Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 05, 2019 | Jun. 30, 2018 | |
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, 2018 | ||
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 | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 26,404,997 | ||
Entity Common Stock, Shares Outstanding | 40,174,821 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 1,349,831 | $ 1,105,787 |
Restricted cash | 1,500,000 | 0 |
Accounts receivable, net | 9,027,990 | 11,288,991 |
Federal income tax receivable | 137,212 | 0 |
Inventory | 8,091,397 | 6,304,842 |
Derivative commodity asset | 695,941 | 0 |
Prepaid expenses | 2,740,541 | 1,771,832 |
Total current assets | 23,542,912 | 20,471,452 |
Fixed assets, at cost | 67,212,486 | 65,237,652 |
Less accumulated depreciation | (19,927,479) | (16,617,824) |
Fixed assets, net | 47,285,007 | 48,619,828 |
Goodwill and other intangible assets, net | 12,578,519 | 14,499,354 |
Deferred tax asset | 137,211 | 274,423 |
Other assets | 616,759 | 440,417 |
TOTAL ASSETS | 84,160,408 | 84,305,474 |
Current liabilities | ||
Accounts payable | 8,791,529 | 7,826,016 |
Accrued expenses | 2,535,347 | 2,492,722 |
Dividends payable | 403,002 | 420,713 |
Capital leases-current | 95,857 | 0 |
Current portion of long-term debt, net of unamortized finance costs | 1,325,240 | 1,616,926 |
Revolving note | 3,844,636 | 4,591,527 |
Total current liabilities | 16,995,611 | 16,947,904 |
Long-term debt, net of unamortized finance costs | 14,402,179 | 13,531,179 |
Capital leases-long-term | 276,355 | 0 |
Contingent consideration | 15,564 | 236,680 |
Derivative warrant liability | 1,481,692 | 2,245,408 |
Total liabilities | 33,171,401 | 32,961,171 |
COMMITMENTS AND CONTINGENCIES (Note 4) | 0 | 0 |
TEMPORARY EQUITY | ||
Series B and B1 preferred shares | 22,179,963 | 22,959,945 |
EQUITY | ||
Common stock, $0.001 par value per share; 750,000,000 shares authorized; 40,174,821 and 32,658,176 issued and outstanding at December 31, 2018 and 2017, respectively. | 40,175 | 32,658 |
Additional paid-in capital | 75,131,122 | 67,768,509 |
Accumulated deficit | (47,800,886) | (39,816,300) |
Total Vertex Energy, Inc. stockholders' equity | 27,370,831 | 27,985,353 |
Non-controlling interest | 1,438,213 | 399,005 |
Total Equity | 28,809,044 | 28,384,358 |
TOTAL LIABILITIES, TEMPORARY EQUITY AND EQUITY | 84,160,408 | 84,305,474 |
Series B Preferred Stock | ||
TEMPORARY EQUITY | ||
Series B and B1 preferred shares | 8,900,208 | 7,190,467 |
Series B1 Preferred Stock | ||
TEMPORARY EQUITY | ||
Series B and B1 preferred shares | 13,279,755 | 15,769,478 |
Series A Preferred | ||
EQUITY | ||
Series A and C Preferred Stock | $ 420 | 454 |
Series C Preferred | ||
EQUITY | ||
Series A and C Preferred Stock | $ 32 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares authorized | 50,000,000 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued | 40,174,821 | 32,658,176 |
Common stock, shares outstanding (in shares) | 40,174,821 | 32,658,176 |
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 | 3,604,827 | 3,427,597 |
Temporary equity, shares outstanding | 3,604,827 | 3,427,597 |
Temporary equity, liquidation preference | $ 11,174,964 | $ 10,625,551 |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | 3,604,827 | 3,427,597 |
Preferred stock, shares outstanding | 3,604,827 | 3,427,597 |
Series B1 Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary equity, shares authorized | 17,000,000 | 17,000,000 |
Temporary equity, shares issued | 10,057,597 | 13,151,989 |
Temporary equity, shares outstanding | 10,057,597 | 13,151,989 |
Temporary equity, liquidation preference | $ 15,689,851 | $ 20,517,103 |
Preferred stock, shares authorized | 17,000,000 | |
Preferred stock, shares issued | 10,057,597 | 13,151,989 |
Preferred stock, shares outstanding | 10,057,597 | 13,151,989 |
Series A Preferred | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 419,859 | 453,567 |
Preferred stock, shares outstanding | 419,859 | 453,567 |
Preferred stock, liquidation preference | $ 625,590 | $ 675,815 |
Series C Preferred | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 44,000 | 44,000 |
Preferred stock, shares issued | 0 | 31,568 |
Preferred stock, shares outstanding | 0 | 31,568 |
Preferred stock, liquidation preference | $ 0 | $ 3,156,800 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 180,720,661 | $ 145,499,092 |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 151,314,039 | 124,226,489 |
Gross profit | 29,406,622 | 21,272,603 |
Operating expenses: | ||
Selling, general and administrative expenses | 21,927,264 | 21,685,542 |
Depreciation and amortization | 6,991,010 | 6,643,324 |
Total operating expenses | 28,918,274 | 28,328,866 |
Income (loss) from operations | 488,348 | (7,056,263) |
Other income (expense): | ||
Other income | 659 | 5,748 |
Gain on sale of assets | 45,553 | 445 |
Gain on change in value of derivative warrant liability | 763,716 | 2,120,584 |
Interest expense | (3,281,855) | (3,483,062) |
Total expense | (2,471,927) | (1,356,285) |
Loss before income taxes | (1,983,579) | (8,412,548) |
Income tax benefit | 0 | 274,423 |
Net loss | (1,983,579) | (8,138,125) |
Net income attributable to non-controlling interest | 234,188 | 295,108 |
Net loss attributable to Vertex Energy, Inc. | (2,217,767) | (8,433,233) |
Accretion of discount on series B and B-1 Preferred Stock | (3,132,414) | (1,713,736) |
Dividends on series B and B-1 Preferred Stock | (2,687,123) | (1,677,633) |
Net loss available to common stockholders | $ (8,037,304) | $ (11,824,602) |
Income (loss) per common share | ||
Basic (in dollars per share) | $ (0.23) | $ (0.36) |
Diluted (in dollars per share) | $ (0.23) | $ (0.36) |
Shares used in computing earnings per share | ||
Basic (in shares) | 35,411,264 | 32,653,402 |
Diluted (in shares) | 35,411,264 | 32,653,402 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Non-controlling Interest | Series A PreferredPreferred Stock | Series C PreferredPreferred Stock |
Balance at beginning, shares at Dec. 31, 2016 | 33,151,391 | 492,716 | 31,568 | ||||
Balance at beginning, value at Dec. 31, 2016 | $ 38,713,966 | $ 33,151 | $ 66,534,971 | $ (27,958,578) | $ 103,897 | $ 493 | $ 32 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity reclassifications | 0 | 59 | (59) | ||||
Dividends on Series B and B1 Preferred Stock | (1,677,633) | (1,677,633) | |||||
Accretion of discount on Series B and B1 Preferred Stock | (1,713,736) | (1,713,736) | |||||
Return of common shares for Safety-Kleen/Bango Sale Escrow (in shares) | (1,108,928) | ||||||
Return of common shares for Safety-Kleen/Bango Sale Escrow | 0 | $ (1,109) | 1,109 | ||||
Share based compensation expense, total | 606,446 | 606,446 | |||||
Conversion of Series A Preferred stock to common (in shares) | 39,149 | (39,149) | |||||
Conversion of Series A Preferred stock to common | 0 | $ 39 | $ (39) | ||||
Conversion of Series B1 Preferred stock to common (in shares) | 76,564 | ||||||
Conversion of Series B1 Preferred stock to common | 119,440 | $ 77 | 152,424 | (33,061) | |||
Common shares for Nickco Acquisition (in shares) | 500,000 | ||||||
Common shares for Nickco Acquisition | 474,000 | $ 500 | 473,500 | ||||
Net income (loss) | $ (8,138,125) | (8,433,233) | 295,108 | ||||
Exercise of options to common (in shares) | 0 | ||||||
Balance at end, shares at Dec. 31, 2017 | 32,658,176 | 453,567 | 31,568 | ||||
Balance at end, value at Dec. 31, 2017 | $ 28,384,358 | $ 32,658 | 67,768,509 | (39,816,300) | 399,005 | $ 454 | $ 32 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends on Series B and B1 Preferred Stock (in shares) | 166,630 | ||||||
Dividends on Series B and B1 Preferred Stock | (2,373,859) | $ 167 | 313,097 | (2,687,123) | |||
Accretion of discount on Series B and B1 Preferred Stock | (1,960,013) | (1,960,013) | |||||
Share based compensation expense, total | 659,836 | 659,836 | |||||
Conversion of Series A Preferred stock to common (in shares) | 33,708 | (33,708) | |||||
Conversion of Series A Preferred stock to common | 0 | $ 34 | $ (34) | ||||
Conversion of Series B1 Preferred stock to common (in shares) | 3,977,117 | ||||||
Conversion of Series B1 Preferred stock to common | 5,068,601 | $ 3,976 | 6,200,326 | (1,135,701) | |||
Common shares for Nickco Acquisition (in shares) | 150,000 | ||||||
Common shares for Nickco Acquisition | 93,000 | $ 150 | 92,850 | ||||
Net income (loss) | (1,983,579) | (2,217,767) | 234,188 | ||||
Conversion of Series B preferred stock into common stock (in shares) | 32,149 | ||||||
Conversion of Series B Preferred Stock to common | $ 62,962 | $ 33 | 99,629 | (36,700) | |||
Exercise of options to common (in shares) | 7,500 | 241 | |||||
Correction of non-controlling interest | $ 0 | 52,718 | (52,718) | ||||
Fixed assets contributed capital VRMLA | 857,738 | 857,738 | |||||
Conversion of Series C Preferred Stock to common (in shares) | 3,156,800 | (31,568) | |||||
Conversion of Series C Preferred Stock to common | $ 3,157 | (3,125) | $ (32) | ||||
Balance at end, shares at Dec. 31, 2018 | 40,174,821 | 419,859 | 0 | ||||
Balance at end, value at Dec. 31, 2018 | $ 28,809,044 | $ 40,175 | $ 75,131,122 | $ (47,800,886) | $ 1,438,213 | $ 420 | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (1,983,579) | $ (8,138,125) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Stock-based compensation expense | 659,836 | 606,446 |
Depreciation and amortization | 6,991,010 | 6,643,324 |
Bad debt recovery | (299,110) | 0 |
Gain on commodity derivative contracts | (1,062,682) | 0 |
Net cash settlement on commodity derivatives | 369,188 | 0 |
Gain on sale of assets | (45,553) | (445) |
Gain on disposition | (241,416) | 0 |
Amortization of debt discount and deferred costs | 584,336 | 715,112 |
Deferred federal income tax | (274,423) | |
Decrease in fair value of derivative liability | (763,716) | (2,120,584) |
Contingent consideration | (128,116) | 0 |
Impairment of goodwill | 176,349 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,143,834 | (336,772) |
Inventory | (1,786,555) | (1,910,884) |
Prepaid expenses | (597,146) | 897,285 |
Accounts payable | 1,493,324 | 487,343 |
Accrued expenses | 42,625 | 390,699 |
Other assets | (176,342) | 77,833 |
Net cash provided by (used in) operating activities | 5,376,287 | (2,963,191) |
Cash flows from investing activities | ||
Acquisitions | (269,826) | (1,999,580) |
Proceeds from the sale of assets | 0 | 327,718 |
Purchase of fixed assets | (2,499,117) | (2,125,667) |
Net cash used in investing activities | (2,768,943) | (3,797,529) |
Cash flows from financing activities | ||
Line of credit proceeds (payments), net | (746,891) | 1,865,488 |
Payments on capital lease obligations | (77,886) | 0 |
Payment of debt issuance costs | 0 | (1,718,090) |
Proceeds from notes payable | 4,024,964 | 17,570,929 |
Payments made on notes payable | (4,063,487) | (13,057,978) |
Net cash used in (provided by) financing activities | (863,300) | 4,660,349 |
Net change in cash and cash equivalents and restricted cash | 1,744,044 | (2,100,371) |
Cash and cash equivalents and restricted cash at beginning of the year | 1,105,787 | 3,206,158 |
Cash and cash equivalents and restricted cash at end of year | 2,849,831 | 1,105,787 |
SUPPLEMENTAL INFORMATION | ||
Cash paid for interest | 2,722,542 | 1,952,719 |
Cash paid for income taxes | 0 | |
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Equipment acquired under capital leases | 450,098 | 0 |
Contributed assets Vertex Recovery Management LA from non-controlling interest | 857,738 | 0 |
Contingent consideration | (128,116) | 0 |
Common restricted shares for Nickco acquisition | 93,000 | 474,000 |
Return of common shares for sale escrow | 0 | 1,109 |
Series A Preferred | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Preferred Stock into common stock | 34 | 39 |
Series B and B-1 Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Preferred Stock into common stock | 6,613,052 | 119,440 |
Dividends on Series B and B-1 Preferred Stock | 2,687,123 | 1,677,633 |
Accretion of discount on Series B and B-1 Preferred Stock | 3,132,414 | 1,713,736 |
Nickco Recycling, LLC | ||
Adjustments to reconcile net loss to cash used in operating activities: | ||
Contingent consideration | 0 | 236,680 |
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Contingent consideration | $ 0 | $ 236,680 |
BASIS OF PRESENTATION AND NATUR
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2018 | |
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 15 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 segments are comprised of Black Oil, Refining and Marketing, and Recovery. Black Oil Through its Black Oil segment, 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 (when such use makes economic sense) and a higher-value feedstock for further processing. The finished product can then be sold by barge as a fuel oil cutterstock and a feedstock component for major refineries. Today we are 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 instead of to create marine fuel cutterstock as such use is not currently economically accretive. 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 segment, 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 segment, which has been operational since 2002, Vertex Energy generates solutions for the proper recovery and management of hydrocarbon streams. 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 commodities. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
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 ”) provided dismantling and demolition services at industrial facilities throughout the Gulf Coast - provided that such entity is no longer operational as of the date of this filing. • 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. • 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 "), is a holding company for various of the subsidiaries described above. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the same such amounts shown in the consolidated statements of cash flows. December 31, 2018 December 31, 2017 Cash and cash equivalents $ 1,349,831 $ 1,105,787 Restricted cash 1,500,000 — Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows $ 2,849,831 $ 1,105,787 In November 2018, we placed $1.5 million in a letter of credit to serve as collateral for acquiring products. The transaction did not materialize and the full amount was released to us and received in February 2019. The amount is recorded as restricted cash in our 2018 consolidated balance sheet. 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 $831,768 and $1,636,068 at December 31, 2018 and 2017 , 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 major 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. 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 Financial Accounting Standards Board Accounting Standards Codification (“ 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. For the year ended December 31, 2018, there was a $176,349 goodwill impairment. 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. 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 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. Our Level 2 liabilities include our marked to market changes in the estimated value of our open derivative contracts held at the balance sheet date. Our Level 3 liabilities include our marked to market changes in the estimated value of our derivative warrants issued in connection with our Series B Preferred Stock and Series B1 Preferred Stock. The Company estimates the fair values of the crude oil swaps and collars based on published forward commodity price curves for the underlying commodity as of the date of the estimate for which published forward pricing is readily available. The determination of the fair values above incorporates various factors including the impact of the Company's non-performance risk and the credit standing of the counterparty involved in the Company's derivative contracts. In addition, the Company routinely monitors the creditworthiness of its counterparty. Nonfinancial assets and liabilities measured at fair value on a nonrecurring basis include certain nonfinancial assets and liabilities as may be acquired in a business combination and thereby measured at fair value. Debt Issuance Costs The Company follows the accounting guidance of ASC 835-30, Interest-Imputation of Interest, which requires that debt issuance costs related to a recognized debt liability be reported on the Consolidated Balance Sheet as a direct reduction from the carrying amount of that debt liability. 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. 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 determined that no long-lived asset impairment existed at December 31, 2018 and 2017 . 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 balance sheet. 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 Company recognizes and measures a tax benefit from uncertain tax positions when it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company recognizes a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate or future recognition of an unrecognized benefit. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the consolidated statements of operations. Accrued interest and penalties are included within deferred taxes, unrecognized tax benefits and other long-term liabilities line in the consolidated balance sheet. Derivative Transactions All derivative instruments are recorded on the accompanying balance sheets at fair value. These derivative transactions are not designated as cash flow hedges under FASB ASC 815, Derivatives and Hedges. Accordingly, these derivative contracts are marked-to-market and any changes in the estimated value of derivative contracts held at the balance sheet date are recognized in the accompanying statements of operations as net gain or loss on derivative contracts. The derivative assets or liabilities are classified as either current or noncurrent assets or liabilities based on their anticipated settlement date. The Company nets derivative assets and liabilities for counterparties where it has a legal right of offset. 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 in earnings. To derive an estimate of the fair value of these warrants, a Dynamic Black Scholes model is utilized which 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, our quoted 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 and Series B1 Preferred Stock if the redemption would not be subject to the existing restrictions under the Company's 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 stock-based expense and activity in accordance with FASB ASC Topic 718, which establishes accounting for equity instruments exchanged for services. Under this provision, stock-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 Basic earnings per share 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 years ended December 31, 2018 and December 31, 2017 , respectively, includes the weighted average of common shares outstanding. 