5. INTANGIBLE ASSETS AND ACQUISITION

3 Months Ended

Mar. 31, 2015

Notes to Financial Statements

5. INTANGIBLE ASSETS AND ACQUISITION

On May 15, 2014, the Company, in order to establish a presence in the solid waste disposal industry, entered into an asset purchase agreement by and among the Company, HTSMWD, Meridian Waste Services, LLC (“MWS”) and the members of MWS, pursuant to which HTSMWD acquired certain assets and liabilities of MWS, in exchange for $11,000,000 cash,13,191,667 shares of Class A Common Stock of HTSHC and 71,210 shares of Series B Cumulative Convertible Preferred Stock of HTSHC.

The merger was accounted for by Here to Serve using business combination accounting. Under this method, the purchase price paid by the acquirer is allocated to the assets acquired and liabilities assumed as of the acquisition date based on the fair value. By the application of “push-down” accounting, our assets, liabilities and equity were accordingly adjusted to fair value on May 15, 2014. Determining the fair value of certain assets and liabilities assumed is judgmental in nature and often involves the use of significant estimates and assumptions.

The purchase of MWS included the acquisition of assets of $22,175,706 and liabilities of $2,075,956. The aggregate purchase price consisted of the following:

Cash $ 11,000,000

Estimated value of common stock issued to sellers 1,978,750

Estimated value of preferred stock issued to sellers 7,121,000

$ 20,099,750

The following table summarizes the estimated fair value of MWS assets acquired and liabilities assumed at the date of acquisition:

Accounts receivable $ 632,322

Prepaid expenses 123,544

Deposits 8,303

Containers 2,710,671

Furniture and equipment 299,450

Trucks 4,243,964

Customer lists 14,007,452

Non-compete agreement 150,000

Accounts payable and accrued expenses (54,387)

Notes payable (143,464)

Deferred revenue (1,878,105)

$ 20,099,750

Intangible Assets

The following table sets forth the intangible assets, both acquired and developed, including accumulated amortization:

			March 31, 2015
	Remaining			Accumulated	Net Carrying
	Useful Life	Cost		Amortization	Value
Customer list	4.5 years	14,007,452		2,568,033	11,439,419
Loan fees	4.5 years	50,613		15,465	35,148
Non compete agreement	4.5 years	150,000		27,500	122,500
Website	2.9 years	13,920		928	12,992
		$     14,221,985		$ 2,611,926	$  11,610,059

Amortization expense amounted to $712,786 for the three months ending March 31, 2015. There was no amortization expense for the three months ending March 31, 2014.