Allan Priaulx - IR Eric Langan - President and CEO

Eric Wold - Merriman Curhan Ford Ed Gobin - Private Investor Blair Sanford - Burlingame Asset Management Tom Andres - Private Investor Ryan Parker - EquityBrief Capital Management Peter Siris - Guerrilla Capital Management

Greetings, ladies and gentlemen, and welcome to the Rick's Cabaret International Earnings Call. (Operator Instructions). As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Mr. Allan Priaulx, Investor Relations Council. Thank you. Mr. Priaulx you may begin.

Thank you, Ralph. Before we begin, I just want to remind you all of our Safe Harbor statement. In this conference call, you may hear or see 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 conference call. All of those risks and uncertainties are listed very carefully in the PowerPoint presentation as is available on our website. I don't need to go into them again at this time but they are right there and we urge you to read them. So it is my pleasure right now to introduce our President and CEO, Eric Langan to discuss our second quarter '07 results. Eric?

Thanks Allan. Thanks for calling in everyone and someone on the internet. I like to apologize first I have been very sick, I've been traveling a lot and got a nasty head-cold that's move down into my chest. So, I'll do my best to try to stay clear for you guys today. Beginning with overview of today's presentation when we review our second quarter results, talk about the drivers of our sales increases, the effect on our earnings from new club openings and our acquisition strategy update. We'll discuss our new Latin American licensing program that we've announced this morning and then review guidance for '07. To begin with our second quarter, we had record revenue $7.5 million compared to $6.1 million in the second quarter of '06. Total revenue increase of 23.7%, the Ft. Worth acquisition did not contribute any revenue in this quarter, since we didn't close till April for those of you that maybe concerned with that. Our revenue drivers include a 10.4% increase in same club, same period sales in addition of our new clubs in San Antonio and Austin. Net income of $492,344 or $0.09 per basic share, $0.08 fully diluted, those earnings were affected by some costs associated with the new club openings in Austin and San Antonio of approximately $220,000 for launches reported in the quarter for those locations. As well as a change in employee based stock option compensation of approximately $65,000. So, to let you know why we are off a little bit from where we thought we would be in this quarter. Our second quarter driving factors, where alcoholic beverage sales were up 27% and our service revenues were up 24.5%. New York City continues to grow on a quarter-over-quarter basis, we are very pleased with the revenue increases we are having there as well as the building of our repeat business and additional entertainers that are starting to frequent the club. The numbers compared very strong to the second quarter when you take out the impact, especially when you take out the impact of the NBA All-Star Game that we had in February '06 which helped our '06 revenues and have drastically affected our net income in '06. The Ft. Worth acquisition was completed on April 24, of New Orleans Nights. We were in the process now of working on ordering our signs and changing the name of that club to our Rick's Cabaret, it's currently still operating as New Orleans Nights. We also plan to take the second floor of that location and convert it into a VIP and dining area, we believe it's approximately 5,000 square feet and we think it'll have a very significant impact on increasing revenues of that location and the profitability. This club fits into our new acquisition model of buying clubs that are already profitable operations and should be immediately accretive to earnings. You'll see in May the increase on our gross revenues from this acquisition. A few specifics that I'd like to point out for this quarter is, cash flow from operations increased to $1.3 million versus $1.0 million. Our financing activities raised $5.3 million in this quarter, so you'll see a significant increase in our cash holding. Subsequently, we used $5 million of that money to acquire the Ft. Worth location. Our balance sheet stands at $38.6 million and