What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-12-14 compared with 2020-12-14 · 649 added, 642 removed, 165 unchanged (89% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

In connection with the preparation of this

report, an evaluation was carried out by certain members of Company management, with the participation of the Chief Executive

Officer (“CEO”) and the Chief Financial Officer (“CFO”) of the effectiveness of the Company’s disclosure

controls and procedures (as defined in Securities and Exchange Commission’s (“SEC”) Rules 13a-15(e) and 15d-15(e)

under the Securities Exchange Act of 1934 (“Exchange Act”) as of September 30, 2020.

Disclosure controls and procedures

are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded,

processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information

is accumulated and communicated to management, including the CEO and the CFO, to allow timely decisions regarding required disclosures.

Due to a material weakness in internal

control over financial reporting described below, management concluded that the Company’s disclosure controls and procedures

were not effective as of September 30, 2020.

Notwithstanding the existence of this material weakness, management believes that

the consolidated financial statements in this annual report filed on Form 10-K present, in all material respects, the Company’s

financial condition as reported, in conformity with United States Generally Accepted Accounting Principles (“U.S.

connection with the preparation of this report, an evaluation was carried out by certain members of Company management, with the participation

of the Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) of the effectiveness of the Company’s

disclosure controls and procedures (as defined in Securities and Exchange Commission’s (“SEC”) Rules 13a-15(e) and

15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) as of September 30, 2021.

Disclosure controls

and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act

is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such

information is accumulated and communicated to management, including the CEO and the CFO, to allow timely decisions regarding required

to a material weakness in internal control over financial reporting described below, management concluded that the Company’s disclosure

controls and procedures were not effective as of September 30, 2021.

Notwithstanding the existence of this material weakness,

management believes that the consolidated financial statements in this annual report filed on Form 10-K present, in all material respects,

the Company’s financial condition as reported, in conformity with United States Generally Accepted Accounting Principles (“U.S.

Annual Report on Internal Control over Financial Reporting

Management of the Company is responsible

for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with U.S.

GAAP and includes those policies

and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions

and the dispositions of our assets;

(2) provide reasonable assurance that our transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles and that our receipts and expenditures

of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule

13a-15(f) under the Exchange Act.

Our internal control over financial reporting is designed to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

and includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately and fairly

reflect our transactions and the dispositions of our assets;

(2) provide reasonable assurance that our 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 appropriate authorizations;

and (3) provide reasonable assurance regarding prevention or

timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated

financial statements.

Because of its inherent limitations, internal

control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness

to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree

of compliance with the policies or procedures may deteriorate.

Under the supervision of and with the participation

of our management, we assessed the effectiveness of our internal control over financial reporting as of September 30, 2020, using

the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal

Control—Integrated Framework (2013).

A material weakness is a deficiency, or combination of deficiencies, in internal control

over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual

or interim financial statements will not be prevented or detected on a timely basis.

We identified a material weakness in internal

control related to the proper design and implementation of controls over our income tax provision, specifically over management’s

review of the income tax provision.

Based on our evaluation and as a result of the material weakness identified, our management,

with the participation of our chief executive officer and chief financial officer, concluded that our internal control over financial

reporting was not effective as of September 30, 2020.

The Company’s independent registered

public accounting firm, Friedman, LLP, has expressed an adverse opinion on our internal control over financial reporting as of

September 30, 2020 in the audit report that appears at the end of Part II of this Annual Report on Form 10-K.

Remediation Plan for Existing Material

Management is committed to the remediation of the material weakness

described above, as well as the continued improvement of the Company’s internal control over financial reporting.

has been implementing, and continues to implement, measures designed to ensure that control deficiencies contributing to the material

weakness are remediated, such that these controls are designed, implemented, and operating effectively.

Management will enhance our risk

assessment process over the design and implementation of internal controls over the income tax provision, including enhanced

review controls to be performed by senior accounting management.

It is our belief that these added controls

will effectively remediate the existing material weakness.

and (3) provide reasonable assurance regarding prevention or timely

detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,

or that the degree of compliance with the policies or procedures may deteriorate.

the supervision of and with the participation of our management, we assessed the effectiveness of our internal control over financial

reporting as of September 30, 2021, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway

Commission (“COSO”) in Internal Control—Integrated Framework (2013).

A material weakness is a deficiency, or combination

of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement

of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

We identified a material

weakness in internal control related to the proper design and implementation of controls over our estimates relating to the impairment

of goodwill, indefinite-lived intangibles and long-lived assets, specifically over the precision of management’s review of certain

Based on our evaluation and as a result of the material weakness identified, our management, with the participation of our

chief executive officer and chief financial officer, concluded that our internal control over financial reporting was not effective as

of September 30, 2021.

Company’s independent registered public accounting firm, Friedman, LLP, has expressed an adverse opinion on our internal control

over financial reporting as of September 30, 2021 in the audit report that appears at the end of Part II of this Annual Report

on Form 10-K.

Plan for Existing Material Weakness

Management is

committed to the remediation of the material weakness described above.

As such, controls will be added to both increase

the precision of the review of all assumptions used in the impairment valuation model, as well as to conduct senior management

reviews of any and all material estimates that are applied in these instances.

is our belief that these added controls will effectively remediate the existing material weakness.

Reported Material Weakness in Internal Control Over Financial Reporting

As disclosed in Item 9A Controls and Procedures

in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, we identified a material weakness in internal

control related to ineffective financial statement close and reporting controls in the areas of management review of financial

statement information, independent review of journal entries, disclosure of related party transactions and accounting for loss

contingencies.

disclosed in Item 9A Controls and Procedures in our Annual Report on Form 10-K for the fiscal year ended September 30, 2020, we

identified a material weakness in internal control related to management’s review of the income tax provision.

Efforts to Address Material Weakness

In response to the previously reported

material weakness, management has made the following changes:

developed policies and procedures to

enhance the precision of management review of financial statement information;

implemented policies and procedures

to enhance independent review of journal entries;

developed and implemented procedures

to ensure the completeness of related party disclosures;

developed and implemented procedures

related to the identification and accounting for loss contingencies.

During the fourth quarter of 2020, we completed

our testing of the operating effectiveness of the implemented controls and, with the exception of the new material weakness related

to the income tax provision described above, management has concluded that the previously reported material weakness has been

response to the previously reported material weakness, management has made the following changes:

enhanced review procedures that are performed by senior management over the income tax provision;

the services of a new third-party income tax consultant to assist in the preparation and review of the income tax provision.

the fourth quarter of 2021, we completed our testing of the operating effectiveness of the implemented controls.

has completed the documentation and testing of the corrective actions described above and has concluded that the remediation activities

implemented are sufficient to conclude that the previously disclosed material weakness on management’s review of the income tax

provision has been remediated as of September 30, 2021.

in Internal Control Over Financial Reporting

Except for the changes discussed above,

there have been no other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f)

of the Exchange Act) that occurred during the fourth quarter of 2020 that have materially affected, or are reasonably likely to

materially affect, the Company’s internal control over financial reporting.

We have not experienced any material impact

to our internal controls over financial reporting despite the fact that many of our employees are working remotely due to the

COVID-19 pandemic.

We are continually monitoring and assessing the COVID-19 situation on our internal controls to minimize the

impact on their design and operating effectiveness.

for the changes discussed above, there have been no other changes in our internal control over financial reporting (as defined in Rules

13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of 2021 that have materially affected, or

are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Other Information.

3 unchanged sentences

Opinion on Internal Control over Financial Reporting

have audited RCI Hospitality Holdings, Inc.’s (the “Company’s”) internal control over financial reporting

as of September 30, 2020, based on criteria established in Internal Control—Integrated Framework (2013) issued

by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, because of the effect

of the material weakness described in the following paragraph on the achievement of the objectives of the control criteria, the

Company has not maintained effective internal control over financial reporting as of September 30, 2020, based on criteria

established in Internal Control—Integrated Framework (2013) issued by COSO.

material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting, such

that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements

will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s

Ineffective controls related to management’s review of the

income tax provision.

This material weakness was considered in determining

the nature, timing, and extent of audit tests applied in our audit of the 2020 consolidated financial statements, and this

report does not affect our report dated December 14, 2020, on those consolidated financial statements.

