##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K/A
 
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from                    to
 Commission File Number: 001-32208
 VCG HOLDING CORP.
 (Exact Name of Registrant as Specified in its Charter)
 Colorado
    
    84-1157022(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)390 Union Boulevard, Suite 540, Lakewood, CO
    
    80228(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code: (303) 934-2424
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class:
    
    Name of Each Exchange on Which Registered:Common Stock, $.0001 par value
    
    The NASDAQ Global Market
 Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ




---



##### Table of Contents



EXPLANATORY NOTE
 
 
 Amendment of the December 31, 2008 Form 10-K filed on April 13, 2009
 
 
  
 
 
    
    An expanded description of the nature of the errors that caused Goodwill to be overstated
by $2.1 million, Additional Paid-in Capital to be overstated by $1.2 million and Other Income
to be overstated by $0.9 million. This expanded description replaced the third
paragraph in the following sections of the Original 10-K:
 
 ¡
    
    Explanatory Note;¡
    
    Item 7. Managements Discussion and Analysis- Restatement of 2007 Annual
Financial Statements and 2008 Quarterly Financial Statements;¡
    
    Notes to Consolidated Financial Statements  Note 2)Restatement of 2007 Annual
Financial Statements and 2008 Quarterly Financial Statements, including a table that
shows the effect on the 2007 financial statements; and¡
    
    Notes to Consolidated Financial Statements  Note 14)2008 Quarterly Restatements
 
    
    Item 9A(T) Controls and Procedureswas also revised to include the same expanded
description of the nature of the errors that caused Goodwill to be overstated by $2.1 million,
Additional Paid-in Capital to be overstated by $1.2 million and Other Income to be overstated
by $0.9 million in the fourth paragraph.
    
    Item 1(A) Risk Factors- two risk factors were modified to disclose that the Company believes it is currently in compliance with the SECs and NASDAQs director independence rules as of the filing date.
    
    Signatures and Certifications- the signatures and certifications were updated to the
amended filing date.
 
  
 Restatement of 2007 Annual Financial Statements and 2008 Quarterly Financial Statements
   
  
  2




---



##### 



VCG HOLDING CORP.
FORM 10-K
 TABLE OF CONTENTS
 EXPLANATORY NOTE
 PART IITEM 1.
    
    Business
    
    
    4ITEM 1A.
    
    Risk Factors
    
    
    8ITEM 1B.
    
    Unresolved Staff Comments
    
    
    17ITEM 2.
    
    Properties
    
    
    18ITEM 3.
    
    Legal Proceedings
    
    
    21ITEM 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    22PART IIITEM 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
    
    
    23ITEM 6.
    
    Selected Financial Data
    
    
    25ITEM 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26ITEM 8.
    
    Financial Statements and Supplementary Data
    
    
    34ITEM 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    69ITEM 9A(T).
    
    Controls and Procedures
    
    
    69ITEM 9B.
    
    Other Information
    
    
    70PART IIIITEM 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    71ITEM 11.
    
    Executive Compensation
    
    
    71ITEM 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    71ITEM 13.
    
    Certain Relationships and Related Transactions and Directors Independence
    
    
    71ITEM 14.
    
    Principal Accountant Fees and Services
    
    
    71PART IVITEM 15.
    
    Exhibits and Financial Statement Schedules
    
    
    72SIGNATURES
    
    
    78EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2
  3




---



##### Table of Contents



PART I
 Forward-Looking Statement Disclaimer
     
 Item 1. Business
 General Information
   4




---



##### Table of Contents



Business
  
    
    PTs® Showclub in Indianapolis, Indiana (acquired 2002)
    
    PTs® Brooklyn in East Saint Louis, Illinois (acquired 2002)
    
    PTs® All Nude in Denver, Colorado (acquired 2004)
    
    The Penthouse Club® in Denver, Colorado (acquired 2004)
    
    Diamond Cabaret® in Denver, Colorado (acquired 2004)
    
    The Penthouse Club® in Phoenix, Arizona (opened 2004 and sold in January 2007)
    
    PTs® Appaloosa in Colorado Springs, Colorado (acquired October 2006)
    
    PTs® Showclub in Denver, Colorado (acquired December 2006)
    
    PTs® Showclub in Louisville, Kentucky (acquired January 2007)
    
    Roxys in East Saint Louis, Illinois (acquired February 2007)
    
    PTs® Showclub in East Saint Louis, Illinois (acquired February 2007)
    
    PTs® Sports Cabaret St. Louis in East Saint Louis, Illinois (acquired March
2007)
    
    The Penthouse Club® St. Louis in East Saint Louis, Illinois (acquired March
2007)
    
    The Mens Club® in Raleigh, North Carolina (acquired April 2007)
    
    Schieks Palace Royale in Minneapolis, Minnesota (acquired May 2007)
    
    PTs® Showclub in Portland, Maine (acquired September 2007)
    
    Jaguars Gold Club in Ft. Worth, Texas (acquired September 2007)
    
    PTs® Showclub in Miami, Florida (acquired October 2007)
    
    LaBoheme Gentlemens Club in Denver, Colorado (acquired December 2007)
    
    Jaguars Gold Club in Dallas, Texas (acquired April 2008)
    
    Imperial Showgirls Gentlemens Club in Anaheim, California (acquired June 2008)
   5




---



##### Table of Contents




    
    Facilities Our nightclub facilities are within ready access to the principal
business, tourist and/or commercial districts in the metropolitan areas in which they are
located. The facilities have state of the art sound systems, lighting and professional stage
design. Our nightclubs maintain an upscale level of décor and furniture furnishings to
create a professional appearance. Three of our nightclubs offer VIP rooms. Our VIP rooms are
open to individuals who purchase annual memberships. They offer a higher level of service
and are elegantly appointed and spacious.
    
    Professional On-Site Management  Our nightclubs are managed by persons who are
experienced in the restaurant and/or hospitality industry. The managers for the nightclubs
are responsible for maintaining a quality and professionally run nightclub. At a higher
level, our Area Directors oversee the management of several nightclubs within a specified
geographical area. The Company currently has 12 Area Directors who have 17 to 25 years of
experience in the industry.
    
    Food and Beverage Operations  Many of our nightclubs offer a first-class bar and
food service. Three of our nightclubs offer a full service restaurant that provides
customers with exceptional food, service and luxury. At most locations, we provide a
selective variety of food including, but not limited to, hot and cold appetizers, pizza, and
other limited food choices. Some of our nightclub operations do not have liquor licenses.
Those of our nightclubs that carry BYOB bring your own bottle permits, sell non-alcoholic
beverages. Experienced chef and bar managers are responsible for training, supervising,
staffing and operating the food and beverage operations at each nightclub.
    
    Entertainment  Our nightclubs provide a high standard of attractive, talented
and courteous female performers and waitresses. We maintain the highest standards for
appearance, attitude, demeanor, dress and personality. The entertainment encourages repeat
visits and increases the average length of a patrons stay. We prefer that performers who
work at our nightclubs be experienced entertainers.
 Working Capital
  Advertising and Promotion
   Compliance Policies and Controls
  6




---



##### Table of Contents



Patents, Trademarks, Licenses and Royalty Agreements
  ® ®
  Club Ownership
    

Trade NameGlenarm Restaurant, LLC
    
    Diamond CabaretRCC, LP
    
    Roxys ShowclubClassic
Affairs, Inc.
    
    Schieks Palace RoyaleVCG-IS, LLC
    
    Imperial Showgirls Gentlemens ClubStout Restaurant Concepts, Inc.
    
    La Boheme Gentlemens Cabaret
   7




---



##### Table of Contents



Seasonality
  Competition
  Government Regulations
   Employees and Independent Contractors
  
 Item 1A. Risk Factors
  We have had limited operations which makes our future operating results difficult to predict.
  8




---



##### Table of Contents



Our inability to obtain capital, use internally generated cash, or use our securities or debt
to finance future expansion efforts could impair the growth and expansion of our business.
  Our business has been, and may continue to be, adversely affected by disruptions in the credit
markets, including reduced access to credit and higher costs of obtaining credit.
  Our business has been, and may continue to be, adversely affected by conditions in the
U.S. financial markets and economic conditions generally.
  9




---



##### Table of Contents



Our acquisitions may result in disruptions in our business and diversion of managements
attention.
  Our business is subject to risks associated with geographic market concentration.
  Our business operations are subject to regulatory uncertainties which may affect our ability
to acquire additional nightclubs, remain in operation or be profitable.
    10




---



##### Table of Contents



There is substantial competition in the nightclub entertainment industry, which may affect our
ability to operate profitably or acquire additional nightclubs.
  If we are unable to effectively promote our brands and establish a leading position in the
marketplace, our business may fail.
 ® ® ®
 Our failure to protect our brand may undermine our competitive position, and litigation to
protect our brands or defend against third-party allegations of infringement may be costly.
  Our business is dependent upon management and employees for continuing operations and
expansion.
   11




---



##### Table of Contents



Troy Lowrie, our Chairman of the Board and CEO, may have potential conflicts of interest with
the Company, which may adversely affect our business. He beneficially owns a significant number of
shares of our common stock, which will have an impact on all major decisions on which our
stockholders may vote and which may discourage an acquisition of our Company.
    
    
    Election of our Directors;
    
    Amendment of our organizational documents;
    
    Merger of our Company or the sale of our assets or other corporate transaction; and
    
    Control of the outcome of any other matter submitted to the stockholders for vote.
  We must comply with all licenses and permits relating to the sale of alcohol.
  Activities or conduct at our nightclubs may cause us to lose necessary business licenses,
expose us to liability, or result in adverse publicity, which may increase our costs, divert
managements attention from our business and cause our stockholders to lose confidence in us,
thereby lowering our profitability and our stock price.
  12




---



##### Table of Contents



Our industry is viewed negatively by many for moral, religious and other reasons and,
therefore, the market for our securities is smaller than for other securities and an investor may
find it hard to sell our securities.
  Our business plan and proposed strategy has not been independently evaluated.
  We may be subject to uninsured risks which, if realized, could expose us to money damages,
which we may be unable to pay.
  Provisions in our Bylaws provide for indemnification of officers and Directors, which could
require us to direct funds away from our business.
  We could use the issuance of additional shares of our authorized stock to deter a change in
control.
  13




---



##### Table of Contents



We have entered into employment agreements with Troy Lowrie and Micheal Ocello that contain
features that may discourage a change of control.
     We must meet the NASDAQ Global Market continued listing requirements or we risk delisting, which
may decrease our stock price and make it harder for holders of our securities to trade in them.
 
  
 
 In the event the make-up of our Board of Directors or Audit Committee were not or are not in the
future in compliance with the SEC and NASDAQ independence requirements, we face a number of risks
that could materially and adversely affect our stockholders and our business.
 
 
  
 14




---



##### Table of Contents



Securities analysts may not initiate coverage or continue to cover our common stock, and this
may have a negative impact on our common stocks market price.
  In the past, we have raised substantial amounts of capital in private placements, and if we
fail to comply with the applicable securities laws, ensuing rescission rights or lawsuits would
severely damage our financial position.
  The application of the penny stock rules could adversely affect the market price of our
common stock and increase the transaction costs to sell those shares.
  Because we do not intend to pay any dividends on our common stock, purchases of our common
stock may not be suited for investors seeking dividend income.
  Future sales of our common stock may depress our stock price. A significant amount of common
stock is subject to issuance upon exercise of securities to purchase common stock. The exercise and
sale of these financial instruments could depress the market price of our common stock.
  15




---



##### Table of Contents



Ownership could be diluted by future issuances of our stock, options, warrants or other
securities.
  There is a limited public trading market for our common stock.
  Our stock price has been volatile and may fluctuate in the future.
  
    
    Our performance and prospects;
    
    The depth and liquidity of the market for our securities;
    
    Sales by selling stockholders of shares issued or issuable in connection with our private
placements;
    
    Investor perception of us and the industry in which we operate;
    
    Changes in earnings estimates or buy/sell recommendations by analysts;
    
    General financial and other market conditions; and
    
    Domestic and international economic conditions.
  16




---



##### Table of Contents



If we fail to implement effective internal controls required by the Sarbanes-Oxley Act of
2002, to remedy any material weaknesses in our internal controls that we may identify, or to obtain
the attestation required by Section 404 of the Sarbanes-Oxley Act of 2002, such failure could
result in material misstatements in our financial statements, cause investors to lose confidence in
our reported financial information and have a negative effect on the trading price of our common
stock.
    Other Risk Factors May Adversely Affect Our Financial Performance.
  
 Item 1B. Unresolved Staff Comments
  17




---



##### Table of Contents



Item 2. Properties
 Corporate Office
  Additional Office Location
  Our Nightclubs
   Name/Club Ownership
    
    Lease InformationPTs® Brooklyn
Platinum of Illinois, Incorporated
Acq. Date: 5/1/2002
Location: Brooklyn, IL
Sq. Ft.: 9,000
Building Owned by VCG: Yes
    
    An Illinois corporation and wholly-owned subsidiary of VCG.PTs® Showclub
Indy Restaurant Concepts, Inc.
Acq. Date: 6/30/02
Location: Indianapolis, IN
Sq. Ft.: 9,200
Building Owned by VCG: Yes
    
    An Indiana corporation and wholly-owned subsidiary of VCG.
VCG Real Estate leases a portion of the building that is
not used by the nightclub operation to an unaffiliated
third party.PTs® All Nude
VCG Restaurants Denver, Inc.
Acq. Date: 6/30/04
Location: Denver, CO
Sq. Ft.: 8,000
Building Owned by VCG: No
    
    A Colorado corporation and wholly-owned subsidiary of VCG.
The building is leased from an unaffiliated third party
currently for $14,500 per month. The lease term expires on
January 31, 2010 and has an additional five year option
until 2015. The base rent will be adjusted in February
2010 by the percentage increases in the Consumer Price
Index for the month of February 2005 and the Consumer
Price Index for the month of February 2010. And for each
subsequent lease year during the option period commencing
February 1, 2011 and every February 1 by the percentage
increase in the Consumer Price Index for the month of
February immediately preceding the adjustment date and the
Consumer Price Index for the month of February for the
year preceding the adjustment date.The Penthouse Club®
Glendale Restaurant Concepts, LP
Acq. Date: 6/30/04
Location: Glendale, CO
Sq. Ft.: 9,600
Building Owned by VCG: No
    
    A Colorado limited partnership and 98% owned subsidiary of
VCG, including the 1% general partnership interest. The
building is leased from Lowrie LLLP, controlled by our
Chairman of the Board and CEO, Troy Lowrie, currently for
$12,000 per month. The lease term expires September 2014
and has three options to extend that expire July 2029. The
base rent adjusts every five years. The rent from years
one to five is $12,000 per month, years six to ten is
$13,500 per month, years eleven to fifteen (option 1) is
$15,000 per month, years sixteen to twenty (option 2) is
$16,500 per month and years twenty one to twenty five
(option 3) is $18,000 per month.
 18




---



##### Table of Contents



Name/Club Ownership
    
    Lease InformationPTs® Showclub Appaloosa
VCG CO Springs, Inc.
Acq. Date: 10/2/06
Location: Colorado Springs, CO
Sq. Ft.: 9,500
Building Owned by VCG: No
    
    A Colorado corporation and wholly-owned subsidiary of VCG.
The building is leased from an unaffiliated third party
for $10,000 per month. The lease term expires on
October 1, 2016 and has two options to extend that expire
October 2026. The base rent adjusts every five years. The
rent from years one to five is $10,000 per month, years
six to ten is $10,500 per month, years eleven to fifteen
(option 1) is $12,000 per month and years sixteen to
twenty (option 2) is $13,500 per month.Diamond Cabaret®
Glenarm Restaurant, LLC
Acq. Date: 10/8/04
Location: Denver, CO
Sq. Ft.: 36,000
Building Owned by VCG: No
    
    A Colorado limited liability company and 90% owned
subsidiary of VCG. The building is leased from an
unaffiliated third party for $40,000 per month. The lease
term expires in October 2014 and has three options to
extend that expire October 2029. The base rent adjusts
every five years. The rent from years one to five is
$40,000 per month, years six to ten is $45,000 per month,
years eleven to fifteen (option 1) is $50,000 per month
and years sixteen to twenty (option 2) is $55,000 per
month and years twenty one to twenty five (option 3) is
$60,000.The Phoenix Club
Epicurean Enterprises, LLC
Acq. Date: 11/2/04
Location: Phoenix, AZ
Sq. Ft.: 14,000
Building Owned by VCG: Yes
    
    A previously-owned subsidiary of VCG. The nightclub was
sold in January 2007. The Company owns the building and
leases it to an unrelated third party, and purchaser of
the nightclub operations, for $20,000 per month. The lease
term expires January 2012 and has three options to extend
that expire January 2027. The rent from years one to five
is $20,000 per month, years six to ten (option 1) is
$20,000 per month, years eleven to fifteen (option 2) is
$25,000 per month and years sixteen to twenty (option
3) is $25,000 per month. The lessee defaulted on this
lease agreement in August 2008 and the Company has fully
reserved the uncollected rent payments and property taxes
as of December 31, 2008. The lessee has personally
guaranteed the lease, but the Company expects to file a
court action to enforce the lease and collect back-due
rent payments and property taxes.PTs® Show Club
Denver Restaurant Concepts, LP
Acq. Date: 1/29/06
Location: Denver, CO
Sq. Ft.: 20,720
Building Owned by VCG: No
    
