-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RSCe/jMDEAwZZsKvSkSH3Yg08okjUD225Atylgb8bsi401VInQHhYkTqqbGPT8kw 1a0A9ZeBdK8IPh66Lk3EBw== 0001144204-05-036631.txt : 20051117 0001144204-05-036631.hdr.sgml : 20051117 20051117171830 ACCESSION NUMBER: 0001144204-05-036631 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051117 DATE AS OF CHANGE: 20051117 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SCORES HOLDING CO INC CENTRAL INDEX KEY: 0000831489 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AMUSEMENT & RECREATION SERVICES [7900] IRS NUMBER: 870426358 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16665 FILM NUMBER: 051213382 BUSINESS ADDRESS: STREET 1: 150 EAST 58TH STREET STREET 2: SUITE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-421-8480 MAIL ADDRESS: STREET 1: 533-535 WEST 27TH STREET STREET 2: SUITE CITY: NEW YORK STATE: NY ZIP: 10001 FORMER COMPANY: FORMER CONFORMED NAME: INTERNET ADVISORY CORP DATE OF NAME CHANGE: 19980904 FORMER COMPANY: FORMER CONFORMED NAME: OLYMPUS MTM CORP DATE OF NAME CHANGE: 19970215 10QSB 1 v029774_10qsb.txt U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: September 30, 2005 |_| TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT For the transition period from ________________ to __________________ COMMISSION FILE NUMBER 0-16665 SCORES HOLDING COMPANY INC. (Exact name of small business issuer as specified in its charter) UTAH 87-0426358 ----------------------------- --------------- (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 533-535 WEST 27TH ST., NEW YORK, NY 10001 ----------------------------------------- (Address of principal executive offices) (212) 868-4900 -------------- (Issuer's telephone number) - -------------------------------------------------------------------------------- (Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes |X| No |_| Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. [Yes |_| No |_|] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practical date: 71,402,188 AS OF NOVEMBER 14, 2005 TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (CHECK ONE). YES |_|; NO |X| SCORES HOLDING COMPANY INC. SEPTEMBER 30, 2005 QUARTERLY REPORT ON FORM 10-QSB TABLE OF CONTENTS Page ---- Special Note Regarding Forward Looking Statements............................ 2 PART I - FINANCIAL INFORMATION Item 1. Financial Statements................................................ 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations .............................................. 10 Item 3. Controls and Procedures............................................. 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings................................................... 13 Item 2. Changes in Securities and Use of Proceeds........................... 13 Item 6. Exhibits and Reports on Form 8-K.................................... 13 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS To the extent that the information presented in this Quarterly Report on Form 10-QSB for the quarter ended September 30, 2005, discusses financial projections, information or expectations about our products or markets, or otherwise makes statements about future events, such statements are forward-looking. We are making these forward-looking statements in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks and uncertainties are described, among other places in this Quarterly Report, in "Management's Discussion and Analysis of Financial Condition and Results of Operations". In addition, we disclaim any obligations to update any forward-looking statements to reflect events or circumstances after the date of this Quarterly Report. When considering such forward-looking statements, you should keep in mind the risks referenced above and the other cautionary statements in this Quarterly Report. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PAGE Consolidated Balance Sheets as of September 30, 2005 (unaudited) and December 31, 2004..................................................... 3 Consolidated Statements of Operations for the nine months ended September 30, 2005 (unaudited)............................................. 4 Consolidated Statements of Cash Flows for the nine months ended September 30, 2005 (unaudited)............................................. 5 Notes to Consolidated Financial Statements (unaudited)....................... 6 2 PART I. FINANCIAL INFORMATION Item 1. Financial Statements SCORES HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
