Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Sep. 12, 2023 | Jun. 30, 2021 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 000-16665 | ||
Entity Registrant Name | SCORES HOLDING CO INC | ||
Entity Incorporation, State or Country Code | UT | ||
Entity Tax Identification Number | 87-0426358 | ||
Entity Address, Address Line One | 34-35 Steinway Street | ||
Entity Address, Postal Zip Code | 11101 | ||
Entity Address, City or Town | Long Island City | ||
Entity Address, State or Province | NY | ||
City Area Code | 212 | ||
Local Phone Number | 246–9090 | ||
Title of 12(b) Security | None | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Interactive Data Current | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 762,859.14 | ||
Entity Common Stock, Shares Outstanding | 165,186,144 | ||
Entity Central Index Key | 0000831489 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Trading Symbol | SCRH | ||
Auditor Name | RBSM LLP | ||
Auditor Firm ID | 587 | ||
Auditor Location | New York, NY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 33,353 | $ 21,143 |
Trade receivables, net of allowance of $0 and $0, respectively | 140,000 | 41,597 |
Prepaid expenses | 38,051 | 37,241 |
Total Current Assets | 211,404 | 99,981 |
TOTAL ASSETS | 211,404 | 99,981 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 213,937 | 168,646 |
Accrued expenses, related party | 7,500 | |
Related party loan payable | 374,346 | |
Related party payable | $ 187,500 | $ 97,500 |
Notes payable current, related party type | Related Party | Related Party |
Total Current Liabilities | $ 775,783 | $ 273,646 |
Related party loan payable - long term | $ 359,692 | |
Notes payable Non-Current, related party type | Related Party | Related Party |
Contract Liabilities | $ 351,000 | $ 235,000 |
TOTAL LIABILITIES | 1,126,783 | 868,338 |
Commitments and Contingencies | ||
STOCKHOLDERS' DEFICIT | ||
Preferred stock, $.0001 par value, 10,000,000 shares authorized, -0- share issued and outstanding | ||
Common stock, $.001 par value; 500,000,000 shares authorized, 165,186,144 shares issued and 165,186,144 shares outstanding, respectively | 165,186 | 165,186 |
Additional paid-in capital | 6,058,117 | 6,058,117 |
Accumulated deficit | (7,138,682) | (6,991,660) |
Total Stockholders' Deficit | (915,379) | (768,357) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ 211,404 | $ 99,981 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for trade receivables | $ 0 | $ 0 |
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 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
REVENUES | ||
Royalty Revenue | $ 241,001 | $ 263,142 |
Total Revenue | 241,001 | 263,142 |
OPERATING EXPENSES | ||
General and Administrative Expenses | 371,928 | 387,254 |
LOSS FROM OPERATIONS | (130,927) | (124,112) |
OTHER INCOME/(EXPENSE) | ||
Other income | 48,225 | |
Interest Expense, net | (16,095) | (15,778) |
TOTAL OTHER INCOME/( EXPENSE) | (16,095) | 32,447 |
NET LOSS BEFORE INCOME TAXES | (147,022) | (91,665) |
INCOME TAXES | 0 | 0 |
NET LOSS | $ (147,022) | $ (91,665) |
NET LOSS PER SHARE-Basic | $ 0 | $ 0 |
NET LOSS PER SHARE-Diluted | $ 0 | $ 0 |
WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING-Basic | 165,186,144 | 165,186,144 |
WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING-Diluted | 165,186,144 | 165,186,144 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (147,022) | $ (91,665) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Recovery of bad debts | 0 | (13,750) |
Changes in operating assets and liabilities: | ||
Trade receivable | (98,403) | 17,066 |
Prepaid expenses | (810) | (20,722) |
Accounts payable and accrued expenses | 45,291 | (15,498) |
Accrued expenses, related party | (7,500) | 0 |
Accrued interest, related party | 14,654 | 14,081 |
Contract liabilities | 116,000 | 54,800 |
Related party payables | 90,000 | 67,500 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 12,210 | 11,812 |
CASH FLOW FROM INVESTING ACTIVITES: | ||
CASH FLOW FROM INVESTING ACTIVITES: | 0 | 0 |
CASH FLOW FROM FINANCING ACTIVITIES: | ||
CASH FLOW FROM FINANCING ACTIVITIES: | 0 | 0 |
NET INCREASE IN CASH | 12,210 | 11,812 |
Cash and cash equivalents - beginning of period | 21,143 | 9,331 |
Cash and cash equivalents - end of period | 33,353 | 21,143 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for interest | 1,441 | 1,349 |
Cash paid for income taxes | 350 | 0 |
Supplemental disclosure of cash flows from noncash investing and financing activities | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'' DEFICIT - USD ($) | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 165,186 | $ 6,058,117 | $ (6,899,995) | $ (676,692) |
Balance (in shares) at Dec. 31, 2019 | 165,186,144 | |||
Net Loss | $ 0 | 0 | (91,665) | (91,665) |
Balance at Dec. 31, 2020 | $ 165,186 | 6,058,117 | (6,991,660) | (768,357) |
Balance (in shares) at Dec. 31, 2020 | 165,186,144 | |||
Net Loss | $ 0 | 0 | (147,022) | (147,022) |
Balance at Dec. 31, 2021 | $ 165,186 | $ 6,058,117 | $ (7,138,682) | $ (915,379) |
Balance (in shares) at Dec. 31, 2021 | 165,186,144 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2021 | |
Organization | |
Organization | Note 1. Organization BASIS OF PRESENTATION Scores Holding Company, Inc. (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 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”). |
Summary of Significant Accounti
Summary of Significant Accounting Principles | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Principles | |
Summary of Significant Accounting Principles | Note 2. Summary of Significant Accounting Principles Going Concern As of December 31, 2021, the Company has accumulated deficit totaling $7,138,682 and negative working capital deficit of $564,379. The Company had net loss of $147,022 for the year ended December 31, 2021. Because of these conditions, the Company will require additional working capital to develop business operations. The Company raised and intends to raise additional working capital through the continued licensing of its brand with its current and new operators. There are no assurances that the Company will be able to achieve the level of revenues adequate to generate sufficient cash flow from operations to support the Company’s working capital requirements. To the extent that funds generated from any future use of licensing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not continue its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these consolidated financial statements. The consolidated 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. Pursuant to ASC 205-40 in preparing financial statements for each annual and interim reporting period, management must evaluate whether there are conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued. COVID-19 As a result of the COVID-19 virus, state and local governments have required all but certain essential businesses to close, including all clubs operating under the Scores name. The impact on such clubs’ revenue was material in 2020 and resulted in a significant decline in our royalty revenues that continued in 2021. Upon management’s evaluation of relevant hospitality industry conditions and events known as of the date that these financial statements are issued it is their belief the financial effects of the Covid 19 pandemic will not have a substantial or long term effect on the financial viability of the adult entertainment industry. There will be operational changes to be certain but not a consequentially detrimental impact on the industry. That said it should be noted all royalty paying licensees have reopened. In addition, cash collections increased from $235,000 during 2020 to $236,000 and $858,000 during 2021 and 2022 respectively. Although there are fewer licensees and some of the licensing fees have been re-negotiated management believes the worst of the effects the Covid 19 pandemic are over. The lifting of many, if not all, gathering restrictions imposed by local government has vastly improved the appeal of adult entertainment-oriented establishments. Consequently, the Company has seen a recent increase in the number of such establishments interested in utilizing the SCORES brand trademarks. Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Inter-company items and transactions have been eliminated in consolidation. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management 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 revenue and expenses during the reported period. Significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts and valuation allowance on deferred taxes. Actual results could differ materially from such estimates under different assumptions or circumstances. 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, the FDIC insured limit. At December 31, 2021 and 2020, the uninsured balance amounted to $-0- and $-0-, respectively. The Company has no cash equivalents as of December 31, 2021 and 2020. Fair Value of Financial Instruments The carrying value of cash and accrued expenses, 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. Accounts receivable and reserves Accounts deemed uncollectible are applied against the allowance for doubtful accounts. Allowance for doubtful accounts as of December 31, 2021 and 2020 were $0 and $0 respectively. In reviewing any delinquent royalty receivable, the Company considers many factors in estimating its reserve, including historical data, experience, customer types, credit worthiness, financial distress and economic trends. From time to time, the Company may adjust its assumptions for anticipated changes in any of above or other factors expected to affect collectability. Contract liabilities Contract liabilities are cash collected from customers where collection is not considered probable and is therefore deferred until such time as collection is considered probable or the contract is terminated. Income per Share Under ASC 260-10-45, “Earnings Per Share”, basic income (loss) per common share is computed by dividing the income (loss) applicable to common stockholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted income (loss) per common share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. As of December 31, 2021 and 2020, there were no common stock equivalents. Accordingly, the weighted average number of common shares outstanding for the years ended December 31, 2021 and 2020, respectively, is the same for purposes of computing both basic and diluted net income per share for such years. Revenue Recognition Under ASC 606, revenue from the initiation fees are recognizable at a point in time (first month of the contract) and royalty revenues are recognized over time for those contracts with probable collections. The Company’s license fee revenue is generated from royalties earned through intellectual property licensing agreements which permit the licensee to use the recognition and status of the Scores brand in order to promote their businesses. Under ASC 606, revenue is recognized throughout the life of the executed licensing agreement. The Company measures revenue based on consideration specified in a contract with a customer. Furthermore, the Company recognizes revenue when it satisfies a performance obligation by transferring control over the service to its customer. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The Company’s customers typically receive the benefit of its services as they are performed. Substantially all customer contracts provide that the Company is compensated for services performed to date. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Contract Liabilities arise when the company collects cash from a customer where collection is not considered probable and therefore deferred until such time as collection is probable or the contract is terminated. Nature of goods and services The following is a description of the Company’s products and services from which it generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: i. Licensing Revenue Licensing fees represent the fees the Company receives from the licensing of the Company’s Scores trademark. 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. The licensing rights are transferred to the Company’s customers over time, and the Company recognizes licensing revenue over time because the customer will simultaneously receive and consume the benefit from the license as the performance occurs. ii. Stand-Ready for Consulting and Club Set-up Services The Company offers an initial set-up and consultation to new clubs in order to aid in the opening and operation. The services are provided within the first month of any licensing agreements, and sometimes are not requested by the licensee and therefore never provided at all. Concentration of Credit Risk The Company received royalty revenues from 6 licensees during the year ended December 31, 2021. Pursuant to ASC 606 of those 6 licensees we recognized revenue from only 3 licensees. The Company received royalty revenues from 11 licensees during the year ended December 31, 2020. Pursuant to ASC 606 of those 11 licensees we recognized revenue from only 9 licensees. With regards to December 31, 2021, concentrations of revenue from 2 licensees for 40% and 58%, respectively totaling 98%. There are receivables from 1 licensee, totaling 100%. There are no sales or receivables from these licensees that are considered related parties. With regards to December 31, 2020, concentrations of revenue from 4 licensees for 15%, 15%, 24% and 27%, respectively, totaling 81%. There are receivables from 1 licensee, totaling 100%. There are no sales or receivables from these licensees that are considered related parties. Commitments and Contingencies In the ordinary course of our business, we are involved in certain legal proceedings and other claims. In determining whether a loss should be accrued, we evaluate, among other factors, the probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. As additional information becomes available, we reassess the potential liability related to our pending litigation and other contingencies and revise our estimates as applicable. Revisions of our estimates of the potential liability could materially impact our results of operations. Additionally, if the final outcome of such litigation and contingencies differs adversely from that currently expected, it would result in a charge to operating results when determined. See Note 9 for commitments and contingencies. Related Party Transactions Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. See Note 4 for related party transactions. Recently Issued Accounting Standards Update Credit loss In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendment to the initial guidance: ASU 2018-19 (collectively, Topic 326). ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact on the Company’s consolidated financial statements. All other 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. |
