Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 01, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | SCORES HOLDING CO INC | |
Entity Central Index Key | 831,489 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | SCRH | |
Entity Common Stock, Shares Outstanding | 165,186,144 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash | $ 8,532 | $ 515,994 |
Trade receivables - including affiliates, net of allowance of $396,807 and $266,807, respectively | 130,709 | 280,119 |
Prepaid expenses | 48,549 | 11,437 |
Total Current Assets | 187,790 | 807,550 |
TOTAL ASSETS | 187,790 | 807,550 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 76,506 | 255,509 |
Accrued expenses, related | 27,670 | 0 |
Security deposit payable | 35,000 | 35,000 |
Accrued income tax payable | 0 | 49,400 |
Deferred revenue | 52,000 | 48,000 |
Total Current Liabilities | 191,176 | 387,909 |
Deferred revenue | 41,167 | 20,500 |
TOTAL LIABILITIES | 232,343 | 408,409 |
Commitments and Contingencies (Note 7) | ||
STOCKHOLDERS' EQUITY /(DEFICIT) | ||
Preferred stock, $.0001 par value, 10,000,000 shares authorized, -0- issued and outstanding | 0 | 0 |
Common stock, $.001 par value; 500,000,000 shares authorized, 165,186,144 issued and 165,186,144 outstanding, respectively | 165,186 | 165,186 |
Additional paid-in capital | 5,783,117 | 6,058,117 |
Accumulated deficit | (5,992,856) | (5,824,162) |
Total stockholders' Equity/(Deficit) | (44,553) | 399,141 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 187,790 | $ 807,550 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Allowance for Doubtful Accounts Receivable, Current | $ 396,807 | $ 266,807 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 165,186,144 | 165,186,144 |
Common stock, shares outstanding | 165,186,144 | 165,186,144 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
REVENUES | ||||
Royalty Revenue | $ 242,606 | $ 392,279 | $ 479,344 | $ 614,267 |
Initiation Fee | 3,000 | 0 | 5,333 | 0 |
Total Revenue | 245,606 | 392,279 | 484,677 | 614,267 |
EXPENSES | ||||
General and Administrative Expenses | 308,421 | 125,266 | 643,684 | 316,891 |
INCOME(LOSS) FROM OPERATIONS | (62,815) | 267,013 | (159,007) | 297,376 |
OTHER INCOME/(EXPENSE) | ||||
Interest Income/(Expense), net | (161) | (63) | (348) | (220) |
TOTAL OTHER INCOME/(EXPENSE) | (161) | (63) | (348) | (220) |
NET INCOME(LOSS) BEFORE INCOME TAXES | (62,976) | 266,950 | (159,355) | 297,156 |
INCOME TAXES | 128 | 0 | 9,339 | 0 |
NET INCOME(LOSS) | $ (63,104) | $ 266,950 | $ (168,694) | $ 297,156 |
NET INCOME(LOSS) PER SHARE-Basic and Diluted (in dollars per share) | $ 0 | $ 0.002 | $ (0.001) | $ 0.002 |
WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING-Basic and Diluted (in shares) | 165,186,144 | 165,186,144 | 165,186,144 | 165,186,144 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income (Loss) | $ (168,694) | $ 297,156 |
Adjustments to reconcile net income to net cash provided by (used) in operating activities: | ||
Reserve for bad debts | 130,000 | 0 |
Changes in assets and liabilities: | ||
Licensee receivable | 19,410 | (144,430) |
Prepaid expenses | (37,112) | (16,825) |
Security deposit payable | 0 | 12,500 |
Accounts payable and accrued expenses | (179,003) | 737 |
Accrued expenses, related party | 27,670 | |
Accrued income tax payable | (49,400) | 0 |
Deferred revenue | 24,667 | 0 |
NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES | (232,462) | 149,138 |
CASH FLOW FROM INVESTING ACTIVITIES: | ||
Advances to related party | (275,000) | 0 |
NET CASH USED IN INVESTING ACTIVITIES | (275,000) | 0 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
Related party payables | 0 | 15,000 |
Settlement receivable | 0 | 23,781 |
Loan receivable | 0 | 34,844 |
Settlement payable | 0 | (28,654) |
Loan payable | 0 | (34,844) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 0 | 10,127 |
NET INCREASE/(DECREASE) IN CASH | (507,462) | 159,265 |
Cash and cash equivalents - beginning of year | 515,994 | 127,253 |
Cash and cash equivalents - end of year | 8,532 | 286,518 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the year for interest | 348 | 952 |
