-----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, V8UbobZEjxyh3Rbih3uajQPxdEHD6fD/07IJfrL36OGOOf1C6n7qx2yeU3itFO0K ny+eM9Hbdnr5LVP/4KFXwQ== 0001144204-06-031507.txt : 20060808 0001144204-06-031507.hdr.sgml : 20060808 20060808153610 ACCESSION NUMBER: 0001144204-06-031507 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20060630 FILED AS OF DATE: 20060808 DATE AS OF CHANGE: 20060808 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: 061012786 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 v049172_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: June 30, 2006 [_] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ________________ to __________________ Commission file number 000-16665 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 [_] State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practical date: 146,185,026 as of August 4, 2006 Transitional Small Business Disclosure Format (check one). Yes [_] No [X] Scores Holding Company Inc. June 30, 2006 Quarterly Report on Form 10-QSB Table of Contents Page Special Note Regarding Forward Looking Statements..............................3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements...................................................5 Item 2. Management's Discussion and Analysis or Plan of Operation..............9 Item 3. Controls and Procedures...............................................11 PART II - OTHER INFORMATION Item 1. Legal Proceedings.....................................................11 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds...........12 Item 6. Exhibits..............................................................12 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 June 30, 2006 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 or Plan of Operation". 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. 3 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Page ---- Consolidated Balance Sheets as of June 30, 2006 (unaudited) and December 31, 2005..................................5 Consolidated Statements of Operations for the Six and three months ended June 30, 2006 and June 30, 2005 (unaudited)...................................................6 Consolidated Statements of Cash Flows for the six months ended June 30, 2006 and June 30, 2005 (unaudited)........................7 Notes to Consolidated Financial Statements (unaudited)........................................................8 4 SCORES HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
June 30, December 31, 2006 2005 ----------- ----------- (Unaudited) (Audited) ASSETS CURRENT ASSETS: Cash $ 80,283 $ 31,185 Notes receivable - current portion -related party 1,103,112 1,030,476 Licensee receivable - including affiliates 1,527,931 1,244,888 Prepaid expenses 58,970 39,648 Inventory 35,996 31,715 ----------- ----------- Total current Assets 2,806,292 2,377,912 FURNITURE AND EQUIPMENT, NET 3,763 8,763 INTANGIBLE ASSETS, NET 128,250 140,750 NOTES RECEIVABLE - long term - related party 743,827 830,894 ----------- ----------- $ 3,682,132 $ 3,358,319 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and accrued expenses $ 160,500 $ 323,407 Related party payable 9,600 11,000 Notes payable 0 28,965 Convertible debentures, net of discount 26,400 123,300 ----------- ----------- Total Current Liabilities 196,500 486,672 COMMITMENTS & CONTINGENCIES -- -- STOCKHOLDERS' EQUITY Preferred stock, $.0001 par value, 10,000,000 shares authorized, -0- issued and outstanding -- -- Common stock, $.001 par value; 500,000,000 shares authorized, 144,185,026 and 78,642,188 issued and outstanding, respectively 144,185 78,642 Additional paid-in capital 5,908,969 5,875,310 Accumulated deficit (2,567,522) (3,082,305) ----------- ----------- Total stockholder's equity 3,485,632 2,871,647 ----------- ----------- $ 3,682,132 $ 3,358,319 =========== ===========
5 SCORES HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
Six months ended June 30, Three months ended June 30, 2006 2005 2006 2005 ------------ ------------ ------------ ------------ (Unaudited) (Unaudited) (Unaudited) (Unaudited) REVENUES Royalty revenue $ 905,082 $ 623,344 $ 464,956 $ 317,478 Merchandise revenue 47,294 41,482 30,847 15,527 Public relations revenue 6,000 -- 3,000 -- ------------ ------------ ------------ ------------ Total 958,376 664,826 498,803 333,005 COST OF MERCHANDISE SOLD 37,835 52,240 24,677 24,317 ------------ ------------ ------------ ------------ GROSS PROFIT 920,541 612,586 474,126 308,688 GENERAL AND ADMINISTRATIVE EXPENSES 454,646 479,588 193,659 260,506 ------------ ------------ ------------ ------------ NET INCOME FROM OPERATIONS 465,895 132,998 280,467 48,182 INTEREST INCOME/EXPENSE NET 54,889 47,991 27,585 25,153 ------------ ------------ ------------ ------------ NET INCOME BEFORE INCOME TAXES 520,784 180,989 308,052 73,335 PROVISION FOR INCOME TAXES 6,000 5,000 6,000 -- ------------ ------------ ------------ ------------ NET INCOME $ 514,784 $ 175,989 302,052 73,335 ============ ============ ============ ============ NET INCOME PER SHARE - Basic and Diluted $ 0 $ 0 0 0 ============ ============ ============ ============ WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING - Basic and diluted 106,550,728 41,572,395 134,459,268 46,148,621 ============ ============ ============ ============
