Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 03, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Vertex Energy Inc. | ||
Entity Central Index Key | 0000890447 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
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 | $ 48,536,718 | ||
Entity Common Stock, Shares Outstanding | 45,554,841 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 4,099,655 | $ 1,249,831 |
Restricted cash | 100,170 | 1,600,000 |
Accounts receivable, net | 12,138,078 | 9,027,990 |
Federal income tax receivable | 68,606 | 137,212 |
Inventory | 6,547,479 | 8,091,397 |
Derivative commodity asset | 0 | 695,941 |
Prepaid expenses and other current assets | 4,452,920 | 2,740,541 |
Total current assets | 27,406,908 | 23,542,912 |
Fixed assets, at cost | 69,469,548 | 66,762,388 |
Less accumulated depreciation | (24,708,151) | (19,874,896) |
Fixed assets, net | 44,761,397 | 46,887,492 |
Finance lease right-of-use assets | 851,570 | |
Finance lease right-of-use assets | 397,515 | |
Operating lease right-of-use assets | 35,586,885 | |
Intangible assets, net | 11,243,800 | 12,578,519 |
Deferred income taxes | 68,605 | 137,211 |
Other assets | 840,754 | 616,759 |
TOTAL ASSETS | 120,759,919 | 84,160,408 |
Current liabilities | ||
Accounts payable | 7,620,098 | 8,791,529 |
Accrued expenses | 5,016,132 | 2,535,347 |
Dividends payable | 389,176 | 403,002 |
Finance lease-current | 217,164 | |
Finance lease-current | 95,857 | |
Operating lease-current | 5,885,304 | |
Current portion of long-term debt, net of unamortized finance costs | 2,017,345 | 1,325,240 |
Revolving note | 3,276,230 | 3,844,636 |
Derivative commodity liability | 375,850 | 0 |
Total current liabilities | 24,797,299 | 16,995,611 |
Long-term debt, net of unamortized finance costs | 12,433,000 | 14,402,179 |
Finance lease-long-term | 610,450 | |
Finance lease-long-term | 276,355 | |
Operating lease-long-term | 29,701,581 | |
Contingent consideration | 0 | 15,564 |
Derivative warrant liability | 1,969,216 | 1,481,692 |
Total liabilities | 69,511,546 | 33,171,401 |
COMMITMENTS AND CONTINGENCIES (Note 4) | 0 | 0 |
TEMPORARY EQUITY | ||
Redeemable non-controlling interest | 4,396,894 | 0 |
Total Temporary Equity | 28,146,347 | 22,179,963 |
EQUITY | ||
Common stock, $0.001 par value per share; 750,000,000 shares authorized; 43,395,563 and 40,174,821 issued and outstanding at December 31, 2019 and 2018, respectively. | 43,396 | 40,175 |
Additional paid-in capital | 81,527,351 | 75,131,122 |
Accumulated deficit | (59,246,514) | (47,800,886) |
Total Vertex Energy, Inc. stockholders' equity | 22,324,653 | 27,370,831 |
Non-controlling interest | 777,373 | 1,438,213 |
Total Equity | 23,102,026 | 28,809,044 |
TOTAL LIABILITIES, TEMPORARY EQUITY AND EQUITY | 120,759,919 | 84,160,408 |
Series B Preferred Stock | ||
TEMPORARY EQUITY | ||
Total Temporary Equity | 11,006,406 | 8,900,208 |
Series B1 Preferred Stock | ||
TEMPORARY EQUITY | ||
Total Temporary Equity | 12,743,047 | 13,279,755 |
Series A Convertible Preferred Stock | ||
EQUITY | ||
Preferred stock value | $ 420 | $ 420 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares authorized (in shares) | 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 (in shares) | 43,395,563 | 40,174,821 |
Common stock, shares outstanding (in shares) | 43,395,563 | 40,174,821 |
Series B Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary equity, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Temporary equity, shares issued (in shares) | 3,826,055 | 3,604,827 |
Temporary equity, shares outstanding (in shares) | 3,826,055 | 3,604,827 |
Temporary equity, liquidation preference | $ 11,860,771 | $ 11,174,964 |
Preferred stock, shares authorized (in shares) | 10,000,000 | |
Preferred stock, shares issued (in shares) | 3,826,055 | 3,604,827 |
Preferred stock, shares outstanding (in shares) | 3,826,055 | 3,604,827 |
Series B1 Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary equity, shares authorized (in shares) | 17,000,000 | 17,000,000 |
Temporary equity, shares issued (in shares) | 9,028,085 | 10,057,597 |
Temporary equity, shares outstanding (in shares) | 9,028,085 | 10,057,597 |
Temporary equity, liquidation preference | $ 14,083,813 | $ 15,689,851 |
Preferred stock, shares authorized (in shares) | 17,000,000 | |
Preferred stock, shares issued (in shares) | 9,028,085 | 10,057,597 |
Preferred stock, shares outstanding (in shares) | 9,028,085 | 10,057,597 |
Series A Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, shares issued (in shares) | 419,859 | 419,859 |
Preferred stock, shares outstanding (in shares) | 419,859 | 419,859 |
Preferred stock, liquidation preference | $ 625,590 | $ 625,590 |
Series C Convertible Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 44,000 | 44,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, liquidation preference | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 163,365,565 | $ 180,720,661 |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 134,777,113 | 151,314,039 |
Gross profit | 28,588,452 | 29,406,622 |
Operating expenses: | ||
Selling, general and administrative expenses | 24,182,407 | 21,927,264 |
Depreciation and amortization | 7,180,089 | 6,991,010 |
Total operating expenses | 31,362,496 | 28,918,274 |
Income (loss) from operations | (2,774,044) | 488,348 |
Other income (expense): | ||
Other income | 920,197 | 659 |
Gain (loss) on sale of assets | (74,111) | 45,553 |
Gain (loss) on change in value of derivative warrant liability | (487,524) | 763,716 |
Interest expense | (3,070,071) | (3,281,855) |
Total other expense | (2,711,509) | (2,471,927) |
Loss before income taxes | (5,485,553) | (1,983,579) |
Income tax benefit | 0 | 0 |
Net loss | (5,485,553) | (1,983,579) |
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest | (436,974) | 234,188 |
Net loss attributable to Vertex Energy, Inc. | (5,048,579) | (2,217,767) |
Accretion of redeemable noncontrolling interest to redemption value | (2,279,371) | 0 |
Accretion of discount on series B and B-1 Preferred Stock | 2,489,722 | 3,132,414 |
Dividends on series B and B-1 Preferred Stock | (1,627,956) | (2,687,123) |
Net loss available to common stockholders | $ (11,445,628) | $ (8,037,304) |
Loss per common share | ||
Basic (in dollars per share) | $ (0.28) | $ (0.23) |
Diluted (in dollars per share) | $ (0.28) | $ (0.23) |
Shares used in computing loss per share | ||
Basic (in shares) | 40,988,946 | 35,411,264 |
Diluted (in shares) | 40,988,946 | 35,411,264 |
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 (in shares) at Dec. 31, 2017 | 32,658,176 | 453,567 | 31,568 | ||||
Balance at beginning 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] | |||||||
Correction of non-controlling interest | 52,718 | (52,718) | |||||
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) | |||||
Conversion of Series B Preferred stock to common (in shares) | 32,149 | ||||||
Conversion of Series B Preferred stock to common | 62,962 | $ 33 | 99,629 | (36,700) | |||
Share based compensation expense, total | $ 659,836 | 659,836 | |||||
Exercise of options to common (in shares) | 7,500 | 241 | |||||
Conversion of Series A Preferred stock to common (in shares) | 33,708 | (33,708) | |||||
Conversion of Series A Preferred stock to common | $ 34 | $ (34) | |||||
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) | ||||
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) | |||
Fixed assets contributed by noncontrolling interest | 857,738 | 857,738 | |||||
Issue of common stock from Nickco contingent consideration (in shares) | 150,000 | ||||||
Issue of common stock from Nickco contingent consideration | 93,000 | $ 150 | 92,850 | ||||
Adjustment of carrying amount of noncontrolling interest | 0 | ||||||
Net income (loss) | (1,983,579) | (2,217,767) | 234,188 | ||||
Balance at end (in shares) at Dec. 31, 2018 | 40,174,821 | 419,859 | 0 | ||||
Balance at end at Dec. 31, 2018 | 28,809,044 | $ 40,175 | 75,131,122 | (47,800,886) | 1,438,213 | $ 420 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends on Series B and B1 Preferred Stock | (1,627,956) | (1,627,956) | |||||
Accretion of discount on Series B and B1 Preferred Stock | (2,169,597) | (2,169,597) | |||||
Share based compensation expense, total | $ 642,840 | 642,840 | |||||
Exercise of options to common (in shares) | 112,500 | 78,425 | |||||
Exercise of options to common | $ 7,075 | $ 79 | 6,996 | ||||
Conversion of Series B1 Preferred stock to common (in shares) | 1,642,317 | ||||||
Conversion of Series B1 Preferred stock to common | 2,241,890 | $ 1,642 | 2,560,373 | (320,125) | |||
Issue of common stock from Nickco contingent consideration | 0 | ||||||
Distribution to noncontrolling | (285,534) | (285,534) | |||||
Adjustment of redeemable noncontrolling interest to redemption value | (2,217,703) | (2,217,703) | |||||
Adjustment of carrying amount of noncontrolling interest | 970,809 | 970,809 | |||||
Issue of common stock and warrants (in shares) | 1,500,000 | ||||||
Issue of common stock and warrants | 2,216,711 | $ 1,500 | 2,215,211 | ||||
Net income (loss) | (5,485,553) | (5,110,247) | (375,306) | ||||
Balance at end (in shares) at Dec. 31, 2019 | 43,395,563 | 419,859 | 0 | ||||
Balance at end at Dec. 31, 2019 | $ 23,102,026 | $ 43,396 | $ 81,527,351 | $ (59,246,514) | $ 777,373 | $ 420 | $ 0 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, par value (in dollars per share) | 0.001 | |
Series A Preferred | ||
Preferred stock, par value (in dollars per share) | 0.001 | 0.001 |
Series C Preferred | ||
Preferred stock, par value (in dollars per share) | 0.001 | $ 0.001 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (5,485,553) | $ (1,983,579) |
Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||
Stock-based compensation expense | 642,840 | 659,836 |
Depreciation and amortization | 7,180,089 | 6,991,010 |
Reduction in allowance for bad debt | (320,013) | (299,110) |
Gain on commodity derivative contracts | 2,458,359 | (1,062,682) |
Net cash settlement on commodity derivatives | (2,841,052) | 369,188 |
Gain on sale of assets | 74,111 | (45,553) |
Gain on disposition | 0 | (241,416) |
Amortization of debt discount and deferred costs | 573,908 | 584,336 |
Deferred federal income tax | 0 | |
Decrease in fair value of derivative liability | 487,524 | (763,716) |
Reduction in contingent consideration | (15,564) | (128,116) |
Impairment of goodwill | 0 | 176,349 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2,652,864) | 2,143,834 |
Inventory | 1,543,918 | (1,786,555) |
Prepaid expenses | (257,894) | (597,146) |
Accounts payable | (1,171,433) | 1,493,324 |
Accrued expenses | 2,480,786 | 42,625 |
Other assets | (223,995) | (176,342) |
Net cash provided by operating activities | 2,473,167 | 5,376,287 |
Cash flows from investing activities | ||
Internally developed software | (489,093) | 0 |
Proceeds from the sale of assets | 232,020 | 0 |
Acquisitions | 0 | (269,826) |
Purchase of fixed assets | (3,369,367) | (2,499,117) |
Net cash used in investing activities | (3,626,440) | (2,768,943) |
Cash flows from financing activities | ||
Line of credit proceeds (payments), net | (568,406) | (746,891) |
Proceeds received from issuance of common stock and warrants | 2,216,711 | |
Proceeds from exercise of stock options | 7,075 | 0 |
Distribution VRM LA | 285,534 | 0 |
Contribution received from redeemable noncontrolling interest | 3,150,000 | 0 |
Payments on finance leases | 165,598 | |
Payments on finance leases | (77,886) | |
Proceeds from notes payable | 2,809,139 | 4,024,964 |
Payments made on notes payable | (4,660,120) | (4,063,487) |
Net cash provided by (used in) financing activities | 2,503,267 | (863,300) |
Net change in cash and cash equivalents and restricted cash | 1,349,994 | 1,744,044 |
Cash and cash equivalents and restricted cash at beginning of the year | 2,849,831 | 1,105,787 |
Cash and cash equivalents and restricted cash at end of year | 4,199,825 | 2,849,831 |
SUPPLEMENTAL INFORMATION | ||
Cash paid for interest | 2,505,852 | 2,722,542 |
Cash paid for income taxes | 0 | |
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Initial adjustment of carrying amount of redeemable noncontrolling interest | 970,809 | 0 |
Accretion of redeemable noncontrolling interest to redemption value | 2,279,371 | 0 |
Equipment acquired under capital leases | 621,000 | 450,098 |
Contributed assets Vertex Recovery Management LA from non-controlling interest | 0 | 857,738 |
Common restricted shares for Nickco acquisition | 0 | 93,000 |
Series A Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Preferred Stock into common stock | 34 | |
Series B and B-1 Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Preferred Stock into common stock | 2,560,373 | 6,613,052 |
Dividends on Series B and B-1 Preferred Stock | 1,627,956 | 2,687,123 |
Accretion of discount on Series B and B-1 Preferred Stock | $ 2,489,722 | $ 3,132,414 |
BASIS OF PRESENTATION AND NATUR
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2019 | |
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. 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, the ownership of 65% of which was transferred to Tensile in connection with the Heartland SPV (discussed below under “ Note 19. Subsequent Events ” - “ Heartland Share Purchase and Subscription Agreement ”), effective January 1, 2020, 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, 2019 | |
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. • Vertex Refining, LA, LLC which owned a used oil re-refinery based in Marrero, Louisiana and also has assets in Belle Chasse, Louisiana, prior to the consummation of the MG Share Purchase in July 2019, as discussed below under “ Note 6. Acquisitions and Dispositions ” - “ Myrtle Grove Share Purchase and Subscription Agreement . • 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 with collection branches located in Norwalk, Ohio, Zanesville, Ohio, Ravenswood, West Virginia, and Mt. Sterling, Kentucky. Effective January 1, 2020, the ownership of 65% of the assets of Vertex OH, LLC were transferred to Tensile in connection with the Heartland SPV (discussed below under “ Note 19. Subsequent Events ” - “Heartland Share Purchase and Subscription Agreement”). • Vertex Refining Myrtle Grove LLC (“MG SPV”), is a special purpose entity formed to hold the Belle Chasse, Louisiana, re-refining complex, which entity is 84.42% owned by Vertex Operating. • 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, 2019 December 31, 2018 Cash and cash equivalents $ 4,099,655 $ 1,249,831 Restricted cash 100,170 1,600,000 Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows $ 4,199,825 $ 2,849,831 The Company has placed $ 100,000 of restricted cash in a money market account, to serve as collateral for payment of a credit card. In November 2018, we placed $1.5 million into an account in order to receive 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 part of 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 90 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 $402,475 and $831,768 at December 31, 2019 and 2018 , 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. Internal-Use Software We incur costs related to internal-use software and cloud computing development, including purchased software and internally-developed software. Costs incurred in the planning and evaluation stage of internally-developed software and cloud computing development are expensed as incurred. Costs incurred and accumulated during the application development stage are capitalized and included within intangibles, net on the consolidated balance sheets. Amortization of internal-use software will be recorded on a straight-line basis over the estimated useful life of the assets. Cloud Computing Costs We have entered into non-cancellable cloud computing hosting arrangements for which we incur implementation costs. Costs incurred in the planning and evaluation stage of the cloud computing hosting arrangement are expensed as incurred. Costs incurred during the application development stage related to implementation of the hosting arrangement are capitalized and included within prepaid expenses on the consolidated balance sheets. Amortization of implementation costs is recorded on a straight-line basis over the term of the associated hosting arrangement for each module or component of the related hosting arrangement when it is ready for its intended use. Amortization costs will be recorded primarily in selling, general and administrative expense on the consolidated statements of operations. 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 or an impairment. 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 years ended December 31, 2019 and 2018, goodwill impairment was $0 and $176,349 , respectively. 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 the purchase price for certain of 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.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. 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. 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 initially 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. 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. 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. From time to time, our fuel oil customers in our black oil segment may request that we store product at our facilities which they purchase from us. 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. 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, deferred tax assets, and redemption value of noncontrolling interest. 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, 2019 and 2018 . 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. Until all net operating losses are utilized, there is no impact on the 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 and if the Company is not prohibited from completing such redemption under Nevada law. 