Cash paid for income taxes | $ 58,739 | $ 1,225 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Organization [Text Block] | Note 1. Organization BASIS OF PRESENTATION Scores Holding Company, Inc. and subsidiary (the “Company”) is a Utah corporation, formed in September 1981 and located in New York, NY. Originally incorporated as Adonis Energy, Inc., the Company adopted its current name in July 2002. The Company is a licensing company that utilizes the “SCORES” name and trademark for licensing options. The condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States. The consolidated financial statements of the Company include the accounts of Scores Licensing Corp. (“SLC”). Our condensed consolidated financial statements include our accounts, as well as those of our wholly-owned subsidiary. Certain prior period amounts have been reclassified to conform to the current period presentation. Our accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation of the condensed consolidated results of operations and financial position for the interim periods presented. All such adjustments are of a normal recurring nature. These unaudited condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2015. The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The results of operations for the six months ended June 30, 2016 are not necessarily indicative of the results to be expected for any other interim period or for the year ending December 31, 2016. |
Summary of Significant Accounti
Summary of Significant Accounting Principles | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary Of Significant Accounting Principles [Text Block] | Note 2. Summary of Significant Accounting Principles As of June 30, 2016 the Company has cumulative losses totaling $ (5,992,856) (3,386) (168,694) These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Concentration of Credit Risk The Company earns predominately royalty revenues and to a lesser extent merchandise sales from 26 licensees. With regards to 2016, concentrations of sales from 5 licensees range from 12 16 67 18 28 93 23 25 27 With regards to 2015, concentrations of sales from 7 licensees range from 10 14 82 15 25 61 10 15 21 25 The Company records revenues earned as royalties under its license agreements as they are earned over the term of the license agreements. The terms of the royalties earned under these license agreements vary from a flat monthly fee to a percentage of the revenues of the licensee on a monthly basis. If a license agreement is terminated, then the remaining unearned balance of the deferred revenues are recorded as earned if applicable. As a result of the tenuous nature of the gentlemen’s club industry in general and the resulting financial instability of several of our new licensees the company has implemented a policy of recognizing revenue for these specific entities as it is received rather than when it is earned. Once our relationship with them has been more firmly established and payments have been made regularly and on time we will report these revenues when earned. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Inter-company items and transactions have been eliminated in consolidation. The Company considers all highly liquid temporary cash investments, with a maturity of three months or less when purchased, to be cash equivalents. There are times when cash may exceed $ 250,000 Net income per share data for both the six-month periods ending June 30, 2016 and 2015 are based on net income available to common shareholders divided by the weighted average of the number of common shares outstanding. As of June 30, 2016, there are no outstanding stock equivalents. The carrying value of cash and accrued expenses, if applicable, approximate their fair values based on the short-term maturity of these instruments. The carrying amounts of debt were also estimated to approximate fair value. The Company utilizes the methods of fair value measurement as described in ASC 820 to value its financial assets and liabilities. As defined in ASC 820, fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. In August 2015, FASB issued Accounting Standards Update (“ASU”) No.2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” defers the effective date ASU No. 2014-09 for all entities by one year. Public business entities, certain not-forprofit entities, and certain employee benefit plans should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. All other entities may apply the guidance in ASU No. 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance in Update 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance in ASU No. 2014-09. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. In January 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) “ASU 2016 01 Recognition and Measurement of Financial Assets and Financial Liabilities“intended to improve the recognition and measurement of financial instruments. The ASU affects public and private companies, not-for-profit organizations, and employee benefit plans that hold financial assets or owe financial liabilities. The new guidance makes targeted improvements to existing GAAP by requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. Eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities. Eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, and requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The ASU on recognition and measurement will take effect for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The ASU permits early adoption of the own credit provision (referenced above). Additionally, it permits early adoption of the provision that exempts private companies and not-for-profit organizations from having to disclose fair value information about financial instruments measured at amortized cost. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. In April 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) “ASU 2016 10 Revenue from Contract with Customers ( Topic 606 ): identifying Performance Obligations and Licensing “ .The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments in this update are intended render more detailed implementation guidance with the expectation to reduce the degree of judgment necessary to comply with Topic 606. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update2014-09 by one year. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. All new accounting pronouncements issued but not yet effective or adopted have been deemed not to be relevant to us, hence are not expected to have any impact once adopted |
Related-Party Transactions
Related-Party Transactions | 6 Months Ended |
Jun. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 3. Related-Party Transactions Transactions with Common ownership affiliates: On January 24, 2006, the Company entered into a licensing agreement with AYA International, Inc. (“AYA”) granting AYA the right to use our trademarks in connection with its online video chat website, “Scoreslive.com.” The agreement with AYA provides for royalty payments to be made directly to the Company at the rate of 4.99 80 122,109 On January 27, 2009, the Company entered into a licensing agreement with its affiliate through common ownership I.M. Operating LLC (“IMO”) for the use of the Scores brand name “Scores New York”. Robert M. Gans is the majority owner ( 72 2 144,698 The Company also leases office space directly from Westside Realty of New York, Inc. (WSR), the owner of the West 27 th 80 2,500 0 0 Effective January 1, 2013, the Company entered into a management services agreement with Metropolitan Lumber Hardware and Building Supplies, Inc., pursuant to which Metropolitan Lumber Hardware and Building Supplies, Inc. provides management and other services to the Company, including the services of Robert M. Gans and Howard Rosenbluth to act as executive officers of the Company. In consideration of the services, the Company paid Metropolitan Lumber Hardware and Building Supplies, Inc. a fee in the amount of $ 30,000 90,000 0 0 The Company has accrued expenses of $ 27,670 27,670 0 During the quarter, the Company has made advances to Starlin LLC and Metropolitan Lumber, Hardware & Building Supplies, Inc. as short term loans totaling $275,000. It should be noted both of the loans were repaid on July 29, 2016. Both of these entities are under the common control of Mr. Robert Gans, our President and Chief Executive Officer. At June 30, 2016 amounts due from these related parties amounted to $ 225,000 50,000 Company accounted for and presented the advances due from related parties as a reduction of stockholders' equity in accordance with the guidance of ASC 505-10-45. It is possible that these advances by the Company to related parties could be deemed to be in violation of Section 402 of the Sarbanes-Oxley Act of 2002. However, the Company has not made a determination as of the date hereof if the advances resulted in a violation of that provision. If, however, it is determined these advances violated the prohibitions of Section 402 from making loans to executive officers or directors, the Company could be subject to investigation and/or litigation that could involve significant time and costs and may not be resolved favorably. The Company is unable to predict the extent of its ultimate liability with respect to these transactions. The costs and other effects of any future litigation, government investigations, legal and administrative cases and proceedings, settlements, judgments and investigations, claims and changes in this matter could have a material adverse effect on the Company's financial condition and operating results. In December 2015, the Company accrued a $ 180,000 Effective December 9, 2013, we granted an exclusive, non-transferable license for the use of the “Scores Atlantic City” name to Star Light Events LLC (“Star Light”) for its gentlemen’s club in Atlantic City, New Jersey. Royalties under this license are payable at the rate of $ 10,000 Starlight will purchase the licensed products from us or our affiliates at our cost plus 25% 92.165 1 130,000 On December 9, 2013, the Company entered into a license agreement with its subsidiary, SLC, granting SLC the exclusive right to use certain trademarks, including the “Scores” stylized trademark, in connection with certain goods and services. The grant of license also includes the right to