UNITED STATES SECURITIES AND EXCHANG

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 8-K



CURRENT REPORT



Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934



Date of Report (Date of earliest event reported): October 17, 2014



BROOKLYN CHEESECAKE & DESSERTS COMPANY, INC.

(Exact name of registrant as specified in its charter)





New York

001-13984

13-3832215


(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)




2070 Central Park Avenue, 2 nd Floor

Yonkers, New York 10710

(Address of Principal Executive Offices)




(914) 361-1420

Registrant’s telephone number, including area code



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






















Forward Looking Statements



This Current Report on Form 8-K and other reports filed by registrant from time to time with the Securities and Exchange Commission (collectively, the “Filings”) contain or may contain forward-looking statements and information that is based upon beliefs of, and information currently available to, registrant’s management, as well as estimates and assumptions made by registrant’s management. When used in the Filings, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan” or the negative of these terms and similar expressions as they relate to registrant or registrant’s management identify forward-looking statements. Such statements reflect the current view of registrant with respect to future events and are subject to risks, uncertainties, assumptions and other factors (including the risks contained in the section of this Current Report on Form 8-K entitled “Risk Factors”) relating to registrant’s industry and registrant’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.



You should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this Current Report on Form 8-K. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this Current Report on Form 8-K to conform our statements to actual results or changed expectations, or the results of any revision to these forward-looking statements.



Item 1.01 Entry Into A Material Definitive Agreement






On October 17, 2014, Brooklyn Cheesecake & Desserts Company, Inc. (the “Company”) entered into that certain Membership Interest Purchase Agreement (the “Purchase Agreement”) by and among Here to Serve Holding Corp., a Delaware corporation, as seller (“Here to Serve”), the Company, as parent, Brooklyn Cheesecake & Dessert Acquisition Corp., a wholly-owned subsidiary of the Company, as buyer (the “Acquisition Corp.”), the Chief Executive Officer of the Company (the “Company Executive”), the majority shareholder of the Company (the “Company Majority Shareholder”) and certain shareholders of Here to Serve (the “Here to Serve Shareholders”), pursuant to which the Acquisition Corp acquired from Here to Serve all of Here to Serve’s right, title and interest in and to (i) 100% of the membership interests of Here to Serve – Missouri Waste Division, LLC d/b/a Meridian Waste, a Missouri limited liability company (“HTS Waste”); (ii) 100% of the membership interests of Here to Serve Technology, LLC, a Georgia limited liability company (“HTS Tech”); and (iii) 100% of the membership interests of Here to Serve – Georgia Waste Division, LLC, a Georgia limited liability company (“HTS Waste Georgia”, and together with HTS Waste and HTS Tech, collectively, the “Membership Interests”). As consideration for the Membership Interests, on October 31, 2014 (the "Closing Date" (i) the Company issued to Here to Serve 9,054,134 shares of the Company’s common stock, (the “Common Stock”); (ii) the Company issued to the holder of Class A Preferred Stock of Here to Serve (“Here to Serve’s Class A Preferred Stock”) 51 shares of the Company’s to-be-designated Class A Preferred Stock (the “Class A Preferred Stock”), which Class A Preferred Stock shall have the rights and preferences as described in the Purchase Agreement; (iii) the Company issued to the holder of Class B Preferred Stock of Here to Serve (Here to Serve’s Class B Preferred Stock”) an aggregate of 71,120 shares of the Company’s to-be-designated Class B Preferred Stock (the “Class B Preferred Stock”), which Class B Preferred Stock shall have the rights and preferences as described in the Purchase Agreement (the Common Stock, the Class A Preferred Stock and the Class B Preferred Stock are referred to as the “Purchase Price Shares;”), and (iv) the Company shall assume certain assumed liabilities (the “Initial Consideration”).




As further consideration, on the Closing Date of the transaction contemplated under the Purchase Agreement, (i) in satisfaction of all accounts payable and shareholder loans, Here to Serve paid to the Company Majority Shareholder $70,000 and (ii) Here to Serve purchased from the Company Majority Shareholder 230,000 shares of the Company’s common stock for a purchase price of $230,000, with such shares cancelled immediately after such purchase. Pursuant to the Purchase Agreement, to the extent Purchase Price Shares are issued to individual shareholders of Here to Serve at or upon closing of the Purchase Agreement: (i) shares of common stock of Here to Serve held by the individuals listed on Schedule 2.2 of the Purchase Agreement will be cancelled in accordance with such Schedule 2.2; (ii) 1,000,000 shares of Here to Serve’s Class A Preferred Stock will be cancelled; and (iii) 71,120 shares of Here to Serve’s Class B Preferred Stock will be cancelled (the “Additional Consideration”).






The closing of the Purchase Agreement resulted in a change of control of Brooklyn Cheesecake & Desserts Company, Inc.








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The description of the Purchase Agreement set forth above is qualified in its entirety by reference to the full text of such Purchase Agreement filed on October 22, 2014 as Exhibit 10.1 to the Current Report on Form 8-K and is incorporated herein by reference.



Item 2.01 Completion of Acquisition or Disposition of Assets



CLOSING OF THE AGREEMENT



As described in Item 1.01 above, on October 17, 2014, the Company entered into the Purchase Agreement which, on the Closing Date, resulted in the Company acquiring the LLC Membership Interests. In exchange, the Company issued to the entities described above in Item 1.01, their designees or assigns, the Initial Consideration and the Additional Consideration.




Following the above transactions, there are 9,963,418 shares of the Company’s common stock issued and outstanding.



The directors of the Company have approved the Purchase Agreement and the transactions contemplated under the Purchase Agreement. The directors of Here to Serve and the Here to Serve Shareholders have approved the Purchase Agreement and the transactions contemplated thereunder. Immediately following the above described transactions, the Company changed its business plan to that of Here to Serve.



References to “we”, “our”, “us”, or “our Company”, from this point forward refer to Brooklyn Cheesecake & Desserts Company, Inc. as currently constituted with Brooklyn Cheesecake & Dessert Acquisition Corp., as our operating subsidiary, as owner of the business of Here to Serve and the limited liability companies owned and operated thereunder.



BUSINESS OF HERE TO SERVE HOLDING CORP.



Overview



Here To Serve Holding Corp., f/k/a F3 Technologies, Inc. (the “Company” or “Here to Serve,”) was incorporated in the State of Delaware as New Ithaca Corporation on September 22, 1983. Here to Serve is a holding company and, prior to the closing of the Purchase Agreement, was the sole owner of all membership interests in Here to Serve – Missouri Waste Division, LLC d/b/a Meridian Waste, a Missouri limited liability company (“HTS Waste”); (ii) Here to Serve Technology, LLC, a Georgia limited liability company (“HTS Tech”); and (iii) Here to Serve – Georgia Waste Division, LLC, a Georgia limited liability company (“HTS Waste Georgia”). A description of the business of each such company follows.




Here to Serve – Missouri Waste Division, LLC d/b/a Meridian Waste




HTS Waste is a non-hazardous solid waste management company providing collection services for approximately 40,000 commercial, industrial and residential customers in Missouri. We own one collection operation based out of Bridgeton, Missouri. Approximately 100% of HTS Waste’s 2013 revenue was from collection, utilizing over 60 collection vehicles.




Here to Serve began non-hazardous waste collection operations in May 2014 upon our acquisition of nearly all of the assets from Meridian Waste Service, LLC that in turn became the core of our operations. From our formation through today, we have begun to create the infrastructure needed to expand our operations through acquisitions and market development opportunities.








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Waste Industry Overview




The non- hazardous solid waste industry can be divided into the following three categories: collection, transfer and disposal services. Companies engaging in collection and/or transfer operations of solid waste typically have lower margins than those performing disposal service operations. By vertically integrating collection, transfer and disposal operations, operators seek to capture significant waste volumes and improve operating margins.



During the past four decades, our industry has experienced periods of substantial consolidation activity; however, we believe significant fragmentation remains. We believe that there are two primary factors that lead to consolidation:







●

Stringent industry regulations have caused operating and capital costs to rise, with many local industry participants finding these costs difficult to bear and deciding to either close their operations or sell them to larger operators; and







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Larger operators are increasingly pursuing economies of scale by vertically integrating their operations or by utilizing their facility, asset and management infrastructure over larger volumes and, accordingly, larger solid waste collection and disposal companies have become more cost-effective and competitive by controlling a larger waste stream and by gaining access to significant financial resources to make acquisitions.





Integration and Acquisitions



Vertical Integration and Internalization




Vertical integration is a key element of our operating strategy for the future because it will allow us to manage the waste stream from the point of collection through disposal, thereby maximizing the rate of waste internalization, increasing our operating margins and improving our operating cash flows. Internalization refers to the disposal of collected waste into the landfills we own. All collected waste must ultimately be processed or disposed of, with landfills being the main depository for such waste. Generally, the most cost efficient collection services occur within a 35-mile operating radius from the disposal site (up to 100 miles if a transfer station is used). Collection companies that do not own a landfill within such range from their collection routes will usually have to dispose of the waste they collect in landfills owned by third parties. Thus, owning a landfill in a market area would provide substantial leverage in the waste management business. We do not currently own any landfills as part of our operations.




Acquisition History and Outlook




Acquisitions will play a key role in our planned revenue growth and expansion into new markets. Our acquisition of Meridian Waste Services, LLC currently provides us a platform and infrastructure to make additional acquisitions in the near future. We strive to integrate all of our completed acquisitions into our existing operations as soon as feasible; however, based on our current trajectory it may take up to a year to fully realize operating synergies for the acquisitions that we completed.



In 2015, we intend to continue seeking and pursuing attractive acquisition opportunities that enable us to grow our current operations based on (i) new markets, (ii) acquiring disposal and transfer capacity, and (iii) waste streams opportunities. In 2015, we may consider a secondary offering to raise capital for immediate acquisition targets, secure a robust senior credit facility and register available authorized shares of our capital stock to pursue and consummate acquisitions that enable us to effectively build a comprehensive waste solutions enterprise.




HTS Waste Operations and Customers



The operations of HTS Waste consist of the collection of solid waste.



Customers



HTS Waste has a broad and diverse customer base. We have two municipal contracts that accounted for 32% and 35% and 21% and 23% of HTS Waste’s long-term contracted revenue for the years ended December 31, 2013 and 2012 respectively.








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Collection Services




HTS Waste provides solid waste collection services to approximately 40,000 industrial, commercial and residential customers in the Metropolitan St. Louis, Missouri area. In 2013, its collection revenue consisted of approximately 14% from services provided to industrial customers, 21% from services provided to commercial customers and 65% from services provided to residential customers.



In our commercial collection operations, we supply our customers with waste containers of various types and sizes. These containers are designed so that they can be lifted mechanically and emptied into a collection truck to be transported to a disposal facility. By using these containers, we can service most of our commercial customers with trucks operated by a single employee. Commercial collection services are generally performed under service agreements with a duration of one to five years with possible renewal options. Fees are generally determined by such considerations as individual market factors, collection frequency, the type of equipment we furnish, the type and volume or weight of the waste to be collected, the distance to the disposal facility and the cost of disposal.



Residential solid waste collection services often are performed under contracts with municipalities, which we generally secure by competitive bid and which give us exclusive rights to service all or a portion of the homes in these municipalities. These contracts usually range in duration from one to five years with possible renewal options. Residential solid waste collection services may also be performed on a subscription basis, in which individual households or homeowners’ or similar associations contract directly with us. The fees received for residential collection are based primarily on market factors, frequency and type of service, the distance to the disposal facility and the cost of disposal.



Additionally, we rent waste containers and provide collection services to construction, demolition and industrial sites. We load the containers onto our vehicles and transport them with the waste to either a landfill or a transfer station for disposal. We refer to this as “roll-off” collection. Roll-off collection services are generally performed on a contractual basis. Contract terms tend to be shorter in length and may vary according to the customers’ underlying projects.




Transfer and Disposal Services




Landfills are the main depository for solid waste in the United States. Solid waste landfills are built, operated, and tied to a state permit under stringent federal, state and local regulations. Currently, solid waste landfills in the United States must be designed, permitted, operated, closed and maintained after closure in compliance with federal, state and local regulations pursuant to Subtitle D of the Resource Conservation and Recovery Act of 1976, as amended. We do not operate hazardous waste landfills, which are subject to even greater regulations. Operating a solid waste landfill includes excavating, constructing liners, continually spreading and compacting waste and covering waste with earth or other inert material as required, final capping, closure and post-closure monitoring. The objectives of these operations are to maintain sanitary conditions, to ensure the best possible use of the airspace and to prepare the site so that it can ultimately be used for other end use purposes.



Access to a disposal facility is a necessity for all solid waste management companies. While access to disposal facilities owned or operated by third parties can be obtained, we believe that it is preferable to internalize the waste streams when possible.



Transfer stations will allow us to consolidate waste for subsequent transfer in larger loads, thereby making disposal in our otherwise remote landfills economically feasible. A transfer station is a facility located near residential and commercial collection routes where collection trucks take the solid waste that has been collected. The waste is unloaded from the collection trucks and reloaded onto larger transfer trucks for transportation to a landfill for final disposal. In addition to increasing our ability to internalize the waste that our collection operations collect, using transfer stations reduces the costs associated with transporting waste to final disposal sites because the trucks we use for transfer have a larger capacity than collection trucks, thus allowing more waste to be transported to the disposal facility on each trip. It also increases the efficiency of our collection personnel and equipment because it allows them to focus more on collection.




Competition




The solid waste collection and disposal industry is highly competitive and fragmented and requires substantial labor and capital resources. The industry presently includes large, publicly-held, national waste companies such as Republic Services, Inc. and Waste Management, Inc., as well as numerous other public and privately-held waste companies. In our existing market and certain of the markets in which we will likely compete are served by one or more of these companies, as well as by numerous privately-held regional and local solid waste companies of varying sizes and resources, some of which have accumulated substantial goodwill in their markets. We also compete with operators of alternative disposal facilities and with counties, municipalities and solid waste districts that maintain their own waste collection and disposal operations. Public sector operations may have financial advantages over us because of their access to user fees and similar charges, tax revenues and tax-exempt financing.








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We compete for collection based primarily on geographic location and the price and quality of our services. From time to time, our competitors may reduce the price of their services in an effort to expand their market share or service areas or to win competitively bid municipal contracts. These practices may cause us to reduce the price of our services or, if we elect not to do so, to lose business.



The solid waste collection and disposal industry has undergone significant consolidation, and, as a result of this consolidation, we encounter competition in our efforts to acquire landfills, transfer stations and collection operations. Competition exists not only for collection, transfer and disposal volume but also for acquisition candidates. We generally compete for acquisition candidates with large, publicly-held waste management companies, private equity backed firms as well as numerous privately-held regional and local solid waste companies of varying sizes and resources. Competition in the disposal industry may also be affected by the increasing national emphasis on recycling and other waste reduction programs, which may reduce the volume of waste deposited in landfills. Accordingly, it may become uneconomical for us to make further acquisitions or we may be unable to locate or acquire suitable acquisition candidates at price levels and on terms and conditions that we consider appropriate, particularly in markets we do not already serve.




Sales and Marketing




We focus our marketing efforts on increasing and extending business with existing customers, as well as increasing our new customer base. Our sales and marketing strategy is to provide prompt, high quality, comprehensive solid waste collection to our customers at competitive prices. We target potential customers of all sizes, from small quantity generators to large companies and municipalities. Because the waste collection and disposal business is a highly localized business, most of our marketing activity is local in nature.




Government Contracts




We are party to contracts with municipalities and other associations and agencies. Many of these contracts are or will be subject to competitive bidding. We may not be the successful bidder, or we may have to substantially lower prices in order to be the successful bidder. In addition, some of our customers may have the right to terminate their contracts with us before the end of the contract term.



Municipalities may annex unincorporated areas within counties where we provide collection services, and as a result, our customers in annexed areas may be required to obtain service from competitors who have been franchised or contracted by the annexing municipalities to provide those services. Some of the local jurisdictions in which we currently operate grant exclusive franchises to collection and disposal companies, others may do so in the future, and we may enter markets where franchises are granted by certain municipalities, thereby reducing the potential market opportunity for us.




Regulation




Our business is subject to extensive and evolving federal, state and local environmental, health, safety and transportation laws and regulations. These laws and regulations are administered by the U.S. Environmental Protection Agency, or EPA, and various other federal, state and local environmental, zoning, air, water, transportation, land use, health and safety agencies. Many of these agencies regularly inspect our operations to monitor compliance with these laws and regulations. Governmental agencies have the authority to enforce compliance with these laws and regulations and to obtain injunctions or impose civil or criminal penalties in cases of violations. We believe that regulation of the waste industry will continue to evolve, and we will adapt to future legal and regulatory requirements to ensure compliance.








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Our operations are subject to extensive regulation, principally under the federal statutes described below.




The Resource Conservation and Recovery Act of 1976, as amended, or RCRA. RCRA regulates the handling, transportation and disposal of hazardous and non-hazardous wastes and delegates authority to states to develop programs to ensure the safe disposal of solid wastes. On October 9, 1991, the EPA promulgated Solid Waste Disposal Facility Criteria for non-hazardous solid waste landfills under Subtitle D of RCRA. Subtitle D includes location standards, facility design and operating criteria, closure and post-closure requirements, financial assurance standards and groundwater monitoring, as well as corrective action standards, many of which had not commonly been in place or enforced at landfills. Subtitle D applies to all solid waste landfill cells that received waste after October 9, 1991, and, with limited exceptions, required all landfills to meet these requirements by October 9, 1993. All states in which we operate have EPA-approved programs which implemented at least the minimum requirements of Subtitle D and in some states even more stringent requirements.



The Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or CERCLA. CERCLA, which is also known as Superfund, addresses problems created by the release or threatened release of hazardous substances (as defined in CERCLA) into the environment. CERCLA’s primary mechanism for achieving remediation of such problems is to impose strict joint and several liability for cleanup of disposal sites on current owners and operators of the site, former site owners and operators at the time of disposal and parties who arranged for disposal at the facility ( i.e. , generators of the waste and transporters who select the disposal site). The costs of a CERCLA cleanup can be substantial. Liability under CERCLA is not dependent on the existence or intentional disposal of “hazardous wastes” (as defined under RCRA), but can also be based upon the release or threatened release, even as a result of lawful, unintentional and non-negligent action, of any one of the more than 700 “hazardous substances” listed by the EPA, even in minute amounts.



The Federal Water Pollution Control Act of 1972, as amended, or the Clean Water Act. This act establishes rules regulating the discharge of pollutants into streams and other waters of the United States (as defined in the Clean Water Act) from a variety of sources, including solid waste disposal sites. If runoff from our landfills or transfer stations may be discharged into surface waters, the Clean Water Act requires us to apply for and obtain discharge permits, conduct sampling and monitoring and, under certain circumstances, reduce the quantity of pollutants in those discharges. In 1990, the EPA issued additional rules under the Clean Water Act, which establish standards for management of storm water runoff from landfills and which require landfills that receive, or in the past received, industrial waste to obtain storm water discharge permits. In addition, if a landfill or transfer station discharges wastewater through a sewage system to a publicly-owned treatment works, the facility must comply with discharge limits imposed by the treatment works. Also, if development of a landfill may alter or affect “wetlands,” the owner may have to obtain a permit and undertake certain mitigation measures before development may begin. This requirement is likely to affect the construction or expansion of many solid waste disposal sites.



The Clean Air Act of 1970, as amended, or the Clean Air Act. The Clean Air Act provides for increased federal, state and local regulation of the emission of air pollutants. The EPA has applied the Clean Air Act to solid waste landfills and vehicles with heavy duty engines, such as waste collection vehicles. Additionally, in March 1996, the EPA adopted New Source Performance Standards and Emission Guidelines (the “Emission Guidelines”) for municipal solid waste landfills to control emissions of landfill gases. These regulations impose limits on air emissions from solid waste landfills. The Emission Guidelines impose two sets of emissions standards, one of which is applicable to all solid waste landfills for which construction, reconstruction or modification was commenced before May 30, 1991. The other applies to all municipal solid waste landfills for which construction, reconstruction or modification was commenced on or after May 30, 1991. The Emission Guidelines are being implemented by the states after the EPA approves the individual state’s program. These guidelines, combined with the new permitting programs established under the Clean Air Act, subject solid waste landfills to significant permitting requirements and, in some instances, require installation of gas recovery systems to reduce emissions to allowable limits. The EPA also regulates the emission of hazardous air pollutants from municipal landfills and has promulgated regulations that require measures to monitor and reduce such emissions.



Climate Change . A variety of regulatory developments, proposals or requirements have been introduced that are focused on restricting the emission of carbon dioxide, methane and other gases known as greenhouse gases. Congress has considered legislation directed at reducing greenhouse gas emissions. There has been support in various regions of the country for legislation that requires reductions in greenhouse gas emissions, and some states have already adopted legislation addressing greenhouse gas emissions from various sources. In 2007, the U.S. Supreme Court held in Massachusetts, et al. v. EPA that greenhouse gases are an “air pollutant” under the federal Clean Air Act and, thus, subject to future regulation. In a move toward regulating greenhouse gases, on December 15, 2009, the EPA published its findings that emission of carbon dioxide, methane and other greenhouse gases present an endangerment to human health and the environment because greenhouse gases are, according to EPA, contributing to climate change. On October 30, 2009, the EPA published the greenhouse gas reporting final rule, effective December 29, 2009, which establishes a new comprehensive scheme requiring certain specified industries as well as operators of stationary sources emitting more than established annual thresholds of carbon dioxide-equivalent greenhouse gases to inventory and report their greenhouse gas emissions annually. Municipal solid waste landfills are subject to the rule. EPA proposed regulations that would require a reduction in emissions of greenhouse gases from motor vehicles. Finally, according to the EPA, the final motor vehicle greenhouse gas standards will trigger construction and operating permit requirements for stationary sources. As a result, the EPA has proposed to tailor these programs such that only large stationary sources will be required to have air permits that authorize greenhouse gas emissions.








