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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-KSB

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended: December 31, 2002

Commission file number: 000-50291

VCG HOLDING CORP.

(Name of small business issuer in its charter)

1601 W. Evans, Suite 200, Denver, Colorado 80223

(Address of principal executive offices, including zip code)

(303) 934-2424

(Issuer’s telephone number)

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $.0001 Par Value

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ¨    No  x

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.    x

Issuer’s revenues for fiscal year ended December 31, 2002 were $3,627,804.

The aggregate market value of the voting stock held by non-affiliates as of May 14, 2002 was $7,671,138.

The number of shares outstanding of the issuer’s common stock as of May 14, 2002 was 6,280,000.

Documents incorporated by reference: None.

Transitional Small Business Disclosure Format (Check one): Yes  ¨    No  x

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PART I

Item 1.    Description of Business

VCG Holding Corp. (“VCG”) is in the business of acquiring, owning and operating nightclubs which provide premium quality live adult entertainment, and upscale restaurant and beverage services in a first class environment to affluent patrons. Our management has over 20 years of experience in successfully owning and operating first class nightclubs and has in-depth knowledge of the industry. Our management has contributed approximately $1.6 million cash and contributed assets of approximately $2.4 million in exchange for shares of our common stock. Management also has provided a five year $1.4 million line of credit to VCG. We were incorporated in Colorado in 1998.

We currently own three nightclubs, all of which were acquired in 2002:

The St. Louis Club was purchased from a third party. The Indianapolis Club and the Memphis Club were owned in part and operated by affiliates of VCG’s current management for 14 and two years, respectively.

We believe that there is an opportunity for industry consolidation of many profitable first class clubs which are available for acquisition on favorable terms. We also believe that the benefits of consolidation – namely, centralized management, more efficient operations, less costly overhead, and increased market recognition and identity of the clubs under a single brand name – will increase the current profitability of these nightclubs.

Our Business Strategy

VCG’s business strategy is to consolidate first class adult entertainment nightclubs and increase their profitability. VCG believes this can be accomplished through the opportunities that consolidation provides for economies of scale in management, operations and marketing.

We plan to acquire established nightclubs in existing locations in order to avoid the substantial costs and risks associated with building and licensing nightclubs in new locations with no existing customer base. The adult entertainment nightclub industry is fragmented with most nightclub owners owning only one club. Adult entertainment nightclubs are rarely advertised for sale; but rather, their availability is made known through word-of-mouth within the industry. VCG, through its extensive contacts in the industry, is aware of numerous nightclubs that are for sale throughout the United States. Typically, these nightclubs become available for sale because of owners reaching retirement age, increased operating expenses causing decreased profitability, and inability or unwillingness to commit capital in order to upgrade older nightclubs.

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Management believes that if VCG able to achieve sufficient public market valuation for its shares as a public company, VCG will be able to make all or partial stock acquisitions of nightclubs.

The Adult Entertainment Industry

For years, sexual content has been continually increasing in the media – including movies, television, magazines, newspapers, and the Internet. Capitalizing on this opportunity, businesses that were not previously involved in the industry have now become major providers of adult entertainment. These include hotel chains, cable and satellite television companies, national video store companies and long distance telephone carriers.

Public acceptance and demand for the premium quality adult entertainment nightclubs have become common in both cities and suburbs throughout the United States as there is an increasingly open and healthy attitude toward sexuality. There is a strong existing and developing market among businessmen, professionals and other affluent persons for first-class adult entertainment nightclubs.

According to Forbes magazine (May 23, 2001), as the adult entertainment industry has become more socially acceptable, it has grown to an $11 billion market and “Adult entertainment businesses can expect to see their market capitalizations at least triple over the next five to seven years.”

The social acceptance and accelerating growth in adult entertainment includes adult entertainment nightclubs, particularly first class adult entertainment nightclubs, which are popular among affluent customers for social and business entertainment.