issue sublicenses to third parties, subject to the approval of the Company. Pursuant to the agreement, SLC shall pay to the Company a royalty, as determined by the Company, such as a percentage of net revenue or a flat fee, received in connection with the provision of services and/or sale of goods using the trademarks. SLC may also pay a percentage, as determined by the Company, of all royalties received by SLC under any sublicense agreements. SLC and any sublicensees are to adhere to quality standards as set by the Company, and the Company has the right to inspect all facilities and approve all promotional and marketing materials as well as any related packaging. The agreement has a one-year term with automatic one-year renewals, subject to either party’s election to terminate the agreement at least thirty days prior to such renewal. The Company also has the right to terminate the agreement, with immediate effect, upon the occurrence of certain events. The license is subject to any pre-existing license agreements as of the date of the agreement. The total amounts due to the various related parties as of June 30, 2016 and December 31, 2015 was $ 27,670 180,000 671,807 396,807 |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets [Text Block] | Note 4. Intangible Assets Trademark In connection with the acquisition of Scores Licensing Company (“SLC”) as discussed above, the Company acquired the trademark to the name "SCORES". This trademark had a gross recorded value at December 31, 2008 of $ 878,318 250,000 . The Company believes that the carrying amount of the “Scores” trademark exceeds its fair or net present value as of June 30, 2016 and December 31, 2015. |
Licensees
Licensees | 6 Months Ended |
Jun. 30, 2016 | |
Licenses [Abstract] | |
Licenses Disclosure [Text Block] | Note 5. Licensees The Company has 26 license agreements which were obtained between 2003 and 2016; Stone Park Entertainment Group, Inc. known as “Scores Chicago”, Club 2000 Eastern Avenue Inc. known as “Scores Baltimore”, Silver Bourbon, Inc. known as “Scores New Orleans”, I.M Operating LLC known as “Scores New York”, Tampa Food and Entertainment Inc. known as “Scores Tampa”, Norm A Properties, LLC known as “Scores Detroit”, Swan Media Group, Inc. (formerly AYA International, Inc.) known as “Scores Live”, South East Clubs, LLC (which includes “Scores Savannah” and “Scores Jacksonville”), Starlight Events LLC known as “Scores Atlantic City”, Scores Licensing Corp known as “SLC”, Houston KP LLC known as “Scores Houston”, Parallax Management Corporation known as “Scores Gary”, Manhattan Fashions, LLC known as “Scores Harvey”, TWDDD, Inc. known as “Scores Mooresville”, High Five Management Inc. known as “Scores Greenville”, CG Consulting LLC known as “Scores Columbus”, Dick Shappy known as “Scores Providence”, Funn House Productions LLC known as “Scores New Haven”, Palm Springs Grill LLC known as “Scores Palm Springs”, CJ NYC Inc, known as “Scores Queens”, Mideast Mountain Communications, Inc. known as “Scores Denver”, Cary Golf & Travel Inc. known as “Scores Raleigh”, 5111 Genesee St Inc. known as “Scores Tiffany Buffalo”, Mustang Sally’s Spirits and Grill, Inc. known as “Scores Tonawanda Buffalo”, Bonkers Space Coast, Inc. known as “Scores Green Bay” and NEW 4125 LLC known as “Scores Phoenix”. See Note 10 for litigation relating to a few of these clubs. “IMO’s” members are our majority shareholder, Robert M. Gans ( 72 2 80 0 8 80 0 1 92.165 0 8 |
Deferred Revenue
Deferred Revenue | 6 Months Ended |
Jun. 30, 2016 | |
Deferred Revenue [Abstract] | |
Deferred Revenue Amortization Life [Text Block] | Note 6. Deferred Revenue License agreements sometimes include Initiation/Inception Fees. These fees are recorded as deferred revenue and amortized over the life of the agreements, usually five years. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 7. Commitments and Contingencies The Company records $ 7,500 The Company currently leases office space from the Westside Realty of New York which is owned and operated by Robert Gans our majority shareholder, for $ 2,500 On or about March 7, 2014, Kiana Love, a former entertainer and masseuse at The Penthouse Executive Club and Scores New York, both located in New York, NY, filed a civil lawsuit in the SDNY against us, The Executive Club, LLC, Go West Entertainment, Inc., Scores Entertainment, Inc., Entertainment Management Services, Inc., 333 East 60th Street., Inc., I.M. Operating, LLC, Richard Goldring, Elliot Osher, Robert Gans and Mark Yackow (collectively “Defendants”), alleging, for the time during which she performed as a masseuse, violations of the state and federal wage and hour laws, including the New York Labor Law and Fair Labor Standards Act, based upon allegations of failure to pay minimum wage, uniform related expenses, and allegations of