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The Occupational Safety and Health Act of 1970, as amended, or OSHA. OSHA establishes certain employer responsibilities, including maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated by the Occupational Safety and Health Administration and various record keeping, disclosure and procedural requirements. Various standards, including standards for notices of hazards, safety in excavation and demolition work and the handling of asbestos, may apply to our operations.



Flow Control/Interstate Waste Restrictions. Certain permits and approvals, as well as certain state and local regulations, may limit a landfill or transfer station to accepting waste that originates from specified geographic areas, restrict the importation of out-of-state waste or wastes originating outside the local jurisdiction or otherwise discriminate against non-local waste. These restrictions, generally known as flow control restrictions, are controversial, and some courts have held that some flow control schemes violate constitutional limits on state or local regulation of interstate commerce. From time to time, federal legislation is proposed that would allow some local flow control restrictions. Although no such federal legislation has been enacted to date, if such federal legislation should be enacted in the future, states in which we own landfills could limit or prohibit the importation of out-of-state waste or direct that wastes be handled at specified facilities. Such state actions could adversely affect our landfills. These restrictions could also result in higher disposal costs for our collection operations. If we were unable to pass such higher costs through to our customers, our business, financial condition and operating results could be adversely affected.



Certain state and local jurisdictions may also seek to enforce flow control restrictions through local legislation or contractually. In certain cases, we may elect not to challenge such restrictions. These restrictions could reduce the volume of waste going to landfills in certain areas, which may adversely affect our ability to operate our landfills at their full capacity and/or reduce the prices that we can charge for landfill disposal services. These restrictions may also result in higher disposal costs for our collection operations. If we were unable to pass such higher costs through to our customers, our business, financial condition and operating results could be adversely affected.



State and Local Regulation. Each state in which we now operate or may operate in the future has laws and regulations governing the generation, storage, treatment, handling, transportation and disposal of solid waste, occupational safety and health, water and air pollution and, in most cases, the siting, design, operation, maintenance, closure and post-closure maintenance of landfills and transfer stations. State and local permits and approval for these operations may be required and may be subject to periodic renewal, modification or revocation by the issuing agencies. In addition, many states have adopted statutes comparable to, and in some cases more stringent than, CERCLA. These statutes impose requirements for investigation and cleanup of contaminated sites and liability for costs and damages associated with such sites, and some provide for the imposition of liens on property owned by responsible parties. Furthermore, many municipalities also have ordinances, local laws and regulations affecting our operations. These include zoning and health measures that limit solid waste management activities to specified sites or activities, flow control provisions that direct or restrict the delivery of solid wastes to specific facilities, laws that grant the right to establish franchises for collection services and then put such franchises out for bid and bans or other restrictions on the movement of solid wastes into a municipality.



Permits or other land use approvals with respect to a landfill, as well as state or local laws and regulations, may specify the quantity of waste that may be accepted at the landfill during a given time period and/or specify the types of waste that may be accepted at the landfill. Once an operating permit for a landfill is obtained, it must generally be renewed periodically.



There has been an increasing trend at the state and local level to mandate and encourage waste reduction and recycling and to prohibit or restrict the disposal in landfills of certain types of solid wastes, such as yard wastes, beverage containers, unshredded tires, lead-acid batteries, paper, cardboard and household appliances.








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Many states and local jurisdictions have enacted “bad boy” laws that allow the agencies that have jurisdiction over waste services contracts or permits to deny or revoke these contracts or permits based on the applicant’s or permit holder’s compliance history. Some states and local jurisdictions go further and consider the compliance history of the parent, subsidiaries or affiliated companies, in addition to that of the applicant or permit holder. These laws authorize the agencies to make determinations of an applicant’s or permit holder’s fitness to be awarded a contract to operate and to deny or revoke a contract or permit because of unfitness unless there is a showing that the applicant or permit holder has been rehabilitated through the adoption of various operating policies and procedures put in place to assure future compliance with applicable laws and regulations.



Some state and local authorities enforce certain federal laws in addition to state and local laws and regulations. For example, in some states, RCRA, OSHA, parts of the Clean Air Act and parts of the Clean Water Act are enforced by local or state authorities instead of the EPA, and in some states those laws are enforced jointly by state or local and federal authorities.




Public Utility Regulation. In many states, public authorities regulate the rates that landfill operators may charge.




Seasonality



Based on our industry and our historic trends, we expect our operations to vary seasonally. Typically, revenue will be highest in the second and third calendar quarters and lowest in the first and fourth calendar quarters. These seasonal variations result in fluctuations in waste volumes due to weather conditions and general economic activity. We also expect that our operating expenses may be higher during the winter months due to periodic adverse weather conditions that can slow the collection of waste, resulting in higher labor and operational costs.




Employees




As of November 5, 2014, we have approximately 87 full-time employees. None of our employees are represented by a labor union. We have not experienced any work stoppages and we believe that our relations with our employees are good.



Here to Serve – Georgia Waste Division, LLC




We are currently developing Here to Serve – Georgia Waste Division, LLC to operate as our waste facility located in Georgia.




Here To Serve Technology, LLC



HTS Tech is currently in the business of designing, developing and selling mobile based apps for smartphones and computers to the general public as well as Enterprise versions.



Current Portfolio




cConnects TM is a cloud-based mobile app used as a micro-scheduling solution, as well as a fleet/asset management system. It allows users in any industry to connect with their customers, vendors and internal organization without wasting time using the current switch board type operations of the current phone system. cConnects was created to maximize time for its users, reduce costs to deliver products and services, provide new technology to an aging business model, while changing the future of customer service.



Most competitors of cConnects must have a hardware and software component to make their systems work. cConnects is mobile app based. In addition, known competitors to cConnects are not cross-platform capable and take years of implementation and millions of dollars of capital to execute.








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HTS – Home Watch, HTS – Lockbox & HTS – Citizen Alert



These products were purchased by HTS Tech in August 2014 from Interactive Defense, LLC. These products are in the late stages of development and will be sold as Social and Enterprise versions to municipal governments and residents of municipalities.




Discontinued Operations and Investments




Ascend™ Global Business System – Ascend™ was an online software as a service (SaaS) product created by the former F3 Technologies development team. It has been since been discontinued.




Record Management System (“RMS”) was a product being developed by Interactive Defense, LLC. RMS was financed by HTST until 1 st Quarter 2014 when it was discontinued.




FargoTube was a product developed by the former F3 Technologies development team. FargoTube was discontinued in 2013.





Available Information



We electronically file certain documents with the Securities and Exchange Commission (the SEC). We file annual reports on Form 10-K; quarterly reports on Form 10-Q; and current reports on Form 8-K (as appropriate); along with any related amendments and supplements thereto. From time-to-time, we may also file registration statements and related documents in connection with equity or debt offerings. You may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. You may obtain information regarding the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet website at www.sec.gov that contains reports and other information regarding registrants that file electronically with the SEC.



DESCRIPTION OF PROPERTY



Our principal office is located at 12540 Broadwell Road, Suite 1203, Milton, Georgia and is an approximately 3,500 sq. ft. office space rented at a rate of $1,000 per month. This space is utilized for office purposes and it is our belief that the space is adequate for our immediate needs. Additional space may be required as we expand our business activities. We do not foresee any significant difficulties in obtaining additional facilities if deemed necessary.




Item 1A. Risk Factors.



RISK FACTORS



You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities. The statements contained in or incorporated into this offering that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.




WE ARE SUBJECT TO ENVIRONMENTAL AND SAFETY LAWS, WHICH RESTRICT OUR OPERATIONS AND INCREASE OUR COSTS.




We are subject to extensive federal, state and local laws and regulations relating to environmental protection and occupational safety and health. These include, among other things, laws and regulations governing the use, treatment, storage and disposal of wastes and materials, air quality, water quality and the remediation of contamination associated with the release of hazardous substances. Our compliance with existing regulatory requirements is costly, and continued changes in these regulations could increase our compliance costs. Government laws and regulations often require us to enhance or replace our equipment. We are required to obtain and maintain permits that are subject to strict regulatory requirements and are difficult and costly to obtain and maintain. We may be unable to implement price increases sufficient to offset the cost of complying with these laws and regulations. In addition, regulatory changes could accelerate or increase expenditures for closure and post-closure monitoring at solid waste facilities and obligate us to spend sums over the amounts that we have accrued.









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WE MAY BECOME SUBJECT TO ENVIRONMENTAL CLEAN-UP COSTS OR LITIGATION THAT COULD CURTAIL OUR BUSINESS OPERATIONS AND MATERIALLY DECREASE OUR EARNINGS.




The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, or CERCLA, and analogous state laws provide for the remediation of contaminated facilities and impose strict joint and several liability for remediation costs on current and former owners or operators of a facility at which there has been a release or a threatened release of a hazardous substance. This liability is also imposed on persons who arrange for the disposal of and who transport such substances to the facility. Hundreds of substances are defined as hazardous under CERCLA and their presence, even in small amounts, can result in substantial liability. The expense of conducting a cleanup can be significant. Notwithstanding our efforts to comply with applicable regulations and to avoid transporting and receiving hazardous substances, we may have liability because these substances may be present in waste collected by us. The actual costs for these liabilities could be significantly greater than the amounts that we might be required to accrue on our financial statements from time to time.




In addition to the costs of complying with environmental regulations, we may incur costs to defend against litigation brought by government agencies and private parties. As a result, we may be required to pay fines or our permits and licenses may be modified or revoked. We may in the future be a defendant in lawsuits brought by governmental agencies and private parties who assert claims alleging environmental damage, personal injury, property damage and/or violations of permits and licenses by us. A significant judgment against us, the loss of a significant permit or license or the imposition of a significant fine could curtail our business operations and may decrease our earnings.




OUR BUSINESS IS CAPITAL INTENSIVE, REQUIRING ONGOING CASH OUTLAYS THAT MAY STRAIN OR CONSUME OUR AVAILABLE CAPITAL AND FORCE US TO SELL ASSETS, INCUR DEBT, OR SELL EQUITY ON UNFAVORABLE TERMS.




Our ability to remain competitive, grow and maintain operations largely depends on our cash flow from operations and access to capital. Maintaining our existing operations and expanding them through internal growth or acquisitions requires large capital expenditures. As we undertake more acquisitions and further expand our operations, the amount we expend on capital will increase. These increases in expenditures may result in lower levels of working capital or require us to finance working capital deficits. We intend to continue to fund our cash needs through cash flow from operations and borrowings under our credit facility, if necessary. However, we may require additional equity or debt financing to fund our growth.




We do not have complete control over our future performance because it is subject to general economic, political, financial, competitive, legislative, regulatory and other factors. It is possible that our business may not generate sufficient cash flow from operations, and we may not otherwise have the capital resources, to allow us to make necessary capital expenditures. If this occurs, we may have to sell assets, restructure our debt or obtain additional equity capital, which could be dilutive to our stockholders. We may not be able to take any of the foregoing actions, and we may not be able to do so on terms favorable to us or our stockholders.




GOVERNMENTAL AUTHORITIES MAY ENACT CLIMATE CHANGE REGULATIONS THAT COULD INCREASE OUR COSTS TO OPERATE.



Environmental advocacy groups and regulatory agencies in the United States have been focusing considerable attention on the emissions of greenhouse gases and their potential role in climate change. Congress has considered recent proposed legislation directed at reducing greenhouse gas emissions and President Obama has indicated his support of legislation aimed at reducing greenhouse gases. EPA has proposed rules to regulate greenhouse gases, regional initiatives have formed to control greenhouse gases and certain of the states in which we operate are contemplating air pollution control regulations that are more stringent than existing and proposed federal regulations, in particular the regulation of emissions of greenhouse gases. The adoption of laws and regulations to implement controls of greenhouse gases, including the imposition of fees or taxes, could adversely affect our collection operations. Changing environmental regulations could require us to take any number of actions, including the purchase of emission allowances or installation of additional pollution control technology, and could make some operations less profitable, which could adversely affect our results of operations.








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CURRENT U.S. ECONOMIC CONDITIONS, AS WELL AS POTENTIAL FUTURE DOWNTURNS, HAS REDUCED AND MAY CONTINUE TO REDUCE OUR VOLUME AND/OR PRICING ON OUR SERVICES, RESULTING IN DECREASES IN OUR REVENUE, PROFITABILITY AND CASH FLOWS.




Our business is affected by changes in national and general economic factors that are outside of our control, including economic activity, consumer confidence, interest rates and access to capital markets. Although our services are of an essential nature, a weak economy generally results in decreases in volumes of waste generated, which decreases our revenues. Additionally, consumer uncertainty and the loss of consumer confidence may limit the number or amount of services requested by customers and our ability to increase customers’ pricing. During weak economic conditions we may also be adversely impacted by customers’ inability to pay us in a timely manner, if at all, due to their financial difficulties, which could include bankruptcies.




INCREASES IN THE COSTS OF FUEL MAY REDUCE OUR OPERATING MARGINS.




The price and supply of fuel needed to run our collection vehicles is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by OPEC and other oil and gas producers, war and unrest in oil producing countries, regional production patterns and environmental concerns. Any significant price escalations or reductions in the supply could increase our operating expenses or interrupt or curtail our operations. Failure to offset all or a portion of any increased fuel costs through increased fees or charges would reduce our operating margins.




CHANGES IN INTEREST RATES MAY AFFECT OUR PROFITABILITY.




Our acquisitions could require us to incur substantial additional indebtedness in the future, which will increase our interest expense. Further, to the extent that these borrowings are subject to variable rates of interest, increases in interest rates will increase our interest expense, which will affect our profitability. In connection with the restructuring of our long-term debt in July 2014, we entered into a swap agreement effective July 14, 2014, where we agreed to pay a fixed-rate of 4.74% in exchange for one-month floating rate LIBOR. This interest rate swap expires on April 30, 2016. With the placement of this swap agreement, we bear exposure to, and are primarily affected by, changes in LIBOR rates. As of July 14, 2014, $6.0 million was subject to the effect of the swap agreement.




INCREASES IN THE COSTS OF DISPOSAL MAY REDUCE OUR OPERATING MARGINS.




We dispose of approximately 100% of the waste that we collect in landfills operated by others, but that rate may increase in the future. We may incur increases in disposal fees paid to third parties. Failure to pass these costs on to our customers may reduce our operating margins.




INCREASES IN THE COSTS OF LABOR MAY REDUCE OUR OPERATING MARGINS.




We compete with other businesses in our markets for qualified employees. A shortage of qualified employees would require us to enhance our wage and benefits packages to compete more effectively for employees or to hire more expensive temporary employees. Labor is our second largest operating cost, and even relatively small increases in labor costs per employee could materially affect our cost structure. Failure to attract and retain qualified employees, to control our labor costs, or to recover any increased labor costs through increased prices we charge for our services or otherwise offset such increases with cost savings in other areas may reduce our operating margins.




INCREASES IN COSTS OF INSURANCE WOULD REDUCE OUR OPERATING MARGINS.




One of our largest operating costs is for insurance coverage, including general liability, automobile physical damage and liability, property, employment practices, pollution, directors and officers, fiduciary, workers’ compensation and employer’s liability coverage, as well as umbrella liability policies to provide excess coverage over the underlying limits contained in our primary general liability, automobile liability and employer’s liability policies. Changes in our operating experience, such as an increase in accidents or lawsuits or a catastrophic loss, could cause our insurance costs to increase significantly or could cause us to be unable to obtain certain insurance. Increases in insurance costs would reduce our operating margins. Changes in our industry and perceived risks in our business could have a similar effect.








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WE MAY NOT BE ABLE TO MAINTAIN SUFFICIENT INSURANCE COVERAGE TO COVER THE RISKS ASSOCIATED WITH OUR OPERATIONS, WHICH COULD RESULT IN UNINSURED LOSSES THAT WOULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.




Integrated non-hazardous waste companies are exposed to a variety of risks that are typically covered by insurance arrangements. However, we may not be able to maintain sufficient insurance coverage to cover the risks associated with our operations for a variety of reasons. Increases in insurance costs and changes in the insurance markets may, given our resources, limit the coverage that we are able to maintain or prevent us from insuring against certain risks. Large or unexpected losses may exceed our policy limits, adversely affecting our results of operations, and may result in the termination or limitation of coverage, exposing us to uninsured losses, thereby adversely affecting our financial condition.




OUR FAILURE TO REMAIN COMPETITIVE WITH OUR NUMEROUS COMPETITORS, SOME OF WHOM HAVE GREATER RESOURCES, COULD ADVERSELY AFFECT OUR ABILITY TO RETAIN EXISTING CUSTOMERS AND OBTAIN FUTURE BUSINESS.




Because our industry is highly competitive, we compete with large companies and municipalities, many of whom have greater financial and operational resources. The non-hazardous solid waste collection and disposal industry includes large national, publicly-traded waste management companies; regional, publicly-held and privately-owned companies; and numerous small, local, privately-owned companies. Additionally, many counties and municipalities operate their own waste collection and disposal facilities and have competitive advantages not available to private enterprises. If we are unable to successfully compete against our competitors, our ability to retain existing customers and obtain future business could be adversely affected.




WE MAY LOSE CONTRACTS THROUGH COMPETITIVE BIDDING, EARLY TERMINATION OR GOVERNMENTAL ACTION, OR WE MAY HAVE TO SUBSTANTIALLY LOWER PRICES IN ORDER TO RETAIN CERTAIN CONTRACTS, ANY OF WHICH WOULD CAUSE OUR REVENUE TO DECLINE.




We are parties to contracts with municipalities and other associations and agencies. Many of these contracts are or will be subject to competitive bidding. We may not be the successful bidder, or we may have to substantially lower prices in order to be the successful bidder. In addition, some of our customers may terminate their contracts with us before the end of the contract term. If we were not able to replace revenue from contracts lost through competitive bidding or early termination or from lowering prices or from the renegotiation of existing contracts with other revenue within a reasonable time period, our revenue could decline.




Municipalities may annex unincorporated areas within counties where we provide collection services, and as a result, our customers in annexed areas may be required to obtain service from competitors who have been franchised or contracted by the annexing municipalities to provide those services. Some of the local jurisdictions in which we currently operate grant exclusive franchises to collection and disposal companies, others may do so in the future, and we may enter markets where franchises are granted by certain municipalities. Unless we are awarded a franchise by these municipalities, we will lose customers which will cause our revenue to decline.




EFFORTS BY LABOR UNIONS TO ORGANIZE OUR EMPLOYEES COULD DIVERT MANAGEMENT ATTENTION AND INCREASE OUR OPERATING EXPENSES.




We do not have any union representation in our operations. Groups of employees may seek union representation in the future, and the negotiation of collective bargaining agreements could divert management attention and result in increased operating expenses and lower net income. If we are unable to negotiate acceptable collective bargaining agreements, we might have to wait through “cooling off” periods, which are often followed by union-initiated work stoppages, including strikes. Depending on the type and duration of these work stoppages, our operating expenses could increase significantly.








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POOR DECISIONS BY OUR REGIONAL AND LOCAL MANAGERS COULD RESULT IN THE LOSS OF CUSTOMERS OR AN INCREASE IN COSTS, OR ADVERSELY AFFECT OUR ABILITY TO OBTAIN FUTURE BUSINESS.




We manage our operations on a decentralized basis. Therefore, regional and local managers have the authority to make many decisions concerning their operations without obtaining prior approval from executive officers. Poor decisions by regional or local managers could result in the loss of customers or an increase in costs, or adversely affect our ability to obtain future business.




WE ARE VULNERABLE TO FACTORS AFFECTING OUR LOCAL MARKETS, WHICH COULD ADVERSELY AFFECT OUR STOCK PRICE RELATIVE TO OUR COMPETITORS.




Because the non-hazardous waste business is local in nature, our business in one or more regions or local markets may be adversely affected by events and economic conditions relating to those regions or markets even if the other regions of the country are not affected. As a result, our financial performance may not compare favorably to our competitors with operations in other regions, and our stock price could be adversely affected by our inability to compete effectively with our competitors.




SEASONAL FLUCTUATIONS WILL CAUSE OUR BUSINESS AND RESULTS OF OPERATIONS TO VARY AMONG QUARTERS, WHICH COULD ADVERSELY AFFECT OUR STOCK PRICE.




Based on historic trends experienced by the businesses we have acquired, we expect our operating results to vary seasonally, with revenue typically lowest in the first quarter, higher in the second and third quarters, and again lower in the fourth quarter. This seasonality generally reflects the lower volume of waste during the winter months. Adverse weather conditions negatively affect waste collection productivity, resulting in higher labor and operational costs. The general increase in precipitation during the winter months increases the weight of collected waste, resulting in higher disposal costs, as costs are often calculated on a per ton basis. Because of these factors, we expect operating income to be generally lower in the winter months. As a result, our operating results may be negatively affected by these variations. Additionally, severe weather during any time of the year can negatively affect the costs of collection and disposal and may cause temporary suspensions of our collection services. Long periods of inclement weather may interfere with collection operations and reduce the volume of waste generated by our customers. Any of these conditions can adversely affect our business and results of operations, which could negatively affect our stock price.




THE MARKET IN WHICH WE PARTICIPATE IS INTENSELY COMPETITIVE, AND IF WE DO NOT COMPETE EFFECTIVELY, OUR OPERATING RESULTS COULD BE HARMED.




The market for enterprise Software as a Service (SaaS) business applications and development platforms is highly competitive, rapidly evolving and fragmented, and subject to changing technology, shifting customer needs and frequent introductions of new products and services.