SEPT 30, DECEMBER 31, 2005 2004 -------------- ------------ (unaudited) (audited) ASSETS CURRENT ASSETS: Cash $ 44,356 $ 173 Notes Receivable - current portion -related party 971,302 699,013 Royalty Receivable 1,106,166 971,263 Inventory 26,903 -------------- ------------ Total Current Assets 2,148,727 1,670,449 FURNITURE AND EQUIPMENT, NET 11,263 18,763 INTANGIBLE ASSETS, NET 147,000 165,750 NOTES RECEIVABLE - long term - related party 884,483 1,074,017 -------------- ------------ $ 3,191,473 2,928,979 ============== ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 382,837 $ 280,024 Related party payable 1,810 28,760 Notes Payable 62,477 79,889 Convertible Debentures, Net of Discount 123,300 184,600 -------------- ------------ Total Current Liabilities 570,424 573,273 LONG TERM DEBT -- 34,738 COMMITMENTS & CONTINGENCIES -- -- STOCKHOLDERS' EQUITY Preferred stock, $.0001 par value, 10,000,000 shares authorized, -0- issued and outsatanding -- -- Common stock, $.001 par value; 500,000,000 shares authorized, 71,402,188 and 30,876,046 issued and outstanding, respectively 71,402 30,877 Additional paid-in capital 5,833,150 5,691,598 Accumulated deficit (3,283,503) (3,401,507) -------------- ------------ Total Stockholder's equity 2,621,049 2,320,968 -------------- ------------ $ 3,191,473 $ 2,928,979 ============== ============
3
SCORES HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPT 30, THREE MONTHS ENDED SEPT 30, -------------------------- ---------------------------- 2005 2004 2005 2004 ----------- ------------ ------------- ------------ Royalty Revenue $ 940,499 $ 937,443 $ 317,155 $ 234,317 Merchandise Revenue 83,176 77,585 41,694 33,107 ----------- ------------ ------------- ------------ Net Sales 1,023,675 1,015,028 358,849 267,424 COST OF GOODS SOLD 83,176 85,962 31,185 35,302 ----------- ------------ ------------- ------------ GROSS PROFIT 940,499 929,066 327,664 232,122 GENERAL AND ADMINISTRATIVE EXPENSES 896,934 828,613 412,044 372,473 ----------- ------------ ------------- ------------ NET INCOME (LOSS) FROM OPERATIONS 43,565 100,453 (84,380) (140,351) INTEREST INCOME (EXPENSE ) 74,439 (179,135) 26,394 (226,956) ----------- ------------ ------------- ------------ NET INCOME BEFORE INCOME TAXES 118,004 (78,682) (57,986) (367,307) PROVISION FOR INCOME TAXES 0 5,000 -- -- ----------- ------------ ------------- ------------ NET INCOME (LOSS) $ 118,004 $ (83,682) $ (57,986) $ (367,307) =========== ============ ============= ============ NET INCOME PER SHARE $ 0.00 $ (0.01) $ (0.01) $ (0.03) =========== ============ ============= ============ WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING 41,572,395 12,512,298 46,148,621 14,194,056 =========== ============ ============= ============ WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING - DILUTED 41,572,395 12,512,298 41,148,621 14,194,056 =========== ============ ============= ============
4 SCORES HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPT 30, ---------------------- 2005 2004 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (Loss) $ 118,004 $ (83,682) Adjustments to reconcile net loss to net cash provided by (used) in operating activites: Depreciation & Amortization 26,250 24,379 Common stock issued for services 120,777 518,000 Royalty receivable (134,903) (594,370) Inventory (26,903) (32,973) Interest receivable (82,755) (83,332) Accounts payable and accrued expenses 102,813 89,252 --------- --------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 123,283 (162,726) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Note receivable -- 60,000 Security deposits -- (8,987) --------- --------- NET CASH PROVIDED BY INVESTING ACTIVITIES 51,013 --------- --------- CASH PROVIDED BY FINANCING ACTIVITIES: Issuance of Debentures -- 250,000 Related party payable (26,950) 37,460 Repayment of notes payable (52,150) (59,759) --------- --------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (79,100) 227,701 --------- --------- NET INCREASE IN CASH 44,183 115,988 CASH, beginning of the period 173 9 --------- --------- CASH, end of the period $ 44,356 $ 115,997 ========= ========= Supplemental disclosures of cash flow information: Cash paid during the year for interest $ 8,316 $ 12,845 Cash paid during the year for taxes 5,905 Non cash financing activities: Common stock issued for services $ 120,777 $ 268,000 Common stock issued in connection with debenture conversion 61,620 -- Beneficial conversion 250,000
5 SCORES HOLDING COMPANY INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: Basis of Presentation The accompanying unaudited consolidated financial statements of Scores Holding Company Inc., (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation (consisting of normal recurring accruals) have been included. The preparation of financial statements in conformity with generally accepted accounting principles 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Operating results expected for the nine months ended September 30, 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2005. For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2004. 