Disaggregation of Revenue
Disaggregation of Revenue | 12 Months Ended |
Dec. 31, 2021 | |
Disaggregation of Revenue | |
Disaggregation of Revenue | Note 3. Disaggregation of Revenue In the following table, revenue is disaggregated by major products/service lines, and timing of revenue recognition: For the Years Ended December 31, 2021 2020 Major products/service lines Licensing fees - royalty revenue $ 241,001 $ 263,142 Initiation fees 0 0 Total Revenue $ 241,001 $ 263,142 Timing of revenue recognition Products transferred at a point in time $ 0 $ 0 Products and services transferred over time 241,001 263,142 $ 241,001 $ 263,142 Contract balances The following table provides information about receivables, assets, and liabilities from contracts with customers: December 31, December 31, 2021 2020 Assets Trade receivables, net $ 140,000 $ 41,597 Liabilities Contracted liabilities $ 0 $ 0 Contracted liabilities - long term $ 351,000 $ 235,000 December 31, December 31, 2021 2020 Contract liabilities Opening $ 235,000 $ 180,200 Additions 116,000 79,000 Transfer to revenue 0 (24,200) Ending $ 351,000 $ 235,000 Contract receivables are recorded at the invoiced amount and do not bear interest. Credit is extended based on the evaluation of a customer’s financial condition and collateral is not required. The contract liabilities primarily relate to amounts billed in advance of performance obligations being satisfied are booked as deferred revenue. |
Related-Party Transactions
Related-Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related-Party Transactions | |
Related-Party Transactions | Note 4. Related-Party Transactions Transactions with Common ownership affiliates: 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%) of IMO and is also the Company’s majority shareholder and chief executive officer and Howard Rosenbluth, the Company’s Treasurer and a Director, owns 2%. IMO owes the Company a royalty receivable of $0 and $0 as of December 31, 2021 and December 31, 2020, respectively. On August 31, 2017, IMO entered into an agreement to sell all of its assets to Club Azure LLC (“CA”). Effective September 1, 2017, IMO no longer operated Scores New York and terminated its licensing agreement with the Company. Mark Yackow, an unrelated party, is the sole owner (100%) of CA and former Chief Operating Officer of IMO. Effective September 1, 2017, the Company granted an exclusive, non-transferable license for the use of the “Scores New York” to CA for its gentlemen’s club in New York City. On March 16th 2020 New York City Mayor Bill De Blasio ordered the closure of all New York City nightclubs, theaters, restaurants and concert venues in an effort to slow down the spread of Covid 19 and to protect ourselves against it. As a result of this closure order and effective March 17, 2020 the above business entity closed and has been closed since. The Company previously leased office space directly from Westside Realty of New York, Inc. (“WSR”), the owner of the West 27th Street Building. The majority owner of WSR (80%) is Robert M. Gans. Since April 1, 2009, the monthly rent has been $2,500 per month including overhead costs. This lease was terminated on December 31, 2020. The Company incurred rent expense of $-0- and $30,000 for the years ending December 31, 2021 and 2020, respectively. The Company owed WSR $30,000 and $30,000 in unpaid rents as of December 31, 2021 and December 31, 2020, respectively. Effective January 1, 2013, the Company entered into a management services agreement with Metropolitan (“Metropolitan”) pursuant to which Metropolitan 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 a fee in the amount of $30,000 per year. Effective May 5, 2015, the agreement was amended increasing the annual fee to $90,000. Effective January 1, 2017, the agreement was further amended to remove the requirement that the services of Robert M. Gans to be provided under the agreement. In addition, Metropolitan shall be eligible for a discretionary cash bonus. The agreement may be terminated by either party upon ten days written notice. Mr. Gans is the sole owner of Metropolitan. The Company incurred management fees of $90,000 for the years ending December 31, 2021 and 2020. The Company owed $157,500 and $67,500 in unpaid management services as of December 31, 2021 and December 31, 2020, respectively. The Company had accrued expenses of $7,500 due to Metropolitan and was repaid in December 2021. The Company owed $0 and $7,500 as of December 31, 2021 and December 31, 2020, respectively. It should be noted as outlined below the results of two separate events and their subsequent settlement agreements were offset against one another resulting in a third settlement agreement. First, effective February 28, 2017 (the “Effective Date”), the Company entered into separate Settlement Agreements (a “Royalty Settlement Agreement”) each with three licensees, IMO, Star Light and Swan (are sometimes referred to individually as a “Licensee” and collectively as the “Licensees”) controlled by Robert M. Gans, the Company’s President, Chief Executive Officer and a member of its Board of Directors. Pursuant to the Royalty Settlement Agreements, the Company forgave the repayment of a certain portion of unpaid, past-due royalties in return for the respective Licensees’ agreements to pay the remainder (the “Royalty Settlement Amount”) of the unpaid royalties, plus interest, to the Company. The Royalty Settlement Amount for each Licensee was represented by a promissory note. IMO, Star Light and Swan owed the Company an aggregate of $255,406, $75,000, and $50,000 respectively in full settlement of unpaid royalties and other fees (the “Royalty Amount”). The settlement amounts were payable pursuant to promissory notes in monthly installments commencing March 1, 2017, and bears simple interest at the rate of 4% per year Robert M. Gans is a majority owner of the equity of each of the Licensees and guaranteed the payment of each Licensee’s obligations under each of the 3 Settlement Documents. The Licensees were not current with respect to their obligations under the Settlement Documents and the Company did not call upon Mr. Gans to honor his Guaranties. Second, on April 3, 2016, 50 individuals purporting to be professional models and/or actresses collectively, (the “Plaintiffs”) 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 the (the “Defendants”) alleging that images of 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”) and (the “Voronina Matter). In July 2018, the Company entered into a confidential settlement agreement (the “Settlement Agreement”) in the Voronina litigation, and on August 4, 2018, the Court entered an order dismissing the plaintiff’s claims against the Defendants with prejudice and settled the Plaintiffs claims in the Voronina matter for $1,310,000 (the “Voronina Settlement Agreement”). See Note 7 for additional information. The Company had insufficient liquid resources to enable it to make a portion of the settlement payments called for by the Voronina Settlement Agreement. Metropolitan, made loans to the Company in the aggregate amount of $770,000 to enable the Company to make the payments under the Voronina Settlement Agreement. On December 1, 2018, the balance due Metropolitan inclusive of interest was $781,399. Third, the