VERTEX ENERGY, INC. (NASDAQ:VTNR) Files An 8-K Financial Statements and Exhibits
Item 9.01 of the Original Report to include pro forma financial information relating to the disposition (the “Pro Forma Financial Information”).
Subsequently, in connection with additional analysis of the various aspects of the transaction, the Company determined that such Pro Forma Financial Information was not required to be included in the Amended Report.
Specifically, the Company determined that Heartland SPV is a variable interest entity (“VIE”) in which the Company holds a controlling financial interest. The Company’s conclusion that Heartland SPV is a VIE results from a put option held by Tensile, which upon exercise would require Heartland SPV to redeem the membership interests held by Tensile at the greater of fair market value of the membership units or the original per unit price of the membership units plus any unpaid preferred return (initially 22.5% compounding quarterly). Tensile can exercise the put option after five years or upon a qualifying event, as further described in the HPRM LLC Company Agreement. to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) paragraph 810-10-25-38A and paragraph 810-10-25-38B, a reporting entity (the Company) is deemed to have a controlling financial interest in a VIE if it has both of the following characteristics:
a. The power to direct the activities of a VIE that most significantly impact the VIE’s economic performance; and
b. The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.
The Company determined that since substantially all of the activities of Heartland SPV (i.e., the VIE) are conducted on behalf of a single VIE holder, and that the Company is the primary beneficiary of the VIE, Heartland SPV should be consolidated in the Company’s consolidated financial statements and that such prior Pro Forma Financial Information was not required and not consistent with the ASC discussed above. The Company is filing this Amendment No. 2 to the Original Report to amend and restate Item 9.01 of the Original Report to remove and delete the Pro Forma Financial Information.
The Company asks that the Pro Forma Financial Information filed in connection with the Amended Report not be relied upon and be disregarded for all purposes.
This Current Report on Form 8-K does not amend or modify the Original Report, except as to Item 9.01.
Item 9.01 Financial Statements and Exhibits.
(b) Pro forma.
The Company has determined that pro forma financial information regarding the disposition of Vertex OH in connection with the Heartland Share Purchase is not required.
(d) Exhibits.
| 2.1*+ | Share Purchase and Subscription Agreement dated January 17, 2020, by and among HPRM LLC, Vertex Energy Operating LLC, Tensile-Heartland Acquisition Corporation, and solely for the purposes of Section 9.1, Vertex Energy, Inc. |
| 10.2* | Limited Liability Company Agreement of HPRM LLC dated January 17, 2020 |
| 99.1* | Press Release of Vertex Energy, Inc., dated January 22, 2020 |
* Filed or furnished as exhibits to the Original Report.
+ Certain schedules and exhibits have been omitted to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request; provided, however that Vertex Energy, Inc. may request confidential treatment
About VERTEX ENERGY, INC. (NASDAQ:VTNR)
Vertex Energy, Inc. is an environmental services company that recycles industrial waste streams and off-specification commercial chemical products. The Company focuses on recycling used motor oil and other petroleum by-products. The Company’s segments include the Black Oil, Refining and Marketing, and Recovery divisions. The Company’s product categories include Used Motor Oil, Fuel Oil, pyrolysis gasoline (Pygas), Gasoline Blendstock and Base Oil. The Black Oil division is engaged in operations across the used motor oil recycling value chain, including collection, aggregation, transportation, storage, refinement and sales of aggregated feedstock and re-refined products to end users. The Refining and Marketing division is engaged in the aggregation of feedstock, re-refining it into end products, and selling these products to customers. The Recovery division is a provider of generator solutions for the recovery and management of hydrocarbon streams.