Our Product – First Class Adult Entertainment Nightclubs

Management believes maximum profitability is obtained from owning and operating only first class adult entertainment nightclubs which attract an affluent clientele. VCG’s first class entertainment nightclubs are distinguished by the following features:

Facilities. The facilities are within ready access to the principal business, tourist and/or commercial districts in the metropolitan areas in which they are located. Both the exterior of the buildings and the interior design and decor of the clubs provide the appearance and atmosphere of an upscale restaurant. The facilities have state of the art sound systems, theater-quality lighting and professional stage design. Some facilities have a VIP Room. This is a separate area of the club accessible only to those who purchase annual memberships. The VIP Room provides an elegant, quiet atmosphere with its own restaurant featuring a more upscale food menu. The VIP Room is particularly conducive to business entertaining.

Professional On-Site Management. The facilities are managed by persons who are highly experienced in the restaurant hospitality industry. The managers are responsible for maintaining the overall quality of the nightclubs and, specifically: (i) providing attentive customer service; (ii) supervising all personnel, including kitchen staff, bartenders, security, waitresses, disc jockey’s and performers; and (iii) maintaining the facility as clean, inviting, safe and comfortable.

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Food and Beverage Operations. The food and beverage operations meet the high standard of business entertaining provided by an upscale restaurant. An experienced chef is responsible for staffing and operating the food service and an experienced bar manager is responsible for staffing and operating the beverage service. The food menu ranges from buffet lunch service to fine dining for both lunch and dinner. The beverage menu ranges from domestic and imported beer to fine wines, champagne and premium liquors.

Entertainment. The facilities provide premium quality female performers. The highest standards are maintained for appearance, attitude, demeanor, dress and personality. The entertainment encourages repeat visits, increases the average length of a patron’s stay and attracts customers to a late night destination, all of which provides for increased revenue.

Our Operations

We have contracted with International Entertainment Consultants, Inc. (“IEC”) to manage our nightclub operations. IEC has more than 20 years of experience in managing adult entertainment nightclubs and currently has twelve clubs under management including VCG’s three current clubs. Our Chairman, Mr. Lowrie and our President, Mr. Ocello are affiliated with IEC and the other nightclubs managed by IEC. IEC has approximately 50 employees.

The principal employees of IEC have been with that company for four to 20 years and they are highly experienced in this industry. IEC is responsible for all aspects of club management, administration and accounting. Among other things, IEC is responsible for the following:

Through this centralization of management, we believe that we will be able to realize a substantial reduction in management expense that would otherwise be incurred and is able to use the experience and expertise of IEC.

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The IEC management contract is for a one year term, automatically renewable for successive terms of one year absent prior termination by either party. No management fees have been paid. Such fees will only be paid upon prior review by our Compensation Committee to determine the fair market value of IEC services and approval of a majority of disinterested members of our Board of Directors. We currently do not pay IEC for its management services. Under our contract with IEC each of our nightclubs pays its proportionate share of IEC’s general operating and administrative expenses for all of the nightclubs managed by IEC. These expenses do not include the direct operating expenses of each of our nightclubs which include: food and beverage operations, employee payroll, advertising, entertainment and maintenance of facilities.

Compliance Policies and Controls

IEC has developed compliance policies for nightclub operations aimed at assuring that the operations of each club are conducted in conformance with local, state and federal laws. The principal areas to which the policies are directed are illegal drug use and sexual activity. In keeping with the upscale nightclub environment, IEC does not use visible security, but rather persons who act in a host capacity to address and resolve situations in which a customer’s behavior may be inappropriate.

IEC has developed and implemented internal operating and accounting controls to track cash, credit card transactions and food and beverage inventory. These controls also help to maintain the accuracy of VCG’s operating and accounting records. In particular, IEC has developed sophisticated software programs to capture operating information and generate reports for efficient management and control of the nightclub. Analysis of the information provided enables IEC to detect atypical variances from expected operating results based on historical activity.

