Vertex Energy Inc. - FORM 10-Q

Attached files

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EX-32.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - Vertex Energy Inc.	ex32-1.htm
EX-32.2 - CERTIFICATION OF ACTING PRINCIPAL ACCOUNTING OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT - Vertex Energy Inc.	ex32-2.htm
EX-31.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT - Vertex Energy Inc.	ex31-1.htm
EX-31.2 - CERTIFICATION OF ACTING PRINCIPAL ACCOUNTING OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT. - Vertex Energy Inc.	ex31-2.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM _____________ TO _____________

Commission File Number 000-53619

———————

VERTEX ENERGY, INC.

(Exact name of registrant as specified in its charter)

———————

NEVADA	94-3439569
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

1331 GEMINI STREET SUITE 250 HOUSTON, TEXAS	77058
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: 866-660-8156

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, and accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨ Accelerated filer ¨

Non-accelerated filer ¨ Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.

Yes ¨ No x

State the number of shares of the issuer’s common stock outstanding, as of the latest practicable date: 8,463,823 shares of common stock issued and outstanding as of May 2, 2011.

TABLE OF CONTENTS

PART I

Item 1.	Consolidated Financial Statements	3

	Consolidated Balance Sheets	F-2

	Consolidated Statements of Operations (unaudited)	F-3

	Consolidated Statements of Cash Flows (unaudited)	F-4

	Notes to Consolidated Financial Statements (unaudited)	F-5

Item 2.	Management’s Discussion And Analysis Of Financial Condition And Results Of Operations	4

Item 3.	Quantitative And Qualitative Disclosures About Market Risk	18

Item 4.	Controls and Procedures	18



PART II

Item 1.	Legal Proceedings	19

Item 1A:	Risk Factors	19

Item 2.	Unregistered Sales Of Equity Securities And Use Of Proceeds	19

Item 3.	Defaults Upon Senior Securities	19

Item 4.	(Removed and Reserved)	19

Item 5.	Other Information	19

Item 6.	Exhibits	20

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

VERTEX ENERGY, INC.

CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011

VERTEX ENERGY, INC.

CONTENTS


		Page
Consolidated Financial Statements

Consolidated Balance Sheets		F-2

Consolidated Statements of Operations		F-3

Consolidated Statements of Cash Flows		F-4

Notes to Consolidated Financial Statements		F-5

F-1

VERTEX ENERGY, INC.
CONSOLIDATED BALANCE SHEETS

	March 31,		December 31,
	2011		2010
	(unaudited)
ASSETS

Current assets
Cash and cash equivalents	$	1,207,465	$	744,313
Accounts receivable, net		1,954,047		1,482,510
Accounts receivable- related party		10,361		-
Inventory		5,825,120		3,901,781
Prepaid expenses		234,870		100,485
Total current assets		9,231,863		6,229,089

Noncurrent assets
Licensing agreement, net		1,873,028		1,833,966
Fixed assets, net		73,274		76,290
Total noncurrent assets		1,946,302		1,910,256

TOTAL ASSETS	$	11,178,165	$	8,139,345

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Accounts payable and accrued expenses	$	5,757,110	$	4,593,199
Accounts payable-related party		1,048,670		407,273
Total current liabilities		6,805,780		5,000,472

Long-term liabilities
Mandatorily redeemable preferred stock, Series B, $.001 par value, 2,000,000 shares authorized, 600,000 issued and outstanding as of March 31, 2011 and December 31, 2010 (includes $150,000 to a related party)		600,000		600,000
Total liabilities		7,405,780		5,600,472

Commitments and contingencies

STOCKHOLDERS’ EQUITY

Preferred stock, $0.001 par value per share:
50,000,000 shares authorized
Series A Convertible Preferred stock, $0.001 par value, 5,000,000 authorized and 4,634,396 and 4,675,716 issued and outstanding at March 31, 2011 and December 31, 2010 respectively		4,635		4,676
Common stock, $0.001 par value per share;
750,000,000 shares authorized; 8,452,169 and 8,370,849 issued and outstanding at March 31, 2011 and December 31, 2010 respectively		8,452		8,371
Additional paid-in capital		2,312,449		2,275,074
Retained earnings		1,446,849		250,752
Total stockholders’ equity		3,772,385		2,538,873

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	11,178,165	$	8,139,345

See accompanying notes to the consolidated financial statements

F-2

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(UNAUDITED)


	March 31,			March 31,
	2011			2010

Revenues	$	20,290,925		$	13,273,080
Revenues-related parties		17,978			-
		20,308,903			13,273,080

Cost of revenues		18,038,007			12,245,250

Gross profit		2,270,896			1,027,830

Selling, general and administrative expenses		1,026,055			751,173

Income from operations		1,244,841			276,657

Other income (expense)
Other income		-			30,000
Interest expense		(29,041	)		(36,646	)
Total other income (expense)		(29,041	)		(6,646	)

Income before income tax		1,215,800			270,011

Income tax expense		(19,703	)		-

Net income	$	1,196,097		$	270,011


Earnings per common share
Basic	$	0.14		$	0.03
Diluted	$	0.09		$	0.02

Shares used in computing earnings per share
Basic		8,440,064			8,254,256
Diluted		13,935,781			13,726,756

See accompanying notes to the consolidated financial statements

F-3

VERTEX ENERGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2011 AND 2010
(unaudited)


	March 31, 2011			March 31, 2010
	March 31, 2011			March 31, 2010


Cash flows operating activities
Net income	$	1,196,097		$	270,011
Adjustments to reconcile net income to cash
used by operating activities
Stock based compensation expense		33,415			46,848
Depreciation and amortization		37,305			33,448
Changes in assets and liabilities
Accounts receivable		(471,537	)		(486,702	)
Accounts receivable- related parties		(10,361	)		-
Inventory		(1,923,339	)		382,476
Prepaid expenses		(134,385	)		12,810
Accounts payable		1,163,911			(1,439,143	)
Accounts payable – related parties		641,397			90,133
Net cash provided (used) by operating activities		532,503			(1,090,119	)

Cash flows from investing activities
Purchase of intangible assets		(73,351	)		(149,956	)
Purchase of fixed assets		-			(2,716	)
Net cash used by investing activities		(73,351	)		(152,672	)

Cash flows from financing activities
Proceeds from sale of Preferred “B” shares		-			100,000
Proceeds from exercise of common stock warrants		4,000			-
Line of credit proceeds, net		-			1,100,000
Payments on due to related party balance		-			(400,000	)
Net cash provided by financing activities		4,000			800,000

Net change in cash and cash equivalents		463,152			(442,791	)

Cash and cash equivalents at beginning of the period		744,313			514,136

Cash and cash equivalents at end of period	$	1,207,465		$	71,345

SUPPLEMENTAL INFORMATION
Cash paid for interest during the period	$	31,914		$	33,443
Cash paid for income taxes during the period	$	12,000		$	-

NON-CASH TRANSACTIONS
Conversion of Series A Preferred Stock into common shares	$	41		$	-

See accompanying notes to the consolidated financial statements

F-4

VERTEX ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011

(UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited consolidated interim financial statements of Vertex Energy, Inc. (the “Company,” or “Vertex Energy”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s annual financial statements as filed with the SEC on Form 10-K on March 31, 2011 (the “Form 10-K”). In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Certain prior period amounts have been reclassified to conform to current period presentation. Notes to the consolidated financial statements which would substantially duplicate the disclosure contained in the audited consolidated financial statements for the most recent fiscal year 2010 as reported in Form 10-K, have been omitted.

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-owed 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 $17,978 and $0 and inventory purchases from related parties of $2,550,287 and $1,232,847 for the three months ended March 31, 2011 and 2010, respectively. As of March 31, 2011, the Company owes $1,048,670 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 subleases office space from Vertex L.P. Rental payments under the lease are $6,629 per month and the lease will expire in May 2011.

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. 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 Cedar Marine Terminal, located in Baytown, Texas. The monthly lease expense is $38,250 and the lease expired in March 2011. The Company will continue to operate on a month to month basis until the lease is renewed.

NOTE 3. CONCENTRATIONS, SIGNIFICANT CUSTOMERS, COMMITMENTS AND CONTINGENCIES

The Company has concentrated credit risk for cash by maintaining deposits in one bank. These balances are insured by the Federal Deposit Insurance Corporation up to $250,000. From time to time during the three months ended March 31, 2011, the Company’s cash balances exceeded the federally insured limits. No losses have been incurred relating to this concentration.

