Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 07, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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,$0.001 Par Value Per Share | |
Trading Symbol(s) | VTNR | |
Name of each exchange on which registered | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 75,668,826 | |
Entity Central Index Key | 0000890447 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 117,464 | $ 36,130 |
Restricted cash | 4,929 | 100,497 |
Accounts receivable, net | 50,829 | 14,880 |
Inventory | 169,772 | 8,031 |
Derivative commodity asset | 1,219 | 96 |
Prepaid expenses and other current assets | 33,337 | 4,567 |
Assets held for sale, current | 11,651 | 10,070 |
Total current assets | 390,202 | 174,271 |
Noncurrent assets | ||
Fixed assets, at cost | 198,088 | 62,196 |
Less accumulated depreciation | (33,371) | (26,043) |
Fixed assets, net | 164,717 | 36,153 |
Finance lease right-of-use assets | 43,649 | 377 |
Operating lease right-of use assets | 33,960 | 33,272 |
Intangible assets, net | 12,803 | 6,652 |
Other assets | 2,246 | 15,335 |
TOTAL ASSETS | 647,577 | 266,060 |
Current liabilities | ||
Accounts payable | 70,906 | 11,980 |
Accrued expenses | 42,650 | 4,942 |
Finance lease liability-current | 1,155 | 342 |
Operating lease liability-current | 6,421 | 5,849 |
Current portion of long-term debt, net | 16,637 | 2,413 |
Obligations under inventory financing agreement, net | 134,244 | 0 |
Total current liabilities | 272,013 | 25,526 |
Liabilities Noncurrent | ||
Long-term debt, net | 167,665 | 64,131 |
Finance lease liability-long-term | 44,339 | 256 |
Operating lease liability-long-term | 27,539 | 27,423 |
Derivative warrant liability | 14,303 | 75,211 |
Other liabilities | 1,378 | 0 |
Total liabilities | 527,237 | 192,547 |
COMMITMENTS AND CONTINGENCIES | 0 | 0 |
TEMPORARY EQUITY | ||
Redeemable non-controlling interest | 0 | 43,447 |
Total temporary equity | 0 | 43,447 |
EQUITY | ||
Common stock, $0.001 par value per share; 750,000,000 shares authorized; 75,608,826 and 63,287,965 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively. | 76 | 63 |
Additional paid-in capital | 278,930 | 138,620 |
Accumulated deficit | (160,354) | (110,614) |
Total Vertex Energy, Inc. shareholders' equity | 118,652 | 28,069 |
Non-controlling interest | 1,688 | 1,997 |
Total equity | 120,340 | 30,066 |
TOTAL LIABILITIES, TEMPORARY EQUITY, AND EQUITY | 647,577 | 266,060 |
Receivables, Net, Current | $ 51,830 | $ 14,880 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Series A Preferred Stock | ||
EQUITY | ||
Series A Convertible Preferred Stock, $0.001 par value; zero and 5,000,000 shares designated, zero and 385,601 shares issued and outstanding at September 30, 2022 and December 31, 2021, with a liquidation preference of $0 and $574,545 at September 30, 2022 and December 31, 2021. | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 0 | 5,000,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
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) | 75,608,826 | 63,287,965 |
Common stock, shares outstanding (in shares) | 75,608,826 | 63,287,965 |
Series A Preferred Stock | ||
Preferred stock, shares authorized (in shares) | 0 | 5,000,000 |
Preferred stock, shares issued (in shares) | 0 | 385,601 |
Preferred stock, shares outstanding (in shares) | 0 | 385,601 |
Preferred stock, liquidation preference | $ 0 | $ 574,545 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 810,208,000 | $ 50,982,000 | $ 1,915,423,000 | $ 147,807,000 |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 750,463,000 | 46,142,000 | 1,819,757,000 | 127,986,000 |
Depreciation and amortization attributable to costs of revenues | 4,050,000 | 1,028,000 | 9,144,000 | 3,002,000 |
Gross profit | 55,695,000 | 3,812,000 | 86,522,000 | 16,819,000 |
Operating expenses: | ||||
Selling, general and administrative expenses | 36,978,000 | 8,177,000 | 89,934,000 | 21,742,000 |
Depreciation and amortization attributable to operating expenses | 1,120,000 | 420,000 | 2,656,000 | 1,260,000 |
Total operating expenses | 38,098,000 | 8,597,000 | 92,590,000 | 23,002,000 |
Income (loss) from operations | 17,597,000 | (4,785,000) | (6,068,000) | (6,183,000) |
Other income (expense): | ||||
Other income (expenses) | 417,000 | (3,000) | 1,060,000 | 4,220,000 |
Gain (loss) on change in value of derivative warrant liability | 12,312,000 | 11,907,000 | 7,788,000 | (11,380,000) |
Interest expense | (13,131,000) | (455,000) | (65,083,000) | (919,000) |
Total other income (expense) | (402,000) | 11,449,000 | (56,235,000) | (8,079,000) |
Income (loss) from continuing operations before income tax | 17,195,000 | 6,664,000 | (62,303,000) | (14,262,000) |
Income tax benefit (expense) | 0 | 0 | 0 | 0 |
Income (loss) from continuing operations | 17,195,000 | 6,664,000 | (62,303,000) | (14,262,000) |
Income from discontinued operations, net of tax | 4,975,000 | 3,981,000 | 19,882,000 | 11,915,000 |
Net income (loss) | 22,170,000 | 10,645,000 | (42,421,000) | (2,347,000) |
Net income (loss) attributable to non-controlling interest and redeemable non-controlling interest from continuing operations | (64,000) | (115,000) | 33,000 | 511,000 |
Net income attributable to non-controlling interest and redeemable non-controlling interest from discontinued operations | 0 | 2,400,000 | 6,829,000 | 7,183,000 |
Net income (loss) attributable to Vertex Energy, Inc. | 22,234,000 | 8,360,000 | (49,283,000) | (10,041,000) |
Accretion of redeemable noncontrolling interest to redemption value from continued operations | 0 | (415,000) | (428,000) | (1,177,000) |
Accretion of discount on Series B and B1 Preferred Stock | 0 | 0 | 0 | (507,000) |
Net income (loss) attributable to common shareholders from continuing operations | 17,259,000 | 6,364,000 | (62,764,000) | (16,457,000) |
Net income attributable to common shareholders from discontinued operations, net of tax | 4,975,000 | 1,581,000 | 13,053,000 | 4,732,000 |
Net income (loss) attributable to common shareholders, basic | 22,234,000 | 7,945,000 | (49,711,000) | (11,725,000) |
Net income (loss) attributable to common shareholders diluted | $ 22,234,000 | $ 7,945,000 | $ (49,711,000) | $ (11,725,000) |
Basic income (loss) per common share | ||||
Continuing operations (in dollars per share) | $ 0.23 | $ 0.10 | $ (0.91) | $ (0.31) |
Discontinued operations, net of tax (in dollars per share) | 0.07 | 0.03 | 0.19 | 0.09 |
Basic income (loss) per common share (in dollars per share) | 0.30 | 0.13 | (0.72) | (0.22) |
Diluted income (loss) per common share | ||||
Continuing operations (in dollars per share) | 0.22 | 0.10 | (0.91) | (0.31) |
Discontinued operations, net of tax (in dollars per share) | 0.06 | 0.02 | 0.19 | 0.09 |
Diluted income (loss) per share (in dollars per share) | $ 0.28 | $ 0.12 | $ (0.72) | $ (0.22) |
Shares used in computing earnings per share | ||||
Basic (in shares) | 75,591,000 | 61,349,000 | 69,007,000 | 53,964,000 |
Diluted (in shares) | 79,638,000 | 64,605,000 | 69,007,000 | 53,964,000 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) | Total | Series A Preferred | Series B1 Preferred Stock | Series B Preferred Stock | Common Stock | Common Stock Series A Preferred | Common Stock Series B1 Preferred Stock | Common Stock Series B Preferred Stock | Preferred stock | Preferred stock Series A Preferred | Additional Paid-In Capital | Additional Paid-In Capital Series B1 Preferred Stock | Additional Paid-In Capital Series B Preferred Stock | Retained Earnings | Retained Earnings Series B Preferred Stock | Non-controlling Interest |
Beginning balance (in shares) at Dec. 31, 2020 | 45,555,000 | 420,000 | ||||||||||||||
Beginning balance at Dec. 31, 2020 | $ 5,925,000 | $ 46,000 | $ 0 | $ 94,570,000 | $ (90,009,000) | $ 1,318,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Exercise of options/B1 warrants (in shares) | 23,000 | 1,080,000 | ||||||||||||||
Exercise of options/ B1 warrants | 0 | $ 2,758,000 | $ 0 | $ 1,000 | 0 | $ 2,757,000 | ||||||||||
Share based compensation expense | 150,000 | 150,000 | ||||||||||||||
Exchanges of Series B Preferred stock to common (in shares) | 2,359,000 | |||||||||||||||
Exchanges of Series B Preferred stock to common | $ 4,746,000 | $ 2,000 | $ 4,114,000 | $ 630,000 | ||||||||||||
Conversion of Series B Preferred stock to common (in shares) | 638,000 | |||||||||||||||
Conversion of Series B Preferred stock to common | 1,979,000 | $ 1,000 | 1,978,000 | |||||||||||||
Conversion of Series B1 Preferred stock to common (in shares) | 2,087,000 | |||||||||||||||
Conversion of Series B1 Preferred stock to common | 3,256,000 | $ 2,000 | 3,254,000 | |||||||||||||
Dividends on Series B and B1 | (372,000) | (372,000) | ||||||||||||||
Accretion of discount on Series B and B1 | (224,000) | (224,000) | ||||||||||||||
Accretion of redeemable non-controlling interest to redemption value | (373,000) | (373,000) | ||||||||||||||
Net income (loss) | 2,965,000 | 974,000 | 1,991,000 | |||||||||||||
Less: amount attributable to redeemable non-controlling interest | (1,542,000) | (1,542,000) | ||||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 51,742,000 | 420,000 | ||||||||||||||
Ending balance at Mar. 31, 2021 | 19,268,000 | $ 52,000 | $ 0 | 106,823,000 | (89,374,000) | 1,767,000 | ||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 45,555,000 | 420,000 | ||||||||||||||
Beginning balance at Dec. 31, 2020 | 5,925,000 | $ 46,000 | $ 0 | 94,570,000 | (90,009,000) | 1,318,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Exercise of options/B1 warrants (in shares) | 528,368 | |||||||||||||||
Net income (loss) | (2,347,000) | |||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 63,003,000 | 386,000 | ||||||||||||||
Ending balance at Sep. 30, 2021 | 37,342,000 | $ 63,000 | $ 0 | 136,906,000 | (101,475,000) | 1,848,000 | ||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 51,742,000 | 420,000 | ||||||||||||||
Beginning balance at Mar. 31, 2021 | 19,268,000 | $ 52,000 | $ 0 | 106,823,000 | (89,374,000) | 1,767,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Exercise of options/B1 warrants (in shares) | 505,000 | 157,000 | ||||||||||||||
Exercise of options/ B1 warrants | 229,000 | 1,634,000 | $ 0 | 229,000 | 1,634,000 | |||||||||||
Exercise of options to common- unissued | 475,000 | 475,000 | ||||||||||||||
Leverage Lubricants contribution | (13,000) | (13,000) | ||||||||||||||
Exercise of B1 warrants-unissued | 1,186,000 | 1,186,000 | ||||||||||||||
Share based compensation expense | 205,000 | 205,000 | ||||||||||||||
Conversion of Series A Preferred stock to common (in shares) | 28,000 | (28,000) | ||||||||||||||
Conversion of Series A Preferred stock to common | $ 0 | |||||||||||||||
Conversion of Series B Preferred stock to common (in shares) | 1,842,000 | |||||||||||||||
Conversion of Series B Preferred stock to common | 5,709,000 | $ 2,000 | 5,707,000 | |||||||||||||
Conversion of Series B Preferred stock to common-unissued | 760,000 | $ 760,000 | ||||||||||||||
Conversion of Series B1 Preferred stock to common (in shares) | 5,635,000 | |||||||||||||||
Conversion of Series B1 Preferred stock to common | 8,791,000 | $ 6,000 | 8,785,000 | |||||||||||||
Accretion of discount on Series B and B1 | (284,000) | (284,000) | ||||||||||||||
Accretion of redeemable non-controlling interest to redemption value | (387,000) | (387,000) | ||||||||||||||
Net income (loss) | (15,957,000) | (19,375,000) | 3,418,000 | |||||||||||||
Less: amount attributable to redeemable non-controlling interest | (3,113,000) | (3,113,000) | ||||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 59,909,000 | 392,000 | ||||||||||||||
Ending balance at Jun. 30, 2021 | 18,503,000 | $ 60,000 | $ 0 | 125,804,000 | (109,420,000) | 2,059,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Exercise of options/B1 warrants (in shares) | 1,267,000 | 1,576,000 | ||||||||||||||
Exercise of options/ B1 warrants | 1,482,000 | 9,363,000 | $ 1,000 | $ 2,000 | 1,481,000 | 9,361,000 | ||||||||||
Exercise of options to common- unissued | 3,000 | 3,000 | ||||||||||||||
Distribution to noncontrolling shareholder | (169,000) | (169,000) | ||||||||||||||
Leverage Lubricants contribution | 2,000 | 2,000 | ||||||||||||||
Share based compensation expense | 257,000 | 257,000 | ||||||||||||||
Conversion of Series A Preferred stock to common (in shares) | 6,000 | 245,000 | (6,000) | |||||||||||||
Conversion of Series A Preferred stock to common | 0 | $ 0 | ||||||||||||||
Accretion of redeemable non-controlling interest to redemption value | (415,000) | (415,000) | ||||||||||||||
Net income (loss) | 10,645,000 | 8,360,000 | 2,285,000 | |||||||||||||
Less: amount attributable to redeemable non-controlling interest | (2,329,000) | (2,329,000) | ||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 63,003,000 | 386,000 | ||||||||||||||
Ending balance at Sep. 30, 2021 | 37,342,000 | $ 63,000 | $ 0 | 136,906,000 | (101,475,000) | 1,848,000 | ||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 63,288,000 | 386,000 | ||||||||||||||
Beginning balance at Dec. 31, 2021 | 30,066,000 | $ 63,000 | $ 0 | 138,620,000 | (110,614,000) | 1,997,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Exercise of options/B1 warrants (in shares) | 60,000 | 1,113,000 | ||||||||||||||
Exercise of options/ B1 warrants | 76,000 | 0 | $ 1,000 | 76,000 | (1,000) | |||||||||||
Share based compensation expense | 250,000 | 250,000 | ||||||||||||||
Conversion of Series A Preferred stock to common (in shares) | 5,000 | (5,000) | ||||||||||||||
Conversion of Series A Preferred stock to common | 0 | |||||||||||||||
Reclassification of derivative liabilities | 78,789,000 | 78,789,000 | ||||||||||||||
Accretion of redeemable non-controlling interest to redemption value | (422,000) | (422,000) | ||||||||||||||
Net income (loss) | (808,000) | (4,547,000) | 3,739,000 | |||||||||||||
Less: amount attributable to redeemable non-controlling interest | (3,769,000) | (3,769,000) | ||||||||||||||
Ending balance (in shares) at Mar. 31, 2022 | 64,466,000 | 381,000 | ||||||||||||||
Ending balance at Mar. 31, 2022 | 104,182,000 | $ 64,000 | $ 0 | 217,734,000 | (115,583,000) | 1,967,000 | ||||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 63,288,000 | 386,000 | ||||||||||||||
Beginning balance at Dec. 31, 2021 | 30,066,000 | $ 63,000 | $ 0 | 138,620,000 | (110,614,000) | 1,997,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Exercise of options/B1 warrants (in shares) | 561,317 | |||||||||||||||
Conversion of Series A Preferred stock to common (in shares) | 10,165,149 | |||||||||||||||
Conversion of Series A Preferred stock to common | $ 59,822,000 | |||||||||||||||
Net income (loss) | (42,421,000) | |||||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 75,610,000 | 0 | ||||||||||||||
Ending balance at Sep. 30, 2022 | 120,340,000 | $ 76,000 | $ 0 | 278,930,000 | (160,354,000) | 1,688,000 | ||||||||||
Beginning balance (in shares) at Mar. 31, 2022 | 64,466,000 | 381,000 | ||||||||||||||
Beginning balance at Mar. 31, 2022 | 104,182,000 | $ 64,000 | $ 0 | 217,734,000 | (115,583,000) | 1,967,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Exercise of options/B1 warrants (in shares) | 498,000 | |||||||||||||||
Exercise of options/ B1 warrants | 554,000 | $ 1,000 | 553,000 | |||||||||||||
Exercise of options to common- unissued | 3,000 | 3,000 | ||||||||||||||
Distribution to noncontrolling shareholder | (380,000) | (380,000) | ||||||||||||||
Adjustment of redeemable non controlling interest | 0 | 29,000 | (29,000) | |||||||||||||
Share based compensation expense | 324,000 | 324,000 | ||||||||||||||
Conversion of Series A Preferred stock to common (in shares) | 10,165,000 | 381,000 | (381,000) | |||||||||||||
Conversion of Series A Preferred stock to common | 59,822,000 | $ 1,000 | $ 10,000 | $ 1,000 | 59,812,000 | |||||||||||
Accretion of redeemable non-controlling interest to redemption value | (6,000) | (6,000) | ||||||||||||||
Net income (loss) | (63,782,000) | (66,970,000) | 3,188,000 | |||||||||||||
Less: amount attributable to redeemable non-controlling interest | (3,023,000) | (3,023,000) | ||||||||||||||
Ending balance (in shares) at Jun. 30, 2022 | 75,510,000 | 0 | ||||||||||||||
Ending balance at Jun. 30, 2022 | 97,695,000 | $ 76,000 | $ 0 | 278,455,000 | (182,588,000) | 1,752,000 | ||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||
Exercise of options/B1 warrants (in shares) | 4,000 | 96,000 | ||||||||||||||
Exercise of options/ B1 warrants | 0 | $ 0 | $ 0 | $ 0 | 0 | $ 0 | ||||||||||
Exercise of options to common- unissued | 97,000 | 97,000 | ||||||||||||||
Share based compensation expense | 378,000 | 378,000 | ||||||||||||||
Net income (loss) | 22,170,000 | 22,234,000 | (64,000) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 75,610,000 | 0 | ||||||||||||||
Ending balance at Sep. 30, 2022 | $ 120,340,000 | $ 76,000 | $ 0 | $ 278,930,000 | $ (160,354,000) | $ 1,688,000 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, par value (in dollars per share) | $ 0.001 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities | ||
Net loss | $ (42,421,000) | $ (2,347,000) |
Income from discontinued operations, net of tax | 19,882,000 | 11,915,000 |
Loss from continuing operations | (62,303,000) | (14,262,000) |
Adjustments to reconcile net loss from continuing operations to cash provided by (used in) operating activities, net of acquisitions | ||
Stock based compensation expense | 952,000 | 613,000 |
Depreciation and amortization | 11,800,000 | 4,263,000 |
Gain on forgiveness of debt | 0 | (4,222,000) |
(Gain) loss on sale of assets | (112,000) | 2,000 |
Provision for environment clean up | 1,428,000 | 0 |
Increase in allowance for bad debt | 157,000 | 717,000 |
Increase in fair value of derivative warrant liability | (7,788,000) | 11,380,000 |
Loss on commodity derivative contracts | 87,218,000 | 2,205,000 |
Net cash settlements on commodity derivatives | (100,253,000) | (1,999,000) |
Amortization of debt discount and deferred costs | 44,537,000 | 38,000 |
Changes in operating assets and liabilities, net of acquisition | ||
Accounts receivable and other receivables | (37,157,000) | (6,123,000) |
Inventory | (31,521,000) | (3,716,000) |
Prepaid expenses and other current assets | (16,433,000) | (2,366,000) |
Accounts payable | 58,925,000 | 1,945,000 |
Accrued expenses | 37,658,000 | 2,450,000 |
Other assets | 54,000 | (648,000) |
Net cash used in operating activities from continuing operations | (12,838,000) | (9,723,000) |
Cash flows from investing activities | ||
Acquisition of business, net of cash | (227,525,000) | 2,000 |
Software purchase | (106,000) | 0 |
Purchase of fixed assets | (34,744,000) | (2,313,000) |
Investment in Mobile Refinery assets | 0 | (10,241,000) |
Proceeds from sale of fixed assets | 188,000 | 75,000 |
Net cash used in investing activities from continuing operations | (262,187,000) | (12,477,000) |
Cash flows from financing activities | ||
Payments on finance leases | (201,000) | (409,000) |
Proceeds from exercise of options and warrants to common stock | 729,000 | 6,493,000 |
Distributions to noncontrolling interest | (380,000) | (169,000) |
Net borrowings on inventory financing agreements | 133,744,000 | 0 |
Net change in line of credit | 0 | (166,000) |
Redemption of noncontrolling interest | (50,666,000) | 0 |
Proceeds from note payable | 173,315,000 | 10,078,000 |
Payments on note payable | (14,101,000) | (3,779,000) |
Net cash provided by financing activities from continuing operations | 242,440,000 | 12,050,000 |
Net cash provided by operating activities | 20,199,000 | 13,043,000 |
Discontinued operations: | ||
Net cash provided by operating activities | 20,199,000 | 13,043,000 |
Net cash used in investing activities | (1,848,000) | (1,675,000) |
Net cash provided by discontinued operations | 18,351,000 | 11,368,000 |
Net change in cash, cash equivalents and restricted cash | (14,234,000) | 1,218,000 |
Cash, cash equivalents, and restricted cash at beginning of the period | 136,627,000 | 10,995,000 |
Cash, cash equivalents, and restricted cash at end of period | 122,393,000 | 12,213,000 |
Cash and cash equivalents | 117,464,000 | 12,113,000 |
Restricted cash | 4,929,000 | 100,000 |
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Total | 122,393,000 | 12,213,000 |
SUPPLEMENTAL INFORMATION | ||
Cash paid for interest | 20,191,000 | 844,000 |
Cash paid for taxes | 0 | 0 |
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Equity component of the convertible note issuance | 78,789,000 | 0 |
Exchanges of Series B Preferred Stock into common stock | 0 | 4,747,000 |
Accretion of discount on Series B and B1 Preferred Stock | 0 | 507,000 |
Dividends-in-kind accrued on Series B and B1 Preferred Stock | 0 | (258,000) |
Conversion of Convertible Senior Notes to common stock | 59,822,000 | 0 |
Equipment acquired (disposed) under leases | 45,096,000 | 174,000 |
Accretion of redeemable noncontrolling interest to redemption value | 428,000 | 1,177,000 |
Series B Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Series A, B and B1 Preferred Stock into Common Stock | 0 | 8,447,000 |
Series B1 Preferred Stock | ||
NON-CASH INVESTING AND FINANCING TRANSACTIONS | ||
Conversion of Series A, B and B1 Preferred Stock into Common Stock | $ 0 | $ 12,046,000 |
BASIS OF PRESENTATION AND NATUR
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND NATURE OF OPERATIONS | BASIS OF PRESENTATION AND NATURE OF OPERATIONS Vertex Energy, Inc. (the "Company" or "Vertex Energy") is an energy transition company focused on the production and distribution of conventional and alternative fuels. We operate used motor oil processing plants in Houston, Texas, Port Arthur, Texas, Marrero, Louisiana, and Columbus, Ohio. As of April 1, 2022, we own a refinery in Mobile, Alabama (the “Mobile Refinery”) with an operable refining capacity of 75,000 barrels per day (“bpd”) and more than 3.2 million barrels of storage capacity. The total purchase consideration was $75.0 million in cash plus $16.3 million in previously agreed upon capital expenditures and miscellaneous prepaid and reimbursable items. At the time of the acquisition, the Company also purchased $130.0 million in hydrocarbon inventories of which $124.0 were financed under an inventory financing agreement. See Note 3 “Mobile Refinery Acquisition” and Note 10 “Inventory Financing Agreement” for additional information. The accompanying unaudited interim consolidated financial statements of the Company 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, 2021, contained in the Company's annual report, as filed with the SEC on Form 10-K on March 14, 2022 (the " Form 10-K "). The December 31, 2021 balance sheet was retroactively restated from the audited financial statements of our 2021 Form 10-K to account for the change for our discontinued business, see Note 23 "Discontinued Operations" . 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. All significant intercompany transactions have been eliminated in consolidation. 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 2021 as reported in Form 10-K have been omitted. Used Motor Oils Business ("UMO Business") Our UMO Business consists of our used oil refinery in Marrero, Louisiana, our Heartland used oil refinery in Ohio, 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 to a lease at the Cedar Marine terminal in Baytown, Texas. The UMO Business is presented as part of our Black Oil segment in our consolidated financial statements. On June 29, 2021, the Company, through certain of its subsidiaries, entered into an Asset Purchase Agreement (the “UMO Sale Agreement”) with Safety-Kleen Systems, Inc. (“Safety-Kleen”) by which Safety-Kleen agreed to acquire the Company’s UMO Business. Assets which form a part of our Black Oil Segment which will not be sold as part of the sale of the UMO Business consent of (1) our re-refining complex located in Belle Chasse, Louisiana, which we refer to as our Myrtle Grove Facility; (2) our Marine division established in 2022, which consists of blending and distribution of fuels to the marine market; and (3) our finished lubricants and metal operations, including the distribution and blending of lubricants as well as a metal recovery operation. During the third quarter of 2021, the Company classified the UMO Business as held for sale based on management’s intention and the Company’s shareholders’ approval to sell the UMO Business. The Company’s historical financial statements have been revised to present the operating results of the UMO Business as discontinued operations. The results of operations of this business are presented as “Income (loss) from discontinued operations” in the statement of operations and the related cash flows of this business have been reclassified to discontinued operations for all periods presented. The assets and liabilities of the UMO Business have been reclassified to “Assets held for sale” and “Liabilities held for sale”, respectively, in the consolidated balance sheet for all periods presented. On January 24, 2022, the Company and its subsidiaries that were party to the UMO Sale Agreement and Safety-Kleen, entered into an Asset Purchase Termination Agreement (the “UMO Termination Agreement ”) pursuant to which the UMO Sale Agreement was terminated. Under the terms of the UMO Termination Agreement, the Company paid a termination fee to Safety-Kleen of $3.0 million. Immediately upon receipt of such termination fee, which the Company paid simultaneously with the execution of the UMO Termination Agreement, the UMO Sale Agreement was terminated and is of no further force or effect, and with no further liability to any party thereunder, other than certain confidentiality obligations of the parties and ongoing liability for any willful or intentional breach of, or non-compliance with, the UMO Sale Agreement. The Company is still exploring opportunities t o sell the UMO Business and believes it will sell such assets within a year. As of the day of this filing, the Company is in ongoing discussions with a third party regarding a potential sale of the Company's Heartland refinery in Ohio, and as such has determined to present only the Company's Heartland refinery options as discontinued operations (" Heartland Business "). Use of Estimates The preparation of GAAP financial statements 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. The majority of the numbers presented below are rounded numbers and should be considered as approximate. 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. The Company included the Heartland Business as discontinued operation, and reclassified the other UMO Business operations out of the assets held for sale, and all liabilities of the UMO Business out of liabilities held for sale, other than in connection with the Heartland Business. |