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. 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. New Accounting Pronouncements (a) Application of New Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU No. 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU No. 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU No. 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In July 2015, the FASB issued ASU No. 2015-14 which delayed the effective date of ASU No. 2014-09 by one year (effective for annual periods beginning after December 15, 2017). The Company adopted ASU 2014-09 in the first quarter of fiscal 2018 using the modified retrospective method. The adoption of the standard did not have a material impact on our revenue recognition policies, and the Company has concluded that the most significant impact of the standard relates to the incremental disclosures required. (b) New Accounting Requirements and Disclosures In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU No. 2016-02, lessor accounting is largely unchanged. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018 with early application permitted. In February 2018, FASB issued ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. The amendment clarifies that land easements are within the scope of the new leases standard (ASC 842) and introduces a new transition practical expedient allowing a company to not assess whether existing and expired land easements that were not previously accounted for as leases under current US GAAP (ASC 840) are or contain leases under ASC 842. In July 2018, FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases. The amendment provides improvements that clarify specific aspects of the guidance in ASU 2016-02. In August 2018, FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. The amendment provides entities with an additional (and optional) transition method to adopt the new leases standard and provides lessors with a practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if certain criteria are met. The Company adopted ASU 2016-02 on January 1, 2019. As of the date of this filing, the Company is refining its estimate and anticipates the implementation of this standard will result in an increase to assets and liabilities of approximately between $30.0 million and $35.0 million on January 1, 2019. |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Revenue Recognition We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when our performance obligations under the terms of a contract with our customers are satisfied. Recognition occurs when the Company transfers control by completing the specified services at the point in time the customer benefits from the services performed or once our products are delivered. Revenue is measured as the amount of consideration we expect to receive in exchange for completing our performance obligations. Sales tax and other taxes we collect with revenue-producing activities are excluded from revenue. In the case of contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative stand-alone selling prices of the various goods and/or services encompassed by the contract. We do not have any material significant payment terms, as payment is generally due within 30 days after the performance obligation has been satisfactorily completed. The Company has elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. In applying the guidance in Topic 606, there were no judgments or estimates made that the Company deems significant. The nature of the Company's contracts give rise to certain types of variable consideration. Accordingly, management establishes a revenue allowance to cover the estimated amounts of revenue that may need to be credited to customers' accounts in future periods. The Company estimates the amount of variable consideration to include in the estimated transaction price based on historical experience, anticipated performance and its best judgment at the time and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. For time to time, our fuel oil customers in our black oil segment may request that we store product which they purchase from us in our facilities. We recognize revenues for these “bill and hold” sales once the following criteria have been met: (1) there is a substantive reason for the arrangement, (2) the product is segregated and identified as the customer's asset, (3) the product is ready for delivery to the customer, and (4) we cannot use the product or direct it to another customer. Disaggregation of Revenue The following table presents our revenues disaggregated by revenue source: Year ended December 31, 2018 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 41,207,747 $ — $ — $ 41,207,747 Southern United States 102,629,234 22,935,482 13,948,198 139,512,914 $ 143,836,981 $ 22,935,482 $ 13,948,198 $ 180,720,661 Sources of Revenue Petroleum products $ 143,836,981 $ 22,935,482 $ 1,960,915 $ 168,733,378 Metals — — 11,987,283 11,987,283 Total revenues $ 143,836,981 $ 22,935,482 $ 13,948,198 $ 180,720,661 Year ended December 31, 2017 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 31,242,068 $ — $ — $ 31,242,068 Southern United States 76,746,483 20,097,325 17,413,216 114,257,024 $ 107,988,551 $ 20,097,325 $ 17,413,216 $ 145,499,092 Sources of Revenue Petroleum products $ 107,988,551 $ 20,097,325 $ 10,070,746 $ 138,156,622 Metals — — 7,342,470 7,342,470 Total revenues $ 107,988,551 $ 20,097,325 $ 17,413,216 $ 145,499,092 Petroleum products - We derive a majority of our revenues from the sale of recovered/re-refined petroleum products, which include Base Oil, VGO (Vacuum Gas Oil), Pygas, Gasoline, Cutterstock and Fuel Oils. Metals - Consist of recoverable ferrous and non-ferrous recyclable metals from manufacturing and consumption. Scrap metal can be recovered from pipes, barges, boats, building supplies, surplus equipment, tanks, and other items consisting of metal composition. These materials are segregated, processed, cut-up and sent back to a steel mill for re-purposing. |
CONCENTRATIONS, SIGNIFICANT CUS
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 , 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, 2018 and 2017 , the Company’s revenues and receivables were comprised of the following customer concentrations: 2018 2017 % of Revenues % of Receivables % of % of Customer 1 34% 21% 17% 10% Customer 2 11% —% 5% —% Customer 3 8% 6% 9% 11% Customer 4 7% 6% 13% 7% Customer 5 4% 13% —% —% Customer 6 —% —% 2% 15% Customer 7 —% —% 14% —% At December 31, 2018 and 2017 , and for the years then ended, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment 2018 % of Revenue by Segment 2017 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 100 % — % — % 100 % — % — % Customer 2 100 % — % — % 100 % — % — % Customer 3 — % 100 % — % — % 100 % — % Customer 4 100 % — % — % 100 % — % — % Customer 5 100 % — % — % 100 % — % — % Customer 6 100 % — % — % 100 % — % — % Customer 7 100 % — % — % 100 % — % — % The Company had no vendors that represented 10% or more of total purchases or payables for the years ended December 31, 2018 and 2017. 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. 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 or have recently resolved, 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. In July 2018, the parties entered into a confidential settlement agreement and settled all previously pending claims. The settlement did not have a material impact on the consolidated financial statements. 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. There were no related party transactions during the years ended December 31, 2018 and 2017. 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. Plant, vehicle and equipment leases are included as part of cost of revenues, and office leases are included in the selling, general and administrative expenses line items in the consolidated statements of operations, respectively. Total rent expense for all operating leases for 2018 and 2017 is summarized as follows: 2018 2017 Office leases $ 773,282 $ 744,154 Plant leases 4,093,800 4,123,600 Vehicle and equipment leases 392,623 363,616 $ 5,259,705 $ 5,231,370 Minimum future lease commitments as of December 31, 2018 , are summarized as follows: Year ending December 31, Office Facilities Vehicles Plant Leases Total 2019 $ 727,028 $ 219,248 $ 4,044,000 $ 4,990,276 2020 549,264 161,538 4,044,000 4,754,802 2021 433,909 161,538 4,044,000 4,639,447 2022 314,000 31,094 3,666,000 4,011,094 2023 300,000 — 1,132,000 1,432,000 Thereafter 2,975,000 — — 2,975,000 $ 5,299,201 $ 573,418 $ 16,930,000 $ 22,802,619 |
FIXED ASSETS, NET
FIXED ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment and Asset Retirement Obligations [Abstract] | |
FIXED ASSETS, NET | FIXED ASSETS, NET Fixed assets consist of the following: Useful Life (in years) December 31, 2018 December 31, 2017 Equipment 7-20 $ 40,404,582 $ 38,843,978 Furniture and fixtures 7 108,896 108,896 Leasehold improvements 15 2,331,071 2,323,356 Office equipment 5 1,190,509 1,048,313 Vehicles 5 7,349,486 7,175,147 Building 20 274,203 274,203 Construction in progress 12,720,188 12,612,208 Land 2,833,551 2,851,551 Total fixed assets 67,212,486 65,237,652 Less accumulated depreciation (19,927,479 ) (16,617,824 ) Net fixed assets $ 47,285,007 $ 48,619,828 Depreciation expense was $5,166,467 and $4,817,264 for the years ended December 31, 2018 and 2017 , respectively. Equipment under construction in progress is related to 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. |
ACQUISITIONS AND ASSET PURCHASE
ACQUISITIONS AND ASSET PURCHASE | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS AND ASSET PURCHASE | ACQUISITIONS AND ASSET PURCHASE Acadiana Recovery, LLC On February 2, 2017, the Company entered into and closed an Asset Purchase Agreement (the "APA") with Acadiana Recovery, LLC ("Acadiana") pursuant to which the Company agreed to buy substantially all of Acadiana's customer relations, vehicles, equipment, supplies and tools for an aggregate purchase price of $710,350 . This resulted in the recognition of $389,650 in fixed assets and $320,700 in intangible assets as of the acquisition date. Nickco Recycling, Inc. On May 1, 2017, the Company entered into and closed an APA with Nickco Recycling, Inc. ("Nickco") pursuant to which the Company agreed to buy substantially all the processing equipment and the rolling stock of Nickco for aggregate consideration of $1,804,000 . This included $1,126,730 in cash, 500,000 shares of restricted common stock and contingent consideration of 500,000 shares of common stock, which is payable only if the assets acquired meet a pre-agreed EBITDA target for the 12 calendar months ending on the last day of the 12 th calendar month following closing. This resulted in the recognition of $1,182,000 in fixed assets, $585,000 in intangible assets, $37,000 of inventory, and $203,000 as contingent consideration. Acquisition of Ygriega Assets On July 16, 2017, the Company entered into and closed an Asset Purchase and Sale Agreement with Ygriega Environmental Services, LLC ("Ygriega") pursuant to which the Company agreed to buy substantially all the collections routes of Ygriega (which related to used oil, used oil filters, used anti-freeze and other related services) and certain other assets, for aggregate consideration of $196,000 , which included $162,500 in cash at time of closing plus $87,500 payable in two installments in the next two years contingent on collected oil gallons (i.e., adjustable downward in the event certain targets are not met in such years). The agreement also included a two year non-compete by the seller. This resulted in the recognition of $38,500 in fixed assets, $159,000 in intangibles, a bargain gain of $1,500 , and contingent consideration of $33,500 . Specialty Environmental Services On April 30, 2018, the Company entered into and closed an APA with Specialty Environmental Services ("SES") pursuant to which the Company agreed to buy substantially all of SES's customer relations, vehicles, equipment, supplies and tools in Texas for an aggregate purchase price of $269,826 . We recognized the consideration in tangible and intangible assets as of the purchase date. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill and components of intangible assets (subject to amortization) consist of the following items: December 31, 2018 December 31, 2017 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Net Customer relations 5-8 $ 1,329,580 $ 718,890 $ 610,690 $ 1,588,700 $ 872,654 $ 716,046 Vendor relations 10 6,654,497 3,531,764 3,122,733 6,654,497 2,866,314 3,788,183 Trademark/Trade name 6-16 1,249,887 436,869 813,018 1,321,000 423,514 897,486 TCEP Technology/Patent 15 13,287,000 5,294,843 7,992,157 13,287,000 4,409,043 8,877,957 Non-compete agreements 3-5 196,601 156,680 39,921 189,000 145,667 43,333 Goodwill — — — 176,349 — 176,349 $ 22,717,565 $ 10,139,046 $ 12,578,519 $ 23,216,546 $ 8,717,192 $ 14,499,354 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. Total amortization expense of intangibles was $1,818,854 and $1,818,475 for the years ended December 31, 2018 and 2017 , respectively. Estimated future amortization expense is as follows: 2019 $ 1,823,812 2020 1,823,812 2021 1,823,812 2022 1,608,884 2023 1,251,500 Thereafter 4,246,699 $ 12,578,519 We analyzed the goodwill on the books for the Nickco as of December 31, 2018 to determine whether the amount should be impaired at year end. Nickco was purchased with anticipated EBITDA to be in excess of $700,000 with the synergies of the two companies. The EBITDA for the first 12 months after acquisition of Nickco was well below the expected EBITDA. The earnout target for the seller of the business during the initial 12 months was a range between $392,000 and $567,000 ; the achieved results of $334,000 did not meet the lower end of the threshold. Our budgeted target EBITDA for 2018 at this segment was $461,000 of EBITDA, the results came in over $1 million short of the target. There were some circumstances around the operations and downtime that impacted these results. Based on the above financial performance, as well as the current outlook for 2019, the Company impaired the remaining goodwill. As a result of the above, we recognized a $176,349 goodwill impairment in 2018, which is included in selling, administrative and general expenses and thus eliminated the goodwill balance in our Recovery segment. At December 31, 2018 and 2017, there was $0 and $176,349 goodwill recorded, respectively. Our Black Oil and Refining and Marketing segment did not have any goodwill recorded as of December 31, 2018 and 2017. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable, net, consists of the following at December 31: 2018 2017 Accounts receivable trade $ 9,859,758 $ 12,925,059 Allowance for doubtful accounts (831,768 ) (1,636,068 ) Accounts receivable trade, net $ 9,027,990 $ 11,288,991 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. |
LINE OF CREDIT AND LONG-TERM DE
LINE OF CREDIT AND LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT AND LONG-TERM DEBT | LINE OF CREDIT AND LONG-TERM DEBT Credit and Guaranty Agreement and Revolving Credit Facility with Encina Business Credit, LLC Effective February 1, 2017, we, Vertex Operating, and substantially all of our other operating subsidiaries, other than E-Source Holdings, LLC (" E-Source "), entered into a Credit Agreement (the “ EBC Credit Agreemen t”) 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 , provided that the amount outstanding under the EBC Credit Agreement at any time cannot exceed 50% of the value of the operating plant facilities and related machinery and equipment owned by us (not including E-Source). 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 interest rate is 12% at December 31, 2018 . 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. The amounts borrowed under the EBC Credit Agreement are guaranteed by us and our subsidiaries, other than E-Source, pursuant to a Guaranty and Security Agreement (the “ Guaranty and Security Agreement ”), whereby we also pledged substantially all of our assets and all of the securities of our subsidiaries (other than E-Source) as collateral securing the amount due under the terms of the EBC Credit Agreement. We also provided EBC mortgages on our Marrero, Louisiana, and Columbus, Ohio facilities to secure the repayment of outstanding amounts and agreed to provide mortgages on certain other real property to be delivered post-closing. The post-closing mortgage properties provided were in Baytown, Pflugerville and Corpus Christi, Texas. The EBC Credit Agreement contains customary representations, warranties and requirements for the Company to indemnify the EBC Lenders and their affiliates. The EBC Credit Agreement also includes various covenants (positive and negative) binding upon the Company, including, prohibiting us from undertaking acquisitions or dispositions unless they meet the criteria set forth in the EBC Credit Agreement, not incurring any capital expenditures in amount exceeding $3 million in any fiscal year that the EBC Credit Agreement is in place, and requiring us to maintain at least $2.5 million of borrowing availability under the Revolving Credit Agreement (defined below) at any time. As of December 31, 2018 , the borrowing availability was $3,408,448 , and the Company was in compliance with all covenants thereunder. The EBC Credit Agreement includes customary events of default for facilities of a similar nature and size as the EBC Credit Agreement, including if an event of default occurs under any agreement evidencing $500,000 or more of indebtedness of the Company; we fail to make any payment when due under any material agreement; subject to certain exceptions, any judgment is entered against the Company in an amount exceeding $500,000 ; and also provides that an event of default occurs if a change in control of the Company occurs, which includes if (a) Benjamin P. Cowart, the Company’s Chief Executive Officer, Chairman of the Board and largest shareholder, and Chris Carlson, the Chief Financial Officer of the Company, cease to own and control legally and beneficially, collectively, either directly or indirectly, equity securities in Vertex Energy, Inc., representing more than 15% of the combined voting power of all securities entitled to vote for members of the board of directors or equivalent on a fully-diluted basis, (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any person or group of securities representing more than 30% of the aggregate ordinary voting power represented by the issued and outstanding securities of Vertex Energy, Inc., or (c) during any period of 12 consecutive months, a majority of the members of the board of directors of the Company cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (collectively “ Events of Default ”). An event of default under the Revolving Credit Agreement (defined below), is also an event of default under the EBC Credit Agreement. Effective February 1, 2017, we, Vertex Operating and substantially all of our operating subsidiaries, other than E-Source, entered into a Revolving Credit Agreement (the “ Revolving Credit Agreement ”) with Encina Business Credit SPV, LLC as lender (“ Encina ”) and EBC as the administrative agent. Pursuant to the Revolving Credit Agreement, and the terms thereof, Encina 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, which provide that the amount outstanding thereunder cannot exceed an amount equal to the total of (a) the lesser of (A) the value (as calculated in the Revolving Credit Agreement) of our inventory which are raw materials or finished goods that are merchantable and readily saleable to the public in the ordinary course of our business (“ EBC Eligible Inventory ”), net of certain inventory reserves, multiplied by 85% of the appraised value of EBC Eligible Inventory, or (B) the value (as calculated in the Revolving Credit Agreement) of EBC Eligible Inventory, net of certain inventory reserves, multiplied by 65% , subject to a ceiling of $4 million , plus (b) the face amount of certain accounts receivables (net of certain reserves applicable thereto) multiplied by 85% (subject to adjustment as provided in the Revolving Credit Agreement); minus (c) the then-current amount of certain reserves that the agent may determine necessary for the Company to maintain. At December 31, 2018 , the maximum amount available to be borrowed was $3,408,448 , based on the above borrowing base calculation. 