F-5

VERTEX ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011

(UNAUDITED)

At March 31, 2011 and 2010, the Company’s revenues and receivables were comprised of the following customer concentrations:

	2011		2010
	% of	% of	% of	% of
	Revenues	Receivables	Revenues	Receivables
Customer 1	44%	69%	25%	53%
Customer 2	13%	0%	16%	0%
Customer 3	10%	26%	1%	12%
Customer 4	9%	0%	11%	0%
Customer 5	4%	0%	26%	32%
Customer 6	0%	0%	21%	2%

The Company purchases goods and services from three companies that represented 16%, 10% and 10% of total purchases for the three months ended March 31, 2011. One entity that was 10% of the total is a related party from which Vertex Energy purchased the license described in Note 9.

The Company has several purchase agreements with suppliers that require purchases of minimum quantities of the Company’s products. The agreements generally have a one year term, after which they become month-to-month agreements. There are no penalties associated with these agreements. Minimum future purchases under these contracts are approximately $14,674,198 through September 30, 2011 based on forward contract pricing as of April 25, 2011.

The Company has one debt facility available for use, of which there were no amounts outstanding as of March 31, 2011 and 2010, respectively. See note 4 for further details.

The Company’s revenue, profitability and future rate of growth are substantially dependent on prevailing prices for petroleum-based products. Historically, the energy markets have been very volatile, and there can be no assurance that these prices will not be subject to wide fluctuations in the future. A substantial or extended decline in such prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows, and access to capital and on the quantities of petroleum-based product that the Company can economically produce.

The Company, in its normal course of business, is involved in various other claims and legal action. In the opinion of management, the outcome of these claims and actions will not have a material adverse impact upon the financial position of the Company.

We intend to take advantage of any potential tax benefits related to net operating losses (“NOLs”) acquired as part of the World Waste merger. As a result of the merger we acquired approximately $42 million of net operating losses that may be used to offset taxable income generated by the Company in future periods.

It is possible that the Company may be unable to use these NOLs in their entirety. The extent to which the Company will be able to utilize these carry-forwards in future periods is subject to limitations based on a number of factors, including the number of shares issued within a three-year look-back period, whether the merger is deemed to be a change in control, whether there is deemed to be a continuity of World Waste’s historical business, and the extent of the Company’s subsequent income. As of December 31, 2010, the Company had utilized $1,616,638 of these NOLs leaving approximately $39.8 million of potential NOLs of which we expect to utilize approximately $1.2 million for the three months ended March 31, 2011.

F-6

VERTEX ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011

(UNAUDITED)

NOTE 4. NOTES PAYABLE

In September 2010, the Company entered into a loan agreement with Bank of America Merrill Lynch. The balance on the line of credit was $0 and $2,600,000 was available at March 31, 2011. The loan agreement is guaranteed by Cedar Marine Terminal, 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 March 31, 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 expires on October 14, 2011. To date, there have been no draws against the letter of credit.

NOTE 5. STOCK BASED COMPENSATION

The stock based compensation cost that has been charged against income by the Company was $33,415 and $46,848 for the three months ended March 31, 2011 and 2010, respectively, for options previously awarded by the Company.

Stock option activity for the three months ended March 31, 2011 is summarized as follows:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)		Grant Date Fair Value
Outstanding at December 31, 2010		2,703,334	$	5.81		7.60	$	715,826
Options granted		-		-		-		-
Options exercised		-		-		-		-
Options cancelled/forfeited/expired		-		-		-		-
Outstanding at March 31, 2011		2,703,334	$	5.81		7.36	$	715,826

Vested at March 31, 2011		1,952,584	$	7.78		7.04	$	413,006

Exercisable at March 31, 2011		1,952,584	$	7.78		7.04	$	413,006

F-7

VERTEX ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011

(UNAUDITED)

A summary of the Company’s stock warrant activity and related information for the three months ended March 31, 2011 is as follows:

	Shares			Weighted Average Exercise Price			Weighted Average Remaining Contractual Life (in Years)			Grant Date Fair Value
Outstanding at December 31, 2010		1,773,457		$	14.24			1.96		$	172,973
Warrants granted		-			-			-			-
Warrants exercised		(40,000	)		(.10	)		(2.04	)		(2,342	)
Warrants cancelled/forfeited/expired		(13,333	)		(12.50	)		-			(781	)
Warrants at March 31, 2011		1,720,124		$	14.58			1.72		$	169,850

Vested at March 31, 2011		1,015,960		$	23.43			1.41		$	71,884

Exercisable at March 31, 2011		1,015,960		$	23.43			1.41		$	71,884

NOTE 6. EARNINGS (LOSS) PER SHARE

Basic earnings per share includes no dilution and is computed by dividing income (loss) available to common shareholders by the weighted average number of common shares outstanding for the periods presented. The calculation of basic earnings per share for the three months ended March 31, 2011 includes the weighted average of common shares outstanding. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity, such as convertible preferred stock, stock options, warrants or convertible securities. The calculation of diluted earnings per share for the three months ended March 31, 2011 does not include options to purchase 2,475,575 shares and warrants to purchase 1,686,562 shares due to their anti-dilutive effect, since the instruments were out of the money.

The following is a reconciliation of the numerator and denominator for basic and diluted earnings per share for the three months ended March 31, 2011 and 2010:

	2011		2010

Basic Earnings per Share
Numerator:
Income available to common shareholders	$	1,196,097	$	270,011
Denominator:
Weighted-average shares outstanding		8,440,064		8,254,256

Basic earnings per share	$	0.14	$	0.03

Diluted Earnings per Share
Numerator:
Income	$	1,196,097	$	270,011
Denominator:
Weighted-average shares outstanding		8,440,064		13,726,756
Effect of dilutive securities
Stock options and warrants		261,321		-
Preferred stock		5,234,396		-

Diluted weighted-average shares outstanding		13,935,781		13,726,756

Diluted earnings per share	$	0.09	$	0.02

F-8

VERTEX ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011

(UNAUDITED)

NOTE 7. COMMON STOCK

The total number of authorized shares of the Company’s common stock is 750,000,000 shares, $0.001 par value per share. As of March 31, 2011 there were 8,452,169 common shares issued and outstanding.

During the three months ending March 31, 2011 there were 41,320 shares of the Company's Series A Preferred Stock converted into the Company's common stock and warrants and options to purchase 40,000 shares of the Company's common stock were exercised for cash proceeds of $4,000.

NOTE 8. PREFERRED STOCK

The total number of authorized shares of the Company’s preferred stock is 50,000,000 shares, $0.001 par value per share. The total number of designated shares of the Company’s Series A Preferred Stock is 5,000,000 (“Series A Preferred”). The total number of designated shares of the Company’s Series B Preferred Stock is 2,000,000. As of March 31, 2011 there were 4,634,396 shares of Series A Preferred Stock issued and outstanding and 600,000 Series B Preferred shares issued and outstanding. As of March 31, 2011, all $600,000 of unconverted Series B Preferred Stock is redeemable in 2013.The Company recognized $18,000 of interest expense related to the Series B Preferred Stock liability during the three months ending March 31, 2011.

NOTE 9. LICENSING AGREEMENT

The Company operates under an operating and licensing agreement with a related party that is majority-owned and controlled by the Company’s Chief Executive Officer and Chairman, Benjamin P. Cowart, that provides for an irrevocable, non-transferable, royalty-free, perpetual right to use a certain thermal/chemical extraction technology (TCEP”) to re-refine certain used oil feedstock and associated operations of this technology on a global basis. This includes the right to utilize the technology in any future production facilities built by the Company. If the related entity is unable to continue operations, the Company would not have a source of its TCEP products to sell to customers, which could negatively impact sales. The Company must approve any research and development costs that are performed by the related party and this may affect the related party’s ability to maintain technological feasibility of the technology which could impact the value of the license. The Company will continue to make expenditures on the development of the process in the foreseeable future, which could be significant. We believe the license is technologically feasible; however, it believes it can make improvements that will enhance the TCEP process and design.

The initial valuation of the license was based upon the cost to acquire the use of TCEP and its processes. It will be assessed over time for changes in the valuation. Additional development costs capitalized during the three months ended March 31, 2011 and 2010 were $73,351 and $149,956 respectively. The Company is amortizing the value of the license agreement over a fifteen year period. Amortization expense was $34,289 and $29,523 for the three months ending March 31, 2011 and 2010, respectively. No indications of impairment of the license existed as of March 31, 2011.

