement (defined below) (which falls into two tiers: less than $2.5 million and greater than or equal to $2.5 million , which together with the calculation above, determines which interest rate is applicable), as described in greater detail in the EBC Credit Agreement (increasing by 2% per annum upon the occurrence of an event of default). Interest on amounts borrowed under the EBC Credit Agreement is payable by us in arrears, on the first business day of each month, beginning on the first business day of the first full month following the closing, together with required $75,000 monthly principal repayments. We also have the right to make voluntary repayments of the amount owed under the EBC Credit Agreement in amounts equal to or greater than $100,000 , from time to time. The EBC Credit Agreement terminates on February 1, 2020, on which date we are required to repay the outstanding balance owed thereunder and any accrued and unpaid interest thereon. Revolving Credit Facility with Encina Business Credit, LLC Effective February 1, 2017, Vertex Energy, Vertex Operating and substantially all of Vertex Energy’s operating subsidiaries, other than E-Source, entered into a Revolving Credit Agreement (the “ Revolving Credit Agreement ”) with Encina Business Credit SPV, LLC as lender (the “ Lender ”) and EBC as the administrative agent. Pursuant to the Revolving Credit Agreement, and the terms thereof, the Lender agreed to loan us, on a revolving basis, up to $10 million , subject to the terms of the Revolving Credit Agreement and certain lending ratios set forth therein. Amounts borrowed under the Revolving Credit Agreement bear interest, subject to the terms of the Revolving Credit Agreement, at the one month LIBOR interest rate then in effect, subject to a floor of 0.25% (which interest rate is currently approximately 0.78% per annum), plus an additional 6.50% per annum (increasing by 2% per annum upon the occurrence of an event of default), provided that under certain circumstances amounts borrowed bear interest at the higher of (a) the “ prime rate ”; (b) the Federal Funds Rate, plus 0.50% ; and (c) the LIBOR Rate for a one month interest period, plus 1.00% ). Interest on amounts borrowed under the Revolving Credit Agreement is payable by us in arrears, on the first business day of each, beginning on the first business day of the first full month following the closing. The Revolving Credit Agreement terminates on February 1, 2020, on which date we are required to repay the outstanding balance owed thereunder and any accrued and unpaid interest thereon. Debt and Revolving Note Repayment A total of $11,282,537 of the amount borrowed under the EBC Credit Agreement and Revolving Credit Agreement was used to repay amounts owed under (a) the Restated Goldman Credit Agreement, (b) the MidCap Loan Agreement; and (c) the Fox Note (collectively, “ Existing Credit Obligations ”), all of which have been repaid in full as of the date of this filing. Additionally, in connection with the repayment of such obligations, the Restated Goldman Credit Agreement and Midcap Loan, and our right to borrow funds thereunder were terminated. Issuance of Series B and B1 Preferred Stock Shares in-Kind Pursuant to the terms of our Goldman Credit Agreement, we were prohibited from paying dividends in cash on our Series B Preferred Stock and Series B1 Preferred Stock and therefore we paid the accrued dividends on our Series B Preferred Stock and Series B1 Preferred Stock, which accrued as of December 31, 2016, in-kind by way of the issuance of 48,447 restricted shares of Series B Preferred Stock pro rata to each of the then holders of our Series B Preferred Stock in January 2017 and the issuance of 184,297 restricted shares of Series B1 Preferred Stock pro rata to each of the then holders of our Series B1 Preferred Stock in January 2017. If converted in full, the 48,447 shares of Series B Preferred Stock would convert into 48,447 shares of common stock and the 184,297 shares of Series B1 Preferred Stock would convert into 184,297 shares of common stock. Conversion of Series B1 and Series A Convertible Preferred Stock In January 2017, two holders of our Series B1 Convertible Preferred Stock converted 66,564 and 10,000 shares, respectively, of our Series B1 Convertible Preferred Stock into 66,564 and 10,000 shares, respectively, of our common stock. In January 2017, a holder of our Series A Convertible Preferred Stock converted 30,072 shares of our Series A Convertible Preferred Stock into 30,072 shares of our common stock. |
SUMMARY OF SIGNIFICANT ACCOUN28
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation. The subsidiaries are as follows: • Cedar Marine Terminals, L.P. (“ CMT ”) operates a 19 -acre bulk liquid storage facility on the Houston Ship Channel. The terminal serves as a truck-in, barge-out facility and provides throughput terminal operations. CMT is also the site of the TCEP. • Crossroad Carriers, L.P. (“ Crossroad ”) is a common carrier that provides transportation and logistical services for liquid petroleum products, as well as other hazardous materials and product streams. • Vertex Recovery, L.P. (“ Vertex Recovery ”) is a generator solutions company for the recycling and collection of used oil and oil-related residual materials from large regional and national customers throughout the U.S. It facilitates its services through a network of independent recyclers and franchise collectors. • H&H Oil, L.P. (“ H&H Oil ”) collects and recycles used oil and residual materials from customers based in Austin, Baytown, Dallas, San Antonio and Corpus Christi, Texas. • E-Source Holdings, LLC (“ E-Source ”) provides dismantling and demolition services at industrial facilities throughout the Gulf Coast. • Vertex Refining, LA, LLC is a used oil re-refinery based in Marrero, Louisiana and also has assets in Belle Chasse, Louisiana. • Vertex Refining, NV, LLC (" Vertex Refining ") is a base oil marketing and distribution company with customers throughout the United States. • Vertex Recovery Management, LLC is currently buying and preparing ferrous and non-ferrous scrap intended for large haul barge sales. • Golden State Lubricant Works, LLC (" Golden State ") previously operated an oil storage and blend facility based in Bakersfield, California. • Vertex Refining, OH, LLC collects and re-refines used oil and residual materials from customers throughout the Midwest. Refinery operations are based in Columbus, Ohio and has collection branches located in Norwalk, Ohio, Zanesville, Ohio, Ravenswood, West Virginia, and Mt. Sterling, Kentucky. • Vertex Energy Operating, LLC (" Vertex Operating "), a holding company for various of the subsidiaries described above. |
Cash and cash equivalents | Cash and cash equivalents For purposes of the statement of cash flows, the Company considers all short-term investments purchased with original maturities of three months or less at the date of purchase to be cash equivalents. |
Accounts receivable | Accounts receivable Accounts receivable represents amounts due from customers. Accounts receivable are recorded at invoiced amounts, net of reserves and allowances, do not bear interest and are not collateralized. The Company uses its best estimate to determine the required allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, economic trends and conditions affecting its customer base, significant one-time events and historical write-off experience. Specific provisions are recorded for individual receivables when we become aware of a customer’s inability to meet its financial obligations. The Company reviews the adequacy of its reserves and allowances quarterly. Receivable balances greater than 30 days past due are individually reviewed for collectability and if deemed uncollectible, are charged off against the allowance accounts after all means of collection have been exhausted and the potential for recovery is considered remote. |
Inventory | Inventory Inventories of products consist of feedstocks and refined petroleum products and are reported at the lower of cost or market. Cost is determined using the first-in, first-out (“ FIFO ”) method. The Company reviews its inventory commodities whenever events or circumstances indicate that the value may not be recoverable. |
Fixed assets | Fixed assets Fixed assets are stated at historical costs. Depreciation of fixed assets placed in operations is provided using the straight-line method over the estimated useful lives of the assets. The policy of the Company is to charge amounts for maintenance and repairs to expenses, and to capitalize expenditures for major replacements and betterments. |
Asset Retirement Obligations | Asset Retirement Obligations The Company records a liability, which is referred to as an asset retirement obligation, at fair value for the estimated cost to retire a tangible long-lived asset at the time the Company incurs that liability, which is generally when the asset is purchased, constructed, or leased. The Company records the liability when it has a legal obligation to incur costs to retire the asset and when a reasonable estimate of the fair value of the liability can be made. If a reasonable estimate cannot be made at the time the liability is incurred, the Company records the liability when sufficient information is available to estimate the liability’s fair value. |
Intangible assets | Intangible assets Intangible assets are amortized over their estimated useful lives. Amortizable intangible assets are reviewed at least annually to determine whether events and circumstances warrant a revision to the remaining period of amortization. |
Goodwill | Goodwill Goodwill is the excess of cost of an acquired entity over the amounts assigned to identifiable assets acquired and liabilities assumed in a business combination. In accordance with the FASB ASC 350, “ Intangibles - Goodwill and Other ,” goodwill is not amortized. We periodically, at least on an annual basis, review goodwill, considering factors such as projected cash flows and revenue and earnings multiples, to determine whether the carrying value of the goodwill is impaired. If the goodwill is deemed to be impaired, the difference between the carrying amount reflected in the financial statements and the estimated fair value is recognized as an expense in the period in which the impairment occurs. We define our reportable segments to be the same as our operating segments for purposes of reviewing impairment and the recoverability of goodwill and other intangible assets. |
Revenue recognition | Revenue recognition Revenue for each of the Company’s divisions is recognized when persuasive evidence of an arrangement exists, goods are delivered, sales price is determinable, and collection is reasonably assured. Revenue is recognized upon delivery by truck and railcar of feedstock to its re-refining customers and upon product leaving the Company’s terminal facilities and third party processing facility via barge. Revenue is also recognized as recovered scrap materials are sold. |
Leases | Leases The Company recognizes lease expense on a straight-line basis over the minimum lease terms which expire at various dates through 2032. These leases are for office and storage tank facilities and are classified as operating leases. For leases that contain predetermined, fixed escalations of the minimum rentals, the Company recognizes the rent expense on a straight-line basis and records the difference between the rent expense and the rental amount payable in liabilities. Leasehold improvements made at the inception of the lease are amortized over the shorter of the asset life or the initial lease terms as described above. Leasehold improvements made during the lease term are also amortized over the shorter of the assets life or the remaining lease term. For capital leases assumed as a result of an acquisition, the leased assets owned by the acquiree and financed through a capital lease are measured separately, at fair value, from the underlying lease to which they are subject. The present value of the lease is then calculated using the lease terms and implicit interest rate. For operating leases assumed as a result of an acquisition, the lease terms are measured, at acquisition date, to determine if the terms are favorable or unfavorable when compared to a comparable market lease with similar terms. |
Business Combinations | Business Combinations The Company accounts for business combinations using the acquisition method of accounting. The results of operations for the acquired entities are included in the Company’s consolidated financial results from their associated acquisition dates. The Company allocates the purchase price of acquisitions to the tangible assets, liabilities, and identifiable intangible assets acquired based on their estimated fair values. A portion of purchase price for our acquisitions is contingent upon the realization of certain operating results. The fair values assigned to identifiable intangible assets acquired and contingent consideration were determined by third party specialists engaged by the Company on a case by case basis. The excess of the purchase price over the fair value of the identified assets and liabilities has been recorded as goodwill. If the purchase price is under the fair value of the identified assets and liabilities, a bargain purchase is recognized and included in income from continuing operations. |
