##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 (Mark One):þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO 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(State or other jurisdiction of 
incorporation or organization)
    
    84-1157022(I.R.S. Employer
Identification No.)390 Union Boulevard, Suite 540, Lakewood, CO(Address of principal executive offices)
    
    80228(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
 o þ
 o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o(Do not check if a smaller reporting company)
    
    Smaller Reporting company þ
 o þ




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##### 



VCG HOLDING CORP.
 FORM 10-K
 TABLE OF CONTENTS
 PART IITEM 1.
    
    Business
    
    3ITEM 1A.
    
    Risk Factors
    
    8ITEM 1B.
    
    Unresolved Staff Comments
    
    17ITEM 2.
    
    Properties
    
    17ITEM 3.
    
    Legal Proceedings
    
    20ITEM 4.
    
    (Removed and Reserved)
    
    23PART IIITEM 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    24ITEM 6.
    
    Selected Financial Data
    
    26ITEM 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    27ITEM 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    37ITEM 8.
    
    Financial Statements and Supplementary Data
    
    37ITEM 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    66ITEM 9A
    
    Controls and Procedures
    
    66ITEM 9B.
    
    Other Information
    
    67PART IIIITEM 10.
    
    Directors, Executive Officers and Corporate Governance
    
    68ITEM 11.
    
    Executive Compensation
    
    72ITEM 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    76ITEM 13.
    
    Certain Relationships and Related Transactions and Director Independence
    
    79ITEM 14.
    
    Principal Accountant Fees and Services
    
    82PART IVITEM 15.
    
    Exhibits and Financial Statement Schedules
    
    83SIGNATURES
    
    91EX-21.1EX-23.1EX-31.1EX-32.1
  2




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PART I
 Forward-Looking Statement Disclaimer
     
 Item 1. Business
 General Information
   3




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##### Table of Contents



Business
  Name of Nightclub
    
    Date Acquired
    
    Nightclub TypePTs® Showclub in Indianapolis, Indiana
    
    2002
    
    BPTs® Brooklyn in Brooklyn, Illinois
    
    2002
    
    BPTs® All Nude in Denver, Colorado
    
    2004
    
    CThe Penthouse Club® in Glendale, Colorado
    
    2004
    
    ADiamond Cabaret® in Denver, Colorado
    
    2004
    
    APTs® Appaloosa in Colorado Springs, Colorado
    
    October 2006
    
    BPTs® Showclub in Denver, Colorado
    
    December 2006
    
    BPTs® Showclub in Louisville, Kentucky
    
    January 2007
    
    BRoxys in Brooklyn, Illinois
    
    February 2007
    
    BPTs® Showclub in Centreville, Illinois
    
    February 2007
    
    BPTs® Sports Cabaret in Sauget, Illinois
    
    March 2007
    
    BThe Penthouse Club® in Sauget, Illinois
    
    March 2007
    
    AThe Mens Club® in Raleigh, North Carolina
    
    April 2007
    
    ASchieks Palace Royale in Minneapolis, Minnesota**
    
    May 2007
    
    APTs® Showclub in Portland, Maine
    
    September 2007
    
    BPTs® Showclub in Hialeah, Florida
    
    October 2007
    
    BLa Boheme Gentlemens Club in Denver, Colorado
    
    December 2007
    
    BJaguars Gold Club in Dallas, Texas (Manana)
    
    April 2008
    
    CImperial Showgirls Gentlemens Club in Anaheim, California
    
    July 2008
    
    CJaguars Gold Club in Ft. Worth, Texas (Golden)*
    
    September 2007
    
    C
 
 *
    
    - sold on July 16, 2010**
    
    - signed an Asset Purchase Agreement to sell March 22, 2011 (see Note 15 of the Notes to the
Consolidated Financial Statements under Subsequent Events.      
    
    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 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.
 4




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
    
    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 twelve area directors who have twelve to
twenty-eight years of experience in the industry.
 
    
    Food and Beverage Operations  Many of our nightclubs offer a first-class bar
and food service. Five 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 B.Y.O.B. 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 and male performers and servers. 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. Performers who work at our
nightclubs are experienced entertainers.
 Working Capital
  Advertising and Promotion
   Compliance Policies and Controls
   Patents, Trademarks, Licenses and Royalty Agreements
  5




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##### Table of Contents



® ® ® ®
  Club Ownership
    
    Trade NameClassic Affairs, Inc.
    
    Schieks Palace RoyaleVCG-IS, LLC
    
    Imperial Showgirls Gentlemens ClubStout Restaurant Concepts, Inc.
    
    La Boheme Gentlemens Cabaret
   Seasonality
  Customers
  Competition
  6




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Government Regulations
   Employees and Independent Contractors
  Potential Sale of the Company
     7




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Available Information
 www.vcgh.com
 
 Item 1A. Risk Factors
  The process of consummating the Going Private Transaction or any other transaction, as well as the
failure to successfully consummate such a transaction, could adversely affect our business.
  We are subject to litigation related to the Going Private Transaction, which could affect our
ability to consummate a transaction, force us to rescind a transaction if it is consummated before
the conclusion of the litigation or otherwise adversely affect our business or stock price.
   8




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Anyone buying shares of our Common Stock for more than $2.25 per share is unlikely to receive more
than $2.25 per share for such stock for as long as the merger agreement remains in effect.
  We have had limited operations which makes our future operating results difficult to predict.
   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.
  9




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Our business has been, and may continue to be, adversely affected by conditions in the U.S.
financial markets and economic conditions generally.
   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




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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 brands 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




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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.
  Several of our landlords and lenders have required Mr. Lowries continued management role with our
Company in order to avoid a default or acceleration of our obligations under certain of our leases
or loan agreements.
  
    
    election of our directors;
 
    
    amendment of our organizational documents;
 
    
    the Going Private Transaction 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




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Our industry is viewed negatively by many for moral, religious, womens rights, and other reasons,
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 have 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.
  Our directors and officers have limited liability and are entitled to indemnification that could
encourage derivative lawsuits and require us to direct funds away from our business.
   13




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We could use the issuance of additional shares of our authorized stock to deter a change in
control.
  We have employment agreements with Troy Lowrie and Micheal Ocello that contain features that may
discourage a change of control.
     14




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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 our stockholders to trade our stock.
  In the event the make-up of our Board 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.
    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.
  15




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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.
    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.
  16




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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;
 
    
    the Going Private Transaction and any public announcements related thereto or any other
transaction;
 
    
    investor perception of us and the industry in which we operate;
 
    
    changes in earnings estimates or buy/sell recommendations by the analyst;
 
    
    general financial and other market conditions; and
 
    
    domestic and international economic conditions.
  Other Risk Factors May Adversely Affect Our Financial Performance.
  
 Item 1B. Unresolved Staff Comments
  
 Item 2. Properties
    17




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Name/Club Ownership
    
    
    Lease InformationPTs® BrooklynPlatinum of Illinois, Inc.Acq. Date: 5/1/02Location: Brooklyn, ILSq. Ft.: 9,000Building owned by VCG: Yes
    
    
    An Illinois corporation and
wholly-owned subsidiary of VCG.PTs® ShowclubIndy Restaurant Concepts, Inc.Acq. Date: 6/30/02Location: Indianapolis, INSq. Ft.: 9,200Building 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 NudeVCG Restaurants Denver, Inc.Acq. Date: 6/30/04Location: Denver, COSq. Ft.: 8,000Building 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 regular lease term expired in January 2010 but the Company exercised a five year extension option and
 the lease now will expire in January 2015. The base rent for each subsequent lease year during the option
 period commencing February 2010 and every February 1st will increase by the percentage increase in the
Consumer Price Index (CPI) for the month of February immediately preceding the adjustment date, and
the CPI for the month of February for the year preceding the adjustment date.The Penthouse Club®Glendale Restaurant Concepts, LPAcq. Date: 6/30/04Location: Glendale, COSq. Ft.: 9,600Building 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 Management LLLP, controlled by our Chairman of the Board and CEO, Troy Lowrie,
currently for $13,500 per month. The lease term expires September 2014 and has three options to
extend that expire September 2029. The base rent adjusts every five years. The rent from years one to
five was $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.PTs® Showclub AppaloosaVCG CO Springs, Inc.Acq. Date: 10/2/06Location: Colorado Springs, COSq. Ft.: 9,500Building 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 October 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, LLCAcq. Date: 10/8/04Location: Denver, COSq. Ft.: 33,000Building 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
$45,000 per month. The lease term expires 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 was $40,000 per
 month, years six to ten is $45,000 per month, years eleven to fifteen (option 1) is $50,000 per month,
years sixteen to twenty (option 2) is $55,000 per month, and years twenty-one to twenty-five (option 3)
is $60,000 per month.PTs® Show ClubDenver Restaurant Concepts, LPAcq. Date: 12/28/06Location: Denver, COSq. Ft.: 20,720Building owned by VCG: No
    
    
    A Colorado limited
partnership and 98% owned subsidiary of VCG. The building is leased from Lowrie Management LLLP,
 controlled by our Chairman of the Board and CEO, Troy Lowrie, currently for $17,500 per month. This
 square footage includes nightclub, office and storage space. The lease term expires December 2014,
 and has three options to extend that expire December 2029. The base rent adjusts every five years.
 The rent from years one to five was $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 per month.
 18




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RoxysRCC LPAcq. Date: 1/18/07Location: Brooklyn, ILSq. Ft.: 4,400Building 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 January 2017 and has two options to extend that expire January 2027.
 The base rent never changes, but the rent amount fluctuates monthly based on sales.PTs® ShowclubKentucky Restaurant Concepts, Inc.Acq. Date: 1/2/07Location: Louisville, KYSq. Ft.: 23,000Building owned by VCG: No
    
    
    A Kentucky corporation and
 100% owned subsidiary of VCG. The building is leased from Lowrie Management LLLP, controlled by our Chairman
of the Board and CEO, Troy Lowrie, currently for $7,500 per month. The lease term expires December 2016
and has three five year options to extend that expire December 2031. 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 per month.PTs® ShowclubCardinal Management LPAcq. Date: 2/5/07Location: Centreville, ILSq. Ft.: 5,700Building 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 January 2017 and has two options to extend that expire January 2027.
 The base rent never changes, but the rent amount fluctuates monthly based on sales.PTs® Sports CabaretMRC LPAcq. Date: 2/9/07Location: Sauget, ILSq. Ft.: 9,700Building 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 February 2017 and has two options to extend that expire
February 2027. The base rent never changes but the rent amount fluctuates monthly based on sales.The Penthouse Club®IRC LPAcq. Date: 2/7/07Location: Sauget, ILSq. Ft.: 19,300Building 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 March 2017 and has two options to extend that expire
March 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: 4/16/07Location: Raleigh, NCSq. Ft.: 21,200Building 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 2062. The base rent adjusts every five years by $250 per month after January 2017 with a
 maximum of $8,250 per month. The Company also has a separate lease for the parking premises currently for
$20,750 per month. This lease expires January 2012 and has ten consecutive renewal terms of five years
each that expire on January 2062. The base rent adjusts every year by $500 per month with a maximum of
$45,750 per month.Schieks Palace RoyaleClassic Affairs, Inc.Acq. Date: 5/30/07Location: Minneapolis, MNSq. Ft.: 23,000Building owned by VCG: No
    
    
    A 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 June 2012 and has three five year options
to extend that expire June 2027. The base rent adjusts every five years. The rent from 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. On March 22, 2011,
The Company signed an Asset Purchase Agreement to sell (see Note 15 of the Notes to the Consolidated Financial
 Statements under Subsequent Events.PTs® ShowclubKenkev II, Inc.Acq. Date: 9/14/07Location: Portland, MESq. Ft.: 13,000Building owned by VCG: No
    
    
    A Maine corporation and
wholly-owned subsidiary of VCG. The building is leased from an unaffiliated third party currently for $16,118 per month.
 The lease term expires September 2032 and has two options to extend that expire September 2042.
The base rent adjusts every year by 3% after the first year of the lease.
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PTs® ShowclubKenja II, Inc.Acq. Date: 10/29/07Location: Miami, FLSq. Ft.: 7,600Building owned by VCG: No
    
    
    A Florida corporation and
wholly-owned subsidiary of VCG. The building is leased from an unaffiliated third party
 currently for $10,927 per month. The lease term expires October 2032 and has two options to
extend that expire October 2042. The base rent adjusts every year by 3% after the first year of the lease.La Boheme Gentlemens ClubStout Restaurant Concepts, Inc.Acq. Date: 12/21/07Location: Denver, COSq. Ft.: 6,200Building 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 August 2016. The rent from years one to three was $12,000 per month, years
four to six was $15,000 per month, years seven to nine is $21,000 per month, years ten to eleven is $20,000 per month,
 and years twelve to fifteen is $21,000 per month.Jaguars Gold ClubManana Entertainment, Inc.Acq. Date: 4/14/08Location: Dallas, TXSq. Ft.: 12,500Building owned by VCG: Yes
    
    
    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 April 2013 and
has four five year options to extend that expire April 2033. The base rent adjusts every option period
by 10% over the prior terms rental obligation.Imperial Showgirls Gentlemens ClubVCG-IS, LLCAcq. Date: 7/28/08Location: Anaheim, CASq. Ft.: 8,100Building owned by VCG: No
    
    
    A California corporation and
wholly-owned subsidiary of VCG. The building is leased from an unaffiliated third party currently for $10,000 per
month. The regular lease term expired August 2010. The company exercised the first option and the current
option period will expire in April 2015. There are four remaining five-year options expiring in 2035.
The base rent adjusts by $1,000 every option period.
 