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 topic, 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, 2019 and December 31, 2018 , 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. Contingent Consideration During the year ended December 31, 2019, the Company wrote off and recognized in income the remaining portion of the contingent consideration related to the July 2017 Ygriega Environmental Services, LLC ("Ygriega") acquisition earn-out due to the fact that collected oil gallons targets required for the payout of such earn-out, were not met. Other Income During the year ended December 31, 2019, the Company received a payment of $ 907,500 related to the proceeds of an insurance settlement for a fire that had occurred at the used oil re-refining plant located in Churchill County, Nevada, which we previously rented. The insurance settlement satisfies a previous loan we made to Omega Refining, LLC to fund operating expenses at that facility. The Company previously determined this loan was uncollectible and wrote it off. Redeemable Noncontrolling Interest As more fully described in " Note 6. Myrtle Grove Share Purchase and Subscription Agreement ", the Company is party to a put/call option agreement with the holder of MG SPV’s non-controlling interest. The put option permits the MG SPV's non-controlling interest holder, at any time on or after the earlier of (a) July 26, 2024 and (ii) the occurrence of certain triggering events (a “MG Redemption”) to require MG SPV to redeem the non-controlling interest from the holder of such interest. Per the agreement, the cash purchase price for such redeemed Class B Units is the greater of (y) the fair market value of such units (without discount for illiquidity, minority status or otherwise) as determined by a qualified third party agreed to in writing by a majority of the holders seeking an MG Redemption and Vertex Operating (provided that Vertex Operating still owns Class A Units on such date) and (z) the original per-unit price for such Class B Units plus fifty percent ( 50% ) of the aggregate capital invested by the Class B Unit holders through such MG Redemption date. The agreement also permits the Company to acquire the non-controlling interest from the holder thereof upon certain events. Applicable accounting guidance requires an equity instrument that is redeemable for cash or other assets to be classified outside of permanent equity if it is redeemable (a) at a fixed or determinable price on a fixed or determinable date, (b) at the option of the holder, or (c) upon the occurrence of an event that is not solely within the control of the issuer. Distributions of available cash of MG SPV pursuant to the MG Company Agreement (including pursuant to liquidations of MG SPV), subject to certain exemptions and exemptions set forth therein, are to be made (a) first, to the holders of the Class B Units, in an amount equal to the greater of (A) the aggregate unpaid “Class B Yield” (equal to an annual return of 22.5% per annum) and (B) an amount equal to fifty percent ( 50 %) of the aggregate capital invested by the Class B Unit holders (initially Tensile-MG)(such aggregate capital invested by the Class B Unit holders, the “MG Invested Capital”, which totals $ 3 million as of the Closing Date), less prior distributions (the greater amount of (A) and (B), the “Class B Priority Distributions”); (b) second, the Class B Unitholders, together as a separate and distinct class, are entitled to receive an amount equal to the aggregate MG Invested Capital; (c) third, the Class A Unitholders (other than Class A Unitholders which received Class A Units upon conversion of Class B Units), together as a separate and distinct class, are entitled to receive all or a portion of any distribution equal to the sum of all distributions made under sections (a) and (b) above; and (d) fourth, to the holders of Units who are eligible to receive such distributions in proportion to the number of Units held by such holders.Based on this guidance, the Company has classified the MG SPV non-controlling interest between the liabilities and equity sections of the accompanying December 31, 2019 and December 31, 2018 consolidated balance sheets. If an equity instrument subject to the guidance is currently redeemable, the instrument is adjusted to its maximum redemption amount at the balance sheet date. If the equity instrument subject to the guidance is not currently redeemable but it is probable that the equity instrument will become redeemable (for example, when the redemption depends solely on the passage of time), the guidance permits either of the following measurement methods: (a) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument using an appropriate methodology, or (b) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The amount presented in temporary equity should be no less than the initial amount reported in temporary equity for the instrument. Because the MG SPV equity instrument will become redeemable solely based on the passage of time, the Company determined that it is probable that the MG SPV equity instrument will become redeemable. The Company has elected to apply the second of the two measurement options described above. An adjustment to the carrying amount of a non-controlling interest from the applica |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Disaggregation of Revenue The following table presents our revenues disaggregated by revenue source: Year ended December 31, 2019 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 42,195,020 $ — $ — $ 42,195,020 Southern United States 97,074,144 12,957,767 11,138,634 121,170,545 $ 139,269,164 $ 12,957,767 $ 11,138,634 $ 163,365,565 Sources of Revenue Petroleum products $ 139,269,164 $ 12,957,767 $ 2,666,077 $ 154,893,008 Metals — — 8,472,557 8,472,557 Total revenues $ 139,269,164 $ 12,957,767 $ 11,138,634 $ 163,365,565 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 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, 2019 | |
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, 2019 and 2018 , 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, 2019 and 2018 , the Company’s revenues and receivables were comprised of the following customer concentrations: 2019 2018 % of Revenues % of Receivables % of % of Customer 1 40% 36% 34% 21% Customer 2 8% 14% —% —% Customer 3 9% —% 11% —% Customer 4 3% 7% 4% 13% At December 31, 2019 and 2018 , and for the years then ended, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment 2019 % of Revenue by Segment 2018 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 47 % — % — % 43 % — % — % Customer 2 10 % — % — % — % — % — % Customer 3 10 % — % — % 14 % — % — % Customer 4 4 % — % — % 5 % — % — % The Company had no vendors that represented 10% or more of total purchases or payables for the years ended December 31, 2019 and 2018. 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. Related Parties The Company has a Related Party Transaction committee including at least two independent directors who review and pre-approve all related party transactions. From time to time, the Company consults with a related party law firm. During the years ended December 31, 2019 and 2018, we paid $100,683 and $40,707 , respectively, to such law firm for services rendered. |
FIXED ASSETS, NET
FIXED ASSETS, NET | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 December 31, 2018 Equipment 7-20 $ 42,879,308 $ 40,404,582 Furniture and fixtures 7 108,896 108,896 Leasehold improvements 15 2,434,690 2,331,071 Office equipment 5 1,213,865 1,190,509 Vehicles 5 7,114,001 6,899,388 Building 20 274,203 274,203 Construction in progress 12,361,034 12,720,188 Land 3,083,551 2,833,551 Total fixed assets 69,469,548 66,762,388 Less accumulated depreciation (24,708,151 ) (19,874,896 ) Net fixed assets $ 44,761,397 $ 46,887,492 Depreciation expense was $5,189,331 and $5,166,467 for the years ended December 31, 2019 and 2018 , respectively. 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 DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
ACQUISITIONS AND DISPOSITIONS | ACQUISITIONS AND DISPOSITIONS Specialty Environmental Services On April 30, 2018, the Company entered into and closed an Asset Purchase Agreement 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. Myrtle Grove Share Purchase and Subscription Agreement On July 26, 2019 (the “ MG Closing Date ”), Vertex Refining Myrtle Grove LLC, a Delaware limited liability company, which entity was formed as a special purpose vehicle in connection with the transactions, described in greater detail below (“ MG SPV ”), Vertex Operating, Tensile-Myrtle Grove Acquisition Corporation (“ Tensile-MG ”), an affiliate of Tensile Capital Partners Master Fund LP, an investment fund based in San Francisco, California (“ Tensile ”), and solely for the purposes of the MG Guaranty (defined below), we entered into and closed the transactions contemplated by a Share Purchase and Subscription Agreement (the “ MG Share Purchase ”). Prior to entering into the MG Share Purchase, Vertex Operating’s wholly-owned subsidiary, Vertex Refining LA, LLC (“ Vertex LA ”), transferred all of the operating assets owned by it and related to the planned development of the MG Refinery (as defined below), which the parties agreed had a fair market value of $22,666,667 , to MG SPV in consideration for 21,667 Class A Units and 1,000 Class B Units of MG SPV, which units were distributed to Vertex Operating. At the closing of the MG Share Purchase (on the MG Closing Date), Vertex Operating sold 1,000 of the Class B Units to Tensile-MG for consideration of $1 million and Tensile-MG, purchased an additional 3,000 Class B Units directly from MG SPV for $3 million (less Tensile’s fees and expenses incurred in connection with the transaction of $850,000 ). As a result of the transaction, Tensile, through Tensile-MG, acquired an approximate 15.58% ownership interest in MG SPV, which in turn now owns the Company’s Belle Chasse, Louisiana, re-refining complex (the “ MG Refinery ”). We, as required, used all proceeds we received from the sale of the Class B Units to pay down the EBC Credit Agreement (defined and described under “ Note 9. Line of Credit and Long-Term Debt ”). Amounts received by MG SPV from its direct sale of Class B Units to Tensile-MG may only be used for additional investments in the MG refinery or for day to day operations at the MG Refinery. At December 31, 2019, $ 1.7 million reported as cash and cash equivalents on the balance sheet is restricted to MG Refinery investments or operating expenses. The MG Share Purchase includes customary representations and warranties and requires Myrtle-Grove SPV to indemnify Tensile-MG (and its related parties), Vertex Operating to indemnify Tensile-MG (and its related parties), and Tensile-MG to indemnify the Company (and its related parties), against various matters (subject to minimum losses being incurred by Myrtle-Grove SPV (and its related parties, as applicable) of $226,000 and a maximum liability by Myrtle-Grove SPV for all losses of Myrtle-Grove SPV of $3,400,000 , subject to certain exceptions). Additionally, Myrtle-Grove SPV’s maximum indemnification liability under the agreement is not to exceed $4 million , except in the case of fraud, intentional misrepresentation or criminal activity. The MG Share Purchase also provided for a guarantee by the Company to Tensile-MG of the payment obligations of Myrtle-Grove SPV and Vertex Operating as set forth in the MG Share Purchase, including the indemnification rights summarized above (the “ MG Guaranty ”). In connection with the closing of the MG Share Purchase, MG SPV, Vertex Operating and the Company entered into an environmental remediation and indemnity agreement, whereby we agreed to indemnify and hold Tensile-MG harmless against certain potential environmental liabilities. As discussed above, after the consummation of the transactions set forth in the MG Share Purchase, MG SPV is owned 84.42% by Vertex Operating and 15.58% by Tensile-MG. The Class B Units held by Tensile-MG are convertible into Class A Units at the option of Tensile-MG, as provided in the Limited Liability Company Agreement of MG SPV dated July 25, 2019 (the “ MG Company Agreement ”), based on a conversion price (initially one -for-one) which may be reduced from time to time if new Units of MG SPV are issued, and automatically convert into Series A Units upon certain events described in the MG Company Agreement. Additionally, the Class B Unit holders may force MG SPV to redeem the outstanding Class B Units at any time on or after the earlier of (a) July 26, 2024 and (ii) the occurrence of a Triggering Event (defined below)(an “ MG Redemption ”). The cash purchase price for such redeemed Class B Units is the greater of (y) the fair market value of such units (without discount for illiquidity, minority status or otherwise) as determined by a qualified third party agreed to in writing by a majority of the holders seeking an MG Redemption and Vertex Operating (provided that Vertex Operating still owns Class A Units on such date) and (z) the original per-unit price for such Class B Units plus fifty percent ( 50% ) of the aggregate capital invested by the Class B Unit holders through such MG Redemption date. “ Triggering Events ” mean (a) any dissolution, winding up or liquidation of the Company, Vertex Operating or any significant subsidiary of Vertex Operating, (b) any sale, lease, license or disposition of any material assets of the Company, Vertex Operating or any significant subsidiary of Vertex Operating, (c) any transaction or series of related transactions (whether by merger, exchange, contribution, recapitalization, consolidation, reorganization, combination or otherwise) involving the Company, Vertex Operating or any significant subsidiary of Vertex Operating, the result of which is that the holders of the voting securities of the relevant entity as of the MG Closing Date are no longer the beneficial owners, in the aggregate, after giving effect to such transaction or series of transactions, directly or indirectly, of more than fifty percent ( 50% ) of the voting power of the outstanding voting securities of the entity, subject to certain other requirements set forth in the MG Company Agreement, (d) the failure to consummate the Heartland Closing (defined below) by June 30, 2020 (a “ Failure to Close ”), (e) the failure of Vertex Operating to operate MG SPV in good faith with appropriate resources, or (f) the material failure of the Company and its affiliates to comply with the terms of the contribution agreement, whereby the Company contributed assets and operations to MG SPV. On or after the third anniversary of the MG Closing Date, the Company or any of its subsidiaries, may elect to purchase all of the outstanding units of MG SPV held by Tensile-MG (or any assignee of Tensile-MG) as discussed in the MG Company Agreement. On the MG Closing Date, and as a required term of the closing of the MG Share Purchase, Tensile entered into a Subscription Agreement dated July 25, 2019, and effective on July 26, 2019, in favor of the Company (the “ Subscription Agreement ”), pursuant to which it subscribed to purchase (a) 1,500,000 shares of our common stock (the “ Tensile Shares ”), and (b) warrants to purchase 1,500,000 shares of our common stock, which were documented by a Common Stock Purchase Warrant (the “ Warrants ” and the shares of common stock issuable upon exercise thereof, the “ Warrant Shares ”) in consideration for $2.22 million or $1.48 per share and warrant. The Warrants have an exercise price of $2.25 per share and a term of ten years . The Warrants also include a beneficial ownership limitation which prohibits Tensile from exercising any Warrants, if upon such exercise, Tensile, together with its affiliates, would, subject to limited exceptions, beneficially own in excess of 4.999% of the number of shares of our common stock outstanding immediately after the exercise. Tensile may elect to change this beneficial ownership limitation from 4.999% to up to 9.999% of the number of shares of our common stock outstanding immediately after the exercise upon 61 days ’ prior written notice to us. In connection with the subscription, we and Tensile entered into a Registration Rights and Lock-Up Agreement dated July 25, 2019 (the “ Lock-Up Agreement ”), pursuant to which we agreed to use commercially reasonable efforts to register the Tensile Shares and Warrant Shares prior to the end of the Initial Lock-Up (defined below) and Tensile agreed to not sell any of the Tensile Shares or Warrant Shares for a period of one year following the MG Closing Date (the “ Initial Lock-Up ”) and to sell no more than 300,000 of such Tensile Shares and Warrant Shares in any 90 day period during the four years thereafter (the “ Volume Limitations ”), each, subject to certain exceptions set forth therein. The Initial Lock-Up, but not the Volume Limitation, terminates if our common stock is not traded on Nasdaq or a similar market for a period of more than five consecutive trading days. Upon any termination of the Initial Lock-Up pursuant to the preceding sentence, in the event Tensile holds any Tensile Shares, Warrant Shares or any Warrants, we are required to disclose publicly all material nonpublic information disclosed to Tensile prior to the date of such termination. We also provided Tensile-Heartland Acquisition Corporation (“ Tensile-Heartland ”), an affiliate of Tensile, an option (the “ Heartland Option ”), exercisable at any time prior to June 30, 2020, to the extent certain pilot studies to be conducted by MG SPV meet the standards of Tensile-Heartland, in its sole discretion, or the outcome of such studies are waived by Tensile-Heartland, to execute and close (within 30 days from such date of exercise by Tensile-Heartland) the acquisition of a 65% interest in a special purpose entity which will be formed to hold ownership of our Heartland refinery, similar to what we have done with our Myrtle Grove facility as discussed above (the " Heartland Transaction "). Under the terms of that transaction, if closed, the Company will retain a 35% stake in the SPV and the Company will receive $13.5 million of non-recourse cash to its balance sheet. As discussed below under “ Note 19. Subsequent Events ” - “ Heartland Share Purchase and Subscription Agreement ”, the Heartland Transaction closed on January 17, 2020. Redeemable Noncontrolling Interest As a result of the MG Share Purchase (as defined and discussed above), Tensile, through Tensile-Myrtle Grove Acquisition Corporation, acquired an approximate 15.58% ownership interest in Vertex Refining Myrtle Grove LLC, a Delaware limited liability company, which entity was formed as a special purpose vehicle in connection with the transactions. This is considered a redeemable noncontrolling equity interest, as it is redeemable in the future and not solely within our control. The initial carrying amount that is recognized in temporary equity for redeemable noncontrolling interests is the initial carrying amount determined in accordance with the accounting requirements for noncontrolling interests in ASC 810-10. In accordance with ASC 810-10-45-23, changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary are accounted for as equity transactions. Therefore, the Company recognized no gain or loss in consolidated net income and the carrying amount of the noncontrolling interest was adjusted to reflect the change in our ownership interest of the subsidiary. The difference of $ 970,809 between the fair value of the consideration received of $ 3,150,000 and the carrying amount of the noncontrolling interest determined in accordance with ASC 810-10 of $ 2,179,191 , was recognized in additional paid in capital. After initial recognition, in accordance with ASC 480-10-S99-3A, the Company applied a two-step approach to measure noncontrolling interests at the balance sheet date. First, the Company applied the measurement guidance in ASC 810-10 by attributing a portion of the subsidiary's net loss of $ 61,668 to the noncontrolling interest. Second, the Company applied the subsequent measurement guidance in ASC 480-10-S99-3A, which indicates that the noncontrolling interest’s carrying amount is the higher of (1) the cumulative amount that would result from applying the measurement guidance in ASC 810-10 in the first step or (2) the redemption value. Pursuant to ASC 480-10-S99-3A, for a security that is probable of becoming redeemable in the future, the Company adjusted the carrying amount of the redeemable noncontrolling interests to what would be the redemption value assuming the security was redeemable at the balance sheet date. This adjustment of $ 2,279,371 increased the carrying amount of redeemable noncontrolling interests to the redemption value as of December 31, 2019 of $ 4,396,894 . Adjustments to the carrying amount of redeemable noncontrolling interests to redemption value are reflected in retained earnings. The table below presents the reconciliation of changes in redeemable noncontrolling interest during the year ended December 31, 2019: Beginning balance at January 1, 2019 $ — Capital contribution from non-controlling interest 3,150,000 Initial adjustment of carrying amount of non-controlling interest (970,809 ) Net loss attributable to redeemable non-controlling interest (61,668 ) Accretion of non-controlling interest to redemption value 2,279,371 Ending balance at December 31, 2019 $ 4,396,894 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | INTANGIBLE ASSETS, NET Components of intangible assets (subject to amortization) consist of the following items: December 31, 2019 December 31, 2018 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Net Customer relations 5-8 $ 1,329,580 $ 884,917 $ 444,663 $ 1,329,580 $ 718,890 $ 610,690 Vendor relations 10 6,654,497 4,197,213 2,457,284 6,654,497 3,531,764 3,122,733 Trademark/Trade name 6-16 1,249,887 531,885 718,002 1,249,887 436,869 813,018 TCEP Technology/Patent 15 13,287,000 6,180,643 7,106,357 13,287,000 5,294,843 7,992,157 Non-compete agreements 3-5 196,601 168,200 28,401 196,601 156,680 39,921 Internally developed software in progress 3-5 489,093 — 489,093 — — — $ 23,206,658 $ 11,962,858 $ 11,243,800 $ 22,717,565 $ 10,139,046 $ 12,578,519 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. Certain internally developed software is expected to be completed and put into service in the second quarter of 2020. Total amortization expense of intangibles was $1,823,812 and $1,818,854 for the years ended December 31, 2019 and 2018 , respectively. Estimated future amortization expense is as follows: 2020 $ 1,921,630 2021 1,921,630 2022 1,706,702 2023 1,349,318 2024 1,292,875 Thereafter 3,051,645 $ 11,243,800 We analyzed the goodwill on the books relating to the prior acquisition of Nickco Recycling, Inc. (" 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 ; and 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, and 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, the Company impaired the remaining goodwill and 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. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable, net, consists of the following at December 31: 2019 2018 Accounts receivable trade $ 12,540,553 $ 9,859,758 Allowance for doubtful accounts (402,475 ) (831,768 ) Accounts receivable trade, net $ 12,138,078 $ 9,027,990 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, 2019 | |