past due amounts including principal and interest under the Royalty Settlement Agreements were $382,259 as of December 1, 2018. On this date the Company entered into an agreement (the “Settlement and Offset Agreement”) to offset the Royalty Amount owed to the Company against the Voronina Amount owed to Metropolitan, thereby reducing the amount owed by the Company to Metropolitan to $399,139 (the “Net Voronina Amount”) pursuant to the terms of a Settlement and Offset Agreement made by and among the Company, Star Light, Swan, Metropolitan and Robert M. Gans. The Net Voronina Amount is payable pursuant to a promissory note (the “Voronina Note”), which bears simple interest at the rate of 4% per annum, in 86 consecutive monthly installments of $5,000 and a final installment of $1,370, with the initial installment due and payable on February 1, 2022 (or the first business day thereafter). The Company may prepay the Voronina Note at any time, in whole or in part without premium or penalty. The Offset Agreement also provides for the immediate termination of the Royalty Settlement Agreements and the related promissory notes and guarantees. On March 28, 2022 the entire balance due of the Voronina Note in the amount of $373,068 was paid in full. The total amounts due to the various related parties as of December 31, 2021 and December 31, 2020, was $561,846 and $464,692 respectively and the total amounts due to the Company from the various related parties as of December 31, 2021 and December 31, 2020, was $0 and $0, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | Note 5. Income Taxes The Company accounts for income taxes in accordance with ASC 740-10-25, “Accounting for Income Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2021 and 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company has net operating loss carryforwards (“NO L’s) of approximately $6,823,000 which expire at various times through 2040. Management has determined that it is more likely than not that the NOL’s will not be fully utilized; therefore a full valuation allowance has been provided. Approximately $4,091,000 of these NOL’s are subject to an annual limitation of approximately $70,000 due to a change of ownership pursuant to Internal Revenue Code section 382. Due to this annual limitation, NOL’s of approximately $2,978,000 have been lost. As a result, only approximately $3,845,000 of NOL’s remain available to the Company as of December 31, 2021. 2021 2020 Deferred tax assets: Net operating loss carryforward $ 1,192,000 $ 543,000 Prior year true-up 0 603,000 Less valuation allowance (1,192,000) (1,146,000) Net deferred tax asset $ — $ — The reconciliation of the Company’s effective tax rate differs from the Federal income tax rate of 21% and 21% for the years ended December 31, 2021 and 2020, respectively as a result of the following: 2021 2020 Tax expense(benefit) at statutory rate $ (31,000) $ (30,000) State and local taxes, net of federal benefit (15,000) (15,000) Permanent differences — — Change in valuation allowance 46,000 45,000 Tax expense $ 0 $ 0 Federal and State/Local tax years remain open by statute, generally three years. There are no open Statutory Federal or State/Local audits at December 31, 2021. |
Licensees
Licensees | 12 Months Ended |
Dec. 31, 2021 | |
Licensees | |
Licensees | Note 6. Licensees The Company has 6 license agreements as of September 12, 2023. See Note 9 for litigation relating to one of the Company’s license agreements. |
Contract liabilities
Contract liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Contract liabilities | |
Contract liabilities | Note 7. Contract Liabilities License agreements sometimes include Initiation/Inception Fees. Please see Note 3 for additional information regarding this matter. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Payable and Accrued Expenses | |
Accounts Payable and Accrued Expenses | Note 8. Accounts Payable and Accrued Expenses December 31, December 31, Accounts Payable and Accrued Expenses 2021 2020 Professional fees $ 147,500 $ 100,000 Legal Fees 17,166 8,749 Insurance 25,940 24,234 Filing fees 22,316 17,472 Marketing fees and expenses — 15,320 Miscellaneous 1,015 2,871 Total Accounts Payable and Accrued Expenses $ 213,937 $ 168,646 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 9. Commitments and Contingencies The Company records $7,500 a month as rent, overhead, and services due to Metropolitan Lumber Hardware Building Supplies, Inc, owned and operated by Robert Gans, the Company’s sole owner, for services rendered by the management of the Company. The Company incurred management service expenses of $90,000 and $90,000 as December 31, 2021 and December 31, 2020, respectively. The Company ceased leasing office space on December 31, 2020 from the Westside Realty Inc. of New York was owned and operated by Robert Gans, the Company’s majority shareholder, for $2,500 a month. The Company incurred rent expense of $-0- and $30,000 for the years ending December 31, 2021 and 2020. On or about July 27, 2018, Plaintiff Luisa Santos de Oliveira filed a Complaint against the Company and various other Defendants (the “Complaint”) alleging violations of both the Fair Labor Standard Act, as amended, 29 U.S.C. § 201 et seq inter alia On October 8, 2018, the Company was served with a Summons and Complaint in the action entitled Luisa Santos de Oliveira v. Scores Holding Company, Inc.; Club Azure, LLC; Robert Gans; Mark S. Yackow; Howard Rosenbluth, Docket No. 1:18-cv-06769-GBD, in the United States District Court of the Southern District The case was assigned to a Magistrate Judge. There was a conference on March 2, 2021 and a Scheduling Order was entered. On March 26, 2021, a Stipulation of Discontinuance was so ordered by the Federal Court, discontinuing all claims against the Company, Robert Gans, Mark S. Yackow and Howard Rosenbluth. Pending Court approval on May 12, 2023, a Stipulation of Voluntary Dismissal Without Prejudice was signed discontinuing all claims against Club Azure LLC. On September 5, 2019, the Company together with its subsidiary SLC filed a civil action in Supreme Court of New York, New York County against Scores Alabama. A cease and desist letter was sent. The Company finally entered into a license agreement as of March 5, 2020 with Cheetah Club, LLC for a club located in Huntsville, Alabama. They agreed to pay the arrears and then cease using the Scores brand by March 31, 2023. On April 11, 2023, the Company agreed to terminate the licensing agreement and settle this matter for $45,000, which was paid on May 23, 2023. It should be noted as outlined below the results of two separate events and their subsequent settlement agreements were offset against one another resulting in a third settlement agreement. First, effective February 28, 2017 (the “Effective Date”), the Company entered into separate Settlement Agreements (a “Royalty Settlement Agreement”) each with three licensees, IMO, Star Light and Swan (are sometimes referred to individually as a “Licensee” and collectively as the “Licensees”) controlled by Robert M. Gans, the Company’s President, Chief Executive Officer and a member of its Board of Directors. Pursuant to the Royalty Settlement Agreements, the Company forgave the repayment of a certain portion of unpaid, past-due royalties in return for the respective Licensees’ agreements to pay the remainder (the “Royalty Settlement Amount”) of the