improper wage deductions and tip misappropriation as well as record keeping violations. The lawsuit further alleged that at all material times Defendants were employers of Ms. Love, the plaintiff, while she performed massage services at Scores New York as well as The Penthouse Executive Club. The lawsuit sought unspecified compensatory damages for plaintiff’s alleged loss of past wages and reimbursement of allegedly unlawful deductions. Without any party admitting liability, the parties settled the referenced litigation for approximately $21,403.65. The settlement was approved by the Court on April 13, 2015 On February 13, 2015 we, together with our subsidiary SLC, filed an action against Southeast Show Clubs, LLC and Michael Tomkovich in the Supreme Court of the State of New York for the County of New York. Defendants had utilized the “Scores” name and trademark in connection with their ownership and operation of adult entertainment clubs in Jacksonville and Palm Beach, Florida and in Savannah, Georgia. In this action we sought damages for breach of contract in the amount of $900,000 plus interest, damages due to defamation and tortuous interference in connection with the use of the “Scores” trademark in the amount of $500,000 Pursuant to the settlement, defendants agreed to pay us $150,000, payable in 13 installments. The first installment of $50,000 was paid upon finalization of the settlement, with 12 subsequent monthly payments of $8,333.33 commencing on May 1, 2015. 5,000 On February 19, 2015 we, together with our subsidiary SLC, filed an action against Norm A Properties LLC in the Supreme Court of the State of New York for the County of New York. Defendant utilizes the “Scores” name and trademark in connection with its ownership and operation of and adult entertainment club in Detroit, Michigan. In this action we sought damages for breach of contract in the amount of $ 110,000 On March 14, 2016 three individuals purporting to be adult entertainers who performed at Scores New York commenced a lawsuit in the SDNY on behalf of themselves and a putative collective and class. The defendants in the action, in addition to us, include IMO, Robert Gans and Mark Yackow. The lawsuit alleges violation of federal and state wage and hour laws, including, inter alia On April 3, 2016, fifty (50) individuals purporting to be professional models and/or actresses, filed a civil suit in the United States District Court for the Southern District of New York against the Company, I.M. Operating, LLC, The Executive Club, LLC, and Robert M. Gans (collectively, “Defendants”), alleging images of the plaintiffs were used without their consent for commercial purposes on websites and social media outlets to promote gentlemen’s clubs operated by the Defendants or licensees of the Defendants. The lawsuit further alleges that the unauthorized use of these images created, among other things, the false impression that these individuals either worked at, or endorsed, one or more of such clubs. The lawsuit asserts causes of action under Section 43 of the Lanham Act, 28 U.S.C. § 1125(a)(1), premised on a theory of false endorsement and/or association; New York Civil Rights Law §§ 50-51; New York’s Deceptive Trade Practices Act, New York General Business Law § 349; defamation; as well as various common law torts, namely negligence, conversion, unjust enrichment and quantum meruit There are no other material legal proceedings pending to which the Company or any of its property is subject, nor to our knowledge are any such proceedings threatened. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 8. SUBSEQUENT EVENTS Management evaluated subsequent events through the date of this filing and determined that no additional events have occurred that would require adjustment to or disclosure in the financial statements. |
Summary of Significant Accoun14
Summary of Significant Accounting Principles (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Going Concern [Policy Text Block] | Going Concern As of June 30, 2016 the Company has cumulative losses totaling $ (5,992,856) (3,386) (168,694) These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration of Credit Risk The Company earns predominately royalty revenues and to a lesser extent merchandise sales from 26 licensees. With regards to 2016, concentrations of sales from 5 licensees range from 12 16 67 18 28 93 23 25 27 With regards to 2015, concentrations of sales from 7 licensees range from 10 14 82 9 25 61 10 15 21 25 |