    A Colorado limited partnership and 98% owned subsidiary of
VCG. The building is leased from Lowrie LLLP, controlled
by our Chairman of the Board and CEO, Troy Lowrie,
currently for $15,000 per month. This square footage
includes nightclub, office and storage space. The lease
term expires December 2015 and has three options to extend
that expire December 2029. The base rent adjusts every
five years. The rent from years one to five is $15,000 per
month, years six to ten is $17,500 per month, years eleven
to fifteen (option 1) is $20,000 per month, years sixteen
to twenty (option 2) is $22,500 per month and years twenty
one to twenty five (option 3) is $25,000.Roxys
RCC LP
Acq. Date: 1/18/07
Location: Brooklyn, IL
Sq. Ft.: 4,400
Building Owned by VCG: No
    
    An Illinois limited partnership and 88% subsidiary of VCG.
The building is leased from an unaffiliated third party
for $5,000 per month. The lease term expires February 1,
2017 and has two options to extend that expire February 1,
2027. The base rent never changes, but the rent amount
fluctuates monthly based on sales.PTs® Showclub
Kentucky Restaurant Concepts, Inc.
Acq. Date: 1/1/07
Location: Louisville, KY
Sq. Ft.: 23,000
Building Owned by VCG: No
    
    A Kentucky corporation and 100% owned subsidiary of VCG.
The building is leased from Lowrie LLLP, controlled by our
Chairman of the Board and CEO, Troy Lowrie, currently for
$7,500 per month. The lease term expires December 31, 2017
and has three five year options to extend that expire
December 31, 2032. The base rent adjusts every five years.
The rent from years one to five is $7,500 per month, years
six to ten is $8,750 per month, years eleven to fifteen
(option 1) is $10,000 per month, years sixteen to twenty
(option 2) is $11,250 per month and years twenty one to
twenty five (option 3) is $12,000.PTs® Showclub
Cardinal Management LP
Acq. Date: 2/5/07
Location: Centreville, IL
Sq. Ft.: 5,700
Building Owned by VCG: No
    
    An Illinois limited partnership and 83% owned subsidiary
of VCG. The building is leased from an unaffiliated third
party for $5,000 per month. The lease term expires on
February 1, 2017 and has two options to extend that expire
February 1, 2027. The base rent never changes, but the
rent amount fluctuates monthly based on sales.
 19




---



##### Table of Contents



Name/Club Ownership
    
    Lease InformationPTs® Sports Cabaret
MRC LP
Acq. Date: 2/9/07
Location: Sauget, IL
Sq. Ft.: 9,700
Building Owned by VCG: No
    
    An Illinois limited partnership and 100% owned subsidiary
of VCG. The building is leased from an unaffiliated third
party for $20,000 per month. The lease term expires on
March 1, 2017 and has two options to extend that expire
March 1, 2027. The base rent never changes, but the rent
amount fluctuates monthly based on sales.The Penthouse Club®
IRC LP
Acq. Date: 2/7/07
Location: Sauget, IL
Sq. Ft.: 19,385
Building Owned by VCG: No
    
    An Illinois limited partnership and a 90% owned subsidiary
of VCG. The building is leased from an unaffiliated third
party for $25,000 per month. The lease term expires on
March 1, 2017 and has two options to extend that expire
March 1, 2027. The base rent never changes, but the rent
amount fluctuates monthly based on sales.The Mens Club®
Raleigh Restaurant Concepts, Inc.
Acq. Date: 4/16/07
Location: Raleigh, NC
Sq. Ft.: 21,200
Building Owned by VCG: No
    
    A North Carolina corporation and wholly-owned subsidiary
of VCG. The building is leased from an unaffiliated third
party currently for $6,000 per month. This lease has
options to renew for ten consecutive renewal terms of five
years each that expire January 31, 2062. The base rent
adjusts every five years by $250 after January 1, 2017
with a maximum of $8,250 per month. The Company also has a
separate lease for the parking premises currently for
$19,750 per month. This lease expires January 31, 2012 and
has ten consecutive renewal terms of five years each that
expire on January 31, 2062. The base rent adjusts on every
renewal term by $500 with a maximum of $45,750.Schieks Palace Royale
Classic Affairs, Inc.
Acq. Date: 5/30/07
Location: Minneapolis, MN
Sq. Ft.: 11,600
Building Owned by VCG: No
    
    Minnesota corporation and wholly-owned subsidiary of VCG.
The building is leased from an unaffiliated third party
currently for $25,000 per month. The building lease term
expires on June 29, 2012 and has three five year options
to extend that expire July 1, 2027. The base rent adjusts
every five years. The rent from years one to five years is
$25,000 per month, years six to ten (option 1) is $27,750
per month, years eleven to fifteen (option 2) is $30,000
per month and years sixteen to twenty (option 3) is
$33,000 per month.PTs® Showclub
Kenkev II, Inc.
Acq. Date: 9/14/07
Location: Portland, ME
Sq. Ft.: 13,000
Building Owned by VCG: No
    
    A Maine corporation and wholly-owned subsidiary of VCG.
The building is leased from an unaffiliated third party
currently for $14,750 per month. The lease term expires on
September 30, 2032 and has two options to extend that
expire September 30, 2042. The base rent adjusts every
year by 3% after the first year of the lease.Jaguars Gold Club
Golden Productions JGC
Fort Worth LLC
Acq. Date: 9/17/07
Location: Fort Worth, TX
Sq. Ft.: 10,000
Building Owned by VCG: No
    
    A Texas limited liability company and wholly-owned
subsidiary of VCG. The building is owned by the nightclub
but the land is leased from an unaffiliated third party
currently for $20,000 per month. The lease term expires on
September 30, 2012 and has four five year options to
extend that expire September 30, 2032. The base rent
adjusts every option period by 10% over the prior terms
rental obligation.PTs® Showclub
Kenja II, Inc.
Acq. Date: 10/29/07
Location: Miami, FL 
Sq. Ft.: 7,600 
Building Owned by VCG: No
    
    A Florida corporation and wholly-owned subsidiary of VCG.
The building is leased from an unaffiliated third party
currently for $10,000 per month. The lease term expires on
November 1, 2032 and has two options to extend that expire
November 1, 2042. The base rent adjusts every year by 3%
after the first year of the lease.
 20




---



##### Table of Contents



Name/Club Ownership
    
    Lease InformationLaBoheme Gentlemens Club
Stout Restaurant Concepts, Inc.
Acq. Date: 12/21/07
Location: Denver, CO 
Sq. Ft.: 6,200
Building Owned by VCG: No
    
    A Colorado corporation and wholly-owned subsidiary of VCG.
The building is leased from an unaffiliated third party
currently for $17,000 per month. The lease term expires on
September 1, 2016. The base rent adjusts every three
years. The rent from years one to four is $17,000 per
month, years five to seven is $20,000 per month and years
eight to nine is $21,000 per month.Jaguars Gold Club
Manana Entertainment, Inc.
Acq. Date: 4/14/08
Location: Dallas, TX
Sq. Ft.: 12,500
Building Owned by VCG: No
    
    A Texas limited liability company and wholly-owned
subsidiary of VCG. The building is owned by the nightclub
but the land is leased from an unaffiliated third party
for $25,000 per month. The lease term expires on April 14,
2012 and has four five year options to extend that expire
April 2032. The base rent adjusts every option period by
10% over the prior terms rental obligation.Imperial Showgirls Gentlemens Club 
VCG-IS, LLC
Acq. Date: 7/28/08
Location: Anaheim, CA
Sq. Ft.: 8,148
Building Owned by VCG: No
    
    A California corporation and wholly-owned subsidiary of
VCG. The building is leased from an unaffiliated third
party currently for $8,000 per month. The lease term
expires on September 1, 2010 and has four five year
options to extend that expire September 1, 2025. The base
rent adjusts by $500 every five years with a maximum of
$9,500 per month.
 
 Item 3. Legal Proceedings
 Thee Dollhouse Productions Litigation
     21




---



##### Table of Contents



Zajkowski, et. al. vs VCG and Classic Affairs Litigation
   Texas Patron Tax Litigation
  Adventure Plus Enterprises, Inc. (Adventure) v. Gold Suit, et.al. Litigation
  Department of Labor Review
   
 Item 4. Submission of Matters to a Vote of Security Holders
  22




---



##### Table of Contents



PART II
 
 Item 5. Market For Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 Market Information
   2008
    
    2007
    
    2006Three Months Ended
    
    High
    
    Low
    
    High
    
    Low
    
    High
    
    LowMarch 31
    
    $
    13.90
    
    
    $
    5.95
    
    
    $
    12.65
    
    
    $
    4.90
    
    
    $
    1.50
    
    
    $
    0.90June 30
    
    $
    6.70
    
    
    $
    3.60
    
    
    $
    10.60
    
    
    $
    6.81
    
    
    $
    1.54
    
    
    $
    0.90September 30
    
    $
    4.03
    
    
    $
    2.80
    
    
    $
    9.28
    
    
    $
    5.15
    
    
    $
    2.65
    
    
    $
    1.10December 31
    
    $
    3.35
    
    
    $
    1.24
    
    
    $
    15.00
    
    
    $
    7.45
    
    
    $
    5.35
    
    
    $
    2.00
  Holders
  Dividends
  Recent Sales of Unregistered Securities
        23




---



##### Table of Contents



Equity Compensation Plan Information
  Transfer Agent and Registrar
  Repurchases of Equity Securities of the Issuer
   Maximum Number(or ApproximateTotal Number of
    
    Dollar Value) ofShares Purchased
    
    Shares that Mayas Part of
    
    Yet BeTotal Number of
    
    
    
    
    
    Publicly
    
    Purchased underShares
    
    Average Price
    
    Announced Plans
    
    the Plans orPeriod
    
    Purchased(1)
    
    Paid per Share
    
    or Programs(1)
    
    ProgramsOctober 1 to 31, 2008
    
    
    225,045
    (2)
    
    $
    2.61
    
    
    
    225,045
    (2)
    
    1,334,955 shares  or $9,154,616November 1 to 30, 2008
    
    
    49,000
    
    
    $
    1.90
    
    
    
    49,000
    
    
    1,285,955 shares  or $9,061,668December 1 to 31, 2008
    
    
    52,979
    
    
    $
    1.34
    
    
    
    52,979
    
    
    1,232,976 shares  or $8,989,426Total
    
    
    327,024
    
    
    $
    2.30
    
    
    
    327,024
    
    
    1,232,976 shares  or $8,989,426
 
 (1)
    
    Unless noted, the Company made all repurchases in the open market.(2)
    
    Of these repurchases, the Company purchased 100,045 shares of common
stock in the open market and 125,000 shares of common stock in a
private transaction. 24




---



##### Table of Contents



Item 6. Selected Financial Data
  Description
    
    2008
    
    2007
    
    2006
    
    2005
    
    2004(Restated  Note 2)Revenue (in thousands)
    
    $
    57,693
    
    
    $
    39,617
    
    
    $
    16,115
    
    
    $
    15,854
    
    
    $
    12,220Net (loss)/income (in thousands)
    
    $
    (30,711
    )
    
    $
    5,419
    
    
    $
    237
    
    
    $
    (1,271
    )
    
    $
    (2,122
    )Basic (loss)/income per common share
    
    $
    (1.71
    )
    
    $
    .33
    
    
    $
    .03
    
    
    $
    (.15
    )
    
    $
    (.26
    )Weighted average number of shares
outstanding
    
    
    17,925,132
    
    
    
    16,623,213
    
    
    
    9,128,985
    
    
    
    8,477,571
    
    
    
    8,121,107Total assets (in thousands)
    
    $
    75,626
    
    
    $
    103,720
    
    
    $
    35,080
    
    
    $
    27,859
    
    
    $
    29,157Total stockholders equity (in thousands)
    
    $
    24,826
    
    
    $
    53,988
    
    
    $
    12,796
    
    
    $
    3,044
    
    
    $
    3,541
  25




---



##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statement Disclaimer
  Restatements of 2007 Annual Financial Statements and 2008 Quarterly Financial Statements
   
  
  Overview
  26




---



##### Table of Contents



Critical Accounting Policies
 Basis of Consolidation
  Use of Estimates
  Assignment of Fair Values upon Acquisition of Licenses, Goodwill and Other Intangibles
 Business
Combinations Goodwill and Other Intangibles,
   Testing for Impairment of Intangible Assets
    27




---



##### Table of Contents



Impairment of Real Estate
 Impairment of Assets
 Other Receivables
  Revenue Recognition
    Effects of Inflation
  Off-Balance Sheet Arrangements
  28




---



##### Table of Contents



Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
 Revenues
   Cost of Goods Sold
  Salaries and Wages
  
    
    An increase from 795 tipped minimum wage nightclub employees at December 31, 2007 to 890
nightclub employees at December 31, 2008. This increase is directly related to nightclub
acquisitions;
    
    An increase in the federal and state minimum wages ranging from $0.17 to $0.70 per hour
from 2007 to 2008; and
    
    A company-wide mandate that employees claim all the tips they receive, resulting in an
increase in payroll taxes.
    Other General and Administrative Expenses
  29




---



##### Table of Contents



Accounting for Leases
        30




---



##### Table of Contents



Depreciation and Amortization
   Interest Expense
  Interest Income
  Loss on Sale of Assets
  Liquidity and Capital Resources
  31




---



##### Table of Contents



Working Capital
       Capital Resources
    32




---



##### Table of Contents



December 31,20072008
    
    
    (Restated  Note 2)Net Income (loss)
    
    $
    (30,711
    )
    
    $
    5,419Add back:Depreciation
    
    
    1,678
    
    
    
    1,030Amortization of covenants not-to-compete
    
    
    21
    
    
    
    Amortization of leasehold rights and liabilities, net
    
    
    (192
    )
    
    
    (100
    )Interest expense
    
    
    3,761
    
    
    
    2,440Total income taxes
    
    
    (11,102
    )
    
    
    1,250EBITDA before non-cash impairment charges
    
    $
    (36,545
    )
    
    $
    10,039Add back:Total non-cash impairment charges
    
    
    48,006
    
    
    
    EBITDA excluding non-cash impairment charges
    
    $
    11,461
    
    
    $
    10,039
  Contractual Obligations and Commercial Commitments
  Payments Due by PeriodTotal
    
    2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    ThereafterLong-term debt
    
    $
    36,458
    
    
    $
    3,626
    
    
    $
    13,587
    
    
    $
    13,544
    
    
    $
    2,613
    
    
    $
    1,434
    
    
    $
    1,654Interest payments
    
    
    8,031
    
    
    
    3,274
    
    
    
    2,341
    
    
    
    1,685
    
    
    
    331
    
    
    
    168
    
    
    
    232Capital leases
    
    
    19
    
    
    
    10
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating leases
    
    
    107,565
    
    
    
    3,618
    
    
    
    3,674
    
    
    
    3,691
    
    
    
    3,828
    
    
    
    3,853
    
    
    
    88,901
 33




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 Report of Independent Registered Public Accounting Firm
 
     /s/ Causey Demgen & Moore Inc.
  34




---



##### Table of Contents



VCG Holding Corp.
 Consolidated Balance Sheets
(Dollar amounts in thousands)
 December 31,2008
    
    
    2007(Restated  Note 2)AssetsCurrent AssetsCash and cash equivalents (including $250 of restricted cash in 2007)
    
    $
    2,210
    
    
    $
    2,979Assets held for sale
    
    
    107
    
    
    
    373Other receivables
    
    
    25
    
    
    
    182Income taxes receivable
    
    
    276
    
    
    
    272Inventories
    
    
    949
    
    
    
    965Prepaid expenses
    
    
    282
    
    
    
    276Current portion of deferred income tax asset
    
    
    171
    
    
    
    Total Current Assets
    
    
    4,020
    
    
    
    5,047Property and equipment, net
    
    
    25,738
    
    
    
    24,717Deferred income tax asset (non-current)
    
    
    4,069
    
    
    
    Non-compete agreements
    
    
    41
    
    
    
    52License
    
    
    36,413
    
    
    
    53,317Goodwill
    
    
    2,453
    
    
    
    17,622Favorable lease rights
    
    
    1,705
    
    
    
    1,533Trade names
    
    
    619
    
    
    
    578Other long-term assets
    
    
    568
    
    
    
    854Total Assets
    
    $
    75,626
    
    
    $
    103,720Liabilities and Stockholders EquityCurrent LiabilitiesAccounts payable  trade
    
    $
    848
    
    
    $
    764Accrued expenses
    
    
    2,257
    
    
    
    1,647Deferred revenue
    
    
    109
    
    
    
    150Current portion of unfavorable lease liabilities
    
    
    278
    
    
    
    262Current portion of capitalized lease
    
    
    10
    
    
    
    9Current portion of long-term debt
    
    
    2,602
    
    
    
    8,386Current portion of long-term debt, related party
    
    
    1,024
    
    
    
    948Total current liabilities
    
    
    7,128
    
    
    
    12,166Long-term LiabilitiesDeferred income tax liability
    
    
    
    
    
    
    7,076Deferred rent
    
    
    845
    
    
    
    Unfavorable lease liabilities, net of current portion
    
    
    6,426
    
    
    
    5,322Capital lease, net of current portion
    
    
    9
    
    
    
    19Long-term debt, net of current portion
    
    
    25,749
    
    
    
    15,695Long-term debt, related party
    
    
    7,083
    
    
    
    5,791Total long-term liabilities
    
    
    40,112
    
    
    
    33,903Commitments and contingent liabilities (Note 12)Minority Interest
    
    
    3,560
    
    
    