unpaid royalties, plus interest, to the Company. The Royalty Settlement Amount for each Licensee was represented by a promissory note. IMO, Star Light and Swan owed the Company an aggregate of $255,406, $75,000, and $50,000 respectively in full settlement of unpaid royalties and other fees (the “Royalty Amount”). The settlement amounts were payable pursuant to promissory notes in monthly installments commencing March 1, 2017, and bears simple interest at the rate of 4% per year Robert M. Gans is a majority owner of the equity of each of the Licensees and guaranteed the payment of each Licensee’s obligations under each of the 3 Settlement Documents. The Licensees were not current with respect to their obligations under the Settlement Documents and the Company did not call upon Mr. Gans to honor his Guaranties. Second, on April 3, 2016, 50 individuals purporting to be professional models and/or actresses collectively, (the “Plaintiffs”) 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 the (the “Defendants”) alleging that images of 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”) and (the “Voronina Matter”). In July 2018, the Company entered into a confidential settlement agreement (the “Settlement Agreement”) in the Voronina litigation, and on August 4, 2018, the Court entered an order dismissing the plaintiff’s claims against the Defendants with prejudice and settled the Plaintiffs claims in the Voronina matter for $1,310,000 (the “Voronina Settlement Agreement”). See Note 7 for additional information. The Company had insufficient liquid resources to enable it to make a portion of the settlement payments called for by the Voronina Settlement Agreement. Metropolitan, made loans to the Company in the aggregate amount of $770,000 to enable the Company to make the payments under the Voronina Settlement Agreement. On December 1, 2018, the balance due Metropolitan inclusive of interest was $781,399. Third, the past due amounts including principal and interest under the Royalty Settlement Agreements were $382,259 as of December 1, 2018. On this date the Company entered into an agreement (the “Settlement and Offset Agreement”) to offset the Royalty Amount owed to the Company against the Voronina Amount owed to Metropolitan, thereby reducing the amount owed by the Company to Metropolitan to $399,139 (the “Net Voronina Amount”) pursuant to the terms of a Settlement and Offset Agreement made by and among the Company, Star Light, Swan, Metropolitan and Robert M. Gans. The Net Voronina Amount is payable pursuant to a promissory note (the “Voronina Note”), which bears simple interest at the rate of 4% per annum, in 86 consecutive monthly installments of $5,000 and a final installment of $1,370, with the initial installment due and payable on February 1, 2022 (or the first business day thereafter). The Company may prepay the Voronina Note at any time, in whole or in part without premium or penalty. The Offset Agreement also provides for the immediate termination of the Royalty Settlement Agreements and the related promissory notes and guarantees. On March 28, 2022, the entire balance due of the Voronina Note in the amount of $373,068 was paid in full. In an action entitled Jane Doe v. Scores Holding Company, Inc., Scores Licensing Corp., Tampa Food and Hospitality Corp., d/b/a Scores Tampa, et al th inter alia On July 15, 2019, plaintiff Jeremy Green, a former consultant to Swan Media Group, Inc (“SMG”), commenced an action in U.S. District Court, Southern District of New York against Scores Holding Co., Inc., Scores Media Group LLC, Scores Digital Gaming LLC (“SDG”) and individual defendants Robert Gans and Charilaos Yioves seeking to recover from all defendants under various theories of breach of contract, unjust enrichment, promissory estoppels, fraudulent inducement and breach of implied duty of good faith and fair dealing. On October 6, 2022 to avoid expense, inconvenience, and uncertainty of further litigation, the Company has agreed to settle this matter for $10,000. Greene will receive the settlement sum in two payments of $5,000 each. The first settlement payment was made upon execution of the settlement agreement and the second payment will be due thirty days after the first payment. Finally, in an action entitled Jessica Hall v. Scores Holding Company, Inc., et al, seeking summary judgment, which should be granted given that both the documents and deposition testimony clearly show that the Company did not manage or otherwise control Plaintiff’s employment. There are no other material legal proceedings pending to which the Company or any of its property is subject, nor to the Company’s knowledge are any such proceedings threatened. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | Note 10. Subsequent Events Please see Note 9 for events concerning legal matters. On January 21, 2022 the Company and “Scores Chicago” entered into a Settlement Agreement and Amendment to the Licensing Agreement agreeing to a one-time payment to settle arrears resulting from the Covid 19 pandemic and to change the monthly licensing fee to a flat rate. All other terms of the original agreement were to remain in effect. On March 23, 2022 the Company and “Scores Las Vegas” entered into a First Amendment to the Scores Trademark Sublicense Agreement agreeing to a one-time payment to settle arrears resulting from the Covid 19 pandemic and to make a one-time payment for granting it an exclusive, non-transferable license for the use of certain Scores trademarks in its night club/restaurant for a period of twenty-five On September 23, 2022, the Company and “Scores Sports Bar” entered into a First Amendment to Scores Sports Bar Service/Trademark License Agreement. Because of the impact the Covid 19 Pandemic had on the economy and the hospitality industry, certain benchmarks in the original licensing agreement became difficult to accomplish. Essentially the amendment extended the term of the original agreement, established a new timeframe for licensing fee payments and reduced the minimum number of new establishments to be opened to a more realistic amount given the economic effects of Covid 19. 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 consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Principles (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Principles | |