Fair value of financial instruments | Fair value of financial instruments Under the Financial Accounting Standards Board Accounting Standards Codification (“ FASB ASC ”), we are permitted to elect to measure financial instruments and certain other items at fair value, with the change in fair value recorded in earnings. We elected not to measure any eligible items using the fair value option. Consistent with the Fair Value Measurement Topic of the FASB ASC, we implemented guidelines relating to the disclosure of our methodology for periodic measurement of our assets and liabilities recorded at fair market value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include: • Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; • Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Our Level 1 assets primarily include our cash and cash equivalents. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. The carrying amounts of accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the immediate or short-term maturities of these financial instruments. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of revenue and expenses. Actual results could differ from these estimates. Any effects on the business, financial position or results of operations from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to estimates and assumptions include the carrying amount and useful lives of property and equipment and intangible assets, impairment assessments, share-based compensation expense, and valuation allowances for accounts receivable, inventories, and deferred tax assets. |
Impairment of long-lived assets | Impairment of long-lived assets The Company evaluates the carrying value and recoverability of its long-lived assets when circumstances warrant such evaluation by applying the provisions of the FASB ASC regarding long-lived assets. It requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with the FASB ASC Topic 740. The Company records a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and when temporary differences become deductible. The Company considers, among other available information, uncertainties surrounding the recoverability of deferred tax assets, scheduled reversals of deferred tax liabilities, projected future taxable income, and other matters in making this assessment. As part of the process of preparing its consolidated financial statements, the Company is required to estimate its income taxes in each of the jurisdictions in which it operates. This process requires the Company to estimate its actual current tax liability and to assess temporary differences resulting from differing book versus tax treatment of items, such as deferred revenue, compensation and benefits expense and depreciation. These temporary differences result in deferred tax assets and liabilities, which are included within the Company’s consolidated statements of financial condition. Significant management judgment is required in determining the Company’s provision for income taxes, its deferred tax assets and liabilities and any valuation allowance recorded against its net deferred tax assets. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized and, when necessary, valuation allowances are established. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences become deductible. Management considers the level of historical taxable income, scheduled reversals of deferred taxes, projected future taxable income and tax planning strategies that can be implemented by the Company in making this assessment. If actual results differ from these estimates or the Company adjusts these estimates in future periods, the Company may need to adjust its valuation allowance, which could materially impact the Company’s consolidated financial position and results of operations. Tax contingencies can involve complex issues and may require an extended period of time to resolve. Changes in the level of annual pre-tax income can affect the Company’s overall effective tax rate. Significant management judgment is required in determining the Company’s provision for income taxes, its deferred tax assets and liabilities and any valuation allowance recorded against its net deferred tax assets. Furthermore, the Company’s interpretation of complex tax laws may impact its recognition and measurement of current and deferred income taxes. |
Derivative liabilities | Derivative liabilities The Company, in accordance with ASC 815-40-25 and ASC 815-10-15 Derivatives and Hedging and ASC 480-10-25 Liabilities-Distinguishing from Equity, convertible preferred shares are accounted for net, outside of shareholders' equity and warrants are accounted for as liabilities at their fair value during periods where they can be net cash settled in case of a change in control transaction. The warrants are accounted for as a liability at their fair value at each reporting period. The value of the derivative warrant liability will be re-measured at each reporting period with changes in fair value recorded as earnings. To derive an estimate of the fair value of these warrants, a Dynamic Black Scholes model is utilized that computes the impact of a possible change in control transaction upon the exercise of the warrant shares. This process relies upon inputs such as shares outstanding, estimated stock prices, strike price and volatility assumptions to dynamically adjust the payoff of the warrants in the presence of the dilution effect. |
Preferred Stock Classification | Preferred Stock Classification A mandatorily redeemable financial instrument shall be classified as a liability unless the redemption is required to occur only upon the liquidation or termination of the reporting entity. A financial instrument issued in the form of shares is mandatorily redeemable if it embodies an unconditional obligation requiring the issuer to redeem the instrument by transferring its assets at a specified or determinable date (or dates) or upon an event certain to occur. A financial instrument that embodies a conditional obligation to redeem the instrument by transferring assets upon an event not certain to occur becomes mandatorily redeemable-and, therefore, becomes a liability-if that event occurs, the condition is resolved, or the event becomes certain to occur. The Series B preferred stock and Series B1 preferred stock requires the Company to redeem such preferred stock on the fifth anniversary of the issuance of the Series B Preferred stock if the redemption would not be subject to then existing restrictions under the Company's prior senior credit agreement. SEC reporting requirements provide that any possible redemption outside of the control of the Company requires the preferred stock to be classified outside of permanent equity. |
Stock based compensation | Stock based compensation The Company accounts for share-based expense and activity in accordance with FASB ASC Topic 718, which establishes accounting for equity instruments exchanged for services. Under this provision, share-based compensation costs are measured at the grant date, based on the calculated fair value of the award, and are recognized as an expense over both the employee and non-employee’s requisite service period, generally the vesting period of the equity grant. The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, expected option term, expected volatility of the stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the expected annual dividend yield. The Company believes that the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the stock options granted. |
Earnings per share | Earnings per share Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common shareholders by the weighted average number of common and common equivalent shares outstanding during the period. Common share equivalents included in the diluted computation represent shares issuable upon assumed exercise of stock options and warrants using the treasury stock and “ if converted ” method. For periods in which net losses are incurred, weighted average shares outstanding is the same for basic and diluted loss per share calculations, as the inclusion of common share equivalents would have an anti-dilutive effect. |
New Accounting Pronouncements | New Accounting Pronouncements (a) Application of New Accounting Standards On August 27, 2014, the FASB (the “ board ”) issued Accounting Standards Update (" ASU ") No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Before this new standard, there was minimal guidance in U.S. GAAP specific to going concern. Under the new standard, disclosures are required when conditions give rise to substantial doubt about a company’s ability to continue as a going concern within one year from the financial statement issuance date. The new standard applies to all companies and is effective for the annual period ending after December 15, 2016, and all annual and interim periods thereafter. The adoption of ASU 2014-15 in fiscal 2016 resulted in no impact to our consolidated financial statements. Effective January 3, 2016, the Company adopted the accounting guidance in Accounting Standards Update (“ ASU ”) No. 2015-16, " Business Combinations: Simplifying the Accounting for Measurement Period Adjustments. " This update simplifies the accounting for measurement-period adjustments in a business combination by requirement the acquirer to recognize adjustments to provisional amounts identified during the measurement period in the reporting period in which the adjustments are determined. The acquirer is also required to record in the reporting period in which the adjustments are determined the effect on earnings of changes in depreciation, amortization, and other items resulting from the change to the provisional amounts. The adoption of this ASU 2015-16 did not have an impact on our consolidated financial condition and results of operations. Effective January 1, 2017, the Company adopted the accounting guidance in Accounting Standards Update (“ ASU ”) No. 2015-17, " Balance Sheet Classification of Deferred Taxes. " This ASU requires that deferred tax assets and liabilities be classified as non-current in the statement of financial position. The adoption of ASU 2015-17 in fiscal 2016 resulted in no impact to our consolidated financial statements. See " Note 11. Income Taxes " for a discussion of our income taxes. Effective January 1, 2015, the Company adopted the accounting guidance in Accounting Standards Update (“ ASU ”) No. 2014-08, “ Presentation of Financial Statements and Property, Plant, and Equipment - Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ,” which amends the definition of a discontinued operation by raising the threshold for a disposal to qualify as discontinued operations. The ASU also requires entities to provide additional disclosures about discontinued operations as well as disposal transactions that do not meet the discontinued operations criteria. The Company is following this guidance. (b) New Accounting Requirements and Disclosures In February 2016, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2016-02, “Leases.” This update was issued to increase transparency and comparability amount organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations. In March 2016, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting.” This update addresses the simplification of accounting for employee share-based payment transactions as it pertains to income taxes, the classification of awards as equity or liabilities, accounting for forfeitures, statutory tax withholding requirements, and certain classifications on the statements of cash flows. The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations. In July 2015, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2015-11, “Simplifying the Measurement of Inventory.” This update requires the measurement of inventory at the lower of cost of net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonable predictable costs of completion, disposal and transportation. The Company is currently evaluating the effect that implementation of this update will have on its consolidated financial position and results of operations. In May 2014, the Financial Accounting Standards Board (“ FASB ”) issued ASU No. 2014-09, “ Revenue from Contracts with Customers .” The ASU will supersede most of the existing revenue recognition requirements in U.S. GAAP and will require entities to recognize revenue at an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The new standard also requires significantly expanded disclosures regarding the qualitative and quantitative information of an entity’s nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU No. 2015-14, which deferred the effective date by one year to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted, but not before the original effective date of reporting periods beginning after December 15, 2016. The Company is currently evaluating the impact the pronouncement will have on the consolidated financial statements and related disclosures. In January 2015, the FASB issued ASU No. 2015-01, “ Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items . ” This ASU eliminates from U.S. GAAP the concept of extraordinary items and the need for an entity to separately classify, present, and disclose extraordinary events and transactions, while retaining certain presentation and disclosure guidance for items that are unusual in nature or occur infrequently. The pronouncement is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period and may be applied retrospectively, with early application permitted. In April 2015, the FASB issued ASU No. 2015-03, “ Simplifying the Presentation of Debt Issuance Costs .” The accounting guidance requires that debt issuance costs related to a recognized debt liability be reported on the Consolidated Statements of Financial Condition as a direct deduction from the carrying amount of that debt liability. The pronouncement is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period with early application permitted for financial statements that have not been previously issued. In August 2015, the FASB issued ASU No. 2015-15, which provides additional guidance related to the presentation or subsequent measurement of debt issuance costs related to line-of-credit arrangements. An entity may present debt issuance costs as an asset and subsequently amortize the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings. |
