Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 09, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-11476 | |
Entity Registrant Name | VERTEX ENERGY, INC. | |
Entity Incorporation, State | NV | |
Entity Tax Identification Number | 94-3439569 | |
Entity Address, Street | 1331 Gemini Street | |
Entity Address, Suite | Suite 250 | |
Entity Address, City | Houston | |
Entity Address, State | TX | |
Entity Address, Postal Zip Code | 77058 | |
City Area Code | 866 | |
Local Phone Number | 660-8156 | |
Title of each class | Common Stock,$0.001 Par Value Per Share | |
Trading Symbol(s) | VTNR | |
Name of each exchange on which registered | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 60,941,960 | |
Entity Central Index Key | 0000890447 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 14,966,612 | $ 10,895,044 |
Restricted cash | 100,125 | 100,125 |
Accounts receivable, net | 18,379,672 | 11,138,933 |
Accounts receivable, other | 170,075 | 0 |
Inventory | 8,869,840 | 4,439,839 |
Prepaid expenses and other current assets | 1,324,816 | 3,211,448 |
Total current assets | 43,811,140 | 29,785,389 |
Noncurrent assets | ||
Fixed assets, at cost | 78,549,353 | 75,777,552 |
Less accumulated depreciation | (31,865,623) | (29,337,036) |
Fixed assets, net | 46,683,730 | 46,440,516 |
Finance lease right-of-use assets | 1,328,739 | 1,536,711 |
Operating lease right-of use assets | 33,141,878 | 33,315,876 |
Intangible assets, net | 8,431,703 | 9,397,441 |
Other assets | 1,711,036 | 1,624,025 |
TOTAL ASSETS | 135,108,226 | 122,099,958 |
Current liabilities | ||
Accounts payable | 15,383,088 | 10,484,911 |
Accrued expenses | 2,175,449 | 2,053,106 |
Dividends payable | 0 | 606,550 |
Finance lease liability-current | 511,121 | 496,231 |
Operating lease liability-current | 5,540,226 | 5,614,785 |
Current portion of long-term debt, net of unamortized finance costs | 6,215,145 | 4,367,169 |
Revolving note | 1,165,183 | 133,446 |
Derivative commodity liability | 8,707 | 94,214 |
Total current liabilities | 30,998,919 | 23,850,412 |
Long-term liabilities | ||
Long-term debt, net of unamortized finance costs | 133,709 | 7,981,496 |
Finance lease liability-long-term | 678,547 | 945,612 |
Operating lease liability-long-term | 27,601,652 | 27,701,091 |
Derivative warrant liability | 20,164,443 | 330,412 |
Total liabilities | 79,577,270 | 60,809,023 |
COMMITMENTS AND CONTINGENCIES (Note 3) | 0 | 0 |
TEMPORARY EQUITY | ||
Series B and B-1 preferred shares | 37,027,813 | 55,366,186 |
Redeemable non-controlling interest | 37,027,813 | 31,611,674 |
EQUITY | ||
Common stock, $0.001 par value per share; 750,000,000 shares authorized; 59,909,219 and 45,554,841 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively. | 59,909 | 45,555 |
Additional paid-in capital | 125,803,839 | 94,569,674 |
Accumulated deficit | (109,420,115) | (90,008,778) |
Total Vertex Energy, Inc. stockholders' equity | 16,444,025 | 4,606,871 |
Non-controlling interest | 2,059,118 | 1,317,878 |
Total equity | 18,503,143 | 5,924,749 |
TOTAL LIABILITIES, TEMPORARY EQUITY, AND EQUITY | 135,108,226 | 122,099,958 |
Series B Preferred Stock | ||
TEMPORARY EQUITY | ||
Series B and B-1 preferred shares | 0 | 12,718,339 |
Series B1 Preferred Stock | ||
TEMPORARY EQUITY | ||
Series B and B-1 preferred shares | 0 | 11,036,173 |
Series A Preferred Stock | ||
EQUITY | ||
Series A and C Preferred stock | 392 | 420 |
Series C Preferred Stock | ||
EQUITY | ||
Series A and C Preferred stock | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
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) | 59,909,219 | 45,554,841 |
Common stock, shares outstanding (in shares) | 59,909,219 | 45,554,841 |
Series B Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary equity, shares designated (in shares) | 10,000,000 | 10,000,000 |
Temporary equity, shares issued (in shares) | 0 | 4,102,690 |
Temporary equity, shares outstanding (in shares) | 0 | 4,102,690 |
Temporary equity, liquidation preference | $ 0 | $ 12,718,339 |
Series B1 Preferred Stock | ||
Temporary equity, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Temporary equity, shares designated (in shares) | 17,000,000 | 17,000,000 |
Temporary equity, shares issued (in shares) | 0 | 7,399,649 |
Temporary equity, shares outstanding (in shares) | 0 | 7,399,649 |
Temporary equity, liquidation preference | $ 0 | $ 11,543,452 |
Series A Preferred Stock | ||
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) | 391,602 | 419,859 |
Preferred stock, shares outstanding (in shares) | 391,602 | 419,859 |
Preferred stock, liquidation preference | $ 583,487 | $ 583,487 |
Series C Preferred Stock | ||
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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenues | $ 65,194,911 | $ 21,374,127 | $ 123,278,904 | $ 57,577,556 |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 52,904,991 | 22,197,805 | 96,251,265 | 49,034,659 |
Depreciation and amortization attributable to costs of revenues | 1,393,350 | 1,239,564 | 2,741,170 | 2,415,986 |
Gross profit (loss) | 10,896,570 | (2,063,242) | 24,286,469 | 6,126,911 |
Operating expenses: | ||||
Selling, general and administrative expenses | 8,825,940 | 6,030,560 | 16,752,520 | 12,731,078 |
Depreciation and amortization attributable to operating expenses | 482,869 | 473,897 | 965,738 | 932,033 |
Total operating expenses | 9,308,809 | 6,504,457 | 17,718,258 | 13,663,111 |
Income (loss) from operations | 1,587,761 | (8,567,699) | 6,568,211 | (7,536,200) |
Other income (expense): | ||||
Other income | 4,222,000 | 20 | 4,222,000 | 100 |
Gain on sale of assets | 0 | 12,344 | 1,424 | 12,344 |
Loss on change in value of derivative warrant liability | (21,507,332) | (110,965) | (23,287,535) | 1,587,782 |
Interest expense | (259,091) | (222,173) | (495,424) | (562,259) |
Total other income (expense) | (17,544,423) | (320,774) | (19,559,535) | 1,037,967 |
Loss before income tax | (15,956,662) | (8,888,473) | (12,991,324) | (6,498,233) |
Income tax benefit (expense) | 0 | 0 | 0 | 0 |
Net loss | (15,956,662) | (8,888,473) | (12,991,324) | (6,498,233) |
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest | 3,417,907 | 109,165 | 5,408,876 | (289,444) |
Net loss attributable to Vertex Energy, Inc. | (19,374,569) | (8,997,638) | (18,400,200) | (6,208,789) |
Accretion of redeemable noncontrolling interest to redemption value | (388,245) | (1,381,889) | (761,993) | (12,348,238) |
Accretion of discount on Series B and B1 Preferred Stock | (283,555) | (539,235) | (507,282) | (1,471,238) |
Dividends on Series B and B1 Preferred Stock | 0 | (360,217) | 258,138 | (704,716) |
Net loss available to common shareholders | $ (20,046,369) | $ (11,278,979) | $ (19,411,337) | $ (20,732,981) |
Loss per common share | ||||
Basic (in dollars per share) | $ (0.38) | $ (0.25) | $ (0.39) | $ (0.46) |
Diluted (in dollars per share) | $ (0.38) | $ (0.25) | $ (0.39) | $ (0.46) |
Shares used in computing earnings per share | ||||
Basic (in shares) | 52,683,012 | 45,554,841 | 50,209,970 | 45,463,600 |
Diluted (in shares) | 52,683,012 | 45,554,841 | 50,209,970 | 45,463,600 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Total | Series A Preferred | Series B1 Preferred Stock | Series B Preferred Stock | Common Stock | Common StockSeries A Preferred | Common StockSeries B1 Preferred Stock | Common StockSeries B Preferred Stock | Preferred stockSeries A Preferred | Preferred stockSeries C Preferred | Additional Paid-In Capital | Additional Paid-In CapitalSeries B1 Preferred Stock | Additional Paid-In CapitalSeries B Preferred Stock | Retained Earnings | Non-controlling Interest |
Beginning balance (in shares) at Dec. 31, 2019 | 43,395,563 | 419,859 | 0 | ||||||||||||
Beginning balance at Dec. 31, 2019 | $ 23,102,026 | $ 43,396 | $ 420 | $ 0 | $ 81,527,351 | $ (59,246,514) | $ 777,373 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Purchase of shares of consolidated subsidiary | (71,171) | (71,171) | |||||||||||||
Share based compensation expense | 163,269 | 163,269 | |||||||||||||
Adjustment of carrying amount of non-controlling interest | 9,091,068 | 9,091,068 | |||||||||||||
Conversion of Series B/B-1 Preferred stock to common (in shares) | 2,159,278 | ||||||||||||||
Conversion of Series B/B-1 Preferred stock to common | 3,368,474 | $ 2,159 | 3,366,315 | ||||||||||||
Dividends on Series B and B1 | (344,499) | (344,499) | |||||||||||||
Accretion of discount on Series B and B1 | (932,003) | (932,003) | |||||||||||||
Accretion of redeemable non-controlling interest to redemption value | (10,966,349) | (10,966,349) | |||||||||||||
Net income (loss) | 2,390,251 | 2,788,860 | (398,609) | ||||||||||||
Less: amount attributable to redeemable non-controlling interest | 517,877 | 517,877 | |||||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 45,554,841 | 419,859 | 0 | ||||||||||||
Ending balance at Mar. 31, 2020 | 26,318,943 | $ 45,555 | $ 420 | $ 0 | 94,076,832 | (68,700,505) | 896,641 | ||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 43,395,563 | 419,859 | 0 | ||||||||||||
Beginning balance at Dec. 31, 2019 | 23,102,026 | $ 43,396 | $ 420 | $ 0 | 81,527,351 | (59,246,514) | 777,373 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Adjustment of carrying amount of non-controlling interest | 9,091,068 | ||||||||||||||
Accretion of discount on Series B and B1 | $ (616,874) | $ (854,364) | |||||||||||||
Net income (loss) | (6,498,233) | ||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 45,554,841 | 419,859 | 0 | ||||||||||||
Ending balance at Jun. 30, 2020 | 15,178,624 | $ 45,555 | $ 420 | $ 0 | 94,233,371 | (79,979,484) | 878,762 | ||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 45,554,841 | 419,859 | 0 | ||||||||||||
Beginning balance at Mar. 31, 2020 | 26,318,943 | $ 45,555 | $ 420 | $ 0 | 94,076,832 | (68,700,505) | 896,641 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Share based compensation expense | 156,539 | 156,539 | |||||||||||||
Dividends on Series B and B1 | (360,217) | (360,217) | |||||||||||||
Accretion of discount on Series B and B1 | (539,235) | (539,235) | |||||||||||||
Accretion of redeemable non-controlling interest to redemption value | (1,381,889) | (1,381,889) | |||||||||||||
Net income (loss) | (8,888,473) | (8,997,638) | 109,165 | ||||||||||||
Less: amount attributable to redeemable non-controlling interest | (127,044) | (127,044) | |||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 45,554,841 | 419,859 | 0 | ||||||||||||
Ending balance at Jun. 30, 2020 | 15,178,624 | $ 45,555 | $ 420 | $ 0 | 94,233,371 | (79,979,484) | 878,762 | ||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 45,554,841 | 419,859 | 0 | ||||||||||||
Beginning balance at Dec. 31, 2020 | 5,924,749 | $ 45,555 | $ 420 | $ 0 | 94,569,674 | (90,008,778) | 1,317,878 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Exercise of options/B1 warrants (in shares) | 22,992 | 1,079,753 | |||||||||||||
Exercise of options/ B1 warrants | 0 | 2,757,957 | $ 23 | $ 1,080 | (23) | $ 2,756,877 | |||||||||
Exchanges of Series B Preferred stock to common (in shares) | 2,359,494 | ||||||||||||||
Exchanges of Series B Preferred stock to common | 4,747,250 | $ 2,359 | 4,114,570 | 630,321 | |||||||||||
Share based compensation expense | 150,514 | 150,514 | |||||||||||||
Conversion of Series B/B-1 Preferred stock to common (in shares) | 2,087,195 | 638,224 | |||||||||||||
Conversion of Series B/B-1 Preferred stock to common | 3,256,024 | 1,978,494 | $ 2,087 | $ 638 | 3,253,937 | $ 1,977,856 | |||||||||
Dividends on Series B and B1 | (372,183) | (372,183) | |||||||||||||
Accretion of discount on Series B and B1 | (223,727) | (223,727) | |||||||||||||
Accretion of redeemable non-controlling interest to redemption value | (373,748) | (373,748) | |||||||||||||
Net income (loss) | 2,965,338 | 974,369 | 1,990,969 | ||||||||||||
Less: amount attributable to redeemable non-controlling interest | (1,542,402) | (1,542,402) | |||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 51,742,499 | 419,859 | 0 | ||||||||||||
Ending balance at Mar. 31, 2021 | 19,268,266 | $ 51,742 | $ 420 | $ 0 | 106,823,405 | (89,373,746) | 1,766,445 | ||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 45,554,841 | 419,859 | 0 | ||||||||||||
Beginning balance at Dec. 31, 2020 | 5,924,749 | $ 45,555 | $ 420 | $ 0 | 94,569,674 | (90,008,778) | 1,317,878 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Exercise of options/B1 warrants (in shares) | 528,368 | ||||||||||||||
Accretion of discount on Series B and B1 | (507,282) | 0 | |||||||||||||
Net income (loss) | (12,991,324) | ||||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 59,909,219 | 391,602 | 0 | ||||||||||||
Ending balance at Jun. 30, 2021 | 18,503,143 | $ 59,909 | $ 392 | $ 0 | 125,803,839 | (109,420,115) | 2,059,118 | ||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 51,742,499 | 419,859 | 0 | ||||||||||||
Beginning balance at Mar. 31, 2021 | 19,268,266 | $ 51,742 | $ 420 | $ 0 | 106,823,405 | (89,373,746) | 1,766,445 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||||
Exercise of options/B1 warrants (in shares) | 505,376 | 156,792 | |||||||||||||
Exercise of options/ B1 warrants | 229,512 | 1,634,566 | $ 505 | $ 157 | 229,007 | 1,634,409 | |||||||||
Stock Unissued During Period Value Exercise Of B1 Warrants | 1,185,831 | 1,185,831 | |||||||||||||
Exercise of options to common- unissued | 474,866 | 474,866 | |||||||||||||
Leverage Lubricants contribution | (13,491) | (13,491) | |||||||||||||
Share based compensation expense | 205,039 | 205,039 | |||||||||||||
Conversion of Series A Preferred stock to common (in shares) | 28,257 | (28,257) | |||||||||||||
Conversion of Series A Preferred stock to common | $ 0 | $ 28 | $ (28) | ||||||||||||
Conversion of Series B/B-1 Preferred stock to common (in shares) | 5,634,889 | 1,841,406 | |||||||||||||
Conversion of Series B/B-1 Preferred stock to common | $ 8,790,417 | 5,708,359 | $ 5,635 | $ 1,842 | $ 8,784,782 | 5,706,517 | |||||||||
Conversion of Series B Preferred stock to common-unissued | $ 759,983 | $ 759,983 | |||||||||||||
Accretion of discount on Series B and B1 | (283,555) | (283,555) | |||||||||||||
Accretion of redeemable non-controlling interest to redemption value | (388,245) | (388,245) | |||||||||||||
Net income (loss) | (15,956,662) | (19,374,569) | 3,417,907 | ||||||||||||
Less: amount attributable to redeemable non-controlling interest | (3,111,743) | (3,111,743) | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 59,909,219 | 391,602 | 0 | ||||||||||||
Ending balance at Jun. 30, 2021 | $ 18,503,143 | $ 59,909 | $ 392 | $ 0 | $ 125,803,839 | $ (109,420,115) | $ 2,059,118 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
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 Stock | ||
Preferred stock, par value (in dollars per share) | 0.001 | 0.001 |
Series C Preferred Stock | ||
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 ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (12,991,324) | $ (6,498,233) |
Adjustments to reconcile net loss to cash provided by operating activities | ||
Stock based compensation expense | 355,553 | 319,809 |
Depreciation and amortization | 3,706,908 | 3,348,008 |
Gain on forgiveness of debt | (4,222,000) | 0 |
Gain on sale of assets | (1,424) | (12,344) |
Bad debt expense | 737,002 | 65,443 |
Increase (decrease) in fair value of derivative warrant liability | 23,287,535 | (1,587,782) |
Loss (gain) on commodity derivative contracts | 1,925,158 | (4,484,798) |
Net cash settlements on commodity derivatives | (1,960,424) | 4,781,183 |
Amortization of debt discount and deferred costs | 0 | 47,826 |
Changes in operating assets and liabilities, net of effect of acquisition | ||
Accounts receivable and other receivables | (8,093,446) | 4,986,003 |
Inventory | (4,398,143) | 3,711,239 |
Prepaid expenses | 1,836,390 | 1,834,361 |
Accounts payable | 4,828,808 | (269,740) |
Accrued expenses | 120,577 | (2,150,272) |
Other assets | (84,953) | (378,547) |
Net cash provided by operating activities | 5,046,217 | 3,712,156 |
Cash flows from investing activities | ||
Acquisition | 0 | (1,822,690) |
Internally developed software | 0 | (49,229) |
Purchase of fixed assets | (2,748,528) | (1,526,379) |
Proceeds from sale of fixed assets | 1,600 | 22,844 |
Net cash used in investing activities | (2,746,928) | (3,375,454) |
Cash flows from financing activities | ||
Payments on finance leases | (252,175) | (162,312) |
Proceeds from exercise of options and warrants to common stock | 2,829,228 | 0 |
Contributions received from noncontrolling interest and redeemable noncontrolling interest | 0 | 21,000,000 |
Line of credit (payments) proceeds, net | 1,031,737 | (3,276,230) |
Payments on note payable | (1,836,511) | (8,618,202) |
Net cash provided by financing activities | 1,772,279 | 13,317,899 |
Net change in cash, cash equivalents and restricted cash | 4,071,568 | 13,654,601 |
Cash, cash equivalents, and restricted cash at beginning of the period | 10,995,169 | 4,199,825 |
Cash, cash equivalents, and restricted cash at end of period | 15,066,737 | 17,854,426 |
SUPPLEMENTAL INFORMATION | ||
Cash paid for interest | 483,285 | 562,259 |
Cash paid for taxes | 0 | 0 |
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Exchanges of Series B Preferred Stock into common stock | 4,747,250 | 0 |
Accretion of discount on Series B and B1 Preferred Stock | 507,282 | 1,471,238 |
Dividends-in-kind accrued on Series B and B1 Preferred Stock | (258,138) | 704,716 |
Initial adjustment of carrying amount redeemable noncontrolling interests | 0 | 9,091,068 |
Accretion of redeemable noncontrolling interest to redemption value | 761,993 | 12,348,238 |
Series B Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Series B and B1 Preferred Stock into Common Stock | 8,446,836 | 0 |
Dividends-in-kind accrued on Series B and B1 Preferred Stock | 0 | |
Series B1 Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Series B and B1 Preferred Stock into Common Stock | 12,046,441 | $ 3,368,474 |
Dividends-in-kind accrued on Series B and B1 Preferred Stock | $ 0 |
BASIS OF PRESENTATION AND NATUR
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | BASIS OF PRESENTATION AND NATURE OF OPERATIONS The accompanying unaudited interim consolidated financial statements of Vertex Energy, Inc. (the " Company " or " Vertex Energy ") have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (" SEC ") and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2020, contained in the Company's annual report, as filed with the SEC on Form 10-K on March 9, 2021 (the " Form 10-K "). The December 31, 2020 balance sheet was derived from the audited financial statements of our 2020 Form 10-K. In the opinion of management all adjustments, consisting of normal recurring adjustments necessary for a fair presentation of financial position and the results of operations for the interim periods presented, have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements which would substantially duplicate the disclosures contained in the audited consolidated financial statements for the most recent fiscal year 2020 as reported in Form 10-K have been omitted. Novel Coronavirus (COVID-19) In December 2019, a novel strain of coronavirus, which causes the infectious disease known as COVID-19, was reported in Wuhan, China. The World Health Organization declared COVID-19 a “Public Health Emergency of International Concern” on January 30, 2020 and a global pandemic on March 11, 2020. In March and April, many U.S. states and local jurisdictions began issuing ‘stay-at-home’ orders, which continue in various forms as of the date of this report. Notwithstanding such ‘stay-at-home’ orders, to date, our operations have for the most part been deemed an essential business under applicable governmental orders based on the critical nature of the products we offer. We sell products and services primarily in the U.S. domestic oil and gas commodity markets. Throughout the first quarter of 2020, the industry experienced multiple factors which lowered both the demand for, and prices of, oil and gas. First, the COVID-19 pandemic lowered global demand for hydrocarbons, as social distancing and travel restrictions were implemented across the world. Second, the lifting of Organization of the Petroleum Exporting Countries (OPEC)+ supply curtailments, and the associated increase in production of oil, drove the global supply of hydrocarbons higher through the first quarter of 2020. As a result of both dynamics, prices for hydrocarbons declined 67% from peak prices within the first quarter of 2020. While global gross domestic product (GDP) growth was impacted by COVID-19 during 2020 and into the first and second quarter of 2021, we expect GDP to continue to be impacted globally for the remainder of 2021, as a result of the COVID-19 pandemic. As a result, we expect oil and gas related markets will continue to experience significant volatility in the second half of 2021. Our goal through this downturn has been to remain disciplined in allocating capital and to focus on liquidity and cash preservation. We are taking the necessary actions to right-size the business for expected activity levels. As a result of the impact of the COVID-19 outbreak, some of our feedstock suppliers have permanently or temporarily closed their businesses, limited our access to their businesses, and/or have experienced a decreased demand for services. As a result of the above, and due to ‘stay-at-home’ and other social distancing orders, as well as the decline in U.S. travel caused by COVID-19, we saw a significant decline in the volume of feedstocks (specifically used oil) that we were able to collect during 2020, and therefore process through our facilities. A prolonged economic slowdown, renewed periods of social quarantine (imposed by the government or otherwise), or another prolonged period of decreased travel due to COVID-19 or the responses thereto, similar to those experienced during 2020, will likely have a material negative adverse impact on our ability to produce products, and consequently our revenues and results of operations. The full extent of the impact of COVID-19 on our business and operations currently cannot be estimated and will depend on a number of factors including the scope and duration of the global pandemic, the efficacy of, and the willingness of the general public to obtain, vaccines, as well as the rate of transmission of new COVID-19 variants. Currently we believe that we have sufficient cash on hand and will generate sufficient cash through operations to support our operations for the foreseeable future; however, we will continue to evaluate our business operations based on new information as it becomes available and will make changes that we consider necessary in light of any new developments regarding the pandemic. |
SUMMARY OF CRITICAL ACCOUNTING