SUMMARY OF CRITICAL ACCOUNTING
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES | SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES With the exception of the accounting policies below, there have been no new or material changes to the significant accounting policies discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. 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. Restricted cash as of September 30, 2022, consisted of a $4.8 million deposit in a bank for financing of a short-term equipment lease, and a $0.1 million deposit in a money market account to serve as collateral for payment of a credit card. As of December 31, 2021, a total of $100.4 million was held in an escrow account in connection with the issuance of certain convertible notes (see Note 15. " Long-Term Debt" . The funds were released on April 1, 2022 and used in the purchase of the Mobile Refinery. See Note 3 “Mobile Refinery Acquisition ” . Accounts Receivable Accounts receivable represents amounts due from customers. Accounts receivable are recorded at invoiced amounts, net of reserves and allowances, do not bear interest and are not collateralized. The Company uses its best estimate to determine the required allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, economic trends and conditions affecting its customer base, significant one-time events, and historical write-off experience. Specific provisions are recorded for individual receivables when we become aware of a customer’s inability to meet its financial obligations. The Company reviews the adequacy of its reserves and allowances quarterly. Receivable balances greater than 90 days past due are individually reviewed for collectability and if deemed uncollectible, are charged off against the allowance accounts after all means of collection have been exhausted and the potential for recovery is considered remote. The allowance was $1.5 million and $1.4 million at September 30, 2022 and December 31, 2021, respectively. Inventory and Obligations Under Inventory Financing Agreements Mobile Refinery. Inventories at the recently acquired Mobile Refinery consist of crude oil and refined petroleum products. Simultaneously with the acquisition of the Mobile Refinery, the Company entered into an inventory financing agreement with Macquarie Energy North America Trading Inc. (“Macquarie”) under which Macquarie agreed to finance all the crude oil utilized at the Mobile Refinery under procurement contracts. In addition, the Company became a party to a Supply and Offtake Agreement with Macquarie. Under this arrangement, the Company purchases crude oil supplied from third-party suppliers and Macquarie provides credit support for certain of these purchases. Macquarie holds title to all crude oil and refined products inventories at all times, except for liquefied petroleum gases and sulfur, which the Company has pledged, together with all receivables arising from the sales of such inventories. The crude oil remains in the legal title of Macquarie and is stored in our storage tanks governed by a storage agreement. Legal title to the crude oil passes to us at the tank outlet. After processing, Macquarie takes title to the refined products stored in our storage tanks until they are sold to our retail locations or to third parties. We record the inventory owned by Macquarie on our behalf as inventory with a corresponding accrued liability on our balance sheet because we maintain the risk of loss until the refined products are sold to third parties and we have an obligation to repurchase it. The valuation of our repurchase obligation requires that we make estimates of the prices and differentials assuming settlement occurs at the end of the reporting period. Hydrocarbon inventories at the Mobile Refinery are stated at the lower of cost or net realizable value using the weighted average inventory accounting method. Estimating the net realizable value of our inventory requires management to make assumptions about the timing of sales and the expected proceeds that will be realized for these sales. See Note 9 “Inventory” Note 10 “Inventory Financing Agreement” Other locations. Inventories from our legacy business consist of feedstocks and refined petroleum products and recovered ferrous and non-ferrous metals. These commodity inventories are stated at the lower of cost or net realizable value using the first-in, first-out (“FIFO”) accounting method. Revenue Recognition Our revenues are generated through the sale of refined petroleum products and terminalling and storage services. We recognize revenue from product sales at prevailing market rates at the point in time in which the customer obtains control of the product. Terminalling and storage revenues are recognized as services are rendered, and our performance obligations have been satisfied once the product has been transferred back to the customer. These services are short-term in nature, and the service fees charged to our customers are at prevailing market rates. The timing of our revenue recognition may differ from the timing of payment from our customers. A receivable is recorded when revenue is recognized prior to payment and we have an unconditional right to payment. Environmental Reserves We accrue for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. The liability represents the expected costs of remediating contaminated soil and groundwater at the site. Costs of future expenditures for environmental remediation obligations are discounted to their present value. Impairment of long-lived assets The Company evaluates the carrying value and recoverability of its long-lived assets when circumstances warrant such evaluation. Long-lived assets are 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 nine months ended September 30, 2022 and 2021. Redeemable Noncontrolling Interests As more fully described in “ Note 22. Non-Controlling Interests ”, the Company was 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 in non-controlling interests. The put options permited 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. 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 classified the MG SPV and Heartland SPV non-controlling interests between the liabilities and equity sections of the accompanying 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 were to 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 would become redeemable. The Company 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 loss in the consolidated financial statements. Rather, such adjustments are treated as equity transactions and adjustment to net loss in determining net loss available to common stockholders for the purpose of calculating earnings per share. On April 1, 2022, the Company redeemed the non-controlling interest holder's interest of MG SPV, and on May 26, 2022, the Company redeemed the non-controlling interest holder's interest of Heartland SPV. Variable Interest Entities The Company determines whether each business entity in which it has equity interests, debt, or other investments constitutes a variable interest entity (“ VIE ”) based on consideration of the following criteria: (i) the entity lacks sufficient equity at-risk to finance its activities without additional subordinated financial support, or (ii) equity holders, as a group, lack the characteristics of a controlling financial instrument. If an entity is determined to be a VIE, the Company then determines whether to consolidate the entity as the primary beneficiary. The primary beneficiary has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the entity. Assets and Liabilities Held for Sale The Company classifies disposal groups as held for sale in the period in which all of the following criteria are met: (1) management, having the authority to approve the action, commits to a plan to sell the disposal group; (2) the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups; (3) an active program to locate a buyer or buyers and other actions required to complete the plan to sell the disposal group have been initiated; (4) the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale, within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year; (5) the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. A disposal group that is classified as held for sale is initially measured at the lower of its carrying amount or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. No loss was recognized during the periods presented. Subsequent changes in the fair value of a disposal group less any costs to sell are reported as an adjustment to the carrying amount of the disposal group, as long as the new carrying amount does not exceed the carrying amount of the asset at the time it was initially classified as held for sale. Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group for all periods presented in the line items assets held for sale and liabilities held for sale, respectively, in the consolidated balance sheets. Discontinued Operations The results of operations of a component of the Company that can be clearly distinguished, operationally and for financial reporting purposes, that either has been disposed of or is classified as held for sale is reported in discontinued operations, if the disposal represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results. New Accounting Pronouncements Accounting pronouncements adopted by the Company in 2022 . In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity to simplify the accounting for convertible debt and other equity-linked instruments. The new guidance simplifies the accounting for convertible instruments by eliminating the cash conversion and beneficial conversion feature models used to separately account for embedded conversion features as a component of equity. Instead, the entity will account for the convertible debt or convertible preferred stock securities as a single unit of account, unless the conversion feature requires bifurcation and recognition as derivatives. Additionally, the guidance requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of potential share settlement for instruments that may be settled in cash or shares. The Company adopted this new guidance as of January 1, 2022, under the modified retrospective method. On January 20, 2022, our shareholders approved the issuance of shares of our common stock issuable upon the conversion of our $155 million aggregate principal amount at maturity 6.25% Convertible Senior Notes due 2027 (the "Convertible Senior Notes"), the $79 million derivative liabilities were recorded as additional paid-in capital. Accounting pronouncements not yet adopted. The Company has not identified any recent accounting pronouncements that are expected to have a material impact on our financial condition, results of operations or cash flows upon adoption. |
MOBILE REFINERY ACQUISITION
MOBILE REFINERY ACQUISITION | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
MOBILE REFINERY ACQUISITION | MOBILE REFINERY ACQUISITION On April 1, 2022 (the “Effective Date”), Vertex Energy Operating, LLC (“ Vertex Operating ”), the Company’s wholly-owned subsidiary assigned its rights to that certain May 26, 2021 Sale and Purchase Agreement between Vertex Operating and Equilon Enterprises LLC d/b/a Shell Oil Products US, Shell Oil Company and Shell Chemical LP, subsidiaries of Shell plc (“ Shell ”) (the “ Refinery Purchase Agreement ”), to Vertex Refining Alabama LLC, a Delaware limited liability company (“ Vertex Refining ”) which is indirectly wholly-owned by the Company, and on the same date, Vertex Refining completed the acquisition of a Mobile, Alabama refinery (the “ Mobile Refinery ”) from Shell (the “Mobile Acquisition”). On the Effective Date, a total of $75 million (less $10 million previously paid) was paid by Vertex Refining in consideration for the acquisition of the Mobile Refinery, which amount was subject to customary purchase price adjustments and reimbursement for certain capital expenditures in the amount of approximately $0.4 million, $15.9 million was paid to Shell for previously agreed upon capital expenditures and miscellaneous prepaid and reimbursable items, and $130 million was paid to Shell by Vertex Refining in connection with the purchase of certain crude oil inventory and finished products owned by Shell and located at the Mobile Refinery on April 1, 2022 (approximately $124 million of which was funded by Macquarie as a result of the simultaneous sale of such inventory to Macquarie pursuant to an Inventory Sales Agreement between Vertex Refining and Macquarie). The Company also paid $8.7 million at closing pursuant to the terms of a Swapkit Purchase Agreement entered into with Shell on May 26, 2021 (the “ Swapkit Agreement ”), pursuant to which the Company agreed to fund a technology solution comprising the ecosystem required for the Company to run the Mobile Refinery after closing (the “ Swapkit ”). The purchase price allocation is preliminary and subject to change based upon the finalization of our valuation report. The following table summarizes the preliminary determination and recognition of assets acquired (in thousands): Financing agreement Vertex acquisition Total Inventory $ 124,311 $ 5,909 $ 130,220 Prepaid assets — 147 147 Fixed assets — 97,158 97,158 Total purchase price $ 124,311 $ 103,214 $ 227,525 The following table presents summarized results of operations of the Mobile Refinery for the period from April 1, 2022 to September 30, 2022, which are included in the accompanying consolidated statement of operations for the period ended September 30, 2022 (in thousands): For Three Months Ended September 30, 2022 For Six Months Ended September 30, 2022 Revenue $ 733,521 $ 1,655,717 Net Income (loss) $ 18,370 $ (5,592) The following table presents unaudited pro forma results of operations reflecting the acquisition of the Mobile Refinery as if the acquisition had occurred as of January 1, 2021. This information has been compiled from current and historical financial statements and is not necessarily indicative of the results that actually would have been achieved had the transaction occurred at the beginning of the periods presented or that may be achieved in the future (in thousands): For Nine Months Ended September 30, 2022 2021 Revenue $ 2,406,617 $ 1,473,700 Net income (loss) $ 49,509 $ (37,500) |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2022 | |
Environmental Remediation Obligations [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES 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 61st Judicial District Court of Harris County, Texas, Cause No. 2020-65269, for breach of contract and simultaneously sought a Temporary Restraining Order and 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”). Vertex seeks damages, attorney’s fees, costs of court, and all other relief to which it may be entitled. On February 8, 2021, Penthol filed a complaint against Vertex Operating in the United States District Court for the Southern District of Texas; Civil Action No. 4:21-CV-416 (the “Complaint”). Penthol’s Complaint sought 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. On August 12, 2021, United States District Judge Andrew S. Hanen dismissed Penthol’s Sherman Act claim. Penthol’s remaining claims are pending. Penthol is seeking a declaration that Vertex has materially breached the agreement; an injunction that prohibits Vertex from using Penthol’s alleged trade secrets and requires Vertex to return any of Penthol’s alleged trade secrets; awards of actual, consequential and exemplary damages, attorneys’ fees and costs of court; and other relief to which it may be entitled. Vertex denies Penthol’s allegations in the Complaint. Vertex contends Penthol’s claims are completely without merit, and that Penthol’s termination of the Penthol Agreement was wrongful and resulted in damages to Vertex that it is seeking to recover in the Harris County lawsuit. Further, Vertex contends that Penthol’s termination of the Penthol Agreement 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. Vertex disputes Penthol’s allegations of wrongdoing and intends to vigorously defend itself in this matter. On February 26, 2021, Penthol filed its second amended answer and counterclaims, alleging that Vertex improperly terminated the Penthol Agreement and that Vertex tortiously interfered with Penthol’s prospective and existing business relationships. Vertex denies these allegations and is vigorously defending them. Recently, the parties agreed to move the pending claims and defenses in the Texas state court lawsuit into the federal court lawsuit. Both parties also sought to amend their pleadings to add additional claims. By order dated October 18, 2022, the Judge in the lawsuit, Judge Hanen largely granted these requests. As a result, Vertex was granted leave to add Penthol C.V. as a defendant. Penthol was granted leave to add claims for fraud and breach of contract relating to an assignment agreement, and add claims for misappropriation of trade secrets. All pending claims between the parties are now in the federal court action. The parties recently conducted numerous depositions and substantial document discovery. Vertex has filed a motion for summary judgment, and Penthol has filed a motion for partial summary judgment, both of which are pending. This case is pending, but is currently set for trial in January 2023. 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). Environmental Matters |
REVENUES
REVENUES | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Our revenues are primarily generated from contracts with customers through the sale of refined petroleum products and terminalling and storage services. We recognize revenue from product sales at prevailing market rates at the point in time in which the customer obtains control of the product. Terminalling and storage revenues are recognized as services are rendered, and our performance obligations have been satisfied once the product has been transferred back to the customer. These services are short-term in nature, and the service fees charged to our customers are at prevailing market rates. The following tables present our revenues disaggregated by geographical market and revenue source (in thousands): Three Months Ended September 30, 2022 Black Oil* & Recovery Refining & Consolidated Primary Geographical Markets Southern United States $ 43,439 $ 766,769 $ 810,208 Sources of Revenue Refined products: Gasolines $ — $ 171,023 $ 171,023 Jet Fuels — 138,962 138,962 Diesel — 276,355 276,355 Other refinery products (1) 37,607 108,337 145,944 Re-refined products: Pygas — 15,285 15,285 Metals (2) 4,060 — 4,060 Other re-refined products (3) 1,490 54,663 56,153 Services: Terminalling — 2,144 2,144 Oil collection services 282 — 282 Total revenues $ 43,439 $ 766,769 $ 810,208 Three Months Ended September 30, 2021 Black Oil* & Recovery Refining & Consolidated Primary Geographical Markets Southern United States $ 26,410 $ 24,572 $ 50,982 Sources of Revenue Refined products: Gasolines $ — $ 6,674 $ 6,674 Jet Fuels — — — Diesel — 13,745 13,745 Other refinery products (1) 20,339 — 20,339 Re-refined products: Pygas — 3,736 3,736 Metals (2) 4,328 — 4,328 Other re-refined products (3) 909 417 1,326 Services: — Oil collection services 834 — 834 Total revenues $ 26,410 $ 24,572 $ 50,982 Nine Months Ended September 30, 2022 Black Oil* & Recovery Refining & Consolidated Primary Geographical Markets Southern United States $ 147,545 $ 1,767,878 $ 1,915,423 Sources of Revenue Refined products: Gasolines $ — $ 432,173 $ 432,173 Jet Fuels — 282,650 282,650 Diesel — 620,580 620,580 Other refinery products (1) 129,078 259,667 388,745 Re-refined products: Pygas — 40,661 40,661 Metals (2) 13,080 — 13,080 Other re-refined products (3) 4,111 127,695 131,806 Services: — Terminalling — 4,452 4,452 Oil collection services 1,276 — 1,276 Total revenues $ 147,545 $ 1,767,878 $ 1,915,423 Nine Months Ended September 30, 2021 Black Oil* & Recovery Refining & Consolidated Primary Geographical Markets Southern United States $ 80,124 $ 67,683 $ 147,807 Sources of Revenue Refined products: Gasolines — 17,168 17,168 Jet Fuels — — — Diesel — 38,806 38,806 Other refinery products (1) 58,039 — 58,039 Re-refined products: Pygas — 10,571 10,571 Metals (2) 17,455 — 17,455 Other re-refined products (3) 1,763 1,138 2,901 Services: — Oil collection services 2,867 — 2,867 Total revenues $ 80,124 $ 67,683 $ 147,807 * The Company has determined to combine the Black Oil and Recovery segments in the presentation above due to the revenue from such segment being less than 10% of the Company's total revenue after the Mobile Refinery acquisition. The Black Oil segment includes the Heartland Business, which is presented herein as discontinued operations. (1) Other refinery products include the sales of base oil, VGO, cutterstock and Hydrotreated VGO and other petroleum products. (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. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING After the acquisition of the Mobile Refinery on April 1, 2022, the revenues of our Black Oil and Recovery segments are less than 10% of consolidated revenue. The Company decided to present our Black Oil and Recovery segment together during this reporting period. The Refining and Marketing segment consists primarily of the sale of gasoline, diesel and jet fuel produced at the Mobile Refinery as well as pygas and industrial fuels, which are produced at a third-party facility. The Black Oil and Recovery 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; (e) the sale of VGO (vacuum gas oil)/marine fuel; (f) the sale of ferrous and non-ferrous recyclable Metal(s) products that are recovered from manufacturing and consumption; and (g) revenues generated from trading/marketing of Group III Base Oils. The Black Oil segment includes the Heartland Business, which is presented herein as discontinued operations. 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 nine months ended September 30, 2022 and 2021 is as follows (in thousands): THREE MONTHS ENDED SEPTEMBER 30, 2022 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Revenues: Refined products $ 37,607 $ 694,677 $ — $ 732,284 Re-refined products 5,550 69,948 — 75,498 Services 282 2,144 — 2,426 Total revenues 43,439 766,769 — 810,208 Cost of revenues (exclusive of depreciation and amortization shown separately below) 35,299 715,164 — 750,463 Depreciation and amortization attributable to costs of revenues 939 3,111 — 4,050 Gross profit 7,201 48,494 — 55,695 Selling, general and administrative expenses 4,919 27,988 4,071 36,978 Depreciation and amortization attributable to operating expenses 39 850 231 1,120 Income (loss) from operations $ 2,243 $ 19,656 $ (4,302) $ 17,597 Capital expenditures $ 412 $ 26,333 $ — $ 26,745 THREE MONTHS ENDED SEPTEMBER 30, 2021 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Revenues: Refined products $ 20,339 $ 20,419 $ — $ 40,758 Re-refined products 5,237 4,153 — 9,390 Services 834 — — 834 Total revenues 26,410 24,572 — 50,982 Cost of revenues (exclusive of depreciation and amortization shown separately below) 22,205 23,937 — 46,142 Depreciation and amortization attributable to costs of revenues 901 127 — 1,028 Gross profit 3,304 508 — 3,812 Selling, general and administrative expenses 3,618 1,034 3,525 8,177 Depreciation and amortization attributable to operating expenses 59 108 253 420 Loss from operations $ (373) $ (634) $ (3,778) $ (4,785) Capital expenditures $ 228 $ — $ — $ 228 NINE MONTHS ENDED SEPTEMBER 30, 2022 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Revenues: Refined products $ 129,078 $ 1,595,070 $ — $ 1,724,148 Re-refined products 17,191 168,356 — 185,547 Services 1,276 4,452 — 5,728 Total revenues 147,545 1,767,878 — 1,915,423 Cost of revenues (exclusive of depreciation and amortization shown separately below) 111,740 1,708,017 — 1,819,757 Depreciation and amortization attributable to costs of revenues 2,805 6,339 — 9,144 Gross profit 33,000 53,522 — 86,522 Selling, general and administrative expenses 13,383 52,709 23,842 89,934 Depreciation and amortization attributable to operating expenses 142 1,785 729 2,656 Income (loss) from operations $ 19,475 $ (972) $ (24,571) $ (6,068) Capital expenditures $ 2,830 $ 142,927 $ — $ 145,757 NINE MONTHS ENDED SEPTEMBER 30, 2021 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Revenues: Refined products $ 58,039 $ 55,974 $ — $ 114,013 Re-refined products 19,218 11,709 — 30,927 Services 2,867 — — 2,867 Total revenues 80,124 67,683 — 147,807 Cost of revenues (exclusive of depreciation and amortization shown separately below) 63,431 64,555 — 127,986 Depreciation and amortization attributable to costs of revenues 2,623 379 — 3,002 Gross profit 14,070 2,749 — 16,819 Selling, general and administrative expenses 10,841 2,482 8,419 21,742 Depreciation and amortization attributable to operating expenses 176 325 759 1,260 Income (loss) from operations $ 3,053 $ (58) $ (9,178) $ (6,183) Capital expenditures $ 2,313 $ — $ — $ 2,313 Total assets by segment were as follows (in thousands): AS OF SEPTEMBER 30, 2022 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Total assets $ 123,808 $ 395,692 $ 128,077 $ 647,577 AS OF SEPTEMBER 30, 2021 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Total assets $ 101,461 $ 4,775 $ 38,414 $ 144,650 Segment assets for the Refining and Marketing and Black Oil and Recovery segments consist of property, plant, and equipment, right-of-use assets, intangible assets, accounts receivable, inventories and other assets. Assets for the corporate unallocated amounts consist of property, plant, and equipment used at the corporate headquarters, intangible assets, derivative commodity assets, assets held for sale as well as cash. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE Accounts receivable, net, consists of the following at September 30, 2022 and December 31, 2021(in thousands): September 30, 2022 December 31, 2021 Accounts receivable trade $ 52,338 $ 16,302 Allowance for doubtful accounts (1,509) (1,422) Accounts receivable trade, net 50,829 14,880 Accounts receivable other 1,001 — Accounts receivable, net $ 51,830 $ 14,880 |