Market Environment/Marketing

The demographic market for adult entertainment nightclubs is substantial as nightclubs appeal to men of all age groups. Within this market, there are two general categories of nightclubs, each having distinct differences in entertainment quality, atmosphere and food service. On the lower-end are “strip clubs” which typically have small facilities and a low-grade atmosphere. These clubs generally cater to a blue-collar clientele, have limited or non-existent food service and a small number of entertainers who are not of the caliber of the upper-scale clubs. The upper-scale clubs are termed “gentlemen’s clubs.” These clubs are characterized by their large facilities and featuring dozens of entertainers on any given night. They offer a variety of entertainment such as sports on television monitors, billiard tables, VIP rooms and specialty acts. Their target market/audience is a more affluent clientele of businessmen and professionals for whom gentlemen’s clubs are increasingly becoming a viable and attractive entertainment option. In addition, they are no longer limited to providing evening entertainment; daytime operations are also growing, particularly during the lunch hour. Food is prepared by an on-site chef and the menu typically offers a wide variety of entrees and appetizers. Most clubs provide a buffet at least once a week as a promotion special.

VCG plans to focus on acquiring and marketing upscale gentlemen’s clubs in areas that are not market saturated and already receptive to well managed adult gentlemen’s clubs. Adult entertainment nightclubs tend to group together by location. When clubs are within relatively

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close proximity, regular customers are more likely to try a new club. A significant marketing benefit for VCG will be its ownership of multiple clubs in multiple cities which will enable VCG to obtain recognition as a brand-name for its first-class adult entertainment nightclubs. Management believes VCG is well positioned both financially and managerially to continue to grow in the adult entertainment industry. By expanding into other locations in other cities and states, VCG will have the opportunity to realize the benefits of both the economies of scale and name recognition marketing.

The ability to attract new patrons to a nightclub for the first time is critical to a nightclub’s success. Promotions, advertising and specials are the typical means to market a nightclub. Newspaper and magazine coupons are often used to attract new customers. Professional sporting events are a natural advertising venue, including ticket-stub drink vouchers and other advertising, including aerial banners at outdoor events.

IEC applies its marketing expertise and experience to VCG’s clubs. During the past 20 years operating nightclubs, IEC has developed a results-proven, cost-efficient marketing program. The clubs are marketed as a safe and upscale environment for adult entertainment. The marketing strategy is to attract new customers, to increase the frequency of visits by existing customers and establish a higher level of name recognition. The marketing program includes advertising in travel and hospitality magazines, print advertising, billboards with distinctive graphics and taxi cab reader boards. The target market is the business-convention traveler and local professionals and business people. In addition, IEC conducts various promotion activities throughout the year to keep the club’s name before the public. In order to promote a good community reputation, the clubs actively sponsor and participate in local charitable events and make contributions to local charities.

Growth

Our goal is to become the leader in the first-class adult entertainment nightclub industry through acquisition of existing nightclubs. We anticipate that the increase in the profitability of our recently acquired nightclubs and the addition of more nightclubs will be a major source of growth. We plan to have at least five nightclubs by fiscal year end 2003. We plan to increase revenue at our recently acquired nightclubs through the efficiencies provided by consolidation and the application of the experience and expertise of IEC.

Competition

The adult entertainment nightclub industry is very competitive with respect to price, location and quality of (i) the facility, (ii) entertainment, (iii) service and (iv) food and beverages. Further, the industry is especially sensitive to ever-changing and unpredictable competitive trends which cannot be easily predicted and which are beyond our control.

We have many competitors in the metropolitan areas in which we are located and intend to expand. Some competitors have substantially greater financial resources and a longer history of operations than the nightclubs currently owned by VCG. Changes in customer preferences, economic conditions, demographic trends and the location, number of and quality of competing nightclubs could adversely affect our business, as could a shortage of experienced local management and hourly employees. We believe our nightclubs enjoy a high level of repeat

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business and customer loyalty due to our upscale restaurant atmosphere, food quality, premium entertainment, perceived price-value relationship and efficient service.