NOTE 10. SEGMENT REPORTING

The Company’s reportable segments include the Black Oil and Refining & Marketing divisions. Segment information for the three months ended March 31, 2011 and 2010, is as follows:

THREE MONTHS ENDED MARCH 31, 2011
			Refining &
	Black Oil		Marketing		Total
Revenues	$	4,402,106	$	15,906,797	$	20,308,903

Income from operations	$	2,003	$	1,242,838	$	1,244,841

Total Assets	$	2,844,504	$	8,333,661	$	11,178,165

F-9

VERTEX ENERGY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2011

(UNAUDITED)

THREE MONTHS ENDED MARCH 31, 2010
				Refining &
	Black Oil			Marketing		Total
Revenues	$	3,160,614		$	10,112,466	$	13,273,080

Income (loss) from operations	$	(30,724	)	$	307,381	$	276,657

NOTE 11. SUBSEQUENT EVENTS

Subsequent to March 31, 2011, the available credit on the Line of Credit is $3,500,000 of which $900,000 has been allocated to the outstanding letter of credit. To date the outstanding balance drawn on the line of credit is $1,500,000 leaving an available balance for draws of $1,100,000.

In April 2011, the Company entered into a marketing agreement with a strategic petroleum products trading company in the Gulf of Mexico where we will jointly procure and market black oil feedstock. Nothing contained in the agreement shall be construed to create an association, trust, partnership, or joint venture or impose a trust, fiduciary or partnership duty, obligation or liability on either party. The agreement is to be in effect for three years from the effective date and may be terminated early only upon the occurrence of an early termination event.

Subsequent to the three months ended March 31, 2011, a total of 11,654 shares of the Company’s Series A Preferred Stock were converted into 11,654 shares of the Company’s common stock.

F-10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

We caution you that this report contains forward-looking statements regarding, among other things, financial, business, and operational matters.

All statements that are included in this Quarterly Report, other than statements of historical fact, are forward-looking statements. Forward-looking statements involve known and unknown risks, assumptions, uncertainties, and other factors. Statements made in the future tense, and statements using words such as “may,” “can,” “could,” “should,” “predict,” “aim’” “potential,” “continue,” “opportunity,” “intend,” “goal,” “estimate,” “expect,” “expectations,” “project,” “projections,” “plans,” “anticipates,” “believe,” “think,” “confident,” “scheduled,” or similar expressions are intended to identify forward-looking statements. Forward-looking statements are not a guarantee of performance and are subject to a number of risks and uncertainties, many of which are difficult to predict and are beyond our control. These risks and uncertainties could cause actual results to differ materially from those expressed in or implied by the forward-looking statements, and therefore should be carefully considered. We caution you not to place undo reliance on the forward-looking statements, which speak only as of the date of this report. We disclaim any obligation to update any of these forward-looking statements as a result of new information, future events, or otherwise, except as expressly required by law.

Please see the “Glossary of Selected Terms” incorporated by reference hereto as Exhibit 99.6, for a list of abbreviations and definitions used throughout this report.

Corporate History of the Registrant:

Vertex Energy, Inc. (the “Company,” “we,” “us,” and “Vertex”) was formed as a Nevada corporation on May 14, 2008. Pursuant to an Amended and Restated Agreement and Plan of Merger dated May 19, 2008, by and between Vertex Holdings, L.P. (formerly Vertex Energy, L.P.), a Texas limited partnership ("Vertex LP"), us, World Waste Technologies, Inc., a California corporation (“WWT” or “World Waste”), Vertex Merger Sub, LLC, a California limited liability company and our wholly-owned subsidiary ("Merger Subsidiary"), and Benjamin P. Cowart, our Chief Executive Officer, as agent for our shareholders (as amended from time to time, the “Merger Agreement”). Effective on April 16, 2009, World Waste merged with and into Merger Subsidiary, with Merger Subsidiary continuing as the surviving corporation and becoming our wholly-owned subsidiary (the "Merger"). In connection with the Merger, (i) each outstanding share of World Waste common stock was cancelled and exchanged for 0.10 shares of our common stock; (ii) each outstanding share of World Waste Series A preferred stock was cancelled and exchanged for 0.4062 shares of our Series A preferred stock; and (iii) each outstanding share of World Waste Series B preferred stock was cancelled and exchanged for 11.651 shares of our Series A preferred stock.

Additionally, as a result of the Merger, as the successor entity of World Waste, we assumed World Waste’s filing obligations with the Securities and Exchange Commission and our common stock began trading on the Over-The-Counter Bulletin Board under the symbol “VTNR.OB” effective May 4, 2009. The previous trading symbol on the Over-The-Counter Bulletin Board was “WDWT.OB”. Finally, as a result of the Merger, the common stock of World Waste was effectively reversed one for ten (10) as a result of the exchange ratios set forth in the Merger, and unless otherwise noted, the impact of such effective reverse stock split, created by the exchange ratio set forth above, is retroactively reflected throughout this report. Effective March 1, 2011, we were automatically delisted from the OTCBB due to the fact that no market marker quoted our common stock for a period of more than 4 days. We may take steps in the future to re-quote our common stock on the OTCBB. Our common stock currently trades on the OTCQB market.

Description of Business Activities:

We provide a range of services designed to aggregate, process, and recycle industrial and commercial waste streams and off specification commercial chemical products. We currently provide these services in 13 states, with our primary focus in the Gulf Coast and Central Midwest Region of the United States. Our primary focus is on the recycling of used motor oil and other distressed hydrocarbon streams. This is accomplished (1) through our Black Oil division, which aggregates used motor oil from third-party collectors and manages the delivery of this feedstock to third-party re-refining facilities, as well as fuel oil blenders, and burners of black oil, and (2) through our Refining and Marketing division, which aggregates hydrocarbon streams from collectors and generators and manages the delivery of the hydrocarbon products to a third-party facility for further processing, and then manages the sale of the end products. In addition, we have implemented a proprietary licensed thermal chemical extraction process that, through an operating and license agreement with a related party, will process used motor oil and convert it to higher value products such as fuel oil cutter and a feedstock component for major refineries.

Biomass Renewable Energy

We are also continuing to work on joint development commercial projects which focus on the separation of municipal solid waste into feedstocks for energy production. We are very selective in choosing opportunities that we believe will result in value for the shareholders of Vertex. We can provide no assurance that the ongoing venture will successfully bring any projects to a point of financing or successful construction and operation.

Reliance on Contracts and Relationships; Low Capital Intensive Business

We currently have no significant capital assets and instead contract on a fee-paid basis for the use of all assets we deem to be necessary to conduct our operations, from either independent third-parties or related-parties, pursuant to the License and Operating Agreement, described below, and other related party agreements described in greater detail in our Report on Form 10-K, filed with the Commission on March 31, 2011. These assets are made available to us at market rates which are periodically reviewed by the Related Party Transaction Committee of the Company’s Board of Directors. Our management has chosen to contract for the use of assets rather than purchase or build and own them in order to provide flexibility in the Company’s capital equipment requirements in the event there is a need for more or less capacity due to rapid growth or contraction in the future. We expect to continue to rely on contracts for access to assets moving forward, to avoid the initial capital expenditures that would be required to build our own facilities.

We also have an agreement in place with KMTEX, pursuant to which KMTEX has agreed to process feedstock of certain petroleum distillates, which we provide to KMTEX, into more valuable feedstocks, including pygas, gasoline blend stock and cutter stock, which agreement expires on June 30, 2011, provided that Vertex believes that it will be able to renew or extend such agreement subsequent to the expiration of such term. In connection with and pursuant to the agreement, we pay KMTEX certain monthly tank rental fees, truck and rail car fees, and processing fees based on the weight of the material processed by KMTEX, as well as certain disposal fees and other fees.

Operating and Licensing Agreement

In connection with the Merger and effective as of the effective date of the Merger, we entered into an Operating and Licensing Agreement (the “Operating Agreement”) with Cedar Marine Terminals, L.P., a subsidiary of Vertex LP (“CMT”). CMT is controlled by Vertex LP, an entity which is majority-owned and controlled by our Chief Executive Officer and Chairman, Benjamin P. Cowart. These related party transactions are discussed in detail in the Form 8-K/A filed on June 26, 2009. Pursuant to the Operating Agreement, CMT agreed to provide services to us in connection with the operation of the Terminal run by CMT, and the operations of and use of certain proprietary technology relating to the re-refining of certain oil feedstock referred to as our “thermal chemical extraction process” (“TCEP”), in connection with a Terminaling Agreement by and between CMT and Vertex LP. Additionally, we have the right to use the first 33,000 monthly barrels of the capacity of the thermal chemical extraction process pursuant to the terms of the Operating Agreement, with CMT being provided the right to use the next 20,000 barrels of capacity and any additional capacity allocated pro rata (based on the percentages above), subject to separate mutually agreeable allocations.

The Operating Agreement has a term expiring on February 28, 2017, and can be terminated (a) by the mutual consent of both parties, (b) with thirty days prior written notice, if any term of the agreement is breached, by the non-breaching party, or (c) at any time after the R&D Costs (as defined below) are paid and Mr. Cowart’s employment has been terminated by Vertex; provided that the parties intend for the rights granted pursuant to the License (defined below) to be perpetual.