We do not express an opinion or any other form

of assurance on management’s statements referring to any corrective actions taken by the Company after the date of management’s

We also have audited, in accordance with the

standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets

and the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash

flows of the Company, and our report dated December 14, 2020, expressed an unqualified opinion.

have audited RCI Hospitality Holdings, Inc.’s (the “Company’s”) internal control over financial reporting as

of September 30, 2021, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee

of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, because of the effect of the material weakness

described in the following paragraph on the achievement of the objectives of the control criteria, the Company has not maintained effective

internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control—Integrated

Framework (2013) issued by COSO.

material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting, such that

there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not

be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment:

controls related to management’s review of the Company’s estimates relating to the impairment of goodwill and indefinite-lived

intangible assets and long-lived assets, specifically related to the precision of management’s review of the assumptions used in

the impairment analysis.

material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2021 consolidated

financial statements, and this report does not affect our report dated December 14, 2021, on those consolidated financial statements.

do not express an opinion or any other form of assurance on management’s statements referring to any corrective actions taken by

the Company after the date of management’s assessment.

also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”),

the consolidated balance sheets and the related consolidated statements of operations, comprehensive income (loss), changes in equity,

and cash flows of the Company, and our report dated December 14, 2021, expressed an unqualified opinion.

Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment

of the effectiveness of internal control over financial reporting, included in the accompanying “Item 9A - Management’s

Annual Report on Internal Control over Financial Reporting”.

Our responsibility is to express an opinion on the Company’s

internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

of the effectiveness of internal control over financial reporting, included in the accompanying “Item 9A - Management’s Annual

Report on Internal Control over Financial Reporting”.

Our responsibility is to express an opinion on the Company’s internal

control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be

independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material

Our audit of internal control over financial reporting included obtaining an understanding of internal control over

financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness

of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary

in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing

the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based

on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

that our audit provides a reasonable basis for our opinion.

and Limitations of Internal Control over Financial Reporting

company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the

reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally

accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures

that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and

dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures

of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s

assets that could have a material effect on the financial statements.

company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance

with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection

of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Friedman LLP

Marlton, New Jersey

December 14, 2020

Also, projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,

or that the degree of compliance with the policies or procedures may deteriorate.

Directors, Executive Officers and Corporate Governance.

AND EXECUTIVE OFFICERS

Directors are elected annually and hold office until the next annual meeting of our stockholders or until their successors are

elected and qualified.

Officers are appointed by the Board of Directors annually and serve at the discretion of the Board of Directors

(subject to any existing employment agreements).

There is no family relationship between or among any of our directors and executive

Directors are elected annually and hold office until the next annual meeting of our stockholders or until their successors are elected

and qualified.

Officers are appointed by the Board of Directors annually and serve at the discretion of the Board of Directors (subject

to any existing employment agreements).

There is no family relationship between or among any of our directors and executive officers.

Our Board of Directors consists of seven persons.

The following table sets forth our Directors and executive officers

as of December 8, 2020:

The following table sets forth our Directors and executive officers as of December

Chairman, Chief Executive Officer, President

3 unchanged sentences

Langan has been a director since 1998, and our President, CEO and Chairman since 1999.

He began his career in the hospitality

industry in 1989 and has developed significant expertise in sports bar/restaurants and adult entertainment nightclubs, including

related areas of real estate development and finance.

Langan built the XTC Cabaret nightclub brand and merged it into RCI

in 1998, expanding the scope of the company.

He has been instrumental in bringing professional marketing, management, finance,

and technology practices and systems to the gentlemen’s club industry.

As one of the original founders of the National Association

of Club Executives (ACE), Mr.

He began his career in the hospitality industry

in 1989 and has developed significant expertise in sports bar/restaurants and adult entertainment nightclubs, including related areas

of real estate development and finance.

Langan built the XTC Cabaret nightclub brand and merged it into RCI in 1998, expanding the

scope of the company.

He has been instrumental in bringing professional marketing, management, finance, and technology practices and

systems to the gentlemen’s club industry.

As one of the original founders of the National Association of Club Executives (ACE),

Langan has been an active member of its Board of Directors since 1999.

Through these activities,

Langan has acquired the knowledge and skills necessary to successfully operate adult entertainment businesses.

Involvement in certain legal proceedings :

On September 21, 2020, as part of the settlement of a civil administrative proceeding with the SEC, Mr.

Langan agreed, without

admitting or denying the findings, to a cease-and-desist order regarding certain sections of the Securities Exchange Act of 1934

and certain rules promulgated thereunder.

See the subsection “SEC Matter and Internal Review” under the “Legal

Matters” section within Note 12 to our consolidated financial statements within this Annual Report on Form 10-K for

a description of the settlement and order, which description is incorporated herein by reference.

Through these activities, Mr.

Langan has acquired the knowledge

and skills necessary to successfully operate adult entertainment businesses.

in certain legal proceedings :

On September 21, 2020, as part of the settlement of a civil administrative proceeding with the SEC,

the Company, Mr.

Langan and Phil Marshall (our former chief financial officer) agreed, without admitting or denying the findings, to

a cease-and-desist order regarding certain sections of the Securities Exchange Act of 1934 and certain rules promulgated thereunder.

The SEC’s order as to the Company, Mr.

Marshall found that, from fiscal 2014 through 2019, the Company failed to disclose a total of $615,000 in executive compensation

in the form of perquisites.

According to the order, these undisclosed perquisites included the cost of the personal use of the Company’s

aircraft and Company-provided vehicles, reimbursements for personal airline flights, charitable corporate contributions to the school

Langan’s children attended, and housing costs and meal allowance for Mr.

In addition, the order found that

the Company failed to disclose related party transactions involving Mr.

Langan’s father and brother and a director’s brother.

The order further found that the Company failed to keep books and records that allowed it to report, and lacked sufficient internal controls

concerning, these executive perquisites and related party transactions.

The SEC’s order as to the Company, Mr.

Marshall found that the Company and Mr.

Langan violated, and Mr.

Langan and Mr.

Marshall caused the Company to violate, the proxy

solicitation provisions of Section 14(a) of the Securities Exchange Act of 1934 and Rules 14a-3 and 14a-9 thereunder.

The order further

found that the Company violated, and Mr.

Langan and Mr.

Marshall caused the Company to violate, the reporting provisions of Section 13(a)

of the Exchange Act and Rules 13a-1 and 12b-20 thereunder, the books and records provisions of Sections 13(b)(2)(A) and 13(b)(2)(B) of

the Exchange Act, and the disclosure controls provision of Rule 13a-15(a) under the Exchange Act.

The Company, Mr.

Langan, and Mr.

agreed, without admitting or denying the SEC’s findings, to a cease-and-desist order and to pay civil penalties in the amounts

of $400,000, $200,000, and $35,000, respectively.

Chhay was appointed as our CFO on September 14, 2020.

He is a Certified Public Accountant (CPA), Certified Fraud

Examiner (CFE), and Certified Information Systems Auditor (CISA).

He joined us in November 2015 as Controller in charge of migrating

the company to an upgraded ERP system and enhancing internal and external audit and SEC reporting functions.

From 2007 through

2009, he was an auditor for Deloitte & Touche LLP.

From 2009 through 2013, he served as Internal Audit Senior, IT Auditor,

and Senior Fraud Auditor for Live Nation Entertainment, Inc.

of Beverly Hills, a publicly-traded company that markets tickets

for live entertainment worldwide, owns and operates entertainment venues, and manages music artists.

He is a Certified Public Accountant (CPA), Certified Fraud Examiner (CFE), and

Certified Information Systems Auditor (CISA).

He joined us in November 2015 as Controller in charge of migrating the company to an upgraded

ERP system and enhancing internal and external audit and SEC reporting functions.

From 2007 through 2009, he was an auditor for Deloitte

& Touche LLP.

From 2009 through 2013, he served as Internal Audit Senior, IT Auditor, and Senior Fraud Auditor for Live Nation Entertainment,

of Beverly Hills, a publicly-traded company that markets tickets for live entertainment worldwide, owns and operates entertainment

venues, and manages music artists.

From 2013 through 2015, Mr.

Chhay was an Audit Supervisor and Global ERP Project Lead for RigNet, Inc.

of Houston, a publicly-traded digital technology company

serving the oil and gas, maritime and government markets.

After RigNet, he briefly served as CFO for a smaller, privately-held,

multi-unit restaurant chain.

Chhay was an Audit Supervisor and Global ERP Project Lead for RigNet,

of Houston, a publicly-traded digital technology company serving the oil and gas, maritime and government markets.

After RigNet,

he briefly served as CFO for a smaller, privately-held, multi-unit restaurant chain.

Reese became a director and our Executive Vice President in 1999.

From 1997 through 1999, Mr.

Reese had been a senior network

administrator at St.

Reese had been a senior network administrator

Vincent’s Hospital in Santa Fe, New Mexico.

During 1997, Mr.

Reese was a computer systems engineer

with Deloitte & Touche.

From 1995 until 1997, Mr.

Reese was Vice President with Digital Publishing Resources, Inc., an Internet

service provider.

Reese was a computer systems engineer with Deloitte & Touche.

From 1995 until 1997, Mr.

Reese was Vice President with Digital Publishing Resources, Inc., an Internet service provider.

From 1994 until

Reese was a pilot with Continental Airlines.

From 1992 until 1994, Mr.

pilot with Hang On, Inc., an airline company.