 Item 3. Legal Proceedings
  Acquisition Indemnification Claim and Litigation
  th
  20




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Texas Patron Tax Litigation
    DOL Audit (PTs Showclub)
  Texas Sales Tax Audit
    21




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Litigation Associated with the Going Private Transaction
      Cohen v. Grusin, et. al. Doyle v. Lowrie, et. al.
 
    
    the termination fee payable by the Company to Family Dog,
in the event that the Company terminates the Merger
Agreement to enter into a Company Acquisition Agreement (as
defined in the Merger Agreement) involving a Superior
Acquisition Proposal (as defined in the Merger Agreement)
from certain parties described in the Merger Agreement,
will be reduced from $600,000 to $100,000;
    
    the terms of the stipulation of settlement will include,
among other things and subject to certain terms and
conditions, a full, final, and complete release of any and
all known and unknown claims, liabilities, or damages, that
were brought or could have been brought in the State Action
and the Federal Action, or that relate to the Merger
Agreement and the merger, including filings with the SEC
relating to the Merger Agreement and the merger;
 22




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
    
    the Company, or its successors, will pay any fees and
expenses of the plaintiffs in such actions awarded by the
court up to $67,500, following final approval from the
state court and petition by the plaintiffs for an award of
fees and expenses; and
    
    the Federal Action will be dismissed with prejudice after
certification of the class and approval of the stipulation
of settlement in the state court action.
  Johnson Litigation
  ®
  Louisville Ordinance Litigation
 ®
  
 Item 4. (Remove and Reserved)
 23




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PART II
 
 Item 5. Market For Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 Market Information
   2010
    
    2009Three Months Ended
    
    High
    
    Low
    
    High
    
    LowMarch 31
    
    $
    2.92
    
    
    $
    2.05
    
    
    $
    1.85
    
    
    $
    1.27June 30
    
    $
    2.38
    
    
    $
    1.53
    
    
    $
    2.79
    
    
    $
    1.38September 30
    
    $
    2.19
    
    
    $
    1.56
    
    
    $
    2.30
    
    
    $
    1.90December 31
    
    $
    2.22
    
    
    $
    1.78
    
    
    $
    2.31
    
    
    $
    1.62
  Holders
  Dividends
  Recent Sales of Unregistered Securities
  Transfer Agent and Registrar
  Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  24




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25




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Item 6. Selected Financial Data
   Year Ended December 31,2010
    
    2009
    
    2008
    
    2007
    
    2006Statements of Income Data:
    
    
    
    
    
    
    
    
    
    
    
    
    (Restated)Total Revenue
    $
    55,269,961
    
    (6)
    $
    53,201,905
    
    
    $
    55,563,227
    
    (3)
    $
    38,743,730
    
    (2)
    $
    16,114,581
    
    (1)Income (loss) From Continuing Operations, net of Income
Taxes

    $
    2,004,049
    
    
    $
    1,081,676
    
    (5)
    $
    (28,799,586)
    
    (4)
    $
    5,403,274
    
    
    $
    1,619,687Basic Income (loss) from continuing operations per
common share attributable to VCG stockholders

    $
    0.12
    
    
    $
    0.06
    
    
    $
    (1.61
    )
    
    $
    0.33
    
    
    $
    0.18Fully diluted income (loss) from continuing operations per
common share attributable to VCG stockholders
    $
    0.12
    
    
    $
    0.06
    
    
    $
    (1.59
    )
    
    $
    0.32
    
    
    $
    0.17Weighted average shares outstanding
    
    16,805,951
    
    
    
    17,541,376
    
    
    
    17,925,132
    
    
    
    16,623,213
    
    
    
    9,128,985Fully diluted weighted average shares outstanding
    
    16,805,951
    
    
    
    17,541,376
    
    
    
    18,146,949
    
    
    
    17,012,983
    
    
    
    9,338,570Balance Sheet Data (At End of Period):Total Assets
    $
    66,887,112
    
    
    $
    71,151,173
    
    
    $
    75,626,043
    
    
    $
    103,719,255
    
    
    $
    35,079,698Current portion of notes and other obligations
    $
    10,350,988
    
    
    $
    3,867,344
    
    
    $
    3,636,000
    
    
    $
    9,343,029
    
    
    $
    2,761,197Long-term notes and other obligations, net of current
portion
    $
    14,571,722
    
    
    $
    26,880,039
    
    
    $
    32,840,320
    
    
    $
    21,505,497
    
    
    $
    17,230,560Total Stockholders Equity
    $
    28,867,983
    
    
    $
    28,482,530
    
    
    $
    28,386,742
    
    
    $
    53,987,842
    
    
    $
    12,795,623
 
 (1)
    
    Fiscal year 2006 reflects the acquisitions of two adult nightclubs in Colorado.(2)
    
    Fiscal year 2007 reflects the sale of the membership interests in Epicurean Enterprises, LLC,
which operated a nightclub in Arizona, and the acquisitions of 11 adult nightclubs in
Minnesota (1), Illinois (4), Colorado (1), Maine (1), Florida (1) North Carolina (1), Kentucky
(1), and Texas (1).(3)
    
    Fiscal year 2008 reflects the acquisitions of one adult nightclub in California and one in
Texas.(4)
    
    Fiscal year 2008 includes non-cash impairment charges for goodwill, licenses, trade names and
other intangible assets for a total amount of approximately $43.0 million with Golden
Productions JGC Fort Worth LLC (Golden) taken out of the numbers. In addition, VCG
recognized a non-cash impairment of real estate of approximately $1.9 million.(5)
    
    Fiscal year 2009 includes non-cash impairment charges for goodwill, licenses, trade names and
other intangible assets for a total amount of approximately $2.0 million. In addition, VCG
recognized a non-cash impairment of real estate of approximately $268,000. This also reflects
Golden taken out of the numbers.(6)
    
    Fiscal year 2010 reflects the sale of Golden. Discontinued Operations
  26




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
  Critical Accounting Estimates
   Assignment of Fair Values upon Acquisition of Licenses, Goodwill and Other Intangibles
 Business Combinations Intangibles -
Goodwill and Other
   Testing for Impairment of Intangible Assets
  27




---



##### Table of Contents



Impairment of Real Estate
 Property Plant and Equipment
 Stock Options
    Legal and Other Contingencies
  28




---



##### Table of Contents



DOL Audit
 ®
  Self-Insured Health Insurance
  Income Taxes
     29




---



##### Table of Contents



Recently Issued Accounting Pronouncements
  Fair Value Measurements and Disclosures (Topic
820) Improving Disclosures about Fair Value Measurements.
 Consolidation (Topic 810)  Accounting and
Reporting for Decreases in Ownership Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51
 Consolidation (Topic 810)  Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities. Accounting for Transfers of Financial Assets  an
amendment of FASB Statement No. 140
  Results of Operations
 Year Ended December 31, 2010 Compared to Year Ended December 31, 2009
 Revenues
   30




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##### Table of Contents



Cost of Goods Sold
   For the Years EndedDecember 31,2010
    
    2009Total
    
    A Clubs
    
    All Other Clubs
    
    Total
    
    A Clubs
    
    All Other ClubsSales of alcoholic beverages
    
    $
    21,009,283
    
    
    $
    8,221,697
    
    
    $
    12,787,586
    
    
    $
    22,808,436
    
    
    $
    9,007,272
    
    
    $
    13,801,164Sales of food and merchandise
    
    
    2,006,147
    
    
    
    1,063,242
    
    
    
    942,905
    
    
    
    1,844,738
    
    
    
    985,511
    
    
    
    859,227Total
    
    $
    23,015,430
    
    
    $
    9,284,939
    
    
    $
    13,730,491
    
    
    $
    24,653,174
    
    
    $
    9,992,783
    
    
    $
    14,660,391Cost of goods sold
    
    $
    5,999,135
    
    
    $
    2,637,439
    
    
    $
    3,361,696
    
    
    $
    5,877,337
    
    
    $
    2,484,045
    
    
    $
    3,393,292Cost of goods sold percentage
    
    
    26.1%
    
    
    
    28.4%
    
    
    
    24.5%
    
    
    
    23.8%
    
    
    
    24.9%
    
    
    
    23.1%
  Salaries and Wages
   For the Years EndedDecember 31,2010
    
    2009Salaries and wages
    
    $
    15,615,313
    
    
    $
    13,874,720As a percentage of revenue
    
    
    28.3
    %
    
    
    26.1
    %
 Other General and Administrative Expenses
 Taxes, Permits, and Licenses
  31




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##### Table of Contents



For the Years EndedDecember 31,2010
    
    2009Employment Taxes
    
    $
    1,901,069
    
    
    $
    2,187,151Business License
    
    
    392,392
    
    
    
    250,225Property Taxes
    
    
    155,816
    
    
    
    167,643Texas Patron Tax Expense
    
    
    623,491
    
    
    
    645,157$
    3,072,768
    
    
    $
    3,250,176
     Charge Card and Bank Fees
  Rent
 Accounting
Codification 840-10 and 840-20
 Legal Fees
  32




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##### Table of Contents



Other Professional Fees
  Advisory Fees Related to Change in Control Proposals
  Advertising and Marketing
  Insurance
  Repairs and Maintenance
  Other Expenses
  Depreciation and Amortization
  33




---



##### Table of Contents



Interest Expense
  Gain (Loss) on Sale of Assets
  Income Taxes
    Liquidity
     Working Capital
  34




---



##### Table of Contents



Capital Resources
     35




---



##### Table of Contents



For The Year EndedDecember 31,2010
    
    2009Net Income attributable to VCG stockholders
    
    $
    2,048,049
    
    
    $
    735,691Add back:Depreciation
    
    
    1,737,248
    
    
    
    1,695,277Amortization of non-compete agreements
    
    
    14,518
    
    
    
    17,035Amortization of leasehold rights and liabilities, net
    
    
    (178,102
    )
    
    
    (212,342
    )Interest expense
    
    
    2,818,010
    
    
    
    3,456,616Total income tax expense
    
    
    944,345
    
    
    
    339,000EBITDA before non-cash impairment charges
    
    $
    7,384,068
    
    
    $
    6,031,277Add back:Total non-cash impairment charges
    
    
    -
    
    
    