In consideration for the services to be rendered pursuant to the Operating Agreement, we agreed to pay CMT its actual costs and expenses associated with providing such services, plus 10%, subject to a maximum price per gallon of $0.40, subject to CMT meeting certain minimum volume requirements as provided in the agreement. The maximum price to be paid per gallon is subject to change based on the mutual agreement of both parties and during the first quarter of 2010 we agreed to pay CMT its actual costs and expenses (which exceeded $0.40 per gallon) associated with providing such services, plus 10%, not withstanding the maximum price per gallon. This decision was made in light of unanticipated per gallon costs greater than $0.40 per gallon incurred during the start-up phase of the plant. As of the date of this filing we are no longer operating under this structure, and are operating under the original structure of the agreement, as the costs at the end of the first quarter of 2011 were maintained at levels below $0.40 per gallon and we expect they will continue at these levels going forward.

Pursuant to the Operating Agreement, we also have the right to a non-revocable, non-transferable, royalty-free, perpetual (except as provided in the agreement) license to use the technology associated with the operations of the thermal chemical extraction process (the “TCEP”) and the “License”) which we have fully paid for in the amount of $2,093,255 (the “R&D Costs”), in any market in the world (except at CMT’s Baytown facility where it is non-exclusive).

Strategy and Plan of Operations

Our goal is to continue to grow our business of recycling used motor oil and other distressed hydrocarbon streams. Strategies to achieve this goal include (1) working to grow revenues in core businesses, (2) seeking to increase margins through developing additional processing capabilities, including but not limited to the thermal chemical extraction process at additional locations other than Baytown, Texas, (3) increasing market share through greenfield development or through acquisitions, and (4) continued pursuit of alternative energy project development opportunities, some of which were originally sourced by World Waste.

Our primary focus is to continue to supply used motor oil and other hydrocarbons to existing customers and to cultivate additional feedstock supply volume by expanding relationships with existing suppliers and developing new supplier relationships. We will seek to maintain good relations with existing suppliers, customers and vendors and the high levels of customer service necessary to maintain these businesses. We plan to seek to develop relationships with several other re-refining facilities to serve as such facilities’ primary and exclusive feedstock provider.

We intend to work to improve margins by applying new technologies, including but not limited to the re-refining of certain oil feedstock through the “thermal chemical extraction process” to existing and new feedstock streams. The first application of this technology at CMT’s Baytown, Texas facility came on-line during the third quarter of 2009 and we have continued to enhance the facility and process since that time. We also plan to build additional facilities for various processes to implement proprietary company-owned, leased, or potentially acquired technologies to upgrade feedstock materials to create marine cutterstock, vacuum gas oil and other value-added energy products. By moving from our historical role as a value-added logistics provider, to operating as an actual re-refiner ourselves, we plan to improve margins through the upgrading of used motor oil and transmix inventories into higher value end products, funding permitting, of which there can be no assurance.

We plan to seek to grow our market share by consolidating feedstock supply through partnering with or acquiring collection and aggregation assets, funding permitting. For example, we may seek to use a combination of stock and cash to acquire or enter into joint ventures with various local used motor oil collectors and aggregators, technology providers, real estate partners and others. Such acquisitions and/or ventures, if successful, could add to revenues and provide better control over the quality and quantity of feedstock available for resale and/or upgrading as well as providing additional locations for the implementation of the contracted TCEP technology. This may include the greenfield development of collection assets, terminals, re-refining facilities and equipment and opportunistic mergers and acquisitions.

We will continue to evaluate and potentially pursue various alternative energy project development opportunities. These opportunities may be a continuation of the projects sourced originally by World Waste and/or may include new projects initiated by us.

Recent Events

In April 2011, we entered into a Marketing Agreement with a strategic petroleum products trading company in the Gulf of Mexico pursuant to which we agreed to jointly procure and market black oil feedstock barrels. We believe that this venture will further expand our footprint and market share of black oil in the Gulf, as well as provide improved margins for this product. This opportunity fits our Strategy of Plan of Operations by growing revenues in one of our core businesses, while increasing overall market share. The agreement has a term of three years and provides for us and the third party company to split any profits or losses on the purchase and sale of black oil feedstocks 50/50.

RESULTS OF OPERATIONS

Description of Material Financial Line Items:

Revenues

We generate revenues from two existing operating divisions as follows:

BLACK OIL - Revenues for our Black Oil division are comprised primarily of feedstock sales (used motor oil) which are purchased from a network of local and regional suppliers. Volumes are consolidated for efficient delivery and then sold to third-party re-refiners and fuel oil blenders for the export market.

REFINING AND MARKETING - The Refining and Marketing division generates revenues relating to the sales of finished products. The Refining and Marketing division gathers hydrocarbon streams in the form of petroleum distillates, transmix and other chemical products that have become off-specification during the transportation or refining process. These feedstock streams are purchased from pipeline operators, refineries, chemical processing facilities and third-party providers, and then processed at a third-party facility under our direction. The end products are typically three distillate petroleum streams (gasoline blendstock, fuel oil cutterstock and marine cutterstock), which are sold to major oil companies or to large petroleum trading and blending companies. The end products are delivered by barge and truck to customers. In addition, the Refining and Marketing division purchases black oil which is then re-refined through our thermal chemical extraction process. The finished product is then sold by barge as marine fuel cutterstock and a feedstock component for major refineries.

Our revenues are affected by changes in various commodity prices including crude oil, natural gas and #6 oil.

Cost of Revenues

BLACK OIL - Cost of revenues for our Black Oil division are comprised primarily of feedstock purchases from a network of providers. Other cost of revenues include transportation costs incurred by third parties, purchasing and receiving costs, analytical assessments, brokerage fees and commissions, surveying and storage costs.

REFINING AND MARKETING - The Refining and Marketing division incurs cost of revenues relating to the purchase of feedstock, purchasing and receiving costs, and inspection and processing of the feedstock into gasoline blendstock, pygas and fuel oil cutter by a third party. Cost of revenues also includes broker’s fees, inspection and transportation costs.

Our cost of revenues are affected by changes in various commodity indices, including crude oil, natural gas and #6 oil. For example, if the price for crude oil increases, the cost of solvent additives used in the production of blended oil products, and fuel cost for transportation cost from third party providers will generally increase. Similarly, if the price of crude oil falls, these costs may also decline.

General and Administrative Expenses

Our general and administrative expenses consist primarily of salaries and other employee-related benefits for executive, administrative, legal, financial and information technology personnel, as well as outsourced and professional services, rent, utilities, and related expenses at our headquarters, as well as certain taxes.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2011 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2010

Set forth below are our results of operations for the three months ended March 31, 2011, as compared to the same period in 2010; in the comparative tables below, increases in revenue/income or decreases in expense (favorable variances) are shown without parentheses while decreases in revenue/income or increases in expense (unfavorable variances) are shown with parentheses in the “$ Change” and “% Change” columns.

	Three Months Ended March 31,
	2011			2010			$ Change			% Change
Revenues	$	20,308,903		$	13,273,080		$	7,035,823			53	%

Cost of Revenues		18,038,007			12,245,250			(5,792,757	)		(47	)%

Gross Profit		2,270,896			1,027,830			1,243,066			121	%

Selling, general and administrative expenses		1,026,055			751,173			(274,882	)		(37	)%

Income (loss) from operations		1,244,841			276,657			968,184			350	%

Other Income		-			30,000			(30,000	)		100	%
Interest Expense		(29,041	)		(36,646	)		7,605			21	%
Income tax expense		(19,703	)		-			(19,703	)		(100	)%

Net income	$	1,196,097		$	270,011		$	926,086			343	%

Each of our segments’ gross profit during the three months ended March 31, 2011 and 2010 was as follows (increases in revenue and/or decreases in cost of revenues are shown without parentheses while decreases in revenue and/or increases in cost of revenues are shown with parentheses in the “$ Change” and “% Change” columns):

	Three Months Ended March 31,
Black Oil Segment	2011		2010		$ Change			% Change
Total revenue	$	4,402,107	$	3,160,614	$	1,241,493			39	%
Total cost of revenue	$	3,994,569		2,890,077		(1,104,492	)		(38	)%
Gross profit	$	407,538	$	270,537	$	137,001			51	%

Refining and Marketing Segment
Total revenue	$	15,906,796	$	10,112,466	$	5,794,330			57	%
Total cost of revenue	$	14,043,438		9,355,173		(4,688,265	)		(50	)%
Gross profit	$	1,863,358	$	757,293	$	1,106,065			146	%

Our revenues and cost of revenues are significantly impacted by fluctuations in commodity prices; decreases in commodity prices typically result in decreases in revenue and cost of revenues. Our gross profit is to a large extent a function of the market discount we are able to obtain in purchasing feedstock, as well as how efficiently management conducts operations.