WE ARE DEPENDENT ON OUR MANAGEMENT TEAM AND DEVELOPMENT AND OPERATIONS PERSONNEL, AND THE LOSS OF ONE OR MORE KEY EMPLOYEES OR GROUPS COULD HARM OUR BUSINESS AND PREVENT US FROM IMPLEMENTING OUR BUSINESS PLAN IN A TIMELY MANNER.




Our success depends substantially upon the continued services of our executive officers and other key members of management, particularly our Chief Executive Officer. From time to time, there may be changes in our executive management team resulting from the hiring or departure of executives. Such changes in our executive management team may be disruptive to our business. We are also substantially dependent on the continued service of our existing development and operations personnel because of the complexity of our service and technologies. We have an employment agreement with Mr. Cosman. At this time, we do not maintain key person life insurance policies on any of our employees. The loss of one or more of our key employees or groups could seriously harm our business.








14









The Company does not have an arrangement with Legacy Waste Solutions, LLC or Mr. Cosman for past, current or future services to be performed between Legacy Waste Solutions and Here To Serve.




OUR BUSINESS IS SUBJECT TO CHANGING REGULATIONS REGARDING CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE THAT HAVE INCREASED BOTH OUR COSTS AND THE RISK OF NON-COMPLIANCE.




We are subject to rules and regulations by various governing bodies, including, for example, the Securities and Exchange Commission, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded. Our efforts to comply with new and changing regulations have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply with these regulations and any subsequent changes, our business may be harmed.




WE NEED ADDITIONAL CAPITAL TO DEVELOP OUR BUSINESS.




The development of our services will require the commitment of substantial resources to implement our business plan. In addition, substantial expenditures will be required to enable us to complete projects in the future. Currently, we have no established bank-financing arrangements. Therefore, it is likely we would need to seek additional financing through subsequent future private offerings of our equity securities, or through strategic partnerships and other arrangements with corporate partners.




We cannot give you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us. The sale of additional equity securities will result in dilution to our stockholders. The occurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict our operations. If adequate additional financing is not available on acceptable terms, we may not be able to implement our business development plan or continue our business operations.




IF WE FAIL TO ESTABLISH AND MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROL, WE MAY NOT BE ABLE TO REPORT OUR FINANCIAL RESULTS ACCURATELY OR TO PREVENT FRAUD. ANY INABILITY TO REPORT AND FILE OUR FINANCIAL RESULTS ACCURATELY AND TIMELY COULD HARM OUR REPUTATION AND ADVERSELY IMPACT THE TRADING PRICE OF OUR COMMON STOCK.



Effective internal control is necessary for us to provide reliable financial reports and prevent fraud. If we cannot provide reliable financial reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation with investors may be harmed. As a result, our small size and any current internal control deficiencies may adversely affect our financial condition, results of operation and access to capital.



We currently have insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements. Additionally, there is a lack of formal process and timeline for closing the books and records at the end of each reporting period and such weaknesses restrict the Company’s ability to timely gather, analyze and report information relative to the financial statements.



Because of the Company’s limited resources, there are limited controls over information processing. There is inadequate segregation of duties consistent with control objectives. Our Company’s management is composed of a small number of individuals resulting in a situation where limitations on segregation of duties exist. In order to remedy this situation we would need to hire additional staff. Currently, the Company is unable to hire additional staff to facilitate greater segregation of duties but will reassess its capabilities.








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RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK




THE MARKET PRICE OF OUR COMMON STOCK IS LIKELY TO BE VOLATILE AND COULD SUBJECT US TO LITIGATION.




The market price of our common stock has been and is likely to continue to be subject to wide fluctuations. Factors affecting the market price of our common stock include:





●

variations in our operating results, earnings per share, cash flows from operating activities, deferred revenue, and other financial metrics and non-financial metrics, and how those results compare to analyst expectations;




●

issuances of new stock which dilutes earnings per share;




●

forward looking guidance to industry and financial analysts related to future revenue and earnings per share;




●

the net increases in the number of customers and paying subscriptions, either independently or as compared with published expectations of industry, financial or other analysts that cover our company;




●

changes in the estimates of our operating results or changes in recommendations by securities analysts that elect to follow our common stock;




●

announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors;




●

announcements by us or by our competitors of mergers or other strategic acquisitions, or rumors of such transactions involving us or our competitors;




●

announcements of customer additions and customer cancellations or delays in customer purchases;




●

recruitment or departure of key personnel;




●

trading activity by a limited number of stockholders who together beneficially own a majority of our outstanding common stock.




In addition, if the stock market in general experiences uneven investor confidence, the market price of our common stock could decline for reasons unrelated to our business, operating results or financial condition. The market price of our common stock might also decline in reaction to events that affect other companies within, or outside, our industries even if these events do not directly affect us. Some companies that have experienced volatility in the trading price of their stock have been the subject of securities class action litigation. If we are to become the subject of such litigation, it could result in substantial costs and a diversion of management’s attention and resources.




THE CONCENTRATION OF OUR CAPITAL STOCK OWNERSHIP WITH INSIDERS WILL LIKELY LIMIT YOUR ABILITY TO INFLUENCE CORPORATE MATTERS.




Our executive officers, directors, and several stockholders and their affiliated entities together beneficially own a majority of our outstanding common stock. As a result, these stockholders, if they act together or in a block, could have significant influence over most matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions, even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders may view as beneficial.




OUR COMMON STOCK IS CURRENTLY ELIGIBLE FOR QUOTATION ON THE OTQB OPERATED BY OTC MARKETS GROUP, INC. AND AN INVESTOR’S ABILITY TO TRADE OUR COMMON STOCK MAY BE LIMITED BY TRADING VOLUME.




The trading volume in our common shares has been relatively limited. A consistently active trading market for our common stock may not develop on the OTCQB. The average daily trading volume in our common stock on the OTCQB as of November 5, 2014 was negligible. Accordingly, the ability of our shareholders to sell their shares of our common stock may be extremely limited.









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WE MAY BE SUBJECT TO PENNY STOCK RULES WHICH WILL MAKE THE SHARES OF OUR COMMON STOCK MORE DIFFICULT TO SELL.




We may be subject now and in the future to the SEC’s “penny stock” rules if our shares common stock sell below $5.00 per share. Penny stocks generally are equity securities with a price of less than $5.00. The penny stock rules require broker-dealers to deliver a standardized risk disclosure document prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson, and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information must be given to the customer orally or in writing prior to completing the transaction and must be given to the customer in writing before or with the customer’s confirmation.




In addition, the penny stock rules require that prior to a transaction the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. The penny stock rules are burdensome and may reduce purchases of any offerings and reduce the trading activity for shares of our common stock. As long as our shares of common stock are subject to the penny stock rules, the holders of such shares of common stock may find it more difficult to sell their securities.




SALES OF OUR CURRENTLY ISSUED AND OUTSTANDING STOCK MAY BECOME FREELY TRADABLE PURSUANT TO RULE 144 AND MAY DILUTE THE MARKET FOR YOUR SHARES AND HAVE A DEPRESSIVE EFFECT ON THE PRICE OF THE SHARES OF OUR COMMON STOCK




A substantial majority of our outstanding shares of common stock are “restricted securities” within the meaning of Rule 144 under the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable state securities laws. Rule 144 provides in essence that an Affiliate (as such term is defined in Rule 144(a)(1)) of an issuer who has held restricted securities for a period of at least six months (one year after filing Form 10 information with the SEC for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokerage transactions, a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average weekly trading volume during the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies quoted on the OTC Bulletin Board). Rule 144 also permits, under certain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate of the Company and who has satisfied a one-year holding period. A sale under Rule 144 or under any other exemption from the Act, if available, or pursuant to subsequent registrations of our shares of common stock, may have a depressive effect upon the price of our shares of common stock in any active market that may develop.




YOU WILL EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST BECAUSE OF THE FUTURE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK AND OUR PREFERRED STOCK.




In the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We are currently authorized to issue an aggregate of 80,000,000 shares of capital stock consisting of 75,000,000 shares of common stock, par value $0.025 and 5,000,000 shares of blank check preferred stock, par value $0.001.




We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock or other securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for other business purposes, including at a price (or exercise prices) below the price at which shares of our common stock are trading.









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POSSIBLE ADVERSE EFFECT OF ISSUANCE OF PREFERRED STOCK




Our Restated Certificate of Incorporation authorizes the issuance of 5,000,000 shares of Preferred Stock, with designations, rights and preferences as determined from time to time by the Board of Directors. As a result of the foregoing, the Board of Directors can issue, without further shareholder approval, Preferred Stock with dividend, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of Common Stock. The issuance of Preferred Stock could, under certain circumstances, discourage, delay or prevent a change in control of the Company.




WE DO NOT EXPECT TO PAY DIVIDENDS AND INVESTORS SHOULD NOT BUY OUR COMMON STOCK EXPECTING TO RECEIVE DIVIDENDS.




We have not paid any dividends on our common stock in the past, and do not anticipate that we will declare or pay any dividends in the foreseeable future. Consequently, investors will only realize an economic gain on their investment in our common stock if the price appreciates. Investors should not purchase our common stock expecting to receive cash dividends. Because we do not pay dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment. Therefore, our failure to pay dividends may cause investors to not see any return on investment even if we are successful in our business operations. In addition, because we do not pay dividends we may have trouble raising additional funds, which could affect our ability to expand our business operations.



MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS




This Current Report on Form 8-K contains forward-looking statements. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,”“management believes” and similar language. Except for the historical information contained herein, the matters discussed in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Current Report are forward-looking statements that involve risks and uncertainties. The factors listed in the section captioned “Risk Factors,” as well as any cautionary language in this Current Report, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from those projected. Except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events after the date of this Current Report on Form 8-K.



Overview



We intend for this discussion to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. This discussion should be read in conjunction with our financial statements and accompanying notes for the fiscal year ended September 30, 2013.




Executive Overview




General Overview of Our Business




The platform operation of the Company is our subsidiary Here To Serve Missouri Waste Division, LLC (“HTS Waste”). HTS Waste is in the business of collection of non-hazardous solid waste. Our revenue is generated primarily by collection services provided to residential customers. The following table reflects our total revenue for the previous two years along with a projected/annualized 2014 (dollars in thousands):






Projected/Annualized

2014 2013 2012

%

%

%

$
increase
$
increase
$
increase


Revenue
13,250 17 % 11,350 11 % 10,250 12 %








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As our revenues continue to grow in this existing market, we plan to increase the rate of this growth by expanding the collection business into the commercial arena as well as increasing our presence in the “roll-off” business. Roll-off service is the hauling and disposal of large waste containers (typically between 10 and 40 cubic yards) that are loaded on to and off of the collection vehicle.



Management expects continued growth through additional mergers and acquisitions. The following discussion and analysis should be read in conjunction with the financial statements, the related notes thereto and the pro forma financials included in this Form 8-K.



Results of Operations




Revenue




The Company’s revenues were $1,664,916 and $35,982 for the nine months ending June 30, 2014 and 2013 respectively. This significant increase was due to the acquisition of Meridian Waste Services, LLC (“MWS”) by our subsidiary Here to Serve Missouri Waste Division, LLC.




Gross Profit




Gross profit increased substantially for the nine months ended June 30, 2014 at $389,668 compared with $35,982 for the corresponding period ended June 30, 2013. This increase of $353,686 was primarily due to the acquisition of MWS.




Operating Expenses




Selling, general and administrative expenses were $3,347,879 and $99,212 for the nine months ending June 30, 2014 and 2013 respectively. This increase is again related to the acquisition of MWS and certain one-time expenses related to corporate structure changes and the acquisition.




Segment Information




Not applicable.




Liquidity and Capital Resources




As of June 30, 2014, the Company had negative working capital of $4,475,388. This lack of liquidity is mitigated by the Company’s ability to generate cash from operating activities. Cash generated from operating activities was $1,759,380 for the nine months ending June 30, 2014.




Net cash provided by financing activities during the nine months ending June 30, 2014 was $10,697,296. The net cash provided by operating activities and financing activities was generally used to fund investing activities. These included $11,500,000 used for the acquisition of MWS, $530,064 used for the purchase of additional equipment and $109,074 for the purchase of capitalized software.




Inflation and Seasonality




Revenues from solid waste collections are relatively consistent with little variations caused by different seasons.




Critical Accounting Policies



Revenue Recognition




The Company follows the guidance of ASC 605 (formerly the Securities and Exchange Commission’s Staff Accounting Bulletin No. 104) for revenue recognition. In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable and collectability is reasonably assured.









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Stock Based Compensation




The Company has adopted the provisions of ASC 718 (formerly SFAS No. 123(R)), “Share-Based Payment,” under the modified prospective method, SFAS No 123(R) eliminates accounting for share-based compensation transaction using the intrinsic value method prescribed under APB Opinion No. 25 “Accounting for Stock Issued to Employees,” and requires instead that such transactions be accounted for using a fair-value-based method. Under the modified prospective method, the Company is required to recognize compensation cost for share-based payments to employees based on their grant date fair value from the beginning of the fiscal period in which the recognition provisions are first applied. For periods prior to the adoption, the financial statements are unchanged, and the pro forma disclosures previously required by ASC 718, as amended by SFAS No. 148, will continue to be required under ASC 718 to the extent those amounts differ from those in the statement of operations.




All stock-based payments to employees and to nonemployee directors for their services as directors, including any grants of restricted stock and stock options, are measured at fair value on the grant date and recognized in the statements of operations as compensation or other expense over the relevant service period. Stock-based payments to nonemployees are recognized as an expense over the period of performance. Such payments are measured at fair value at the earlier of the date a performance commitment is reached or the date performance is completed. In addition, for awards that vest immediately and are non-forfeitable the measurement date is the date the award is issued.




Use of Estimates




The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.



The Company’s significant estimates and assumptions include the fair value of stock based compensation; the carrying value, recoverability and impairment, if any, of long-lived assets. Those significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to those estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.



Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.



Management regularly reviews its estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such reviews, and if deemed appropriate, those estimates are adjusted accordingly. Actual results could differ from those estimates.



Property and Equipment




Property and equipment is stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization is computed on a straight-line basis over the estimated useful lives of the assets, varying from 3 to 5 years or, when applicable, the life of the lease, whichever is shorter.




Fair Value of Financial Instruments




We follow paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of our financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of our financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (“U.S. GAAP”), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs.








20









Recent Accounting Pronouncements




In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-09, Revenue from Contracts with Customers . Amendments in this Update create Topic 606, Revenue from Contracts with Customers, and supersede the revenue recognition requirements in Topic 605, Revenue Recognition, including most industry-specific revenue recognition guidance throughout the Industry Topics of the Codification. In addition, the amendments supersede the cost guidance in Subtopic 605-35, Revenue Recognition—Construction-Type and Production-Type Contracts, and create new Subtopic 340-40, Other Assets and Deferred Costs—Contracts with Customers. In summary, the core principle of Topic 606 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This Accounting Standards Update is the final version of Proposed Accounting Standards Update 2011-230—Revenue Recognition (Topic 605) and Proposed Accounting Standards Update 2011–250—Revenue Recognition (Topic 605): Codification Amendments, both of which have been deleted. Accounting Standards Update 2014-09. The amendments in this Update are effectively for the Company for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently evaluating the effects of ASU 2014-09 on the consolidated financial statements.




Off-Balance Sheet Arrangements




There were no off-balance sheet arrangements during the nine months ended June 30, 2014 that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to our interests.



MANAGEMENT



Directors



The following sets forth the current members of our board of directors (“Board”) and information concerning their ages and background. All directors hold office until the next annual meeting of stockholders or until their respective successors are elected, except in the case of death, resignation or removal:





Name

Age

Position



Jeffrey Cosman (1)

43

Director



Anthony J. Merante (2)

52

Director







(1)


Jeffrey Cosman was appointed to the Board on October 31, 2014.







(2)


Anthony J. Merante has been a Director of Brooklyn Cheesecake & Deserts Company, Inc. since January 2003.







A brief biography of each of our directors is more fully set forth in Item 5.02, which is incorporated herein by reference.



Committees



We currently do not have any committees in place but anticipate establishing an audit committee, compensation committee and governance and nominating committee in the near future.








21









Independent Directors



For purposes of determining independence, the Company has adopted the definition of independence as contained in NASDAQ Market Place Rules 5605. Pursuant to the definition, the Company has determined that none of its directors currently qualify as independent.



Employment Agreements



Section 5.02(e) is hereby incorporated by reference.



Family Relationships



There are no family relationships amongst our officers and directors.



Code of Ethics



We currently do not have a code of ethics that applies to our sole officer and director. However, the company is in the process of developing a code of ethics for the 2015 fiscal year.



EXECUTIVE COMPENSATION



Brooklyn Cheesecake & Desserts Company, Inc. Summary Compensation



The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by Brooklyn Cheesecake & Desserts Company, Inc. during the period from 2011 through 2013.





Name and Principal Position

Year

Salary

($)

Bonus

($)

Stock Awards

($)

Option Awards

($)

Non-Equity Incentive Plan Compensation

($)

Non- Qualified Deferred Compensation Earnings

($)

All Other Compensation

($)

Totals

($)


Anthony J. Merante

2013

$

0

0

0

0

0

0

$

$

0

President, Chief Executive Officer
2012

$

0

0

0

0

0

0

$

$

0

and Chief Financial Officer
2011
$
0

0

0

0

0

0

$

$

0




Option Grants Table



There were no individual grants of stock options to purchase our common stock made to the executive officers named in the Summary Compensation Table from 2011 through 2013.









22








Here to Serve Summary Compensation



The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the periods ended September 30, 2013, 2012 and 2011.





Name and Principal Position

Year

Salary

($)

Bonus

($)

Stock Awards

($)

Option Awards

($)

Non-Equity Incentive Plan Compensation

($)

Non- Qualified Deferred Compensation Earnings

($)

All Other Compensation

($)

Totals

($)



Frank Connor

2013
1,190 0 0 0 0 0 0 1,190
Chief Executive Officer(1)
2012
0 0 110,000 0 0 0 0 110,000

2011
0 0 0 0 0 0 0 0


Jeffrey Cosman

2013
121,500 0 0 0 0 0 0 121,500
Chief Executive Officer(1)
2012
0 0 0 0 0 0 0 0

2011
0 0 0 0 0 0 0 0



On September 5, 2013, Mr. Conner resigned from all positions with the company. On the same date, Mr. Cosman was appointed Chief Executive Officer of the Company.



Aggregated Option Exercises and Fiscal Year-End Option Value Table



There were no stock options exercised since the date of inception of the Company through the date of this Current Report on Form 8-K by the executive officers named in the Summary Compensation Tables.



Long-Term Incentive Plan (“LTIP”) Awards Table



There were no awards made to named executive officers in the last completed fiscal year under any LTIP.



Compensation of Directors



Currently the Company does not pay its board members for their service to the Board but, it may do so in the future.



Option Plan



We currently do not have a Stock Option Plan, however, we may wish to issue stock options pursuant to a Stock Option Plan in the future. Such stock options may be awarded to management, employees, members of the Company’s Board of Directors and consultants of the Company.



CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE



None of our officers, directors, proposed director nominees, beneficial owners of more than 10% of our shares of common stock, or any relative or spouse of any of the foregoing persons, or any relative of such spouse who has the same house as such person or who is a director or officer of any parent or subsidiary of our Company, has any direct or indirect material interest in any transaction to which we are a party since our incorporation or in any proposed transaction to which we are proposed to be a party. In the event a related party transaction is proposed, such transaction will be presented to our board of directors for consideration and approval. Any such transaction will require approval by a majority of the disinterested directors and such transactions will be on terms no less favorable than those available to disinterested third parties.









23









PRE-CLOSING PRINCIPAL STOCKHOLDERS



The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding shares of common stock as of November 5, 2014, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly and the shareholders listed possesses sole voting and investment power with respect to the shares shown.






Name and Address

Title

Amount and Nature of Beneficial Ownership

Percent of Class (1)



Anthony J. Merante

Executive Officer,
145,103 (2) 12.70 %

c/o 2070 Central Park Ave 2Fl

Director and Beneficial Owner


Yonkers, NY 10710



Liberio Borsellino

Director
1,575 .13 %

c/o 2070 Central Park Ave 2Fl


Yonkers, NY 10710 (4)



Carmelo L. Foti

Director
1,820 .16 %

c/o 2070 Central Park Ave 2Fl


Yonkers, NY 10710 (4)



David Rabe

Director
1,575 .13 %

c/o 2070 Central Park Ave 2Fl


Yonkers, NY 10710 (4)



Donald O’Toole

Director
1,341 .11 %

c/o 2070 Central Park Ave 2Fl


Yonkers, NY 10710 (4)



Ronald L. Schutté

Beneficial Owner
922,788 (3) 80.10 %

c/o 2070 Central Park Ave 2Fl


Yonkers, NY 10710



Wachovia Corporation

Beneficial Owner
5,383 .47 %

c/o 2070 Central Park Ave 2Fl


Yonkers, NY 10710



Directors and Named Executive Officers as a Group (5 persons)
151,414 13.3 %






(1)

Beneficial ownership has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934. Unless otherwise noted, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.







(2)

Does not include 8,000 shares owned by two individuals Charles Brofman and James Bruchetta over which Mr. Merante holds voting rights pursuant to a website development agreement by and between us and the two individuals dated March 1, 2005.







(3)

Includes 343 shares which Mr. Schutté owns jointly with his wife.







(4)

Resigned as a member of the Board of Directors on October 31, 2014.









24








POST-CLOSING PRINCIPAL STOCKHOLDERS



The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding shares of common stock as of November 5, 2014, and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly and the shareholders listed possesses sole voting and investment power with respect to the shares shown.





