VERTEX ENERGY, INC. (NASDAQ:VTNR) Files An 8-K Unregistered Sales of Equity Securities
Item 3.02 Unregistered Sales of Equity Securities.
For the period from October 1, 2020 to December 31, 2020, a total of approximately $317,970 of dividends accrued on the outstanding Series B Preferred Stock of Vertex Energy, Inc. (the “Company”, “we”, “us” and “our”) and for the period from October 1, 2020 to December 31, 2020, a total of approximately $288,594 of dividends accrued on our outstanding Series B1 Preferred Stock. We chose to pay such dividends in-kind by way of the issuance of 102,571 restricted shares of Series B Preferred Stock pro rata to each of the then holders of our Series B Preferred Stock in January 2021 and the issuance of 184,996 restricted shares of Series B1 Preferred Stock pro rata to each of the then holders of our Series B1 Preferred Stock in January 2021. The maximum number of shares of common stock issuable upon conversion of the 102,571 shares of Series B Preferred Stock issued in lieu of December 31, 2020 dividends, if converted in full, would total 102,571 shares of common stock and the maximum number of shares of common stock issuable upon conversion of the 184,996 shares of Series B1 Preferred Stock issued in lieu of December 31, 2020 dividends, if converted in full, would total 184,996 shares of common stock.
As the issuance of the Series B Preferred Stock and Series B1 Preferred Stock in-kind in satisfaction of the dividends did not involve a “sale” of securities under Section 2(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”), we believe that no registration of such securities, or exemption from registration for such securities, was required under the Securities Act.
On January 26, 2021, two holders of our Series B1 Preferred Stock converted an aggregate of 1,884,925 shares of such preferred stock into the same number of shares of common stock, on a one-for-one basis, to the terms of such Series B1 Preferred Stock.
On January 26, 2021, a holder of our Series B Preferred Stock converted 420,224 shares of such preferred stock into the same number of shares of common stock, on a one-for-one basis, to the terms of such Series B Preferred Stock.
We claim an exemption from registration provided by Section 3(a)(9) of the Securities Act for such issuances, as the securities were exchanged by us with our existing security holder in a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange. After the conversions described above, there are 3,785,037 outstanding shares of Series B Preferred Stock, which if converted in full, would convert into 3,785,037 shares of common stock and 5,699,720 outstanding shares of Series B1 Preferred Stock, which if converted in full, would convert into 5,699,720 shares of common stock.
On January 26, 2021, two holders of warrants to purchase shares of our common stock exercised warrants to purchase 857,082 shares of common stock for cash ($1,311,335 in aggregate or $1.53 per share), and were issued 857,082 shares of our common stock.
On January 28, 2021, a holder of warrants to purchase shares of our common stock exercised warrants to purchase 70,385 shares of common stock for cash ($107,689 in aggregate or $1.53 per share), and was issued 70,385 shares of our common stock.
We claim an exemption from registration to Section 4(a)(2) of the Securities Act, for the above issuances in connection with the exercises.
The resale of all of the shares of common stock issuable upon conversion the Series B Preferred Stock and Series B1 Preferred Stock, and the exercise of the warrants, have been registered by the Company under the Securities Act, on a registration statement declared effective by the Securities and Exchange Commission.
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.
