RELATED PARTIES	6 Months Ended
Jun. 30, 2012
Related Parties
RELATED PARTIES	NOTE 2. RELATED PARTIES The Company has numerous transactions with Vertex Holdings, L.P., formerly Vertex Energy, L.P. (also defined herein as the “Partnership” or “Vertex LP”), including the lease of the Partnership’s storage facility, subletting of office space, transportation of feedstock to re-refiners and the Company’s storage facility, and delivery from the Company’s re-refinery to end customers. The pricing under these contracts is with certain wholly-owned subsidiaries of the Partnership and is priced at market, and is reviewed periodically from time to time by the Board of Director’s Related Party Transaction committee. The Related Party Transaction committee includes at least two independent directors and will review and pre-approve any and all related party transactions. The consolidated financial statements include revenues from related parties of $0 and $17,978 and inventory purchases from related parties of $7,381,179 and $6,109,872 for the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, the Company owes $748,026 of accounts payable to related parties including Cedar Marine Terminal (“CMT”), H&H Oil Baytown, H&H Oil Austin and H&H Oil Corpus. These entities are majority-owned and controlled by our Chief Executive Officer and Chairman, Benjamin P. Cowart. The Company also incurred process costs of $3,858,699 and $3,293,572 for the six months ended June 30, 2012 and 2011, respectively. The costs arise from the Thermal Chemical Extraction Process (“TCEP”) operating agreement with CMT, whereby we pay up to $0.40 per gallon of processing costs. In the past, both parties have agreed to share increased costs. The Company subleases office space from Vertex L.P. Rental payments under the lease are $6,600 per month and the lease will expire in June 2013. The Company leases approximately 30,000 barrels in storage capacity for its Black Oil division at Cedar Marine Terminal, located in Baytown, Texas. The monthly lease expense is $22,500 and the lease expired in March 2011; however, the parties have agreed to an extension of the lease with the same terms and conditions, through June 2012; provided that the terms of such extension are still subject to the approval of the Related Party Transaction Committee. The Company will continue to operate on a month to month basis until the lease is renewed. The Company leases approximately 45,000 barrels in storage capacity for its TCEP division at CMT, located in Baytown, Texas. The monthly lease expense is $45,000 and the lease expired in March 2011; however, the parties have agreed to an extension of the leases with same terms and conditions, through June 2012, other than an increase in the monthly lease expense to $49,500 in consideration for an additional rental of 3,000 barrels of capacity; provided that the terms of such extension are still subject to the approval of the Related Party Transaction Committee. The Company will continue to operate on a month to month basis until the lease is renewed.

NOTE 2. RELATED PARTIES

The Company has numerous transactions with Vertex Holdings, L.P., formerly Vertex Energy, L.P. (also defined herein as the “Partnership” or “Vertex LP”), including the lease of the Partnership’s storage facility, subletting of office space, transportation of feedstock to re-refiners and the Company’s storage facility, and delivery from the Company’s re-refinery to end customers. The pricing under these contracts is with certain wholly-owned subsidiaries of the Partnership and is priced at market, and is reviewed periodically from time to time by the Board of Director’s Related Party Transaction committee. The Related Party Transaction committee includes at least two independent directors and will review and pre-approve any and all related party transactions.

The consolidated financial statements include revenues from related parties of $0 and $17,978 and inventory purchases from related parties of $7,381,179 and $6,109,872 for the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, the Company owes $748,026 of accounts payable to related parties including Cedar Marine Terminal (“CMT”), H&H Oil Baytown, H&H Oil Austin and H&H Oil Corpus. These entities are majority-owned and controlled by our Chief Executive Officer and Chairman, Benjamin P. Cowart. The Company also incurred process costs of $3,858,699 and $3,293,572 for the six months ended June 30, 2012 and 2011, respectively. The costs arise from the Thermal Chemical Extraction Process (“TCEP”) operating agreement with CMT, whereby we pay up to $0.40 per gallon of processing costs. In the past, both parties have agreed to share increased costs.

The Company subleases office space from Vertex L.P. Rental payments under the lease are $6,600 per month and the lease will expire in June 2013.

The Company leases approximately 30,000 barrels in storage capacity for its Black Oil division at Cedar Marine Terminal, located in Baytown, Texas. The monthly lease expense is $22,500 and the lease expired in March 2011; however, the parties have agreed to an extension of the lease with the same terms and conditions, through June 2012; provided that the terms of such extension are still subject to the approval of the Related Party Transaction Committee. The Company will continue to operate on a month to month basis until the lease is renewed.

The Company leases approximately 45,000 barrels in storage capacity for its TCEP division at CMT, located in Baytown, Texas. The monthly lease expense is $45,000 and the lease expired in March 2011; however, the parties have agreed to an extension of the leases with same terms and conditions, through June 2012, other than an increase in the monthly lease expense to $49,500 in consideration for an additional rental of 3,000 barrels of capacity; provided that the terms of such extension are still subject to the approval of the Related Party Transaction Committee. The Company will continue to operate on a month to month basis until the lease is renewed.