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES | SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES Cash, 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. June 30, 2021 unaudited June 30, 2020 Cash and cash equivalents $ 14,966,612 $ 17,754,301 Restricted cash 100,125 100,125 Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows $ 15,066,737 $ 17,854,426 The Company placed all the restricted cash in a money market account, to serve as collateral for payment of a credit card. Inventory Inventories of products consist of feedstocks, refined petroleum products and recovered ferrous and non-ferrous metals and are reported at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (“ FIFO ”) method. The Company reviews its inventory commodities for impairment whenever events or circumstances indicate that the value may not be recoverable. 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 Financial Accounting Standards Board (“ FASB ”) Accounting Standards Codification (" 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 during the three and six months ended June 30, 2021. 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. 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. Redeemable Noncontrolling Interests As more fully described in " Note 14. Share Purchase and Subscription Agreements ", the Company is party to put/call option agreements with the holder of Vertex Refining Myrtle Grove LLC (“MG SPV”) and HPRM LLC, a Delaware limited liability company, (“Heartland SPV”), which entities were formed as special purpose vehicles in connection with the transactions described in greater detail below, non-controlling interests. The put options permit MG SPV's and Heartland SPV's non-controlling interest holders, at any time on or after the earlier of (a) the fifth anniversary of the applicable closing date of such issuances and (ii) the occurrence of certain triggering events (an “MG Redemption” and "Heartland Redemption", as applicable) to require MG SPV and Heartland SPV to redeem the non-controlling interest from the holder of such interest. Per the agreements, the cash purchase price for such redeemed Class B Units (MG SPV) and Class A Units (Heartland SPV) 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 SPV Redemption and Heartland SPV Redemption and Vertex Operating, LLC, our wholly-owned subsidiary (“Vertex Operating”) (provided that Vertex Operating still owns Class A Units (as to MG SPV) or Class B Units (as to Heartland SPV) on such date, as applicable) and (z) the original per-unit price for such Class B Units/Class A Units plus any unpaid Class A/Class B preference. The preference is defined as the greater of (A) the aggregate unpaid “Class B/Class A 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/Class A Unit holders. The agreements also permit the Company to acquire the non-controlling interest from the holders 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. Based on this guidance, the Company has classified the MG SPV and Heartland SPV non-controlling interests between the liabilities and equity sections of the accompanying June 30, 2021 and December 31, 2020 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 and Heartland SPV equity instruments will become redeemable solely based on the passage of time, the Company determined that it is probable that the MG SPV and Heartland SPV equity instruments 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 or loss in the consolidated financial statements. Rather, such adjustments are treated as equity transactions. Variable Interest Entities The Company accounts for the investments it makes in certain legal entities in which equity investors do not have (1) sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support, (2) as a group (the holders of the equity investment at risk), either the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impacts the entity’s economic performance, or (3) the obligation to absorb the expected losses of the legal entity or the right to receive expected residual returns of the legal entity. These certain legal entities are referred to as “variable interest entities” or “VIEs.” The Company consolidates the results of any such entity in which it determines that it has a controlling financial interest. The Company has a “controlling financial interest” in such an entity if the Company has both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially significant to the VIE. On a quarterly basis, the Company reassesses whether it has a controlling financial interest in any investments it has in these certain legal entities. |
CONCENTRATIONS, SIGNIFICANT CUS
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
Concentrations, Significant Customers, Commitments And Contingencies Disclosure [Abstract] | |
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES | CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES At June 30, 2021 and 2020 and for each of the six months then ended, the Company’s revenues and receivables were comprised of the following customer concentrations: Six Months Ended June 30, 2021 Six Months Ended % of % of % of % of Customer 1 25% 12% 38% 7% Customer 2 10% 23% 12% 16% Customer 3 10% 5% 3% 7% For each of the six months ended June 30, 2021 and 2020, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment % Revenue by Segment Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 46% —% —% 53% —% —% Customer 2 18% —% —% 17% —% —% Customer 3 —% 27% —% —% 16% —% Customer 4 —% —% 72% —% —% 22% The Company had one and no vendors that represented 10% of total purchases or payables for the six months ended June 30, 2021 and 2020, respectively. 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, access to capital, and the quantities of petroleum-based products that the Company can economically produce. Litigation The Company, in its normal course of business, is involved in various other claims and legal action. In the opinion of management, the outcome of these claims and actions will not have a material adverse impact upon the financial position of the Company. We are currently party to the following material litigation proceedings: Vertex Refining LA, LLC (" Vertex Refining LA "), the wholly-owned subsidiary of Vertex Operating was named as a defendant, along with numerous other parties, in five lawsuits filed on or about February 12, 2016, in the Second Parish Court for the Parish of Jefferson, State of Louisiana, Case No. 121749, by Russell Doucet et. al., Case No. 121750, by Kendra Cannon et. al., Case No. 121751, by Lashawn Jones et. al., Case No. 121752, by Joan Strauss et. al. and Case No. 121753, by Donna Allen et. al. The suits relate to alleged noxious and harmful emissions from our facility located in Marrero, Louisiana. The suits seek damages for physical and emotional injuries, pain and suffering, medical expenses and deprivation of the use and enjoyment of plaintiffs’ homes. We intend to vigorously defend ourselves and oppose the relief sought in the complaints, provided that at this stage of the litigation, the Company has no basis for determining whether there is any likelihood of material loss associated with the claims and/or the potential and/or the outcome of the litigation. On November 17, 2020, Vertex filed a lawsuit against Penthol LLC (“Penthol”) in the District Court for the 61st Judicial District, Harris County, Texas (Cause No. 2020-65269), for breach of contract and simultaneously sought a Temporary Injunction enjoining Penthol from, among other things, circumventing Vertex in violation of the terms of that certain June 5, 2016 Sales Representative and Marketing Agreement entered into between Vertex Operating and Penthol (the “ Penthol Agreement ”). On February 8, 2021, Penthol filed a complaint against Vertex Operating with the Federal District Court for the Southern District of Texas Houston division; Civil Action No. 4:21-CV-416 (the “ Complaint ”). Because the issues raised in the Complaint largely mirror those in the then pending state court action in the District Court of Harris County Texas, 61st Judicial District Court, the state court action was removed to federal court and combined with the pending federal court action. Penthol’s Complaint seeks damages from Vertex Operating for alleged violations of the Sherman Act, breach of contract, business disparagement, and misappropriation of trade secrets under the Defend Trade Secrets Act and Texas Uniform Trade Secrets Act. Penthol is seeking a declaration that the Penthol Agreement is invalid, unenforceable and was terminated on January 27, 2021, or that Penthol’s actions are excused due to Vertex’s breach of such agreement; that Vertex has materially breached the agreement; an injunction that prohibits enforcement of the agreement, Vertex from using Penthol’s trade secrets, and requires Vertex to return any of Penthol’s trade secrets; awards of actual, treble, consequential and exemplary damages, attorneys’ fees and costs of court; and other relief to which it may be entitled. Vertex contends the claims made by Penthol are completely without merit, and that the termination of the Penthol Agreement was wrongful and resulted in damages to Vertex that it will seek to recover. Further, Vertex contends that the termination of the Penthol Agreement by Penthol constitutes a breach by Penthol under the express terms of the Penthol Agreement, and that Vertex remains entitled to payment of the amounts due Vertex under the Penthol Agreement for unpaid commissions and unpaid performance incentives. On March 2, 2021, Vertex filed a Motion to Dismiss Penthol's lawsuit with the court. Vertex plans to seek the recovery of its legal fees and costs incurred in enforcing its rights under the terms of the Penthol Agreement.Vertex disputes Penthol’s allegations of wrongdoing and intends to vigorously defend itself in this matter. We cannot predict the impact (if any) that any of the matters described above may have on our business, results of operations, financial position, or cash flows. Because of the inherent uncertainties of such matters, including the early stage and lack of specific damage claims in the Penthol matter, we cannot estimate the range of possible losses from them (except as otherwise indicated). Related Parties From time to time, the Company consults with a related party law firm. During the six months ended June 30, 2021 and 2020, we paid $134,185 and $30,061, respectively, to such law firm for services rendered. Accounts receivable, other, represents the amounts due from our non interest holder partner, who have a 49% ownership of associated entities, which is not interest bearing. During the period ended June 30, 2021 and 2020, the related party balance was $170,075 and $0 respectively. Leverage Lubricants, LLC On May 1, 2021, Vertex Energy Operating, LLC obtained a 51% membership interest in Leverage Lubricants, LLC. Leverage Lubricants is in the business of wholesale specialty blending of lubricants and warehousing and distribution of petroleum based products and related services. May 2021 Purchase Agreement On May 26, 2021, Vertex Operating, entered into a definitive Sale and Purchase Agreement (the “Refinery Purchase Agreement”) with Equilon Enterprises LLC d/b/a Shell Oil Products US and/or Shell Chemical LP and/or Shell Oil Company (“Seller”), to purchase the Seller’s Mobile, Alabama refinery, certain real property associated therewith, and related assets, including all inventory at the refinery as of closing and certain equipment, rolling stock, and other personal property associated with the Mobile refinery (collectively, the “Mobile Refinery” and the “Mobile Acquisition”). The Mobile Refinery is located on an 800+ acre site in the city and county of Mobile, Alabama. The 91,000 barrel-per-day nameplate capacity Mobile Refinery is capable of sourcing a flexible mix of cost-advantaged light-sweet domestic and international feedstocks. Approximately 70% of the refinery’s current annual production is distillate, gasoline and jet fuel, with the remainder being vacuum gas oil, liquefied petroleum gas (LPG) and other products. The facility distributes its finished product across the southeastern United States through a high-capacity truck rack, together with deep and shallow water distribution points capable of supplying waterborne vessels. In addition to refining assets, the transaction will include the acquisition by the Company of approximately 3.2 million barrels of inventory and product storage, logistics and distribution assets, together with more than 800+ acres of developed and undeveloped land. The initial base purchase price for the assets is $75 million. In addition, Vertex Operating will also pay for the hydrocarbon inventory located at the Mobile Refinery, as valued at closing, and the purchase price is subject to other customary purchase price adjustments and reimbursement for certain capital expenditures in the amount of approximately $225,000 and those relating to a turnaround at the Mobile Refinery that is slated to occur in fourth quarter of 2021, in the approximate amount of $13 million. In connection with Vertex Operating’s execution of the Refinery Purchase Agreement, and as a required term and condition thereof, Vertex Operating provided the Seller a promissory note in the amount of $10 million (the “Deposit Note”). Pursuant to the terms of the Refinery Purchase Agreement, the terms of such agreement (other than exclusivity through December 31, 2021, or such earlier date that the Refinery Purchase Agreement is terminated), were not legally binding on the Seller until such time as Vertex Operating funds the Deposit Note in cash (which note has been paid in full to date). The Deposit Note did not accrue interest unless or until an event of default occurs under such note, at which time interest accrues at 12% per annum until paid. The entire balance of the Deposit Note was due upon the earlier of (i) 45 calendar days following the date of the Deposit Note (i.e., July 10, 2021); and (ii) five In the event of the closing of the transactions contemplated by the Refinery Purchase Agreement, the funded portion of the Deposit Note, and any interest thereon (the “Deposit”) is credited against the purchase price due to the Seller. In the event the Refinery Purchase Agreement is terminated, the Deposit is non-refundable except as more particularly described in the Refinery Purchase Agreement, which provides that in some circumstances the Company may receive a complete refund of the Deposit or must pay a portion of (or in some cases all) the costs for the Swapkit (defined below) and/or the audit of the Seller’s operations, to the extent requested by the Company. The Refinery Purchase Agreement is subject to termination prior to closing under certain circumstances, and may be terminated: at any time prior to the closing date by the mutual consent of the parties; by Vertex Operating or Seller in the event the closing has not occurred by May 26, 2022 (the “Outside Date”, subject to extensions as discussed in the Purchase and Sale Agreement), in the event such failure to close is not a result of Vertex Operating’s or Seller’s breach of the agreement, respectively, or the failure to obtain any government consent; by Vertex Operating or Seller, if the other party has breached any representation, warranty or covenant set forth in the agreement, subject to certain cases to the right to cure such breach, or required regulatory approvals have not been received as of the Outside Date; or by Seller if Vertex Operating fails to remit payment of the Deposit by the Deposit Note Due Date, at which time Seller also has the right to pursue collection under the terms of the Deposit Note, plus interest, if any, and to retain any amounts thereby collected. The Refinery Purchase Agreement provides that if all conditions to closing are satisfied other than government approvals and required permits and registrations, then the Outside Date is extended to such date as the parties mutually agree; provided, however, in the event the parties do not mutually agree, then the Outside Date is automatically extended to May 26, 2023. The Refinery Purchase Agreement contemplates the Company and the Seller entering into various supply and offtake agreements at closing. The Mobile Acquisition is expected to close near the end of the third quarter of 2021, subject to satisfaction of customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the absence of legal impediments prohibiting the Mobile Acquisition, receipt of regulatory approvals and required consents, absence of a material adverse effect and the Company raising sufficient cash to pay such aggregate purchase price. The Company anticipates financing the transaction through the entry into a debt facility and funds generated through the sale of common equity. The Company has not entered into any agreements regarding such fundings to date, and such fundings may not be available on favorable terms, if at all. The Company may also generate cash through asset divestitures. The conditions to the closing of the Mobile Acquisition may not be met, and such closing may not ultimately occur on the terms set forth in the Refinery Purchase Agreement, if at all. Upon completion of the transaction and provided that Vertex’s fundraising initiatives are successful, Vertex plans to launch an $85 million capital project designed to modify the Mobile Refinery’s hydrocracking unit to produce renewable diesel fuel on a standalone basis. In connection with the entry into the Refinery Purchase Agreement, Vertex Operating and the Seller entered into a Swapkit Purchase Agreement (the “Swapkit Agreement”). Pursuant to the agreement, Vertex Operating agreed to fund a technology solution comprising the ecosystem required for the Company to run the Mobile Refinery after closing (the “Swapkit”), at a cost of $8.7 million, which is payable at closing (subject to certain adjustments), or in certain circumstances, upon termination of the Purchase and Sale Agreement. Safety-Kleen Sale Agreement On June 29, 2021, we entered into an Asset Purchase Agreement (the “Sale Agreement” and the transactions contemplated therein, the “Sale Transaction” or the “Sale”) with Vertex Operating, Vertex Refining LA, LLC (“Vertex LA”), Vertex Refining OH, LLC (“Vertex OH”), Cedar Marine Terminals, L.P. (“CMT”), H & H Oil, L.P. (“H&H”), as sellers, and Safety-Kleen Systems, Inc., as purchaser (“Safety-Kleen”), dated as of June 28, 2021. Pursuant to the Sale Agreement, Safety-Kleen agreed to acquire the Company’s Marrero used oil refinery in Louisiana (currently owned by Vertex LA); our Heartland used oil refinery in Ohio (currently owned by Vertex OH); our H&H and Heartland used motor oil (“UMO”) collections business; our oil filters and absorbent materials recycling facility in East Texas; and the rights CMT holds to a lease on the Cedar Marine terminal in Baytown, Texas (the “UMO Business”). The initial base purchase price for the assets is $140 million, which is subject to customary adjustments to account for working capital, taxes and assumed liabilities. The Sale Agreement also requires us to place $7 million of shares of our common stock into escrow for a period of 18 months following the closing (the “Escrow Period”), in order to satisfy any indemnification claims made by Safety-Kleen pursuant to the terms of the Sale Agreement. Such shares are to be valued at the volume weighted average price of the Company’s common stock for the ten 10-Day VWAP, using the last day of each quarter as the ending trading day in lieu of the closing date), and if such value is less than $7 million (less any value of shares released from escrow to satisfy indemnification claims under the Sale Agreement, based on the 10-Day VWAP ending on the trading day immediately prior to the date any such shares are released from escrow), we are required to deposit additional shares into escrow such that the value of shares held in the escrow account is at least $7 million at all times. Notwithstanding the above, in no event will the number of shares issued into the escrow account, or otherwise pursuant to the terms of the Sale Agreement, exceed 19.9% of the Company’s outstanding common stock on the date the Sale Agreement was entered into. Upon termination of the Escrow Period, any shares remaining in escrow (subject to pending claims) are to be returned to the Company for cancellation. The Sale Agreement is subject to termination prior to closing under certain circumstances, and may be terminated: at any time prior to the closing date by the mutual consent of the parties; by Safety-Kleen in the event the closing has not occurred by December 31, 2021 (the “Outside Date”, subject to certain extensions as discussed in the Sale Agreement), in the event such failure to close is not a result of Safety-Kleen’s breach of the agreement, provided that if the failure to close is the result of the failure to obtain certain government consents or the failure of the Company to obtain the required shareholder approval for the transaction, either party may extend the Outside Date for up to an additional 90 days; by the Company or Safety-Kleen, if the other party has breached the agreement, subject to certain cases to the right to cure such breach; by the Company if it becomes apparent that the closing of the Sale Agreement will not occur due to certain reasons, including if any of Safety-Kleen’s required conditions to closing conditions will not be fulfilled by the Outside Date, unless such failure is the result of the Company. In the event that the Sale Agreement is terminated as a result of the failure of the Company’s shareholders to approve the transaction, we are required to reimburse all of Safety-Kleen’s out-of-pocket expenses (including all fees and expenses of counsel, accountants, investment bankers, financing sources, experts and consultants) incurred in connection with the authorization, preparation, negotiation, execution and performance of the Sale Agreement and the transactions contemplated therein (the “Reimbursement”). If Safety-Kleen terminates the Sale Agreement for certain reasons, including in certain cases due to a breach of the agreement by the Company in the event the Company solicits other competing transactions or takes other similar actions; because the Company considers a competing transaction and the shareholders of the Company fail to approve the Sale Agreement; or the Company’s board of directors refuses to complete the transaction due to a competing transaction, then we are required to pay Safety-Kleen a break-fee of $3,000,000, less amounts paid as Reimbursement (the “Break-Fee”), which will be the sole remedy of Safety-Kleen in such situation. The Sale Agreement is expected to close in the fourth quarter of 2021, subject to satisfaction of customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the absence of legal impediments prohibiting the transaction, and receipt of regulatory approvals and required consents. The Sale Agreement also requires us to hold a shareholders meeting to seek shareholder approval for the Sale Agreement, and the closing is conditioned on the Company’s shareholders approving such Sale Agreement. The conditions to the closing of the Sale Agreement may not be met, and such closing may not ultimately occur on the terms set forth in the Sale Agreement, if at all. Houlihan Lokey and H.C. Wainwright acted as financial advisors to the Company on the transaction. Vallum Advisors acted as financial communications counsel to the Company. |
REVENUES
REVENUES | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Disaggregation of Revenue The following tables present our revenues disaggregated by geographical market and revenue source: Three Months Ended June 30, 2021 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 15,641,683 $ — $ — $ 15,641,683 Southern United States 18,714,713 23,836,691 7,001,824 49,553,228 $ 34,356,396 $ 23,836,691 $ 7,001,824 $ 65,194,911 Sources of Revenue Base oil $ 12,928,334 $ — $ — $ 12,928,334 Pygas — 3,861,942 — 3,861,942 Industrial fuel — 409,522 — 409,522 Distillates — 19,565,227 — 19,565,227 Oil collection services 2,022,975 — 68,309 2,091,284 Metals — — 6,847,085 6,847,085 Other re-refinery products 2,066,008 — 86,430 2,152,438 VGO/Marine fuel sales 17,339,079 — — 17,339,079 Total revenues $ 34,356,396 $ 23,836,691 $ 7,001,824 $ 65,194,911 Six Months Ended June 30, 2021 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 26,506,093 $ — $ — $ 26,506,093 Southern United States 40,008,551 43,110,644 13,653,616 96,772,811 $ 66,514,644 $ 43,110,644 $ 13,653,616 $ 123,278,904 Sources of Revenue Base oil $ 22,042,228 $ — $ 295,315 $ 22,337,543 Pygas — 6,834,373 — 6,834,373 Industrial fuel — 721,215 — 721,215 Distillates — 35,555,056 — 35,555,056 Oil collection services 3,584,901 — 144,739 3,729,640 Metals — — 13,127,132 13,127,132 Other re-refinery products 3,534,237 — 86,430 3,620,667 VGO/Marine fuel sales 37,353,278 — — 37,353,278 Total revenues $ 66,514,644 $ 43,110,644 $ 13,653,616 $ 123,278,904 Three Months Ended June 30, 2020 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 6,167,062 $ — $ — $ 6,167,062 Southern United States 5,376,074 6,297,328 3,533,663 15,207,065 $ 11,543,136 $ 6,297,328 $ 3,533,663 $ 21,374,127 Sources of Revenue Base oil $ 4,919,622 $ — $ 555,350 $ 5,474,972 Pygas — 1,172,766 — 1,172,766 Industrial fuel 83,940 — — 83,940 Distillates — 5,124,562 — 5,124,562 Oil collection services 2,058,734 — — 2,058,734 Metals — — 2,978,313 2,978,313 Other re-refinery products 849,885 — — 849,885 VGO/Marine fuel sales 3,630,955 — — 3,630,955 Total revenues $ 11,543,136 $ 6,297,328 $ 3,533,663 $ 21,374,127 Six Months Ended June 30, 2020 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 15,725,630 $ — $ — $ 15,725,630 Southern United States 25,348,876 8,807,920 7,695,130 41,851,926 $ 41,074,506 $ 8,807,920 $ 7,695,130 $ 57,577,556 Sources of Revenue Base oil $ 12,282,349 $ — $ 1,358,250 $ 13,640,599 Pygas — 3,630,606 — 3,630,606 Industrial fuel 1,241,076 52,752 — 1,293,828 Distillates — 5,124,562 — 5,124,562 Oil collection services 3,257,562 — — 3,257,562 Metals — — 6,336,880 6,336,880 Other re-refinery products 3,506,589 — — 3,506,589 VGO/Marine fuel sales 20,786,930 — — 20,786,930 Total revenues $ 41,074,506 $ 8,807,920 $ 7,695,130 $ 57,577,556 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable, net, consists of the following at June 30, 2021 and December 31, 2020: June 30, 2021 Unaudited December 31, 2020 Accounts receivable trade $ 19,696,183 $ 11,751,679 Allowance for doubtful accounts (1,316,511) (612,746) Accounts receivable trade, net $ 18,379,672 $ 11,138,933 |
LINE OF CREDIT AND LONG-TERM DE
LINE OF CREDIT AND LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