Revenue Recognition, Policy [Policy Text Block] | Revenue recognition The Company records revenues earned as royalties under its license agreements as they are earned over the term of the license agreements. The terms of the royalties earned under these license agreements vary from a flat monthly fee to a percentage of the revenues of the licensee on a monthly basis. If a license agreement is terminated, then the remaining unearned balance of the deferred revenues are recorded as earned if applicable. As a result of the tenuous nature of the gentlemen’s club industry in general and the resulting financial instability of several of our new licensees the company has implemented a policy of recognizing revenue for these specific entities as it is received rather than when it is earned. Once our relationship with them has been more firmly established and payments have been made regularly and on time we will report these revenues when earned. |
Consolidation, Policy [Policy Text Block] | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Inter-company items and transactions have been eliminated in consolidation. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents The Company considers all highly liquid temporary cash investments, with a maturity of three months or less when purchased, to be cash equivalents. There are times when cash may exceed $ 250,000 |
Earnings Per Share, Policy [Policy Text Block] | Income per Share Net income per share data for both the six-month periods ending June 30, 2016 and 2015 are based on net income available to common shareholders divided by the weighted average of the number of common shares outstanding. As of June 30, 2016, there are no outstanding stock equivalents. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | Fair Value of Financial Instruments The carrying value of cash and accrued expenses, if applicable, approximate their fair values based on the short-term maturity of these instruments. The carrying amounts of debt were also estimated to approximate fair value. The Company utilizes the methods of fair value measurement as described in ASC 820 to value its financial assets and liabilities. As defined in ASC 820, fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, ASC 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In August 2015, FASB issued Accounting Standards Update (“ASU”) No.2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” defers the effective date ASU No. 2014-09 for all entities by one year. Public business entities, certain not-forprofit entities, and certain employee benefit plans should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities should apply the guidance in Update 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. All other entities may apply the guidance in ASU No. 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, including interim reporting periods within that reporting period. All other entities also may apply the guidance in Update 2014-09 earlier as of an annual reporting period beginning after December 15, 2016, and interim reporting periods within annual reporting periods beginning one year after the annual reporting period in which the entity first applies the guidance in ASU No. 2014-09. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. In January 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) “ASU 2016 01 Recognition and Measurement of Financial Assets and Financial Liabilities“intended to improve the recognition and measurement of financial instruments. The ASU affects public and private companies, not-for-profit organizations, and employee benefit plans that hold financial assets or owe financial liabilities. The new guidance makes targeted improvements to existing GAAP by requiring equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. Requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. Eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities. Eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet, and requiring a reporting organization to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The ASU on recognition and measurement will take effect for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The ASU permits early adoption of the own credit provision (referenced above). Additionally, it permits early adoption of the provision that exempts private companies and not-for-profit organizations from having to disclose fair value information about financial instruments measured at amortized cost. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. In April 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) “ASU 2016 10 Revenue from Contract with Customers ( Topic 606 ): identifying Performance Obligations and Licensing “ .The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments in this update are intended render more detailed implementation guidance with the expectation to reduce the degree of judgment necessary to comply with Topic 606. The amendments in this Update affect the guidance in Accounting Standards Update 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update2014-09 by one year. We are currently reviewing the provisions of this ASU to determine if there will be any impact on our results of operations, cash flows or financial condition. All new accounting pronouncements issued but not yet effective or adopted have been deemed not to be relevant to us, hence are not expected to have any impact once adopted |