    2,026,000Total excluding non-cash impairment charges
    
    $
    7,384,068
    
    
    $
    8,057,277Total revenue (excluding discontinued operations)
    
    $
    55,269,961
    
    
    $
    53,201,905EBITDA as a percentage of revenue
    
    
    13.4%
    
    
    
    15.1%
  For The Year EndedDecember 31,2010
    
    2009EBITDA (excluding non-cash impairment charges)
    
    $
    7,384,068
    
    
    $
    8,057,277Less:Interest expense
    
    
    2,818,010
    
    
    
    3,456,616Current income tax
    
    
    179,803
    
    
    
    (126,896
    )Capital expenditures
    
    
    1,200,772
    
    
    
    1,454,478Free Cash Flow
    
    $
    3,185,483
    
    
    $
    3,273,079
 Contractual Obligations and Commercial Commitments
  Total
    
    2011
    
    2012
    
    2013
    
    2014
    
    2015
    
    ThereafterLong-term debt 
and capital leases
    
    $
    24,922,709
    
    
    $
    10,350,988
    
    
    $
    10,293,290
    
    
    $
    2,848,352
    
    
    $
    1,278,040
    
    
    $
    40,993
    
    
    $
    111,046Interest payments
    
    
    3,399,479
    
    
    
    2,150,173
    
    
    
    920,328
    
    
    
    243,138
    
    
    
    51,185
    
    
    
    12,842
    
    
    
    21,813Operating leases
    
    
    98,265,853
    
    
    
    3,659,037
    
    
    
    3,737,601
    
    
    
    3,792,958
    
    
    
    3,840,618
    
    
    
    3,810,090
    
    
    
    79,425,549
 Potential Sale of the Company
  36




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##### Table of Contents



Item 7A. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 8. Financial Statements and Supplementary Data.
 37




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
          38




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
           39




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##### Table of Contents



VCG Holding Corp. 
 Consolidated Balance Sheets
 December 31,2010

    
    2009AssetsCurrent AssetsCash
    
    $
    2,653,878
    
    
    $
    2,677,440Other receivables
    
    
    198,035
    
    
    
    254,333Income taxes receivable
    
    
    61,935
    
    
    
    594,720Inventories
    
    
    855,419
    
    
    
    920,192Prepaid expenses
    
    
    456,655
    
    
    
    354,730Current portion of deferred income tax asset
    
    
    837,628
    
    
    
    76,920Assets of business held for sale
    
    
    -
    
    
    
    2,519,962Total Current Assets
    
    
    5,063,550
    
    
    
    7,398,297Property and equipment, net
    
    
    20,742,386
    
    
    
    21,016,179Licenses, net
    
    
    34,103,622
    
    
    
    34,252,018Goodwill, net
    
    
    2,279,045
    
    
    
    2,279,045Trade names
    
    
    452,000
    
    
    
    452,000Favorable lease rights, net
    
    
    1,576,100
    
    
    
    1,647,968Non-compete agreements, net
    
    
    8,000
    
    
    
    22,000Other long-term assets
    
    
    197,592
    
    
    
    241,993Non-current portion of deferred income tax asset
    
    
    2,464,817
    
    
    
    3,841,673Total Assets
    
    $
    66,887,112
    
    
    $
    71,151,173Liabilities and EquityCurrent LiabilitiesAccounts payable  trade
    
    $
    1,362,430
    
    
    $
    1,750,940Accrued expenses
    
    
    4,576,654
    
    
    
    1,930,049Income taxes payable
    
    
    27,395
    
    
    
    67,917Deferred revenue
    
    
    139,851
    
    
    
    110,010Current portion of capitalized lease
    
    
    16,664
    
    
    
    -Current portion of long-term debt
    
    
    10,258,057
    
    
    
    3,805,277Current portion of long-term debt, related party
    
    
    76,267
    
    
    
    62,067Current portion of unfavorable lease rights
    
    
    217,116
    
    
    
    217,116Liabilities of business held for sale
    
    
    -
    
    
    
    1,488,157Total Current Liabilities
    
    
    16,674,434
    
    
    
    9,431,533Long-Term LiabilitiesDeferred rent
    
    
    2,154,158
    
    
    
    1,521,140Unfavorable lease rights, net of current portion
    
    
    4,618,815
    
    
    
    4,835,931Capital lease, net of current portion
    
    
    87,845
    
    
    
    -Long-term debt, net of current portion
    
    
    7,439,373
    
    
    
    19,751,021Long-term debt, related party, net of current portion
    
    
    7,044,504
    
    
    
    7,129,018Total Long-Term Liabilities
    
    
    21,344,695
    
    
    
    33,237,110Commitments and Contingent Liabilities (Note 12)EquityCommon stock $.0001 par value; 50,000,000 shares authorized;16,292,071 (2010)
and 17,310,723 (2009) shares issued and outstanding
    
    
    1,629
    
    
    
    1,731Additional paid-in capital
    
    
    50,275,118
    
    
    
    51,932,082Accumulated deficit
    
    
    (24,948,814
    )
    
    
    (26,996,863
    )Total VCG Stockholders Equity
    
    
    25,327,933
    
    
    
    24,936,950Noncontrolling interests in consolidated partnerships
    
    
    3,540,050
    
    
    
    3,545,580Total Equity
    
    
    28,867,983
    
    
    
    28,482,530Total Liabilities and Equity
    
    $
    66,887,112
    
    
    $
    71,151,173
  40




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##### Table of Contents



VCG Holding Corp. 
 Consolidated Statements of Income  For the years ended
 December 31,2010

    
    2009RevenueSales of alcoholic beverages
    
    $
    21,009,283
    
    
    $
    22,808,436Sales of food and merchandise
    
    
    2,006,147
    
    
    
    1,844,738Service revenue
    
    
    29,176,688
    
    
    
    25,560,047Other income
    
    
    3,077,843
    
    
    
    2,988,684Total Revenue
    
    
    55,269,961
    
    
    
    53,201,905Operating ExpensesCost of goods sold
    
    
    5,999,135
    
    
    
    5,877,337Salaries and wages
    
    
    15,615,313
    
    
    
    13,874,720Acquisition indemnification claim
    
    
    2,134,866
    
    
    
    -Other general and administrative:Taxes, permits and licenses
    
    
    3,072,768
    
    
    
    3,250,176Charge card and bank fees
    
    
    736,566
    
    
    
    787,087Rent
    
    
    5,855,941
    
    
    
    5,611,343Legal fees
    
    
    1,440,466
    
    
    
    1,456,463Other professional fees
    
    
    2,385,983
    
    
    
    2,614,981Advisory fees related to change in control proposals
    
    
    407,737
    
    
    
    953,517Advertising and marketing
    
    
    2,772,839
    
    
    
    2,627,948Insurance
    
    
    1,774,048
    
    
    
    1,595,043Utilities
    
    
    982,760
    
    
    
    971,962Repairs and maintenance
    
    
    1,105,656
    
    
    
    1,229,399Other
    
    
    3,736,109
    
    
    
    3,824,695Impairment of building and land
    
    
    -
    
    
    
    268,000Impairment of indefinite-lived intangible assets
    
    
    -
    
    
    
    1,741,000Impairment of goodwill
    
    
    -
    
    
    
    17,000Depreciation and amortization
    
    
    1,685,610
    
    
    
    1,593,655Total Operating Expenses
    
    
    49,705,797
    
    
    
    48,294,326Income from Operations
    
    
    5,564,164
    
    
    
    4,907,579Other Income (Expenses)Interest expense
    
    
    (2,098,431
    )
    
    
    (2,746,503
    )Interest expense, related party
    
    
    (719,579
    )
    
    
    (710,113
    )Interest income
    
    
    6,927
    
    
    
    7,382Gain (loss) on sale of assets
    
    
    968
    
    
    
    (74,669
    )Total Other Expenses
    
    
    (2,810,115
    )
    
    
    (3,523,903
    )Income Before Income Taxes
    
    
    2,754,049
    
    
    
    1,383,676Income tax expense (benefit)  current
    
    
    171,454
    
    
    
    (133,808
    )Income tax expense  deferred
    
    
    578,546
    
    
    
    435,808Total Income Tax Expense
    
    
    750,000
    
    
    
    302,000Income From Continuing Operations, net of Income Taxes
    
    
    2,004,049
    
    
    
    1,081,676Income From Discontinued Operations, net of Income Taxes
    
    
    520,389
    
    
    
    130,732Profit of
Consolidated and Affiliated Companies
    
    
    2,524,438
    
    
    
    1,212,408Net Income Attributable to Noncontrolling Interests
    
    
    (476,389
    )
    
    
    (476,717
    )Net Income Attributable to VCG
    
    $
    2,048,049
    
    
    $
    735,691Earnings Per ShareContinuing Operations:Basic and fully diluted income per share attributable to VCGs stockholders
    
    $
    0.09
    
    
    $
    0.03Discontinued Operations:Basic and fully diluted earnings per share attributable to VCGs stockholders
    
    $
    0.03
    
    
    $
    0.01Net Income Attributable to VCG Stockholders:
    
    $
    0.12
    
    
    $
    0.04Basic and fully diluted weighted average shares outstanding
    
    
    16,805,951
    
    
    
    17,541,376
  41




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##### Table of Contents



VCG Holding Corp. 
 Consolidated Statements of Equity  For the years ended December 31, 2010 and 2009
 NoncontrollingAdditional

    
    
    
    
    
    Interests in

    
    TotalCommon Stock

    
    Paid-in

    
    Accumulated

    
    Consolidated

    
    StockholdersShares

    
    Amount

    
    Capital

    
    Deficit

    
    Partnerships

    
    EquityBalance, December 31, 2008
    
    
    17,755,378
    
    
    $
    1,775
    
    
    $
    52,557,047
    
    
    $
    (27,732,554
    )
    
    $
    3,560,474
    
    
    $
    28,386,742Amortization of warrants for services
    
    
    -
    
    
    
    -
    
    
    
    102,288
    
    
    
    -
    
    
    
    -
    
    
    
    102,288Stock-based compensation
    
    
    -
    
    
    
    -
    
    
    
    142,095
    
    
    
    -
    
    
    
    -
    
    
    
    142,095Repurchase of common stock
    
    
    (444,655
    )
    
    
    (44
    )
    
    
    (869,348
    )
    
    
    -
    
    
    
    -
    
    
    
    (869,392
    )Net income for the year ended December 31, 2009
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    735,691
    
    
    
    476,717
    
    
    
    1,212,408Distributions paid to noncontrolling interests
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    
    
    
    
    (491,611
    )
    
    
    (491,611
    )Balances, December 31, 2009
    
    
    17,310,723
    
    
    $
    1,731
    
    
    $
    51,932,082
    
    
    $
    (26,996,863
    )
    
    $
    3,545,580
    
    
    $
    28,482,530Amortization of stock-based compensation
    
    
    -
    
    
    
    -
    
    
    
    72,922
    
    
    
    -
    
    
    
    -
    
    
    
    72,922Repurchase of common stock
    
    
    (551,155
    )
    
    
    (55
    )
    
    
    (935,188
    )
    
    
    -
    
    
    
    -
    
    
    
    (935,243
    )Common stock received as consideration for club sale
    
    
    (467,497
    )
    
    
    (47
    )
    
    
    (794,698
    )
    
    
    -
    
    
    
    -
    
    
    
    (794,745
    )Net income for the year ended December 31, 2010
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    2,048,049
    
    
    
    476,389
    
    
    
    2,524,438Distributions paid to noncontrolling interests
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    (481,919
    )
    
    
    (481,919
    )Balances, December 31, 2010
    
    
    16,292,071
    
    
    $
    1,629
    
    
    $
    50,275,118
    
    
    $
    (24,948,814
    )
    
    $
    3,540,050
    
    
    $
    28,867,983
  42




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##### Table of Contents



VCG Holding Corp. 
 Consolidated Statements of Cash Flows  For the years ended
 December 31,2010