LINE OF CREDIT AND LONG-TERM DEBT | LINE OF CREDIT AND LONG-TERM DEBT On April 24, 2020, (a) Encina Business Credit, LLC (“EBC”) and the lenders under our Revolving Credit Agreement with EBC (the “EBC Lenders”), and Vertex Operating, entered into a Fourth Amendment and Limited Waiver to Credit Agreement, effective on April 24, 2020, pursuant to which the EBC Lenders agreed to amend the EBC Credit Agreement; and (b) the EBC Lenders and Vertex Operating entered into a Fourth Amendment and Limited Waiver to ABL Credit Agreement, effective on April 24, 2020, 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, 2021 to February 1, 2022. On August 7, 2020, the Company and Vertex Operating entered into a Fifth Amendment to Credit Agreement with EBC (the “ Fifth Amendment ”), which amended the EBC Credit Agreement to provide the Company up to a $2 million term loan to be used for capital expenditures (the “ CapEx Loan ”), which amounts may be requested from time to time by the Company, provided that not more than four advances of such amount may be requested, with each advance being not less than $500,000 (in multiples of $100,000). The amendment also provided that any prepayments of the EBC Credit Agreement would first be applied to the term loan and then to the CapEx Loan. The CapEx Loan bears interest at the rate of LIBOR (0.16% at June 30, 2021) plus 7%, or to the extent that LIBOR is not available, the highest of the prime rate and the Federal Funds Rate plus 0.50%, in each case, plus 6%. We are required to repay the CapEx Loan in monthly installments of 1/48 th of the amount borrowed, each month that the CapEx Loan is outstanding, with a final balloon payment due at maturity. The obligation of EBC to fund the CapEx Loan is subject to customary conditions and requirements set forth in the Fifth Amendment, including the requirement that the Company has maintained daily availability under the ABL Credit Agreement greater than $1 million for the last thirty days, and that such availability would remain over $1 million, on a pro forma basis with such new loan. We are also required to provide the agent for the EBC Credit Agreement, a first priority security interest in the rolling stock collection assets or other assets acquired with the CapEx Loan. On November 27, 2020, the Company, Vertex Operating, the Agent and the EBC Lenders, entered into a Fifth Amendment and Limited Waiver to Credit Agreement (the “Amendment and Waiver”), pursuant to which the Lenders agreed to amend the Revolving Credit Agreement, to (1) provide for the Lender’s waiver of an event of default which occurred under the Revolving Credit Agreement, relating solely to the Company exceeding the $3 million capital expenditure limitation for 2020 set forth in the Revolving Credit Agreement; (2) amend the capital expenditure limit set forth in the Revolving Credit Agreement to $4 million for 2020 (compared to $3 million previously) and $3 million thereafter; and (3) amended the minimum required availability under the Revolving Credit Agreement to be $1 million prior to December 31, 2020 (which amount was previously $2 million) and $2 million thereafter. Notwithstanding the technical default under the Revolving Credit Agreement discussed above, the Lenders did not take any action to accelerate amounts due under the Revolving Credit Agreement, such amounts due thereunder were not automatically accelerated in connection with the default, and as discussed above, such technical default was waived by the Lenders according to the Amendment and Waiver. On January 18, 2021, the Company, Vertex Operating and EBC as agent for the lenders named therein, and such lenders, entered into a Sixth Amendment to Credit Agreement (the “6th Amendments”), which amended the EBC Credit Agreement and a separate ABL Credit Agreement dated February 1, 2017, between Vertex Operating, the Company, substantially all of the Company’s subsidiaries, EBC, as agent for the lenders named therein, and such lenders (as amended to date, the “ABL Credit Agreement”), to permit availability at any time to be less than (a) $1,000,000 at any time during the period commencing on December 31, 2020 through and including March 31, 2021 and (b) $2,000,000 at any time from and after April 1, 2021. On May 26, 2021, the Company, Vertex Operating and EBC as agent for the lenders named therein, and such lenders, entered into a Seventh Amendment to Credit Agreement and a Seventh Amendment to ABL Credit Agreement (collectively, the “7th Amendments”), which amended the EBC Credit Agreement and ABL Credit Agreement, to allow the Company to enter into the a purchase agreement, subject to the Company agreeing to not use any funds from the ABL Credit Agreement towards such purchase agreement or to pay amounts in connection with a $10 million deposit note in connection with such purchase agreement. As of the date of this filing, the Company is in discussions with EBC regarding the potential extension of the maturity date of the EBC debt to February 1, 2023. The Company presented the EBC debt in the current portion of long-term debt balance on the consolidated balance sheet at June 30, 2021. Loan Agreements On May 4, 2020, the Company applied for a loan from Texas Citizens Bank in the principal amount of $4.22 million, pursuant to the Paycheck Protection Program (the “ PPP ” and the “PPP Loan”) under the Coronavirus Aid, Relief, and Economic Security Act (the “ CARES Act ”), which was enacted on March 27, 2020. On May 5, 2020, the Company received the loan funds. The Note was unsecured, was to mature on April 28, 2022, and accrued interest at a rate of 1.00% per annum, payable monthly commencing in February 2021, following an initial deferral period as specified under the PPP. Under the terms of the CARES Act, PPP loan recipients can apply for, and the U.S. Small Business Administration (“SBA”), which administers the CARES Act, can grant forgiveness of, all or a portion of loans made under the PPP if the recipients use the PPP loan proceeds for eligible purposes, including payroll costs, mortgage interest, rent or utility costs and meet other requirements regarding, among other things, the maintenance of employment and compensation levels. The Company used the PPP Loan proceeds for qualifying expenses and applied for forgiveness of the PPP Loan in accordance with the terms of the CARES Act. On June 22, 2021, the Company received a notification from the Lender that the SBA approved the Company’s PPP Loan forgiveness application for the entire PPP Loan balance of $4.222 million and accrued interest and that the remaining PPP Loan balance is zero. The forgiveness of the PPP Loan was recognized during the quarter ending June 30, 2021. On May 27, 2020, the Company entered into a loan contract security agreement with John Deere to finance $152,643 to purchase equipment. The Note matures on June 27, 2024, and bears interest at a rate of 2.45% per annum, payable monthly commencing on June 27, 2020. The payment of the note is secured by the equipment purchased. On July 18, 2020, Leverage Lubricants LLC, which Vertex Energy Operating, LLC holds 51% interest, entered into a SBA loan in the amount of $58,700. The loan matures on July 18, 2050 and bears interest at the rate of 3.75% per annum. Insurance Premiums The Company financed insurance premiums through various financial institutions bearing interest rates from 4.00% to 4.90% per annum. All such premium finance agreements have maturities of less than one year and have a balance of $0 at June 30, 2021 and $1,183,543 at December 31, 2020. Finance Leases On April 2, 2020, the Company obtained one finance lease with payments of $9,322 per month for three years and on July 28, 2020, the Company entered into another finance lease with payments of $3,545 per month for three years. The amo unt of the finance lease obligation has been reduced to $318,689 at June 30, 2021. On May 22, 2020, the Company entered into one finance lease. Payments are $15,078 per month for three years and the amount of the finance lease obligation has been reduced to $377,933 at June 30, 2021. The Company's outstanding debt facilities as of June 30, 2021 and December 31, 2020 are summarized as follows: Creditor Loan Type Origination Date Maturity Date Loan Amount Balance on June 30, 2021 Balance on December 31, 2020 Encina Business Credit, LLC Term Loan February 1, 2017 February 1, 2022 $ 20,000,000 $ 4,983,000 $ 5,433,000 Encina Business Credit SPV, LLC Revolving Note February 1, 2017 February 1, 2022 $ 10,000,000 1,165,183 133,446 Encina Business Credit, LLC Capex Loan August 7, 2020 February 1, 2022 $ 2,000,000 1,194,386 1,378,819 Wells Fargo Equipment Lease-Ohio Finance Lease April-May, 2019 April-May, 2024 $ 621,000 376,738 436,411 AVT Equipment Lease-Ohio Finance Lease April 2, 2020 April 2, 2023 $ 466,030 318,689 380,829 AVT Equipment Lease-HH Finance Lease May 22, 2020 May 22, 2023 $ 551,609 377,933 450,564 John Deere Note Note May 27, 2020 June 24, 2024 $ 152,643 112,768 131,303 Tetra Capital Lease Finance Lease May, 2018 May, 2022 $ 419,690 116,308 172,235 Loan-Leverage Lubricants SBA Loan July 18, 2020 July 18, 2050 $ 58,700 58,700 — Well Fargo Equipment Lease-VRM LA Finance Lease March, 2018 March, 2021 $ 30,408 — 1,804 Texas Citizens Bank PPP Loan May 5, 2020 April 28, 2022 $ 4,222,000 — 4,222,000 Various institutions Insurance premiums financed Various < 1 year $ 2,902,428 — 1,183,543 Total $ 8,703,705 $ 13,923,954 Future contractual maturities of notes payable as of June 30, 2021 are summarized as follows: Creditor Year 1 Year 2 Year 3 Year 4 Year 5 Thereafter Encina Business Credit, LLC $ 4,983,000 $ — $ — $ — $ — $ — Encina Business Credit SPV, LLC 1,165,183 — — — — — Encina Business Credit, LLC 1,194,386 — — — — — John Deere Note 37,759 38,696 36,313 — — — Well Fargo Equipment Lease- Ohio 124,041 130,574 122,123 — — — AVT Equipment Lease-Ohio 132,443 186,246 — — — — AVT Equipment Lease-HH 154,805 223,128 — — — — Tetra Capital Lease 99,832 16,476 — — — — Loan-Leverage Lubricants — 413 1,273 1,321 1,371 54,322 Texas Citizens Bank — — — — — — Various institutions — — — — — — Totals $ 7,891,449 $ 595,533 $ 159,709 $ 1,321 $ 1,371 $ 54,322 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share includes no dilution and is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the periods presented. Diluted earnings per share reflects 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 three and six months ended June 30, 2021 and 2020 excludes: 1) options to purchase 5,641,778 and 5,140,288 shares, respectively, of common stock, 2) warrants to purchase 1,864,376 and 8,633,193 shares, respectively, of common stock, 3) Series B Preferred Stock which is convertible int o 0 and 3,883,449 shares, respectively, of common stock, 4) Series B1 Preferred Stock which is convertible into 0 a |
COMMON STOCK
COMMON STOCK | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021, there were 59,909,219 common shares issued and outstanding. During the six months ended June 30, 2021, the Company issued 13,826,010 shares of common stock in connection with the conversion of Series A, Series B and B1 Convertible Preferred Stock, and exercise of warrants into common stock of the Company, pursuant to the terms of such securities. In addition, the Company issued 528,368 shares of common stock in connection with the exercise of options. During the six months ended June 30, 2020, the Company issued 2,159,278 shares of common stock in connection with the conversion of Series B1 Convertible Preferred Stock into common stock of the Company, pursuant to the terms of such securities. Series B Exchange Agreements On February 23, 2021, the Company entered into a Series B Preferred Stock Exchange Agreement with Pennington Capital LLC, the then holder of shares of Series B Preferred Stock, pursuant to which the holder exchanged 822,824 shares of the Series B Preferred Stock of the Company which it held, which had an aggregate liquidation preference of $2,550,754 ($3.10 per share), for 1,261,246 shares of the Company's common stock (based on an exchange ratio equal to approximately the five-day volume-weighted average price per share of the Company's common stock on the date the Exchange Agreement was entered into). The Series B Preferred Stock shares were subsequently returned to the Company and cancelled in consideration for the issuance of the 1,261,246 shares of common stock. The Exchange Agreement included customary representations and warranties of the parties. This resulted in a deemed dividend recognition of $267,899 due to more shares being issued than were provided in the original agreement. On March 2, 2021, the Company entered into a Series B Preferred Stock Exchange Agreement with Carrhae & Co FBO Wasatch Micro Cap Value Fund, the then holder of shares of Series B Preferred Stock, pursuant to which the holder exchanged 708,547 shares of the Series B Preferred Stock of the Company which it held, which had an aggregate liquidation preference of $2,196,496 ($3.10 per share), for 1,098,248 shares of the Company's common stock (based on an exchange ratio equal to $2.00 per share of common stock). The Series B Preferred Stock returned to the Company and cancelled in consideration for the issuance of the 1,098,248 shares of common stock. The Exchange Agreement included customary representations and warranties of the parties. This resulted in a deemed dividend recognition of $362,422 due to more shares being issued than were provided in the original agreement. As described in ASC 260-10-S99-2, when preferred stock is exchanged, the difference between fair value of the consideration transferred to the holders of the preferred stock and (2) the carrying amount of the preferred stock in the registrant’s balance sheet (net of issuance costs) should be subtracted from (or added to) net income to arrive at income available to common shareholders in the calculation of earnings per share. As a result, the Company recorded a credit to retained earnings with a corresponding debit to additional paid in capital (APIC) of $630,321 which was added to net income to arrive at net income available to common shareholders, as a result of the transactions above. Series B and B1 Conversions During the three months ended June 30, 2021, holders our Series B and Series B1 Preferred Stock converted 58,114 and 2,500,000 shares, respectively, of such preferred stock into the same number of shares of common stock, on a one-for-one basis, pursuant to the terms of such preferred stock. During the three months ended March 31, 2021, holders our Series B and Series B1 Preferred Stock converted 638,224 and 2,087,195 shares, respectively, of such preferred stock into the same number of shares of common stock, on a one-for-one basis, pursuant to the terms of such preferred stock. Series B and B1 Automatic Conversions Pursuant to the terms of the Series B Preferred Stock and Series B1 Preferred Stock of the Company, in the event that the closing sales price of the Company’s common stock was at least $6.20 (as to the Series B Preferred Stock) and $3.90 (as to the Series B1 Preferred Stock) per share for at least 20 consecutive trading days, such shares of Series B Preferred Stock and Series B1 Preferred Stock were to convert automatically into common stock of the Company on a one-for-one basis (the “Automatic Conversion Provisions”). Effective on June 24, 2021 (as to the Series B1 Preferred Stock) and June 25, 2021 (as to the Series B Preferred Stock), the Automatic Conversion Provisions of the Series B Preferred Stock and Series B1 Preferred Stock were triggered, and the outstanding shares of the Company’s Series B Preferred Stock and Series B1 Preferred Stock automatically converted into common stock of the Company. Specifically, the 1,783,292 then outstanding shares of Series B Preferred Stock automatically converted into 1,783,292 shares of common stock and the 3,134,889 then outstanding shares of Series B1 Preferred Stock automatically converted into 3,134,889 shares of common stock (or 4,918,181 shares of common stock in total). 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 Convertible Preferred Stock is 5,000,000 (“ Series A Preferred ”). The total number of designated shares of the Company’s Series B Convertible Preferred Stock is 10,000,000. The total number of designated shares of the Company’s Series B1 Convertible Preferred Stock is 17,000,000. As of June 30, 2021 and December 31, 2020, there were 391,602 and 419,859 shares, respectively, of Series A Preferred Stock issued and outstanding. As of June 30, 2021 and December 31, 2020, there were 0 and 4,102,690 shares of Series B Preferred Stock issued and outstanding, respectively. As of June 30, 2021 and December 31, 2020, there were 0 and 7,399,649 shares of Series B1 Preferred Stock issued and outstanding, respectively. Series B Preferred Stock and Temporary Equity The following table represents the activity related to the Series B Preferred Stock, classified as Temporary Equity on the accompanying unaudited consolidated balance sheet, during the six months ended June 30, 2021 and 2020: 2021 2020 Balance at beginning of period $ 12,718,339 $ 11,006,406 Less: conversions of shares to common (8,446,837) — Less: exchanges of shares to common (4,747,250) — Plus: discount accretion — 854,364 Plus: dividends in kind 475,748 358,512 Balance at end of period $ — $ 12,219,282 At June 30, 2021 and December 31, 2020, a total of $0 and $317,970 of dividends were accrued on our outstanding Series B Preferred Stock, respectively. During the three months ended June 30, 2021 and 2020, we paid dividends in-kind in additional shares of Series B Preferred Stock of $157,778 and $180,591, respectively. Because such preferred stock was not redeemed on June 24, 2020, the preferred stock accrued a 10% per annum dividend (payable in-kind at the option of the Company), until such preferred stock was redeemed or converted into common stock, which preferred stock was automatically converted into common stock effective on June 25, 2021. Series B1 Preferred Stock and Temporary Equity The following table represents the activity related to the Series B1 Preferred Stock, classified as Temporary Equity on the accompanying unaudited consolidated balance sheet, for the six months ended June 30, 2021 and 2020: 2021 2020 Balance at beginning of period $ 11,036,173 $ 12,743,047 Less: conversions of shares to common (12,046,441) (3,368,474) Plus: discount accretion 507,282 616,874 Plus: dividends in kind 502,986 375,177 Balance at end of period $ — $ 10,366,624 As of June 30, 2021 and December 31, 2020, respectively, a total of $0 and $288,594 of dividends were accrued on our outstanding Series B1 Preferred Stock. During the three months ended June 30, 2021 and 2020, we paid dividends in-kind in additional shares of Series B1 Preferred Stock of $214,405 and $163,908, respectively. Because such preferred stock was not redeemed on June 24, 2020, the preferred stock accrued a 10% per annum dividend (payable in-kind at the option of the Company), until such preferred stock was redeemed or converted into common stock, which preferred stock was automatically converted into common stock effective on June 24, 2021. The Series B1 Warrants were revalued at June 30, 2021 and December 31, 2020 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 $20,164,443 and $330,412, respectively. The Dynamic Black Scholes Merton inputs used were: expected dividend rate of 0%, expected volatility of 66%-202%, risk free interest rate of 0.06% and expected term of 0.50 years. The Series B Warrants expired pursuant to their terms on December 24, 2020. The following is an analysis of changes in the derivative liability for the six months ended June 30: Level Three Roll-Forward 2021 2020 Balance at beginning of period $ 330,412 $ 1,969,216 Value of warrants exercised (3,453,504) — Change in valuation of warrants 23,287,535 (1,587,782) Balance at end of period $ 20,164,443 $ 381,434 Myrtle Grove Share Purchase and Subscription Agreement Amounts received by MG SPV from its direct sale of Class B Units to 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”) may only be used for additional investments in the Company’s former Belle Chasse, Louisiana, re-refining complex (the “MG Refinery”) or for day to day operations at the MG Refinery. At June 30, 2021, $0.1 million reported as cash and cash equivalents on the balance sheet is restricted to MG Refinery investments or operating expenses. 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) the fifth anniversary of July 26, 2019 (the " MG Closing Date ") 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 any unpaid Class B preference. The preference is defined as 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. The Company did not pay the preferential yield during the six months ended June 30, 2021. “ 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 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 ”), provided that such Heartland Closing was consummated by June 30, 2020, (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. No triggering events occurred during the six months ended June 30, 2021. Myrtle Grove Redeemable Noncontrolling Interest As a result of the Share Purchase and Subscription Agreement (the “ MG Share Purchase ”), 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. After initial recognition, in accordance with ASC 480-10-S99-3A, the Company applied a two-step approach to measure noncontrolling interests associated with MG SPV 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 $128,981 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 $761,993 increased the carrying amount of redeemable noncontrolling interests to the redemption value as of June 30, 2021 of $6,105,853. 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 relating to MG SPV as of June 30, 2021 and 2020. June 30, 2021 June 30, 2020 Beginning balance $ 5,472,841 $ 4,396,894 Net loss attributable to redeemable non-controlling interest (128,981) (82,401) Change in ownership — 71,171 Accretion of non-controlling interest to redemption value 761,993 519,792 Ending balance $ 6,105,853 $ 4,905,456 Heartland Share Purchase and Subscription Agreement On January 17, 2020 (the “Heartland Closing Date”), Vertex Operating, Tensile-Heartland Acquisition Corporation (“Tensile-Heartland”), an affiliate of Tensile, and solely for the purposes of the Heartland Guaranty (defined below), the Company, and 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 owns 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. 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). As a result of this transaction, MG SPV is owned 85.00% by Vertex Operating and 15.00% by Tensile-MG. The Heartland Share Purchase provides Tensile-Heartland an option, exercisable at its election, at 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 B 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 Heartland Closing Date and (b) 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 any unpaid Class A preference. The Class A preference is defined as 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 Unit holders through such Heartland Redemption date. “Heartland Triggering Events” include (a) any termination of an Administrative Services Agreement entered into with Tensile, pursuant to its terms and/or any material breach by us of the environmental remediation and indemnity agreement entered into with Tensile, (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 Heartland 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 an amount equal to the Class A preference; (b) second, the Class A Preferred Unit holders, 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. Heartland Variable interest entity The Company has assessed the Heartland SPV under the variable interest guidance in ASC 810. The Company determined that the Class A Units are not at risk due to a 22.5% preferred return and a redemption provision that, if elected, would require Heartland SPV to repurchase the Class A Units at their original cost plus the preferred return. The Company further determined that as a minority shareholder, holding only 35% of the voting rights, the Company does not have the ability to direct the activities of Heartland SPV that most significantly impact the entity’s performance. Based on this assessment, the Company concluded that Heartland SPV is a variable interest entity. In assessing if the Company is the primary beneficiary of Heartland SPV, the Company determined that certain provisions of the Heartland Company Agreement prohibiting the transfer of its Class B Units result in the Class A Unit holders being related parties under the de facto agents criteria in ASC 810. The Company and the Class A Unit holders, as a group, have the power to direct the significant activities of Heartland SPV and the obligations to absorb the losses and the right to receive the benefits that could potentially be significant to Heartland SPV. The Company concluded that substantially all of the activities of Heartland SPV are conducted on its behalf, and not on behalf of the Class A Unit holders, the decision maker, thus the Company is the primary beneficiary and required to consolidate Heartland SPV in accordance with ASC 810. The Company's consolidated financial statements include the assets, liabilities and results of operations of Heartland SPV for which the Company is the primary beneficiary. The other equity holders’ interests are reflected in net loss attributable to noncontrolling interests and redeemable noncontrolling interest in the consolidated statements of income and noncontrolling interests in the consolidated balance sheets. The following table summarizes the carrying amounts of Heartland SPV's assets and liabilities included in the Company’s consolidated balance sheets at June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 Cash and cash equivalents $ 11,417,106 $ 7,890,886 Accounts receivable, net 8,056,815 3,591,468 Inventory 800,575 629,667 Prepaid expense and other current assets 239,730 926,203 Total current assets 20,514,226 13,038,224 Fixed assets, net 7,102,863 6,549,139 Finance lease right-of-use assets 880,717 1,031,353 Operating lease right-of-use assets 306,866 299,758 Intangible assets, net 939,168 1,064,624 Other assets 106,643 108,643 Total assets $ 29,850,483 $ 22,091,741 Accounts payable $ 2,235,371 $ 1,753,160 Accrued expenses 395,845 307,340 Finance lease liability-current 356,317 346,029 Operating lease liability-current 235,644 251,037 Total current liabilities 3,223,177 2,657,566 Finance lease liability-long term 455,419 643,446 Operating lease liability-long term 71,222 48,721 Total liabilities $ 3,749,818 $ 3,349,733 The assets of Heartland SPV may only be used to settle the obligations of Heartland SPV, and may not be used for other consolidated entities. The liabilities of Heartland SPV are non-recourse to the general credit of the Company’s other consolidated entities. Heartland Redeemable Noncontrolling Interest As a result of the Heartland Share Purchase (as defined and discussed above), Tensile, through Tensile-Heartland, acquired an approximate 65.00% ownership interest in Heartland SPV, 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 $9,091,068 between the fair value of the consideration received of $21,000,000 and the carrying amount of the noncontrolling interest determined in accordance with ASC 810-10 of $11,908,932, 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 associated with Heartland SPV 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 income of $4,783,127 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. At June 30, 2021, the cumulative amount resulting from the application of the measurement guidance in ASC 810-10 exceeded the redemption value of $29,162,156. The table below presents the reconciliation of changes in redeemable noncontrolling interest relating to Heartland SPV as of June 30, 2021 and 2020. June 30, 2021 June 30, 2020 Beginning balance $ 26,138,833 $ — Initial adjustment of carrying amount of non-controlling interest — 11,908,932 Net income (loss) attributable to redeemable non-controlling interest 4,783,127 (308,432) Accretion of non-controlling interest to redemption value — 11,828,445 Ending balance $ 30,921,960 $ 23,428,945 |
