INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2014

NOTE 3 – INTANGIBLE ASSETS

In 2011, the Company paid $300,000 for the non-exclusive rights and license to use the Southern Hospitality system and Southern Hospitality licensed marks in connection with the operation of ten restaurants to be owned and operated by the Company under franchise and related area development agreements. These costs were allocable to each planned restaurant.

In September 2013, the Company terminated the Area Developer Agreement ("ADA") with the Franchisor. As a result of the termination of the ADA, the Company determined this event impaired the intangible asset, and a resulting impairment expense was recorded in the year ended December 31, 2013, of $250,000. The intangible asset at September 30, 2014, represents franchise license costs for the Denver restaurant (net of accumulated amortization of $8,125).

Amortization began in February 2013 with the opening of the Company's Denver-based restaurant, with amortization expense of $1,250 and $3,750 recorded for the three months and nine months ended September 30, 2014, respectively. Amortization expense for the next five years is estimated to be as follows:

2014 (remaining three months)	$	1,250
2015		5,000
2016		5,000
2017		5,000
2018		5,000
Thereafter		20,625
	$	41,875

The Company licenses the rights to the trademark "Bourbon Brothers" and certain intellectual property, as defined, from a related party, Bourbon Brothers LLC ("BBLLC), for the use in the Company's business operations. BBLLC has granted an exclusive license to use and to sublicense the tradename and intellectual property for an initial ten-year term. The agreement shall automatically renew for additional terms of ten-years each without any action required by either party. This license agreement does not require the payment of royalties or any other consideration.