CONCENTRATIONS OF RISK AND SIGN
CONCENTRATIONS OF RISK AND SIGNIFICANT CUSTOMERS | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONCENTRATIONS OF RISK AND SIGNIFICANT CUSTOMERS | CONCENTRATIONS OF RISK AND SIGNIFICANT CUSTOMERS At September 30, 2022 and 2021 and for each of the nine months then ended, the Company’s revenues and receivables were comprised of the following customer concentrations: As of and for the Nine Months Ended September 30, 2022 September 30, 2021 % of % of % of % of Customer 1 40% 2% 34% 11% Customer 2 22% 45% 12% 6% Customer 3 10% 7% 9% 5% For each of the nine months ended September 30, 2022 and 2021, the Company’s segment revenues were comprised of the following customer concentrations: % of Revenue by Segment % Revenue by Segment Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Black Oil and Recovery Refining Black Oil and Recovery Refining Customer 1 —% 43% —% 27% Customer 2 —% 24% —% 20% Customer 3 83% 4% 64% —% |
INVENTORY
INVENTORY | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | INVENTORY The following table describes the Company's inventory balances by category (in thousands): As of September 30, 2022 As of December 31, 2021 Crude oil $ 60,504 $ 926 Refined products 97,568 4,729 Re-refined products 6,590 2,376 Total hydrocarbon inventories 164,662 8,031 Other inventories 5,110 — Total inventories $ 169,772 $ 8,031 September 30, 2022 Obligations under inventory financing agreement $ 135,744 Unamortized financing cost (1,500) Obligations under inventory financing agreement, net $ 134,244 The valuation of our obligations at the end of each reporting period requires that we make estimates of the prices and differentials for our then monthly forward purchase obligations. Supply and Offtake Agreement On April 1, 2022 (the “ Commencement Date ”), Vertex Refining entered into a Supply and Offtake Agreement (the “ Supply and Offtake Agreement ”) with Macquarie, pertaining to crude oil supply and offtake of finished products located at the Mobile Refinery acquired on April 1, 2022. On the Commencement Date, pursuant to an Inventory Sales Agreement and in connection with the Supply and Offtake Agreement, Macquarie purchased from Vertex Refining all crude oil and finished products within the categories covered by the Supply and Offtake Agreement and the Inventory Sales Agreement, which were held at the Mobile Refinery and a certain specified third party storage terminal, which were previously purchased by Vertex Refining as part of the acquisition of the Mobile Refinery as discussed in greater detail above in Note 3. "Mobile Refinery Acquisition" . Pursuant to the Supply and Offtake Agreement, beginning on the Commencement Date and subject to certain exceptions, substantially all of the crude oil located at the Mobile Refinery and at a specified third party storage terminal from time to time will be owned by Macquarie prior to its sale to Vertex Refining for consumption within the Mobile Refinery processing units. Also pursuant to the Supply and Offtake Agreement, and subject to the terms and conditions and certain exceptions set forth therein, Macquarie will purchase from Vertex Refining substantially all of the Mobile Refinery’s output of certain refined products and will own such refined products while they are located within certain specified locations at the Mobile Refinery. Macquarie takes title to the refined products stored in our storage tanks until they are sold to our retail locations or to third parties. We record the inventory owned by Macquarie on our behalf as inventory with a corresponding accrued liability on our balance sheet because we maintain the risk of loss until the refined products are sold to third parties and we have an obligation to repurchase it. Pursuant to the Supply and Offtake Agreement and subject to the terms and conditions therein, Macquarie may during the term of the Supply and Offtake Agreement procure crude oil and refined products from certain third parties which may be sold to Vertex Refining or third parties pursuant to the Supply and Offtake Agreement and may sell Refined Products to Vertex Refining or third parties (including customers of Vertex Refining). The obligations of Vertex Refining and any of its subsidiaries under the Supply and Offtake Agreement and related transaction documents are guaranteed by the Company. The obligations of Vertex Refining and any of its subsidiaries under the Supply and Offtake Agreement and related transaction documents are also secured by a Pledge and Security Agreement in favor of Macquarie, discussed below, executed by Vertex Refining. In addition, the Supply and Offtake Agreement also requires that Vertex Refining post and maintain cash collateral (in the form of an independent amount) as security for Vertex Refining’s obligations under the Supply and Offtake Agreement and the related transaction documents. The amount of cash collateral is subject to adjustments during the term. Pursuant to the Supply and Offtake Agreement, Vertex Refining and Macquarie are in discussions to cooperate to develop and document, by no later than 180 days after the Commencement Date, procedures relating to the unwinding and termination of the agreement and related agreements, in the event of the expiration or early termination of the Supply and Offtake Agreement. The parties also agreed to use commercially reasonable efforts to negotiate mutually agreeable terms for Macquarie’s intermediating of renewable feedstocks and renewable diesel that will be utilized and/or produced by Vertex Refining in connection with and following a planned renewable diesel conversion project at the Mobile Refinery (including providing Macquarie a right of first refusal in connection therewith), for 90 days after the Commencement Date (the “ RD Period ”), which discussions are ongoing. If, by the end of the RD Period, Macquarie and Vertex Refining, each acting in good faith and in a commercially reasonable manner, have not been able to reach commercial agreement regarding the entry into a renewable diesel intermediation, Vertex Refining may elect to terminate the Supply and Offtake Agreement by providing notice of any such election to Macquarie; provided that no such election may be effective earlier than the date falling 90 calendar days following the date on which such notice is delivered. The agreement is also subject to termination upon the occurrence of certain events, including the termination of certain agreements relating to the delivery of crude oil to and the offtake of products from the Mobile Refinery. Upon an early termination of the Supply and Offtake Agreement, Vertex Refining is required to pay amounts relating to such termination to Macquarie including, among other things, outstanding unpaid amounts, amounts owing with respect to terminating transactions under the Supply and Offtake Agreement and related transaction documents, unpaid ancillary costs, and breakage costs, losses and out-of-pocket costs with respect to the termination, liquidation, maintenance or reestablishment, or redeployment of certain hedges put in place by Macquarie in connection with the transactions contemplated by the agreement, and Vertex Refining is required to pay other termination fees and amounts to Macquarie in the event of any termination of the agreement. Additionally, upon the termination of the Supply and Offtake Agreement, the outstanding obligations of Vertex Refining and Macquarie to each other will be calculated and reduced to an estimated net settlement payment which will be subject to true-up when the final settlement payment has been calculated following termination. The Supply and Offtake Agreement requires Vertex Refining to prepare and deliver certain forecasts, projections and estimates and comply with financial statement delivery obligations and other disclosure obligations. The agreement also requires Vertex Refining to provide Macquarie notice of certain estimated monthly crude oil delivery, crude oil consumption, product production, target inventory levels and product offtake terms, which Macquarie has the right to reject, subject to certain disclosure requirements. The Supply and Offtake Agreement has a 24 month term following the Commencement Date, subject to the performance of customary covenants, and certain events of default and termination events provided therein (certain of which are discussed in greater detail below), for a facility of this size and type. Additionally, either party may terminate the agreement at any time, for any reason, with no less than 180 days prior notice to the other. The Supply and Offtake Agreement includes certain customary representations, warranties, indemnification obligations and limitations of liability of the parties for a facility of this size and type, and also requires Vertex Refining to be responsible for certain ancillary costs relating to the Supply and Offtake Agreement and the transactions contemplated thereby. The Supply and Offtake Agreement requires Vertex Refining to comply with various indemnity, insurance and tax obligations, and also includes a prohibition on any amendments to Vertex Refining’s financing agreements which, among other things, adversely affect Macquarie’s rights and remedies under the Supply and Offtake Agreement and related transaction documents without the prior consent of Macquarie; a prohibition on Vertex Refining entering into any financing agreement which would cause Vertex Refining’s specified indebtedness to exceed $10 million without Macquarie’s prior consent, subject to certain exceptions; and a requirement that Vertex Refining not have less than $17.5 million in unrestricted cash for any period of more than three The price for crude oil purchased by the Company from Macquarie and for products sold by the Company to Macquarie within each agreed product group, in each case, is equal to a pre-determined benchmark, plus a pre-agreed upon differential, subject to adjustments and monthly true-ups. Vertex Refining is required to pay Macquarie various monthly fees in connection with the Supply and Offtake Agreement and related arrangements, including, without limitation, (1) an inventory management fee, calculated based on the value of the inventory owned by Macquarie in connection with the Supply and Offtake Agreement, (2) a lien inventory fee based upon the value of certain inventory on which Macquarie has a lien, (3) a per barrel crude handling fee based upon the volume of crude oil Macquarie sells to Vertex Refining, (4) per barrel crude oil and products intermediation fees for each barrel of crude oil which Macquarie buys from a third party and each barrel of products Macquarie sells to a third party, in each case, in connection with the Supply and Offtake Agreement, and (5) a services fee in respect of which Macquarie agrees to make Crude Oil and Products available to the Company in accordance with the weekly nomination procedure as set forth in the Supply and Offtake Agreement. Vertex Refining will also be responsible for certain payments relating to Macquarie’s hedging of the inventory it owns in connection with the Supply and Offtake Agreement, including the costs of rolling hedges forward each month, as well as any costs (or gains) resulting from a mismatch between the Company’s projected target inventory levels (which provide the basis for Macquarie’s hedge position) and actual month end inventory levels. In connection with the entry into the Supply and Offtake Agreement, Vertex Refining entered into various ancillary agreements which relate to supply, storage, marketing and sales of crude oil and refined products including, but not limited to the following: Inventory Sales Agreement, Master Crude Oil and Products Agreement, Storage and Services Agreement, and a Pledge and Security Agreement (collectively with the Supply and Offtake Agreement, the “ Supply Transaction Documents ”). The Company agreed to guarantee the obligations of Vertex Refining and any of its subsidiaries arising under the Supply Transaction Documents pursuant to the entry into a Guaranty in favor of Macquarie. Tripartite Agreements Also on the Commencement Date, Vertex Refining, Macquarie and certain parties subject to crude oil supply and products offtake agreements with Vertex Refining, relating to the Mobile Refinery, entered into various tripartite agreements (the “ Tripartite Agreements ”), whereby Vertex Refining granted Macquarie the right, on a rolling daily or monthly basis, as applicable, to elect to assume Vertex Refining’s rights and obligations under such crude oil supply and products offtake agreements in connection with the performance of the Supply and Offtake Agreement, and the counterparties thereto are deemed to have consented to Macquarie’s assuming such obligations. Such Tripartite Agreements also provided for certain interpretations of the provisions of such supply and offtake agreements between Vertex Refining and such third parties in connection with Macquarie’s right to elect to assume Vertex Refining’s rights and obligations under such agreements. The Tripartite Agreements remain in place until the termination of the agreements to which they relate, or the earlier termination thereof as set forth in the Tripartite Agreements, including in the event of certain events of default by the parties thereto under the modified crude oil supply and products offtake agreements or the Supply and Offtake Agreement and related transaction documents and also in the event of the termination of the Supply and Offtake Agreement. Macquarie, Vertex Refining and a third party offtaker also entered into a tripartite agreement pursuant to which certain storage capacity within the Mobile Refinery which Macquarie had leased pursuant to the Storage and Services Agreement was effectively made available to such third party consistent with the terms agreed by such party and Vertex Refining in its underlying products offtake agreement. Macquarie, Vertex Refining and a third party storage terminal operator also entered into a tripartite agreement relating to the storage of Macquarie-owned crude oil in such terminal in connection with the Supply and Offtake Agreement. Guaranty Vertex Refining’s obligations under the Supply and Offtake Agreement and related transaction documents (other than the hedges which are secured and guaranteed on a pari passu basis under the Loan and Security Agreement) were unconditionally guaranteed by the Company pursuant to the terms of a Guaranty entered into on April 1, 2022, by the Company in favor of Macquarie (the “ Guaranty ”). |
INVENTORY FINANCING AGREEMENT
INVENTORY FINANCING AGREEMENT | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY FINANCING AGREEMENT | INVENTORY The following table describes the Company's inventory balances by category (in thousands): As of September 30, 2022 As of December 31, 2021 Crude oil $ 60,504 $ 926 Refined products 97,568 4,729 Re-refined products 6,590 2,376 Total hydrocarbon inventories 164,662 8,031 Other inventories 5,110 — Total inventories $ 169,772 $ 8,031 September 30, 2022 Obligations under inventory financing agreement $ 135,744 Unamortized financing cost (1,500) Obligations under inventory financing agreement, net $ 134,244 The valuation of our obligations at the end of each reporting period requires that we make estimates of the prices and differentials for our then monthly forward purchase obligations. Supply and Offtake Agreement On April 1, 2022 (the “ Commencement Date ”), Vertex Refining entered into a Supply and Offtake Agreement (the “ Supply and Offtake Agreement ”) with Macquarie, pertaining to crude oil supply and offtake of finished products located at the Mobile Refinery acquired on April 1, 2022. On the Commencement Date, pursuant to an Inventory Sales Agreement and in connection with the Supply and Offtake Agreement, Macquarie purchased from Vertex Refining all crude oil and finished products within the categories covered by the Supply and Offtake Agreement and the Inventory Sales Agreement, which were held at the Mobile Refinery and a certain specified third party storage terminal, which were previously purchased by Vertex Refining as part of the acquisition of the Mobile Refinery as discussed in greater detail above in Note 3. "Mobile Refinery Acquisition" . Pursuant to the Supply and Offtake Agreement, beginning on the Commencement Date and subject to certain exceptions, substantially all of the crude oil located at the Mobile Refinery and at a specified third party storage terminal from time to time will be owned by Macquarie prior to its sale to Vertex Refining for consumption within the Mobile Refinery processing units. Also pursuant to the Supply and Offtake Agreement, and subject to the terms and conditions and certain exceptions set forth therein, Macquarie will purchase from Vertex Refining substantially all of the Mobile Refinery’s output of certain refined products and will own such refined products while they are located within certain specified locations at the Mobile Refinery. Macquarie takes title to the refined products stored in our storage tanks until they are sold to our retail locations or to third parties. We record the inventory owned by Macquarie on our behalf as inventory with a corresponding accrued liability on our balance sheet because we maintain the risk of loss until the refined products are sold to third parties and we have an obligation to repurchase it. Pursuant to the Supply and Offtake Agreement and subject to the terms and conditions therein, Macquarie may during the term of the Supply and Offtake Agreement procure crude oil and refined products from certain third parties which may be sold to Vertex Refining or third parties pursuant to the Supply and Offtake Agreement and may sell Refined Products to Vertex Refining or third parties (including customers of Vertex Refining). The obligations of Vertex Refining and any of its subsidiaries under the Supply and Offtake Agreement and related transaction documents are guaranteed by the Company. The obligations of Vertex Refining and any of its subsidiaries under the Supply and Offtake Agreement and related transaction documents are also secured by a Pledge and Security Agreement in favor of Macquarie, discussed below, executed by Vertex Refining. In addition, the Supply and Offtake Agreement also requires that Vertex Refining post and maintain cash collateral (in the form of an independent amount) as security for Vertex Refining’s obligations under the Supply and Offtake Agreement and the related transaction documents. The amount of cash collateral is subject to adjustments during the term. Pursuant to the Supply and Offtake Agreement, Vertex Refining and Macquarie are in discussions to cooperate to develop and document, by no later than 180 days after the Commencement Date, procedures relating to the unwinding and termination of the agreement and related agreements, in the event of the expiration or early termination of the Supply and Offtake Agreement. The parties also agreed to use commercially reasonable efforts to negotiate mutually agreeable terms for Macquarie’s intermediating of renewable feedstocks and renewable diesel that will be utilized and/or produced by Vertex Refining in connection with and following a planned renewable diesel conversion project at the Mobile Refinery (including providing Macquarie a right of first refusal in connection therewith), for 90 days after the Commencement Date (the “ RD Period ”), which discussions are ongoing. If, by the end of the RD Period, Macquarie and Vertex Refining, each acting in good faith and in a commercially reasonable manner, have not been able to reach commercial agreement regarding the entry into a renewable diesel intermediation, Vertex Refining may elect to terminate the Supply and Offtake Agreement by providing notice of any such election to Macquarie; provided that no such election may be effective earlier than the date falling 90 calendar days following the date on which such notice is delivered. The agreement is also subject to termination upon the occurrence of certain events, including the termination of certain agreements relating to the delivery of crude oil to and the offtake of products from the Mobile Refinery. Upon an early termination of the Supply and Offtake Agreement, Vertex Refining is required to pay amounts relating to such termination to Macquarie including, among other things, outstanding unpaid amounts, amounts owing with respect to terminating transactions under the Supply and Offtake Agreement and related transaction documents, unpaid ancillary costs, and breakage costs, losses and out-of-pocket costs with respect to the termination, liquidation, maintenance or reestablishment, or redeployment of certain hedges put in place by Macquarie in connection with the transactions contemplated by the agreement, and Vertex Refining is required to pay other termination fees and amounts to Macquarie in the event of any termination of the agreement. Additionally, upon the termination of the Supply and Offtake Agreement, the outstanding obligations of Vertex Refining and Macquarie to each other will be calculated and reduced to an estimated net settlement payment which will be subject to true-up when the final settlement payment has been calculated following termination. The Supply and Offtake Agreement requires Vertex Refining to prepare and deliver certain forecasts, projections and estimates and comply with financial statement delivery obligations and other disclosure obligations. The agreement also requires Vertex Refining to provide Macquarie notice of certain estimated monthly crude oil delivery, crude oil consumption, product production, target inventory levels and product offtake terms, which Macquarie has the right to reject, subject to certain disclosure requirements. The Supply and Offtake Agreement has a 24 month term following the Commencement Date, subject to the performance of customary covenants, and certain events of default and termination events provided therein (certain of which are discussed in greater detail below), for a facility of this size and type. Additionally, either party may terminate the agreement at any time, for any reason, with no less than 180 days prior notice to the other. The Supply and Offtake Agreement includes certain customary representations, warranties, indemnification obligations and limitations of liability of the parties for a facility of this size and type, and also requires Vertex Refining to be responsible for certain ancillary costs relating to the Supply and Offtake Agreement and the transactions contemplated thereby. The Supply and Offtake Agreement requires Vertex Refining to comply with various indemnity, insurance and tax obligations, and also includes a prohibition on any amendments to Vertex Refining’s financing agreements which, among other things, adversely affect Macquarie’s rights and remedies under the Supply and Offtake Agreement and related transaction documents without the prior consent of Macquarie; a prohibition on Vertex Refining entering into any financing agreement which would cause Vertex Refining’s specified indebtedness to exceed $10 million without Macquarie’s prior consent, subject to certain exceptions; and a requirement that Vertex Refining not have less than $17.5 million in unrestricted cash for any period of more than three The price for crude oil purchased by the Company from Macquarie and for products sold by the Company to Macquarie within each agreed product group, in each case, is equal to a pre-determined benchmark, plus a pre-agreed upon