asset value versus $30.6 million last year. The sign of our Latin American Licensing Agreement with Rick's Buenos Aires, and the first club it will obviously be operated in Buenos Aires. Their license are all in place, remodeling is currently underway, and the beauty of this agreement is, we receive revenue from the Latin American market with no real expense on our part. We're going to provide some expertise in helping them design and layout their marketing. We will probably provide some management consulting which we will be paid for and of course, we will receive 10% of their gross revenues after the value-added tax is deducted. Our acquisition strategy has continued to evolve into acquiring already up and running in profitable location. The reason we want to do this is to stay away from this ramp-up period that we are currently seeing in Austin and San Antonio with the new locations that we purchased there. Typically, when we buy these new locations, the ramp-up period is somewhere between 12 months and 18 months. With acquisitions like our Ft. Worth acquisition we are certain they are merely accretive to earnings and really required no ramp-up period before we see profits hit the bottom line. And we don't have the losses associated with that start-up period. We are continuing to target profitable clubs in major metropolitan areas. We're seeing more and more clubs on the market today than we've seen in the past years, getting calls from club owners around the country that I don't think or even considering to own a location three years ago, but I have seen us make significant acquisitions and PTT - VCG Holding has made a few significant acquisitions with cash and I think it's waking some of these older seller -- or older operators to up and expand, maybe now is the time for me to look at monetizing my assets. We will continue to pay three to six times earnings, depending on the individual growth opportunities of those clubs and the current legal environment and whether the license are grandfathered or not, and we plan to continue to use equity and various other combinations of cash/stock and debt to acquire those locations. Our immediate goals are to continue to grow the Rick's Cabaret in New York City location. We think we are -- still have plenty of room for growth at that location and we continue to see it every quarter. And they're really focused on the operations of our San Antonio and Austin locations and bringing those locations into profitability. The losses are shrinking on a quarter-over-quarter basis and we hope to continue to see that grow into profitability here in the next quarter or two. As well as focusing on our Ft. Worth location in developing that second floor into a VIP area and dinning area. We also continue to make selective acquisitions that are accretive to our earnings and help build our brand in markets that we feel are best for our long-term growth. Guidance update for '07, we think we are on track to meet our targets. Our original guidance of revenue was $32 million to $34 million we believe we're on course for that, our net income of $2.6 million to $2.8 million and earnings per share of $0.48. At this time, we believe we are on course for that we are going to be watching those numbers very closely this quarter. And making sure that some of the plans that we have on our Austin and San Antonio location are paying off to shrink those losses or actually turn those into profits which should drastically increase our net earnings over this quarter and the next quarter. At this time, we feel very comfortable with our previous guidance and we'll continue to back that guidance, please note that any further acquisitions could impact that guidance and we would put out information pertaining to that as it becomes available. Our 2008 outlook we remain very comfortable with our outlook based on current projections and trends. Our projected acquisitions worth $15 million by the quarter ending September of '08, and revenues are $48 million to $50 million with net income of about $6 million or $0.85 fully taxed earnings per share for '08. That will conclude the presentation part of this. I would like to invite everyone to come down to the Due Diligence Ball this evening in New York at 50 West 33rd if you are available and open this up for any questions that anyone may have.