Name(1)

Number of Common

Shares Owned(2)

Percentage of Class(3)



Jeffrey S. Cosman
2,448,000 24.57
%



Anthony J. Merante
145,103 0.015
%



Officers and Directors as a Group (2)
2,593,103 24.59
%







Jeffrey S. Cosman

2,448,000
24.57
%



Ronald Schutte

692,788
7
%



James P. Canouse

765,000
7.7
%



Charles E. Barcom

672,775
6.8
%



Joseph E. Reich

672,775
6.8
%



CC2G Investment Trust (3)

672,775
6.8
%



Here to Serve Holding Corp. (4)

3,822,809
38.37
%



5% or greater beneficial owners

9,746,922
97.83
%






(1)

Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable and to the information contained in the footnotes to this table. Unless otherwise indicated, the address of the beneficial owner is 12540 Broadwell Road, Suite 1203, Milton, Georgia.







(2)

Pursuant to Rules 13d-3 and 13d-5 of the Exchange Act, beneficial ownership includes any shares as to which a shareholder has sole or shared voting power or investment power, and also any shares which the shareholder has the right to acquire within 60 days, including upon exercise of common shares purchase options or warrants. There are 9,963,418 shares of common stock issued and outstanding as of November 5, 2014.







(3)


The shares held by CC2G Investment Trust are beneficially owned by Edward H. Kniep IV.







(4)



The shares held by Here to Serve Holding Corp. are beneficially owned by Jeffrey S. Cosman.







DESCRIPTION OF SECURITIES



General



The Company is authorized to issue an aggregate number of 80,000,000 shares of capital stock, of which 5,000,000 shares are preferred stock, $0.001 par value per share and 75,000,000 shares are common stock, $0.025 par value per share.



Preferred Stock



The Company is authorized to issue 5,000,000 shares of preferred stock, $0.001 par value per share. Please see Item 1.01 herein for a description of the Company's Preferred Stock that is issued and outstanding.



Common Stock



The Company is authorized to issue 75,000,000 shares of common stock, $0.025 par value per share. After the closing of the Purchase Agreement and the issuances thereunder we currently have 9,963,418 shares of common stock issued and outstanding.



Dividends



We have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.








25








Warrants



We currently do not have any warrants issued and outstanding.



Options



There are no outstanding options to purchase our securities.



While there is no established public trading market for our Common Stock, our Common Stock is quoted on the OTCQB operated by the OTC Markets Group, Inc., under the symbol “BCKE”.



The market price of our Common Stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market and other factors, over many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our Common Stock, regardless of our actual or projected performance.




Holders



As of November 5, 2014, we have 9,963,418 shares of our common stock par value, $0.025, issued and outstanding. There are approximately 50 holders of our common stock.



Transfer Agent and Registrar



The Transfer Agent for our capital stock is Computershare, located in Highlands Ranch, Colorado.



Penny Stock Regulations



The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share. Our Common Stock, when and if a trading market develops, may fall within the definition of penny stock and be subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 individually, or $300,000, together with their spouse).



For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the Securities and Exchange Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the “penny stock” rules may restrict the ability of broker-dealers to sell our Common Stock and may affect the ability of investors to sell their Common Stock in the secondary market.



Dividend Policy



Any future determination as to the declaration and payment of dividends on shares of our Common Stock will be made at the discretion of our board of directors out of funds legally available for such purpose. We are under no contractual obligations or restrictions to declare or pay dividends on our shares of Common Stock. In addition, we currently have no plans to pay such dividends. Our board of directors currently intends to retain all earnings for use in the business for the foreseeable future. See “Risk Factors.”








26








Equity Compensation Plan Information



The 2004 Stock Incentive Plan authorizes the issuance of up to 2,000,000 shares of common stock, none of which are currently outstanding.



LEGAL PROCEEDINGS



There are no material proceedings to which any director or officer, or any associate of any such director or officer, is a party that is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries. No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years. No current director or executive officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years. No current director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities during the past ten years. No current director or officer has been found by a court to have violated a federal or state securities or commodities law during the past ten years.



In addition, there are no material proceedings to which any affiliate of our Company, or any owner of record or beneficially of more than five percent of any class of voting securities of our Company, is a party that is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries. We are not currently involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations.




However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.



RECENT SALES OF UNREGISTERED SECURITIES



Reference is made to Item 3.02 of this Current Report on Form 8-K for a description of recent sales of unregistered securities, which is hereby incorporated by reference.



INDEMNIFICATION OF OFFICERS AND DIRECTORS



The directors and officers of the Company are indemnified as provided by the New York corporate law and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.



We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court’s decision.



Item 3.02 Unregistered Sales of Equity Securities.



Pursuant to the Purchase Agreement, we issued 9,054,134 shares of our Common Stock to Here to Serve, its affiliates or assigns and 230,000 shares of our Common Stock were cancelled, in exchange for, among other things, our purchase of the Membership Interests. Such securities were not registered under the Securities Act of 1933.



These securities were not registered under the Securities Act. These securities qualified for exemption under Section 4a(2) of the Securities Act since the issuance of securities by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4a(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of securities offered. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, these shareholders had the necessary investment intent as required by Section 4a(2) of the Securities Act since the Conventions Shareholders agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4a(2) of the Securities Act.








27








Item 4.01 Changes in Registrant’s Certifying Accountant.



There are no changes to the Company’s certifying accountant.




Item 5.01 Changes in Control of Registrant.



As explained more fully in Item 2.01, in connection with the Purchase Agreement, on October 31, 2014, we issued 9,054,134 shares of our Common Stock to Here to Serve, its affiliates or assigns and 230,000 shares of our Common Stock were cancelled in exchange for, among other things, the purchase of the Membership Interests. As such, immediately following the closing of the Purchase, Agreement Here to Serve, its affiliates and assigns collectively hold approximately 90.87% of the total combined voting power of all classes of the common stock entitled to vote. Reference is made to the disclosures set forth under Item 2.01 of this Current Report on Form 8-K, which disclosure is incorporated herein by reference.



In connection with the closing of the Purchase Agreement, and as explained more fully in Item 2.01 above under the section titled “Management” and in Item 5.02 of this Current Report, Anthony Merante, former Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Corporate Secretary resigned from all officer positions effective as of the Closing Date. Mr. Merante will remain as a Director of the Company. Additionally, Carmelo Foti, David Babe, Liborio Borsellino and Donald O’Toole resigned from their positions as members of the board of directors on the Closing Date.



Further, effective upon closing of the Purchase Agreement, our Directors appointed the following officer:





Name

Age

Position



Jeffrey S. Cosman

43

Chief Executive Officer




Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers.



(a) Resignation of Directors, Appointment of Director



Effective October 31, 2014, David Rabe, Carmelo Foti, Liborio Borsellino and Donald O’Toole resigned from their positions as members of the board of directors. Effective October 31, 2013, Jeffrey S. Cosman was appointed as a Director of the company. There were no disagreements between any of the foregoing resigning officer and directors and us or any other officer or director of the Company.



(b) Resignation of Officers, Appointment of Officer



Anthony Merante, former Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Corporate Secretary resigned from all officer positions effective as of October 31, 2014. Effective October 31, 2014, Jeffrey S. Cosman was appointed Chief Executive Officer of the company.




The business background descriptions of the newly appointed officer and director is as follows:



Jeffrey S. Cosman, 43, Chief Executive Officer, Director



Jeffrey S. Cosman combines over 10 years’ experience in the solid waste industry, which includes local operations, local and regional accounting and corporate finance. In addition, Mr. Cosman has experience in mobile-based app development, medical device sales leadership and capital raising. From 1993 through 1996, Mr. Cosman had a career in professional baseball with the New York Mets’ minor league organization. After retiring from baseball, Mr. Cosman worked at Republic Services from February 1996 until February 1999. In his role in Corporate Finance, Mr. Cosman assisted due diligence of acquisitions, provided accounting guidance in over 168 transactions totaling $1.6 Billion in annualized revenue, supported Corporate Controllers in monthly reporting and assisted in the preparation of a registration statement for Republic Services. In the early 2000’s, Mr. Cosman became involved in start-up technology in the medical device industry, but subsequently left to focus on a career in the solid waste industry, founding, in 2010, Legacy Waste Solutions, LLC, a compressed natural gas consulting business. In 2012, Mr. Cosman purchased Rosewood Communication Supply, a warehouse centric telecom parts and supplies distributor as a partner. Mr. Cosman holds a B.B.A. in Managerial Finance and Banking and Finance, and a Bachelors of Accountancy from the University of Mississippi. The Board believes that Mr. Cosman’s “ground up” experience in the solid waste industry, together with his background in related fields, as well as finance, will support the Company’s growth plans as it moves forward in implementing its transition into the waste industry.








28









Family Relationships



There are no family relationships with any of our officers and directors.



Here to Serve Employment Agreements




We have entered into an Employment Agreement with Jeffrey S. Cosman, an officer and director of the Company. For more detailed information, please refer to the Employment Agreement filed as Exhibit 10.1 to this Current Report on Form 8-K.



Item 8.01 Other Items



None.



Item 9.01 Financial Statement and Exhibits.



(a) Financial Statements of Business Acquired. The Audited Financial Statements of Here to Serve, are filed as Exhibit 99.1 to this Current Report on Form 8-K and are incorporated herein by reference.



(d) Exhibits. Exhibit No. Description





Exhibit No.

Description



2.1

Purchase Agreement dated October 17, 2014 (incorporated herein by reference to Exhibit 10.1 to the Brooklyn Cheesecake & Desserts Company, Inc. Current Report on Form 8-K filed with the SEC on October 22, 2014)



3.1

Restated Certificate of Incorporation of Brooklyn Cheesecake & Deserts Company, Inc.



3.12

Certificate of Incorporation of Brooklyn Cheesecake & Dessert Acquisition Corp.



3.2

Amended and Restated By-laws of Brooklyn Cheesecake & Deserts Company, Inc.



3.21

By-Laws of Brooklyn Cheesecake & Dessert Acquisition Corp.



10.1

Employment Agreement by and between Here to Serve Holding Corp. and Jeffrey S. Cosman dated January 1, 2014



99.1

Here to Serve Holding Corp.’s Audited financial statements for the fiscal years ended September 30, 2013 and September 30, 2012


99.2 Meridian Waste Services, LLC Audited financial statements for the fiscal years ended December 31, 2013 and 2012


99.3

Here to Serve Holding Corp.’s Unaudited financial statements for the nine months ended June 30, 2014 and 2013


99.4 Brooklyn Cheesecake & Desserts Company, Inc. Unaudited Pro Forma Information












29









SIGNATURES



Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.





Brooklyn Cheesecake & Desserts Company, Inc.



Date: November 5, 2014

By:

/s/ Jeffrey Cosman


Name:

Jeffrey Cosman


Title:

Chief Executive Officer































Here To Serve Holding Corp.




Financial Statements




Years Ended September 30, 2013 and 2012





















TABLE OF CONTENTS






PAGE


Report of Independent Registered Public Accounting Firm

1


Balance Sheets

2


Statements of Operations

3


Statements of Shareholders' Deficit

4


Statements of Cash Flows

5


Notes to the financial statements

6-14































REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors and Stockholders

of Here to Serve Holding Corp. (F/K/A F3 Technologies, Inc.)




We have audited the accompanying financial statements of Here to Serve Holding Corp. (a Delaware corporation), which comprise the balance sheets as of September 30, 2013 and 2012, and the related statements of operations, changes in shareholders’ deficit, and cash flows for the years then ended, and the related notes to the financial statements.




Management’s Responsibility for the Financial Statements




Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.




Auditor’s Responsibility




Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America as established by the Auditing Standards Board (United States) and in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.




An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.




We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.




Opinion




In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Here to Serve Holding Corp. as of September 30, 2013 and 2012, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.




The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 9 to the financial statements, the Company has incurred a net loss of $198,905 for the year ended September 30, 2013, and the Company had an accumulated deficit of $3,786,399 at September 30, 2013 and net cash used in operating activities of $19,041 for the year ended September 30, 2013. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to these matters are also described in Note 9. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.



/s/ D’Arelli Pruzansky. P.A.

Certified Public Accountants



Boca Raton, Florida

November 22, 2013












1









Here To Serve Holding Corp.


Balance Sheets








September 30,

2013

September 30,

2012


ASSETS


Current Assets


Cash
$ 495 $ 9,615

Advances To Officers
- 17,254

Total Current Assets
495 26,869


Property and Equipment, net of accumulated depreciation


of $7,090 and $4,389, respectively
- 2,701


Other Assets


Capitalized Software
279,608 -

Purchased Software, net of accumulated


amortization of $0 and $19,814, respectively.
- 2,414

Total Other Assets
279,608 2,414


TOTAL ASSETS
$ 280,103 $ 31,984


LIABILITIES & SHAREHOLDERS' DEFICIT


Liabilities


Current Liabilities


Accounts Payable
$ 442 $ 10,691

Accrued Salaries
- 66,300

Convertible Notes Payable
578,306 616,767

Accrued Interest Payable
166,619 92,988

Notes due related parties
550,929 334,262

Other Current Liabilities
14,208 2,519

Total Current Liabilities
1,310,504 1,123,527


Shareholders' Deficit


Preferred Stock - Par Value $.001,Authorized 2,000,000, Outstanding 2,000,000 and 2,000,000, respectively
2,000 2,000

Common Stock - Par Value $0.001, Authorized 400,000,000, Outstanding 25,020,704 and 4,863,495, respectively
25,021 4,864

Additional Paid iIn Capital
2,728,977 2,489,087

Accumulated Deficit
(3,786,399 ) (3,587,494 )

Total Shareholder's Deficit
(1,030,401 ) (1,091,543 )

TOTAL LIABILITIES & SHAREHOLDERS' DEFICIT
$ 280,103 $ 31,984




See accompanying notes to financial statements.








2








Here To Serve Holding Corp.


Statements of Operations


For the Year Ended September 30,






Income

2013

2012


Revenue


Software sales
$ 6,128 $ 21,966

Consulting services
38,624 69,900

Other income
3,267 326

Total Revenue
48,019 92,192


Expense


Compensation and Related Expense
21,139 230,712

Depreciation and Amortization
9,571 97,807

Branch Office Expense
- 8,096

Professional Services
8,330 45,078

Information Processing Expense
12,801 37,223

Marketing Expense
15,904 18,639

Bank, Brokerage, and Credit Card Expense
3,219 6,070

Impairment Expense
- 214,440

Product Development Expense
50,290 1,781

Communication Expense
4,131 4,601

State & Local Taxes
1,698 2,435

Travel & Entertainment
24 5,395

Dues and Subscriptions
316 2,328

Miscellaneous expenses
- 2,764

Bad Debts
- 34,675

Total Expenses
127,423 712,044


Loss From Operations
(79,404 ) (619,852 )


Other Expenses


Loss on Note Conversions
- 61,141

Interest Expense
119,501 89,794

Loss on Sale of Marketable Securities
- 5,703
119,501 156,638


Net Loss before income taxes
$ (198,905 ) $ (776,490 )


Income tax expense
- -


Net Loss
(198,905 ) (776,490 )


Basic and Diluted Net Loss Per Share
$ (0.02 ) $ (0.31 )


Weighted Average Number Of Shares Outstanding (Basic and Diluted)
11,496,462 2,515,516




See accompanying notes to financial statements.








3









Here To Serve Holding Corp.


Statements of Shareholders' Deficit


For The Years Ended September 30, 2013 and 2012






Common Shares

Common Stock, Par

Preferred Shares

Preferred Stock, Par

Additonal Paid in Capital

Accumulated Deficit

Total



Balance September 30, 2011
906,724 $ 907 2,000,000 $ 2,000 $ 1,378,337 $ (2,811,004 ) $ (1,429,760 )

Common stock issued in connection with debt conversions
1,859,271 1,859 - - 398,697 - 400,556

Common stock issued to employees and officers
150,000 150 - - 119,850 - 120,000

Common stock issued to vendors for settlement of accounts payable
20,000 20 - - 7,680 - 7,700

Common stock issued for cash
1,927,500 1,928 - - 188,573 - 190,501

Accrued salaries forgiven- former officer
- - - - 395,950 - 395,950

Net loss
- - - - - (776,490 ) (776,490 )

Balance September 30, 2012
4,863,495 $ 4,864 2,000,000 $ 2,000 $ 2,489,087 $ (3,587,494 ) $ (1,091,543 )



Common stock issued in connection with debt conversions
1,121,500 1,121 - - 41,545 - 42,666

Common stock issued to employees and officers
13,100,000 13,100 - - 55,200 - 68,300

Common stock issued to vendors for settlement of accounts payable
500,000 500 - - 9,500 - 10,000

Common stock issued to acquire software products
4,285,714 4,286 - - 92,743 - 97,029

Common stock issued for cash
1,150,000 1,150 - - 16,350 - 17,500

Accrued expenses forgiven- former officer
- - - - 24,552 - 24,552

Fractional shares cancelled due to reverse stock split
(5 ) - - - - - -

Net loss
- - - - - (198,905 ) (198,905 )

Balance September 30, 2013
25,020,704 $ 25,021 2,000,000 $ 2,000 $ 2,728,977 $ (3,786,399 ) $ (1,030,401 )




See accompanying notes to financial statements.








4








Here To Serve Holding Corp.


Statements of Cash Flows


For the Years Ended September 30, 2013 and 2012






2013

2012


OPERATING ACTIVITIES


Net loss from operations
$ (198,905 ) $ (776,490 )

Adjustment to reconcile net loss to net cash used in operating activities:


Depreciation & Amortization
9,571 97,807

Stock issued to vendors for service
10,000 7,700

Stock based compensation
2,000 120,000

Premium Expense
41,666 11,846

Loss on note conversions
- 61,141

Impairment Expense
- 214,440

Note for services
- 20,000

Loss on sale of marketable securities
- 5,703

Bad debt expense
- 34,675

Changes in working capital items:


Accounts payable
14,053 1,634

Accounts receivable
- (3,175 )

Advances to officers
17,254 (17,254 )

Other current liabilities
11,689 1,339

Accrued interest payable
73,631 79,244

Cash flow from operating activities
$ (19,041 ) $ (141,390 )


INVESTING ACTIVITIES


Proceeds from sale of marketable securities
- 19,297

Purchased capitalized software
- (76,914 )

Purchased equipment
- (795 )

Purchased software
(7,579 ) (44 )

Cash flow from investing activities
$ (7,579 ) $ (58,456 )


FINANCING ACTIVITIES


Proceeds from common stock sold
17,500 190,501

Related party loans
- -

Cash Contributed Officer
- -

Cash flow from financing activities
$ 17,500 $ 190,501


Net change in cash
(9,120 ) (9,345 )

Beginning cash
9,615 18,960

Ending Cash
$ 495 $ 9,615


Supplemental disclosure of cash flow information:


Cash paid for income taxes
- -

Cash paid for interest
- -


Supplemental Non-Cash Investing and Financing Information:


Common stock issued in connection with debt conversions
41,544 339,416

Common stock issued to employees and officers
66,300 -

Common stock issued to vendors for settlement of accounts payable
- -

Common stock issued to acquire software products
97,029 -

Debt forgiveness former officer.
24,553 395,950




See accompanying notes to financial statements.








5









HERE TO SERVE HOLDING CORP.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 AND 2012



NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS



Nature of Business



Here To Serve Holding Corp. f/k/a F3 Technologies, Inc. ( “the Company” or “Here To Serve,” ) was incorporated in the State of Delaware on September 22, 1983. In 2013, the Company changed its name to Here To Serve Holding Corp.




Here To Serve is an Atlanta based Software-as-a-Service (SaaS) development company and application service provider that offers innovative on-demand web and mobile solutions to businesses and consumers.



Here To Serve Holding Corp. began operations in March 2002. Until 2009, the Company focused on developing software, implementing its initial marketing strategy, and building customer relationships. In 2009, the Company transitioned to a “public business entity” when its stock began trading on the OTC Market exchange under the symbol FTCH, and took initial steps to raise adequate capital to complete its business plan. Over the next several years, the Company completed a number of successful software development contracts but failed to finalize development of its own primary priority products. As a result, revenue declined and capital market confidence in the Company diminished. On September 05, 2013, the CEO and Secretary of Here To Serve Holding Corp. was replaced.



Effective April 30, 2013 the Company affected a 1 for 200 reverse stock split, reducing the number of issued and outstanding common shares from 1,546,999,105 to approximately 7,734,984. The effect of this reverse stock split have been applied retroactively for all periods presented.



NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Accounting Basis



The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a September 30 fiscal year end.



Cash and Cash Equivalents



Here To Serve considers all highly liquid investments with maturities of three months or less to be cash equivalents. At September 30, 2013 and September 30, 2012, the Company had $495 and $9,615 of cash, respectively.




Fair Value of Financial Instruments



The Company’s financial instruments consist of cash, accounts payable, other liabilities, accrued interest, notes payable, and an amount due to a related party. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.




Income taxes



The Company accounts for income taxes pursuant to the provisions of ASC 740-10, “Accounting for Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities








6









HERE TO SERVE HOLDING CORP.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 AND 2012




NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.



The Company follows the provisions of the ASC 740 -10 related to, Accounting for Uncertain Income Tax Positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions will be highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.



The Company has adopted ASC 740-10-25 Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. Management has not yet determined for which tax years the Company may have unfiled tax returns. Therefore, as of September 30, 2013, all tax years ending September 30, 2012 and prior may be subject to audit.




Use of Estimates



The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in 2013 and 2012 include stock-based compensation, and the useful lives and valuation of property and equipment and intangible assets.



Accounts Receivable



The Company had no accounts receivable, at September 30, 2013 and 2012.