Government Regulations

Adult entertainment nightclubs are subject to ever changing local, state and federal regulation. Our business is regulated by local zoning, local and state liquor licensing, local ordinances and state and federal time place and manner restrictions. In the states in which we currently operate, liquor licenses renew annually, and are considered to be a “privileged” license that could be subject to suspension or revocation. The adult entertainment provided by our nightclubs has elements of speech and expression and, therefore, enjoys some protection under the First Amendment to the United States Constitution. However, the protection is limited to the expression, and not the conduct of an entertainer. While our nightclubs are generally well established in their respective markets, there can be no assurance that local, state and/or federal licensing and other regulations will permit our nightclubs to remain in operation or profitable in the future.

Trademarks

The PT’s^® name and logo are trademarks registered with the United States Patent and Trademark Office. We have been granted a license to use the trademarks by Lowrie Management, LLLP, an affiliate of VCG. There is currently no fee for the license. Any future fee will be reviewed for fairness by, and be subject to the approval of, a majority of independent directors. Until then, and as is currently the case, any such fee will be at a price the fairness of which will be established by an independent valuation.

Employees and Independent Contractors

As of December 31, 2002, VCG and its subsidiaries had approximately 180 employees in food and beverage service capacities. VCG has 20 executive personnel provided by IEC. VCG’s employees are not members of a union and VCG has never suffered a work stoppage. The performers providing entertainment in the nightclubs are not employees of VCG. They are self-employed independent contractors who work at VCG’s nightclubs on a non-exclusive basis. The performers pay VCG a fee for providing the facilities for them to perform. The performers’ source of revenue is tips from nightclub customers.

Risk Factors

Our success is subject to the risks described below, among others. Each of these risk factors could adversely affect the price of our common stock, our business, financial condition and results of operations.

We may not be able to acquire additional nightclubs and we may not be able to operate on a profitable basis.

Our growth strategy will depend in large part on our ability to acquire additional nightclubs and to operate our clubs on a profitable basis. The success of our planned expansion

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will depend upon numerous factors, many of which are beyond our control, including the following:

We have had limited operations which makes our future operating results difficult to predict.

We were incorporated as a Colorado corporation in 1998 and recently became the owner of three nightclubs, including real estate, located in suburbs of St. Louis, Missouri; Memphis, Tennessee; and, Indianapolis, Indiana, which have been in business since 1992, 2000 and 1988, respectively. We have a limited operating history. We face the risks and uncertainties of other early-stage companies. Our limited operating history and history of losses make future operating results difficult to predict.

We may need additional financing and we may not be able to obtain it. As a result, our business expansion plans may be significantly limited.

If cash generated from our operations is insufficient to satisfy our working capital and capital expenditure requirements during the next year to two years, we will need to raise additional funds through the public or private sale of our equity or debt securities. The timing and amount of our capital requirements will depend on a number of factors, including cash flow and cash requirements for nightclub acquisitions. If additional funds are raised through the issuance of equity or convertible debt securities, the percentage ownership of our then-existing shareholders will be reduced. We cannot assure you that additional financing will be available on terms favorable to us, if at all. If adequate funds are not available on acceptable terms, our ability to fund our expansion, take advantage of unanticipated opportunities, or otherwise respond to competitive pressures, could be significantly limited. Our business, financial condition and results of operations may be harmed by such limitations.

Our directors and executive officers own a majority of our common stock and may exercise significant influence over our direction and policies. Accordingly, non-management shareholders are subject to the control of our company by our management.

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Our directors and executive officers beneficially own approximately 62.41% of the outstanding shares of our common stock, excluding up to 1,400,000 shares of our common stock which may be issued to Lowrie Management LLLP, an affiliate of Troy H. Lowrie, our Chairman of the Board, upon conversion of a $1,400,000 promissory note. As a result of this stock ownership, management has sufficient voting power to significantly influence our direction and policies, the election of directors, the outcome of any other matter submitted to a vote of shareholders, and a change in control.