PREFERRED STOCK AND DETACHABLE
PREFERRED STOCK AND DETACHABLE WARRANTS | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
PREFERRED STOCK AND DETACHABLE WARRANTS | 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 June 30, 2021, there were 59,909,219 common shares issued and outstanding. During the six months ended June 30, 2021, the Company issued 13,826,010 shares of common stock in connection with the conversion of Series A, Series B and B1 Convertible Preferred Stock, and exercise of warrants into common stock of the Company, pursuant to the terms of such securities. In addition, the Company issued 528,368 shares of common stock in connection with the exercise of options. During the six months ended June 30, 2020, the Company issued 2,159,278 shares of common stock in connection with the conversion of Series B1 Convertible Preferred Stock into common stock of the Company, pursuant to the terms of such securities. Series B Exchange Agreements On February 23, 2021, the Company entered into a Series B Preferred Stock Exchange Agreement with Pennington Capital LLC, the then holder of shares of Series B Preferred Stock, pursuant to which the holder exchanged 822,824 shares of the Series B Preferred Stock of the Company which it held, which had an aggregate liquidation preference of $2,550,754 ($3.10 per share), for 1,261,246 shares of the Company's common stock (based on an exchange ratio equal to approximately the five-day volume-weighted average price per share of the Company's common stock on the date the Exchange Agreement was entered into). The Series B Preferred Stock shares were subsequently returned to the Company and cancelled in consideration for the issuance of the 1,261,246 shares of common stock. The Exchange Agreement included customary representations and warranties of the parties. This resulted in a deemed dividend recognition of $267,899 due to more shares being issued than were provided in the original agreement. On March 2, 2021, the Company entered into a Series B Preferred Stock Exchange Agreement with Carrhae & Co FBO Wasatch Micro Cap Value Fund, the then holder of shares of Series B Preferred Stock, pursuant to which the holder exchanged 708,547 shares of the Series B Preferred Stock of the Company which it held, which had an aggregate liquidation preference of $2,196,496 ($3.10 per share), for 1,098,248 shares of the Company's common stock (based on an exchange ratio equal to $2.00 per share of common stock). The Series B Preferred Stock returned to the Company and cancelled in consideration for the issuance of the 1,098,248 shares of common stock. The Exchange Agreement included customary representations and warranties of the parties. This resulted in a deemed dividend recognition of $362,422 due to more shares being issued than were provided in the original agreement. As described in ASC 260-10-S99-2, when preferred stock is exchanged, the difference between fair value of the consideration transferred to the holders of the preferred stock and (2) the carrying amount of the preferred stock in the registrant’s balance sheet (net of issuance costs) should be subtracted from (or added to) net income to arrive at income available to common shareholders in the calculation of earnings per share. As a result, the Company recorded a credit to retained earnings with a corresponding debit to additional paid in capital (APIC) of $630,321 which was added to net income to arrive at net income available to common shareholders, as a result of the transactions above. Series B and B1 Conversions During the three months ended June 30, 2021, holders our Series B and Series B1 Preferred Stock converted 58,114 and 2,500,000 shares, respectively, of such preferred stock into the same number of shares of common stock, on a one-for-one basis, pursuant to the terms of such preferred stock. During the three months ended March 31, 2021, holders our Series B and Series B1 Preferred Stock converted 638,224 and 2,087,195 shares, respectively, of such preferred stock into the same number of shares of common stock, on a one-for-one basis, pursuant to the terms of such preferred stock. Series B and B1 Automatic Conversions Pursuant to the terms of the Series B Preferred Stock and Series B1 Preferred Stock of the Company, in the event that the closing sales price of the Company’s common stock was at least $6.20 (as to the Series B Preferred Stock) and $3.90 (as to the Series B1 Preferred Stock) per share for at least 20 consecutive trading days, such shares of Series B Preferred Stock and Series B1 Preferred Stock were to convert automatically into common stock of the Company on a one-for-one basis (the “Automatic Conversion Provisions”). Effective on June 24, 2021 (as to the Series B1 Preferred Stock) and June 25, 2021 (as to the Series B Preferred Stock), the Automatic Conversion Provisions of the Series B Preferred Stock and Series B1 Preferred Stock were triggered, and the outstanding shares of the Company’s Series B Preferred Stock and Series B1 Preferred Stock automatically converted into common stock of the Company. Specifically, the 1,783,292 then outstanding shares of Series B Preferred Stock automatically converted into 1,783,292 shares of common stock and the 3,134,889 then outstanding shares of Series B1 Preferred Stock automatically converted into 3,134,889 shares of common stock (or 4,918,181 shares of common stock in total). 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 Convertible Preferred Stock is 5,000,000 (“ Series A Preferred ”). The total number of designated shares of the Company’s Series B Convertible Preferred Stock is 10,000,000. The total number of designated shares of the Company’s Series B1 Convertible Preferred Stock is 17,000,000. As of June 30, 2021 and December 31, 2020, there were 391,602 and 419,859 shares, respectively, of Series A Preferred Stock issued and outstanding. As of June 30, 2021 and December 31, 2020, there were 0 and 4,102,690 shares of Series B Preferred Stock issued and outstanding, respectively. As of June 30, 2021 and December 31, 2020, there were 0 and 7,399,649 shares of Series B1 Preferred Stock issued and outstanding, respectively. Series B Preferred Stock and Temporary Equity The following table represents the activity related to the Series B Preferred Stock, classified as Temporary Equity on the accompanying unaudited consolidated balance sheet, during the six months ended June 30, 2021 and 2020: 2021 2020 Balance at beginning of period $ 12,718,339 $ 11,006,406 Less: conversions of shares to common (8,446,837) — Less: exchanges of shares to common (4,747,250) — Plus: discount accretion — 854,364 Plus: dividends in kind 475,748 358,512 Balance at end of period $ — $ 12,219,282 At June 30, 2021 and December 31, 2020, a total of $0 and $317,970 of dividends were accrued on our outstanding Series B Preferred Stock, respectively. During the three months ended June 30, 2021 and 2020, we paid dividends in-kind in additional shares of Series B Preferred Stock of $157,778 and $180,591, respectively. Because such preferred stock was not redeemed on June 24, 2020, the preferred stock accrued a 10% per annum dividend (payable in-kind at the option of the Company), until such preferred stock was redeemed or converted into common stock, which preferred stock was automatically converted into common stock effective on June 25, 2021. Series B1 Preferred Stock and Temporary Equity The following table represents the activity related to the Series B1 Preferred Stock, classified as Temporary Equity on the accompanying unaudited consolidated balance sheet, for the six months ended June 30, 2021 and 2020: 2021 2020 Balance at beginning of period $ 11,036,173 $ 12,743,047 Less: conversions of shares to common (12,046,441) (3,368,474) Plus: discount accretion 507,282 616,874 Plus: dividends in kind 502,986 375,177 Balance at end of period $ — $ 10,366,624 As of June 30, 2021 and December 31, 2020, respectively, a total of $0 and $288,594 of dividends were accrued on our outstanding Series B1 Preferred Stock. During the three months ended June 30, 2021 and 2020, we paid dividends in-kind in additional shares of Series B1 Preferred Stock of $214,405 and $163,908, respectively. Because such preferred stock was not redeemed on June 24, 2020, the preferred stock accrued a 10% per annum dividend (payable in-kind at the option of the Company), until such preferred stock was redeemed or converted into common stock, which preferred stock was automatically converted into common stock effective on June 24, 2021. The Series B1 Warrants were revalued at June 30, 2021 and December 31, 2020 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 $20,164,443 and $330,412, respectively. The Dynamic Black Scholes Merton inputs used were: expected dividend rate of 0%, expected volatility of 66%-202%, risk free interest rate of 0.06% and expected term of 0.50 years. The Series B Warrants expired pursuant to their terms on December 24, 2020. The following is an analysis of changes in the derivative liability for the six months ended June 30: Level Three Roll-Forward 2021 2020 Balance at beginning of period $ 330,412 $ 1,969,216 Value of warrants exercised (3,453,504) — Change in valuation of warrants 23,287,535 (1,587,782) Balance at end of period $ 20,164,443 $ 381,434 Myrtle Grove Share Purchase and Subscription Agreement Amounts received by MG SPV from its direct sale of Class B Units to 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”) may only be used for additional investments in the Company’s former Belle Chasse, Louisiana, re-refining complex (the “MG Refinery”) or for day to day operations at the MG Refinery. At June 30, 2021, $0.1 million reported as cash and cash equivalents on the balance sheet is restricted to MG Refinery investments or operating expenses. 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) the fifth anniversary of July 26, 2019 (the " MG Closing Date ") 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 any unpaid Class B preference. The preference is defined as 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. The Company did not pay the preferential yield during the six months ended June 30, 2021. “ 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 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 ”), provided that such Heartland Closing was consummated by June 30, 2020, (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. No triggering events occurred during the six months ended June 30, 2021. Myrtle Grove Redeemable Noncontrolling Interest As a result of the Share Purchase and Subscription Agreement (the “ MG Share Purchase ”), 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. After initial recognition, in accordance with ASC 480-10-S99-3A, the Company applied a two-step approach to measure noncontrolling interests associated with MG SPV 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 $128,981 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 $761,993 increased the carrying amount of redeemable noncontrolling interests to the redemption value as of June 30, 2021 of $6,105,853. 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 relating to MG SPV as of June 30, 2021 and 2020. June 30, 2021 June 30, 2020 Beginning balance $ 5,472,841 $ 4,396,894 Net loss attributable to redeemable non-controlling interest (128,981) (82,401) Change in ownership — 71,171 Accretion of non-controlling interest to redemption value 761,993 519,792 Ending balance $ 6,105,853 $ 4,905,456 Heartland Share Purchase and Subscription Agreement On January 17, 2020 (the “Heartland Closing Date”), Vertex Operating, Tensile-Heartland Acquisition Corporation (“Tensile-Heartland”), an affiliate of Tensile, and solely for the purposes of the Heartland Guaranty (defined below), the Company, and 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 owns 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. 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). As a result of this transaction, MG SPV is owned 85.00% by Vertex Operating and 15.00% by Tensile-MG. The Heartland Share Purchase provides Tensile-Heartland an option, exercisable at its election, at 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 B 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 Heartland Closing Date and (b) 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 any unpaid Class A preference. The Class A preference is defined as 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 Unit holders through such Heartland Redemption date. “Heartland Triggering Events” include (a) any termination of an Administrative Services Agreement entered into with Tensile, pursuant to its terms and/or any material breach by us of the environmental remediation and indemnity agreement entered into with Tensile, (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 Heartland 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 an amount equal to the Class A preference; (b) second, the Class A Preferred Unit holders, 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. Heartland Variable interest entity The Company has assessed the Heartland SPV under the variable interest guidance in ASC 810. The Company determined that the Class A Units are not at risk due to a 22.5% preferred return and a redemption provision that, if elected, would require Heartland SPV to repurchase the Class A Units at their original cost plus the preferred return. The Company further determined that as a minority shareholder, holding only 35% of the voting rights, the Company does not have the ability to direct the activities of Heartland SPV that most significantly impact the entity’s performance. Based on this assessment, the Company concluded that Heartland SPV is a variable interest entity. In assessing if the Company is the primary beneficiary of Heartland SPV, the Company determined that certain provisions of the Heartland Company Agreement prohibiting the transfer of its Class B Units result in the Class A Unit holders being related parties under the de facto agents criteria in ASC 810. The Company and the Class A Unit holders, as a group, have the power to direct the significant activities of Heartland SPV and the obligations to absorb the losses and the right to receive the benefits that could potentially be significant to Heartland SPV. The Company concluded that substantially all of the activities of Heartland SPV are conducted on its behalf, and not on behalf of the Class A Unit holders, the decision maker, thus the Company is the primary beneficiary and required to consolidate Heartland SPV in accordance with ASC 810. The Company's consolidated financial statements include the assets, liabilities and results of operations of Heartland SPV for which the Company is the primary beneficiary. The other equity holders’ interests are reflected in net loss attributable to noncontrolling interests and redeemable noncontrolling interest in the consolidated statements of income and noncontrolling interests in the consolidated balance sheets. The following table summarizes the carrying amounts of Heartland SPV's assets and liabilities included in the Company’s consolidated balance sheets at June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 Cash and cash equivalents $ 11,417,106 $ 7,890,886 Accounts receivable, net 8,056,815 3,591,468 Inventory 800,575 629,667 Prepaid expense and other current assets 239,730 926,203 Total current assets 20,514,226 13,038,224 Fixed assets, net 7,102,863 6,549,139 Finance lease right-of-use assets 880,717 1,031,353 Operating lease right-of-use assets 306,866 299,758 Intangible assets, net 939,168 1,064,624 Other assets 106,643 108,643 Total assets $ 29,850,483 $ 22,091,741 Accounts payable $ 2,235,371 $ 1,753,160 Accrued expenses 395,845 307,340 Finance lease liability-current 356,317 346,029 Operating lease liability-current 235,644 251,037 Total current liabilities 3,223,177 2,657,566 Finance lease liability-long term 455,419 643,446 Operating lease liability-long term 71,222 48,721 Total liabilities $ 3,749,818 $ 3,349,733 The assets of Heartland SPV may only be used to settle the obligations of Heartland SPV, and may not be used for other consolidated entities. The liabilities of Heartland SPV are non-recourse to the general credit of the Company’s other consolidated entities. Heartland Redeemable Noncontrolling Interest As a result of the Heartland Share Purchase (as defined and discussed above), Tensile, through Tensile-Heartland, acquired an approximate 65.00% ownership interest in Heartland SPV, 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 $9,091,068 between the fair value of the consideration received of $21,000,000 and the carrying amount of the noncontrolling interest determined in accordance with ASC 810-10 of $11,908,932, 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 associated with Heartland SPV 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 income of $4,783,127 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. At June 30, 2021, the cumulative amount resulting from the application of the measurement guidance in ASC 810-10 exceeded the redemption value of $29,162,156. The table below presents the reconciliation of changes in redeemable noncontrolling interest relating to Heartland SPV as of June 30, 2021 and 2020. June 30, 2021 June 30, 2020 Beginning balance $ 26,138,833 $ — Initial adjustment of carrying amount of non-controlling interest — 11,908,932 Net income (loss) attributable to redeemable non-controlling interest 4,783,127 (308,432) Accretion of non-controlling interest to redemption value — 11,828,445 Ending balance $ 30,921,960 $ 23,428,945 |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company’s reportable segments include the (1) Black Oil, (2) Refining and Marketing, and (3) Recovery segments. (1) The Black Oil segment consists primarily of the sale of (a) petroleum products which include base oil and industrial fuels—which consist of used motor oils, cutterstock and fuel oil generated by our facilities; (b) oil collection services—which consist of used oil sales, burner fuel sales, antifreeze sales and service charges; (c) the sale of other re-refinery products including asphalt, condensate, recovered products, and used motor oil; (d) transportation revenues; and (e) the sale of VGO (vacuum gas oil)/marine fuel. (2) The Refining and Marketing segment consists primarily of the sale of pygas; industrial fuels, which are produced at a third-party facility; and distillates. (3) The Recovery segment consists primarily of revenues generated from the sale of ferrous and non-ferrous recyclable Metal(s) products that are recovered from manufacturing and consumption. It also includes revenues generated from trading/marketing of Group III Base Oils. We also disaggregate our revenue by product category for each of our segments, as we believe such disaggregation helps depict how our revenue and cash flows are affected by economic factors. Segment information for the three and six months ended June 30, 2021 and 2020 is as follows: THREE MONTHS ENDED JUNE 30, 2021 Black Oil Refining & Recovery Total Revenues: Base oil $ 12,928,334 $ — $ — $ 12,928,334 Pygas — 3,861,942 — 3,861,942 Industrial fuel — 409,522 — 409,522 Distillates (1) — 19,565,227 — 19,565,227 Oil collection services 2,022,975 — 68,309 2,091,284 Metals (2) — — 6,847,085 6,847,085 Other re-refinery products (3) 2,066,008 — 86,430 2,152,438 VGO/Marine fuel sales 17,339,079 — — 17,339,079 Total revenues 34,356,396 23,836,691 7,001,824 65,194,911 Cost of revenues (exclusive of depreciation and amortization shown separately below) 24,165,394 22,467,363 6,272,234 52,904,991 Depreciation and amortization attributable to costs of revenues 1,089,417 126,429 177,504 1,393,350 Gross profit 9,101,585 1,242,899 552,086 10,896,570 Selling, general and administrative expenses 7,516,867 688,108 620,965 8,825,940 Depreciation and amortization attributable to operating expenses 353,947 108,472 20,450 482,869 Income from operations $ 1,230,771 $ 446,319 $ (89,329) $ 1,587,761 THREE MONTHS ENDED JUNE 30, 2020 Black Oil Refining & Recovery Total Revenues: Base oil $ 4,919,622 $ — $ 555,350 $ 5,474,972 Pygas — 1,172,766 — 1,172,766 Industrial fuel 83,940 — — 83,940 Distillates (1) — 5,124,562 — 5,124,562 Oil collection services 2,058,734 — — 2,058,734 Metals (2) — — 2,978,313 2,978,313 Other re-refinery products (3) 849,885 — — 849,885 VGO/Marine fuel sales 3,630,955 — — 3,630,955 Total revenues 11,543,136 6,297,328 3,533,663 21,374,127 Cost of revenues (exclusive of depreciation and amortization shown separately below) 11,848,334 5,958,778 4,390,693 22,197,805 Depreciation and amortization attributable to costs of revenues 982,085 113,986 143,493 1,239,564 Gross profit (loss) (1,287,283) 224,564 (1,000,523) (2,063,242) Selling, general and administrative expenses 4,869,390 578,027 583,143 6,030,560 Depreciation and amortization attributable to operating expenses 347,667 105,780 20,450 473,897 Loss from operations $ (6,504,340) $ (459,243) $ (1,604,116) $ (8,567,699) SIX MONTHS ENDED JUNE 30, 2021 Black Oil Refining & Recovery Total Revenues: Base oil $ 22,042,228 $ — $ 295,315 $ 22,337,543 Pygas — 6,834,373 — 6,834,373 Industrial fuel — 721,215 — 721,215 Distillates (1) — 35,555,056 — 35,555,056 Oil collection services 3,584,901 — 144,739 3,729,640 Metals (2) — — 13,127,132 13,127,132 Other re-refinery products (3) 3,534,237 — 86,430 3,620,667 VGO/Marine fuel sales 37,353,278 — — 37,353,278 Total revenues 66,514,644 43,110,644 13,653,616 123,278,904 Cost of revenues (exclusive of depreciation and amortization shown separately below) 44,001,840 40,618,133 11,631,292 96,251,265 Depreciation and amortization attributable to costs of revenues 2,163,678 252,062 325,430 2,741,170 Gross profit 20,349,126 2,240,449 1,696,894 24,286,469 Selling, general and administrative expenses 13,938,563 1,447,518 1,366,439 16,752,520 Depreciation and amortization attributable to operating expenses 707,895 216,943 40,900 965,738 Income from operations $ 5,702,668 $ 575,988 $ 289,555 $ 6,568,211 SIX MONTHS ENDED JUNE 30, 2020 Black Oil Refining & Recovery Total Revenues: Base oil $ 12,282,349 $ — $ 1,358,250 $ 13,640,599 Pygas — 3,630,606 — 3,630,606 Industrial fuel 1,241,076 52,752 — 1,293,828 Distillates (1) — 5,124,562 — 5,124,562 Oil collection services 3,257,562 — — 3,257,562 Metals (2) — — 6,336,880 6,336,880 Other re-refinery products (3) 3,506,589 — — 3,506,589 VGO/Marine fuel sales 20,786,930 — — 20,786,930 Total revenues 41,074,506 8,807,920 7,695,130 57,577,556 Cost of revenues (exclusive of depreciation and amortization shown separately below) 31,914,575 8,554,830 8,565,254 49,034,659 Depreciation and amortization attributable to costs of revenues 1,918,980 219,754 277,252 2,415,986 Gross profit (loss) 7,240,951 33,336 (1,147,376) 6,126,911 Selling, general and administrative expenses 10,280,613 1,170,416 1,280,049 12,731,078 Depreciation and amortization attributable to operating expenses 682,783 206,178 43,072 932,033 Loss from operations $ (3,722,445) $ (1,343,258) $ (2,470,497) $ (7,536,200) (1) Distillates are finished fuel products such as gasoline and diesel fuels. (2) 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. (3) Other re-refinery products include the sales of asphalt, condensate, recovered products, and other petroleum products. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our effective tax rate of 0% on pretax income differs from the U.S. federal income tax rate of 21% because of the change in our valuation allowance. The year to date loss at June 30, 2021 puts the Company in an accumulated loss position for the cumulative 12 quarters then ended. For tax reporting purposes, we have net operating losses ("NOLs") of approximately $37.9 million as of June 30, 2021 that are available to reduce future taxable income. In determining the carrying value of our net deferred tax asset, the Company considered all negative and positive evidence. The Company has generated pre-tax loss of approximately $13.0 million from January 1, 2021 through June 30, 2021. |
