April 03, 2000 04:34am
Rick's Cabaret International Signs Letter of Intent
Source: Ricks Cabaret International
by: Company Press Release
(HOUSTON, TX) -- Rick's Cabaret International, Inc. (Nasdaq: RICK - news) announced today that it has entered into a letter of intent with Voice Media, Inc. to acquire www.XXXPASSWORD.com. This web site had gross revenues of $2.15 million for the seven months ended January 31, 2000. Rick's proposed acquisition will be the first of a planned series of adult Internet web site acquisitions aimed at greatly increasing Rick's presence on the Internet.
Under the terms of the letter of intent, Rick's will issue 700,000 restricted shares of Rick's common stock to Voice Media at the time the acquisition is completed, of which 250,000 shares will remain in escrow until certain earnings benchmarks are achieved. Voice Media could also receive up to $1,305,000 during the six years following Rick's acquisition if certain other earnings benchmarks are achieved. The cash portion of the purchase price is payable only from up to 50% of the free cash flow from the web site. As part of the proposed acquisition, Voice Media will continue to manage and market the web site for a flat monthly fee.
Eric Langan, President and CEO of Rick's, stated, ``The purchase of XXXPASSWORD.com will launch our acquisition strategy to acquire adult Internet web sites that have substantial revenues, free cash flow and profits that can be generated under the web site's present management or Rick's management. We are continuing to examine a number of other viable acquisition targets to enhance our expanding Internet revenues.''
The letter of intent is subject to due diligence and the execution of definitive documentation, which Rick's expects to be completed within 45 days.
Rick's Cabaret International Inc. opened its first ``Rick's Cabaret'' in Houston, Texas in 1983 and went public with its IBO in 1995, making Rick's the world's first publicly traded topless entertainment business. Rick's owns and operates premier adult entertainment Internet web sites, such as www.DANCERDORM.com and www.SMUTDOG.com. Rick's also owns and operates three Rick's Cabaret locations, two of which are in Houston and one of which is in Minneapolis. Rick's also owns and operates two XTC Cabarets, which are located in San Antonio and Austin, through its 93% owned subsidiary, Taurus Entertainment Companies Inc. Rick's and its subsidiaries own all the real estate properties where their cabarets and Internet production studio are located.
Other companies in the adult entertainment industry include New Frontier Media Inc., Playboy Enterprises Inc. and Private Media Group.
This press release contains forward-looking statements that involve a number of risks and uncertainties. Important factors that could cause Rick's actual results to differ materially from those indicated in this press release include the risks and uncertainties as to whether the definitive documentation will ultimately be executed, the future operational and financial results of the newly acquired web site, the future operational strength of Voice Media, the laws governing the operation of adult entertainment businesses, competitive factors, dependence on key personnel, and the ability to manage operations. Rick's has no obligation to update or revise the forward-looking statements to reflect the occurrence of future events or circumstances.
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