    
    2009Operating ActivitiesProfit of consolidated and affiliated companies
    
    $
    2,524,438
    
    
    $
    1,212,408Adjustments to reconcile profit of consolidated and affiliated companies to
net cash provided by operating activities:Impairment of building and land
    
    
    -
    
    
    
    268,000Impairment of goodwill
    
    
    -
    
    
    
    17,000Impairment of indefinite lived intangible assets
    
    
    -
    
    
    
    1,741,000Depreciation
    
    
    1,737,248
    
    
    
    1,695,277Amortization of non-compete agreements
    
    
    14,518
    
    
    
    17,035Amortization of leasehold rights and liabilities, net
    
    
    (178,102
    )
    
    
    (212,342
    )Amortization of loan fees
    
    
    65,661
    
    
    
    216,205Stock-based compensation expense
    
    
    72,922
    
    
    
    244,383Deferred income taxes
    
    
    764,543
    
    
    
    465,896(Gain) Loss on disposition of assets
    
    
    (817,002
    )
    
    
    74,669Accrued interest added to long-term debt
    
    
    160,605
    
    
    
    243,901Write-off uncollectible deposits
    
    
    -
    
    
    
    7,151Changes in operating assets and liabilities:Income taxes and other receivables
    
    
    589,082
    
    
    
    (287,894
    )Inventories
    
    
    60,322
    
    
    
    22,767Prepaid expenses
    
    
    (101,925
    )
    
    
    (72,245
    )Accounts payable  trade and accrued expenses
    
    
    2,258,095
    
    
    
    576,380Income taxes payable
    
    
    (40,522
    )
    
    
    67,917Deferred revenue
    
    
    9,841
    
    
    
    555Deferred rent
    
    
    661,969
    
    
    
    783,165Net cash provided by operating activities
    
    
    7,781,693
    
    
    
    7,081,228Investing ActivitiesProceeds from divestiture of a club
    
    
    1,000,000
    
    
    
    -Additions to property and equipment
    
    
    (1,200,772
    )
    
    
    (1,454,478
    )Deposits
    
    
    18,740
    
    
    
    (19,444
    )Proceeds from sale of assets
    
    
    4,200
    
    
    
    238,241Net cash used in investing activities
    
    
    (177,832
    )
    
    
    (1,235,681
    )Financing ActivitiesProceeds from debt
    
    
    100,000
    
    
    
    1,212,115Payments on debt
    
    
    (5,757,891
    )
    
    
    (4,152,700
    )Proceeds from related party debt
    
    
    200,000
    
    
    
    25,099Payments on related party debt
    
    
    (355,958
    )
    
    
    (912,843
    )Net borrowing (payments) on revolving line of credit
    
    
    (370,000
    )
    
    
    (90,000
    )Payment on capitalized leases
    
    
    (6,412
    )
    
    
    (19,111
    )Loan fees paid
    
    
    (40,000
    )
    
    
    (78,724
    )Repurchase of stock
    
    
    (935,243
    )
    
    
    (869,392
    )Distributions to noncontrolling interests
    
    
    (481,919
    )
    
    
    (491,611
    )Net cash used in financing activities
    
    
    (7,647,423
    )
    
    
    (5,377,167
    )Net increase (decrease) in cash
    
    
    (43,562
    )
    
    
    468,380Cash beginning of period
    
    
    2,677,440
    
    
    
    2,209,060Cash end of period
    
    $
    2,633,878
    
    
    $
    2,677,440Supplemental cash flow information:Income taxes paid in cash
    
    $
    319,788
    
    
    $
    225,972Interest paid in cash
    
    $
    2,529,453
    
    
    $
    3,067,195Non-cash divestiture activities:Common stock received as partial consideration for Golden
    
    $
    794,745Fair value of liabilities transferred to buyer
    
    
    
    
    
    $
    1,771,854Issuance of note receivable to buyer
    
    
    
    
    
    $
    322,963Non-cash investing and financing activities:Acquisition of vehicles through capital leases and loans
    
    $
    204,984
  43




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##### Table of Contents



VCG Holding Corp.

Notes to Consolidated Financial Statements
 Index
 Note1.
    
    Description of Business
    
    452.
    
    Summary of Significant Accounting Policies
    
    453.
    
    Inventories
    
    494.
    
    Discontinued Operations
    
    505.
    
    Property and Equipment
    
    516.
    
    Goodwill and Other Intangible Assets
    
    517.
    
    Other Long-Term Assets
    
    528.
    
    Accrued Expenses
    
    529.
    
    Long-Term Debt
    
    5310.
    
    Income Taxes
    
    5511.
    
    Stockholders Equity
    
    5612.
    
    Commitments and Contingencies
    
    5813.
    
    Fair Value Disclosure
    
    6414.
    
    Potential Sale of the Company
    
    6515.
    
    Subsequent Events
    
    65
 44




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements
 
 1) Description of Business
  
 2) Summary of Significant Accounting Policies
 Principles of Consolidation
  Use of Estimates
  Cash
  Other Receivables
  Income Tax Receivable
  Inventories
  Prepaid Expenses
  45




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##### 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 termVehicles
    
    5Computers and software
    
    5Equipment
    
    3  10Furniture and Fixtures
    
    3  7Signs
    
    10
   Goodwill
 Intangibles 
Goodwill and Other
 Intangible Assets
   Favorable Lease Rights and Unfavorable Lease Rights
  Deferred Revenue
  46




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 Deferred Rent
 Leases
 Revenue Recognition
   Legal Fees
  Advertising Costs
  Stock-Based Compensation
 Compensation-Stock Compensation ,
 Income Taxes
 Income
Taxes
   47




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 Earnings per Share
 Earnings per Share,
  Years Ended December 31,2010
    
    2009Net income attributable to VCG
    
    $
    2,048,049
    
    
    $
    735,691Basic weighted average shares outstanding
    
    
    16,805,951
    
    
    
    17,541,376Effect of dilutive securities:Stock options and warrants
    
    
    -
    
    
    
    -Basic and dilutive weighted average shares outstanding
    
    
    16,805,951
    
    
    
    17,541,376Basic and dilutive earnings per share
    
    $
    0.12
    
    
    $
    0.04
  Reclassifications
  Recently Issued Accounting Pronouncements
  Fair Value Measurements and Disclosures (Topic
820) Improving Disclosures about Fair Value Measurements.
 48




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 Consolidation (Topic 810)  Accounting and
Reporting for Decreases in Ownership Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51
 Consolidation (Topic 810)  Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities. Accounting for Transfers of Financial Assets  an
amendment of FASB Statement No. 140
  Consolidation of Variable Interest Entities
  Consolidation
 
    
    the Limited Partners have very limited rights with respect to the management and control
of 4th Street;
    
    the Company is the General Partner; and therefore, has control of the partnership;
    
    the Company is the Primary Beneficiary;
    
    the Company has determined that 4th Street is a variable interest entity; and
    
    therefore, the Company has consolidated 4th Streets assets and included its equity as
noncontrolling interest on the consolidated balance sheet.
 Real Estate Sales
 
 3) Inventories
  December 312010
    
    2009Food and beverage
    
    $
    754,593
    
    
    $
    820,534Tobacco and merchandise
    
    
    100,826
    
    
    
    99,658Total
    
    $
    855,419
    
    
    $
    920,192
 49




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 
 4) Discontinued Operations
     Years ended December 31,2010
    
    2009Revenue
    
    $
    843,139
    
    
    $
    1,838,129Cost of goods sold
    
    
    18,815
    
    
    
    43,717Salaries and wages
    
    
    277,352
    
    
    
    457,599Other general and administrative expenses
    
    
    582,117
    
    
    
    1,050,425Depreciation and amortization
    
    
    66,156
    
    
    
    118,656Total Operating Expenses
    
    
    944,440
    
    
    
    1,670,397Gain on sale of business
    
    
    816,035
    
    
    
    -Income From Discontinued Operations Before Income Taxes
    
    
    714,734
    
    
    
    167,732Income tax expense
    
    
    194,345
    
    
    
    37,000Income From Discontinued Operations, Net of Income Taxes
    
    $
    520,389
    
    
    $
    130,732Assets and liabilities held for sale consist of the following:December 31, 2009Inventories
    
    $
    6,129Property and equipment, net
    
    
    1,929,935Non-compete agreement, net
    
    
    1,898Licenses, net
    
    
    582,000Assets of business held for sale
    
    $
    2,519,962Unfavorable lease rights, net
    
    $
    1,380,996Deferred rent
    
    
    107,161Liabilities of business held for sale
    
    $
    1,488,157
 50




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 
 5) Property and Equipment
  December 31,2010
    
    2009Land
    
    $
    500,000
    
    
    $
    500,000Buildings
    
    
    9,362,143
    
    
    
    9,362,143Leasehold improvements
    
    
    11,834,023
    
    
    
    11,021,103Equipment
    
    
    3,376,731
    
    
    
    3,082,474Vehicles
    
    
    479,039
    
    
    
    269,503Signs
    
    
    311,239
    
    
    
    308,819Furniture and fixtures
    
    
    2,020,869
    
    
    
    1,911,270Assets to be placed in service
    
    
    112,120
    
    
    
    168,24527,996,164
    
    
    
    26,623,557Less accumulated depreciation
    
    
    (7,253,778
    )
    
    
    (5,607,378
    )Property and equipment, net
    
    $
    20,742,386
    
    
    $
    21,016,179
   
 6) Goodwill and Other Intangible Assets
  December 31,2010

    
    2009Accumulated
    
    
    
    
    
    
    
    
    
    
    AccumulatedCost
    
    Amortization
    
    Net
    
    Cost
    
    Amortization
    
    NetAmortizable intangible assetsCovenant not to compete
    
    $
    56,694
    
    
    $
    (48,694
    )
    
    $
    8,000
    
    
    $
    56,694
    
    
    $
    (34,694
    )
    
    $
    22,000Favorable lease rights
    
    
    1,820,000
    
    
    
    (243,900
    )
    
    
    1,576,100
    
    
    
    1,820,000
    
    
    
    (172,032
    )
    
    
    1,647,968$
    1,876,694
    
    
    $
    (292,594
    )
    
    $
    1,584,100
    
    
    $
    1,876,694
    
    
    $
    (206,726
    )
    
    $
    1,669,968
   Year Ending December 31,2011
    
    $
    75,8682012
    
    
    75,4682013
    
    
    72,2682014
    
    
    71,8682015
    
    
    71,868Thereafter
    
    
    1,216,760$
    1,584,100
 51




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
  Goodwill
    
    Licenses
    
    Trade NamesBalance at
December 31, 2008 (net of accumulated impairment losses of $43,434,821)
    
    $
    2,453,122
    
    
    $
    35,831,189
    
    
    $
    619,000Component 2 amortization
    
    
    (157,077
    )
    
    
    (5,171
    )
    
    
    -2009 impairment charges
    
    
    (17,000
    )
    
    
    (1,574,000
    )
    
    
    (167,000
    )Balance at December 31, 2009
    
    
    2,279,045
    
    
    
    34,252,018
    
    
    
    452,000Component 2 amortization
    
    
    -
    
    
    
    (148,396
    )
    
    
    -Balance at December 31, 2010
    
    $
    2,279,045
    
    
    $
    34,103,622
    
    
    $
    452,000
   
 7) Other Long-Term Assets
  December 31,2010
    
    2009Loan fees, net
    
    $
    83,205
    
    
    $
    108,866Deposits  lease, utility, and taxes
    
    
    114,387
    
    
    
    133,127$
    197,592
    
    
    $
    241,993
 
 8) Accrued Expenses
  December 31,2010
    
    2009Payroll and related expenses
    
    $
    1,014,531
    
    
    $
    1,225,526Sales taxes
    
    
    822,643
    
    
    
    282,007Property taxes
    
    
    351,054
    
    
    
    319,773Legal and professional charges
    
    
    133,973
    
    
    
    31,344Interest
    
    
    35,549
    
    
    
    54,772Rent
    
    
    5,200
    
    
    
    16,627Indemnification claim and interest
    
    
    2,213,704
    
    
    
    -Total
    
    $
    4,576,654
    
    
    $
    1,930,049
 52




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 
 9) Long-Term Debt
  Related Party
 December 31,Description of Related Party Debt
    
    2010
    
    2009Note payable to Lowrie Management LLLP, interest at 10%, due monthly, principal due June 2012,
collateralized by general assets of Illinois Restaurant Concepts LP and Denver Restaurant Concepts LP,
plus the consent to the transfer of the adult permit and liquor license for both clubs upon default.
    