COMMODITY DERIVATIVE INSTRUMENT
COMMODITY DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 and December 31, 2020, 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 futures agreements is based on the difference between the strike price and the New York Mercantile Exchange futures price for the applicable trading months. As of June 30, 2021 Contract Type Contract Period Weighted Average Strike Price (Barrels) Remaining Volume (Barrels) Fair Value Futures Jun. 2021- Aug. 2021 $ 89.39 40,000 $ (8,707) As of December 31, 2020 Contract Type Contract Period Weighted Average Strike Price (Barrels) Remaining Volume (Barrels) Fair Value Futures Dec. 2020-Mar. 2021 $ 62.33 55,000 $ (94,214) The carrying values of the Company's derivatives positions and their locations on the consolidated balance sheets as of June 30, 2021 and December 31, 2020 are presented in the table below. Balance Sheet Classification Contract Type 2021 2020 Derivative commodity liability Futures $ (8,707) $ (94,214) For the three months ended June 30, 2021 and 2020, we recognized a $1,203,628 loss and a $57,016 gain, respectively, on commodity derivative contracts on the consolidated statements of operations as part of our cost of revenues. For the six months ended June 30, 2021 and 2020, we recognized a $1,925,158 loss and a $4,484,798 gain, respectively, on commodity derivative contracts on the consolidated statements of operations as part of our cost of revenues. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
LEASES | LEASES 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 expenses for the three months ended June 30, 2021 and 2020 were $103,989 and $73,552, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the three months ended June 30, 2021 and 2020 were $22,880 and $22,019, respectively, and are included in interest expense on the unaudited consolidated statements of operations. The associated amortization expenses for the six months ended June 30, 2021 and 2020 were $207,972 and $126,673, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the six months ended June 30, 2021 and 2020 were $49,503 and $32,938, respectively, and are included in interest expense on the unaudited consolidated statements of operations. Please see “ Note 6. 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 unaudited consolidated statements of operations and are reported net of lease income. Lease income is not material to the results of operations for the three and six months ended June 30, 2021 and 2020. Total operating lease costs for both the three months ended June 30, 2021 and 2020 were $1.5 million. Total operating lease costs for both the six months ended June 30, 2021 and 2020 were $3.0 million. Cash Flows Cash paid for amounts included in operating lease liabilities, including some small leases with initial terms less than twelve months was $0.2 million and $0.9 million during the six months ended June 30, 2021 and 2020, and is included in operating cash flows. Cash paid for amounts included in finance lease was $252,175 and $162,312 during the six months ended June 30, 2021 and 2020, respectively, and is included in financing cash flows. Maturities of our lease liabilities for all operating leases are as follows as of June 30, 2021: June 30, 2021 Facilities Equipment Plant Railcar Total Year 1 $ 716,215 $ 115,223 $ 4,060,417 $ 648,371 $ 5,540,226 Year 2 574,638 7,500 4,060,417 443,541 5,086,096 Year 3 414,039 7,500 4,060,417 219,412 4,701,368 Year 4 338,400 6,250 4,060,417 — 4,405,067 Year 5 322,400 — 4,060,417 — 4,382,817 Thereafter 1,925,000 — 27,434,282 — 29,359,282 Total lease payments $ 4,290,692 $ 136,473 $ 47,736,367 $ 1,311,324 $ 53,474,856 Less: interest (1,413,113) (5,424) (18,797,855) (116,586) (20,332,978) Present value of lease liabilities $ 2,877,579 $ 131,049 $ 28,938,512 $ 1,194,738 $ 33,141,878 The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of June 30, 2021: Remaining lease term and discount rate: June 30, 2021 Weighted average remaining lease terms (years) Lease facilities 5.40 Lease equipment 0.80 Lease plant 11.80 Lease railcar 1.40 Weighted average discount rate Lease facilities 9.10 % 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. 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 The largest facility lease has an initial term through 2032. That lease does not have an extension option. 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-of-use asset and lease obligation. 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 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 expenses for the three months ended June 30, 2021 and 2020 were $103,989 and $73,552, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the three months ended June 30, 2021 and 2020 were $22,880 and $22,019, respectively, and are included in interest expense on the unaudited consolidated statements of operations. The associated amortization expenses for the six months ended June 30, 2021 and 2020 were $207,972 and $126,673, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the six months ended June 30, 2021 and 2020 were $49,503 and $32,938, respectively, and are included in interest expense on the unaudited consolidated statements of operations. Please see “ Note 6. 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 unaudited consolidated statements of operations and are reported net of lease income. Lease income is not material to the results of operations for the three and six months ended June 30, 2021 and 2020. Total operating lease costs for both the three months ended June 30, 2021 and 2020 were $1.5 million. Total operating lease costs for both the six months ended June 30, 2021 and 2020 were $3.0 million. Cash Flows Cash paid for amounts included in operating lease liabilities, including some small leases with initial terms less than twelve months was $0.2 million and $0.9 million during the six months ended June 30, 2021 and 2020, and is included in operating cash flows. Cash paid for amounts included in finance lease was $252,175 and $162,312 during the six months ended June 30, 2021 and 2020, respectively, and is included in financing cash flows. Maturities of our lease liabilities for all operating leases are as follows as of June 30, 2021: June 30, 2021 Facilities Equipment Plant Railcar Total Year 1 $ 716,215 $ 115,223 $ 4,060,417 $ 648,371 $ 5,540,226 Year 2 574,638 7,500 4,060,417 443,541 5,086,096 Year 3 414,039 7,500 4,060,417 219,412 4,701,368 Year 4 338,400 6,250 4,060,417 — 4,405,067 Year 5 322,400 — 4,060,417 — 4,382,817 Thereafter 1,925,000 — 27,434,282 — 29,359,282 Total lease payments $ 4,290,692 $ 136,473 $ 47,736,367 $ 1,311,324 $ 53,474,856 Less: interest (1,413,113) (5,424) (18,797,855) (116,586) (20,332,978) Present value of lease liabilities $ 2,877,579 $ 131,049 $ 28,938,512 $ 1,194,738 $ 33,141,878 The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of June 30, 2021: Remaining lease term and discount rate: June 30, 2021 Weighted average remaining lease terms (years) Lease facilities 5.40 Lease equipment 0.80 Lease plant 11.80 Lease railcar 1.40 Weighted average discount rate Lease facilities 9.10 % 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. 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 The largest facility lease has an initial term through 2032. That lease does not have an extension option. 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-of-use asset and lease obligation. 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. |
SHARE PURCHASE AND SUBSCRIPTION
SHARE PURCHASE AND SUBSCRIPTION AGREEMENTS | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
SHARE PURCHASE AND SUBSCRIPTION AGREEMENTS | 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 June 30, 2021, there were 59,909,219 common shares issued and outstanding. During the six months ended June 30, 2021, the Company issued 13,826,010 shares of common stock in connection with the conversion of Series A, Series B and B1 Convertible Preferred Stock, and exercise of warrants into common stock of the Company, pursuant to the terms of such securities. In addition, the Company issued 528,368 shares of common stock in connection with the exercise of options. During the six months ended June 30, 2020, the Company issued 2,159,278 shares of common stock in connection with the conversion of Series B1 Convertible Preferred Stock into common stock of the Company, pursuant to the terms of such securities. Series B Exchange Agreements On February 23, 2021, the Company entered into a Series B Preferred Stock Exchange Agreement with Pennington Capital LLC, the then holder of shares of Series B Preferred Stock, pursuant to which the holder exchanged 822,824 shares of the Series B Preferred Stock of the Company which it held, which had an aggregate liquidation preference of $2,550,754 ($3.10 per share), for 1,261,246 shares of the Company's common stock (based on an exchange ratio equal to approximately the five-day volume-weighted average price per share of the Company's common stock on the date the Exchange Agreement was entered into). The Series B Preferred Stock shares were subsequently returned to the Company and cancelled in consideration for the issuance of the 1,261,246 shares of common stock. The Exchange Agreement included customary representations and warranties of the parties. This resulted in a deemed dividend recognition of $267,899 due to more shares being issued than were provided in the original agreement. On March 2, 2021, the Company entered into a Series B Preferred Stock Exchange Agreement with Carrhae & Co FBO Wasatch Micro Cap Value Fund, the then holder of shares of Series B Preferred Stock, pursuant to which the holder exchanged 708,547 shares of the Series B Preferred Stock of the Company which it held, which had an aggregate liquidation preference of $2,196,496 ($3.10 per share), for 1,098,248 shares of the Company's common stock (based on an exchange ratio equal to $2.00 per share of common stock). The Series B Preferred Stock returned to the Company and cancelled in consideration for the issuance of the 1,098,248 shares of common stock. The Exchange Agreement included customary representations and warranties of the parties. This resulted in a deemed dividend recognition of $362,422 due to more shares being issued than were provided in the original agreement. As described in ASC 260-10-S99-2, when preferred stock is exchanged, the difference between fair value of the consideration transferred to the holders of the preferred stock and (2) the carrying amount of the preferred stock in the registrant’s balance sheet (net of issuance costs) should be subtracted from (or added to) net income to arrive at income available to common shareholders in the calculation of earnings per share. As a result, the Company recorded a credit to retained earnings with a corresponding debit to additional paid in capital (APIC) of $630,321 which was added to net income to arrive at net income available to common shareholders, as a result of the transactions above. Series B and B1 Conversions During the three months ended June 30, 2021, holders our Series B and Series B1 Preferred Stock converted 58,114 and 2,500,000 shares, respectively, of such preferred stock into the same number of shares of common stock, on a one-for-one basis, pursuant to the terms of such preferred stock. During the three months ended March 31, 2021, holders our Series B and Series B1 Preferred Stock converted 638,224 and 2,087,195 shares, respectively, of such preferred stock into the same number of shares of common stock, on a one-for-one basis, pursuant to the terms of such preferred stock. Series B and B1 Automatic Conversions Pursuant to the terms of the Series B Preferred Stock and Series B1 Preferred Stock of the Company, in the event that the closing sales price of the Company’s common stock was at least $6.20 (as to the Series B Preferred Stock) and $3.90 (as to the Series B1 Preferred Stock) per share for at least 20 consecutive trading days, such shares of Series B Preferred Stock and Series B1 Preferred Stock were to convert automatically into common stock of the Company on a one-for-one basis (the “Automatic Conversion Provisions”). Effective on June 24, 2021 (as to the Series B1 Preferred Stock) and June 25, 2021 (as to the Series B Preferred Stock), the Automatic Conversion Provisions of the Series B Preferred Stock and Series B1 Preferred Stock were triggered, and the outstanding shares of the Company’s Series B Preferred Stock and Series B1 Preferred Stock automatically converted into common stock of the Company. Specifically, the 1,783,292 then outstanding shares of Series B Preferred Stock automatically converted into 1,783,292 shares of common stock and the 3,134,889 then outstanding shares of Series B1 Preferred Stock automatically converted into 3,134,889 shares of common stock (or 4,918,181 shares of common stock in total). 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 Convertible Preferred Stock is 5,000,000 (“ Series A Preferred ”). The total number of designated shares of the Company’s Series B Convertible Preferred Stock is 10,000,000. The total number of designated shares of the Company’s Series B1 Convertible Preferred Stock is 17,000,000. As of June 30, 2021 and December 31, 2020, there were 391,602 and 419,859 shares, respectively, of Series A Preferred Stock issued and outstanding. As of June 30, 2021 and December 31, 2020, there were 0 and 4,102,690 shares of Series B Preferred Stock issued and outstanding, respectively. As of June 30, 2021 and December 31, 2020, there were 0 and 7,399,649 shares of Series B1 Preferred Stock issued and outstanding, respectively. Series B Preferred Stock and Temporary Equity The following table represents the activity related to the Series B Preferred Stock, classified as Temporary Equity on the accompanying unaudited consolidated balance sheet, during the six months ended June 30, 2021 and 2020: 2021 2020 Balance at beginning of period $ 12,718,339 $ 11,006,406 Less: conversions of shares to common (8,446,837) — Less: exchanges of shares to common (4,747,250) — Plus: discount accretion — 854,364 Plus: dividends in kind 475,748 358,512 Balance at end of period $ — $ 12,219,282 At June 30, 2021 and December 31, 2020, a total of $0 and $317,970 of dividends were accrued on our outstanding Series B Preferred Stock, respectively. During the three months ended June 30, 2021 and 2020, we paid dividends in-kind in additional shares of Series B Preferred Stock of $157,778 and $180,591, respectively. Because such preferred stock was not redeemed on June 24, 2020, the preferred stock accrued a 10% per annum dividend (payable in-kind at the option of the Company), until such preferred stock was redeemed or converted into common stock, which preferred stock was automatically converted into common stock effective on June 25, 2021. Series B1 Preferred Stock and Temporary Equity The following table represents the activity related to the Series B1 Preferred Stock, classified as Temporary Equity on the accompanying unaudited consolidated balance sheet, for the six months ended June 30, 2021 and 2020: 2021 2020 Balance at beginning of period $ 11,036,173 $ 12,743,047 Less: conversions of shares to common (12,046,441) (3,368,474) Plus: discount accretion 507,282 616,874 Plus: dividends in kind 502,986 375,177 Balance at end of period $ — $ 10,366,624 As of June 30, 2021 and December 31, 2020, respectively, a total of $0 and $288,594 of dividends were accrued on our outstanding Series B1 Preferred Stock. During the three months ended June 30, 2021 and 2020, we paid dividends in-kind in additional shares of Series B1 Preferred Stock of $214,405 and $163,908, respectively. Because such preferred stock was not redeemed on June 24, 2020, the preferred stock accrued a 10% per annum dividend (payable in-kind at the option of the Company), until such preferred stock was redeemed or converted into common stock, which preferred stock was automatically converted into common stock effective on June 24, 2021. The Series B1 Warrants were revalued at June 30, 2021 and December 31, 2020 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 $20,164,443 and $330,412, respectively. The Dynamic Black Scholes Merton inputs used were: expected dividend rate of 0%, expected volatility of 66%-202%, risk free interest rate of 0.06% and expected term of 0.50 years. The Series B Warrants expired pursuant to their terms on December 24, 2020. The following is an analysis of changes in the derivative liability for the six months ended June 30: Level Three Roll-Forward 2021 2020 Balance at beginning of period $ 330,412 $ 1,969,216 Value of warrants exercised (3,453,504) — Change in valuation of warrants 23,287,535 (1,587,782) Balance at end of period $ 20,164,443 $ 381,434 Myrtle Grove Share Purchase and Subscription Agreement Amounts received by MG SPV from its direct sale of Class B Units to 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”) may only be used for additional investments in the Company’s former Belle Chasse, Louisiana, re-refining complex (the “MG Refinery”) or for day to day operations at the MG Refinery. At June 30, 2021, $0.1 million reported as cash and cash equivalents on the balance sheet is restricted to MG Refinery investments or operating expenses. 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) the fifth anniversary of July 26, 2019 (the " MG Closing Date ") 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 any unpaid Class B preference. The preference is defined as 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. The Company did not pay the preferential yield during the six months ended June 30, 2021. “ 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 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 ”), provided that such Heartland Closing was consummated by June 30, 2020, (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. No triggering events occurred during the six months ended June 30, 2021. Myrtle Grove Redeemable Noncontrolling Interest As a result of the Share Purchase and Subscription Agreement (the “ MG Share Purchase ”), 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. After initial recognition, in accordance with ASC 480-10-S99-3A, the Company applied a two-step approach to measure noncontrolling interests associated with MG SPV 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 $128,981 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 $761,993 increased the carrying amount of redeemable noncontrolling interests to the redemption value as of June 30, 2021 of $6,105,853. 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 relating to MG SPV as of June 30, 2021 and 2020. June 30, 2021 June 30, 2020 Beginning balance $ 5,472,841 $ 4,396,894 Net loss attributable to redeemable non-controlling interest (128,981) (82,401) Change in ownership — 71,171 Accretion of non-controlling interest to redemption value 761,993 519,792 Ending balance $ 6,105,853 $ 4,905,456 Heartland Share Purchase and Subscription Agreement On January 17, 2020 (the “Heartland Closing Date”), Vertex Operating, Tensile-Heartland Acquisition Corporation (“Tensile-Heartland”), an affiliate of Tensile, and solely for the purposes of the Heartland Guaranty (defined below), the Company, and 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 owns 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. 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). As a result of this transaction, MG SPV is owned 85.00% by Vertex Operating and 15.00% by Tensile-MG. The Heartland Share Purchase provides Tensile-Heartland an option, exercisable at its election, at 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 B 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 Heartland Closing Date and (b) 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 any unpaid Class A preference. The Class A preference is defined as 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 Unit holders through such Heartland Redemption date. “Heartland Triggering Events” include (a) any termination of an Administrative Services Agreement entered into with Tensile, pursuant to its terms and/or any material breach by us of the environmental remediation and indemnity agreement entered into with Tensile, (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 Heartland 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 an amount equal to the Class A preference; (b) second, the Class A Preferred Unit holders, 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. Heartland Variable interest entity The Company has assessed the Heartland SPV under the variable interest guidance in ASC 810. The Company determined that the Class A Units are not at risk due to a 22.5% preferred return and a redemption provision that, if elected, would require Heartland SPV to repurchase the Class A Units at their original cost plus the preferred return. The Company further determined that as a minority shareholder, holding only 35% of the voting rights, the Company does not have the ability to direct the activities of Heartland SPV that most significantly impact the entity’s performance. Based on this assessment, the Company concluded that Heartland SPV is a variable interest entity. In assessing if the Company is the primary beneficiary of Heartland SPV, the Company determined that certain provisions of the Heartland Company Agreement prohibiting the transfer of its Class B Units result in the Class A Unit holders being related parties under the de facto agents criteria in ASC 810. The Company and the Class A Unit holders, as a group, have the power to direct the significant activities of Heartland SPV and the obligations to absorb the losses and the right to receive the benefits that could potentially be significant to Heartland SPV. The Company concluded that substantially all of the activities of Heartland SPV are conducted on its behalf, and not on behalf of the Class A Unit holders, the decision maker, thus the Company is the primary beneficiary and required to consolidate Heartland SPV in accordance with ASC 810. The Company's consolidated financial statements include the assets, liabilities and results of operations of Heartland SPV for which the Company is the primary beneficiary. The other equity holders’ interests are reflected in net loss attributable to noncontrolling interests and redeemable noncontrolling interest in the consolidated statements of income and noncontrolling interests in the consolidated balance sheets. The following table summarizes the carrying amounts of Heartland SPV's assets and liabilities included in the Company’s consolidated balance sheets at June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 Cash and cash equivalents $ 11,417,106 $ 7,890,886 Accounts receivable, net 8,056,815 3,591,468 Inventory 800,575 629,667 Prepaid expense and other current assets 239,730 926,203 Total current assets 20,514,226 13,038,224 Fixed assets, net 7,102,863 6,549,139 Finance lease right-of-use assets 880,717 1,031,353 Operating lease right-of-use assets 306,866 299,758 Intangible assets, net 939,168 1,064,624 Other assets 106,643 108,643 Total assets $ 29,850,483 $ 22,091,741 Accounts payable $ 2,235,371 $ 1,753,160 Accrued expenses 395,845 307,340 Finance lease liability-current 356,317 346,029 Operating lease liability-current 235,644 251,037 Total current liabilities 3,223,177 2,657,566 Finance lease liability-long term 455,419 643,446 Operating lease liability-long term 71,222 48,721 Total liabilities $ 3,749,818 $ 3,349,733 The assets of Heartland SPV may only be used to settle the obligations of Heartland SPV, and may not be used for other consolidated entities. The liabilities of Heartland SPV are non-recourse to the general credit of the Company’s other consolidated entities. Heartland Redeemable Noncontrolling Interest As a result of the Heartland Share Purchase (as defined and discussed above), Tensile, through Tensile-Heartland, acquired an approximate 65.00% ownership interest in Heartland SPV, 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 $9,091,068 between the fair value of the consideration received of $21,000,000 and the carrying amount of the noncontrolling interest determined in accordance with ASC 810-10 of $11,908,932, 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 associated with Heartland SPV 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 income of $4,783,127 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. At June 30, 2021, the cumulative amount resulting from the application of the measurement guidance in ASC 810-10 exceeded the redemption value of $29,162,156. The table below presents the reconciliation of changes in redeemable noncontrolling interest relating to Heartland SPV as of June 30, 2021 and 2020. June 30, 2021 June 30, 2020 Beginning balance $ 26,138,833 $ — Initial adjustment of carrying amount of non-controlling interest — 11,908,932 Net income (loss) attributable to redeemable non-controlling interest 4,783,127 (308,432) Accretion of non-controlling interest to redemption value — 11,828,445 Ending balance $ 30,921,960 $ 23,428,945 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Encina Credit Agreement Term Loan On July 1, 2021, the Company and Vertex Operating entered into an Eighth Amendment to Credit Agreement with EBC (the “8th Amendment”), which amendment amended the EBC Credit Agreement between the Company and certain of its subsidiaries, including Vertex Operating. Pursuant to the 8th Amendment, Encina Business Credit SPV, LLC agreed to loan the Company $5 million under the terms of the EBC Credit Agreement (the “Term Loan”), under the stipulation that the Company use such loaned funds solely to paydown amounts owed under the $10 million deposit note payable in connection with the entry into a purchase agreement ( the "Deposit Note"). The $5 million Term Loan bears interest at the variable-rate of LIBOR (0.16% at June 30, 2021) plus 6.5% per year, or to the extent that LIBOR is not available, the highest of the prime rate and the Federal Funds Rate plus 0.50%, in each case, plus 6%. We are required to repay the Term Loan in monthly installments of 1/48th of the amount borrowed, each month that the Term Loan is outstanding, with a final balloon payment due at maturity. The Term Loan is subject to customary events of defaults and other covenants set forth in the EBC Credit Agreement. The Term Loan is secured by Encina’s security interests over substantially all of our assets. Tensile Transactions On July 1, 2021, the Operating Agreement of MG SPV was amended to provide that from the date of such agreement until December 31, 2021, the Company (through Vertex Operating), is required to fund the working capital requirements of MG SPV, which advances are initially characterized as debt, but that Tensile MG may convert such debt into additional Class A Units of MG SPV (after December 31, 2021), at $1,000 per unit (the “MG SPV Amendment”). On July 1, 2021, Heartland SPV loaned Vertex Operating $7,000,000, which was evidenced by a Promissory Note (the “Heartland Note”). The Heartland Note accrues interest at the applicable federal rate of interest from time to time, increasing to 12% upon an event of default. Amounts borrowed under the Heartland Note are due ninety days after the date of the note or within five (5) days of the closing of the Sale Agreement describe below (whichever is earlier), and may be prepaid at any time without penalty. In the event the Heartland Note is not paid on or before the applicable due date, we agreed to use our best efforts to raise the funds necessary to repay the note as soon as possible. The Heartland Note includes customary events of defaults. The Company used the funds borrowed under the Heartland Note, to paydown a portion of the Deposit Note, with the remaining funds coming from a loan from EBC as discussed above. |
SUMMARY OF CRITICAL ACCOUNTIN_2
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted CashThe Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Inventory | Inventory Inventories of products consist of feedstocks, refined petroleum products and recovered ferrous and non-ferrous metals and are reported at the lower of cost or net realizable value. Cost is determined using the first-in, first-out (“ FIFO ”) method. The Company reviews its inventory commodities for impairment whenever events or circumstances indicate that the value may not be recoverable. |
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 Financial Accounting Standards Board (“ FASB ”) Accounting Standards Codification (" ASC |
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. |
Reclassification of Prior Year Presentation | Reclassification of Prior Year PresentationCertain prior period amounts have been reclassified to conform to current period presentation. These reclassifications had no effect on the reported results of operations. |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interests As more fully described in " Note 14. Share Purchase and Subscription Agreements ", the Company is party to put/call option agreements with the holder of Vertex Refining Myrtle Grove LLC (“MG SPV”) and HPRM LLC, a Delaware limited liability company, (“Heartland SPV”), which entities were formed as special purpose vehicles in connection with the transactions described in greater detail below, non-controlling interests. The put options permit MG SPV's and Heartland SPV's non-controlling interest holders, at any time on or after the earlier of (a) the fifth anniversary of the applicable closing date of such |
Variable Interest Entities | Variable Interest Entities The Company accounts for the investments it makes in certain legal entities in which equity investors do not have (1) sufficient equity at risk for the legal entity to finance its activities without additional subordinated financial support, (2) as a group (the holders of the equity investment at risk), either the power, through voting or similar rights, to direct the activities of the legal entity that most significantly impacts the entity’s economic performance, or (3) the obligation to absorb the expected losses of the legal entity or the right to receive expected residual returns of the legal entity. These certain legal entities are referred to as “variable interest entities” or “VIEs.” The Company consolidates the results of any such entity in which it determines that it has a controlling financial interest. The Company has a “controlling financial interest” in such an entity if the Company has both the power to direct the activities that most significantly affect the VIE’s economic performance and the obligation to absorb the losses of, or right to receive benefits from, the VIE that could be potentially significant to the VIE. On a quarterly basis, the Company reassesses whether it has a controlling financial interest in any investments it has in these certain legal entities. |
SUMMARY OF CRITICAL ACCOUNTIN_3
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of restrictions on cash and 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. June 30, 2021 unaudited June 30, 2020 Cash and cash equivalents $ 14,966,612 $ 17,754,301 Restricted cash 100,125 100,125 Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows $ 15,066,737 $ 17,854,426 |
CONCENTRATIONS, SIGNIFICANT C_2
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Concentrations, Significant Customers, Commitments And Contingencies Disclosure [Abstract] | |
Schedule of concentrations | At June 30, 2021 and 2020 and for each of the six months then ended, the Company’s revenues and receivables were comprised of the following customer concentrations: Six Months Ended June 30, 2021 Six Months Ended % of % of % of % of Customer 1 25% 12% 38% 7% Customer 2 10% 23% 12% 16% Customer 3 10% 5% 3% 7% For each of the six months ended June 30, 2021 and 2020, the Company's segment revenues were comprised of the following customer concentrations: % of Revenue by Segment % Revenue by Segment Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 Black Oil Refining Recovery Black Oil Refining Recovery Customer 1 46% —% —% 53% —% —% Customer 2 18% —% —% 17% —% —% Customer 3 —% 27% —% —% 16% —% Customer 4 —% —% 72% —% —% 22% |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following tables present our revenues disaggregated by geographical market and revenue source: Three Months Ended June 30, 2021 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 15,641,683 $ — $ — $ 15,641,683 Southern United States 18,714,713 23,836,691 7,001,824 49,553,228 $ 34,356,396 $ 23,836,691 $ 7,001,824 $ 65,194,911 Sources of Revenue Base oil $ 12,928,334 $ — $ — $ 12,928,334 Pygas — 3,861,942 — 3,861,942 Industrial fuel — 409,522 — 409,522 Distillates — 19,565,227 — 19,565,227 Oil collection services 2,022,975 — 68,309 2,091,284 Metals — — 6,847,085 6,847,085 Other re-refinery products 2,066,008 — 86,430 2,152,438 VGO/Marine fuel sales 17,339,079 — — 17,339,079 Total revenues $ 34,356,396 $ 23,836,691 $ 7,001,824 $ 65,194,911 Six Months Ended June 30, 2021 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 26,506,093 $ — $ — $ 26,506,093 Southern United States 40,008,551 43,110,644 13,653,616 96,772,811 $ 66,514,644 $ 43,110,644 $ 13,653,616 $ 123,278,904 Sources of Revenue Base oil $ 22,042,228 $ — $ 295,315 $ 22,337,543 Pygas — 6,834,373 — 6,834,373 Industrial fuel — 721,215 — 721,215 Distillates — 35,555,056 — 35,555,056 Oil collection services 3,584,901 — 144,739 3,729,640 Metals — — 13,127,132 13,127,132 Other re-refinery products 3,534,237 — 86,430 3,620,667 VGO/Marine fuel sales 37,353,278 — — 37,353,278 Total revenues $ 66,514,644 $ 43,110,644 $ 13,653,616 $ 123,278,904 Three Months Ended June 30, 2020 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 6,167,062 $ — $ — $ 6,167,062 Southern United States 5,376,074 6,297,328 3,533,663 15,207,065 $ 11,543,136 $ 6,297,328 $ 3,533,663 $ 21,374,127 Sources of Revenue Base oil $ 4,919,622 $ — $ 555,350 $ 5,474,972 Pygas — 1,172,766 — 1,172,766 Industrial fuel 83,940 — — 83,940 Distillates — 5,124,562 — 5,124,562 Oil collection services 2,058,734 — — 2,058,734 Metals — — 2,978,313 2,978,313 Other re-refinery products 849,885 — — 849,885 VGO/Marine fuel sales 3,630,955 — — 3,630,955 Total revenues $ 11,543,136 $ 6,297,328 $ 3,533,663 $ 21,374,127 Six Months Ended June 30, 2020 Black Oil Refining & Marketing Recovery Total Primary Geographical Markets Northern United States $ 15,725,630 $ — $ — $ 15,725,630 Southern United States 25,348,876 8,807,920 7,695,130 41,851,926 $ 41,074,506 $ 8,807,920 $ 7,695,130 $ 57,577,556 Sources of Revenue Base oil $ 12,282,349 $ — $ 1,358,250 $ 13,640,599 Pygas — 3,630,606 — 3,630,606 Industrial fuel 1,241,076 52,752 — 1,293,828 Distillates — 5,124,562 — 5,124,562 Oil collection services 3,257,562 — — 3,257,562 Metals — — 6,336,880 6,336,880 Other re-refinery products 3,506,589 — — 3,506,589 VGO/Marine fuel sales 20,786,930 — — 20,786,930 Total revenues $ 41,074,506 $ 8,807,920 $ 7,695,130 $ 57,577,556 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable, net, consists of the following at June 30, 2021 and December 31, 2020: June 30, 2021 Unaudited December 31, 2020 Accounts receivable trade $ 19,696,183 $ 11,751,679 Allowance for doubtful accounts (1,316,511) (612,746) Accounts receivable trade, net $ 18,379,672 $ 11,138,933 |
LINE OF CREDIT AND LONG-TERM _2
LINE OF CREDIT AND LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding debt facilities | The Company's outstanding debt facilities as of June 30, 2021 and December 31, 2020 are summarized as follows: Creditor Loan Type Origination Date Maturity Date Loan Amount Balance on June 30, 2021 Balance on December 31, 2020 Encina Business Credit, LLC Term Loan February 1, 2017 February 1, 2022 $ 20,000,000 $ 4,983,000 $ 5,433,000 Encina Business Credit SPV, LLC Revolving Note February 1, 2017 February 1, 2022 $ 10,000,000 1,165,183 133,446 Encina Business Credit, LLC Capex Loan August 7, 2020 February 1, 2022 $ 2,000,000 1,194,386 1,378,819 Wells Fargo Equipment Lease-Ohio Finance Lease April-May, 2019 April-May, 2024 $ 621,000 376,738 436,411 AVT Equipment Lease-Ohio Finance Lease April 2, 2020 April 2, 2023 $ 466,030 318,689 380,829 AVT Equipment Lease-HH Finance Lease May 22, 2020 May 22, 2023 $ 551,609 377,933 450,564 John Deere Note Note May 27, 2020 June 24, 2024 $ 152,643 112,768 131,303 Tetra Capital Lease Finance Lease May, 2018 May, 2022 $ 419,690 116,308 172,235 Loan-Leverage Lubricants SBA Loan July 18, 2020 July 18, 2050 $ 58,700 58,700 — Well Fargo Equipment Lease-VRM LA Finance Lease March, 2018 March, 2021 $ 30,408 — 1,804 Texas Citizens Bank PPP Loan May 5, 2020 April 28, 2022 $ 4,222,000 — 4,222,000 Various institutions Insurance premiums financed Various < 1 year $ 2,902,428 — 1,183,543 Total $ 8,703,705 $ 13,923,954 |
Schedule of future maturities of notes payable | Future contractual maturities of notes payable as of June 30, 2021 are summarized as follows: Creditor Year 1 Year 2 Year 3 Year 4 Year 5 Thereafter Encina Business Credit, LLC $ 4,983,000 $ — $ — $ — $ — $ — Encina Business Credit SPV, LLC 1,165,183 — — — — — Encina Business Credit, LLC 1,194,386 — — — — — John Deere Note 37,759 38,696 36,313 — — — Well Fargo Equipment Lease- Ohio 124,041 130,574 122,123 — — — AVT Equipment Lease-Ohio 132,443 186,246 — — — — AVT Equipment Lease-HH 154,805 223,128 — — — — Tetra Capital Lease 99,832 16,476 — — — — Loan-Leverage Lubricants — 413 1,273 1,321 1,371 54,322 Texas Citizens Bank — — — — — — Various institutions — — — — — — Totals $ 7,891,449 $ 595,533 $ 159,709 $ 1,321 $ 1,371 $ 54,322 |
PREFERRED STOCK AND DETACHABL_2
PREFERRED STOCK AND DETACHABLE WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Summary of temporary equity | The following table represents the activity related to the Series B Preferred Stock, classified as Temporary Equity on the accompanying unaudited consolidated balance sheet, during the six months ended June 30, 2021 and 2020: 2021 2020 Balance at beginning of period $ 12,718,339 $ 11,006,406 Less: conversions of shares to common (8,446,837) — Less: exchanges of shares to common (4,747,250) — Plus: discount accretion — 854,364 Plus: dividends in kind 475,748 358,512 Balance at end of period $ — $ 12,219,282 The following table represents the activity related to the Series B1 Preferred Stock, classified as Temporary Equity on the accompanying unaudited consolidated balance sheet, for the six months ended June 30, 2021 and 2020: 2021 2020 Balance at beginning of period $ 11,036,173 $ 12,743,047 Less: conversions of shares to common (12,046,441) (3,368,474) Plus: discount accretion 507,282 616,874 Plus: dividends in kind 502,986 375,177 Balance at end of period $ — $ 10,366,624 |
Schedule of liabilities with unobservable inputs | The following is an analysis of changes in the derivative liability for the six months ended June 30: Level Three Roll-Forward 2021 2020 Balance at beginning of period $ 330,412 $ 1,969,216 Value of warrants exercised (3,453,504) — Change in valuation of warrants 23,287,535 (1,587,782) Balance at end of period $ 20,164,443 $ 381,434 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of the company's reportable segment information | Segment information for the three and six months ended June 30, 2021 and 2020 is as follows: THREE MONTHS ENDED JUNE 30, 2021 Black Oil Refining & Recovery Total Revenues: Base oil $ 12,928,334 $ — $ — $ 12,928,334 Pygas — 3,861,942 — 3,861,942 Industrial fuel — 409,522 — 409,522 Distillates (1) — 19,565,227 — 19,565,227 Oil collection services 2,022,975 — 68,309 2,091,284 Metals (2) — — 6,847,085 6,847,085 Other re-refinery products (3) 2,066,008 — 86,430 2,152,438 VGO/Marine fuel sales 17,339,079 — — 17,339,079 Total revenues 34,356,396 23,836,691 7,001,824 65,194,911 Cost of revenues (exclusive of depreciation and amortization shown separately below) 24,165,394 22,467,363 6,272,234 52,904,991 Depreciation and amortization attributable to costs of revenues 1,089,417 126,429 177,504 1,393,350 Gross profit 9,101,585 1,242,899 552,086 10,896,570 Selling, general and administrative expenses 7,516,867 688,108 620,965 8,825,940 Depreciation and amortization attributable to operating expenses 353,947 108,472 20,450 482,869 Income from operations $ 1,230,771 $ 446,319 $ (89,329) $ 1,587,761 THREE MONTHS ENDED JUNE 30, 2020 Black Oil Refining & Recovery Total Revenues: Base oil $ 4,919,622 $ — $ 555,350 $ 5,474,972 Pygas — 1,172,766 — 1,172,766 Industrial fuel 83,940 — — 83,940 Distillates (1) — 5,124,562 — 5,124,562 Oil collection services 2,058,734 — — 2,058,734 Metals (2) — — 2,978,313 2,978,313 Other re-refinery products (3) 849,885 — — 849,885 VGO/Marine fuel sales 3,630,955 — — 3,630,955 Total revenues 11,543,136 6,297,328 3,533,663 21,374,127 Cost of revenues (exclusive of depreciation and amortization shown separately below) 11,848,334 5,958,778 4,390,693 22,197,805 Depreciation and amortization attributable to costs of revenues 982,085 113,986 143,493 1,239,564 Gross profit (loss) (1,287,283) 224,564 (1,000,523) (2,063,242) Selling, general and administrative expenses 4,869,390 578,027 583,143 6,030,560 Depreciation and amortization attributable to operating expenses 347,667 105,780 20,450 473,897 Loss from operations $ (6,504,340) $ (459,243) $ (1,604,116) $ (8,567,699) SIX MONTHS ENDED JUNE 30, 2021 Black Oil Refining & Recovery Total Revenues: Base oil $ 22,042,228 $ — $ 295,315 $ 22,337,543 Pygas — 6,834,373 — 6,834,373 Industrial fuel — 721,215 — 721,215 Distillates (1) — 35,555,056 — 35,555,056 Oil collection services 3,584,901 — 144,739 3,729,640 Metals (2) — — 13,127,132 13,127,132 Other re-refinery products (3) 3,534,237 — 86,430 3,620,667 VGO/Marine fuel sales 37,353,278 — — 37,353,278 Total revenues 66,514,644 43,110,644 13,653,616 123,278,904 Cost of revenues (exclusive of depreciation and amortization shown separately below) 44,001,840 40,618,133 11,631,292 96,251,265 Depreciation and amortization attributable to costs of revenues 2,163,678 252,062 325,430 2,741,170 Gross profit 20,349,126 2,240,449 1,696,894 24,286,469 Selling, general and administrative expenses 13,938,563 1,447,518 1,366,439 16,752,520 Depreciation and amortization attributable to operating expenses 707,895 216,943 40,900 965,738 Income from operations $ 5,702,668 $ 575,988 $ 289,555 $ 6,568,211 SIX MONTHS ENDED JUNE 30, 2020 Black Oil Refining & Recovery Total Revenues: Base oil $ 12,282,349 $ — $ 1,358,250 $ 13,640,599 Pygas — 3,630,606 — 3,630,606 Industrial fuel 1,241,076 52,752 — 1,293,828 Distillates (1) — 5,124,562 — 5,124,562 Oil collection services 3,257,562 — — 3,257,562 Metals (2) — — 6,336,880 6,336,880 Other re-refinery products (3) 3,506,589 — — 3,506,589 VGO/Marine fuel sales 20,786,930 — — 20,786,930 Total revenues 41,074,506 8,807,920 7,695,130 57,577,556 Cost of revenues (exclusive of depreciation and amortization shown separately below) 31,914,575 8,554,830 8,565,254 49,034,659 Depreciation and amortization attributable to costs of revenues 1,918,980 219,754 277,252 2,415,986 Gross profit (loss) 7,240,951 33,336 (1,147,376) 6,126,911 Selling, general and administrative expenses 10,280,613 1,170,416 1,280,049 12,731,078 Depreciation and amortization attributable to operating expenses 682,783 206,178 43,072 932,033 Loss from operations $ (3,722,445) $ (1,343,258) $ (2,470,497) $ (7,536,200) (1) Distillates are finished fuel products such as gasoline and diesel fuels. (2) 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. (3) Other re-refinery products include the sales of asphalt, condensate, recovered products, and other petroleum products. |
COMMODITY DERIVATIVE INSTRUME_2
COMMODITY DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments | The fair value of the crude oil futures agreements is based on the difference between the strike price and the New York Mercantile Exchange futures price for the applicable trading months. As of June 30, 2021 Contract Type Contract Period Weighted Average Strike Price (Barrels) Remaining Volume (Barrels) Fair Value Futures Jun. 2021- Aug. 2021 $ 89.39 40,000 $ (8,707) As of December 31, 2020 Contract Type Contract Period Weighted Average Strike Price (Barrels) Remaining Volume (Barrels) Fair Value Futures Dec. 2020-Mar. 2021 $ 62.33 55,000 $ (94,214) |
Schedule of fair value of derivative instruments within balance sheet | The carrying values of the Company's derivatives positions and their locations on the consolidated balance sheets as of June 30, 2021 and December 31, 2020 are presented in the table below. Balance Sheet Classification Contract Type 2021 2020 Derivative commodity liability Futures $ (8,707) $ (94,214) |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Schedule of maturities of operating lease liabilities | Maturities of our lease liabilities for all operating leases are as follows as of June 30, 2021: June 30, 2021 Facilities Equipment Plant Railcar Total Year 1 $ 716,215 $ 115,223 $ 4,060,417 $ 648,371 $ 5,540,226 Year 2 574,638 7,500 4,060,417 443,541 5,086,096 Year 3 414,039 7,500 4,060,417 219,412 4,701,368 Year 4 338,400 6,250 4,060,417 — 4,405,067 Year 5 322,400 — 4,060,417 — 4,382,817 Thereafter 1,925,000 — 27,434,282 — 29,359,282 Total lease payments $ 4,290,692 $ 136,473 $ 47,736,367 $ 1,311,324 $ 53,474,856 Less: interest (1,413,113) (5,424) (18,797,855) (116,586) (20,332,978) Present value of lease liabilities $ 2,877,579 $ 131,049 $ 28,938,512 $ 1,194,738 $ 33,141,878 |
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 June 30, 2021: Remaining lease term and discount rate: June 30, 2021 Weighted average remaining lease terms (years) Lease facilities 5.40 Lease equipment 0.80 Lease plant 11.80 Lease railcar 1.40 Weighted average discount rate Lease facilities 9.10 % Lease equipment 8.00 % Lease plant 9.37 % Lease railcar 8.00 % |
SHARE PURCHASE AND SUBSCRIPTI_2
SHARE PURCHASE AND SUBSCRIPTION AGREEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Reconciliation of changes in redeemable noncontrolling interest | The table below presents the reconciliation of changes in redeemable noncontrolling interest relating to MG SPV as of June 30, 2021 and 2020. June 30, 2021 June 30, 2020 Beginning balance $ 5,472,841 $ 4,396,894 Net loss attributable to redeemable non-controlling interest (128,981) (82,401) Change in ownership — 71,171 Accretion of non-controlling interest to redemption value 761,993 519,792 Ending balance $ 6,105,853 $ 4,905,456 June 30, 2021 June 30, 2020 Beginning balance $ 26,138,833 $ — Initial adjustment of carrying amount of non-controlling interest — 11,908,932 Net income (loss) attributable to redeemable non-controlling interest 4,783,127 (308,432) Accretion of non-controlling interest to redemption value — 11,828,445 Ending balance $ 30,921,960 $ 23,428,945 |
Schedule of variable interest entities | The following table summarizes the carrying amounts of Heartland SPV's assets and liabilities included in the Company’s consolidated balance sheets at June 30, 2021 and December 31, 2020: June 30, 2021 December 31, 2020 Cash and cash equivalents $ 11,417,106 $ 7,890,886 Accounts receivable, net 8,056,815 3,591,468 Inventory 800,575 629,667 Prepaid expense and other current assets 239,730 926,203 Total current assets 20,514,226 13,038,224 Fixed assets, net 7,102,863 6,549,139 Finance lease right-of-use assets 880,717 1,031,353 Operating lease right-of-use assets 306,866 299,758 Intangible assets, net 939,168 1,064,624 Other assets 106,643 108,643 Total assets $ 29,850,483 $ 22,091,741 Accounts payable $ 2,235,371 $ 1,753,160 Accrued expenses 395,845 307,340 Finance lease liability-current 356,317 346,029 Operating lease liability-current 235,644 251,037 Total current liabilities 3,223,177 2,657,566 Finance lease liability-long term 455,419 643,446 Operating lease liability-long term 71,222 48,721 Total liabilities $ 3,749,818 $ 3,349,733 |
BASIS OF PRESENTATION AND NAT_2
BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Hydrocarbons | |
Product Information | |
Percentage of decrease in prices (as a percent) | 67.00% |
SUMMARY OF CRITICAL ACCOUNTIN_4
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 14,966,612 | $ 10,895,044 | $ 17,754,301 | |
Restricted cash | 100,125 | 100,125 | 100,125 | |
Cash and cash equivalents and restricted cash as shown in the consolidated statements of cash flows | $ 15,066,737 | $ 10,995,169 | $ 17,854,426 | $ 4,199,825 |
SUMMARY OF CRITICAL ACCOUNTIN_5
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle | ||
Asset impairment | $ 0 | $ 0 |
Common Class B and Class A | ||
New Accounting Pronouncements or Change in Accounting Principle | ||
Annual return (as a percent) | 22.50% | |
Percentage of aggregate capital investment to be added to original per-unit price to determine cash purchase price (as a percent) | 50.00% |
CONCENTRATIONS, SIGNIFICANT C_3
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES - Customer Concentrations (Details) - Customer concentration risk | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues | Customer 1 | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 25.00% | 38.00% |
Revenues | Customer 1 | Black Oil | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 46.00% | 53.00% |
Revenues | Customer 1 | Refining | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0.00% | 0.00% |
Revenues | Customer 1 | Recovery | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0.00% | 0.00% |
Revenues | Customer 2 | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 10.00% | 12.00% |
Revenues | Customer 2 | Black Oil | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 18.00% | 17.00% |
Revenues | Customer 2 | Refining | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0.00% | 0.00% |
Revenues | Customer 2 | Recovery | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0.00% | 0.00% |
Revenues | Customer 3 | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 10.00% | 3.00% |
Revenues | Customer 3 | Black Oil | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0.00% | 0.00% |
Revenues | Customer 3 | Refining | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 27.00% | 16.00% |
Revenues | Customer 3 | Recovery | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0.00% | 0.00% |
Revenues | Customer 4 | Black Oil | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0.00% | 0.00% |
Revenues | Customer 4 | Refining | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0.00% | 0.00% |
Revenues | Customer 4 | Recovery | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 72.00% | 22.00% |
Receivables | Customer 1 | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 12.00% | 7.00% |
Receivables | Customer 2 | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 23.00% | 16.00% |
Receivables | Customer 3 | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 5.00% | 7.00% |
CONCENTRATIONS, SIGNIFICANT C_4
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 6 Months Ended | |||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | May 01, 2021 | Feb. 12, 2016lawsuit | |
Revenue, Major Customer | ||||
Related party payments | $ 134,185 | $ 30,061 | ||
Related party balance | $ 170,075 | $ 0 | ||
Leverage Lubricants LLC | ||||
Revenue, Major Customer | ||||
Ownership percentage (as a percent) | 51.00% | |||
Vertex Refining LA, LLC | ||||
Revenue, Major Customer | ||||
Number of lawsuits named as defendant | lawsuit | 5 | |||
Non Interest Holder Partner | ||||
Revenue, Major Customer | ||||
Ownership percentage (as a percent) | 49.00% |
CONCENTRATIONS, SIGNIFICANT C_5
CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES - Purchase and Sale Agreement (Details) bbl / d in Thousands, bbl in Millions | Jun. 29, 2021USD ($) | May 26, 2021USD ($)abbl / dbbl | Sep. 30, 2021USD ($) | Dec. 31, 2021USD ($) |
Deposit Note | Seller | ||||
Revenue, Major Customer | ||||
Promissory note | $ 10,000,000 | |||
Debt instrument, stated rate (as a percent) | 12.00% | |||
Debt instrument term, option one | 45 days | |||
Debt instrument term, option two | 5 years | |||
Capital Addition Purchase Commitments | Vertex Operating, Vertex Refining, LLC, Vertex Refining OH, LLC, Cedar Marine Terminals, L.P. and H & H Oil, L.P. | ||||
Revenue, Major Customer | ||||
Shares of common stock placed into escrow | $ 7,000,000 | |||
Period of shares in escrow | 18 months | |||
Consecutive trading days | 10 days | |||
Amount required for escrow | $ 7,000,000 | |||
Percentage in excess of outstanding common stock | 19.90% | |||
Break-Fee | $ 3,000,000 | |||
Capital Addition Purchase Commitments | Forecast | ||||
Revenue, Major Customer | ||||
Capital project | $ 85,000,000 | |||
Amount payable after closing | $ 8,700,000 | |||
Seller | Capital Addition Purchase Commitments | ||||
Revenue, Major Customer | ||||
Acre site | a | 800 | |||
Nameplate annual production capacity (bbl/day) | bbl / d | 91 | |||
Percentage of annual production as distillate, gasoline and jet fuel | 70.00% | |||
Inventory acquired (barrels) | bbl | 3.2 | |||
Initial base purchase price for the assets | $ 75,000,000 | |||
Purchase price adjustment and reimbursement | $ 225,000 | |||
Seller | Capital Addition Purchase Commitments | Forecast | ||||
Revenue, Major Customer | ||||
Purchase price adjustment and reimbursement | $ 13,000,000 | |||
Vertex Operating, Vertex Refining, LLC, Vertex Refining OH, LLC, Cedar Marine Terminals, L.P. and H & H Oil, L.P. | Capital Addition Purchase Commitments | Safety-Kleen | ||||
Revenue, Major Customer | ||||
Initial base purchase price for the assets | $ 140,000,000 | |||
Extension option, period | 90 days |
REVENUES (Details)
REVENUES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue | ||||
Total revenues | $ 65,194,911 | $ 21,374,127 | $ 123,278,904 | $ 57,577,556 |
Base oil | ||||
Disaggregation of Revenue | ||||
Total revenues | 12,928,334 | 5,474,972 | 22,337,543 | 13,640,599 |
Pygas | ||||
Disaggregation of Revenue | ||||
Total revenues | 3,861,942 | 1,172,766 | 6,834,373 | 3,630,606 |
Industrial fuel | ||||
Disaggregation of Revenue | ||||
Total revenues | 409,522 | 83,940 | 721,215 | 1,293,828 |
Distillates | ||||
Disaggregation of Revenue | ||||
Total revenues | 19,565,227 | 5,124,562 | 35,555,056 | 5,124,562 |
Oil collection services | ||||
Disaggregation of Revenue | ||||
Total revenues | 2,091,284 | 2,058,734 | 3,729,640 | 3,257,562 |
Metals | ||||
Disaggregation of Revenue | ||||
Total revenues | 6,847,085 | 2,978,313 | 13,127,132 | 6,336,880 |
Other re-refinery products | ||||
Disaggregation of Revenue | ||||
Total revenues | 2,152,438 | 849,885 | 3,620,667 | 3,506,589 |
VGO/Marine fuel sales | ||||
Disaggregation of Revenue | ||||
Total revenues | 17,339,079 | 3,630,955 | 37,353,278 | 20,786,930 |
Northern United States | ||||
Disaggregation of Revenue | ||||
Total revenues | 15,641,683 | 6,167,062 | 26,506,093 | 15,725,630 |
Southern United States | ||||
Disaggregation of Revenue | ||||
Total revenues | 49,553,228 | 15,207,065 | 96,772,811 | 41,851,926 |
Black Oil | ||||
Disaggregation of Revenue | ||||
Total revenues | 34,356,396 | 11,543,136 | 66,514,644 | 41,074,506 |
Black Oil | Base oil | ||||
Disaggregation of Revenue | ||||
Total revenues | 12,928,334 | 4,919,622 | 22,042,228 | 12,282,349 |
Black Oil | Pygas | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil | Industrial fuel | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 83,940 | 0 | 1,241,076 |
Black Oil | Distillates | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil | Oil collection services | ||||
Disaggregation of Revenue | ||||
Total revenues | 2,022,975 | 2,058,734 | 3,584,901 | 3,257,562 |
Black Oil | Metals | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil | Other re-refinery products | ||||
Disaggregation of Revenue | ||||
Total revenues | 2,066,008 | 849,885 | 3,534,237 | 3,506,589 |
Black Oil | VGO/Marine fuel sales | ||||
Disaggregation of Revenue | ||||
Total revenues | 17,339,079 | 3,630,955 | 37,353,278 | 20,786,930 |
Black Oil | Northern United States | ||||
Disaggregation of Revenue | ||||
Total revenues | 15,641,683 | 6,167,062 | 26,506,093 | 15,725,630 |
Black Oil | Southern United States | ||||
Disaggregation of Revenue | ||||
Total revenues | 18,714,713 | 5,376,074 | 40,008,551 | 25,348,876 |
Refining & Marketing | ||||
Disaggregation of Revenue | ||||
Total revenues | 23,836,691 | 6,297,328 | 43,110,644 | 8,807,920 |
Refining & Marketing | Base oil | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | Pygas | ||||
Disaggregation of Revenue | ||||
Total revenues | 3,861,942 | 1,172,766 | 6,834,373 | 3,630,606 |
Refining & Marketing | Industrial fuel | ||||
Disaggregation of Revenue | ||||
Total revenues | 409,522 | 0 | 721,215 | 52,752 |
Refining & Marketing | Distillates | ||||
Disaggregation of Revenue | ||||
Total revenues | 19,565,227 | 5,124,562 | 35,555,056 | 5,124,562 |
Refining & Marketing | Oil collection services | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | Metals | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | Other re-refinery products | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | VGO/Marine fuel sales | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | Northern United States | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | Southern United States | ||||
Disaggregation of Revenue | ||||
Total revenues | 23,836,691 | 6,297,328 | 43,110,644 | 8,807,920 |
Recovery | ||||
Disaggregation of Revenue | ||||
Total revenues | 7,001,824 | 3,533,663 | 13,653,616 | 7,695,130 |
Recovery | Base oil | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 555,350 | 295,315 | 1,358,250 |
Recovery | Pygas | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Recovery | Industrial fuel | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Recovery | Distillates | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Recovery | Oil collection services | ||||
Disaggregation of Revenue | ||||
Total revenues | 68,309 | 0 | 144,739 | 0 |
Recovery | Metals | ||||
Disaggregation of Revenue | ||||
Total revenues | 6,847,085 | 2,978,313 | 13,127,132 | 6,336,880 |
Recovery | Other re-refinery products | ||||
Disaggregation of Revenue | ||||
Total revenues | 86,430 | 0 | 86,430 | 0 |
Recovery | VGO/Marine fuel sales | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Recovery | Northern United States | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Recovery | Southern United States | ||||
Disaggregation of Revenue | ||||
Total revenues | $ 7,001,824 | $ 3,533,663 | $ 13,653,616 | $ 7,695,130 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | ||
Accounts receivable trade | $ 19,696,183 | $ 11,751,679 |
Allowance for doubtful accounts | (1,316,511) | (612,746) |
Accounts receivable trade, net | $ 18,379,672 | $ 11,138,933 |
LINE OF CREDIT AND LONG-TERM _3
LINE OF CREDIT AND LONG-TERM DEBT - Long Term Debt (Details) - USD ($) | Aug. 07, 2020 | Jul. 01, 2021 | Jun. 30, 2021 | May 26, 2021 | Apr. 01, 2021 | Mar. 31, 2021 | Jan. 01, 2021 | Nov. 27, 2020 | Nov. 26, 2020 | Dec. 31, 2019 |
Deposit Note | Seller | ||||||||||
Debt Instrument | ||||||||||
Promissory note | $ 10,000,000 | |||||||||
Deposit Note | Subsequent Event | Seller | ||||||||||
Debt Instrument | ||||||||||
Promissory note | $ 10,000,000 | |||||||||
EBC Credit Agreement | Capex Loan | ||||||||||
Debt Instrument | ||||||||||
Line of credit, maximum borrowing capacity | $ 2,000,000 | |||||||||
Minimum advance request | 500,000 | |||||||||
Advance request multiples | 100,000 | |||||||||
Debt instrument interest rate effective percentage | 0.16% | |||||||||
Daily availability requirements | $ 1,000,000 | |||||||||
Line of credit capital expenditure limitation | $ 3,000,000 | $ 4,000,000 | $ 3,000,000 | $ 3,000,000 | ||||||
Line of credit, minimum required availability | $ 2,000,000 | $ 1,000,000 | $ 2,000,000 | |||||||
EBC Credit Agreement | Capex Loan | LIBOR | ||||||||||
Debt Instrument | ||||||||||
Interest rate (percentage) | 7.00% | |||||||||
EBC Credit Agreement | Capex Loan | Prime Rate | ||||||||||
Debt Instrument | ||||||||||
Interest rate (percentage) | 0.50% | |||||||||
EBC Credit Agreement | Capex Loan | Federal fund rate | ||||||||||
Debt Instrument | ||||||||||
Interest rate (percentage) | 6.00% | |||||||||
ABL Credit Agreement | ||||||||||
Debt Instrument | ||||||||||
Line of credit, minimum required availability | $ 2,000,000 | $ 1,000,000 |
LINE OF CREDIT AND LONG-TERM _4
LINE OF CREDIT AND LONG-TERM DEBT - Loan Agreement (Details) - USD ($) | Jun. 22, 2021 | May 01, 2021 | Jul. 18, 2020 | May 27, 2020 | May 04, 2020 |
Leverage Lubricants LLC | |||||
Debt Instrument | |||||
Ownership percentage (as a percent) | 51.00% | ||||
SBA Loan | Leverage Lubricants LLC | |||||
Debt Instrument | |||||
Amount borrowed | $ 58,700 | ||||
Debt instrument, stated rate (as a percent) | 3.75% | ||||
Ownership percentage (as a percent) | 51.00% | ||||
Secured debt | Contract Security Agreement | |||||
Debt Instrument | |||||
Amount borrowed | $ 152,643 | ||||
Debt instrument, stated rate (as a percent) | 2.45% | ||||
Unsecured Debt | Paycheck Protection Program | |||||
Debt Instrument | |||||
Amount borrowed | $ 4,222,000 | $ 4,220,000 | |||
Debt instrument, stated rate (as a percent) | 1.00% |
LINE OF CREDIT AND LONG-TERM _5
LINE OF CREDIT AND LONG-TERM DEBT - Insurance Premiums (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Instrument | ||
Long-term debt | $ 8,703,705 | $ 13,923,954 |
Insurance premiums financed | Various institutions | ||
Debt Instrument | ||
Long-term debt | $ 0 | $ 1,183,543 |
Insurance premiums financed | Various institutions | Minimum | ||
Debt Instrument | ||
Debt instrument, stated rate (as a percent) | 4.00% | |
Insurance premiums financed | Various institutions | Maximum | ||
Debt Instrument | ||
Debt instrument, stated rate (as a percent) | 4.90% |
LINE OF CREDIT AND LONG-TERM _6
LINE OF CREDIT AND LONG-TERM DEBT - Finance Leases (Details) | Jul. 28, 2020USD ($) | May 22, 2020USD ($)contract | Apr. 02, 2020USD ($)contract | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Lessee, Lease, Description | ||||||
Finance lease payment | $ 252,175 | $ 162,312 | ||||
Secured debt | AVT Equipment Lease-Ohio | ||||||
Lessee, Lease, Description | ||||||
Number of finance leases assumed | contract | 1 | |||||
Finance lease payment | $ 9,322 | |||||
Finance lease term | 3 years | |||||
Secured debt | Finance Lease Originated July 28, 2020 | ||||||
Lessee, Lease, Description | ||||||
Finance lease payment | $ 3,545 | |||||
Finance lease term | 3 years | |||||
Secured debt | AVT Equipment Lease-HH | ||||||
Lessee, Lease, Description | ||||||
Number of finance leases assumed | contract | 1 | |||||
Finance lease payment | $ 15,078 | |||||
Finance lease term | 3 years | |||||
Finance Lease | AVT Equipment Lease-Ohio | ||||||
Lessee, Lease, Description | ||||||
Finance lease obligation | 318,689 | $ 380,829 | ||||
Finance Lease | AVT Equipment Lease-HH | ||||||
Lessee, Lease, Description | ||||||
Finance lease obligation | $ 377,933 | $ 450,564 |
LINE OF CREDIT AND LONG-TERM _7
LINE OF CREDIT AND LONG-TERM DEBT - Outstanding Debt Facilities (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Long-term Debt | ||
Long-term debt | $ 8,703,705 | $ 13,923,954 |
Term Loan | Encina Business Credit, LLC | ||
Long-term Debt | ||
Loan Amount | 20,000,000 | |
Long-term debt | 4,983,000 | 5,433,000 |
Term Loan | John Deere Note | ||
Long-term Debt | ||
Loan Amount | 152,643 | |
Long-term debt | 112,768 | 131,303 |
Revolving Note | Encina Business Credit SPV, LLC | ||
Long-term Debt | ||
Loan Amount | 10,000,000 | |
Long-term debt | 1,165,183 | 133,446 |
Capex Loan | Encina Business Credit, LLC | ||
Long-term Debt | ||
Loan Amount | 2,000,000 | |
Long-term debt | 1,194,386 | 1,378,819 |
Finance Lease | AVT Equipment Lease-Ohio | ||
Long-term Debt | ||
Loan Amount | 466,030 | |
Finance lease obligation | 318,689 | 380,829 |
Finance Lease | AVT Equipment Lease-HH | ||
Long-term Debt | ||
Loan Amount | 551,609 | |
Finance lease obligation | 377,933 | 450,564 |
Finance Lease | Wells Fargo Equipment Lease-Ohio | ||
Long-term Debt | ||
Loan Amount | 621,000 | |
Finance lease obligation | 376,738 | 436,411 |
Finance Lease | Tetra Capital Lease | ||
Long-term Debt | ||
Loan Amount | 419,690 | |
Finance lease obligation | 116,308 | 172,235 |
Finance Lease | Well Fargo Equipment Lease-VRM LA | ||
Long-term Debt | ||
Loan Amount | 30,408 | |
Finance lease obligation | 0 | 1,804 |
SBA Loan | Loan-Leverage Lubricants | ||
Long-term Debt | ||
Loan Amount | 58,700 | |
Long-term debt | 58,700 | 0 |
PPP Loan | Texas Citizens Bank | ||
Long-term Debt | ||
Loan Amount | 4,222,000 | |
Long-term debt | 0 | 4,222,000 |
Insurance premiums financed | Various institutions | ||
Long-term Debt | ||
Loan Amount | 2,902,428 | |
Long-term debt | $ 0 | $ 1,183,543 |
LINE OF CREDIT AND LONG-TERM _8
LINE OF CREDIT AND LONG-TERM DEBT - Future Contractual Maturities (Details) | Jun. 30, 2021USD ($) |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | $ 7,891,449 |
Year 2 | 595,533 |
Year 3 | 159,709 |
Year 4 | 1,321 |
Year 5 | 1,371 |
Thereafter | 54,322 |
Encina Business Credit, LLC | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 4,983,000 |
Year 2 | 0 |
Year 3 | 0 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
Encina Business Credit SPV, LLC | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 1,165,183 |
Year 2 | 0 |
Year 3 | 0 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
Encina Business Credit, LLC | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 1,194,386 |
Year 2 | 0 |
Year 3 | 0 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
John Deere Note | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 37,759 |
Year 2 | 38,696 |
Year 3 | 36,313 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
Well Fargo Equipment Lease- Ohio | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 124,041 |
Year 2 | 130,574 |
Year 3 | 122,123 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
AVT Equipment Lease-Ohio | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 132,443 |
Year 2 | 186,246 |
Year 3 | 0 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
AVT Equipment Lease-HH | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 154,805 |
Year 2 | 223,128 |
Year 3 | 0 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
Tetra Capital Lease | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 99,832 |
Year 2 | 16,476 |
Year 3 | 0 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
Loan-Leverage Lubricants | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 0 |
Year 2 | 413 |
Year 3 | 1,273 |
Year 4 | 1,321 |
Year 5 | 1,371 |
Thereafter | 54,322 |
Texas Citizens Bank | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 0 |
Year 2 | 0 |
Year 3 | 0 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
Various institutions | |
Maturities of Long-term Debt and Capital Lease Obligations [Abstract] | |
Year 1 | 0 |
Year 2 | 0 |
Year 3 | 0 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | $ 0 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Options to purchase (in shares) | 5,641,778 | 5,140,288 |
Warrants to purchase (in shares) | 1,864,376 | 8,633,193 |
Series B Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Convertible preferred stock, common stock issuable upon conversion (in shares) | 0 | 3,883,449 |
Series B1 Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Convertible preferred stock, common stock issuable upon conversion (in shares) | 0 | 7,004,236 |
Series A Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Conversion of stock, shares issued (in shares) | 391,602 | 419,859 |
COMMON STOCK (Details)
COMMON STOCK (Details) - USD ($) | Jun. 24, 2021 | Mar. 02, 2021 | Feb. 23, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 25, 2021 | Dec. 31, 2020 |
Conversion of Stock | |||||||||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Common stock, shares issued (in shares) | 59,909,219 | 59,909,219 | 45,554,841 | ||||||
Common stock, shares outstanding (in shares) | 59,909,219 | 59,909,219 | 45,554,841 | ||||||
Accumulated deficit | $ (109,420,115) | $ (109,420,115) | $ (90,008,778) | ||||||
Additional paid-in capital | $ 125,803,839 | $ 125,803,839 | $ 94,569,674 | ||||||
Series B Preferred Stock | |||||||||
Conversion of Stock | |||||||||
Shares issued (in dollars per share) | $ 6.20 | $ 6.20 | |||||||
Number of shares converted into common stock (in shares) | 58,114 | 638,224 | 58,114 | 1,783,292 | |||||
Conversion basis (in shares) | 1 | 1 | 1 | ||||||
Consecutive trading days | 20 days | ||||||||
Preferred stock, shares outstanding (in shares) | 1,783,292 | ||||||||
Series B1 Preferred Stock | |||||||||
Conversion of Stock | |||||||||
Shares issued (in dollars per share) | $ 3.90 | $ 3.90 | |||||||
Number of shares converted into common stock (in shares) | 3,134,889 | 2,500,000 | 2,087,195 | 2,500,000 | |||||
Preferred stock, shares outstanding (in shares) | 3,134,889 | ||||||||
Common Stock | |||||||||
Conversion of Stock | |||||||||
Shares issued as result of share conversion (in shares) | 4,918,181 | ||||||||
Pennington Capital LLC | Series B Preferred Stock | |||||||||
Conversion of Stock | |||||||||
Preferred stock, held (in shares) | 822,824 | ||||||||
Preferred stock, liquidation preference | $ 2,550,754 | ||||||||
Liquidation preference per share (in dollars per share) | $ 3.10 | ||||||||
Preferred stock, liquidation preference (in shares) | 1,261,246 | ||||||||
Volume weighted average price, period | 5 days | ||||||||
Cancelled in consideration for the issuance (in shares) | 1,261,246 | ||||||||
Deemed dividend recognition | $ 362,422 | $ 267,899 | |||||||
Carrhae & Co FBO Wasatch Micro Cap Value Fund | |||||||||
Conversion of Stock | |||||||||
Accumulated deficit | $ 630,321 | $ 630,321 | |||||||
Additional paid-in capital | $ 630,321 | $ 630,321 | |||||||
Carrhae & Co FBO Wasatch Micro Cap Value Fund | Series B Preferred Stock | |||||||||
Conversion of Stock | |||||||||
Preferred stock, held (in shares) | 708,547 | ||||||||
Preferred stock, liquidation preference | $ 2,196,496 | ||||||||
Liquidation preference per share (in dollars per share) | $ 3.10 | ||||||||
Preferred stock, liquidation preference (in shares) | 1,098,248 | ||||||||
Cancelled in consideration for the issuance (in shares) | 1,098,248 | ||||||||
Shares issued (in dollars per share) | $ 2 | ||||||||
Common Stock | |||||||||
Conversion of Stock | |||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||
Shares issued as result of share conversion (in shares) | 13,826,010 | 2,159,278 | |||||||
Exercise of options to purchase common stock (in shares) | 505,376 | 22,992 | 528,368 | ||||||
Common Stock | Series B1 Preferred Stock | |||||||||
Conversion of Stock | |||||||||
Exercise of options to purchase common stock (in shares) | 156,792 | 1,079,753 |
PREFERRED STOCK AND DETACHABL_3
PREFERRED STOCK AND DETACHABLE WARRANTS - Narrative (Details) | Jun. 24, 2020 | Jun. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2020USD ($) | Jun. 25, 2021shares | Jun. 24, 2021shares | Dec. 31, 2020USD ($)$ / sharesshares |
Class of Stock | ||||||||
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||
Liabilities at fair value | $ | $ 20,164,443 | $ 20,164,443 | $ 330,412 | |||||
Dividends payable | $ | $ (258,138) | $ 704,716 | $ (258,138) | $ 704,716 | ||||
Liability | Expected Dividend Rate | ||||||||
Class of Stock | ||||||||
Warrant measurement input (as a percent) | 0 | 0 | ||||||
Series A Preferred Stock | ||||||||
Class of Stock | ||||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | 5,000,000 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares issued (in shares) | 391,602 | 391,602 | 419,859 | |||||
Preferred stock, shares outstanding (in shares) | 391,602 | 391,602 | 419,859 | |||||
Series B Preferred Stock | ||||||||
Class of Stock | ||||||||