differential, subject to adjustments and monthly true-ups. Vertex Refining is required to pay Macquarie various monthly fees in connection with the Supply and Offtake Agreement and related arrangements, including, without limitation, (1) an inventory management fee, calculated based on the value of the inventory owned by Macquarie in connection with the Supply and Offtake Agreement, (2) a lien inventory fee based upon the value of certain inventory on which Macquarie has a lien, (3) a per barrel crude handling fee based upon the volume of crude oil Macquarie sells to Vertex Refining, (4) per barrel crude oil and products intermediation fees for each barrel of crude oil which Macquarie buys from a third party and each barrel of products Macquarie sells to a third party, in each case, in connection with the Supply and Offtake Agreement, and (5) a services fee in respect of which Macquarie agrees to make Crude Oil and Products available to the Company in accordance with the weekly nomination procedure as set forth in the Supply and Offtake Agreement. Vertex Refining will also be responsible for certain payments relating to Macquarie’s hedging of the inventory it owns in connection with the Supply and Offtake Agreement, including the costs of rolling hedges forward each month, as well as any costs (or gains) resulting from a mismatch between the Company’s projected target inventory levels (which provide the basis for Macquarie’s hedge position) and actual month end inventory levels. In connection with the entry into the Supply and Offtake Agreement, Vertex Refining entered into various ancillary agreements which relate to supply, storage, marketing and sales of crude oil and refined products including, but not limited to the following: Inventory Sales Agreement, Master Crude Oil and Products Agreement, Storage and Services Agreement, and a Pledge and Security Agreement (collectively with the Supply and Offtake Agreement, the “ Supply Transaction Documents ”). The Company agreed to guarantee the obligations of Vertex Refining and any of its subsidiaries arising under the Supply Transaction Documents pursuant to the entry into a Guaranty in favor of Macquarie. Tripartite Agreements Also on the Commencement Date, Vertex Refining, Macquarie and certain parties subject to crude oil supply and products offtake agreements with Vertex Refining, relating to the Mobile Refinery, entered into various tripartite agreements (the “ Tripartite Agreements ”), whereby Vertex Refining granted Macquarie the right, on a rolling daily or monthly basis, as applicable, to elect to assume Vertex Refining’s rights and obligations under such crude oil supply and products offtake agreements in connection with the performance of the Supply and Offtake Agreement, and the counterparties thereto are deemed to have consented to Macquarie’s assuming such obligations. Such Tripartite Agreements also provided for certain interpretations of the provisions of such supply and offtake agreements between Vertex Refining and such third parties in connection with Macquarie’s right to elect to assume Vertex Refining’s rights and obligations under such agreements. The Tripartite Agreements remain in place until the termination of the agreements to which they relate, or the earlier termination thereof as set forth in the Tripartite Agreements, including in the event of certain events of default by the parties thereto under the modified crude oil supply and products offtake agreements or the Supply and Offtake Agreement and related transaction documents and also in the event of the termination of the Supply and Offtake Agreement. Macquarie, Vertex Refining and a third party offtaker also entered into a tripartite agreement pursuant to which certain storage capacity within the Mobile Refinery which Macquarie had leased pursuant to the Storage and Services Agreement was effectively made available to such third party consistent with the terms agreed by such party and Vertex Refining in its underlying products offtake agreement. Macquarie, Vertex Refining and a third party storage terminal operator also entered into a tripartite agreement relating to the storage of Macquarie-owned crude oil in such terminal in connection with the Supply and Offtake Agreement. Guaranty Vertex Refining’s obligations under the Supply and Offtake Agreement and related transaction documents (other than the hedges which are secured and guaranteed on a pari passu basis under the Loan and Security Agreement) were unconditionally guaranteed by the Company pursuant to the terms of a Guaranty entered into on April 1, 2022, by the Company in favor of Macquarie (the “ Guaranty ”). |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | PREPAID EXPENSES AND OTHER CURRENT ASSETS The following table describes the Company's prepaid expenses and other current assets balances (in thousands): As of September 30, 2022 As of December 31, 2021 Prepaid insurance $ 15,168 $ 2,638 Commodity derivative advance 12,468 556 Renewable volume obligation (RVO) assets 1,389 — Other prepaid expenses 4,312 1,373 Total prepaid expenses $ 33,337 $ 4,567 |
FIXED ASSETS, NET
FIXED ASSETS, NET | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS, NET | FIXED ASSETS, NET Fixed assets consist of the following (in thousands): Useful Life September 30, 2022 December 31, 2021 Equipment 10 $ 116,370 $ 38,682 Furniture and fixtures 7 106 106 Leasehold improvements 15 2,779 2,473 Office equipment 5 1,433 1,183 Vehicles 5 8,168 6,999 Building 20 2,334 274 Land improvements 20 158 — Construction in progress 57,730 10,484 Land 9,010 1,995 Total fixed assets 198,088 62,196 Less accumulated depreciation (33,371) (26,043) Net fixed assets $ 164,717 $ 36,153 The increase in fixed assets is due to the fixed assets acquired by the acquisition of the Mobile Refinery on April 1, 2022. Depreciation expense was $3.3 million and $1.0 million for the three months ended September 30, 2022 and 2021, respectively, for the continued operations. Depreciation expense was $7.6 million and $2.9 million for the nine months ended September 30, 2022 and 2021, respectively for the continued operations. Asset Retirement Obligations: The Company has asset retirement obligations with respect to certain of its refinery assets due to various legal obligations to clean and/or dispose of various component parts of each refinery at the time they are retired. However, these component parts can be used for extended and indeterminate periods of time as long as they are properly maintained and/or upgraded. It is the Company’s practice and current intent to maintain its refinery assets and continue making improvements to those assets based on technological advances. As a result, the Company believes that its refinery assets have indeterminate lives for purposes of estimating asset retirement obligations because dates, or ranges of dates, upon which the Company would retire refinery assets cannot reasonably be estimated. When a date or range of dates can reasonably be estimated for the retirement of any component part of a refinery, the Company estimates the cost of performing the retirement activities and records a liability for the fair value of that cost using established present value techniques. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | INTANGIBLE ASSETS, NET Components of intangible assets (subject to amortization) consist of the following items: September 30, 2022 December 31, 2021 Useful Life Gross Accumulated Amortization Net Gross Net Customer relations 5 $ 978 $ 971 $ 7 $ 978 $ 940 $ 38 Vendor relations 10 4,778 4,557 221 4,778 4,199 579 Trademark/Trade name 15 887 595 292 887 550 337 TCEP Technology/Patent 15 13,287 8,617 4,670 13,287 7,952 5,335 Non-compete 3 197 196 1 197 192 5 Software 3 9,344 1,732 7,612 538 180 358 $ 29,471 $ 16,668 $ 12,803 $ 20,665 $ 14,013 $ 6,652 Intangible assets are amortized on a straight-line basis. We continually evaluate the amortization period and carrying basis of intangible assets to determine whether subsequent events and circumstances warrant a revised estimated useful life or reduction in value. Total amortization expense of intangibles was $1.1 million and $0.4 million for the three months ended September 30, 2022 and 2021, respectively. Total amortization expense of intangibles was $2.7 million and $1.3 million for the nine months ended September 30, 2022 and 2021, respectively. Estimated future amortization expense is as follows (in thousands): Year 1 $ 4,061 Year 2 4,005 Year 3 2,549 Year 4 950 Year 5 948 Thereafter 290 $ 12,803 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, 2022 December 31, 2021 Accrued purchases $ 18,496 $ 1,877 Accrued interest 1 1,594 Accrued compensation and benefits 3,625 1,082 Accrued income, real estate, sales and other taxes 1,454 389 RINS liabilities 19,023 — Environmental liabilities - current 51 — $ 42,650 $ 4,942 The increase in accrued liabilities from December 31, 2021 is due to the operation of the Mobile Refinery, which was acquired on April 1, 2022. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The Company's long-term debt consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands): Creditor Loan Type Balance on September 30, 2022 Balance on December 31, 2021 Senior Convertible Note Convertible note $ 95,178 $ 155,000 Term Loan 2025 Loan 165,000 — John Deere Note Note — 94 SBA Loan SBA Loan 59 59 Various institutions Insurance premiums financed 10,449 2,375 Principal amount of long-term debt 270,686 157,528 Less: unamortized discount and deferred financing costs (86,384) (90,984) Total debt, net of unamortized discount and deferred financing costs 184,302 66,544 Less: current maturities, net of unamortized discount and deferred financing costs (16,637) (2,413) Long term debt, net of current maturities $ 167,665 $ 64,131 Future maturities of long-term debt, excluding financing lease obligations, as of September 30, 2022 are summarized as follows (in thousands): Period Ended September 30, Amount Due 2023 $ 16,637 2024 8,252 2025 150,563 2026 1 2027 95,180 Thereafter 53 Total $ 270,686 Term Loan On April 1, 2022 (the “ Closing Date ”), Vertex Refining; the Company, as a guarantor; substantially all of the Company’s direct and indirect subsidiaries, as guarantors (together with the Company, the “ Initial Guarantors ”); certain funds and accounts under management by BlackRock Financial Management, Inc. or its affiliates, as lenders (“BlackRock”), certain funds managed or advised by Whitebox Advisors, LLC, as lenders (“ Whitebox ”), certain funds managed by Highbridge Capital Management, LLC, as lenders (“ Highbridge ”), Chambers Energy Capital IV, LP, as a lender (“ Chambers ”), CrowdOut Capital LLC, as a lender (“ CrowdOut Capital ”), CrowdOut Credit Opportunities Fund LLC, as a lender (collectively with BlackRock, Whitebox, Highbridge, Chambers and CrowdOut Capital, the “ Lenders ”); and Cantor Fitzgerald Securities, in its capacity as administrative agent and collateral agent for the Lenders (the “ Agent ”), entered into a Loan and Security Agreement (the “ Loan and Security Agreement ”). Pursuant to the Loan and Security Agreement, the Lenders agreed to provide a $125 million term loan to Vertex Refining (the “Initial Term Loan”), the proceeds of which, less agreed upon fees and discounts, were held in escrow prior to the Closing Date, pursuant to an Escrow Agreement. On the Closing Date, net proceeds from the term loans, less the agreed upon fees and discounts, as well as certain transaction expenses, were released from escrow to Vertex Refining in an aggregate amount of $94 million. On May 26, 2022, each of the Initial Guarantors (including the Company), Vertex Refining OH, LLC, which is indirectly wholly-owned by the Company ( "Vertex OH" ), Heartland SPV, and Tensile-Heartland Acquisition Corporation, a Delaware corporation (“Tensile-Heartland”, and together with Vertex Ohio and Heartland SPV, the “Additional Guarantors”, and the Additional Guarantors, together with the Initial Guarantors, the “Guarantors”, and the Guarantors, together with Vertex Refining, the “Loan Parties”), entered into an Amendment Number One to Loan and Security Agreement (“Amendment No. One to Loan Agreement”), with certain of the Lenders and CrowdOut Warehouse LLC, as a lender (the “Additional Lenders” and together with the Initial Lenders, the “Lenders”) and the Agent, pursuant to which, the amount of the Term Loan (as defined below) was increased from $125 million to $165 million, with the Additional Lenders providing an additional term loan in the amount of $40 million (the “Additional Term Loan”, and together with the Initial Term Loan, the “Term Loan”). Pursuant to the Loan and Security Agreement, on the last day of March, June, September and December of each year (or if such day is not a business day, the next succeeding business day), beginning on March 31, 2023 and ending on December 31, 2024, Vertex Refining is required to repay $2 million of the principal amount owed under the Loan and Security Agreement (i.e., 1.25% of the original principal amount per quarter), subject to reductions in the event of any prepayment of the Loan and Security Agreement. The Company used a portion of the proceeds from the Term Loan borrowing to pay a portion of the purchase price associated with the acquisition of the Mobile Refinery (defined above) acquired by Vertex Refining on April 1, 2022, as discussed in greater detail above, and to pay certain fees and expenses associated with the closing of the Loan and Security Agreement and is required to use the remainder of the funds for (i) the planned renewable diesel conversion of the Mobile Refinery, and (ii) working capital and liquidity needs. On September 30, 2022, Vertex Refining; the Company, as a guarantor; substantially all of the Company’s direct and indirect subsidiaries, as guarantors; Vertex Marine Fuel Services LLC (“ Vertex Marine ”) and Vertex Refining Texas LLC (“ Vertex Texas ,” and together with Vertex Marine, the “ New Subsidiary Guarantors ”), which are indirectly wholly-owned by the Company; the lenders thereto; and the Agent, entered into a second amendment (“ Amendment No. Two ”) to the Loan and Security Agreement. Amendment No. Two (a) extends the date that the Company is required to begin initial commercial production of renewable diesel at the Mobile Refinery, from February 28, 2023 to April 28, 2023, and provides other corresponding extensions of the milestones required to complete the Company’s capital project designed to modify the Mobile Refinery’s existing hydrocracking unit to produce renewable diesel fuel on a standalone basis, which as previously described, is currently anticipated for mechanical completion during the first quarter of 2023; and (b) waives and extends certain deadlines and time periods for the Company to take other actions in connection with the Loan and Security Agreement. In addition, each of the New Subsidiary Guarantors also entered into a Guarantor Joinder, agreeing to be bound by the terms of the Loan and Security Agreement, and to guaranty the amounts owed thereunder. Warrant Agreement and Derivative Liabilities In connection with the Loan and Security Agreement, and as additional consideration for the Lenders agreeing to loan funds to the Company thereunder, the Company granted warrants to purchase 2.75 million shares of common stock of the Company to the Lenders (and/or their affiliates) on the Closing Date (the “ Initial Warrants ”). The terms of the warrants are set forth in a Warrant Agreement (the “ April 2022 Warrant Agreement ”) entered into on April 1, 2022, between the Company and Continental Stock Transfer & Trust Company as warrant agent. In connection with the entry into the Amendment No. One to Loan Agreement, and as a required term and condition thereof, on May 26, 2022, the Company granted warrants (the “ Additional Warrants ” and together with the Initial Warrants, the “ Warrants ”) to purchase 250 thousand shares of the Company’s common stock to the Additional Lenders and their affiliates. The terms of the Additional Warrants are set forth in a Warrant Agreement (the “ May 2022 Warrant Agreement ” and together with the April 2022 Warrant Agreement, the “ Warrant Agreements ”) entered into on May 26, 2022, between the Company and Continental Stock Transfer & Trust Company as warrant agent. Each Warrant holder has a put right to require the Company to repurchase any portion of the warrants held by such holder concurrently with the consummation of such fundamental transaction. The fundamental transaction clause requires the warrants to be classified as liabilities. Indenture and Convertible Senior Notes On November 1, 2021, we issued $155 million aggregate principal amount at maturity of our 6.25% Convertible Senior Notes due 2027 (the “ Convertible Senior Notes ”) pursuant to an Indenture (the “ Indenture ”), dated November 1, 2021, between the Company and U.S. Bank National Association, as trustee (the “ Trustee ”), in a private offering (the “ Note Offering ”) to persons reasonably believed to be “qualified institutional buyers” and/or to “accredited investors” in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended ( the "Securities Act" ), pursuant to Securities Purchase Agreements. The issue price was 90% of the face amount of each note. Interest payments on the Notes are paid semiannually on April 1 and October 1 of each year, beginning on April 1, 2022. As of October 1, 2022, a total of $7 million of interest was paid on our outstanding Convertible Senior Notes. A total of seventy-five percent (75%) of the net proceeds from the offering were placed into an escrow account to be released to the Company, upon the satisfaction of certain conditions, including the satisfaction or waiver of all of the conditions prece dent to the Company’s obligation to consummate the Mobile Acquisition (collectively, the “ Escrow Release Conditions ”). The Mobile Acquisition was consummated on April 1, 2022, and the proceeds from the sale of the Convertible Senior Notes which were held in escrow were released on April 1, 2022. Prior to July 1, 2027, the Convertible Senior Notes are convertible at the option of the holders of the Convertible Senior Notes only u pon the satisfaction of certain conditions and during certain periods, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, provided that until such time as the Company’s stockholders had approved the issuance of more than 19.99% of our common stock issuable upon conversion of the Convertible Senior Notes in accordance with the rules of The Nasdaq Capital Market, such Convertible Senior Notes were not convertible. Initially, a maximum of 36 million shares of common stock can be issued upon conversion of the Convertible Senior Notes, based on the initial maximum conversion rate of 233.6449 shares of the Company’s common stock per $1,000 principal amount of Convertible Senior Notes, which is subject to customary and other adjustments described in the Indenture. On January 20, 2022, our shareholders approved the issuance of shares of our common stock issuable upon conversion of the Convertible Senior Notes, in accordance with Nasdaq Listing Rules 5635 (a) and (d). Accordingly, $79 million of derivative Convertible Senior Note liabilities were reclassified to additional paid in capital. On May 26, 2022, May 27, 2022, May 31, 2022, and June 1, 2022, holders of an aggregate of $60 million of the Convertible Senior Notes due 2027, converted such notes into 10.2 million shares of common stock of the Company pursuant to the terms of the Indenture. Upon the conversion, the Company recognized $33.9 million unamortized deferred loan cost and discount as interest expense. The components of the Convertible Senior Notes are presented as follows (in thousands) : September 30, 2022 Principal Amounts $ 155,000 Conversion of principal into common stock (59,822) Outstanding principal amount 95,178 Unamortized discount and issuance costs (52,362) Net Carrying Amount $ 42,816 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | LEASES Finance Leases The Company's finance leases liabilities consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands): Creditor Loan Type Balance on September 30, 2022 Balance on December 31, 2021 AVT Equipment Lease-HH Finance Lease $ — $ 302 AVT Equipment Lease-Ohio Finance Lease — 296 VRA Finance Lease Finance Lease 45,494 — $ 45,494 $ 598 Future maturities of finance lease obligations, as of September 30, 2022 are summarized as follows (in thousands): Period Ended September 30, Amount Due 2023 $ 1,155 2024 1,301 2025 1,466 2026 1,652 2027 1,862 Thereafter 38,058 Total $ 45,494 On April 1, 2022, the Company entered into one finance lease. Base payments are $0.4 million per month for the first six months, increasing to $0.5 million per month for the next 180 months. The amount of the right of use assets is $43.6 million at September 30, 2022, and the finance lease obligation is $45.5 million at September 30, 2022. The associated amortization expenses for the three months ended September 30, 2022 and 2021 were $0.7 million and $28.7 thousand, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the three months ended September 30, 2022 and 2021 were $1.4 million and $19.4 thousand, respectively, and are included in interest expense on the unaudited consolidated statements of operations. The associated amortization expenses for the nine months ended September 30, 2022 and 2021 were $0.7 million and $86.0 thousand, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the nine months ended September 30, 2022 and 2021 were $2.7 million and $37 thousand, respectively, and are included in interest expense on the unaudited consolidated statements of operations. 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 nine months ended September 30, 2022 and 2021. Total operating lease costs for both the three months ended September 30, 2022 and 2021 were $1.5 million and $1.4 million, respectively. Total operating lease costs for both the nine months ended September 30, 2022 and 2021 were $4.4 million and $4.2 million, respectively. Cash Flows Cash paid for amounts included in operating lease liabilities was $4.4 million and $4.2 million during the nine months ended September 30, 2022 and 2021, respectively, and is included in operating cash flows. Cash paid for amounts included in finance lease was $201 thousand and $409 thousand during the nine months ended September 30, 2022 and 2021, respectively, and is included in financing cash flows. Maturities of our lease liabilities for all operating leases are as follows as of September 30, 2022 (in thousands): September 30, 2022 Facilities Equipment Plant Railcar Total Year 1 $ 715 $ 262 $ 4,111 $ 1,333 $ 6,421 Year 2 495 262 4,111 1,437 6,305 Year 3 394 259 4,111 489 5,253 Year 4 306 259 4,111 305 4,981 Year 5 300 234 4,111 181 4,826 Thereafter 1,550 — 22,482 — 24,032 Total lease payments 3,760 1,276 43,037 3,745 51,818 Less: interest (1,139) (218) (15,728) (773) (17,858) Present value of operating lease liabilities $ 2,621 $ 1,058 $ 27,309 $ 2,972 $ 33,960 The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of September 30, 2022: Remaining lease term and discount rate: September 30, 2022 Weighted average remaining lease terms (years) Lease facilities 4.79 Lease equipment 10.69 Lease plant 10.47 Lease railcar 3.22 Weighted average discount rate Lease facilities 9.13 % Lease equipment 7.97 % Lease plant 9.37 % Lease railcar 8.00 % The plant lease has multiple 5-year extension options for a total of 20 years. The extension option has 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 The Company's finance leases liabilities consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands): Creditor Loan Type Balance on September 30, 2022 Balance on December 31, 2021 AVT Equipment Lease-HH Finance Lease $ — $ 302 AVT Equipment Lease-Ohio Finance Lease — 296 VRA Finance Lease Finance Lease 45,494 — $ 45,494 $ 598 Future maturities of finance lease obligations, as of September 30, 2022 are summarized as follows (in thousands): Period Ended September 30, Amount Due 2023 $ 1,155 2024 1,301 2025 1,466 2026 1,652 2027 1,862 Thereafter 38,058 Total $ 45,494 On April 1, 2022, the Company entered into one finance lease. Base payments are $0.4 million per month for the first six months, increasing to $0.5 million per month for the next 180 months. The amount of the right of use assets is $43.6 million at September 30, 2022, and the finance lease obligation is $45.5 million at September 30, 2022. The associated amortization expenses for the three months ended September 30, 2022 and 2021 were $0.7 million and $28.7 thousand, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the three months ended September 30, 2022 and 2021 were $1.4 million and $19.4 thousand, respectively, and are included in interest expense on the unaudited consolidated statements of operations. The associated amortization expenses for the nine months ended September 30, 2022 and 2021 were $0.7 million and $86.0 thousand, respectively, and are included in depreciation and amortization on the unaudited consolidated statements of operations. The associated interest expense for the nine months ended September 30, 2022 and 2021 were $2.7 million and $37 thousand, respectively, and are included in interest expense on the unaudited consolidated statements of operations. 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 nine months ended September 30, 2022 and 2021. Total operating lease costs for both the three months ended September 30, 2022 and 2021 were $1.5 million and $1.4 million, respectively. Total operating lease costs for both the nine months ended September 30, 2022 and 2021 were $4.4 million and $4.2 million, respectively. Cash Flows Cash paid for amounts included in operating lease liabilities was $4.4 million and $4.2 million during the nine months ended September 30, 2022 and 2021, respectively, and is included in operating cash flows. Cash paid for amounts included in finance lease was $201 thousand and $409 thousand during the nine months ended September 30, 2022 and 2021, respectively, and is included in financing cash flows. Maturities of our lease liabilities for all operating leases are as follows as of September 30, 2022 (in thousands): September 30, 2022 Facilities Equipment Plant Railcar Total Year 1 $ 715 $ 262 $ 4,111 $ 1,333 $ 6,421 Year 2 495 262 4,111 1,437 6,305 Year 3 394 259 4,111 489 5,253 Year 4 306 259 4,111 305 4,981 Year 5 300 234 4,111 181 4,826 Thereafter 1,550 — 22,482 — 24,032 Total lease payments 3,760 1,276 43,037 3,745 51,818 Less: interest (1,139) (218) (15,728) (773) (17,858) Present value of operating lease liabilities $ 2,621 $ 1,058 $ 27,309 $ 2,972 $ 33,960 The weighted average remaining lease terms and discount rates for all of our operating leases were as follows as of September 30, 2022: Remaining lease term and discount rate: September 30, 2022 Weighted average remaining lease terms (years) Lease facilities 4.79 Lease equipment 10.69 Lease plant 10.47 Lease railcar 3.22 Weighted average discount rate Lease facilities 9.13 % Lease equipment 7.97 % Lease plant 9.37 % Lease railcar 8.00 % The plant lease has multiple 5-year extension options for a total of 20 years. The extension option has 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. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
