Profile: Rick's Cabaret International, Inc. (RICK.O)

Rick's Cabaret International, Inc. incorporated in 1994, owns and/or operates a total of 19 adult nightclubs that offers live adult entertainment, restaurant and bar operations. Nine of its clubs operate under the name Rick's Cabaret; four operate under the name Club Onyx, upscale venues that welcome all customers but cater especially to urban professionals, businessmen and professional athletes; four operate under the name XTC Cabaret; one club that operates as Encounters; and one club that operates as Tootsie’s. The Company’s nightclubs are in Houston, Austin, San Antonio, Dallas and Fort Worth, Texas; Charlotte, North Carolina; Minneapolis, Minnesota; New York, New York; Miami Gardens, Florida; Philadelphia, Pennsylvania and Las Vegas, Nevada. The Company owns and operates adult entertainment Internet Websites. The Company’s online entertainment sites include CouplesTouch.com, NaughtyBids.com and xxxpassword.com. In April 2008, the Company acquired a media division, including the trade magazine serving the multi-billion dollar adult nightclubs industry. As part of the transaction the Company also acquired two industry trade shows, two other industry trade publications and more than 25 industry Websites.

On March 31, 2008, the Company’s wholly owned subsidiary, RCI Entertainment (Philadelphia), Inc. completed the 100% acquisition of The End Zone, Inc. On March 31, 2008, the Company’s subsidiary, RCI Entertainment (Austin), Inc. (RCI), completed the acquisition of 49% of Playmates Gentlemen’s Club, LLC (Playmates), which owns an adult entertainment cabaret. On April 11, 2008, the Company’s wholly owned subsidiary, RCI Entertainment (Dallas), Inc., completed the acquisition of 100% of Hotel Development - Texas, Ltd and 100% of HD-Texas Management, LLC. On April 15, 2008, the Company’s wholly owned subsidiary, RCI Entertainment (Media Holdings), Inc., acquired 100% of ED Publications, Inc., 100% of TEEZE International, Inc. and 100% of Adult Store Buyers Magazine, LLC.

Nightclubs

The Rick's Cabaret's areas of operations include female entertainment, where the Company maintains standards for both personal appearance and personality for the entertainers and waitresses. The Company makes a determination as to whether a particular applicant is suitable based on such factors of appearance, attitude, dress, communication skills and demeanor. At all clubs, except for its Minnesota location, the entertainers are independent contractors. The Company does not schedule their work hours.

The Company’s restaurant operations provide business lunch buffets and full lunch and dinner menu service with hot and cold appetizers, salads, seafood, steak and lobster. A selection of wines is also available. The Company maintains a high-design standard in its facilities and decor. The sound system provides sound at levels at which conversations can take place. The environment is monitored for music selection, entertainer and waitress appearance and aspects of customer service on a continuous basis. Some of the nightclubs include a VIP room, to serve the upper-end of the businessmen's market, which is open to individuals who purchase memberships.

Internet Adult Entertainment Websites

The Company’s xxxPassword.com Website features adult content licensed through Voice Media, Inc. The CouplesTouch.com was added as a dating site catering to those in the swinging lifestyle. The Company has purchased CouplesClick.net, a competing site of its CouplesTouch.com site. As part of this transaction, the Company organized RCI Dating Services, Inc., which operates as an addition to its Internet operations, to acquire CouplesClick.net from ClickMatch, LLC. The Company’s Internet traffic is generated through the purchase of traffic from third-party adult sites or Internet domain owners and the purchase of banner advertisements or key word searches from Internet search engines.

Internet Adult Auction Websites

The Company’s adult auction site features erotica and other adult materials that are purchased in a bid-ask method. It previously operated six individual auctions sites, which has been combined into one main site, NaughtyBids.com. The site contains adult oriented consumer initiated auctions for items, such as adult videos, apparel, photo sets and adult paraphernalia.