Preferred stock, shares outstanding (in shares) | 1,783,292 | |||||||
Temporary equity, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | |||||
Temporary equity, shares outstanding (in shares) | 0 | 0 | 4,102,690 | |||||
Temporary equity, shares issued (in shares) | 0 | 0 | 4,102,690 | |||||
Dividends payable | $ | $ 0 | $ 0 | $ 317,970 | |||||
Dividends paid in kind | $ | $ 157,778 | 180,591 | $ 475,748 | 358,512 | ||||
Preferred stock, dividend percentage (as a percent) | 10.00% | |||||||
Series B Preferred Stock | Liability | Risk Free Interest Rate | ||||||||
Class of Stock | ||||||||
Warrant measurement input (as a percent) | 0.0006 | 0.0006 | ||||||
Series B Preferred Stock | Liability | Minimum | Expected Volatility Rate | ||||||||
Class of Stock | ||||||||
Warrant measurement input (as a percent) | 0.66 | 0.66 | ||||||
Series B Preferred Stock | Liability | Maximum | Expected Volatility Rate | ||||||||
Class of Stock | ||||||||
Warrant measurement input (as a percent) | 2.02 | 2.02 | ||||||
Series B1 Preferred Stock | ||||||||
Class of Stock | ||||||||
Preferred stock, shares outstanding (in shares) | 3,134,889 | |||||||
Temporary equity, shares authorized (in shares) | 17,000,000 | 17,000,000 | 17,000,000 | |||||
Temporary equity, shares outstanding (in shares) | 0 | 0 | 7,399,649 | |||||
Temporary equity, shares issued (in shares) | 0 | 0 | 7,399,649 | |||||
Dividends payable | $ | $ 0 | $ 0 | $ 288,594 | |||||
Dividends paid in kind | $ | $ 214,405 | $ 163,908 | $ 502,986 | $ 375,177 | ||||
Preferred stock, dividend percentage (as a percent) | 10.00% | |||||||
Series B1 Preferred Stock | Liability | ||||||||
Class of Stock | ||||||||
Expected term (years) | 6 months | 6 months | ||||||
Series B1 Preferred Stock | Liability | Minimum | Expected Volatility Rate | ||||||||
Class of Stock | ||||||||
Warrant measurement input (as a percent) | 0.66 | 0.66 | ||||||
Series B1 Preferred Stock | Liability | Maximum | Expected Volatility Rate | ||||||||
Class of Stock | ||||||||
Warrant measurement input (as a percent) | 2.02 | 2.02 |
PREFERRED STOCK AND DETACHABL_4
PREFERRED STOCK AND DETACHABLE WARRANTS - Activity in Preferred Stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Increase (Decrease) in Temporary Equity | ||||||
Balance at beginning of period | $ 55,366,186 | $ 55,366,186 | ||||
Plus: discount accretion | $ 283,555 | 223,727 | $ 539,235 | $ 932,003 | ||
Balance at end of period | 37,027,813 | 37,027,813 | ||||
Series B Preferred Stock | ||||||
Increase (Decrease) in Temporary Equity | ||||||
Balance at beginning of period | 12,718,339 | 11,006,406 | 12,718,339 | $ 11,006,406 | ||
Less: conversions of shares to common | (8,446,837) | 0 | ||||
Less: exchanges of shares to common | (4,747,250) | 0 | ||||
Plus: discount accretion | 0 | 854,364 | ||||
Plus: dividends in kind | 157,778 | 180,591 | 475,748 | 358,512 | ||
Balance at end of period | 0 | 12,219,282 | 0 | 12,219,282 | ||
Series B1 Preferred Stock | ||||||
Increase (Decrease) in Temporary Equity | ||||||
Balance at beginning of period | $ 11,036,173 | $ 12,743,047 | 11,036,173 | 12,743,047 | ||
Less: conversions of shares to common | (12,046,441) | (3,368,474) | ||||
Plus: discount accretion | 507,282 | 616,874 | ||||
Plus: dividends in kind | 214,405 | 163,908 | 502,986 | 375,177 | ||
Balance at end of period | $ 0 | $ 10,366,624 | $ 0 | $ 10,366,624 |
PREFERRED STOCK AND DETACHABL_5
PREFERRED STOCK AND DETACHABLE WARRANTS - Changes in Derivative Liability (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Balance at beginning of period | $ 330,412 | $ 1,969,216 |
Value of warrants exercised | (3,453,504) | 0 |
Change in valuation of warrants | 23,287,535 | (1,587,782) |
Balance at end of period | $ 20,164,443 | $ 381,434 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment Reporting Information | ||||
Total revenues | $ 65,194,911 | $ 21,374,127 | $ 123,278,904 | $ 57,577,556 |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 52,904,991 | 22,197,805 | 96,251,265 | 49,034,659 |
Depreciation and amortization attributable to costs of revenues | 1,393,350 | 1,239,564 | 2,741,170 | 2,415,986 |
Gross profit (loss) | 10,896,570 | (2,063,242) | 24,286,469 | 6,126,911 |
Selling, general and administrative expenses | 8,825,940 | 6,030,560 | 16,752,520 | 12,731,078 |
Depreciation and amortization attributable to operating expenses | 482,869 | 473,897 | 965,738 | 932,033 |
Income (loss) from operations | 1,587,761 | (8,567,699) | 6,568,211 | (7,536,200) |
Base oil | ||||
Segment Reporting Information | ||||
Total revenues | 12,928,334 | 5,474,972 | 22,337,543 | 13,640,599 |
Pygas | ||||
Segment Reporting Information | ||||
Total revenues | 3,861,942 | 1,172,766 | 6,834,373 | 3,630,606 |
Industrial fuel | ||||
Segment Reporting Information | ||||
Total revenues | 409,522 | 83,940 | 721,215 | 1,293,828 |
Distillates | ||||
Segment Reporting Information | ||||
Total revenues | 19,565,227 | 5,124,562 | 35,555,056 | 5,124,562 |
Oil collection services | ||||
Segment Reporting Information | ||||
Total revenues | 2,091,284 | 2,058,734 | 3,729,640 | 3,257,562 |
Metals | ||||
Segment Reporting Information | ||||
Total revenues | 6,847,085 | 2,978,313 | 13,127,132 | 6,336,880 |
Other re-refinery products | ||||
Segment Reporting Information | ||||
Total revenues | 2,152,438 | 849,885 | 3,620,667 | 3,506,589 |
VGO/Marine fuel sales | ||||
Segment Reporting Information | ||||
Total revenues | 17,339,079 | 3,630,955 | 37,353,278 | 20,786,930 |
Black Oil | ||||
Segment Reporting Information | ||||
Total revenues | 34,356,396 | 11,543,136 | 66,514,644 | 41,074,506 |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 24,165,394 | 11,848,334 | 44,001,840 | 31,914,575 |
Depreciation and amortization attributable to costs of revenues | 1,089,417 | 982,085 | 2,163,678 | 1,918,980 |
Gross profit (loss) | 9,101,585 | (1,287,283) | 20,349,126 | 7,240,951 |
Selling, general and administrative expenses | 7,516,867 | 4,869,390 | 13,938,563 | 10,280,613 |
Depreciation and amortization attributable to operating expenses | 353,947 | 347,667 | 707,895 | 682,783 |
Income (loss) from operations | 1,230,771 | (6,504,340) | 5,702,668 | (3,722,445) |
Black Oil | Base oil | ||||
Segment Reporting Information | ||||
Total revenues | 12,928,334 | 4,919,622 | 22,042,228 | 12,282,349 |
Black Oil | Pygas | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil | Industrial fuel | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 83,940 | 0 | 1,241,076 |
Black Oil | Distillates | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil | Oil collection services | ||||
Segment Reporting Information | ||||
Total revenues | 2,022,975 | 2,058,734 | 3,584,901 | 3,257,562 |
Black Oil | Metals | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil | Other re-refinery products | ||||
Segment Reporting Information | ||||
Total revenues | 2,066,008 | 849,885 | 3,534,237 | 3,506,589 |
Black Oil | VGO/Marine fuel sales | ||||
Segment Reporting Information | ||||
Total revenues | 17,339,079 | 3,630,955 | 37,353,278 | 20,786,930 |
Refining & Marketing | ||||
Segment Reporting Information | ||||
Total revenues | 23,836,691 | 6,297,328 | 43,110,644 | 8,807,920 |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 22,467,363 | 5,958,778 | 40,618,133 | 8,554,830 |
Depreciation and amortization attributable to costs of revenues | 126,429 | 113,986 | 252,062 | 219,754 |
Gross profit (loss) | 1,242,899 | 224,564 | 2,240,449 | 33,336 |
Selling, general and administrative expenses | 688,108 | 578,027 | 1,447,518 | 1,170,416 |
Depreciation and amortization attributable to operating expenses | 108,472 | 105,780 | 216,943 | 206,178 |
Income (loss) from operations | 446,319 | (459,243) | 575,988 | (1,343,258) |
Refining & Marketing | Base oil | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | Pygas | ||||
Segment Reporting Information | ||||
Total revenues | 3,861,942 | 1,172,766 | 6,834,373 | 3,630,606 |
Refining & Marketing | Industrial fuel | ||||
Segment Reporting Information | ||||
Total revenues | 409,522 | 0 | 721,215 | 52,752 |
Refining & Marketing | Distillates | ||||
Segment Reporting Information | ||||
Total revenues | 19,565,227 | 5,124,562 | 35,555,056 | 5,124,562 |
Refining & Marketing | Oil collection services | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | Metals | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | Other re-refinery products | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | VGO/Marine fuel sales | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Recovery | ||||
Segment Reporting Information | ||||
Total revenues | 7,001,824 | 3,533,663 | 13,653,616 | 7,695,130 |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 6,272,234 | 4,390,693 | 11,631,292 | 8,565,254 |
Depreciation and amortization attributable to costs of revenues | 177,504 | 143,493 | 325,430 | 277,252 |
Gross profit (loss) | 552,086 | (1,000,523) | 1,696,894 | (1,147,376) |
Selling, general and administrative expenses | 620,965 | 583,143 | 1,366,439 | 1,280,049 |
Depreciation and amortization attributable to operating expenses | 20,450 | 20,450 | 40,900 | 43,072 |
Income (loss) from operations | (89,329) | (1,604,116) | 289,555 | (2,470,497) |
Recovery | Base oil | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 555,350 | 295,315 | 1,358,250 |
Recovery | Pygas | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Recovery | Industrial fuel | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Recovery | Distillates | ||||
Segment Reporting Information | ||||
Total revenues | 0 | 0 | 0 | 0 |
Recovery | Oil collection services | ||||
Segment Reporting Information | ||||
Total revenues | 68,309 | 0 | 144,739 | 0 |
Recovery | Metals | ||||
Segment Reporting Information | ||||
Total revenues | 6,847,085 | 2,978,313 | 13,127,132 | 6,336,880 |
Recovery | Other re-refinery products | ||||
Segment Reporting Information | ||||
Total revenues | 86,430 | 0 | 86,430 | 0 |
Recovery | VGO/Marine fuel sales | ||||
Segment Reporting Information | ||||
Total revenues | $ 0 | $ 0 | $ 0 | $ 0 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)quarter | Jun. 30, 2020USD ($) | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate (as a percent) | 0.00% | |||
U.S. federal income tax rate (as a percent) | 21.00% | |||
Number of quarters of cumulative loss | quarter | 12 | |||
Operating loss carryforwards | $ 37,900,000 | $ 37,900,000 | ||
Before income tax | $ 15,956,662 | $ 8,888,473 | $ 12,991,324 | $ 6,498,233 |
COMMODITY DERIVATIVE INSTRUME_3
COMMODITY DERIVATIVE INSTRUMENTS - Schedule of Derivative Instruments (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021USD ($)$ / bblbbl | Dec. 31, 2020USD ($)$ / bblbbl | |
Derivative | ||
Fair Value | $ (8,707) | $ (94,214) |
Jun. 2021- Aug. 2021 | ||
Derivative | ||
Weighted average strike price (in usd per barrel) | $ / bbl | 89.39 | |
Remaining Volume (Barrels) | bbl | 40,000 | |
Fair Value | $ (8,707) | |
Dec. 2020-Mar. 2021 | ||
Derivative | ||
Weighted average strike price (in usd per barrel) | $ / bbl | 62.33 | |
Remaining Volume (Barrels) | bbl | 55,000 | |
Fair Value | $ (94,214) |
COMMODITY DERIVATIVE INSTRUME_4
COMMODITY DERIVATIVE INSTRUMENTS - Fair Value of Derivative Instruments within Balance Sheet (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative commodity liability | $ (8,707) | $ (94,214) |
COMMODITY DERIVATIVE INSTRUME_5
COMMODITY DERIVATIVE INSTRUMENTS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Derivative | ||||
Gain (loss) on sale of commodity contracts | $ 1,960,424 | $ (4,781,183) | ||
Cost of Revenues | ||||
Derivative | ||||
Gain (loss) on sale of commodity contracts | $ (1,203,628) | $ 57,016 | $ 1,925,158 | $ 4,484,798 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)leaserenewal_option | Jun. 30, 2020USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle | ||||
Finance lase cost | $ 103,989 | $ 73,552 | $ 207,972 | $ 126,673 |
Finance lease, interest expense | 22,880 | 22,019 | 49,503 | 32,938 |
Operating lease cost | $ 1,500,000 | $ 1,500,000 | 3,000,000 | 3,000,000 |
Operating lease payments | 200,000 | 900,000 | ||
Finance lease payment | $ 252,175 | $ 162,312 | ||
Number of extension options | renewal_option | 2 | |||
Plant | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Lease renewal term | 5 years | 5 years | ||
Number of operating leases | lease | 2 | |||
Lease renewal term, total | 20 years | |||
Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Lease renewal term | 1 year | 1 year | ||
Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle | ||||
Lease renewal term | 20 years | 20 years |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) | Jun. 30, 2021USD ($) |
Lessee, Lease, Description | |
Year 1 | $ 5,540,226 |
Year 2 | 5,086,096 |
Year 3 | 4,701,368 |
Year 4 | 4,405,067 |
Year 5 | 4,382,817 |
Thereafter | 29,359,282 |
Total lease payments | 53,474,856 |
Less: interest | (20,332,978) |
Present value of lease liabilities | 33,141,878 |
Facilities | |
Lessee, Lease, Description | |
Year 1 | 716,215 |
Year 2 | 574,638 |
Year 3 | 414,039 |
Year 4 | 338,400 |
Year 5 | 322,400 |
Thereafter | 1,925,000 |
Total lease payments | 4,290,692 |
Less: interest | (1,413,113) |
Present value of lease liabilities | 2,877,579 |
Equipment | |
Lessee, Lease, Description | |
Year 1 | 115,223 |
Year 2 | 7,500 |
Year 3 | 7,500 |
Year 4 | 6,250 |
Year 5 | 0 |
Thereafter | 0 |
Total lease payments | 136,473 |
Less: interest | (5,424) |
Present value of lease liabilities | 131,049 |
Plant | |
Lessee, Lease, Description | |
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 | 27,434,282 |
Total lease payments | 47,736,367 |
Less: interest | (18,797,855) |
Present value of lease liabilities | 28,938,512 |
Railcar | |
Lessee, Lease, Description | |
Year 1 | 648,371 |
Year 2 | 443,541 |
Year 3 | 219,412 |
Year 4 | 0 |
Year 5 | 0 |
Thereafter | 0 |
Total lease payments | 1,311,324 |
Less: interest | (116,586) |
Present value of lease liabilities | $ 1,194,738 |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease Weighted Average Remaining Lease Terms and Discount Rates (Details) | Jun. 30, 2021 |
Lease facilities | |
Lessee, Lease, Description | |
Weighted average remaining lease terms (years) | 5 years 4 months 24 days |
Weighted average discount rate (as a percent) | 9.10% |
Lease equipment | |
Lessee, Lease, Description | |
Weighted average remaining lease terms (years) | 9 months 18 days |
Weighted average discount rate (as a percent) | 8.00% |
Lease plant | |
Lessee, Lease, Description | |
Weighted average remaining lease terms (years) | 11 years 9 months 18 days |
Weighted average discount rate (as a percent) | 9.37% |
Lease railcar | |
Lessee, Lease, Description | |
Weighted average remaining lease terms (years) | 1 year 4 months 24 days |
Weighted average discount rate (as a percent) | 8.00% |
SHARE PURCHASE AND SUBSCRIPTI_3
SHARE PURCHASE AND SUBSCRIPTION AGREEMENTS - Myrtle Grove Share Purchase and Subscription Agreement (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Common Class B and Class A | |
Class of Stock | |
Annual return (as a percent) | 22.50% |
Percentage of aggregate capital investment to be added to original per-unit price to determine cash purchase price (as a percent) | 50.00% |
Tensile-MG | Common Class B | |
Class of Stock | |
Percentage of voting power of the outstanding voting securities (more than) (as a percent) | 50.00% |
Tensile-MG | MG SPV | Common Class B | |
Class of Stock | |
Restricted cash and cash equivalents | $ 0.1 |
SHARE PURCHASE AND SUBSCRIPTI_4
SHARE PURCHASE AND SUBSCRIPTION AGREEMENTS - Redeemable Noncontrolling Interest (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jan. 17, 2020 | |
Redeemable Noncontrolling Interest | |||||||
Contributions received from noncontrolling interest and redeemable noncontrolling interest | $ 0 | $ 21,000,000 | |||||
Adjustment of carrying amount of non-controlling interest | $ 9,091,068 | 9,091,068 | |||||
Increase (Decrease) in Temporary Equity | |||||||
Beginning balance | $ 31,611,674 | 31,611,674 | |||||
Initial adjustment of carrying amount of non-controlling interest | 0 | 9,091,068 | |||||
Net income (loss) attributable to redeemable non-controlling interest | $ 3,111,743 | 1,542,402 | $ 127,044 | (517,877) | |||
Change in ownership | 71,171 | ||||||
Accretion of non-controlling interest to redemption value | 761,994 | ||||||
Ending balance | 37,027,813 | 37,027,813 | |||||
MG SPV | |||||||
Increase (Decrease) in Temporary Equity | |||||||
Beginning balance | 5,472,841 | 4,396,894 | 5,472,841 | 4,396,894 | |||
Net income (loss) attributable to redeemable non-controlling interest | (128,981) | (82,401) | |||||
Change in ownership | 0 | 71,171 | |||||
Accretion of non-controlling interest to redemption value | 761,993 | 519,792 | |||||
Ending balance | 6,105,853 | 4,905,456 | 6,105,853 | 4,905,456 | |||
Heartland SPV | |||||||
Redeemable Noncontrolling Interest | |||||||
Cumulative amount exceeding redemption value | 29,162,156 | ||||||
Increase (Decrease) in Temporary Equity | |||||||
Beginning balance | $ 26,138,833 | $ 0 | 26,138,833 | 0 | |||
Initial adjustment of carrying amount of non-controlling interest | 0 | 11,908,932 | |||||
Net income (loss) attributable to redeemable non-controlling interest | 4,783,127 | (308,432) | |||||
Accretion of non-controlling interest to redemption value | 0 | 11,828,445 | |||||
Ending balance | $ 30,921,960 | $ 23,428,945 | $ 30,921,960 | $ 23,428,945 | |||
Heartland SPV | |||||||
Redeemable Noncontrolling Interest | |||||||
Ownership percentage (as a percent) | 35.00% | 35.00% | |||||
Heartland SPV | Tensile-Heartland | |||||||
Redeemable Noncontrolling Interest | |||||||
Ownership percentage (as a percent) | 65.00% | 65.00% | 65.00% |
SHARE PURCHASE AND SUBSCRIPTI_5
SHARE PURCHASE AND SUBSCRIPTION AGREEMENTS - Heartland Share Purchase and Subscription Agreement (Details) $ / shares in Units, $ in Millions | Jan. 17, 2020USD ($)member$ / sharesshares | Jun. 30, 2021 | Jun. 30, 2020 |
Common Class A | |||
Class of Stock | |||
Capital investment, percentage (as a percent) | 50.00% | ||
Heartland SPV | |||
Class of Stock | |||
Ownership percentage (as a percent) | 35.00% | ||
Number of managers | member | 5 | ||
Conversion basis ratio (in shares) | 1 | ||
Annual return (as a percent) | 22.50% | ||
Vertex Refining OH, LLC | |||
Class of Stock | |||
Ownership percentage (as a percent) | 100.00% | ||
Tensile-Heartland | Preferred Class A | |||
Class of Stock | |||
Preferred stock, dividend percentage (as a percent) | 22.50% | ||
Tensile-Heartland | Heartland SPV | |||
Class of Stock | |||
Ownership percentage (as a percent) | 65.00% | 65.00% | |
Number of managers | member | 3 | ||
Tensile-Heartland | Heartland SPV | Preferred Class A | |||
Class of Stock | |||
Ownership percentage (as a percent) | 100.00% | ||
Vertex Operating | Heartland SPV | |||
Class of Stock | |||
Ownership percentage (as a percent) | 35.00% | ||
Number of managers | member | 2 | ||
Heartland SPV | Common Class A | |||
Class of Stock | |||
Redemption period | 180 days | ||
Redemption price, percentage (as a percent) | 25.00% | ||
Heartland SPV | Tensile-Heartland | Class A-2 Preferred Units | |||
Class of Stock | |||
Share price (in usd per share) | $ / shares | $ 1,000 | ||
Additional consideration (in shares) | 7,000 | ||
Heartland SPV | Heartland SPV | |||
Class of Stock | |||
Percentage acquired (as a percent) | 50.00% | ||
Vertex Refining OH, LLC | Heartland SPV | Common Class A | |||
Class of Stock | |||
Consideration transferred (in shares) | 13,500 | ||
Vertex Refining OH, LLC | Heartland SPV | A-1 Preferred Units | |||
Class of Stock | |||
Consideration transferred (in shares) | 13,500 | ||
Vertex Refining OH, LLC | Heartland SPV | Common Class B | |||
Class of Stock | |||
Consideration transferred (in shares) | 11,300 | ||
Vertex Splitter Corporation | Vertex Refining OH, LLC | Heartland SPV | Common Class B | |||
Class of Stock | |||
Consideration transferred (in shares) | 248 | ||
Vertex Operating | MG SPV | Common Class A | |||
Class of Stock | |||
Consideration transferred (in shares) | 1,000 | ||
Share price (in usd per share) | $ / shares | $ 1,000 | ||
Equity interest issued or issuable | $ | $ 1 | ||
Vertex Operating | Heartland SPV | Tensile-Heartland | Common Class A | |||
Class of Stock | |||
Consideration transferred (in shares) | 13,500 | ||
Total purchase price | $ | $ 13.5 | ||
Vertex Operating | Heartland SPV | Tensile-Heartland | A-1 Preferred Units | |||
Class of Stock | |||
Consideration transferred (in shares) | 13,500 | ||
Heartland SPV | Heartland SPV | Tensile-Heartland | Common Class A | |||
Class of Stock | |||
Consideration transferred (in shares) | 7,500 | ||
Total purchase price | $ | $ 7.5 | ||
Heartland SPV | Heartland SPV | Tensile-Heartland | A-1 Preferred Units | |||
Class of Stock | |||
Consideration transferred (in shares) | 7,500 | ||
Tensile-MG | MG SPV | MG SPV | |||
Class of Stock | |||
Percentage acquired (as a percent) | 15.58% | ||
MG SPV | Tensile-MG | |||
Class of Stock | |||
Ownership interest (as a percent) | 15.00% | ||
MG SPV | Vertex Operating | |||
Class of Stock | |||
Ownership interest (as a percent) | 85.00% |
SHARE PURCHASE AND SUBSCRIPTI_6
SHARE PURCHASE AND SUBSCRIPTION AGREEMENTS - Variable Interest Entities (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Variable Interest Entity | |||
Cash and cash equivalents | $ 14,966,612 | $ 10,895,044 | $ 17,754,301 |
Accounts receivable, net | 18,379,672 | 11,138,933 | |
Inventory | 8,869,840 | 4,439,839 | |
Prepaid expense and other current assets | 1,324,816 | 3,211,448 | |
Total current assets | 43,811,140 | 29,785,389 | |
Fixed assets, net | 46,683,730 | 46,440,516 | |
Finance lease right-of-use assets | 1,328,739 | 1,536,711 | |
Operating lease right-of-use assets | 33,141,878 | 33,315,876 | |
Intangible assets, net | 8,431,703 | 9,397,441 | |
Other assets | 1,711,036 | 1,624,025 | |
TOTAL ASSETS | 135,108,226 | 122,099,958 | |
Accounts payable | 15,383,088 | 10,484,911 | |
Accrued expenses | 2,175,449 | 2,053,106 | |
Finance lease liability-current | 5,540,226 | 5,614,785 | |
Operating lease liability-current | 6,215,145 | 4,367,169 | |
Total current liabilities | 30,998,919 | 23,850,412 | |
Finance lease liability-long term | 678,547 | 945,612 | |
Operating lease liability-long term | 27,601,652 | 27,701,091 | |
Total liabilities | 79,577,270 | $ 60,809,023 | |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity | |||
Cash and cash equivalents | 11,417,106 | 7,890,886 | |
Accounts receivable, net | 8,056,815 | 3,591,468 | |
Inventory | 800,575 | 629,667 | |
Prepaid expense and other current assets | 239,730 | 926,203 | |
Total current assets | 20,514,226 | 13,038,224 | |
Fixed assets, net | 7,102,863 | 6,549,139 | |
Finance lease right-of-use assets | 880,717 | 1,031,353 | |
Operating lease right-of-use assets | 306,866 | 299,758 | |
Intangible assets, net | 939,168 | 1,064,624 | |
Other assets | 106,643 | 108,643 | |
TOTAL ASSETS | 29,850,483 | 22,091,741 | |
Accounts payable | 2,235,371 | 1,753,160 | |
Accrued expenses | 395,845 | 307,340 | |
Finance lease liability-current | 356,317 | 346,029 | |
Operating lease liability-current | 235,644 | 251,037 | |
Total current liabilities | 3,223,177 | 2,657,566 | |
Finance lease liability-long term | 455,419 | 643,446 | |
Operating lease liability-long term | 71,222 | 48,721 | |
Total liabilities | $ 3,749,818 | $ 3,349,733 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Jul. 01, 2021 | May 26, 2021 | Jun. 30, 2021 |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Tensile MG convert debt ( in shares) | $ 1,000 | ||
Term Loan | |||
Subsequent Event [Line Items] | |||
Term Loan bears interest at the variable-rate of LIBOR( Percentage) | 0.16% | ||
Term Loan | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Line of credit, maximum borrowing capacity | $ 5,000,000 | ||
Term Loan | Subsequent Event | LIBOR | |||
Subsequent Event [Line Items] | |||
Interest rate (percentage) | 6.50% | ||
Term Loan | Subsequent Event | Prime Rate | |||
Subsequent Event [Line Items] | |||
Interest rate (percentage) | 0.50% | ||
Term Loan | Subsequent Event | Federal fund rate | |||
Subsequent Event [Line Items] | |||
Interest rate (percentage) | 6.00% | ||
Deposit Note | Seller | |||
Subsequent Event [Line Items] | |||
Promissory note | $ 10,000,000 | ||
Debt instrument, stated rate (as a percent) | 12.00% | ||
Debt instrument term, option one | 45 days | ||
Debt instrument term, option two | 5 years | ||
Deposit Note | Subsequent Event | Seller | |||
Subsequent Event [Line Items] | |||
Promissory note | $ 10,000,000 | ||
Heartland Note | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Promissory note | $ 7,000,000 | ||
Debt instrument, stated rate (as a percent) | 12.00% | ||
Debt instrument term, option one | 90 days | ||
Debt instrument term, option two | 5 days |