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 14% at December 31, 2019 . The EBC Credit Agreement was to terminate on February 1, 2020, and has since been extended until February 1, 2021, as discussed below, 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, the ownership of 65% of which was transferred to Tensile in connection with the Heartland SPV (discussed below under “ Note 19. Subsequent Events ” - “ Heartland Share Purchase and Subscription Agreement ”), effective January 1, 2020, 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, 2019 , the borrowing availability was $3,835,997 , 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, 2019 , the maximum amount available to be borrowed was $3,835,997 , 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 1.69% 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 was to terminate on February 1, 2020, but has since been extended until February 1, 2021, as discussed below, 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, 2019 . 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, the ownership of 65% of which was transferred to Tensile in connection with the Heartland SPV (discussed below under “Note 19. Subsequent Events ” - “ Heartland Share Purchase and Subscription Agreement” ), effective January 1, 2020, 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 (reduced to $2.0 million pursuant to the amendments described below) under the Revolving Credit Agreement in any 30 day period. During the year ended December 31, 2019, the Company was not in compliant with the capital expenditure limitation; however, a waiver was obtained. 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. The balance of the EBC Credit Agreement and the Revolving Credit Agreement as of December 31, 2019 are $ 13,333,000 and $ 3,276,230 , respectively. Credit Agreement Amendments On July 25, 2019, (a) EBC, the EBC Lenders, and Vertex Operating, entered into a Third Amendment and Limited Waiver to Credit Agreement, effective on July 26, 2019, pursuant to which the EBC Lenders agreed to amend the EBC Credit Agreement; and (b) the EBC Lenders and Vertex Operating entered into a Third Amendment and Limited Waiver to ABL Credit Agreement, effective on July 26, 2019, pursuant to which the EBC Lenders agreed to amend the Revolving Credit Agreement (collectively, the “ Waivers ”). The Waivers amended the credit agreements to: extend the due date of amounts owed thereunder from February 1, 2020 to February 1, 2021; to increase the amount of permitted indebtedness allowable thereunder from $500,000 to $750,000 ; to increase the amount of capital expenditures we are authorized to make in fiscal 2019 from $3.0 million to $3.5 million , and to set the amount of capital expenditures we are authorized to make in fiscal 2020 and thereafter at $3.0 million ; and to decrease the minimum amount of availability required under the credit agreements to $1.5 million at any time from July 26, 2019 to August 31, 2019, and $2.0 million at any time thereafter. The Waivers also provided for waivers by the lenders of certain restrictions in the credit agreements which would have prevented us from consummating the MG Share Purchase and Heartland Share Purchase Agreement (discussed below under “ Note 19. Subsequent Events ” - “ Heartland Share Purchase and Subscription Agreement ”), subject to certain conditions, including us paying at least $1.1 million to the lenders from the amount received pursuant to the MG Purchase Agreement (which amount has been paid to date) and at least $7.0 million (unless otherwise agreed by the lenders) of the amount to be received by us pursuant to terms of the Heartland Purchase Agreement (which amount has been paid to date), to the lenders. Insurance Premiums The Company financed insurance premiums through various financial institutions bearing interest rates from 4.00% to 4.90% . All such premium finance agreements have maturities of less than one year and have a balance of $ 1,165,172 at December 31, 2019 and $ 999,152 at December 31, 2018 . Finance Leases On March 1, 2018, the Company obtained one finance lease. Payments are $908 per month for three years and the amount of the finance lease obligation has been reduced to $ 12,341 at December 31, 2019 . On May 29, 2018, the Company obtained one finance lease. Payments are $26,305 per quarter for four years and the amount of the finance lease obligation has been reduced to $ 264,014 at December 31, 2019 . During April and May 2019, the Company obtained five finance leases. Payments are approximately $ 11,710 per month for five years and the amount of the finance lease obligation has been reduced to $ 551,260 at December 31, 2019 . The Company's outstanding debt as of December 31, 2019 and December 31, 2018 is summarized as follows: Creditor Loan Type Origination Date Maturity Date Loan Amount Balance on December 31, 2019 Balance on December 31, 2018 Encina Business Credit, LLC Term Loan February 1, 2017 February 1, 2021 $ 20,000,000 $ 13,333,000 $ 15,350,000 Encina Business Credit SPV, LLC Revolving Note February 1, 2017 February 1, 2021 $ 10,000,000 3,276,230 3,844,636 Tetra Capital Lease Finance Lease May, 2018 May, 2022 $ 419,690 264,014 349,822 Wells Fargo Equipment Lease-VRM LA Finance Lease March, 2018 March, 2021 $ 30,408 12,341 22,390 Wells Fargo Equipment Lease-Ohio Finance Lease April-May, 2019 April-May, 2024 $ 621,000 551,260 — Various institutions Insurance premiums financed Various < 1 year $ 2,902,428 1,165,172 999,152 Total 18,602,017 20,566,000 Deferred finance costs (47,826 ) (621,733 ) Total, net of deferred finance costs $ 18,554,191 $ 19,944,267 Future maturities of debt are summarized as follows: Creditor 2020 2021 2022 2023 2024 Thereafter Encina Business Credit, LLC $ 900,000 $ 12,433,000 $ — $ — $ — $ — Encina Business Credit SPV, LLC 3,276,230 — — — — — Tetra Capital Lease 91,779 98,167 74,068 — — — Wells Fargo Equipment Lease-VRM LA 10,537 1,804 — — — — Wells Fargo Equipment Lease-Ohio 114,848 120,895 127,264 138,476 49,777 — Various institutions 1,165,172 — — — — — Totals 5,558,566 12,653,866 201,332 138,476 49,777 — Deferred finance costs (47,826 ) — — — — — Totals, net of deferred finance costs $ 5,510,740 $ 12,653,866 $ 201,332 $ 138,476 $ 49,777 $ — |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES 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 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, 2019 and 2018 are as follows: December 31, 2019 December 31, 2018 Current federal tax (expense)/benefit $ (68,606 ) $ (137,212 ) Deferred federal tax (expense)/benefit 68,606 137,212 Total federal tax (expense)/benefit $ — $ — Reconciliation between the amount determined by applying the U.S. federal income tax rate of 21% to pretax income from continuing operations and income tax expense presented in the accompanying consolidated statements of operations was as follows for the years ended December 31, 2019 and 2018 : December 31, 2019 December 31, 2018 Statutory tax on book income $ (1,152,000 ) $ (417,000 ) Permanent differences 139,000 114,000 Change in derivative liability 102,000 (160,000 ) Myrtle Grove transaction gain 210,000 — Change in valuation allowance 1,344,000 967,000 Prior year return true up (643,000 ) (504,000 ) Income tax expense (benefit) $ — $ — The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2019 and 2018 are presented below: December 31, 2019 December 31, 2018 Deferred tax assets: Alternative minimum tax credits $ 69,000 $ 137,000 Accrued bonus and stock based compensation 386,000 358,000 Basis of intangible assets 1,687,000 1,368,000 Bad debt reserve 85,000 175,000 Contribution carryover 38,000 26,000 Interest expense carryforward 487,000 190,000 Net operating loss carry forwards 13,682,000 12,500,000 Less valuation allowance (13,453,000 ) (12,109,000 ) Total deferred tax assets $ 2,981,000 $ 2,645,000 December 31, 2019 December 31, 2018 Deferred tax liabilities: Basis of fixed assets $ (2,788,000 ) $ (2,444,000 ) Contingent liability — 3,000 Partnership income (124,000 ) (67,000 ) Total deferred tax liabilities $ (2,912,000 ) $ (2,508,000 ) Net deferred tax assets $ 69,000 $ 137,000 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, 2019 and 2018, valuation allowances of approximately $13,453,000 and $ 12,109,000 , respectively, has been recorded to reduce net deferred tax assets to an amount that management believes is more than likely not to be realized. The Company is subject to examination by Federal and State tax authorities for fiscal years 2016 through 2019 , except for utilization of net operating losses. At December 31, 2019 , the Company had federal net operating loss carry-forwards (" NOLs ") of approximately $73.1 million acquired as part of the April 2009 merger between World Waste Technologies, Inc. and the Company's wholly-owned subsidiary Vertex Merger Sub, LLC and subsequent operating losses incurred by the Company. 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, 2019 reflect a reduction of approximately $31.6 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 will never expire. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION The stock based compensation cost that has been charged against income by the Company was $642,840 and $659,836 for the years ended December 31, 2019 and 2018 , respectively, for options awarded by the Company. Stock option activity for the years ended December 31, 2019 and 2018 is 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, 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 Outstanding at December 31, 2018 3,460,750 $ 2.05 3.50 $ 3,469,298 Options granted 1,150,000 1.40 8.76 1,148,662 Options exercised (112,500 ) 0.46 0.00 (41,789 ) Options cancelled/forfeited/expired (80,000 ) 0.46 0.00 (28,800 ) Outstanding at December 31, 2019 4,418,250 $ 1.95 6.25 $ 4,547,371 Vested at December 31, 2019 2,383,625 $ 2.50 4.84 $ 2,625,779 Exercisable at December 31, 2019 2,383,625 $ 2.50 4.84 $ 2,625,779 On October 9, 2019, the Board of Directors granted one employee options to purchase an aggregate of 75,000 shares of common stock at an exercise price of $1.13 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 October 29, 2019, the Board of Directors granted the same employee above options to purchase an aggregate of 125,000 shares of common stock at an exercise price of $1.00 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 2019 Equity Incentive Plan, in consideration for services rendered and to be rendered to the Company. On May 20, 2019, the Board of Directors granted 12 employees, 1 officer/director (Benjamin P. Cowart, the Company’s Chief Executive Officer), and 5 board members options to purchase an aggregate of 487,000 , 163,000 , and 300,000 , shares of common stock, respectively, at an exercise price of $1.45 , $1.60 , and $1.45 per share, respectively, with a ten year, 5 year, and ten 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 April 12, 2018, the Board of Directors granted 11 employees and 1 officer/director (Benjamin P. Cowart, the Company’s Chief Executive Officer) options to purchase an aggregate of 521,000 and 166,000 , shares of common stock, respectively, 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. A summary of the Company’s stock warrant activity and related information for the years ended December 31, 2019 and 2018 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, 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 Outstanding at December 31, 2018 219,868 $ 3.01 0.93 $ 140,249 Warrants granted 1,500,000 2.25 9.70 1,496,372 Warrants exercised — — — — Warrants canceled/forfeited/expired (219,868 ) 3.01 — (140,249 ) Warrants at December 31, 2019 1,500,000 $ 2.25 9.70 $ 1,496,372 Vested at December 31, 2019 — $ — — $ — Exercisable at December 31, 2019 — $ — — $ — 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. See " Note 6. Myrtle Grove Share Purchase and Subscription Agreement " for a description of the warrants that were granted in conjunction with the MG SPV closing. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and December 31, 2018 , 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, 2019 and December 31, 2018 excludes: 1) options to purchase 4,418,250 and 3,460,750 shares, respectively, of common stock, 2) warrants to purchase 8,633,188 and 7,353,056 shares, respectively, of common stock, 3) Series B Preferred Stock which is convertible into 3,826,055 and 3,604,827 shares, respectively, of common stock, 4) Series B1 Preferred Stock which is convertible into 9,028,085 and 10,057,597 shares, respectively, of common stock, and 5) Series A Preferred Stock which is convertible into 419,859 shares of common stock. The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share for the years ended December 31, 2019 and 2018 : 2019 2018 Basic loss per Share Numerator: Net loss available to common shareholders $ (11,445,628 ) $ (8,037,304 ) Denominator: Weighted-average common shares outstanding 40,988,946 35,411,264 Basic loss per share $ (0.28 ) $ (0.23 ) Diluted Earnings per Share Numerator: Net loss available to common shareholders $ (11,445,628 ) $ (8,037,304 ) Denominator: Weighted-average shares outstanding 40,988,946 35,411,264 Effect of dilutive securities Stock options and warrants — — Preferred stock — — Diluted weighted-average shares outstanding 40,988,946 35,411,264 Diluted loss per share $ (0.28 ) $ (0.23 ) |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and December 31, 2018 , there were 43,395,563 and 40,174,821 , 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, 2019 , the Company issued 1,642,317 shares of common stock in connection with the conversion of Series B1 Preferred Stock, pursuant to the terms of such securities. In addition, the Company issued 1,500,000 shares of common stock pursuant to the provisions of a subscription agreement entered into with Tensile. Also, the Company issued 78,425 shares of common stock in connection with the exercise of options. 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. |
PREFERRED STOCK AND TEMPORARY E
PREFERRED STOCK AND TEMPORARY EQUITY | 12 Months Ended |
Dec. 31, 2019 | |
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 . As of December 31, 2019 and December 31, 2018 , there were 419,859 shares of Series A Preferred Stock issued and outstanding. As of December 31, 2019 and December 31, 2018 , there were 3,826,055 and 3,604,827 Series B Preferred shares issued and outstanding, respectively. As of December 31, 2019 and December 31, 2018 , there were 9,028,085 and 10,057,597 shares of Series B1 Preferred Stock issued and outstanding, respectively. There were no shares of Series C Preferred Stock issued or outstanding as of December 31, 2019 or 2018. 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 and such redemption is legal under Nevada law. 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, 2019 and December 31, 2018 : 2019 2018 Balance at beginning of period $ 8,900,208 $ 7,190,467 Less: conversions of shares to common — (62,962 ) Plus: discount accretion 1,420,391 1,118,259 Plus: dividends in kind 685,807 654,444 Balance at end of period $ 11,006,406 $ 8,900,208 The Series B Warrants and Series B1 Warrants were revalued at December 31, 2019 and December 31, 2018 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 $ 1,969,216 and $ 1,481,692 , respectively. At December 31, 2019 , the Series B Warrants and Series B1 Warrants were valued at approximately $150,558 and $1,818,658 , respectively. The dynamic Black-Scholes inputs used were: expected dividend rate of 0% , expected volatility of 65% - 100% , risk free interest rate of 1.59% (Series B Warrants) and 1.58% (Series B1 Warrants), and expected term of 1 year (Series B Warrants) and 2 years (Series B1 Warrants). As of December 31, 2019 and December 31, 2018 , respectively, a total of $ 177,921 and $ 167,642 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 differences 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 and such redemption is legal under Nevada law. 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 $ 12,743,047 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, 2019 and December 31, 2018 : 2019 2018 Balance at beginning of period $ 13,279,755 $ 15,769,478 Less: conversions of shares to common (2,241,890 ) (5,068,602 ) Plus: discount accretion 749,206 841,754 Plus: dividends in kind 955,976 1,737,125 Balance at end of period $ 12,743,047 $ 13,279,755 For the years ending December 31, 2019 and December 31, 2018 , respectively, a total of $ 211,256 and $ 235,360 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, 2019 2018 Balance at beginning of period $ 1,481,692 $ 2,245,408 Change in fair value of warrants 487,524 (763,716 ) Balance at end of period $ 1,969,216 $ 1,481,692 |
COMMODITY DERIVATIVE INSTRUMENT
COMMODITY DERIVATIVE INSTRUMENTS | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and December 31, 2018 , are summarized in the following table. 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. December 31, 2019 Contract Type Contract Period Weighted Average Trade Price (Barrels) Remaining Volume (Barrels) Fair Value Swap Dec. 2019- Mar. 2020 $ 40.88 130,000 $ 539,800 Swap Dec. 2019- Mar. 2020 $ 81.19 130,000 $ (673,428 ) Futures Dec. 2019- Mar. 2020 $ 84.83 105,000 $ (242,222 ) December 31, 2018 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, 2019 and 2018 are presented in the table below. Balance Sheet Classification Contract Type 2019 2018 Crude oil swaps $ (133,628 ) $ 48,724 Crude oil futures (242,222 ) 647,217 Derivative commodity asset (liability) $ (375,850 ) $ 695,941 For the years ended December 31, 2019 and 2018, we recognized a $ 2,458,359 loss and $ 1,062,682 gain, respectively, on commodity derivative contracts on the consolidated statements of operations as part of our costs of revenues. |
JOINT VENTURE
JOINT VENTURE | 12 Months Ended |
Dec. 31, 2019 | |