Reese has an Associate’s Degree in Aeronautical Science from Texas State

Technical College.

Reese has been involved in the adult entertainment industry since 1992.

His experience and knowledge in

this industry is essential to the Board’s oversight of our businesses.

Reese was a pilot with Hang On, Inc., an airline company.

Reese has an Associate’s Degree in Aeronautical Science from Texas State Technical College.

Reese has been involved in

the adult entertainment industry since 1992.

His experience and knowledge in this industry is essential to the Board’s oversight

of our businesses.

Lirot became a director on July 31, 2007.

Lirot received his law degree from the University of San Francisco in 1986.

serving as an intern in the San Francisco Public Defender’s Office in 1986, Mr.

Lirot returned to Florida and established

a private law practice where he continues to practice and specializes in adult entertainment issues.

He is a past President of

the First Amendment Lawyers’ Association and has actively participated in numerous state and federal legal matters.

Lirot represents as counsel scores of individuals and entities within our industry.

Having practiced in this area for over 30

years, he is aware of virtually every type of legal issue that can arise, making him an important member of the Board.

Anakar became a director on September 14, 2010.

Anakar is a seasoned gaming and hospitality senior executive with a 28-year

successful track record in leading the development and management of top ranked gaming and hospitality operations in the United

States, Europe, and Latin America.

He was Chairman and CEO of Sorteo Games Inc.

from 2002 through 2014 and since 2015 has been

a partner of the McKinney Capital Group and oversees all international developments.

He received his BA in Management Science

from Duke University and CHA in Hospitality Management from the Conrad Hilton College at the University of Houston.

experience managing and developing businesses in industries with similar characteristics to ours make him an excellent fit to

After serving

as an intern in the San Francisco Public Defender’s Office in 1986, Mr.

Lirot returned to Florida and established a private law

practice where he continues to practice and specializes in adult entertainment issues.

He is a past President of the First Amendment

Lawyers’ Association and has actively participated in numerous state and federal legal matters.

Lirot represents as counsel

scores of individuals and entities within our industry.

Having practiced in this area for over 30 years, he is aware of virtually every

type of legal issue that can arise, making him an important member of the Board.

Barabash became a director on September 19, 2017.

Barabash has been a Chief Operating Officer of Gingko Online Learning LLC,

private online learning company in Florida since July 2020 and a consultant to Chengdu Gingko Education Management, educational

management company in Chengdu, China since August 2019.

Barabash has extensive corporate finance experience across multiple

industries domestically and internationally, and has been involved in multiple equity and debt financings and M&A transactions

for public and private companies in the US, China, Brazil, EU and Russia.

From 2016 to June 2019 he was a Senior Vice President

of Finance at Motorsport Network LLC (www.motorsportnetwork.com) in Miami, the largest motorsport data enabled digital media company

in the world.

Barabash has been a Vice President of Business Development at AVI-SPL, a global

market leader in audio visual and unified communications based in Florida since October 2021.

Barabash has extensive corporate

finance experience across multiple industries domestically and internationally, and has been involved in multiple equity and debt financings

and M&A transactions for public and private companies in the US, China, Brazil, EU and Russia.

From August 2019 to January 2021,

Barabash was a Chief Operating Officer of Gingko Online Learning LLC, private online learning company in Florida and a consultant

to Chengdu Gingko Education Management, educational management company in Chengdu, China.

From 2016 to June 2019 he was a Senior

Vice President of Finance at Motorsport Network LLC (www.motorsportnetwork.com) in Miami, the largest motorsport data enabled digital

media company in the world.

Prior to joining Motorsport Network, he was an investment banker at Primary Capital from 2011 until 2016.

Previously, Mr.

Barabash was an investment banker at Rodman & Renshaw and Merrill Lynch.

2 unchanged sentences

in Ukraine and a Master in International Affairs from Columbia University in New York City, and is fluent in Russian.

is a valuable member of the Board of Directors based on his extensive corporate finance and investment banking experience across

multiple industries domestically and internationally with a wide range of transactions (debt and equity).

He also possesses extensive

financial modeling and investor relationship experience and experience in diligence, governance and accounting.

a valuable member of the Board of Directors based on his extensive corporate finance and investment banking experience across multiple

industries domestically and internationally with a wide range of transactions (debt and equity).

He also possesses extensive financial

modeling and investor relationship experience, and experience in diligence, governance and accounting.

Martin became a director on August 8, 2019.

She is co-founder and general partner of two privately-held Houston area businesses

for which she provides a broad array of management and accounting functions on a day-to-day basis.

In 1993, she co-founded Medco

Manufacturing LLC, which develops, manufactures and sells, under Food and Drug Administration (FDA) guidelines, equipment and

disposable products used by plastic surgeons in domestic and international markets.

Martin co-founded Aero Tech Aviation

LLC, which trains foreign nationals for the Federal Aviation Administration (FAA) Air Frame and Power Plant examination, for their

license to repair US-origin aircraft.

She is co-founder and general partner of two privately-held Houston area businesses for

which she provides a broad array of management and accounting functions on a day-to-day basis.

In 1993, she co-founded Medco Manufacturing

LLC, which develops, manufactures and sells, under Food and Drug Administration (FDA) guidelines, equipment and disposable products used

by plastic surgeons in domestic and international markets.

Martin co-founded Aero Tech Aviation LLC, which trains foreign

nationals for the Federal Aviation Administration (FAA) Air Frame and Power Plant examination, for their license to repair US-origin

Earlier in her career, she was a Registered Nurse specializing in cosmetic surgery.

Martin received her BS in Biology and Chemistry from Houston Baptist University.

Her volunteer activities have included serving

as a member of the Board of Directors of Texas A&M University Mothers’ Club (Aggie Moms).

Martin’s business

acumen and experience running companies make her an important member of the Board.

Martin received her BS in Biology and

Chemistry from Houston Baptist University.

Her volunteer activities have included serving as a member of the Board of Directors of Texas

A&M University Mothers’ Club (Aggie Moms).

Martin’s business acumen and experience running companies make her an

important member of the Board.

Allan Priaulx became a director on August 8, 2019.

He has more than 45 years of experience in the communications industry.

in his career, he was Vice President and General Manager of King Features Division of Hearst Corporation, in charge of worldwide

newspaper activities and product licensing.

He was also publisher of American Banker, a leading trade publication in the financial

services industry, when it was owned by Thomson Financial.

In 1993, he founded Resource Media Group, a New York-based financial

media and investor relations firm.

His clients included a wide range of companies, including RCI Hospitality Holdings, Inc., for

which he provided public and investor relations services from 1994 to 2013.

his career, he was Vice President and General Manager of King Features Division of Hearst Corporation, in charge of worldwide newspaper

activities and product licensing.

He was also publisher of American Banker, a leading trade publication in the financial services industry,

when it was owned by Thomson Financial.

In 1993, he founded Resource Media Group, a New York-based financial media and investor relations

His clients included a wide range of companies, including RCI Hospitality Holdings, Inc., for which he provided public and investor

relations services from 1994 to 2013.

Priaulx has been retired since 2014.

Dartmouth College and University of Southampton in the U.K.

He has also completed graduate-level courses at INSEAD Business School

in France and the Wharton School of the University of Pennsylvania.

His volunteer activities have included serving as national

vice president of United Cerebral Palsy.

He attended Dartmouth College and University of Southampton

He has also completed graduate-level courses at INSEAD Business School in France and the Wharton School of the University

of Pennsylvania.

His volunteer activities have included serving as national vice president of United Cerebral Palsy.

OF THE BOARD OF DIRECTORS

have an Audit Committee whose members are Yura Barabash, Elaine Martin and Arthur Allan Priaulx.

All members of the Audit Committee

are independent directors.

The purpose of the Audit Committee is to (i) oversee our accounting and financial reporting processes,

our disclosure controls and procedures and system of internal controls and audits of our consolidated financial statements, (ii)

oversee the relationship with our independent auditors, including appointing or changing our auditors and ensuring their independence,

and (iii) provide oversight regarding significant financial matters.

The Audit Committee meets privately with our Chief Financial

Officer and with our independent registered public accounting firm and evaluates the responses by the Chief Financial Officer

both to the facts presented and to the judgments made by our outside independent registered public accounting firm.

Yura Barabash

serves as the Audit Committee’s financial expert.

All members of the Audit Committee are

independent directors.

The purpose of the Audit Committee is to (i) oversee our accounting and financial reporting processes, our disclosure

controls and procedures and system of internal controls and audits of our consolidated financial statements, (ii) oversee the relationship

with our independent auditors, including appointing or changing our auditors and ensuring their independence, and (iii) provide oversight

regarding significant financial matters.

The Audit Committee meets privately with our Chief Financial Officer and with our independent

registered public accounting firm and evaluates the responses by the Chief Financial Officer both to the facts presented and to the judgments

made by our outside independent registered public accounting firm.

