Note 8.Commitments and Contingencies

Effective January 1, 2025, the Company records a monthly management fee of $1,000 for services provided by Metropolitan on behalf of the Company, compared with $7,500 per month in 2024. Due to a decrease in the Company’s revenue and its limited ability to pay the original annual management fee of $90,000, the Company and Metropolitan entered into a Second Amendment to the Management Agreement. The amendment reduced the annual management fee to $12,000 for the two-year period from January 1, 2025 through December 31, 2026. At the end of this period, the Company has accrued the amount of $128,000 payable for the management fee and intends to evaluate whether its financial condition supports reinstating the original management fee of $7,500 per month, or $90,000 annually.

On August 5, 2025, in an action entitled Jane Doe v. Roderick A. Martin, Scores Holding Company, Inc., Stone Park Entertainment, Inc., d/b/a Scores Chicago, filed in the Circuit Court of Cook County, Illinois, County Department, Law Division, Case No. 2025L009824, the Plaintiff states a cause of action against Defendant Roderick A. Martin for Intentional Assault and Battery and cause of actions against Scores Chicago and the Company for Negligent Security/Premises Liability; Negligent Hiring, Supervision or Retention; Intentional Infliction of Emotion Distress; Willful and Wanton Misconduct; and Breach of Contract stemming from allegations that she was sexually assaulted and battered at the Scores adult entertainment club located in Chicago, Illinois (“Scores Chicago”). The Company is currently seeking counsel licensed in the State of Illinois to represent it. It is anticipated that the Company will move to dismiss the action against it because the Company, as simply the owner of the “Scores” brand and trademarks, did not own, operate or otherwise control Scores Chicago or employ, manage, or otherwise control Plaintiff’s employment.

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. On March 12, 2026, a Settlement Agreement and Amendment to the Licensing Agreement with Scores Chicago was signed to address and settle a prior licensing fee balance due at February 28, 2026 of $106,500. for $80,000 by forgiving $26,500 owed and to revise the monthly license fee from $7,500 per month to $5,000. As of March 31, 2025, the receivable was $18,300. 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 years. All other terms of the original agreement were to remain in effect.

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. Effective July 24, 2025, the agreement with Scores Sports Bar was terminated.

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.