    3,663Stockholders EquityRedeemable Preferred Stock, none issued and outstanding
    
    
    
    
    
    
    Common StockCommon stock $.0001 par value; 50,000,000 shares authorized;
17,755,378 (2008) and 17,723,975 (2007) shares issued and
outstanding
    
    
    2
    
    
    
    2Additional paid-in capital
    
    
    52,557
    
    
    
    51,008Retained earnings (accumulated deficit)
    
    
    (27,733
    )
    
    
    2,978Total stockholders equity
    
    
    24,826
    
    
    
    53,988Total Liabilities and Stockholders Equity
    
    $
    75,626
    
    
    $
    103,720
  35




---



##### Table of Contents



VCG Holding Corp.
 Consolidated Statements of Operations
For the years ended
(Dollar amounts in thousands except
earnings per share)
 December 31,2008
    
    
    2007(Restated  Note 2)RevenuesSales of alcoholic beverages
    
    $
    26,242
    
    
    $
    19,248Sales of food and merchandise
    
    
    2,503
    
    
    
    2,282Service revenue
    
    
    25,568
    
    
    
    13,997Management fees and other income
    
    
    3,380
    
    
    
    4,090Total revenues
    
    
    57,693
    
    
    
    39,617Operating ExpensesCost of goods sold
    
    
    6,980
    
    
    
    5,414Salaries and wages
    
    
    13,461
    
    
    
    8,899Other general and administrativeTaxes and permits
    
    
    2,894
    
    
    
    1,527Charge card and bank fees
    
    
    869
    
    
    
    480Rent
    
    
    5,798
    
    
    
    3,764Legal fees
    
    
    1,101
    
    
    
    673Other professional fees
    
    
    2,788
    
    
    
    1,495Advertising and marketing
    
    
    2,921
    
    
    
    1,859Insurance
    
    
    1,712
    
    
    
    1,042Utilities
    
    
    1,104
    
    
    
    652Repairs and maintenance
    
    
    1,022
    
    
    
    631Other
    
    
    4,778
    
    
    
    3,193Impairment of building and land
    
    
    1,961
    
    
    
    Impairment of indefinite-lived intangible assets
    
    
    27,324
    
    
    
    Impairment of goodwill
    
    
    18,721
    
    
    
    Depreciation and amortization
    
    
    1,699
    
    
    
    1,030Total operating expenses
    
    
    95,133
    
    
    
    30,659Income (loss) from operations
    
    
    (37,440
    )
    
    
    8,958Other income (expenses)Interest expense
    
    
    (3,761
    )
    
    
    (2,440
    )Interest income
    
    
    23
    
    
    
    326(Loss) gain on sale of assets
    
    
    (206
    )
    
    
    190Realized loss on sale of marketable securities
    
    
    
    
    
    
    (91
    )Total other expenses
    
    
    (3,944
    )
    
    
    (2,015
    )Income (loss) from continuing operations before income taxes
    
    
    (41,384
    )
    
    
    6,943Income taxesIncome tax expense  current
    
    
    730
    
    
    
    Income tax expense (benefit)  deferred
    
    
    (11,832
    )
    
    
    1,250Total income taxes
    
    
    (11,102
    )
    
    
    1,250Minority interest expense
    
    
    (429
    )
    
    
    (251
    )Income (loss) from continuing operations
    
    
    (30,711
    )
    
    
    5,442(Loss) from discontinued operations
    
    
    
    
    
    
    (23
    )Net income (loss)
    
    $
    (30,711
    )
    
    $
    5,419Earnings per shareBasic income (loss) per common shareIncome (loss) from continuing operations
    
    $
    (1.71
    )
    
    $
    0.33Loss from discontinued operations
    
    
    
    
    
    
    Net income (loss)
    
    $
    (1.71
    )
    
    $
    0.33Fully diluted income per common shareIncome (loss) from continuing operations
    
    $
    (1.69
    )
    
    $
    0.32Loss from discontinued operations
    
    
    
    
    
    
    Net income (loss)
    
    $
    (1.69
    )
    
    $
    0.32Weighted average shares outstanding
    
    
    17,925,132
    
    
    
    16,623,213Fully diluted weighted average shares outstanding
    
    
    18,146,949
    
    
    
    17,012,983
  36




---



##### Table of Contents



VCG Holding Corp.
 Consolidated Statements of Stockholders Equity
For the years ended December 31, 2008 and 2007
(In thousands)
 RetainedAdditional
    
    
    Earnings
    
    
    TotalCommon Stock
    
    
    Paid-in
    
    
    (Accumulated
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    deficit)
    
    
    Equity(2007
    
    
    (2007
    
    
    (2007
    
    
    (2007
    
    
    (2007Restated  Note 2)
    
    
    Restated  Note 2)
    
    
    Restated  Note 2)
    
    
    Restated  Note 2)
    
    
    Restated  Note 2)Balances, December 31, 2006
    
    
    12,645
    
    
    $
    2
    
    
    $
    15,235
    
    
    $
    (2,441
    )
    
    $
    12,796Sale of common stock for cash
    
    
    3,000
    
    
    
    
    
    
    
    20,400
    
    
    
    
    
    
    
    20,400Conversion of long-term debt to
common stock
    
    
    750
    
    
    
    
    
    
    
    10,000
    
    
    
    
    
    
    
    10,000Common stock issued for
acquisitions of businesses
    
    
    1,048
    
    
    
    
    
    
    
    6,302
    
    
    
    
    
    
    
    6,302Cancel common stock for partial
payment on sale of Epicurean
Enterprises
    
    
    (300
    )
    
    
    
    
    
    
    (2,370
    )
    
    
    
    
    
    
    (2,370
    )Conversion of preferred stock
to common stock
    
    
    89
    
    
    
    
    
    
    
    325
    
    
    
    
    
    
    
    325Exercise of warrants
    
    
    330
    
    
    
    
    
    
    
    1,008
    
    
    
    
    
    
    
    1,008Exercise of cashless warrants
    
    
    162
    
    
    
    
    
    
    
    (0
    )
    
    
    
    
    
    
    0Issue common stock for services
    
    
    40
    
    
    
    
    
    
    
    367
    
    
    
    
    
    
    
    367Repurchase of common stock
    
    
    (40
    )
    
    
    
    
    
    
    (257
    )
    
    
    
    
    
    
    (257
    )Amortize warrants for services
    
    
    
    
    
    
    
    
    
    
    122
    
    
    
    
    
    
    
    122Amortize deferred offering costs
    
    
    
    
    
    
    
    
    
    
    (124
    )
    
    
    
    
    
    
    (124
    )Restated net income for year
ended December 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,419
    
    
    
    5,419Restated Balances,
December 31, 2007
    
    
    17,724
    
    
    
    2
    
    
    
    51,008
    
    
    
    2,978
    
    
    
    53,988Issue common stock for services
    
    
    184
    
    
    
    
    
    
    
    1,487
    
    
    
    
    
    
    
    1,487Issue common stock for loan fee
    
    
    7
    
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    36Exercise of warrants
    
    
    167
    
    
    
    
    
    
    
    459
    
    
    
    
    
    
    
    459Repurchase of common stock
    
    
    (327
    )
    
    
    
    
    
    
    (753
    )
    
    
    
    
    
    
    (753
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    234
    
    
    
    
    
    
    
    234Amortize warrants for services
    
    
    
    
    
    
    
    
    
    
    123
    
    
    
    
    
    
    
    123Amortize deferred offering costs
    
    
    
    
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    (37
    )Net loss for year ended
December 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,711
    )
    
    
    (30,711
    )Balances, December 31, 2008
    
    
    17,755
    
    
    $
    2
    
    
    $
    52,557
    
    
    $
    (27,733
    )
    
    $
    24,826
  37




---



##### Table of Contents



VCG Holding Corp.
 Consolidated Statements of Cash Flows
For the years ended
(In thousands)
 20072008
    
    
    (Restated  Note 2)Operating ActivitiesNet income (loss)
    
    $
    (30,711
    )
    
    $
    5,419Adjustments to reconcile net income (loss) to net cash provided by operating activities:Impairment of goodwill
    
    
    18,721
    
    
    
    Impairment of indefinite life intangible assets
    
    
    27,324
    
    
    
    Impairment of building and land
    
    
    1,961
    
    
    
    Depreciation and amortization
    
    
    1,678
    
    
    
    1,030Amortization of lease rights and lease liabilities
    
    
    (192
    )
    
    
    (100
    )Amortization of covenant not to compete agreements
    
    
    21
    
    
    
    Amortization of loan fees
    
    
    448
    
    
    
    132Stock-based compensation expense
    
    
    421
    
    
    
    150Issuance of common stock for services
    
    
    1,422
    
    
    
    339Deferred income tax expense (benefit)
    
    
    (11,831
    )
    
    
    1,250Minority interest expense
    
    
    427
    
    
    
    251(Gain) loss on disposition of assets
    
    
    216
    
    
    
    (99
    )Accrued interest added to long-term debt
    
    
    181
    
    
    
    Changes in operating assets and liabilities:Income taxes and other receivables
    
    
    152
    
    
    
    69Inventories
    
    
    20
    
    
    
    (76
    )Prepaid expenses
    
    
    (6
    )
    
    
    (2
    )Accounts payable and accrued expenses
    
    
    694
    
    
    
    825Deferred revenue
    
    
    (41
    )
    
    
    109Deferred rent
    
    
    845
    
    
    
    Net cash provided by operating activities
    
    
    11,750
    
    
    
    9,297Investing ActivitiesInvestments
    
    
    
    
    
    
    259Acquisitions of businesses, net of cash acquired
    
    
    (9,670
    )
    
    
    (40,639
    )Additions to property and equipment
    
    
    (1,321
    )
    
    
    (998
    )Deposits
    
    
    (206
    )
    
    
    56Purchase of assets held for resale
    
    
    (128
    )
    
    
    (930
    )Proceeds from sale of assets
    
    
    243
    
    
    
    763Net cash used by investing activities
    
    
    (11,082
    )
    
    
    (41,489
    )Financing ActivitiesLoan fees paid
    
    
    (268
    )
    
    
    (392
    )Payment on capitalized leases
    
    
    (9
    )
    
    
    (950
    )Proceeds from long-term debt
    
    
    16,149
    
    
    
    25,225Payments on debt
    
    
    (16,486
    )
    
    
    (11,300
    )Offering costs
    
    
    
    
    
    
    (129
    )Proceeds from stock issuances
    
    
    
    
    
    
    20,400Distributions to minority interests
    
    
    (529
    )
    
    
    (445
    )Repurchase of stock
    
    
    (753
    )
    
    
    (257
    )Proceeds from exercise of warrants
    
    
    459
    
    
    
    1,008Net cash provided (used) by financing activities
    
    
    (1,437
    )
    
    
    33,160Net increase (decrease) in cash
    
    
    (769
    )
    
    
    968Cash and cash equivalents beginning of year
    
    
    2,979
    
    
    
    2,011Cash end of year
    
    $
    2,210
    
    
    $
    2,979Supplemental cash flow information:Income taxes paid
    
    $
    822
    
    
    $
    Interest paid
    
    $
    3,109
    
    
    $
    2,315Non-cash acquisition activities:Fair value of assets acquired, net of cash acquired
    
    $
    17,558
    
    
    $
    66,781Fair value of liabilities assumed
    
    
    (2,095
    )
    
    
    (12,439
    )Issuance of notes payable for acquisitions
    
    
    (5,793
    )
    
    
    (7,400
    )Issuance of common stock for acquisitions
    
    
    
    
    
    
    (6,303
    )Cash paid to purchase business
    
    $
    9,670
    
    
    $
    40,639Other non-cash investing and financing activities:Conversion of debt to common stock
    
    $
    
    
    
    $
    10,000Conversion of preferred stock to common stock
    
    $
    
    
    
    $
    325Cancellation of common stock for sale of Epicurean
    
    $
    
    
    
    $
    (2,370
    )Amortization of deferred offering costs
    
    $
    37
    
    
    $
    124Issuance of common stock for loan fees
    
    $
    36
    
    
    $
    
  38




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements
Index
 Note1.
    
    Organization
    
    
    402.
    
    Restatement of 2007 Annual Financial Statements and 2008 Quarterly Financial Statements
    
    
    403.
    
    Summary of Significant Accounting Policies
    
    
    434.
    
    Acquisitions
    
    
    485.
    
    Property and Equipment
    
    
    536.
    
    Intangible Assets
    
    
    547.
    
    Other Long Term Assets
    
    
    558.
    
    Accrued Expenses
    
    
    559.
    
    Long Term Debt
    
    
    5510.
    
    Income Taxes
    
    
    5711.
    
    Stockholders Equity
    
    
    5812.
    
    Commitments and Contingencies
    
    
    6013.
    
    Discontinued Operations
    
    
    6314.
    
    2008 Quarterly Restatements
    
    
    6415.
    
    Subsequent Events
    
    
    68
 39




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements
 
 1)  Organization
  
 2)  Restatement of 2007 Annual Financial Statements and 2008 Quarterly Financial Statements
   
  
  40




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 
  
 
 VCG Holding Corp.
Consoldated Balance Sheet
December 31, 2007
(Dollar amounts in thousands)
 
 
 As Reported
    
    Valuation
    
    Equity
    
    Restated2007
    
    Adjustments
    
    Restatement
    
    2007AssetsCurrent AssetsCash & cash equivalents (including $250 of
restricted cash at 12/31/07)
    
    $
    2,979
    
    
    
    
    
    
    
    
    
    
    $
    2,979Assets held for sale
    
    
    373
    
    
    
    
    
    
    
    
    
    
    
    373Other receivables
    
    
    182
    
    
    
    
    
    
    
    
    
    
    
    182Inventories
    
    
    965
    
    
    
    
    
    
    
    
    
    
    
    965Prepaid expenses
    
    
    276
    
    
    
    
    
    
    
    
    
    
    
    276Income taxes receivable
    
    
    272
    
    
    
    
    
    
    
    
    
    
    
    272Total Current Assets
    
    
    5,047
    
    
    
    0
    
    
    
    0
    
    
    
    5,047Property and equipment, net
    
    
    24,517
    
    
    
    200
    
    
    
    
    
    
    
    24,717Licenses
    
    
    3,205
    
    
    
    50,112
    
    
    
    
    
    
    
    53,317Favorable lease rights
    
    
    0
    
    
    
    1,533
    
    
    
    
    
    
    
    1,533Trade names
    
    
    0
    
    
    
    578
    
    
    
    
    
    
    
    578Intellectual property
    
    
    1,500
    
    
    
    (1,500
    )
    
    
    
    
    
    
    0Plans and drawings
    
    
    76
    
    
    
    
    
    
    
    
    
    
    
    76Deferred acquisition costs
    
    
    268
    
    
    
    
    
    
    
    
    
    
    
    268Covenants not to compete
    
    
    111
    
    
    
    (59
    )
    
    
    
    
    
    
    52Deferred offering costs
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    37Goodwill
    
    
    58,964
    
    
    
    (39,166
    )
    
    
    (2,176
    )
    
    
    17,622Loan fees, net
    
    
    390
    
    
    
    
    
    
    
    
    
    
    
    390Deposits
    
    
    83
    
    
    
    
    
    
    
    
    
    
    
    83Total Assets
    
    $
    94,198
    
    
    
    11,698
    
    
    
    (2,176
    )
    
    $
    103,720Liabilities and Stockholders EquityCurrent LiabilitiesAccounts payabletrade
    
    $
    764
    
    
    
    
    
    
    
    
    
    
    $
    764Accrued expenses
    
    
    1,647
    
    
    
    
    
    
    
    
    
    
    
    1,647Deferred revenue
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    150Unfavorable leasehold rights
    
    
    0
    
    
    
    262
    
    
    
    
    
    
    
    262Current portion of capitalized leases
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    9Current portion of long-term debt
    
    
    9,334
    
    
    
    
    
    
    
    
    
    
    
    9,334Total Current Liabilities
    
    
    11,904
    
    
    
    262
    
    
    
    0
    
    
    
    12,166Long-term LiabilitiesDeferred income tax
    
    
    1,061
    
    
    
    6,015
    
    
    
    
    
    
    
    7,076Unfavorable lease liabilities, net of current portion
    
    
    0
    
    
    
    5,322
    
    
    
    
    
    
    
    5,322Capitalized leases, net of current portion
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    19Long-term debt
    
    
    21,486
    
    
    
    
    
    
    
    
    
    
    
    21,486Total Long-Term liabilities
    
    
    22,566
    
    
    
    11,337
    
    
    
    0
    
    
    
    33,903Minority Interests
    
    
    3,663
    
    
    
    
    
    
    
    
    
    
    
    3,663Stockholders EquityRedeemable preferred stock, none issued and outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock $.0001 par value; 50,000,000 shares
authorized; 12,645,441 (2006) and 17,723,975 (2007)
shares issued and outstanding
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Additional paid-in capital
    
    
    52,252
    
    
    
    
    
    
    
    (1,244
    )
    
    
    51,008Retained earnings (deficit)
    
    
    3,811
    
    
    
    99
    
    
    
    (932
    )
    
    
    2,978Total Stockholders Equity
    
    
    56,065
    
    
    
    99
    
    
    
    (2,176
    )
    
    
    53,988Total Liabilities and Stockholders Equity
    
    $
    94,198
    
    
    
    11,698
    
    
    
    (2,176
    )
    
    $
    103,720
 
 41




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 
 VCG Holding Corp.
Consolidated Statements of Operations
For the year ended
(Dollar amounts in thousands except earnings per share)
 