6 SCORES HOLDING COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended June 30, --------- --------- 2006 2005 --------- --------- (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 514,784 $ 175,989 Adjustments to reconcile net loss to net cash provided by (used) in operating activities: Depreciation &Amortization 17,500 17,500 Common stock and warrants issued for services -- 23,000 Royalty receivable (283,043) (150,838) Prepaid expenses (19,322) -- Inventory (4,281) -- Interest receivable (18,068) (55,170) Accounts payable and accrued expenses (162,907) 51,937 --------- --------- NET CASH PROVIDED BY OPERATING ACTIVITIES 44,663 62,418 CASH FLOWS FROM INVESTING ACTIVITIES: Cash collected on notes receivable 34,800 -- --------- --------- NET CASH PROVIDED BY INVESTING ACTIVITIES 34,800 -- --------- --------- CASH PROVIDED BY FINANCING ACTIVITIES: Related party payable (1,400) (16,950) Repayment of notes payable (28,965) (45,468) --------- --------- NET CASH (USED IN) FINANCING ACTIVITIES (30,365) (62,418) --------- --------- NET INCREASE IN CASH 49,098 -- CASH, beginning of the period 31,185 173 --------- --------- CASH, end of the period $ 80,283 $ 173 ========= ========= Supplemental disclosures of cash flow information: Cash paid during the year for interest $ -- $ 5,353 Cash paid during the year for taxes 6,000 5,905 Non cash financing activities: Common stock issued for services -- 23,000 Common stock issued in connection with debenture conversion $ 34,050 $ 39,069
7 Scores Holding Company Inc. and Subsidiaries Notes To Consolidated Financial Statements (Unaudited) PART I. FINANCIAL INFORMATION Item 1. Financial Statements Note 1: Basis of Presentation 1. The accompanying unaudited consolidated financial statements of Scores Holding Company Inc., formerly Internet Advisory Corporation, (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 three months ended June 30, 2006 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006. 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, 2005. Note 2: Summary of Significant Accounting Principles Stock based compensation plans - We previously accounted for stock-based compensation issued to our employees under Accounting Principles Board Opinion 25, (APB 25). Accordingly, no compensation costs for stock options issued to employees, which was measured as the excess, if any, of the fair value of our common stock at the date of grant over the exercise price of the options. The pro forma net earnings per share amounts as if the fair value method had been used would have been presented for the three and six months ended June 30, 2006, in accordance with the Company's adoption of SFAS 123(R), if the Company had issued any such options during the quarter. For purposes of the following disclosures during the transition period of the adoption of SFAS 123(R), the weighted average fair value of options has been estimated on the date of grant using the Black-Scholes options pricing model. The Company did not issue any options or warrants in each of the quarters ended, presented, hence there was no compensation costs to record for the quarter ended June 30, 2006 or to present on a pro forma basis for the quarter ended June 30, 2005. Concentration of Credit Risk Currently, the Company earns royalties and merchandise revenues from seven Licensees in which, four (Chicago, Las Vegas, Baltimore and Lake Geneva) are unrelated from management of the Company. For the six months ended 2006, revenues earned from royalties and merchandise sales from these unrelated licensees amounted to $392,649 which there is $54,953 due and outstanding as of June 30, 2006. Revenues from royalties and merchandise sales from the three related licensees' based in New York and Florida was $565,727, which there was $1,472,978 due and outstanding as of June 30, 2006. Note 3: Equity Transactions On January 27, 2006, the Company issued 3,841,700 shares of common stock in exchange for the conversion of $12,850 of debenture principal and $281 of interest, respectively. On January 27, 2006, the Company issued 5,900,000 shares of common stock in accordance with the anti-dilution provisions in the unwinding agreement. On February 8, 2006, the Company issued 15,029,118 shares of common stock in exchange for the conversion of $50,000 of debenture principal and $1,099 of interest, respectively. On June 2, 2006, the Company issued 27,075,002 retroactive to February 8, 2006 ,shares of our common stock in accordance with the anti-dilution provisions in the unwinding agreement . On June 2, 2006, the Company issued 4,996,020 shares of common stock in exchange for the conversion of $34,050 of Debenture principal and $922.14 of of interest respectively. On June 5, 2006, the Company issued 8,701,000 shares of our common stock in accordance with the anti-dilution provisions in the unwinding agreement. 8 Note 4: New Accounting Pronouncements FASB 155 - Accounting for Certain Hybrid Financial Instruments In February 2006, the FASB issued FASB Statement No. 155, which is an amendment of FASB Statements No. 133 and 140. This Statement; a) permits fair value re-measurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation, b) clarifies which interest-only strip and principal-only strip are not subject to the requirements of Statement 133, c) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, d) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, e) amends Statement 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. This Statement is effective for financial statements for fiscal years beginning after September 15, 2006. Earlier adoption of this Statement is permitted as of the beginning of an entity's fiscal year, provided the entity has not yet issued any financial statements for that fiscal year. Management believes this Statement will have no impact on the financial statements of the Company once adopted. FASB 156 - Accounting for Servicing of Financial Assets In March 2006, the FASB issued FASB Statement No. 156, which amends FASB Statement No. 140. This Statement establishes, among other things, the accounting for all separately recognized servicing assets and servicing liabilities. This Statement amends Statement 140 to require that all separately recognized servicing assets and servicing liabilities be initially measured at fair value, if practicable. This Statement permits, but does not require, the subsequent measurement of separately recognized servicing assets and servicing liabilities at fair value. An entity that uses derivative instruments to mitigate the risks inherent in servicing assets and servicing liabilities is required to account for those derivative instruments at fair value. Under this Statement, an entity can elect subsequent fair value measurement to account for its separately recognized servicing assets and servicing liabilities. By electing that option, an entity may simplify its accounting because this Statement permits income statement recognition of the potential offsetting changes in fair value of those servicing assets and servicing liabilities and derivative instruments in the same accounting period. This Statement is effective for financial statements for fiscal years beginning after September 15, 2006. Earlier adoption of this Statement is permitted as of the beginning of an entity's fiscal year, provided the entity has not yet issued any financial statements for that fiscal year. 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 $1,846,939 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. Payments in the amount of $34,800 have been made on this outstanding balance through June 30, 2006; however, management continues to re-negotiate the payment terms and continues to pay $11,600 monthly of principle and interest, which is less than the required monthly payments due per the note and technically in default. Management believes such balance due is adequately secured by leaseholds and the underlying lease, although subordinated to the underlying mortgage of such property. The Company has not received any payments for royalties from the Go West night club during the six months ended June 30, 2006, although $120,000 of rent payments by the Company for the lease of office space from the Go West has been applied to the royalties earned from Go West. Included in the royalty receivable is $1,114,443 from the 333 night club, which is partially owned and operated by the CEO of the Company. For the six months ended June 30, 2006, the Company has not received any payments for royalties due, however, during the three months ended June 30, 2006. the Company received $55,000 of prior years royalties due. This was agreed on as a plan to pay an additional $20K per month towards the balance of the prior quarters' outstanding royalty receivable. Note 6 - Sub-licensees On March 15, 2006, Scores Baltimore "D/B/A Club 2000 Eastern Avenue, Inc." commenced its operations pursuant to an agreement made with Entertainment Management Services, Inc. on February 27, 2004. There are no royalties due during the quarter ended March 31, 2006. On June 15, 2006, Scores of Lake Geneva "D/B/A Sugar Shack Entertainment, Inc." commenced its operations pursuant to an agreement made with Entesrtainment Management Service, Inc. Accrued royalties in the amount of $2,500 was outstanding at June 30, 2006. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION RESULTS OF OPERATIONS: Six Months Ended June 30, 2006 (the "2006 Period") Compared to Six Months Ended June 30, 2005 (the "2005 Period") 9 REVENUES: Overall revenues increased approximately 46 percent to $911,082 for the six months ended June 30, 2006 from $623,344 for the six months ended June 30, 2005. The increase was due primarily to additional royalties earned from our newly licensed cabarets in Las Vegas (25%), Baltimore (2%) and Lake Geneva (1%) combined and totaled to approximately 28 percent of our revenue during the 2006 Period. Revenues from our Go West and 333 East "Marquee" licensees' combined accounts for 62 percent of 2006 revenue. Our "Marquee" licensee, who accounted for approximately 59 percent of our total revenues in 2005, now accounts for approximately 30 percent of our total revenue in 2006. This was due to increases in admissions at our Go West licensee. OPERATING EXPENSES: Operating expenses for the 2006 Period and the 2005 Period were $454,646 and $479,588 respectively. During the 2006 Period we incurred $110,000 of business development, executive and travel cost that relates directly to expanding the SCORES brand name into new markets and the grand opening of Baltimore and Lake Geneva Licensees. These costs were offset by reductions in costs related to legal, financing charges and other administrative costs that approximated to $85,000. INTEREST INCOME (EXPENSE) - NET: Interest income is presented net of interest expense for the 2006 Period and 2005 Period respectively. Interest income is accrued and amounted to $54,889 and $47,991 for the 2006 and 2005 Period ended respectively. 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 $280 for the 2006 Period from $7,176 for 2005 Period. Provision for Income Taxes: Although the Company had net profits during the 2006 Period, the provision for income taxes relate primarily to the estimated minimum tax on average assets and capital which was not impacted by net operating losses. Net Income (per share): Net income was $514,784 or $0.00 per share for the 2006 Period versus a net income of $175,989 or $0.00 per share for the 2005 Period. The increase was due primarily to the additional royalty revenue earned during the 2006 Period from the Las Vegas, Baltimore and Lake Geneva sub-licensee which amounted to approximately $250,000. Net income per share data for both the 2006 and 2005 Period is based on net income available to common shareholders divided by the weighted average of the common shares. Three Months Ended June 30, 2006 Compared to Three Months Ended June 30, 2005 REVENUES: Revenues increased approximately 47 percent to $ 467,956 from $317,418 for the six months ended June 30, 2006 and June 30, 2005 respectively. This increased was due primarily to the addition of our new licensees' in Las Vegas, Baltimore and Lake Geneva who revenues approximate 20 percent of our total revenue during the three months period ended June 30, 2006. In addition, revenues from our "Marquee" 333 East licensee continued to decline to 29 percent from 57 percent for the three month period ended June 30, 2006. This was primarily due to a shift in admissions from our East side licensee to our West side "Go West" licensee. OPERATING EXPENSES: Operating expenses decreased approximately 26 percent to $194,000 for the three months ended June 30, 2006 from $261,000 for the three-month period ended June 30, 2005. This was due primarily to an increase in business development and executive cost associated with the expansion of the SCORES brand name into new markets that approximated to $69,000. On the other hand, legal fees and other administrative cost were reduced by $136,000 to maximize the above-mentioned cost during the three-month period ended June 30, 2005. INTEREST INCOME (EXPENSE) - NET: Interest income is presented net of interest expense for the three-month periods