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: May 9, 2006
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.)
10959 Cutten Road
Houston, Texas 77066
(Address Of Principal Executive Offices, Including Zip Code)
(281) 397-6730
(Registrant's Telephone Number, Including Area Code)
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On May 9, 2006, we entered a Stock Purchase Agreement (the "Agreement")
with Joint Ventures, Inc., a Texas corporation ("JVI"), and JVI's two
stockholders who are unrelated third parties (the "Sellers") to purchase all of
the shares of common stock of JVI. Under the terms of the Agreement, we acquired
all of the assets of JVI, including an adult entertainment cabaret known as
Dreamer's Cabaret located at 802 Houston Blvd., South Houston, Texas
("Dreamers").
Pursuant to the terms of the Agreement, we paid a total sales price of
$840,000 which was paid in cash at the time of closing. Pursuant to the terms
and conditions of the Agreement, the Sellers entered into a five year covenant
not to compete with us in the city of South Houston.
The transaction was partially funded by our issuance of a Convertible
Debenture in the principal amount of $600,000 (the "Debenture") to Ralph
McElroy, a greater than 10% shareholder (the "Holder"). The Debenture bears
interest at the rate of 12% per annum with a maturity date of April 30, 2008.
Under the terms of the Debenture, we are required to make monthly interest
payments beginning June 1, 2006. We have the right to redeem the Debenture in
whole or in part at any time during the term of the Debenture. The Holder has
the option to convert all or any portion of the principal amount of the
Debenture into shares of our common stock at a rate of $6.55 per share (the
"Conversion Shares"), subject to adjustment under certain conditions. The
Debenture provides, absent shareholder approval, that the number of shares of
our common stock that may be issued by us or acquired by the Holder upon
conversion of the Debenture shall not exceed 19.99% of the total number of
issued and outstanding shares of our common stock. The Conversion Shares have
piggyback registration rights. The Debenture is secured by a deed of trust
covering our property located at 9009 Airport Blvd., Houston, Texas
The terms and conditions of the transaction were the result of arms-length
negotiation 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 May 9, 2006.
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.
By: /s/ Eric Langan
--------------------
Date: May 9, 2006 Eric Langan
Chief Executive Officer, Chairman and
Acting Chief Financial Officer