Going Concern | Going Concern As of December 31, 2021, the Company has accumulated deficit totaling $7,138,682 and negative working capital deficit of $564,379. The Company had net loss of $147,022 for the year ended December 31, 2021. Because of these conditions, the Company will require additional working capital to develop business operations. The Company raised and intends to raise additional working capital through the continued licensing of its brand with its current and new operators. There are no assurances that the Company will be able to achieve the level of revenues adequate to generate sufficient cash flow from operations to support the Company’s working capital requirements. To the extent that funds generated from any future use of licensing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available, the Company may not continue its operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the issuance of these consolidated financial statements. The consolidated 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. Pursuant to ASC 205-40 in preparing financial statements for each annual and interim reporting period, management must evaluate whether there are conditions and events that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date the financial statements are issued. COVID-19 As a result of the COVID-19 virus, state and local governments have required all but certain essential businesses to close, including all clubs operating under the Scores name. The impact on such clubs’ revenue was material in 2020 and resulted in a significant decline in our royalty revenues that continued in 2021. Upon management’s evaluation of relevant hospitality industry conditions and events known as of the date that these financial statements are issued it is their belief the financial effects of the Covid 19 pandemic will not have a substantial or long term effect on the financial viability of the adult entertainment industry. There will be operational changes to be certain but not a consequentially detrimental impact on the industry. That said it should be noted all royalty paying licensees have reopened. In addition, cash collections increased from $235,000 during 2020 to $236,000 and $858,000 during 2021 and 2022 respectively. Although there are fewer licensees and some of the licensing fees have been re-negotiated management believes the worst of the effects the Covid 19 pandemic are over. The lifting of many, if not all, gathering restrictions imposed by local government has vastly improved the appeal of adult entertainment-oriented establishments. Consequently, the Company has seen a recent increase in the number of such establishments interested in utilizing the SCORES brand trademarks. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Inter-company items and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management 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 revenue and expenses during the reported period. Significant areas requiring the use of management estimates include, but are not limited to, the allowance for doubtful accounts and valuation allowance on deferred taxes. Actual results could differ materially from such estimates under different assumptions or circumstances. |
Cash and cash equivalents | 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, the FDIC insured limit. At December 31, 2021 and 2020, the uninsured balance amounted to $-0- and $-0-, respectively. The Company has no cash equivalents as of December 31, 2021 and 2020. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying value of cash and accrued expenses, 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. |
Accounts receivable and reserves | Accounts receivable and reserves Accounts deemed uncollectible are applied against the allowance for doubtful accounts. Allowance for doubtful accounts as of December 31, 2021 and 2020 were $0 and $0 respectively. In reviewing any delinquent royalty receivable, the Company considers many factors in estimating its reserve, including historical data, experience, customer types, credit worthiness, financial distress and economic trends. From time to time, the Company may adjust its assumptions for anticipated changes in any of above or other factors expected to affect collectability. |
Contract liabilities | Contract liabilities Contract liabilities are cash collected from customers where collection is not considered probable and is therefore deferred until such time as collection is considered probable or the contract is terminated. |
Income per Share | Income per Share Under ASC 260-10-45, “Earnings Per Share”, basic income (loss) per common share is computed by dividing the income (loss) applicable to common stockholders by the weighted average number of common shares assumed to be outstanding during the period of computation. Diluted income (loss) per common share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. As of December 31, 2021 and 2020, there were no common stock equivalents. Accordingly, the weighted average number of common shares outstanding for the years ended December 31, 2021 and 2020, respectively, is the same for purposes of computing both basic and diluted net income per share for such years. |
Revenue Recognition | Revenue Recognition Under ASC 606, revenue from the initiation fees are recognizable at a point in time (first month of the contract) and royalty revenues are recognized over time for those contracts with probable collections. The Company’s license fee revenue is generated from royalties earned through intellectual property licensing agreements which permit the licensee to use the recognition and status of the Scores brand in order to promote their businesses. Under ASC 606, revenue is recognized throughout the life of the executed licensing agreement. The Company measures revenue based on consideration specified in a contract with a customer. Furthermore, the Company recognizes revenue when it satisfies a performance obligation by transferring control over the service to its customer. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the customer receives the benefit of the performance obligation. The Company’s customers typically receive the benefit of its services as they are performed. Substantially all customer contracts provide that the Company is compensated for services performed to date. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Contract Liabilities arise when the company collects cash from a customer where collection is not considered probable and therefore deferred until such time as collection is probable or the contract is terminated. Nature of goods and services The following is a description of the Company’s products and services from which it generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each: i. Licensing Revenue Licensing fees represent the fees the Company receives from the licensing of the Company’s Scores trademark. 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. The licensing rights are transferred to the Company’s customers over time, and the Company recognizes licensing revenue over time because the customer will simultaneously receive and consume the benefit from the license as the performance occurs. ii. Stand-Ready for Consulting and Club Set-up Services The Company offers an initial set-up and consultation to new clubs in order to aid in the opening and operation. The services are provided within the first month of any licensing agreements, and sometimes are not requested by the licensee and therefore never provided at all. |
Concentration of Credit Risk | Concentration of Credit Risk The Company received royalty revenues from 6 licensees during the year ended December 31, 2021. Pursuant to ASC 606 of those 6 licensees we recognized revenue from only 3 licensees. The Company received royalty revenues from 11 licensees during the year ended December 31, 2020. Pursuant to ASC 606 of those 11 licensees we recognized revenue from only 9 licensees. With regards to December 31, 2021, concentrations of revenue from 2 licensees for 40% and 58%, respectively totaling 98%. There are receivables from 1 licensee, totaling 100%. There are no sales or receivables from these licensees that are considered related parties. With regards to December 31, 2020, concentrations of revenue from 4 licensees for 15%, 15%, 24% and 27%, respectively, totaling 81%. There are receivables from 1 licensee, totaling 100%. There are no sales or receivables from these licensees that are considered related parties. |