6 Note 2: Summary of Significant Accounting Principles Stock based compensation plans - We account for our stock-based compensation plans under Accounting Principles Board Opinion 25, (APB 25) Accounting for Stock Issued to Employees and the related interpretation, for which no compensation cost is recorded in the statement of operations for the estimated fair value of stock options issued with an exercise price equal to the fair value of the common stock on the date of grant. Statement of Financial Accounting Standards No. 123 (SFAS 123) Accounting for Stock-Based Compensation, as amended by Statement of Financial Accounting Standards No. 148 (SFAS 148) Accounting for Stock-Based Compensation - - Transition and Disclosure, requires that companies, which do not elect to account for stock-based compensation as prescribed by this statement, disclose the pro-forma effects on earnings and earnings per share as if SFAS 123 has been adopted. If we applied the recognition provisions of SFAS 123 using the Black-Scholes option pricing model, the resulting pro-forma net income (loss) available to common shareholders, and pro-forma net income (loss) available to common shareholders per share would be as follows: FOR THE NINE MONTHS ENDED SEPTEMBER 30, ------------------------ 2005 2004 ----------- ---------- Net income (loss) available to common shareholders, as reported $ 118,004 $ (83,682) Deduct: Stock-based compensation, net of tax -- -- ----------- ---------- Net income (loss) available to common shareholders, pro-forma $ 118,004 $ (83,682) =========== ========== Basic earnings (loss) per share: As reported - $ .00 $ (.01) Pro-forma - $ .00 $ (.01) Diluted earnings (loss) per share As reported - $ .00 $ (.01) Pro-forma $ .00 $ (.01) 7 The above stock-based employee compensation expense has been determined utilizing a fair value method, the Black-Scholes option-pricing model. We have recorded no compensation expense for stock options granted to employees during three ended September 30, 2005 and 2004, respectively. In accordance with SFAS 123, the fair value of each option grant has been estimated as of the date of the grant using the Black-Scholes option pricing model. No assumptions have been made therefore there are no disclosures. Note 3: Equity Transactions During the nine months ended September 30, 2005, the Company issued 6,036,534 shares of common stock in exchange for the conversion of $126,700 of debenture principal and $530.22 of interest, respectively. During the nine months ended September 30, 2005, the Company issued 21,792,200 shares of common stock in accordance with the anti-dilution provisions in the unwinding agreement. During the nine months ended September 30, 2005, the Company issued 8,715,000 shares of common stock for services. Note 4: NEW ACCOUNTING PRONOUNCEMENTS In March 2005, FASB Interpretation No.47 "FIN 47" was issued, which clarifies certain terminology as used in FASB Statement No. 143, Accounting for Asset Retirement Obligations. In addition it clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005. Early adoption of FIN 47 is encouraged. Management believes the adoption of FIN 47 will have no impact on the financials of the Company, once adopted. 8 FASB 154 - Accounting Changes and Error Corrections In May 2005, the FASB issued FASB Statement No. 154, which replaces APB Opinion No.20 and FASB No. 3. This Statement provides guidance on the reporting of accounting changes and error corrections. It established, unless impracticable retrospective application as the required method for reporting a change in accounting principle in the absence of explicit transition requirements to a newly adopted accounting principle. The Statement also provides guidance when the retrospective application for reporting of a change in accounting principle is impracticable. The reporting of a correction of an error by restating previously issued financial statements is also addressed by this Statement. This Statement is effective for financial statements for fiscal years beginning after December 15, 2005. Earlier application is permitted for accounting changes and corrections of errors made in fiscal years beginning after the date of this Statement is issued. Management believes this Statement will have no impact on the financial statements of the Company once adopted. Note 5: Related Party Receivable The notes receivable amount current and long term portion, including accrued interest amounts to $1,855,785, such amount relates to a secured receivable from the Go West night club which is partially owned and operated by the CEO of the Company. There have been no payments on this outstanding balance through September 30, 2005; however, management is in the process of renegotiating the payment terms to pay $11K monthly of principle and interest for 120 months with a balloon payment at the end of the term. Management believes such balance due is still secured by leaseholds and the underlying lease. The company has received $239,754 in royalties form the Go West night club for the nine months ended September 30, 2005, which includes $120,000 of rent payable by the Company for the lease of office space from the Go West realty entity. The Go West club accounts for approximately 33% and 25% of royalty revenue for the third quarter September 2005 and 2004 respectively. Included in the royalty receivable is $940,302 from the 333 night club, which is partially owned and operated by the CEO of the Company. The Company has received its royalties earned from 333 for the recent three months through November 2005. The club continues to show profits and has been current with its monthly royalties for the third quarter September 2005. In addition, the Company has agreed on a plan to pay an additional $20K per month towards the balance of the prior quarters' outstanding royalty receivable. Such payments commence November 2005. The company has received $527,006 in royalties from the 333 club which accounts for approximately 61% and 59% of royalty revenue for the third quarter September 2005 and 2004 respectively. Note 6: Licensees During the nine months ended September 30, 2005, the Company entered into four licensee agreements with Ft. Lauderdale, Baltimore, Las Vegas and Lake Geneva. 