    $
    5,700,000
    
    
    $
    5,700,000Note payable to Lowrie Family Foundation, a corporation controlled by the Companys Chairman of the
Board and Chief Executive Officer, interest at 10%, interest accrued monthly to principal, but no
payments, due August 2013, unsecured.
    
    
    772,122
    
    
    
    698,934Note payable to the President and Chief Operating Officer with interest at 10%, due monthly, principal
due April 2012, unsecured. This note was prepaid in September 2010.
    
    
    -
    
    
    
    100,000Note payable to a board member with interest at 10%, due monthly, principal due November 2011,
unsecured.
    
    
    50,000
    
    
    
    50,000Note payable to the mother of the Chairman with interest at 10%, monthly principal and interest
payments of $4,900 due April 2014, unsecured.
    
    
    166,517
    
    
    
    170,000Note payable to the mother of the Chairman, with interest at 10%, monthly principal and interest
payments of $3,456, due December 2010, unsecured.
    
    
    -
    
    
    
    36,741Note payable to the mother of the Chairman, with interest at 10%, interest accrues monthly to principal,
but no payments, due December 2011, unsecured.
    
    
    22,049
    
    
    
    25,326Note payable to an affiliate of a current Board member with interest at 10%, due September 2012,
collateralized by a personal guarantee from Mr. Lowrie and Lowrie Management LLLP.
    
    
    410,083
    
    
    
    410,084Total Debt Due, Related Party
    
    $
    7,120,771
    
    
    $
    7,191,085Less Current Portion, Related Party
    
    
    (76,267
    )
    
    
    (62,067
    )Total Long-Term Debt, Related Party
    
    $
    7,044,504
    
    
    $
    7,129,018
  53




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 Third Party
 December 31,Description of Debt
    
    2010

    
    2009Promissory
note issued by the Company to Sunshine Mortgage, interest at 14% fixed, due monthly, periodic principal
with balance due December 2011, collateralized by the common stock of Kenja II, Inc., furniture, fixtures and
equipment of Kenja II, Inc., 238,500 shares of VCG common stock and a guarantee from Lowrie Management LLLP.
    
    $
    3,700,000
    
    
    $
    4,700,000Loan from Citywide Banks, interest at 7% fixed, monthly principal and interest payments of $76,865 due August
2014, collateralized with VCG Stock, a life insurance policy on Troy Lowrie and additional securities owned by Mr.
Lowrie.
    
    
    2,969,658
    
    
    
    3,654,865Note payable, interest at 8% fixed, monthly principal and interest payments, due July 2011, collateralized by assets of
VCG-IS, LLC.
    
    
    2,621,407
    
    
    
    2,915,386Loan from Amfirst Bank, interest at prime (6% floor) (6% at December 31, 2010) plus 1% due monthly, principal and
interest payments of $55,898 due November 2014, collateralized by certain security agreements with RCC L.P.,
Roxys Nightclub L.P., IRC L.P., Diamond Cabaret L.P., Platinum of Illinois, Inc., PTs Brooklyn, MRC L.P., PTs
Sports Cabaret L.P., Cardinal Management L.P., PTs Showclub L.P., VCG CO Springs, Inc., VCG Real Estate
Holdings, Inc., Glendale Restaurant Concepts LP, Glenarm Restaurant LLC, and the mortgage for 7946 Pendleton
Pike.
    
    
    2,332,599
    
    
    
    2,844,219Line of credit from Citywide Banks, interest at prime (6% at December 31, 2010) plus 0.5% (floor is 6%) due
monthly, principal due August 2012, collateralized by Company shares of common stock owned by Lowrie
Management LLLP, a life insurance policy on Troy Lowrie and additional securities owned by Mr. Lowrie.
    
    
    2,350,000
    
    
    
    2,720,000Notes payable to investors, interest at 11%, monthly interest payments, due January 2010, collateralized by the
general assets of the Company and a guarantee by Mr. Lowrie.
    
    
    -
    
    
    
    1,400,000Note payable, interest at 10% fixed, monthly interest payments, due November 2010, collateralized by the general
assets of the Company, the cash flow and 100% stock in Manana Entertainment, Inc.
    
    
    -
    
    
    
    1,086,529Notes payable, interest at 11% fixed, monthly interest payments, due on demand, collateralized by the general assets
of the Company, the cash flow and 100% stock in Manana Entertainment, Inc.
    
    
    150,000
    
    
    
    250,000Notes payable, interest at 10%, monthly interest payments, due between November 2009 and September 2013,
unsecured.
    
    
    698,000
    
    
    
    998,000Notes payable, interest at 10%, monthly interest payments, due on demand, unsecured.
    
    
    200,000
    
    
    
    200,000Various notes payable, interest at 11% fixed, monthly interest payments, due July 2011, collateralized by the general
assets and cash flow of the Company and 100% stock in VCG-IS, LLC and a guarantee by Mr. Lowrie
    
    
    1,000,000
    
    
    
    1,000,000Note payable, interest at 12% fixed due monthly, periodic principal payments with balance due July 2011,
collateralized by one parcel of real property located in Ft. Worth, TX and the common stock of Kenja II, Inc. and a
guarantee from Lowrie Management LLLP.
    
    
    1,000,000
    
    
    
    1,000,000Note payable, interest at 10% fixed, monthly principal and interest payments, due August 2013, unsecured.
    
    
    196,203
    
    
    
    214,732Note payable, interest at 8.5% fixed, monthly principal and interest payments, due October 2011, collateralized by the
general assets of the Company and guaranteed by Mr. Lowrie.
    
    
    98,697
    
    
    
    208,295Note payable to employee, interest at 10%, due November 2011, unsecured.
    
    
    205,612
    
    
    
    186,122Auto loans payable, interest at 0% to 8.5%, monthly principal and interest payments, due in May 2012 and June 2016,
these loans are collateralized by the vehicles purchased.
    
    
    169,420
    
    
    
    102,317Note payable, interest at prime (6% at December 31, 2010) plus 1% due monthly, principal and interest due January
2011, this note is unsecured.
    
    
    5,834
    
    
    
    75,833Total Debt Due
    
    $
    17,697,430
    
    
    $
    23,556,298Less Current Portion
    
    
    (10,258,057
    )
    
    
    (3,805,277
    )Total Long-Term Debt
    
    $
    7,439,373
    
    
    $
    19,751,021
 54




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
   2011
    
    $
    10,334,3242012
    
    
    10,270,9492013
    
    
    2,796,2512014
    
    
    1,264,6382015
    
    
    40,993Thereafter
    
    
    111,046Total
    
    $
    24,818,201
  
 10) Income Taxes
  Year Ended December 31,2010
    
    2009United States federal statutory rate
    
    
    34.0
    %
    
    
    34.0
    %State income taxes, net of Federal income tax benefit
    
    
    4.6
    %
    
    
    5.2
    %Permanent differences
    
    
    13.0
    %
    
    
    25.1
    %Tax credit generated in the current year
    
    
    (21.3
    ) %
    
    
    (42.0
    ) %Utilization of net operating loss
    
    
    (8.2
    ) %
    
    
    -
    %Other
    
    
    5.1
    %
    
    
    (0.5
    ) %27.2
    %
    
    
    21.8
    %
  55




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
  December 31,2010
    
    2009Licenses, Goodwill and other Intangible Assets
    
    $
    (283,975
    )
    
    $
    1,195,738Favorable/Unfavorable Leases, Net
    
    
    1,285,424
    
    
    
    1,866,569Property and equipment
    
    
    (888,560
    )
    
    
    (819,743
    )Accrued costs
    
    
    5,031
    
    
    
    76,920Litigation related to an acquisition
    
    
    1,022,324
    
    
    
    -Net operating loss and contributions carryforwards
    
    
    966,879
    
    
    
    1,017,181Tax credits
    
    
    1,195,322
    
    
    
    581,928Net deferred tax asset
    
    $
    3,302,445
    
    
    $
    3,918,593
     
 11) Stockholders Equity
 Common Stock
  Preferred Stock
  56




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##### 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
    
    
    
    93,333
    
    
    
    906,667
    
    
    
    231,500
    
    
    
    644,1671,950,000
    
    
    
    1,040,401
    
    
    
    909,599
    
    
    
    231,500
    
    
    
    647,099
   Weighted-AverageOptions
    
    
    Exercise PriceOutstanding at December
31, 2008
    
    
    300,500
    
    
    $
    10.37Granted
    
    
    -
    
    
    
    -Exercised
    
    
    -
    
    
    
    -Forfeited
    
    
    (38,000)
    
    
    
    11.42Outstanding at December 31,
2009
    
    
    262,500
    
    
    $
    10.21Granted
    
    
    -
    
    
    
    -Exercised
    
    
    -
    
    
    
    -Forfeited
    
    
    (31,000)
    
    
    
    7.35Outstanding at December 31,
2010
    
    
    231,500
    
    
    
    11.24Exercisable at December 31,
2010
    
    
    31,090
    
    
    $
    10.00
   57




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 Valuation and Assumptions
 Stock Compensation
 Option Grant Year2008
    
    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
  
 12) Commitments and Contingencies
 Operating Leases
   58




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
  Year Ended December 31,
    
    Related Party
    
    Third Party
    
    Total2011
    
    $
    462,000
    
    
    $
    3,197,037
    
    
    $
    3,659,0372012
    
    
    477,000
    
    
    
    3,260,601
    
    
    
    3,737,6012013
    
    
    477,000
    
    
    
    3,315,958
    
    
    
    3,792,9582014
    
    
    481,500
    
    
    
    3,359,118
    
    
    
    3,840,6182015
    
    
    525,000
    
    
    
    3,285,090
    
    
    
    3,810,090Thereafter
    
    
    8,655,000
    
    
    
    70,770,548
    
    
    
    79,425,548Total minimum lease payments
    
    $
    11,077,500
    
    
    $
    87,188,352
    
    
    $
    98,265,852
    Guaranty of Real Property Loan
  Capitalized Leases
  Year Ending December 31,2011
    
    $
    24,6262012
    
    
    24,6262013
    
    
    56,6452014
    
    
    18,575Total minimum payments
    
    
    124,472Amount representing interest
    
    
    (19,963
    )Present value of future minimum payments
    
    
    104,509Current portion of lease obligation
    
    
    16,664Obligation under capital lease
    
    $
    87,845
 59




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 Legal Proceedings
 Acquisition Indemnification Claim and Litigation
  th
  Texas Patron Tax Litigation
    60




---



##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 DOL Audit (PTs Showclub)
  Texas Sales Tax Audit
    Litigation Associated with the Going Private Transaction
    61




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
   Cohen v. Grusin, et. al. Doyle v. Lowrie, et. al.
 
    
    the termination fee payable by the Company to Family Dog,
in the event that the Company terminates the Merger
Agreement to enter into a Company Acquisition Agreement (as
defined in the Merger Agreement) involving a Superior
Acquisition Proposal (as defined in the Merger Agreement)
from certain parties described in the Merger Agreement,
will be reduced from $600,000 to $100,000;
    
    the terms of the stipulation of settlement will include,
among other things and subject to certain terms and
conditions, a full, final, and complete release of any and
all known and unknown claims, liabilities, or damages, that
were brought or could have been brought in the State Action
and the Federal Action, or that relate to the Merger
Agreement and the merger, including filings with the SEC
relating to the Merger Agreement and the merger;
    
    the Company, or its successors, will pay any fees and
expenses of the plaintiffs in such actions awarded by the
court up to $67,500, following final approval from the
state court and petition by the plaintiffs for an award of
fees and expenses; and
    
    the Federal Action will be dismissed with prejudice after
certification of the class and approval of the stipulation
of settlement in the state court action.
  Johnson Litigation
  ®
  62




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 Louisville Ordinance Litigation
 ®
   Employment Contracts and Termination of Employment and Change in Control Arrangements
    63




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
     
 13) Fair Value of Financial Instruments
      Financial Instruments
 64




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 
 14) Potential Sale of the Company
      
 15) Subsequent Events
 Related Party Long-term Debt
  Third Party Long-term Debt
  65




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##### Table of Contents



VCG Holding Corp.
Notes to Consolidated Financial Statements (continued)
 Execution of Asset Purchase Agreement for Classic Affairs, Inc.
     
