NOTES PAYABLE

9 Months Ended

Sep. 30, 2011

Notes Payable [Abstract]

NOTES PAYABLE

NOTE 4. NOTES PAYABLE

In September 2010, the Company entered into a loan agreement and obtained a line of credit with Bank of America Merrill Lynch. The balance on the line of credit was $1,000,000 and $2,350,000 was available at September 30, 2011. On September 22, 2011 Bank of America provided an extension on the line of credit through December 31, 2011 and the Company will renegotiate the terms of the loan agreement at this date. The loan agreement is guaranteed by CMT, a related party of the Company.  The most restrictive covenant of the loan requires an interest coverage ratio of at least 1.5 to 1.  The Company believes it was in compliance of all aspects of the agreement at September 30, 2011.

The financing arrangement discussed above is secured by all of the assets of the Company.  Management of Vertex Energy believes that with the financing arrangements, in addition to projected earnings, it will have sufficient liquidity to fund the Company’s operations for the foreseeable future, although it may seek additional financing to fund acquisitions or other development in the future.

On October 15, 2010, we entered into a sales/purchase agreement with a supplier requiring the Company to provide a standby letter of credit in the amount of $900,000, which was amended to $550,000 on May 20, 2011 and to $150,000 on August 26, 2011. The expiration date was amended from October 14, 2011 to November 30, 2011.