9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30, 2004 REVENUES: Revenues increased 1% to $1,024,000 for the nine months ended September 30, 2005 from $1,015,000 for the nine months ended September 30, 2004. The increase was attributable primarily to royalties earned from the addition of two new licensees in Las Vegas and Ft. Lauderdale in 2005 which accounted for approximately of 2% of total revenues for the nine months ended September 2005. Royalties for the 333 East Side licensee, which accounted for approximately 61% of total revenue for the nine months ended September 30, 2005, royalties declined by approximately $126,000 compared to other licensees whose royalties increased by approximately $133,000 for the nine months ended September 30, 2005. OPERATING EXPENSES: Operating expenses increased 8% to $897,000 for the nine months ended September 30, 2005 from $829,000 for the nine months ended September 30, 2004. The difference was due primarily to a net increase in general and administrative expenses resulting from a $68,000 combined increase in payroll, public relations and business development cost applicable to two newly licensees in Las Vegas, Ft. Lauderdale, Baltimore and Lake Geneva during the nine months ended September 30, 2005. INTEREST INCOME (EXPENSE) - NET: Interest income is presented net of interest expense for the nine months ended September 30, 2005 and 2004, respectively. Interest income is accrued and amounted to $83,000 for both the nine months ended September 30, 2005 and the nine months ended September 30, 2004. Interest income is due primarily in consideration of a secured promissory note issue from Go West based on an agreement in March 2003 to unwind our acquisition of Go West in March 2002. Interest expense is due primarily from the issuance of long-term debentures and notes payable. Interest expense decreased to $8,000 for the nine months ended September 30, 2005 from $263,000 for the nine months ended September 30, 2004. This decrease was due primarily to a beneficial conversion of debt to equity amounting to $250,000 in the third quarter September 30, 2004. PROVISION FOR INCOME TAXES: Although the company had net profits during the nine months ended September 30, 2005, the provision for income taxes related primarily to average assets and capital was not impacted by net operating losses. NET INCOME (PER SHARE): Net income was $118,000 or $0.00 per share for the nine months ended September 30, 2005 versus net loss of $84,000 or $(.01) per share for the nine months ended September 30, 2004. The increase was due primarily to the addition of two new licensees clubs and a reduction in general and administrative cost during the third quarter 2005. Net income per share data for the nine months ended September 2005 and September 30, 2004 is based on net income available to common shareholders divided by the weighted average of the common shares. RESULTS OF OPERATIONS: Three months ended September 30, 2005 Compared to three months ended September 30, 2004. REVENUES: Revenues increased 34% to $359,000 for the three months ended September 30, 2005 from $267,000 for the three months ended September 30, 2005. The increase was attributable to a 10% increase in royalties and merchandise sales for the three months ended September 30, 2005 from all licensees other than the 333 East Side licensee which accounted for approximately 59% and 49% of total royalty revenue for three month period ended September 30, 2005 and September 30, 2004 respectively. The new Scores Las Vegas licensee that opened in late September accounted for approximately 4% of royalty revenue and merchandise sales during the three months ended September 30, 2005. 10 OPERATING EXPENSES: Operating expenses increased 11% to $412,000 for the three months ended September 30, 2005 from $372,000 for the three months ended September 30, 2005. The increase was due primarily to a $78,000 increase in general and administrative expenses both related to new business development, legal and the marketing of the Scores brand name, which introduced three new licensees in Lake Geneva, Baltimore and Las Vegas. INTEREST INCOME (EXPENSE) - NET: Interest income is presented net of interest expense for both the nine months ended September 30, 2005 and the nine months ended September 30, 2004. Interest income for both the three months ended September 30, 2005 and the three months ended September 30, 2004 amounted to $27,000. Interest income is due primarily in consideration to a secured promissory note issue from Go West based on the unwinding agreement. Interest expense is due primarily from the issuance of long-term debentures and notes