 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
  
 Item 9A. Controls and Procedures
 Effectiveness of Disclosure Controls and Procedures.
  66




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##### Table of Contents



Managements Annual Report on Internal Control over Financial Reporting.
  
    
    pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect transactions and dispositions of our assets;
    
    provide reasonable assurance that transactions are recorded, as necessary, to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that our receipts and expenditures are being made only in accordance with
authorizations of our management and directors; and
    
    provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of our assets that could have a material effect on the
financial statements.
    Changes in Internal Control Over Financial Reporting.
  
 Item 9B. Other Information
  67




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##### Table of Contents



PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance
 Background of our Directors and Executive Officers
  TermName
    
    Age
    
    Positions
    
    ExpiresTroy Lowrie (4),(6)
    
    
    45
    
    
    Chairman of the Board and Chief Executive Officer and
Acting   Principal Chief Financial Officer
    
    
    2013Micheal Ocello (7)
    
    
    51
    
    
    Chief Operating Officer and President
    
    
    -Robert McGraw, Jr. (2),(3),(5)
    
    
    56
    
    
    Director
    
    
    2013Martin Grusin (6)
    
    
    67
    
    
    Director
    
    
    2012George Sawicki (1),(2),(3),(5)
    
    
    51
    
    
    Director
    
    
    2011David Levine (1),(2),(3),(5)
    
    
    63
    
    
    Director
    
    
    2011
 
 (1)
    
    Member of the audit committee(2)
    
    Member of the governance and nominating committee(3)
    
    Member of the compensation committee(4)
    
    Member of the Executive committee(5)
    
    Independent board member(6)
    
    Non-independent board member who is currently not serving on any committee(7)
    
    Mr. Ocello is an advisor to the board
    Troy Lowrie.
 68




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##### Table of Contents



Micheal Ocello.
 Robert McGraw, Jr.
 Martin Grusin.
 George Sawicki.
 David Levine.
 69




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##### Table of Contents



Audit Committee
   
    
    oversaw the work and compensation of the independent auditor;
    
    reviewed the scope of the independent auditors audit examination, including its
engagement letter prior to the annual audit, and reviewed the audit fees agreed upon and
any permitted non-audit services to be provided by the independent auditors;
    
    recommended to the board the retention or replacement of the independent auditors, which
reports solely and directly to the audit committee;
    
    reviewed and discussed the audited financial statements with management;
    
    discussed with the
independent auditors the matters required under Standards of the
Public Company Oversight Board (United States);
    
    received written disclosures and the letter from the independent accountants required by
ISB No. 1 and has discussed with the independent accountants their independence; and
    
    recommended to the board of directors that the audited financial statements be included
in the companys annual report of
Form 10-K for the last fiscal year
  Compensation Committee
  
    
    to develop, review, evaluate and recommend to the board, for its approval, the Companys
compensation and benefit policies, including the review and approval of the Companys
incentive and equity-based compensation plans, or amendments to such plans; and
    
    to review and recommend to the board, for its approval, compensation of the Companys
executive officers including annual base salaries, annual incentive compensation, long-term
incentive compensation, retirement benefits, if any, employment, severance, and
change-in-control agreements.
   70




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##### Table of Contents



Governance and Nominating Committee
  
    
    assists the board in identifying individuals qualified to become board members and
committee members;
    
    recommends that the board select the director nominees for election at the next annual or
special meeting of stockholders at which directors are to be elected;
    
    recommends individuals to fill any vacancies or newly created directorships that occur on
the board or its committees between any annual or special meeting of stockholders at which
directors are to be elected;
    
    makes recommendations to the board as to determinations of director independence;
    
    evaluates the board and committee structure, performance and composition;
    
    reviews, evaluates, recommends changes, and oversees compliance with the Companys
corporate governance guidelines, including the Companys Code of Ethics; and
    
    performs other duties or responsibilities expressly delegated to the governance and
nominating committee by the board relating to the nomination of board or committee members.
  Executive Committee
  
    
    authorize distributions;
    
    fill vacancies on the board;
    
    authorize reacquisition of shares;
    
    authorize and determine rights for shares;
    
    amend the Articles of Incorporation;
    
    adopt plans of merger or share exchange;
    
    recommend to the stockholders the sale, lease or other disposition of all or
substantially all of the property and assets of the Company otherwise than in the usual and
regular course of the Companys business;
    
    recommend to the stockholders a voluntary dissolution of the Company; or
    
    amend our bylaws.
  71




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##### Table of Contents



http://www.vcgh.com
 Special Committee
  Section 16 (a) Beneficial Ownership Reporting Compliance
   Code of Ethics
  
    
    honest and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships;
    
    full, fair, accurate, timely, and understandable disclosure in reports and documents that
we file with, or submit to, the SEC and in other public communications made by us;
    
    compliance with applicable governmental laws, rules and regulations;
    
    prompt internal reporting of violations of the ethics code to an appropriate person or
persons identified in the code; and
    
    accountability for adherence to the Code of Ethics.
 www.vcgh.com
 
 Item 11. Executive Compensation
 Executive Compensation
  72




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NonqualifiedNon-Equity
    
    
    DeferredStock
    
    
    Options
    
    
    Incentive Plan
    
    
    Compensation
    
    
    All OtherSalary
    
    
    Bonus
    
    
    Award(s)
    
    
    Award(s)
    
    
    Compensation
    
    
    Earnings
    
    
    Compensation
    
    
    TotalName and Principal Position
    
    Year
    
    (a) ($)
    
    (b) ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    (d) ($)
    
    ($)Troy Lowrie
    
    2010
    
    
    726,923
    
    
    
    1,500
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    87,387
    
    
    
    815,810Chief Executive Officer
    
    2009
    
    
    700,000
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    92,449
    
    
    
    792,449Micheal Ocello
    
    2010
    
    
    726,923
    
    
    
    1,500
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    165,676
    
    
    
    894,099President/Chief Operating Officer
    
    2009
    
    
    700,000
    
    
    
    1,500
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    162,460
    
    
    
    863,960Courtney Cowgill(c)
    
    2010
    
    
    209,763
    
    
    
    25,000
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    20,719
    
    
    
    255,482Former Chief Financial and
Accounting Officer
    
    2009
    
    
    190,000
    
    
    
    26,500
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    14,763
    
    
    
    231,263
 
 (a)
    
    Salary amounts represent base salary and payment for vacation, holidays, and sick days.(b)
    
    Unless otherwise indicated, bonuses shown were paid in the fiscal year in which services were provided.(c)
    
    Ms. Cowgill joined the Company in June 2008 as Chief Financial Officer and left the Company in June
2010. Ms. Cowgill forfeited 25,000 stock options upon her departure.(d)
    
    Amounts in the All
Other Compensation column consist of the following payments to or on behalf of
the named executive officers: Variable
    
    
    Life, HealthUniversal Life
    
    
    and DentalCompany
    
    
    Insurance
    
    
    Insurance
    
    
    BoardCar
    
    
    Premiums
    
    
    Premiums
    
    
    Compensation
    
    
    TotalName and Principal Position
    
    Year
    
    ($) (a)
    
    ($) (b)
    
    ($) (c)
    
    ($) (d)
    
    ($)Troy Lowrie
    
    
    2010
    
    
    
    16,668
    
    
    
    -
    
    
    
    20,719
    
    
    
    50,000
    
    
    
    87,387Chief Executive Officer
    
    
    2009
    
    
    
    22,040
    
    
    
    -
    
    
    
    20,409
    
    
    
    50,000
    
    
    
    92,449Micheal Ocello
    
    
    2010
    
    
    
    24,957
    
    
    
    58,673
    
    
    
    32,046
    
    (e)
    
    50,000
    
    
    
    165,676President/Chief Operating Officer
    
    
    2009
    
    
    
    22,051
    
    
    
    58,673
    
    
    
    31,736
    
    
    
    50,000
    
    
    
    162,460Courtney Cowgill
    
    
    2010
    
    
    
    -
    
    
    
    -
    
    
    
    20,719
    
    
    
    -
    
    
    
    20,719Former Chief Financial and Accounting Officer
    
    
    2009
    
    
    
    -
    
    
    
    -
    
    
    
    14,763
    
    
    
    -
    
    
    
    14,763
 
 (a)
    
    Certain executives and other employees receive Company cars.(b)
    
    Variable universal life insurance is provided to Mr. Ocello and paid by the Company.(c)
    
    Life, health, and dental insurance is provided to all executives.(d)
    
    Mr. Lowrie and Mr. Ocello received cash compensation for their services on the Companys board.(e)
    
    Mr. Ocello receives long-term disability insurance. Outstanding Equity Awards at Fiscal Year End
  Number of
    
    
    Number ofSecurities
    
    
    SecuritiesUnderlying
    
    
    UnderlyingUnexercised
    
    
    Unexercised
    
    
    Option
    
    
    OptionOptions (#)
    
    
    Options (#)
    
    
    Exercise
    
    
    ExpirationName and Principal Position
    
    Exercisable
    
    Unexercisable
    
    Price ($)
    
    DateMicheal Ocello
    
    
    10,000
    
    
    
    20,000
    (1)
    
    $
    10.00
    
    
    
    10/12/2017President/Chief Operating Officer
 
 (1)
    
    On October 12, 2007, the Company granted to Mr. Ocello options to
purchase 30,000 shares of the Companys Common Stock. The options vest
in three equal installments on the third, fifth, and seventh
anniversaries of the date of grant. 73




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Employment Contracts and Termination of Employment and Change in Control Arrangements
          74




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Potential Payments upon Termination or Change in Control
  Termination w/outCause, Non-RenewalChange in Controlor Quit with
    
    
    
    
    
    
    Total
    
    
    TerminationName and Principal Position
    
    Benefit
    
    Good Reason
    
    Death
    
    Disability
    
    with CauseTroy Lowrie
    
    Salary
    
    $
    2,100,000
    
    
    $
    700,000
    
    
    $
    700,000
    
    
    $
    -Chief Executive Officer
    
    Board of Directors Compensation
    
    
    50,000
    
    
    
    -
    
    
    
    -
    
    
    
    -Bonus
    
    
    1,500
    
    
    
    1,500
    
    
    
    1,500
    
    
    
    -Health Benefits
    
    
    61,227
    
    
    
    61,227
    
    
    
    61,227
    
    
    
    -Acceleration of Options
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -All Other Benefits
    
    
    192,525
    
    
    
    -
    
    
    
    168,912
    
    
    
    -Micheal Ocello
    
    Salary
    
    
    2,100,000
    
    
    
    700,000
    
    
    
    700,000
    
    
    
    -President/Chief Operating Officer
    
    Board of Directors Compensation
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Bonus
    
    
    1,500
    
    
    
    1,500
    
    
    
    1,500
    
    
    
    -Health Benefits
    
    
    61,227
    
    
    
    61,227
    
    
    
    61,227
    
    
    
    -Acceleration of Options
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -All Other Benefits
    
    
    140,596
    
    
    
    -
    
    
    
    -
    
    
    
    -All Other Benefits:Troy Lowrie
    
    Disability Insurance
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Long Term Care Insurance
    
    
    168,912
    
    
    
    -
    
    
    
    168,912
    
    
    
    -Auto
    
    
    23,613
    
    
    
    -
    
    
    
    -
    
    
    
    -Retirement Plans
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Unused Vacation
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Club Memberships
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -192,525
    
    
    
    -
    
    
    
    168,912
    
    
    
    -Micheal Ocello
    
    Disability and VUL Insurance
    
    
    70,000
    
    
    
    -
    
    
    
    -
    
    
    
    -Long Term Care Insurance
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Auto
    
    
    70,596
    
    
    
    -
    
    
    
    -
    
    
    
    -Retirement Plans
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Unused Vacation
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -Club Memberships
    
    
    -
    
    
    
    -
    
    
    
    -
    
    
    
    -140,596
    
    
    
    -
    
    
    
    -
    
    
    
    -
 Compensation of our Directors
  Fees Earnedor Paidin Cash
    
    
    TotalName and Principal Position
    
    ($)(1)
    
    ($)Robert McGraw Jr.
    
    
    50,000
    
    
    
    50,000Martin Grusin
    
    
    50,000
    
    
    
    50,000George Sawicki(2),(3)
    
    
    97,500
    
    
    
    97,500David Levine(2),(3),(4)
    
    
    50,000
    
    
    
    50,000Kenton Sieckman(2),(3),(5)
    
    
    41,250
    
    
    
    41,250Carolyn Romero(3),(6)
    
    
    96,333
    
    
    
    96,333385,083
    
    
    
    385,083
 75




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##### Table of Contents



(1)
    
    Except for Messrs. Sieckman and Levine, all board members received
$50,000 as compensation for their service on the board for their
2010/2011 term.(2)
    
    Messrs. Sawicki, Levine and Sieckman served as members of the audit
committee. Mr. Sawicki served for the full 2009/2010 term and received
an additional $12,500. Messrs. Levine and Sieckman both only served
for a portion of the term and received additional compensation of
$6,250 each.(3)
    
    Messrs. Sawicki, Levine and Sieckman and Ms. Romero were each
compensated for their services as members of the Special Committee of
$2,500 per month. Mr. Sawicki received a total of $35,000 in cash for
his service as Chairman of the Special Committee for the period of
January through April and for the period of July through December. Mr.
Sawicki, as Chairman, of the Special Committee was compensated an
additional amount of $1,000 each month. Mr. Levine received a total of
$17,500 in cash for his service on the Special Committee for the
period of July through December. Ms. Romero received a total of
$20,000 in cash for her service on the Special Committee for the
period of January through April and for the period of July through
October. Mr. Sieckman received a total of $10,000 in cash for his
service on the Special Committee for the period of January through
April.(5)
    
    Mr. Sieckman resigned from the board in June 2010. The amount reflects
payments to Mr. Sieckman through his service on the board.(6)
    
    Ms. Romero resigned from the board effective October 31, 2010. The
amount reflects payments made to Ms. Romero through her services on
the board, $18,000 for additional services and the audit committee,
including a partial payment of $520 for her role as an independent
financial expert. Indemnification of Directors
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 Security Ownership of Certain Beneficial Owners and Management
  Amount and Natureof BeneficialName and Address of Beneficial Owner(1)
    
    Ownership(2)
    
    Percent of Class(2)Troy Lowrie(3)
    
    
    4,943,289
    
    
    
    30.3
    %Micheal Ocello(4)
    
    
    195,589
    
    
    
    1.2
    %Robert McGraw(5)
    
    
    70,235
    
    
    
    *Martin Grusin(6)
    
    
    86,319
    
    
    
    *George Sawicki
    
    
    11,218
    
    
    
    *David Levine
    
    
    
    
    
    
    All executive officers and directors as a group (6 persons)
    
    
    5,304,650
    
    
    
    32.6
    %Spoede at Olive, LLC and Lawrence R. Goldberg (7)
    
    
    978,000
    
    
    
    6
    %
 76




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##### Table of Contents



*
    
    Less than 1%.(1)
    
    Unless otherwise indicated, all shareholders listed above have an
address in care of our principal executive offices, which are located
at 390 Union Boulevard, Suite 540, Lakewood, Colorado 80228.(2)
    
    Unless otherwise noted, all shares of common stock listed above are
owned and registered in the name of each person listed as beneficial
owner and such person has sole voting and dispositive power with
respect to the shares of common stock beneficially owned by each of
them. Percentage of ownership for each shareholder is based on
16,292,071 shares of common stock outstanding as of March 29, 2011.
Pursuant to Exchange Act Rule 13d-3(d), shares not outstanding which
are subject to options, warrants, rights, or conversion privileges
exercisable within 60 days of the record date are deemed outstanding
for the purpose of calculating the number and percentage beneficially
owned by such person, but are not deemed outstanding for the purpose
of calculating the percentage beneficially owned by each other person
listed.(3)
    
    Includes (a) 4,394,100 shares of common stock owned by Lowrie
Management LLLP, and (b) 549,189 shares of common stock owned by Mr.
Lowrie. Mr. Lowrie is the managing partner of Lowrie Management LLLP
and has sole voting and dispositive power of the shares of VCGs
common stock owned by Lowrie Management LLLP. Mr. Lowrie disclaims
beneficial ownership of the shares owned by Lowrie Management LLLP,
except to the extent of his pecuniary interest therein. Mr. Lowrie
has pledged 2,325,900 shares of stock as collateral to secure VCGs
obligations under two promissory notes.(4)
    
    Includes (a) 158,000 shares of common stock owned by LTD Investment
Group, LLC, of which Mr. Ocello is the sole member and manager, and
(b) 37,589 shares of common stock owned by Mr. Ocello. This does not
include any options held by Mr. Ocello. He has 30,000 options
outstanding (at an exercise price of $10.00), of which 10,000 options
are vested.(5)
    
    Includes (a) 68,235 shares of common stock owned by Mr. McGraw, and
(b) 2,000 shares of common stock held by Mrs. Marjorie McGraw, Mr.
McGraws wife.(6)
    
    Includes (a) 10,000 shares of common stock beneficially owned by ACM
Management, LLC, of which Mr. Grusin is the Chief Manager and shares
voting power with other members, (b) 66,319 shares of common stock
owned by Mr. Grusin, and (c) 10,000 shares of common stock held by
Mr. Grusins wife, Ms. Gayle Powelson.(7)
    
    Based soley on a Schedule 13D filed with the Securities and Exchange
Commission on March 8, 2011. According to this filing, Lawrence R.
Goldberg has voting and dispositive power over these securities in
his capacity as the managing member of Spoede at Olive, LLC.
According to this filing, the address of the business office of the
filing person is 851 N. Spoede Road, Suite 200, Creve Coeur, MO
63141. Securities Authorized for Issuance under Equity Compensation Plans
  Number of SecuritiesRemaining Available forNumber of Securities
    
    
    
    
    
    Future Issuance Underto be Issued Upon
    
    Weighted-average
    
    Equity CompensationExercise of
    
    Exercise Price of
    
    PlansOutstanding
    
    Outstanding
    
    (Excluding SecuritiesOptions
    
    Options
    
    Reflected in Column (a))Plan Category
    
    (a)
    
    (b)
    
    (c)Equity compensation plans approved by security holders
    
    
    231,500
    (3)
    
    
    $  11.24
    
    
    
    644,391
    (1)Equity compensation plans not approved by security holders
    
    
    -0-
    
    
    
    -0-
    
    
    
    2,708
    (2)Total
    
    
    231,500
    
    
    
    $  11.24
    
    
    
    647,099
 
 (1)
    
    The Company adopted a 2002 Stock Option and Stock Bonus Plan, which was approved by its stockholders on July
22, 2002, and reserved 700,000 shares of Common Stock for issuance under the plan. In addition, the Company
adopted a 2004 Stock Option and Appreciation Rights Plan, which was approved by its stockholders on July 29,
2005, and reserved 1,000,000 shares of Common Stock for issuance under the plan. Shares of Common Stock may be
issued either: (a) upon the exercise of stock options granted under the plans; or (b) as stock bonuses granted
under the plans. If there is any change in the number of shares of Common Stock through the declaration of
stock dividends, or through a recapitalization resulting in stock splits, or combinations or exchanges of such
shares, the number of shares of Common Stock available for options and the number of such shares covered by
outstanding options, and the exercise price per share of the outstanding options, shall be proportionately
adjusted to reflect any increase or decrease in the number of issued shares of Common Stock; provided,
however, that any fractional shares resulting from such adjustment shall be eliminated. 77




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##### Table of Contents



(2)
    
    The Company adopted a 2003 Stock Option and Stock Bonus Plan and reserved 250,000 shares of Common Stock for
issuance under the plan. These shares have been registered under the Securities Exchange Act of 1933, as
amended, pursuant to a registration statement on Form S-8.(3)
    
    The Company has issued 231,500 options to employees under the 2002 and 2004 Stock Option and Stock Bonus Plans. Equity Incentive Plans
   
    
    Under both the 2002 and the 2003 Plans, we may grant to our designated employees,
officers, directors, advisors and consultants incentive stock options, nonqualified stock
options and stock. Under the 2004 Plan, we may grant to our designated employees, officers,
directors, advisors and consultants incentive stock options, nonqualified stock options and
stock appreciation rights. As applicable, stock grants and stock appreciation rights may be
made to employees, officers, directors and consultants of the Company and its subsidiaries,
including any non-employee members of the board. Incentive stock options may be granted only
to employees of the Company. Nonqualified stock options may be granted to employees,
officers, directors and consultants.
    
    If options granted under either plan expire or are terminated for any reason without
being exercised, or bonus shares are forfeited, the shares underlying such option and/or
bonus shares will become available again for issuance under the respective plan.
    
    The compensation committee determines which individuals will receive grants, the type,
size and terms of the grants, the time when the grants are made and the duration of any
applicable exercise or restriction period, including the criteria for vesting and the
acceleration of vesting, and the total number of shares of Common Stock available for
grants. The exercise price of an option may be equal to, greater than, or less than the fair
market value of a share of Common Stock at the time of grant; provided that:
    
    
    The compensation committee determines the term of each option, which may not exceed ten
years from the date of grant, except that the term of an incentive stock option granted to
an employee who owns more than 10% of the issued and outstanding Common Stock may not exceed
five years from the date of grant. The compensation committee may accelerate or extend the
exercisability of any or all outstanding options at any time for any reason.
    
    The compensation committee determines the number of shares of stock granted to a
participant and may subject any grant to performance requirements, vesting provisions,
transfer restrictions and other restrictions and conditions.
  78




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##### Table of Contents



Item 13. Certain Relationships and Related Transactions, and Director Independence
 Review, Approval or Ratification of Transactions with Related Persons
   
    
    whether the terms of the related party transaction are fair to the Company and such terms
would be on the same basis if the transaction did not involve a related party;
    
    whether there are business reasons for the Company to enter into the related party
transaction;
    
    whether the related party transaction would impair the independence of an independent
director;
    
    whether the related party transaction would present an improper conflict of interest for
any director or executive officer of the Company, taking into account: (a) the size of the
transaction, (b) the overall financial position of the director or executive officer, (c)
the direct or indirect nature of the directors or executive officers interest in the
transaction, and (d) the ongoing nature of any proposed relationship, and any other factors
deemed relevant; and
    
    whether the related party transaction is material, taking into account: (a) the
importance of the interest to the related party, (b) the relationship of the related party
to the transaction and of related parties to each other, (c) the dollar amount involved, and
(d) the significance of the transaction to the Companys investors in light of all of the
circumstances.
    Guarantees
   79




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##### Table of Contents



December 31,Description of Transactions
    
    2010

    
    2009Promissory note issued by the Company to Sunshine Mortgage, interest at 14% fixed, due monthly,
periodic principal with balance due December 2011, collateralized by the common stock of Kenja II,
Inc., 238,000 shares of VCG common stock, furniture, fixtures and equipment of Kenja II, Inc. and a
guarantee from Lowrie Management LLLP.
    