Commitments and Contingencies | Commitments and Contingencies In the ordinary course of our business, we are involved in certain legal proceedings and other claims. In determining whether a loss should be accrued, we evaluate, among other factors, the probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. As additional information becomes available, we reassess the potential liability related to our pending litigation and other contingencies and revise our estimates as applicable. Revisions of our estimates of the potential liability could materially impact our results of operations. Additionally, if the final outcome of such litigation and contingencies differs adversely from that currently expected, it would result in a charge to operating results when determined. See Note 9 for commitments and contingencies. |
Related Party Transactions | Related Party Transactions Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. See Note 4 for related party transactions. |
Recently Issued Accounting Standards Update | Recently Issued Accounting Standards Update Credit loss In September 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendment to the initial guidance: ASU 2018-19 (collectively, Topic 326). ASU 2016-13 amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments, including trade receivables. ASU 2016-13 is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact on the Company’s consolidated financial statements. All other 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. |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Disaggregation of Revenue | |
Schedule of disaggregation of revenue by major products/service lines, and timing of revenue recognition | For the Years Ended December 31, 2021 2020 Major products/service lines Licensing fees - royalty revenue $ 241,001 $ 263,142 Initiation fees 0 0 Total Revenue $ 241,001 $ 263,142 Timing of revenue recognition Products transferred at a point in time $ 0 $ 0 Products and services transferred over time 241,001 263,142 $ 241,001 $ 263,142 |
Schedule of contract balances | December 31, December 31, 2021 2020 Assets Trade receivables, net $ 140,000 $ 41,597 Liabilities Contracted liabilities $ 0 $ 0 Contracted liabilities - long term $ 351,000 $ 235,000 December 31, December 31, 2021 2020 Contract liabilities Opening $ 235,000 $ 180,200 Additions 116,000 79,000 Transfer to revenue 0 (24,200) Ending $ 351,000 $ 235,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of deferred tax assets and liabilities | 2021 2020 Deferred tax assets: Net operating loss carryforward $ 1,192,000 $ 543,000 Prior year true-up 0 603,000 Less valuation allowance (1,192,000) (1,146,000) Net deferred tax asset $ — $ — |
Schedule of reconciliation effective tax rate | 2021 2020 Tax expense(benefit) at statutory rate $ (31,000) $ (30,000) State and local taxes, net of federal benefit (15,000) (15,000) Permanent differences — — Change in valuation allowance 46,000 45,000 Tax expense $ 0 $ 0 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounts Payable and Accrued Expenses | |
Schedule of accounts payable and accrued expenses | December 31, December 31, Accounts Payable and Accrued Expenses 2021 2020 Professional fees $ 147,500 $ 100,000 Legal Fees 17,166 8,749 Insurance 25,940 24,234 Filing fees 22,316 17,472 Marketing fees and expenses — 15,320 Miscellaneous 1,015 2,871 Total Accounts Payable and Accrued Expenses $ 213,937 $ 168,646 |
Summary of Significant Accoun_3
Summary of Significant Accounting Principles (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Principles | |||
Cash collections | $ 858,000 | $ 236,000 | $ 235,000 |
Cumulative losses | 7,138,682 | 6,991,660 | |
Negative working capital | 564,379 | ||
Net Loss | (147,022) | (91,665) | |
FDIC insured limit | 250,000 | ||
Uninsured balance | 0 | 0 | |
Cash equivalents | 0 | 0 | |
Allowance for doubtful accounts | $ 0 | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Principles - Concentration of Credit Risk (Details) | 12 Months Ended | ||
Dec. 31, 2021 item | Dec. 31, 2020 item | Sep. 12, 2023 agreement | |
Concentration of Credit Risk | |||
Number of license agreements | 6 | 11 | 6 |
Royalty | |||
Concentration of Credit Risk | |||
Number of licenses for which revenue recognized | 3 | 9 | |
Revenue | Product concentration risk | Royalty | |||
Concentration of Credit Risk | |||
Number of license agreements | 2 | 4 | |
Concentration risk percentage | 0% | 81% | |
Revenue | Product concentration risk | Royalty | Licensees One | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 15% | ||
Revenue | Product concentration risk | Royalty | Licensees Two | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 98% | 15% | |
Revenue | Product concentration risk | Royalty | Licensees Three | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 24% | ||
Revenue | Product concentration risk | Royalty | Licensees Four | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 27% | ||
Revenue | Product concentration risk | Minimum | Royalty | Licensees Two | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 40% | ||
Revenue | Product concentration risk | Maximum | Royalty | Licensees Two | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 58% | ||
Accounts receivable | Credit concentration risk | Royalty | |||
Concentration of Credit Risk | |||
Number of license agreements | 1 | 1 | |
Concentration risk percentage | 0% | ||
Accounts receivable | Credit concentration risk | Royalty | one receivable | |||
Concentration of Credit Risk | |||
Concentration risk percentage | 100% | 100% |
Disaggregation of Revenue - Rev
Disaggregation of Revenue - Revenue is disaggregated by major products/service lines, and timing of revenue recognition (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue | ||
Total Revenue | $ 241,001 | $ 263,142 |
Products transferred at a point in time | ||
Disaggregation of Revenue | ||
Total Revenue | 0 | 0 |
Products and services transferred over time | ||
Disaggregation of Revenue | ||
Total Revenue | 241,001 | 263,142 |
Licensing fees - royalty revenue | ||
Disaggregation of Revenue | ||
Total Revenue | 241,001 | 263,142 |
Initiation fees | ||
Disaggregation of Revenue | ||
Total Revenue | $ 0 | $ 0 |
Disaggregation of Revenue - Con
Disaggregation of Revenue - Contract balances (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Assets | ||
Trade receivables, net | $ 140,000 | $ 41,597 |
Liabilities | ||
Contracted liabilities | 0 | 0 |
Contracted liabilities - long term | 351,000 | 235,000 |
Contract liabilities | ||
Opening | 235,000 | 180,200 |
Additions | 116,000 | 79,000 |
Transfer to revenue | 0 | (24,200) |
Ending | $ 351,000 | $ 235,000 |
Related-Party Transactions (Det
Related-Party Transactions (Details) | 1 Months Ended | 12 Months Ended | ||||||||||||||
Mar. 28, 2022 USD ($) | Dec. 01, 2018 USD ($) | Aug. 04, 2018 USD ($) | Mar. 01, 2017 USD ($) | Feb. 28, 2017 item | Apr. 03, 2016 item | Apr. 03, 2016 individual | May 05, 2015 USD ($) | Jan. 01, 2013 USD ($) | Mar. 31, 2017 USD ($) | Jan. 31, 2017 | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jul. 31, 2018 USD ($) | Sep. 01, 2017 | Jan. 27, 2009 | |
Related Party Transactions | ||||||||||||||||
Number of licenses with settlement agreements | item | 3 | |||||||||||||||
Due from related parties | $ 0 | $ 0 | ||||||||||||||
Number of plaintiffs filed a civil suit | 50 | 50 | ||||||||||||||