Our business operations are subject to regulatory uncertainties which may affect our ability to acquire additional nightclubs, remain in operation or be profitable.

Adult entertainment nightclubs are subject to ever changing local, state and federal regulation. Our business is regulated by local zoning, local and state liquor licensing, local ordinances and state and federal time place and manner restrictions. In the states in which we currently operate, liquor licenses renew annually, and are considered to be a “privileged” license that could be subject to suspension or revocation. The adult entertainment provided by our nightclubs has elements of speech and expression and, therefore, enjoys some protection under the First Amendment to the United States Constitution. However, the protection is limited to the expression, and not the conduct of an entertainer. While our nightclubs are generally well established in their respective markets, there can be no assurance that local, state and/or federal licensing and other regulations will permit our nightclubs to remain in operation or profitable in the future.

There is substantial competition in the nightclub entertainment industry which may effect our ability to operate profitably or acquire additional clubs.

Our company and its existing nightclubs (and any other clubs that we may acquire) face competition from other nightclubs, both for nightclub acquisitions and patrons. These competitors may have greater financial and management resources than our company. In addition, the industry is especially sensitive to ever-changing and unpredictable competitive trends and competition for general entertainment dollars which cannot be easily predicted and which are beyond our control.

Our business is dependent upon management and employees for continuing operations and expansion.

Our success will depend, to a significant extent, on the efforts and abilities of Troy H. Lowrie, our Chairman of the Board, and Micheal L. Ocello, our President. The loss of the services of Messrs. Lowrie and/or Ocello could have a material and continuing adverse effect on our business. In addition, if our business grows, we will need to hire additional management and employees.

We are dependent upon the management services of International Entertainment Consultants, Inc. We may not be able to replace these services which could result in significant limitations on our operations.

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We have contracted with International Entertainment Consultants, Inc. a Colorado corporation (“IEC”), to manage all of our nightclub operations. IEC is an affiliate of Messrs. Lowrie and Ocello. IEC has more than 20 years of experience in managing adult entertainment nightclubs. If IEC were to terminate or breach their contract with us, or if we were unable to renew our contract with IEC, there likely will be a significant adverse effect on our business.

Our business plan and proposed strategy has not been independently evaluated.

We have not obtained any independent evaluation of our business plan and proposed business strategy. There can be no assurance that our nightclubs or proposed strategy will generate sufficient revenues to maintain profitability.

We may be subject to uninsured risks which if realized could expose us to liabilities which we may not be able to pay.

We maintain insurance in amounts we consider adequate for personal injury and property damage to which our nightclubs may be subject. When available at reasonable rates, we maintain personal injury liquor liability insurance. However, there can be no assurance that we will not be exposed to potential liabilities in excess of the coverage provided by insurance, including, but not limited to, liabilities which may be imposed pursuant to state “dram shop” statutes or common law theories of liability. In general, “dram shop” statutes provide that a person injured by an intoxicated person has the right to recover damages from an establishment that wrongfully served alcoholic beverages to such person if it was apparent to the server that the individual being sold, served or provided with an alcoholic beverage was obviously intoxicated to the extent that he presented a clear danger to himself and others.

We could use the issuance of additional shares of our authorized stock to deter a change in control. Even if a change in control would be beneficial to our shareholders, management would be able to maintain control off our company.

We currently have 6,280,000 shares of common stock outstanding, out of a total of 50,000,000 shares of common stock and 1,000,000 shares of preferred stock authorized for future issuance under our Articles of Incorporation. This does not include 700,000 shares of common stock reserved for issuance under our Stock Option and Stock Bonus Plan. The remaining shares of common stock and preferred stock not issued or reserved for specific purposes may be issued without any action or approval of our shareholders unless such approval is required by applicable law. The issuance of additional shares would make it more difficult for a third party to acquire us, even if its doing so would be beneficial to our shareholders.