Total revenues increased 53% for the first quarter of 2011, compared to the same period in 2010, largely due to increases in commodity prices during the first quarter of 2011, compared to the first quarter of 2010. The average posting (U.S. Gulfcoast Residual Fuel No. 6 3%) for the three months ended March 31, 2011 increased $16.76 per barrel from a three month average of $70.68 per barrel during the 2010 period to $87.45 per barrel during the 2011 period. On average, prices we received for our products increased 30% for the quarter ended March 31, 2011, compared to the prior year’s quarter, resulting in a $7.0 million increase in revenue.

Total volume company wide increased 20% during the three months ended March 31, 2011, compared to the prior year’s period. This increase was a result of the increased utilization of Black Oil in the contracted TCEP process.

Along with our volume growth for the three months ended March 31, 2011, our per barrel margin increased approximately 84% from the three months ended March 31, 2010. This per barrel improvement is largely due to the now positive impact of TCEP to our bottom line versus the negative impact it had during the same period in 2010.

Our Refining and Marketing division experienced an increase in production of 51% for its marine fuel oil cutter product for the three months ended March 31, 2011, compared to the same period in 2010, and commodity price increases of approximately 38% for the same period. The average posting (U.S. Gulfcoast No. 2 Waterborne) for the three months ended March 31, 2011 increased $31.88 per barrel from a three month average of $84.42 per barrel during the three months ended March 31, 2010 to $116.30 per barrel during the three months ended March 31, 2011.

The thermal/chemical extraction technology generated revenues of $8,503,900 during the three months ended March 31, 2011, with cost of revenues of $8,017,886, producing a gross profit of $486,014. If the Company did not have the rights to license the use of the technology, its income from operations would have been approximately $197,509 lower for the period ended March 31, 2011. The Company’s current operations for the period ended March 31, 2011 would have been negatively impacted if the Company were unable to use the licensing agreement.

Therefore, if the Company were not able to use the CMT facilities moving forward, the Company would be negatively impacted by its ability to compete in the marketplace, as it believes that in order to compete with its competitors, it may need the CMT facilities to produce higher valued products from Black Oil streams. Additionally, as our competitors bring new technologies to the marketplace, which will likely enable them to obtain higher values for the finished products created through their technologies from purchased Black Oil feedstock, they will be able to pay more for feedstock due to the additional value received from their finished product (i.e., as their margins increase, they are able to increase the prices they are willing to pay for feedstock). If CMT is not able to continue to refine the technology and gain efficiencies in their TCEP process, we could be negatively impacted by the ability of our competitors to bring new processes to market which compete with our processes as well as their ability to outbid us for feedstock supplies.

If we are unable to effectively compete with additional technologies brought to market by our competitors, our finished products could be worth less and if our competitors are willing to pay more for feedstock than we are, they could drive up prices, which would cause our revenues to decrease, and cause our cost of sales to increase, respectively. Additionally, if we are forced to pay more for feedstock, our cash flows will be negatively impacted and our margins will decrease.

Provided the Company’s expenses do not increase, the Company is able to meet its objectives and reduce its operating costs associated with the TCEP technology, as well as increase volumes of Black Oil feedstock being purchased, and none of our competitors bring similar technology to market as our TCEP technology, we anticipate our revenues increasing moving forward. In addition, if we are able to accomplish our goals, as described above, we believe our cash flow will improve substantially which will further the Company’s ability to expand its contracted TCEP operations as well as reduce its reliance on its Line of Credit with Bank of America. This will further increase available cash for future research and development and potentially the creation of additional facilities using its license.

The Company believes that the enhancements to the TCEP are substantially complete and we will begin to see positive results of operations from such enhancements moving forward.

Our Pygas production decreased 75% for the three months ended March 31, 2011, compared to the same period in 2010 and commodity prices increased approximately 27% for our finished product for the three month period ended March 31, 2011, compared to the same period in 2010.

Our gasoline blendstock volumes increased 105% for the three months ended March 31, 2011 as compared to the same period in 2010. The overall increase in revenues associated with our Refining and Marketing division for the three months ended March 31, 2011, compared to the three months ended March 31, 2010, was due to small increases in volume coupled with increased market prices. Overall volume for the Refining and Marketing division increased 24% during the three month period ended March 31, 2011 as compared to the same period in 2010. Margin per barrel increased substantially as a result of improved costs for our TCEP operation as well as improved market conditions for the three months ended March 31 2011, compared to the three months ended March 31, 2010.

The following table sets forth the high and low spot prices during the first three months of 2010 for our key benchmarks.

Benchmark	High		Date	Low		Date
U.S. Gulfcoast No. 2 Waterborne (dollars per gallon)	$	2.16	January 6	$	1.84	February 8
U.S. Gulfcoast Unleaded 87 Waterborne (dollars per gallon)	$	2.21	March 17	$	1.86	February 8
U.S. Gulfcoast Residual Fuel No. 6 3% (dollars per barrel)	$	75.70	January 7	$	65.55	February 5
NYMEX Crude oil (dollars per barrel)	$	83.76	March 31	$	71.19	February 5
Reported in Platt's US Marketscan (Gulf Coast)

The following table sets forth the high and low spot prices during the first three months of 2011 for our key benchmarks.

Benchmark	High		Date	Low		Date
U.S. Gulfcoast No. 2 Waterborne (dollars per gallon)	$	3.07	March 31	$	2.44	January 4
U.S. Gulfcoast Unleaded 87 Waterborne (dollars per gallon)	$	3.08	March 31	$	2.33	January 25
U.S. Gulfcoast Residual Fuel No. 6 3% (dollars per barrel)	$	98.15	March 25	$	76.70	January 4
NYMEX Crude oil (dollars per barrel)	$	105.75	March 23	$	84.32	February 15
Reported in Platt's US Marketscan (Gulf Coast)

We have seen a consistent increase in each of the benchmark commodities we track through March 2011.

Our margins are a function of the difference between what we are able to pay for raw materials and the market prices for the range of products produced. The various petroleum products produced are typically a function of Crude Oil indices and are quoted on multiple exchanges such as the New York Mercantile Exchange (“NYMEX”). These prices are determined by a global market and are subject to external factors over which the Company has no control, including but not limited to supply/demand, weather, politics, and global/regional inventory levels. As such, we cannot provide any assurances regarding results of operations for any future periods, as numerous factors outside of our control affect the prices paid for raw materials and the prices (for the most part keyed to the NYMEX) that can be charged for such products. Additionally, for the near term, results of operations will be subject to further uncertainty, as the global markets and exchanges, including the NYMEX, continue to experience volatility.

During the three months ended March 31, 2011, gross profit increased 121% from the same period in 2010, primarily due to increases in commodity prices, increases in volumes sold or re-refined through the contracted TCEP, along with reduced costs related to the contracted TCEP process. Total selling, general, and administrative expenses increased 37% for the three months ended March 31, 2011, compared to the same period in 2010. This increase is primarily due to increased accounting, legal and administrative costs for the three months ended March 31, 2011, compared to the three months ended March 31, 2010.

We had net income of $1,196,097 for the three months ended March 31, 2011, compared to net income of $270,011 for the three months ended March 31, 2010, an increase in net income of $926,086 or 343% from the prior year’s period. The increase in net income was mainly due to increased commodity prices as well as an overall increased per barrel margin for the products we sell. A 53% increase in revenues and a 121% increase in gross profit helped to offset the additional 37% increase in selling, general and administrative expenses incurred during the period ended March 31, 2011, compared to the three months ended March 31, 2010.

Liquidity and Capital Resources

The success of our current business operations is not dependent on extensive capital expenditures, but rather on relationships with feedstock suppliers and end-product customers, and on efficient management of overhead costs. Through these relationships, we have historically been able to achieve volume discounts in the procurement of our feedstock, thereby increasing the margins of our segments’ operations. The resulting operating cash flow is crucial to the viability and growth of our existing business lines.

