NOTE 1 – ORGANIZATION, RECENT EVENTS, BASIS OF PRESENTATION AND MANAGEMENT'S PLANS

Organization and Recent Events

Bourbon Brothers Holding Corporation ("BBHC" or the "Company") is a Colorado corporation. The Company, on January 22, 2014, with approval of a majority of the Company's shareholders, changed its name from Smokin Concepts Development Corporation to Bourbon Brothers Holding Corporation.

The Company's subsidiary, Southern Hospitality Franchisee Holding Corporation ("SH") entered into a franchise agreement and area development agreement with SH Franchising & Licensing LLC, dba Southern Hospitality BBQ (the "Franchisor") in November 2011. In May 2012, SH formed Southern Hospitality Denver Holdings, LLC ("SHDH"), a wholly-owned subsidiary, and Southern Hospitality Denver, LLC ("SHD"). SHD was formed for the purpose of owning and operating the Company's first franchised restaurant in Denver, Colorado. As of September 30, 2014, and December 31, 2013, SHD is 51% owned by SHDH and 49% owned by non-controlling interest holders, of which related parties of the company are 22% non-controlling interest holders.

On September 30, 2013, the Company entered into an Acquisition Agreement with Bourbon Brothers Holding Company, LLC ("BBHCLLC") to acquire all of the equity interests in BBHCLLC and its subsidiaries (the "BB Transaction"). BBHCLLC is a Colorado limited liability company ("LLC") formed in May 2013, for the purpose of developing and managing all aspects of operating units related to a recently developed "Bourbon Brothers" brand. The principals of BBHCLLC were also, at various times, on the board of directors of the Company, and therefore BBHCLLC is considered to be a related party. As of December 31, 2013, BBHCLLC was a development stage company. BBHCLLC's subsidiaries (all LLCs formed in April 2013) include Bourbon Brothers Restaurant Group, LLC ("BBRG"), Bourbon Brothers Franchise, LLC ("BBF") and Bourbon Brothers Brand, LLC ("BBB"). BBRG owns the stores to encompass several Bourbon Brothers brands, and owns Bourbon Brothers Southern Kitchen Colorado Springs, LLC ("BBSK"), which opened its first restaurant in January 2014, and for which BBSK is 51% owned by BBRG as of the date of the BB Transaction. BBRG also owns Bourbon Brothers Seafood and Chophouse Colorado Springs, LLC ("BBSF"). BBB manages all aspects of the Bourbon Brothers brand and anticipates establishing licensing and royalty agreements with producers of bourbon, spices, cigars and other products that fit the Company's core brand. In July 2014, the Company announced that the board of directors approved a third restaurant concept, 53 Peaks Local Kitchen, a Colorado-themed, casual dining restaurant, with the first location to be in Lone Tree, Colorado. This location is anticipated to open in the first quarter of 2015.

On January 22, 2014, the Company and BBHCLLC closed on the BB Transaction. On that date, the Company issued 20,274,193 shares of common stock to BBHCLLC Class B Non-Voting members and 18,242,687 shares of Series A Convertible Preferred Stock to BBHCLLC Class A Voting members. All outstanding options and warrants to acquire BBHCLLC units were assumed by the Company, applying a 1.82427 conversion ratio. The acquisition of BBHCLLC was accounted for using the purchase method of accounting. The purchase price was allocated among the assets acquired and liabilities assumed at their estimated fair values, which management believes approximates the net book value of the assets and liabilities.

The purchase price allocation is preliminary and subject to change, as a final analysis and review of all underlying assumptions and calculations used in the determination of the purchase price and the allocation, especially in consideration of the related party nature of the underlying transaction, has not yet been completed. The following table summarizes the estimated fair values of BBHCLLC's assets and liabilities acquired at the acquisition date (January 22, 2014):

Cash	$	869,907
Property and equipment		957,705
Other assets	`	270,955
Accounts payable and accrued expenses		(135,260	)
Purchase price (estimated fair value of common and preferred shares issued)
	$	1,963,307

The pro forma effects on the Company's consolidated results of operations for the nine months ended September 30, 2014, as if the acquisition had occurred on January 1, 2014, are not material. The pro forma effects of the acquisition related to the nine months ended September 30, 2013, as if the acquisition occurred at the beginning of the year, would have had no affect on revenues of $1,553,052, increased loss from operations to $2,587,844, increased net loss to $3,073,408 and increased net loss per share to $0.11, after giving effect to the pro forma adjustment to increase the weighted average number of common shares.

Basis of Presentation

Since inception through February 20, 2013, the Company devoted substantially all of its efforts to establishing its business. The Company's planned principal operations commenced on February 21, 2013, with the opening of the Southern Hospitality Denver restaurant. As a result, the Company was no longer considered to be a development stage enterprise as of February 21, 2013.

The unaudited consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and accounting principles generally accepted in the United States ("U.S. GAAP"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. A description of the Company's accounting policies and other financial information is included in the audited consolidated financial statements as filed with the SEC in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. Amounts as of December 31, 2013, are derived from those audited consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the annual audited financial statements, accounting policies and notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013, which has previously been filed with the SEC.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of September 30, 2014, and the results of operations and cash flows for the periods presented. All such adjustments include those that are of a normal recurring nature. The results of operations for the nine months ended September 30, 2014, are not necessarily indicative of the results that may be achieved for a full fiscal year and cannot be used to indicate financial performance for the entire year.

Management's Plans

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported a net loss of approximately $812,600, $2.86 million, $613,300 and $2.6 million for the three and nine month periods ended September 30, 2014 and 2013, respectively, and has an accumulated deficit of approximately $7.9 million at September 30, 2014. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company has devoted substantially all of its efforts to developing its business plan, raising capital, and opening and operating its Denver and Colorado Springs restaurants, as well as its planned Lone Tree, Colorado restaurant.

The Company began revenue generating activities in late February 2013, and in January 2014, BBHCLLC's restaurant, located in Colorado Springs, Colorado, opened and began generating revenues. The Company does not have a revolving loan agreement with any financial institution, nor can the Company provide any assurance it will be able to enter into any such agreement in the future, or be able to raise funds through a future issuance of debt or equity. The Company's continued implementation of its business plan is dependent on its future profitability and engaging in strategic transactions, or on additional debt or equity financing, which may not be available in amounts or on terms acceptable to the Company or at all. As a consequence, if the Company is unable to achieve and maintain profitability through current restaurant operations, enter into strategic transactions, or obtain additional financing in the near term, the Company may be required to delay its business plan implementation, which would have a material adverse impact on the Company.