EQUITY | EQUITY During the nine months ended September 30, 2022, the Company issued 385,593 shares of common stock in connection with the conversion of Series A Convertible Preferred Stock, pursuant to the terms of such securities, issued 1,112,728 shares of the Company's common stock in exchange for warrants to purchase 1,500,000 shares of the Company's common stock with an exercise price of $2.25 per share, issued 96,074 shares of the Company's common stock in exchange for warrants to purchase 165,100 shares of the Company's common stock with an exercise price of $4.50 per share on a cash and cashless basis, and issued 10,165,149 shares of the Company's common stock in conversion of $59,822,000 in Convertible Senior Notes. In addition, the Company issued 561,317 shares of common stock in connection with the exercise of options. During the nine months ended September 30, 2021, the Company issued 13,826,010 shares of common stock in connection with the conversion of Series A, Series B & B1 Convertible Preferred Stock (which has since been fully converted and terminated) and exercises 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. Warrant Exchange Agreement. On March 24, 2022, the Company entered into an Exchange Agreement with Tensile Capital Partners Master Fund LP (the “ Holder ” and " Tensile "). The Holder agreed to exchange outstanding warrants to purchase 1,500,000 shares of the Company’s common stock with an exercise price of $2.25 per share and an expiration date of July 25, 2029, for 1,112,728 shares of the Company’s common stock, effectively resulting in a net cashless exercise of the warrants (which were cancelled in connection with the transaction), with the value of such surrendered shares based on the five day trailing volume weighted average price of the Company’s common stock. Warrant Agreement in connection with term loan. On July 11, 2022, the holders of warrants to purchase 165,000 shares of the Company’s common stock exercised warrants to purchase 165,000 shares of the Company's common stock with an exercise price of $4.50 per share and an expiration date of April 1, 2027, on a cashless basis, and were issued 95,974 shares of the Company’s common stock, with the value of such surrendered shares based on the five day trailing volume weighted average price of the Company’s common stock. On July 22, 2022, the holders of warrants to purchase 100 shares of common stock exercised warrants to purchase 100 shares of the Company's common stock with an exercise price of $4.50 per share and were issued 100 shares of common stock. Conversion of Convertible Senior Notes. On May 26, 2022, May 27, 2022, May 31, 2022, and June 1, 2022, holders of an aggregate of $59,822,000 of the Company’s 6.25% Convertible Senior Notes due 2027, converted such notes into 10,165,149 shares of common stock of the Company pursuant to the terms of the Indenture. Conversion of Series A Preferred Stock. Pursuant to the prior designation of the rights and preferences of the Series A Convertible Preferred Stock of the Company, each share of Series A Convertible Preferred Stock was to be automatically converted into shares of common stock of the Company (on a one-for-one basis), automatically and without further action by the Company or any holder, upon the first to occur of certain events, including if the closing price of the Company’s common stock on the Nasdaq Capital Market averaged at least $15.00 per share over a period of 20 consecutive trading days and the daily trading volume over the same 20-day period averaged at least 7,500 shares (the “ Automatic Conversion Provision ”). Effective on June 10, 2022, the Automatic Conversion Provision of the Series A Convertible Preferred Stock was triggered, and the 374,337 then outstanding shares of the Company’s Series A Convertible Preferred Stock automatically converted into 374,337 shares of common stock of the Company and on June 10, 2022, all rights of any holder with respect to the shares of the Series A Convertible Preferred Stock so converted, including the rights, if any, to receive distributions of the Company’s assets terminated, except only for the rights of such holders to receive certificates for the number of whole shares of common stock into which such shares of the Series A Convertible Preferred Stock were converted. Preferred Stock and Detachable Warrants. 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 0 and 5,000,000, as of September 30, 2022 and December 31, 2021 (“ Series A Preferred ”). The total number of designated shares of the Company’s Series B Convertible Preferred Stock is 0 and 10 million, as of September 30, 2022 and December 31, 2021. The total number of designated shares of the Company’s Series B1 Convertible Preferred Stock is 0 and 17,000,000 as of September 30, 2022 and December 31, 2021. The total number of designated shares of Series C Convertible Preferred Stock is 0 and 44,000 as of September 30, 2022 and December 31, 2021. As of September 30, 2022 and December 31, 2021, there were 0 and 385,601 shares, respectively, of Series A Preferred Stock issued and outstanding. As of September 30, 2022 and December 31, 2021, there were no shares of Series B, B1 and C Preferred Stock outstanding. On August 31, 2022, the Company decided to withdraw and terminate the designations of the Series A, Series B, Series B1 and Series C preferred stock. Certificates of Withdrawal of Previously Designated Preferred Stock. The Company filed Certificates of Withdrawal relating to each series of Preferred Stock previously designated with the Secretary of State of Nevada and terminated the designation of its Series A Preferred Stock (on August 24, 2022); Series B Preferred Stock (on August 24, 2022); Series B1 Preferred Stock (on August 23, 2022) and Series C Preferred Stock (on August 23, 2022). At the time of the filing of the Certificates of Withdrawal, no shares of any of the previously designated series of Preferred Stock were outstanding. The Certificates of Withdrawal were effective upon filing, and eliminated from our Articles of Incorporation all matters set forth in the previously-filed Certificates of Designation with respect to the previously designated series of Preferred Stock. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following is a reconciliation of the numerator and denominator for basic and diluted income (loss) per share for the three months and nine months ended September 30, 2022 and 2021 (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Basic income (loss) per Share Numerator: Net income (loss) attributable to shareholders from continuing operations $ 17,259 $ 6,364 $ (62,764) $ (16,457) Net income attributable to shareholders from discontinued operations, net of tax 4,975 1,581 13,053 4,732 Net income (loss) attributable to common shareholders $ 22,234 $ 7,945 $ (49,711) $ (11,725) Denominator: Weighted-average common shares outstanding 75,591 61,349 69,007 53,964 Basic income (loss) per common shares Continuing operations $ 0.23 $ 0.10 $ (0.91) $ (0.31) Discontinued operations, net of tax 0.07 0.03 0.19 0.09 Basic income (loss) per share $ 0.30 $ 0.13 $ (0.72) $ (0.22) Diluted Income (Loss) per Share Numerator: Net income (loss) attributable to shareholders from continuing operations $ 17,259 $ 6,364 $ (62,764) $ (16,457) Net income available to shareholders from discontinued operations, net of tax 4,975 1,581 13,053 4,732 Net income (loss) available to common shareholders $ 22,234 $ 7,945 $ (49,711) $ (11,725) Denominator: Weighted-average shares outstanding 75,591 61,349 69,007 53,964 Effect of dilutive securities Stock options and warrants 4,047 2,871 — — Preferred stock — 385 — — Diluted weighted-average shares outstanding 79,638 64,605 69,007 53,964 Diluted income (loss) per common shares Continuing operations $ 0.22 $ 0.10 $ (0.91) $ (0.31) Discontinued operations, net of tax 0.06 0.02 0.19 0.09 Diluted income (loss) per share $ 0.28 $ 0.12 $ (0.72) $ (0.22) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTSThe following tables present assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 (in thousands): As of September 30, 2022 Level 1 Level 2 Level 3 Total Derivative instruments, assets Commodity $ 1,219 $ — $ — $ 1,219 Derivative instruments, assets 1,219 — — 1,219 Derivative instruments, liabilities Derivative warrants — — 14,303 14,303 Derivative warrants, liabilities — — 14,303 14,303 Total $ 1,219 $ — $ (14,303) $ (13,084) As of December 31, 2021 Level 1 Level 2 Level 3 Total Derivative instruments, assets Commodity $ 96 $ — $ — $ 96 Derivative instruments, assets 96 — — 96 Derivative instruments, liabilities Derivative warrants — — 75,211 75,211 Derivative warrants, liabilities — — 75,211 75,211 Total $ 96 $ — $ (75,211) $ (75,115) Level 3 instruments include Initial Warrants and Additional Warrants granted in connection with the Loan and Security Agreement, s ee Note 15 "Long-Term Debt" . We revalued the 2,835 thousand warrants granted and outstanding at September 30, 2022 using the Dynamic Black-Scholes model that computes the impact of a possible change in control transaction upon the exercise of the warrant shares. The Dynamic Black-Scholes Merton unobservable inputs used were as follows: Dynamic Black-Scholes Merton Unobservable Inputs Initial Warrants Additional Warrants Expected dividend rate — % — % Expected volatility 104.52 % 101 % Risk free interest rate 4.06 % 4.06 % Expected term 5 5.5 The following is an analysis of changes in the derivative liability classified as level 3 in the fair value hierarchy for the nine months ended September 30, 2022 (in thousands): Level Three Roll-Forward 2022 Balance at beginning of period $ 75,211 April 1 warrants granted 22,795 May 26 warrants granted 2,874 Equity component of the convertible senior not (78,789) Change in valuation of warrants included in net income (7,788) Balance at end of period $ 14,303 See Note 20 "Commodity Deri vative Instru ments " , below for information on the impact on results of operations of our commodity derivative instruments. |
COMMODITY DERIVATIVE INSTRUMENT
COMMODITY DERIVATIVE INSTRUMENTS | 9 Months Ended |
Sep. 30, 2022 | |
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 option and futures arrangements for oil. For option and 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 September 30, 2022 and December 31, 2021, 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 and Brent Complex futures price for the applicable trading months. As of September 30, 2022 Contract Type Contract Period Weighted Average Strike Price (Barrels) Remaining Volume (Barrels) Fair Value (in thousands) (in thousands) Swap Sept. 2022 - Nov. 2022 $ 4.51 12 $ 54 Swap Sept. 2022 - Nov. 2022 $ 2.39 6 $ 14 Option Sept. 2022 - Nov. 2022 $ 10.75 42 $ 1,075 Swap Sept. 2022 - Nov. 2022 $ 1.52 50 $ 76 As of December 31, 2021 Contract Type Contract Period Weighted Average Strike Price (Barrels) Remaining Volume (Barrels) Fair Value (in thousands) (in thousands) Options Dec. 2021-Mar. 2022 $ 3.18 18 $ 136 Futures Dec. 2021-Mar. 2022 $ 31.59 20 $ 71 Futures Dec. 2021-Mar. 2022 $ 32.48 50 $ (111) The carrying values of the Company’s derivatives positions and their locations on the consolidated balance sheets as of September 30, 2022 and December 31, 2021 are presented in the table below. Balance Sheet Classification Contract Type 2022 2021 Crude oil options $ 1,075 $ 136 Crude oil swaps 144 — Crude oil futures — (40) Derivative commodity assets $ 1,219 $ 96 For the three months ended September 30, 2022 and 2021, we recognized $11.0 million and $0.3 million of gain, respectively, on commodity derivative contracts on the consolidated statements of operations as part of our cost of revenues. For the nine months ended September 30, 2022 and 2021, we recognized $87.2 million and $2.2 million of loss, respectively, on commodity derivative contracts on the consolidated statements of operations as part of our cost of revenues. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 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 $106 million as of September 30, 2022 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 $29.1 million from January 1, 2022 through September 30, 2022. The year to date loss at September 30, 2021 puts the Company in an accumulated loss position for the cumulative 12 quarters then ended. For tax reporting purposes, we have NOLs of approximately $38.9 million as of September 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 generated pre-tax loss of approximately $2.3 million from January 1, 2021 through September 30, 2021. |
Noncontrolling Interest
Noncontrolling Interest | 9 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest Disclosure | NON-CONTROLLING INTERESTS Myrtle Grove Facility On April 1, 2022, the Company, through Vertex Splitter Corporation (“ Vertex Splitter ”), a wholly-owned subsidiary of the Company, acquired the 15% noncontrolling interest of Vertex Refining Myrtle Grove LLC (“ MG SPV ”) held by 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 ”) from Tensile-Vertex for $7.2 million, which was based on the value of the Class B Unit preference of MG SPV held by Tensile-MG, plus capital invested by Tensile-MG in MG SPV (which had not been returned as of the date of payment), plus cash and cash equivalents held by Tensile-MG as of the closing date. As a result, the Company acquired 100% of MG SPV, which in turn owns the Company’s Belle Chasse, Louisiana, re-refining complex. Myrtle Grove Redeemable Noncontrolling Interest. 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 $38 thousand 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 accretion adjustment of $0.4 million increased the carrying amount of redeemable noncontrolling interests to the redemption value as of April 1, 2022 of $7.2 million. 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 September 30, 2022 and 2021 (in thousands): September 30, 2022 September 30, 2021 Beginning balance $ 6,812 $ 5,473 Net loss attributable to redeemable non-controlling interest (38) (200) Accretion of non-controlling interest to redemption value 428 1,176 Redemption of non-controlling interest (7,202) — Ending balance $ — $ 6,449 Heartland Re-refining Complex On May 26, 2022, the Company, through Vertex Splitter acquired the 65% noncontrolling interest of Heartland SPV held by Tensile-Heartland from Tensile-Vertex Holdings LLC (“ Tensile-Vertex ”), an affiliate of Tensile for $43.5 million, which was based on the value of the Class B Unit preference of Heartland SPV held by Tensile-Heartland, plus capital invested by Tensile-Heartland in Heartland SPV (which had not been returned as of the date of payment), plus cash and cash equivalents held by Tensile-Heartland as of the closing date. As a result, the Company acquired 100% of Heartland SPV, which in turn owns the Company’s Columbus, Ohio, re-refining complex. Heartland Redeemable Noncontrolling Interest . 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 $6.8 million 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 May 26, 2022, the cumulative amount resulting from the application of the measurement guidance in ASC 810-10 was $43.5 million. On May 26, 2022, the Company acquired a 65% interest in Heartland SPV from Tensile for $43.5 million. The table below presents the reconciliation of changes in redeemable noncontrolling interest relating to Heartland SPV as of September 30, 2022 and 2021 (in thousands): September 30, 2022 September 30, 2021 Beginning balance $ 36,635 $ 26,139 Net income attributable to redeemable non-controlling interest 6,829 7,183 Redemption of non-controlling interest (43,464) — Ending balance $ — $ 33,322 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS During the third quarter of 2021, the Company initiated and began executing a strategic plan to sell its UMO Business. An investment banking advisory services firm was engaged and actively marketed this segment. On September 28, 2021, the shareholders approved the proposed sale of its portfolio of used motor oil collection and recycling assets to Safety-Kleen pursuant to the UMO Sale Agreement discussed below. On January 25, 2022, the Company entered into a mutual agreement with Safety-Kleen to terminate the UMO Sale Agreement. In connection with the termination agreement, the Company paid Safety-Kleen a break-up fee of $3 million. Vertex is continuing to explore opportunities for the sale of the UMO Business. Subsequent to the April 1, 2022 acquisition of the Mobile Refinery, our UMO Business operations no longer consist of ‘all or substantially all’ of our assets and as such, we have determined that the sale of such operations does not reach a level that would require shareholder approval if sold under Nevada law. As such, the requirement to obtain shareholder approval for any subsequent sale of the UMO Business is no longer necessary. The Company is still exploring opportunities t o sell the UMO Business and believes it will sell such assets within a year. As of the day of this filing, the Company is in ongoing discussions with a third party regarding a potential sale of the Heartland Business and has accordingly presented only this division as discontinued operations while reclassifying the other UMO Business operations out of assets held for sale, and all liabilities of the UMO Business out of liabilities held for sale, other than in connection with the Heartland Business. The following summarized financial information has been reclassified as continued operations for the six months ended June 30, 2022 and 2021 (in thousands): June 30, 2022 December 31, 2021 Assets held for sale to assets held and used $ 81,616 $ 74,046 Liabilities held for sale to liabilities held and paid $ (35,507) $ (37,645) Six Months Ended June 30, 2022 2021 Net income from discontinued operations to continued operation $ 16,736 $ 1,284 The following summarized financial information has been segregated from continuing operations and reported as Discontinued Operations for the three months and nine months ended September 30, 2022, and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 22,153 $ 14,507 $ 63,534 $ 41,039 Cost of revenues (exclusive of depreciation shown separately below) 14,306 8,638 36,077 23,124 Depreciation and amortization attributable to costs of revenues 391 393 1,170 1,160 Gross profit 7,456 5,476 26,287 16,755 Operating expenses: Selling, general and administrative expenses (exclusive of depreciation shown separately below) 2,418 1,418 6,213 4,606 Depreciation and amortization expense attributable to operating expenses 63 63 188 188 Total operating expenses 2,481 1,481 6,401 4,794 Income from operations 4,975 3,995 19,886 11,961 Other income (expense) Interest expense — (14) (4) (46) Total other expense — (14) (4) (46) Income before income tax 4,975 3,981 19,882 11,915 Income tax benefit (expense) — — — — Income from discontinued operations, net of tax $ 4,975 $ 3,981 $ 19,882 $ 11,915 The assets and liabilities held for sale on the Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 are as follows (in thousands): September 30, 2022 December 31, 2021 ASSETS Inventory $ 2,190 $ 1,253 Prepaid expenses 317 163 Total current assets 2,507 1,416 Fixed assets, at cost 17,658 15,451 Less accumulated depreciation (9,140) (8,047) Fixed assets, net 8,518 7,404 Finance lease right-of-use assets — 436 Intangible assets, net 626 814 Assets held for sale $ 11,651 $ 10,070 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Related Parties From time to time, the Company consults Ruddy Gregory, PLLC., a related party law firm of which James Gregory, a member of the Board of Directors, serves as a partner. During the nine months ended September 30, 2022 and 2021, we paid $0.5 million an d $0.6 million, respectively, to such law firm for services rendered, which services include the drafting and negotiation of, and due diligence associated with, the Sale Agreement and Refinery Purchase Agreement (defined and discussed above), and related transactions, including the Loan and Security Agreement and Supply and Offtake Agreement, discussed above. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn October 1, 2022, a total of $3 million of interest was paid on our outstanding Convertible Senior Notes. |
SUMMARY OF CRITICAL ACCOUNTIN_2
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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. |
Accounts Receivable | Accounts Receivable Accounts receivable represents amounts due from customers. Accounts receivable are recorded at invoiced amounts, net of reserves and allowances, do not bear interest and are not collateralized. The Company uses its best estimate to determine the required allowance for doubtful accounts based on a variety of factors, including the length of time receivables are past due, economic trends and conditions affecting its customer base, significant one-time events, and historical write-off experience. Specific provisions are recorded for individual receivables when we become aware of a customer’s inability to meet its financial obligations. The Company reviews the adequacy of its reserves and allowances quarterly. |
Inventory and Obligations Under Inventory Financing Agreements | Inventory and Obligations Under Inventory Financing Agreements Mobile Refinery. Inventories at the recently acquired Mobile Refinery consist of crude oil and refined petroleum products. Simultaneously with the acquisition of the Mobile Refinery, the Company entered into an inventory financing agreement with Macquarie Energy North America Trading Inc. (“Macquarie”) under which Macquarie agreed to finance all the crude oil utilized at the Mobile Refinery under procurement contracts. In addition, the Company became a party to a Supply and Offtake Agreement with Macquarie. Under this arrangement, the Company purchases crude oil supplied from third-party suppliers and Macquarie provides credit support for certain of these purchases. Macquarie holds title to all crude oil and refined products inventories at all times, except for liquefied petroleum gases and sulfur, which the Company has pledged, together with all receivables arising from the sales of such inventories. The crude oil remains in the legal title of Macquarie and is stored in our storage tanks governed by a storage agreement. Legal title to the crude oil passes to us at the tank outlet. After processing, Macquarie takes title to the refined products stored in our storage tanks until they are sold to our retail locations or to third parties. We record the inventory owned by Macquarie on our behalf as inventory with a corresponding accrued liability on our balance sheet because we maintain the risk of loss until the refined products are sold to third parties and we have an obligation to repurchase it. The valuation of our repurchase obligation requires that we make estimates of the prices and differentials assuming settlement occurs at the end of the reporting period. Hydrocarbon inventories at the Mobile Refinery are stated at the lower of cost or net realizable value using the weighted average inventory accounting method. Estimating the net realizable value of our inventory requires management to make assumptions about the timing of sales and the expected proceeds that will be realized for these sales. See Note 9 “Inventory” Note 10 “Inventory Financing Agreement” |