payable. Interest expense decrease for the three months ended September 30, 2005 to $1,000 from $255,000 for the three months ended September 30, 2004. This decrease was due primarily to a beneficial conversion of debt to equity amounting to $250,000 in the third quarter September 30, 2004. NET INCOME (LOSS) PER SHARE: Net income was $(58,000) or $(0.01) per share for the three months ended September 30, 2005 versus net loss of $(367,000) or $(.01) per share for the three months ended September 30, 2004. The profit increase was due primarily to the increase in revenues of $91,000 and a decrease in net general and administrative cost of $218,000 related to interest, consulting and finance charges. Net income per share data for the three months ended September 30, 2005 and September 30, 2004 is based on net income available to common shareholders divided by the weighted average of the common shares. Revenues are recognized as they are earned, not necessarily as they are collected. Direct cost such as merchandise, labor and shipping related cost incurred for resale to licensees are classified as cost of sales. General and administrative expenses include accounting, advertising, contract labor, bank charges, depreciation, entertainment, insurance, legal, office supplies, payroll taxes, postage, professional fees, rent, telephone, business development, trade shows and travel. Liquidity and Capital Resources We have incurred losses since the inception of our business. Since our inception, we have been dependent on acquisitions and funding from private lenders and investors to conduct operations. As of September 30, 2005 we had an accumulated deficit of $3,283,503. As of September 30, 2005, we had total current assets of $2,148,727 and total current liabilities of $570,424 or working capital of $1,578,303. At December 31, 2004, we had total current assets of $1,670,449 and total current liabilities of $573,273 or working capital of $1,097,176. The increase in current assets is due to the royalty receivable due from the licensees and the increase in the loan payments due from Go West Entertainment within the next 12 months. The majority of the royalty receivable is due from 333 E. 60th Street, Inc which is under common control with us. We are mindful that those royalties receivable may take on the appearance of a prohibited loan under Section 402 of the Sarbanes-Oxley Act of 2002. We do not believe, however, that this is a prohibited loan as we are seeking to reduce the amount due under this receivable and believe that 333 E. 60th Street, Inc. will significantly reduce this receivable during 2005 as its cash flow allows. We currently have no material commitments. The increase in the amount of our working capital is primarily attributable to legal and consulting, expenses that the Company is no longer responsible for and the steady flow of income from our licensees. We will continue to evaluate possible acquisitions of or investments in businesses, products and technologies that are complimentary to ours. These may require the use of cash, which would require us to seek financing. We may sell equity or debt securities or seek credit facilities to fund acquisition-related or other business costs. Sales of equity or convertible debt securities would result in additional dilution to our stockholders. We may also need to raise additional funds in order to support more rapid expansion, develop new or enhanced services or products, respond to competitive pressures, or take advantage of unanticipated opportunities. Our future liquidity and capital requirements will depend upon numerous factors, including the success of our adult entertainment licensing business. 11 ITEM 3. CONTROLS AND PROCEDURES Our principal executive officer, in his capacity as such and as the person performing similar functions to that of a principle financial officer, evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on this evaluation, our principal executive officer, in his capacity as such and as the person performing similar functions to that of a principle financial officer, has concluded that the Company's controls and procedures are effective in providing reasonable assurance that the information required to be disclosed in this report has been recorded, processed, summarized and reported as of the end of the period covered by this report. During the period covered by this report, there have not been any significant changes in our internal controls or, to our knowledge, in other factors that could significantly affect our internal controls. 