We do not anticipate paying dividends in the foreseeable future.

Since our inception we have not paid any dividends and we do not anticipate paying any dividends in the foreseeable future. We expect that future earnings, if any, will be used for working capital and to finance growth.

There has never been a market for our common stock and shareholders may not have liquidity for their shares.

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Prior to this offering, there has been no public market for our common stock and there can be no assurance that a public trading market for our common stock will develop, or if developed, will be sustained. We have applied for the listing of our common stock on the American Stock Exchange (“AMEX”). The minimum trading price per share to be qualified for listing on the AMEX is $3.00 per share. The AMEX may decide to see whether there is an actual trading price above $3.00 in the public market as a condition to listing our common stock. For this reason we also have applied for listing on the Over-the-Counter (“OTC”) Bulletin Board.

Future sales of our common stock may depress the price of our stock.

We have filed a registration statement on Form SB-2 to register up to 3,136,778 shares of our common stock. Upon completion of the offering, we may have up to 6,980,000 shares of common stock outstanding. All of these shares will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended (“Securities Act”), except for 74,922 shares issued to a former affiliate of our Company and 3,319,650 shares owned by affiliates not being registered at this time. The future sale of these shares of our common stock may depress the price of our stock. Any sales of shares owned or subsequently purchased by “affiliates” as that term is defined in Rule 144 of the Securities Act, are subject to certain limitations and restrictions.

Forward Looking Statements

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. We have attempted to identify forward looking statements by using words such as “anticipate,” “believe,” “expect,” “future,” “may,” “should,” “plan,” “projected,” “intend” and similar expressions. These statements are only predictions and are based on our beliefs and the assumptions we made using information currently available to us. Because these statements reflect our current views and assumptions concerning future events, these statements involve know and unknown risks, uncertainties and other factors. Our actual results could differ materially from the results discussed in the forward-looking statements. Undue reliance should not be placed on these forward-looking statements which apply only as of the date of this annual report.

Item 2.    Description of Property

VCG’s Offices

VCG maintains its offices at 1601 W. Evans, Suite 200, Denver, Colorado 80223, telephone number (303) 934-2424, at the facilities of IEC for which it pays its pro rata share of rent based on all clubs managed by IEC. IEC is currently paying monthly rent of approximately $3,000.

VCG’s Nightclubs

Each of VCG’s three adult entertainment nightclub businesses is held in a separate, wholly-owned subsidiary and the related real estate and leases are held by a fourth wholly-owned subsidiary.

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The Indianapolis Club is owned by Indy Restaurant Concepts, Inc., an Indiana corporation and wholly-owned subsidiary of VCG. The club has been in business since 1988. VCG began operating the nightclub on June 30, 2002. The PT’s^® Showclub is located in Indianapolis, Indiana in a 7,200 square foot space.

The Memphis Club is owned by Tennessee Restaurant Concepts, Inc., a Tennessee corporation and wholly-owned subsidiary of VCG. The club has been in business since 2000. VCG acquired and began operating the nightclub on June 30, 2002. The PT’s^® Showclub is located in Memphis, Tennessee in a 14,000 square foot building.

The St. Louis Club is owned by Platinum of Illinois, Incorporated, an Illinois corporation and wholly-owned subsidiary of VCG. The club has been in business since 1992. VCG acquired Platinum of Illinois, Incorporated and began operating the nightclub on May 1, 2002. The Platinum Club is located in Brooklyn, Illinois (known as East Saint Louis) in a 9,000 square foot building.

The real estate and leases related to the nightclubs are owned by VCG RE.

In March 2003, VCG RE purchased a building, land and adult entertainment license in Phoenix, Arizona, where VCG intends to locate an additional club. The building is approximately 16,000 square feet (including a 5,000 square foot mezzanine) and the land is approximately four acres. VCG expects that the transfer of the license will be approved in the first quarter, the refinish of the property will be completed in the second quarter and the club will be operational in the third quarter of 2003.

