Securities and Exchange Commission
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant To Section 13 or 15(d) Of
The Securities Exchange Act of 1934
Date of Report: September 15, 2004
RICK'S CABARET INTERNATIONAL, INC.
(Exact Name of Registrant As Specified in Its Charter)
Texas 0-26958 76-0037324
(State Or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
505 North Belt, Suite 630
Houston, Texas 77060
(Address Of Principal Executive Offices, Including Zip Code)
(281) 820-1181
(Registrant's Telephone Number, Including Area Code)
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On September 15, 2004, our wholly owned subsidiary, RCI Entertainment (New
York), Inc., a New York corporation ("RCI New York"), entered a definitive Stock
Purchase Agreement (the "Stock Purchase Agreement") with Peregrine Enterprises,
Inc., a New York corporation ("Peregrine") and its shareholders, pursuant to
which RCI New York agreed to purchase all of the shares of common stock of
Peregrine. Peregrine owns and operates an adult entertainment cabaret located
in midtown Manhattan. The cabaret club is located near the Empire State
Building and Madison Square Garden, and less than 10 blocks from Times Square.
The Stock Purchase Agreement provides for closing the transaction on or before
December 1, 2004, subject to satisfaction of certain conditions, including
obtaining adequate financing, transfer of all existing licenses and permits to
RCI New York, obtaining consent of the Landlord, execution of a Non-Disturbance
Agreement, and other conditions consistent with transactions of this type.
Under the terms of the Stock Purchase Agreement, the purchase price of the
transaction is $7,625,000, payable $2,500,000 in cash at closing and $5,125,000
payable in a promissory note bearing simple interest at the rate of 4.0% per
annum (the "Promissory Note"). The Promissory Note is payable commencing 120
days after Closing as follows: (a) the payment of $58,333.33 per month for
twenty-four (24) consecutive months; (b) the payment of $63,333.33 for
twenty-four (24) consecutive months; (c) the payment of $68,333.33 for twelve
(12) consecutive months; and
(d) a lump sum payment of the remaining balance to be paid on the sixty-first
(61st) month. $2,000,000 of the principal amount of the Promissory Note is
convertible into shares of our restricted common stock at prices ranging from
$4.00 to $7.50 per share. The parties will also enter a Stock Pledge Agreement
and Security Agreement to secure the Promissory Note.
Upon closing of the transaction, the owners of Peregrine will enter a
five-year covenant not to compete with Peregrine, RCI New York or Rick's Cabaret
International, Inc. We intend to rename the cabaret club as "Rick's Cabaret"
which will occupy 10,000 square feet on three levels, with an additional 4,000
square feet available for office space.
The terms and conditions of the Stock Purchase Agreement were the result of
extensive arm's length negotiations between the parties. A copy of the press
release related to this transaction is attached hereto as Exhibit 99.1.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit Number Description
10.1 Stock Purchase Agreement
99.1 Press release dated September 16, 2004
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report on Form 8-K to be signed on its behalf by
the undersigned hereunto duly authorized.
RICK'S CABARET INTERNATIONAL, INC.
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By: /s/ Eric Langan
Date: September 16, 2004 Eric Langan
Chairman, President, Chief
Executive Officer and Acting Chief
Accounting Officer