Yura Barabash serves as the Audit Committee’s financial expert.

August 2015, our Board adopted a new Charter for the Audit Committee.

A copy of the Audit Committee Charter can be found on our

website at www.rcihospitality.com/investor .

The Charter establishes the independence of our Audit Committee and sets forth

the scope of the Audit Committee’s duties.

The Audit Committee conducts an ongoing review of our financial reports and other

financial information prior to their being filed with the SEC, or otherwise provided to the public.

The Audit Committee also reviews

our systems, methods and procedures of internal controls in the areas of:

financial reporting, audits, treasury operations, corporate

finance, managerial, financial and SEC accounting, compliance with law, and ethical conduct.

NASDAQ Stock Market Rules require

all members of the Audit Committee to be independent.

The Audit Committee is objective, and reviews and assesses the work of our

independent registered public accounting firm and our internal accounting department.

A copy of the Audit Committee Charter can be found on our website

at www.rcihospitality.com/investor .

The Charter establishes the independence of our Audit Committee and sets forth the scope of

the Audit Committee’s duties.

The Audit Committee conducts an ongoing review of our financial reports and other financial information

prior to their being filed with the SEC, or otherwise provided to the public.

The Audit Committee also reviews our systems, methods and

procedures of internal controls in the areas of:

financial reporting, audits, treasury operations, corporate finance, managerial, financial

and SEC accounting, compliance with law, and ethical conduct.

NASDAQ Stock Market Rules require all members of the Audit Committee to

be independent.

The Audit Committee is objective, and reviews and assesses the work of our independent registered public accounting firm

and our internal accounting department.

have a Nominating Committee whose current members are Elaine Martin, Luke Lirot, Yura Barabash and Arthur Allan Priaulx.

2004, the Board unanimously adopted a Charter with regard to the process to be used for identifying and evaluating nominees for

The Charter establishes the independence of our Nominating Committee and sets forth the scope of the Nominating Committee’s

In July 2004,

the Board unanimously adopted a Charter with regard to the process to be used for identifying and evaluating nominees for director.

Charter establishes the independence of our Nominating Committee and sets forth the scope of the Nominating Committee’s duties.

NASDAQ Stock Market Rules require all members of the Nominating Committee to be independent.

Pursuant to its Charter,

the Committee has the power and authority to consider Board nominees and proposals submitted by our stockholders and to establish

any procedures, including procedures to facilitate stockholder communication with the Board of Directors, and to make any such

disclosures required by applicable law in the course of exercising such authority.

A copy of the Nominating Committee’s

Charter can be found on our website at www.rcihospitality.com/investor .

Pursuant to its Charter, the Committee has

the power and authority to consider Board nominees and proposals submitted by our stockholders and to establish any procedures, including

procedures to facilitate stockholder communication with the Board of Directors, and to make any such disclosures required by applicable

law in the course of exercising such authority.

A copy of the Nominating Committee’s Charter can be found on our website at www.rcihospitality.com/investor .

have a Compensation Committee whose current members are Elaine Martin, Luke Lirot, Yura Barabash and Arthur Allan Priaulx.

June 2014, the Compensation Committee adopted a Charter with regard to the Compensation Committee’s responsibilities, including

evaluating, reviewing and determining the compensation of our Chief Executive Officer and other executive officers.

the Compensation Committee’s Charter can be found on our website at www.rcihospitality.com/investor .

In June 2014,

the Compensation Committee adopted a Charter with regard to the Compensation Committee’s responsibilities, including evaluating,

reviewing and determining the compensation of our Chief Executive Officer and other executive officers.

A copy of the Compensation Committee’s

Charter can be found on our website at www.rcihospitality.com/investor .

Section 16(a) Reports

16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own beneficially more

than ten percent of our common stock, to file reports of ownership and changes of ownership with the Securities and Exchange Commission.

Based solely upon a review of Forms 3, 4 and 5 furnished to us during the fiscal year ended September 30, 2020, we believe that

the directors, executive officers, and greater than ten percent beneficial owners have complied with all applicable filing requirements

during the fiscal year ended September 30, 2020, except for (i) two untimely Form 4s filed on March 19, 2020 and July 24, 2020

by Elaine Martin, our director, with respect to a total of seven transactions occurring on March 13, 16, and 19, 2020, and (ii)

an untimely Form 4 filed on February 12, 2020 by each of Eric Langan, our Chief Executive Officer;

Phillip Marshall,

our former Chief Financial Officer;

and Travis Reese, our Director and Executive Vice President, with respect to the same transaction

involving an investment club.

16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own beneficially more than

ten percent of our common stock, to file reports of ownership and changes of ownership with the Securities and Exchange Commission.

solely upon a review of Forms 3, 4 and 5 furnished to us during the fiscal year ended September 30, 2021, we believe that the directors,

executive officers, and greater than ten percent beneficial owners have complied with all applicable filing requirements during the fiscal

year ended September 30, 2021.

have adopted a code of ethics for our principal executive and senior financial officers, a copy of which can be found on our website

2 unchanged sentences

DISCUSSION AND ANALYSIS

compensation discussion and analysis describes the material elements of the Company’s compensation programs as they relate

to our executive officers who are listed in the compensation tables appearing below.

This compensation discussion and analysis

focuses on the information contained in the following tables and related footnotes.

The individuals who served as the Company’s

Chief Executive Officer and Chief Financial Officer during fiscal 2020, as well as any other individuals included in the

Summary Compensation Table, are referred to as “named executive officers.”

compensation discussion and analysis describes the material elements of the Company’s compensation programs as they relate to our

executive officers who are listed in the compensation tables appearing below.

This compensation discussion and analysis focuses on the

information contained in the following tables and related footnotes.

The individuals who served as the Company’s Chief Executive

Officer and Chief Financial Officer during fiscal 2021, as well as any other individuals included in the Summary Compensation

Table, are referred to as “named executive officers.”

of Compensation Committee Role and Responsibilities

Compensation Committee of the Board of Directors oversees our compensation plans and policies, reviews and approves all decisions

concerning the named executive officers’ compensation, which may further be approved by the Board, and administers our stock

option and equity plans, including reviewing and approving stock option grants and equity awards under the plans.

The Compensation

Committee’s membership is determined by the Board and is composed entirely of independent directors.

Compensation Committee of the Board of Directors oversees our compensation plans and policies, reviews and approves all decisions concerning

the named executive officers’ compensation, which may further be approved by the Board, and administers our stock option and equity

plans, including reviewing and approving stock option grants and equity awards under the plans.

The Compensation Committee’s membership

is determined by the Board and is composed entirely of independent directors.

plays a role in the compensation-setting process.

The most significant aspects of management’s role are to evaluate employee

performance and recommend salary levels and equity compensation awards.

Our Chief Executive Officer often makes recommendations

to the Compensation Committee and the Board concerning compensation for other executive officers.

Our Chief Executive Officer

is a member of the Board but does not participate in Board decisions regarding any aspect of his own compensation.

The Compensation

Committee can retain independent advisors or consultants.

The most significant aspects of management’s role are to evaluate employee performance

and recommend salary levels and equity compensation awards.

Our Chief Executive Officer often makes recommendations to the Compensation

Committee and the Board concerning compensation for other executive officers.

Our Chief Executive Officer is a member of the Board but

does not participate in Board decisions regarding any aspect of his own compensation.

The Compensation Committee can retain independent

advisors or consultants.

Committee Process

Compensation Committee reviews executive compensation in connection with the evaluation and approval of an employment agreement,

an increase in responsibilities or other factors.

With respect to equity compensation awarded to other employees, the Compensation

Committee or the Board grants stock options, often after receiving a recommendation from our Chief Executive Officer.

The Compensation

Committee also evaluates proposals for incentive and performance equity awards, and other compensation.

Compensation Committee emphasizes the important link between the Company’s performance, which ultimately affects stockholder

value, and the compensation of its executives.

Therefore, the primary goal of the Company’s executive compensation policy

is to try to align the interests of the executive officers with the interests of the stockholders.

In order to achieve this goal,

the Company attempts to (i) offer compensation opportunities that attract and retain executives whose abilities and skills are

critical to the long-term success of the Company and reward them for their efforts in ensuring the success of the Company, (ii)

align the Company’s compensation programs with the Company’s long-term business strategies and objectives, and (iii)

provide variable compensation opportunities that are directly linked to the Company’s performance and stockholder value,

including an equity stake in the Company.

Our named executive officers’ compensation utilizes two primary components —

base salary and long-term equity compensation — to achieve these goals.

We have not, however, granted any equity awards

to our executive officers since 2014.

Additionally, the Compensation Committee may award discretionary bonuses to certain executives

based on the individual’s contribution to the achievement of the Company’s strategic objectives.

Compensation Committee reviews executive compensation in connection with the evaluation and approval of an employment agreement, an increase

in responsibilities or other factors.

