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July 29, 2002 01:45pm
Scores Gets Go for Liquor License From NYC
Source: Scores Holding Company Inc.
by: Company Press Release

(NEW YORK, NY) -- Scores Holding Company Inc. announced today that the Manhattan Community Board No. 4 has voted to recommend to the New York State Liquor Authority the approval of the full, on-premises liquor license for the Company's proposed adult entertainment nightclub, to be known as "Scores West" which will be located on the west side of Manhattan at 533-535 West 28th Street.

The Company intends to model Scores West after Scores Showroom, a highly successful and well know upscale adult entertainment nightclub owned by Scores Entertainment Inc. ("SEI"), that is presently operating on the east side of Manhattan. The Company has no ownership interest in SEI but executive officers and directors of the Company and its wholly owned subsidiary, Go West Entertainment Inc., presently serve as operations managers for Scores Showroom.

Due to the success of Scores Showroom, the Scores name has stood as a well recognized brand name in the adult nightclub industry for the past 10 years. The Company will own and operate the new west side nightclub which will have 10,000 square feet of space, (the maximum permitted by law), allocated for adult entertainment purposes. Scores Showroom utilizes only 3,900 square feet of space for adult entertainment purposes. Based solely upon an unaudited management review, the Company estimates that during the fiscal year ended September 30, 2001, SEI had in excess of $16 million in gross revenues attributable to Scores Showroom. The Company has begun the normal permit, planning and building process, and is finalizing construction financing. The nightclub is projected to open during the latter part of the 4th quarter of 2002.

In New York City, the location of adult entertainment establishments, including adult entertainment nightclubs featuring topless dancing ("Adult Cabarets"), are subject to restriction by city ordinance. The ordinance restricts location based upon an areas zoning classification together with distances from schools, places of workship, and other sexually oriented business. The New York City ordinance presently in effect together with related enforcement policies presently permit certain businesses offering adult entertainment, including Scores Showroom, to operate under the so called "60/40 Rule".

The 60/40 Rule provides that businesses that utilize no more than 40% of their public space for adult entertainment uses are not deemed adult entertainment establishments for purposes of the ordinance. New York City has contended that it was never its intent that the 60/40 Rule apply to, among other types of adult businesses, Adult Cabarets. Consequently on October 31, 2001, New York City changed the definition of adult entertainment establishment to specifically exclude Adult Cabarets from the types of businesses eligible to rely on the 60/40 Rule.

This change is scheduled to be implemented and enforced on November 1, 2002 although no assurance can be given as to the actual timing of and manner of enforcement. The Company estimates that full enforcement will reduce the number of adult entertainment clubs operating in Manhattan from approximately 15 to 6. The Scores West location is zoned to permit adult entertainment establishments to operate without reliance on the 60/40 Rule and therefore the Company will be legally able to utilize all 10,000 square feet of its public space for adult entertainment purposes and will not be affected by the enforcement of the new ordinance.

Lonnie Hanover, Vice President of Public Relations for the Company states that, "The Scores name has received a significant amount of media exposure and become a household name over the years. Television segments about Scores have appeared on television talk shows and it has been featured prominently on the CBS radio and television networks. Scores' business has consistently resisted economic downturns and current research suggests that the adult entertainment industry will continue to grow." Northwestern University's Medill News Service estimates that the annual market for adult entertainment clubs is $8 billion in the United States and $20 billion worldwide.

Safe Harbor Statement -- Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and may contain forward-looking statements, with words such as "anticipate," "believe," "expect," "future," "may," "Will," "should," "plan," "projected," "intend," and similar expressions to identify forward-looking statements. These statements are based on the Company's beliefs and the assumptions it made using information currently available to it. Because these statements reflect the Company's current views concerning future events, these statements involve risks, uncertainties and assumptions. The actual results could differ materially from the results discussed in the forward-looking statements. In any event, undue reliance should not be placed on any forward-looking statements, which apply only as of the date of this press release. Accordingly, reference should be made to the Company's periodic filings with the Securities and Exchange Commission.

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