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 loss and income of $765,931 and $602,259 , respectively for the years ended December 31, 2019 and December 31, 2018 , respectively, and then deducted and added the 49% or $375,306 and $234,188 , respectively, of income (loss) 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, 2019 | |
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, 2019 and 2018 are as follows: YEAR ENDED DECEMBER 31, 2019 Black Oil Refining and Marketing Recovery Total Revenues $ 139,269,164 $ 12,957,767 $ 11,138,634 $ 163,365,565 Income (loss) from operations $ 433,901 $ (576,487 ) $ (2,631,458 ) $ (2,774,044 ) Total assets $ 114,976,772 $ 1,101,470 $ 4,681,677 $ 120,759,919 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 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES The Company has various lease agreements including leases of plant, facilities, railcar, and equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. Leases with an initial term of 12 months or less are not recorded on our consolidated balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Leases with initial terms in excess of 12 months are recorded as operating or financing leases in our consolidated balance sheet. Lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use secured incremental borrowing rates based on the information available at commencement date, including lease term, in determining the present value of future payments. The operating lease asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g., minimum rent payments) and non-lease components (e.g. maintenance, labor charges, etc.). The Company generally does not separate lease and nonlease components for all classes of underlying assets. For certain equipment leases, such as freight car, vehicles and work equipment, the Company accounts for the lease and non-lease components as a single lease component. Certain of the Company’s lease agreements include rental payments that are adjusted periodically for an index or rate. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Finance Leases Finance leases are included in finance lease right-of-use lease assets and finance lease liability current and long-term liabilities on the unaudited consolidated balance sheets. The associated amortization expense of $166,946 and interest expense of $41,889 are included in depreciation and amortization and interest expense, respectively, on the unaudited consolidated statements of operations for the year ended December 31, 2019. Please see “Note 9. Line of Credit and Long-Term Debt ” for more details. Operating Leases Operating leases are included in operating lease right-of-use lease assets, and operating current and long-term lease liabilities on the consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense for equipment is included in cost of revenues and other rents are included in selling, general and administrative expense on the consolidated statements of operations and are reported net of lease income. Lease income is not material to the results of operations for the year ended December 31, 2019. Total operating lease costs for the year ended December 31, 2019 was $6.3 million . Cash Flows An initial right-of-use asset of $37.8 million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard. Cash paid for amounts included in operating lease liabilities was $2.3 million during the year ended December 31, 2019 and is included in operating cash flows. Cash paid for amounts included in finance lease was $ 165,598 during the year ended December 31, 2019 and is included in financing cash flows. Maturities of our lease liabilities for all operating leases are as follows as of December 31, 2019: Facilities Equipment Plant Railcar Total Year 1 $ 719,607 $ 161,539 $ 4,060,417 $ 943,741 $ 5,885,304 Year 2 549,293 161,539 4,060,417 582,386 5,353,635 Year 3 392,654 26,953 4,060,417 24,696 4,504,720 Year 4 306,000 — 4,060,417 1,278 4,367,695 Year 5 300,000 — 4,060,417 — 4,360,417 Thereafter 2,375,000 — 35,524,907 — 37,899,907 Total lease payments $ 4,642,554 $ 350,031 $ 55,826,992 $ 1,552,101 $ 62,371,678 Less: interest (1,685,627 ) (22,605 ) (24,980,750 ) (95,811 ) (26,784,793 ) Present value of lease liabilities $ 2,956,927 $ 327,426 $ 30,846,242 $ 1,456,290 $ 35,586,885 The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of December 31, 2019: Remaining lease term and discount rate: December 31, 2019 Weighted average remaining lease terms (years) Lease facilities 5.34 Lease equipment 2.17 Lease plant 13.26 Lease railcar 1.33 Weighted average discount rate Lease facilities 9.17 % Lease equipment 8.00 % Lease plant 9.37 % Lease railcar 8.00 % Significant Judgments Significant judgments include the discount rates applied, the expected lease terms, lease renewal options and residual value guarantees. There are several leases with renewal options or purchase options. Using the practical expedient, the Company utilized existing lease classifications as of December 31, 2018. The purchase options are not expected to have a material impact on the lease obligation. There are several facility and plant leases which have lease renewal options from one to twenty years . The largest facility lease has an initial term through 2032. That lease does not have an extension option. For the two plant leases both have multiple 5 -year extension options for a total of 20 years . Two extension options have been included in the lease right to use asset and lease obligation at December 31, 2019. The Company will reassess the lease terms and purchase options when there is a significant change in circumstances or when the Company elects to exercise an option that had previously been determined that it was not reasonably certain to do so. |
LEASES | LEASES The Company has various lease agreements including leases of plant, facilities, railcar, and equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised. Leases with an initial term of 12 months or less are not recorded on our consolidated balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Leases with initial terms in excess of 12 months are recorded as operating or financing leases in our consolidated balance sheet. Lease assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use secured incremental borrowing rates based on the information available at commencement date, including lease term, in determining the present value of future payments. The operating lease asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that the option will be exercised. At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g., minimum rent payments) and non-lease components (e.g. maintenance, labor charges, etc.). The Company generally does not separate lease and nonlease components for all classes of underlying assets. For certain equipment leases, such as freight car, vehicles and work equipment, the Company accounts for the lease and non-lease components as a single lease component. Certain of the Company’s lease agreements include rental payments that are adjusted periodically for an index or rate. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Finance Leases Finance leases are included in finance lease right-of-use lease assets and finance lease liability current and long-term liabilities on the unaudited consolidated balance sheets. The associated amortization expense of $166,946 and interest expense of $41,889 are included in depreciation and amortization and interest expense, respectively, on the unaudited consolidated statements of operations for the year ended December 31, 2019. Please see “Note 9. Line of Credit and Long-Term Debt ” for more details. Operating Leases Operating leases are included in operating lease right-of-use lease assets, and operating current and long-term lease liabilities on the consolidated balance sheets. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense for equipment is included in cost of revenues and other rents are included in selling, general and administrative expense on the consolidated statements of operations and are reported net of lease income. Lease income is not material to the results of operations for the year ended December 31, 2019. Total operating lease costs for the year ended December 31, 2019 was $6.3 million . Cash Flows An initial right-of-use asset of $37.8 million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard. Cash paid for amounts included in operating lease liabilities was $2.3 million during the year ended December 31, 2019 and is included in operating cash flows. Cash paid for amounts included in finance lease was $ 165,598 during the year ended December 31, 2019 and is included in financing cash flows. Maturities of our lease liabilities for all operating leases are as follows as of December 31, 2019: Facilities Equipment Plant Railcar Total Year 1 $ 719,607 $ 161,539 $ 4,060,417 $ 943,741 $ 5,885,304 Year 2 549,293 161,539 4,060,417 582,386 5,353,635 Year 3 392,654 26,953 4,060,417 24,696 4,504,720 Year 4 306,000 — 4,060,417 1,278 4,367,695 Year 5 300,000 — 4,060,417 — 4,360,417 Thereafter 2,375,000 — 35,524,907 — 37,899,907 Total lease payments $ 4,642,554 $ 350,031 $ 55,826,992 $ 1,552,101 $ 62,371,678 Less: interest (1,685,627 ) (22,605 ) (24,980,750 ) (95,811 ) (26,784,793 ) Present value of lease liabilities $ 2,956,927 $ 327,426 $ 30,846,242 $ 1,456,290 $ 35,586,885 The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of December 31, 2019: Remaining lease term and discount rate: December 31, 2019 Weighted average remaining lease terms (years) Lease facilities 5.34 Lease equipment 2.17 Lease plant 13.26 Lease railcar 1.33 Weighted average discount rate Lease facilities 9.17 % Lease equipment 8.00 % Lease plant 9.37 % Lease railcar 8.00 % Significant Judgments Significant judgments include the discount rates applied, the expected lease terms, lease renewal options and residual value guarantees. There are several leases with renewal options or purchase options. Using the practical expedient, the Company utilized existing lease classifications as of December 31, 2018. The purchase options are not expected to have a material impact on the lease obligation. There are several facility and plant leases which have lease renewal options from one to twenty years . The largest facility lease has an initial term through 2032. That lease does not have an extension option. For the two plant leases both have multiple 5 -year extension options for a total of 20 years . Two extension options have been included in the lease right to use asset and lease obligation at December 31, 2019. The Company will reassess the lease terms and purchase options when there is a significant change in circumstances or when the Company elects to exercise an option that had previously been determined that it was not reasonably certain to do so. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019, in-kind by way of the issuance of 57,394 restricted shares of Series B Preferred Stock pro rata to each of the then holders of our Series B Preferred Stock in January 2020 and the issuance of 135,429 restricted shares of Series B1 Preferred Stock pro rata to each of the then holders of our Series B1 Preferred Stock in January 2020. If converted in full, the 57,394 shares of Series B Preferred Stock would convert into 57,394 shares of common stock and the 135,429 shares of Series B1 Preferred Stock would convert into 135,429 shares of common stock. Conversions of Series B1 Preferred Stock On January 3, 2020 a holder of our Series B1 Preferred Stock converted 1,107,893 shares of Series B1 Preferred Stock into 1,107,893 shares of common stock, pursuant to the terms of such Series B1 Preferred Stock. On January 9, 2020 and January 13, 2020, two holders converted an aggregate of 601,090 and 9,018 shares of Series B1 Preferred Stock into 601,090 and 9,018 shares of common stock, respectively, pursuant to the terms of such Series B1 Preferred Stock. On January 10, 2020, a holder of our Series B1 Preferred Stock converted 104,940 shares of Series B1 Preferred Stock into 104,940 shares of common stock, pursuant to the terms of such Series B1 Preferred Stock. On January 13, 2020, a holder of our Series B1 Preferred Stock converted 9,018 shares of Series B1 Preferred Stock into 9,018 shares of common stock, pursuant to the terms of such Series B1 Preferred Stock. On January 22, 2020, two holders of our Series B1 Preferred Stock converted 25,000 shares each of Series B Preferred Stock into 25,000 shares of common stock each, pursuant to the terms of such Series B Preferred Stock. On January 27, 2020, a holder of our Series B1 Preferred Stock converted 252,337 shares of Series B1 Preferred Stock into 252,337 shares of common stock, pursuant to the terms of such Series B1 Preferred Stock. On January 28, 2020, two holders of our Series B1 Preferred Stock converted 17,000 shares each of Series B Preferred Stock into 17,000 shares of common stock each, pursuant to the terms of such Series B1 Preferred Stock. Heartland Share Purchase and Subscription Agreement On January 17, 2020 (the “Heartland Closing Date”), Vertex Operating, Tensile-Heartland, and solely for the purposes of the Heartland Guaranty (defined below), the Company, and HPRM LLC, a Delaware limited liability company, which entity was formed as a special purpose vehicle in connection with the transactions, described in greater detail below (“Heartland SPV”), entered into a Share Purchase and Subscription Agreement (the “Heartland Share Purchase”). Prior to entering into the Heartland Share Purchase, the Company transferred 100% of the ownership of Vertex Refining OH, LLC, its indirect wholly-owned subsidiary (“Vertex OH”) to Heartland SPV in consideration for 13,500 Class A Units, 13,500 Class A-1 Preferred Units and 11,300 Class B Units of Heartland SPV and immediately thereafter contributed 248 Class B Units to the Company’s wholly-owned subsidiary, Vertex Splitter Corporation, a Delaware corporation (“Vertex Splitter”), as a contribution to capital. Vertex OH owned the Company’s Columbus, Ohio, Heartland facility, which produces a base oil product that is sold to lubricant packagers and distributors. Pursuant to the Heartland Share Purchase, Vertex Operating sold Tensile-Heartland the 13,500 Class A Units and 13,500 Class A-1 Preferred Units of Heartland SPV in consideration for $13.5 million . Also, on the Heartland Closing Date, Tensile-Heartland purchased 7,500 Class A Units and 7,500 Class A-1 Units in consideration for $7.5 million (less the expenses of Tensile-Heartland in connection with the transaction) directly from Heartland SPV. The approximate $7.5 million purchase amount and future free cash flows from the operation of Heartland SPV are planned to be available for investments at the Heartland facility to increase self-collections, maximize the throughput of the refinery, enhance the quality of the output and complete other projects. Concurrently with the closing of the transactions described above, and pursuant to the terms of the Heartland Share Purchase, the Company, through Vertex Operating, purchased 1,000 newly issued Class A Units from MG SPV at a cost of $1,000 per unit ( $1 million in aggregate). The Heartland Share Purchase provides Tensile-Heartland an option, exercisable at its election, any time, subject to the terms of the Heartland Share Purchase, to purchase up to an additional 7,000 Class A-2 Preferred Units at a cost of $1,000 per Class A-2 Preferred Unit from Heartland SPV. The Heartland SPV is currently owned 35% by Vertex Operating and 65% by Tensile-Heartland. Heartland SPV is managed by a five -member Board of Managers, of which three members are appointed by Tensile-Heartland and two are appointed by the Company. The Class A Units held by Tensile-Heartland are convertible into Class B Units as provided in the Limited Liability Company Agreement of Heartland SPV (the “Heartland Company Agreement”), based on a conversion price (initially one -for-one) which may be reduced from time to time if new Units of Heartland SPV are issued and will automatically convert into Series A Units upon certain events described in the Heartland Company Agreement. The Class A-1 and A-2 Preferred Units (“Class A Preferred Units”), which are 100% owned by Tensile-Heartland, accrue a 22.5% per annum preferred return subject to terms of the Heartland Company Agreement (the “Class A Yield”). Additionally, the Class A Unit holders (common and preferred) may force Heartland SPV to redeem the outstanding Class A Units at any time on or after the earlier of (a) the fifth anniversary of the Closing Date and (ii) the occurrence of a Heartland Triggering Event (defined below)(a “Heartland Redemption”). The cash purchase price for such redeemed Class A Unit will be the greater of (y) the fair market value of such units (without discount for illiquidity, minority status or otherwise) as determined by a qualified third party agreed to in writing by a majority of the holders seeking Heartland Redemption and Vertex Operating (provided that Vertex Operating still owns Class B Units on such date) and (z) the original per-unit price for such Class A Units plus fifty percent ( 50% ) of the aggregate capital invested by the Class A Unit holders through such Heartland Redemption date. “Heartland Triggering Events” include (a) any termination of the Administrative Services Agreement pursuant to its terms and/or any material breach by us of the environmental remediation and indemnity agreement, (b) any dissolution, winding up or liquidation of the Company, Vertex Operating or any significant subsidiary of Vertex Operating, (c) any sale, lease, license or disposition of any material assets of the Company, Vertex Operating or any significant subsidiary of Vertex Operating, or (d) any transaction or series of related transactions (whether by merger, exchange, contribution, recapitalization, consolidation, reorganization, combination or otherwise) involving the Company, Vertex Operating or any significant subsidiary of Vertex Operating, the result of which is that the holders of the voting securities of the relevant entity as of the Closing Date are no longer the beneficial owners, in the aggregate, after giving effect to such transaction or series of transactions, directly or indirectly, of more than fifty percent ( 50% ) of the voting power of the outstanding voting securities of the entity, subject to certain other requirements set forth in the Heartland Company Agreement. In the event that Heartland SPV fails to redeem such Class A Units within 180 days after a redemption is triggered, the Class A Yield is increased to 25% until such time as such redemption is completed (with such increase being effective back to the original date of a notice of redemption). In addition, in such event, the Class A Unit holders may cause Heartland SPV to initiate a process intended to result in a sale of Heartland SPV. Distributions of available cash of Heartland SPV pursuant to the Heartland Company Agreement (including pursuant to liquidations of Heartland SPV), subject to certain exceptions set forth therein, are to be made (a) first, to the holders of the Class A Preferred Units, in amount equal to the greater of (A) the aggregate unpaid Class A Yield and (B) an amount equal to fifty percent ( 50% ) of the aggregate capital invested by the Class A Preferred Unit holders (initially Tensile-Heartland)(such aggregate capital invested by the Class A Preferred Unit holders, the “ Heartland Invested Capital ”, which totaled approximately $ 21 million as of the Heartland Closing Date, subject to adjustment as provided in the Heartland Share Purchase), less prior distributions (such greater amount of (A) and (B), the “ Class A Preferred Priority Distributions ”); (b) second, the Class A Preferred Unitholders, together as a separate and distinct class, are entitled to receive an amount equal to the aggregate Heartland Invested Capital; (c) third, the Class B Unitholders (other than Class B Unitholders which received Class B Units upon conversion of Class A Preferred Units), together as a separate and distinct class, are entitled to receive all or a portion of any distribution equal to the sum of all distributions made under sections (a) and (b) above; and (d) fourth, to the holders of Units who are eligible to receive such distributions in proportion to the number of Units held by such holders. Variable interest entity Per ASC 810-10-25-38A and 38B, a reporting entity shall be deemed to have a controlling financial interest in a variable interest entity (VIE) if it has both of the following characteristics: the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, and the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determined that since substantially all of the activities of Heartland SPV (i.e., the VIE) are conducted on behalf of a single VIE holder, and that the Company is the primary beneficiary of the VIE. Accordingly, Heartland SPV should be consolidated in the Company’s consolidated financial statements. Accordantly, the only impact to the consolidated financial position and results of operations will be to present the 65% owned by Tensile-Heartland in non-controlling interest. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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. • Vertex Refining, LA, LLC which owned a used oil re-refinery based in Marrero, Louisiana and also has assets in Belle Chasse, Louisiana, prior to the consummation of the MG Share Purchase in July 2019, as discussed below under “ Note 6. Acquisitions and Dispositions ” - “ Myrtle Grove Share Purchase and Subscription Agreement . • 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 with collection branches located in Norwalk, Ohio, Zanesville, Ohio, Ravenswood, West Virginia, and Mt. Sterling, Kentucky. Effective January 1, 2020, the ownership of 65% of the assets of Vertex OH, LLC were transferred to Tensile in connection with the Heartland SPV (discussed below under “ Note 19. Subsequent Events ” - “Heartland Share Purchase and Subscription Agreement”). • Vertex Refining Myrtle Grove LLC (“MG SPV”), is a special purpose entity formed to hold the Belle Chasse, Louisiana, re-refining complex, which entity is 84.42% owned by Vertex Operating. • 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 90 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. |