Summary of Significant Accoun15
Summary of Significant Accounting Principles (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Accounting policies [Line Items] | |||||
Retained Earnings (Accumulated Deficit) | $ (5,992,856) | $ (5,992,856) | $ (5,824,162) | ||
Working Capital Surplus Deficit | (3,386) | ||||
Net Income (Loss) | (63,104) | $ 266,950 | (168,694) | $ 297,156 | |
Cash, FDIC Insured Amount | $ 250,000 | $ 250,000 | |||
Merchandise Sales - 3 Licenses [Member] | Accounts Receivable [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 25.00% | ||||
Merchandise Sales - 3 Licenses [Member] | Minimum [Member] | Accounts Receivable [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 15.00% | ||||
Merchandise Sales - 1 License [Member] | Sales Revenue, Net [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 10.00% | ||||
Merchandise Receivables - 5 Licenses [Member] | Sales Revenue, Net [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 67.00% | ||||
Merchandise Receivables - 5 Licenses [Member] | Minimum [Member] | Sales Revenue, Net [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 12.00% | ||||
Merchandise Receivables - 5 Licenses [Member] | Maximum [Member] | Sales Revenue, Net [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 16.00% | ||||
Merchandise Receivables - 3 Licenses [Member] | Accounts Receivable [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 27.00% | 61.00% | |||
Merchandise Receivables - 3 Licenses [Member] | Accounts Receivable [Member] | Related Parties [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 25.00% | ||||
Merchandise Receivables - 3 Licenses [Member] | Minimum [Member] | Accounts Receivable [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 23.00% | ||||
Merchandise Receivables - 3 Licenses [Member] | Minimum [Member] | Accounts Receivable [Member] | Related Parties [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 15.00% | ||||
Merchandise Receivables - 3 Licenses [Member] | Maximum [Member] | Accounts Receivable [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 25.00% | ||||
Merchandise Receivables - 3 Licenses [Member] | Maximum [Member] | Accounts Receivable [Member] | Related Parties [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 21.00% | ||||
Merchandise Receivables - 4 Licenses [Member] | Accounts Receivable [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 93.00% | ||||
Merchandise Receivables - 4 Licenses [Member] | Minimum [Member] | Accounts Receivable [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 18.00% | ||||
Merchandise Receivables - 4 Licenses [Member] | Maximum [Member] | Accounts Receivable [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 28.00% | ||||
Merchandise Sales - 7 Licenses [Member] | Sales Revenue, Net [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 82.00% | ||||
Merchandise Sales - 7 Licenses [Member] | Minimum [Member] | Sales Revenue, Net [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 10.00% | ||||
Merchandise Sales - 7 Licenses [Member] | Maximum [Member] | Sales Revenue, Net [Member] | |||||
Accounting policies [Line Items] | |||||
Concentration Risk, Percentage | 14.00% |
Related-Party Transactions (Det
Related-Party Transactions (Details Textual) - USD ($) | Dec. 09, 2013 | May 31, 2015 | Jan. 31, 2013 | Jan. 24, 2006 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | Jan. 27, 2009 |
Related Party Transaction [Line Items] | ||||||||
Due To Related Parties, Current | $ 27,670 | $ 0 | ||||||
Royalty Payment Rate On Gross Revenue | 4.99% | |||||||
Royalties And Expenses Payable, Related Party | 122,109 | 122,109 | ||||||
Due from Related Parties, Current | 671,807 | 396,807 | ||||||
License Agreement Selling Price Description | Starlight will purchase the licensed products from us or our affiliates at our cost plus 25% | |||||||
Due to Related Parties | 27,670 | 180,000 | ||||||
Origination of Notes Receivable from Related Parties | 275,000 | $ 0 | ||||||
Westside Realty of New York Inc [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Rent Per Month | 2,500 | |||||||
Rent Payable, Related Party | $ 0 | 0 | ||||||
Scores New York [Member] | Director [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 2.00% | |||||||
Star Light Evens LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related Party Royalties Payable Per Month | $ 10,000 | |||||||
Star Light Evens LLC [Member] | Director [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 1.00% | |||||||
Star Light Evens LLC [Member] | Royalty Receivable [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due to Affiliate | $ 130,000 | 130,000 | ||||||