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 2.35% 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 month, 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. Borrowings under a revolving credit agreement that contain a subjective acceleration clause and also require a borrower to maintain a lockbox with the lender (whereby lockbox receipts may be applied to reduce the amount outstanding under the revolving credit agreement) are considered short-term obligations. As a result, the debt is classified as a current liability at December 31, 2018 . The amounts borrowed under the Revolving Credit Agreement are guaranteed by us and our subsidiaries, other than E-Source, pursuant to a separate Guaranty and Security Agreement, similar to the EBC Credit Agreement, described in greater detail above. We also provided Encina mortgages on our Marrero, Louisiana, and Columbus, Ohio facilities to secure the repayment of outstanding amounts. The Revolving Credit Agreement contains customary representations, warranties and requirements for the Company to indemnify Encina and its affiliates. The Revolving Credit Agreement also includes various covenants (positive and negative) binding upon the Company, including, prohibiting us from undertaking acquisitions or dispositions unless they meet the criteria set forth in the Revolving Credit Agreement, not incurring any capital expenditures in amount exceeding $3 million in any fiscal year that the Revolving Credit Agreement is in place, and requiring us to maintain at least $2.5 million of borrowing availability under the Revolving Credit Agreement in any 30 day period. The Revolving Credit Agreement includes customary events of default for facilities of a similar nature and size as the Revolving Credit Agreement, including the same Events of Default as are described above under the description of the EBC Credit Agreement. A total of $11,282,537 of the amount initially borrowed under the EBC Credit Agreement and Revolving Credit Agreement was used to repay amounts owed under (a) a Restated Credit Agreement with Goldman Sachs Bank, (b) our loan agreement with MidCap Business Credit LLC; and (c) amounts owed under another note provided to us by a third party, 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 Business Credit LLC Loan Agreement, and our right to borrow funds thereunder were terminated. The balance of the EBC Credit Agreement and the Revolving Credit Agreement as of December 31, 2018 are $ 15,350,000 and $ 3,844,636 , respectively. Texas Citizens Bank Loan Agreement The Company has notes payable to Texas Citizens Bank bearing interest at 5.50% per annum, maturing on January 7, 2020. The balance of the notes payable was $ 834,283 at December 31, 2017 . The note was paid off during the quarter ended September 30, 2018. Insurance Premiums The Company financed insurance premiums through various financial institutions bearing interest rates from 4.00% to 4.52% . All such premium finance agreements have maturities of less than one year and have a balance of $ 999,152 at December 31, 2018 and $ 803,392 at December 31, 2017 . Capital Leases On March 1, 2018, the Company obtained one capital lease. Payments are $908 per month for the three years and the amount of the capital lease obligation has been reduced to $ 22,390 at December 31, 2018 . On May 29, 2018, the Company obtained one capital lease. Payments are $26,305 per quarter for four years and the amount of the capital lease obligation has been reduced to $ 349,822 at December 31, 2018 . The Company's outstanding debt as of December 31, 2018 and December 31, 2017 are summarized as follows: Creditor Loan Type Origination Date Maturity Date Loan Amount Balance on December 31, 2018 Balance on December 31, 2017 Encina Business Credit, LLC Term Loan February 1, 2017 February 1, 2020 $ 20,000,000 $ 15,350,000 $ 14,750,000 Encina Business Credit SPV, LLC Revolving Note February 1, 2017 February 1, 2020 $ 10,000,000 3,844,636 4,591,527 Tetra Capital Lease Capital Lease May, 2018 May, 2018 $ 419,690 349,822 — Wells Fargo Equipment Lease Capital Lease March, 2018 March, 2021 $ 30,408 22,390 — Texas Citizens Bank Term Note January, 2015 January, 2020 $ 2,045,500 — 834,283 Various institutions Insurance premiums financed Various < 1 year $ 2,902,428 999,152 803,392 Total 20,566,000 20,979,202 Deferred finance costs, net (621,733 ) (1,239,570 ) Total, net of deferred finance costs, net $ 19,944,267 $ 19,739,632 Future maturities of debt are summarized as follows: Creditor 2019 2020 2021 2022 2023 Thereafter Encina Business Credit, LLC $ 900,000 $ 14,450,000 $ — $ — $ — $ — Encina Business Credit SPV, LLC 3,844,636 — — — — — Tetra Capital Lease 85,808 91,779 98,167 74,068 — — Wells Fargo Equipment Lease 10,049 10,537 1,804 — — — Various institutions 999,152 — — — — — Totals 5,839,645 14,552,316 99,971 74,068 — — Deferred finance costs, net (573,912 ) (47,821 ) — — — — Totals, net of deferred finance costs $ 5,265,733 $ 14,504,495 $ 99,971 $ 74,068 $ — $ — |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES On December 22, 2017, the Tax Reform Act was signed into law. The legislation significantly changes U.S. tax law by, among other things, lowering the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. As a result of the decrease in the corporate income tax rate, we revalued our ending net deferred tax assets at December 31, 2017, but did not recognize any incremental income tax expense in 2017 due to the revaluation of the valuation allowance. On December 22, 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. We provisionally recognized the incremental tax impacts related to the revaluation of deferred tax assets and liabilities and our reassessment of uncertain tax positions and valuation allowances and included these amounts in our Consolidated Financial Statements for the year ended December 31, 2017. We completed our accounting for all of the enactment-date income tax effects of the Tax Reform Act during the fourth quarter of 2018 with no further changes. The components of income tax (benefit) expense for the years ended December 31, 2018 and 2017 are as follows: December 31, 2018 December 31, 2017 Current federal tax (expense)/benefit $ (137,212 ) $ — Deferred federal tax (expense)/benefit 137,212 274,423 Total federal tax (expense)/benefit $ — $ 274,423 Reconciliation between the amount determined by applying the U.S. federal income tax rate of 21% and 34% to pretax income from continuing operations as a result of the following for the years ended December 31, 2018 and 2017 , respectively: December 31, 2018 December 31, 2017 Statutory tax on book income $ (417,000 ) $ (2,860,000 ) Permanent differences (46,000 ) 135,000 Change in expected tax rate — 6,897,408 Change in valuation allowance 967,000 (3,672,000 ) Prior year return true up (504,000 ) (774,831 ) Income tax expense (benefit) $ — $ (274,423 ) The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2018 and 2017 are presented below: December 31, 2018 December 31, 2017 Deferred tax assets: Alternative minimum tax credits $ 137,000 $ 274,000 Accrued bonus and stock based compensation 358,000 225,000 Intangible assets 1,368,000 1,013,000 Bad debt reserve 175,000 344,000 Contribution carryover 26,000 18,000 Disallowed interest expense IRC Section 163(j) 190,000 — Net operating loss carry forwards 12,500,000 11,670,000 Less valuation allowance (12,109,000 ) (11,142,000 ) Total deferred tax assets $ 2,645,000 $ 2,402,000 December 31, 2018 December 31, 2017 Deferred tax liabilities: Accelerated tax depreciation $ (2,444,000 ) $ (2,128,000 ) Contingent liability 3,000 — Vertex Recovery Management LA (67,000 ) — Total deferred tax liabilities $ (2,508,000 ) $ (2,128,000 ) Net deferred tax assets $ 137,000 $ 274,000 The Company provides a valuation allowance when it is more likely than not that some portion of the deferred tax assets will not be realized. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to utilize the existing deferred tax assets. Based on this evaluation, as of December 31, 2018 , a valuation allowance of approximately $12,109,000 has been recorded on the net deferred tax assets in order to measure only the portion of the deferred tax assets that more than likely not will be realized. As of December 31, 2017 , a valuation allowance of $ 11,142,000 was recorded against the net deferred tax asset not expected to be realized. The Company is subject to examination by Federal and State tax authorities for fiscal years 2014 through 2018 , except for utilization of net operating losses. At December 31, 2018 , the Company had federal net operating loss carry-forwards (" NOLs ") of approximately $59.5 million . IRC Sections 382 and 383 provide an annual limitation with respect to the ability of a corporation to utilize its tax attributes against future U.S. taxable income in the event of a change in ownership. The net operating loss carry-forwards at December 31, 2018 reflect a reduction of approximately $32.5 million as a result of an ownership change triggering event in May 2016, as defined under IRC Section 382. The net operating loss carryforward will begin to expire in 2026. Those arising in tax years after 2017 can be carried forward indefinitely. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2018 | |
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 $659,836 and $606,446 for the years ended December 31, 2018 and 2017 , respectively, for options awarded by the Company. Stock option activity for the years ended December 31, 2018 and 2017 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, 2016 3,206,916 $ 4.33 5.80 $ 2,966,028 Options granted 500,000 1.01 8.12 363,089 Options exercised — — 0.00 — Options cancelled/forfeited/expired (526,499 ) (14.00 ) 0.00 (30,921 ) Outstanding at December 31, 2017 3,180,417 $ 2.21 4.62 $ 3,298,196 Vested at December 31, 2017 1,959,167 $ 2.55 4.45 $ 1,885,850 Exercisable at December 31, 2017 1,959,167 $ 2.55 4.45 $ 1,885,850 Outstanding at December 31, 2017 3,180,417 $ 2.21 4.62 $ 3,298,196 Options granted 697,000 1.17 8.10 610,305 Options exercised (7,500 ) 1.20 0.00 (4,241 ) Options cancelled/forfeited/expired (409,167 ) 1.80 0.00 (434,962 ) Outstanding at December 31, 2018 3,460,750 $ 2.05 3.50 $ 3,469,298 Vested at December 31, 2018 2,127,500 $ 2.48 4.67 $ 2,122,478 Exercisable at December 31, 2018 2,127,500 $ 2.48 4.67 $ 2,122,478 On April 12, 2018, the Board of Directors granted 11 employees and 1 officer/director options to purchase an aggregate of 521,000 and 166,000 , respectively, shares of common stock at an exercise price of $1.14 and $1.26 per share, respectively, with a ten year and 5 year term, respectively (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first 4 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 May 22, 2018, the Board of Directors granted 1 employee options to purchase an aggregate of 10,000 shares of common stock at an exercise price of $1.03 per share with a 10 year term (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first 4 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 January 4, 2017, the Board of Directors granted one employee options to purchase an aggregate of 20,000 shares of common stock at an exercise price of $1.31 per share with a 5 year term (subject to continued employment), vesting at the rate of 1/4th of such options per year on the first 4 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 August 21, 2017, the Board of Directors granted 5 employees and 1 officer/director options to purchase an aggregate of 330,000 and 150,000 , respectively, shares of common stock at an exercise price of $0.97 and $1.07 per share, respectively, with a ten year and 5 year term, respectively, (subject to continued employment/directorship), vesting at the rate of 1/4th of such options per year on the first 4 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, 2018 and 2017 is as follows: WARRANTS ISSUED AND OTHER THAN SERIES B AND B1 PREFERRED STOCK: Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Grant Date Fair Value Outstanding at December 31, 2016 219,868 $ 3.01 3.00 $ 140,249 Warrants granted — — — — Warrants exercised — — — — Warrants canceled/forfeited/expired — — — — Warrants at December 31, 2017 219,868 $ 3.01 2.00 $ 140,249 Vested at December 31, 2017 219,868 $ 3.01 2.00 $ 140,249 Exercisable at December 31, 2017 219,868 $ 3.01 3.00 $ 140,249 Outstanding at December 31, 2017 219,868 $ 3.01 2.00 $ 140,249 Warrants granted — — — — Warrants exercised — — — — Warrants canceled/forfeited/expired — — — — Warrants at December 31, 2018 219,868 $ 3.01 0.93 $ 140,249 Vested at December 31, 2018 219,868 $ 3.01 0.93 $ 140,249 Exercisable at December 31, 2018 219,868 $ 3.01 0.93 $ 140,249 See " Note 14. 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, 2018 YEAR ENDED DECEMBER 31, 2017 Expected volatility 78-79% 78-79% Expected dividends —% —% Expected term (in years) 5-10 5-10 Risk-free rate 2.46-2.59% 2.20-2.40% |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2018 | |
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 years ended December 31, 2018 and December 31, 2017 , respectively, 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. Due to their anti-dilutive effect, the calculation of diluted earnings per share for the years ended December 31, 2018 and December 31, 2017 excludes: 1) options to purchase 3,460,750 and 3,180,417 shares, respectively, of common stock, 2) warrants to purchase 7,353,056 and 7,353,056 shares, respectively, of common stock, 3) Series B Preferred Stock which is convertible into 3,604,827 and 3,427,597 shares, respectively, of common stock, 4) Series B1 Preferred Stock which is convertible into 10,057,597 and 13,151,989 shares, respectively, of common stock, 5) Series A Preferred Stock which is convertible into 419,859 and 453,567 shares, respectively, of common stock, and 6) zero and 31,568 shares, respectively, of Series C Preferred Stock, which is convertible into zero and 3,156,800 shares of common stock, respectively. The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share for the years ended December 31, 2018 and 2017 : 2018 2017 Basic loss per Share Numerator: Net loss available to common shareholders $ (8,037,304 ) $ (11,824,602 ) Denominator: Weighted-average common shares outstanding 35,411,264 32,653,402 Basic loss per share $ (0.23 ) $ (0.36 ) Diluted Earnings per Share Numerator: Net loss available to common shareholders $ (8,037,304 ) $ (11,824,602 ) Denominator: Weighted-average shares outstanding 35,411,264 32,653,402 Effect of dilutive securities Stock options and warrants — — Preferred stock — — Diluted weighted-average shares outstanding 35,411,264 32,653,402 Diluted loss per share $ (0.23 ) $ (0.36 ) |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and December 31, 2017 , there were 40,174,821 and 32,658,176 , respectively, shares of common stock 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. During the year ended December 31, 2018 , the Company issued 7,199,774 shares of common stock in connection with the conversion of Series B1, Series B, Series C, and Series A Convertible Preferred Stock, pursuant to the terms of such securities. In addition, the Company issued 150,000 shares of common stock pursuant to the earnout provisions of the Nickco acquisition agreement. Also, the Company issued 241 shares of common stock in connection with the cashless exercise of options. Finally, the Company issued 166,630 shares of common stock in lieu of cash dividends which accrued on the Series B1 Preferred Stock During the year ended December 31, 2017 , the Company issued 115,713 shares of common stock in connection with the conversion of Series B1 and Series A Convertible Preferred Stock, pursuant to the terms of such securities. In addition, the Company issued 500,000 shares of common stock in connection with the Nickco acquisition, and the Company received and cancelled 1,108,928 shares of common stock previously held in escrow as part of the escrow fulfillment of the sale of the Vertex Refining NV assets to Safety-Kleen System, Inc. |
PREFERRED STOCK AND TEMPORARY E
