Rick’s Cabaret International, Inc. (NASDAQ: RICK), the nation’s
leading chain of upscale gentlemen’s clubs, said today it has raised
$7.2 million through convertible debentures that will be used to make
future acquisitions.
“This facility demonstrates clearly that we have excellent access to
capital markets and lets sellers of clubs know that we are well
positioned with cash to continue our acquisitions program,” said Eric
Langan, President and CEO of the company. “We already have several
targets of interest, but we want to talk with other possible
acquisition candidates at the Gentlemen’s Club Owners Expo
in Las Vegas August 23-26, which is attended by most club owners.” Mr.
Langan continued, "This facility, along with our current cash resources,
enables us to make important accretive acquisitions and we are going to
shop for the best deals we can find to put our cash to work for our
shareholders."
Mr. Langan noted that during fiscal 2008, the company acquired five
nightclub operations and the remaining 49% of one other location. The
company has spent much of fiscal 2009 integrating these acquisitions and
evaluating other potential purchases as part of its industry
consolidation program, while waiting for the economy to show signs of
improvement. “We are starting to see improvements in several of the
markets we operate in and hope to see this continue in the next few
quarters,” Mr. Langan said.
The new three-year debentures bear interest at 10 percent per annum and
can be convertible into shares of Rick’s common stock at $8.75 per
share. The debentures are redeemable by the company on or after six
months from issuance if the closing price of Rick’s stock is at least
$11.50 for 20 consecutive trading days. In addition, the company issued
three year warrants exercisable at $8.75 that can be called by Rick’s
Cabaret if the shares underlying the warrants are registered and the
closing price for 20 consecutive trading days is $12.25. Other terms of
the debentures and the warrants will be available in the company’s 8-K
filing with the SEC.
Merriman
Curhan Ford (NASDAQ: MERR) acted as the placement agent in the
transaction. Montgomery Street Research acted as an adviser to
the company.
About Rick’s Cabaret: Rick’s Cabaret International, Inc. (NASDAQ:
RICK) is home to upscale adult nightclubs serving primarily businessmen
and professionals that offer live entertainment, dining and bar
operations. Nightclubs in New York City, Miami, Philadelphia, New
Orleans, Charlotte, Dallas, Houston, Minneapolis and other cities
operate under the names "Rick's Cabaret," "XTC," “Club Onyx” and
“Tootsie’s Cabaret”. Sexual contact is not permitted at these locations.
Rick’s Cabaret also operates a media division, ED Publications, and owns
the adult Internet membership Web site, couplestouch.com as well as a
network of online adult auction sites under the flagship URL
naughtybids.com. Rick’s Cabaret common stock is traded on NASDAQ under
the symbol RICK. For further information contact ir@ricks.com.
Forward-looking Statements: This document contains
forward-looking statements that involve a number of risks and
uncertainties that could cause the company’s actual results to differ
materially from those indicated in this document, including the risks
and uncertainties associated with operating and managing an adult
business, the business climates in cities where it operates, the success
or lack thereof in launching and building the company’s businesses,
risks and uncertainties related to the operational and financial results
of our Web sites, conditions relevant to real estate transactions, and
numerous other factors such as laws governing the operation of adult
entertainment businesses, competition and dependence on key personnel.
Rick's has no obligation to update or revise the forward-looking
statements to reflect the occurrence of future events or circumstances.
For further information visit ricks.com.
For Rick’s Cabaret International, Inc.
Allan Priaulx,
212-338-0050
ir@ricks.com