Thank you, sir. Ladies and gentlemen, at this time, we will be conducting a question-and-session. (Operator Instructions). Our first question is from the line of Eric Wold with Merriman Curhan Ford. Please proceed with your question. Eric Wold - Merriman Curhan Ford: Hey, good afternoon, Eric.

Hi. Eric Wold - Merriman Curhan Ford: A couple of questions on expansion of your existing clubs, because obviously the Austin Rick's, yesterday and we saw the expansion there on the second floor. Maybe talk a little bit about what that's going to do to finish up that club and what do you think once the VIP area there is opened up, how that could grow revenues in that location? And then secondly on the Ft. Worth club what would be the timing on second floor there, potential cost of that build out and then how incremental could that be to the kind of $4 million run rate that the club's currently on?

Okay. Starting with Austin, as you've seen from our quarterly numbers and I have reviewed at club, we ran into some problems when we first opened that location with the city annexing the property. The property was originally in the county when it was in built. When the city annexed it, they decided that the plans for the kitchen after they had given us the okay to open were not good and made us tear the kitchen back out. We estimated originally that that kitchen was going to be in two weeks because the city had given us assurances of that. It took five months to get the kitchen reopened. We went through some unbelievable problems there. They've since than resolved, we have a permanent CEO and as you've seen the construction on the second floor has now begun, should be completed in the next three to four weeks. We estimate that when we get that second floor done we're going to do a new grand opening party; it's basically the only two storey club in the city of Austin. It's the only club that is going have a private room type setup somewhat to what we have in New York and it's just a fantastic location. We can add about 6000 square feet to the club including like I said in Austin the only second floor VIP room. We believe that that will be the big turning point. I believe they are having a sign this week we finally got the sign permits out of this city. We have one other issue with them on parking that I believe will be corrected here shortly. And then that location will be up to a 100%. I think that the significance of that is right now the rate of that club is around $100,000 to $125,000 a month in revenue. We predicted originally that location within 12-months we would be doing $300,000 plus, and I think that with these changes and with that second floor opening that will get much closer to that burn rate much quicker and therefore stopping the losses and actually contributing to earning. As far as Ft. Worth location goes I will be in Ft. Worth the last week of this month, we're getting some bids. Right now we're estimating somewhere around $200,000 to $300,000 in remodeling expenses to bring the second floor up to the level that we want to make it a VIP area. The bar is already there, the plumbing is there, it's a lot of cosmetics. The second floor is very rustic, it's very Ft. Worth and there is a lot of wood in that. We want to really modernize it and make it more modern to make it a modern VIP area. We should be able to do that in about 90 days based on the permitting process in Ft. Worth and hope to have that area actually opened in October; I estimate that it will add about $1 million a year in revenues from that area. So, it will take our rate to about $5 million a year at that location instead of $4 million Eric Wold - Merriman Curhan Ford: Perfect and then one follow-up, as you mentioned a lot of these your owner operators are kind of coming out of wood work now, they realize that there is a market for their clubs obviously you are only competing with PTT in one market now in Minneapolis from April --?

I don't if they have got -- I think they have a licensing hearing on Wednesday and we will find out, they keep for some reasons city fees postponing out, but I do believe that they are going to get their license on Wednesday from what we have been told. We really don't think that that's a competitive market with PTT there is only three locations in the city, it's about 5 million people and we actually look forward to them coming into the marketplace because the current operators of that location are not operating it properly and we believe that its actually hurting our businesses as much as its hurting the business of the existing club. So, we are actually looking forward to them coming into the market adding additional marketing and bringing people to the area and bringing people down town. We believe it will help our business and theirs. Eric Wold - Merriman Curhan Ford: No, but -- or its kind of going with some of these you guys are now looking for buyers with you and PTT out there, you got to sense these buyers are going to start trying to nickel and dime for more money or they basically even kind of stay for the low end of that 3 to 6 times earnings?

No, I mean really right now they are just looking for cash and whoever gives it to them first I think there are so many clubs out there right now, I think we have 14 locations now I think PTT have about the same. Out of 3500 clubs that are out there its probably 300 prime location we both loved to own we don't really have to fight over locations at this time. Eric Wold - Merriman Curhan Ford: Perfect. Great, I appreciate it. Thank you.

Thank you.

Our next question is from the line of [Ed Gobin], a Private Investor. Please proceed with your question. Ed Gobin - Private Investor: Hi. I'm just wondering how the Onyx concept is that done well at all.

Onyx concept is doing very well for us. We have expanded in the Charlotte. Since Charlotte has become Club Onyx; it's running higher gross revenues numbers and net profit numbers than we ever ran as Rick's Cabaret at that location. We've been very pleased with it. The two Houston locations are still doing very well at this time, and we continue to see opportunities to expand that brand in the future. Ed Gobin - Private Investor: Okay. Thank you very much.

Thank you.

Our next question is from the line of Blair Sanford with Burlingame Asset Management. Please proceed with your question. Blair Sanford - Burlingame Asset Management: Hey Eric, how are you doing?

Good, how are you? Blair Sanford - Burlingame Asset Management: Good. Can you give us a number in terms of how much San Antonio and Austin are costing you guys per quarter/per year right now?

Yeah, it cost us $220,000 in the last quarter. Blair Sanford - Burlingame Asset Management: For both of them?