Revenue Recognition | Revenue RecognitionOur revenues are generated through the sale of refined petroleum products and terminalling and storage services. We recognize revenue from product sales at prevailing market rates at the point in time in which the customer obtains control of the product. Terminalling and storage revenues are recognized as services are rendered, and our performance obligations have been satisfied once the product has been transferred back to the customer. These services are short-term in nature, and the service fees charged to our customers are at prevailing market rates. The timing of our revenue recognition may differ from the timing of payment from our customers. A receivable is recorded when revenue is recognized prior to payment and we have an unconditional right to payment. |
Environmental Reserves | Environmental Reserves We accrue for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. The liability represents the expected costs of remediating contaminated soil and groundwater at the site. Costs of future expenditures for environmental remediation obligations are discounted to their present value. |
Impairment of long-lived assets | Impairment of long-lived assetsThe Company evaluates the carrying value and recoverability of its long-lived assets when circumstances warrant such evaluation. Long-lived assets are 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. |
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interests As more fully described in “ Note 22. Non-Controlling Interests ”, the Company was 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 in non-controlling interests. The put options permited 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 |
Variable Interest Entities | Variable Interest Entities The Company determines whether each business entity in which it has equity interests, debt, or other investments constitutes a variable interest entity (“ VIE ”) based on consideration of the following criteria: (i) the entity lacks sufficient equity at-risk to finance its activities without additional subordinated financial support, or (ii) equity holders, as a group, lack the characteristics of a controlling financial instrument. If an entity is determined to be a VIE, the Company then determines whether to consolidate the entity as the primary beneficiary. The primary beneficiary has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the entity. |
Assets and Liabilities Held for Sale | Assets and Liabilities Held for Sale The Company classifies disposal groups as held for sale in the period in which all of the following criteria are met: (1) management, having the authority to approve the action, commits to a plan to sell the disposal group; (2) the disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such disposal groups; (3) an active program to locate a buyer or buyers and other actions required to complete the plan to sell the disposal group have been initiated; (4) the sale of the disposal group is probable, and transfer of the disposal group is expected to qualify for recognition as a completed sale, within one year, except if events or circumstances beyond the Company’s control extend the period of time required to sell the disposal group beyond one year; (5) the disposal group is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (6) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. A disposal group that is classified as held for sale is initially measured at the lower of its carrying amount or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. No loss was recognized during the periods presented. Subsequent changes in the fair value of a disposal group less any costs to sell are reported as an adjustment to the carrying amount of the disposal group, as long as the new carrying amount does not exceed the carrying amount of the asset at the time it was initially classified as held for sale. Upon determining that a disposal group meets the criteria to be classified as held for sale, the Company reports the assets and liabilities of the disposal group for all periods presented in the line items assets held for sale and liabilities held for sale, respectively, in the consolidated balance sheets. |
Discontinued Operations | Discontinued OperationsThe results of operations of a component of the Company that can be clearly distinguished, operationally and for financial reporting purposes, that either has been disposed of or is classified as held for sale is reported in discontinued operations, if the disposal represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results. |
New Accounting Pronouncements | New Accounting Pronouncements Accounting pronouncements adopted by the Company in 2022 . In August 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity to simplify the accounting for convertible debt and other equity-linked instruments. The new guidance simplifies the accounting for convertible instruments by eliminating the cash conversion and beneficial conversion feature models used to separately account for embedded conversion features as a component of equity. Instead, the entity will account for the convertible debt or convertible preferred stock securities as a single unit of account, unless the conversion feature requires bifurcation and recognition as derivatives. Additionally, the guidance requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of potential share settlement for instruments that may be settled in cash or shares. The Company adopted this new guidance as of January 1, 2022, under the modified retrospective method. On January 20, 2022, our shareholders approved the issuance of shares of our common stock issuable upon the conversion of our $155 million aggregate principal amount at maturity 6.25% Convertible Senior Notes due 2027 (the "Convertible Senior Notes"), the $79 million derivative liabilities were recorded as additional paid-in capital. Accounting pronouncements not yet adopted. The Company has not identified any recent accounting pronouncements that are expected to have a material impact on our financial condition, results of operations or cash flows upon adoption. |
MOBILE REFINERY ACQUISITION (Ta
MOBILE REFINERY ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of business acquisitions, by acquisition | The purchase price allocation is preliminary and subject to change based upon the finalization of our valuation report. The following table summarizes the preliminary determination and recognition of assets acquired (in thousands): Financing agreement Vertex acquisition Total Inventory $ 124,311 $ 5,909 $ 130,220 Prepaid assets — 147 147 Fixed assets — 97,158 97,158 Total purchase price $ 124,311 $ 103,214 $ 227,525 |
Summarized results of operations | The following table presents summarized results of operations of the Mobile Refinery for the period from April 1, 2022 to September 30, 2022, which are included in the accompanying consolidated statement of operations for the period ended September 30, 2022 (in thousands): For Three Months Ended September 30, 2022 For Six Months Ended September 30, 2022 Revenue $ 733,521 $ 1,655,717 Net Income (loss) $ 18,370 $ (5,592) |
Schedule of unaudited pro forma | The following table presents unaudited pro forma results of operations reflecting the acquisition of the Mobile Refinery as if the acquisition had occurred as of January 1, 2021. This information has been compiled from current and historical financial statements and is not necessarily indicative of the results that actually would have been achieved had the transaction occurred at the beginning of the periods presented or that may be achieved in the future (in thousands): For Nine Months Ended September 30, 2022 2021 Revenue $ 2,406,617 $ 1,473,700 Net income (loss) $ 49,509 $ (37,500) |
REVENUES (Tables)
REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of revenue | The following tables present our revenues disaggregated by geographical market and revenue source (in thousands): Three Months Ended September 30, 2022 Black Oil* & Recovery Refining & Consolidated Primary Geographical Markets Southern United States $ 43,439 $ 766,769 $ 810,208 Sources of Revenue Refined products: Gasolines $ — $ 171,023 $ 171,023 Jet Fuels — 138,962 138,962 Diesel — 276,355 276,355 Other refinery products (1) 37,607 108,337 145,944 Re-refined products: Pygas — 15,285 15,285 Metals (2) 4,060 — 4,060 Other re-refined products (3) 1,490 54,663 56,153 Services: Terminalling — 2,144 2,144 Oil collection services 282 — 282 Total revenues $ 43,439 $ 766,769 $ 810,208 Three Months Ended September 30, 2021 Black Oil* & Recovery Refining & Consolidated Primary Geographical Markets Southern United States $ 26,410 $ 24,572 $ 50,982 Sources of Revenue Refined products: Gasolines $ — $ 6,674 $ 6,674 Jet Fuels — — — Diesel — 13,745 13,745 Other refinery products (1) 20,339 — 20,339 Re-refined products: Pygas — 3,736 3,736 Metals (2) 4,328 — 4,328 Other re-refined products (3) 909 417 1,326 Services: — Oil collection services 834 — 834 Total revenues $ 26,410 $ 24,572 $ 50,982 Nine Months Ended September 30, 2022 Black Oil* & Recovery Refining & Consolidated Primary Geographical Markets Southern United States $ 147,545 $ 1,767,878 $ 1,915,423 Sources of Revenue Refined products: Gasolines $ — $ 432,173 $ 432,173 Jet Fuels — 282,650 282,650 Diesel — 620,580 620,580 Other refinery products (1) 129,078 259,667 388,745 Re-refined products: Pygas — 40,661 40,661 Metals (2) 13,080 — 13,080 Other re-refined products (3) 4,111 127,695 131,806 Services: — Terminalling — 4,452 4,452 Oil collection services 1,276 — 1,276 Total revenues $ 147,545 $ 1,767,878 $ 1,915,423 Nine Months Ended September 30, 2021 Black Oil* & Recovery Refining & Consolidated Primary Geographical Markets Southern United States $ 80,124 $ 67,683 $ 147,807 Sources of Revenue Refined products: Gasolines — 17,168 17,168 Jet Fuels — — — Diesel — 38,806 38,806 Other refinery products (1) 58,039 — 58,039 Re-refined products: Pygas — 10,571 10,571 Metals (2) 17,455 — 17,455 Other re-refined products (3) 1,763 1,138 2,901 Services: — Oil collection services 2,867 — 2,867 Total revenues $ 80,124 $ 67,683 $ 147,807 * The Company has determined to combine the Black Oil and Recovery segments in the presentation above due to the revenue from such segment being less than 10% of the Company's total revenue after the Mobile Refinery acquisition. The Black Oil segment includes the Heartland Business, which is presented herein as discontinued operations. (1) Other refinery products include the sales of base oil, VGO, cutterstock and Hydrotreated VGO and other petroleum products. (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. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of the company's reportable segment information | Segment information for the three and nine months ended September 30, 2022 and 2021 is as follows (in thousands): THREE MONTHS ENDED SEPTEMBER 30, 2022 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Revenues: Refined products $ 37,607 $ 694,677 $ — $ 732,284 Re-refined products 5,550 69,948 — 75,498 Services 282 2,144 — 2,426 Total revenues 43,439 766,769 — 810,208 Cost of revenues (exclusive of depreciation and amortization shown separately below) 35,299 715,164 — 750,463 Depreciation and amortization attributable to costs of revenues 939 3,111 — 4,050 Gross profit 7,201 48,494 — 55,695 Selling, general and administrative expenses 4,919 27,988 4,071 36,978 Depreciation and amortization attributable to operating expenses 39 850 231 1,120 Income (loss) from operations $ 2,243 $ 19,656 $ (4,302) $ 17,597 Capital expenditures $ 412 $ 26,333 $ — $ 26,745 THREE MONTHS ENDED SEPTEMBER 30, 2021 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Revenues: Refined products $ 20,339 $ 20,419 $ — $ 40,758 Re-refined products 5,237 4,153 — 9,390 Services 834 — — 834 Total revenues 26,410 24,572 — 50,982 Cost of revenues (exclusive of depreciation and amortization shown separately below) 22,205 23,937 — 46,142 Depreciation and amortization attributable to costs of revenues 901 127 — 1,028 Gross profit 3,304 508 — 3,812 Selling, general and administrative expenses 3,618 1,034 3,525 8,177 Depreciation and amortization attributable to operating expenses 59 108 253 420 Loss from operations $ (373) $ (634) $ (3,778) $ (4,785) Capital expenditures $ 228 $ — $ — $ 228 NINE MONTHS ENDED SEPTEMBER 30, 2022 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Revenues: Refined products $ 129,078 $ 1,595,070 $ — $ 1,724,148 Re-refined products 17,191 168,356 — 185,547 Services 1,276 4,452 — 5,728 Total revenues 147,545 1,767,878 — 1,915,423 Cost of revenues (exclusive of depreciation and amortization shown separately below) 111,740 1,708,017 — 1,819,757 Depreciation and amortization attributable to costs of revenues 2,805 6,339 — 9,144 Gross profit 33,000 53,522 — 86,522 Selling, general and administrative expenses 13,383 52,709 23,842 89,934 Depreciation and amortization attributable to operating expenses 142 1,785 729 2,656 Income (loss) from operations $ 19,475 $ (972) $ (24,571) $ (6,068) Capital expenditures $ 2,830 $ 142,927 $ — $ 145,757 NINE MONTHS ENDED SEPTEMBER 30, 2021 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Revenues: Refined products $ 58,039 $ 55,974 $ — $ 114,013 Re-refined products 19,218 11,709 — 30,927 Services 2,867 — — 2,867 Total revenues 80,124 67,683 — 147,807 Cost of revenues (exclusive of depreciation and amortization shown separately below) 63,431 64,555 — 127,986 Depreciation and amortization attributable to costs of revenues 2,623 379 — 3,002 Gross profit 14,070 2,749 — 16,819 Selling, general and administrative expenses 10,841 2,482 8,419 21,742 Depreciation and amortization attributable to operating expenses 176 325 759 1,260 Income (loss) from operations $ 3,053 $ (58) $ (9,178) $ (6,183) Capital expenditures $ 2,313 $ — $ — $ 2,313 Total assets by segment were as follows (in thousands): AS OF SEPTEMBER 30, 2022 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Total assets $ 123,808 $ 395,692 $ 128,077 $ 647,577 AS OF SEPTEMBER 30, 2021 Black Oil & Recovery Refining & Corporate and Eliminations Consolidated Total assets $ 101,461 $ 4,775 $ 38,414 $ 144,650 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Accounts receivable, net, consists of the following at September 30, 2022 and December 31, 2021(in thousands): September 30, 2022 December 31, 2021 Accounts receivable trade $ 52,338 $ 16,302 Allowance for doubtful accounts (1,509) (1,422) Accounts receivable trade, net 50,829 14,880 Accounts receivable other 1,001 — Accounts receivable, net $ 51,830 $ 14,880 |
CONCENTRATIONS OF RISK AND SI_2
CONCENTRATIONS OF RISK AND SIGNIFICANT CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of concentrations | At September 30, 2022 and 2021 and for each of the nine months then ended, the Company’s revenues and receivables were comprised of the following customer concentrations: As of and for the Nine Months Ended September 30, 2022 September 30, 2021 % of % of % of % of Customer 1 40% 2% 34% 11% Customer 2 22% 45% 12% 6% Customer 3 10% 7% 9% 5% For each of the nine months ended September 30, 2022 and 2021, the Company’s segment revenues were comprised of the following customer concentrations: % of Revenue by Segment % Revenue by Segment Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021 Black Oil and Recovery Refining Black Oil and Recovery Refining Customer 1 —% 43% —% 27% Customer 2 —% 24% —% 20% Customer 3 83% 4% 64% —% |
INVENTORY (Tables)
INVENTORY (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The following table describes the Company's inventory balances by category (in thousands): As of September 30, 2022 As of December 31, 2021 Crude oil $ 60,504 $ 926 Refined products 97,568 4,729 Re-refined products 6,590 2,376 Total hydrocarbon inventories 164,662 8,031 Other inventories 5,110 — Total inventories $ 169,772 $ 8,031 September 30, 2022 Obligations under inventory financing agreement $ 135,744 Unamortized financing cost (1,500) Obligations under inventory financing agreement, net $ 134,244 The valuation of our obligations at the end of each reporting period requires that we make estimates of the prices and differentials for our then monthly forward purchase obligations. |
INVENTORY FINANCING AGREEMENT (
INVENTORY FINANCING AGREEMENT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The following table describes the Company's inventory balances by category (in thousands): As of September 30, 2022 As of December 31, 2021 Crude oil $ 60,504 $ 926 Refined products 97,568 4,729 Re-refined products 6,590 2,376 Total hydrocarbon inventories 164,662 8,031 Other inventories 5,110 — Total inventories $ 169,772 $ 8,031 September 30, 2022 Obligations under inventory financing agreement $ 135,744 Unamortized financing cost (1,500) Obligations under inventory financing agreement, net $ 134,244 The valuation of our obligations at the end of each reporting period requires that we make estimates of the prices and differentials for our then monthly forward purchase obligations. |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule Of Prepaid Expenses And Other Current Assets | The following table describes the Company's prepaid expenses and other current assets balances (in thousands): As of September 30, 2022 As of December 31, 2021 Prepaid insurance $ 15,168 $ 2,638 Commodity derivative advance 12,468 556 Renewable volume obligation (RVO) assets 1,389 — Other prepaid expenses 4,312 1,373 Total prepaid expenses $ 33,337 $ 4,567 |
FIXED ASSETS, NET (Tables)
FIXED ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Fixed assets consist of the following (in thousands): Useful Life September 30, 2022 December 31, 2021 Equipment 10 $ 116,370 $ 38,682 Furniture and fixtures 7 106 106 Leasehold improvements 15 2,779 2,473 Office equipment 5 1,433 1,183 Vehicles 5 8,168 6,999 Building 20 2,334 274 Land improvements 20 158 — Construction in progress 57,730 10,484 Land 9,010 1,995 Total fixed assets 198,088 62,196 Less accumulated depreciation (33,371) (26,043) Net fixed assets $ 164,717 $ 36,153 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Components of intangible assets (subject to amortization) consist of the following items: September 30, 2022 December 31, 2021 Useful Life Gross Accumulated Amortization Net Gross Net Customer relations 5 $ 978 $ 971 $ 7 $ 978 $ 940 $ 38 Vendor relations 10 4,778 4,557 221 4,778 4,199 579 Trademark/Trade name 15 887 595 292 887 550 337 TCEP Technology/Patent 15 13,287 8,617 4,670 13,287 7,952 5,335 Non-compete 3 197 196 1 197 192 5 Software 3 9,344 1,732 7,612 538 180 358 $ 29,471 $ 16,668 $ 12,803 $ 20,665 $ 14,013 $ 6,652 |
Schedule of estimated future amortization expense | Estimated future amortization expense is as follows (in thousands): Year 1 $ 4,061 Year 2 4,005 Year 3 2,549 Year 4 950 Year 5 948 Thereafter 290 $ 12,803 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, 2022 December 31, 2021 Accrued purchases $ 18,496 $ 1,877 Accrued interest 1 1,594 Accrued compensation and benefits 3,625 1,082 Accrued income, real estate, sales and other taxes 1,454 389 RINS liabilities 19,023 — Environmental liabilities - current 51 — $ 42,650 $ 4,942 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding debt facilities | The Company's long-term debt consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands): Creditor Loan Type Balance on September 30, 2022 Balance on December 31, 2021 Senior Convertible Note Convertible note $ 95,178 $ 155,000 Term Loan 2025 Loan 165,000 — John Deere Note Note — 94 SBA Loan SBA Loan 59 59 Various institutions Insurance premiums financed 10,449 2,375 Principal amount of long-term debt 270,686 157,528 Less: unamortized discount and deferred financing costs (86,384) (90,984) Total debt, net of unamortized discount and deferred financing costs 184,302 66,544 Less: current maturities, net of unamortized discount and deferred financing costs (16,637) (2,413) Long term debt, net of current maturities $ 167,665 $ 64,131 |
Schedule of future maturities of notes payable | Future maturities of long-term debt, excluding financing lease obligations, as of September 30, 2022 are summarized as follows (in thousands): Period Ended September 30, Amount Due 2023 $ 16,637 2024 8,252 2025 150,563 2026 1 2027 95,180 Thereafter 53 Total $ 270,686 |
Schedule of debt | The components of the Convertible Senior Notes are presented as follows (in thousands) : September 30, 2022 Principal Amounts $ 155,000 Conversion of principal into common stock (59,822) Outstanding principal amount 95,178 Unamortized discount and issuance costs (52,362) Net Carrying Amount $ 42,816 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of Operating Lease Weighted Average Remaining Lease Terms And Discount Rates | The Company's finance leases liabilities consisted of the following as of September 30, 2022 and December 31, 2021 (in thousands): Creditor Loan Type Balance on September 30, 2022 Balance on December 31, 2021 AVT Equipment Lease-HH Finance Lease $ — $ 302 AVT Equipment Lease-Ohio Finance Lease — 296 VRA Finance Lease Finance Lease 45,494 — $ 45,494 $ 598 Remaining lease term and discount rate: September 30, 2022 Weighted average remaining lease terms (years) Lease facilities 4.79 Lease equipment 10.69 Lease plant 10.47 Lease railcar 3.22 Weighted average discount rate Lease facilities 9.13 % Lease equipment 7.97 % Lease plant 9.37 % Lease railcar 8.00 % |
Schedule of Finance Lease, Liability, Fiscal Year Maturity | Future maturities of finance lease obligations, as of September 30, 2022 are summarized as follows (in thousands): Period Ended September 30, Amount Due 2023 $ 1,155 2024 1,301 2025 1,466 2026 1,652 2027 1,862 Thereafter 38,058 Total $ 45,494 |
Schedule of Maturities of Operating Lease Liabilities | Maturities of our lease liabilities for all operating leases are as follows as of September 30, 2022 (in thousands): September 30, 2022 Facilities Equipment Plant Railcar Total Year 1 $ 715 $ 262 $ 4,111 $ 1,333 $ 6,421 Year 2 495 262 4,111 1,437 6,305 Year 3 394 259 4,111 489 5,253 Year 4 306 259 4,111 305 4,981 Year 5 300 234 4,111 181 4,826 Thereafter 1,550 — 22,482 — 24,032 Total lease payments 3,760 1,276 43,037 3,745 51,818 Less: interest (1,139) (218) (15,728) (773) (17,858) Present value of operating lease liabilities $ 2,621 $ 1,058 $ 27,309 $ 2,972 $ 33,960 |
EARNINGS_PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of basic and diluted earnings (loss) per share | The following is a reconciliation of the numerator and denominator for basic and diluted income (loss) per share for the three months and nine months ended September 30, 2022 and 2021 (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Basic income (loss) per Share Numerator: Net income (loss) attributable to shareholders from continuing operations $ 17,259 $ 6,364 $ (62,764) $ (16,457) Net income attributable to shareholders from discontinued operations, net of tax 4,975 1,581 13,053 4,732 Net income (loss) attributable to common shareholders $ 22,234 $ 7,945 $ (49,711) $ (11,725) Denominator: Weighted-average common shares outstanding 75,591 61,349 69,007 53,964 Basic income (loss) per common shares Continuing operations $ 0.23 $ 0.10 $ (0.91) $ (0.31) Discontinued operations, net of tax 0.07 0.03 0.19 0.09 Basic income (loss) per share $ 0.30 $ 0.13 $ (0.72) $ (0.22) Diluted Income (Loss) per Share Numerator: Net income (loss) attributable to shareholders from continuing operations $ 17,259 $ 6,364 $ (62,764) $ (16,457) Net income available to shareholders from discontinued operations, net of tax 4,975 1,581 13,053 4,732 Net income (loss) available to common shareholders $ 22,234 $ 7,945 $ (49,711) $ (11,725) Denominator: Weighted-average shares outstanding 75,591 61,349 69,007 53,964 Effect of dilutive securities Stock options and warrants 4,047 2,871 — — Preferred stock — 385 — — Diluted weighted-average shares outstanding 79,638 64,605 69,007 53,964 Diluted income (loss) per common shares Continuing operations $ 0.22 $ 0.10 $ (0.91) $ (0.31) Discontinued operations, net of tax 0.06 0.02 0.19 0.09 Diluted income (loss) per share $ 0.28 $ 0.12 $ (0.72) $ (0.22) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, by Balance Sheet Grouping | The following tables present assets and liabilities accounted for at fair value on a recurring basis as of September 30, 2022 and December 31, 2021 (in thousands): As of September 30, 2022 Level 1 Level 2 Level 3 Total Derivative instruments, assets Commodity $ 1,219 $ — $ — $ 1,219 Derivative instruments, assets 1,219 — — 1,219 Derivative instruments, liabilities Derivative warrants — — 14,303 14,303 Derivative warrants, liabilities — — 14,303 14,303 Total $ 1,219 $ — $ (14,303) $ (13,084) As of December 31, 2021 Level 1 Level 2 Level 3 Total Derivative instruments, assets Commodity $ 96 $ — $ — $ 96 Derivative instruments, assets 96 — — 96 Derivative instruments, liabilities Derivative warrants — — 75,211 75,211 Derivative warrants, liabilities — — 75,211 75,211 Total $ 96 $ — $ (75,211) $ (75,115) |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The Dynamic Black-Scholes Merton unobservable inputs used were as follows: Dynamic Black-Scholes Merton Unobservable Inputs Initial Warrants Additional Warrants Expected dividend rate — % — % Expected volatility 104.52 % 101 % Risk free interest rate 4.06 % 4.06 % Expected term 5 5.5 The following is an analysis of changes in the derivative liability classified as level 3 in the fair value hierarchy for the nine months ended September 30, 2022 (in thousands): Level Three Roll-Forward 2022 Balance at beginning of period $ 75,211 April 1 warrants granted 22,795 May 26 warrants granted 2,874 Equity component of the convertible senior not (78,789) Change in valuation of warrants included in net income (7,788) Balance at end of period $ 14,303 |