PREFERRED STOCK AND TEMPORARY EQUITY | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and December 31, 2017 , there were 419,859 shares and 453,567 shares of Series A Preferred Stock issued and outstanding, respectively. As of December 31, 2018 and December 31, 2017 , there were 3,604,827 and 3,427,597 Series B Preferred shares issued and outstanding, respectively. As of December 31, 2018 and December 31, 2017 , there were 10,057,597 and 13,151,989 shares of Series B1 Preferred Stock issued and outstanding, respectively. As of December 31, 2018 and December 31, 2017 , there were 0 and 31,568 shares of Series C Preferred Stock issued and outstanding, respectively. 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. 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 received no fee) from the June 2015 Offering, for an aggregate commission of $1.4 million which was netted against the proceeds. 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 June 2015 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 Warrants issued in connection with the Series B Preferred Stock (Series B Warrants) were initially 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 . 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 preferred shares are accounted for net outside of stockholders' equity with the Warrants accounted for as liabilities at their fair value. The initial value assigned to the derivative warrant liability was recognized through a corresponding discount to the Series B Preferred Stock. The value of the derivative warrant liability will be re-measured at each reporting period with changes in fair value recorded in earnings. The initial valuation of the warrants resulted in a beneficial conversion feature on the convertible preferred stock of $5,737,796 . The amounts related to the warrant discount and beneficial conversion feature will be accreted over the term as deemed dividend. Fees in the amount of $1.4 million relating to the stock placement were netted against proceeds. The following table represents the activity related to the Series B Preferred Stock, classified as Temporary Equity on the accompanying Consolidated Balance Sheet, during the years ended December 31, 2018 and December 31, 2017 : 2018 2017 Balance at beginning of period $ 7,190,467 $ 5,676,467 Less: conversions of shares to common (62,962 ) — Plus: discount accretion 1,118,259 882,215 Plus: dividends in kind 654,444 631,785 Balance at end of period $ 8,900,208 $ 7,190,467 The Series B Warrants and Series B1 Warrants were revalued at December 31, 2018 and December 31, 2017 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 $ 1,481,692 and $ 2,245,408 , respectively. At December 31, 2018 , the Series B Warrants and Series B1 Warrants were valued at approximately $256,458 and $1,243,234 , respectively. The dynamic Black-Scholes inputs used were: expected dividend rate of 0% , expected volatility of 64% - 100% , risk free interest rate of 2.63% (Series B Warrants) and 2.48% (Series B1 Warrants), and expected term of 2 years (Series B Warrants) and 3 years (Series B1 Warrants). As of December 31, 2018 and December 31, 2017 , respectively, a total of $ 167,642 and $ 139,186 of dividends were accrued on our outstanding Series B Preferred Stock. 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 initial BCF of the Series B Preferred Stock 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 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 $8.2 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 $0.61 million which was netted against the proceeds raised. 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 Warrants issued in connection with the Series B1 Preferred Stock offering (Series B1 Warrants) were initially 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 . 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 $ 13,279,755 with the May 2016 Warrants accounted for as liabilities at their fair value. The initial value assigned to the derivative warrant liability was recognized through a corresponding discount to the Series B1 Preferred Stock. The value of the derivative warrant liability will be re-measured at each reporting period with changes in fair value recorded in earnings. This initial valuation of the warrants resulted in a beneficial conversion feature on the convertible preferred stock of approximately $2,371,106 . The amounts related to the warrant discount and beneficial conversion feature 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 following table represents the activity related to the Series B1 Preferred Stock, classified as Temporary Equity on the accompanying Consolidated Balance Sheet, for the year ended December 31, 2018 and December 31, 2017 : 2018 2017 Balance at beginning of period $ 15,769,478 $ 13,927,788 Less: conversions of shares to common (5,068,602 ) (86,467 ) Plus: discount accretion 841,754 798,548 Plus: dividends in kind 1,737,125 1,129,609 Balance at end of period $ 13,279,755 $ 15,769,478 For the years ending December 31, 2018 and December 31, 2017 , respectively, a total of $ 235,360 and $ 281,527 of dividends were accrued on our outstanding Series B1 Preferred Stock. 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, value allocated to warrants, and BCF should be accreted to the Series B1 Preferred Stock to ensure that the Series B1 Preferred Stock balance is equal to its face value as of the redemption or conversion date, if conversion is expected earlier. 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 $ 19,349,745 Less: allocated value of May 2016 Warrants 2,867,264 Allocated value of Series B1 Preferred Stock $ 16,482,481 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 The following is an analysis of changes in the derivative liability: Level Three Roll-Forward Year Ended December 31, 2018 2017 Balance at beginning of period $ 2,245,408 $ 4,365,992 Change in fair value of warrants (763,716 ) (2,120,584 ) Balance at end of period $ 1,481,692 $ 2,245,408 Series C Convertible Preferred Stock On January 29, 2016, we sold 44,000 shares of Series C Preferred Stock (as described below) in consideration for $4 million . The Series C Convertible Preferred Stock (" Series C Preferred Stock "), authorized on January 29, 2016, does not accrue a dividend, but has participation rights on an as-converted basis, to any dividends paid on the Company’s common stock (other than dividends paid solely in common stock). Each Series C Preferred Stock share has a $100 face value, and a liquidation preference (in the amount of $100 per share) which is junior to the Company’s previously outstanding shares of preferred stock (including the Series B and B1 Preferred Stock), senior credit facilities and other debt holders as provided in further detail in the designation, but senior to the common stock. The Series C Preferred Stock is convertible into shares of the Company’s common stock at the holder’s option at any time at $1.00 per share (initially each share of Series C Preferred Stock is convertible into 100 shares of common stock (subject to adjustments for stock splits and recapitalizations)). The Series C Preferred Stock votes together with the common stock on an as-converted basis (the " Voting Rights "), provided that each holder’s voting rights are subject to and limited by the Series C Beneficial Ownership Limitation described below and provided further that notwithstanding any of the foregoing, solely for purposes of determining the Voting Rights, the Voting Rights accorded to such Series C Convertible Preferred Stock will be determined as if converted at $1.05 per share ( the market value of the common stock as of the close of trading on the day prior to the original issuance date of the Series C Preferred Stock ), and subject to equitable adjustment as discussed in the designation . There are no redemption rights associated with the Series C Preferred Stock. The Series C Preferred Stock contains a provision prohibiting the conversion of the Series C Preferred Stock into common stock of the Company, if upon such conversion or exercise, as applicable, the holder thereof would beneficially own more than 4.999% of the Company’s then outstanding common stock (the “ Series C Beneficial Ownership Limitation ”). The Series C Beneficial Ownership Limitation may be increased up and down on a per holder basis, with 61 days prior written notice from any holder, provided the Series C Beneficial Ownership Limitation may never be higher than 9.999% . So long as any shares of Series C Preferred Stock are outstanding, we are prohibited from undertaking any of the following without first obtaining the approval of the holders of a majority of the outstanding shares of Series C Preferred Stock: (a) increasing or decreasing (other than by redemption or conversion) the total number of authorized shares of Series C Preferred Stock; (b) re-issuing any shares of Series C Preferred Stock converted; (c) creating, or authorizing the creation of, or issuing or obligating the Company to issue shares of, any class or series of capital stock unless the same ranks junior to (and not pari passu with) the Series C Preferred Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Company, or increasing the authorized number of shares of any additional class or series of capital stock unless the same ranks junior to (and not pari passu with) the Series C Preferred Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Company; (d) effecting an exchange, reclassification, or cancellation of all or a part of the Series C Preferred Stock (except pursuant to the terms of the designation); (e) effecting an exchange, or creating a right of exchange, of all or part of the shares of another class of shares into shares of Series C Preferred Stock (except pursuant to the terms of the designation); (f) issuing any additional shares of Series C Preferred Stock; (g) altering or changing the rights, preferences or privileges of the shares of Series C Preferred Stock so as to affect adversely the shares of such series; or (h) amending or waiving any provision of |
COMMODITY DERIVATIVE INSTRUMENT
COMMODITY DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
COMMODITY DERIVATIVE INSTRUMENTS | COMMODITY DERIVATIVE INSTRUMENTS The Company utilizes derivative instruments to manage its exposure to fluctuations in the underlying commodity prices of its inventory. The Company's management sets and implements hedging policies, including volumes, types of instruments and counterparties, to support oil prices at targeted levels and manage its exposure to fluctuating prices. The Company’s derivative instruments consist of swap and futures arrangements for oil. In a commodity swap agreement, if the agreed-upon published third-party index price (“index price”) is lower than the swap fixed price, the Company receives the difference between the index price and the swap fixed price. If the index price is higher than the swap fixed price, the Company pays the difference. For futures arrangements, the Company receives the difference positive or negative between an agreed-upon strike price and the market price. The mark-to-market effects of these contracts as of December 31, 2018 , are summarized in the following table. The Company held no open contracts at December 31, 2017 . The notional amount is equal to the total net volumetric derivative position during the period indicated. The fair value of the crude oil swap agreements is based on the difference between the strike price and the New York Mercantile Exchange futures price for the applicable trading months. Contract Type Contract Period Weighted Average Trade Price (Barrels) Remaining Volume (Barrels) Fair Value Swap Dec. 2018- Feb. 2019 $ 48.78 60,000 $ (1,048,400 ) Swap Dec. 2018- Feb. 2019 $ 68.69 60,000 $ 1,097,124 Futures Feb. 2019- Mar. 2019 $ 70.42 69,000 $ 394,317 Futures Dec. 2018- Feb. 2019 $ 45.41 30,000 $ 252,900 The carrying values of the Company's derivatives positions and their locations on the consolidated balance sheets as of December 31, 2018 are presented in the table below. Balance Sheet Classification Contract Type 2018 Derivative commodity asset Crude oil swaps $ 48,724 Derivative commodity asset Crude oil futures 647,217 Total Derivative commodity $ 695,941 |
JOINT VENTURE
JOINT VENTURE | 12 Months Ended |
Dec. 31, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
JOINT VENTURE | 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 net income of $477,935 and $602,259 for the years ended December 31, 2018 and December 31, 2017 , respectively, and then added the 49% or $234,188 and $295,108 , respectively, income attributable to the non-controlling interest back to the Company's " Net income (loss) attributable to Vertex Energy, Inc. " in the Consolidated Statement of Operations. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company’s reportable segments include the Black Oil, Refining and Marketing and Recovery segments. Segment information for the years ended December 31, 2018 and 2017 are as follows: YEAR ENDED DECEMBER 31, 2018 Black Oil Refining and Marketing Recovery Total Revenues $ 143,836,981 $ 22,935,482 $ 13,948,198 $ 180,720,661 Income (loss) from operations $ 3,561,223 $ (2,250,924 ) $ (821,951 ) $ 488,348 Total assets $ 76,540,888 $ 1,407,002 $ 6,212,518 $ 84,160,408 YEAR ENDED DECEMBER 31, 2017 Black Oil Refining and Marketing Recovery Total Revenues $ 107,988,551 $ 20,097,325 $ 17,413,216 $ 145,499,092 Income (loss) from operations $ (6,511,944 ) $ (1,195,946 ) $ 651,627 $ (7,056,263 ) Total assets $ 75,709,845 $ 3,454,010 $ 5,141,619 $ 84,305,474 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Issuance of Series B and B1 Preferred Stock Shares in-Kind We paid the accrued dividends on our Series B Preferred Stock and Series B1 Preferred Stock, which accrued as of December 31, 2018, in-kind by way of the issuance of 54,078 restricted shares of Series B Preferred Stock pro rata to each of the then holders of our Series B Preferred Stock in January 2019 and the issuance of 150,872 restricted shares of Series B1 Preferred Stock pro rata to each of the then holders of our Series B1 Preferred Stock in January 2019. If converted in full, the 54,078 shares of Series B Preferred Stock would convert into 54,078 shares of common stock and the 150,872 shares of Series B1 Preferred Stock would convert into 150,872 shares of common stock. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
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 ”) provided dismantling and demolition services at industrial facilities throughout the Gulf Coast - provided that such entity is no longer operational as of the date of this filing. • 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. • 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 "), is a holding company for various of the subsidiaries described above. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with an original maturity of three months or less 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 major 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 Financial Accounting Standards Board Accounting Standards Codification (“ 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. |
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. |
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 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. Our Level 2 liabilities include our marked to market changes in the estimated value of our open derivative contracts held at the balance sheet date. Our Level 3 liabilities include our marked to market changes in the estimated value of our derivative warrants issued in connection with our Series B Preferred Stock and Series B1 Preferred Stock. The Company estimates the fair values of the crude oil swaps and collars based on published forward commodity price curves for the underlying commodity as of the date of the estimate for which published forward pricing is readily available. The determination of the fair values above incorporates various factors including the impact of the Company's non-performance risk and the credit standing of the counterparty involved in the Company's derivative contracts. In addition, the Company routinely monitors the creditworthiness of its counterparty. Nonfinancial assets and liabilities measured at fair value on a nonrecurring basis include certain nonfinancial assets and liabilities as may be acquired in a business combination and thereby measured at fair value. |
Debt Issuance Costs | Debt Issuance Costs The Company follows the accounting guidance of ASC 835-30, Interest-Imputation of Interest, which requires that debt issuance costs related to a recognized debt liability be reported on the Consolidated Balance Sheet as a direct reduction from the carrying amount of that debt liability. |
Reclassification of Prior Year Presentation | 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. |
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 balance sheet. 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 Company recognizes and measures a tax benefit from uncertain tax positions when it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company recognizes a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate or future recognition of an unrecognized benefit. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the consolidated statements of operations. Accrued interest and penalties are included within deferred taxes, unrecognized tax benefits and other long-term liabilities line in the consolidated balance sheet. |
Derivative Transactions | Derivative Transactions All derivative instruments are recorded on the accompanying balance sheets at fair value. These derivative transactions are not designated as cash flow hedges under FASB ASC 815, Derivatives and Hedges. Accordingly, these derivative contracts are marked-to-market and any changes in the estimated value of derivative contracts held at the balance sheet date are recognized in the accompanying statements of operations as net gain or loss on derivative contracts. The derivative assets or liabilities are classified as either current or noncurrent assets or liabilities based on their anticipated settlement date. The Company nets derivative assets and liabilities for counterparties where it has a legal right of offset. 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 in earnings. To derive an estimate of the fair value of these warrants, a Dynamic Black Scholes model is utilized which 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, our quoted 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 and Series B1 Preferred Stock if the redemption would not be subject to the existing restrictions under the Company's 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 stock-based expense and activity in accordance with FASB ASC Topic 718, which establishes accounting for equity instruments exchanged for services. Under this provision, stock-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 Basic earnings per share 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 years ended December 31, 2018 and December 31, 2017 , respectively, includes the weighted average of common shares outstanding. 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. 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. |