With respect to equity compensation awarded to other employees, the Compensation Committee or the

Board may grant stock options, often after receiving a recommendation from our Chief Executive Officer.

The Compensation Committee

also evaluates proposals for incentive and performance equity awards, and other compensation.

Compensation Committee emphasizes the important link between the Company’s performance, which ultimately affects stockholder value,

and the compensation of its executives.

Therefore, the primary goal of the Company’s executive compensation policy is to try to

align the interests of the executive officers with the interests of the stockholders.

In order to achieve this goal, the Company attempts

to (i) offer compensation opportunities that attract and retain executives whose abilities and skills are critical to the long-term success

of the Company and reward them for their efforts in ensuring the success of the Company, (ii) align the Company’s compensation

programs with the Company’s long-term business strategies and objectives, and (iii) provide variable compensation opportunities

that are directly linked to the Company’s performance and stockholder value, including an equity stake in the Company.

executive officers’ compensation utilizes two primary components — base salary and long-term equity compensation —

to achieve these goals.

We have not, however, granted any equity awards to our executive officers since 2014.

Additionally, the Compensation

Committee may award discretionary bonuses to certain executives based on the individual’s contribution to the achievement of the

Company’s strategic objectives.

Executive Compensation

fix executive base compensation at a level we believe enables us to hire and retain individuals in a competitive environment and

to reward satisfactory individual performance and a satisfactory level of contribution to our overall business goals.

take into account the compensation that is paid by companies that we believe to be our competitors and by other companies with

which we believe we generally compete for executives.

fix executive base compensation at a level we believe enables us to hire and retain individuals in a competitive environment and to reward

satisfactory individual performance and a satisfactory level of contribution to our overall business goals.

We also take into account

the compensation that is paid by companies that we believe to be our competitors and by other companies with which we believe we generally

compete for executives.

establishing compensation packages for executive officers, numerous factors are considered, including the particular executive’s

1 unchanged sentence

for similar positions.

In arriving at amounts for each component of compensation, our Compensation Committee strives to strike

an appropriate balance between base compensation and incentive compensation.

The Compensation Committee also endeavors to properly

allocate between cash and non-cash compensation and between annual and long-term compensation.

In arriving at amounts for each component of compensation, our Compensation Committee strives to strike an appropriate

balance between base compensation and incentive compensation.

The Compensation Committee also endeavors to properly allocate between

cash and non-cash compensation and between annual and long-term compensation.

Role of Shareholder Say-on-Pay Votes

our annual meeting of shareholders held on September 14, 2020, approximately 96.6% of the shareholders who voted

on the “say-on-pay” proposal approved the compensation of our named executive officers, as disclosed in the proxy

Although this advisory shareholder vote on executive compensation is non-binding, the Compensation Committee will consider

the outcome of the vote when making future compensation decisions for named executive officers.

Company provides executive officers and other employees with base salary to compensate them for services rendered during the fiscal

Subject to the provisions contained in employment agreements with executive officers concerning base salary amounts, base

salaries of the executive officers are established based upon compensation data of comparable companies in our market, the executive’s

job responsibilities, level of experience, individual performance and contribution to the business.

We believe it is important

for the Company to provide adequate fixed compensation to highly qualified executives in our competitive industry.

In making base

salary decisions, the Compensation Committee uses its discretion and judgment based upon personal knowledge of industry practice

but does not apply any specific formula to determine the base salaries for the executive officers.

our annual meeting of shareholders held on September 14, 2021, approximately 94.7% of the shareholders who voted (including

abstentions) on the “say-on-pay” proposal approved the compensation of our named executive officers, as disclosed in

the proxy statement.

Although this advisory shareholder vote on executive compensation is non-binding, the Compensation Committee will

consider the outcome of the vote when making future compensation decisions for named executive officers.

Company provides executive officers and other employees with base salary to compensate them for services rendered during the fiscal year.

Subject to the provisions contained in employment agreements with executive officers concerning base salary amounts, base salaries of

the executive officers are established based upon compensation data of comparable companies in our market, the executive’s job

responsibilities, level of experience, individual performance and contribution to the business.

We believe it is important for the Company

to provide adequate fixed compensation to highly qualified executives in our competitive industry.

In making base salary decisions, the

Compensation Committee uses its discretion and judgment based upon personal knowledge of industry practice but does not apply any specific

formula to determine the base salaries for the executive officers.

Company maintains a retirement savings plan for the benefit of our executives and employees.

Our Simple IRA Plan is intended to

qualify as a defined contribution arrangement under the Internal Revenue Code (the “Code”).

Participants may elect

to defer a percentage of their eligible pretax earnings each year or contribute a fixed amount per pay period up to the maximum

contribution permitted by the Code.

Our Simple IRA Plan is intended to qualify

as a defined contribution arrangement under the Internal Revenue Code (the “Code”).

Participants may elect to defer a percentage

of their eligible pretax earnings each year or contribute a fixed amount per pay period up to the maximum contribution permitted by the

All participants’ plan accounts are 100% vested at all times.

All assets of our Simple

IRA Plan are invested based on participant-directed elections.

We make certain matching contributions to the Simple IRA Plan,

which are also 100% vested.

All assets of our Simple IRA Plan are invested based on participant-directed

We make certain matching contributions to the Simple IRA Plan, which are also 100% vested.

and Other Personal Benefits

Company’s executive officers participate in the Company’s other benefit plans on the same terms as other employees

on a non-discriminatory basis.

Company’s executive officers participate in the Company’s other benefit plans on the same terms as other employees on a non-discriminatory

These plans include medical, dental, life and disability insurance.

Relocation benefits also are

reimbursed and are individually negotiated when they occur.

The Company reimburses each executive officer for all reasonable business

and other expenses incurred by them in connection with the performance of their duties and obligations.

The Company does not provide

named executive officers with any significant perquisites or other personal benefits except for personal travel using Company-owned

automobiles and/or aircrafts, and housing and living expenses for our former CFO.

In September 2019, the board of directors

approved an aircraft policy allowing personal use of Company aircrafts as follows:

(1) 25 hours per fiscal quarter for our CEO,

and (2) 12 hours each per fiscal quarter for other executive officers.

Relocation benefits also are reimbursed and are individually

negotiated when they occur.

The Company reimburses each executive officer for all reasonable business and other expenses incurred by

them in connection with the performance of their duties and obligations.

The Company does not provide named executive officers with any

significant perquisites or other personal benefits except for personal travel using Company-owned automobiles and/or aircrafts, and housing

and living expenses for our former CFO.

In September 2019, the board of directors approved an aircraft policy allowing personal use of

Company aircrafts as follows:

(1) 25 hours per fiscal quarter for our CEO, and (2) 12 hours each per fiscal quarter for other executive

COMPENSATION TABLE

following table reflects all forms of compensation for services to us for the fiscal years ended September 30, 2020, 2019, and

2018 of our named executive officers.

following table reflects all forms of compensation for services to us for the fiscal years ended September 30, 2021, 2020, and 2019 of

our named executive officers.

Compensation (1)

President and

Chief Executive Officer

Principal Position

President and Chief Executive Officer

Bradley Chhay

Chief Financial

Executive Vice

Former Chief Financial

Other Compensation consists of SIMPLE IRA matching contributions, automobile expenses, personal use of aircraft, and housing

and living expenses.

We account for personal use of aircraft to be the aggregate incremental cost of personal use of the

company aircraft as calculated based on a cost-per-flight-hour charge developed by a nationally recognized and independent

The charge reflects the direct cost of operating the aircraft, including fuel, additives, lubricants, maintenance

labor, airframe parts, engine restoration, and major periodic maintenance.

We added actual airport/hangar fees charged to

the company on a per-flight basis.

The charge does not include fixed costs that do not change based on usage, such as aircraft

depreciation, home hangar expenses, and general taxes and insurance.

We value automobile expenses based on the annual depreciation

rate of automobiles assigned for use by the particular officer (until fiscal 2019), plus cost of insurance, registration,

repairs, maintenance, tolls, fuel, and starting fiscal 2020, tax reimbursement on automobile fringe benefits.

Chief Financial Officer

Executive Vice President

Other Compensation consists of SIMPLE IRA matching contributions, automobile expenses, personal use of aircraft, and housing and

living expenses.

We account for personal use of aircraft to be the aggregate incremental cost of personal use of the company aircraft

as calculated based on a cost-per-flight-hour charge developed by a nationally recognized and independent service.

The charge reflects

the direct cost of operating the aircraft, including fuel, additives, lubricants, maintenance labor, airframe parts, engine restoration,

and major periodic maintenance.

We added actual airport/hangar fees charged to the company on a per-flight basis.

The charge does

not include fixed costs that do not change based on usage, such as aircraft depreciation, home hangar expenses, and general taxes

and insurance.