ended June 30, 2006 and 2005. Interest income is accrued and amounted to $27,585 and $25,157 for the three months periods ended June 30, 2006 and 2005, respectively. Interest income is due primarily in consideration of a secured promissory note issued by Go West pursuant to an agreement from March 2003 to unwind our acquisition of Go West in March 2002. During the three months ended June 30, 2006, prior period receipts of interest in the amount of $45,712 was applied to principal and reclassified to reduce interest receivable. Interest expense is due primarily from the issuance of long-term debentures and notes payable. Interest expense decreased to $0 for the three months ended June 30, 2006 from $2,428 for the three months ended June 30, 2005. Provision for Income Taxes: Although the Company had net profits during the three months ended June 30, 2006, the provision for income taxes relate primarily to the estimated minimum tax on average assets and capital which was not impacted by net operating losses. 10 NET INCOME (PER SHARE): Net income was $302,052 or $0.00 per share for the three months ended June 30, 2006 versus a net income of $73,335 or $0.00 per share for the three months ended June 30, 2005. The increase was due primarily to the additional royalty revenue earned during the three months ended June 30, 2006 from the Las Vegas, Baltimore and Lake Geneva sub-licensees which amounted to approximately $138,000 and a $67,000 reduction of administrative cost due to the SCORES brand name expansion. Net income per share data for both the three months ended June 30, 2006 and June 30, 2005 is based on net income available to common shareholders divided by the weighted average of the common shares. We recognize revenues as they are earned, not necessarily as they are collected. Cost of goods sold relates to the merchandise sold. General and administrative expenses include accounting, advertising, contract labor, bank charges, depreciation, entertainment, equipment rental, insurance, legal, supplies, payroll taxes, postage, professional fees, rent, telephone 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 June 30, 2006 we had an accumulated deficit of $(2,567,522). As of June 30, 2006, we had total current assets of $2,806,292 and total current liabilities of $196,500 or working capital of $2,609,792. At December 31, 2005, we had total current assets of $2,377,912 and total current liabilities of $486,672 or working capital of $1,891,240. Such working capital amount may decrease upon renegotiating the amounts due from the Go West note receivable by a significant amount of up to $900,000 as such amount would be reclassed to the long term portion. 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. We currently have no material commitments. The increase in the amount of our working capital is primarily attributable to legal, consulting, rent and salary expenses that the Company is no longer responsible for due to the unwinding of Go West Entertainment 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. ITEM 3. CONTROLS AND PROCEDURES Our principal executive officer and principal financial officer, whom is the sole officer and director of the Company, 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, the Company's principal executive officer and principal financial officer, whom is the sole officer and director of the Company, has concluded that the Company's controls and procedures are not 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. The controls over the shares of its common stock held in escrow require improvement, since shares were recently released from escrow for debt converted into shares of common stock without the Company recording the conversion of such debt to equity. As a result, the Form 10-QSB for the quarter ended March 31, 2006 had to be restated for this matter. 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. However, based on the understatement of the number of issued and outstanding shares during the period ended March 31, 2006, we continue to review, tighten and improve our internal controls. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS On March 31, 2006, Richard K. Goldring, president, chief executive officer, acting principal financial officer and our principal shareholder, entered a plea of guilty to one count of Offering a False Instrument for Filing in the First Degree pursuant to a plea agreement with the District Attorney of the County of New York (the "DA"). In the event that within one year of the date of the entry of the guilty plea, Mr. Goldring resigns from all "control management positions" he holds in publicly traded companies, including us, and divests himself of all "control ownership positions" in publicly traded companies, including us, and satisfies other conditions, the DA will recommend a sentence of probation. The plea agreement resolves the DA's investigation against Mr. Goldring and us. No charges were brought against us. 11 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS RECENT SALES OF UNREGISTERED SECURITIES During the quarter ended June 30, 2006, the Company issued 35,776,002 shares of common stock in accordance with the anti-dilution provisions in the unwinding agreement. These shares were issued to Goldring and the Oshers pursuant to the "anti-dilution" provisions of the Acquisition Agreement dated March 31, 2003, among Go West Entertainment, Inc., Goldring, the Oshers' and us. Goldring and the Oshers' did not pay to us any consideration for these shares. The shares were issued under the exemption from registration provided in section 4(2) of the Securities Act of 1933. Pursuant to debentures issued by the Company in August of 2004, on February 8, 2006 the Company issued 15,029,118 shares of common stock to Hem Mutual Assurance, LLC in exchange for the conversion of $50,000 of debenture principal and $1,099 of interest. As a result of the issuance of shares of common stock pursuant under the conversion of the debentures Goldring and the Oshers became entitled to receive an aggretgate of 26,250,000 shares of common stock pursuant to the anti-diultion provisions of the Acquisition Agreement. In addition, Goldring and the Oshers became entitled in the quarter ended March 31, 2006 to receive an aggregate of approximately 825,00 shares pursuant to the anti-dilution provisions of the Acquistion Agreement as the result of an incorrect calculation by the Company of debentures converted on January 27, 2006. An aggregate of 27,075,002 shares were issued by the Company to Goldring and the Oshers to cover these anti-dilution shares on June 2, 2006. During the three month period ended June 30, 2006, the Company issued 4,996,020 shares of common stock held in escrow to Hem Mutual Assurance, LLC in exchange for the conversion of $34,050 of principal and $922.14 of interest on the debentures on June 2, 2006. The conversion shares were issued in reliance on the exemption from registration under Section 4 (2) of the Securities Act of 1933. On June 5, 2006, the Company issued an aggregate of 6,293,433 shares of our common stock to Goldring and each of the Oshers was issued and aggregate of 1,203,783 shares of our common stock pursuant to the antidilution provision, the Company received no consideration for the issuance of these shares. ITEM 6. EXHIBITS (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 12 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: August 7, 2006 By: /s/ Richard Goldring ---------------------------------- Richard Goldring President, Chief Executive Officer EX-31.1 2 v049172_ex31-1.txt EXHIBIT 31.1 CERTIFICATIONS I, Richard Goldring, certify that: 2. I have reviewed this quarterly report on Form 10-QSB of Scores Holding Company, Inc.; 3. 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; 4. 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; 5. 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 6. 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. Date: August 7, 2006 /s/ Richard Goldring ---------------------------------- Name: Richard Goldring Title: Principal Executive Officer EX-31.2 3 v049172_ex31-2.txt EXHIBIT 31.2 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. Date: August 7, 2006 /s/ Richard Goldring ---------------------------------- Name: Richard Goldring Title: In his capacity as the acting Principal Financial Officer EX-32.1 4 v049172_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 June 30, 2006 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Richard Goldring, Chief Executive Officer and 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 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, Date: August 7, 2006 EX-32.2 5 v049172_ex32-2.txt CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SRBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report if Scores Holding Company, Inc.. (the "Company") on Form 10-QSB for the quarter ended June 30, 2006 as filed with the Securities and Exchange Commission on the hereof (the "Report"), I, Richard Goldring, performing similar functions to that of 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 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: in his capacity as the acting Principal Financial Officer Date: August 7, 2006 -----END PRIVACY-ENHANCED MESSAGE-----