Yeah, for all three locations. We have two San Antonio locations and one in Austin that are new. The net loss from those locations was $220,000 last quarter. And that's shrinking its down, I don't have the number in front of me from the quarter before but I know it's considerably higher in the previous quarter. Blair Sanford - Burlingame Asset Management: What's the revenue base that you get from those three clubs?

I am sorry. Blair Sanford - Burlingame Asset Management: What's the revenue that those clubs are generating?

I don't have it in front of me but I can do it real quick in my head. Probably around between $1.0 million and $1.1 million in the last quarter. Blair Sanford - Burlingame Asset Management: In the quarter, okay. Okay Eric, few more questions. Let's see, what are you using in terms of add backs to get your operating cash flow number. I'm just trying to reconcile the net income and what numbers I am going to add back to get my operating cash flow?

Are you talking about how much cash we actually have to spend from our depreciation an expense, that’s what you mean? Blair Sanford - Burlingame Asset Management: Let see that wouldn't be the only add back if you had the cash flow numbers you are talking about.

The cash flow, yeah, let me; I got that right in front of me here. Do we have the cash flow, there it is right there. The cash flow statement, I was just looking at that a few moments ago…

That's the revenue, I'll get the cash flow statement. Blair Sanford - Burlingame Asset Management: I am just curious if that includes working capital?

Over $65,000 obviously, that we expensed from employee stock options was non-cash, also we have about I believe there was $172,000 from minority interests that we will be making a cash call on from one of our partners shortly on that as well, so that cash will be added back in soon. Blair Sanford - Burlingame Asset Management: Then it's very much all of the depreciation --

And the depreciation was about $750,000. I'm looking at the six months, for the quarter, I am sorry. Blair Sanford - Burlingame Asset Management: So was it 65 and the 172 from the stock options from minority interests? Was that from the quarter or from the half year?

That's half year, yeah. I am looking at the six months. Now the 172 is for the half year. And we have one more expense next quarter of $65,000 from what I understand and then those expenses stop. Blair Sanford - Burlingame Asset Management: From stock options or minority interests?

From the stock options, I am sorry. I am looking at the wrong one again, I am sorry. The stock option was $130,000. The 172 is from the minority interests for the six months. Blair Sanford - Burlingame Asset Management: 130 and then 172.

Right. Blair Sanford - Burlingame Asset Management: Since you're talking about that, then you got --

And if you look, I think I believe that, you look at we have $756,000 depreciation and amortization and additions of property and equipment was $341,000. So, probably about $400,000 of our depreciation and amortization expense. Blair Sanford - Burlingame Asset Management: The normal CapEx that you would consider or is there is some extraordinary stuff in there is it?

If you look at it its pretty standard, if you look at '06 it was 289,000 for the six months this time it's 340,000 so that's pretty standard. Seems to be little over 50,000 a month on average right now and depreciation is little over by almost a 110. Blair Sanford - Burlingame Asset Management: All right, okay good. And then last question Eric relates to the Ft. Worth property. What is that generating now before you get the upstairs and as you say that's going to add a million dollars of revenue?

Right, right now it's doing a little over $4 million the AKA is out if you want to take a look at it. I believe that we'll have additional revenues added from that from some of the cost cutting that we are going to do in there. And it should come in right around $800,000 is what I believe. We'll hit the bottom line from that location. Income, yeah income, $1 million in revenue and about $800,000 in net income. Blair Sanford - Burlingame Asset Management: And that's before you do the upstairs.

Right, before the upstairs. Blair Sanford - Burlingame Asset Management: And so the upstairs is going to be incremental a million dollars in revenue.

Right. Blair Sanford - Burlingame Asset Management: And there is obviously some cost already in the building et cetera. What's going to be the incremental profit contribution from that upstairs?

I would assume that because most of fixed costs are already there that we could probably hit as much as 60% of that to the bottom line, it's about $600,000 a year. Makes about two times our cash investment on that. That's in the first year. Blair Sanford - Burlingame Asset Management: Okay Eric, that's great thanks for those answers.