I.M. Operating LLC [Member] | Director [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 2.00% | |||||||
Due to Affiliate | 144,698 | |||||||
I.M. Operating LLC [Member] | Royalty Receivable [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due to Affiliate | $ 144,698 | |||||||
Robert M. Gans [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Accrued Bonuses, Current | 180,000 | |||||||
Robert M. Gans [Member] | Westside Realty of New York Inc [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 80.00% | |||||||
Robert M. Gans [Member] | Scores New York [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 72.00% | 72.00% | ||||||
Robert M. Gans [Member] | Star Light Evens LLC [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 92.165% | |||||||
Robert M. Gans [Member] | Swan Media Group, Inc [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Equity Method Investment, Ownership Percentage | 80.00% | |||||||
Metropolitan Lumber [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due To Related Parties, Current | $ 27,670 | |||||||
Management Services, Fee Amount Per Year | $ 90,000 | $ 30,000 | ||||||
Management Services, Fee Payable | 0 | $ 0 | ||||||
Due from Related Parties, Current | 50,000 | |||||||
Starlin Llc [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due from Related Parties, Current | $ 225,000 |
Intangible Assets (Details Text
Intangible Assets (Details Textual) - Trademarks [Member] | 12 Months Ended |
Dec. 31, 2008USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | |
Intangible Assets, Net (Excluding Goodwill) | $ 878,318 |
Finite-lived Intangible Assets Acquired | $ 250,000 |
Licensees (Details Textual)
Licensees (Details Textual) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Jan. 27, 2009 | |
I.M. Operating LLC [Member] | |||||
Licenses [Line Items] | |||||
Percentage Of Royalty Revenue | 0.00% | 8.00% | |||
I.M. Operating LLC [Member] | Director [Member] | |||||
Licenses [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 2.00% | 2.00% | |||
Westside Realty of New York Inc [Member] | Robert M. Gans [Member] | |||||
Licenses [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 80.00% | 80.00% | |||
Swan Media Group, Inc [Member] | |||||
Licenses [Line Items] | |||||
Percentage Of Royalty Revenue | 0.00% | 1.00% | |||
Swan Media Group, Inc [Member] | Robert M. Gans [Member] | |||||
Licenses [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 80.00% | 80.00% | |||
Scores Atlantic City [Member] | |||||
Licenses [Line Items] | |||||
Percentage Of Royalty Revenue | 0.00% | 8.00% | |||
Scores Atlantic City [Member] | Robert M. Gans [Member] | |||||
Licenses [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 92.165% | 92.165% | |||
Scores New York [Member] | Director [Member] | |||||
Licenses [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 2.00% | 2.00% | |||
Scores New York [Member] | Robert M. Gans [Member] | |||||
Licenses [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 72.00% | 72.00% | 72.00% |
Deferred Revenue (Details Textu
Deferred Revenue (Details Textual) | 6 Months Ended |
Jun. 30, 2016 | |
Deferred Revenue Arrangement [Line Items] | |
Deferred Revenue Amortization Period | 5 years |
Commitments and Contingencies (
Commitments and Contingencies (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | |||
Aug. 31, 2015 | Apr. 17, 2015 | Feb. 19, 2015 | Feb. 13, 2015 | Jun. 30, 2016 | |
Other Commitments [Line Items] | |||||
Loss Contingency, Damages Sought | amount of $900,000 plus interest, damages due to defamation and tortuous interference in connection with the use of the Scores trademark in the amount of $500,000 | ||||
Loss Contingency, Settlement Agreement, Terms | Pursuant to the settlement, defendants agreed to pay us $150,000, payable in 13 installments. The first installment of $50,000 was paid upon finalization of the settlement, with 12 subsequent monthly payments of $8,333.33 commencing on May 1, 2015. | ||||
Loss Contingency Defendant Awarding Total | $ 117,646.92 | ||||
Defendants [Member] | Settled Litigation [Member] | |||||
Other Commitments [Line Items] | |||||
Litigation Settlement, Amount | $ 21,403.65 | ||||
Loss Contingency, Date of Dismissal | Apr. 13, 2015 | ||||
Norm A Properties LLC [Member] | |||||
Other Commitments [Line Items] | |||||
Loss Contingency, Damages Sought, Value | $ 110,000 | ||||
Southeast Show Clubs, LLC and Michael Tomkovich [Member] | Settled Litigation [Member] | |||||
Other Commitments [Line Items] | |||||
Monthly Royalty Fee | $ 5,000 | ||||
Robert Gan [Member] | |||||
Other Commitments [Line Items] | |||||
Lease Amount Per Month | $ 2,500 | ||||
Metropolitan Lumber [Member] | |||||
Other Commitments [Line Items] | |||||
Contributed Services Rent Per Month | $ 7,500 |