Item 3.    Legal Proceedings

VCG is not a party to any legal proceedings. VCG is unaware of any pending litigation or proceeding involving a director, officer, employee or agent of VCG where indemnification will be required or permitted. We are not aware of any threatened litigation or proceeding which may result in a claim for such indemnification.

Item 4.    Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of VCG’s security holders during the fourth quarter of the fiscal year ended December 31, 2002.

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PART II

Item 5.    Market for Common Equity and Related Stockholder Matters

Common Stock

There currently is no public market for our common stock. We have applied for the listing of our common stock on the American Stock Exchange (“AMEX”). The minimum trading price per share to be qualified for listing on the AMEX is $3.00 per share. The AMEX may decide to see whether there is an actual trading price above $3.00 in the public market as a condition to listing our common stock. For this reason we also have applied for listing on the Over-the-Counter (“OTC”) Bulletin Board.

As of May 13, 2003, there were approximately 426 holders of record of VCG’s common stock (which number does not include shareholders whose shares are held of record by brokerage firms, if any.

We have filed a registration statement on Form SB-2 to register up to 3,136,778 shares of our common stock, which was declared effective on May 13, 2003. The registration statement relates to the offer by selling security holders, for their own accounts, of 2,436,778 shares of our common stock and up to 700,000 shares of our common stock reserved for issuance under our Stock Option and Bonus Plan. Upon completion of the offering, we may have up to 6,980,000 shares of common stock outstanding. All of these shares will be freely tradable without restriction or further registration under the Securities Act, except for 74,922 shares issued to a former affiliate of our Company and 3,319,650 shares owned by affiliates not being registered at this time. Any sales of shares owned or subsequently purchased by “affiliates” as that term is defined in Rule 144 of the Securities Act, are subject to certain limitations and restrictions.

Dividends

We have never declared or paid any dividends on our common stock. We do not intend to pay cash dividends on our common stock. We plan to retain our future earnings, if any, to finance our operations and for expansion of our business. The decision whether to pay cash dividends on our common stock will be made by our Board of Directors, in its discretion, and will depend on our financial condition, operating results, capital requirements and other factors that our Board of Directors considers significant.

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Equity Compensation Plan Information

The following table sets forth information as of the fiscal year ended December 31, 2002 with respect to compensation plans (including individual compensation arrangements) under which equity securities of VCG are authorized for issuance.

Recent Sales of Unregistered Securities

The following equity securities were sold by VCG during the fiscal year ended December 31, 2002 that were not registered under the Securities Act.

In April 2002, VCG sold 1,585,000 shares of its common stock at $1.00 per share to Lowrie Management, LLLP, an affiliate of VCG’s Chairman of the Board. The sale was not underwritten and no commissions or other remuneration was paid in connection with the sale of the shares. The shares were issued under the exemption provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D.

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In April 2002, VCG sold 515,000 shares of common stock at $1.00 per share to the following accredited investors:

The sale was not underwritten and no commissions or other remuneration was paid in connection with the sale of the shares. The shares were issued under the exemption provided by Section 4(2) of the Securities Act and Rule 506 of Regulation D.

On June 30, 2002, VCG acquired all of the outstanding capital stock of Tennessee Restaurant Concepts, Inc., a Tennessee corporation, which was valued at $604,800 for 604,800 shares of VCG’s common stock. The 604,800 shares were issued as follows:

The sale was not underwritten and no commissions or other remuneration was paid in connection with the sale of the shares. The shares were issued under the exemption provided by Section 4(2) of the Securities Act.

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On June 30, 2002, VCG acquired the 14,000 square foot building in which the Tennessee Club is located. The purchase price consisted of the assumption of the $1,640,000 mortgage on the property and 195,200 shares of VCG’s common stock valued at $1.00 per share. The 195,200 shares were issued as follows: