For investors in SCRH/SCORES HOLDING, a list of things to know about your company is posted below. SCRH is ramping up operations/Revenue/expansion and it is expected that expenses will increase during this period. Also, only 16 of the present 26 clubs were producing revenue for THE COMPANY at the end of 2015. As additional clubs meet the company guidelines for royalty payments, the number of revenue producing clubs will dramatically increase. During periods of growth and expansion and turnaround of the business plan, no company is going to pay a dividend to share holders of any stock. (Stated below). SCRH needs all of its money to invest in and develop name brand. Investors should experience an ROI in the very near future with this activity of MR. Gans to increase investor return.
(This information was gleaned from the Investor Letter page of scoresholding.com and the last financial report and is available for all to read)
On September 30, 2015, the last business day of the registrant’s most recently completed third fiscal quarter, 76,285,894 shares of its common stock, $0.001 par
value per share (its only class of voting or non-voting common equity) were held by non-affiliates of the registrant. The market value of those shares was
$2,509,806, based on the last sale price of $0.0329 per share of the common stock on that date. Shares of common stock held by each officer and director and by
each shareowner affiliated with a director have been excluded from this calculation because such persons may be deemed to be affiliates. This determination of
officer or affiliate status is not necessarily a conclusive determination for other purposes.
As of March 14, 2016, there were 165,186,144 shares of the registrant's common stock, par value $0.001, issued and outstanding.
Competition
The adult nightclub entertainment business is highly competitive with respect to price, service, location and professionalism of its entertainment. Sublicensed
clubs will compete with many locally-owned adult nightclubs. It is our belief, however, that only a few of these nightclubs have names that enjoy recognition
and status equal to the Scores brand. For example, there are approximately 25 adult entertainment cabaret night clubs within the five boroughs of New York
City; approximately six upscale located in the borough of Manhattan. We believe only three (Rick’s Cabaret, Hustler and Penthouse) provide the most
competitive adult entertainment experience to that of our brand and our New York affiliate. Other localities where our “Scores” brand is licensed have similar
competitive environments. Penthouse is a related-party competitor due to the common control and ownership by our President and Chief Executive Officer,
Robert M. Gans, who owns 83% of Penthouse.
Dividends
We have never declared any cash dividends with respect to our common stock. Future payment of dividends is within the discretion of our Board of Directors
and will depend on our earnings, capital requirements, financial condition and other relevant factors. Although there are no material restrictions limiting, or that
are likely to limit, our ability to pay dividends on our common stock, we presently intend to retain future earnings, if any, for use in our business and have no
present intention to pay cash dividends on our common stock.
Revenues:
Revenues increased to $1,181,564 for the 2015 period from $835,240 for the 2014 period. This increase was primarily due to the launching of four new clubs
and 2 clubs paying royalties in arrears. Our licenses are structured such that we receive a percentage of revenues from our licensees, or a flat monthly rate.
Operating Expenses:
Operating expenses for the 2015 period and the 2014 period were $1,050,196 and $481,178 respectively. These expenses were for recording a reserve for bad
debt and directly related to the maintenance of the corporate entity and regulatory filing of periodic reports under the Securities Exchange Act of 1934 (the
“Exchange Act”). To comply with the requirements of the Sarbanes-Oxley Act, we expect these regulatory costs to increase in future years. Virtually all of the
63% increase in operating expenses can be attributed to our business development, legal costs and other executive administrative costs that changed during the
2015 period from the 2014 period, and are expected to increase in future periods due to the expansion of our brand into emerging markets.
Provision for Income Taxes:
The provision for income taxes relates primarily to average assets and capital which were not impacted by net operating losses.
Net Income per share:
Our net income for the 2015 year end was $83,837 or $.001 per share versus a net income of $450,148 or $.003 per share for the 2014 year end. During the
2015 period, we increased our royalty revenue by $346,324. Our net income decreased in 2015 by $366,311, primarily due to an increase in fees payable under
the management services agreement, payroll related to the new clubs opening and recording a reserve for bad debt. This change from the 2015 period to the
2014 period is based on net income available to common shareholders divided by the weighted average of the common shares outstanding.
In December 2015, the Company accrued $180,000 bonus to Robert Gans which was paid in February 2016.
Mr. Sabbeth’s compensation of $130,000 per year represents consulting fees. Mr. Sabbeth became an executive officer during 2015 It was time to pay the cost for being the boss. No one likes to work for nothing!
The Company earns predominately royalty revenues from 16 licensees. (2015)
