Scores(OTC) SCRH

Scores licenses its brand to adult nightclubs in the United States. Clubs use the Scores name to attract customers seeking adult entertainment. The company earns revenue from licensing fees paid by these clubs.

Products and Services

• Brand Licensing (100%): Licenses the "Scores" name and trademarks to adult nightclubs in the U.S.
• Consulting Services: Offers club set-up and operational advice to new licensees, usually at the start of agreements.
• Initiation Fees: Collects one-time fees from new licensees when agreements begin.
• Specialty Brand Licensing: Licenses "Scores Sports Bar" and other related brands under separate agreements.

Growth and Expansion

• Amended licensing agreements with Scores Chicago, Scores Las Vegas, and Scores Sports Bar in 2021-2022 to address payment arrears.
• Expanded to six licensed clubs across the U.S. as of June 2024.
• Evaluated potential acquisitions and investments in related businesses, pending additional funding.

What Makes Scores Stand Out

Scores operates with a lean structure, relying on licensing rather than direct club management. Its revenue model is based on long-term agreements with a small number of U.S. clubs. The company’s brand is recognized within the adult entertainment sector, supporting stable royalty streams.

Five Things You Need to Know

• Revenue was $73,500 in Q3 2022, up 18.5% from Q3 2021.
• Net income reached $31,875 in Q1 2024, reversing a loss in Q1 2023.
• Cash flow from operations was $915 in Q3 2022, down 98.5% year-over-year.
• Four licensees made up 94% of revenue in Q1 2024.
• Working capital deficit was $173,800 as of March 31, 2024.

Bottom Line

Scores has evolved into a focused licensing business with a small client base. Its future depends on maintaining licensee relationships and managing financial risks.