Intangible Assets



Intangible assets consist of assets acquired and costs incurred in connection with the development of the Company’s capitalized software.




Revenue Recognition



The Company recognizes revenue when there is persuasive evidence that an arrangement exists, the revenue is fixed or determinable, the products are fully delivered or services have been provided and collection is reasonably assured








7









HERE TO SERVE HOLDING CORP.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 AND 2012




NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Impairment of long-lived assets



The Company periodically reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company charges $214,440 to impairment expense in the year ended September 30, 2012.




Concentration of Credit Risks



The Company maintains its cash and cash equivalents in bank deposit accounts, which could, at times, exceed federally insured limits. The Company has not had balances exceeding such limits and has not experienced any losses in such accounts; however, amounts in excess of the federally insured limit may be at risk if the bank experiences financial difficulties. The Company reviews the credit worthiness of its banks on a periodic basis.



Basic Income (Loss) Per Share



Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. At September 30, 2013 the Company had a series of convertible notes outstanding that could be converted into approximately 39,170,000 common shares. These are not included in the diluted shares outstanding since the company incurred a loss and the effect of these shares would be anti-dilutive.




Stock-Based Compensation



Stock-based compensation to employees is accounted for at fair value in accordance with ASC Topic 718. Compensation for share-based payments to employees is based on their grant date fair value from the beginning of the fiscal period in which the recognition provisions are first applied. In December 2012 the Company issued 150,000 shares of common stock to employees as incentive compensation. To date, the Company has not adopted a stock option plan and has not granted any stock options.



Non-employee Stock-based Compensation




The cost of stock based compensation awards issued to non-employees for services are recorded at either fair value of the services rendered or the instrument issued in exchange for such services, whichever is more readily determinable, based on their grant-date fair value from the beginning of the fiscal period in which the recognition provisions are first applied.



Recent Accounting Pronouncements



The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.








8








HERE TO SERVE HOLDING CORP.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 AND 2012




NOTE 3 – PROPERTY AND EQUIPMENT



Property and equipment is recorded at cost. The Company has depreciated the equipment using the straight-line method over the useful lives of the equipment. The useful lives are estimated to be between 3 and 7 years.



At September 30, 2012 equipment consisted of:






2013

2012


Equipment
$ 7,090 $ 7,090


Total Equipment
7,090 7,090

Less: Accumulated Depreciation
$ (7,090 ) $ (4,389 )

Equipment, net
$ - $ 2,701



Purchased Software
$ 22,228 $ 22,228


Total Purchased Software
22,228 22,228

Less: Accumulated Amortization
$ (22,228 ) $ (19,814 )

Purchased Software, net
$ - $ 2,414



N OTE 4 – NOTES RECEIVABLE




In June and August of 2010 the Company received two convertible notes receivable, totaling $62,000, from Tivus Inc., a public company, to formalize the amount due to the Company for work completed on Tivus’s website. In August 2011, November 2011, and June 2012 the Company converted $37,000 of the notes to common stock of Tivus and sold the stock at a loss of $16,568 on these transactions, of which $5,703 was recorded as of September 30, 2012. The remaining $25,000 was deemed uncollectible and could not be converted to common stock of Tivus. The Company recorded a charge to bad debt expense for $25,000 on September 30, 2012. NOTE 5 – CAPITALIZED SOFTWARE




The Company acquired a software product in September 2013, from Covi Point, LLC, a company owned by our CEO. This asset will be amortized over a three to five year period using a straight-line method of depreciation for book purposes once placed in service. The asset was purchased, for approximately $272,000, by the issuance of convertible notes in the amount of $175,000 and the issuance of 4,285,714 common shares of the Company to the shareholders of Covi.




The value of the assets of Covi were determined using the sellers original cost basis, which approximated the fair value of the consideration paid due to the related party nature of the transaction. The acquisition was accounted for as an asset purchase.



NOTE 6 – NOTE PAYABLE




Previously, beginning January 8, 2008 the Company issued a series of one year convertible promissory notes to finance operations. The notes were issued to a related party, generally earned interest at 8%, and could be








9









HERE TO SERVE HOLDING CORP.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 AND 2012




NOTE 6 – NOTE PAYABLE (CONTINUED)




convertible into common stock of the Company at a discount 35% of the lowest average trading prices for the stock during periods five to three days prior to the conversion date. A number of these notes were converted into stock. The notes included a default interest rate of 12% if not paid at maturity or converted to common stock. All but four of the notes went to default. Total outstanding on these notes was $375,900 and $400,900 as of September 30, 2013 and 2012 respectively. Due to the conversion feature included in the notes, the Company has recorded a premium expense on the notes totaling $202,406 and $215,867 as of September 30, 2013 and 2012 respectively. These amounts have been included in interest expense by the Company at the time the notes were recorded.




The Company also issued three notes to related parties between June 2010 and April 2012. Two of these notes were issued to employees for services and totaled $220,000 with a premium of $118,461, which has also been included in interest expense by the Company at the time the notes were recorded. The third note, in the amount of $25,000, was issued for cash. This note had a premium of $37,500 which has been included in interest expense by the Company at the time the note was issued. The Company issued three promissory notes during the twelve month period ended September 30, 2013 to related parties as part of the acquisition of the Covi Point software product and notes. These notes totaled $175,000 and are generally convertible into common stock of the Company at discounts of 10 % to 20% of the lowest average trading prices for the stock during periods five to one day prior to the conversion date. These notes bears interest at 6% to 8%, are unsecured, and matures (including premium payable), within one year of the date issued. The Company recorded a premium expense on these notes totaling $41,667 at the time the notes were issued. This amount has been included in interest expense by the Company. Total outstanding on these notes was $579,166 and $362,499 as of September 30, 2013 and 2012 respectively.



NOTE 7 – STOCKHOLDERS’ EQUITY



The Company has 400,000,000 shares of common stock authorized with a par value of $0.001 and 2,000,000 shares of Preferred stock with a par value of $0.001. Effective April 30, 2013 the Company effected a 1 for 200 reverse stock split. There were 25,020,704 common shares outstanding and 2,000,000 Preferred shares outstanding at September 30, 2013.




During the year ended September 30, 2012, the Company issued a total of 3,956,771 shares of common stock.




The Company issued 1,859,271 shares of common stock in connection with various debt conversions throughout the year. The notes payable were to be converted at a 35% discount to the average bid price on the three days prior to the date of conversion. The conversions prices ranged from $0.02 to $3.86. The conversions were not done at the agreed conversions terms resulting in an additional net loss of $61,141 for the year ended September 30, 2012, which has been recorded as other expenses.




The Company issued 150,000 shares of common stock to employees and officers, of which 25,000 shares were issued at $0.40 per share, the fair market value, and 125,000 shares at $0.88 per share, the fair market value, based on the current quoted trading price. The total amount recorded as compensation expense was $120,000.




The Company issued 20,000 shares of common stock, of which 5,000 shares were issues at $0.16 per share, the fair market value, and 15,000 shares at $0.46, the fair market value.




The Company sold 1,927,500 shares of common stock for cash, at prices ranging from $0.04 to $0.28 per share.




The Company eliminated $395,950 of accrued salaries payable to the former CEO in accordance with his debt settlement agreement. This was recorded against additional paid in capital.








10









HERE TO SERVE HOLDING CORP.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 AND 2012




NOTE 7 – STOCKHOLDERS’ EQUITY (CONTINUED)




During the year ended September 30, 2013, the Company issued a total of 20,157,214 shares of common stock.




The Company issued 1,121,500 shares of common stock in connection with various debt conversions throughout the year. The notes payable were to be converted at a 35% discount to the average bid price on the three days prior to the date of conversion. The conversions price was $0.038.




The Company issued 13,000,000 shares of common stock to the former CEO, in exchange for settlement of accrued salaries. The shares were issued $0.0051 which is the fair market value at time of issuance.




The Company issued 100,000 shares of common stock to an employee, at $0.02 per share, the fair market value at the time of issuance.




The Company issued 500,000 shares of common stock to a vendor for settlement of accounts payable, at $0.02 per share, the fair market at the time of issuance.




The Company issued 4,285,714 shares of common stock as part of the acquisition of software products from Covi Point, LLC. See note 5. The shares were issued $0.0226, the fair market value at time of issuance




The Company sold 1,150,000 shares of common stock for cash, at $0.015 per share.




The Company mitigated $24,552 of expenses payable to the former CEO in accordance with his debt settlement agreement. This was recorded against additional paid in capital.



NOTE 8 – COMMITMENTS AND CONTINGENCIES



The Company has no leased office space at the present time. Management shares an office with Machiavelli Ltd.

LLC, a related party, in Alpharetta, Georgia and currently is not obligated to pay rent.




NOTE 9 – GOING CONCERN




As reflected in the accompanying financial statements, the Company had an accumulated deficit of $3,786,399 and a working capital deficit of $1,310,009 at September 30, 2013, net loss for the year ended September 30, 2013 of $198,905 and cash used in operations of $19,041. While the Company is attempting to increase sales, the growth has yet to achieve significant levels to fully support its daily operations. Management’s plans with regards to this going concern are as follows:




While the Company believes in the viability of its strategy to improve sales volume and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent on the Company’s ability to further implement its business plan and generate greater revenues. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management believes that the actions presently taken to further implement its business plan and general additional revenues provide the opportunity for the Company to continue as a going concern. The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. However, the Company had limited revenues as of September 30, 2013 but was able to raise additional working capital in October 2013. See subsequent events.








11









HERE TO SERVE HOLDING CORP.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 AND 2012




NOTE 10 - INCOME TAXES



The Company is not current in its tax filings as of September 30, 2013. Management estimates that the Company has net operating loss carry forwards for federal income tax purposes of approximately $2.1 million at September 30, 2013, the unused portion of which, if any, expires in year 2033. The Company accounts for income taxes under Accounting Standards Codification 740, Income Taxes “ASC 740”. ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carry forwards. ASC 740 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Internal Revenue Code Section 382 “IRC 382” places a limitation on the amount of taxable income that can be offset by carry forwards after a change in control (generally greater than a 50% change in ownership).




The table below summarizes the difference between the Company’s effective tax rate and the statutory federal rate as follows for the periods ended September 30, 2013 and 2012:






2013

2012



Computed "expected" expense (benefit)
(35 ) % (35 ) %

State tax expense (benefit), net of federal effect
(5 ) % (5 ) %

Stock based compensation
2 % 6 %

Convertible note premium and losses
7 % 4 %

Increase in valuation allowance
31 % 30 %



Deferred tax assets and liabilities are provided for significant income and expense items recognized in different years for tax and financial reporting purposes. The components of the net deferred tax assets for the years ended September 30, 2013 and 2012 were as follows:






Deferred tax assets:

2013

2012



Net operating loss carry forward
848,000 790,000

Total deferred tax asset
848,000 790,000

Less: valuation allowance
(848,000 ) (790,000 )

Net deferred tax asset
- -



The Company has fully reserved the deferred tax asset due to substantial uncertainty of the realization of any tax assets in future periods. The valuation allowance was increased by $58,000 from the prior year.








12









HERE TO SERVE HOLDING CORP.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 AND 2012




NOTE 11 – FAIR VALUE MEASUREMENT



The Company has adopted new guidance under ASC Topic 820, effective January 1, 2009. New authoritative accounting guidance (ASC Topic 820-10-15) under ASC Topic 820, Fair Value Measurement and Disclosures, delayed the effective date of ASC Topic 820-10 for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, until 2009.



ASC Topic 820 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data and requires disclosures for assets and liabilities measured at fair value based on their level in the hierarchy. Further new authoritative accounting guidance (ASU No. 2009-05) under ASC

Topic 820 provides clarification that in circumstances in which a quoted price in an active market for the identical liabilities is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update.




The standard describes a fair value hierarchy based on three levels of input, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:




Level 1 – Quoted prices in active markets for identical assets and liabilities.




Level 2 – Input other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liabilities.




Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.




Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. There were no fair value transactions at September 30, 2013 and 2012. NOTE 12 – IMPAIRMENT OF ASSETS




During the twelve months ended September 30, 2012 the Company reviewed the status of internally developed software. Management concluded that the completion of the development program would be too expensive for the Company to absorb and that the projected final product may not be of competitive when compared to similar products developed by other companies. Accordingly, it was decided to terminate the project and expense the unamortized capitalized software of $214,440. The amount was charged against earnings for the twelve months ended September 30, 2012.




NOTE 13 – RELATED PARTY TRANSACTIONS




On September 10, 2012 the Company eliminated $395,950 of accrued salaries owed the former CEO.




In December 2012, the Company issued 125,000 shares of common stock to the former CEO as compensation.




The Company issued three notes to related parties between June 2010 and April 2012. Two of these notes were issued to employees for services and totaled $220,000 with a premium of $118,461, which has also been deducted as interest expense by the Company at the time the notes were recorded. The third note, in the amount of $25,000, was issued for cash. This note had a premium of $37,500 which has been deducted as interest expense by the Company at the time the note was issued. Total outstanding on these notes was $579,166 and $362,499 as of September 30, 2013 and 2012 respectively.








13









HERE TO SERVE HOLDING CORP.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2013 AND 2012




NOTE 13 – RELATED PARTY TRANSACTIONS (CONTINUED)



On September 5, 2013 the Company replaced its CEO and Secretary. In the transaction the Company eliminated $24,553 of accrued expenses owed to the former CEO.




In June 2013 the former CEO of the Company, issued 13,000,000 shares of common stock to himself. This stock was subsequently transferred to Jeffrey Cosman upon his assumption as Chief Executive Officer of the Company. To date, the Company has not adopted a stock option plan and has not granted any stock options.




NOTE 14 – SUBSEQUENT EVENTS




On October 2, 2013 the Company issued a convertible note to a related party for $20,000. The note bears interest at 8%, is convertible into common stock of the Company, at a 25% discount to the three days average bid price on the three days prior to the date of conversion and matures within a year.




On October 29, 2013 the Company issued a convertible note to a related party for $100,000. The note bears interest at 10%, is convertible into common stock of the Company, at a 25% discount to the three days average bid price on the three days prior to the date of conversion and matures within a year.



On November 5, 2013 the Company changed the name to Here To Serve Holding Corp. Here To Serve is a Waste Management Company and Software as a Service (SaaS) platform provider that creates mobile and cloud based platforms and applications for industries ranging from law enforcement and municipalities to entertainment and B2B enterprises. Its products includes; Interactive Defense SystemTM, for law enforcement and other municipal departments; cConnectsTM, for efficient communication and fleet/asset management using mobile and web based portals; and FargoTubeTM (http://www.fargotube.com), a scalable and mobile platform for online distribution and social networking of entertainment professionals and their content.



In accordance with ASC 855-10, the Company has analyzed its operations subsequent to September 30, 2013 through the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events described above.








14










MERIDIAN WASTE SERVICES, LLC


Financial Statements



For the Years Ended December 31, 2013 and 2012

























MERIDIAN WASTE SERVICES, LLC


Table of Contents


For the Years Ended December 31, 2013 and 2012





FINANCIAL STATEMENTS

Page



Report of Independent Registered Public Accounting Firm

1



Balance Sheets

2



Statements of Income

4



Statements of Members' Equity

5



Statements of Cash Flows

6



Notes to Financial Statements

7 - 14






















REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







To the Stockholder and Board of Directors

Meridian Waste Services, LLC







We have audited the accompanying balance sheets of Meridian Waste Services, LLC as of December 31, 2013 and 2012 and the related statements of operations, changes in members’ equity, and cash flows for each of the two years in the period ended December 31, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.




We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.




In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Meridian Waste Services, LLC as of December 31, 2013 and 2012 and the results of their operations and their cash flows for the each of the two years in the period ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.



/s/ D’Arelli Pruzansky, P.A.

Certified Public Accountants




Boca Raton, Florida

August 7, 2014







1









MERIDIAN WASTE SERVICES, LLC

Balance Sheets

December 31,





ASSETS

2013

2012



CURRENT ASSETS


Cash
$ 1,461,372 $ 1,646,556

Accounts receivable, less allowances for doubtful
440,569 343,962
accounts of $42,509 in 2013 and $0 in 2012

Employee Advances
2,000 -

Note receivable - related party
75,000 202

Prepaid expenses
81,128 68,459

Prepaid insurance
108,393 48,822


Total Current Assets 2,168,462 2,108,001


PROPERTY AND EQUIPMENT


Equipment and fixtures
116,429 69,162

Furniture and fixtures
18,351 18,351

Containers, carts, and roll off
3,568,631 2,727,517

Vehicles
8,887,425 7,686,624

Total Property and Equipment 12,590,836 10,501,654

Less: accumulated depreciation
7,780,233 6,364,005

Net Property and Equipment 4,810,603 4,137,649


OTHER ASSETS


Loan to member
50,000 -

Deposits
8,303 8,303

Total Other Assets 58,303 8,303


TOTAL ASSETS
$ 7,037,368 $ 6,253,953








2











MERIDIAN WASTE SERVICES, LLC

Balance Sheets - continued

December 31,






LIABILITIES AND MEMBERS' EQUITY



CURRENT LIABILITIES


Accounts payable
$ 239,739 $ 161,660

Accrued payroll and payroll tax
94,620 69,595

Current portion of long-term liabilities
1,211,299 1,042,664

Deferred revenue
1,910,465 1,744,578

Deposit
25,000 -

Loan from member
25,000 -


Total Current Liabilities
3,506,123 3,018,497


LONG-TERM LIABILITIES


Long-term liabilities, less current maturities
1,991,508 1,957,365


Total Liabilities
5,497,631 4,975,862


MEMBERS' EQUITY
1,539,737 1,278,091


Total Members' Equity
1,539,737 1,278,091


TOTAL LIABILITIES AND MEMBERS' EQUITY
$ 7,037,368 $ 6,253,953








3









MERIDIAN WASTE SERVICES, LLC


Statements of Income


For the Years Ended December 31,






2013

2012


Amount

Amount



Service revenues
$ 11,247,773 $ 10,076,570

Recycling income
102,099 173,204

Total Income
11,349,872 10,249,774


Cost of Services
8,380,287 7,521,583


Gross Profit
2,969,585 2,728,191


General and Administrative Expenses


Compensation and related expenses
703,688 612,578

Rent expense
249,793 134,778

Advertising expense
95,403 116,187

Depreciation expense
13,541 10,232

Other general and administrative expenses
524,197 437,256


Total General and Administrative Expenses
1,586,622 1,311,031


Income from Operations
1,382,963 1,417,160


Other Income (Expense)


Miscellaneous income
6,995 2,605

Interest income
- 1,004

Gain(Loss) on disposal of assets
(6,250 ) 15,134

Political contributions
- (300 )

Loss on bad loans
(403 ) (110,006 )

Interest expense
(146,659 ) (159,964 )


Total Other Income (Expense)
(146,317 ) (251,527 )


NET INCOME
$ 1,236,646 $ 1,165,633








4









MERIDIAN WASTE SERVICES, LLC


Statements of Changes in Members' Equity


For the Years Ended December 31, 2013 and 2012






Members' Equity - December 31, 2011
$ 1,192,458


Net Income
1,165,633


Shareholder Distributions
(1,080,000 )


Members' Equity - December 31, 2012
1,278,091


Net Income
1,236,646


Shareholder Distributions
(975,000 )


Members' Equity - December 31, 2013
$ 1,539,737










5









MERIDIAN WASTE SERVICES, LLC


Statements of Cash Flows


For the Years Ended December 31






2013

2012



Cash Flows from Operating Activities


Net income
$ 1,236,646 $ 1,165,633

Adjustments to reconcile net income to net cash


provided by operating activities


Allowance for doubtful accounts
42,509

Depreciation and amortization
1,424,979 1,553,121

Change in assets - (increase) decrease


Accounts receivable
(139,117 ) (73,290 )

Other receivables
(76,798 ) 75,021

Prepaid insurance
(59,571 ) 6,689

Prepaid expenses
(12,669 ) (9,241 )

Loan to member
(50,000 )

Letter of credit
- 50,297

Deposits
- 5,000

Gain/Loss on sale of asset
6,250 (15,134 )

Change in liabilities - increase (decrease)


Accounts payable
78,077 89,899

Accrued expenses
- (9,203 )

Accrued payroll and payroll taxes
25,025 17,358

Deferred revenue
165,887 (56,854 )

Deposit
25,000 -

Total Adjustments
1,429,572 1,633,663


Net Cash Provided by Operating Activities
2,666,218 2,799,296


Cash Flows from Investing Activities


Proceeds from sale of fixed assets
12,415 53,622

Purchase of property and equipment
(705,607 ) (188,219 )

Net Cash Used in Investing Activities
(693,192 ) (134,597 )


Cash Flows from Financing Activities


Member distributions
(975,000 ) (1,080,000 )

Loan from member
25,000

Principal payments on notes
(1,208,210 ) (1,151,370 )

Net Cash Used in Financing Activities
(2,158,210 ) (2,231,370 )


Net Increase (Decrease) in Cash
(185,184 ) 433,329


Cash - Beginning of Year
1,646,556 1,213,227


Cash - End of Year
$ 1,461,372 $ 1,646,556










6










MERIDIAN WASTE SERVICES, LLC

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012




NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




NATURE OF OPERATIONS – The Company was organized December 9, 2004 as a Limited Liability Company under the laws of the State of Missouri. The Company is taxed as an S Corporation. Meridian Waste Services LLC (the Company) is primarily in the business of residential and commercial waste hauling and has contracts with various cities and municipalities. The majority of the Company’s customers are located in the St. Louis metropolitan area.




BASIS OF ACCOUNTING - The Company follows accounting principles generally accepted in the United States of America, accordingly it utilizes the accrual method of accounting whereby revenues are recorded when earned and expenses are recorded when incurred.




