Business Combinations

9 Months Ended

Sep. 30, 2011

Business Combinations

Business Combination Disclosure [Text Block]

4. Business Combinations

On May 14, 2010, the Company entered into a Purchase Agreement with a telecom and cable services provider. At this time, the Company made a deposit of $500,000 toward the purchase.  Under the terms of the agreement, Connected Lyfe would acquire for specified properties, (i) property rights of entry, (ii) network infrastructure, (iii) subscribers, (iv) certain regional assets, and (v) license to the telecom and cable services provider back office system for use on acquired subscribers and future subscribers of the subsidiary of the Company. On June 22, 2011 the Company completed the acquisition of the (i) property rights of entry, (ii) network infrastructure, (iii) subscribers, (iv) certain regional assets, and (v) license to the telecom and cable services provider back office system.  The Company accounted for the transaction as a business combination in accordance with ASC 805.

The estimated allocation of the purchase price was as follows:

Assets:
Property and equipment	$	73,040
Intangible assets		426,960
Total assets acquired		500,000
Total consideration	$	500,000

It is impracticable to disclose the pro forma revenues and expenses from the acquisition because the accounting is incomplete.  Additionally the allocation of purchase price to the assets acquired in the business combination is based on management’s best estimate of fair value of the acquired assets and will be adjusted when a full valuation is completed.  The estimates were based on the approximate values of the assets provided by the seller.  The accounting is incomplete at the time of this report due to the timing of the acquisition completed recently which does not allow sufficient time to complete a full valuation of the rights of entry, property, equipment, licenses, customers, and network infrastructure.

Two of the properties with an estimated value of $145,044 were returned to the seller and were recorded as a loss on disposal of assets. As of the date of the report, management has estimated the value of the remaining property rights of entry recorded as intangible assets with a five year life at $303,000 and the remaining infrastructure and equipment at $51,956 as of June 22, 2011. The business combination was a result of the acquisition of the assets from Ygnition Networks, a long-standing partner and operator in the MDU space. Services and subscribers from forty-three properties in seven cities in the US have been transferred to Lyfe Communications. The Company has plans to consolidate these operations and increase the number and type of services provided at these locations. This tends to increase the market share of the property, as the offerings are typically much stronger than what was typically offered.