Internal-Use Software | Internal-Use Software We incur costs related to internal-use software and cloud computing development, including purchased software and internally-developed software. Costs incurred in the planning and evaluation stage of internally-developed software and cloud computing development are expensed as incurred. Costs incurred and accumulated during the application development stage are capitalized and included within intangibles, net on the consolidated balance sheets. Amortization of internal-use software will be recorded on a straight-line basis over the estimated useful life of the assets. |
Cloud Computing Costs | Cloud Computing Costs We have entered into non-cancellable cloud computing hosting arrangements for which we incur implementation costs. Costs incurred in the planning and evaluation stage of the cloud computing hosting arrangement are expensed as incurred. Costs incurred during the application development stage related to implementation of the hosting arrangement are capitalized and included within prepaid expenses on the consolidated balance sheets. Amortization of implementation costs is recorded on a straight-line basis over the term of the associated hosting arrangement for each module or component of the related hosting arrangement when it is ready for its intended use. Amortization costs will be recorded primarily in selling, general and administrative expense on the consolidated statements of operations. |
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 or an impairment. |
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. |
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 the purchase price for certain of 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.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. 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. 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 initially 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. |
Revenue Recognition | 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. 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. From time to time, our fuel oil customers in our black oil segment may request that we store product at our facilities which they purchase from us. 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. |
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, deferred tax assets, and redemption value of noncontrolling interest. |
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. Until all net operating losses are utilized, there is no impact on the 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 and if the Company is not prohibited from completing such redemption under Nevada law. 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 topic, 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, 2019 and December 31, 2018 , 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. |
Contingent Consideration | Contingent Consideration During the year ended December 31, 2019, the Company wrote off and recognized in income the remaining portion of the contingent consideration related to the July 2017 Ygriega Environmental Services, LLC ("Ygriega") acquisition earn-out due to the fact that collected oil gallons targets required for the payout of such earn-out, were not met. |
Other Income | Other Income During the year ended December 31, 2019, the Company received a payment of $ 907,500 related to the proceeds of an insurance settlement for a fire that had occurred at the used oil re-refining plant located in Churchill County, Nevada, which we previously rented. The insurance settlement satisfies a previous loan we made to Omega Refining, LLC to fund operating expenses at that facility. The Company previously determined this loan was uncollectible and wrote it off. |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest As more fully described in " Note 6. Myrtle Grove Share Purchase and Subscription Agreement ", the Company is party to a put/call option agreement with the holder of MG SPV’s non-controlling interest. The put option permits the MG SPV's non-controlling interest holder, at any time on or after the earlier of (a) July 26, 2024 and (ii) the occurrence of certain triggering events (a “MG Redemption”) to require MG SPV to redeem the non-controlling interest from the holder of such interest. Per the agreement, the cash purchase price for such redeemed Class B Units is the greater of (y) the fair market value of such units (without discount for illiquidity, minority status or otherwise) as determined by a qualified third party agreed to in writing by a majority of the holders seeking an MG Redemption and Vertex Operating (provided that Vertex Operating still owns Class A Units on such date) and (z) the original per-unit price for such Class B Units plus fifty percent ( 50% ) of the aggregate capital invested by the Class B Unit holders through such MG Redemption date. The agreement also permits the Company to acquire the non-controlling interest from the holder thereof upon certain events. Applicable accounting guidance requires an equity instrument that is redeemable for cash or other assets to be classified outside of permanent equity if it is redeemable (a) at a fixed or determinable price on a fixed or determinable date, (b) at the option of the holder, or (c) upon the occurrence of an event that is not solely within the control of the issuer. Distributions of available cash of MG SPV pursuant to the MG Company Agreement (including pursuant to liquidations of MG SPV), subject to certain exemptions and exemptions set forth therein, are to be made (a) first, to the holders of the Class B Units, in an amount equal to the greater of (A) the aggregate unpaid “Class B Yield” (equal to an annual return of 22.5% per annum) and (B) an amount equal to fifty percent ( 50 %) of the aggregate capital invested by the Class B Unit holders (initially Tensile-MG)(such aggregate capital invested by the Class B Unit holders, the “MG Invested Capital”, which totals $ 3 million as of the Closing Date), less prior distributions (the greater amount of (A) and (B), the “Class B Priority Distributions”); (b) second, the Class B Unitholders, together as a separate and distinct class, are entitled to receive an amount equal to the aggregate MG Invested Capital; (c) third, the Class A Unitholders (other than Class A Unitholders which received Class A Units upon conversion of Class B Units), together as a separate and distinct class, are entitled to receive all or a portion of any distribution equal to the sum of all distributions made under sections (a) and (b) above; and (d) fourth, to the holders of Units who are eligible to receive such distributions in proportion to the number of Units held by such holders.Based on this guidance, the Company has classified the MG SPV non-controlling interest between the liabilities and equity sections of the accompanying December 31, 2019 and December 31, 2018 consolidated balance sheets. If an equity instrument subject to the guidance is currently redeemable, the instrument is adjusted to its maximum redemption amount at the balance sheet date. If the equity instrument subject to the guidance is not currently redeemable but it is probable that the equity instrument will become redeemable (for example, when the redemption depends solely on the passage of time), the guidance permits either of the following measurement methods: (a) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument using an appropriate methodology, or (b) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. The amount presented in temporary equity should be no less than the initial amount reported in temporary equity for the instrument. Because the MG SPV equity instrument will become redeemable solely based on the passage of time, the Company determined that it is probable that the MG SPV equity instrument will become redeemable. The Company has elected to apply the second of the two measurement options described above. An adjustment to the carrying amount of a non-controlling interest from the application of the above guidance does not impact net income in the consolidated financial statements. Rather, such adjustments are treated as equity transactions. |
New Accounting Pronouncements | New Accounting Pronouncements Leases In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842) . ASU 2016-02 requires companies to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. We adopted ASU 2016-02, Leases (Topic 842) effective January 1, 2019 and did not recast comparative periods in transition to the new standard. In addition, we elected certain practical expedients which permit us to not reassess whether existing contracts are or contain leases, to not reassess the lease classification of any existing leases, to not reassess initial direct costs for any existing leases, and to not separate lease and nonlease components for all classes of underlying assets. We also made an accounting policy election to keep leases with an initial term of 12 months or less off of the balance sheet for all classes of underlying assets. Adoption of the new standard resulted in an increase in the Company’s assets and liabilities of approximately $37.8 million on January 1, 2019. The ASU did not have an impact on our consolidated results of operations or cash flows. Additional information and disclosures required by this new standard are contained in " Note 18. Leases ". Internal Use Software and Cloud Computing Costs We adopted the guidance in ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) -Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, on January 1, 2019. This ASU requires entities in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40, Internal-Use Software, to determine which costs to implement the service contract would be capitalized as an asset related to the service contract and which costs would be expensed. The requirements of ASU 2018-15 have been applied on a prospective basis to implementation costs incurred on or after January 1, 2019. As a result of the adoption of ASU 2018-15, we capitalized $0.7 million of implementation costs for the year ended December 31, 2019. We have not recognized any amortization related to these implementation costs for the year ended December 31, 2019. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash and Cash Equivalents and 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, 2019 December 31, 2018 Cash and cash equivalents $ 4,099,655 $ 1,249,831 Restricted cash 100,170 1,600,000 Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows $ 4,199,825 $ 2,849,831 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 42,195,020 $ — $ — $ 42,195,020 Southern United States 97,074,144 12,957,767 11,138,634 121,170,545 $ 139,269,164 $ 12,957,767 $ 11,138,634 $ 163,365,565 Sources of Revenue Petroleum products $ 139,269,164 $ 12,957,767 $ 2,666,077 $ 154,893,008 Metals — — 8,472,557 8,472,557 Total revenues $ 139,269,164 $ 12,957,767 $ 11,138,634 $ 163,365,565 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 |
CONCENTRATIONS, SIGNIFICANT C_2
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Concentrations, Significant Customers, Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Revenues and Receivables Comprised of Customer Concentrations | For the years ended December 31, 2019 and 2018 , the Company’s revenues and receivables were comprised of the following customer concentrations: 2019 2018 % of Revenues % of Receivables % of % of Customer 1 40% 36% 34% 21% Customer 2 8% 14% —% —% Customer 3 9% —% 11% —% Customer 4 3% 7% 4% 13% |
Schedule of Segment Revenues Comprised of Customer Concentrations | At December 31, 2019 and 2018 , and for the years then ended, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment 2019 % of Revenue by Segment 2018 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 47 % — % — % 43 % — % — % Customer 2 10 % — % — % — % — % — % Customer 3 10 % — % — % 14 % — % — % Customer 4 4 % — % — % 5 % — % — % The Company’s reportable segments include the Black Oil, Refining and Marketing and Recovery segments. Segment information for the years ended December 31, 2019 and 2018 are as follows: YEAR ENDED DECEMBER 31, 2019 Black Oil Refining and Marketing Recovery Total Revenues $ 139,269,164 $ 12,957,767 $ 11,138,634 $ 163,365,565 Income (loss) from operations $ 433,901 $ (576,487 ) $ (2,631,458 ) $ (2,774,044 ) Total assets $ 114,976,772 $ 1,101,470 $ 4,681,677 $ 120,759,919 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 |
FIXED ASSETS, NET (Tables)
FIXED ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 December 31, 2018 Equipment 7-20 $ 42,879,308 $ 40,404,582 Furniture and fixtures 7 108,896 108,896 Leasehold improvements 15 2,434,690 2,331,071 Office equipment 5 1,213,865 1,190,509 Vehicles 5 7,114,001 6,899,388 Building 20 274,203 274,203 Construction in progress 12,361,034 12,720,188 Land 3,083,551 2,833,551 Total fixed assets 69,469,548 66,762,388 Less accumulated depreciation (24,708,151 ) (19,874,896 ) Net fixed assets $ 44,761,397 $ 46,887,492 |
ACQUISITIONS AND DISPOSITIONS (
ACQUISITIONS AND DISPOSITIONS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Reconciliation of Changes in Redeemable Noncontrolling Interest | The table below presents the reconciliation of changes in redeemable noncontrolling interest during the year ended December 31, 2019: Beginning balance at January 1, 2019 $ — Capital contribution from non-controlling interest 3,150,000 Initial adjustment of carrying amount of non-controlling interest (970,809 ) Net loss attributable to redeemable non-controlling interest (61,668 ) Accretion of non-controlling interest to redemption value 2,279,371 Ending balance at December 31, 2019 $ 4,396,894 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Components of Intangible Assets Subject to Amortization | Components of intangible assets (subject to amortization) consist of the following items: December 31, 2019 December 31, 2018 Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Net Customer relations 5-8 $ 1,329,580 $ 884,917 $ 444,663 $ 1,329,580 $ 718,890 $ 610,690 Vendor relations 10 6,654,497 4,197,213 2,457,284 6,654,497 3,531,764 3,122,733 Trademark/Trade name 6-16 1,249,887 531,885 718,002 1,249,887 436,869 813,018 TCEP Technology/Patent 15 13,287,000 6,180,643 7,106,357 13,287,000 5,294,843 7,992,157 Non-compete agreements 3-5 196,601 168,200 28,401 196,601 156,680 39,921 Internally developed software in progress 3-5 489,093 — 489,093 — — — $ 23,206,658 $ 11,962,858 $ 11,243,800 $ 22,717,565 $ 10,139,046 $ 12,578,519 |
Schedule of Estimated Future Amortization Expense | Estimated future amortization expense is as follows: 2020 $ 1,921,630 2021 1,921,630 2022 1,706,702 2023 1,349,318 2024 1,292,875 Thereafter 3,051,645 $ 11,243,800 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net, consists of the following at December 31: 2019 2018 Accounts receivable trade $ 12,540,553 $ 9,859,758 Allowance for doubtful accounts (402,475 ) (831,768 ) Accounts receivable trade, net $ 12,138,078 $ 9,027,990 |
LINE OF CREDIT AND LONG-TERM _2
LINE OF CREDIT AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Debt | The Company's outstanding debt as of December 31, 2019 and December 31, 2018 is summarized as follows: Creditor Loan Type Origination Date Maturity Date Loan Amount Balance on December 31, 2019 Balance on December 31, 2018 Encina Business Credit, LLC Term Loan February 1, 2017 February 1, 2021 $ 20,000,000 $ 13,333,000 $ 15,350,000 Encina Business Credit SPV, LLC Revolving Note February 1, 2017 February 1, 2021 $ 10,000,000 3,276,230 3,844,636 Tetra Capital Lease Finance Lease May, 2018 May, 2022 $ 419,690 264,014 349,822 Wells Fargo Equipment Lease-VRM LA Finance Lease March, 2018 March, 2021 $ 30,408 12,341 22,390 Wells Fargo Equipment Lease-Ohio Finance Lease April-May, 2019 April-May, 2024 $ 621,000 551,260 — Various institutions Insurance premiums financed Various < 1 year $ 2,902,428 1,165,172 999,152 Total 18,602,017 20,566,000 Deferred finance costs (47,826 ) (621,733 ) Total, net of deferred finance costs $ 18,554,191 $ 19,944,267 |
Schedule of Future Maturities of Debt | Future maturities of debt are summarized as follows: Creditor 2020 2021 2022 2023 2024 Thereafter Encina Business Credit, LLC $ 900,000 $ 12,433,000 $ — $ — $ — $ — Encina Business Credit SPV, LLC 3,276,230 — — — — — Tetra Capital Lease 91,779 98,167 74,068 — — — Wells Fargo Equipment Lease-VRM LA 10,537 1,804 — — — — Wells Fargo Equipment Lease-Ohio 114,848 120,895 127,264 138,476 49,777 — Various institutions 1,165,172 — — — — — Totals 5,558,566 12,653,866 201,332 138,476 49,777 — Deferred finance costs (47,826 ) — — — — — Totals, net of deferred finance costs $ 5,510,740 $ 12,653,866 $ 201,332 $ 138,476 $ 49,777 $ — |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax (Benefit) Expense | The components of income tax (benefit) expense for the years ended December 31, 2019 and 2018 are as follows: December 31, 2019 December 31, 2018 Current federal tax (expense)/benefit $ (68,606 ) $ (137,212 ) Deferred federal tax (expense)/benefit 68,606 137,212 Total federal tax (expense)/benefit $ — $ — |