New Accounting Pronouncements | New Accounting Pronouncements (a) Application of New Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU No. 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU No. 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required under existing U.S. GAAP. The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU No. 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). In July 2015, the FASB issued ASU No. 2015-14 which delayed the effective date of ASU No. 2014-09 by one year (effective for annual periods beginning after December 15, 2017). The Company adopted ASU 2014-09 in the first quarter of fiscal 2018 using the modified retrospective method. The adoption of the standard did not have a material impact on our revenue recognition policies, and the Company has concluded that the most significant impact of the standard relates to the incremental disclosures required. (b) New Accounting Requirements and Disclosures In February 2016, the FASB issued ASU No. 2016-02, Leases, which requires lessees to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under ASU No. 2016-02, lessor accounting is largely unchanged. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018 with early application permitted. In February 2018, FASB issued ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. The amendment clarifies that land easements are within the scope of the new leases standard (ASC 842) and introduces a new transition practical expedient allowing a company to not assess whether existing and expired land easements that were not previously accounted for as leases under current US GAAP (ASC 840) are or contain leases under ASC 842. In July 2018, FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases. The amendment provides improvements that clarify specific aspects of the guidance in ASU 2016-02. In August 2018, FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements. The amendment provides entities with an additional (and optional) transition method to adopt the new leases standard and provides lessors with a practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if certain criteria are met. The Company adopted ASU 2016-02 on January 1, 2019. As of the date of this filing, the Company is refining its estimate and anticipates the implementation of this standard will result in an increase to assets and liabilities of approximately between $30.0 million and $35.0 million on January 1, 2019. |
Revenue Recognition | We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when our performance obligations under the terms of a contract with our customers are satisfied. Recognition occurs when the Company transfers control by completing the specified services at the point in time the customer benefits from the services performed or once our products are delivered. Revenue is measured as the amount of consideration we expect to receive in exchange for completing our performance obligations. Sales tax and other taxes we collect with revenue-producing activities are excluded from revenue. In the case of contracts with multiple performance obligations, the Company allocates the transaction price to each performance obligation based on the relative stand-alone selling prices of the various goods and/or services encompassed by the contract. We do not have any material significant payment terms, as payment is generally due within 30 days after the performance obligation has been satisfactorily completed. The Company has elected the practical expedient to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. In applying the guidance in Topic 606, there were no judgments or estimates made that the Company deems significant. The nature of the Company's contracts give rise to certain types of variable consideration. Accordingly, management establishes a revenue allowance to cover the estimated amounts of revenue that may need to be credited to customers' accounts in future periods. The Company estimates the amount of variable consideration to include in the estimated transaction price based on historical experience, anticipated performance and its best judgment at the time and to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. For time to time, our fuel oil customers in our black oil segment may request that we store product which they purchase from us in our facilities. We recognize revenues for these “bill and hold” sales once the following criteria have been met: (1) there is a substantive reason for the arrangement, (2) the product is segregated and identified as the customer's asset, (3) the product is ready for delivery to the customer, and (4) we cannot use the product or direct it to another customer. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of restricted cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the same such amounts shown in the consolidated statements of cash flows. December 31, 2018 December 31, 2017 Cash and cash equivalents $ 1,349,831 $ 1,105,787 Restricted cash 1,500,000 — Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows $ 2,849,831 $ 1,105,787 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenue | The following table presents our revenues disaggregated by revenue source: Year ended December 31, 2018 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 41,207,747 $ — $ — $ 41,207,747 Southern United States 102,629,234 22,935,482 13,948,198 139,512,914 $ 143,836,981 $ 22,935,482 $ 13,948,198 $ 180,720,661 Sources of Revenue Petroleum products $ 143,836,981 $ 22,935,482 $ 1,960,915 $ 168,733,378 Metals — — 11,987,283 11,987,283 Total revenues $ 143,836,981 $ 22,935,482 $ 13,948,198 $ 180,720,661 Year ended December 31, 2017 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 31,242,068 $ — $ — $ 31,242,068 Southern United States 76,746,483 20,097,325 17,413,216 114,257,024 $ 107,988,551 $ 20,097,325 $ 17,413,216 $ 145,499,092 Sources of Revenue Petroleum products $ 107,988,551 $ 20,097,325 $ 10,070,746 $ 138,156,622 Metals — — 7,342,470 7,342,470 Total revenues $ 107,988,551 $ 20,097,325 $ 17,413,216 $ 145,499,092 |
CONCENTRATIONS, SIGNIFICANT C_2
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Concentrations, Significant Customers, Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Concentrations | For the years ended December 31, 2018 and 2017 , the Company’s revenues and receivables were comprised of the following customer concentrations: 2018 2017 % of Revenues % of Receivables % of % of Customer 1 34% 21% 17% 10% Customer 2 11% —% 5% —% Customer 3 8% 6% 9% 11% Customer 4 7% 6% 13% 7% Customer 5 4% 13% —% —% Customer 6 —% —% 2% 15% Customer 7 —% —% 14% —% |
Schedule of Segment Revenues | At December 31, 2018 and 2017 , and for the years then ended, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment 2018 % of Revenue by Segment 2017 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 100 % — % — % 100 % — % — % Customer 2 100 % — % — % 100 % — % — % Customer 3 — % 100 % — % — % 100 % — % Customer 4 100 % — % — % 100 % — % — % Customer 5 100 % — % — % 100 % — % — % Customer 6 100 % — % — % 100 % — % — % Customer 7 100 % — % — % 100 % — % — % The Company’s reportable segments include the Black Oil, Refining and Marketing and Recovery segments. Segment information for the years ended December 31, 2018 and 2017 are as follows: YEAR ENDED DECEMBER 31, 2018 Black Oil Refining and Marketing Recovery Total Revenues $ 143,836,981 $ 22,935,482 $ 13,948,198 $ 180,720,661 Income (loss) from operations $ 3,561,223 $ (2,250,924 ) $ (821,951 ) $ 488,348 Total assets $ 76,540,888 $ 1,407,002 $ 6,212,518 $ 84,160,408 YEAR ENDED DECEMBER 31, 2017 Black Oil Refining and Marketing Recovery Total Revenues $ 107,988,551 $ 20,097,325 $ 17,413,216 $ 145,499,092 Income (loss) from operations $ (6,511,944 ) $ (1,195,946 ) $ 651,627 $ (7,056,263 ) Total assets $ 75,709,845 $ 3,454,010 $ 5,141,619 $ 84,305,474 |
Schedule of Operating Leases Rent Expense | Total rent expense for all operating leases for 2018 and 2017 is summarized as follows: 2018 2017 Office leases $ 773,282 $ 744,154 Plant leases 4,093,800 4,123,600 Vehicle and equipment leases 392,623 363,616 $ 5,259,705 $ 5,231,370 |
Schedule of Future Minimum Operating Lease Commitments | Minimum future lease commitments as of December 31, 2018 , are summarized as follows: Year ending December 31, Office Facilities Vehicles Plant Leases Total 2019 $ 727,028 $ 219,248 $ 4,044,000 $ 4,990,276 2020 549,264 161,538 4,044,000 4,754,802 2021 433,909 161,538 4,044,000 4,639,447 2022 314,000 31,094 3,666,000 4,011,094 2023 300,000 — 1,132,000 1,432,000 Thereafter 2,975,000 — — 2,975,000 $ 5,299,201 $ 573,418 $ 16,930,000 $ 22,802,619 |
FIXED ASSETS, NET (Tables)
FIXED ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 December 31, 2017 Equipment 7-20 $ 40,404,582 $ 38,843,978 Furniture and fixtures 7 108,896 108,896 Leasehold improvements 15 2,331,071 2,323,356 Office equipment 5 1,190,509 1,048,313 Vehicles 5 7,349,486 7,175,147 Building 20 274,203 274,203 Construction in progress 12,720,188 12,612,208 Land 2,833,551 2,851,551 Total fixed assets 67,212,486 65,237,652 Less accumulated depreciation (19,927,479 ) (16,617,824 ) Net fixed assets $ 47,285,007 $ 48,619,828 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Goodwill and components of intangible assets (subject to amortization) consist of the following items: December 31, 2018 December 31, 2017 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Net Customer relations 5-8 $ 1,329,580 $ 718,890 $ 610,690 $ 1,588,700 $ 872,654 $ 716,046 Vendor relations 10 6,654,497 3,531,764 3,122,733 6,654,497 2,866,314 3,788,183 Trademark/Trade name 6-16 1,249,887 436,869 813,018 1,321,000 423,514 897,486 TCEP Technology/Patent 15 13,287,000 5,294,843 7,992,157 13,287,000 4,409,043 8,877,957 Non-compete agreements 3-5 196,601 156,680 39,921 189,000 145,667 43,333 Goodwill — — — 176,349 — 176,349 $ 22,717,565 $ 10,139,046 $ 12,578,519 $ 23,216,546 $ 8,717,192 $ 14,499,354 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense is as follows: 2019 $ 1,823,812 2020 1,823,812 2021 1,823,812 2022 1,608,884 2023 1,251,500 Thereafter 4,246,699 $ 12,578,519 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net, consists of the following at December 31: 2018 2017 Accounts receivable trade $ 9,859,758 $ 12,925,059 Allowance for doubtful accounts (831,768 ) (1,636,068 ) Accounts receivable trade, net $ 9,027,990 $ 11,288,991 |
LINE OF CREDIT AND LONG-TERM _2
LINE OF CREDIT AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt Facilities | The Company's outstanding debt as of December 31, 2018 and December 31, 2017 are summarized as follows: Creditor Loan Type Origination Date Maturity Date Loan Amount Balance on December 31, 2018 Balance on December 31, 2017 Encina Business Credit, LLC Term Loan February 1, 2017 February 1, 2020 $ 20,000,000 $ 15,350,000 $ 14,750,000 Encina Business Credit SPV, LLC Revolving Note February 1, 2017 February 1, 2020 $ 10,000,000 3,844,636 4,591,527 Tetra Capital Lease Capital Lease May, 2018 May, 2018 $ 419,690 349,822 — Wells Fargo Equipment Lease Capital Lease March, 2018 March, 2021 $ 30,408 22,390 — Texas Citizens Bank Term Note January, 2015 January, 2020 $ 2,045,500 — 834,283 Various institutions Insurance premiums financed Various < 1 year $ 2,902,428 999,152 803,392 Total 20,566,000 20,979,202 Deferred finance costs, net (621,733 ) (1,239,570 ) Total, net of deferred finance costs, net $ 19,944,267 $ 19,739,632 |
Schedule of Maturities of Long-term Debt | Future maturities of debt are summarized as follows: Creditor 2019 2020 2021 2022 2023 Thereafter Encina Business Credit, LLC $ 900,000 $ 14,450,000 $ — $ — $ — $ — Encina Business Credit SPV, LLC 3,844,636 — — — — — Tetra Capital Lease 85,808 91,779 98,167 74,068 — — Wells Fargo Equipment Lease 10,049 10,537 1,804 — — — Various institutions 999,152 — — — — — Totals 5,839,645 14,552,316 99,971 74,068 — — Deferred finance costs, net (573,912 ) (47,821 ) — — — — Totals, net of deferred finance costs $ 5,265,733 $ 14,504,495 $ 99,971 $ 74,068 $ — $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax (benefit) expense for the years ended December 31, 2018 and 2017 are as follows: December 31, 2018 December 31, 2017 Current federal tax (expense)/benefit $ (137,212 ) $ — Deferred federal tax (expense)/benefit 137,212 274,423 Total federal tax (expense)/benefit $ — $ 274,423 |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliation between the amount determined by applying the U.S. federal income tax rate of 21% and 34% to pretax income from continuing operations as a result of the following for the years ended December 31, 2018 and 2017 , respectively: December 31, 2018 December 31, 2017 Statutory tax on book income $ (417,000 ) $ (2,860,000 ) Permanent differences (46,000 ) 135,000 Change in expected tax rate — 6,897,408 Change in valuation allowance 967,000 (3,672,000 ) Prior year return true up (504,000 ) (774,831 ) Income tax expense (benefit) $ — $ (274,423 ) |
Schedule of Deferred Tax Assets and Liabilities | The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2018 and 2017 are presented below: December 31, 2018 December 31, 2017 Deferred tax assets: Alternative minimum tax credits $ 137,000 $ 274,000 Accrued bonus and stock based compensation 358,000 225,000 Intangible assets 1,368,000 1,013,000 Bad debt reserve 175,000 344,000 Contribution carryover 26,000 18,000 Disallowed interest expense IRC Section 163(j) 190,000 — Net operating loss carry forwards 12,500,000 11,670,000 Less valuation allowance (12,109,000 ) (11,142,000 ) Total deferred tax assets $ 2,645,000 $ 2,402,000 December 31, 2018 December 31, 2017 Deferred tax liabilities: Accelerated tax depreciation $ (2,444,000 ) $ (2,128,000 ) Contingent liability 3,000 — Vertex Recovery Management LA (67,000 ) — Total deferred tax liabilities $ (2,508,000 ) $ (2,128,000 ) Net deferred tax assets $ 137,000 $ 274,000 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | Stock option activity for the years ended December 31, 2018 and 2017 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, 2016 3,206,916 $ 4.33 5.80 $ 2,966,028 Options granted 500,000 1.01 8.12 363,089 Options exercised — — 0.00 — Options cancelled/forfeited/expired (526,499 ) (14.00 ) 0.00 (30,921 ) Outstanding at December 31, 2017 3,180,417 $ 2.21 4.62 $ 3,298,196 Vested at December 31, 2017 1,959,167 $ 2.55 4.45 $ 1,885,850 Exercisable at December 31, 2017 1,959,167 $ 2.55 4.45 $ 1,885,850 Outstanding at December 31, 2017 3,180,417 $ 2.21 4.62 $ 3,298,196 Options granted 697,000 1.17 8.10 610,305 Options exercised (7,500 ) 1.20 0.00 (4,241 ) Options cancelled/forfeited/expired (409,167 ) 1.80 0.00 (434,962 ) Outstanding at December 31, 2018 3,460,750 $ 2.05 3.50 $ 3,469,298 Vested at December 31, 2018 2,127,500 $ 2.48 4.67 $ 2,122,478 Exercisable at December 31, 2018 2,127,500 $ 2.48 4.67 $ 2,122,478 |
Schedule of Stock Warrant Activity | A summary of the Company’s stock warrant activity and related information for the years ended December 31, 2018 and 2017 is as follows: WARRANTS ISSUED AND OTHER THAN SERIES B AND B1 PREFERRED STOCK: Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in Years) Grant Date Fair Value Outstanding at December 31, 2016 219,868 $ 3.01 3.00 $ 140,249 Warrants granted — — — — Warrants exercised — — — — Warrants canceled/forfeited/expired — — — — Warrants at December 31, 2017 219,868 $ 3.01 2.00 $ 140,249 Vested at December 31, 2017 219,868 $ 3.01 2.00 $ 140,249 Exercisable at December 31, 2017 219,868 $ 3.01 3.00 $ 140,249 Outstanding at December 31, 2017 219,868 $ 3.01 2.00 $ 140,249 Warrants granted — — — — Warrants exercised — — — — Warrants canceled/forfeited/expired — — — — Warrants at December 31, 2018 219,868 $ 3.01 0.93 $ 140,249 Vested at December 31, 2018 219,868 $ 3.01 0.93 $ 140,249 Exercisable at December 31, 2018 219,868 $ 3.01 0.93 $ 140,249 |
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, 2018 YEAR ENDED DECEMBER 31, 2017 Expected volatility 78-79% 78-79% Expected dividends —% —% Expected term (in years) 5-10 5-10 Risk-free rate 2.46-2.59% 2.20-2.40% |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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, 2018 and 2017 : 2018 2017 Basic loss per Share Numerator: Net loss available to common shareholders $ (8,037,304 ) $ (11,824,602 ) Denominator: Weighted-average common shares outstanding 35,411,264 32,653,402 Basic loss per share $ (0.23 ) $ (0.36 ) Diluted Earnings per Share Numerator: Net loss available to common shareholders $ (8,037,304 ) $ (11,824,602 ) Denominator: Weighted-average shares outstanding 35,411,264 32,653,402 Effect of dilutive securities Stock options and warrants — — Preferred stock — — Diluted weighted-average shares outstanding 35,411,264 32,653,402 Diluted loss per share $ (0.23 ) $ (0.36 ) |
PREFERRED STOCK AND TEMPORARY_2
PREFERRED STOCK AND TEMPORARY EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Summary of Temporary Equity | 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 $ 19,349,745 Less: allocated value of May 2016 Warrants 2,867,264 Allocated value of Series B1 Preferred Stock $ 16,482,481 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 The initial BCF of the Series B Preferred Stock 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 The following table represents the activity related to the Series B Preferred Stock, classified as Temporary Equity on the accompanying Consolidated Balance Sheet, during the years ended December 31, 2018 and December 31, 2017 : 2018 2017 Balance at beginning of period $ 7,190,467 $ 5,676,467 Less: conversions of shares to common (62,962 ) — Plus: discount accretion 1,118,259 882,215 Plus: dividends in kind 654,444 631,785 Balance at end of period $ 8,900,208 $ 7,190,467 The following table represents the activity related to the Series B1 Preferred Stock, classified as Temporary Equity on the accompanying Consolidated Balance Sheet, for the year ended December 31, 2018 and December 31, 2017 : 2018 2017 Balance at beginning of period $ 15,769,478 $ 13,927,788 Less: conversions of shares to common (5,068,602 ) (86,467 ) Plus: discount accretion 841,754 798,548 Plus: dividends in kind 1,737,125 1,129,609 Balance at end of period $ 13,279,755 $ 15,769,478 |
Schedule of Liabilities with Unobservable Inputs | The following is an analysis of changes in the derivative liability: Level Three Roll-Forward Year Ended December 31, 2018 2017 Balance at beginning of period $ 2,245,408 $ 4,365,992 Change in fair value of warrants (763,716 ) (2,120,584 ) Balance at end of period $ 1,481,692 $ 2,245,408 |
COMMODITY DERIVATIVE INSTRUME_2
COMMODITY DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The fair value of the crude oil swap agreements is based on the difference between the strike price and the New York Mercantile Exchange futures price for the applicable trading months. Contract Type Contract Period Weighted Average Trade Price (Barrels) Remaining Volume (Barrels) Fair Value Swap Dec. 2018- Feb. 2019 $ 48.78 60,000 $ (1,048,400 ) Swap Dec. 2018- Feb. 2019 $ 68.69 60,000 $ 1,097,124 Futures Feb. 2019- Mar. 2019 $ 70.42 69,000 $ 394,317 Futures Dec. 2018- Feb. 2019 $ 45.41 30,000 $ 252,900 |