CONCENTRATIONS OF RISK – The Company maintains its cash balances at one financial institution located in St. Louis, MO. At various times during the year the account balances exceed the Federally insured limits. The Company has not experienced any losses on the accounts and management believes it is not exposed to any significant risk on cash.




The Company has significant revenue with two major municipal customers. These customers accounted for approximately 52.66% and 57.83% of revenue for the years ended December 31, 2013 and 2012, respectively.






2013

2012



Customer A
31.58 % 34.72 %

Customer B
21.08 % 23.11 %
52.66 % 57.83 %







CASH AND CASH EQUIVALENTS – For purposes of the statement of cash flows, the Company considers money market funds, certificates of deposit, Treasury bills, and any other short-term debt securities with a maturity of three months or less at the time of purchase to be cash equivalents.




USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.




INCOME TAXES – The members elected to have the Company’s income taxed as an “S” Corporation under provisions of the Internal Revenue Code; therefore, taxable income or loss is reported to the individual members for inclusion on their personal tax returns. No provision for federal and state income taxes is included in these statements.








7











MERIDIAN WASTE SERVICES, LLC

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED




ACCOUNTS RECEIVABLE – Accounts receivable is carried at the original invoice amount. Customers are billed every three months in advance and payment is due the 15 th of the first month of their billing cycle. If payment is not received, the customer is placed on stop service. The previous billing cycle is reviewed for stop service accounts. Uncollected accounts are written off at that time and charged directly against revenue.




Accounts receivable aging at December 31:





2013

2012



0-30 days
$ 398,767 $ 308,338

31-60 days
19,796 17,813

61-90 days
7,836 5,680

Over 90 days
56,679 12,131

Allowance
(42,509 ) -
$ 440,569 $ 343,962



ALLOWANCE FOR DOUBTFUL ACCOUNTS – The Company provides an allowance for doubtful accounts equal to the estimated collection losses that will be incurred in collection of receivables related to commercial project invoices. The estimated losses are based on managements’ evaluation of outstanding accounts receivable at the end of the year. Allowance for doubtful accounts was $42,509 and $0 at December 31, 2013 and 2012, respectively.




PREPAID EXPENSES – The Company prepays and amortizes the costs of sponsorship agreements and calendar costs over 12 months. Software support agreements are amortized over 12 months. The cost of performance bonds are amortized over 12 months. Prepaid expenses at December 31, 2013 and 2012 respectively, consisted of the following:





2013

2012



Advertising
$ 50,492 $ 34,146

Software support
7,240 5,320

Performance bonds
23,396 19,184

Rent
$ - $ 9,809
81,128 68,459









8










MERIDIAN WASTE SERVICES, LLC

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED




PROPERTY AND EQUIPMENT - Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the following estimated useful lives of the assets.




YEARS

Trucks

5 years

Containers and carts 7 years
Leasehold Improvements 7-15 years

Furniture and equipment

5-7 years


Office equipment

3-7 years




Depreciation expense amounted to $1,424,979 and $1,553,121 for the years ended December 31, 2013 and 2012, respectively.




Expenditures for major renewals and betterment that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred.




IMPAIRMENT OF LONG-LIVED ASSETS – In accordance with Accounting Standards Codification 360-10, “Property, Plant and Equipment”, the Company periodically reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. As of December 31, 2013 and 2012, the Company did not impair any long-lived assets.




FAIR VALUE OF FINANCIAL INSTRUMENTS – The Company adopted ASC topic 820, “Fair Value Measurements and Disclosures” (ASC 820), formerly SFAS No. 157 “Fair Value Measurements,” effective January 1, 2009. ASC 820 defines “fair value” as the price that would be received for an asset or paid to transfer a liability (and exit price0 in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There was no impact relating to the adoption of ASC 820 to the Company’s financial statements.




ASC 820 also describes three levels of inputs that may be used to measure fair value:




Level 1: Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs that are generally unobservable. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value.




Financial instruments consist principally of cash, accounts receivable, prepaid expenses, accounts payable, accrued liabilities and other current liabilities. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature. The fair value of long-term debt








9










MERIDIAN WASTE SERVICES, LLC

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – CONTINUED




is based on current rates at which the Company could borrow funds with similar remaining maturities. The carrying amounts approximate fair value. It is management’s opinion that the Company is not exposed to any significant currency or credit risks arising from these financial instruments.




ADVERTISING - The Company expenses advertising costs as they are incurred except for Sponsorship and calendar costs which is capitalized and amortized over 12 months. Advertising expense amounted to $95,403 and $116,187 for the years ended December 31, 2013 and 2012, respectively.




REVENUE RECOGNITION – Our revenues are generated from the fees we charge for waste collection, transfer, disposal and recycling. The fees charged for our services are generally defined in our service agreements and vary based on contract-specific terms such as frequency of service, weight, volume and the general market factors influencing a region’s rates. We generally recognize revenue as services are performed.




DEFERRED REVENUE – The Company bills one month in advance for the following three months. The balance in this account consists of amounts billed in October, November, and December for:





2013

2012



January
$ 812,515 $ 735,865

February
655,837 610,047

March
442,113 398,666
$ 1,910,465 $ 1,744,578




COST OF SERVICES – Costs of services includes expenses that are directly attributable to generating service revenues. Cost of services at December 31, 2013 and 2012 respectively, consisted of the following:





2013

2012



Labor costs
$ 2,772,312 $ 2,514,803

Landfill costs
1,541,692 1,228,786

Depreciation
1,411,438 1,542,889

Fuel costs
1,113,879 1,000,096

Repairs and maintenance
1,037,037 870,726

Vehicle insurance
164,331 83,281

Property taxes
147,046 130,881

Other direct costs
150,121
$ 8,380,287 $ 7,521,583








10











MERIDIAN WASTE SERVICES, LLC

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012



NOTE B - LONG-TERM DEBT




Long-term debt consists of the following:





2013

2012


Notes payable in monthly installments to 1 st Source Bank totaling $31,405, including interest at 6%, secured by equipment. Maturing from 2014 to 2016.
$ 761,994 $ 1,082,162


Note Payable to Ford Motor Credit, interest at 5%, monthly payments of $1,165, matures August 2015, secured by vehicle.
21,405 33,983


Note Payable to KIA Motors, interest at 4.9%, monthly payments of $401, matures August 2015, secured by a vehicle.
7,940 12,753


Notes Payable in monthly installments to TCF Equipment Finance totaling $41,755, including interest ranging from 4.42% to 4.67%, secured by equipment. Maturing from 2014 to 2017.
1,157,327 1,080,188

Notes Payable in monthly installments to Wells Fargo Equipment Finance, Inc. totaling $27,271, including interest ranging from 4.75% to 4.95%, secured by equipment. Maturing from 2014 to 2017. 733,090 537,587


Notes Payable in monthly installments to US Bank Equipment Finance totaling $14,490, including interest ranging from 4.25% to 5.25%, secured by equipment. Maturing from 2016 to 2017.
521,051 253,356

TOTAL DEBT 3,202,807 3,000,029

Less current maturities 1,211,299 1,042,664

TOTAL LONG-TERM DEBT $ 1,991,508 $ 1,957,365








11











MERIDIAN WASTE SERVICES, LLC

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012



NOTE B - LONG-TERM DEBT – CONTINUED




The aggregate principal maturities of long-term debt at December 31, 2013 are as follows:





2014
$ 1,211,299

2015
1,129,965

2016
671,948

2017
189,595

Thereafter
-


TOTAL DEBT
$ 3,202,807



NOTE C - RELATED PARTY TRANSACTIONS








As of December 31, 2013, the Company had a demand note receivable with an outstanding balance of $75,000 from BRK Holding LLC which is owned by the Company’s members.









As of December 31, 2013, the Company had a demand note receivable with an outstanding balance of $50,000 from J. Reich, a member of the Company.









In September of 2013, C. Barcom, an officer of the Company, made a loan to the Company of $25,000. Repayment is due upon demand.





NOTE D - LEASES




The Company leases its office and warehouse facilities. The lease agreement commenced September 1, 2010 and expires August 30, 2017. Future minimum lease payments at December 31, 2013 are as follows:





2014
$ 265,915

2015
271,915

2016
277,915

2017
283,915

Thereafter
-


TOTAL
$ 1,099,660




Rent expense amounted to $249,793 and $134,778 for the years ended December 31, 2013 and 2012, respectively.








12











MERIDIAN WASTE SERVICES, LLC

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012



NOTE E - COMPENSATED ABSENCES



Employees are entitled to holiday and vacation time throughout the year based on length of service. Unused vacation time is paid to employees at the end of employment. Accrued vacation pay at December 31, 2013 and 2012 was deemed immaterial and not accrued.




NOTE F – CASH FLOW INFORMATION








Operating activities reflect interest paid of $146,659 and $159,964 during 2013 and 2012, respectively.









Noncash investing and financing activity during 2013 and 2012:







2013

2012


Acquisition of equipment


Cost of equipment
$ 2,058,359 $ 1,815,160

Less notes payable
1,352,752 1,626,941


Cash payments for equipment
$ 705,607 $ 188,219




NOTE G – COMMITMENTS AND CONTINGENCIES




The Company is involved in various claims against the Company, arising in the normal course of business. Management believes that their insurance coverage will be sufficient to pay potential liabilities, if any.



NOTE H – BONDING




In connection with its normal activities, the Company may be required to acquire a Performance bond on contracts with customers. There were not any performance bonds required for the years ended December 31, 2013 and 2012.








13











MERIDIAN WASTE SERVICES, LLC

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012



NOTE I – NEW ACCOUNTING PRONOUNCEMENTS




In February 2013, the Financial Accounting Standards Board issued an Accounting Standards Update to the Comprehensive Income Topic in the Accounting Standards Codifications. This update requires separate presentation of the components that are reclassified out of accumulated other comprehensive income either on the face of the financial statements or in the notes to the financial statements. This update also requires companies to disclose the income statement line items impacted by any significant reclassifications, such as the gains and losses on cash flow hedges and defined benefit pension adjustments. The adoption of the standard did not have an impact on our consolidated financial condition, results of operations or cash flows.




Other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.



NOTE J – SUBSEQUENT EVENTS








The Company has evaluated subsequent events through July 16, 2014, the date the financial statements were available to be issued.









On May 15, 2014 the Company signed an asset purchase agreement with Here To Serve – Missouri Waste Division, LLC, a Missouri limited liability company. A down payment has been received in the amount of $25,000 which is recorded as a current liability on the Company’s books.
















14









Here To Serve Holding Corp.




Consolidated Unaudited Financial Statements




Nine Months Ended




June 30, 2013 and 2014




















TABLE OF CONTENTS






Consolidated Unaudited Balance Sheets

1


Consolidated Unaudited Statements of Operations

2


Consolidated Unaudited Statements of Changes in Shareholders' Equity (Deficit)

3


Consolidated Unaudited Statements of Cash Flows

4


Notes to the consolidated unaudited financial statements

5-13




























June 30,

2014
September 30,

(UNAUDITED)

2013


ASSETS


Current Assets


Cash
313,597 $ 495

Accounts receivable, trade
629,818 -

Employee advance
1,347 -

Prepaid expenses
144,418 -

Total Current Assets
1,089,180 495


Property and Equipment, net of accumulated


depreciation of $219,222 and $7,090, repsectively
7,421,463 -


Other Assets


Capitalized software
388,681 279,608

Customer list, net of accumulated


amortization of $499,915
13,540,537 -

Deposits
28,303 -

Loan fees, net of accumulated


amortization of $2,812
47,801 -

Non-compete, net of accumulated


amortization of $5,000
145,000 -

Total Other Assets
14,150,322 279,608


TOTAL ASSETS
$ 22,660,965 $ 280,103


LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT)


Liabilities


Current Liabilities


Accounts payable
$ 430,878 $ 442

Accrued expenses
243,098 164,691

Convertible notes payable
578,146 562,921

Deferred compensation
729,000 -

Deferred revenue
1,995,282 -

Notes due related parties
266,250 550,929

Other current liabilities
113,605 14,208

Current portion - long term debt
1,208,309 -

Total Current Liabilities
5,564,568 1,293,191


Long-term notes payable


Less: current portion - long term debt
9,680,654 -


Total Liabilities
15,245,222 1,293,191



Shareholders' Equity (Deficit)


Preferred stock
2,071 2,000

Common stock
57,700 25,021

Additional paid in capital
14,209,518 2,733,040

Accumulated deficit
(6,853,546 ) (3,773,149 )

Total Shareholders' Equity (Deficit)
7,415,743 (1,013,088 )


TOTAL LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT)
$ 22,660,965 $ 280,103










1










Nine Months Ended June 30,

2014

2013


Income


Revenue


Software sales
4,539 4,826

Services
1,660,377 31,156

Total Revenue
1,664,916 35,982


Cost of Sales/Services


Cost of Sales/Services
1,063,564 -

Depreciation
211,684 -

Total Cost of Sales/Services
1,275,248 -


Gross Profit
389,668 35,982


Expenses


Bad debt expense
2,335

Bank, brokerage & credit card expense
3,040 2,758

Communication expense
15,164 3,795

Compensation and related expense
2,145,828 19,789

Depreciation and amortization
482,265 46,389

Dues & subscriptions
450 317

Information processing expense
14,616 12,801

Insurance/bond expense
21,335 -

Marketing expense
10,466 5,904

Office expense
14,180 673

Product development expense
11,740 (602 )

Professional services
563,937 6,241

Rent
27,642 -

Repairs & maintenance
6,404 -

State & local taxes, licenses, permits
9,589 1,123

Travel & entertainment
18,888 23

Total Expenses
3,347,879 99,212


Other Expenses


Loss on note conversion
23,913 -

Interest expense
98,273 56,467

Total Other Expenses
122,186 56,467


Net Loss before income taxes
(3,080,397 ) (119,696 )


Income tax expense
- -


Net Loss
(3,080,397 ) (119,696 )


Basic Net Loss Per Share
(0.07 ) (0.01 )


Weighted Average Number of Shares Outstanding


(Basic and Diluted)
41,563,674 8,961,509








2









Here To Serve Holding Corp.


Statement of Changes in Shareholders' Equity (Deficit)


For The Nine Months Ended June 30, 2014


UNAUDITED






Common Shares

Common Stock, Par

Preferred Shares

Preferred Stock, Par

Additonal Paid in Capital

Accumulated Deficit

Total



Balance September 30, 2013
25,020,704 $ 25,021 2,000,000 $ 2,000 $ 2,733,040 $ (3,773,149 ) $ (1,013,088 )


Common stock issued in connection with debt conversions
11,656,547 11,657 - - 815,066 - 826,723

Common stock issued to employees and officers
5,500,000 5,500 - - 1,245,000 - 1,250,500

Common stock issued for services
2,331,000 2,331 - - 329,925 - 332,256

Common stock issued in connection with acquisition of subsidiary
13,191,666 13,191 - - 1,965,558 - 1,978,749

Preferred stock issued in connection with acquisition of subsidiary
- - 71,210 71 7,120,929 - 7,121,000

Net loss
(3,080,397 ) (3,080,397 )

Balance June 30, 2014
57,699,917 $ 57,700 2,071,210 $ 2,071 $ 14,209,518 $ (6,853,546 ) $ 7,415,743














3












Nine Months Ending June 30,

2014

2013


OPERATING ACTIVITIES


Net loss from operations
(3,080,397 ) (119,696 )

Adjustment to reconcile net loss to net cash used in operating activities:


Depreciation & Amortization
693,949 1,243

Stock issued to vendors for service
1,494,593 -

Increase in deferred compensation
729,000 -

Adjustments to accrued interest for note conversions
4,656 -

Incentive Stock awards
5,500 -

(Gain) Loss on note conversions
23,913 -

Note for services
30,000 -

Premium expense
58,750 -

Deposits
(28,303 ) -

Changes in working capital items:


Accounts receivable
(629,818 ) -

Employee advance
(1,347 ) -

Prepaid expenses
(144,418 ) -

Other current assets
10,801

Accounts payable & accrued expenses
489,979 42,945

Deferred revenue
1,995,281 -

Other current liabilities
113,605 (66,300 )

Cash flow from operating activities
1,754,944 (131,007 )


INVESTING ACTIVITIES



Purchased capitalized software
(109,074 ) -

Acquisition of subsidiary
(11,500,000 ) -

Purchased equipment
(530,064 ) -

Cash flow from investing activities
(12,139,138 ) -


FINANCING ACTIVITIES


Common stock issued for convertible notes
48,461

Proceeds from issuance of common stock
75,357

Proceed from long-term notes payable
10,697,296 -

Cash flow from financing activities
10,697,296 123,818


Net change in cash
313,102 (7,189 )

Beginning cash
495 8,056

Ending Cash
313,597 867



Supplemental disclosure of cash flow information:


Cash paid for income taxes
- -

Cash paid for interest
98,272 56,467


Supplemental Non-Cash Investing and Financing Information:


Common stock issued in connection with debt conversions
826,723 48,461

Common stock issued to employees and officers
1,250,500 -

Common stock issued for services
332,256 -

Common stock issued in connection with acquisition


of subsidiary
1,978,750 -

Preferred stock issued in connection with acquisition


of subsidiary
7,121,000








4









HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014




NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS




Nature of Business




Here To Serve Holding Corp. f/k/a F3 Technologies, Inc. (the “Company” or “Here To Serve”) was incorporated in the State of Delaware as New Ithaca Corporation on September 22, 1983. In 2006, under the direction of Mr. Frank Connor, the Company operating as F3 Technologies began trading on the OTC Market Exchange under the symbol FTCH. Over the next several years, the Company consulted in the software development industry.




In September of 2013, the Company’s board resolved to make a change in management and Mr. Jeffrey Cosman was appointed CEO and Director of the Company.




Under Mr. Cosman’s direction, the Company began operating as Here To Serve Holding Corp. and repositioned itself into two growth potential industries.




Currently the Company is operating under three separate Limited Liability Companies; Here To Serve Missouri Waste Division, LLC (“HTSMWD”), a Missouri Limited Liability Company, Here To Serve Technology Division, LLC (“HTST), a Georgia Limited Liability Company and Here To Serve Georgia Waste Division, LLC (“HTSGWD”), a Georgia Limited Liability Company.




Through acquisitions and restructuring, HTST has repositioned the Company’s presence in the software development industry. By acquiring products developed for the mobile app market and by shifting the focus of future development, HTST is anticipating significant expansion into this growing business segment.




In 2014, HTSMWD purchased the assets of a large solid waste disposal company in the St. Louis, MO market. This acquisition is considered the platform company for future acquisitions in the solid waste disposal industry. HTSGWD was created to facilitate expansion in this industry throughout the Southeast.



NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Accounting Basis




The Company uses the accrual basis of accounting and accounting principles generally accepted in the United States of America (“GAAP” accounting). The Company has adopted a September 30 fiscal year end.









5










HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014




NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Basis of Consolidation




The consolidated financial statements for the nine months ended June 30, 2014 include the operations of the Company and its wholly-owned subsidiaries, Here To Serve Missouri Waste Division, LLC and Here To Serve Technology, LLC. The third subsidiary of the Company, Here To Serve Georgia Waste Division, LLC had no operations during the period. All significant intercompany accounts and transactions have been eliminated in consolidation.




Reclassifications




Certain accounts and financial statement captions in the prior periods have been reclassified to conform to the current period consolidated financial statements.




Cash and Cash Equivalents




Here To Serve Holding Corp considers all highly liquid investments with maturities of three months or less to be cash equivalents. At June 30, 2014 the Company had $313,597 of cash compared to $495 at September 30, 2013.




Deferred Revenue




The Company’s Missouri Waste Division bills one month in advance for the following three months. The balance in deferred revenue represents amounts billed in April, May and June for services that will be provided during July, August and September.




Fair Value of Financial Instruments




The Company’s financial instruments consist of cash and cash equivalents, accounts payable, other liabilities, accrued interest, notes payable, and an amount due to a related party. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these consolidated financial statements.




Impairment of long-lived assets




The Company periodically reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less that the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. During the nine months ending June 30, 2014, the Company experienced no losses due to impairment.









6










HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014




NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Income Taxes




Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that based on available evidence, which are not expected to be realized.




Use of Estimates




The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the consolidated financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.




Accounts Receivable




At June 30, 2014 the Company had $629,818 of trade receivables compared to $0 at September 30, 2013. Here to Serve – Missouri Waste Division, LLC, primarily owns these trade receivables.




Allowance for Doubtful Accounts




The Company provides an allowance for doubtful accounts equal to the estimated collection losses that will be incurred in collection of receivable related to commercial project invoices. The estimated losses are based on managements’ evaluation of outstanding accounts receivable at the end of the accounting period. At June 30, 2014, no such allowance was recorded.




Intangible Assets




Intangible assets consist of assets acquired and costs incurred in connection with the development of the Company’s capitalized software. See note below. The Company also has intangible assets related to the purchase of Meridian Waste Services, LLC. See Note 4 below.



Capitalized Software




The company acquired a software product in September 2013. This asset will be amortized over a three to five year period using the straight-line method of depreciation for book purposes beginning when the software is completed.









7









HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014




NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




Revenue Recognition




The Company recognizes revenue when there is persuasive evidence of that an arrangement exists, the revenue is fixed or determinable, the products are fully delivered or services have been provided and collection is reasonably assured.




Concentration of Credit Risks




The Company maintains its cash and cash equivalents in bank deposit accounts, which could, at times, exceed federally insured limits. The Company has not experienced any losses in such accounts; however, amounts in excess of the federally insured limit may be at risk if the bank experiences financial difficulties.