COMMODITY DERIVATIVE INSTRUME_2
COMMODITY DERIVATIVE INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 and Brent Complex futures price for the applicable trading months. As of September 30, 2022 Contract Type Contract Period Weighted Average Strike Price (Barrels) Remaining Volume (Barrels) Fair Value (in thousands) (in thousands) Swap Sept. 2022 - Nov. 2022 $ 4.51 12 $ 54 Swap Sept. 2022 - Nov. 2022 $ 2.39 6 $ 14 Option Sept. 2022 - Nov. 2022 $ 10.75 42 $ 1,075 Swap Sept. 2022 - Nov. 2022 $ 1.52 50 $ 76 As of December 31, 2021 Contract Type Contract Period Weighted Average Strike Price (Barrels) Remaining Volume (Barrels) Fair Value (in thousands) (in thousands) Options Dec. 2021-Mar. 2022 $ 3.18 18 $ 136 Futures Dec. 2021-Mar. 2022 $ 31.59 20 $ 71 Futures Dec. 2021-Mar. 2022 $ 32.48 50 $ (111) |
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 September 30, 2022 and December 31, 2021 are presented in the table below. Balance Sheet Classification Contract Type 2022 2021 Crude oil options $ 1,075 $ 136 Crude oil swaps 144 — Crude oil futures — (40) Derivative commodity assets $ 1,219 $ 96 |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Noncontrolling Interest [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 September 30, 2022 and 2021 (in thousands): September 30, 2022 September 30, 2021 Beginning balance $ 6,812 $ 5,473 Net loss attributable to redeemable non-controlling interest (38) (200) Accretion of non-controlling interest to redemption value 428 1,176 Redemption of non-controlling interest (7,202) — Ending balance $ — $ 6,449 The table below presents the reconciliation of changes in redeemable noncontrolling interest relating to Heartland SPV as of September 30, 2022 and 2021 (in thousands): September 30, 2022 September 30, 2021 Beginning balance $ 36,635 $ 26,139 Net income attributable to redeemable non-controlling interest 6,829 7,183 Redemption of non-controlling interest (43,464) — Ending balance $ — $ 33,322 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Disposal Groups Including Discontinued Operations Income Statement and Balance Sheet | The following summarized financial information has been reclassified as continued operations for the six months ended June 30, 2022 and 2021 (in thousands): June 30, 2022 December 31, 2021 Assets held for sale to assets held and used $ 81,616 $ 74,046 Liabilities held for sale to liabilities held and paid $ (35,507) $ (37,645) Six Months Ended June 30, 2022 2021 Net income from discontinued operations to continued operation $ 16,736 $ 1,284 The following summarized financial information has been segregated from continuing operations and reported as Discontinued Operations for the three months and nine months ended September 30, 2022, and 2021 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 22,153 $ 14,507 $ 63,534 $ 41,039 Cost of revenues (exclusive of depreciation shown separately below) 14,306 8,638 36,077 23,124 Depreciation and amortization attributable to costs of revenues 391 393 1,170 1,160 Gross profit 7,456 5,476 26,287 16,755 Operating expenses: Selling, general and administrative expenses (exclusive of depreciation shown separately below) 2,418 1,418 6,213 4,606 Depreciation and amortization expense attributable to operating expenses 63 63 188 188 Total operating expenses 2,481 1,481 6,401 4,794 Income from operations 4,975 3,995 19,886 11,961 Other income (expense) Interest expense — (14) (4) (46) Total other expense — (14) (4) (46) Income before income tax 4,975 3,981 19,882 11,915 Income tax benefit (expense) — — — — Income from discontinued operations, net of tax $ 4,975 $ 3,981 $ 19,882 $ 11,915 The assets and liabilities held for sale on the Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 are as follows (in thousands): September 30, 2022 December 31, 2021 ASSETS Inventory $ 2,190 $ 1,253 Prepaid expenses 317 163 Total current assets 2,507 1,416 Fixed assets, at cost 17,658 15,451 Less accumulated depreciation (9,140) (8,047) Fixed assets, net 8,518 7,404 Finance lease right-of-use assets — 436 Intangible assets, net 626 814 Assets held for sale $ 11,651 $ 10,070 |
BASIS OF PRESENTATION AND NAT_2
BASIS OF PRESENTATION AND NATURE OF OPERATIONS (Details) bbl in Millions, $ in Millions | Apr. 01, 2022 USD ($) bbl / d bbl | Jan. 25, 2022 USD ($) | Jan. 24, 2022 USD ($) |
Safety-Kleen | |||
Product Information | |||
Break up fee payment | $ 3 | $ 3 | |
Mobile Refinery | |||
Product Information | |||
Annual production capacity (bbl/day) | bbl / d | 75,000 | ||
Inventory acquired (barrels/gallons) | bbl | 3.2 | ||
Purchase consideration | $ 75 | ||
Asset acquisition, consideration transferred | 16.3 | ||
Hydrocarbon | |||
Product Information | |||
Purchase consideration | 130 | ||
Asset acquisition, consideration transferred | $ 124 |
SUMMARY OF CRITICAL ACCOUNTIN_3
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES - Narrative (Details) - USD ($) | 3 Months Ended | |||||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 01, 2022 | Jan. 20, 2022 | Dec. 31, 2021 | Nov. 01, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle | ||||||
Restricted cash and cash equivalents | $ 100,400,000 | |||||
Allowance for credit loss | $ 1,500,000 | $ 1,400,000 | ||||
Asset impairment | 0 | $ 0 | ||||
Derivative commodity liability | $ 79,000,000 | |||||
Convertible Notes | Senior Notes | ||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||
Principal Amounts | $ 59,822,000 | $ 60,000,000 | $ 155,000,000 | $ 155,000,000 | ||
Debt instrument, stated rate (as a percent) | 6.25% | 6.25% | 6.25% | |||
Short Term Equipment Lease Deposit | ||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||
Restricted cash and cash equivalents | $ 4,800,000 | |||||
Money Market Funds | ||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||
Restricted cash and cash equivalents | $ 100,000 |
MOBILE REFINERY ACQUISITION (De
MOBILE REFINERY ACQUISITION (Details) - USD ($) $ in Thousands | Apr. 01, 2022 | Sep. 30, 2022 |
Capital Addition Purchase Commitments | ||
Business Acquisition | ||
Amount payable after closing | $ 8,700 | |
Mobile Refinery | ||
Business Acquisition | ||
Inventory | $ 130,220 | |
Mobile Refinery | Vertex Refining | ||
Business Acquisition | ||
Total purchase price | 75,000 | |
Amount previously paid in consideration for acquisition | 10,000 | |
Certain capital expenditures reimbursed | 400 | |
Acquisition of VRA | 15,900 | |
Mobile Refinery | Vertex Refining | Shell | ||
Business Acquisition | ||
Acquisition of VRA | 130,000 | |
Inventory | $ 124,000 |
MOBILE REFINERY ACQUISITION - S
MOBILE REFINERY ACQUISITION - Schedule of Business Acquisitions, by Acquisition (Details) - Mobile Refinery $ in Thousands | Sep. 30, 2022 USD ($) |
Business Acquisition | |
Inventory | $ 130,220 |
Prepaid assets | 147 |
Fixed assets | 97,158 |
Total purchase price | 227,525 |
Financing agreement | |
Business Acquisition | |
Inventory | 124,311 |
Prepaid assets | 0 |
Fixed assets | 0 |
Total purchase price | 124,311 |
Vertex acquisition | |
Business Acquisition | |
Inventory | 5,909 |
Prepaid assets | 147 |
Fixed assets | 97,158 |
Total purchase price | $ 103,214 |
MOBILE REFINERY ACQUISITION - O
MOBILE REFINERY ACQUISITION - Operations of Mobile Refinery (Details) - Mobile Refinery - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Business Acquisition | ||
Revenue | $ 733,521 | $ 1,655,717 |
Net loss | $ 18,370 | $ (5,592) |
MOBILE REFINERY ACQUISITION - P
MOBILE REFINERY ACQUISITION - Pro Forma (Details) - Mobile Refinery - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition | ||
Revenue | $ 2,406,617 | $ 1,473,700 |
Net income (loss) | $ 49,509 | $ (37,500) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Environmental Remediation | Environmental Remediation | |
Site Contingency [Line Items] | |
Accrual for environmental loss contingencies | $ 1.4 |
REVENUES (Details)
REVENUES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue | ||||
Total revenues | $ 810,208 | $ 50,982 | $ 1,915,423 | $ 147,807 |
Gasolines | ||||
Disaggregation of Revenue | ||||
Total revenues | 171,023 | 6,674 | 432,173 | 17,168 |
Jet Fuels | ||||
Disaggregation of Revenue | ||||
Total revenues | 138,962 | 0 | 282,650 | 0 |
Diesel | ||||
Disaggregation of Revenue | ||||
Total revenues | 276,355 | 13,745 | 620,580 | 38,806 |
Other refinery products | ||||
Disaggregation of Revenue | ||||
Total revenues | 145,944 | 20,339 | 388,745 | 58,039 |
Pygas | ||||
Disaggregation of Revenue | ||||
Total revenues | 15,285 | 3,736 | 40,661 | 10,571 |
Metals | ||||
Disaggregation of Revenue | ||||
Total revenues | 4,060 | 4,328 | 13,080 | 17,455 |
Other re-refined products | ||||
Disaggregation of Revenue | ||||
Total revenues | 56,153 | 1,326 | 131,806 | 2,901 |
Terminalling | ||||
Disaggregation of Revenue | ||||
Total revenues | 2,144 | 4,452 | ||
Services | ||||
Disaggregation of Revenue | ||||
Total revenues | 282 | 834 | 1,276 | 2,867 |
Black Oil & Recovery | ||||
Disaggregation of Revenue | ||||
Total revenues | 43,439 | 26,410 | 147,545 | 80,124 |
Black Oil & Recovery | Gasolines | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil & Recovery | Jet Fuels | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil & Recovery | Diesel | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil & Recovery | Other refinery products | ||||
Disaggregation of Revenue | ||||
Total revenues | 37,607 | 20,339 | 129,078 | 58,039 |
Black Oil & Recovery | Pygas | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Black Oil & Recovery | Metals | ||||
Disaggregation of Revenue | ||||
Total revenues | 4,060 | 4,328 | 13,080 | 17,455 |
Black Oil & Recovery | Other re-refined products | ||||
Disaggregation of Revenue | ||||
Total revenues | 1,490 | 909 | 4,111 | 1,763 |
Black Oil & Recovery | Terminalling | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | ||
Black Oil & Recovery | Services | ||||
Disaggregation of Revenue | ||||
Total revenues | 282 | 834 | 1,276 | 2,867 |
Refining & Marketing | ||||
Disaggregation of Revenue | ||||
Total revenues | 766,769 | 24,572 | 1,767,878 | 67,683 |
Refining & Marketing | Gasolines | ||||
Disaggregation of Revenue | ||||
Total revenues | 171,023 | 6,674 | 432,173 | 17,168 |
Refining & Marketing | Jet Fuels | ||||
Disaggregation of Revenue | ||||
Total revenues | 138,962 | 0 | 282,650 | 0 |
Refining & Marketing | Diesel | ||||
Disaggregation of Revenue | ||||
Total revenues | 276,355 | 13,745 | 620,580 | 38,806 |
Refining & Marketing | Other refinery products | ||||
Disaggregation of Revenue | ||||
Total revenues | 108,337 | 0 | 259,667 | 0 |
Refining & Marketing | Pygas | ||||
Disaggregation of Revenue | ||||
Total revenues | 15,285 | 3,736 | 40,661 | 10,571 |
Refining & Marketing | Metals | ||||
Disaggregation of Revenue | ||||
Total revenues | 0 | 0 | 0 | 0 |
Refining & Marketing | Other re-refined products | ||||
Disaggregation of Revenue | ||||
Total revenues | 54,663 | 417 | 127,695 | 1,138 |
Refining & Marketing | Terminalling | ||||
Disaggregation of Revenue | ||||
Total revenues | 2,144 | 4,452 | ||
Refining & Marketing | Services | ||||
Disaggregation of Revenue | ||||
Total revenues | $ 0 | $ 0 | $ 0 | $ 0 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information | |||||
Total revenues | $ 810,208,000 | $ 50,982,000 | $ 1,915,423,000 | $ 147,807,000 | |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 750,463,000 | 46,142,000 | 1,819,757,000 | 127,986,000 | |
Depreciation and amortization attributable to costs of revenues | 4,050,000 | 1,028,000 | 9,144,000 | 3,002,000 | |
Gross profit | 55,695,000 | 3,812,000 | 86,522,000 | 16,819,000 | |
Selling, general and administrative expenses | 36,978,000 | 8,177,000 | 89,934,000 | 21,742,000 | |
Depreciation and amortization attributable to operating expenses | 1,120,000 | 420,000 | 2,656,000 | 1,260,000 | |
Loss from operations | 17,597,000 | (4,785,000) | (6,068,000) | (6,183,000) | |
Capital Expenditure, Discontinued Operations | 26,745,000 | 228,000 | 145,757,000 | 2,313,000 | |
Total assets | 647,577,000 | 144,650,000 | 647,577,000 | 144,650,000 | $ 266,060,000 |
Refined products | |||||
Segment Reporting Information | |||||
Total revenues | 732,284,000 | 40,758,000 | 1,724,148,000 | 114,013,000 | |
Re-refined products | |||||
Segment Reporting Information | |||||
Total revenues | 75,498,000 | 9,390,000 | 185,547,000 | 30,927,000 | |
Services | |||||
Segment Reporting Information | |||||
Total revenues | 2,426,000 | 834,000 | 5,728,000 | 2,867,000 | |
Corporate and Eliminations | |||||
Segment Reporting Information | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 0 | 0 | 0 | 0 | |
Depreciation and amortization attributable to costs of revenues | 0 | 0 | 0 | 0 | |
Gross profit | 0 | 0 | 0 | 0 | |
Selling, general and administrative expenses | 4,071,000 | 3,525,000 | 23,842,000 | 8,419,000 | |
Depreciation and amortization attributable to operating expenses | 231,000 | 253,000 | 729,000 | 759,000 | |
Loss from operations | (4,302,000) | (3,778,000) | (24,571,000) | (9,178,000) | |
Capital Expenditure, Discontinued Operations | 0 | 0 | 0 | 0 | |
Total assets | 128,077,000 | 38,414,000 | 128,077,000 | 38,414,000 | |
Corporate and Eliminations | Refined products | |||||
Segment Reporting Information | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Corporate and Eliminations | Re-refined products | |||||
Segment Reporting Information | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Corporate and Eliminations | Services | |||||
Segment Reporting Information | |||||
Total revenues | 0 | 0 | 0 | 0 | |
Black Oil & Recovery | |||||
Segment Reporting Information | |||||
Total revenues | 43,439,000 | 26,410,000 | 147,545,000 | 80,124,000 | |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 35,299,000 | 22,205,000 | 111,740,000 | 63,431,000 | |
Depreciation and amortization attributable to costs of revenues | 939,000 | 901,000 | 2,805,000 | 2,623,000 | |
Gross profit | 7,201,000 | 3,304,000 | 33,000,000 | 14,070,000 | |
Selling, general and administrative expenses | 4,919,000 | 3,618,000 | 13,383,000 | 10,841,000 | |
Depreciation and amortization attributable to operating expenses | 39,000 | 59,000 | 142,000 | 176,000 | |
Loss from operations | 2,243,000 | (373,000) | 19,475,000 | 3,053,000 | |
Capital Expenditure, Discontinued Operations | 412,000 | 228,000 | 2,830,000 | 2,313,000 | |
Total assets | 123,808,000 | 101,461,000 | 123,808,000 | 101,461,000 | |
Black Oil & Recovery | Refined products | |||||
Segment Reporting Information | |||||
Total revenues | 37,607,000 | 20,339,000 | 129,078,000 | 58,039,000 | |
Black Oil & Recovery | Re-refined products | |||||
Segment Reporting Information | |||||
Total revenues | 5,550,000 | 5,237,000 | 17,191,000 | 19,218,000 | |
Black Oil & Recovery | Services | |||||
Segment Reporting Information | |||||
Total revenues | 282,000 | 834,000 | 1,276,000 | 2,867,000 | |
Refining & Marketing | |||||
Segment Reporting Information | |||||
Total revenues | 766,769,000 | 24,572,000 | 1,767,878,000 | 67,683,000 | |
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 715,164,000 | 23,937,000 | 1,708,017,000 | 64,555,000 | |
Depreciation and amortization attributable to costs of revenues | 3,111,000 | 127,000 | 6,339,000 | 379,000 | |
Gross profit | 48,494,000 | 508,000 | 53,522,000 | 2,749,000 | |
Selling, general and administrative expenses | 27,988,000 | 1,034,000 | 52,709,000 | 2,482,000 | |
Depreciation and amortization attributable to operating expenses | 850,000 | 108,000 | 1,785,000 | 325,000 | |
Loss from operations | 19,656,000 | (634,000) | (972,000) | (58,000) | |
Capital Expenditure, Discontinued Operations | 26,333,000 | 0 | 142,927,000 | 0 | |
Total assets | 395,692,000 | 4,775,000 | 395,692,000 | 4,775,000 | |
Refining & Marketing | Refined products | |||||
Segment Reporting Information | |||||
Total revenues | 694,677,000 | 20,419,000 | 1,595,070,000 | 55,974,000 | |
Refining & Marketing | Re-refined products | |||||
Segment Reporting Information | |||||
Total revenues | 69,948,000 | 4,153,000 | 168,356,000 | 11,709,000 | |
Refining & Marketing | Services | |||||
Segment Reporting Information | |||||
Total revenues | $ 2,144,000 | $ 0 | $ 4,452,000 | $ 0 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | ||
Accounts receivable trade | $ 52,338 | $ 16,302 |
Allowance for doubtful accounts | (1,509) | (1,422) |
Accounts receivable, net | 50,829 | 14,880 |
Accounts receivable other | 1,001 | 0 |
Receivables, Net, Current | $ 51,830 | $ 14,880 |
CONCENTRATIONS OF RISK AND SI_3
CONCENTRATIONS OF RISK AND SIGNIFICANT CUSTOMERS (Details) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Purchases Benchmark | Vendor Concentration Risk | Vendor One | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 57% | 38% |
Accounts Payable Benchmark | Vendor Concentration Risk | Vendor One | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 49% | 26% |
Customer 1 | Revenues | Customer concentration risk | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 40% | 34% |
Customer 1 | Revenues | Customer concentration risk | Black Oil and Recovery | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0% | 0% |
Customer 1 | Revenues | Customer concentration risk | Refining | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 43% | 27% |
Customer 1 | Receivables | Customer concentration risk | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 2% | 11% |
Customer 2 | Revenues | Customer concentration risk | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 22% | 12% |
Customer 2 | Revenues | Customer concentration risk | Black Oil and Recovery | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 0% | 0% |
Customer 2 | Revenues | Customer concentration risk | Refining | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 24% | 20% |
Customer 2 | Receivables | Customer concentration risk | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 45% | 6% |
Customer 3 | Revenues | Customer concentration risk | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 10% | 9% |
Customer 3 | Revenues | Customer concentration risk | Black Oil and Recovery | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 83% | 64% |
Customer 3 | Revenues | Customer concentration risk | Refining | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 4% | 0% |
Customer 3 | Receivables | Customer concentration risk | ||
Revenue, Major Customer | ||
Concentration percentage (as a percent) | 7% | 5% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | ||
Inventory | $ 169,772 | $ 8,031 |
Crude oil | ||
Inventory [Line Items] | ||
Inventory | 60,504 | 926 |
Refined products | ||
Inventory [Line Items] | ||
Inventory | 97,568 | 4,729 |
Re-refined products | ||
Inventory [Line Items] | ||
Inventory | 6,590 | 2,376 |
Total hydrocarbon inventories | ||
Inventory [Line Items] | ||
Inventory | 164,662 | 8,031 |
Other inventories | ||
Inventory [Line Items] | ||
Inventory | $ 5,110 | $ 0 |
INVENTORY FINANCING AGREEMENT -
INVENTORY FINANCING AGREEMENT - Narrative (Details) - USD ($) | Apr. 01, 2022 | Sep. 30, 2022 |
Vertex Refining | ||
Inventory [Line Items] | ||
Capital stock ownership percentage | 100% | |
Change in ownership percentage | 50% | |
Vertex Refining | First-Lien Senior Secured Term Loan Facility | Secured debt | ||
Inventory [Line Items] | ||
Required minimum unrestricted cash | $ 17,500,000 | |
Required minimum unrestricted cash, period | 3 days | |
Change of control, period | 12 months | |
Cross default to indebtedness amount | $ 20,000,000 | |
Final judgement rendered amount | 20,000,000 | |
Vertex Refining | Minimum | First-Lien Senior Secured Term Loan Facility | Secured debt | ||
Inventory [Line Items] | ||
Specified indebtedness limit | $ 10,000,000 | |
Macquarie | Vertex Refining | ||
Inventory [Line Items] | ||
Period after commencement date | 180 days | |
Conversion project period | 90 days | |
Termination date period | 90 days | |
Customary covenant period | 24 months | |
Termination period after notice | 180 days | |
Mobile Refinery | ||
Inventory [Line Items] | ||
Inventory | $ 130,220,000 | |
Mobile Refinery | Macquarie | Vertex Refining | ||
Inventory [Line Items] | ||
Inventory | $ 130,000,000 |
INVENTORY FINANCING AGREEMENT_2
INVENTORY FINANCING AGREEMENT - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory [Line Items] | ||
Obligations under inventory financing agreement, net | $ 134,244 | $ 0 |
Inventory Financing Agreement | Macquarie | ||
Inventory [Line Items] | ||
Obligations under inventory financing agreement | 135,744 | |
Unamortized financing cost | (1,500) | |
Obligations under inventory financing agreement, net | $ 134,244 |
PREPAID EXPENSES AND OTHER CU_3
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Prepaid insurance | $ 15,168 | $ 2,638 | |
Commodity derivative advance | 12,468 | 556 | |
Renewable volume obligation (RVO) assets | 1,389 | $ (19,023) | 0 |
Other prepaid expenses | 4,312 | 1,373 | |
Total prepaid expenses | $ 33,337 | $ 4,567 |
FIXED ASSETS, NET - Schedule of
FIXED ASSETS, NET - Schedule of Fixed Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment, Net | ||
Total fixed assets | $ 198,088 | $ 62,196 |
Less accumulated depreciation | (33,371) | (26,043) |
Fixed assets, net | $ 164,717 | 36,153 |
Equipment | ||
Property, Plant and Equipment, Net | ||
Useful Life (in years) | 10 years | |
Total fixed assets | $ 116,370 | 38,682 |
Furniture and fixtures | ||
Property, Plant and Equipment, Net | ||
Useful Life (in years) | 7 years | |
Total fixed assets | $ 106 | 106 |
Leasehold improvements | ||
Property, Plant and Equipment, Net | ||
Useful Life (in years) | 15 years | |
Total fixed assets | $ 2,779 | 2,473 |
Office equipment | ||
Property, Plant and Equipment, Net | ||
Useful Life (in years) | 5 years | |
Total fixed assets | $ 1,433 | 1,183 |
Vehicles | ||
Property, Plant and Equipment, Net | ||
Useful Life (in years) | 5 years | |
Total fixed assets | $ 8,168 | 6,999 |
Building | ||
Property, Plant and Equipment, Net | ||
Useful Life (in years) | 20 years | |
Total fixed assets | $ 2,334 | 274 |
Land improvements | ||
Property, Plant and Equipment, Net | ||
Useful Life (in years) | 20 years | |
Total fixed assets | $ 158 | 0 |
Construction in progress | ||
Property, Plant and Equipment, Net | ||
Total fixed assets | 57,730 | 10,484 |
Land | ||
Property, Plant and Equipment, Net | ||
Total fixed assets | $ 9,010 | $ 1,995 |
FIXED ASSETS, NET - Narrative (
FIXED ASSETS, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation | $ 3.3 | $ 1 | $ 7.6 | $ 2.9 |
INTANGIBLE ASSETS, NET -Schedul
INTANGIBLE ASSETS, NET -Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Net Carrying Amount | ||
Gross Carrying Amount | $ 29,471 | $ 20,665 |
Accumulated Amortization | 16,668 | 14,013 |
Net Carrying Amount | $ 12,803 | 6,652 |
Customer Relationships | ||
Net Carrying Amount | ||
Useful Life (in years) | 5 years | |
Gross Carrying Amount | $ 978 | 978 |
Accumulated Amortization | 971 | 940 |
Net Carrying Amount | $ 7 | 38 |
Vendor Relations | ||
Net Carrying Amount | ||
Useful Life (in years) | 10 years | |
Gross Carrying Amount | $ 4,778 | 4,778 |
Accumulated Amortization | 4,557 | 4,199 |
Net Carrying Amount | $ 221 | 579 |
Trademarks and Trade Names | ||
Net Carrying Amount | ||
Useful Life (in years) | 15 years | |
Gross Carrying Amount | $ 887 | 887 |
Accumulated Amortization | 595 | 550 |
Net Carrying Amount | $ 292 | 337 |
TCEP Technology/Patent | ||
Net Carrying Amount | ||
Useful Life (in years) | 15 years | |
Gross Carrying Amount | $ 13,287 | 13,287 |
Accumulated Amortization | 8,617 | 7,952 |
Net Carrying Amount | $ 4,670 | 5,335 |
Non-competes | ||
Net Carrying Amount | ||
Useful Life (in years) | 3 years | |
Gross Carrying Amount | $ 197 | 197 |
Accumulated Amortization | 196 | 192 |
Net Carrying Amount | $ 1 | 5 |
Software | ||
Net Carrying Amount | ||
Useful Life (in years) | 3 years | |
Gross Carrying Amount | $ 9,344 | 538 |
Accumulated Amortization | 1,732 | 180 |
Net Carrying Amount | $ 7,612 | $ 358 |
INTANGIBLE ASSETS, NET - Narrat
INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense | $ 1,100 | $ 400 | $ 2,700 | $ 1,300 |
INTANGIBLE ASSETS, NET -Sched_2
INTANGIBLE ASSETS, NET -Schedule of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Estimated future amortization expense | ||
Year 1 | $ 4,061 | |
Year 2 | 4,005 | |
Year 3 | 2,549 | |
Year 4 | 950 | |
Year 5 | 948 | |
Thereafter | 290 | |
Net Carrying Amount | $ 12,803 | $ 6,652 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | |||
Accrued purchases | $ 18,496 | $ 1,877 | |
Accrued interest | 1 | 1,594 | |
Accrued compensation and benefits | 3,625 | 1,082 | |
Accrued income, real estate, sales and other taxes | 1,454 | 389 | |
RINS liabilities | $ (1,389) | 19,023 | 0 |
Environmental liabilities - current | 51 | 0 | |
Accrued liabilities total | $ 42,650 | $ 42,650 | $ 4,942 |
LONG-TERM DEBT - Outstanding De
LONG-TERM DEBT - Outstanding Debt Facilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument | ||
Outstanding principal amount | $ 270,686 | $ 157,528 |
Less: unamortized discount and deferred financing costs | (86,384) | (90,984) |
Total debt, net of unamortized discount and deferred financing costs | 184,302 | 66,544 |
Less: current maturities, net of unamortized discount and deferred financing costs | (16,637) | (2,413) |
Long term debt, net of current maturities | 167,665 | 64,131 |
Senior Convertible Note | ||
Debt Instrument | ||
Outstanding principal amount | 95,178 | 155,000 |
Term Loan 2025 | ||
Debt Instrument | ||