CONCENTRATIONS, SIGNIFICANT C29
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Concentrations, Significant Customers, Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Concentrations | For the years ended December 31, 2016 and 2015 , the Company’s revenues and receivables were comprised of the following customer concentrations: 2016 2015 % of Revenues % of Receivables % of % of Customer 1 19% —% 24% 11% Customer 2 11% 10% 2% 2% Customer 3 9% 9% 15% 2% Customer 4 8% 4% 8% 16% Customer 5 5% 10% 1% —% |
Schedule of Segment Revenues | At December 31, 2016 and 2015 , and the years then ended, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment 2016 % of Revenue by Segment 2015 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 100 % — % — % 100 % — % — % Customer 2 100 % — % — % 100 % — % — % Customer 3 100 % — % — % 60 % 40 % — % Customer 4 — % 100 % — % — % 100 % — % Customer 5 — % — % 100 % — % — % 100 % The Company’s reportable segments include the Black Oil, Refining and Marketing and Recovery divisions. Segment information for the years ended December 31, 2016 and 2015 are as follows: YEAR ENDED DECEMBER 31, 2016 Black Oil Refining and Marketing Recovery Total Revenues $ 76,634,940 $ 13,154,777 $ 8,289,197 $ 98,078,914 Net loss from operations $ (8,849,055 ) $ (402,317 ) $ (861,142 ) $ (10,112,514 ) Total Assets $ 80,774,533 $ 1,573,395 $ 4,638,040 $ 86,985,968 YEAR ENDED DECEMBER 31, 2015 Black Oil Refining and Marketing Recovery Total Revenues $ 103,890,188 $ 31,154,066 $ 11,898,207 $ 146,942,461 Net loss from operations $ (15,957,969 ) $ 363,708 $ 1,501,220 $ (14,093,041 ) Total Assets $ 87,326,506 $ 1,845,669 $ 4,472,641 $ 93,644,816 |
Schedule of Operating Leases Rent Expense | Total rent expense for all operating leases for 2016 and 2015 is summarized as follows: 2016 2015 Office leases $ 875,320 $ 620,219 Plant Leases 4,052,250 3,996,000 Vehicle leases 365,877 326,476 $ 5,293,447 $ 4,942,695 |
Schedule of Future Minimum Operating Lease Commitments | Minimum future lease commitments as of December 31, 2016 , are summarized as follows: Year ending December 31, Office Facilities Vehicles Plant Leases Total 2017 $ 466,266 $ 231,084 $ 3,646,000 $ 4,343,350 2018 391,050 115,665 1,132,000 1,638,715 2019 384,500 57,956 — 442,456 2020 345,000 — — 345,000 2021 342,000 — — 342,000 Thereafter 3,275,000 — — 3,275,000 $ 5,203,816 $ 404,705 $ 4,778,000 $ 10,386,521 |
FIXED ASSETS, NET AND ASSET R30
FIXED ASSETS, NET AND ASSET RETIREMENT OBLIGATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment and Asset Retirement Obligations [Abstract] | |
Schedule of Fixed Assets | Fixed assets consist of the following: Useful Life (in years) December 31, 2016 December 31, 2015 Equipment 7-20 $ 37,260,920 $ 36,540,268 Furniture and fixtures 7 108,896 133,823 Leasehold improvements 15 2,303,156 2,300,207 Office equipment 5 713,095 591,619 Vehicles 5 6,702,093 6,422,531 Construction in progress 12,675,648 12,305,376 Land 2,553,000 2,553,000 Total fixed assets 62,316,808 60,846,824 Less accumulated depreciation (12,286,874 ) (7,818,217 ) Net fixed assets $ 50,029,934 $ 53,028,607 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table contains consideration paid in excess of the net assets of the companies acquired, allocated to the respective business segment as of December 31, 2015: Black Oil Refining and Marketing Recovery Total Balance as of December 31, 2014 $ 3,554,515 $ — $ 1,367,838 $ 4,922,353 Less: Impairment (3,554,515 ) — (1,367,838 ) (4,922,353 ) Balance as of December 31, 2015 $ — $ — $ — $ — |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Components of intangible assets (all subject to amortization) consist of the following items: December 31, 2016 December 31, 2015 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Net Customer relations 5-8 $ 1,011,000 $ 689,032 $ 321,968 $ 1,011,000 $ 581,321 $ 429,679 Vendor relations 10 6,495,049 2,210,166 4,284,883 6,495,049 1,560,661 4,934,388 H&H Oil Trademark/Trade name 6-16 1,219,000 337,276 881,724 1,219,000 264,639 954,361 TCEP Technology/Patent 15 13,287,000 3,523,243 9,763,757 13,287,000 2,637,443 10,649,557 Non-compete agreements 3 139,000 139,000 — 139,000 139,000 — $ 22,151,049 $ 6,898,717 $ 15,252,332 $ 22,151,049 $ 5,183,064 $ 16,967,985 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense is as follows: 2017 $ 1,698,372 2018 1,646,923 2019 1,646,922 2020 1,646,922 2021 1,646,922 Thereafter 6,966,271 $ 15,252,332 |
ACCOUNTS RECEIVABLE AND NOTES33
ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Receivables [Abstract] | |
Schedule of Accounts and Notes Receivable | Accounts receivable, net, consists of the following at December 31: 2016 2015 Accounts receivable trade $ 12,598,493 $ 8,280,749 Allowance for doubtful accounts (1,646,274 ) (1,965,335 ) Accounts receivable trade, net $ 10,952,219 $ 6,315,414 Notes receivable, net, consists of the following at December 31: 2016 2015 Notes receivable (collateralized by invoiced accounts receivable) $ — $ 5,346,452 Payments received and amounts written off — (3,654,790 ) Allowance for doubtful accounts — — Note receivable (collateralized by invoiced accounts receivable), net $ — $ 1,691,662 |
ASSETS HELD FOR SALE (Tables)
ASSETS HELD FOR SALE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Assets Held-for-sale | December 31, 2015 Accounts Receivable $ 1,691,662 Note Receivable - Current 8,308,000 Fixed Assets - Construction in Process 1,170,581 Total Assets held for sale at December 31, 2015 11,170,243 January 2016 sale of assets (11,170,243 ) Total Assets held for sale at December 31, 2016 $ — |
LINE OF CREDIT AND LONG-TERM 35
LINE OF CREDIT AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt Facilities | The Company's total line of credit and long term debt as of December 31, 2016 is as follows: Creditor Loan Type Origination Date Maturity Date Loan Amount Balance on December 31, 2016 Balance on December 31, 2015 MidCap Revolving Line of Credit Revolving Note March, 2015 March, 2017 $ 7,000,000 $ 2,726,039 $ 1,744,122 Goldman Sachs USA Term Loan- Restated Credit Agreement May, 2014 May 2, 2019 8,900,000 4,000,000 22,400,000 Fox Encore Note Promissory Note January 29, 2016 July 31, 2017 5,150,000 5,150,000 — Pacific Western Bank Capital Lease September, 2012 August, 2017 3,154,860 133,153 320,101 Texas Citizens Bank Term Note January, 2015 January, 2020 2,045,500 1,531,506 1,974,107 Various institutions Insurance premiums financed Various > 1 year 2,902,428 1,060,065 515,762 Total 14,600,763 26,954,092 Deferred Finance Costs, Net (244,178 ) (1,693,872 ) Total, Net of Deferred Finance Costs $ 29,152,788 $ 14,356,585 $ 25,260,220 |
Schedule of Maturities of Long-term Debt | Future maturities of notes payable are summarized as follows: Creditor 2017 2018 2019 2020 2021 Thereafter MidCap Revolving Line of Credit $ 2,726,039 $ — $ — $ — $ — $ — Goldman Sachs USA 3,200,000 800,000 — — — — Fox Encore Note 5,150,000 — — — — — Pacific Western Bank 133,153 — — — — — Texas Citizens Bank 468,225 495,013 523,333 44,935 — — Various institutions 1,060,065 — — — — — Totals 12,737,482 1,295,013 523,333 44,935 — — Deferred Finance Costs, Net (229,008 ) (7,585 ) (7,585 ) — — — Total, Net of Deferred Finance Costs $ 12,508,474 $ 1,287,428 $ 515,748 $ 44,935 $ — $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | Income tax expense (benefit) attributable to income from continuing operations differed from the amounts computed by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations as a result of the following for the years ended December 31, 2016 and 2015 : December 31, 2016 December 31, 2015 Statutory tax on book income $ (1,344,000 ) $ (7,656,000 ) Permanent differences 32,000 33,000 Net operating loss utilization — — Change in valuation allowance (9,306,753 ) 13,114,000 Other 10,501,107 (185,000 ) Income tax expense (benefit) $ (117,646 ) $ 5,306,000 |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax (benefit) expense for the years ended December 31, 2016 and 2015 are as follows: December 31, 2016 December 31, 2015 Current federal tax (expense)/benefit $ 117,646 $ — Deferred federal tax (expense)/benefit — (5,306,000 ) Total federal tax (expense)/benefit $ 117,646 $ (5,306,000 ) |
Schedule of Deferred Tax Assets and Liabilities | The cumulative tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2016 and 2015 are presented below: December 31, 2016 December 31, 2015 Deferred tax assets: Alternative minimum tax credits $ — $ — Accrued compensation 464,000 393,000 Intangible Assets 1,990,000 232,000 Bad debt reserve 560,000 668,000 Contribution carryover 67,000 51,000 Net operating loss carry forwards 15,009,000 24,150,000 Less valuation allowance (14,814,000 ) (24,120,753 ) Total deferred tax assets $ 3,276,000 $ 1,373,247 December 31, 2016 December 31, 2015 Deferred tax liabilities: Gain on purchase $ — $ (108,247 ) Contingent liability — — Accelerated tax depreciation (3,276,000 ) (1,265,000 ) Impairment Expense — — Other - income from partnership — — Net deferred tax liabilities $ (3,276,000 ) $ (1,373,247 ) Net Deferred tax assets and liabilities $ — $ — |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | Stock option activity for the years ended December 31, 2016 and 2015 are summarized as follows: OPTIONS ISSUED FOR COMPENSATION: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Grant Date Fair Value Outstanding at December 31, 2014 2,648,583 $ 7.07 5.81 $ 1,654,641 Options granted 525,000 2.23 9.71 1,083,411 Options exercised (25,000 ) (0.45 ) 0.00 (9,000 ) Options cancelled/forfeited/expired (275,001 ) (20.22 ) 0.00 (143,711 ) Outstanding at December 31, 2015 2,873,582 $ 4.99 5.94 $ 2,585,341 Vested at December 31, 2015 1,881,395 $ 5.70 4.55 $ 372,367 Exercisable at December 31, 2015 1,881,395 $ 5.70 4.55 $ 372,367 Outstanding at December 31, 2015 2,873,582 $ 4.99 5.94 $ 2,585,341 Options granted 570,000 1.38 9.72 622,115 Options exercised (100,000 ) (0.50 ) 0.00 (27,753 ) Options cancelled/forfeited/expired (136,666 ) (8.64 ) 0.00 (213,675 ) Outstanding at December 31, 2016 3,206,916 $ 4.33 5.80 $ 2,966,028 Vested at December 31, 2016 2,044,104 $ 4.05 4.29 $ 1,295,727 Exercisable at December 31, 2016 2,044,104 $ 4.05 4.29 $ 1,295,727 |
Schedule of Stock Warrant Activity | A summary of the Company’s stock warrant activity and related information for the years ended December 31, 2016 and 2015 is as follows: WARRANTS ISSUED FOR COMPENSATION AND OTHER THAN SERIES B AND B1 PREFERRED STOCK: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Grant Date Fair Value Outstanding at December 31, 2014 219,868 $ 3.01 5.00 $ 140,249 Warrants granted — $ — — $ — Warrants exercised — — — — Warrants canceled/forfeited/expired — — — — Warrants at December 31, 2015 219,868 $ 3.01 4.00 $ 140,249 Vested at December 31, 2015 219,868 $ 3.01 4.00 $ 140,149 Exercisable at December 31, 2015 219,868 $ 3.01 4.00 $ 140,149 Outstanding at December 31, 2015 219,868 $ 3.01 4.00 $ 140,249 Warrants granted — $ — — $ — Warrants exercised — — — — Warrants canceled/forfeited/expired — — — — Warrants at December 31, 2016 219,868 $ 3.01 3.00 $ 140,249 Vested at December 31, 2016 219,868 $ 3.01 3.00 $ 140,149 Exercisable at December 31, 2016 219,868 $ 3.01 3.00 $ 140,149 |
Schedule of Assumptions Used in Option and Warrant Valuations | The following table summarizes the assumptions used in assessing the above described option and warrant valuations: YEAR ENDED DECEMBER 31, 2016 YEAR ENDED DECEMBER 31, 2015 Expected volatility 78-79% 29-69% Expected dividends —% —% Expected term (in years) 0 10 Risk-free rate .91-1.57% .96-1.06% |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Basic and Diluted Earnings Per Share | The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share for the years ended December 31, 2016 and 2015 : 2016 2015 Basic Earnings per Share Numerator: Net income (loss) available to common shareholders $ (15,537,395 ) $ (24,102,700 ) Denominator: Weighted-average common shares outstanding 30,520,820 28,181,096 Basic earnings per share $ (0.51 ) $ (0.86 ) Diluted Earnings per Share Numerator: Net income (loss) available to common shareholders $ (15,537,395 ) $ (24,102,700 ) Denominator: Weighted-average shares outstanding 30,520,820 28,181,096 Effect of dilutive securities Stock options and warrants — — Preferred stock — — Diluted weighted-average shares outstanding 30,520,820 28,181,096 Diluted earnings (loss) per share $ (0.51 ) $ (0.86 ) |
PREFERRED STOCK AND TEMPORARY39
PREFERRED STOCK AND TEMPORARY EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Class of Stock [Line Items] | |
Schedule of Liabilities with Unobservable Inputs | The changes in liabilities measured using significant unobservable inputs for the period ended December 31, 2016 were as follows: Level Three Roll-Forward Item Level 3 Balance at December 31, 2014 $ — Warrants issued June 24, 2015 7,028,067 Change in valuation of warrants (5,479,463 ) Balance at December 31, 2015 1,548,604 May 2016 Series B1 Preferred Warrants (described below) 2,867,264 Change in valuation of warrants (49,876 ) Balance at December 31, 2016 $ 4,365,992 |
Series B Preferred Stock | |
Class of Stock [Line Items] | |
Summary of Temporary Equity | The following table represents the carrying amount of the Series B Preferred Stock, classified as Temporary Equity on the Balance Sheet, at inception and as of December 31, 2016 and December 31, 2015 : Temporary Equity: At Inception June 24, 2015 Face amount of Series B Preferred $ 25,000,000 Less: warrant value 7,028,067 Less: beneficial conversion feature 5,737,796 Less: issuance costs and fees 1,442,462 Carrying amount at inception $ 10,791,675 December 31, 2016 December 31, 2015 Face amount of Series B Preferred $ 25,000,000 $ 25,000,000 Less: repurchase of 3,575,070 shares 11,189,838 — Less: conversion of 1,739,272 shares to common stock 5,386,341 — Plus: dividend in kind 1,164,701 — Less: un-accreted discount 6,256,604 13,044,793 Carrying amount $ 3,331,918 $ 11,955,207 The BCF in June 24, 2015 was determined by calculating the intrinsic value of the conversion feature as follows: Face amount of Series B Preferred Stock $ 25,000,000 Less: allocated value of Warrants 7,028,067 Allocated value of Series B Preferred Stock $ 17,971,933 Shares of Common stock to be converted 8,064,534 Effective conversion price $ 2.23 Market price $ 2.94 Intrinsic value per share $ 0.7115 Intrinsic value of beneficial conversion feature $ 5,737,796 |
Series B-1 Preferred Stock | |
Class of Stock [Line Items] | |
Summary of Temporary Equity | The following table represents the carrying amount of the Series B1 Preferred Stock, classified as Temporary Equity on the Balance Sheet, at inception (May 13, 2016) and as of December 31, 2016 : Temporary Equity: At Inception May 13, 2016 Face amount of Series B1 Preferred $ 19,349,745 Less: May 2016 Warrant value 2,867,264 Less: May 2016 Beneficial Conversion Feature 2,371,106 Less: May 2016 issuance costs and fees 607,880 Carrying amount at inception $ 13,503,495 December 31, 2016 Face amount of Series B1 Preferred $ 19,349,745 Less: conversion of 403,217 shares to common 628,866 Plus: dividends-in-kind 435,369 Less: unaccreted discount 5,400,064 Carrying amount $ 13,756,184 The May 2016 BCF was determined by calculating the intrinsic value of the conversion feature as follows: May 13, 2016 Face amount of Series B1 Preferred Stock $ 19,349,756 Less: allocated value of May 2016 Warrants 2,867,264 Allocated value of Series B1 Preferred Stock $ 16,482,492 Shares of Common stock to be converted 12,403,683 Effective conversion price $ 1.33 Market price $ 1.52 Intrinsic value per share $ 0.19 Intrinsic value of May 2016 beneficial conversion feature $ 2,371,106 |
DISPOSITION (Tables)
DISPOSITION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Gain on Sale of Assets | As shown in the table below, a gain on sale of approximately $9.7 million was recorded associated with the sale. The gain on sale is included in the accompanying consolidated statement of operations. Sales price (fair value) $ 35,000,000 Release of lien on certain equipment at the Bango Plant (3,100,000 ) Transaction Fees (2,111,886 ) Net Proceeds 29,788,114 Book Value at January 29, 2016 (date transaction closed) 20,039,553 Gain on Sale $ 9,748,561 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | At December 31, 2016 and 2015 , and the years then ended, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment 2016 % of Revenue by Segment 2015 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 100 % — % — % 100 % — % — % Customer 2 100 % — % — % 100 % — % — % Customer 3 100 % — % — % 60 % 40 % — % Customer 4 — % 100 % — % — % 100 % — % Customer 5 — % — % 100 % — % — % 100 % The Company’s reportable segments include the Black Oil, Refining and Marketing and Recovery divisions. Segment information for the years ended December 31, 2016 and 2015 are as follows: YEAR ENDED DECEMBER 31, 2016 Black Oil Refining and Marketing Recovery Total Revenues $ 76,634,940 $ 13,154,777 $ 8,289,197 $ 98,078,914 Net loss from operations $ (8,849,055 ) $ (402,317 ) $ (861,142 ) $ (10,112,514 ) Total Assets $ 80,774,533 $ 1,573,395 $ 4,638,040 $ 86,985,968 YEAR ENDED DECEMBER 31, 2015 Black Oil Refining and Marketing Recovery Total Revenues $ 103,890,188 $ 31,154,066 $ 11,898,207 $ 146,942,461 Net loss from operations $ (15,957,969 ) $ 363,708 $ 1,501,220 $ (14,093,041 ) Total Assets $ 87,326,506 $ 1,845,669 $ 4,472,641 $ 93,644,816 |
BASIS OF PRESENTATION AND NAT42
BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Details) | 12 Months Ended | |
Dec. 31, 2016USD ($)statesegmentsupplier | Feb. 01, 2017USD ($) | |
Business Acquisition [Line Items] | ||
Number of states in which Company provides service | state | 13 | |
Number of operating segments | segment | 3 | |
Working capital deficit | $ 1,268,192 | |
Black Oil | ||
Business Acquisition [Line Items] | ||
Number of suppliers | supplier | 50 | |
Subsequent event | Line of Credit | ||
Business Acquisition [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 30,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN43
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | ||
Dec. 31, 2016USD ($)a | Dec. 31, 2015USD ($) | Mar. 31, 2015USD ($) | |
Accounting Policies [Abstract] | |||
Liquid storage facility, number of acres | a | 19 | ||
Allowance for doubtful accounts | $ 1,646,274 | $ 1,965,335 | |
Impairment of long-lived assets | 0 | 0 | |
Valuation allowance | (14,814,000) | (24,120,753) | $ (5,306,000) |
Deferred tax assets | 11,702,000 | ||
Deferred tax liabilities | 3,276,000 | 1,373,247 | $ 6,436,000 |
Income tax (expense) benefit | $ (117,646) | $ 5,306,000 |
RELATED PARTIES (Details)
RELATED PARTIES (Details) | 12 Months Ended |
Dec. 31, 2016USD ($)director | |
Related Party Transaction [Line Items] | |
Related party expenses for rent, equipment rental and transportation | $ | $ 113,576 |
Minimum | |
Related Party Transaction [Line Items] | |
Number of Independent Directors Included on Related Party Committee | director | 2 |
CONCENTRATIONS, SIGNIFICANT C45
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Jun. 15, 2016 | Dec. 31, 2016 |
Long-term Purchase Commitment [Line Items] | ||
Marketing, sales, and logistical duties agreement, term of contract | 5 years | |
Maximum | ||
Long-term Purchase Commitment [Line Items] | ||
FDIC insurance amount | $ 250,000 | |
Whole Environmental, Inc. | ||
Long-term Purchase Commitment [Line Items] | ||
Damages sought in litigation | 864,000 | |
E-Source Holdings, LLC | ||
Long-term Purchase Commitment [Line Items] | ||
Damages sought in litigation | $ 1,000,000 |
CONCENTRATIONS, SIGNIFICANT C46
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES (Details) - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 19.00% | 24.00% |
Revenue | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 11.00% | 2.00% |
Revenue | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 9.00% | 15.00% |
Revenue | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 8.00% | 8.00% |
Revenue | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 5.00% | 1.00% |
Receivables | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 11.00% |
Receivables | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 10.00% | 2.00% |
Receivables | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 9.00% | 2.00% |
Receivables | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 4.00% | 16.00% |
Receivables | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 10.00% | 0.00% |
Black Oil | Revenue | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 100.00% | 100.00% |
Black Oil | Revenue | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 100.00% | 100.00% |
Black Oil | Revenue | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 100.00% | 60.00% |
Black Oil | Revenue | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 0.00% |
Black Oil | Revenue | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 0.00% |
Refining | Revenue | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 0.00% |
Refining | Revenue | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 0.00% |
Refining | Revenue | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 40.00% |
Refining | Revenue | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 100.00% | 100.00% |
Refining | Revenue | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 0.00% |
Recovery | Revenue | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 0.00% |
Recovery | Revenue | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 0.00% |
Recovery | Revenue | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 0.00% |
Recovery | Revenue | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 0.00% | 0.00% |
Recovery | Revenue | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration, percentage | 100.00% | 100.00% |
CONCENTRATIONS, SIGNIFICANT C47
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||
Rent expense | $ 5,293,447 | $ 4,942,695 |
Office leases | ||
Related Party Transaction [Line Items] | ||
Rent expense | 875,320 | 620,219 |
Plant Leases | ||
Related Party Transaction [Line Items] | ||
Rent expense | 4,052,250 | 3,996,000 |
Vehicle leases | ||
Related Party Transaction [Line Items] | ||
Rent expense | $ 365,877 | $ 326,476 |
CONCENTRATIONS, SIGNIFICANT C48
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES (Details 2) | Dec. 31, 2016USD ($) |
Long-term Purchase Commitment [Line Items] | |
2,017 | $ 4,343,350 |
2,018 | 1,638,715 |
2,019 | 442,456 |
2,020 | 345,000 |
2,021 | 342,000 |
Thereafter | 3,275,000 |
Total minimum future lease commitments | 10,386,521 |
Office Facilities | |
Long-term Purchase Commitment [Line Items] | |
2,017 | 466,266 |
2,018 | 391,050 |
2,019 | 384,500 |
2,020 | 345,000 |
2,021 | 342,000 |
Thereafter | 3,275,000 |
Total minimum future lease commitments | 5,203,816 |
Vehicles | |
Long-term Purchase Commitment [Line Items] | |
2,017 | 231,084 |
2,018 | 115,665 |
2,019 | 57,956 |
2,020 | 0 |
Total minimum future lease commitments | 404,705 |
Plant Leases | |
Long-term Purchase Commitment [Line Items] | |
2,017 | 3,646,000 |
2,018 | 1,132,000 |
2,019 | 0 |
2,020 | 0 |
Total minimum future lease commitments | $ 4,778,000 |
FIXED ASSETS, NET AND ASSET R49
FIXED ASSETS, NET AND ASSET RETIREMENT OBLIGATIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment and Asset Retirement Obligations [Abstract] | ||
Depreciation expense | $ 4,502,597 | $ 4,106,526 |
FIXED ASSETS, NET AND ASSET R50
FIXED ASSETS, NET AND ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | ||
Fixed assets, at cost | $ 62,316,808 | $ 60,846,824 |
Less accumulated depreciation | (12,286,874) | (7,818,217) |
Net fixed assets | 50,029,934 | 53,028,607 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, at cost | $ 37,260,920 | 36,540,268 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 7 years | |
Fixed assets, at cost | $ 108,896 | 133,823 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 15 years | |
Fixed assets, at cost | $ 2,303,156 | 2,300,207 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Fixed assets, at cost | $ 713,095 | 591,619 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Fixed assets, at cost | $ 6,702,093 | 6,422,531 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, at cost | 12,675,648 | 12,305,376 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, at cost | $ 2,553,000 | $ 2,553,000 |
Minimum | Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 7 years | |
Maximum | Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 20 years |
GOODWILL (Details Narrative)
GOODWILL (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Goodwill [Line Items] | |||
Number of operating segments | segment | 3 | ||
Goodwill impairment | $ 0 | $ 4,922,353 | |
Goodwill | $ 0 | 0 | $ 4,922,353 |
Operating Segments | Recovery | |||
Goodwill [Line Items] | |||
Goodwill impairment | 1,367,838 | ||
Goodwill | 0 | 1,367,838 | |
Operating Segments | Black Oil | |||
Goodwill [Line Items] | |||
Goodwill impairment | 3,554,515 | ||
Goodwill | 0 | 3,554,515 | |
Operating Segments | Refining and Marketing | |||
Goodwill [Line Items] | |||
Goodwill impairment | 0 | ||
Goodwill | $ 0 | $ 0 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $ 0 | $ 4,922,353 |
Less: Impairment | 0 | (4,922,353) |
Goodwill, end of period | 0 | 0 |
Operating Segments | Black Oil | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 0 | 3,554,515 |
Less: Impairment | (3,554,515) | |
Goodwill, end of period | 0 | |
Operating Segments | Refining and Marketing | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | 0 | 0 |
Less: Impairment | 0 | |
Goodwill, end of period | 0 | |
Operating Segments | Recovery | ||
Goodwill [Roll Forward] | ||
Goodwill, beginning of period | $ 0 | 1,367,838 |
Less: Impairment | (1,367,838) | |
Goodwill, end of period | $ 0 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 1,715,653 | $ 2,032,051 |
E-Source Holdings, LLC | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense | $ 277,450 |
INTANGIBLE ASSETS, NET (Detai54
INTANGIBLE ASSETS, NET (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 22,151,049 | $ 22,151,049 |
Accumulated Amortization | 6,898,717 | 5,183,064 |
Net Carrying Amount | 15,252,332 | 16,967,985 |
Customer relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,011,000 | 1,011,000 |
Accumulated Amortization | 689,032 | 581,321 |
Net Carrying Amount | $ 321,968 | 429,679 |
Vendor relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 10 years | |
Gross Carrying Amount | $ 6,495,049 | 6,495,049 |
Accumulated Amortization | 2,210,166 | 1,560,661 |
Net Carrying Amount | 4,284,883 | 4,934,388 |
H&H Oil Trademark/Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,219,000 | 1,219,000 |
Accumulated Amortization | 337,276 | 264,639 |
Net Carrying Amount | $ 881,724 | 954,361 |
TCEP Technology/Patent | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 15 years | |
Gross Carrying Amount | $ 13,287,000 | 13,287,000 |
Accumulated Amortization | 3,523,243 | 2,637,443 |
Net Carrying Amount | $ 9,763,757 | 10,649,557 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 3 years | |
Gross Carrying Amount | $ 139,000 | 139,000 |
Accumulated Amortization | 139,000 | 139,000 |
Net Carrying Amount | $ 0 | $ 0 |
Minimum | Customer relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 5 years | |
Minimum | H&H Oil Trademark/Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 6 years | |
Maximum | Customer relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 8 years | |
Maximum | H&H Oil Trademark/Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 16 years |
INTANGIBLE ASSETS, NET (Detai55
INTANGIBLE ASSETS, NET (Details 1) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Estimated future amortization expense | ||
2,017 | $ 1,698,372 | |
2,018 | 1,646,923 | |
2,019 | 1,646,922 | |
2,020 | 1,646,922 | |
2,021 | 1,646,922 | |
Thereafter | 6,966,271 | |
Net Carrying Amount | $ 15,252,332 | $ 16,967,985 |
ACCOUNTS RECEIVABLE AND NOTES56
ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE (Details Narrative) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Omega Holdings, LLC | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Current portion of notes receivable, net | $ 0 | $ 1,691,662 | |
Note receivable | 8,308,000 | $ 8,308,000 | |
Omega Holdings, LLC | Non-Interest bearing notes receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Current portion of notes receivable, net | 1,691,662 | ||
Omega Holdings, LLC | Notes receivable | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Financing receivable, stated interest rate | 9.50% | ||
Assets held-for-sale | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts receivable | 1,691,662 | ||
Notes receivable | $ 8,308,000 |
ACCOUNTS RECEIVABLE AND NOTES57
ACCOUNTS RECEIVABLE AND NOTES RECEIVABLE (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Receivable, Net, Current [Abstract] | ||
Accounts receivable trade | $ 12,598,493 | $ 8,280,749 |
Allowance for doubtful accounts | (1,646,274) | (1,965,335) |
Accounts receivable trade, net | 10,952,219 | 6,315,414 |
Omega Holdings, LLC | ||
Notes, Loans and Financing Receivable, Net, Current [Abstract] | ||
Notes receivable (collateralized by invoiced accounts receivable) | 0 | 5,346,452 |
Payments received and amounts written off | 0 | (3,654,790) |
Allowance for doubtful accounts | 0 | 0 |
Note receivable (collateralized by invoiced accounts receivable), net | $ 0 | $ 1,691,662 |
ASSETS HELD FOR SALE (Details)
ASSETS HELD FOR SALE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total Assets held for sale at December 31, 2015 | $ 0 | $ 11,170,243 |
Total Assets held for sale at December 31, 2016 | 0 | |
Assets held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts Receivable | 1,691,662 | |
Note Receivable - Current | 8,308,000 | |
Fixed Assets - Construction in Process | 1,170,581 | |
Total Assets held for sale at December 31, 2015 | 0 | $ 11,170,243 |
January 2016 sale of assets | (11,170,243) | |
Total Assets held for sale at December 31, 2016 | $ 0 |
LINE OF CREDIT AND LONG-TERM 59
LINE OF CREDIT AND LONG-TERM DEBT (Details Narrative) | May 13, 2016USD ($) | May 09, 2016 | Jan. 29, 2016USD ($)extension | Jan. 28, 2016USD ($) | Mar. 27, 2015USD ($) | May 02, 2014USD ($)lease | Dec. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Nov. 09, 2015USD ($) |
Line of Credit Facility [Line Items] | ||||||||||
Interest Expense, Debt | $ 1,700,000 | |||||||||
Deferred financing costs write off | 1,390,727 | $ 0 | ||||||||
Term loan, face | $ 29,152,788 | 29,152,788 | ||||||||
Interest expense | 3,094,956 | 3,580,726 | ||||||||
Outstanding debt | 14,356,585 | 14,356,585 | 25,260,220 | |||||||
Long-term Debt, Gross | 14,600,763 | 14,600,763 | 26,954,092 | |||||||
Note payable maturities, 2017 | 12,737,482 | 12,737,482 | ||||||||
Note payable Maturities, 2018 | 1,295,013 | 1,295,013 | ||||||||
Term loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Covenant, change in control, threshold ownership by largest stockholder (percent) | 20.00% | |||||||||
Repayments of debt | $ 16,100,000 | |||||||||
Term loan | Credit Agreement 2014 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term loan, face | $ 40,000,000 | |||||||||
Term loan | Restated Credit Agreement | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Principal payments | $ 800,000 | |||||||||
Repayments of debt | 16,000,000 | |||||||||
Additional cash proceeds payable per agreement threshold | $ 500,000 | |||||||||
Period for synergies to be achieved | 90 days | |||||||||
Minimum liquidity | $ 2,000,000 | |||||||||
Term loan | Midcap First Amendment [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Long-term Debt, Gross | 2,726,039 | $ 2,726,039 | ||||||||
Line of Credit Facility, Maximum Borrowing Capacity, Per Customer | $ 100,000 | |||||||||
Term loan | Amendment Number 1 to Amended Credit Agreement | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Covenant, change in control, threshold ownership by largest stockholder (percent) | 10.00% | |||||||||
Repayments of debt | $ 800,000 | $ 800,000 | ||||||||
Term loan | Maximum | Credit Agreement 2014 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 4.50% | |||||||||
Term loan | Minimum | MidCap Loan Agreement [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt Instrument, Expected Amount | $ 7,000,000 | |||||||||
Debt Instrument, Expected Amount, Percentage of Accounts Receivable | 85.00% | |||||||||
Debt Instrument, Additional Expected Amount | $ 3,000,000 | |||||||||
Term loan | Bank of America London Interbank Offered Rate (LIBOR) | Maximum | Credit Agreement 2014 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Variable rate basis, basis spread | 1.00% | |||||||||
Term loan | ICE Benchmark Administration Limited | Maximum | Credit Agreement 2014 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Basis spread on variable rate, numerator component | 1.50% | |||||||||
Notes payable | Federal funds rate | Maximum | Credit Agreement 2014 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Variable rate basis, basis spread | 0.50% | |||||||||
Goldman Sachs, USA | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 11.00% | 11.00% | ||||||||
Note payable maturities, 2017 | $ 3,200,000 | $ 3,200,000 | ||||||||
Note payable Maturities, 2018 | 800,000 | 800,000 | ||||||||
Goldman Sachs, USA | Term loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term loan, face | 8,900,000 | 8,900,000 | ||||||||
Outstanding debt | 4,000,000 | 4,000,000 | 22,400,000 | |||||||
Long-term Debt, Gross | 4,000,000 | 4,000,000 | ||||||||
Goldman Sachs, USA | Term loan | Restated Credit Agreement | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Deferred financing costs write off | 1,300,000 | |||||||||
Line of credit facility, maximum borrowing capacity | 8,900,000 | |||||||||
Line of credit, outstanding | 6,400,000 | |||||||||
Remaining borrowing capacity | 2,500,000 | |||||||||
Various institutions | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Note payable maturities, 2017 | 1,060,065 | 1,060,065 | ||||||||
Note payable Maturities, 2018 | $ 0 | $ 0 | ||||||||
Various institutions | Notes payable | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate | 5.50% | 5.50% | ||||||||
Outstanding debt | $ 1,531,506 | $ 1,531,506 | ||||||||
Various institutions | Insurance premiums financed | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term loan, face | 2,902,428 | 2,902,428 | ||||||||
Debt, outstanding | 1,060,065 | $ 1,060,065 | 515,762 | |||||||
Stated interest rate, minimum | 4.00% | |||||||||
Stated interest rate, maximum | 4.52% | |||||||||
Long-term Debt, Gross | 1,060,065 | $ 1,060,065 | 515,762 | |||||||
Pacific Western Bank | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Note payable maturities, 2017 | 133,153 | 133,153 | ||||||||
Note payable Maturities, 2018 | 0 | 0 | ||||||||
Pacific Western Bank | Capital lease obligations | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term loan, face | 3,154,860 | 3,154,860 | ||||||||
Debt, outstanding | 133,153 | 133,153 | ||||||||
Outstanding debt | 133,153 | 133,153 | 320,101 | |||||||
Fox Encore [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Note payable maturities, 2017 | 5,150,000 | 5,150,000 | ||||||||
Note payable Maturities, 2018 | 0 | 0 | ||||||||
Fox Encore [Member] | Term loan | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest Expense, Debt | 100,000 | |||||||||
Term loan, face | 5,150,000 | 5,150,000 | ||||||||
Long-term Debt, Gross | 5,150,000 | 5,150,000 | $ 0 | |||||||
Omega Refining | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Number of capital leases assumed | lease | 2 | |||||||||
Capital lease obligations | $ 3,154,860 | |||||||||
Raw Materials and Finished Goods [Member] | Term loan | Minimum | MidCap Loan Agreement [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Debt Instrument, Additional Expected Amount, Percentage of Inventory | 50.00% | |||||||||
Vertex OH | Other notes payable | Fox Note | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Term loan, face | $ 5,150,000 | |||||||||
Interest rate | 10.00% | |||||||||
Long-term Debt, Gross | $ 5,150,000 | $ 5,150,000 | ||||||||
Interest rate in the event of default | 15.00% | |||||||||
Number of extension options (extension) | extension | 3 | |||||||||
Length of extension options | 6 months | |||||||||
Extension fee percentage | 3.00% | |||||||||
Prepayment terms, decrease in amount to be repaid | $ 150,000 |
LINE OF CREDIT AND LONG-TERM 60
LINE OF CREDIT AND LONG-TERM DEBT (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Line of Credit Facility [Line Items] | ||
Loan Amount | $ 29,152,788 | |
Long-term Debt, Gross | 14,600,763 | $ 26,954,092 |
Deferred Finance Costs, Net | (244,178) | (1,693,872) |
Total Outstanding Debt Facilities | 14,356,585 | 25,260,220 |
MidCap | Revolving line of credit | ||
Line of Credit Facility [Line Items] | ||
Loan Amount | 7,000,000 | |
Total Outstanding Debt Facilities | 2,726,039 | 1,744,122 |
Goldman Sachs, USA | Term loan | ||
Line of Credit Facility [Line Items] | ||
Loan Amount | 8,900,000 | |
Long-term Debt, Gross | 4,000,000 | |
Total Outstanding Debt Facilities | 4,000,000 | 22,400,000 |
Fox Encore [Member] | Term loan | ||
Line of Credit Facility [Line Items] | ||
Loan Amount | 5,150,000 | |
Long-term Debt, Gross | 5,150,000 | 0 |
Pacific Western Bank | Capital lease obligations | ||
Line of Credit Facility [Line Items] | ||
Loan Amount | 3,154,860 | |
Total Outstanding Debt Facilities | 133,153 | 320,101 |
Texas Citizens Bank | Notes payable | ||
Line of Credit Facility [Line Items] | ||
Loan Amount | 2,045,500 | |
Total Outstanding Debt Facilities | 1,531,506 | 1,974,107 |
Various institutions | Notes payable | ||
Line of Credit Facility [Line Items] | ||
Total Outstanding Debt Facilities | 1,531,506 | |
Various institutions | Insurance premiums financed | ||
Line of Credit Facility [Line Items] | ||
Loan Amount | 2,902,428 | |
Long-term Debt, Gross | $ 1,060,065 | $ 515,762 |
LINE OF CREDIT AND LONG-TERM 61
LINE OF CREDIT AND LONG-TERM DEBT (Details 2) | Dec. 31, 2016USD ($) |
Debt Instrument [Line Items] | |
Note payable maturities, 2017 | $ 12,737,482 |
Deferred Finance Costs, Net, 2017 | (229,008) |
Total, net of Deferred Finance Costs, 2017 | 12,508,474 |
Note payable Maturities, 2018 | 1,295,013 |
Deferred Finance Costs, Net, 2018 | (7,585) |
Total, net of Deferred Finance Costs, 2018 | 1,287,428 |
Note payable maturities, 2019 | 523,333 |
Deferred Finance Costs, Net, 2019 | (7,585) |
Total, net of Deferred Finance Costs, 2019 | 515,748 |
Note payable maturities, 2020 | 44,935 |
Deferred Finance Costs, Net, 2020 | 0 |
Total, net of Deferred Finance Costs, 2020 | 44,935 |
Note payable maturities, 2021 | 0 |
Deferred Finance Costs, Net, 2021 | 0 |
Total, net of Deferred Finance Costs, 2021 | 0 |
Note payable maturities, Thereafter | 0 |
Deferred Finance Costs, Net, Thereafter | 0 |
Total, net of Deferred Finance Costs, Thereafter | 0 |
MidCap | |
Debt Instrument [Line Items] | |
Note payable maturities, 2017 | 2,726,039 |
Note payable Maturities, 2018 | 0 |
Note payable maturities, 2019 | 0 |
Note payable maturities, 2020 | 0 |
Note payable maturities, 2021 | 0 |
Note payable maturities, Thereafter | 0 |
Goldman Sachs, USA | |
Debt Instrument [Line Items] | |
Note payable maturities, 2017 | 3,200,000 |
Note payable Maturities, 2018 | 800,000 |
Note payable maturities, 2019 | 0 |
Note payable maturities, 2020 | 0 |
Note payable maturities, 2021 | 0 |
Note payable maturities, Thereafter | 0 |
Fox Encore [Member] | |
Debt Instrument [Line Items] | |
Note payable maturities, 2017 | 5,150,000 |
Note payable Maturities, 2018 | 0 |
Note payable maturities, 2019 | 0 |
Note payable maturities, 2020 | 0 |
Note payable maturities, 2021 | 0 |
Note payable maturities, Thereafter | 0 |
Pacific Western Bank | |
Debt Instrument [Line Items] | |
Note payable maturities, 2017 | 133,153 |
Note payable Maturities, 2018 | 0 |
Note payable maturities, 2019 | 0 |
Note payable maturities, 2020 | 0 |
Note payable maturities, 2021 | 0 |
Note payable maturities, Thereafter | 0 |
Texas Citizens Bank | |
Debt Instrument [Line Items] | |
Note payable maturities, 2017 | 468,225 |
Note payable Maturities, 2018 | 495,013 |
Note payable maturities, 2019 | 523,333 |
Note payable maturities, 2020 | 44,935 |
Note payable maturities, 2021 | 0 |
Note payable maturities, Thereafter | 0 |
Various institutions | |
Debt Instrument [Line Items] | |
Note payable maturities, 2017 | 1,060,065 |
Note payable Maturities, 2018 | 0 |
Note payable maturities, 2019 | 0 |
Note payable maturities, 2020 | 0 |
Note payable maturities, 2021 | 0 |
Note payable maturities, Thereafter | $ 0 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | |||
Statutory rate | 34.00% | 34.00% | |
Valuation allowance | $ 14,814,000 | $ 24,120,753 | $ 5,306,000 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
NOL carry-forward | $ 44,100,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Statutory tax on book income | $ (1,344,000) | $ (7,656,000) |
Permanent differences | 32,000 | 33,000 |
Net operating loss utilization | 0 | 0 |
Change in valuation allowance | (9,306,753) | 13,114,000 |
Other | 10,501,107 | (185,000) |
Income tax expense (benefit) | $ (117,646) | $ 5,306,000 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Current federal tax (expense)/benefit | $ 117,646 | $ 0 |
Deferred federal tax (expense)/benefit | 0 | (5,306,000) |
Total federal tax (expense)/benefit | $ 117,646 | $ (5,306,000) |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 |
Deferred tax assets: | |||
Alternative minimum tax credits | $ 0 | $ 0 | |
Accrued compensation | 464,000 | 393,000 | |
Intangible Assets | 1,990,000 | 232,000 | |
Bad debt reserve | 560,000 | 668,000 | |
Contribution carryover | 67,000 | 51,000 | |
Net operating loss carry forwards | 15,009,000 | 24,150,000 | |
Less valuation allowance | (14,814,000) | (24,120,753) | $ (5,306,000) |
Total deferred tax assets | 3,276,000 | 1,373,247 | |
Deferred tax liabilities: | |||
Gain on purchase | 0 | (108,247) | |
Contingent liability | 0 | 0 | |
Accelerated tax depreciation | (3,276,000) | (1,265,000) | |
Impairment Expense | 0 | 0 | |
Other - income from partnership | 0 | 0 | |
Net deferred tax liabilities | (3,276,000) | (1,373,247) | $ (6,436,000) |
Net Deferred tax assets and liabilities | $ 0 | $ 0 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Share based compensation cost | $ 527,869 | $ 423,910 |
STOCK BASED COMPENSATION (Det67
STOCK BASED COMPENSATION (Details) | Jun. 06, 2016employee$ / sharesshares | Feb. 05, 2016$ / sharesshares | Feb. 04, 2016shares | Jul. 07, 2015 | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares |
Stock Options | |||||||
Outstanding, beginning (shares) | shares | 2,873,582 | 2,648,583 | |||||
Options granted (shares) | shares | 570,000 | 525,000 | |||||
Options exercised (shares) | shares | (100,000) | (100,000) | (25,000) | ||||
Options cancelled/forfeited/expired (shares) | shares | (136,666) | (275,001) | |||||
Outstanding, ending (shares) | shares | 3,206,916 | 2,873,582 | 2,648,583 | ||||
Vested (shares) | shares | 2,044,104 | 1,881,395 | |||||
Exercisable (shares) | shares | 2,044,104 | 1,881,395 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||||||
Outstanding, beginning - weighted average exercise price (in USD per share) | $ / shares | $ 4.99 | $ 7.07 | |||||
Options granted - weighted average exercise price (in USD per share) | $ / shares | 1.38 | 2.23 | |||||
Options exercised - weighted average exercise price (in USD per share) | $ / shares | (0.50) | (0.45) | |||||
Options cancelled/forfeited/expired - weighted average exercise price (in USD per share) | $ / shares | (8.64) | (20.22) | |||||
Outstanding, ending - weighted average exercise price (in USD per share) | $ / shares | 4.33 | 4.99 | $ 7.07 | ||||
Vested - weighted average exercise price (in USD per share) | $ / shares | 4.05 | 5.70 | |||||
Exercisable - weighted average exercise price (in USD per share) | $ / shares | $ 4.05 | $ 5.70 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value Rollforward [Roll Forward] | |||||||
Outstanding, beginning - grant date fair value | $ | $ 2,585,341 | $ 1,654,641 | |||||
Options granted - grant date fair value | $ | 622,115 | 1,083,411 | |||||
Options exercised - grant date fair value | $ | (27,753) | (9,000) | |||||
Options cancelled/forfeited/expired - grant date fair value | $ | (213,675) | (143,711) | |||||
Outstanding, ending - grant date fair value | $ | $ 2,966,028 | $ 2,585,341 | $ 1,654,641 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||||||
Outstanding - weighted average remaining contractual life (in years) | 5 years 9 months 18 days | 5 years 11 months 8 days | 5 years 9 months 22 days | ||||
Options granted - weighted average remaining contractual life (in years) | 9 years 8 months 19 days | 9 years 8 months 16 days | |||||
Vested - weighted average remaining contractual life (in years) | 4 years 3 months 15 days | 4 years 6 months 18 days | |||||
Exercisable - weighted average remaining contractual life (in years) | 4 years 3 months 15 days | 4 years 6 months 18 days | |||||
Vested - grant date fair value | $ | $ 1,295,727 | $ 372,367 | |||||
Exercisable - grant date fair value | $ | $ 1,295,727 | $ 372,367 | |||||
Stock option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term of awards | 10 years | ||||||
Award vesting period | 4 years | ||||||
2013 Stock Incentive Plan | Stock option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term of awards | 10 years | 10 years | |||||
Award vesting period | 4 years | 4 years | |||||
Number of employees granted options | employee | 10 | ||||||
Stock Options | |||||||
Options granted (shares) | shares | 170,000 | 100,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||||||
Options granted - weighted average exercise price (in USD per share) | $ / shares | $ 1.39 | $ 1.73 |
STOCK BASED COMPENSATION (Det68
STOCK BASED COMPENSATION (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock Warrants | |||
Outstanding, beginning (shares) | 219,868 | 219,868 | |
Warrants granted (shares) | 0 | ||
Warrants exercised (shares) | 0 | 0 | |
Warrants cancelled/forfeited/expired (shares) | 0 | 0 | |
Outstanding, ending (shares) | 219,868 | 219,868 | 219,868 |
Vested (shares) | 219,868 | 219,868 | |
Exercisable (shares) | 219,868 | 219,868 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Outstanding, beginning - weighted average exercise price (in USD per share) | $ 3.01 | $ 3.01 | |
Warrants granted - weighted average exercise price (in USD per share) | 0 | 0 | |
Warrants exercised - weighted average exercise price (in USD per share) | 0 | 0 | |
Warrants cancelled/forfeited/expired - weighted average exercise price (in USD per share) | 0 | 0 | |
Outstanding, ending - weighted average exercise price (in USD per share) | 3.01 | 3.01 | $ 3.01 |
Vested - weighted average exercise price (in USD per share) | 3.01 | 3.01 | |
Exercisable - weighted average exercise price (in USD per share) | $ 3.01 | $ 3.01 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |||
Outstanding - weighted average remaining contractual life (in years) | 3 years | 4 years | 5 years |
Vested - weighted average remaining contractual life (in years) | 3 years | 4 years | |
Exercisable - weighted average remaining contractual life (in years) | 3 years | 4 years | |
Warrants Outstanding, Intrinsic Value Rollforward [Roll Forward] | |||
Outstanding, beginning - grant date fair value | $ 140,249 | $ 140,249 | |
Warrants granted - grant date fair value | 0 | 0 | |
Warrants exercised - grant date fair value | 0 | 0 | |
Warrants cancelled/forfeited/expired - grant date fair value | 0 | 0 | |
Outstanding, ending - grant date fair value | 140,249 | 140,249 | $ 140,249 |
Vested - grant date fair value | 140,149 | 140,149 | |
Exercisable - grant date fair value | $ 140,149 | $ 140,149 |
STOCK BASED COMPENSATION (Det69
STOCK BASED COMPENSATION (Details 2) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility rate, minimum | 78.00% | 29.00% |
Expected volatility rate, maximum | 79.00% | 69.00% |
Expected dividends | 0.00% | 0.00% |
Expected term (in years) | 0 years | 10 years |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free rate | 0.91% | 0.96% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free rate | 1.57% | 1.06% |
STOCK BASED COMPENSATION Stock
STOCK BASED COMPENSATION Stock Based Compensation - Option Grants (Details) | Jun. 06, 2016employee$ / sharesshares | Feb. 05, 2016$ / sharesshares | Jul. 07, 2015 | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted (shares) | shares | 570,000 | 525,000 | |||
Options granted - weighted average exercise price (in USD per share) | $ / shares | $ 1.38 | $ 2.23 | |||
Stock option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of awards | 10 years | ||||
Annual vesting percentage | 25.00% | ||||
Award vesting period | 4 years | ||||
2013 Stock Incentive Plan | Stock option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of employees granted options | employee | 10 | ||||
Options granted (shares) | shares | 170,000 | 100,000 | |||
Options granted - weighted average exercise price (in USD per share) | $ / shares | $ 1.39 | $ 1.73 | |||
Term of awards | 10 years | 10 years | |||
Annual vesting percentage | 25.00% | 25.00% | |||
Award vesting period | 4 years | 4 years |
EARNINGS PER SHARE (Details Nar
EARNINGS PER SHARE (Details Narrative) - shares | Dec. 31, 2016 | Dec. 31, 2016 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options to purchase | 3,063,852 | |
Warrants to purchase | 4,252,135 | |
Series B Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Conversion of stock, common shares issued if converted (shares) | 3,229,409 | |
Series B-1 Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Conversion of stock, common shares issued if converted (shares) | 12,285,875 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | ||
Net income (loss) available to common shareholders | $ (15,537,395) | $ (24,102,700) |
Denominator: | ||
Weighted-average common shares outstanding | 30,520,820 | 28,181,096 |
Basic earnings per share (in USD per share) | $ (0.51) | $ (0.86) |
Numerator: | ||
Net income (loss) available to common shareholders | $ (15,537,395) | $ (24,102,700) |
Effect of dilutive securities | ||
Stock options and warrants | 0 | 0 |
Preferred stock | 0 | 0 |
Diluted weighted-average shares outstanding | 30,520,820 | 28,181,096 |
Diluted earnings (loss) per share (in USD per share) | $ (0.51) | $ (0.86) |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) | Dec. 13, 2016$ / sharesshares | Nov. 02, 2016USD ($)$ / sharesshares | Oct. 31, 2016USD ($)$ / sharesshares | Aug. 02, 2016$ / sharesshares | Jun. 06, 2016$ / sharesshares | Feb. 05, 2016$ / sharesshares | Feb. 04, 2016shares | Jan. 29, 2016$ / sharesshares | Jan. 28, 2016shares | Jan. 21, 2016shares | Sep. 30, 2015USD ($)directorshares | Jul. 07, 2015$ / sharesshares | Jun. 29, 2015USD ($) | Jun. 24, 2015USD ($)$ / sharesshares | Aug. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2016vote / shares$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Apr. 05, 2015$ / sharesshares | Mar. 31, 2015USD ($)shares | Dec. 31, 2014$ / shares |
Conversion of Stock [Line Items] | ||||||||||||||||||||
Common stock, shares authorized | 750,000,000 | 750,000,000 | ||||||||||||||||||
Common stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||||||
Common stock, shares issued | 33,151,391 | 28,239,276 | ||||||||||||||||||
Common stock, shares outstanding | 33,151,391 | 28,239,276 | ||||||||||||||||||
Number of votes per share of common stock | vote / shares | 1 | |||||||||||||||||||
Options exercised during period (shares) | 100,000 | 100,000 | 25,000 | |||||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | |||||||||||||||||||
Derivative liability, fair value | $ | $ 577,440 | |||||||||||||||||||
Aggregate number of shares authorized for purchase (shares) | 570,000 | 525,000 | ||||||||||||||||||
Exercise price of options (in USD per share) | $ / shares | $ 1.38 | $ 2.23 | ||||||||||||||||||
Options to purchase shares, cash exercise | $ | $ 11,250 | |||||||||||||||||||
Common stock | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
New shares as a result of stock conversion (shares) | 255 | 17,476 | ||||||||||||||||||
Shares issued in connection with secondary offering | 25,000 | |||||||||||||||||||
Series C Preferred Stock | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 100 | ||||||||||||||||||
Preferred stock converted to common stock (shares) | 12,432 | |||||||||||||||||||
Number of common shares issued for each convertible preferred share | 1,243,200 | 100 | 3,156,800 | |||||||||||||||||
Series B Preferred Stock | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | |||||||||||||||||||
Preferred stock converted to common stock (shares) | 1,739,272 | 32,260 | ||||||||||||||||||
Number of common shares issued for each convertible preferred share | 1,739,272 | 1 | 1 | |||||||||||||||||
Conversion of dividends | $ | $ 946,805 | $ 791 | ||||||||||||||||||
Price per share issued (in USD per share) | $ / shares | $ 3.10 | |||||||||||||||||||
Series A Preferred Stock | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||||||||
Preferred stock converted to common stock (shares) | 17,476 | |||||||||||||||||||
Number of common shares issued for each convertible preferred share | 1 | 1 | ||||||||||||||||||
Series B-1 Preferred Stock | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | |||||||||||||||||||
Preferred stock converted to common stock (shares) | 403,217 | |||||||||||||||||||
Number of common shares issued for each convertible preferred share | 403,217 | |||||||||||||||||||
Conversion of dividends | $ | $ 69,595 | |||||||||||||||||||
Heartland Group Holdings, LLC | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | |||||||||||||||||||
Number of shares issued in connection with Inventory Purchase | 56,180 | |||||||||||||||||||
Stock option | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Term of awards | 10 years | |||||||||||||||||||
Annual vesting percentage | 25.00% | |||||||||||||||||||
Award vesting period | 4 years | |||||||||||||||||||
Non-Executive Director | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Aggregate number of shares authorized for purchase (shares) | 300,000 | |||||||||||||||||||
Exercise price of options (in USD per share) | $ / shares | $ 2.08 | |||||||||||||||||||
Grant date fair value | $ | $ 478,200 | |||||||||||||||||||
Number of options granted per individual (shares) | 60,000 | |||||||||||||||||||
Number of resigned individuals | director | 1 | |||||||||||||||||||
Number of nonvested options forfeited (shares) | 50,000 | |||||||||||||||||||
Non-Executive Officer | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Aggregate number of shares authorized for purchase (shares) | 150,000 | |||||||||||||||||||
Exercise price of options (in USD per share) | $ / shares | $ 2.08 | |||||||||||||||||||
Number of options granted per individual (shares) | 50,000 | |||||||||||||||||||
2013 Stock Incentive Plan | Stock option | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Aggregate number of shares authorized for purchase (shares) | 170,000 | 100,000 | ||||||||||||||||||
Exercise price of options (in USD per share) | $ / shares | $ 1.39 | $ 1.73 | ||||||||||||||||||
Term of awards | 10 years | 10 years | ||||||||||||||||||
Annual vesting percentage | 25.00% | 25.00% | ||||||||||||||||||
Award vesting period | 4 years | 4 years | ||||||||||||||||||
2013 Stock Incentive Plan | Chief Financial Officer | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Aggregate number of shares authorized for purchase (shares) | 75,000 | |||||||||||||||||||
Exercise price of options (in USD per share) | $ / shares | $ 3.15 | |||||||||||||||||||
2013 Stock Incentive Plan | Chief Financial Officer | Stock option | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Term of awards | 10 years | |||||||||||||||||||
Annual vesting percentage | 25.00% | |||||||||||||||||||
Award vesting period | 4 years | |||||||||||||||||||
Grant date fair value | $ | $ 90,462 | |||||||||||||||||||
2013 Stock Incentive Plan | Non-Executive Director | Stock option | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Aggregate number of shares authorized for purchase (shares) | 300,000 | |||||||||||||||||||
Exercise price of options (in USD per share) | $ / shares | $ 1.26 | |||||||||||||||||||
Term of awards | 10 years | |||||||||||||||||||
Annual vesting percentage | 25.00% | |||||||||||||||||||
Award vesting period | 4 years | |||||||||||||||||||
Number of options granted per individual (shares) | 60,000 | |||||||||||||||||||
Secured debt | The Second Amendment | Lender Warrant | Common stock | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Number of shares called by each warrant (shares) | 1,766,874 | |||||||||||||||||||
Secured debt | The Third Amendment | Lender Warrant | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Repayments of lines of credit | $ | $ 15,100,000 | |||||||||||||||||||
Discontinued Operations, Disposed of by Sale | Bango Plant | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Shares issued as part of escrow fulfillment (shares) | 1,108,928 | 1,108,928 | ||||||||||||||||||
Common stock | ||||||||||||||||||||
Conversion of Stock [Line Items] | ||||||||||||||||||||
Shares issued to pay rent (shares) | 244,000 | |||||||||||||||||||
Options exercised during period (shares) | 53,271 | 53,271 | 25,000 | |||||||||||||||||
New shares as a result of stock conversion (shares) | 1,739,272 | 403,217 | 1,243,200 | 120,227 |
PREFERRED STOCK AND TEMPORARY74
PREFERRED STOCK AND TEMPORARY EQUITY (Details Narrative) | Nov. 02, 2016USD ($)$ / sharesshares | Oct. 31, 2016USD ($)$ / sharesshares | Aug. 02, 2016$ / sharesshares | May 13, 2016USD ($)unitwarrant$ / shares$ / unitshares | Jan. 29, 2016USD ($)$ / sharesshares | Jan. 28, 2016USD ($) | Jun. 24, 2015USD ($)unitwarrant$ / shares$ / unitshares | May 31, 2016USD ($)trading_days$ / sharesshares | Aug. 31, 2015USD ($)shares | Jun. 30, 2015trading_days$ / shares | Jun. 30, 2016USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2016USD ($)trading_days$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Jun. 24, 2020$ / shares | Jun. 24, 2017$ / shares |
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized | shares | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||||
Number of units sold as part of Unit Agreement | unit | 12,403,683 | 8,064,534 | ||||||||||||||
Unit Purchase Agreement, number of shares for each unit | shares | 1 | |||||||||||||||
Unit Purchase Agreement, number of warrants per unit | warrant | 1 | 1 | ||||||||||||||
Unit Purchase Agreement, price per unit (in USD per unit) | $ / unit | 1.56 | 3.10 | ||||||||||||||
Unit Purchase Agreement, exercise price premium over closing stock price, percentage | 2.60% | 6.10% | ||||||||||||||
Share price (in USD per share) | $ / shares | $ 1.52 | $ 2.91 | ||||||||||||||
Gross proceeds from issuance of private placement | $ 19,400,000 | $ 25,000,000 | ||||||||||||||
Commission percentage of gross proceeds | 6.50% | 6.50% | ||||||||||||||
Amount raised from certain investors with no fee | $ 4,000,000 | |||||||||||||||
Commissions payment | $ 530,000 | 1,365,000 | ||||||||||||||
Proceeds from stock offering | $ 15,100,000 | |||||||||||||||
Unit Purchase Agreement, liquidated damages to aggregate subscription amount, percentage | 1.00% | 1.00% | ||||||||||||||
Unit Purchase Agreement, maximum percentage of liquidated damages to aggregate subscription amount | 6.00% | 6.00% | ||||||||||||||
Warrants issued, Black Scholes model, value | $ 7,028,067 | $ (49,876) | $ (49,876) | |||||||||||||
Preferred stock, beneficial conversion feature | 5,682,741 | |||||||||||||||
Private placement fees | $ 1,400,000 | |||||||||||||||
Derivative liability | $ 4,365,992 | 4,365,992 | $ 1,548,604 | |||||||||||||
Proceeds from issuance of preferred stock | $ 19,349,757 | $ 23,557,553 | ||||||||||||||
Series C Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized | shares | 44,000 | 44,000 | ||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 100 | ||||||||||||||
Preferred stock, shares issued | shares | 44,000 | 31,568 | 31,568 | 0 | ||||||||||||
Preferred stock, shares outstanding | shares | 31,568 | 31,568 | ||||||||||||||
Temporary equity, shares issued | shares | 31,568 | 31,568 | 0 | |||||||||||||
Temporary equity, shares outstanding | shares | 31,568 | 31,568 | 0 | |||||||||||||
Number of common shares issued for each convertible preferred share | shares | 1,243,200 | 100 | 3,156,800 | 3,156,800 | ||||||||||||
Preferred stock, voting rights, assumed conversion price | $ / shares | $ 1.05 | |||||||||||||||
Liquidation preference per share (in USD per share) | $ / shares | $ 100 | |||||||||||||||
Conversion terms, beneficial ownership limitation, percentage | 4.999% | |||||||||||||||
Preferred stock converted to common stock (shares) | shares | 12,432 | |||||||||||||||
Proceeds from issuance of preferred stock | $ 4,000,000 | |||||||||||||||
Conversion terms, price per share (in USD per share) | $ / shares | $ 1 | |||||||||||||||
Beneficial ownership limitation, notice period | 61 days | |||||||||||||||
Series A Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized | shares | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Preferred stock, shares issued | shares | 492,716 | 492,716 | 612,943 | |||||||||||||
Preferred stock, shares outstanding | shares | 492,716 | 492,716 | 612,943 | |||||||||||||
Number of common shares issued for each convertible preferred share | shares | 1 | 1 | 1 | |||||||||||||
Amount each share of preferred stock is entitled to receive prior to similar liquidation payments ( in USD per share) | $ / shares | $ 1.49 | $ 1.49 | ||||||||||||||
Conversion conditions, number of consecutive trading days | 20 days | |||||||||||||||
Conversion conditions, minimum gross public offering amount | $ 10,000,000 | |||||||||||||||
Conversion conditions, minimum proceeds to shareholders if the Company is sold (in USD per share) | $ / shares | $ 10 | |||||||||||||||
Preferred stock converted to common stock (shares) | shares | 17,476 | |||||||||||||||
Series B Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | ||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | |||||||||||||||
Temporary equity, shares issued | shares | 3,229,409 | 3,229,409 | 8,160,809 | |||||||||||||
Stock repurchased and retired during period (shares) | shares | 3,575,070 | 3,575,070 | ||||||||||||||
Temporary equity, shares outstanding | shares | 3,229,409 | 3,229,409 | 8,160,809 | |||||||||||||
Number of common shares issued for each convertible preferred share | shares | 1,739,272 | 1 | 1 | 1 | ||||||||||||
Conversion of dividends | $ 946,805 | $ 791 | ||||||||||||||
Preferred stock, dividend rate | 6.00% | |||||||||||||||
Preferred stock, dividends in arrears (in USD per share) | $ / shares | $ 3.10 | |||||||||||||||
Average of the volume weighted average price of common stock, percentage | 90.00% | 90.00% | ||||||||||||||
Number of trading days used to calculate VWAP | trading_days | 10 | 10 | ||||||||||||||
Minimum dividend payment price (in USD per share) | $ / shares | $ 2.91 | $ 2.91 | ||||||||||||||
Dividends payable, paid-in-kind (in USD per share) | $ / shares | 3.10 | |||||||||||||||
Liquidation preference per share (in USD per share) | $ / shares | $ 3.10 | 3.10 | ||||||||||||||
Redemption price per share (in USD per share) | $ / shares | $ 3.10 | 3.10 | ||||||||||||||
Conversion terms, closing price (in USD per share) | $ / shares | $ 6.20 | |||||||||||||||
Conversion terms, threshold consecutive trading days | 20 days | |||||||||||||||
Conversion terms, beneficial ownership limitation, percentage | 9.999% | |||||||||||||||
Share price (in USD per share) | $ / shares | $ 2.94 | |||||||||||||||
Preferred stock, beneficial conversion feature | $ 5,737,796 | |||||||||||||||
Stock repurchased and retired during period | $ 11,189,838 | $ 11,189,838 | $ 0 | |||||||||||||
Unaccreted discount on preferred shares | $ 5,408,131 | $ 6,256,604 | 6,256,604 | 13,044,793 | ||||||||||||
Carrying amount of preferred shares | 10,791,675 | 3,331,918 | 3,331,918 | 11,955,207 | ||||||||||||
Derivative liability | 1,952,565 | 1,952,565 | 1,548,604 | |||||||||||||
Temporary equity, warrants issued | $ 7,028,067 | 1,952,565 | 1,952,565 | |||||||||||||
Dividends accrued | $ 214,227 | $ 214,227 | $ 376,571 | |||||||||||||
Preferred stock converted to common stock (shares) | shares | 1,739,272 | 32,260 | ||||||||||||||
Unit Purchase Agreement, percentage of proceeds used to repurchase stock | 60.00% | |||||||||||||||
Payments for repurchase of preferred stock | $ 11,189,838 | |||||||||||||||
Series B-1 Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized | shares | 17,000,000 | 17,000,000 | ||||||||||||||
Preferred stock, par value (in USD per share) | $ / shares | $ 0.001 | |||||||||||||||
Preferred stock, shares issued | shares | 12,282,638 | 12,282,638 | 0 | |||||||||||||
Temporary equity, shares issued | shares | 12,282,638 | 12,282,638 | 0 | |||||||||||||
Temporary equity, shares outstanding | shares | 12,282,638 | 12,282,638 | 0 | |||||||||||||
Number of common shares issued for each convertible preferred share | shares | 403,217 | |||||||||||||||
Conversion of dividends | $ 69,595 | |||||||||||||||
Preferred stock, dividend rate | 6.00% | |||||||||||||||
Preferred stock, dividends in arrears (in USD per share) | $ / shares | $ 1.56 | |||||||||||||||
Average of the volume weighted average price of common stock, percentage | 90.00% | |||||||||||||||
Number of trading days used to calculate VWAP | trading_days | 10 | |||||||||||||||
Minimum dividend payment price (in USD per share) | $ / shares | $ 1.52 | $ 1.52 | ||||||||||||||
Dividends payable, paid-in-kind (in USD per share) | $ / shares | 1.56 | |||||||||||||||
Liquidation preference per share (in USD per share) | $ / shares | 1.56 | |||||||||||||||
Conversion terms, closing price (in USD per share) | $ / shares | $ 3.90 | |||||||||||||||
Conversion terms, threshold consecutive trading days | 20 days | |||||||||||||||
Conversion terms, beneficial ownership limitation, percentage | 4.999% | |||||||||||||||
Unit Purchase Agreement, number of shares for each unit | shares | 1 | |||||||||||||||
Share price (in USD per share) | $ / shares | $ 1.52 | |||||||||||||||
Preferred stock, beneficial conversion feature | $ 2,371,106 | |||||||||||||||
Private placement fees | 600,000 | |||||||||||||||
Unaccreted discount on preferred shares | $ (5,400,064) | $ (5,400,064) | ||||||||||||||
Carrying amount of preferred shares | 13,503,495 | 13,756,184 | 13,756,184 | $ 0 | ||||||||||||
Derivative liability | 2,413,427 | 2,413,427 | ||||||||||||||
Temporary equity, warrants issued | 2,867,264 | $ 2,867,264 | 2,413,427 | 2,413,427 | ||||||||||||
Dividends accrued | $ 290,247 | $ 290,247 | ||||||||||||||
Preferred stock converted to common stock (shares) | shares | 403,217 | |||||||||||||||
Convertible preferred stock, conversion terms, threshold closing price | $ / shares | $ 1.56 | |||||||||||||||
Convertible preferred stock, conversion ratio | 1 | |||||||||||||||
Minimum | Series A Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Conversion conditions, average common share market price (minimum) (in USD per share) | $ / shares | $ 15 | $ 15 | ||||||||||||||
Conversion conditions, average daily trading volume (minimum) | shares | 7,500 | 7,500 | ||||||||||||||
Conversion conditions, price per share if Company consummates an underwritten public offering (minimum) (in USD per share) | $ / shares | $ 10 | $ 10 | ||||||||||||||
Maximum | Series C Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Conversion terms, beneficial ownership limitation, percentage | 9.999% | |||||||||||||||
Maximum | Series B-1 Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Conversion terms, beneficial ownership limitation, percentage | 9.999% | |||||||||||||||
Warrant | Series B-1 Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Value of May 2016 warrants | $ 2,867,264 | |||||||||||||||
Warrants | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of shares called by each warrant (shares) | shares | 0.5 | |||||||||||||||
Exercise price of warrants (in USD per share) | $ / shares | $ 1.53 | $ 2.92 | ||||||||||||||
Amount over closing price of warrant exercise price (in USD per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||||||
Restricted stock | Series B Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock dividends, shares | shares | 263,087 | |||||||||||||||
Restricted stock | Series B-1 Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock dividends, shares | shares | 282,172 | |||||||||||||||
Secured debt | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Repayments of debt | $ 16,100,000 | |||||||||||||||
Secured debt | Amendment Number 1 to Amended Credit Agreement | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Repayments of debt | $ 800,000 | $ 800,000 | ||||||||||||||
Previous Participating Investors | Series B Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Gross proceeds from issuance of private placement | 18,649,738 | |||||||||||||||
Net proceeds from issuance of private placement, before agent fees and offering costs | $ 8,100,000 | |||||||||||||||
Forecast | Series B-1 Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Redemption price per share (in USD per share) | $ / shares | $ 1.56 | $ 1.72 | ||||||||||||||
Liability | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Expected dividend percentage | 0.00% | 0.00% | ||||||||||||||
Risk free interest rate | 1.59% | |||||||||||||||
Expected term | 5 years 6 months | |||||||||||||||
Liability | Series B-1 Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Expected dividend percentage | 0.00% | |||||||||||||||
Risk free interest rate | 1.22% | |||||||||||||||
Expected term | 5 years 6 months | |||||||||||||||
Liability | Minimum | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Expected volatility rate percentage | 70.00% | 78.00% | ||||||||||||||
Risk free interest rate | 1.59% | |||||||||||||||
Liability | Minimum | Series B-1 Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Expected volatility rate percentage | 70.00% | |||||||||||||||
Liability | Maximum | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Expected volatility rate percentage | 100.00% | |||||||||||||||
Risk free interest rate | 1.76% | |||||||||||||||
Liability | Maximum | Series B-1 Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Expected volatility rate percentage | 100.00% | |||||||||||||||
Liability | Warrants | Series B Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Expected term | 4 years 6 months 15 days | |||||||||||||||
Liability | Warrants | Series B-1 Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Expected term | 5 years 1 month 10 days |
PREFERRED STOCK AND TEMPORARY75
PREFERRED STOCK AND TEMPORARY EQUITY (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | May 31, 2016 | May 13, 2016 | Jun. 24, 2015 | |
Temporary Equity [Line Items] | ||||||
Less: beneficial conversion feature | $ 5,682,741 | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Balance, beginning | $ 1,548,604 | $ 1,548,604 | $ 0 | |||
Warrants issued | 7,028,067 | |||||
Change in valuation of warrants | (49,876) | (5,479,463) | ||||
Balance, ending | 4,365,992 | 1,548,604 | ||||
Series B Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Face amount of Series B Preferred | 25,000,000 | 25,000,000 | 25,000,000 | |||
Less: warrant value | 1,952,565 | 7,028,067 | ||||
Less: beneficial conversion feature | 5,737,796 | |||||
Less: issuance costs and fees | 1,442,462 | |||||
Less: repurchase of 3,575,070 shares | $ 11,189,838 | 11,189,838 | 0 | |||
Less: conversion of 1,739,272 shares to common stock | 5,386,341 | 0 | ||||
Plus: dividend in kind | 1,164,701 | 0 | ||||
Less: un-accreted discount | 6,256,604 | 13,044,793 | $ 5,408,131 | |||
Carrying amount | 3,331,918 | 11,955,207 | 10,791,675 | |||
Series B-1 Preferred Stock | ||||||
Temporary Equity [Line Items] | ||||||
Face amount of Series B Preferred | 19,349,745 | $ 19,349,745 | 19,349,756 | |||
Less: warrant value | 2,413,427 | 2,867,264 | $ 2,867,264 | |||
Less: beneficial conversion feature | 2,371,106 | |||||
Less: issuance costs and fees | 607,880 | |||||
Less: conversion of 403,217 shares to common | 628,866 | |||||
Plus: dividend in kind | 435,369 | |||||
Less: un-accreted discount | (5,400,064) | |||||
Carrying amount | 13,756,184 | $ 0 | $ 13,503,495 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Warrants issued | $ 2,867,264 |
PREFERRED STOCK AND TEMPORARY76
PREFERRED STOCK AND TEMPORARY EQUITY (Details 2) - USD ($) | Dec. 31, 2016 | May 13, 2016 | Dec. 31, 2015 | Jun. 24, 2015 |
Temporary Equity [Line Items] | ||||
Shares of Common stock to be converted | 8,064,534 | |||
Market price (in USD per share) | $ 1.52 | $ 2.91 | ||
Series B-1 Preferred Stock | ||||
Temporary Equity [Line Items] | ||||
Face amount of Series B Preferred | $ 19,349,745 | $ 19,349,745 | $ 19,349,756 | |
Less: warrant value | 2,413,427 | $ 2,867,264 | 2,867,264 | |
Allocated value of Series B Preferred Stock | $ 16,482,492 | |||
Shares of Common stock to be converted | 12,403,683 | |||
Effective conversion price (in USD per share) | $ 1.33 | |||
Market price (in USD per share) | 1.52 | |||
Intrinsic value per share (in USD per share) | $ 0.19 | |||
Intrinsic value of beneficial conversion feature | $ 2,371,106 | |||
Series B Preferred Stock | ||||
Temporary Equity [Line Items] | ||||
Face amount of Series B Preferred | 25,000,000 | $ 25,000,000 | 25,000,000 | |
Less: warrant value | $ 1,952,565 | 7,028,067 | ||
Allocated value of Series B Preferred Stock | $ 17,971,933 | |||
Effective conversion price (in USD per share) | $ 2.23 | |||
Market price (in USD per share) | 2.94 | |||
Intrinsic value per share (in USD per share) | $ 0.7115 | |||
Intrinsic value of beneficial conversion feature | $ 5,737,796 |
DISPOSITION - Gain on Sale (Det
DISPOSITION - Gain on Sale (Details) - USD ($) | Jan. 28, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 29, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net Proceeds | $ 29,788,114 | $ 0 | ||
Gain on Sale | $ 9,631,712 | $ 13,944 | ||
Bango Plant | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sales price (fair value) | $ 35,000,000 | |||
Release of lien on certain equipment at the Bango Plant | (3,100,000) | |||
Transaction Fees | (2,111,886) | |||
Net Proceeds | 29,788,114 | |||
Book Value at January 29, 2016 (date transaction closed) | $ 20,039,553 | |||
Gain on Sale | $ 9,748,561 |
DISPOSITION - Additional Inform
DISPOSITION - Additional Information (Details) | Jan. 29, 2016shares | Jan. 28, 2016USD ($)ashares | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on Sale | $ 9,631,712 | $ 13,944 | ||
Bango Plant | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Area of land oil re-refining plant is located | a | 40 | |||
Aggregate purchase price | $ 35,000,000 | |||
Gain on Sale | 9,748,561 | |||
Cash placed in escrow | 1,500,000 | |||
Equity interest issued or issuable placed in escrow | $ 1,000,000 | |||
Shares placed in escrow (shares) | shares | 1,108,928 | 1,108,928 | ||
Percentage of equity interest issued or issuable to be released | 50.00% | |||
Release of the remaining equity interest from escrow, period | 18 months | |||
Equity interest issued or issuable required to be maintained in escrow | $ 1,000,000 | |||
Secured debt | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceed used to repay credit agreement | 16,100,000 | |||
Bango Oil, LLC | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Acquisition, cash paid | 9,300,000 | |||
Aggregate indemnification cap | 3,000,000 | |||
Equipment leases | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Payments to acquire leased equipment | $ 1,500,000 |
NEW JOINT VENTURE (Details)
NEW JOINT VENTURE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | May 25, 2016 | |
Vertex Recovery Management, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage in joint venture (percent) | 51.00% | |
Income from VRMLA included in consolidated income (percent) | 100.00% | |
Operating income from VRMLA | $ 4,447 | |
Industrial Pipe, Inc. | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest in VRMLA by Industrial Pipe, Inc. (percent) | 49.00% | |
Industrial Pipe's portion of VRMLA's operating income (percent) | 49.00% | |
Industrial Pipe's portion of VRMLA's operating income | $ 2,179 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 98,078,914 | $ 146,942,461 |
Net loss from operations | (10,112,514) | (14,093,041) |
Total Assets | 86,985,968 | 93,644,816 |
Operating Segments | Black Oil | ||
Segment Reporting Information [Line Items] | ||
Revenues | 76,634,940 | 103,890,188 |
Net loss from operations | (8,849,055) | (15,957,969) |
Total Assets | 80,774,533 | 87,326,506 |
Operating Segments | Refining and Marketing | ||
Segment Reporting Information [Line Items] | ||
Revenues | 13,154,777 | 31,154,066 |
Net loss from operations | (402,317) | 363,708 |
Total Assets | 1,573,395 | 1,845,669 |
Operating Segments | Recovery | ||
Segment Reporting Information [Line Items] | ||
Revenues | 8,289,197 | 11,898,207 |
Net loss from operations | (861,142) | 1,501,220 |
Total Assets | $ 4,638,040 | $ 4,472,641 |
SUBSEQUENT EVENTS - Credit and
SUBSEQUENT EVENTS - Credit and Guaranty Agreement (Details) - Subsequent event | Feb. 01, 2017USD ($) |
Line of Credit | |
Subsequent Event [Line Items] | |
Line of credit facility, maximum borrowing capacity | $ 30,000,000 |
Revolving Credit Agreement | |
Subsequent Event [Line Items] | |
Line of credit facility, maximum borrowing capacity | 10,000,000 |
EBC Credit Agreement | Line of Credit | |
Subsequent Event [Line Items] | |
Line of credit facility, maximum borrowing capacity | 20,000,000 |
Line of credit, outstanding | 12,000,000 |
Remaining borrowing capacity | $ 8,000,000 |
Incremental increase in interest rate per event of default (percent) | 2.00% |
Monthly principal payments | $ 75,000 |
Minimum | EBC Credit Agreement | Line of Credit | |
Subsequent Event [Line Items] | |
Line of credit, voluntary repayment amount | $ 100,000 |
Tier One | EBC Credit Agreement | Line of Credit | |
Subsequent Event [Line Items] | |
Interest rate | 12.00% |
Tier One | Maximum | Revolving Credit Agreement | |
Subsequent Event [Line Items] | |
Line of credit, average available balance | $ 2,500,000 |
Tier One | Maximum | EBC Credit Agreement | Line of Credit | |
Subsequent Event [Line Items] | |
Debt covenant ratio, adjusted EBITDA to sum of debt service charges and other distributions paid on capital stock in cash | 1 |
Tier Two | EBC Credit Agreement | Line of Credit | |
Subsequent Event [Line Items] | |
Interest rate | 13.00% |
Tier Two | Maximum | EBC Credit Agreement | Line of Credit | |
Subsequent Event [Line Items] | |
Debt covenant ratio, adjusted EBITDA to sum of debt service charges and other distributions paid on capital stock in cash | 1.45 |
Tier Two | Minimum | Revolving Credit Agreement | |
Subsequent Event [Line Items] | |
Line of credit, average available balance | $ 2,500,000 |
Tier Two | Minimum | EBC Credit Agreement | Line of Credit | |
Subsequent Event [Line Items] | |
Debt covenant ratio, adjusted EBITDA to sum of debt service charges and other distributions paid on capital stock in cash | 1 |
Tier Three | EBC Credit Agreement | Line of Credit | |
Subsequent Event [Line Items] | |
Interest rate | 14.00% |
Tier Three | Minimum | EBC Credit Agreement | Line of Credit | |
Subsequent Event [Line Items] | |
Debt covenant ratio, adjusted EBITDA to sum of debt service charges and other distributions paid on capital stock in cash | 1.45 |
SUBSEQUENT EVENTS - Revolving C
SUBSEQUENT EVENTS - Revolving Credit Facility (Details) - Revolving Credit Agreement - Subsequent event | Feb. 01, 2017USD ($) |
Subsequent Event [Line Items] | |
Line of credit facility, maximum borrowing capacity | $ 10,000,000 |
One-month LIBOR | |
Subsequent Event [Line Items] | |
Stated interest rate, floor | 0.25% |
Interest rate | 0.78% |
Variable rate basis, basis spread | 6.50% |
Incremental increase in interest rate per event of default (percent) | 2.00% |
LIBOR | |
Subsequent Event [Line Items] | |
Variable rate basis, basis spread | 1.00% |
Federal funds rate | |
Subsequent Event [Line Items] | |
Interest rate | 0.50% |
SUBSEQUENT EVENTS - Debt and Re
SUBSEQUENT EVENTS - Debt and Revolving Note Repayment (Details) | 1 Months Ended |
Mar. 10, 2017USD ($) | |
Existing Credit Obligations | Subsequent event | |
Subsequent Event [Line Items] | |
Repayments of debt | $ 11,282,537 |
SUBSEQUENT EVENTS - Preferred S
SUBSEQUENT EVENTS - Preferred Stock shares in-Kind (Details) - shares | Dec. 31, 2016 | Jan. 31, 2017 | Dec. 31, 2016 |
Series B-1 Preferred Stock | |||
Subsequent Event [Line Items] | |||
Conversion of stock, shares issued if converted (shares) | 12,285,875 | ||
Series B-1 Preferred Stock | Subsequent event | |||
Subsequent Event [Line Items] | |||
Conversion of stock, shares issued if converted (shares) | 184,297 | ||
Series B Preferred Stock | |||
Subsequent Event [Line Items] | |||
Conversion of stock, shares issued if converted (shares) | 3,229,409 | ||
Series B Preferred Stock | Subsequent event | |||
Subsequent Event [Line Items] | |||
Conversion of stock, shares issued if converted (shares) | 48,447 | ||
Restricted stock | Series B-1 Preferred Stock | |||
Subsequent Event [Line Items] | |||
Preferred stock dividends, shares | 282,172 | ||
Restricted stock | Series B-1 Preferred Stock | Subsequent event | |||
Subsequent Event [Line Items] | |||
Preferred stock dividends, shares | 184,297 | ||
Restricted stock | Series B Preferred Stock | |||
Subsequent Event [Line Items] | |||
Preferred stock dividends, shares | 263,087 | ||
Restricted stock | Series B Preferred Stock | Subsequent event | |||
Subsequent Event [Line Items] | |||
Preferred stock dividends, shares | 48,447 |
SUBSEQUENT EVENTS - Conversion
SUBSEQUENT EVENTS - Conversion of shares (Details) | Oct. 31, 2016shares | Jan. 31, 2017shareholdershares | Dec. 31, 2015shares | Feb. 01, 2017 |
Series B-1 Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Preferred stock converted to common stock (shares) | 403,217 | |||
Series B-1 Preferred Stock | Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Number of holders who converted shares | shareholder | 2 | |||
Series A Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Preferred stock converted to common stock (shares) | 17,476 | |||
Series A Preferred Stock | Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Preferred stock converted to common stock (shares) | 30,072 | |||
New shares as a result of stock conversion (shares) | 30,072 | |||
Shareholder One | Series B-1 Preferred Stock | Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Preferred stock converted to common stock (shares) | 66,564 | |||
New shares as a result of stock conversion (shares) | 66,564 | |||
Shareholder Two | Series B-1 Preferred Stock | Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Preferred stock converted to common stock (shares) | 10,000 | |||
New shares as a result of stock conversion (shares) | 10,000 | |||
EBC Credit Agreement | Line of Credit | Tier Three | Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Interest rate | 14.00% |