Basic Income (Loss) Per Share




Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. A diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. At June 30, 2014 the Company had a series of convertible note outstanding that could be converted into approximately 14,488,784 common shares. These are not presented in the

statement of operations since the company incurred a loss and the effect of these shares is anti- dilutive.




Stock-Based Compensation




Stock-based compensation is accounted for at fair value in accordance with ASC Topic 718. To date, the Company has not adopted a stock option plan and has not granted any stock options.




For the nine months ended June 30, 2014 the Company issued 5,000,000 shares of restricted common stock to James Canouse. The Company recorded this as an expense of $1,250,000. The Company also issued 500,000 shares of restricted common stock to J. N. Carter. The Company recorded this as an expense of $47,000.




Recent Accounting Pronouncements




Here To Serve Holding Corp. , does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.









8









HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014




NOTE 3 – PROPERTY AND EQUIPMENT




Property and equipment, including purchased and developed software is recorded at cost. The Company has depreciated or amortized these assets using the straight-line method over the useful lives of the asset. The useful lives are estimated to be between 2 and 7 years.




Property and equipment consisted of the following:





June 30,

2014

September 30,

2013

Furniture & office equipment $ 308,291 $ 7,090
Containers 2,807,167
Trucks 4,525,227 -
Total Property and Equipment 7,640,685 7,090
Less: Accumulated Depreciation (219,222 ) (7,090 )
Net Property and Equipment $ 7,421,463 $ -



NOTE 4 – ACQUISITION




On May 16, 2014, the Company entered into an asset purchase agreement by and among the Company, HTSWD, Meridian Waste Services, LLC (“MWS”) and the members of MWS, pursuant to which HTSWD acquired certain assets and liabilities of MWS, in exchange for $11,500,000 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 purchase of MWS included the acquisition of assets of $22,532,242 and liabilities of $1,932,492. The aggregate purchase price consisted of the following:




Cash $ 11,500,000
Estimated value of common stock issued to sellers 1,978,750
Estimated value of preferred stock issued to sellers 7,121,000
$ 20,599,750



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




Cash $ 500,000
Accounts receivable 632,322
Prepaid expenses 123,544
Deposits 8,303
Containers 2,710,671
Furniture and equipment 299,450
Trucks 4,100,500
Customer lists 14,007,452
Non-compete agreement 150,000
Accounts payable and accrued expenses (54,387 )
Deferred revenue (1,878,105 )
$ 20,599,750








9









HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014




NOTE 4 – ACQUISITION (CONTINUED)




The following table summarizes the required disclosures of the pro forma combined entity, as if the acquisition of MWS occurred at October 1, 2012:





Year Ended

September 30,

2013

Estimated revenues, net $ 11,350,000
Estimated net loss (3,140,000 )
Net loss per common share – basic and diluted $ (0.08 )
Weighted average common shares outstanding – basic & diluted 41,563,674



NOTE 5 – NOTES PAYABLE




The Company issued two promissory notes during the nine month period ended June 30, 2014. These notes totaled $200,000 and are generally convertible into common stock of the Company at discounts of 10 % to 20% of the lowest average trading prices for the stock during periods five to one day prior to the conversion date. These notes bears interest at 6% to 8%, are unsecured, and matures within one year of the date issued. The notes were issued to provide working capital for the Company.




Previously, beginning January 08, 2008 the Company issued a series of one year convertible promissory notes to finance operations. The notes were sold to Machiavelli Ltd. LLC, a related party, and generally earned interest at 8%, and could be convertible into common stock of the Company at a discount 35% of the lowest average trading prices for the stock during periods five to three days prior to the conversion date. A number of these notes were converted into stock. The notes included a default interest rate of 12% if not paid at maturity or converted to common stock. All but four of the notes went to default. Total outstanding on these notes was $ 259,900 and $ 365,900 as of June 30, 2014 and September 30, 2013 respectively. Due to the conversion feature included in the notes, the Company has recorded a premium expense on the notes totaling $67,253 and $197,021 as of June 30, 2014 and September 30, 2013 respectively . These amounts have been deducted as interest expense by the Company.



The Company also issued additional notes to other related parties between June 2010 and June 30, 2014. Two of these notes were issued to employees for services. James Canouse received note for $200,000 and J. N. Carter received a note for $20,000. The Canouse note had a premium expense of $107,692 and the Carter note had a premium expense of $10,769. In March 2011 Mr. Canouse converted $53,237 of his note to common stock.




At June 30, 2014 and September 30, 2013 the Company had $844,396 and $1,113,850 respectively outstanding in convertible notes.









10










HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014


NOTE 5 – NOTES PAYABLE (CONTINUED)




At June 30, 2014, Here To Serve – Missouri Waste Division, LLC, a subsidiary of the Company, had $10,888,963 in Debt, of which $1,208,309 is current and $9,680,654 is long term. $1,475,000 were notes Payable to the Sellers of Meridian as sub-debt and $9,413,962 in Long Term Debt payable to Comeria Bank, the Company’s Senior Lender. At close, the notes payable to the sellers were five-year term sub-debt loans paying interest at 8%. The Company’s Senior Secured Loan was a 4.75% two-year term based on a seven-year amortization schedule. In addition, the Company had a working capital line of credit of $1,250,000 at 4.75%. Finally, there is CAPEX line of credit of $750,000, of which the Company has drawn down $115,000 at close; again at 4.75% interest.




NOTE 6 – STOCK HOLDERS’ EQUITY




The Company has 400,000,000 shares of common stock authorized with a par value of $0.001 and 2,000,000 shares of Preferred stock with a par value of $0.001. As of June 30 th , 2014 there are 57,699,917 common shares outstanding and 2,071,120 Preferred shares outstanding. During the six month period ended June 30, 2014, the company issued 3,344,142 shares of common stock in connection with note conversions and 3,207,288 shares to consultants for services. In May, 2014, the company issued 13,191,666 shares and 7,121,000 shares of Preferred B shares in connection with the acquisition of subsidiary.




NOTE 7 – COMMITMENTS AND CONTINGENCIES




The Company has leased office space at 12540 Broadwell Rd., Suite 1203 Milton, GA 30004.




NOTE 8 – GOING CONCERN




The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. The Company has revenues as of June 30th, 2014 and may look to raise additional working capital through the sale of convertible notes to fund corporate development.




NOTE 9 – INCOME TAXES




As of June 30 2014, the Company had net operating loss carry forwards of approximately $6,850,000 that may be available to reduce our tax liability in future years. We estimate the benefits of this loss carry forward at $2,329,000 if the Company produces sufficient taxable income. No adjustments to the financial statements have been recorded for this potential tax benefit.




NOTE 10 – FAIR VALUE MEASUREMENT




The Company has adopted new guidance under ASC Topic 820, effective January 1, 2009. New authoritative accounting guidance (ASC Topic 820-10-15) under ASC Topic 820, Fair Value Measurement and Disclosures, delayed the effective date of ASC Topic 820-10 for all








11










HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014




NOTE 10 – FAIR VALUE MEASUREMENT (CONTINUED)




nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis, until 2009.




ASC Topic 820 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data and requires disclosures for assets and liabilities measured at fair value based on their level in the hierarchy. Further new authoritative accounting guidance (ASU No. 2009-05) under ASC Topic 820, provides clarification that in circumstances in which a quoted price in an active market for the

identical liabilities is not available, a reporting entity is required to measure fair value using one or more of the techniques provided for in this update.




The standard describes a fair value hierarchy based on three levels of input, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following:




Level 1 – Quoted prices in active markets for identical assets and liabilities.



Level 2 – Input other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets of liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liabilities.



Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.




Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.




The following table sets forth the liabilities at June 30, 2014, which is recorded on the balance sheet at fair value on a recurring basis by level within the fair value hierarchy. As required, these are classified based on the lowest level of input that is significant to the fair value measurement:




Description 6/30/2014
Quoted Prices in Active Markets for Identical Assets

(Level 1)

Significant Other Observable Inputs

(Level 2)

Significant unobservable Inputs

(Level 3)


Convertible promissory note with embedded conversion option $ 427,114 $ - $ - $ 427,114

Total $ 427,114 $ - $ - $ 427,114



NOTE 11 – LEASES




The Company’s subsidiary Here to Serve Missouri Waste Division, LLC leases its office and warehouse facilities. The lease agreement commenced September 1, 2010 and expires










12










HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014




NOTE 11 – LEASES (CONTINUED)




August 30, 2017. This lease was assigned to the Company when the subsidiary purchased Meridian Waste Services, LLC on May 16, 2014. Future minimum lease payments at June 30, 2014 are as follows:




2014 $ 132,958
2015 271,915
2016 277,915
2017 283,915
Thereafter -
Total $ 966,703



Rent expense amounted to $22,494 for the nine months ended June 30, 2014.




NOTE 12 – BONDING




In connection with its normal activities, the Company may be required to acquire a Performance bond on contracts with customers. There were not any performance bonds required for the 9 months ended June 30, 2014.




NOTE 13 – RELATED PARTY TRANSACTIONS




In December 2012, the Company issued 124,000 shares of common stock to the former CEO as compensation.




The Company issued five notes to related parties between October 2012 and June 2014. Two of these notes were issued to CEO and a relative of the CEO in connection with the Company’s purchase of capitalized software. These two notes totaled $160,000 with a premium of $40,000 which was deducted as interest expense by the Company at the time the notes were recorded. Three notes were issued for cash to relatives of the CEO to be used to fund operations and certain acquisition costs. These three notes totaled $195,000 with a premium of $58,750 which was deducted as interest expense by the Company at the time the notes were recorded. Total outstanding on these notes was $266,250 as of June 30, 2014.




On September 5, 2013 the Company replaced its CEO and Secretary. In the transaction, the Company eliminated $24,553 of accrued expenses owed to the former CEO.




In June 2013, the former CEO of the Company issued 13,000,000 shares of common stock to himself. This stock was subsequently transferred to Jeffrey Cosman upon his assumption as Chief Executive officer of the Company.








13










HERE TO SERVE HOLDING CORP. , INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014




NOTE 14 – SUBSEQUENT EVENTS




In accordance with ASC 855-10, the Company has analyzed its operations subsequent to June 30th, 2014 through the date these financial statements were issued and has determined that the following would be included as subsequent events.




Interest Rate Swap



On July 25 th , 2014, pursuant to the Master Credit Agreement the Company’s subsidiary, Here To Serve – Missouri Waste Division, LLC has with Comerica Bank; it entered into an Interest Rate Swap for $6,000,000 of the $9,500,000 Senior Secured Note. The purpose of this agreement is to limit or manage exposure to fluctuations in interest rates, or to obtain a marginally lower interest rate than it would have been able to get without the swap.









14









Brooklyn Cheesecake & Desserts Company, Inc.



Introduction to Unaudited Pro Forma Combined Financial Information



The following unaudited pro forma combined financial information is presented to estimate effects of our purchase of the LLC’s owned by Here to Serve Holding Corp.




On October 17, 2014 Brooklyn Cheesecake & Desserts Company, Inc. (the “Company”) entered into a membership interest purchase agreement with Here to Serve Holding Corp. (“HTSHC”) a Delaware Corporation and the shareholders of HTSHC, whereby the Company agreed to issue 9,054,134 shares of the Company for the interest in the following LLC’s: Here to Serve – Missouri Waste Division, LLC, Here to Serve Technology Division, LLC and Here to Serve – Georgia Waste Division (“LLC’s”). At closing, the Company issued 9,054,134 shares of the Company’s common stock to the HTSHC shareholders who obtained 89% voting control and management control of the Company. The financial statements of the Company and the consolidated financial statements of the LLC’s after the acquisition will include the balance sheets at historical cost, the historical results of the Company and the LLC’s and the results of the Company from the acquisition date.




Upon closing of the transaction, the Company’s officers and directors resigned and a new board of directors and new officer were appointed which consist of Jeff S. Cosman and Rachel M. Cosman. Following the closing, Mr. Cosman was also appointed as Chief Executive Officer and Chairman of the board of the Company and Mrs. Cosman was appointed as Secretary of the Company.




The unaudited pro forma combined financial information assumes the Membership Interest Purchase Agreement was consummated as of January 1, 2013. The financial statements of the Company included in the following unaudited pro forma combined financial information are derived from the audited financial statements of the Company for the year ending December 31, 2013 and the unaudited financial statements of the LLC’s for the same period. The pro forma combined financial information for the six months ending June 30, 2014 are derived from unaudited financial statements of the Company and the LLC's for the six months ending June 30, 2014.




The information presented in the unaudited pro forma combined financial information does not purport to represent what our financial position would have been had the membership interest purchase agreement occurred as of the dates indicated, nor is it indicative of our financial position for any period. You should not rely on this information as being indicative of the historical results that would have been achieved had the companies always been consolidated or the future results that the consolidated company will experience after the Membership Interest Purchase Agreement Transaction.




The pro forma adjustments are based upon available information and certain assumptions that the Company believes is reasonable under the circumstances. The unaudited pro forma combined financial information should be read in conjunction with the historical financial statements and related notes of the Company.









1









Brooklyn Cheesecake & Desserts Company, Inc.


Unaudited Pro Forma Adjustments to Combined Financial Statements


31-Dec-13



(a) to record impact of merger with Meridian Waste Services, LLC






Debit

Credit



Employee advance
$ - $ 2,000

Property & equipment, net
4,810,603

Property & equipment, net
7,420,348

Intangible assets, net
14,233,065

Deposits
38,300

Notes payable related party
1,475,000

Other current liabilities
25,000

Other current liabilities
70,325

Current portion - long term debt
1,211,299

Current portion - long term debt
1,225,000

Notes payable
1,225,000

Notes payable
1,991,508

Notes payable
9,500,000

Series B convertible preferred stock
71

Common stock
13,192

Additional paid in capital
1,539,737

Additional paid in capital
9,086,487

Cost of sales/services - depreciation
1,411,438

Depreciation & amortization
13,541

Depreciation & amortization
2,801,490

Depreciation & amortization
16,871

Depreciation & amortization
30,000

Intangible assets, net
2,848,361

Depreciation & amortization
12,476

Cost of sales/services - depreciation
1,300,408

Property & equipment, net
1,312,884

$ 31,807,202 $ 31,807,202


(b) to record impact of merger with Brooklyn Cheescake & Desserts Company, Inc.



Cash
$ - $ 1,078

Accounts receivable, related party
47,725

Intangible assets, net
19,125

Accounts payable & accrued expenses
24,340

Notes payable - related party
94,744

Accumulated earnings (deficit)
40,873

Licensing fee - related party
13,375

Sales, general & administrative expense
23,658

Treasury stock
300,000

Cash
150,000

Notes payable - related party
150,000

$ 432,459 $ 432,459








2











Pro Forma Adjustments


HTSHC

MWD

BCKE

Debit

Credit

Pro Forma


Current Assets:


Cash
$ 9,760 $ 1,461,372 $ 1,078 $ - $ 151,078 $ 1,321,132

Accounts receivable, trade
440,569 440,569

Accounts receivable, related party
125,000 47,725 47,725 125,000

Employee advance
2,000 2,000 -

Prepaid expenses
189,521 189,521

Total current assets
9,760 2,218,462 48,803 - 200,803 2,076,222


Other Assets:


Property & equipment, net
957 4,810,603 7,420,348 6,123,487 6,108,421

Capitalized software
298,287 298,287

Intangible assets, net
19,125 14,233,065 2,867,486 11,384,704

Deposits
38,300 8,303 38,300 8,303


Total assets
$ 347,304 $ 7,037,368 $ 67,928 $ 21,653,413 $ 9,230,076 $ 19,875,937



Current Liabilities:


Accounts payable & accrued expenses
$ 204,749 $ 334,359 $ 24,340 $ 24,340 $ - $ 539,108

Notes payable - related party
569,262 25,000 94,744 94,744 1,625,000 2,219,262

Convertible notes payable
489,074 489,074

Deferred revenue
1,910,465 1,910,465

Deferred compensation
243,000 243,000

Other current liabilities
25,000 25,000 70,325 70,325

Current portion - long term debt
1,211,299 1,211,299 1,225,000 1,225,000

Total current liabilities
1,506,085 3,506,123 119,084 1,355,383 2,920,325 6,696,234


Long-Term Liabilities:


Notes payable
1,991,508 3,216,508 9,500,000 8,275,000


Total liabilities
$ 1,506,085 $ 5,497,631 $ 119,084 $ 4,571,891 $ 12,420,325 $ 14,971,234


Stockholders' Equity (Deficit):


Series A convertible preferred stock


($.001 parvalue; 2,000,000 shares authorized;


2,000,000 shares issued & outstanding)
$ 2,000 $ - $ - $ - $ - $ 2,000

Series B convertible preferred stock


($.001 parvalue; 71,210 shares authorized;


71,208 shares issued & outstanding)
71 71

Common stock


($.001 parvalue; 400,000,000 shares authorized;


57,699,917 shares issued & outstanding)
36,457 28,482 13,192 78,131

Treasury stock
300,000 (300,000 )

Additional paid in capital
4,217,282 1,539,737 13,585,672 1,539,737 9,086,487 26,889,441

Accumulated earnings (deficit)
(5,414,520 ) (13,665,310 ) 4,174,620 1,489,510 (21,764,940 )

Total shareholders' equity (deficit)
(1,158,781 ) 1,539,737 (51,156 ) 6,014,357 10,589,260 4,904,703


Total Liabilities & Stockholders Equity (Deficit)
$ 347,304 $ 7,037,368 $ 67,928 $ 10,586,248 $ 23,009,585 $ 19,875,937








3











Pro Forma Adjustments


HTSHC

MWD

BCKE

Debit

Credit

Pro Forma



Revenue:


Sales
$ 406 $ - $ - $ - $ - $ 406

Services
11,349,872 11,349,872

Licensing fee - related party
13,375 13,375 -

Total revenue
406 11,349,872 13,375 13,375 - 11,350,278


Cost of Sales/Services
-

Cost of Sales/Services
6,968,849 6,968,849

Depreciation
1,411,438 1,300,408 1,411,438 1,300,408

Total cost of sales/services
- 8,380,287 - 1,300,408 1,411,438 8,269,257


Gross profit
406 2,969,585 13,375 1,313,783 1,411,438 3,081,021


Operating expenses:


Sales, general & adminstrative expense
1,554,647 1,573,484 23,658 23,658 3,128,131

Depreciation & amortization
136 13,541 2,860,837 13,541 2,860,973

Total operating expenses
1,554,783 1,587,025 23,658 2,860,837 37,199 5,989,104


Income (Loss) from Operations
(1,554,377 ) 1,382,560 (10,283 ) 4,174,620 1,448,637 (2,908,083 )


Other Income (Expense):


Miscellaneous income
6,995 6,995

Gain (loss) on disposal of assets
- (6,250 ) (6,250 )

Gain (loss) on note conversion
(23,913 ) (23,913 )

Interest (expense)
(59,831 ) (146,659 ) (206,490 )

Total other income (expense)
(83,744 ) (145,914 ) - - - (229,658 )


Net Income (Loss)
$ (1,638,121 ) $ 1,236,646 $ (10,283 ) $ 4,174,620 $ 1,448,637 $ (3,137,741 )








4









depreciation & amortization






depreciation :


actual, 2 months ending 06/30/2014
218,814

12 months
1,312,884

admin
12,476

cos
1,300,408


amortization :


customer list - 5 years
14,007,452 2,801,490

finance charges - 3 years
50,613 16,871

non-compete - 5 years
150,000 30,000 2,848,361

4,161,245










5









Brooklyn Cheesecake & Desserts Company, Inc.


Unaudited Pro Forma Adjustments to Combined Financial Statements


30-Jun-14




(a) to record impact of merger with Meridian Waste Services, LLC






Debit

Credit



Depreciation & amortization
$ - $ 17,028

Cost of sales/services - depreciation
$ 486,972

Depreciation & amortization
1,400,745

Depreciation & amortization
8,436

Depreciation & amortization
15,000

Intangible assets, net
1,424,181

Depreciation & amortization
21,390

Cost of sales/services - depreciation
635,052

Property & equipment, net
152,442

$ 2,080,623 $ 2,080,623



(b) to record impact of merger with Brooklyn Cheescake & Desserts Company, Inc.