Outstanding principal amount | 165,000 | 0 |
John Deere Note | John Deere Note | ||
Debt Instrument | ||
Outstanding principal amount | 0 | 94 |
John Deere Note | Various institutions | ||
Debt Instrument | ||
Outstanding principal amount | 10,449 | 2,375 |
SBA Loan | SBA Loan | ||
Debt Instrument | ||
Outstanding principal amount | $ 59 | $ 59 |
LONG-TERM DEBT - Future Contrac
LONG-TERM DEBT - Future Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2023 | $ 16,637 | |
2024 | 8,252 | |
2025 | 150,563 | |
2026 | 1 | |
2027 | 95,180 | |
Long-term Debt and Finance Lease, Liability, Due After Year Five | 53 | |
Total | $ 270,686 | $ 157,528 |
LONG-TERM DEBT - Term Loan (Det
LONG-TERM DEBT - Term Loan (Details) - USD ($) | Apr. 01, 2022 | Sep. 30, 2022 | May 26, 2022 | May 25, 2022 |
Warrant | ||||
Debt Instrument | ||||
Warrant outstanding (in shares) | 2,750,000 | 2,835,000 | 250,000 | |
First-Lien Senior Secured Term Loan Facility | Secured debt | Vertex Refining | ||||
Debt Instrument | ||||
Principal Amounts | $ 125,000,000 | |||
Aggregate amount released from escrow | 94,000,000 | |||
Debit instrument, quarterly principal payment | $ 2,000,000 | |||
Required payments to principal, percent of original principal (as percent) | 1.25% | |||
Term Loan | Secured debt | ||||
Debt Instrument | ||||
Line of credit, maximum borrowing capacity | $ 165,000,000 | $ 125,000,000 | ||
Accordion feature, higher borrowing capacity option | $ 40,000,000 |
LONG-TERM DEBT - Indenture and
LONG-TERM DEBT - Indenture and Convertible Senior Notes (Details) - USD ($) | 9 Months Ended | ||||||
May 26, 2022 | Nov. 01, 2021 | Sep. 30, 2022 | Jun. 01, 2022 | Apr. 01, 2022 | Jan. 20, 2022 | Dec. 31, 2021 | |
Line of Credit Facility [Line Items] | |||||||
Debt instrument, conversion ratio (as a percent) | 233.6449 | ||||||
Derivative commodity liability | $ 14,303,000 | $ 79,000,000 | $ 75,211,000 | ||||
Unamortized debt | 33,900,000 | ||||||
Convertible Notes | Senior Notes | |||||||
Line of Credit Facility [Line Items] | |||||||
Principal Amounts | $ 155,000,000 | $ 59,822,000 | $ 60,000,000 | $ 155,000,000 | |||
Debt instrument, stated rate (as a percent) | 6.25% | 6.25% | 6.25% | ||||
Issue price, percentage | 90% | ||||||
Interest Payable | $ 7,000,000 | ||||||
Percentage of offer amount for escrow account to be released | 75% | ||||||
Percentage of common stock issuable upon conversion | 19.99% | ||||||
Common stock issued upon conversion of the convertible notes (in shares) | 10,200,000 | 10,165,149 | |||||
Convertible Notes | Unsecured Debt | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Common stock issued upon conversion of the convertible notes (in shares) | 36,000,000 |
LONG-TERM DEBT - Components of
LONG-TERM DEBT - Components of Convertible Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument | ||
Outstanding principal amount | $ 270,686 | $ 157,528 |
Senior Convertible Note | ||
Debt Instrument | ||
Principal Amounts | 155,000 | |
Conversion of principal into common stock | (59,822) | |
Outstanding principal amount | 95,178 | |
Unamortized discount and issuance costs | (52,362) | |
Net Carrying Amount | $ 42,816 |
Leases - Schedule of Finance Le
Leases - Schedule of Finance Lease, Liability, Fiscal Year Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Lessee, Lease, Description | ||
Finance lease obligation | $ 45,494 | $ 598 |
Finance Lease Obligations | ||
Lessee, Lease, Description | ||
Finance lease obligation | 45,500 | |
AVT Equipment Lease-HH | AVT Equipment Lease-HH | ||
Lessee, Lease, Description | ||
Finance lease obligation | 0 | 302 |
AVT Equipment Lease-Ohio | Finance Lease Obligations | AVT Equipment Lease-Ohio | ||
Lessee, Lease, Description | ||
Finance lease obligation | 0 | 296 |
VRA Finance Lease | VRA Finance Lease | ||
Lessee, Lease, Description | ||
Finance lease obligation | $ 45,494 | $ 0 |
Leases - Schedule of Finance _2
Leases - Schedule of Finance Lease, Liability, Fiscal Year Maturity (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Finance Lease, Liability, to be Paid [Abstract] | |
2023 | $ 1,155 |
2024 | 1,301 |
2025 | 1,466 |
2026 | 1,652 |
2027 | 1,862 |
Thereafter | 38,058 |
Total | $ 45,494 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
Apr. 01, 2022 USD ($) quarter | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle | ||||||
Finance lease payment | $ 201,000 | $ 409,000 | ||||
Finance lease right-of-use assets | $ 43,649,000 | 43,649,000 | $ 377,000 | |||
Finance lease obligation | 45,494,000 | 45,494,000 | $ 598,000 | |||
Finance lase cost | $ 28,700 | 700,000 | 86,000 | |||
Finance lease, interest expense | 1,400,000 | 19,400 | 2,700,000 | 37,000 | ||
Operating lease cost | 1,500,000 | $ 1,400,000 | 4,400,000 | 4,200,000 | ||
Operating lease payments | 4,400,000 | $ 4,200,000 | ||||
Secured debt | ||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||
Number of finance leases assumed | quarter | 1 | |||||
Finance lease payment | $ 400,000 | |||||
Finance Lease Obligations | ||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||
Finance lease payment | $ 500,000 | |||||
Finance lease term | 180 months | |||||
Finance lease obligation | $ 45,500,000 | $ 45,500,000 | ||||
Plant | ||||||
New Accounting Pronouncements or Change in Accounting Principle | ||||||
Lease renewal term | 5 years | 5 years | ||||
Lease renewal term, total | 20 years |
LEASES - Schedule of Maturities
LEASES - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Lessee, Lease, Description | |
Year 1 | $ 6,421 |
Year 2 | 6,305 |
Year 3 | 5,253 |
Year 4 | 4,981 |
Year 5 | 4,826 |
Thereafter | 24,032 |
Total lease payments | 51,818 |
Less: interest | (17,858) |
Present value of operating lease liabilities | 33,960 |
Facilities | |
Lessee, Lease, Description | |
Year 1 | 715 |
Year 2 | 495 |
Year 3 | 394 |
Year 4 | 306 |
Year 5 | 300 |
Thereafter | 1,550 |
Total lease payments | 3,760 |
Less: interest | (1,139) |
Present value of operating lease liabilities | 2,621 |
Equipment | |
Lessee, Lease, Description | |
Year 1 | 262 |
Year 2 | 262 |
Year 3 | 259 |
Year 4 | 259 |
Year 5 | 234 |
Thereafter | 0 |
Total lease payments | 1,276 |
Less: interest | (218) |
Present value of operating lease liabilities | 1,058 |
Plant | |
Lessee, Lease, Description | |
Year 1 | 4,111 |
Year 2 | 4,111 |
Year 3 | 4,111 |
Year 4 | 4,111 |
Year 5 | 4,111 |
Thereafter | 22,482 |
Total lease payments | 43,037 |
Less: interest | (15,728) |
Present value of operating lease liabilities | 27,309 |
Railcar | |
Lessee, Lease, Description | |
Year 1 | 1,333 |
Year 2 | 1,437 |
Year 3 | 489 |
Year 4 | 305 |
Year 5 | 181 |
Thereafter | 0 |
Total lease payments | 3,745 |
Less: interest | (773) |
Present value of operating lease liabilities | $ 2,972 |
LEASES - Schedule of Operating
LEASES - Schedule of Operating Lease Weighted Average Remaining Lease Terms and Discount Rates (Details) | Sep. 30, 2022 |
Lease facilities | |
Lessee, Lease, Description | |
Weighted average remaining lease terms (years) | 4 years 9 months 14 days |
Weighted average discount rate (in pure) | 9.13% |
Lease equipment | |
Lessee, Lease, Description | |
Weighted average remaining lease terms (years) | 10 years 8 months 8 days |
Weighted average discount rate (in pure) | 7.97% |
Lease plant | |
Lessee, Lease, Description | |
Weighted average remaining lease terms (years) | 10 years 5 months 19 days |
Weighted average discount rate (in pure) | 9.37% |
Railcar | |
Lessee, Lease, Description | |
Weighted average remaining lease terms (years) | 3 years 2 months 19 days |
Weighted average discount rate (in pure) | 8% |
EQUITY (Details)
EQUITY (Details) | 3 Months Ended | 9 Months Ended | |||||||||||||||
Jul. 22, 2022 $ / shares shares | Jul. 11, 2022 $ / shares shares | May 26, 2022 shares | Mar. 24, 2022 $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) shares | Mar. 31, 2022 USD ($) shares | Sep. 30, 2021 USD ($) shares | Jun. 30, 2021 USD ($) shares | Mar. 31, 2021 shares | Sep. 30, 2022 USD ($) trading $ / shares shares | Sep. 30, 2021 shares | Jun. 10, 2022 shares | Jun. 01, 2022 USD ($) | Jan. 20, 2022 USD ($) | Dec. 31, 2021 shares | Nov. 01, 2021 USD ($) | |
Conversion of Stock | |||||||||||||||||
Conversion of common stock | $ | $ 59,822,000 | ||||||||||||||||
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 | |||||||||||||||
Convertible Notes | Senior Notes | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Principal Amounts | $ | $ 59,822,000 | $ 59,822,000 | $ 60,000,000 | $ 155,000,000 | $ 155,000,000 | ||||||||||||
Debt instrument, stated rate (as a percent) | 6.25% | 6.25% | 6.25% | 6.25% | |||||||||||||
Common stock issued upon conversion of the convertible notes (in shares) | 10,200,000 | 10,165,149 | |||||||||||||||
Series A Preferred Stock | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Preferred stock, liquidation preference (in shares) | 1,112,728 | 1,112,728 | |||||||||||||||
Warrants to purchase (in shares) | 1,500,000 | ||||||||||||||||
Shares issued (in dollars per share) | $ / shares | $ 2.25 | $ 2.25 | |||||||||||||||
Conversion of common stock | $ | $ 1,000 | $ 0 | $ 0 | $ 0 | |||||||||||||
Preferred stock, convertible, conversion price (in dollars per share) | $ / shares | $ 15 | $ 15 | |||||||||||||||
Number of consecutive trading days | trading | 20 | ||||||||||||||||
Conversion terms, threshold consecutive trading days | 20 days | ||||||||||||||||
Conversion conditions, average daily trading volume (in shares) | 7,500 | 7,500 | |||||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 374,337 | 385,601 | |||||||||||||
Number of shares converted into common stock (in shares) | 374,337 | ||||||||||||||||
Preferred stock, shares authorized (in shares) | 0 | 0 | 5,000,000 | ||||||||||||||
Preferred Stock, Shares Issued | 0 | 0 | 385,601 | ||||||||||||||
Series B Preferred Stock | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Conversion of common stock | $ | $ 0 | ||||||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | ||||||||||||||
Temporary equity, shares authorized (in shares) | 0 | 0 | 10,000,000 | ||||||||||||||
Series B1 Preferred Stock | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | ||||||||||||||
Temporary equity, shares authorized (in shares) | 0 | 0 | 17,000,000 | ||||||||||||||
Series C Preferred Stock | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | ||||||||||||||
Preferred stock, shares authorized (in shares) | 0 | 0 | 44,000 | ||||||||||||||
Common Stock | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Shares issued as result of share conversion (in shares) | 385,593 | 13,826,010 | |||||||||||||||
Preferred stock, liquidation preference (in shares) | 100 | 95,974 | 1,112,728 | 96,074 | 96,074 | ||||||||||||
Warrants to purchase (in shares) | 100 | 165,000 | 1,500,000 | 165,100 | |||||||||||||
Shares issued (in dollars per share) | $ / shares | $ 4.50 | $ 4.50 | $ 4.50 | $ 4.50 | |||||||||||||
Conversion of common stock (in shares) | 10,165,000 | 10,165,149 | |||||||||||||||
Conversion of common stock | $ | $ 10,000 | $ 59,822,000 | |||||||||||||||
Exercise of options to purchase common stock (in shares) | 4,000 | 498,000 | 60,000 | 1,267,000 | 505,000 | 23,000 | 561,317 | 528,368 | |||||||||
Common stock purchased upon exercise of options (in shares) | 100,000 | ||||||||||||||||
Common Stock | Series A Preferred Stock | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Conversion of common stock (in shares) | 381,000 | 5,000 | 6,000 | 28,000 | |||||||||||||
Conversion of common stock | $ | $ 1,000 | ||||||||||||||||
Common Stock | Series B Preferred Stock | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Conversion of common stock (in shares) | 245,000 | ||||||||||||||||
Common Stock | Series B1 Preferred Stock | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Exercise of options to purchase common stock (in shares) | 96,000 | 1,113,000 | 1,576,000 | 157,000 | 1,080,000 | ||||||||||||
Common Stock | Carrhae & Co FBO Wasatch Micro Cap Value Fund | |||||||||||||||||
Conversion of Stock | |||||||||||||||||
Shares issued (in dollars per share) | $ / shares | $ 2.25 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net income (loss) attributable to common shareholders from continuing operations | $ 17,259,000 | $ 6,364,000 | $ (62,764,000) | $ (16,457,000) |
Net income attributable to common shareholders from discontinued operations, net of tax | 4,975,000 | 1,581,000 | 13,053,000 | 4,732,000 |
Net income (loss) attributable to common shareholders, basic | $ 22,234,000 | $ 7,945,000 | $ (49,711,000) | $ (11,725,000) |
Weighted-average common shares outstanding (in shares) | 75,591,000 | 61,349,000 | 69,007,000 | 53,964,000 |
Continuing operations (in dollars per share) | $ 0.23 | $ 0.10 | $ (0.91) | $ (0.31) |
Discontinued operations, net of tax (in dollars per share) | 0.07 | 0.03 | 0.19 | 0.09 |
Basic income (loss) per common share (in dollars per share) | $ 0.30 | $ 0.13 | $ (0.72) | $ (0.22) |
Weighted Average Number of Shares Outstanding, Basic [Abstract] | ||||
Net income (loss) attributable to common shareholders diluted | $ 22,234,000 | $ 7,945,000 | $ (49,711,000) | $ (11,725,000) |
Stock options and warrants (in shares) | 4,047,000 | 2,871,000 | 0 | 0 |
Preferred stock (in shares) | 0 | 385,000 | 0 | 0 |
Diluted weighted-average shares outstanding (in shares) | 79,638,000 | 64,605,000 | 69,007,000 | 53,964,000 |
Continuing operations (in dollars per share) | $ 0.22 | $ 0.10 | $ (0.91) | $ (0.31) |
Discontinued operations, net of tax (in dollars per share) | 0.06 | 0.02 | 0.19 | 0.09 |
Diluted income (loss) per share (in dollars per share) | $ 0.28 | $ 0.12 | $ (0.72) | $ (0.22) |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - shares | Sep. 30, 2022 | May 26, 2022 | Apr. 01, 2022 |
Warrant | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Warrant outstanding (in shares) | 2,835,000 | 250,000 | 2,750,000 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of outstanding debt facilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 20, 2022 | Dec. 31, 2021 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative instruments, assets | $ 1,219 | $ 96 | |
Derivative warrants, liabilities | 14,303 | $ 79,000 | 75,211 |
Total | (13,084) | (75,115) | |
Level 1 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative instruments, assets | 1,219 | 96 | |
Derivative warrants, liabilities | 0 | 0 | |
Total | 1,219 | 96 | |
Level 2 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative instruments, assets | 0 | 0 | |
Derivative warrants, liabilities | 0 | 0 | |
Total | 0 | 0 | |
Level 3 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative instruments, assets | 0 | 0 | |
Derivative warrants, liabilities | 14,303 | 75,211 | |
Total | (14,303) | (75,211) | |
Commodity | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative instruments, assets | 1,219 | 96 | |
Commodity | Level 1 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative instruments, assets | 1,219 | 96 | |
Commodity | Level 2 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative instruments, assets | 0 | 0 | |
Commodity | Level 3 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative instruments, assets | 0 | 0 | |
Derivative warrants | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative warrants, liabilities | 14,303 | 75,211 | |
Derivative warrants | Level 1 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative warrants, liabilities | 0 | 0 | |
Derivative warrants | Level 2 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative warrants, liabilities | 0 | 0 | |
Derivative warrants | Level 3 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Derivative warrants, liabilities | $ 14,303 | $ 75,211 |
FAIR VALUE MEASUREMENTS - Dynam
FAIR VALUE MEASUREMENTS - Dynamic Black-Scholes Merton unobservable inputs (Details) - Stock option | 9 Months Ended |
Sep. 30, 2022 | |
Warrant | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Expected dividend rate (in percent) | 0% |
Expected volatility rate, minimum (in percent) | 104.52% |
Risk free interest rate, minimum (in percent) | 4.06% |
Expected term (in years) | 5 years |
Additional Warrants | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Expected dividend rate (in percent) | 0% |
Expected volatility rate, maximum (in percent) | 101% |
Risk free interest rate, maximum (in percent) | 4.06% |
Expected term (in years) | 5 years 6 months |
FAIR VALUE MEASUREMENTS - Sch_2
FAIR VALUE MEASUREMENTS - Schedule of liabilities with unobservable inputs (Details) - Level 3 $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at beginning of period | $ 75,211 |
April 1 warrants granted | 22,795 |
May 26 warrants granted | 2,874 |
Equity component of the convertible senior not | (78,789) |
Change in valuation of warrants included in net income | (7,788) |
Balance at end of period | $ 14,303 |
COMMODITY DERIVATIVE INSTRUME_3
COMMODITY DERIVATIVE INSTRUMENTS - Schedule of Derivative Instruments (Details) bbl in Thousands, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) $ / bbl bbl | Dec. 31, 2021 USD ($) $ / bbl bbl | |
Derivative | ||
Fair Value | $ (13,084) | $ (75,115) |
Sept. 2022 - Nov. 2022 | ||
Derivative | ||
Weighted average strike price (in usd per barrel) | $ / bbl | 4.51 | |
Remaining Volume (Barrels) | bbl | 12 | |
Fair Value | $ 54 | |
Sept. 2022 - Nov. 2022 | ||
Derivative | ||
Weighted average strike price (in usd per barrel) | $ / bbl | 2.39 | |
Remaining Volume (Barrels) | bbl | 6 | |
Fair Value | $ 14 | |
Sept. 2022 - Nov. 2022 | ||
Derivative | ||
Weighted average strike price (in usd per barrel) | $ / bbl | 10.75 | |
Remaining Volume (Barrels) | bbl | 42 | |
Fair Value | $ 1,075 | |
Sept. 2022 - Nov. 2022 | ||
Derivative | ||
Weighted average strike price (in usd per barrel) | $ / bbl | 1.52 | |
Remaining Volume (Barrels) | bbl | 50 | |
Fair Value | $ 76 | |
Dec. 2021-Mar. 2022 | ||
Derivative | ||
Weighted average strike price (in usd per barrel) | $ / bbl | 3.18 | |
Remaining Volume (Barrels) | bbl | 18 | |
Fair Value | $ 136 | |
Dec. 2021-Mar. 2022 | ||
Derivative | ||
Weighted average strike price (in usd per barrel) | $ / bbl | 31.59 | |
Remaining Volume (Barrels) | bbl | 20 | |
Fair Value | $ 71 | |
Dec. 2021-Mar. 2022 | ||
Derivative | ||
Weighted average strike price (in usd per barrel) | $ / bbl | 32.48 | |
Remaining Volume (Barrels) | bbl | 50 | |
Fair Value | $ (111) |
COMMODITY DERIVATIVE INSTRUME_4
COMMODITY DERIVATIVE INSTRUMENTS - Fair Value of Derivative Instruments within Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative | ||
Total | $ (13,084) | $ (75,115) |
Derivative instruments, assets | 1,219 | 96 |
Crude oil options | ||
Derivative | ||
Total | 1,075 | 136 |
Crude oil swaps | ||
Derivative | ||
Total | 144 | 0 |
Crude oil futures | ||
Derivative | ||
Total | $ 0 | $ (40) |
COMMODITY DERIVATIVE INSTRUME_5
COMMODITY DERIVATIVE INSTRUMENTS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Gain (loss) on commodity derivative contracts | $ 11,000 | $ 300 | $ (87,218) | $ (2,205) |
INCOME TAXES (Details)
INCOME TAXES (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 USD ($) quarter | Sep. 30, 2021 USD ($) | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (as a percent) | 0% | |
U.S. federal income tax rate (as a percent) | 21% | |
Number of quarters of cumulative loss | quarter | 12 | |
Operating loss carryforwards | $ 106 | $ 38.9 |
Pre-tax loss in the period | $ 29.1 | $ (2.3) |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Redeemable Noncontrolling Interest [Line Items] | |||||||
Net loss attributable to redeemable non-controlling interest | $ 3,023 | $ 3,769 | $ 2,329 | $ 3,113 | $ 1,542 | ||
Accretion of non-controlling interest to redemption value | $ 400 | $ 1,100 | |||||
MG SPV | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Beginning balance | 6,812 | 5,473 | 6,812 | 5,473 | |||
Net loss attributable to redeemable non-controlling interest | (38) | (200) | |||||
Accretion of non-controlling interest to redemption value | 428 | 1,176 | |||||
Redemption of non-controlling interest | (7,202) | 0 | |||||
Ending balance | 6,449 | 0 | 6,449 | ||||
Heartland SPV | |||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||
Beginning balance | $ 36,635 | $ 26,139 | 36,635 | 26,139 | |||
Net loss attributable to redeemable non-controlling interest | 6,829 | 7,183 | |||||
Redemption of non-controlling interest | (43,464) | 0 | |||||
Ending balance | $ 33,322 | $ 0 | $ 33,322 |
Noncontrolling Interest (Deta_2
Noncontrolling Interest (Details) (Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||||
May 26, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Apr. 01, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Redeemable Noncontrolling Interest [Line Items] | |||||||||||
Net loss attributable to redeemable non-controlling interest | $ 3,023,000 | $ 3,769,000 | $ 2,329,000 | $ 3,113,000 | $ 1,542,000 | ||||||
Accretion of non-controlling interest to redemption value | $ 400,000 | $ 1,100,000 | |||||||||
Vertex Splitter | Tensile-Vertex | |||||||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||||||
Cumulative amount exceeding redemption value | $ 43,500,000 | ||||||||||
Vertex Splitter | Heartland SPV | |||||||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||||||
Percentage acquired (as a percent) | 100% | ||||||||||
MG SPV | |||||||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||||||
Net loss attributable to redeemable non-controlling interest | (38,000) | (200,000) | |||||||||
Accretion adjustment | 400,000 | ||||||||||
Redeemable Noncontrolling Interest, Equity, Carrying Amount | $ 6,449,000 | 0 | 6,449,000 | $ 7,200,000 | $ 6,812,000 | $ 5,473,000 | |||||
Accretion of non-controlling interest to redemption value | 428,000 | $ 1,176,000 | |||||||||
MG SPV | |||||||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||||||
Ownership percentage (as a percent) | 100% | ||||||||||
MG SPV | Vertex Splitter | |||||||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||||||
Ownership percentage (as a percent) | 15% | ||||||||||
Equity method investment, cost | $ 7,200,000 | ||||||||||
Heartland SPV | |||||||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||||||
Net loss attributable to redeemable non-controlling interest | $ 6,800,000 | ||||||||||
Cumulative amount exceeding redemption value | $ 43,500,000 | ||||||||||
Heartland SPV | Tensile-Vertex | |||||||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||||||
Ownership percentage (as a percent) | 65% | ||||||||||
Cumulative amount exceeding redemption value | $ 43,500,000 | ||||||||||
Heartland SPV | Vertex Splitter | |||||||||||
Redeemable Noncontrolling Interest [Line Items] | |||||||||||
Ownership percentage (as a percent) | 65% |
DISCONTINUED OPERATIONS - Narra
DISCONTINUED OPERATIONS - Narrative (Details) - USD ($) $ in Millions | Jan. 25, 2022 | Jan. 24, 2022 |
Safety-Kleen | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Break up fee payment | $ 3 | $ 3 |
DISCONTINUED OPERATIONS - Incom
DISCONTINUED OPERATIONS - Income Statement Disclosures by Disposal Groups (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Income from discontinued operations, net of tax | $ 4,975 | $ 3,981 | $ 19,882 | $ 11,915 | |||
Held-for-sale | UMO business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Assets held for sale | $ 81,616 | $ 74,046 | |||||
Liabilities held for sale | (35,507) | $ (37,645) | |||||
Net income from discontinued operations to continued operation | $ 16,736 | $ 1,284 | |||||
Revenues | 22,153 | 14,507 | 63,534 | 41,039 | |||
Cost of revenues (exclusive of depreciation shown separately below) | 14,306 | 8,638 | 36,077 | 23,124 | |||
Depreciation and amortization attributable to costs of revenues | 391 | 393 | 1,170 | 1,160 | |||
Gross profit | 7,456 | 5,476 | 26,287 | 16,755 | |||
Selling, general and administrative expenses (exclusive of depreciation shown separately below) | 2,418 | 1,418 | 6,213 | 4,606 | |||
Depreciation and amortization expense attributable to operating expenses | 63 | 63 | 188 | 188 | |||
Total operating expenses | 2,481 | 1,481 | 6,401 | 4,794 | |||
Income from operations | 4,975 | 3,995 | 19,886 | 11,961 | |||
Interest expense | 0 | ||||||
Interest expense | 14 | 4 | 46 | ||||
Total other expense | 0 | (14) | (4) | (46) | |||
Income before income tax | 4,975 | 3,981 | 19,882 | 11,915 | |||
Income tax benefit (expense) | 0 | 0 | 0 | 0 | |||
Income from discontinued operations, net of tax | $ 4,975 | $ 3,981 | $ 19,882 | $ 11,915 |
DISCONTINUED OPERATIONS - Balan
DISCONTINUED OPERATIONS - Balance Sheet Disclosures by Disposal Groups (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
ASSETS | |||
Total current assets | $ 11,651 | $ 10,070 | |
TOTAL ASSETS | 647,577 | 266,060 | $ 144,650 |
Held-for-sale | UMO business | |||
ASSETS | |||
Inventory | 2,190 | 1,253 | |
Prepaid expenses | 317 | 163 | |
Total current assets | 2,507 | 1,416 | |
Fixed assets, at cost | 17,658 | 15,451 | |
Less accumulated depreciation | (9,140) | (8,047) | |
Fixed assets, net | 8,518 | 7,404 | |
Finance lease right-of-use assets | 0 | 436 | |
Intangible assets, net | 626 | 814 | |
TOTAL ASSETS | $ 11,651 | $ 10,070 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transactions [Abstract] | ||
Related party payments | $ 500 | $ 600 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Convertible Notes - Senior Notes - USD ($) | Oct. 01, 2022 | Apr. 01, 2022 |
Subsequent Event [Line Items] | ||
Interest Payable | $ 7,000,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Interest Payable | $ 3,000,000 |