 
 December 31,As Reported
    
    Valuation
    
    Equity
    
    Restated2007
    
    Adjustments
    
    Restatement
    
    2007RevenuesSales of alcoholic beverages
    
    $
    19,248
    
    
    
    
    
    
    
    
    
    
    $
    19,248Sales of food and merchandise
    
    
    2,282
    
    
    
    
    
    
    
    
    
    
    
    2,282Service revenue
    
    
    13,997
    
    
    
    
    
    
    
    
    
    
    
    13,997Management fees and other income
    
    
    5,022
    
    
    
    
    
    
    
    (932
    )
    
    
    4,090Total revenue
    
    
    40,549
    
    
    
    
    
    
    
    (932
    )
    
    
    39,617Operating ExpensesCost of goods sold
    
    
    5,414
    
    
    
    
    
    
    
    
    
    
    
    5,414Salaries and wages
    
    
    8,899
    
    
    
    
    
    
    
    
    
    
    
    8,899Other general and administrativeTaxes and permits
    
    
    1,527
    
    
    
    
    
    
    
    
    
    
    
    1,527Charge card and bank fees
    
    
    480
    
    
    
    
    
    
    
    
    
    
    
    480Rent
    
    
    3,863
    
    
    
    (99
    )
    
    
    
    
    
    
    3,764Professional fees
    
    
    2,168
    
    
    
    
    
    
    
    
    
    
    
    2,168Advertising and marketing
    
    
    1,859
    
    
    
    
    
    
    
    
    
    
    
    1,859Insurance
    
    
    1,042
    
    
    
    
    
    
    
    
    
    
    
    1,042Bad debt expense
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    42Other
    
    
    4,434
    
    
    
    
    
    
    
    
    
    
    
    4,434Depreciation and amortization
    
    
    1,030
    
    
    
    
    
    
    
    
    
    
    
    1,030Total operating expenses
    
    
    30,758
    
    
    
    (99
    )
    
    
    0
    
    
    
    30,659Income from operations
    
    
    9,791
    
    
    
    99
    
    
    
    (932
    )
    
    
    8,958Other income (expenses)Interest expense
    
    
    (2,440
    )
    
    
    
    
    
    
    
    
    
    
    (2,440
    )Interest income
    
    
    326
    
    
    
    
    
    
    
    
    
    
    
    326Gain on sale of assets
    
    
    190
    
    
    
    
    
    
    
    
    
    
    
    190Realized loss on sale of marketable securities
    
    
    (91
    )
    
    
    
    
    
    
    
    
    
    
    (91
    )Total other income (expenses)
    
    
    (2,015
    )
    
    
    0
    
    
    
    0
    
    
    
    (2,015
    )Income from continuing operations before income taxes
    
    
    7,776
    
    
    
    99
    
    
    
    (932
    )
    
    
    6,943Income tax expensecurrent
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0Income tax expensedeferred
    
    
    1,250
    
    
    
    
    
    
    
    0
    
    
    
    1,250Total income taxes
    
    
    1,250
    
    
    
    0
    
    
    
    0
    
    
    
    1,250Minority interest expense
    
    
    (251
    )
    
    
    
    
    
    
    
    
    
    
    (251
    )Income (loss) from continuing operations
    
    
    6,275
    
    
    
    99
    
    
    
    (932
    )
    
    
    5,442(Loss) from discontinued operations, net of tax
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    (23
    )Net income (loss)
    
    $
    6,252
    
    
    $
    99
    
    
    $
    (932
    )
    
    $
    5,419Earnings per shareBasic income per common shareIncome from continuing operations
    
    $
    0.38
    
    
    $
    0.01
    
    
    $
    (0.06
    )
    
    $
    0.33Loss from discontinued operations
    
    $
    Net income applicable to common shareholders
    
    $
    0.38
    
    
    $
    0.01
    
    
    $
    (0.06
    )
    
    $
    0.33Fully diluted income per common shareIncome from continuing operations
    
    $
    0.37
    
    
    $
    0.01
    
    
    $
    (0.06
    )
    
    $
    0.32Loss from discontinued operations
    
    $
    Net income applicable to common shareholders
    
    $
    0.37
    
    
    $
    0.01
    
    
    $
    (0.06
    )
    
    $
    0.32Weighted average shares outstanding
    
    
    16,501
    
    
    
    
    
    
    
    122
    
    
    
    16,623Fully diluted weighted average shares outstanding
    
    
    16,993
    
    
    
    
    
    
    
    20
    
    
    
    17,013
 
 42




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 
 3)  Summary of Significant Accounting Policies
 Principles of Consolidation
  Use of Estimates
  Cash and Cash Equivalents
  Assets Held for Sale
  Other Receivables
  Income Tax Receivable
  Inventories
  Prepaid Expenses
  43




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Property and Equipment
  YearsBuildings
    
    39Leasehold improvements
    
    The shorter of useful life or lease termEquipment
    
    3  10Vehicles
    
    5Signs
    
    10Furniture and Fixtures
    
    3  7
   Deposits
  Goodwill
 Business Combinations Goodwill and Other Intangible Assets
 Intangible Assets
   Favorable Lease Rights and Unfavorable Lease Liabilities
  Deferred Revenue
  44




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Deferred Rent
 Accounting for Leases
 Revenue Recognition
    Advertising Cost
  Stock-based Compensation
 Share-Based Payment
 Income Taxes
 Accounting for
Income Taxes
 Earnings per Share
  Earnings per share
 45




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
   Years Ended December 31,2008
    
    2007Basic weighted average shares outstanding
    
    
    17,925,132
    
    
    
    16,623,213Effect of dilutive securities:Stock warrants
    
    
    221,817
    
    
    
    389,770Stock options
    
    
    
    
    
    
    Dilutive weighted average shares outstanding
    
    
    18,146,949
    
    
    
    17,012,983
  Fair Value of Financial Instruments
  Recently Issued Accounting Pronouncements
 Fair Value Measurements
 The Fair Value Option for Financial Assets
and Financial Liabilities
 Business Combinations
 Noncontrolling Interests in Consolidated Financial
Statements  an amendment of ARB No. 51
 Disclosures about Derivative Instruments and
Hedging Activities  an amendment of FASB Statement No. 133
 46




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  Determination of the Useful Life of Intangible
Assets Goodwill and Other Intangible Assets
 Accounting for Convertible
Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement)
 Determining the Fair Value of a Financial
Asset When the Market for That Asset is Not Active
 Share-Based Payment
  Consolidation of Variable Interest Entities
 th th th th th
 47




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  
    
    4th Street is a variable interest entity,
    
    The Companys General Partner interest is considered to be a variable interest,
    
    The Company is the Primary Beneficiary; and
    
    Therefore, the Company includes 4th Street in its consolidated financial
statements.
  Reclassifications
  
 4)  Acquisitions
  ®
 Cash
    
    $
    95Other current assets
    
    
    5Inventory
    
    
    26Property and equipment
    
    
    349Goodwill
    
    
    453Licenses
    
    
    5,359Unfavorable lease right
    
    
    (290
    )Liabilities assumed
    
    
    (111
    )Minority Interest
    
    
    (31
    )Purchase price
    
    $
    5,855
  ®
 48




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  Cash
    
    $
    79Other current assets
    
    
    38Inventory
    
    
    10Property and equipment
    
    
    233Deposits and other assets
    
    
    15Goodwill
    
    
    230Licenses
    
    
    3,584Favorable lease right
    
    
    390Liabilities assumed
    
    
    (81
    )Purchase price
    
    $
    4,498
   ®
 ® ®
 Seller % Interest
    
    RCC
    
    
    Cardinal
    
    
    MRC
    
    
    IRC
    
    
    TotalLowrie LLLP  1% GP and 87% LPCash
    
    $
    800,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    800,000Common stock (50,000 shares)
    
    
    395,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    395,300Third party LP6%  Cash
    
    
    84,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    84,00020%  Common stock (38,235 shares)
    
    
    302,287
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    302,287Lowrie LLLP 1% GP and 82%
    
    
    
    
    
    $
    300,000
    
    
    
    
    
    
    
    
    
    
    
    300,000Common stock (50,000 shares)
    
    
    
    
    
    
    429,100
    
    
    
    
    
    
    
    
    
    
    
    429,100Third party LP  15.5% for cash
    
    
    
    
    
    
    153,000
    
    
    
    
    
    
    
    
    
    
    
    153,000Lowrie LLLP 1% GP and 99% LP8.5% promissory note
    
    
    
    
    
    
    
    
    
    $
    3,200,000
    
    
    
    
    
    
    
    3,200,000Common stock (50,000 shares)
    
    
    
    
    
    
    
    
    
    
    458,900
    
    
    
    
    
    
    
    458,900Lowrie LLLP 1% GP and 89% LP8.5% promissory note
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    4,200,000
    
    
    
    4,200,000Common stock (50,000 shares)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    437,800
    
    
    
    437,800Third party LP  2% for cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,000
    
    
    
    90,000Debt assumed from seller
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    481,008
    
    
    
    481,008Direct acquisition costs
    
    
    15,004
    
    
    
    53,398
    
    
    
    16,472
    
    
    
    18,335
    
    
    
    103,209Total
    
    $
    1,596,591
    
    
    $
    935,498
    
    
    $
    3,675,372
    
    
    $
    5,227,143
    
    
    $
    11,434,604
 49




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  RCC
    
    
    Cardinal
    
    
    MRC
    
    
    IRC
    
    
    TotalCash
    
    $
    44
    
    
    $
    28
    
    
    $
    69
    
    
    $
    104
    
    
    $
    245Other current assets
    
    
    11
    
    
    
    8
    
    
    
    6
    
    
    
    26
    
    
    
    51Inventory
    
    
    9
    
    
    
    8
    
    
    
    16
    
    
    
    49
    
    
    
    82Property and equipment
    
    
    56
    
    
    
    118
    
    
    
    192
    
    
    
    1,180
    
    
    
    1,546Other assets
    
    
    2
    
    
    
    
    
    
    
    3
    
    
    
    4
    
    
    
    9Licenses
    
    
    1,116
    
    
    
    588
    
    
    
    3,236
    
    
    
    3,931
    
    
    
    8,871Trade name
    
    
    77
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77Favorable leasehold interest
    
    
    210
    
    
    
    160
    
    
    
    
    
    
    
    
    
    
    
    370Goodwill
    
    
    130
    
    
    
    108
    
    
    
    1,087
    
    
    
    1,356
    
    
    
    2,681Liabilities assumed
    
    
    (33
    )
    
    
    (34
    )
    
    
    (94
    )
    
    
    (752
    )
    
    
    (913
    )Unfavorable leasehold interest
    
    
    
    
    
    
    
    
    
    
    (840
    )
    
    
    (610
    )
    
    
    (1,450
    )Minority interest
    
    
    (25
    )
    
    
    (49
    )
    
    
    
    
    
    
    (61
    )
    
    
    (135
    )$
    1,597
    
    
    $
    935
    
    
    $
    3,675
    
    
    $
    5,227
    
    
    $
    11,434
  ®
 Inventory
    
    $
    50Property and equipment
    
    
    4,000Goodwill
    
    
    1,676Trade name
    
    
    Licenses
    
    
    7,209Unfavorable lease right
    
    
    (1,340
    )Purchase price
    
    $
    11,595
   Cash
    
    $
    30Inventory
    
    
    28Property and equipment
    
    
    282Goodwill
    
    
    3,514Trade name
    
    
    277Licenses
    
    
    5,915Unfavorable lease right
    
    
    (750
    )Deferred income taxes
    
    
    (2,249
    )Purchase price
    
    $
    7,047
  50




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 ®
 Inventory
    
    $
    40Property and equipment
    
    
    120Goodwill
    
    
    2,157Licenses
    
    
    4,330Non-compete agreement
    
    
    18Unfavorable lease right
    
    
    (320
    )Deferred income taxes
    
    
    (1,643
    )Purchase price
    
    $
    4,702
   Cash
    
    $
    10Property and equipment
    
    
    2,129Deposits and other assets
    
    
    29Goodwill
    
    
    1,649Licenses
    
    
    1,535Non-compete agreement
    
    
    4Unfavorable lease right
    
    
    (1,520
    )Purchase price
    
    $
    3,836
  ®
 Cash
    
    $
    58Other current assets
    
    
    31Inventory
    
    
    63Property and equipment
    
    
    1,147Goodwill
    
    
    2,779Licenses
    
    
    4,527Non-compete agreement
    
    
    12Favorable lease right
    
    
    810Deferred income taxes
    
    
    (2,122
    )Purchase price
    
    $
    7,305
  51




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  Cash
    
    $
    20Inventory
    
    
    45Property and equipment
    
    
    283Goodwill
    
    
    253Trade name
    
    
    224Licenses
    
    
    4,429Non-compete agreement
    
    
    18Unfavorable lease right
    
    
    (50
    )Purchase price
    
    $
    5,222
   Cash
    
    $
    32Inventory
    
    
    5Property and equipment
    
    
    3,166Deposits and other assets
    
    
    25Goodwill
    
    
    2,259Licenses
    
    
    3,501Non-compete agreement
    
    
    8Unfavorable lease right
    
    
    (1,390
    )Deferred income taxes
    
    
    (705
    )Purchase price
    
    $
    6,901
   Property and equipment
    
    $
    161Deposits and other assets
    
    
    7Goodwill
    
    
    380Trade name
    
    
    276Licenses
    
    
    6,546Favorable lease right
    
    
    250Purchase price
    
    $
    7,620
  52




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  December 31Pro forma
    
    2008
    
    
    2007Revenue
    
    $
    59,816
    
    
    $
    53,228Net income (loss)
    
    
    (29,800
    )
    
    
    9,086Earnings per shareBasic
    
    $
    (1.66
    )
    
    $
    .55Diluted
    
    $
    (1.64
    )
    
    $
    .53
 
 5)  Property and Equipment
  December 31,2008
    
    
    2007(Restated)Land
    
    $
    857
    
    
    $
    857Buildings
    
    
    14,075
    
    
    
    13,222Leasehold Improvements
    
    
    10,646
    
    
    
    9,719Equipment
    
    
    2,471
    
    
    
    2,041Vehicles
    
    
    138
    
    
    
    Signs
    
    
    269
    
    
    
    312Furniture and fixtures
    
    
    1,918
    
    
    
    1,51830,374
    
    
    
    27,669Less accumulated depreciation
    
    
    4,636
    
    
    
    2,952Property and equipment, net
    
    $
    25,738
    
    
    $
    24,717
  Impairment of Assets
 53




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 
 6)  Intangible Assets
  December 31, 2007December 31, 2008
    
    
    (Restated  Note 2)Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedCost
    
    
    Amortization
    
    
    Net
    
    
    Cost
    
    
    Amortization
    
    
    NetAmortizable intangible assetCovenant not to compete
    
    $
    62
    
    
    $
    (21
    )
    
    $
    41
    
    
    $
    52
    
    
    $
    
    
    
    $
    52Favorable lease rights
    
    
    1,820
    
    
    
    (115
    )
    
    
    1,705
    
    
    
    1,570
    
    
    
    (37
    )
    
    
    1,5331,882
    
    
    
    (136
    )
    
    
    1,746
    
    
    
    1,622
    
    
    
    (37
    )
    
    
    1,585Non-amortizable intangible assetsLicenses
    
    
    36,413
    
    
    
    
    
    
    
    36,413
    
    
    
    53,317
    
    
    
    
    
    
    
    53,317Trade names
    
    
    619
    
    
    
    
    
    
    
    619
    
    
    
    578
    
    
    
    
    
    
    
    578$
    38,914
    
    
    $
    (136
    )
    
    $
    38,778
    
    
    $
    55,517
    
    
    $
    (37
    )
    
    $
    55,480
  Year Ending December 31,2009
    
    $
    1022010
    
    
    1002011
    
    
    902012
    
    
    892013
    
    
    85Thereafter
    
    
    1,280$
    1,746
  TradeGoodwill
    
    
    Licenses
    
    
    NamesBalance at December 31, 2006
    
    $
    15,670
    
    
    $
    961
    
    
    $
    Club acquisitions in 2007
    
    
    13,617
    
    
    
    40,401
    
    
    
    578Acquisition purchase price adjustments
    
    
    (11,665
    )
    
    
    11,955
    
    
    
    Balance  December 31, 2007
    
    
    17,622
    
    
    
    53,317
    
    
    
    578Club acquisitions in 2008
    
    
    2,639
    
    
    
    10,047
    
    
    
    276Acquisition purchase price adjustments
    
    
    913
    
    
    
    138
    
    
    
    Less: impairment charges
    
    
    (18,721
    )
    
    
    (27,089
    )
    
    
    (235
    )Balance at December 31, 2008
    
    $
    2,453
    
    
    $
    36,413
    
    
    $
    619
    54




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 
 7)  Other Long-Term Assets
  December 31,2008
    
    
    2007(Restated Note 2)Loan fees, net
    
    $
    246
    
    
    $
    390Deposits  lease and utility
    
    
    122
    
    
    
    83Other
    
    
    200
    
    
    
    381$
    568
    
    
    $
    854
 
 8)  Accrued Expenses
  2008
    
    
    2007(Restated Note 2)Payroll and related expenses
    
    $
    833
    
    
    $
    647Sales taxes
    
    
    297
    
    
    
    226Property taxes
    
    
    375
    
    
    
    191Legal and professional charges
    
    
    668
    
    
    
    288Interest
    
    
    84
    
    
    
    61Rent
    
    
    0
    
    
    
    234Total
    
    $
    2,257
    
    
    $
    1,647
 
 9)  Long-Term Debt
  Related Party
 December 31,Description of Debt
    
    2008
    
    
    2007Note payable to Lowrie Management LLLP, interest at 8.5%, monthly principal and interest payments of
$112,841, due January 2013, collateralized by general assets of IRC, DRC and the Company and consent
to the transfer of the adult permit and liquor license.
    
    
    4,754
    
    
    
    5,660Note payable to Lowrie Family Foundation, a Corporation controlled by the Companys Chairman,
interest at 10%, interest accrued monthly, due February 2011, unsecured.
    
    
    663
    
    
    
    600Note payable to Lowrie Management LLLP, interest at 10% due monthly, principal due April 2011,
collateralized by the general assets of Denver Restaurant Concepts, general assets of IRC, L.P., and
consent to the transfer of the adult permit and liquor license upon default in the name of Denver
Restaurant Concepts LP and RCC, LP.
    
    
    1,336
    
    
    
    Note payable to the President and Chief Operating Officer, interest at 10% due monthly, principal
due February 2010, unsecured.
    
    
    100
    
    
    
    Note payable to a Board member, interest at 10% due monthly, principal due November 2010, unsecured.
    
    
    50
    
    
    
    50Notes payable to related party of Chairman, interest at 10%, monthly interest and principal payments
of approximately $4,873, due between December 2010 and February 2011, unsecured.
    
    
    243
    
    
    
    276Note payable to related party of Chairman, interest at 10%, monthly interest payments of $3,167, due
February 2010, collateralized by the general assets of IRC, LP and Denver Restaurant Concepts LP,
and consent to the transfer of the adult permit and liquor license upon default in the name of
Denver Restaurant Concepts LP and IRC, LP.
    
    
    380
    
    
    
    Note payable to employee, interest at 10%, due October 2011, unsecured.
    
    
    168
    
    
    
    153Note payable to related party of board member, interest at 10%, due February 2010, collateralized by
a personal guarantee from the Chairman.
    
    
    413
    
    
    
    Total debt due at December 31, 2008 and 2007, respectively
    
    $
    8,107
    
    
    $
    6,739Less: Current Portion
    
    
    (1,024
    )
    
    
    (948
    )Total Long-Term Debt
    
    $
    7,083
    
    
    $
    5,791
  55




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Third Party
 December 31,Description of Debt
    
    2008
    
    
    2007$4,000,000 line of credit, interest at prime (6% at
December 31, 2008) plus .5% (floor is 6%) due monthly,
principal due June 2010, collateralized by Company shares
owned by Lowrie Management LLLP.
    
    $
    2,810
    
    
    $
    5,000Note payable, interest at 14% due monthly, periodic
principal payments with balance due December 2011,
collateralized by (6) buildings including KY, CO, IL, TX
and AZ, 500 shares of Kenja common stock, and
238,000 shares of VCGH stock held by Lowrie Management
LLLP.
    
    
    5,000
    
    
    
    5,500Note payable, interest at 8%, monthly principal and
interest payments of $43,041, due July 2011,
collateralized by assets of VCG-IS, LLC.
    
    
    3,187
    
    
    
    Note payable, interest at 12%, monthly principal and
interest payments of $28,694.19 with periodic principal
payments, due May 1, 2010, collateralized by assets of
Manana Entertainment, Inc.
    
    
    1,928
    
    
    
    Note payable, interest at prime (6% at December 31,
2008) plus .5% (floor is 6%) due monthly, periodic
principal payments with balance due June 2013,
collateralized by a P&A Select Strategy Fund and
securities owned by Lowrie Management LLLP.
    
    
    2,375
    
    
    
    Note payable, interest at 8.5%, monthly principal and
interest payments of $36,156 with a balloon payment of
$2,062,483 due May 2010, collateralized by securities
owned by Lowrie Management LLLP.
    
    
    2,081
    
    
    
    2,584Note payable, interest at prime (5.5% at June 29,
2008) plus .5% due monthly, interest only payments with
principal due January 2008, collateralized by a life
insurance policy issued by Security Life of Denver
Insurance Company on the life of the Chairman and
securities owned by Lowrie Management LLLP. In June 2008,
the Company paid this loan in full.
    
    
    
    
    
    
    1,600Note payable, interest at 9%, monthly principal and
interest payments of $7,612 and a balloon of $437, 035,
due May 2010, collateralized by securities owned by in
the name of Lowrie Management LLLP and the assets of
Lowrie Management LLLP a partnership controlled by the
Chairman. In November 2008, the Company paid this loan in
full.
    
    
    
    
    
    
    541Note payable, interest at prime (6% floor) (6% at
December 31, 2008) plus 1% due monthly, principal and
interest payments of $55,898 due November 2014,
collateralized by furniture, fixtures and equipment of
RCC, L.P., IRC, L.P., Platinum of Illinois, Inc., MRC,
L.P., Cardinal Management L.P., VCG CO Springs, Inc., VCG
Real Estate Holdings, Inc., Glendale Restaurant Concepts
L.P., Glenarm Restaurant LLC and the real estate of Indy
Restaurant Concepts.
    
    
    3,326
    
    
    
    Note payable, interest at prime (6% at October 30,
2008) plus 2% due monthly, principal and interest
payments of $15,018 due November 2011, collateralized by
furniture, fixtures, equipment, and inventory of Glenarm
Restaurant LLC. This loan was consolidated into a new
loan in November 2008.
    
    
    
    
    
    
    628Note payable, interest at prime (7.25% at October 30,
2008) plus 1% due monthly, principal and interest
payments of $3,943 due April 2010, collateralized by
furniture, fixtures, and equipment of Glendale
Restaurant. This loan was consolidated into a new loan in
November 2008.
    
    
    
    
    
    
    106Note payable, interest at prime (5% at October 30,
2008) plus 1% due monthly, principal and interest
payments of $13,869 and one balloon of $1,350,853 due
October 2011, collateralized by the real estate of Indy
Restaurant Concepts in Indiana. This loan was
consolidated into a new loan in November 2008.
    
    
    
    
    
    
    1,468Note payable, interest at prime (5% at October 30,
2008) plus 1% due monthly, principal and interest
payments of $18,420 due November 2012, collateralized by
the general assets of Cardinal Management LP. This note
was consolidated into a new loan in November 2008.
    
    
    
    
    
    
    876Note payable, interest at prime (5% at October 30,
2008) plus 1% due monthly, principal and interest
payments of $11,400 due August 2013, collateralized by
furniture, fixtures and equipment of VCG CO Springs, Inc.
This loan was consolidated into a new loan in November
2008.
    
    
    
    
    
    
    605Note payable, from 2009 to 2018, the loan shall bear
interest at a rate equal to the lesser of (i) twelve
percent (12%) or (ii) the rate for ten (10) year Treasury
Bills plus four percent (4%). Monthly principal and
interest payments of $22,949 due September 2018,
collateralized by certain real and personal property of
Epicurean.
    
    
    1,848
    
    
    
    1,930
 56




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 December 31,Description of Debt
    
    2008
    
    
    2007Various notes payable, interest at 11%, monthly interest
payments totaling approximately $12,750, due January
2010, collateralized by the general assets of the Company
and a guarantee by the Chairman of the Company.
    
    
    1,400
    
    
    
    400Various notes payable, interest at 11%, monthly interest
payments totaling approximately $9,166, due July 2010,
collateralized by the general assets of the Company, the
cash flow and 100% stock in VCG-IS, LLC.
    
    
    1,000
    
    
    
    Note payable, interest at 12% due monthly, periodic
principal payments with balance due July 2011,
collateralized by six (6) buildings including Kentucky
Restaurant Concepts, Denver Restaurant Concepts, Glendale
Restaurant Concepts, Platinum of Illinois, Golden
Productions JCG Ft. Worth and Epicurean.
    
    
    1,000
    
    
    
    Notes payable, interest at 10%, monthly interest payments
totaling approximately $11480, due between November 2009
and October 2013, unsecured.
    
    
    1,381
    
    
    
    1,639Notes payable, interest at 11%, monthly interest payments
totaling approximately $2,290, due November 2010,
collateralized by the general assets of the Company, the
cash flow and 100% stock in Manana Entertainment, Inc.
    
    
    250
    
    
    
    Note payable, interest at 10% monthly principal and
interest payments of $3,303 due October 2013, unsecured.
    
    
    232
    
    
    
    206Note payable, interest at prime (8% at December 31,
2008) plus 1% due monthly, principal and interest
payments of $6,819, due December 2009, unsecured.
    
    
    79
    
    
    
    150Note payable, interest at prime (5.5% at December 31,
2008) plus 1% due monthly, principal and interest due
February 2011, this note is unsecured.
    
    
    146
    
    
    
    216Note payable, interest at 8.5%, monthly principal and
interest payments of $10,258 due October 2011,
collateralized by the general assets of the Company and
guaranteed by the Chairman of the Company.
    
    
    308
    
    
    
    401Note payable, interest at 7% monthly principal and
interest payments of $5,955 and one balloon payment of
$226,867 due February 2008, collateralized by a $250,000
certificate of deposit. In January 2008, the Company paid
this loan in full and no longer has the CD requirement.
    
    
    
    
    
    
    230Total debt due at December 31, 2008 and 2007, respectively
    
    $
    28,351
    
    
    $
    24,080Less: Current Portion
    
    
    (2,602
    )
    
    
    (8,386
    )Total Long-Term Debt
    
    $
    25,749
    
    
    $
    15,694
  2009
    
    $
    3,6262010
    
    
    13,5872011
    
    
    13,5442012
    
    
    2,6132013
    
    
    1,434Thereafter
    
    
    1,654$
    36,458
  
 10)  Income Taxes
  Year EndedDecember 31,2008
    
    
    2007Income tax expense- current
    
    $
    730
    
    
    $
    Income tax expense- deferred
    
    
    (11,832
    )
    
    
    (1,250
    )$
    (11,102
    )
    
    $
    (1,250
    )
 57




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  Year EndedDecember 31,2008
    
    2007(Restated  Note 2)United States federal statutory rate
    
    
    (34.0
    )%
    
    
    34.0
    %State income taxes, net of Federal income tax benefit
    
    
    (3.8
    )%
    
    
    2.6
    %Permanent differences
    
    
    2.0
    %
    
    
    0.0
    %Utilization of net operating loss
    
    
    (0.4
    )%
    
    
    (10.0
    )%Tax credits
    
    
    (0.9
    )%
    
    
    (8.6
    )%Impairment of nondeductible goodwill
    
    
    10.3
    %
    
    
    0.0
    %(26.8
    )%
    
    
    18.0
    %
   December 31,2008
    
    
    2007(Restated  Note 2)Licenses, trade names, and other intangibles
    
    $
    3,591
    
    
    $
    (1,267
    )Net unfavorable leases
    
    
    2,075
    
    
    
    1,536Goodwill
    
    
    (1,777
    )
    
    
    (7,451
    )Property and equipment
    
    
    (27
    )
    
    
    (253
    )Accrued litigation cost
    
    
    100
    
    
    
    Net operating loss carryforwards
    
    
    22
    
    
    
    180Tax credits
    
    
    256
    
    
    
    179Net deferred tax asset (liability)
    
    $
    4,240
    
    
    $
    (7,076
    )
  
 11)  Stockholders Equity
 Common Stock
  Preferred Stock
  58




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Stock Option and Stock Bonus Plans
    Shares to be
    
    SharesIssued Upon
    
    RemainingExercise of
    
    Available forShares
    
    Shares
    
    Available
    
    Outstanding
    
    FutureAuthorized
    
    Granted
    
    for Grant
    
    Options
    
    Issuance2002 Stock Option and Stock Bonus Plan
    
    
    700,000
    
    
    
    699,776
    
    
    
    224
    
    
    
    
    
    
    
    2242003 Stock Option and Stock Bonus Plan
    
    
    250,000
    
    
    
    247,292
    
    
    
    2,708
    
    
    
    
    
    
    
    2,7082004 Stock Option and Appreciation Rights Plan
    
    
    1,000,000
    
    
    
    263,333
    
    
    
    736,667
    
    
    
    300,500
    
    
    
    436,1671,950,000
    
    
    
    1,210,401
    
    
    
    739,599
    
    
    
    300,500
    
    
    
    439,099
   Weighted-averageOptions
    
    
    exercise priceOutstanding at December 31, 2006
    
    
    
    
    
    
    Granted above fair market value
    
    
    195,500
    
    
    $
    10.00Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (7,500
    )
    
    
    10.00Outstanding at December 31, 2007
    
    
    188,000
    
    
    $
    10.00Granted above fair market value
    
    
    167,000
    
    
    
    11.95Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (54,500
    )
    
    
    11.21Outstanding at December 31, 2008
    
    
    300,500
    
    
    $
    10.37Exercisable at December 31, 2008
    
    
    
    
    
    
    
   59




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Valuation and Assumptions
 Share-Based Payments
 December 31,2008
    
    2007Expected life in years
    
    
    6.07
    
    
    
    6.07Weighted average expected volatility
    
    
    62
    %
    
    
    61
    %Weighted average risk free rates
    
    
    3.5
    %
    
    
    4.6
    %Dividend yield
    
    
    
    
    
    
    Weighted average grant date fair value
    
    $
    5.25
    
    
    $
    4.89
  Stock Warrants
  Warrants
    
    Warrants
    
    Warrants
    
    WarrantsExercise
    
    Outstanding
    
    Exercised
    
    Exercised
    
    OutstandingPrice
    
    2006
    
    2007
    
    2008
    
    2008Warrants issued in 2004
    
    $
    3.00
    
    
    
    147,500
    
    
    
    120,068
    
    
    
    
    
    
    
    27,432Warrants issued in 2004
    
    $
    4.00
    
    
    
    147,500
    
    
    
    99,234
    
    
    
    
    
    
    
    48,266Warrants issued in 2004
    
    $
    2.00
    
    
    
    59,398
    
    
    
    59,398
    
    
    
    
    
    
    
    Warrants issued in 2004
    
    $
    2.50
    
    
    
    140,208
    
    
    
    140,208
    
    
    
    
    
    
    
    Warrants issued in 2006
    
    $
    2.50
    
    
    
    250,000
    
    
    
    41,661
    
    
    
    83,500
    
    
    
    124,839Warrants issued in 2006
    
    $
    3.00
    
    
    
    250,000
    
    
    
    41,661
    
    
    
    83,500
    
    
    
    124,839Exercisable at December 31, 2008
    
    
    
    
    
    
    994,606
    
    
    
    502,230
    
    
    
    167,000
    
    
    
    325,376
 
 
 12)  Commitments and Contingencies
 Operating Leases
  60




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  Year Ended December 31,
    
    Related Party
    
    
    Non-Related
    
    
    Total2009
    
    $
    419
    
    
    $
    3,199
    
    
    $
    3,6182010
    
    
    462
    
    
    
    3,212
    
    
    
    3,6742011
    
    
    462
    
    
    
    3,229
    
    
    
    3,6912012
    
    
    477
    
    
    
    3,351
    
    
    
    3,8282013
    
    
    477
    
    
    
    3,376
    
    
    
    3,853Thereafter
    
    
    9,661
    
    
    
    79,240
    
    
    
    88,901Total minimum lease payments
    
    $
    11,958
    
    
    $
    95,607
    
    
    $
    107,565
     Capitalized Leases
  Capital LeaseYear Ended December 31,
    
    Obligations2009
    
    $
    122010
    
    
    9Total minimum lease payments
    
    
    21Amount representing interest
    
    
    (2
    )Present value of future minimum lease payments
    
    
    19Current portion of lease obligation
    
    
    (10
    )Obligations under capital lease due after one year
    
    
    9
  2008
    
    
    2007Sign under capital leases
    
    $
    50
    
    
    $
    50Less accumulated depreciation
    
    
    (24
    )
    
    
    (19
    )Net sign under capital leases
    
    $
    26
    
    
    $
    31
  61




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Legal Proceedings
 Thee Dollhouse Productions Litigation
     Zajkowski, et. al. vs VCG and Classic Affairs Litigation
   62




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Texas Patron Tax Litigation
  Adventure Plus Enterprises, Inc. (Adventure) v. Gold Suit, et.al. Litigation
  Department of Labor Review
   
 13)  Discontinued Operations
   December 31,2008
    
    
    2007Loss from discontinued operations
    
    
    
    
    
    $
    (23
    )Income taxes on discontinued operations
    
    
    
    
    
    
    Loss from discontinued operations
    
    
    
    
    
    $
    (23
    )
 63




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  
 14)  2008 Quarterly Restatements
 Restatement of 2007 Annual Financial Statements and 2008 Quarterly Financial Statements
   
  
  64




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Restated Balance Sheet for 2008 Quarter Ended (unaudited)
(In thousands)
 2008 Quarter EndedAs Reported
    
    
    Valuation
    
    
    Equity
    
    
    Restated
    
    
    As Reported
    
    
    Valuation
    
    
    Equity
    
    
    Restated
    
    
    As Reported
    
    
    Valuation
    
    
    Equity
    
    
    RestatedMarch 31
    
    
    Adjustment
    
    
    Restatement
    
    
    March 31
    
    
    June 30
    
    
    Adjustment
    
    
    Restatement
    
    
    June 30
    
    
    September 30
    
    
    Adjustment
    
    
    Restatement
    
    
    September 30AssetsCurrent AssetsCash & cash equivalents
    
    $
    2,760
    
    
    
    
    
    
    
    
    
    
    $
    2,760
    
    
    $
    2,894
    
    
    
    
    
    
    
    
    
    
    $
    2,894
    
    
    $
    2,799
    
    
    
    
    
    
    
    
    
    
    $
    2,799Assets held for sale
    
    
    380
    
    
    
    
    
    
    
    
    
    
    
    380
    
    
    
    243
    
    
    
    
    
    
    
    
    
    
    
    243
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other receivables
    
    
    289
    
    
    
    
    
    
    
    
    
    
    
    289
    
    
    
    226
    
    
    
    
    
    
    
    
    
    
    
    226
    
    
    
    329
    
    
    
    
    
    
    
    
    
    
    
    329Inventories
    
    
    903
    
    
    
    
    
    
    
    
    
    
    
    903
    
    
    
    939
    
    
    
    
    
    
    
    
    
    
    
    939
    
    
    
    931
    
    
    
    
    
    
    
    
    
    
    
    931Prepaid expenses
    
    
    819
    
    
    
    
    
    
    
    
    
    
    
    819
    
    
    
    723
    
    
    
    
    
    
    
    
    
    
    
    723
    
    
    
    740
    
    
    
    
    
    
    
    
    
    
    
    740Income taxes receivable
    
    
    439
    
    
    
    
    
    
    
    
    
    
    
    439
    
    
    
    272
    
    
    
    
    
    
    
    
    
    
    
    272
    
    
    
    287
    
    
    
    
    
    
    
    
    
    
    
    287Total current assets
    
    
    5,590
    
    
    
    
    
    
    
    
    
    
    
    5,590
    
    
    
    5,297
    
    
    
    
    
    
    
    
    
    
    
    5,297
    
    
    
    5,086
    
    
    
    
    
    
    
    
    
    
    
    5,086Property and equipment, net
    
    
    25,023
    
    
    
    200
    
    
    
    
    
    
    
    25,223
    
    
    
    27,903
    
    
    
    200
    
    
    
    
    
    
    
    28,103
    
    
    
    27,879
    
    
    
    199
    
    
    
    
    
    
    
    28,078Favorable leasehold rights
    
    
    
    
    
    
    1,518
    
    
    
    
    
    
    
    1,518
    
    
    
    
    
    
    
    1,503
    
    
    
    
    
    
    
    1,503
    
    
    
    
    
    
    
    1,739
    
    
    
    
    
    
    
    1,739Deposits and prepaid expenses
    
    
    616
    
    
    
    
    
    
    
    
    
    
    
    616
    
    
    
    742
    
    
    
    
    
    
    
    
    
    
    
    742
    
    
    
    844
    
    
    
    
    
    
    
    
    
    
    
    844Loan fees, net
    
    
    339
    
    
    
    
    
    
    
    
    
    
    
    339
    
    
    
    355
    
    
    
    
    
    
    
    
    
    
    
    355
    
    
    
    424
    
    
    
    
    
    
    
    
    
    
    
    424Deferred offering costs
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    37
    
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    37Covenant not to compete
    
    
    111
    
    
    
    (64
    )
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    60Licenses
    
    
    
    
    
    
    53,317
    
    
    
    
    
    
    
    53,317
    
    
    
    
    
    
    
    56,818
    
    
    
    
    
    
    
    56,818
    
    
    
    
    
    
    
    63,364
    
    
    
    
    
    
    
    63,364Goodwill
    
    
    
    
    
    
    20,115
    
    
    
    (2,176
    )
    
    
    17,939
    
    
    
    
    
    
    
    23,109
    
    
    
    (2,176
    )
    
    
    20,933
    
    
    
    
    
    
    
    23,364
    
    
    
    (2,176
    )
    
    
    21,188Trade name
    
    
    
    
    
    
    578
    
    
    
    
    
    
    
    578
    
    
    
    
    
    
    
    578
    
    
    
    
    
    
    
    578
    
    
    
    
    
    
    
    854
    
    
    
    
    
    
    
    854Other intangible assets
    
    
    64,061
    
    
    
    (63,986
    )
    
    
    
    
    
    
    75
    
    
    
    69,543
    
    
    
    (69,459
    )
    
    
    
    
    
    
    84
    
    
    
    77,123
    
    
    
    (76,780
    )
    
    
    
    
    
    
    343Total Assets
    
    $
    95,777
    
    
    $
    11,678
    
    
    $
    (2,176
    )
    
    $
    105,279
    
    
    $
    103,877
    
    
    $
    12,809
    
    
    $
    (2,176
    )
    
    $
    114,510
    
    
    $
    111,393
    
    
    $
    12,800
    
    
    $
    (2,176
    )
    
    $
    122,017Liabilities and
Stockholders EquityCurrent LiabilitiesAccounts payable  trade
    
    $
    1,096
    
    
    
    
    
    
    
    
    
    
    $
    1,096
    
    
    $
    925
    
    
    
    
    
    
    
    
    
    
    $
    925
    
    
    $
    844
    
    
    
    
    
    
    
    
    
    
    $
    844Accrued expenses
    
    
    1,107
    
    
    
    
    
    
    
    
    
    
    
    1,107
    
    
    
    1,847
    
    
    
    
    
    
    
    
    
    
    
    1,847
    
    
    
    2,159
    
    
    
    
    
    
    
    
    
    
    
    2,159Deferred revenue
    
    
    123
    
    
    
    
    
    
    
    
    
    
    
    123
    
    
    
    116
    
    
    
    
    
    
    
    
    
    
    
    116
    
    
    
    114
    
    
    
    
    
    
    
    
    
    
    
    114Income taxes payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    
    
    
    
    
    
    
    
    190
    
    
    
    632
    
    
    
    
    
    
    
    
    
    
    
    632Current portion of
unfavorable lease
liabilities
    
    
    
    
    
    
    262
    
    
    
    
    
    
    
    262
    
    
    
    
    
    
    
    278
    
    
    
    
    
    
    
    278
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Current portion of long-term
debt and capitalized leases
    
    
    8,982
    
    
    
    
    
    
    
    
    
    
    
    8,982
    
    
    
    7,166
    
    
    
    
    
    
    
    
    
    
    
    7,166
    
    
    
    7,295
    
    
    
    
    
    
    
    
    
    
    
    7,295Total current liabilities
    
    
    11,308
    
    
    
    262
    
    
    
    
    
    
    
    11,570
    
    
    
    10,244
    
    
    
    278
    
    
    
    
    
    
    
    10,522
    
    
    
    11,044
    
    
    
    
    
    
    
    
    
    
    
    11,044Deferred income tax
    
    
    1,331
    
    
    
    6,014
    
    
    
    
    
    
    
    7,345
    
    
    
    1,606
    
    
    
    6,720
    
    
    
    
    
    
    
    8,326
    
    
    
    1,960
    
    
    
    6,720
    
    
    
    
    
    
    
    8,680Unfavorable Leasehold Rights
    
    
    
    
    
    
    5,264
    
    
    
    
    
    
    
    5,264
    
    
    
    
    
    
    
    6,567
    
    
    
    
    
    
    
    6,567
    
    
    
    
    
    
    
    6,783
    
    
    
    
    
    
    
    6,783Long-term debt and
capitalized lease
    
    
    20,810
    
    
    
    
    
    
    
    
    
    
    
    20,810
    
    
    
    26,585
    
    
    
    
    
    
    
    
    
    
    
    26,585
    
    
    
    31,065
    
    
    
    
    
    
    
    
    
    
    
    31,065Total long term liabilities
    
    
    22,141
    
    
    
    11,278
    
    
    
    
    
    
    
    33,419
    
    
    
    28,191
    
    
    
    13,287
    
    
    
    
    
    
    
    41,478
    
    
    
    33,025
    
    
    
    13,503
    
    
    
    
    
    
    
    46,528Total Liabilities
    
    
    33,449
    
    
    
    11,540
    
    
    
    
    
    
    
    44,989
    
    
    
    38,435
    
    
    
    13,565
    
    
    
    
    
    
    
    52,000
    
    
    
    44,069
    
    
    
    13,503
    
    
    
    
    
    
    
    57,572Minority Interests
    
    
    3,606
    
    
    
    
    
    
    
    
    
    
    
    3,606
    
    
    
    4,563
    
    
    
    (945
    )
    
    
    
    
    
    
    3,618
    
    
    
    4,592
    
    
    
    (945
    )
    
    
    
    
    
    
    3,647Stockholders EquityCommon stock $.0001 par
value; 50,000,000 shares
authorized; 18,025,248
(2008) and 17,723,975
(2007) shares issued and
outstanding
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    2Paid-in capital
    
    
    53,575
    
    
    
    
    
    
    
    (1,244
    )
    
    
    52,331
    
    
    
    54,204
    
    
    
    
    
    
    
    (1,244
    )
    
    
    52,960
    
    
    
    54,288
    
    
    
    
    
    
    
    (1,244
    )
    
    
    53,044Retained earnings
    
    
    5,145
    
    
    
    138
    
    
    
    (932
    )
    
    
    4,351
    
    
    
    6,673
    
    
    
    189
    
    
    
    (932
    )
    
    
    5,930
    
    
    
    8,442
    
    
    
    242
    
    
    
    (932
    )
    
    
    7,752Total stockholders equity
    
    
    58,722
    
    
    
    138
    
    
    
    (2,176
    )
    
    
    56,684
    
    
    
    60,879
    
    
    
    189
    
    
    
    (2,176
    )
    
    
    58,892
    
    
    
    62,732
    
    
    
    242
    
    
    
    (2,176
    )
    
    
    60,798Total Liabilities and
Stockholders Equity
    
    $
    95,777
    
    
    $
    11,678
    
    
    $
    (2,176
    )
    
    $
    105,279
    
    
    $
    103,877
    
    
    $
    12,809
    
    
    $
    (2,176
    )
    
    $
    114,510
    
    
    $
    111,393
    
    
    $
    12,800
    
    
    $
    (2,176
    )
    
    $
    122,017
 65




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Restated Statement of Operations for 2008 Quarter Ended (unaudited)
(In thousands)
 2008 Quarter EndedAs Reported
    
    
    Valuation
    
    
    Restated
    
    
    As Reported
    
    
    Valuation
    
    
    Restated
    
    
    As Reported
    
    
    Valuation
    
    
    RestatedMarch 31
    
    
    Adjustment
    
    
    March 31
    
    
    June 30
    
    
    Adjustment
    
    
    June 30
    
    
    September 30
    
    
    Adjustment
    
    
    September 30RevenueSales of alcoholic beverages
    
    $
    6,534
    
    
    
    
    
    
    $
    6,534
    
    
    $
    6,590
    
    
    
    
    
    
    $
    6,590
    
    
    $
    6,714
    
    
    
    
    
    
    $
    6,714Sales of food and merchandise
    
    
    709
    
    
    
    
    
    
    
    709
    
    
    
    638
    
    
    
    
    
    
    
    638
    
    
    
    657
    
    
    
    
    
    
    
    657Service revenue
    
    
    5,279
    
    
    
    
    
    
    
    5,279
    
    
    
    6,364
    
    
    
    
    
    
    
    6,364
    
    
    
    7,052
    
    
    
    
    
    
    
    7,052Management fees and other income
    
    
    804
    
    
    
    
    
    
    
    804
    
    
    
    1,015
    
    
    
    
    
    
    
    1,015
    
    
    
    808
    
    
    
    
    
    
    
    808Total revenue
    
    $
    13,326
    
    
    
    
    
    
    
    13,326
    
    
    
    14,607
    
    
    
    
    
    
    
    14,607
    
    
    
    15,231
    
    
    
    
    
    
    
    15,231Operating ExpensesCost of goods sold
    
    
    1,848
    
    
    
    
    
    
    
    1,848
    
    
    
    1,702
    
    
    
    
    
    
    
    1,702
    
    
    
    1,779
    
    
    
    
    
    
    
    1,779Salaries and wages
    
    
    3,063
    
    
    
    
    
    
    
    3,063
    
    
    
    3,482
    
    
    
    
    
    
    
    3,482
    
    
    
    3,312
    
    
    
    
    
    
    
    3,312Other general and administrative Taxes and permits
    
    
    456
    
    
    
    
    
    
    
    456
    
    
    
    652
    
    
    
    
    
    
    
    652
    
    
    
    590
    
    
    
    
    
    
    
    590Charge card and bank fees
    
    
    201
    
    
    
    
    
    
    
    201
    
    
    
    210
    
    
    
    
    
    
    
    210
    
    
    
    223
    
    
    
    
    
    
    
    223Rent
    
    
    1,186
    
    
    
    (43
    )
    
    
    1,143
    
    
    
    1,290
    
    
    
    (56
    )
    
    
    1,234
    
    
    
    1,308
    
    
    
    (46
    )
    
    
    1,262Legal and professional
    
    
    648
    
    
    
    
    
    
    
    648
    
    
    
    647
    
    
    
    
    
    
    
    647
    
    
    
    855
    
    
    
    
    
    
    
    855Advertising and marketing
    
    
    806
    
    
    
    
    
    
    
    806
    
    
    
    746
    
    
    
    
    
    
    
    746
    
    
    
    713
    
    
    
    
    
    
    
    713Insurance
    
    
    376
    
    
    
    
    
    
    
    376
    
    
    
    425
    
    
    
    
    
    
    
    425
    
    
    
    432
    
    
    
    
    
    
    
    432Other
    
    
    1,525
    
    
    
    
    
    
    
    1,525
    
    
    
    1,520
    
    
    
    
    
    
    
    1,520
    
    
    
    1,770
    
    
    
    
    
    
    
    1,770Depreciation & amortization
    
    
    352
    
    
    
    4
    
    
    
    356
    
    
    
    423
    
    
    
    5
    
    
    
    428
    
    
    
    459
    
    
    
    (6
    )
    
    
    453Total operating expenses
    
    
    10,461
    
    
    
    (39
    )
    
    
    10,422
    
    
    
    11,097
    
    
    
    (51
    )
    
    
    11,046
    
    
    
    11,441
    
    
    
    (52
    )
    
    
    11,389Income from operations
    
    
    2,865
    
    
    
    39
    
    
    
    2,904
    
    
    
    3,510
    
    
    
    51
    
    
    
    3,561
    
    
    
    3,790
    
    
    
    52
    
    
    
    3,842Other income (expenses)Interest expense
    
    
    (773
    )
    
    
    
    
    
    
    (773
    )
    
    
    (840
    )
    
    
    
    
    
    
    (840
    )
    
    
    (1,000
    )
    
    
    
    
    
    
    (1,000
    )Interest income
    
    
    3
    
    
    
    
    
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    15
    
    
    
    
    
    
    
    15Unrealized gain on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain (loss) on sale of assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (138
    )
    
    
    
    
    
    
    (138
    )
    
    
    5
    
    
    
    
    
    
    
    5Total other income (expenses)
    
    
    (770
    )
    
    
    
    
    
    
    (770
    )
    
    
    (977
    )
    
    
    
    
    
    
    (977
    )
    
    
    (980
    )
    
    
    
    
    
    
    (980
    )Income from continuing operations before income
taxes
    
    
    2,095
    
    
    
    39
    
    
    
    2,134
    
    
    
    2,533
    
    
    
    51
    
    
    
    2,584
    
    
    
    2,810
    
    
    
    52
    
    
    
    2,862Income tax expense  current
    
    
    333
    
    
    
    
    
    
    
    333
    
    
    
    612
    
    
    
    
    
    
    
    612
    
    
    
    507
    
    
    
    
    
    
    
    507Income tax expense  deferred
    
    
    317
    
    
    
    
    
    
    
    317
    
    
    
    275
    
    
    
    
    
    
    
    275
    
    
    
    401
    
    
    
    
    
    
    
    401Total income taxes
    
    
    650
    
    
    
    
    
    
    
    650
    
    
    
    887
    
    
    
    
    
    
    
    887
    
    
    
    908
    
    
    
    
    
    
    
    908Minority interest expense
    
    
    (111
    )
    
    
    
    
    
    
    (111
    )
    
    
    (118
    )
    
    
    
    
    
    
    (118
    )
    
    
    (132
    )
    
    
    
    
    
    
    (132
    )Income from continuing operations
    
    
    1,334
    
    
    
    39
    
    
    
    1,373
    
    
    
    1,528
    
    
    
    51
    
    
    
    1,579
    
    
    
    1,770
    
    
    
    52
    
    
    
    1,822Discontinued operationsLoss from operations of discontinued operating
segment, net of zero income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    $
    1,334
    
    
    $
    39
    
    
    $
    1,373
    
    
    $
    1,528
    
    
    $
    51
    
    
    $
    1,579
    
    
    $
    1,770
    
    
    $
    52
    
    
    $
    1,822Earnings per share:Income from continuing operations
    
    $
    0.08
    
    
    $
    0.00
    
    
    $
    0.08
    
    
    $
    0.08
    
    
    $
    0.00
    
    
    $
    0.08
    
    
    $
    0.10
    
    
    $
    0.00
    
    
    $
    0.10(Loss) from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Basic income per common share
    
    $
    0.08
    
    
    $
    0.00
    
    
    $
    0.08
    
    
    $
    0.08
    
    
    $
    0.00
    
    
    $
    0.08
    
    
    $
    0.10
    
    
    $
    0.00
    
    
    $
    0.10Net income from continuing operations
    
    $
    0.07
    
    
    $
    0.00
    
    
    $
    0.07
    
    
    $
    0.08
    
    
    $
    0.00
    
    
    $
    0.08
    
    
    $
    0.10
    
    
    $
    0.00
    
    
    $
    0.10(Loss) from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Fully diluted income per common share
    
