Rick's Cabaret International, Inc. Extends Purchase Option On New York City Property; Receives $8 Million Offer For 2/3 Of The Air Rights
NEW YORK CITY, July 11, 2013 /PRNewswire/ -- Rick's Cabaret International, Inc. (NasdaqGM:RICK), the publicly traded group of gentlemen's clubs, said today its subsidiary has extended an option to purchase the property at 50 West 33rd St. until August 9th while it works out contractual details to sell some of the air rights it is acquiring to a third party. The subsidiary has an agreement in place to purchase the property, which is the site of the company's flagship Rick's Cabaret/NYC adult nightclub.
Eric Langan, President and CEO of Rick's Cabaret International, Inc., said the subsidiary has received an offer to purchase two-thirds of the air rights over the building for $8 million.
The original contract for the subsidiary to purchase the property was extended after the owner agreed to finance the acquisition. The parties mutually agreed to the first extension at no cost to the Rick's Cabaret subsidiary while the parties worked to mitigate taxation issues. Subsequently, the subsidiary paid an additional $92,708 to extend the current term by 30 days.
Mr. Langan said the company will now enter into a modified lease-purchase option so that the air rights can be transferred in the most tax efficient method while still protecting the subsidiary's rights under the original agreement with the landlord.
"We are very pleased that we have received an offer for the air rights, which would lower our acquisition costs," said Mr. Langan. "The new structure would mean a savings of about $960,000 a year or $80,000 a month compared with the original financing terms."
About Rick's Cabaret: Subsidiaries of Rick's Cabaret International, Inc. (NASDAQ: RICK) own upscale adult nightclubs serving primarily businessmen and professionals that offer live entertainment, dining and bar operations. Nightclubs called "Rick's Cabaret," "XTC Cabaret," "Club Onyx" and "Tootsie's Cabaret" and other brand names are located in New York City, Miami, Philadelphia, Charlotte, Dallas/Ft. Worth, Houston, Minneapolis, Indianapolis and other cities. Sexual contact is not permitted at any locations. A subsidiary of Rick's Cabaret also owns a media division, ED Publications. Rick's Cabaret common stock is traded on NASDAQ under the symbol RICK. For further information contact firstname.lastname@example.org or visit www.ricksinvestor.com. Twitter: @rickscabaret; Facebook: http://www.facebook.com/rickscabaretintl.
Forward-looking Statements: This press release may contain 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 press release, 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 www.ricksinvestor.com.
SOURCE Rick's Cabaret International, Inc.