SUMMARY OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

3 Months Ended

Mar. 31, 2024

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, 2023.

Liquidity

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company has cash and cash equivalents of $62.1 million as of March 31, 2024. As shown in the accompanying unaudited consolidated financial statements, the Company generated a net loss from continuing operations of $17.9 million during the three months ended March 31, 2024. The Company had cash outflows from operating activities from continuing operations, which were $29.1 million during the three months ended March 31, 2024. The Company has cash outflows from investing activities from continuing operations due to its investments in capital expenditures partially offset by proceeds of real property sales. The Company has generated significant cash inflows from financing activities from continuing operations, primarily attributed to proceeds from inventory financing agreement.

Restricted cash as of March 31, 2024, and December 31, 2023, consisted of a $2.0 million deposit in a bank for financing of a short-term equipment lease, and $1.5 million held in an escrow account in connection with the sale of Vertex Refining OH, LLC (“Vertex OH”), and $0.1 million deposit in a money market account to serve as collateral for payment of a credit card.

Going Concern

The accompanying consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The evaluation of going concern under the accounting guidance requires significant judgment which involves the Company considering that it has historically incurred losses in recent years as it has prepared to grow its business through acquisition opportunities. The Company must also consider its current liquidity as well as future market and economic conditions that may be deemed outside the control of the Company as it relates to obtaining financing and generating future profits.

As of March 31, 2024, the Company has evaluated its ability to continue as a going concern. Management has considered various factors, including historical operating results, liquidity, financial condition, and other relevant conditions and events. Based on this evaluation, management has determined that there is substantial doubt about the Company's ability to continue as a going concern within one year of the financial statement issuance date primarily due to the Term Loan (see below “Note 15. Financing Agreements”) maturing on April 1, 2025. Management's plans to mitigate the going concern risk include current efforts to refinance the debt of the Company with a new lender group, and the various efforts underway to reduce and minimize costs throughout the organization. In addition, the Company believes it has the ability, if necessary, to raise additional capital through the capital equity markets. However, there can be no assurance that these plans will be successful.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Investors and other users of the financial statements are encouraged to consider this information when assessing the Company's financial position and prospects.

New Accounting Pronouncements

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.