    $
    0.07
    
    
    $
    0.00
    
    
    $
    0.07
    
    
    $
    0.08
    
    
    $
    0.00
    
    
    $
    0.08
    
    
    $
    0.10
    
    
    $
    0.00
    
    
    $
    0.10Weighted average shares outstanding
    
    
    17,431,035
    
    
    
    
    
    
    
    17,431,035
    
    
    
    18,006,127
    
    
    
    
    
    
    
    18,006,127
    
    
    
    18,025,248
    
    
    
    
    
    
    
    18,025,248Fully diluted weighted average shares outstanding
    
    
    17,923,402
    
    
    
    
    
    
    
    17,923,402
    
    
    
    18,274,157
    
    
    
    
    
    
    
    18,274,157
    
    
    
    18,350,627
    
    
    
    
    
    
    
    18,350,627
 66




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 Restated Statement of Equity for 2008
(In thousands)
 Common Stock
    
    
    Additional
    
    
    
    
    
    
    TotalAs Reported
    
    
    As Reported
    
    
    Paid-in
    
    
    Retained
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    EquityBalances, December 31, 2007 (Restated)
    
    
    17,724
    
    
    $
    1,772
    
    
    $
    51,008
    
    
    $
    2,978
    
    
    $
    53,988Amortize warrants for services
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    31Issue common stock for services
    
    
    127
    
    
    
    13
    
    
    
    1,293
    
    
    
    
    
    
    
    1,293Net income for the three months ended March 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,372
    
    
    
    1,372Balances, March 31, 2008 (unaudited)
    
    
    17,851
    
    
    $
    1,785
    
    
    $
    52,332
    
    
    $
    4,350
    
    
    $
    56,684Amortize warrants for services
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    31Issue common stock for services
    
    
    7
    
    
    
    1
    
    
    
    37
    
    
    
    
    
    
    
    37Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    102Exercise of warrants
    
    
    167
    
    
    
    16
    
    
    
    459
    
    
    
    
    
    
    
    459Net income for the three months ended June 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,579
    
    
    
    1,579Balances, June 30, 2008 (unaudited)
    
    
    18,025
    
    
    $
    1,802
    
    
    $
    52,961
    
    
    $
    5,929
    
    
    $
    58,892Amortize warrants for services
    
    
    
    
    
    
    
    
    
    
    31
    
    
    
    
    
    
    
    31Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    52Net income for the three months ended September 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,823
    
    
    
    1,823Balances, September 30, 2008 (unaudited)
    
    
    18,025
    
    
    $
    1,802
    
    
    $
    53,044
    
    
    $
    7,752
    
    
    $
    60,798
 Restated Statement of Cash Flows for 2008 (unaudited)
(In thousands)
 YTD
    
    
    
    
    
    
    
    
    
    
    YTDAs
    
    
    
    
    
    
    
    
    
    
    As
    
    
    
    
    
    
    YTD
    
    
    As
    
    
    
    
    
    
    YTDReported
    
    
    
    
    
    
    Restated
    
    
    Reported
    
    
    
    
    
    
    Restated
    
    
    Reported
    
    
    
    
    
    
    RestatedMarch 31
    
    
    Adjustment
    
    
    March 31
    
    
    June 30
    
    
    Adjustment
    
    
    June 30
    
    
    September 30
    
    
    Adjustment
    
    
    September 30Operating ActivitiesNet income
    
    $
    1,334
    
    
    $
    39
    
    
    $
    1,373
    
    
    $
    2,862
    
    
    $
    90
    
    
    $
    2,952
    
    
    $
    4,632
    
    
    $
    142
    
    
    $
    4,774Adjustments to reconcile net income to net cash
provided by operating activities:Depreciation and amortization
    
    
    402
    
    
    
    (39
    )
    
    
    363
    
    
    
    775
    
    
    
    (90
    )
    
    
    685
    
    
    
    1,233
    
    
    
    (142
    )
    
    
    1,091Amortization of loan fees
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    147
    
    
    
    
    
    
    
    147
    
    
    
    226
    
    
    
    
    
    
    
    226Stock-based compensation expense
    
    
    100
    
    
    
    
    
    
    
    100
    
    
    
    354
    
    
    
    
    
    
    
    354
    
    
    
    665
    
    
    
    
    
    
    
    665Deferred income taxes (benefit)
    
    
    270
    
    
    
    47
    
    
    
    317
    
    
    
    
    
    
    
    592
    
    
    
    592
    
    
    
    993
    
    
    
    
    
    
    
    993Minority interest expense
    
    
    (57
    )
    
    
    168
    
    
    
    111
    
    
    
    229
    
    
    
    
    
    
    
    229
    
    
    
    361
    
    
    
    
    
    
    
    361(Gain) loss on disposition of assets
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    138
    
    
    
    
    
    
    
    138
    
    
    
    133
    
    
    
    
    
    
    
    133Changes in operating assets and liabilities
    
    
    (208
    )
    
    
    
    
    
    
    (208
    )
    
    
    64
    
    
    
    (34
    )
    
    
    30
    
    
    
    1,207
    
    
    
    
    
    
    
    1,207Net cash provided by operating activities
    
    
    1,841
    
    
    
    215
    
    
    
    2,056
    
    
    
    4,569
    
    
    
    558
    
    
    
    5,127
    
    
    
    9,450
    
    
    
    0
    
    
    
    9,450Investing ActivitiesAcquisitions of businesses, net of cash acquired
    
    
    (118
    )
    
    
    
    
    
    
    (118
    )
    
    
    (1,927
    )
    
    
    (3,424
    )
    
    
    (5,351
    )
    
    
    (10,721
    )
    
    
    
    
    
    
    (10,721
    )Additions to property and equipment
    
    
    (857
    )
    
    
    
    
    
    
    (857
    )
    
    
    (4,153
    )
    
    
    2,943
    
    
    
    (1,210
    )
    
    
    (1,269
    )
    
    
    
    
    
    
    (1,269
    )Deposits
    
    
    (22
    )
    
    
    
    
    
    
    (22
    )
    
    
    (75
    )
    
    
    25
    
    
    
    (50
    )
    
    
    (164
    )
    
    
    
    
    
    
    (164
    )Assets held for sale
    
    
    (7
    )
    
    
    
    
    
    
    (7
    )Proceeds from sale of assets
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    238
    
    
    
    
    
    
    
    238Net cash used by investing activities
    
    
    (1,004
    )
    
    
    0
    
    
    
    (1,004
    )
    
    
    (6,155
    )
    
    
    (456
    )
    
    
    (6,611
    )
    
    
    (11,916
    )
    
    
    0
    
    
    
    (11,916
    )Financing ActivitiesLoan fees paid
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    (70
    )
    
    
    
    
    
    
    (70
    )
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )Payment on capitalized leases
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )
    
    
    (7
    )
    
    
    
    
    
    
    (7
    )Proceeds from debt
    
    
    
    
    
    
    164
    
    
    
    164
    
    
    
    3,000
    
    
    
    2,795
    
    
    
    5,795
    
    
    
    6,045
    
    
    
    2,702
    
    
    
    8,747Payments on debt
    
    
    (1,055
    )
    
    
    (211
    )
    
    
    (1,266
    )
    
    
    (1,885
    )
    
    
    (2,627
    )
    
    
    (4,512
    )
    
    
    (3,611
    )
    
    
    (2,702
    )
    
    
    (6,313
    )Proceeds from stock issuances
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    460
    
    
    
    
    
    
    
    460
    
    
    
    
    
    
    
    
    
    
    
    0Distributions to minority interests
    
    
    
    
    
    
    (168
    )
    
    
    (168
    )
    
    
    
    
    
    
    (270
    )
    
    
    (270
    )
    
    
    (377
    )
    
    
    
    
    
    
    (377
    )Proceeds from warrants conversion to stock
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0
    
    
    
    459
    
    
    
    
    
    
    
    459Net cash provided by (used in) financing activities
    
    
    (1,057
    )
    
    
    (215
    )
    
    
    (1,272
    )
    
    
    1,500
    
    
    
    (102
    )
    
    
    1,398
    
    
    
    2,285
    
    
    
    0
    
    
    
    2,285Net increase (decrease) in cash
    
    
    (220
    )
    
    
    0
    
    
    
    (220
    )
    
    
    (86
    )
    
    
    0
    
    
    
    (86
    )
    
    
    (181
    )
    
    
    0
    
    
    
    (181
    )Cash beginning of period
    
    
    2,980
    
    
    
    
    
    
    
    2,980
    
    
    
    2,980
    
    
    
    
    
    
    
    2,980
    
    
    
    2,980
    
    
    
    
    
    
    
    2,980Cash end of period
    
    $
    2,760
    
    
    
    
    
    
    $
    2,760
    
    
    $
    2,894
    
    
    
    
    
    
    $
    2,894
    
    
    $
    2,799
    
    
    
    
    
    
    $
    2,799Supplemental disclosures of cash flow information:Income taxes paid in cash
    
    $
    500
    
    
    
    
    
    
    $
    500
    
    
    $
    765
    
    
    
    
    
    
    $
    765
    
    
    $
    822
    
    
    
    
    
    
    $
    822Interest paid in cash
    
    $
    594
    
    
    
    
    
    
    $
    594
    
    
    $
    1,614
    
    
    
    
    
    
    $
    1,614
    
    
    $
    2,268
    
    
    
    
    
    
    $
    2,268Non-cash transactions:Issued notes payable for acquisitions
    
    
    
    
    
    
    
    
    
    $
    0
    
    
    $
    2,500
    
    
    
    
    
    
    $
    2,500
    
    
    $
    5,793
    
    
    
    
    
    
    $
    5,793Issued common stock for services
    
    $
    1,324
    
    
    $
    (1,324
    )
    
    $
    0
    
    
    $
    1,330
    
    
    $
    (1,330
    )
    
    $
    0
    
    
    $
    1,330
    
    
    $
    (1,330
    )
    
    $
    0
 67




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 
 15)  Subsequent Events
 Company Stock Repurchase
   MaximumNumber(or ApproximateTotal Number of
    
    Dollar Value) ofShares Purchased
    
    Shares that Mayas Part of
    
    Yet BeTotal Number of
    
    
    
    
    
    Publicly
    
    Purchased underShares
    
    Average Price
    
    Announced Plans
    
    the Plans orPeriod
    
    Purchased(1)
    
    Paid per Share
    
    or Programs(1)
    
    ProgramsJanuary 1 to 31, 2009
    
    
    33,400
    
    
    $
    1.70
    
    
    
    33,400
    
    
    1,199,576 shares or $8,932,556February 1 to 28, 2009
    
    
    116,257
    (2)
    
    $
    1.68
    
    
    
    116,257
    (2)
    
    1,082,719 shares or $8,737,112March 1 to 31, 2009
    
    
    43,368
    (3)
    
    $
    1.55
    
    
    
    43,368
    
    
    1,039,951 sharesor $8,669,807Total
    
    
    193,025
    
    
    $
    1.66
    
    
    
    193,025
    
    
    1,039,951 sharesor $8,669,807
 
 (1)
    
    Unless noted, the Company made all repurchases in the open market.(2)
    
    Of these repurchases, the Company purchased 20,957 shares of common
stock in the open market and 95,300 shares of common stock in a block
transaction.(3)
    
    Of these repurchases, the Company purchased 10,268 shares of common
stock in the open market and 33,100 shares of common stock in a block
transaction. Long-term debt
   Debt Agreements with Related Parties
    68




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
  
 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A(T). Controls and Procedures
   
    
    pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the Company;
    
    provide reasonable assurance that transactions are recorded, as necessary, to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company are being made only in
accordance with the authorization of management and Directors of the Company;
    
    provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the Companys assets that could have a material effect on
the financial statements.
  
  
  
    
    The Company lacked a sufficient number of accounting personnel with appropriate knowledge
of generally accepted accounting principles to handle the acquisition growth of the Company.
As a result, the input and categorization of certain entries required extensive review to
assure accuracy and the December 31, 2007 year-end financial statements submitted to the SEC
had to be restated.
    
    Turnover in key accounting positions decreased the likelihood that these errors would
have been detected in the ordinary monitoring of reconciliation procedures.
 69




---



##### Table of Contents



VCG Holding Corp.
 Notes to Consolidated Financial Statements  (Continued)
 
    
    The Company failed to maintain effective financial reporting controls in certain areas,
including general ledger journal entries that were not always reviewed prior to entry.
  
    
    Hiring additional accounting personnel with experience and training to produce accurate
financial data and with the intent to limit turnover; and
    
    Engaging the services of technical third party consultants to advise management on
technical financial and reporting matters;
    
 Item 9B. Other Information
  70




---



##### Table of Contents



PART III
  
 Item 10. Directors, Executive Officers and Corporate Governance
  
 Item 11. Executive Compensation
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13. Certain Relationships and Related Transactions, and Director Independence
  
 Item 14. Principal Accountant Fees and Services
  71




---



##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
  Financial Statements
 Page No.Report of Independent Registered Public Accounting Firm
    
    
    34Consolidated Balance Sheets as of December 31, 2008 and December 31, 2007
    
    
    35Consolidated Statements of Operations for the Years Ended December 31, 2008 and 2007
    
    
    36Consolidated Statements of Stockholders Equity for the Years Ended December 31, 2008 and 2007
    
    
    37Consolidated Statements of Cash Flows for the Years Ended December 31, 2008 and 2007
    
    
    38Notes to the Consolidated Financial Statements
    
    
    39
 Financial Statement Schedules
  Exhibits
 ExhibitsNo.
    
    Description3.1
    
    
    Articles of Incorporation(1)3.2
    
    
    Amended Designations, Preferences, Limitations and Relative Rights of Series A Convertible Preferred Stock(9)3.3
    
    
    Amended and Restated Bylaws(28)4.1
    
    
    Specimen common stock certificate, $.0001 par value(1)4.2
    
    
    Specimen preferred stock certificate $.0001 par value(1)*4.3
    
    
    Stock Option and Stock Bonus Plan(1)*4.4
    
    
    2003 Stock Option and Stock Bonus Plan(3)4.5
    
    
    Form of Subscription Agreement(16)10.01
    
    
    Trademark License Agreement, dated June 30, 2002, between VCG Holding Corp. and Lowrie Management, LLLP(1)10.02
    
    
    Line of Credit and Security Agreement, dated June 30, 2002, between VCG Holding Corp. and Lowrie Management,
LLLP(1)*10.03
    
    
    Management Contract, dated May 2, 2002, between VCG Holding Corp. and International Entertainment Consultants,
Inc.(1)10.04
    
    
    Lease Agreement for 213-215 Madison, Brooklyn, Illinois, dated May 1, 2002, by and between RELMSS and VCG Holding
Corp.(1)10.05
    
    
    Agreement to Purchase/Sell Real Estate, dated March 5, 2003, between VCG Real Estate Holdings, Inc. and Sacred
Grounds Resources, L.L.C.(2)10.06
    
    
    Limited Partnership Purchase Agreement, executed effective June 30, 2004, by and among VCG Holding Corp., WCC
Acquisitions, Inc. and Lowrie Management LLLP(4)10.07
    
    
    Promissory Note and Security Agreement, dated July 21, 2004, by VCG Holding Corp. in favor of Lowrie Management
LLLP(4)10.08
    
    
    Lease Agreement, dated October 1, 2004, by and between Lowrie Management LLLP and Glendale Restaurant Concepts
LP(5)10.09
    
    
    Agreement for the Purchase and Sale of Assets, dated August 18, 2004, by and between CCCG, Inc. and Glenarm
Restaurant Concepts, LLC(6)10.10
    
    
    Lease Agreement, dated August 31, 2004, by and between Glenarm Associates, Inc. and Glenarm Restaurant LLC(6)
 72




---



##### Table of Contents



ExhibitsNo.
    