We had total assets of $11,178,165 as of March 31, 2011 compared to $8,139,345 at December 31, 2010. This increase was partially due to $1,196,097 of net income which was generated during the three months ended March 31, 2011 as well as the $1,923,339 increase in inventory as of March 31, 2011, compared to December 30, 2010, along with the increase in our accounts receivable of $471,537 between March 31, 2011 and December 31, 2010. The increase in accounts receivable and inventory is partly due to commodity pricing which increases the carrying value of our inventory as well as timing of our sales. In addition there was a $39,062 increase in the net value of the license for the TCEP technology (due to increased expenditures on such process offset by amortization on such asset), described below, all of which attributed to the increase in total assets as of March 31, 2011, compared to December 31, 2010. Total current assets as of March 31, 2011 of $9,231,863, consisted of cash and cash equivalents of $1,207,465, accounts receivable, net, of $1,954,047, accounts receivable-related party of $10,361 (representing funds due from Vertex Recovery and CrossRoad Carriers, which entities are described in greater detail under “Certain relationships and related Transactions, and Director Independence” in the Company’s Form 10-K for the year ended December 31, 2010), inventory of $5,825,120, and prepaid expenses of $234,870. Long term assets consisted of fixed assets, net, of $73,274, and a licensing agreement in the net amount of $1,873,028, which represents the value of the Company’s licensing agreement for the use of the thermal chemical extraction technology, net of amortization. As of March 31, 2011, an additional $693,256 of development investments have been made to the thermal/chemical process technology and added to the original $1.4 million license value. The Company has fully paid Cedar Marine Terminals (“CMT”) for the license for the thermal/chemical process as of the date of this filing. Our cash, accounts receivable, inventory and accounts payable fluctuate and are somewhat tied to one another based on the timing of our inventory cycles and sales.

We had total liabilities of $7,405,780 as of March 31, 2011, compared to $5,600,472 at December 31, 2010. This increase was largely due to the increase in commodity prices during the period ended March 31, 2011, which in turn increased the cost the products we purchase and attributed to the increase in accounts payable. At March 31, 2011, total liabilities consisted of accounts payable of $5,757,110, accounts payable – related parties of $1,048,670, and long-term liabilities of $600,000 relating to the 600,000 outstanding shares of our Series B Convertible Preferred Stock (“Series B Preferred Stock”), which are mandatorily redeemable, unless converted into common stock pursuant to the terms of such Series B Preferred Stock on the third anniversary of the issuance date of such shares of Series B Preferred Stock. Accounts payable – related parties included amounts payable to Cedar Marine Terminal (“CMT”), H&H Oil Baytown, H&H Oil Austin and H&H Oil Corpus, which entities are majority-owned and controlled by our Chief Executive Officer and Chairman Benjamin P. Cowart.

We had positive working capital of $2,426,083 as of March 31, 2011. Excluding current liabilities to and current assets relating to related parties our working capital was $3,464,392 as of March 31, 2011. We had positive working capital of $1,228,617 as of December 31, 2010. Excluding current liabilities to related parties our working capital was $1,635,890 as of December 31, 2010. The $1,197,466 improvement in working capital from December 31, 2010 to March 31, 2011 is due to the net income of $1,196,097 which we generated for the three months ended March 31, 2011, the increased inventory of $1,923,339 (which increased total current assets), as well as the increase in our accounts receivable of $471,537 as of March 31, 2011, compared to December 31, 2010.

Our future operating cash flows will vary based on a number of factors, many of which are beyond our control, including commodity prices, the cost of recovered oil, and the ability to turn our inventory. Other factors that have affected and are expected to continue to affect earnings and cash flow are transportation, processing, and storage costs. Over the long term, our operating cash flows will also be impacted by our ability to effectively manage our administrative and operating costs.

In September 2010, the Company entered into a loan agreement with Bank of America Merrill Lynch (“Bank of America”). Prior to entering into the loan agreement, the Company satisfied in full all of its prior obligations owing to Regions Bank (“Regions”) under the revolving line of credit agreement entered into in June 2009 and amended on May 25, 2010, which had an outstanding balance of $1,300,000 on June 30, 2010, and terminated such line of credit agreement. Regions released all of its previously held security agreements and financing statements.

Pursuant to the loan agreement, Bank of America agreed to loan up to $3,500,000 in the form of a revolving line of credit, which if borrowed against, is expected to be used for feedstock purchases and general corporate purposes. The line of credit bears interest at the Bank of America LIBOR rate plus 3%, adjusted daily, and is due on September 16, 2011. As of March 31, 2011, there was no balance due on the Line of Credit, of which there was $2,600,000 available (based on the criteria set forth in the line of credit).

The financing arrangement discussed above is secured by all of the assets of the Company. The management of the Company believes that with the financing arrangement, 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.

In October 2010, we entered into a Sales Agreement, pursuant to which we agreed to purchase approximately 400,000 to 600,000 gallons of raw pyronaptha per month at a variable price per gallon formula, based on the prior weeks market prices of certain market indexes, for a term beginning on October 1, 2010 and ending on September 30, 2011. The agreement required the Company to provide a standby letter of credit in the amount of $900,000, which expires on October 14, 2011. To date there have been no draws against the letter of credit. This letter of credit reduces the amount of available balance under the line of credit.

Our re-refining business will require significant capital to design and construct any new facilities other than the existing facility in Baytown, Texas, owned by CMT. We have the right to use the existing facility in Baytown, Texas, pursuant to an Operating Agreement with CMT described above. We currently estimate that the cost to construct a new, fully functional full-scale commercial process at another location would be approximately $2.5 to $5.0 million, based on throughput capacity. The facility infrastructure would be an additional capitalized expenditure to these proposed process costs and would depend on the location and site specifics of the facility.

We believe that cash from ongoing operations and our working capital facility will be sufficient to satisfy our existing cash requirements. However, in order to implement our growth strategy, and pay our outstanding debts (as described above) we may need to secure additional financing in the future.

Additionally, as part of our ongoing efforts to maintain a capital structure that is closely aligned with what we believe to be the potential of our business and future growth, which is subject to cyclical changes in commodity prices, we will be exploring additional sources of external liquidity. The receptiveness of the capital markets to an offering of debt or equities cannot be assured and may be negatively impacted by, among other things, debt maturities, current market conditions, and potential stockholder dilution. The sale of additional securities, if undertaken by the Company and if accomplished, may result in dilution to our shareholders. We cannot assure you, however, that future financing will be available in amounts or on terms acceptable to us, or at all.

There is currently only a limited market for our common stock, and as such, we anticipate that such market will be illiquid, sporadic and subject to wide fluctuations in response to several factors moving forward, including, but not limited to:

(1)	actual or anticipated variations in our results of operations;

(2)	our ability or inability to generate new revenues; and

(3)	the number of shares in our public float.

Furthermore, because our common stock is traded on the OTCQB, our stock price may be impacted by factors that are unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political and market conditions, such as recessions, interest rates or international currency fluctuations may adversely affect the market price of our common stock. Additionally, at present, we have a limited number of shares in our public float, and as a result, there could be extreme fluctuations in the price of our common stock. The total number of shares of common stock outstanding as of the date of this report was 8,463,823 shares, and approximately 6,600,000 of these shares are subject to Lock-up Agreements. The Lock-up Agreements provide that until three years following the effective date of the Merger (the “Lock-Up Period”), shareholders subject to the Lock-Up Agreements cannot sell, assign, pledge or otherwise transfer any shares of common stock such holders beneficially own, without the Company's prior written consent. Notwithstanding the foregoing, the Lock-up Agreements provide that the holders may transfer (i) all or any portion of the shares subject to the Lock-up Agreements commencing on the date that the closing price of our common stock has averaged at least $15.00 per share over a period of 20 consecutive trading days and the daily trading volume over the same 20-day period has averaged at least 7,500 shares; (ii) all or any portion of the shares as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound by the restrictions set forth in the Lock-up Agreement, (iii) all or any portion of the shares to any trust for the direct or indirect benefit of the holder or the immediate family of the holder, provided that the trustee of the trust agrees to be bound by the restrictions set forth in the Lock-up Agreement, and provided further that any such transfer shall not involve a disposition for value, and (iv) in any given three-month period commencing on the one-year anniversary of the effective date of the Merger, up to that number of shares equal to 5% of the total number of shares then beneficially owned by such holder.

The Company’s Board of Directors is currently in discussions regarding the potential partial or complete release and cancellation of some or all of the Lock-Up Agreements. As a result, up to approximately 6.6 million of such shares currently subject to such Lock-Up Agreements may be eligible to be sold (subject to restrictions of such shares under the Securities Act of 1933, as amended (the “Securities Act”)) following the release of such Lock-Up Agreements by the Board of Directors, subsequent to the filing of this Report.

Additionally, the Company has approximately 4.6 million shares of Series A Convertible Preferred Stock (“Series A Preferred Stock”) issued and outstanding as of the date of this report. Among the other rights of the Series A Preferred Stock, each share of Series A Preferred Stock can be converted into one (1) share of common stock, provided that prior to the three-year anniversary of the Merger (April 16, 2012), no holder may, in any given three-month period, convert more than that number of shares of Series A Preferred Stock that equals 5% of the total number of shares of Series A Preferred Stock then beneficially owned by such holder (the “Conversion Limitation”). Additionally, holders may convert only up to that number of shares of Series A Preferred Stock, such that upon conversion, the aggregate beneficial ownership of the Company’s common stock held by any such holder does not exceed 4.99% of the Company’s common stock then outstanding (the “Beneficial Limitation”). The Company’s Board of Directors is currently in discussions regarding the approval of an amended and restated Series A Preferred Stock designation which would remove all or some portion of the Conversion Limitation and may allow for the Series A Preferred Stock holders to convert the entire amount of their holdings of Series A Preferred Stock into shares of the Company’s common stock and sell such common stock, subject only to the Beneficial Limitation (and any conversion or resale limitations under the Securities Act). Assuming the Board of Directors approves such amended and restated designation, such amendment will be subject to the approval of a majority of the outstanding shares of Series A Preferred Stock and the filing of such amended designation with the Secretary of State of Nevada. The Company plans to file a current report on Form 8-K at such time as the Lock-Up Agreements (or any portion thereof) are terminated and/or the terms of the Series A Preferred Stock are amended.