Schedule of Reconciliation by Applying U.S. Federal Income Tax Rate to Pretax Income from Continuing Operations and Income Tax Expense Presented | Reconciliation between the amount determined by applying the U.S. federal income tax rate of 21% to pretax income from continuing operations and income tax expense presented in the accompanying consolidated statements of operations was as follows for the years ended December 31, 2019 and 2018 : December 31, 2019 December 31, 2018 Statutory tax on book income $ (1,152,000 ) $ (417,000 ) Permanent differences 139,000 114,000 Change in derivative liability 102,000 (160,000 ) Myrtle Grove transaction gain 210,000 — Change in valuation allowance 1,344,000 967,000 Prior year return true up (643,000 ) (504,000 ) Income tax expense (benefit) $ — $ — |
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, 2019 and 2018 are presented below: December 31, 2019 December 31, 2018 Deferred tax assets: Alternative minimum tax credits $ 69,000 $ 137,000 Accrued bonus and stock based compensation 386,000 358,000 Basis of intangible assets 1,687,000 1,368,000 Bad debt reserve 85,000 175,000 Contribution carryover 38,000 26,000 Interest expense carryforward 487,000 190,000 Net operating loss carry forwards 13,682,000 12,500,000 Less valuation allowance (13,453,000 ) (12,109,000 ) Total deferred tax assets $ 2,981,000 $ 2,645,000 December 31, 2019 December 31, 2018 Deferred tax liabilities: Basis of fixed assets $ (2,788,000 ) $ (2,444,000 ) Contingent liability — 3,000 Partnership income (124,000 ) (67,000 ) Total deferred tax liabilities $ (2,912,000 ) $ (2,508,000 ) Net deferred tax assets $ 69,000 $ 137,000 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | Stock option activity for the years ended December 31, 2019 and 2018 is 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, 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 Outstanding at December 31, 2018 3,460,750 $ 2.05 3.50 $ 3,469,298 Options granted 1,150,000 1.40 8.76 1,148,662 Options exercised (112,500 ) 0.46 0.00 (41,789 ) Options cancelled/forfeited/expired (80,000 ) 0.46 0.00 (28,800 ) Outstanding at December 31, 2019 4,418,250 $ 1.95 6.25 $ 4,547,371 Vested at December 31, 2019 2,383,625 $ 2.50 4.84 $ 2,625,779 Exercisable at December 31, 2019 2,383,625 $ 2.50 4.84 $ 2,625,779 |
Schedule of Stock Warrant Activity | A summary of the Company’s stock warrant activity and related information for the years ended December 31, 2019 and 2018 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, 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 Outstanding at December 31, 2018 219,868 $ 3.01 0.93 $ 140,249 Warrants granted 1,500,000 2.25 9.70 1,496,372 Warrants exercised — — — — Warrants canceled/forfeited/expired (219,868 ) 3.01 — (140,249 ) Warrants at December 31, 2019 1,500,000 $ 2.25 9.70 $ 1,496,372 Vested at December 31, 2019 — $ — — $ — Exercisable at December 31, 2019 — $ — — $ — |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Numerator and Denominator for 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, 2019 and 2018 : 2019 2018 Basic loss per Share Numerator: Net loss available to common shareholders $ (11,445,628 ) $ (8,037,304 ) Denominator: Weighted-average common shares outstanding 40,988,946 35,411,264 Basic loss per share $ (0.28 ) $ (0.23 ) Diluted Earnings per Share Numerator: Net loss available to common shareholders $ (11,445,628 ) $ (8,037,304 ) Denominator: Weighted-average shares outstanding 40,988,946 35,411,264 Effect of dilutive securities Stock options and warrants — — Preferred stock — — Diluted weighted-average shares outstanding 40,988,946 35,411,264 Diluted loss per share $ (0.28 ) $ (0.23 ) |
PREFERRED STOCK AND TEMPORARY_2
PREFERRED STOCK AND TEMPORARY EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Temporary Equity | 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 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 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, 2019 and December 31, 2018 : 2019 2018 Balance at beginning of period $ 13,279,755 $ 15,769,478 Less: conversions of shares to common (2,241,890 ) (5,068,602 ) Plus: discount accretion 749,206 841,754 Plus: dividends in kind 955,976 1,737,125 Balance at end of period $ 12,743,047 $ 13,279,755 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, 2019 and December 31, 2018 : 2019 2018 Balance at beginning of period $ 8,900,208 $ 7,190,467 Less: conversions of shares to common — (62,962 ) Plus: discount accretion 1,420,391 1,118,259 Plus: dividends in kind 685,807 654,444 Balance at end of period $ 11,006,406 $ 8,900,208 |
Summary of Analysis of Changes in Derivative Liability | The following is an analysis of changes in the derivative liability: Level Three Roll-Forward Year Ended December 31, 2019 2018 Balance at beginning of period $ 1,481,692 $ 2,245,408 Change in fair value of warrants 487,524 (763,716 ) Balance at end of period $ 1,969,216 $ 1,481,692 |
COMMODITY DERIVATIVE INSTRUME_2
COMMODITY DERIVATIVE INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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. December 31, 2019 Contract Type Contract Period Weighted Average Trade Price (Barrels) Remaining Volume (Barrels) Fair Value Swap Dec. 2019- Mar. 2020 $ 40.88 130,000 $ 539,800 Swap Dec. 2019- Mar. 2020 $ 81.19 130,000 $ (673,428 ) Futures Dec. 2019- Mar. 2020 $ 84.83 105,000 $ (242,222 ) December 31, 2018 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 |
Schedule of Carrying Values of Derivatives Positions and their Locations on Consolidated Balance Sheets | The carrying values of the Company's derivatives positions and their locations on the consolidated balance sheets as of December 31, 2019 and 2018 are presented in the table below. Balance Sheet Classification Contract Type 2019 2018 Crude oil swaps $ (133,628 ) $ 48,724 Crude oil futures (242,222 ) 647,217 Derivative commodity asset (liability) $ (375,850 ) $ 695,941 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Reportable Segments | At December 31, 2019 and 2018 , and for the years then ended, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment 2019 % of Revenue by Segment 2018 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 47 % — % — % 43 % — % — % Customer 2 10 % — % — % — % — % — % Customer 3 10 % — % — % 14 % — % — % Customer 4 4 % — % — % 5 % — % — % The Company’s reportable segments include the Black Oil, Refining and Marketing and Recovery segments. Segment information for the years ended December 31, 2019 and 2018 are as follows: YEAR ENDED DECEMBER 31, 2019 Black Oil Refining and Marketing Recovery Total Revenues $ 139,269,164 $ 12,957,767 $ 11,138,634 $ 163,365,565 Income (loss) from operations $ 433,901 $ (576,487 ) $ (2,631,458 ) $ (2,774,044 ) Total assets $ 114,976,772 $ 1,101,470 $ 4,681,677 $ 120,759,919 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 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | Maturities of our lease liabilities for all operating leases are as follows as of December 31, 2019: Facilities Equipment Plant Railcar Total Year 1 $ 719,607 $ 161,539 $ 4,060,417 $ 943,741 $ 5,885,304 Year 2 549,293 161,539 4,060,417 582,386 5,353,635 Year 3 392,654 26,953 4,060,417 24,696 4,504,720 Year 4 306,000 — 4,060,417 1,278 4,367,695 Year 5 300,000 — 4,060,417 — 4,360,417 Thereafter 2,375,000 — 35,524,907 — 37,899,907 Total lease payments $ 4,642,554 $ 350,031 $ 55,826,992 $ 1,552,101 $ 62,371,678 Less: interest (1,685,627 ) (22,605 ) (24,980,750 ) (95,811 ) (26,784,793 ) Present value of lease liabilities $ 2,956,927 $ 327,426 $ 30,846,242 $ 1,456,290 $ 35,586,885 |
Schedule of Operating Lease Weighted Average Remaining Lease Terms and Discount Rates | The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of December 31, 2019: Remaining lease term and discount rate: December 31, 2019 Weighted average remaining lease terms (years) Lease facilities 5.34 Lease equipment 2.17 Lease plant 13.26 Lease railcar 1.33 Weighted average discount rate Lease facilities 9.17 % Lease equipment 8.00 % Lease plant 9.37 % Lease railcar 8.00 % |
BASIS OF PRESENTATION AND NAT_2
BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Details) | 12 Months Ended | ||
Dec. 31, 2019statesegmentsupplier | Jan. 17, 2020 | Jan. 01, 2020 | |
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 | ||
Tensile-Heartland | Heartland SPV | Subsequent Event | |||
Business Acquisition [Line Items] | |||
Ownership percentage | 65.00% | 65.00% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | Jul. 25, 2019USD ($) | Dec. 31, 2019USD ($)a | Dec. 31, 2018USD ($) | Jan. 17, 2020 | Jan. 01, 2020 | Jan. 01, 2019USD ($) | Nov. 30, 2018USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Liquid storage facility, number of acres | a | 19 | ||||||
Restricted cash in money market account | $ 100,170 | $ 1,600,000 | |||||
Collateral for line of credit | $ 1,500,000 | ||||||
Allowance for doubtful accounts | 402,475 | 831,768 | |||||
Impairment of goodwill | 0 | 176,349 | |||||
Impairment of long-lived assets | 0 | $ 0 | |||||
Payment related to proceeds of an insurance settlement | 907,500 | ||||||
Accounting Standards Update 2018-11 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Lease assets | 37,800,000 | $ 37,800,000 | |||||
Accounting Standards Update 2018-15 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Capitalized implementation costs | 700,000 | ||||||
Money Market Funds | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Restricted cash in money market account | $ 100,000 | ||||||
Common Class B | Tensile-Myrtle Grove Acquisition Corporation | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Percentage of aggregate capital investment to be added to original per-unit price to determine cash purchase price | 50.00% | ||||||
Percentage of aggregate unpaid annual return | 22.50% | ||||||
Aggregate unpaid annual return | $ 3,000,000 | ||||||
Heartland SPV | Subsequent Event | Tensile-Heartland | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Ownership percentage | 65.00% | 65.00% | |||||
Heartland SPV | Subsequent Event | Vertex Operating | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Ownership percentage | 35.00% | ||||||
MG SPV | Vertex Operating | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Ownership percentage | 84.42% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Reconciliation of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | |||
Cash and cash equivalents | $ 4,099,655 | $ 1,249,831 | |
Restricted cash | 100,170 | 1,600,000 | |
Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows | $ 4,199,825 | $ 2,849,831 | $ 1,105,787 |
REVENUES (Details)
REVENUES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 163,365,565 | $ 180,720,661 |
Petroleum products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 154,893,008 | 168,733,378 |
Metals | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 8,472,557 | 11,987,283 |
Northern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 42,195,020 | 41,207,747 |
Southern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 121,170,545 | 139,512,914 |
Black Oil | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 139,269,164 | 143,836,981 |
Black Oil | Petroleum products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 139,269,164 | 143,836,981 |
Black Oil | Metals | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Black Oil | Northern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 42,195,020 | 41,207,747 |
Black Oil | Southern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 97,074,144 | 102,629,234 |
Refining & Marketing | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 12,957,767 | 22,935,482 |
Refining & Marketing | Petroleum products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 12,957,767 | 22,935,482 |
Refining & Marketing | Metals | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Refining & Marketing | Northern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Refining & Marketing | Southern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 12,957,767 | 22,935,482 |
Recovery | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 11,138,634 | 13,948,198 |
Recovery | Petroleum products | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,666,077 | 1,960,915 |
Recovery | Metals | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 8,472,557 | 11,987,283 |
Recovery | Northern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Recovery | Southern United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 11,138,634 | $ 13,948,198 |
CONCENTRATIONS, SIGNIFICANT C_3
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES - Schedule of Segment Revenues and Receivables Comprised of Customer Concentrations (Details) - Customer Concentration Risk | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 40.00% | 34.00% |
Revenues | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 8.00% | 0.00% |
Revenues | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 9.00% | 11.00% |
Revenues | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 3.00% | 4.00% |
Receivables | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 36.00% | 21.00% |
Receivables | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 14.00% | 0.00% |
Receivables | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 0.00% | 0.00% |
Receivables | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 7.00% | 13.00% |
Black Oil | Revenues | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 47.00% | 43.00% |
Black Oil | Revenues | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 10.00% | 0.00% |
Black Oil | Revenues | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 10.00% | 14.00% |
Black Oil | Revenues | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 4.00% | 5.00% |
Refining | Revenues | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 0.00% | 0.00% |
Refining | Revenues | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 0.00% | 0.00% |
Refining | Revenues | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 0.00% | 0.00% |
Refining | Revenues | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 0.00% | 0.00% |
Recovery | Revenues | Customer 1 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 0.00% | 0.00% |
Recovery | Revenues | Customer 2 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 0.00% | 0.00% |
Recovery | Revenues | Customer 3 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 0.00% | 0.00% |
Recovery | Revenues | Customer 4 | ||
Revenue, Major Customer [Line Items] | ||
Concentration risk percentage | 0.00% | 0.00% |
CONCENTRATIONS, SIGNIFICANT C_4
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES - Narrative (Details) | Jul. 25, 2016 | Feb. 12, 2016lawsuit | Dec. 31, 2019USD ($)independent_director | Dec. 31, 2018USD ($) |
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 | |||
Law Firm Services | Related party relationship with board member | ||||
Long-term Purchase Commitment [Line Items] | ||||
Related party transactions | $ | $ 100,683 | $ 40,707 |
FIXED ASSETS, NET - Schedule of
FIXED ASSETS, NET - Schedule of Fixed Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 69,469,548 | $ 66,762,388 |
Less accumulated depreciation | (24,708,151) | (19,874,896) |
Fixed assets, net | 44,761,397 | 46,887,492 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 42,879,308 | 40,404,582 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 7 years | |
Total fixed assets | $ 108,896 | 108,896 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 15 years | |
Total fixed assets | $ 2,434,690 | 2,331,071 |
Office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Total fixed assets | $ 1,213,865 | 1,190,509 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Total fixed assets | $ 7,114,001 | 6,899,388 |
Building | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 20 years | |
Total fixed assets | $ 274,203 | 274,203 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | 12,361,034 | 12,720,188 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Total fixed assets | $ 3,083,551 | $ 2,833,551 |
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 (
FIXED ASSETS, NET - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment and Asset Retirement Obligations [Abstract] | ||
Depreciation expense | $ 5,189,331 | $ 5,166,467 |
ACQUISITIONS AND DISPOSITIONS -
ACQUISITIONS AND DISPOSITIONS - Narrative (Details) | Jul. 26, 2019USD ($)$ / sharesshares | Jul. 25, 2019USD ($)shares | Apr. 30, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||||
Restricted cash and cash equivalents | $ 100,170 | $ 1,600,000 | |||
MG SPV | Vertex Operating | |||||
Business Acquisition [Line Items] | |||||
Ownership percentage | 84.42% | ||||
MG SPV | Tensile-MG | |||||
Business Acquisition [Line Items] | |||||
Ownership percentage by noncontrolling interest | 15.58% | ||||
Tensile-Heartland | |||||
Business Acquisition [Line Items] | |||||
Purchase option, execution and closing period | 30 days | ||||
Percentage of interests to be acquired | 65.00% | ||||
Heartland SPV | |||||
Business Acquisition [Line Items] | |||||
Percentage of interests to be acquired | 35.00% | ||||
Cash and cash equivalents | $ 13,500,000 | ||||
Vertex Refining LA, LLC | MG SPV | |||||
Business Acquisition [Line Items] | |||||
Assets acquired | $ 22,666,667 | ||||
Tensile-MG | MG SPV | |||||
Business Acquisition [Line Items] | |||||
Percentage acquired | 15.58% | ||||
Subscription Agreement | Tensile-MG | |||||
Business Acquisition [Line Items] | |||||
Number of shares issued (in shares) | shares | 1,500,000 | ||||
Number of warrants (in shares) | shares | 1,500,000 | ||||
Warrants value | $ 2,220,000 | ||||
Warrants, price per share (in dollars per share) | $ / shares | $ 1.48 | ||||
Exercise price (in dollars per share) | $ / shares | $ 2.25 | ||||
Warrant term | 10 years | ||||
Beneficial ownership limitation | 4.999% | ||||
Beneficial ownership limitation, upon 61 days notice | 9.999% | ||||
Lock-Up Agreement | Tensile-MG | |||||
Business Acquisition [Line Items] | |||||
Lock-up period | 1 year | ||||
Period of maximum units sold | 90 days | ||||
Termination of lock-up, period of consecutive trading days that common stock is not traded on Nasdaq | 5 days | ||||
Minimum | MG SPV | |||||
Business Acquisition [Line Items] | |||||
Indemnification liability | $ 226,000 | ||||
Maximum | MG SPV | |||||
Business Acquisition [Line Items] | |||||
Indemnification liability | 3,400,000 | ||||
Maximum | MG SPV | MG SPV | |||||
Business Acquisition [Line Items] | |||||
Indemnification liability | $ 4,000,000 | ||||
Maximum | Lock-Up Agreement | Tensile-MG | |||||
Business Acquisition [Line Items] | |||||
Number of shares issued (in shares) | shares | 300,000 | ||||
Warrant term | 4 years | ||||
Common Class A | Vertex Refining LA, LLC | MG SPV | |||||
Business Acquisition [Line Items] | |||||
Units purchased (in shares) | shares | 21,667 | ||||
Common Class B | Tensile-MG | |||||
Business Acquisition [Line Items] | |||||
Common units, conversion ratio | 1 | ||||
Percentage of aggregate capital investment to be added to original per-unit price to determine cash purchase price | 50.00% | ||||
Percentage of voting power of the outstanding voting securities (more than) | 50.00% | ||||
Common Class B | Vertex Refining LA, LLC | MG SPV | |||||
Business Acquisition [Line Items] | |||||
Units purchased (in shares) | shares | 1,000 | ||||
Common Class B | Vertex Operating | Tensile-MG | |||||
Business Acquisition [Line Items] | |||||
Units sold (in shares) | shares | 1,000 | ||||
Units sold, value | $ 1,000,000 | ||||
Common Class B | MG SPV | Tensile-MG | |||||
Business Acquisition [Line Items] | |||||
Units sold (in shares) | shares | 3,000 | ||||
Units sold, value | $ 3,000,000 | ||||
Transaction costs | $ 850,000 | ||||