Thank you.

(Operator Instructions).

It's on there, but there are lot of people on there.

Mr. Priaulx, there are no further questions at this time. Do you have any further comments?

No, we do have another question from Tom.

Thank you very much for introducing. The next question is from the line of [Tom Andres], a private investor. Please proceed with your question. Tom Andres - Private Investor: Hey Eric, nice to talk to you. I just had a question on the new licensing agreement for the club, and I guess it is Argentina?

Right, that'd be in Buenos Aires, Argentina Tom Andres - Private Investor: Right, what is the expansion for them, suppose we are going to be, I know that's the one club that you are going to go with originally, and then how many are they planning on open in up like in Mexico?

Well, I know they have talked when we talked briefly. They want to get this one open to see how it does. But I believe they are talking about three or four locations that they are scouting right now and raising capital for. So we are happy right now to see the Buenos Aires, Argentina location open. We really want to see how that goes. But I think it's possible that they asked for three years, they asked for 10 years, so we gave them three years exclusive in Latin America seeing that we wouldn't let anyone to use the name for the next three years provided they open the Buenos Aires store which will give them time to scout Latin America and scout locations. Tom Andres - Private Investor: And did they come to you or did you find them?

They came to us. Tom Andres - Private Investor: Okay. I guess that's just the brand name.

Exactly. They loved the idea of being associated with the New York and the Houston market. So on lots of flights that leave Houston and especially since we have made the Dallas-Ft. Worth announcement as well. There is lot of flights into South America that are based out of Dallas. They just like the association with the Rick's name. Tom Andres - Private Investor: I understand. It makes sense.

They want to create. American products seem to be going over very big in Argentina right now. So they seemed to think that is going to do very, very well for them and I believe that they have the resources and the capabilities and definitely the will and drive to carry on in the Rick's tradition. Tom Andres - Private Investor: Right, and did you got any projections on what that's going to add right off hand to the…

No, we don't and really, I am not really comfortable making any, because, like I said, their location hasn't opened yet. And it is a prime location, it's a fantastic location right in the centre of all the hotels and business districts, on where the waterways are, I can't remember the names of the district now unfortunately it's slipped in my mind. I want some medications I am little out it, but I am doing the best I can. Coronado. And so that's where the main business hotels like the Hilton, Marriott those type of hotels are located out there. Tom Andres - Private Investor: Right, sounds great. Thanks Eric.

Thank you.

Our next question is from the line of Ryan Parker with EquityBrief Capital Management. Please proceed with your question. Ryan Parker - EquityBrief Capital Management: Hey Eric how you are doing?

Good. How are you? Ryan Parker - EquityBrief Capital Management: Wonderful. I had a quick question I don't know if this is really going to affect us too much, what you got to say about the big deal You're making about the, with project Houston right now?

I have been waiting for that question, I was shocked it didn't get asked earlier. Right now our lawyers are working on it for us. We have got some people down on City Council but they are in the legal department, who has sent these letters. They've sent letters to businesses that have been closed for 10 years. The letter doesn't really make any sense and then in fact I have read it again today and I realize the last line says that this is open for reconsideration and let me read that last line here. This notice is subject to reconsideration and administrative recourse. I thought it was, gee you are already saying, the problem this city has is if they decide to go in start enforcing against the existing businesses which is approximately 35 cabarets in Houston that are affected. What will happen those cabarets will go to bikini bottoms and latex covering of the breast, when that happens there is nothing that stops competitors from opening. To me that's scarier then the city trying to close us down because then of course we have a lot more competitions, new clubs opening up and revenue being split between even more locations. I don't really feel at this time that there is anyone knows what's going on, the lawyers, we have I believe right now in the state courts due to the amortization issue. The city has come in and said well do you know the amortization started ten years ago and we've said well no the amortization didn't start ten years ago because the ordinance wasn't ruled constitutional ten years ago, so how could the amortization start. And so we are going to a state court to have that decided now. But right now, nothings really changed in Houston. Friday they had the big article saying that they are closing everybody down, Saturday the article in The Chronicle came out and said, oh, wait we can't close everybody down because they are going to wear bikini bottoms. So I am not sure exactly what's going on but at this point it's being business as usual nothing's changed for us at this time. Ryan Parker - EquityBrief Capital Management: Okay. I wouldn't think which of the clause are actually in that letter, is it really that we're not bearings, club owners are not bearing correct?