We value automobile expenses based on the annual depreciation rate of automobiles assigned for use by the particular

officer (until fiscal 2019), plus cost of insurance, registration, repairs, maintenance, tolls, fuel, and starting fiscal 2020, tax

reimbursement on automobile fringe benefits.

table of All Other Compensation for fiscal 2021 for our named executive officers is presented below:

2 unchanged sentences

Personal Use of Aircraft

Housing and Living Expenses

Tax Reimbursement

Total All Other Compensation

Bradley Chhay

Chhay assumed the role of Chief Financial Officer when Mr.

Marshall retired as the Company’s Chief Financial Officer on September 14, 2020.

reviewed a comparison of annual total compensation of our CEO to the annual compensation of our median employee who was selected

from all employees who were employed (other than the CEO) during our fiscal year ended September 30, 2020.

SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s

annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable

estimates and assumptions that reflect their employee populations and compensation practices.

As a result, the pay ratio reported

by other companies may not be comparable to the pay ratio reported below, as other companies have different employee populations

and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their

own pay ratios.

the fiscal year ended September 30, 2020, the employment of the

median employee that was identified in our Form 10-K for the fiscal year ended September 30, 2019 and 2018 was terminated.

recalculated and identified a new median employee using the same methodology as mentioned above.

compensation for our CEO in fiscal 2020 of $1,169,052 was approximately 17 times the compensation of our fiscal

2020 median employee of $67,654.

reviewed a comparison of annual total compensation of our CEO to the annual compensation of our median employee who was selected from

all employees who were employed (other than the CEO) during our fiscal year ended September 30, 2021.

SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual

total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates

and assumptions that reflect their employee populations and compensation practices.

As a result, the pay ratio reported by other companies

may not be comparable to the pay ratio reported below, as other companies have different employee populations and compensation practices

and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

the fiscal year ended September 30, 2021, a sizable number of employees have been rehired due to the recovery from the pandemic.

We recalculated and identified a new median employee using the same methodology as mentioned above.

compensation for our CEO in fiscal 2021 of $1,545,218 was approximately 50 times the compensation of our fiscal 2021 median

employee of $31,039.

OF PLAN-BASED AWARDS

4 unchanged sentences

were no stock options exercised nor stock that vested during the fiscal year ended September 30, 2021.

As of September 30, 2020,

the Company’s 2010 Stock Option Plan contractually expired.

pay the expenses of our directors in attending board meetings.

We paid no equity-based compensation during the fiscal year ended

September 30, 2020, and we paid our independent directors $30,000 in cash for the fiscal year.

Following is a schedule of all

compensation paid to our directors in the year ended September 30, 2020:

Allan Priaulx

On January 31, 2020, the employment agreements

Langan, our Chief Executive Officer and President, and Travis Reese, our Executive Vice President, expired.

presently in the process of negotiating new employment agreements with these individuals.

During this process, the Compensation

Committee has determined that these executive officers will continue to receive the pay and benefits provided under their previous

employment agreements.

Under their respective agreements, Mr.

Langan’s annual salary was $1,200,000 and Mr.

annual salary was $390,000.

Each of the agreements also provided for bonus eligibility, expense reimbursement, participation in

all benefit plans maintained by us for salaried employees and two weeks paid vacation.

We are also in the process of negotiating

an employment agreement with Bradley Chhay who was appointed Chief Financial Officer on September 14, 2020.

During this process,

the Compensation Committee has determined to pay him an annual salary of $400,000.

We paid no equity-based compensation during the fiscal year ended September

30, 2021, and we paid our independent directors $30,000 in cash for the fiscal year.

Following is a schedule of all compensation paid

to our directors in the year ended September 30, 2021:

Nourdean Anakar*

Yura Barabash

Elaine Martin

Arthur Allan Priaulx

Anakar did not stand for reelection during the September 2021 annual meeting of stockholders.

July 1, 2021, we entered into new two-year employment agreements with each of our executive officers, including Eric Langan, our

Chief Executive Officer and President;

Bradley Chhay, our Chief Financial Officer;

and Travis Reese, our Executive Vice President and

Under their respective new agreements, Mr.

Langan’s annual salary is $1,700,000;

Chhay’s annual salary is

Reese’s annual salary is $420,000.

Each of the agreements has a term that commenced on July 1, 2021 and ends

on June 30, 2023.

Each of the agreements also provides for bonus eligibility, expense reimbursement, health benefits, participation in

our benefit plans, use of a company-owned automobile, access to company-owned aircraft (subject to the terms and conditions of our corporate

aircraft policy), and two weeks paid vacation annually.

Under the terms of the agreements, each executive is bound to a confidentiality

provision and cannot compete with us for a period upon termination of the agreement.

our executive officers do not have long-term incentive plans or defined benefit or actuarial plans outstanding.

1 unchanged sentence

Company’s 2010 Stock Option Plan, as amended, contractually expired on September 30, 2020.

There are presently no outstanding employee

stock options.

POLICIES AND PRACTICES AS THEY RELATE TO RISK MANAGEMENT

attempt to make our compensation programs discretionary, balanced and focused on the long term.

We believe goals and objectives

of our compensation programs reflect a balanced mix of quantitative and qualitative performance measures to avoid excessive weight

on a single performance measure.

Our approach to compensation practices and policies applicable to employees and consultants is

consistent with that followed for our executives.

Based on these factors, we believe that our compensation policies and practices

do not create risks that are reasonably likely to have a material adverse effect on us.

We believe goals and objectives of our

compensation programs reflect a balanced mix of quantitative and qualitative performance measures to avoid excessive weight on a single

performance measure.

Our approach to compensation practices and policies applicable to employees and consultants is consistent with that

followed for our executives.

Based on these factors, we believe that our compensation policies and practices do not create risks that

are reasonably likely to have a material adverse effect on us.

Committee Report

Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis to be included in this

Based on the reviews and discussions referred to above, the Compensation Committee recommends to the Board of Directors

that the Compensation Discussion and Analysis referred to above be included in this report.

This report is furnished by the Compensation

Committee of our Board of Directors, whose members are:

Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis to be included in this Form

Based on the reviews and discussions referred to above, the Compensation Committee recommends to the Board of Directors that the

Compensation Discussion and Analysis referred to above be included in this report.

This report is furnished by the Compensation Committee

of our Board of Directors, whose members are:

Allan Priaulx

3 unchanged sentences

Lirot, Barabash, and Priaulx.

No interlocking relationship exists

between any member of the Compensation Committee and any member of any other company’s Board of Directors or compensation

No interlocking relationship exists between

any member of the Compensation Committee and any member of any other company’s Board of Directors or compensation committee.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information

at December 8, 2020, with respect to the beneficial ownership of shares of common stock by (i) each person known to us

who owns beneficially more than 5% of the outstanding shares of common stock, (ii) each of our directors, (iii) each of our executive

officers and (iv) all of our executive officers and directors as a group.

Unless otherwise noted below, the address of each beneficial

owner listed in the table is c/o RCI Hospitality Holdings, Inc., 10737 Cutten Road, Houston, Texas 77066.

We have determined beneficial

ownership in accordance with the rules of the SEC.

Except as indicated by the footnotes below, we believe, based on the information

furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to

all shares of common stock that they beneficially own, subject to applicable community property laws.

Applicable percentage ownership

is based on 8,999,910 shares of common stock outstanding at December 8, 2020.

In computing the number of shares

of common stock beneficially owned by a person and the percentage ownership of that person, we deemed outstanding shares of common

stock subject to stock options or warrants held by that person that are currently exercisable or exercisable within 60 days of

December 8, 2020 and shares of common stock issuable upon conversion of other securities held by that person that are currently

convertible or convertible within 60 days of December 8, 2020.

We did not deem these shares outstanding, however, for the

purpose of computing the percentage ownership of any other person.

Beneficial ownership representing less than 1% is denoted with

an asterisk (*).

Number of shares

following table sets forth certain information at December 10, 2021, with respect to the beneficial ownership of shares of common

stock by (i) each person known to us who owns beneficially more than 5% of the outstanding shares of common stock, (ii) each of our directors,

(iii) each of our executive officers and (iv) all of our executive officers and directors as a group.

Unless otherwise noted below, the

address of each beneficial owner listed in the table is c/o RCI Hospitality Holdings, Inc., 10737 Cutten Road, Houston, Texas 77066.

We have determined beneficial ownership in accordance with the rules of the SEC.

Except as indicated by the footnotes below, we believe,

based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power

with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.

Applicable percentage

ownership is based on 9,499,910 shares of common stock outstanding at December 10, 2021.

Generally, in computing the number of shares

of common stock beneficially owned by a person and the percentage ownership of that person, we deem outstanding shares of common stock

subject to stock options or warrants held by that person that are currently exercisable or exercisable within 60 days of December 10,

2021 and shares of common stock issuable upon conversion of other securities held by that person that are currently convertible or

convertible within 60 days of December 10, 2021;

we do not deem these shares outstanding, however, for the purpose of computing

the percentage ownership of any other person.