Restricted cash and cash equivalents | $ 1,700,000 | ||||
Specialty Environmental Services, Texas Operations | |||||
Business Acquisition [Line Items] | |||||
Total purchase price | $ 269,826 |
ACQUISITIONS AND DISPOSITIONS_2
ACQUISITIONS AND DISPOSITIONS - Redeemable Noncontrolling Interest (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Jul. 26, 2019 | |
Redeemable Noncontrolling Interest [Line Items] | |||
Adjustment in noncontrolling interest | $ 2,179,191 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Beginning balance at January 1, 2019 | 0 | ||
Capital contribution from non-controlling interest | 3,150,000 | $ 0 | |
Initial adjustment of carrying amount of non-controlling interest | (970,809) | 0 | |
Net loss attributable to redeemable non-controlling interest | (61,668) | ||
Accretion of non-controlling interest to redemption value | 2,279,371 | ||
Ending balance at December 31, 2019 | 4,396,894 | $ 0 | |
MG SPV | |||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||
Net loss attributable to redeemable non-controlling interest | $ 0 | ||
Tensile-MG | MG SPV | |||
Redeemable Noncontrolling Interest [Line Items] | |||
Percentage acquired | 15.58% |
INTANGIBLE ASSETS, NET - Schedu
INTANGIBLE ASSETS, NET - Schedule of Goodwill and Components of Intangible Assets Subject to Amortization (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ 11,962,858 | $ 10,139,046 |
Net Carrying Amount | 11,243,800 | |
Gross Carrying Amount, Total | 23,206,658 | 22,717,565 |
Net Carrying Amount, Total | 11,243,800 | 12,578,519 |
Customer relations | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,329,580 | 1,329,580 |
Accumulated Amortization | 884,917 | 718,890 |
Net Carrying Amount | $ 444,663 | 610,690 |
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 | 4,197,213 | 3,531,764 |
Net Carrying Amount | 2,457,284 | 3,122,733 |
Trademark/Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 1,249,887 | 1,249,887 |
Accumulated Amortization | 531,885 | 436,869 |
Net Carrying Amount | $ 718,002 | 813,018 |
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 | 6,180,643 | 5,294,843 |
Net Carrying Amount | 7,106,357 | 7,992,157 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 196,601 | 196,601 |
Accumulated Amortization | 168,200 | 156,680 |
Net Carrying Amount | 28,401 | 39,921 |
Internally developed software in progress | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 489,093 | 0 |
Accumulated Amortization | 0 | 0 |
Net Carrying Amount | $ 489,093 | $ 0 |
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 | |
Minimum | Internally developed software in progress | ||
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 | |
Maximum | Internally developed software in progress | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (in years) | 5 years |
INTANGIBLE ASSETS, NET - Narrat
INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) | May 01, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 30, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 1,823,812 | $ 1,818,854 | ||
Impairment of goodwill | $ 0 | 176,349 | ||
Nickco Recycling, LLC | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
EBITDA target | 461,000 | |||
Pre-agreed EBITDA target period | 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 |
INTANGIBLE ASSETS, NET - Sche_2
INTANGIBLE ASSETS, NET - Schedule of Estimated Future Amortization Expense (Details) | Dec. 31, 2019USD ($) |
Estimated future amortization expense | |
2020 | $ 1,921,630 |
2021 | 1,921,630 |
2022 | 1,706,702 |
2023 | 1,349,318 |
2024 | 1,292,875 |
Thereafter | 3,051,645 |
Net Carrying Amount | $ 11,243,800 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | ||
Accounts receivable trade | $ 12,540,553 | $ 9,859,758 |
Allowance for doubtful accounts | (402,475) | (831,768) |
Accounts receivable trade, net | $ 12,138,078 | $ 9,027,990 |
LINE OF CREDIT AND LONG-TERM _3
LINE OF CREDIT AND LONG-TERM DEBT - Narrative (Details) | Jul. 26, 2019USD ($) | May 29, 2018USD ($)lease | Mar. 01, 2018USD ($)lease | Feb. 01, 2017USD ($) | Aug. 31, 2019USD ($) | May 31, 2019USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2020 | Dec. 31, 2018USD ($) |
Line of Credit Facility [Line Items] | |||||||||
Long-term debt, gross | $ 18,602,017 | $ 20,566,000 | |||||||
Finance leases, monthly payments | 165,598 | ||||||||
Encina Business Credit SPV, LLC | Revolving Note | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term debt, gross | 3,276,230 | 3,844,636 | |||||||
Encina Business Credit, LLC | Term Loan | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term debt, gross | 13,333,000 | 15,350,000 | |||||||
Various Institutions | Insurance Premiums | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term debt, gross | 1,165,172 | $ 999,152 | |||||||
Wells Fargo Equipment Lease-VRM LA | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Number of finance leases assumed | lease | 1 | ||||||||
Finance leases, monthly payments | $ 908 | ||||||||
Term of contract | 3 years | ||||||||
Wells Fargo Equipment Lease-VRM LA | Finance Lease Obligations | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term debt, gross | 12,341 | ||||||||
Tetra Capital Lease | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Number of finance leases assumed | lease | 1 | ||||||||
Finance leases, monthly payments | $ 26,305 | ||||||||
Term of contract | 4 years | ||||||||
Tetra Capital Lease | Finance Lease Obligations | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Long-term debt, gross | 264,014 | ||||||||
Well Fargo, Ohio | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Finance leases, monthly payments | $ 11,710 | ||||||||
Term of contract | 5 years | ||||||||
Well Fargo, Ohio | Finance Lease Obligations | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Finance lease obligation | $ 551,260 | ||||||||
Minimum | Various Institutions | Insurance Premiums | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest rate | 4.00% | ||||||||
Maximum | Various Institutions | Insurance Premiums | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest rate | 4.90% | ||||||||
Revolving Note | Encina Business Credit SPV, LLC | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit facility, maximum borrowing capacity | $ 10,000,000 | $ 3,835,997 | |||||||
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, pursuant to the amendments | $ 2,000,000 | ||||||||
Revolving Note | Encina Business Credit SPV, LLC | One-month LIBOR | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest rate | 1.69% | ||||||||
Incremental increase per event of default, percent | 2.00% | ||||||||
Variable rate basis, basis spread | 6.50% | ||||||||
Revolving Note | Encina Business Credit SPV, LLC | Federal Funds Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest rate | 0.50% | ||||||||
Revolving Note | 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 Note | Minimum | Encina Business Credit SPV, LLC | One-month LIBOR | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Interest rate | 0.25% | ||||||||
Revolving Note | 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 Note | 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 | $ 3,835,997 | ||||||||
Incremental increase per event of default, percent | 2.00% | ||||||||
Principal payments | $ 75,000 | ||||||||
Effective interest rate | 14.00% | ||||||||
Line of credit, debt covenant, capital expenditures, maximum | $ 3,000,000 | $ 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 | $ 750,000 | $ 500,000 | 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% | ||||||||
Line of credit, debt covenant, capital expenditures, maximum | 3,500,000 | ||||||||
Line of credit, debt covenant, minimum average borrowing availability in any 30 day period | $ 1,500,000 | ||||||||
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% | ||||||||
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 | 2,000,000 | ||||||||
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 | ||||||||
MG Purchase Agreement | Line of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum payment to lenders | $ 1,100,000 | ||||||||
Tensile-Myrtle Grove Acquisition Corporation | Subsequent Event | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Ownership percentage by noncontrolling interest | 65.00% |
LINE OF CREDIT AND LONG-TERM _4
LINE OF CREDIT AND LONG-TERM DEBT - Schedule of Outstanding Debt (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | $ 18,602,017 | $ 20,566,000 |
Deferred finance costs | (47,826) | (621,733) |
Total, net of deferred finance costs | 18,554,191 | 19,944,267 |
Encina Business Credit, LLC | Term Loan | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 20,000,000 | |
Long-term debt, gross | 13,333,000 | 15,350,000 |
Encina Business Credit SPV, LLC | Revolving Note | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 10,000,000 | |
Long-term debt, gross | 3,276,230 | 3,844,636 |
Tetra Capital Lease | Finance Lease | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 419,690 | |
Long-term debt, gross | 264,014 | |
Tetra Capital Lease | Finance Lease | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | 349,822 | |
Wells Fargo Equipment Lease-VRM LA | Finance Lease | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 30,408 | |
Long-term debt, gross | 12,341 | |
Wells Fargo Equipment Lease-VRM LA | Finance Lease | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | 22,390 | |
Wells Fargo Equipment Lease-Ohio | Finance Lease | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 621,000 | |
Finance Lease, Liability | 551,260 | |
Wells Fargo Equipment Lease-Ohio | Finance Lease | ||
Line of Credit Facility [Line Items] | ||
Long-term debt, gross | 0 | |
Various institutions | Insurance premiums financed | ||
Line of Credit Facility [Line Items] | ||
Loan amount | 2,902,428 | |
Long-term debt, gross | $ 1,165,172 | $ 999,152 |
LINE OF CREDIT AND LONG-TERM _5
LINE OF CREDIT AND LONG-TERM DEBT - Schedule of Future Maturities of Debt (Details) | Dec. 31, 2019USD ($) |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2020 | $ 5,558,566 |
2021 | 12,653,866 |
2022 | 201,332 |
2023 | 138,476 |
2024 | 49,777 |
Thereafter | 0 |
Deferred finance costs | |
2020 | 47,826 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Totals, net of deferred finance costs | |
2020 | 5,510,740 |
2021 | 12,653,866 |
2022 | 201,332 |
2023 | 138,476 |
2024 | 49,777 |
Thereafter | 0 |
Encina Business Credit, LLC | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2020 | 900,000 |
2021 | 12,433,000 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Encina Business Credit SPV, LLC | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2020 | 3,276,230 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Tetra Capital Lease | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2020 | 91,779 |
2021 | 98,167 |
2022 | 74,068 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Wells Fargo Equipment Lease-VRM LA | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2020 | 10,537 |
2021 | 1,804 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | 0 |
Wells Fargo Equipment Lease-Ohio | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2020 | 114,848 |
2021 | 120,895 |
2022 | 127,264 |
2023 | 138,476 |
2024 | 49,777 |
Thereafter | 0 |
Various institutions | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
2020 | 1,165,172 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
Thereafter | $ 0 |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Income Tax (Benefit) Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Current federal tax (expense)/benefit | $ (68,606) | $ (137,212) |
Deferred federal tax (expense)/benefit | 68,606 | 137,212 |
Total federal tax (expense)/benefit | $ 0 | $ 0 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2019 | |
Operating Loss Carryforwards [Line Items] | ||
Statutory rate | 21.00% | |
Valuation allowance | $ 12,109,000 | $ 13,453,000 |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carry-forward | 73,100,000 | |
Tax Year 2016 | Federal | ||
Operating Loss Carryforwards [Line Items] | ||
NOL carry-forward | $ 31,600,000 |
INCOME TAXES - Schedule of Reco
INCOME TAXES - Schedule of Reconciliation by Applying U.S. Federal Income Tax Rate to Pretax Income from Continuing Operations (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory tax on book income | $ (1,152,000) | $ (417,000) |
Permanent differences | 139,000 | 114,000 |
Change in derivative liability | 102,000 | (160,000) |
Myrtle Grove transaction gain | 210,000 | 0 |
Change in valuation allowance | 1,344,000 | 967,000 |
Prior year return true up | (643,000) | (504,000) |
Income tax expense (benefit) | $ 0 | $ 0 |
INCOME TAXES - Schedule of Defe
INCOME TAXES - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Alternative minimum tax credits | $ 69,000 | $ 137,000 |
Accrued bonus and stock based compensation | 386,000 | 358,000 |
Basis of intangible assets | 1,687,000 | 1,368,000 |
Bad debt reserve | 85,000 | 175,000 |
Contribution carryover | 38,000 | 26,000 |
Interest expense carryforward | 487,000 | 190,000 |
Net operating loss carry forwards | 13,682,000 | 12,500,000 |
Less valuation allowance | (13,453,000) | (12,109,000) |
Total deferred tax assets | 2,981,000 | 2,645,000 |
Deferred tax liabilities: | ||
Basis of fixed assets | (2,788,000) | (2,444,000) |
Contingent liability | 0 | 3,000 |
Partnership income | (124,000) | (67,000) |
Total deferred tax liabilities | (2,912,000) | (2,508,000) |
Net deferred tax assets | $ 69,000 | $ 137,000 |
STOCK BASED COMPENSATION - Narr
STOCK BASED COMPENSATION - Narrative (Details) | Oct. 29, 2019employee$ / sharesshares | Oct. 09, 2019employee$ / sharesshares | May 20, 2019employee$ / sharesshares | May 22, 2018employee$ / sharesshares | Apr. 12, 2018employee$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share based compensation expense, total | $ | $ 642,840 | $ 659,836 | |||||
Options granted (in shares) | shares | 1,150,000 | 697,000 | |||||
Options granted exercise price (in dollars per share) | $ / shares | $ 1.40 | $ 1.17 | |||||
Stock Option | 2013 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of employees granted options | employee | 1 | ||||||
Options granted (in shares) | shares | 10,000 | ||||||
Options granted exercise price (in dollars per share) | $ / shares | $ 1.03 | ||||||
Term of awards | 10 years | ||||||
Award vesting period | 4 years | 4 years | 4 years | ||||
Annual vesting percentage | 25.00% | 25.00% | |||||
Stock Option | 2013 Stock Incentive Plan | 12 Employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of employees granted options | employee | 12 | ||||||
Options granted (in shares) | shares | 487,000 | ||||||
Options granted exercise price (in dollars per share) | $ / shares | $ 1.45 | ||||||
Term of awards | 10 years | ||||||
Annual vesting percentage | 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 | 163,000 | 166,000 | |||||
Options granted exercise price (in dollars per share) | $ / shares | $ 1.60 | $ 1.26 | |||||
Term of awards | 5 years | 5 years | |||||
Annual vesting percentage | 25.00% | ||||||
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 | 300,000 | ||||||
Options granted exercise price (in dollars per share) | $ / shares | $ 1.45 | ||||||
Term of awards | 10 years | ||||||
Annual vesting percentage | 25.00% | ||||||
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 exercise price (in dollars per share) | $ / shares | $ 1.14 | ||||||
Term of awards | 10 years | ||||||
Employee | 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 | 125,000 | 75,000 | |||||
Options granted exercise price (in dollars per share) | $ / shares | $ 1 | $ 1.13 | |||||
Term of stock option | 5 years | 5 years | |||||
Year 1 | Employee | 2013 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting award percentage | 25.00% | 25.00% | |||||
Year 2 | Employee | 2013 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting award percentage | 25.00% | 25.00% | |||||
Year 3 | Employee | 2013 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting award percentage | 25.00% | 25.00% | |||||
Year 4 | Employee | 2013 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting award percentage | 25.00% | 25.00% |
STOCK BASED COMPENSATION - Sche
STOCK BASED COMPENSATION - Schedule of Stock Option Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | |||
Outstanding, beginning (in shares) | 3,460,750 | 3,180,417 | |
Options granted (in shares) | 1,150,000 | 697,000 | |
Options exercised (in shares) | (112,500) | (7,500) | |
Options cancelled/forfeited/expired (in shares) | (80,000) | (409,167) | |
Outstanding, ending (in shares) | 4,418,250 | 3,460,750 | 3,180,417 |
Vested (in shares) | 2,383,625 | 2,127,500 | |
Exercisable (in shares) | 2,383,625 | 2,127,500 | |
Weighted Average Exercise Price | |||
Outstanding, beginning (in dollars per share) | $ 2.05 | $ 2.21 | |
Options granted (in dollars per share) | 1.40 | 1.17 | |
Options exercised (in dollars per share) | 0.46 | 1.20 | |
Options cancelled/forfeited/expired (in dollars per share) | 0.46 | 1.80 | |
Outstanding, ending (in dollars per share) | 1.95 | 2.05 | $ 2.21 |
Vested (in dollars per share) | 2.50 | 2.48 | |
Exercisable (in dollars per share) | $ 2.50 | $ 2.48 | |
Weighted Average Remaining Contractual Life (in Years) | |||
Outstanding | 6 years 3 months | 3 years 6 months | 4 years 7 months 13 days |
Options granted | 8 years 9 months 4 days | 8 years 1 month 6 days | |
Vested | 4 years 10 months 2 days | 4 years 8 months 1 day | |
Exercisable | 4 years 10 months 2 days | 4 years 8 months 1 day | |
Grant Date Fair Value | |||
Outstanding, beginning | $ 3,469,298 | $ 3,298,196 | |
Options granted | 1,148,662 | 610,305 | |
Options exercised | (41,789) | (4,241) | |
Options cancelled/forfeited/expired | (28,800) | (434,962) | |
Outstanding, ending | 4,547,371 | 3,469,298 | $ 3,298,196 |
Vested | 2,625,779 | 2,122,478 | |
Exercisable | $ 2,625,779 | $ 2,122,478 |
STOCK BASED COMPENSATION - Sc_2
STOCK BASED COMPENSATION - Schedule of Stock Warrant Activity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Warrants | |||
Outstanding, beginning (in shares) | 219,868 | 219,868 | |
Warrants granted (in shares) | 1,500,000 | 0 | |
Warrants exercised (in shares) | 0 | 0 | |
Warrants cancelled/forfeited/expired (in shares) | (219,868) | 0 | |
Outstanding, ending (in shares) | 1,500,000 | 219,868 | 219,868 |
Vested (in shares) | 0 | 219,868 | |
Exercisable (in shares) | 0 | 219,868 | |
Weighted Average Exercise Price | |||
Outstanding, beginning (in dollars per share) | $ 3.01 | $ 3.01 | |
Warrants granted (in dollars per share) | 2.25 | 0 | |
Warrants exercised (in dollars per share) | 0 | 0 | |
Warrants cancelled/forfeited/expired (in dollars per share) | 3.01 | 0 | |
Outstanding, ending (in dollars per share) | 2.25 | 3.01 | $ 3.01 |
Vested (in dollars per share) | 0 | 3.01 | |
Exercisable (in dollars per share) | $ 0 | $ 3.01 | |
Weighted Average Remaining Contractual Life (in Years) | |||
Outstanding | 9 years 8 months 12 days | 11 months 5 days | 2 years |
Granted | 9 years 8 months 12 days | ||
Vested | 0 years | 11 months 5 days | |
Exercisable | 0 years | 11 months 5 days | |
Grant Date Fair Value | |||
Outstanding, beginning | $ 140,249 | $ 140,249 | |
Warrants granted | 1,496,372 | 0 | |
Warrants exercised | 0 | 0 | |
Warrants cancelled/forfeited/expired | (140,249) | 0 | |
Outstanding, ending | 1,496,372 | 140,249 | $ 140,249 |
Vested | 0 | 140,249 | |
Exercisable | $ 0 | $ 140,249 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Options to purchase (in shares) | 4,418,250 | 3,460,750 |
Warrants to purchase (in shares) | 8,633,188 | 7,353,056 |
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) | 3,826,055 | 3,604,827 |
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) | 9,028,085 | 10,057,597 |
