Results of Operations
Three Months Ended September 30, 2014 (“the 2014 three-month period”) Compared to Three Months Ended September 30, 2013 (“the 2013 three-month period”).
Revenues:
Revenues increased to $225,393 for the 2014 three-month period from $187,861 for the 2013 three-month period.
Revenues from the New York Club decreased forty-eight percent (48%) to $20,748 as compared to $39,584 for the 2014 and 2013 three-month periods, respectively. Revenues from our Chicago nightclub increased fifteen percent (15%) to $44,936 for the 2014 three-month period from $38,970 from the 2013 three-month period; revenues from our Baltimore club increased one percent (1%) to $36,073 for the 2014 three-month period from $35,669 for the 2013 three-month period and revenues from our New Orleans club remained the same at $30,000 for the 2014 and 2013 three-month period. Revenue from our Tampa club remained the same at $30,000 for the 2014 and 2013 three-month period. Revenue from our Scoreslive.com licensee decreased thirty-four percent (34%) to $9,000 for the 2014 three-month period from $13,638 for the 2013 three-month period. Revenues from our Atlantic City nightclub licensee increased one hundred percent (100%) to $30,000 as royalties commenced April 2014. Revenues from our Jacksonville club increased one hundred percent (100%) to $10,000 as royalties commenced in September 2014. Revenues from our Savannah Club increased one hundred percent (100%) to $15,000 as royalties commenced in August 2014.
General and Administrative Expenses:
General and administrative expenses decreased during the 2014 three-month period to $110,444 from $122,768 during the 2013 three-month period. General and administrative expenses decreased approximately by $12,324 from 2014 to 2013, which the decrease can be attributed to the decrease in legal fees and accounting fees. Legal expenses attributable to ongoing litigation amounted to $30,038 for the three-month period ended September 30, 2014 and $42,033 for the three-month period ended September 30, 2013.
Provision for Income Taxes
The provision for state income taxes relates primarily to the greater of average assets and capital taxable income. The average assets and capital are not impacted by net operating losses.
Net Income:
Our net income was $114,611 or $0.001 per share for the 2014 three-month period compared to net income of $64,420 or $0.000 per share for the 2013 three-month period. The increase in net income for the 2014 three-month period was a result of the increase in royalty revenue due to the new clubs that commenced royalties in August and September 2014.
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Net income per share data for both the 2014 three-month period and the 2013 three-month period is based on net income available to common shareholders divided by the weighted average of the number of common shares outstanding.
Nine Months Ended September 30, 2014 (“the 2014 nine-month period”) Compared to Nine Months Ended September 30, 2013 (“the 2013 nine-month period”).
Revenues:
Revenues increased to $596,151 for the 2014 nine-month period from $542,809 for the 2013 nine-month period.
Revenues from the New York Club decreased thirty-two percent 32% to $78,816 as compared to $116,985 for the 2014 and 2013 nine-month periods, respectively. Revenues from our Chicago nightclub decreased less than one percent (<1%) to $110,250 for the 2014 nine-month period from $110,565 from the 2013 nine-month period, while revenues from our Baltimore club increased two percent (2%) to $108,415 for the 2014 nine-month period from $106,145 for the 2013 nine-month period and revenues from our New Orleans club remained the same at $90,000 for the 2014 and 2013 nine-month period. Revenue from our Tampa club remained the same at $90,000 for 2014 and 2013 nine month period. Revenue from our Scoreslive.com licensee increased sixteen percent (16%) to $33,640 for the 2014 nine-month period from $29,115 for the 2013 nine-month period. Revenues from our Atlantic City nightclub licensee increased one hundred percent (100%) to $60,000 as royalties commenced in April 2014. Revenues from our Jacksonville club increased one hundred percent (100%) to $10,000 as royalties commenced in September 2014. Revenues from our Savannah Club increased one hundred percent (100%) to $15,000 as royalties commenced in August 2014.
General and Administrative Expenses:
General and administrative expenses decreased during the 2014 nine-month period to $344,778 from $370,966 during the 2013 nine-month period. General and administrative expenses decreased approximately by $26,188 from 2014 to 2013, which decrease can largely be attributed to the decrease in the Company’s legal fees. Legal expenses attributable to ongoing litigation amounted from $121,866 in the 2014 nine-month period to $145,946 in the 2013 nine-month period.
Provision for Income Taxes:
The provision for state income taxes relates primarily to the greater of average assets and capital taxable income. The average assets and capital are not impacted by net operating losses.
Net Income:
Our net income was $347,275 or $0.002 per share for the 2014 nine-month period compared to a net income of $169,607 or $0.001 per share for the 2013 nine-month period. The increase in net operating income for the 2014 nine-month period was a result of an increase in royalty revenue and the settlement award from a lawsuit.
Net income per share data for both the 2014 nine-month period and the 2013 nine-month period is based on net income available to common shareholders divided by the weighted average of the number of common shares outstanding.
Liquidity and Capital Resources
Cash:
At September 30, 2014, we had $99,091 in cash and cash equivalents compared to $4,522 in cash and cash equivalents at December 31, 2013.
Operating Activities:
Net cash provided by operating activities for the nine months ended September 30, 2014 was $251,865 compared to $89,334 for the nine months ended September 30, 2013. The increase in cash is related to the settlement we received in March and June 2014.
Financing Activities:
As of September 30, 2014, we have repaid our Westside Realty affiliate $122,500 and $45,000 to our Metropolitan Lumber Hardware and Building Supplies, Inc. affiliate.
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