    $
    3,700,000
    
    
    $
    4,700,000Loan from Citywide Banks, interest at 7% fixed, monthly principal and interest payments of $76,865
due August 2014, collateralized with VCG Stock, a life insurance policy on Troy Lowrie and
additional securities owned by Mr. Lowrie.
    
    
    2,969,658
    
    
    
    3,654,865Loan from Amfirst Bank, interest at prime (6% floor) (6% at December 31, 2010) plus 1% due
monthly, principal and interest payments of $55,898 due November 2014, collateralized by certain
security agreements with RCC L.P., Roxys Nightclub L.P., IRC L.P., Diamond Cabaret L.P.,
Platinum of Illinois, Inc., PTs Brooklyn, MRC L.P., PTs Sports Cabaret L.P., Cardinal Management
L.P., PTs Showclub L.P., VCG CO Springs, Inc., VCG Real Estate Holdings, Inc., Glendale
Restaurant Concepts LP, Glenarm Restaurant LLC, and the mortgage for 7946 Pendleton Pike.
    
    
    2,332,599
    
    
    
    2,844,219Line of credit from Citywide Banks, interest at prime (6% at December 31, 2010) plus 0.5% (floor is
6%) due monthly, principal due August 2012, collateralized by Company shares of common stock
owned by Lowrie Management LLLP, a life insurance policy on Troy Lowrie and additional securities
owned by Mr. Lowrie.
    
    
    2,350,000
    
    
    
    2,720,000Notes payable to investors, interest at 11%, monthly interest payments, due January 2010,
collateralized by the general assets of the Company and a guarantee by Mr. Lowrie.
    
    
    -
    
    
    
    1,400,000Note payable, interest at 12% fixed due monthly, periodic principal payments with balance due July
2011, collateralized by one parcel of real property located in Ft. Worth, TX and the common stock of
Kenja II, Inc. and a guarantee from Lowrie Management LLLP.
    
    
    1,000,000
    
    
    
    1,000,000Various notes payable, interest at 11% fixed, monthly interest payments, due July 2011, collateralized
by the general assets and cash flow of the Company and 100% stock in VCG-IS, LLC and a guarantee
by Mr. Lowrie.
    
    
    1,000,000
    
    
    
    1,000,000Note payable to an affiliate of a current Board member with interest at 10%, due September 2012,
collateralized by a personal guarantee from Mr. Lowrie and Lowrie Management LLLP.
    
    
    410,084
    
    
    
    410,084Note payable to investors, interest at 8.5%, monthly principal and interest payments, due October 20,
2011, collateralized by the general assets of the Company and guaranteed by Mr. Lowrie.
    
    
    98,697
    
    
    
    208,295Total Debt Guaranteed
    
    $
    13,861,038
    
    
    $
    17,937,463
 Trademarks
 ® ®
 80




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##### Table of Contents



Related Party Long-term Debt
 December 31,Description of Related Party Debt
    
    2010

    
    2009Note payable to Lowrie Management LLLP, interest at 10%, due monthly, principal due June 2012,
collateralized by general assets of Illinois Restaurant Concepts LP and Denver Restaurant Concepts LP, plus
the consent to the transfer of the adult permit and liquor license for both clubs upon default.
    
    $
    5,700,000
    
    
    $
    5,700,000Note payable to Lowrie Family Foundation, a corporation controlled by the Companys Chairman of the
Board and Chief Executive Officer, interest at 10%, interest accrued monthly to principal, but no payments,
due August 2013, unsecured.
    
    
    772,122
    
    
    
    698,934Note payable to the President and Chief Operating Officer with interest at 10%, due monthly, principal due
April 2012, unsecured. This note was prepaid in September 2010.
    
    
    -
    
    
    
    100,000Note payable to a board member with interest at 10%, due monthly, principal due November 2011,
unsecured.
    
    
    50,000
    
    
    
    50,000Note payable to the mother of the Chairman with interest at 10%, monthly principal and interest payments of
$4,900 due April 2014, unsecured.
    
    
    166,517
    
    
    
    170,000Note payable to the mother of the Chairman, with interest at 10%, monthly principal and interest payments of
$3,456, due December 2010, unsecured.
    
    
    -
    
    
    
    36,741Note payable to the mother of the Chairman, with interest at 10%, interest accrues monthly to principal, but
no payments, due December 2011, unsecured.
    
    
    22,049
    
    
    
    25,326Note payable to an affiliate of a current Board member with interest at 10%, due September 2012,
collateralized by a personal guarantee from Mr. Lowrie and Lowrie Management LLLP.
    
    
    410,083
    
    
    
    410,084Total Debt Due, Related Party
    
    $
    7,120,771
    
    
    $
    7,191,085
 Other Transactions
  ®
 ®
 81




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##### Table of Contents



®
 Director Independence
 ® ®
  ®
   
 Item 14. Principal Accountant Fees and Services
   2010

    
    2009Audit fees
    
    $
    188,207
    
    
    $
    194,118Audit-related fees
    
    
    -
    
    
    
    45,350Tax fees
    
    
    -
    
    
    
    2,625All other fees
    
    
    -
    
    
    
    12,237Total
    
    $
    188,207
    
    
    $
    254,330
 Audit fees
  Audit-related fees
  82




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##### Table of Contents



Tax Fees
  Other
  Audit Committees Pre-Approval Policies and Procedures
    
 PART IV
 
 Item 15. Exhibits and Financial Statement Schedules
  Financial Statements
 Page No.Reports of Independent Registered Public Accounting Firm
    
    
    39Consolidated Balance Sheets as of December 31, 2010 and 2009
    
    
    40Consolidated Statements of Income for the Years Ended December 31, 2010 and 2009
    
    
    41Consolidated Statement of Equity for the Years Ended December 31, 2010 and 2009
    
    
    42Consolidated Statements of Cash Flows for the Years Ended December 31, 2010 and 2009
    
    
    43Notes to Consolidated Financial Statements
    
    
    44
 Financial Statement Schedules
  83




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##### Table of Contents



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)10.11

    
    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)
 84




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##### Table of Contents



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 Dinkelmann, 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 Dinkelmann, 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 Dinkelmann 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)10.39
    
    
    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)
 85




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##### Table of Contents



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 Corp.(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 Note 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)10.67
    
    
    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)
 86




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##### Table of Contents



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)10.93
    
    
    Agreement of Merger, dated February 9, 2008 by and between VCG Holding Corp. and TTNA, Inc.(37)10.94
    
    
    Agreement and Plan of Reorganization, dated February 9,2008, by and between VCG Holding Corp and TTNA, Inc.(37)10.95
    
    
    Covenant Not to Compete, dated February 9, 2008, by and between VCG Holding Corp and Duncan Burch(37)10.96
    
    
    Covenant not to Compete, dated February 9, 2008, between TTNA, Inc. Employee and VCG Holding Corp(37)10.97
    
    
    Sales Agreement, dated February 9, 2008, between Duncan Burch and VCG Holding Corp(37)10.98
    
    
    Ground Lease Agreement, dated February 9, 2008, between VCG Holding Corp. and Duncan Burch(37)10.99
    
    
    Promissory Note and Security Agreement, dated June 30, 2009, by VCG Holding Corp. in favor of Lowrie Management
LLLP(38)11.00
    
    
    Real Estate Purchase Agreement, dated July 31, 2009 , by and between Black Canyon Highway LLC and VCG Real Estate
Holding(39)11.01
    
    
    Promissory Note dated August 15, 2009, by VCG Holding Corp. in favor of Citywide Banks(40)11.02
    
    
    Promissory Note dated August 15, 2009, by VCG Holding Corp. in favor of Citywide Banks(40)11.03
    
    
    Business Lease Agreement, dated August 15, 2009 by and between VCG Holding Corp and Lowrie Management LLLP and
Citywide Banks(40)11.04
    
    
    Change in Terms Agreement, dated August 15, 2009 by and between VCG Holding Corp and Citywide Banks(40)11.05
    
    
    Business Lease Agreement, dated August 15, 2009 by and between VCG Holding Corp and Lowrie Management LLLP and
Citywide Banks(40)11.06
    
    
    Indemnification Agreement, dated as of December 16, 2009, by and between VCG Holding Corp, Troy Lowrie, Micheal
Ocello, Courtney Cowgill, Martin Grusin, Robert McGraw, Jr., Kenton Sieckman, George Sawicki and Carolyn
Romero(41)11.07
    
    
    Letter of Intent between Ricks Cabaret International, Inc., VCG Holding Corp., Troy Lowrie and Lowrie Management
LLLP(42)11.08
    
    
    Asset Purchase Agreement, dated July 16, 2010, between VCG Holding Corp and RCI Entertainment (Fort Worth), Inc.
(43)11.09
    
    
    Change in Terms Agreement, dated August 15, 2010 by and between VCG Holding Corp and Citywide Banks(44)11.10
    
    
    Agreement and Plan of Merger, dated November 9, 2010 by and between Family Dog, LLC, FD Acquisition Co., Troy
Lowrie, Michael Ocello, and VCG Holding Corp. (45)
 87




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##### Table of Contents



21.1
    
    
    Subsidiaries of Registrant(47)23.1
    
    
    Consent of Independent Registered Public Accounting Firm(47)31.1
    
    
    Rule 13a-14(a) Certification of Chief Executive Officer and Acting Principal Financial Officer(47)32.1
    
    
    Certification Pursuant to 18 U.S.C. Section 1350 by the Chief Executive Officer and Acting Principal Financial
Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(46)
 88




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##### Table of Contents



(1)
    
    Incorporated by reference from Registration Statement on Form SB-2 filed on September 10, 2002(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 89




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##### Table of Contents



(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(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)
    
    Incorporated by reference from Current Report on Form 8-K filed February 3, 2009(38)
    
    Incorporated by reference from Current Report on Form 8-K filed July 2, 2009(39)
    
    Incorporated by reference from Current Report on Form 8-K filed August 5, 2009(40)
    
    Incorporated by reference from Quarterly Report on Form 10-Q filed November 11, 2009(41)
    
    Incorporated by reference from Current Report on Form 8-K filed December 17, 2009(42)
    
    Incorporated by reference from Current Report on Form 8-K filed February 16, 2010(43)
    
    Incorporated by reference from Current Report on Form 8-K filed July 16, 2010(44)
    
    Incorporated by reference from Current Report on Form 8-K filed August 13, 2010(45)
    
    Incorporated by reference from Current Report on Form 8-K filed November 10, 2010(46)
    
    Furnished herewith(47)
    
    Filed herewith *
    
    Indicates a management contract or compensation plan or arrangement
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##### Table of Contents



SIGNATURES
  VCG HOLDING CORP.By:
    /s/  Troy LowrieTroy LowrieChairman of the Board, Chief Executive Officer,
Acting Principal Financial Officer and Treasurer
(Principal Executive Officer and Acting Principal
Financial Officer)  March 30, 2011
    By:
    /s/  Troy LowrieTroy LowrieChairman of the Board, Chief Executive Officer,
Acting Principal Financial Officer and Treasurer
(Principal Executive Officer and Acting Principal
Financial Officer)March 30, 2011
    By:
    /s/ Robert McGraw, Jr.Robert McGraw, Jr.DirectorMarch 30, 2011
    By:
    /s/  Martin GrusinMartin GrusinDirectorMarch 30, 2011
    By:
    /s/  George SawickiGeorge SawickiDirectorMarch 30, 2011
    By:
    /s/  David LevineDavid LevineDirector 91