Amount settled the plaintiffs claims | $ 1,310,000 | |||||||||||||||
Westside Realty of New York Inc | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Related party rent per month | 2,500 | |||||||||||||||
Rent expense | 0 | 30,000 | ||||||||||||||
Rent payable related party | 30,000 | 30,000 | ||||||||||||||
Scores New York | Director | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Equity method investment ownership percentage | 2% | |||||||||||||||
I.M. Operating LLC | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Due from related parties | $ 255,406 | $ 255,406 | ||||||||||||||
Interest rate (in percentage) | 4% | 4% | ||||||||||||||
I.M. Operating LLC | Royalty Receivable | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Royalty receivable | 0 | 0 | ||||||||||||||
I.M. Operating LLC | Scores New York | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Equity method investment ownership percentage | 100% | 72% | ||||||||||||||
Robert M. Gans | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Rent expense | $ 0 | 30,000 | ||||||||||||||
Threshold period of written note under termination | 10 days | |||||||||||||||
Robert M. Gans | Westside Realty of New York Inc | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Equity method investment ownership percentage | 80% | |||||||||||||||
Metropolitan Lumber | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Management services fee amount per year | $ 90,000 | $ 30,000 | ||||||||||||||
Management services payable related party | $ 157,500 | 67,500 | ||||||||||||||
Accrued expenses of related party | $ 7,500 | |||||||||||||||
Interest rate (in percentage) | 4% | |||||||||||||||
Royalty settlement | $ 382,259 | |||||||||||||||
Transaction amount | $ 399,139 | |||||||||||||||
Number of monthly installments periodic payments | 86 consecutive monthly installments | |||||||||||||||
Monthly installment amount | $ 5,000 | |||||||||||||||
Final installment amount | 1,370 | |||||||||||||||
Metropolitan Lumber | Subsequent Event | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Amount repaid | $ 373,068 | |||||||||||||||
Metropolitan Lumber Hardware And Building Supplies Inc | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Management fees | 90,000 | 90,000 | ||||||||||||||
Accrued expenses of related party | 0 | 7,500 | ||||||||||||||
Aggregate amount | $ 770,000 | |||||||||||||||
Due to related parties | $ 781,399 | |||||||||||||||
Star Light Events LLC | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Due from related parties | $ 75,000 | |||||||||||||||
Interest rate (in percentage) | 4% | |||||||||||||||
Swan Media Group, Inc | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Due from related parties | $ 50,000 | $ 50,000 | ||||||||||||||
Interest rate (in percentage) | 4% | 4% | ||||||||||||||
Related Party | ||||||||||||||||
Related Party Transactions | ||||||||||||||||
Due to related parties | $ 561,846 | $ 464,692 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 1,192,000 | $ 543,000 |
Prior year true-up | 0 | 603,000 |
Less valuation allowance | (1,192,000) | (1,146,000) |
Net deferred tax asset | $ 0 | $ 0 |
Income Taxes - Effective tax ra
Income Taxes - Effective tax rate (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Tax expense(benefit) at statutory rate | $ (31,000) | $ (30,000) |
State and local taxes, net of federal benefit | (15,000) | (15,000) |
Permanent differences | 0 | 0 |
Change in valuation allowance | 46,000 | 45,000 |
Tax expense | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Amount accrued for interest and penalties | 0 | 0 |
Net operating loss carryforwards | 6,823,000 | |
Valuation allowance of NOL's Subject to annual limitation | 4,091,000 | |
Operating loss annual limitation | 70,000 | |
Operating loss annual limitation Due | 2,978,000 | |
Operating loss remaining annual limitation | 3,845,000 | |
Deferred tax assets to net operating loss carryforwards | $ 1,192,000 | $ 543,000 |
Effective income tax rate (in percent) | 21% | 21% |
Licensees (Details)
Licensees (Details) | Sep. 12, 2023 agreement | Dec. 31, 2021 item | Dec. 31, 2020 item |
Licensees | |||
Number of license agreements | 6 | 6 | 11 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Accounts Payable and Accrued Expenses | ||
Professional fees | $ 147,500 | $ 100,000 |
Legal Fees | 17,166 | 8,749 |
Insurance | 25,940 | 24,234 |
Filing fees | 22,316 | 17,472 |
Marketing fees and expenses | 15,320 | |
Miscellaneous | 1,015 | 2,871 |
Total Accounts Payable and Accrued Expenses | $ 213,937 | $ 168,646 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 1 Months Ended | 12 Months Ended | ||||||||||
Apr. 11, 2023 USD ($) | Oct. 06, 2022 USD ($) item | Mar. 28, 2022 USD ($) | Dec. 01, 2018 USD ($) | Aug. 04, 2018 USD ($) | Mar. 01, 2017 USD ($) | Apr. 03, 2016 item | Apr. 03, 2016 individual | Mar. 31, 2017 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Jul. 31, 2018 USD ($) | |
Commitments and Contingencies | ||||||||||||
Royalty amount | $ 0 | $ 0 | ||||||||||
Number of plaintiffs filed a civil suit | 50 | 50 | ||||||||||
Amount settled the plaintiffs claims | $ 1,310,000 | |||||||||||
Subsequent Event | ||||||||||||
Commitments and Contingencies | ||||||||||||
Termination of licensing agreements | $ 45,000 | |||||||||||
Robert M. Gans | ||||||||||||
Commitments and Contingencies | ||||||||||||
Lease amount per month | 2,500 | |||||||||||
Rent expense | 0 | 30,000 | ||||||||||
I.M. Operating LLC | ||||||||||||
Commitments and Contingencies | ||||||||||||
Royalty amount | $ 255,406 | $ 255,406 | ||||||||||
Interest rate (in percentage) | 4% | 4% | ||||||||||
Star Light Evens LLC | ||||||||||||
Commitments and Contingencies | ||||||||||||
Royalty amount | $ 75,000 | |||||||||||
Interest rate (in percentage) | 4% | |||||||||||
Swan Media Group, Inc | ||||||||||||
Commitments and Contingencies | ||||||||||||
Royalty amount | $ 50,000 | $ 50,000 | ||||||||||
Interest rate (in percentage) | 4% | 4% | ||||||||||
Metropolitan Lumber Hardware And Building Supplies Inc | ||||||||||||
Commitments and Contingencies | ||||||||||||
Contributed services rent per month | 7,500 | |||||||||||
Management service expenses | $ 90,000 | $ 90,000 | ||||||||||
Aggregate amount | $ 770,000 | |||||||||||
Aggregate loan | $ 781,399 | |||||||||||
Metropolitan Lumber | ||||||||||||
Commitments and Contingencies | ||||||||||||
Interest rate (in percentage) | 4% | |||||||||||
Royalty settlement | $ 382,259 | |||||||||||
Transaction amount | $ 399,139 | |||||||||||
Number of monthly installments periodic payments | 86 consecutive monthly installments | |||||||||||
Monthly installment amount | $ 5,000 | |||||||||||
Final installment amount | $ 1,370 | |||||||||||
Metropolitan Lumber | Subsequent Event | ||||||||||||
Commitments and Contingencies | ||||||||||||
Amount repaid | $ 373,068 | |||||||||||
Settlement litigation | Subsequent Event | ||||||||||||
Commitments and Contingencies | ||||||||||||
Parties subsequently settled damaged amount | $ 10,000 | |||||||||||
Number of settlement payments | item | 2 | |||||||||||
Amount of each settlement payment | $ 5,000 | |||||||||||
Threshold period for second payment after first payment | 30 days |
Subsequent Events (Details)
Subsequent Events (Details) | Mar. 23, 2022 |
Subsequent Event | First Amendment to the Scores Trademark Sublicense Agreement | |
Subsequent Events | |
License useful period (in years) | 25 years |