Fair Value of Derivative Instruments within Balance Sheet | The carrying values of the Company's derivatives positions and their locations on the consolidated balance sheets as of December 31, 2018 are presented in the table below. Balance Sheet Classification Contract Type 2018 Derivative commodity asset Crude oil swaps $ 48,724 Derivative commodity asset Crude oil futures 647,217 Total Derivative commodity $ 695,941 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information | At December 31, 2018 and 2017 , and for the years then ended, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment 2018 % of Revenue by Segment 2017 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 100 % — % — % 100 % — % — % Customer 2 100 % — % — % 100 % — % — % Customer 3 — % 100 % — % — % 100 % — % Customer 4 100 % — % — % 100 % — % — % Customer 5 100 % — % — % 100 % — % — % Customer 6 100 % — % — % 100 % — % — % Customer 7 100 % — % — % 100 % — % — % The Company’s reportable segments include the Black Oil, Refining and Marketing and Recovery segments. Segment information for the years ended December 31, 2018 and 2017 are as follows: YEAR ENDED DECEMBER 31, 2018 Black Oil Refining and Marketing Recovery Total Revenues $ 143,836,981 $ 22,935,482 $ 13,948,198 $ 180,720,661 Income (loss) from operations $ 3,561,223 $ (2,250,924 ) $ (821,951 ) $ 488,348 Total assets $ 76,540,888 $ 1,407,002 $ 6,212,518 $ 84,160,408 YEAR ENDED DECEMBER 31, 2017 Black Oil Refining and Marketing Recovery Total Revenues $ 107,988,551 $ 20,097,325 $ 17,413,216 $ 145,499,092 Income (loss) from operations $ (6,511,944 ) $ (1,195,946 ) $ 651,627 $ (7,056,263 ) Total assets $ 75,709,845 $ 3,454,010 $ 5,141,619 $ 84,305,474 |
BASIS OF PRESENTATION AND NAT_2
BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Details) | 12 Months Ended |
Dec. 31, 2018statesegmentsupplier | |
Business Acquisition [Line Items] | |
Number of states in which Company provides service | state | 15 |
Number of operating segments | segment | 3 |
Black Oil | |
Business Acquisition [Line Items] | |
Number of suppliers | supplier | 50 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 12 Months Ended | |||
Dec. 31, 2018USD ($)a | Dec. 31, 2017USD ($) | Jan. 01, 2019USD ($) | Nov. 30, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Liquid storage facility, number of acres | a | 19 | |||
Collateral for line of credit | $ 1,500,000 | |||
Allowance for doubtful accounts | $ 831,768 | $ 1,636,068 | ||
Impairment of goodwill | 176,349 | 0 | ||
Impairment of long-lived assets | $ 0 | $ 0 | ||
Minimum | Accounting Standards Update 2018-11 | Forecast | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | $ 30,000,000 | |||
Operating lease liabilities | 30,000,000 | |||
Maximum | Accounting Standards Update 2018-11 | Forecast | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating lease assets | 35,000,000 | |||
Operating lease liabilities | $ 35,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of restricted cash (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 1,349,831 | $ 1,105,787 | |
Restricted cash | 1,500,000 | 0 | |
Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows | $ 2,849,831 | $ 1,105,787 | $ 3,206,158 |
REVENUES (Details)
REVENUES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 180,720,661 | $ 145,499,092 |
Northern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 41,207,747 | 31,242,068 |
Southern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 139,512,914 | 114,257,024 |
Petroleum products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 168,733,378 | 138,156,622 |
Metals | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 11,987,283 | 7,342,470 |
Black Oil | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 143,836,981 | 107,988,551 |
Black Oil | Northern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 41,207,747 | 31,242,068 |
Black Oil | Southern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 102,629,234 | 76,746,483 |
Black Oil | Petroleum products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 143,836,981 | 107,988,551 |
Black Oil | Metals | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Refining & Marketing | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 22,935,482 | 20,097,325 |
Refining & Marketing | Northern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Refining & Marketing | Southern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 22,935,482 | 20,097,325 |
Refining & Marketing | Petroleum products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 22,935,482 | 20,097,325 |
Refining & Marketing | Metals | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Recovery | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 13,948,198 | 17,413,216 |
Recovery | Northern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Recovery | Southern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 13,948,198 | 17,413,216 |
Recovery | Petroleum products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,960,915 | 10,070,746 |
Recovery | Metals | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 11,987,283 | $ 7,342,470 |
CONCENTRATIONS, SIGNIFICANT C_3
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES -Narrative (Details) | Jun. 15, 2016 | Feb. 12, 2016lawsuit | Dec. 31, 2018independent_director |
Long-term Purchase Commitment [Line Items] | |||
Marketing, sales, and logistical duties agreement, term of contract | 5 years | ||
Number of independent directors in related party committee | independent_director | 2 | ||
Vertex Refining LA, LLC | |||
Long-term Purchase Commitment [Line Items] | |||
Number of lawsuits filed against subsidiary | lawsuit | 5 |
CONCENTRATIONS, SIGNIFICANT C_4
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES -Schedule of Concentrations and Segment Revenues (Details) - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 34.00% | 17.00% |
Revenue | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 11.00% | 5.00% |
Revenue | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 8.00% | 9.00% |
Revenue | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 7.00% | 13.00% |
Revenue | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 4.00% | 0.00% |
Revenue | Customer 6 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 2.00% |
Revenue | Customer 7 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 14.00% |
Receivables | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 21.00% | 10.00% |
Receivables | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Receivables | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 6.00% | 11.00% |
Receivables | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 6.00% | 7.00% |
Receivables | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 13.00% | 0.00% |
Receivables | Customer 6 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 15.00% |
Receivables | Customer 7 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Black Oil | Revenue | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 100.00% | 100.00% |
Black Oil | Revenue | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 100.00% | 100.00% |
Black Oil | Revenue | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Black Oil | Revenue | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 100.00% | 100.00% |
Black Oil | Revenue | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 100.00% | 100.00% |
Black Oil | Revenue | Customer 6 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 100.00% | 100.00% |
Black Oil | Revenue | Customer 7 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 100.00% | 100.00% |
Refining | Revenue | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Refining | Revenue | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Refining | Revenue | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 100.00% | 100.00% |
Refining | Revenue | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Refining | Revenue | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Refining | Revenue | Customer 6 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Refining | Revenue | Customer 7 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Recovery | Revenue | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Recovery | Revenue | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Recovery | Revenue | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Recovery | Revenue | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Recovery | Revenue | Customer 5 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Recovery | Revenue | Customer 6 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
Recovery | Revenue | Customer 7 | ||
Revenue, Major Customer [Line Items] | ||
Concentration (as a percentage) | 0.00% | 0.00% |
CONCENTRATIONS, SIGNIFICANT C_5
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES -Schedule of Operating Leases Rent Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||
Rent expense | $ 5,259,705 | $ 5,231,370 |
Office leases | ||
Related Party Transaction [Line Items] | ||
Rent expense | 773,282 | 744,154 |
Plant leases | ||
Related Party Transaction [Line Items] | ||
Rent expense | 4,093,800 | 4,123,600 |
Vehicle and equipment leases | ||
Related Party Transaction [Line Items] | ||
Rent expense | $ 392,623 | $ 363,616 |
CONCENTRATIONS, SIGNIFICANT C_6
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES -Schedule of Future Minimum Operating Lease Commitments (Details) | Dec. 31, 2018USD ($) |
Long-term Purchase Commitment [Line Items] | |
2,019 | $ 4,990,276 |
2,020 | 4,754,802 |
2,021 | 4,639,447 |
2,022 | 4,011,094 |
2,023 | 1,432,000 |
Thereafter | 2,975,000 |
Total minimum future lease commitments | 22,802,619 |
Office Facilities | |
Long-term Purchase Commitment [Line Items] | |
2,019 | 727,028 |
2,020 | 549,264 |
2,021 | 433,909 |
2,022 | 314,000 |
2,023 | 300,000 |
Thereafter | 2,975,000 |
Total minimum future lease commitments | 5,299,201 |
Vehicles | |
Long-term Purchase Commitment [Line Items] | |
2,019 | 219,248 |
2,020 | 161,538 |
2,021 | 161,538 |
2,022 | 31,094 |
Total minimum future lease commitments | 573,418 |
Plant leases | |
Long-term Purchase Commitment [Line Items] | |
2,019 | 4,044,000 |
2,020 | 4,044,000 |
2,021 | 4,044,000 |
2,022 | 3,666,000 |
2,023 | 1,132,000 |
Total minimum future lease commitments | $ 16,930,000 |
FIXED ASSETS, NET -Schedule of
FIXED ASSETS, NET -Schedule of Fixed Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Fixed assets, at cost | $ 67,212,486 | $ 65,237,652 |
Less accumulated depreciation | (19,927,479) | (16,617,824) |
Fixed assets, net | 47,285,007 | 48,619,828 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, at cost | $ 40,404,582 | 38,843,978 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 7 years | |
Fixed assets, at cost | $ 108,896 | 108,896 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 15 years | |
Fixed assets, at cost | $ 2,331,071 | 2,323,356 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Fixed assets, at cost | $ 1,190,509 | 1,048,313 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Fixed assets, at cost | $ 7,349,486 | 7,175,147 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 20 years | |
Fixed assets, at cost | $ 274,203 | 274,203 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, at cost | 12,720,188 | 12,612,208 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, at cost | $ 2,833,551 | $ 2,851,551 |
Minimum | Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 7 years | |
Maximum | Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 20 years |
FIXED ASSETS, NET -Narrative (D
FIXED ASSETS, NET -Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment and Asset Retirement Obligations [Abstract] | ||
Depreciation expense | $ 5,166,467 | $ 4,817,264 |
ACQUISITIONS (Details Narrative
ACQUISITIONS (Details Narrative) - USD ($) | Apr. 30, 2018 | Jul. 16, 2017 | May 01, 2017 | Dec. 31, 2018 | Apr. 30, 2018 | Dec. 31, 2017 | Feb. 02, 2017 |
Business Acquisition [Line Items] | |||||||
Payments to acquire businesses | $ 269,826 | $ 1,999,580 | |||||
Contingent consideration | $ 15,564 | $ 236,680 | |||||
Acadiana Recovery, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Assets acquired | $ 710,350 | ||||||
Fixed assets | 389,650 | ||||||
Intangible assets | $ 320,700 | ||||||
Nickco Recycling, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Fixed assets | $ 1,182,000 | ||||||
Intangible assets | 585,000 | ||||||
Total purchase price | 1,804,000 | ||||||
Payments to acquire businesses | $ 1,126,730 | ||||||
Pre-agreed EBITDA target period | 12 months | 12 months | |||||
Inventory | $ 37,000 | ||||||
Contingent consideration | $ 203,000 | ||||||
Ygriega Environmental Services, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Assets acquired | $ 196,000 | ||||||
Fixed assets | 38,500 | ||||||
Intangible assets | 159,000 | ||||||
Payments to acquire businesses | 162,500 | ||||||
Contingent consideration | 33,500 | ||||||
Contingent consideration payable in two annual installments | $ 87,500 | ||||||
Noncompete agreement term | 2 years | ||||||
Bargain purchase gain | $ 1,500 | ||||||
Specialty Environmental Services, Texas Operations | |||||||
Business Acquisition [Line Items] | |||||||
Total purchase price | $ 269,826 | ||||||
Common Stock | Nickco Recycling, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Common stock issued in acquisition (in shares) | 500,000 | 500,000 | |||||
Contingent consideration (in shares) | 500,000 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET -Schedule of Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ 10,139,046 | $ 8,717,192 |
Net Carrying Amount | 12,578,519 | |
Goodwill | 0 | 176,349 |
Gross Carrying Amount, Total | 22,717,565 | 23,216,546 |
Net Carrying Amount, Total | 12,578,519 | 14,499,354 |
Customer relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,329,580 | 1,588,700 |
Accumulated Amortization | 718,890 | 872,654 |
Net Carrying Amount | $ 610,690 | 716,046 |
Vendor relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 10 years | |
Gross Carrying Amount | $ 6,654,497 | 6,654,497 |
Accumulated Amortization | 3,531,764 | 2,866,314 |
Net Carrying Amount | 3,122,733 | 3,788,183 |
Trademark/Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,249,887 | 1,321,000 |
Accumulated Amortization | 436,869 | 423,514 |
Net Carrying Amount | $ 813,018 | 897,486 |
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 | 5,294,843 | 4,409,043 |
Net Carrying Amount | 7,992,157 | 8,877,957 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 196,601 | 189,000 |
Accumulated Amortization | 156,680 | 145,667 |
Net Carrying Amount | $ 39,921 | $ 43,333 |
Minimum | Customer relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 5 years | |
Minimum | Trademark/Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 6 years | |
Minimum | Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 3 years | |
Maximum | Customer relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 8 years | |
Maximum | Trademark/Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 16 years | |
Maximum | Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 5 years |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET -Narrative (Details) - USD ($) | May 01, 2017 | Dec. 31, 2018 | Apr. 30, 2018 | Dec. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1,818,854 | $ 1,818,475 | ||
Impairment of goodwill | 176,349 | 0 | ||
Goodwill | 0 | $ 176,349 | ||
Nickco Recycling, LLC | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
EBITDA, target | 461,000 | |||
Pre-agreed EBITDA target period | 12 months | 12 months | ||
EBITDA | $ 334,000 | |||
EBITDA, amount below target | $ 1,000,000 | |||
Nickco Recycling, LLC | Minimum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
EBITDA, target | $ 700,000 | |||
EBITDA, seller's Earnout Target | 392,000 | |||
Nickco Recycling, LLC | Maximum | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
EBITDA, seller's Earnout Target | $ 567,000 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS, NET -Schedule of Estimated Future Amortization Expense (Details) | Dec. 31, 2018USD ($) |
Estimated future amortization expense | |
2,019 | $ 1,823,812 |
2,020 | 1,823,812 |
2,021 | 1,823,812 |
2,022 | 1,608,884 |
2,023 | 1,251,500 |
Thereafter | 4,246,699 |
Net Carrying Amount | $ 12,578,519 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Receivable, Net, Current [Abstract] | ||
Accounts receivable trade | $ 9,859,758 | $ 12,925,059 |
Allowance for doubtful accounts | (831,768) | (1,636,068) |
Accounts receivable trade, net | $ 9,027,990 | $ 11,288,991 |
LINE OF CREDIT AND LONG-TERM _3
LINE OF CREDIT AND LONG-TERM DEBT -Narrative (Details) | May 29, 2018USD ($)lease | Mar. 01, 2018USD ($)lease | Feb. 01, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | |||||
Long-term debt, gross | $ 20,566,000 | $ 20,979,202 | |||
Encina Business Credit SPV, LLC | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, gross | 3,844,636 | 4,591,527 | |||
Encina Business Credit, LLC | Term loan | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, gross | 15,350,000 | 14,750,000 | |||
Texas Citizens Bank | Term loan | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, gross | 0 | 834,283 | |||
Various institutions | Insurance premiums financed | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, gross | 999,152 | 803,392 | |||
Wells Fargo Equipment Lease | |||||
Line of Credit Facility [Line Items] | |||||
Number of capital leases assumed | lease | 1 | ||||
Capital leases, monthly payments | $ 908 | ||||
Term of contract | 3 years | ||||
Wells Fargo Equipment Lease | Capital lease obligations | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, gross | 22,390 | 0 | |||
Tetra Capital Lease | |||||
Line of Credit Facility [Line Items] | |||||
Number of capital leases assumed | lease | 1 | ||||
Term of contract | 4 years | ||||
Capital leases, quarterly payments | $ 26,305 | ||||
Tetra Capital Lease | Capital lease obligations | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, gross | $ 349,822 | $ 0 | |||
Minimum | Various institutions | Insurance premiums financed | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 4.00% | ||||
Maximum | Various institutions | Insurance premiums financed | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 4.52% | ||||
Revolving Credit Facility | Encina Business Credit SPV, LLC | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | $ 3,408,448 | |||
Line of credit, debt covenant, capital expenditures, maximum | 3,000,000 | ||||
Line of credit, debt covenant, minimum average borrowing availability in any 30 day period | $ 2,500,000 | ||||
Revolving Credit Facility | Encina Business Credit SPV, LLC | One-month LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 2.35% | ||||
Incremental increase per event of default, percent | 2.00% | ||||
Variable rate basis, basis spread | 6.50% | ||||
Revolving Credit Facility | Encina Business Credit SPV, LLC | Federal funds rate | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 0.50% | ||||