Actually they sent to a 122 different businesses they even -- one of our locations has a permit we've actually received a letter at for that location and it has a permit. So we are confused as to what that means, and the fact that the club has a permit. It's a temporary permit, but they haven't sent us anything saying that thing. Yes, and I am sorry I made a mistake so I said it's not subject to reconsideration but we've already being talking with our attorneys and so I don't believe that is the case, I am sorry I misread that. Ryan Parker - EquityBrief Capital Management: And you are saying that if they change it to bikini bar that will actually open up competition?

I believe that, that is definitely a possibility. I mean that obviously we can't say that well for sure but, if everybody in town wears latex and bikini bottoms and that makes you not a Sexually Oriented Business, what stops you from opening up [F59 in Carbi or I10 in Wilcrest]. I mean you find a location, you get a liquor license and you open up as a bikini bar. You're not -- we acquire to have a Sexually Oriented Business Permit, so therefore what stops competition from opening up at that point. The only thing that can stop them from doing it right now is they couldn't be competitive with the top of ours. Ryan Parker - EquityBrief Capital Management: Okay. Alright, well thank you for the clarification.

Yup, thank you.

Sir, do you have another question.

The next question is from the line of Blair Sanford with Burlingame Asset Management. Blair Sanford - Burlingame Asset Management: Hi. I wanted to get back with the Buenos Aires license deal. So, you've given them an exclusive in South America and are they bound to use solely the Rick's name or they can use other names as well?

You know that's a good question, I have to look at the contract and see. I know its limits I believe that they have to use our name, at least with this corporation I guess nothing would stop them from forming a new corporation and using other name. But I don't think it's their intent to use other names. I believe if they are intent is to build the brand and be part of the Rick's brand in those countries. Blair Sanford - Burlingame Asset Management: Yeah, I would think that it would be nice to know what their intentions are, I mean, you've given them something in terms of the exclusivity and so I would like to see them build the brand and be committed to that brand and not have any other option.

Yeah, I don't think that they, I mean, I know they don't have any plans of using any other brands at this time. I've been in discussions with the principles for sometime now, they have been Buenos Aires, I helped them look at locations. I helped them basically with the area and showed them the area that if I was going to build and invest my money, where I would build and invest. They had few other locations picked out. They passed on both of those locations and waited till they found the location in the area that I told them will be better for the brand and I believe that they have a great understanding of what they need to do and that their interest are also aligned at this time. Blair Sanford - Burlingame Asset Management: And if they operated a club before?

If operated, some of the people are working for them. They are actually just, the main people on dealing with are the investors, they have a management team that they are hiring, and they have operated several nightclubs and not only in Buenos Aires. And I think in Uruguay and Chile as well. Blair Sanford - Burlingame Asset Management: Okay, Eric. Thanks for the clarification. And I would be curious to hear what that looks like --

Okay. Definitely. I'll get on it and I'll give you a call back [inaudible], but I am pretty sure that it last I mean with us for specific years though. Blair Sanford - Burlingame Asset Management: Yes, okay.

Our next question is from the line of Peter Siris with Guerrilla Capital Management. Please proceed with your question, sir. Peter Siris - Guerrilla Capital Management: Peter Siris. So, are you not feeling well, Eric?

[Multiple Speakers]. Peter Siris - Guerrilla Capital Management: It's a wonderful conference call, I have to listen to jerks like us when you are sick.

No problem. What can I do for you? Peter Siris - Guerrilla Capital Management: I got one of these complex questions.

Okay. Peter Siris - Guerrilla Capital Management: Okay. I just want to make sure that I fully understand the earnings here. If I take , the net income was 492 versus 706, so first the interest expense, that was higher because you basically raise money for the Ft. Worth club, but haven't closed on it yet, right?