Cash
$ - $ 1,078

Accounts receivable, related party
54,403

Intangible assets, net
16,125

Accounts payable & accrued expenses
21,464

Notes payable - related party
105,105

Accumulated earnings (deficit)
51,156

Licensing fee - related party
6,678

Sales, general & administrative expense
10,485

$ 133,247 $ 133,247








6











Pro Forma Adjustments


HTSHC

MWD

BCKE

Debit

Credit

Pro Forma


Current Assets:


Cash
$ 313,597 $ 1,078 $ - $ 1,078 $ 313,597

Accounts receivable, trade
629,818 629,818

Accounts receivable, related party
54,403 54,403 -

Employee advance
1,347 1,347

Prepaid expenses
144,418 144,418

Total current assets
1,089,180 - 55,481 - 55,481 1,089,180


Other Assets:


Property & equipment, net
7,421,463 152,442 7,269,021

Capitalized software
388,681 388,681

Intangible assets, net
13,733,338 16,125 1,440,306 12,309,157

Deposits
28,303 28,303


Total assets
$ 22,660,965 $ - $ 71,606 $ - $ 1,648,229 $ 21,084,342



Current Liabilities:


Accounts payable & accrued expenses
$ 673,977 $ - $ 21,464 $ 21,464 $ - $ 673,977

Notes payable - related party
517,243 105,105 105,105 517,243

Convertible notes payable
327,153 327,153

Deferred revenue
1,995,281 1,995,281

Other current liabilities
113,605 113,605

Current portion - long term debt
1,208,309 1,208,309

Total current liabilities
4,835,568 - 126,569 126,569 - 4,835,568


Long-Term Liabilities:


Notes payable
9,680,654 9,680,654


Total liabilities
$ 14,516,222 $ - $ 126,569 $ 126,569 $ - $ 14,516,222


Stockholders' Equity (Deficit):


Series A convertible preferred stock


($.001 parvalue; 2,000,000 shares authorized;


2,000,000 shares issued & outstanding)
$ 2,000 $ - $ - $ - $ - $ 2,000

Series B convertible preferred stock


($.001 parvalue; 71,210 shares authorized;


71,210 shares issued & outstanding)
71 71

Common stock


($.001 parvalue; 400,000,000 shares authorized;


57,699,917 shares issued & outstanding)
57,700 28,482 86,182

Additional paid in capital
14,209,518 13,585,672 27,795,190

Accumulated earnings (deficit)
(6,124,546 ) (13,669,117 ) 2,087,301 565,641 (21,315,323 )

Total shareholders' equity (deficit)
8,144,743 - (54,963 ) 2,087,301 565,641 6,568,120


Total Liabilities & Stockholders Equity (Deficit)
$ 22,660,965 $ - $ 71,606 $ 2,213,870 $ 565,641 $ 21,084,342








7











Pro Forma Adjustments


HTSHC

MWD

BCKE

Debit

Credit

Pro Forma



Revenue:


Sales
$ 4,133 $ - $ 4,133

Services
1,660,378 4,251,674 5,912,052

Licensing fee - related party
6,678 6,678 -

Total revenue
1,664,511 4,251,674 6,678 6,678 - 5,916,185


Cost of Sales/Services


Cost of Sales/Services
1,063,564 2,524,064 3,587,628

Depreciation
211,684 486,972 635,052 486,972 846,736

Total cost of sales/services
1,275,248 3,011,036 - 635,052 486,972 4,434,364


Gross profit
389,263 1,240,638 6,678 641,730 486,972 1,481,821


Operating expenses:


Sales, general & adminstrative expense
843,171 690,383 10,485 10,485 1,533,554

Depreciation & amortization
482,129 17,028 1,445,571 17,028 1,927,700

Total operating expenses
1,325,300 707,411 10,485 1,445,571 27,513 3,461,254


Income (Loss) from Operations
(936,037 ) 533,227 (3,807 ) 2,087,301 514,485 (1,979,433 )


Other Income (Expense):


Interest expense
(48,569 ) (183,205 ) (231,774 )

Total other income (expense)
(48,569 ) (183,205 ) - - - (231,774 )


Net Income (Loss)
$ (984,606 ) $ 350,022 $ (3,807 ) $ 2,087,301 $ 514,485 $ (2,211,207 )








8









depreciation & amortization






depreciation:


actual, 2 months ending 06/30/2014
218,814

6 months
656,442

admin
21390

cos
635,052


amortization:


customer list - 5 years
14,007,452 1,400,745 466915.1

finance charges - 3 years
50,613 8,436 2811.833

non-compete - 5 years
150,000 15,000 5000

2,080,623 474726.9





9





Exhibit 10.1







EMPLOYMENT AGREEMENT




This Employment Agreement (the “Agreement”) is made and entered into as of November 5 th , 2013 by and between Here to Serve Holding Corp. (the “Company”), a Corporation organized and existing under the laws of the State of Delaware (the “Company”), and Jeffrey S. Cosman (“Executive”).



RECITALS



Executive developed or co-developed the concept, strategy, direction, and management team for and on behalf of the Company. Executive desires to continue his employment with the Company, and the Company desires to continue Executive’s employment, on the terms and subject to the conditions set forth in this Agreement.



In consideration of the mutual promises set forth in this Agreement the parties hereto agree as follows:



ARTICLE I



Term of Employment





1.01

Subject to the provisions of Article V, and upon the terms and subject to the conditions set forth herein, the Company will employ Executive for the period beginning November 15 th , 2013 (the “Commencement Date”) and ending on December 31, 2016, (the “Initial Term”). The Initial Term shall be automatically renewed for successive consecutive one- (1-) year periods (each, a “Renewal Term” and the Initial Term and Renewal Term are collectively referred to a the “term of employment”) thereafter unless either party sends notice to the other party, not more than 270 days and not less than 180 days before the end of the then-existing term of employment, of such party’s desire to terminate the Agreement at the end of the then-existing term, in which case this Agreement will terminate at the end of the then-existing term. Executive will serve the Company during the term of employment.




ARTICLE II



Duties



2.01 (a) During the term of employment, Executive will:



(i) Promote the interests, within the scope of his duties, of the Company and devote his full working time and efforts to the Company’s business and affairs;



(ii) Serve as the Chairman of the Board of Directors of the Company and as Chief Executive Officer of the Company;



(iii) Perform the duties and services consistent with the title and function of such office, including without limitation, those set forth in the By-Laws of the Company; and



















(b) Executive shall serve at the Company’s principal headquarters located in its current offices or those within a twenty (20) mile radius as determined by the Company’s Board of Directors.



(c) Notwithstanding anything contained in clause 2.01(a)(i) above to the contrary, nothing contained herein or under law shall be construed as preventing Executive from (i) investing Executive’s personal assets in such form or manner as will not require any services on the part of Executive in the operation or the affairs of the companies in which such investments are made and in which his participation is solely that of an investor; (ii) engaging (whether or not during normal business hours) in any other professional, civic, or philanthropic activities provided that Executive’s engagement does not result in a violation of his covenants under this Section or Article VI hereof; or (iii) accepting appointments to the boards of directors of other companies provided that the Board of Directors of the Company reasonably approves of such appointments and Executive’s performance of his duties on such boards does not result in a violation of his covenants under this Section or Article VI hereof.





ARTICLE III





Base Compensation



3.01 The Company will compensate Executive for the duties performed by him hereunder by payment of a base salary at the rate of FIVE HUNDRED THOUSAND AND NO/100THS DOLLARS ($500,000.00) per annum (the “Base”), payable in equal semi-monthly installments, subject to customary withholding for federal, state, and local taxes and other normal and customary withholding items. The Base will be increased on January 1 of each year by five percent (5%) per annum (which figure shall act as a surrogate for the service cost of living increases) over the then-existing Base. It is further understood that other than five thousand dollars ($5,000.00) per month, the remaining compensation package will accrue until a minimum funding of the Corporation of two hundred and fifty thousand dollars ($250,000.00). At such time the compensation will be paid on a regular basis and the accrued sums will be deemed due and payable.



3.02 If the Company is unable to make a semi-monthly installment within two months of the date upon which it is due, then interest shall accrue and be paid on such semi-monthly installment at a rate of 18% per annum.



3.03 Cash Bonus . In addition to the Base, the Company shall pay to the Executive a bonus determined by the relationship between the Company’s annual performance and an annual target performance set each year by mutual agreement between the Company and the Executive as follows:










% of Target

> 150%

149-120%

119-100%

99-80%

79-60%

Under 60%


% of Base Salary

150%

149-120%

119-100%

60%

30%

0%







3.04 Stock Bonus. Executive shall be entitled to an annual bonus, payable in restricted common stock of the Company, based upon acquisitions by the Company or its subsidiaries of substantially all the assets of existing businesses or of controlling interests in existing business entities during each calendar year of this Agreement. The bonus shall be calculated as of January 15 th of each year of this Agreement based upon transactions which took place in the immediately preceding calendar year. The bonus shall be calculated as follows: The dollar value of the bonus shall be calculated by multiplying the sum of the purchase prices of all transaction in which the Company or any of its subsidiaries acquired substantially all of the assets of any existing business or the controlling interest in any existing business entity during the immediately preceding year by .05. The dollar value of such bonus shall then be divided by the average closing bid price (as reported by The OTC or Electronic Bulletin Board) of the common stock of the Company for the five (5) consecutive trading days ending on the last trading day of the previous calendar year. The resulting calculation shall be the number of restricted commons shares of the Company which shall be issued to the Executive. The calculations described above shall be made by no later than January 15 th of the year following the calendar year for which the calculations are based and the shares shall be issued to the Executive within 15 days of the calculation having been completed.




















ARTICLE IV





Reimbursement and Employment Benefits



4.01 Health and Other Medical . Executive shall be eligible to participate in all health, medical, dental, and life insurance employee benefits as are available from time to time to other key executive employees (and their families) of the Company, including a Life Insurance Plan, Medical and Dental Insurance Plan, and a Long Term Disability Plan (the “Plans”), the terms of which are set forth on Schedule 4.01. The Company shall pay all premiums with respect to such Plans. To the extent that such reimbursement is deemed to be includable in Executive’s gross income, the Company shall pay to the Executive the Tax Effect (as defined herein) of such sum (e.g., if the reimbursement is $1000.00, then the Company would pay to the Executive the sum of $666.67, which is $1000 divided by the Tax Effect (assuming a 40% rate), and subtracting the amount reimbursed). “Tax Effect” shall mean the quotient of the amount reimbursed divided by 0.54.



4.02 Vacation . Executive shall be entitled to five (5) weeks of vacation and twelve (12) personal days per year, to be taken in such amounts and at such times as shall be mutually convenient for Executive and the Company. Any time not taken by Executive in one year shall be carried forward to subsequent years. If all such vacation and personal time to which Executive is entitled is not taken by Executive before the termination of this Agreement, Executive shall be entitled to be reimbursed upon termination (for any reason) for such lost time in accordance with the Base then in effect.



4.03 Performance-Enhancing Items . Executive shall be entitled to receive from the Company (a) an annual car allowance up to Twelve Thousand Dollars ($12,000.00) per annum, and (b) reimbursement by the Company for home office expenses including without limitation the purchase and maintenance of a home computer with linkup facilities to the Company, a home facsimile, printer and scanner, interconnection of two telephone or cable connections to the Internet, laptop computer, portable mobile phone, together with any charges for the use thereof. To the extent that any and all such reimbursements or payments by the Company are includable in Executive’s gross income, then the Company shall, on or before June 1 of the year after the payment is made, pay the Tax Effect thereof to the Executive.



4.04 Reimbursable Expenses . The Company shall in accordance with its standard policies in effect from time to time reimburse Executive for all reasonable out-of-pocket expenses actually incurred by him in the conduct of the business of the Company including business class air travel for flights of 4 hours or more, quality hotels and rental cars, entertainment and similar executive expenditures provided that Executive submits all substantiation of such expenses to the Company on a timely basis in accordance with such standard policies.



4.05 Savings Plan . Executive will be eligible to enroll and participate, and be immediately vested in, all Company savings and retirement plans, including any 401(k) plans. To the extent permissible by law, the Company shall match in cash fifty percent (50%) of all of Executive’s contributions to such plan or plans. To the extent that any and all such reimbursements or payments by the Company are includable in Executive’s gross income, then the Company shall, on or before June 1 of the year after the payment is made, pay the Tax Effect thereof to the Executive.

















4.06 Life Insurance . The Company shall pay all premiums for Executive to receive on his life (a) term life insurance premiums paid by Executive on his own life, provided that the life insurance proceeds do not exceed 300% of Executive’s previous year’s Base and Bonus and (b) split dollar life insurance in the face amount of $1 million, it being understood that Executive may designate the beneficiary (or beneficiaries) of such policies. To the extent that any and all such reimbursements or payments by the Company are includable in Executive’s gross income, then the Company shall, on or before June 1 of the year after the payment is made, pay the Tax Effect thereof to the Executive.



4.07 Directors and Officers Liability Insurance . The Company will provide liability insurance coverage protecting Executive and his estate, to the extent permitted by law against suits by fellow employees, shareholders and third parties and criminal and regulatory investigations arising out of any alleged act or omission occurring with the course and scope of Executive’s employment with the Company. Such insurance will be in an amount not less than two million dollars.



4.08 Financial Planning . The Company shall reimburse Executive for all legal, and accounting costs, fees, and expenses incurred each year by Executive in connection with (a) income tax preparation and (b) estate planning, provided that the aggregate annual expenses to be reimbursed shall not exceed Ten Thousand Dollars ($10,000.00). To the extent that any and all such reimbursements or payments by the Company are includable in Executive’s gross income, then the Company shall, on or before June 1 of the year after the payment is made, pay the Tax Effect thereof to the Executive.



4.09 Legal Costs . The Company shall reimburse Executive for all of his reasonable legal costs, fees, and expenses incurred in connection with the preparation and negotiation of this Agreement, such reimbursable sum of fees not to exceed Five Thousand Dollars ($5,000.00). To the extent that any and all such reimbursements or payments by the Company are includable in Executive’s gross income, then the Company shall, on or before June 1 of the year after the payment is made, pay the Tax Effect thereof to the Executive.



4.10 Outplacement . In the event of the termination of this Agreement for any reason except for Cause, the Company shall pay the reasonable costs of an outplacement agency designated by Executive for a one- (1-) year period.



ARTICLE V



Termination



5.01 Automatic . This Agreement shall be automatically terminated upon the first to occur of the following (a) the Company’s termination pursuant to section 5.02, (b) the Executive’s termination pursuant to section 5.03 or (c) the Executive’s death.



5.02 By the Company . This Agreement may be terminated by the Company upon written notice to the Executive upon the first to occur of the following:



(a) Disability . Upon the Executive’s Disability (as defined herein). The term “Disability” shall mean the Executive’s absence from work due to a physical or mental illness or disability for a consecutive period of one hundred eighty (180) days in any one (1) year period.



(b) Cause . Upon the Executive’s commission of Cause (as defined herein). The term “Cause” shall mean the following:



(i) Any willful violation by Executive of any material provision of this Agreement (including without limitation Sections 6.01 and 6.02 hereof) causing demonstrable and serious injury to the Company, upon written notice of same by the Company describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.02(b)(i), which breach, if capable of being cured, has not been cured within sixty (60) days after such notice or such longer period of time if Executive proceeds with due diligence not later than ten (10) days after such notice to cure such breach;















ii) Embezzlement by Executive of funds or property of the Company;



(iii) Fraud or willful misconduct on the part of Executive in the performance of his duties as an employee of the Company, or gross negligence on the part of Executive in the performance of his duties as an employee of the Company causing demonstrable and serious injury to the Company, provided that the Company has given written notice of such breach which notice describes in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.02(b)(iii), and which breach, if capable of being cured, has not been cured within sixty (60) days after such notice or such longer period of time if Executive proceeds with due diligence not later than ten (10) days after such notice to cure such breach; or



(iv) A felony conviction of Executive under the laws of the United States or any state (except for any conviction based on a vicarious liability theory and not the actual conduct of the Executive).



Upon a termination for Cause, the Company shall pay Executive his Base and benefits including vacation pay through the date of termination of employment; and Executive shall receive no severance under this Agreement.



5.03 By the Executive . This Agreement may be terminated by the Executive upon written notice to the Company upon the first to occur of the following:



(a) Change in Control . Upon the occurrence of a “Change in Control” (as defined herein) of the Company. The term “Change in Control” shall mean any of the following: (i) a replacement of more than one half of the Board of Directors of the Company, (ii) a sale of more than one half of the voting securities of the Company (or the entity ultimately owning or controlling such Company) or the sale or exchange of all or substantially all of the assets of either such Company, (iii) a merger or consolidation involving either such entity where the entity is not the survivor in such merger or consolidation (or the entity ultimately owning or controlling such entity), (iv) a liquidation, winding up, or dissolution of either such entity or (v) an assignment for the benefit of creditors, foreclosure sale, voluntary filing of a petition under the Bankruptcy Reform Act of 1978, or an involuntary filing under such act which filing is not stayed or dismissed within 45 days of filing.



(b) Constructive Termination . Upon the occurrence of a “Constructive Termination” (as defined herein) by the Company. The term “Constructive Termination” shall mean any of the following:



(i) Any breach by the Company of any material provision of this Agreement, including, without limitation, the assignment to the Executive of duties inconsistent with his position specified in Section 2.01 hereof or any breach by the Company of such Section, which is not cured within 60 days after written notice of same by Executive, describing in detail the breach asserted and stating that it constitutes notice pursuant to this Section 5.03;



(ii) Relocation of Executive’s offices in excess of 20 miles from its current headquarters office location; or



(iii) A substantial and continued reduction in the level of support, services, staff, secretarial resources, office space, and accoutrements below that which is reasonably necessary for the performance of Executive’s duties hereunder, consistent with that of other key executive employees.



















5.04 Consequences of Termination . Upon any termination of Executive’s employment with the Company, except for a termination for Cause, the Executive shall be entitled to (a) a payment equal to the greater of (i) three (3) years or (ii) the length of the remaining term hereof worth of the then-existing Base and the last year’s Bonus (the “Severance”) and (b) retain the benefits set forth in Article IV for the balance of the term. If the Severance is equal to the amount set forth in clause (ii), the Company shall also pay to Executive in a timely fashion any excise and other penalties and taxes as a result of section 280G of the Internal Revenue Code of 1986 as amended (or such replacement or successor provision and applicable state law counterpart). The Severance shall be paid, at Executive’s option, either (x) in a lump sum upon termination with such payments discounted by the U.S. Treasury rate most closely comparable to the applicable time period left in the Agreement or (y) as and when normal payroll payments are made (except in the case of the Bonus which shall be payable in a lump sum between January 1 and January 10 of each year).



ARTICLE VI



Covenants



6.01 Executive shall treat as confidential and keep secret the affairs of the Company and shall not at any time during the term of employment or for a period of five years thereafter, without the prior written consent of the Company, divulge, furnish, or make known or accessible to, or use for the benefit of, anyone other than the Company and its subsidiaries and affiliates any information of a confidential nature relating in any way to the business of the Company or its subsidiaries or affiliates or their clients and obtained by him in the course of his employment hereunder; provided, however, that confidential information of the Company shall not include any information known or available generally to the public (other than as a result of unauthorized disclosure by Executive).



6.02 All records, papers, and documents kept or made by Executive relating to the business of the Company or its subsidiaries or affiliates or their clients shall be and remain the property of the Company.



6.03 Following the termination of Executive’s employment hereunder for any reason except for those set forth in section 5.03 in which event this section is inapplicable, Executive shall not for a period of twelve (12) months from such termination, solicit any employee of the Company to leave such employ to enter the employ of Executive or of any person, firm, or Company with which Executive is then associated (except solicitation by general means such as newspapers).



6.04 If at the time of enforcement of any provision of this Agreement, a court shall hold that the duration, scope, or area restriction of any provision hereof is unreasonable under circumstances now or then existing, the parties hereto agree that the maximum duration, scope, or area reasonable under the circumstances shall be substituted by the court for the stated duration, scope, or area.



6.05 Executive acknowledges that any breach by him of the provisions of this Article VI of this Agreement shall cause irreparable harm to the Company and that a remedy at law for any breach or attempted breach of Article VI of this Agreement will be inadequate, and agrees that, notwithstanding Article VIII hereof, the Company shall be entitled to exercise all remedies available to it, including specific performance and injunctive and other equitable relief, in the case of any such breach or attempted breach.



6.06 The Company represents and warrants that this Agreement has been duly authorized, executed, and delivered on behalf of the Company and that this Agreement represents the legal, valid, and binding obligation of the Company and does not conflict with any other agreement binding on the Company.



ARTICLE VII



Assignment



7.01 This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company without relieving the Company of its obligations hereunder. Neither this Agreement nor any rights hereunder shall be assignable by Executive and any such purported assignment by him shall be void.



















ARTICLE VIII



Entire Agreement



8.01 This Agreement constitutes the entire understanding between the Company and Executive concerning his employment by the Company or subsidiaries and supersedes any and all previous agreements between Executive and the Company or any of its affiliates or subsidiaries concerning such employment, and/or any compensation, bonuses or incentives. Each party hereto shall pay its own costs and expenses (including legal fees) except as otherwise expressly provided herein incurred in connection with the preparation, negotiation, and execution of this Agreement. This Agreement may not be changed orally, but only in a written instrument signed by both parties hereto.



ARTICLE IX



Applicable Law; Miscellaneous



9.01 This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia. All actions brought to interpret or enforce this Agreement shall be brought in courts located in Cobb County, Georgia.



9.02 In addition to all other rights and benefits under this Agreement, each party agrees to reimburse the other for, and indemnify and hold harmless such party against, all costs and expenses (including attorney’s fees) incurred by such party (whether or not during the term of this Agreement or otherwise), if and to the extent that such party prevails on or is otherwise successful on the merits with respect to any action, claim, or dispute relating in any manner to this Agreement or to any termination of this Agreement or in seeking to obtain or enforce any right or benefit provided by or claimed under this Agreement, taking into account the relative fault of each of the parties and any other relevant considerations.



9.03 The Company shall indemnify and hold harmless Executive to the full extent authorized or permitted by law with respect to any claim, liability, action, or proceeding instituted or threatened against or incurred by Executive or his legal representatives and arising in connection with Executive’s conduct or position at any time as a director, officer, employee, or agent of the Company or any subsidiary thereof. The Company shall not change, modify, alter, or in any way limit the existing indemnification and reimbursement provisions relating to and for the benefit of its directors and officers without the prior written consent of the Executive, including any modification or limitation of any directors and officers liability insurance policy.



9.04 No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a continuing waiver or a waiver of any similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party hereto which are not set forth expressly in this Agreement.



9.05 The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.



9.06 This Agreement may be executed in several counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.



9.07 The section headings contained in this Agreement are inserted for reference purposes only and shall not affect the meaning or interpretation of this Agreement.



















IN WITNESS WHEREOF , the parties have executed this Agreement as of the date first written above.








Here To Serve Holding Corp.




By:
/s/ Jeffrey S. Cosman
Jeffrey S. Cosman
Chairman







Here To Serve Holding Corp.




By:
/s/ Jeffrey S. Cosman
Jeffrey S. Cosman
CEO









Exhibit 3.12