Revolving Credit Facility | Encina Business Credit SPV, LLC | Bank of America London Interbank Offered Rate (LIBOR) | |||||
Line of Credit Facility [Line Items] | |||||
Variable rate basis, basis spread | 1.00% | ||||
Revolving Credit Facility | Minimum | Encina Business Credit SPV, LLC | One-month LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 0.25% | ||||
Revolving Credit Facility | Tier One | Encina Business Credit SPV, LLC | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit, eligible inventory included in calculation of maximum allowable outstanding balance, percent | 85.00% | ||||
Revolving Credit Facility | Tier Two | Encina Business Credit SPV, LLC | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit, eligible inventory included in calculation of maximum allowable outstanding balance, percent | 65.00% | ||||
Line of credit, eligible inventory included in calculation of maximum allowable outstanding balance, ceiling | $ 4,000,000 | ||||
Line of credit, eligible receivables included in calculation of maximum allowable outstanding balance, percent | 85.00% | ||||
EBC Credit Agreement | Line of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 20,000,000 | ||||
Line of credit outstanding as percent of plant and equipment, maximum | 50.00% | ||||
Line of credit, period for dividends included in calculation of interest rate tier | 12 months | ||||
Line of credit, average availability | $ 3,408,448 | ||||
Incremental increase per event of default, percent | 2.00% | ||||
Principal payments | $ 75,000 | ||||
Effective interest rate | 12.00% | ||||
Line of credit, debt covenant, capital expenditures, maximum | $ 3,000,000 | ||||
Line of credit, debt covenant, minimum average borrowing availability in any 30 day period | 2,500,000 | ||||
Line of credit, debt covenant, event of default under any agreement, debt amount minimum | 500,000 | ||||
Line of credit, debt covenant, event of default, legal judgment, amount, minimum | $ 500,000 | ||||
Line of credit, debt covenant, event of default, change in stock ownership by executive officers, minimum, percent | 15.00% | ||||
Line of credit, debt covenant, event of default, change in ownership, minimum, percent | 30.00% | ||||
Line of credit, debt covenant, event of default, period during which a majority of duly elected board members cease to serve | 12 months | ||||
EBC Credit Agreement | Line of Credit | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit, average availability | $ 2,500,000 | ||||
Line of credit, voluntary repayment amount | 100,000 | ||||
EBC Credit Agreement | Line of Credit | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit, average availability | $ 2,500,000 | ||||
EBC Credit Agreement | Line of Credit | Tier One | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 12.00% | ||||
EBC Credit Agreement | Line of Credit | Tier One | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Debt covenant ratio | 1 | ||||
EBC Credit Agreement | Line of Credit | Tier Two | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 13.00% | ||||
EBC Credit Agreement | Line of Credit | Tier Two | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Debt covenant ratio | 1 | ||||
EBC Credit Agreement | Line of Credit | Tier Two | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Debt covenant ratio | 1.45 | ||||
EBC Credit Agreement | Line of Credit | Tier Three | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 14.00% | ||||
EBC Credit Agreement | Line of Credit | Tier Three | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Debt covenant ratio | 1.45 | ||||
Existing Credit Obligations | |||||
Line of Credit Facility [Line Items] | |||||
Repayments of debt | $ 11,282,537 | ||||
Texas Citizens Bank Loan | Term loan | |||||
Line of Credit Facility [Line Items] | |||||
Effective interest rate | 5.50% |
LINE OF CREDIT AND LONG-TERM _4
LINE OF CREDIT AND LONG-TERM DEBT -Schedule of Outstanding Debt Facilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | $ 20,566,000 | $ 20,979,202 |
Deferred finance costs, net | (621,733) | (1,239,570) |
Total, net of deferred finance costs, net | 19,944,267 | 19,739,632 |
Encina Business Credit, LLC | Term loan | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 20,000,000 | |
Long-term debt, gross | 15,350,000 | 14,750,000 |
Encina Business Credit SPV, LLC | Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 10,000,000 | |
Long-term debt, gross | 3,844,636 | 4,591,527 |
Tetra Capital Lease | Capital lease obligations | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 419,690 | |
Long-term debt, gross | 349,822 | 0 |
Wells Fargo Equipment Lease | Capital lease obligations | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 30,408 | |
Long-term debt, gross | 22,390 | 0 |
Texas Citizens Bank | Term loan | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 2,045,500 | |
Long-term debt, gross | 0 | 834,283 |
Various institutions | Insurance premiums financed | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 2,902,428 | |
Long-term debt, gross | $ 999,152 | $ 803,392 |
LINE OF CREDIT AND LONG-TERM _5
LINE OF CREDIT AND LONG-TERM DEBT -Schedule of Maturities of Long-term Debt (Details) | Dec. 31, 2018USD ($) |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2,019 | $ 5,839,645 |
2,020 | 14,552,316 |
2,021 | 99,971 |
2,022 | 74,068 |
2,023 | 0 |
Thereafter | 0 |
Amortization of Debt Issuance Costs and Discounts [Abstract] | |
2,019 | (573,912) |
2,020 | (47,821) |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Maturities of Long-term Debt and Capital Lease Obligation, Net of Deferred Finance Costs [Abstract] | |
2,019 | 5,265,733 |
2,020 | 14,504,495 |
2,021 | 99,971 |
2,022 | 74,068 |
2,023 | 0 |
Thereafter | 0 |
Encina Business Credit, LLC | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2,019 | 900,000 |
2,020 | 14,450,000 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Encina Business Credit SPV, LLC | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2,019 | 3,844,636 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Tetra Capital Lease | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2,019 | 85,808 |
2,020 | 91,779 |
2,021 | 98,167 |
2,022 | 74,068 |
2,023 | 0 |
Thereafter | 0 |
Wells Fargo Equipment Lease | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2,019 | 10,049 |
2,020 | 10,537 |
2,021 | 1,804 |
2,022 | 0 |
2,023 | 0 |
Thereafter | 0 |
Various institutions | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2,019 | 999,152 |
2,020 | 0 |
2,021 | 0 |
2,022 | 0 |
2,023 | 0 |
Thereafter | $ 0 |
INCOME TAXES -Schedule of Compo
INCOME TAXES -Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Current federal tax (expense)/benefit | $ (137,212) | $ 0 |
Deferred federal tax (expense)/benefit | 137,212 | 274,423 |
Total federal tax (expense)/benefit | $ 0 | $ 274,423 |
INCOME TAXES -Narrative (Detail
INCOME TAXES -Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Statutory rate | 21.00% | 34.00% |
Valuation allowance | $ 12,109,000 | $ 11,142,000 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carry-forward | 59,500,000 | |
Tax Year 2016 | Federal | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carry-forward | $ 32,500,000 |
INCOME TAXES -Schedule of Effec
INCOME TAXES -Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory tax on book income | $ (417,000) | $ (2,860,000) |
Permanent differences | (46,000) | 135,000 |
Change in expected tax rate | 0 | 6,897,408 |
Change in valuation allowance | 967,000 | (3,672,000) |
Prior year return true up | (504,000) | (774,831) |
Income tax expense (benefit) | $ 0 | $ (274,423) |
INCOME TAXES -Schedule of Defer
INCOME TAXES -Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Alternative minimum tax credits | $ 137,000 | $ 274,000 |
Accrued bonus and stock based compensation | 358,000 | 225,000 |
Intangible assets | 1,368,000 | 1,013,000 |
Bad debt reserve | 175,000 | 344,000 |
Contribution carryover | 26,000 | 18,000 |
Disallowed interest expense IRC Section 163(j) | 190,000 | 0 |
Net operating loss carry forwards | 12,500,000 | 11,670,000 |
Less valuation allowance | (12,109,000) | (11,142,000) |
Total deferred tax assets | 2,645,000 | 2,402,000 |
Deferred tax liabilities: | ||
Accelerated tax depreciation | (2,444,000) | (2,128,000) |
Contingent liability | 3,000 | 0 |
Vertex Recovery Management LA | (67,000) | 0 |
Total deferred tax liabilities | (2,508,000) | (2,128,000) |
Net deferred tax assets | $ 137,000 | $ 274,000 |
STOCK BASED COMPENSATION -Narra
STOCK BASED COMPENSATION -Narrative (Details) | May 22, 2018employee$ / sharesshares | Apr. 12, 2018employee$ / sharesshares | Aug. 21, 2017employee$ / sharesshares | Jan. 04, 2017employee$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation expense, total | $ | $ 659,836 | $ 606,446 | ||||
Options granted (in shares) | shares | 697,000 | 500,000 | ||||
Options granted - weighted average exercise price (in dollars per share) | $ / shares | $ 1.17 | $ 1.01 | ||||
Stock option | 2013 Stock Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of employees granted options | employee | 1 | 1 | ||||
Options granted (in shares) | shares | 10,000 | 20,000 | ||||
Options granted - weighted average exercise price (in dollars per share) | $ / shares | $ 1.03 | $ 1.31 | ||||
Term of awards | 10 years | 5 years | ||||
Award vesting period | 4 years | 4 years | 4 years | 4 years | ||
Annual vesting percentage | 25.00% | 25.00% | 25.00% | 25.00% | ||
Stock option | 2013 Stock Incentive Plan | 1 Employee | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of employees granted options | employee | 1 | 1 | ||||
Options granted (in shares) | shares | 166,000 | 150,000 | ||||
Options granted - weighted average exercise price (in dollars per share) | $ / shares | $ 1.26 | $ 1.07 | ||||
Term of awards | 5 years | 5 years | ||||
Stock option | 2013 Stock Incentive Plan | 5 Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of employees granted options | employee | 5 | |||||
Options granted (in shares) | shares | 330,000 | |||||
Options granted - weighted average exercise price (in dollars per share) | $ / shares | $ 0.97 | |||||
Term of awards | 10 years | |||||
Stock option | 2013 Stock Incentive Plan | 11 Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of employees granted options | employee | 11 | |||||
Options granted (in shares) | shares | 521,000 | |||||
Options granted - weighted average exercise price (in dollars per share) | $ / shares | $ 1.14 | |||||
Term of awards | 10 years |
STOCK BASED COMPENSATION -Sched
STOCK BASED COMPENSATION -Schedule of Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares | |||
Outstanding, beginning (in shares) | 3,180,417 | 3,206,916 | |
Options granted (in shares) | 697,000 | 500,000 | |
Options exercised (in shares) | (7,500) | 0 | |
Options cancelled/forfeited/expired (in shares) | (409,167) | (526,499) | |
Outstanding, ending (in shares) | 3,460,750 | 3,180,417 | 3,206,916 |
Vested (in shares) | 2,127,500 | 1,959,167 | |
Exercisable (in shares) | 2,127,500 | 1,959,167 | |
Weighted Average Exercise Price | |||
Outstanding, beginning - weighted average exercise price (in dollars per share) | $ 2.21 | $ 4.33 | |
Options granted - weighted average exercise price (in dollars per share) | 1.17 | 1.01 | |
Options exercised - weighted average exercise price (in dollars per share) | 1.20 | 0 | |
Options cancelled/forfeited/expired - weighted average exercise price (in dollars per share) | (1.80) | (14) | |
Outstanding, ending - weighted average exercise price (in dollars per share) | 2.05 | 2.21 | $ 4.33 |
Vested - weighted average exercise price (in dollars per share) | 2.48 | 2.55 | |
Exercisable - weighted average exercise price (in dollars per share) | $ 2.48 | $ 2.55 | |
Weighted Average Remaining Contractual Life (in Years) | |||
Outstanding - weighted average remaining contractual life | 3 years 6 months | 4 years 7 months 13 days | 5 years 9 months 18 days |
Options granted - weighted average remaining contractual life | 8 years 1 month 6 days | 8 years 1 month 13 days | |
Vested - weighted average remaining contractual life | 4 years 8 months 1 day | 4 years 5 months 12 days | |
Exercisable - weighted average remaining contractual life | 4 years 8 months 1 day | 4 years 5 months 12 days | |
Grant Date Fair Value | |||
Outstanding, beginning - grant date fair value | $ 3,298,196 | $ 2,966,028 | |
Options granted - grant date fair value | 610,305 | 363,089 | |
Options exercised - grant date fair value | (4,241) | 0 | |
Options cancelled/forfeited/expired - grant date fair value | (434,962) | (30,921) | |
Outstanding, ending - grant date fair value | 3,469,298 | 3,298,196 | $ 2,966,028 |
Vested - grant date fair value | 2,122,478 | 1,885,850 | |
Exercisable - grant date fair value | $ 2,122,478 | $ 1,885,850 |
STOCK BASED COMPENSATION -Sch_2
STOCK BASED COMPENSATION -Schedule of Stock Warrant Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Warrants | |||
Outstanding, beginning (in shares) | 219,868 | 219,868 | |
Warrants granted (in shares) | 0 | 0 | |
Warrants exercised (in shares) | 0 | 0 | |
Warrants cancelled/forfeited/expired (in shares) | 0 | 0 | |
Outstanding, ending (in shares) | 219,868 | 219,868 | 219,868 |
Vested (in shares) | 219,868 | 219,868 | |
Exercisable (in 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 dollars per share) | $ 3.01 | $ 3.01 | |
Warrants granted - weighted average exercise price (in dollars per share) | 0 | 0 | |
Warrants exercised - weighted average exercise price (in dollars per share) | 0 | 0 | |
Warrants cancelled/forfeited/expired - weighted average exercise price (in dollars per share) | 0 | 0 | |
Outstanding, ending - weighted average exercise price (in dollars per share) | 3.01 | 3.01 | $ 3.01 |
Vested - weighted average exercise price (in dollars per share) | 3.01 | 3.01 | |
Exercisable - weighted average exercise price (in dollars 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 | 11 months 5 days | 2 years | 3 years |
Vested - weighted average remaining contractual life | 11 months 5 days | 2 years | |
Exercisable - weighted average remaining contractual life | 11 months 5 days | 3 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 | 140,249 | 140,249 | |
Exercisable - grant date fair value | $ 140,249 | $ 140,249 |
STOCK BASED COMPENSATION -Sch_3
STOCK BASED COMPENSATION -Schedule of Assumptions Used in Option and Warrant Valuations (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility rate, minimum | 78.00% | 78.00% |
Expected volatility rate, maximum | 79.00% | 79.00% |
Expected dividends (as a percent) | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 5 years | 5 years |
Risk-free rate | 2.46% | 2.20% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 10 years | 10 years |
Risk-free rate | 2.59% | 2.40% |
EARNINGS PER SHARE -Narrative (
EARNINGS PER SHARE -Narrative (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options to purchase (in shares) | 3,460,750 | 3,180,417 |
Warrants to purchase (in shares) | 7,353,056 | 7,353,056 |
Preferred stock, shares outstanding | 0 | 31,568 |
Series B Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Conversion of stock, common shares issued if converted (in shares) | 3,604,827 | 3,427,597 |
Series B1 Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Conversion of stock, common shares issued if converted (in shares) | 10,057,597 | 13,151,989 |
Series A Preferred | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Conversion of stock, common shares issued if converted (in shares) | 419,859 | 453,567 |
Series C Preferred | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Conversion of stock, common shares issued if converted (in shares) | 0 | 3,156,800 |
EARNINGS PER SHARE -Schedule of
EARNINGS PER SHARE -Schedule of Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | ||
Net loss available to common shareholders | $ (8,037,304) | $ (11,824,602) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 35,411,264 | 32,653,402 |
Basic loss per share (in dollars per share) | $ (0.23) | $ (0.36) |
Numerator: | ||
Net loss available to common shareholders | $ (8,037,304) | $ (11,824,602) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 35,411,264 | 32,653,402 |
Effect of dilutive securities | ||
Stock options and warrants (in shares) | 0 | 0 |
Preferred stock (in shares) | 0 | 0 |
Diluted weighted-average shares outstanding (in shares) | 35,411,264 | 32,653,402 |
Diluted loss per share (in dollars per share) | $ (0.23) | $ (0.36) |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) | May 01, 2017shares | Dec. 31, 2018vote / shares$ / sharesshares | Dec. 31, 2017$ / sharesshares |
Conversion of Stock [Line Items] | |||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Common stock, shares issued (in shares) | 40,174,821 | 32,658,176 | |
Common stock, shares outstanding (in shares) | 40,174,821 | 32,658,176 | |
Number of votes per share of common stock | vote / shares | 1 | ||
Preferred Stock | |||
Conversion of Stock [Line Items] | |||
New shares as a result of stock conversion (in shares) | 7,199,774 | 115,713 | |
Common Stock | |||
Conversion of Stock [Line Items] | |||
New shares as a result of stock conversion (in shares) | 241 | ||
Stock Issued During Period, Shares, Acquisitions | 150,000 | 500,000 | |
Paid-in-kind dividends, common stock | 166,630 | ||
Shares placed in escrow (in shares) | 1,108,928 | ||
Common Stock | Nickco Recycling, LLC | |||
Conversion of Stock [Line Items] | |||
Stock Issued During Period, Shares, Acquisitions | 150,000 | ||
Common stock issued in acquisition (in shares) | 500,000 | 500,000 | |
Common Stock | Discontinued operations, disposed of by sale | |||
Conversion of Stock [Line Items] | |||
Shares placed in escrow (in shares) | 1,108,928 |
PREFERRED STOCK AND TEMPORARY_3
PREFERRED STOCK AND TEMPORARY EQUITY -Narrative (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 29, 2016 |
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 50,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||
Series A Preferred | |||
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares issued | 419,859 | 453,567 | |
Preferred stock, shares outstanding | 419,859 | 453,567 | |
Series B Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 10,000,000 | ||
Preferred stock, shares issued | 3,604,827 | 3,427,597 | |
Preferred stock, shares outstanding | 3,604,827 | 3,427,597 | |
Series B1 Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 17,000,000 | ||
Preferred stock, shares issued | 10,057,597 | 13,151,989 | |
Preferred stock, shares outstanding | 10,057,597 | 13,151,989 | |
Series C Preferred | |||
Class of Stock [Line Items] | |||
Preferred stock, shares authorized | 44,000 | 44,000 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 100 |
Preferred stock, shares issued | 0 | 31,568 | 44,000 |
Preferred stock, shares outstanding | 0 | 31,568 |
PREFERRED STOCK AND TEMPORARY_4