Actually I think that the, we didn't, all the money we raised for Ft. Worth was actually equity. So, I don't think that would affect our interest expense. Our interest expense was higher, because we have a few convertibles one of them was paying as interest in stock that increased our interest expense. And I think we had a little bit of additional debt from the Austin and San Antonio acquisitions. Peter Siris - Guerrilla Capital Management: And the higher number of shares were because you raised the money for Ft. Worth but didn’t yet have it out there.

Exactly. Peter Siris - Guerrilla Capital Management: Okay, so this quarter Ft. Worth will come back and help us. Right?

Most definitely. Peter Siris - Guerrilla Capital Management: Okay, now if I take the income from operation, which is 727 versus 963, the NBA All-Star Game which was just to me just amazing number. But the NBA All-Star Game in Houston last year you figure earned you how much?

Approximately, $25,000 million Peter Siris - Guerrilla Capital Management: On two nights that's the profit on two nights.

It was a four night event for us. It's actually a week long, but it was four nights for us it was Thursday, Friday, Saturday and Sunday that our business was drastically increased. Peter Siris - Guerrilla Capital Management: Okay and you said I think in answer to one of Blair's question. That the start of course was like 269 or something.

About 220,000 the approximate losses in Austin and San Antonio for the three locations, the three new locations. Peter Siris - Guerrilla Capital Management: Okay, so and any of that --

65,000 is the number that you are thinking of is the stock-based compensation. Peter Siris - Guerrilla Capital Management: Stock-based compensation, alright. Okay, so if I take the 250 and the 220 is 470 and 65 is 500 and something dollars, right. And so what that basically says of what I actually have to do is take the 250 of the 960 and add the other two to 720. What that basically says is if I exclude the one-time NBA All-Star Game and the losses from the three new clubs that the other clubs on a like-by-like basis show better earnings, is that reasonable view of the world?

Absolutely. Peter Siris - Guerrilla Capital Management: Okay. And that number which would be approximate, if I take the NBA All-Star Game there again, I am basically at 710 and if I add those other two numbers on 727, 927 and 65 is roughly a million. What that basically says is that if I exclude and I know you can't exclude startups, and you can't, things are recurring but, but you basically looking on a like-by-like basis excluding those three things you had, basically had a 30%, earnings would have gone up like 45% or something like that?

Right. We are very comfortable with our projections going forward because of those basis. When the Austin locations kicks in and actually starts earning money and San Antonio, they start earning money, it's actually a double force, because it's been draining $220,000 this quarter. In the next quarter if it makes $10,000 it's actually $230,000 swing and we get at to the point where it kicks out a quarter of a million in earnings you know you are talking about a half million dollar swing in our reported earnings. Peter Siris - Guerrilla Capital Management: And you get into point where you think that's going to occur?

Finally now that we have got the kitchen done in Austin, yes, I do believe. I mean Austin has been the biggest drain. San Antonio club has gotten closer and closer to profitability every single month. In fact it's very, very close to breakeven and I think it actually posted a small profit one month. The Austin location has been the big drain and now we have got the permits, here we received the first week of April with the kitchen fully open and things are going there. We are starting to see revenue increases. We went ahead and made a management change. We've moved a manager from Minnesota, he's been with us for six years. He is now the new general manager at the Austin location. He moved down a week and a half ago for us. And we're starting to see some changes some very positive influences in that location now. Peter Siris - Guerrilla Capital Management: Great. Thanks Eric.

Thank you.

[Operator Instruction]. Mr. Priaulx there are no further questions at this time. Do you have any further comments?

So we wanted to ask everybody who is in New York to please join us tonight at Due Diligence Ball at Rick's Cabaret between Fifth Avenue and Sixth Avenue on 33rd street. Pre admission [orders] and party till 9 PM for a $7 drinks. Thank you very much.

This concludes today's conference thank you for participation. You may disconnect your line at this time.