    Description10.11
    
    
    First Amendment to Commercial Lease, dated February 1, 2005, by Hampden and Galena Limited and VCG Restaurants
Denver, Inc.(7)*10.12
    
    
    2004 Stock Option and Appreciation Rights Plan(8)10.13
    
    
    Agreement for the Purchase and Sale of Business and Assets, dated August 2, 2006, by and between VCG Holding
Corp. and Consolidated Restaurants Limited, LLC(10)10.14
    
    
    Business Lease, dated October 2, 2006, by and between 5975 Terminal, LLC and VCG CO Springs, Inc.(11)10.15
    
    
    Limited Partnership Purchase Agreement, dated December 18, 2006, by and among Lowrie Management LLLP and W.C.C.
Acquisitions Inc., VCG Holding Corp. and Denver Restaurants Concepts, LP(12)10.16
    
    
    Promissory Note and Security Agreement, dated December 31, 2006, by VCG Holding Corp. in favor of Lowrie
Management LLLP(12)10.17
    
    
    Lease, dated January 1, 2005, by and between Lowrie Management LLLP and Denver Restaurant Concepts LP(12)10.18
    
    
    Sale of VCGs 100% Membership Interest in Epicurean Enterprises, L.L.C., dated January 15, 2007, by and between
VCG Holding Corp and Cory James Anderson(13)10.19
    
    
    Lease, dated January 15, 2007, by and between VCG Real Estate Holdings Inc. and Epicurean Enterprises LLC(13)10.20
    
    
    Purchase Agreement, dated January 2, 2007, by and among Troy Lowrie, VCG Holding Corp and Kentucky Restaurants
Concepts, Inc.(14)10.21
    
    
    Agreement for Sale of Limited Partnership Interest Restaurant Concepts of Kentucky Limited Partnership, dated
January 2, 2007(14)10.22
    
    
    Lease, dated January 1, 2007, by and between Lowrie Management LLLP and Kentucky Restaurant Concepts, Inc.(14)10.23
    
    
    Limited Partnership Purchase Agreement, dated January 18, 2007, by and among Lowrie Management LLLP and Illinois
Acquisitions Inc., VCG Holding Corp and RCC, LP(15)10.24
    
    
    Consent to Sell Partnership Interest of RCC, LP, dated January 31, 2007(15)10.25
    
    
    Consent to Transfer Partnership Interest into Common Stock, dated January 31, 2007(15)10.26
    
    
    Business Lease, dated February 1, 2007, by and between Jay Dinklemann, as Trustee of Chicago Title Land Trust
#1080459 and RCC LP(15)10.27
    
    
    Limited Partnership Purchase Agreement, dated February 5, 2007, by and among Lowrie Management LLLP, Illinois
Acquisitions Inc., VCG Holding Corp. and Cardinal Management LP(16)10.28
    
    
    Business Lease, dated February 1, 2007, by and between Jay E. Dinklemann, as Trustee of Chicago Title Land Trust

#879-51 and Cardinal Management LP dba PTs Centreville(16)10.29
    
    
    Limited Partnership Purchase Agreement, dated February 9, 2007, by and among Lowrie Management LLLP and Illinois
Acquisitions Inc., VCG Holding Corp and MRC, LP(17)10.30
    
    
    Promissory Note and Security Agreement, dated March 31, 2007, by VCG Holding Corp. in favor of Lowrie Management
LLLP(17)10.31
    
    
    Business Lease, dated March 1, 2007, by and between Jay Dinkleman as Trustee of Chicago Title Land Trust #1083191
and MRC, LP.(17)10.32
    
    
    Limited Partnership Purchase Agreement, dated February 7, 2007, by and among Lowrie Management LLLP, Illinois
Acquisitions Inc., VCG Holding Corp. and IRC, LP(18)10.33
    
    
    Promissory Note, dated March 31, 2007, by VCG Holding Corp in favor of Lowrie Management LLLP(18)10.34
    
    
    Consent to Sell Partnership Interest of IRC, LP, dated February 21, 2007(18)10.35
    
    
    Business Lease, dated March 1, 2007, by and between Regions Bank, as Trustee of Trust #39007440 and Omni
Warehouse, Inc. and IRC, LP.(18)10.36
    
    
    Promissory Note and Security Agreement, dated June 1, 2006, by VCG Holding Corp. in favor of Lowrie Management
LLLP(20)10.37
    
    
    Agreement for the Purchase and Sale of Assets, dated March 23, 2007, by and among Regale, Inc., VCG Holding Corp.
and Raleigh Restaurant Concepts, Inc.(20)10.38
    
    
    Agreement of Sublease, dated April 16, 2007, by and between Regale, Inc. and Raleigh Restaurant Concepts, Inc.(21)
 73




---



##### Table of Contents



ExhibitsNo.
    
    Description10.39
    
    
    Lease Agreement, dated April 16, 2007, by and between Big Deck Parking, LLC and Raleigh Restaurant Concepts,
Inc.(21)10.40
    
    
    Stock Purchase Agreement, dated April 25, 2007, by and between Robert W. Sabes and VCG Holding Corp.(22)10.41
    
    
    Real Estate Purchase Agreement, dated April 25, 2007, by and between JFS Desert Fountain Properties, LLC and VCG
Holding Corp.(22)10.42
    
    
    Lease, dated May 31, 2007, by and between JFS Desert Fountain Properties, LLC and Classic Affairs, Inc.(22)10.43
    
    
    Lease, dated June 29, 2007, by and between 4th Street Partnership, LLLP and Classic Affairs, Inc.(23)10.44
    
    
    Stock Purchase Agreement re: Kenkev II, Inc. f/k/a Mark R. Dean, Inc., dated September 14, 2007, between Ken-Kev
Inc. and VCG Holding Corp.(24)10.45
    
    
    Restrictive Covenant  Covenant Not to Compete, dated September 14, 2007, between Gregory Kenwood Gaines and VCG
Holding Corp.(24)10.46
    
    
    Consulting-License Agreement, dated September 14, 2007, by and between Alliance Management Partners, LLC and VCG
Holding Corp. on behalf of Seller Equity holding(24)10.47
    
    
    Business Lease, dated September 14, 2007, by and between K & R Properties, Inc. and KenKevII Inc.(24)10.48
    
    
    Guaranty of Lease, dated September 14, 2007, by VCG Holding Corp. in favor of K & R Properties(24)10.49
    
    
    Purchase of Membership Interest, dated September 17, 2007, by and among VCG Holding Corp. and Golden Productions
JGC Fort Worth, LLC, d/b/a Jaguars Gold Club Fort Worth, and Bryan S. Foster(25)10.50
    
    
    Covenant not to compete, dated September 17, 2007, between Bryan S. Foster and VCG Holding Corp.(25)10.51
    
    
    Covenant not to compete, dated September 17, 2007, between Richard Richardson and VCG Holding Corp.(25)10.52
    
    
    Deed of Ground Lease, dated September 17, 2007, by and between VCG Holding Corp. and Bryan S. Foster(25)10.53
    
    
    Stock Purchase Agreement, dated October 29, 2007, by and among VCG Holding Corp. and Manana Entertainment, Inc.
db/a Jaguars Gold Club Dallas, and Bryan S. Foster(26)10.54
    
    
    Covenant Not to Compete, made and effective as of the Effective Date, as defined in the Stock Purchase Agreement
by and among VCG Holding Corp. and Manana Entertainment, Inc. d/b/a Jaguars Gold Club Dallas and Bryan S.
Foster, between Bryan S. (Niko) Foster and VCG Holding Corp.(26)10.55
    
    
    Covenant Not to Compete, made and effective as of the Effective Date, as defined in the Stock Purchase Agreement
by and among VCG Holding Corp. and Manana Entertainment, Inc. d/b/a Jaguars Gold Club Dallas and Bryan S.
Foster, between Richard Richardson and VCG Holding Company(26)10.56
    
    
    Stock Purchase Agreement Re: Kenja II, Inc. f/k/a Mark R. Dean, Inc., dated September 14, 2007, between Kenja II,
Inc. and VCG Holding Corp.(26)10.57
    
    
    Restrictive Covenant  Covenant Not to Compete, dated October 29, 2007, between Gregory Kenwood Gaines and VCG
Holding Corp.(26)10.58
    
    
    Bonus Agreement Related to Purchase Agreement, dated September 14, 2007, between G. Kenwood Gaines and VCG
Holding Corp.(26)10.59
    
    
    Ground Lease Agreement, dated October 29, 2007, between VCG Holding Corp. and Bryan S. Foster(26)10.60
    
    
    Business Lease Agreement, dated October 29, 2007, by and between Third Properties, LLC and Kenja II, Inc.(26)10.61
    
    
    Guaranty of Lease, dated October 29, 2007, by VCG Holding Corp. in favor of Third Property, Inc.(26)10.62
    
    
    Balloon Promissory Noted dated December 4, 2007, in favor of Sunshine Mortgage Investors, Inc.(27)10.63
    
    
    Agreement for Purchase and Sale of Assets, dated December 5, 2007, by and between 1443 Corp., Inc. and Stout
Restaurant Concepts, Inc.(29)10.64
    
    
    Assignment Agreement, dated December 21, 2007, by and between VVSM, Inc. and VCG Holding Corp.(29)10.65
    
    
    Non-Competition Agreement, dated December 21, 2007, by and between 1443 Corp., Inc., Lance Migliaccio, Gidget
Sanders, Ted R. Bullard and Stout Restaurant Concepts, Inc.(29)10.66
    
    
    Agreement for the Purchase and Sale of Assets, dated December 21, 2007, by and between 1447, Inc. and Bradshaw
Hotel, Inc.(29)
 74




---



##### Table of Contents



ExhibitsNo.
    
    Description10.67
    
    
    Assignment and Assumption of Building Lease, dated December 19, 2007, by and between P.P.P., LLC, Lance C.
Migliaccio, Gidget Bridget Sanders, Anthony Scott Falcone, Frank Henry Walley, IV, Ted R. Bullard and Stout
Restaurant Concepts, Inc.(29)10.68
    
    
    Building Lease, dated July 7, 2001, by and between Dikeou Realty and 2222, Inc., as amended(29)10.69
    
    
    Consulting Agreement, dated December 4, 2007, by and between Lance C. Migliaccio and VCG Holding Corp.(29)10.70
    
    
    Indemnification Agreement, dated as of December 21, 2007, by and between 1443 Corp., Inc., Lance C. Migliaccio,
Gidget Bridget Sanders, Anthony Scott Falcone, Frank Henry Walley, IV, Ted R. Bullard and VCG Holding Corp.(29)10.71
    
    
    Agreement of Merger, dated February 9, 2008 by and between VCG Holding Corp. and Mega Club(30)10.72
    
    
    Agreement and Plan of Reorganization, dated February 9,2008, by and between VCG Holding Corp and Mega Club(30)10.73
    
    
    Covenant Not to Compete, dated February 9, 2008, between Mega Club and VCG Holding Corp.(30)10.74
    
    
    Covenant not to Compete, dated February 9, 2008, between Mega Club Employee and VCG Holding Corp.(30)10.75
    
    
    Sales Agreement, dated February 9, 2008, between Mega Club and VCG Holding Corp.(30)10.76
    
    
    Ground Lease Agreement, dated February 9, 2008, between VCG Holding Corp. and Mega Club(30)10.77
    
    
    Agreement of Purchase of Assets, dated March 15, 2008, by and between VCG Holding Corp. and Mega Club(31)10.78
    
    
    Covenant Not to Compete, dated March 15, 2008, by and between VCG Holding Corp. and Mega Club(31)10.79
    
    
    First Amendment to Stock Purchase Agreement, dated April 15, 2008, by VCG Holding Corp. and Manana Entertainment,
Inc. and Bryan Foster(36)10.80
    
    
    Promissory Note, dated April 14, 2008, by and between VCG Holding Corp. and Bryan Foster(36)10.81
    
    
    Security Agreement, dated April 14, 2008, by and between VCG Holding Corp. and Bryan Foster(32)10.82
    
    
    Leasehold Deed of Trust Security Agreement, dated April 14, 2008(32)10.83
    
    
    Amended Balloon Promissory Note, dated July 11, 2008, by and between VCG Holding Corp. and Sunshine Mortgage
Investors, Inc.(33)10.84
    
    
    Balloon Promissory Note, dated, July 14, 2008, by and between VCG Holding Corp. and Richard Stanton(33)10.85
    
    
    Asset Purchase Agreement, dated March 15, 2008, by and between 2640 W. Woodland Inc., and Glenn Smith, and
VCG-IS, LLC, and VCG Holding Corp.(34)10.86
    
    
    Covenant Not to Compete, dated July 28, 2008, by and between Glenn Smith and VCG-IS, LLC(34)10.87
    
    
    Promissory Note, dated July 28, 2008, by and between VCG-IS, LLC and 2640 W. Woodland, Inc.(34)10.88
    
    
    Security Agreement, dated July 28, 2008, by and between VCG-IS, LLC and 2640 W. Woodland, Inc.(34)10.89
    
    
    Promissory Note and Security Agreement, dated November 11, 2007, by VCG Holding Corp. in favor of Lowrie
Management, LLLP(35)10.90
    
    
    Promissory Note and Security Agreement, dated July 17, 2008, by VCG Holding Corp. in favor of Vali Lowrie Reed(35)*10.91
    
    
    Employment Agreement, dated December 4, 2008, by and between VCG Holding Corp. and Troy Lowrie(36)*10.92
    
    
    Employment Agreement, dated December 4, 2008, by and between VCG Holding Corp. and Micheal Ocello(36)21.1
    
    
    Subsidiaries of VCG Holding Corp.(38)23.1
    
    
    Consent of Causey Demgen & Moore, Inc.(38)31.1
    
    
    Certification of Chief Executive Officer of VCG Holding Corp. required by Rule 13a-14(1) or Rule 15d-14(a) of the
Securities Exchange act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(38)31.2
    
    
    Certification of Chief Financial Officer of VCG Holding Corp. required by Rule 13a-14(1) or Rule 15d-14(a) of the
Securities Exchange act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(38)32.1
    
    
    Certification of Chief Executive Officer of VCG Holding Corp. pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and Section 1350 of 18 U.S.C. 63(37)32.2
    
    
    Certification of Chief Financial Officer of VCG Holding Corp. pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and Section 1350 of 18 U.S.C. 63(37)
 
 (1)
    
    Incorporated by reference from Registration Statement on Form SB-2 filed on September 10, 2002 75




---



##### Table of Contents



(2)
    
    Incorporated by reference from Amendment No. 2 to the Registration Statement on Form SB-2 filed on April 21, 2003(3)
    
    Incorporated by reference from the Companys Registration Statement on Form S-8 filed August 6, 2003(4)
    
    Incorporated by reference from Current Report on Form 8-K filed on July 29, 2004(5)
    
    Incorporated by reference from Current Report on Form 8-K filed on October 8, 2004(6)
    
    Incorporated by reference from Amended Current Report on Form 8-K/A filed on October 18, 2004(7)
    
    Incorporated by reference from Current Report on Form 8-K filed on February 9, 2005(8)
    
    Incorporated by reference from Current Report on Form 8-K filed on August 1, 2005(9)
    
    Incorporated by reference from the Companys Quarterly Report on Form 10-Q filed on November 14, 2005(10)
    
    Incorporated by reference from the Companys Quarterly Report on Form 10-Q filed on August 14, 2006(11)
    
    Incorporated by reference from Current Report on Form 8-K filed on October 5, 2006(12)
    
    Incorporated by reference from Current Report on Form 8-K filed on January 5, 2007(13)
    
    Incorporated by reference from Current Report on Form 8-K on January 19, 2007(14)
    
    Incorporated by reference from Current Report on Form 8-K on January 23, 2007(15)
    
    Incorporated by reference from Current Report on Form 8-K on February 15, 2007(16)
    
    Incorporated by reference from the Companys Registration Statement on Form S-3 filed March 1, 2007(17)
    
    Incorporated by reference from Current Report on Form 8-K on March 6, 2007(18)
    
    Incorporated by reference from Current Report on Form 8-K on March 21, 2007(19)
    
    Incorporated by reference from Current Report on Form 8-K on March 23, 2007(20)
    
    Incorporated by reference from the Annual Report on Form 10-KSB filed April 3, 2007(21)
    
    Incorporated by reference from Current Report on Form 8-K filed on April 20, 2007(22)
    
    Incorporated by reference from Current Report on Form 8-K filed on June 7, 2007(23)
    
    Incorporated by reference from Current Report on Form 8-K/A filed on July 12, 2007(24)
    
    Incorporated by reference from Current Report on Form 8-K filed on September 20, 2007(25)
    
    Incorporated by reference from Current Report on Form 8-K filed on September 21, 2007(26)
    
    Incorporated by reference from Current Report on Form 8-K/A filed on November 16, 2007(27)
    
    Incorporated by reference from Current Report on Form 8-K filed on December 10, 2007(28)
    
    Incorporated by reference from Current Report on Form 8-K filed on December 27, 2007(29)
    
    Incorporated by reference from Current Report on Form 8-K filed on December 28, 2007(30)
    
    Incorporated by reference from Current Report on Form 8-K filed on February 14, 2008 & Current Report on
Form 8-K filed February 3, 2009(31)
    
    Incorporated by reference from Current Report on Form 8-K filed March 20, 2008 & Current Report on Form 8-K
filed February 3, 2009 76




---



##### Table of Contents



(32)
    
    Incorporated by reference from Current Report on Form 8-K/A filed April 18, 2008(33)
    
    Incorporated by reference from Current Report on Form 8-K/A filed July 21, 2008(34)
    
    Incorporated by reference from Current Report on Form 8-K filed August 1, 2008(35)
    
    Incorporated by reference from Quarterly Report on Form 10-Q filed August 11, 2008(36)
    
    Incorporated by reference from Current Report on Form 8-K filed December 10, 2008(37)
    
    Furnished herewith(38)
    
    Filed herewith*
    
    Indicates a management contract or compensation plan or arrangement 77




---



##### Table of Contents



SIGNATURES
 
  
 VCG HOLDING CORP.By:
    
    /s/  Troy Lowrie

Troy LowrieChairman of the Board andChief Executive Officer
  
 June 10, 2009
    
    By:
    
    /s/ Troy LowrieTroy LowrieChairman of the Board andChief Executive OfficerJune 10, 2009
    
    By:
    
    /s/ Micheal OcelloMicheal OcelloDirectorChief Operating Officer and PresidentJune 10, 2009
    
    By:
    
    /s/ Courtney CowgillCourtney CowgillChief Financial OfficerSecretary and TreasurerJune 10, 2009
    
    By:
    
    /s/ Robert McGraw, Jr.Robert McGraw, Jr.DirectorJune 10, 2009
    
    By:
    
    /s/ Allan RubinAllan RubinDirectorJune 10, 2009
    
    By:
    
    /s/ Martin GrusinMartin GrusinDirectorJune 10, 2009
    
    By:
    
    /s/ George SawickiGeorge SawickiDirectorJune 10, 2009
    
    By:
    
    /s/ Kenton SieckmanKenton SieckmanDirector
 
 78