Presently, there are no outstanding securities that are exercisable or convertible into

shares of common stock.

Beneficial ownership representing less than 1% is denoted with an asterisk (*).

Title of class

Percent of Class (1)

Executive Officers and Directors

1 unchanged sentence

Yura Barabash

Nourdean Anakar

Elaine Martin

Arthur Allan Priaulx

All of our Directors and Officers as a Group of eight persons

All of our Directors and Officers as a Group of seven persons

Other > 5% Security Holders

Cooper Capital Securities, L.P.

BlackRock, Inc.

1 unchanged sentence

Greenhaven Road Investment Management, L.P.

Troy Lowrie (9)

percentages exclude treasury shares in the calculation of percentage of class.

1,870 shares held in an investment club over which Mr.

Langan has shared voting and investment

As of the date of this report, Mr.

Langan owns less than 0.1% of the investment

Langan has shared voting and investment power.

As of the date of this report,

Langan owns less than 0.1% of the investment club.

of shares is rounded to the nearest whole number.

The actual amount is 4,020.317 shares.

1,870 shares held in an investment club over which Mr.

Chhay has shared voting and investment

As of the date of this report, Mr.

Chhay owns approximately 3.8% of the

investment club.

Chhay has shared voting and investment power.

As of the date of this report,

Chhay owns approximately 4.1% of the investment club.

1,870 shares held in an investment club over which Mr.

Reese has shared voting and investment power.

As of the date of this

As of the date of this report,

Reese owns approximately 1.8% of the investment club.

on the most recently available Schedule 13G/A filed with the SEC on February 10, 2020 by Cooper Capital Securities, L.P.,

Cooper Capital Management, LLC, Adam Mikkelsen and Yilaap Lai.

Cooper Capital Management is the general partner of Cooper

Capital Securities;

Adam Mikkelsen is the managing member of Cooper Capital Management;

and Yilaap Lai is the limited partner

of Cooper Capital Securities.

Cooper Capital Securities beneficially owned 547,170 shares, with shared voting power over 425,852

shares, and shared dispositive power over 425,852 shares.

The address of Cooper Capital Securities is 520 Newport Center Drive,

Suite 500, Newport Beach, California 92660.

on the most recently available Schedule 13G filed with the SEC on February 1, 2021 by BlackRock Inc.

BlackRock beneficially

owned 596,667 shares, with sole voting power over 581,097 shares and sole dispositive power over 596,667 shares.

of BlackRock is 55 East 52nd Street, New York, New York 10055.

on the most recently available Schedule 13G filed with the SEC on May 21, 2020 by ADW Capital Partners, L.P., ADW Capital

Management, LLC and Adam D.

ADW Capital Management, LLC is the general partner and investment manager of ADW Capital

Partners, L.P.

BlackRock beneficially owned

578,760 shares, with sole voting power over 571,090 shares and sole dispositive power over 578,760 shares.

The address of BlackRock

is 55 East 52nd Street, New York, New York 10055.

on the most recently available Schedule 13G filed with the SEC on January 8, 2021 by ADW Capital Partners, L.P., ADW Capital Management,

LLC and Adam D.

ADW Capital Management, LLC is the general partner and investment manager of ADW Capital Partners, L.P.

Wyden is the sole manager of ADW Capital Management, LLC.

ADW Capital Partners, L.P is the record and direct

beneficial owner of 457,000 shares, with sole voting power and sole dispositive power over all such shares.

The address of

each of these reporting persons is 1133 Broadway, Suite 719, New York, New York 10010.

on the most recently available Schedule 13G filed with the SEC on September 4, 2020 by

Scott Stewart Miller, Greenhaven Road Investment Management, LP (the “Investment

Manager”), MVM Funds, LLC (the “General Partner”), Greenhaven Road

Capital Fund 1, L.P.

ADW Capital Partners, L.P is the record and direct beneficial owner of

899,900 shares, with sole voting power and sole dispositive power over all such shares.

The address of each of these reporting persons

is 1133 Broadway, Suite 719, New York, New York 10010.

on the most recently available Schedule 13G filed with the SEC on February 16, 2021 by Scott Stewart Miller, Greenhaven Road Investment

Management, LP (the “Investment Manager”), MVM Funds, LLC (the “General Partner”), Greenhaven Road Capital

(“Fund 1”), and Greenhaven Road Capital Fund 2, L.P.

(“Fund 2”, and together with Fund 1, the “Funds”).

is a private investment vehicle.

(“Fund 2”, and together with Fund 1, the

Each Fund is a private investment vehicle.

The Funds directly beneficially own the common stock.

The Investment Manager is the investment manager of the Funds.

The General Partner is

the general partner of the Funds and the Investment Manager.

Miller is the controlling

person of the General Partner.

Miller, the Investment Manager and the General Partner

may be deemed to beneficially own the common stock directly beneficially owned by the

Funds, with sole voting power and sole dispositive power over all such shares.

of each of these reporting persons is c/o Royce & Associates LLC, 8 Sound Shore Drive,

Suite 190, Greenwich, CT 06830.

The Investment

Manager is the investment manager of the Funds.

The General Partner is the general partner of the Funds and the Investment Manager.

Miller is the controlling person of the General Partner.

Miller, the Investment Manager and the General Partner may be deemed

to beneficially own the common stock directly beneficially owned by the Funds, with sole voting power and sole dispositive power

over all such shares.

The address of each of these reporting persons is c/o Royce & Associates LLC, 8 Sound Shore Drive, Suite

190, Greenwich, CT 06830.

Based on the most recently available Schedule 13G filed

with the SEC on November 17, 2021 by Troy Lowrie.

Lowrie is the controlling person of Family Dog, LLC and Club Licensing, LLC,

which are the record and direct beneficial owners of 300,000 shares and 200,000 shares, respectively, with each such entity having

sole voting power and sole dispositive power over all its respective shares.

The address of Mr.

Lowrie is 735 S Xenon Ct, Ste 101,

Lakewood, CO 80228.

Company is not aware of any arrangements that could result in a change in control of the Company.

3 unchanged sentences

receives no compensation or other direct financial benefit for any of the guarantees.

In November 2018, we borrowed $500,000 from

Ed Anakar and $100,000 from Allen Chhay as part of a larger group of private lenders.

The note bears interest at the rate

of 12% per annum and matures in November 2021.

The note is payable in monthly installments of interest only with a balloon payment

of all unpaid principal and interest due at maturity.

Ed Anakar is the brother of Nourdean Anakar, a director of the Company.

We paid Ed Anakar, our director of operations – club division, employment compensation of $502,404, $550,000, and $488,462

during the fiscal years ended September 30, 2020, 2019, and 2018, respectively.

Allen Chhay is the brother of Bradley Chhay, our

CFO, and is not employed by the Company or any of its subsidiaries.

used the services of Nottingham Creations (formerly Sherwood Forest Creations, LLC), a furniture fabrication company that manufactures

Two adult children of Mr.

Langan are also

employed by the Company in corporate shared services.

In November 2018, we borrowed $500,000 from Ed

Anakar and $100,000 from Allen Chhay as part of a larger group of private lenders.

Ed Anakar is the brother of Nourdean Anakar, a former

director of the Company.

Allen Chhay is the brother of Bradley Chhay, our CFO, and is not employed by the Company or any of its subsidiaries.

Their promissory notes bore interest at the rate of 12% per annum and were to mature in November 2021.

The notes were payable in monthly

installments of interest only with a balloon payment of all unpaid principal and interest due at maturity.

Both notes were paid off in

relation to the September 2021 Refinancing Note.

See Note 9 to our consolidated financial statements.

In October 2021, we borrowed $500,000 from Ed

Anakar and $150,000 from Allen Chhay as part of a larger group of private lenders (see Note 9 to our consolidated financial statements).

Their promissory notes bear interest at the rate of 12% per annum and mature in October 2024.

The notes are payable in monthly installments

of interest only with a balloon payment of all unpaid principal and interest due at maturity.

The terms of the notes are the same as the rest of the lender group

We paid Ed Anakar, our director of operations

– club division, employment compensation of $655,289, $502,404, and $550,000 during the fiscal years ended September 30, 2021,

2020, and 2019, respectively.

used the services of Nottingham Creations, and previously Sherwood Forest Creations, LLC, both furniture fabrication companies that manufacture

tables, chairs and other furnishings for our Bombshells locations, as well as providing ongoing maintenance.

Nottingham Creations

is owned by a brother of Eric Langan (as was Sherwood Forest).

Amounts billed to us for goods and services provided by Nottingham

Creations and Sherwood Forest were approximately $59,000 in fiscal 2020, $134,000 in fiscal 2019, and $321,000 in fiscal 2018.

As of September 30, 2020 and 2019, we owed Nottingham Creations and Sherwood Forest $0 and $6,588, respectively, in unpaid billings.

