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CONTINGENT CONSIDERATION
9 Months Ended
Sep. 30, 2014
Business Combination, Contingent Consideration Arrangements [Abstract]  
CONTINGENT CONSIDERATION
CONTINGENT CONSIDERATION

As part of the consideration paid related to the August 2012 acquisition of Vertex Holdings, L.P., if certain earnings targets are met, the Company has to pay the seller approximately $2,233,000 annually in each of 2013, 2014 and 2015. In 2013, it had been determined that the 2013 earnings target would not be met and the contingent consideration was reduced by $1,850,000, which represents the discounted cash flow for year one. It had also been determined that the 2014 earnings target would not be met and the contingent consideration was reduced by $1,555,000, which represents 100% of the discounted cash flows for year two.

As part of the consideration paid in connection with the acquisition of Omega Refining (see Note 12), the Company has agreed to pay the seller additional earn-out consideration in the event that certain EBITDA targets are met (a) during any twelve month period during the eighteen month period commencing on the first day of the first full calendar month following the May 2, 2014 initial closing date (which targets begin at $8,000,000 of EBITDA during such twelve month period) of up to 470,498 shares of common stock of the Company; and (b) during the calendar year ended December 31, 2015 (which targets begin at $9,000,000 of EBITDA) of up to 770,498 shares of common stock of the Company, in each case subject to adjustment for certain capital expenditures. The contingent consideration has been evaluated by management and reduced by $99,164.

As part of the consideration paid in connection with the acquisition of 51% of E-Source Holding, LLC, if certain targets are met, the Company has to pay the seller approximately $260,000 annually in 2014, 2015, 2016 and 2017. The Company has recorded contingent consideration of $748,000, which is the discounted cash flows of the earn-out payments. Of this amount, $136,662 was paid during the three months ended September 30, 2014 and the remaining $611,338 was written off. The write off was triggered because certain terms of the contingent consideration agreement were not met by the acquiree.
As part of the consideration paid in connection with the acquisition of an additional 19% of E-source Holding, LLC, if certain targets were met, on January 31, 2015, 207,743 shares of the Company’s common stock were to be issued to the seller. The estimated fair value of the stock at the time of this agreement was approximately $231,000 and was recorded as additional paid in capital and a reduction of the non-controlling interest in accordance with ASC 850-10-45. This amount was written off during the three months ended September 30, 2014 after certain terms of the contingent consideration agreement were not met by the aquiree.
On September 4, 2014, the Company acquired the remaining 30% interest in E-Source Holdings, LLC, of which it had previously acquired 70%. In consideration for the 30% interest, the Company issued 207,743 shares of common stock, valued at approximately $1,790,745, which was recorded as additional paid in capital and a reduction of the non-controlling interest in accordance with ASC 810-10-45.