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 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Reconciliation of Numerator and Denominator for Basic and Diluted Earnings Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||
Net loss available to common shareholders | $ (11,445,628) | $ (8,037,304) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 40,988,946 | 35,411,264 |
Basic loss per share (in dollars per share) | $ (0.28) | $ (0.23) |
Numerator: | ||
Net loss available to common shareholders | $ (11,445,628) | $ (8,037,304) |
Denominator: | ||
Weighted-average common shares outstanding (in shares) | 40,988,946 | 35,411,264 |
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) | 40,988,946 | 35,411,264 |
Diluted loss per share (in dollars per share) | $ (0.28) | $ (0.23) |
COMMON STOCK - Narrative (Detai
COMMON STOCK - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2019vote / shares$ / sharesshares | Dec. 31, 2018$ / 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) | 43,395,563 | 40,174,821 |
Common stock, shares outstanding (in shares) | 43,395,563 | 40,174,821 |
Number of votes per share of common stock | vote / shares | 1 | |
Shares issued as result of options exercised (in shares) | 112,500 | 7,500 |
Preferred Stock | ||
Conversion of Stock [Line Items] | ||
New shares issued resulting due to stock conversion (in shares) | 1,642,317 | 7,199,774 |
Common Stock | ||
Conversion of Stock [Line Items] | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |
New shares issued resulting due to stock conversion (in shares) | 241 | |
Common stock issued in acquisition (in shares) | 1,500,000 | |
Shares issued as result of options exercised (in shares) | 78,425 | 241 |
Shares issued pursuant to the earnout provisions (in shares) | 150,000 | |
Paid-in-kind dividends, common stock (in shares) | 166,630 | |
Common Stock | Nickco Recycling, LLC | ||
Conversion of Stock [Line Items] | ||
Shares issued pursuant to the earnout provisions (in shares) | 150,000 |
PREFERRED STOCK AND TEMPORARY_3
PREFERRED STOCK AND TEMPORARY EQUITY - Narrative (Details) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 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 (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 419,859 | 419,859 |
Preferred stock, shares outstanding (in shares) | 419,859 | 419,859 |
Series B Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | |
Preferred stock, shares issued (in shares) | 3,826,055 | 3,604,827 |
Preferred stock, shares outstanding (in shares) | 3,826,055 | 3,604,827 |
Series B1 Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 17,000,000 | |
Preferred stock, shares issued (in shares) | 9,028,085 | 10,057,597 |
Preferred stock, shares outstanding (in shares) | 9,028,085 | 10,057,597 |
Series C Preferred | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 44,000 | 44,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
PREFERRED STOCK AND TEMPORARY_4
PREFERRED STOCK AND TEMPORARY EQUITY - Series A Preferred Narrative (Details) - Series A Preferred | 12 Months Ended |
Dec. 31, 2019USD ($)$ / 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 | Jun. 30, 2015$ / shares | Jun. 24, 2015USD ($)shareswarrant$ / shares | May 31, 2016USD ($)$ / shares | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | Jun. 24, 2017$ / 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) | $ 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 | $ | $ 1,969,216 | $ 1,481,692 | ||||||
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) | $ 2.23 | 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 | $ 150,558 | ||||||
Dividends payable | $ | $ 177,921 | 167,642 | ||||||
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 | $ 1.33 | ||||||
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 | $ | $ 1,818,658 | $ 2,867,264 | ||||||
Dividends payable | $ | $ 211,256 | $ 235,360 | ||||||
Liability | Series B Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Expected term | 1 year | |||||||
Liability | Series B1 Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Expected term | 2 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 | 0.0159 | |||||||
Liability | Risk Free Interest Rate | Series B1 Preferred Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Warrant measurement input | 0.0158 | |||||||
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 | 0.65 | |||||||
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, 2019 | Dec. 31, 2018 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Balance at beginning of period | $ 22,179,963 | |
Plus: discount accretion | 2,169,597 | $ 1,960,013 |
Balance at end of period | 28,146,347 | 22,179,963 |
Series B Preferred Stock | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Balance at beginning of period | 8,900,208 | 7,190,467 |
Less: conversions of shares to common | 0 | (62,962) |
Plus: discount accretion | 1,420,391 | 1,118,259 |
Plus: dividends in kind | 685,807 | 654,444 |
Balance at end of period | 11,006,406 | 8,900,208 |
Series B1 Preferred Stock | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Balance at beginning of period | 13,279,755 | 15,769,478 |
Less: conversions of shares to common | (2,241,890) | (5,068,602) |
Plus: discount accretion | 749,206 | 841,754 |
Plus: dividends in kind | 955,976 | 1,737,125 |
Balance at end of period | $ 12,743,047 | $ 13,279,755 |
PREFERRED STOCK AND TEMPORARY_7
PREFERRED STOCK AND TEMPORARY EQUITY - Schedule of Initial BCF of Series B Preferred Stock Determined by Calculating the Intrinsic Value of Conversion Feature (Details) - USD ($) | Dec. 31, 2019 | 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 | $ 150,558 | 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) | $ 3.10 | $ 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 | Jun. 30, 2015$ / shares | Jun. 24, 2015USD ($)shareswarrant$ / shares | May 31, 2016USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / shares | Jun. 24, 2020$ / shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 24, 2017$ / shares | 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) | $ 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 | $ | $ 1,969,216 | $ 1,481,692 | ||||||||
Series B and B1 preferred shares | $ | $ 28,146,347 | 22,179,963 | ||||||||
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 (in dollars per share) | $ 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 | $ 1.33 | ||||||||
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 | $ | $ 12,743,047 | 13,279,755 | $ 15,769,478 | |||||||
Beneficial conversion feature | $ | $ 2,371,106 | |||||||||
Private placement fees | $ | $ 600,000 | |||||||||
Dividends payable | $ | $ 211,256 | 235,360 | ||||||||
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) | $ 2.23 | $ 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 | $ | $ 11,006,406 | 8,900,208 | $ 7,190,467 | |||||||
Dividends payable | $ | $ 177,921 | $ 167,642 | ||||||||
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 Determined by Calculating Intrinsic Value of Conversion Feature of Series B1 Preferred Stock (Details) - USD ($) | Dec. 31, 2019 | Jun. 24, 2017 | 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 | $ 1,818,658 | 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) | $ 1.72 | $ 1.33 | |||
Market price (in dollars per unit) | 1.52 | ||||
Intrinsic value per share (in dollars per share) | $ 0.19 | ||||
Intrinsic value of May 2016 beneficial conversion feature | $ 2,371,106 |
PREFERRED STOCK AND TEMPORAR_10
PREFERRED STOCK AND TEMPORARY EQUITY - Summary of Analysis of Changes in Derivative Liability (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Level Three Roll-Forward | ||
Balance at beginning of period | $ 1,481,692 | $ 2,245,408 |
Change in fair value of warrants | 487,524 | (763,716) |
Balance at end of period | $ 1,969,216 | $ 1,481,692 |
COMMODITY DERIVATIVE INSTRUME_3
COMMODITY DERIVATIVE INSTRUMENTS - Schedule of Derivative Instruments (Details) bbl in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)$ / bblbbl | Dec. 31, 2018USD ($)$ / bblbbl | |
Swap | ||
Derivative [Line Items] | ||
Weighted average trade price (in usd per barrel) | $ / bbl | 40.88 | 48.78 |
Remaining volume (barrels) | bbl | 130 | 60 |
Derivative assets, fair value | $ 539,800 | |
Derivative liabilities, fair value | $ (1,048,400) | |
Swap | ||
Derivative [Line Items] | ||
Weighted average trade price (in usd per barrel) | $ / bbl | 81.19 | 68.69 |
Remaining volume (barrels) | bbl | 130 | 60 |
Derivative assets, fair value | $ 1,097,124 | |
Derivative liabilities, fair value | $ (673,428) | |
Futures | ||
Derivative [Line Items] | ||
Weighted average trade price (in usd per barrel) | $ / bbl | 84.83 | 70.42 |
Remaining volume (barrels) | bbl | 105 | 69 |
Derivative assets, fair value | $ 394,317 | |
Derivative liabilities, fair value | $ (242,222) | |
Futures | ||
Derivative [Line Items] | ||
Weighted average trade price (in usd per barrel) | $ / bbl | 45.41 | |
Remaining volume (barrels) | bbl | 30 | |
Derivative assets, fair value | $ 252,900 |
COMMODITY DERIVATIVE INSTRUME_4
COMMODITY DERIVATIVE INSTRUMENTS - Schedule of Carrying Values of Derivatives Positions and their Locations on Consolidated Balance Sheets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | ||
Derivative commodity asset (liability) | $ (375,850) | $ 695,941 |
Gain (loss) on commodity derivative contracts | (2,458,359) | 1,062,682 |
Crude oil swaps | ||
Derivative [Line Items] | ||
Derivative commodity asset | 48,724 | |
Derivative commodity liability | (133,628) | |
Crude oil futures | ||
Derivative [Line Items] | ||
Derivative commodity asset | $ 647,217 | |
Derivative commodity liability | $ (242,222) |
JOINT VENTURE (Details)
JOINT VENTURE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | May 25, 2016 | |
Vertex Recovery Management, LLC | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage in joint venture | 51.00% | ||
Income from VRMLA included in consolidated income | 100.00% | ||
Operating income (loss) from VRMLA | $ (765,931) | $ 602,259 | |
Industrial Pipe, Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Industrial Pipe's portion of VRMLA's operating income | 49.00% | ||
Industrial Pipe's portion of VRMLA's operating income | $ 375,306 | $ 234,188 | |
Vertex Recovery Management, LLC | Industrial Pipe, Inc. | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest in VRMLA | 49.00% |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 163,365,565 | $ 180,720,661 |
Income (loss) from operations | (2,774,044) | 488,348 |
Total assets | 120,759,919 | 84,160,408 |
Black Oil | ||
Segment Reporting Information [Line Items] | ||
Revenues | 139,269,164 | 143,836,981 |
Income (loss) from operations | 433,901 | 3,561,223 |
Total assets | 114,976,772 | 76,540,888 |
Refining and Marketing | ||
Segment Reporting Information [Line Items] | ||
Revenues | 12,957,767 | 22,935,482 |
Income (loss) from operations | (576,487) | (2,250,924) |
Total assets | 1,101,470 | 1,407,002 |
Recovery | ||
Segment Reporting Information [Line Items] | ||
Revenues | 11,138,634 | 13,948,198 |
Income (loss) from operations | (2,631,458) | (821,951) |
Total assets | $ 4,681,677 | $ 6,212,518 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019leaserenewal_option | Dec. 31, 2019USD ($) | Jan. 01, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Finance leases, amortization expense | $ 166,946 | ||
Finance leases, interest expense | 41,889 | ||
Operating lease cost | 6,300,000 | ||
Finance lease payment | 165,598 | ||
Number of extension options | renewal_option | 2 | ||
Accounting Standards Update 2018-11 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use asset | 37,800,000 | $ 37,800,000 | |
Operating lease payments | $ 2,300,000 | ||
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease renewal term | 1 year | ||
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease renewal term | 20 years | ||
Plant | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease renewal term | 5 years | ||
Number of operating leases | lease | 2 | ||
Lease renewal term, total | 20 years |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) | Dec. 31, 2019USD ($) |
Lessee, Lease, Description [Line Items] | |
Year 1 | $ 5,885,304 |
Year 2 | 5,353,635 |
Year 3 | 4,504,720 |
Year 4 | 4,367,695 |
Year 5 | 4,360,417 |
Thereafter | 37,899,907 |
Total lease payments | 62,371,678 |
Less: interest | (26,784,793) |
Present value of lease liabilities | 35,586,885 |
Facilities | |
Lessee, Lease, Description [Line Items] | |
Year 1 | 719,607 |
Year 2 | 549,293 |
Year 3 | 392,654 |
Year 4 | 306,000 |
Year 5 | 300,000 |
Thereafter | 2,375,000 |
Total lease payments | 4,642,554 |
Less: interest | (1,685,627) |
Present value of lease liabilities | 2,956,927 |
Equipment | |
Lessee, Lease, Description [Line Items] | |
Year 1 | 161,539 |
Year 2 | 161,539 |
Year 3 | 26,953 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
Total lease payments | 350,031 |
Less: interest | (22,605) |
Present value of lease liabilities | 327,426 |
Plant | |
Lessee, Lease, Description [Line Items] | |
Year 1 | 4,060,417 |
Year 2 | 4,060,417 |
Year 3 | 4,060,417 |
Year 4 | 4,060,417 |
Year 5 | 4,060,417 |
Thereafter | 35,524,907 |
Total lease payments | 55,826,992 |
Less: interest | (24,980,750) |
Present value of lease liabilities | 30,846,242 |
Railcar | |
Lessee, Lease, Description [Line Items] | |
Year 1 | 943,741 |
Year 2 | 582,386 |
Year 3 | 24,696 |
Year 4 | 1,278 |
Year 5 | 0 |
Thereafter | 0 |
Total lease payments | 1,552,101 |
Less: interest | (95,811) |
Present value of lease liabilities | $ 1,456,290 |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease Weighted Average Remaining Lease Terms and Discount Rates (Details) | Dec. 31, 2019 |
Lease facilities | |
Lessee, Lease, Description [Line Items] | |
Weighted average remaining lease terms (years) | 5 years 4 months 2 days |
Weighted average discount rate | 9.17% |
Lease equipment | |
Lessee, Lease, Description [Line Items] | |
Weighted average remaining lease terms (years) | 2 years 2 months 1 day |
Weighted average discount rate | 8.00% |
Lease plant | |
Lessee, Lease, Description [Line Items] | |
Weighted average remaining lease terms (years) | 13 years 3 months 4 days |
Weighted average discount rate | 9.37% |
Lease railcar | |
Lessee, Lease, Description [Line Items] | |
Weighted average remaining lease terms (years) | 1 year 3 months 29 days |
Weighted average discount rate | 8.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 17, 2020 | Jan. 31, 2020 | Jan. 31, 2019 | May 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 28, 2020 | Jan. 27, 2020 | Jan. 22, 2020 | Jan. 13, 2020 | Jan. 10, 2020 | Jan. 09, 2020 | Jan. 03, 2020 | Jan. 01, 2020 |
Heartland SPV | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Share purchase value | $ 7.5 | |||||||||||||
Percentage acquired | 50.00% | |||||||||||||
Common Stock | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Preferred stock dividends (in shares) | 166,630 | |||||||||||||
Common Stock | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Number of common shares issued for each convertible preferred share (in shares) | 17,000 | 252,337 | 25,000 | 9,018 | 104,940 | 601,090 | 1,107,893 | |||||||
Series B Preferred Stock | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Preferred stock dividends (in shares) | 57,394 | |||||||||||||
Number of common shares issued for each convertible preferred share (in shares) | 57,394 | |||||||||||||
Preferred stock, shares outstanding (in shares) | 3,826,055 | 3,604,827 | ||||||||||||
Preferred stock, dividend rate | 6.00% | |||||||||||||
Series B Preferred Stock | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Preferred stock dividends (in shares) | 57,394 | |||||||||||||
Series B1 Preferred Stock | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Preferred stock dividends (in shares) | 135,429 | |||||||||||||
Number of common shares issued for each convertible preferred share (in shares) | 135,429 | |||||||||||||
Preferred stock, shares outstanding (in shares) | 9,028,085 | 10,057,597 | ||||||||||||
Preferred stock, dividend rate | 6.00% | |||||||||||||
Series B1 Preferred Stock | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Preferred stock dividends (in shares) | 135,429 | |||||||||||||
Preferred stock, shares outstanding (in shares) | 17,000 | 252,337 | 25,000 | 9,018 | 104,940 | 601,090 | 1,107,893 | |||||||
Common Class A | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Aggregated capital investment | 50.00% | |||||||||||||
Common Class A | Heartland SPV | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Preferred stock, redemption period | 180 days | |||||||||||||
Debt instrument redemption | 25.00% | |||||||||||||
Percentage of aggregate capital investment | 50.00% | |||||||||||||
Aggregate unpaid annual return | $ 21 | |||||||||||||
Common Class A | MG SPV | Subsequent Event | Vertex Operating | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Equity issued (in shares) | 1,000 | |||||||||||||
Share price (in dollars per share) | $ 1,000 | |||||||||||||
Equity issued, value | $ 1 | |||||||||||||
Preferred Class A | Tensile-Heartland | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Ownership percentage | 100.00% | |||||||||||||
Preferred stock, dividend rate | 22.50% | |||||||||||||
Heartland SPV | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Number of managers | 5 | |||||||||||||
Effective conversion price (in dollars per share) | 1 | |||||||||||||
Heartland SPV | Tensile-Heartland | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Ownership percentage | 65.00% | 65.00% | ||||||||||||
Number of managers | 3 | |||||||||||||
Heartland SPV | Vertex Operating | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Ownership percentage | 35.00% | |||||||||||||
Number of managers | 2 | |||||||||||||
Vertex Refining OH, LLC | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Ownership percentage | 100.00% | |||||||||||||
Heartland SPV | Common Class A | Tensile-Heartland | Subsequent Event | Vertex Operating | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Equity issued (in shares) | 13,500 | |||||||||||||
Consideration transferred | $ 13.5 | |||||||||||||
Heartland SPV | Common Class A | Tensile-Heartland | Subsequent Event | Heartland SPV | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Equity issued (in shares) | 7,500 | |||||||||||||
Consideration transferred | $ 7.5 | |||||||||||||
Heartland SPV | A-1 Preferred Units | Tensile-Heartland | Subsequent Event | Vertex Operating | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Equity issued (in shares) | 13,500 | |||||||||||||
Heartland SPV | A-1 Preferred Units | Tensile-Heartland | Subsequent Event | Heartland SPV | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Equity issued (in shares) | 7,500 | |||||||||||||
Heartland SPV | Class A-2 Preferred Units | Tensile-Heartland | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Share price (in dollars per share) | $ 1,000 | |||||||||||||
Additional equity (in shares) | 7,000 | |||||||||||||
Vertex Refining OH, LLC | Common Class A | Heartland SPV | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Equity issued (in shares) | 13,500 | |||||||||||||
Vertex Refining OH, LLC | A-1 Preferred Units | Heartland SPV | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Equity issued (in shares) | 13,500 | |||||||||||||
Vertex Refining OH, LLC | Common Class B | Heartland SPV | Subsequent Event | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Equity issued (in shares) | 11,300 | |||||||||||||
Vertex Refining OH, LLC | Common Class B | Heartland SPV | Subsequent Event | Vertex Splitter Corporation | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Equity issued (in shares) | 248 |