12 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On or about June 25, 2004, the New York District Attorney's office served our former independent accountants with a subpoena in connection with proceedings of the Grand Jury of the County of New York. Additionally, on or about October 15, 2004 and in July 2005, the New York District Attorney served us with subpoenas also in connection with proceedings of the Grand Jury of the County of New York, State of New York. Based on the subpoenas, it appears that the Grand Jury is conducting an investigation into unspecified matters concerning our business and affairs. The subpoenas directed us and our former independent accountant to produce records in our possession concerning our business operations. To date, we have not been charged with any violations or crimes. In May 2005, the Securities and Exchange Commission staff (the "SEC") served us with a subpoena for the production of documents. The documents requested relate to all individuals and entities in connection with the merger and financing transactions described in our August 13, 2002 and August 12, 2004 Form 8-K's filed with the SEC. We intend to cooperate with the SEC in its investigation. There are no other material legal proceedings pending to which we or any of our property is subject, nor to our knowledge are any such proceedings threatened. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS On March 31, 2003, we entered into an Acquisition Agreement with Go West, Richard Goldring, William Osher and Elliot Osher (the "Purchasers"). The Agreement has an "anti-dilution" provision under which, in the event we issue shares of our common stock for any purpose, the Purchasers will be issued that number of additional shares of our common stock necessary for them to maintain collectively a holding of 63.6% of our outstanding common stock. Goldring was issued shares necessary for him to maintain a 46% interest and each of the Oshers was issued shares necessary to maintain an 8.8% interest. During the three month period ended September 30, 2005, Goldring was issued an aggregate of 9,690,412 shares of our common stock and each of the Oshers was issued an aggregate of 1,853,544 shares of our common stock pursuant to the anti-dilution provision. We received no additional consideration for the issuance of these shares. The shares were issued in reliance on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 31.1 Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Executive Officer 31.2 Rule 13(a)-14(a)/15(d)-14(a) Certification of Principal Financial Officer 32.1 Section 1350 Certification of Chief Executive Officer 32.2 Section 1350 Certification of Chief Financial Officer 13 SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. SCORES HOLDING COMPANY INC. Dated: November 17, 2005 /s/ Richard Goldring -------------------------------------- Richard Goldring President, Chief Executive Officer 14 EX-31.1 2 v029774_ex31-1.txt EXHIBIT 31.1 CERTIFICATIONS I, Richard Goldring, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Scores Holding Company, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made know to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the quarterly period covered by this report based on our evaluation; c) Disclosed in this quarterly report any change in the issuer's internal control over financial reporting that occurred during the period covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Dated: November 17, 2005 /s/ Richard Goldring -------------------------------------- Name: Richard Goldring Title: Chief Executive Officer EX-31.2 3 v029774_ex31-2.txt EXHIBIT 31.2 CERTIFICATIONS I, Richard Goldring, performing similar functions to that of a principal financial officer of Scores Holding Company, Inc. certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Scores Holding Company, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made know to us by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the quarterly period covered by this report based on our evaluation; (c) Disclosed in this quarterly report any change in the issuer's internal control over financial reporting that occurred during the period covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls over financial reporting. Dated: November 17, 2005 /s/ Richard Goldring -------------------------------------- Name: Richard Goldring Title: Chief Executive Officer and in his capacity as the acting Accounting Officer EX-32.1 4 v029774_ex32-1.txt EXHIBIT 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Scores Holding Company, Inc.. (the "Company") on Form 10-QSB for the quarter ended September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard Goldring, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that; (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. /s/ Richard Goldring - ------------------------------ Name: Richard Goldring Title: Chief Executive Officer Dated: November 17, 2005 EX-32.2 5 v029774_ex32-2.txt EXHIBIT 32.2 CERTIFICATE PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Scores Holding Company, Inc.. (the "Company") on Form 10-QSB for the quarter ended September 30, 2005 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard Goldring, performing similar functions to that of a principal financial officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respect, the financial condition and result of operations of the Company. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. /s/ Richard Goldring - -------------------------------- Name: Richard Goldring Title: Chief Executive Officer and in his capacity as the acting Accounting Officer Dated: November 17, 2005 -----END PRIVACY-ENHANCED MESSAGE-----