As such, and subject to the above and any restrictions on resale set forth in the Securities Act, it is possible that following the filing of this report, and the Board of Director’s approval (and in the case of the Series A Preferred Stock, the Series A Preferred Stock shareholders’ approval), we will have an additional approximately 11.2 million shares of common stock available for immediate resale, which were previously locked-up and/or restricted from conversion. The sale of such common stock previously subject to Lock-Up Agreements may cause the price of our common stock to decline in value and the conversion and sale of shares of Series A Preferred Stock may cause the price of our common stock to decline in value and/or cause immediate and substantial dilution to our common stock shareholders. Additionally, the sale of such previously locked-up and/or converted Series A Preferred Stock shares may cause continued downward pressure on the price of our common stock.

We believe that our stock prices (bid, ask and closing prices) are entirely arbitrary, are not related to the actual value of the Company, and may not reflect the actual value of our common stock (and may reflect a lower value). Shareholders and potential investors in our common stock should exercise caution before making an investment in the Company, and should not rely on the publicly quoted or traded stock prices in determining our common stock value, but should instead determine the value of our common stock based on the information contained in the Company's public reports, industry information, and those business valuation methods commonly used to value private companies.

We may seek the listing of our common stock on NASDAQ, NYSE, or AMEX or another national securities exchange in the future. We believe that the listing of our securities on a national exchange will facilitate the Company’s access to capital, from which certain acquisitions and capital investments might be financed. However, we can provide no assurances that we will be able to meet the initial listing standards of any stock exchange in the future, or that we will be able to maintain a listing of our common stock on any stock exchange in the future, assuming we are initially approved for quotation on an exchange of which there can be no assurance. Until meeting the listing requirements of a national securities exchange, we expect that our common stock will continue to be eligible to trade on the OTCQB or OTCBB (assuming we take steps to re-quote our common stock on the OTCBB in the future), another over-the-counter quotation system, or on the "pink sheets," where our stockholders may find it more difficult to dispose of shares or obtain accurate quotations as to the market value of our common stock.

Cash flows for the three months ended March 31, 2011 compared to the three months ended March 31, 2010

	Three Months Ended March 31,
	2011			2010

Beginning cash and cash equivalents	$	744,313		$	514,136

Net cash provided by (used in):
Operating activities		532,503			(1,090,119	)
Investing activities		(73,351	)		(152,672	)
Financing activities		4,000			800,000

Net increase in cash and cash equivalents		463,152			(442,791	)

Ending cash and cash equivalents	$	1,207,465		$	71,345

Operating activities provided cash of $532,503 for the three months ended March 31, 2011 as compared to using $1,090,119 of cash during the corresponding period in 2010. Our primary sources of liquidity are cash flows from our operations and the availability to borrow funds under our line of credit with Bank of America, as described above. The primary reasons for the increase in cash provided by operating activities are related to our net income of $1,196,097, our increase in accounts payable of $1,163,911, and the $641,397 increase in accounts payable-related parties, which were offset by a $1,923,339 increase in inventory, and a $471,537 increase in accounts receivable for the period ended March 31, 2011. Additionally, non-cash expense related to stock compensation expense (associated with the vesting of previously granted options to management) provided $33,415 of liquidity for the three months ended March 31, 2011 and depreciation and amortization contributed $37,305 of net cash.

Investing activities used cash of $73,351 for the three months ended March 31, 2011 as compared to having used $152,672 of cash during the corresponding period in 2010. Investing activities for the three months ended March 31, 2011 are comprised solely of $73,351 in cash payments related to the license of the thermal chemical extraction process.

Financing activities provided $4,000 during the three months ended March 31, 2011 resulting from proceeds from the exercise of common stock warrants.

In January 2010, the Company began a private placement offering to accredited investors only of up to 2,000,000 units (the “Offering”), each consisting of (a) one share of Series B Preferred Stock; and (b) one three year warrant to purchase one share of common stock of the Company at an exercise price of $2.00 per share (each a “Unit”). We also agreed to grant investors in the offering piggy-back registration rights in connection with the shares of common stock issuable in connection with the conversion of the Series B Preferred Stock and the shares of common stock underlying the exercise of the warrants sold in the Offering. The shares of Series B Preferred Stock are convertible at the option of the holder into shares of our common stock at the rate of one for one, automatically convert into common stock if our common stock trades for at least ten consecutive trading days over $2.00 per share, accrue quarterly dividends at the rate of 12% per annum, and are required to be redeemed by the Company, if not converted prior to such redemption date, on the third anniversary of the issuance date of such shares at a redemption rate of $1.00 per share. The dividends are recorded as interest expense, due to the preferred stock being classified as a liability.

During 2010 the company sold 600,000 Units and raised $600,000 in connection with the Offering. There are 600,000 shares of Series B Preferred Stock issued and outstanding as of the date of this Report.

Net Operating Losses

It is possible that the Company may be unable to use these NOLs in their entirety. The extent to which the Company will be able to utilize these carry-forwards in future periods is subject to limitations based on a number of factors, including the number of shares issued within a three-year look-back period, whether the merger is deemed to be a change in control, whether there is deemed to be a continuity of World Waste’s historical business, and the extent of the Company’s subsequent income. As of December 31, 2010, the company had utilized $1,616,638 of these NOLs leaving approximately $39.8 million of potential NOLs of which we expect to utilize approximately $1.2 million for the three months ended March 31, 2011.

Critical Accounting Policies and Use of Estimates

Our financial statements are prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. Management regularly evaluates its estimates and judgments, including those related to revenue recognition, goodwill, intangible assets, long-lived assets valuation, and legal matters. Actual results may differ from these estimates. (See Note 1 to the Vertex Energy, Inc. financial statements).

The Company evaluates the carrying value and recoverability of its long-lived assets within the provisions of the FASB ASC regarding long-lived assets. It requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Revenue Recognition. Revenue for each of the Company’s divisions is recognized when persuasive evidence of an arrangement exists, goods are delivered, sales price is determinable, and collection is reasonably assured. Revenue is recognized upon delivery by truck and railcar of feedstock to its re-refining customers and upon product leaving the Company’s terminal facilities via barge.

Legal Matters. Accruals are established for legal matters when, in our opinion, it is probable that a liability exists and the liability can be reasonably estimated. Actual expenses incurred in future periods can differ materially from accruals established.

Stock Based Compensation

The Company accounts for share-based expense and activity in accordance with FASB ASC Topic 718, which establishes accounting for equity instruments exchanged for services. Under this provision share-based compensation costs are measured at the grant date, based on the calculated fair value of the award, and are recognized as an expense over the employee’s requisite service period, generally the vesting period of the equity grant.

Share-based payments to non-employees are measured at the grant date, based on the calculated fair value of the award, and are recognized as an expense over the service period, generally the vesting period of the equity grant. The Company estimates the fair value of stock options using the Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the exercise price of the award, expected option term, expected volatility of the stock over the option’s expected term, risk-free interest rate over the option’s expected term, and the expected annual dividend yield. The Company believes that the valuation technique and approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of the stock options granted.

Basic and Diluted Loss per Share

Basic and diluted loss per share has been calculated based on the weighted average number of shares of common stock outstanding during the period.

License Agreement Development Costs

The Company capitalizes costs to improve any acquired intangible asset which is specifically identifiable, and has a definite life. All other costs are expensed as incurred.

Income Taxes

The Company accounts for income taxes in accordance with the FASB ASC Topic 740. The Company records a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and when temporary differences become deductible. The Company considers, among other available information, uncertainties surrounding the recoverability of deferred tax assets, scheduled reversals of deferred tax liabilities, projected future taxable income, and other matters in making this assessment.

Recently Issued Accounting Pronouncements

In June 2009, the FASB issued ASC Topic 810-10-15, “Consolidation-Variable Interest Entities,” or Topic 810-10-15. Topic 810-10-15 improves financial reporting by enterprises involved with variable interest entities and provides more relevant and reliable information to users of financial statements. Topic 810-10-15 is effective as of the beginning of the first annual reporting period that begins after November 15, 2009 and for interim periods within that first annual reporting period. We adopted Topic 810-10-15 on January 1, 2010, but it did not have a material impact on our consolidated financial statements.

Market Risk

Our revenues and cost of revenues are affected by fluctuations in the value of energy related products. We attempt to mitigate much of the risk associated with the volatility of relevant commodity prices by using our knowledge of the market to obtain feedstock at attractive costs, by efficiently managing the logistics associated with our products, by turning our inventory over quickly, and by selling our products into markets where we believe we can achieve the greatest value. We believe that the current downward trend in natural gas prices coupled with increasing crude oil prices provides an attractive margin opportunity for our proposed thermal chemical extraction process.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

We regularly review our system of internal control over financial reporting to ensure we maintain an effective internal control environment. There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in the Company’s Annual Report on Form 10-K, filed with the Commission on March 31, 2011 and investors are encouraged to review such risk factors as set forth in our Form 10-K, prior to making an investment in the Company.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the three months ended March 31, 2011 a total of 41,320 shares of the Company's Series A Preferred Stock were converted into common shares of the Company, and warrants to purchase 40,000 shares of common stock held by entities associated with Trellus Management Company (a significant Series A Preferred stockholder of the company) in consideration for total exercise prices of $4,000, were exercised for, an aggregate of 81,320 shares of the Company's common stock.

Subsequent to the three months ended March 31, 2011 a total of 11,654 shares of the Company's Series A Preferred Stock were converted into 11, 654 shares of the Company's common stock.

We claim an exemption from registration afforded by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Act”), for the above conversions, as the securities were exchanged by the Company with its existing security holders exclusively in transactions where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange and Section 4(2) of the Act for the exercises, since the issuances did not involve a public offering, the recipients took the securities for investment and not resale and we took appropriate measures to restrict transfer.

Item 3. Defaults Upon Senior Securities

None.

Item 4. (Removed and Reserved)

Item 5. Other Information.

None.

Item 6. Exhibits

EXHIBIT NO.	DESCRIPTION
2.1(7)	Amended and Restated Agreement and Plan of Merger by and among World Waste Technologies, Inc., Vertex Holdings, L.P. (formerly Vertex Energy, L.P.), Vertex Energy, Inc., Vertex Merger Sub, LLC and Benjamin P. Cowart

2.2(7)	Amendment No. 1, dated December 2008, to Amended and Restated Agreement and Plan of Merger by and among World Waste Technologies, Inc., Vertex Holdings, L.P. (formerly Vertex Energy, L.P.), Vertex Energy, Inc., Vertex Merger Sub, LLC and Benjamin P. Cowart

2.3(7)	Amendment No. 2, dated December 2008, to Amended and Restated Agreement and Plan of Merger by and among World Waste Technologies, Inc., Vertex Holdings, L.P. (formerly Vertex Energy, L.P.), Vertex Energy, Inc., Vertex Merger Sub, LLC and Benjamin P. Cowart

2.4(7)	Amendment No. 3, dated January 28, 2009, to Amended and Restated Agreement and Plan of Merger by and among World Waste Technologies, Inc., Vertex Holdings, L.P. (formerly Vertex Energy, L.P.), Vertex Energy, Inc., Vertex Merger Sub, LLC and Benjamin P. Cowart

2.5(7)	Amendment No. 4, dated February 2, 2009, to Amended and Restated Agreement and Plan of Merger by and among World Waste Technologies, Inc., Vertex Holdings, L.P. (formerly Vertex Energy, L.P.), Vertex Energy, Inc., Vertex Merger Sub, LLC and Benjamin P. Cowart

2.6(1)	Amendment No. 5, dated as of March 31, 2009, to Amended and Restated Agreement and Plan of Merger by and among World Waste Technologies, Inc., Vertex Holdings, L.P. (formerly Vertex Energy, L.P.), Vertex Energy, Inc., Vertex Merger Sub, LLC and Benjamin P. Cowart.

3.1(2)	Articles of Incorporation (and amendments thereto) of Vertex Energy, Inc.

3.2(5)	Amended and Restated Certificate of Designation of Rights, Preferences and Privileges of Vertex Energy, Inc.'s Series A Convertible Preferred Stock.

3.3(2)	Withdrawal of Designation of the Company’s Series B Preferred Stock

3.4(4)	Series B Convertible Preferred Stock Filing

3.5(2)	Bylaws of Vertex Energy, Inc.

4.1(2)	Vertex Energy, Inc., 2008 Stock Incentive Plan

4.2(3)	2009 Stock Incentive Plan of Vertex Energy, Inc.

10.1(2)	Asset Transfer Agreement

10.2(2)	Services Agreement

10.3(2)	Right of First Refusal Agreement

10.4(2)	Operating and Licensing Agreement

10.5(2)	Employment Agreement with Benjamin P. Cowart

10.6(2)	Employment Agreement with John Pimentel

10.7(2)	Employment Agreement with Matthew Lieb

10.8(2)	Letter Loan Agreement with Regions Bank

10.9(2)	Line of Credit with Regions Bank

10.10(2)	Security Agreement with Regions Bank

10.11(3)	Letter Agreement with Christopher Stratton

10.12(6)	Loan Agreement with Bank of America

10.13(6)	Security Agreement

10.14(8)(+)	Tolling (Processing) Agreement with KMTEX

10.15(8)(+)	First Amendment to Processing Agreement with KMTEX

10.16(8)	Form of Voting Agreement

10.17(8)	Form of Lock-Up Agreement

10.18(8)	Amended and Restated Employment Agreement with Chris Carlson

10.19(8)	First Amendment to Employment Agreement with Benjamin P. Cowart

10.20(8)	First Amendment to Employment Agreement with Matt Lieb

14.1(2)	Code of Ethics

16.1(2)	Letter from Stonefield Josephson, Inc.

21.1(8)	Subsidiaries

31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

31.2*	Certification of Acting Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

32.1*	Certification of Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act

32.2*	Certification of Acting Principal Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act

99.1(2)	Audited Financial Statements of Vertex Holdings, L.P. formerly Vertex Energy, L.P. (certain assets, liabilities and operations related to its black oil division and certain assets, liabilities and operations of the refining and marketing division) for the years ended December 31, 2008 and 2007

99.2(2)	Unaudited Financial Statements of Vertex Holdings, L.P. formerly Vertex Energy, L.P. (certain assets, liabilities and operations related to its black oil division and certain assets, liabilities and operations of the refining and marketing division) for the three months ended March 31, 2009 and 2008

99.3(2)	Audited Financial Statements of Vertex Energy, Inc. as of December 31, 2008

99.4(2)	Unaudited Interim Financial Statements of Vertex Energy, Inc. for the three months ended March 31, 2009 and 2008

99.5(2)	Pro Forma Financial Statements of Vertex Energy, Inc.

99.6(2)

Glossary of Selected Terms

* Filed herewith.

(1) Filed as an exhibit to the registrant’s Report on Form 8-K, filed with the Commission on April 8, 2009, and incorporated herein by reference.

(2) Filed as an exhibit to the registrant’s Report on Form 8-K/A. filed with the Commission on June 26, 2009, and incorporated herein by reference.

(3) Filed as an exhibit to the registrant’s Report on Form 8-K, filed with the Commission on July 31, 2009, and incorporated herein by reference.

(4) Filed as an exhibit to the registrant’s Report on Form 8-K, filed with the Commission on January 14, 2010, and incorporated herein by reference.

(5) Filed as an exhibit to the registrant’s Report on Form 8-K, filed with the Commission on July 16, 2010, and incorporated herein by reference.

(6) Filed as an exhibit to the registrant’s Report on Form 8-K, filed with the Commission on September 24, 2010, and incorporated herein by reference.

(7) Filed as Appendix A to the Company’s Definitive Schedule 14A Proxy Statement, filed with the Commission on February 6, 2009, and incorporated by reference herein.

(8) Filed as an exhibit to the registrant’s Report on Form 10-K, filed with the Commission on March 31, 2011, and incorporated by reference herein.

(+) Certain portions of these documents as filed herewith (which portions have been replaced by "X's") have been omitted in connection with a request for Confidential Treatment as submitted to the Commission in connection with this filing. This entire exhibit including the omitted confidential information has been filed separately with the Commission.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.


	VERTEX ENERGY, INC.

Date: May 9, 2011	By: /s/ Benjamin P. Cowart
	Benjamin P. Cowart
	Chief Executive Officer
	(Principal Executive Officer)


Date: May 9, 2011	By: /s/ Chris Carlson
	Chris Carlson
	Chief Financial Officer
	(Principal Financial Officer)

Vertex Energy Inc. - FORM 10-Q - May 9, 2011

Attached files

Vertex Energy Inc. Reports