PREFERRED STOCK AND TEMPORARY EQUITY -Series A Preferred Narrative (Details) - Series A Preferred | 12 Months Ended |
Dec. 31, 2018USD ($)$ / sharesshares | |
Class of Stock [Line Items] | |
Amount each share of preferred stock is entitled to receive prior to similar liquidation payments (in dollars per share) | $ 1.49 |
Conversion conditions, minimum gross public offering amount | $ | $ 10,000,000 |
Conversion conditions, minimum proceeds to shareholders if the Company is sold (in dollars per share) | $ 10 |
Number of common shares issued for each convertible preferred share (in shares) | shares | 1 |
Minimum | |
Class of Stock [Line Items] | |
Conversion conditions, average common share market price (in dollars per share) | $ 15 |
Conversion terms, threshold consecutive trading days | 20 days |
Conversion conditions, average daily trading volume (in shares) | shares | 7,500 |
Conversion conditions, price per share if Company consummates an underwritten public offering (in dollars per share) | $ 10 |
PREFERRED STOCK AND TEMPORARY_5
PREFERRED STOCK AND TEMPORARY EQUITY -Series B Preferred Stock and Temporary Equity Narrative (Details) | May 10, 2016USD ($)shareswarrant$ / shares$ / unit | Jun. 30, 2015$ / shares | Jun. 24, 2015USD ($)shareswarrant$ / shares$ / unit | May 31, 2016USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($) | Jun. 24, 2017$ / shares | May 13, 2016USD ($)$ / shares |
Class of Stock [Line Items] | ||||||||
Number of units sold (in shares) | shares | 12,403,683 | 8,064,534 | ||||||
Unit Purchase Agreement, number of warrants per unit | warrant | 1 | |||||||
Unit Purchase Agreement, price per unit (in dollars per share) | $ / unit | 1.56 | 3.10 | ||||||
Unit Purchase Agreement, exercise price (in dollars per share) | 2.60% | 6.10% | ||||||
Share price (in dollars per unit) | $ 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 for certain investors with no fee | $ | $ 4,000,000 | |||||||
Commissions payment | $ | $ 1,400,000 | $ 610,000 | ||||||
Unit Purchase Agreement, liquidated damages, percentage of aggregate subscription amount | 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 | |||||||
Beneficial conversion feature | $ | 5,737,796 | |||||||
Private placement fees | $ | $ 1,400,000 | |||||||
Derivative warrant liability | $ | $ 1,481,692 | $ 2,245,408 | ||||||
Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, dividend rate | 6.00% | |||||||
Preferred stock, dividends in arrears (in dollars per share) | $ 3.10 | |||||||
Minimum dividend payment price (in dollars per share) | $ 2.91 | |||||||
Dividends payable, paid-in-kind (in dollars per share) | 3.10 | |||||||
Liquidation preference per share (in dollars per share) | 3.10 | |||||||
Redemption price per share (in dollars per share) | 3.10 | |||||||
Conversion terms, closing price (in dollars per share) | $ 6.20 | |||||||
Conversion terms, threshold consecutive trading days | 20 days | |||||||
Conversion terms, beneficial ownership limitation (as a percent) | 9.999% | |||||||
Unit Purchase Agreement, number of shares per unit (in shares) | shares | 1 | |||||||
Share price (in dollars per unit) | $ 2.94 | |||||||
Temporary equity, warrants issued | $ | $ 7,028,067 | $ 256,458 | ||||||
Dividends payable | $ | $ 167,642 | 139,186 | ||||||
Series B1 Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, dividend rate | 6.00% | |||||||
Preferred stock, dividends in arrears (in dollars per share) | $ 1.56 | |||||||
Minimum dividend payment price (in dollars per share) | 1.52 | |||||||
Dividends payable, paid-in-kind (in dollars per share) | 1.56 | |||||||
Liquidation preference per share (in dollars per share) | 1.56 | |||||||
Redemption price per share (in dollars per share) | $ 1.72 | |||||||
Conversion terms, closing price (in dollars per share) | $ 3.90 | |||||||
Conversion terms, threshold consecutive trading days | 20 days | |||||||
Conversion terms, beneficial ownership limitation (as a percent) | 4.999% | |||||||
Unit Purchase Agreement, number of shares per unit (in shares) | shares | 1 | |||||||
Share price (in dollars per unit) | $ 1.52 | |||||||
Beneficial conversion feature | $ | $ 2,371,106 | |||||||
Private placement fees | $ | 600,000 | |||||||
Temporary equity, warrants issued | $ | $ 1,243,234 | $ 2,867,264 | ||||||
Dividends payable | $ | $ 235,360 | $ 281,527 | ||||||
Liability | Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Expected term (years) | 2 years | |||||||
Liability | Series B1 Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Expected term (years) | 3 years | |||||||
Liability | Expected dividend rate | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant measurement input | 0 | |||||||
Liability | Risk Free interest rate | Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant measurement input | 0.0263 | |||||||
Liability | Risk Free interest rate | Series B1 Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant measurement input | 0.0248 | |||||||
Minimum | Liability | Expected volatility rate | Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant measurement input | 0.64 | |||||||
Minimum | Liability | Expected volatility rate | Series B1 Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant measurement input | 0.64 | |||||||
Maximum | Series B1 Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Conversion terms, beneficial ownership limitation (as a percent) | 9.999% | |||||||
Maximum | Liability | Expected volatility rate | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant measurement input | 1 | |||||||
Maximum | Liability | Expected volatility rate | Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant measurement input | 1 | |||||||
Warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Unit Purchase Agreement, number of warrants per unit | warrant | 1 | |||||||
Number of shares called by each warrant (in shares) | shares | 0.25 | 0.5 | ||||||
Exercise price of warrants (in dollars per share) | $ 1.53 | $ 2.92 | ||||||
Amount over closing price of warrant exercise price (in dollars per share) | $ 0.01 | $ 0.01 | ||||||
Warrant | Series B1 Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Derivative warrant liability | $ | $ 2,867,264 |
PREFERRED STOCK AND TEMPORARY_6
PREFERRED STOCK AND TEMPORARY EQUITY -Summary of Temporary Equity (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance at beginning of period | $ 22,959,945 | |
Plus: discount accretion | 1,960,013 | $ 1,713,736 |
Balance at end of period | 22,179,963 | 22,959,945 |
Series B Preferred Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance at beginning of period | 7,190,467 | 5,676,467 |
Less: conversions of shares to common | (62,962) | 0 |
Plus: discount accretion | 1,118,259 | 882,215 |
Plus: dividends in kind | 654,444 | 631,785 |
Balance at end of period | 8,900,208 | 7,190,467 |
Series B1 Preferred Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Balance at beginning of period | 15,769,478 | 13,927,788 |
Less: conversions of shares to common | (5,068,602) | (86,467) |
Plus: discount accretion | 841,754 | 798,548 |
Plus: dividends in kind | 1,737,125 | 1,129,609 |
Balance at end of period | $ 13,279,755 | $ 15,769,478 |
PREFERRED STOCK AND TEMPORARY_7
PREFERRED STOCK AND TEMPORARY EQUITY -Schedule of initial BCF of Series B Preferred Stock (Details) - USD ($) | Dec. 31, 2018 | May 10, 2016 | Jun. 24, 2015 |
Class of Stock [Line Items] | |||
Market price (in dollars per unit) | $ 1.52 | $ 2.91 | |
Series B Preferred Stock | |||
Class of Stock [Line Items] | |||
Face amount of Series B Preferred Stock | $ 25,000,000 | ||
Temporary equity, warrants issued | $ 256,458 | 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 (in dollars per share) | $ 2.23 | ||
Market price (in dollars per unit) | 2.94 | ||
Intrinsic value per share (in dollars per share) | $ 0.7115 | ||
Intrinsic value of beneficial conversion feature | $ 5,737,796 |
PREFERRED STOCK AND TEMPORARY_8
PREFERRED STOCK AND TEMPORARY EQUITY -Series B1 Preferred Stock and Temporary Equity Narrative (Details) | May 10, 2016USD ($)shareswarrant$ / shares$ / unit | Jun. 30, 2015$ / shares | Jun. 24, 2015USD ($)shareswarrant$ / shares$ / unit | May 31, 2016USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | Jun. 24, 2020$ / shares | Dec. 31, 2017USD ($) | Jun. 24, 2017$ / shares | Dec. 31, 2016USD ($) | May 13, 2016$ / shares |
Class of Stock [Line Items] | ||||||||||
Number of units sold (in shares) | shares | 12,403,683 | 8,064,534 | ||||||||
Unit Purchase Agreement, number of warrants per unit | warrant | 1 | |||||||||
Unit Purchase Agreement, price per unit (in dollars per share) | $ / unit | 1.56 | 3.10 | ||||||||
Unit Purchase Agreement, exercise price (in dollars per share) | 2.60% | 6.10% | ||||||||
Share price (in dollars per unit) | $ 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% | ||||||||
Commissions payment | $ | $ 1,400,000 | $ 610,000 | ||||||||
Unit Purchase Agreement, liquidated damages, percentage of aggregate subscription amount | 1.00% | 1.00% | ||||||||
Unit Purchase Agreement, maximum percentage of liquidated damages to aggregate subscription amount | 6.00% | 6.00% | ||||||||
Derivative warrant liability | $ | $ 1,481,692 | $ 2,245,408 | ||||||||
Series B and B1 preferred shares | $ | $ 22,179,963 | 22,959,945 | ||||||||
Beneficial conversion feature | $ | $ 5,737,796 | |||||||||
Private placement fees | $ | $ 1,400,000 | |||||||||
Series B1 Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock, dividend rate | 6.00% | |||||||||
Preferred stock, dividends in arrears (in dollars per share) | $ 1.56 | |||||||||
Minimum dividend payment price (in dollars per share) | 1.52 | |||||||||
Dividends payable, paid-in-kind (in dollars per share) | 1.56 | |||||||||
Liquidation preference per share (in dollars per share) | 1.56 | |||||||||
Convertible Preferred Stock, Conversion Terms, Threshold Closing Price | $ 1.56 | |||||||||
Convertible preferred stock, conversion ratio | 1 | |||||||||
Conversion terms, closing price (in dollars per share) | $ 3.90 | |||||||||
Conversion terms, threshold consecutive trading days | 20 days | |||||||||
Redemption price per share (in dollars per share) | $ 1.72 | |||||||||
Conversion terms, beneficial ownership limitation (as a percent) | 4.999% | |||||||||
Unit Purchase Agreement, number of shares per unit (in shares) | shares | 1 | |||||||||
Share price (in dollars per unit) | $ 1.52 | |||||||||
Series B and B1 preferred shares | $ | $ 13,279,755 | 15,769,478 | $ 13,927,788 | |||||||
Beneficial conversion feature | $ | $ 2,371,106 | |||||||||
Private placement fees | $ | $ 600,000 | |||||||||
Dividends payable | $ | $ 235,360 | 281,527 | ||||||||
Series B Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock, dividend rate | 6.00% | |||||||||
Preferred stock, dividends in arrears (in dollars per share) | $ 3.10 | |||||||||
Minimum dividend payment price (in dollars per share) | $ 2.91 | |||||||||
Dividends payable, paid-in-kind (in dollars per share) | 3.10 | |||||||||
Liquidation preference per share (in dollars per share) | 3.10 | |||||||||
Conversion terms, closing price (in dollars per share) | $ 6.20 | |||||||||
Conversion terms, threshold consecutive trading days | 20 days | |||||||||
Redemption price per share (in dollars per share) | $ 3.10 | |||||||||
Conversion terms, beneficial ownership limitation (as a percent) | 9.999% | |||||||||
Unit Purchase Agreement, number of shares per unit (in shares) | shares | 1 | |||||||||
Share price (in dollars per unit) | $ 2.94 | |||||||||
Unit Purchase Agreement, percentage of proceeds used to repurchase stock | 60.00% | |||||||||
Payments for repurchase of preferred stock | $ | $ 11,189,838 | |||||||||
Stock repurchased and retired during period, (in shares) | shares | 3,575,070 | |||||||||
Series B and B1 preferred shares | $ | $ 8,900,208 | 7,190,467 | $ 5,676,467 | |||||||
Dividends payable | $ | $ 167,642 | $ 139,186 | ||||||||
Forecast | Series B1 Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Redemption price per share (in dollars per share) | $ 1.56 | |||||||||
Maximum | Series B1 Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Conversion terms, beneficial ownership limitation (as a percent) | 9.999% | |||||||||
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 | $ | 8,200,000 | |||||||||
Warrant | ||||||||||
Class of Stock [Line Items] | ||||||||||
Unit Purchase Agreement, number of warrants per unit | warrant | 1 | |||||||||
Number of shares called by each warrant (in shares) | shares | 0.25 | 0.5 | ||||||||
Exercise price of warrants (in dollars per share) | $ 1.53 | $ 2.92 | ||||||||
Amount over closing price of warrant exercise price (in dollars per share) | $ 0.01 | $ 0.01 | ||||||||
Warrant | Series B1 Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Derivative warrant liability | $ | $ 2,867,264 |
PREFERRED STOCK AND TEMPORARY_9
PREFERRED STOCK AND TEMPORARY EQUITY -Schedule of BCF of Series B1 Preferred Stock (Details) - USD ($) | Dec. 31, 2018 | May 13, 2016 | May 10, 2016 | Jun. 24, 2015 |
Class of Stock [Line Items] | ||||
Market price (in dollars per unit) | $ 1.52 | $ 2.91 | ||
Series B1 Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Face amount of Series B1 Preferred Stock | $ 19,349,745 | |||
Less: allocated value of May 2016 Warrants | $ 1,243,234 | 2,867,264 | ||
Allocated value of Series B Preferred Stock | $ 16,482,481 | |||
Shares of Common stock to be converted | 12,403,683 | |||
Effective conversion price (in dollars per share) | $ 1.33 | |||
Market price (in dollars per unit) | 1.52 | |||
Intrinsic value per share (in dollars per share) | $ 0.1900 | |||
Intrinsic value of May 2016 beneficial conversion feature | $ 2,371,106 |
PREFERRED STOCK AND TEMPORAR_10
PREFERRED STOCK AND TEMPORARY EQUITY -Schedule of Liabilities with Unobservable Inputs (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Level Three Roll-Forward | ||
Balance at beginning of period | $ 2,245,408 | $ 4,365,992 |
Change in fair value of warrants | (763,716) | (2,120,584) |
Balance at end of period | $ 1,481,692 | $ 2,245,408 |
PREFERRED STOCK AND TEMPORAR_11
PREFERRED STOCK AND TEMPORARY EQUITY -Series C Convertible Preferred Stock Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 29, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | |||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||
Series C Preferred | |||
Class of Stock [Line Items] | |||
Preferred stock, shares issued | 44,000 | 0 | 31,568 |
Proceeds from issuance of preferred stock | $ 4 | ||
Preferred stock, par value (in dollars per share) | $ 100 | $ 0.001 | $ 0.001 |
Liquidation preference per share (in dollars per share) | 100 | ||
Conversion terms (in dollars per share) | $ 1 | ||
Number of common shares issued for each convertible preferred share (in shares) | 100 | ||
Assumed conversion price (in dollars per share) | $ 1.05 | ||
Conversion terms, beneficial ownership limitation (as a percent) | 4.999% | ||
Beneficial ownership limitation, notice period | 61 days | ||
Maximum | Series C Preferred | |||
Class of Stock [Line Items] | |||
Conversion terms, beneficial ownership limitation (as a percent) | 9.999% |
COMMODITY DERIVATIVE INSTRUME_3
COMMODITY DERIVATIVE INSTRUMENTS -Schedule of Derivative Instruments (Details) bbl in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)$ / bblbbl | |
Swap | |
Derivative [Line Items] | |
Weighted average trade price (in usd per barrel) | $ / bbl | 48.78 |
Remaining volume (barrels) | bbl | 60 |
Derivative liabilities, fair value | $ | $ (1,048,400) |
Swap | |
Derivative [Line Items] | |
Weighted average trade price (in usd per barrel) | $ / bbl | 68.69 |
Remaining volume (barrels) | bbl | 60 |
Derivative commodity asset | $ | $ 1,097,124 |
Futures | |
Derivative [Line Items] | |
Weighted average trade price (in usd per barrel) | $ / bbl | 70.42 |
Remaining volume (barrels) | bbl | 69 |
Derivative commodity asset | $ | $ 394,317 |
Futures | |
Derivative [Line Items] | |
Weighted average trade price (in usd per barrel) | $ / bbl | 45.41 |
Remaining volume (barrels) | bbl | 30 |
Derivative commodity asset | $ | $ 252,900 |
COMMODITY DERIVATIVE INSTRUME_4
COMMODITY DERIVATIVE INSTRUMENTS -Fair Value of Derivative Instruments within Balance Sheet (Details) | Dec. 31, 2018USD ($) |
Derivative [Line Items] | |
Total Derivative commodity | $ 695,941 |
Crude oil swaps | |
Derivative [Line Items] | |
Derivative commodity asset | 48,724 |
Crude oil futures | |
Derivative [Line Items] | |
Derivative commodity asset | $ 647,217 |
JOINT VENTURE (Details)
JOINT VENTURE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | 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 | $ 477,935 | $ 602,259 | |
Industrial Pipe, Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Industrial Pipe's portion of VRMLA's operating income (percent) | 49.00% | ||
Industrial Pipe's portion of VRMLA's operating income | $ 234,188 | $ 295,108 | |
Vertex Recovery Management, LLC | Industrial Pipe, Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest in VRMLA by Industrial Pipe, Inc. (percent) | 49.00% |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 180,720,661 | $ 145,499,092 |
Income (loss) from operations | 488,348 | (7,056,263) |
Total assets | 84,160,408 | 84,305,474 |
Operating Segments | Black Oil | ||
Segment Reporting Information [Line Items] | ||
Revenues | 143,836,981 | 107,988,551 |
Income (loss) from operations | 3,561,223 | (6,511,944) |
Total assets | 76,540,888 | 75,709,845 |
Operating Segments | Refining and Marketing | ||
Segment Reporting Information [Line Items] | ||
Revenues | 22,935,482 | 20,097,325 |
Income (loss) from operations | (2,250,924) | (1,195,946) |
Total assets | 1,407,002 | 3,454,010 |
Operating Segments | Recovery | ||
Segment Reporting Information [Line Items] | ||
Revenues | 13,948,198 | 17,413,216 |
Income (loss) from operations | (821,951) | 651,627 |
Total assets | $ 6,212,518 | $ 5,141,619 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - shares | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Series B Preferred Stock | |||
Subsequent Event [Line Items] | |||
Conversion of stock, common shares issued if converted (in shares) | 3,604,827 | 3,427,597 | |
Series B Preferred Stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Conversion of stock, common shares issued if converted (in shares) | 54,078 | ||
Series B Preferred Stock | Restricted stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Preferred stock dividends (in shares) | 54,078 | ||
Series B1 Preferred Stock | |||
Subsequent Event [Line Items] | |||
Conversion of stock, common shares issued if converted (in shares) | 10,057,597 | 13,151,989 | |
Series B1 Preferred Stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Conversion of stock, common shares issued if converted (in shares) | 150,872 | ||
Series B1 Preferred Stock | Restricted stock | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Preferred stock dividends (in shares) | 150,872 |