Mechanical LLC (“TW Mechanical”) provided plumbing and HVAC services to both a third-party general contractor providing

construction services to the Company, as well as directly to the Company during fiscal 2020 and 2019.

A son-in-law of Eric Langan

owns a noncontrolling interest in TW Mechanical.

Nottingham Creations is

owned by a brother of Eric Langan (as was Sherwood Forest).

Amounts billed to us for goods and services provided by Nottingham Creations

and Sherwood Forest were approximately $118,000 in fiscal 2021, $59,000 in fiscal 2020, and $134,000 in fiscal 2019.

As of September

30, 2021 and 2020, we owed Nottingham Creations and Sherwood Forest $12,205 and $0, respectively, in unpaid billings.

Mechanical LLC (“TW Mechanical”) provided plumbing and HVAC services to both a third-party general contractor providing construction

services to the Company, as well as directly to the Company during fiscal 2021, 2020, and 2019.

A son-in-law of Eric Langan owns a 50%

interest in TW Mechanical.

Amounts billed by TW Mechanical to the third-party general contractor were approximately $0, $19,000,

and $452,000 for the fiscal years 2021, 2020, and 2019, respectively.

Amounts billed directly to the Company

were approximately $62,000, $47,000, and $7,000 for the fiscal years 2020, 2019, and 2018, respectively.

As of September 30, 2020

and 2019, the Company owed TW Mechanical approximately $5,700 and $0, respectively, in unpaid direct billings.

Amounts billed directly to the Company were approximately $425,000,

$62,000, and $47,000 for the fiscal years 2021, 2020, and 2019, respectively.

As of September 30, 2021 and 2020, the Company owed TW

Mechanical approximately $7,500 and $5,700, respectively, in unpaid direct billings.

Approval, or Ratification of Related Transactions

September 23, 2019, the Board of Directors, acting upon the recommendation of its Audit Committee, adopted a written related party

transaction policy, under which related party transactions are subject to review, approval, rejection, modification and/or ratification

by the Audit Committee.

The policy provides that prior to the entry into any transaction between the Company and one of its officers,

directors, 5% shareholders or an immediate family member of any of the foregoing (a “related party”), such transaction

will be reported to the Company’s chief compliance officer.

The Company’s chief compliance officer will undertake

an evaluation of the transaction.

If that evaluation indicates that the transaction would require the Audit Committee’s

approval, the Company’s chief compliance officer will report this transaction to the Audit Committee.

The Audit Committee

will review the material facts of all related party transactions that require the Audit Committee’s approval and either

approve or disapprove of the entry into the related party transaction.

If advance Audit Committee approval of a related party

transaction is not feasible, then the related party transaction will be considered and, if the Audit Committee determines it to

be appropriate, ratified at the Audit Committee’s next regularly scheduled meeting.

In determining whether to approve or

ratify a related party transaction, the Audit Committee will take into account factors it deems appropriate.

In the event that

the Audit Committee determines not to ratify and approve the related party transaction, then the Audit Committee will instruct

that the related party transaction be rescinded or unwound.

The Audit Committee will not approve or ratify any related party transaction

unless it deems that the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party

under the same or similar circumstances and the extent of the related party’s interest in the transaction.

No director will

participate in any discussion or approval of a related party transaction for which he or she is a related party, except that the

September 23, 2019, the Board of Directors, acting upon the recommendation of its Audit Committee, adopted a written related party transaction

policy, under which related party transactions are subject to review, approval, rejection, modification and/or ratification by the Audit

The policy provides that prior to the entry into any transaction between the Company and one of its officers, directors, 5%

shareholders or an immediate family member of any of the foregoing (a “related party”), such transaction will be reported

to the Company’s chief compliance officer.

The Company’s chief compliance officer will undertake an evaluation of the transaction.

If that evaluation indicates that the transaction would require the Audit Committee’s approval, the Company’s chief compliance

officer will report this transaction to the Audit Committee.

The Audit Committee will review the material facts of all related party

transactions that require the Audit Committee’s approval and either approve or disapprove of the entry into the related party transaction.

If advance Audit Committee approval of a related party transaction is not feasible, then the related party transaction will be considered

and, if the Audit Committee determines it to be appropriate, ratified at the Audit Committee’s next regularly scheduled meeting.

In determining whether to approve or ratify a related party transaction, the Audit Committee will take into account factors it deems

In the event that the Audit Committee determines not to ratify and approve the related party transaction, then the Audit

Committee will instruct that the related party transaction be rescinded or unwound.

The Audit Committee will not approve or ratify any

related party transaction unless it deems that the transaction is on terms no less favorable than terms generally available to an unaffiliated

third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction.

will participate in any discussion or approval of a related party transaction for which he or she is a related party, except that the

director shall provide all material information concerning the transaction to the Audit Committee.

reviewing related party transactions under the policy, the Audit Committee will review and consider one or more of the following

as it seems appropriate for the circumstances:

reviewing related party transactions under the policy, the Audit Committee will review and consider one or more of the following as it

seems appropriate for the circumstances:

(1) the related party’s interest in the related party transaction;

approximate dollar value of the amount involved in the related party transaction;

(3) the approximate dollar value of the amount

of the related party’s interest in the transaction without regard to the amount of any profit or loss;

(4) whether the transaction

was undertaken in the ordinary course of business of the Company;

(5) whether the transaction with the related party is proposed

to be, or was, entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated

(6) the purpose of, and the potential benefits to the Company of, the related party transaction;

(7) whether the

related party transaction would impair the independence of an outside director;

(2) the approximate

dollar value of the amount involved in the related party transaction;

(3) the approximate dollar value of the amount of the related party’s

interest in the transaction without regard to the amount of any profit or loss;

(4) whether the transaction was undertaken in the ordinary

course of business of the Company;

(5) whether the transaction with the related party is proposed to be, or was, entered into on terms

no less favorable to the Company than terms that could have been reached with an unrelated third party;

(6) the purpose of, and the potential

benefits to the Company of, the related party transaction;

(7) whether the related party transaction would impair the independence of

an outside director;

(8) required public disclosure, if any;

any other information regarding the related party transaction or the related party in the context of the proposed transaction

that would be material to investors in light of the circumstances of the particular transaction.

The Audit Committee will review

all relevant information available to it about the related party transaction.

The Audit Committee may approve or ratify the related

party transaction only if the Audit Committee determines in good faith that, under all of the circumstances, the transaction is

fair as to the Company.

The Audit Committee, in its sole discretion, may impose such condition as it deems appropriate on the

Company or the related party in connection with approval of the related party transaction.

Audit Committee is composed of all independent directors, including Yura Barabash, Elaine Martin and Arthur Allan Priaulx.

additionally have two other independent directors, Nourdean Anakar and Luke Lirot, who are not on the Audit Committee.

The definition

of “independent” used herein is based on the independence standards of The NASDAQ Stock Market LLC.

and (9) any other information regarding the related party transaction or

the related party in the context of the proposed transaction that would be material to investors in light of the circumstances of the

particular transaction.

The Audit Committee will review all relevant information available to it about the related party transaction.

The Audit Committee may approve or ratify the related party transaction only if the Audit Committee determines in good faith that, under

all of the circumstances, the transaction is fair as to the Company.

The Audit Committee, in its sole discretion, may impose such condition

as it deems appropriate on the Company or the related party in connection with approval of the related party transaction.

Our Audit Committee is composed of all independent

directors, including Yura Barabash, Elaine Martin and Arthur Allan Priaulx.

We additionally have one other independent director,

Luke Lirot, who is not on the Audit Committee.

The definition of “independent” used herein is based on the independence

standards of The NASDAQ Stock Market LLC.

Principal Accounting Fees and Services.

following table sets forth the aggregate fees paid or accrued for professional services and the aggregate fees paid or accrued

for audit-related services and all other services rendered by Friedman LLP for the fiscal year 2020 and partial 2019, and by

BDO USA, LLP for partial fiscal 2019 (in thousands).

following table sets forth the aggregate fees paid or accrued for professional services and the aggregate fees paid or accrued for audit-related

services and all other services rendered by Friedman LLP for the fiscal year 2021 and 2020 (in thousands).

Audit-related fees

All other fees

fees” include fees billed for professional services rendered in connection with the annual audit and quarterly reviews of

the Company’s consolidated financial statements, the audit of internal control over financial reporting as required by the

Sarbanes-Oxley Act of 2002, and assistance with securities filings other than periodic reports.

were no “Audit-related fees” in fiscal 2020 or 2019.

category of “Tax fees” includes consultation related to tax compliance and tax structuring.

fees” include fees billed for professional services rendered in connection with the annual audit and quarterly reviews of the Company’s

consolidated financial statements, the audit of internal control over financial reporting as required by the Sarbanes-Oxley Act of 2002,

and assistance with securities filings other than periodic reports.

“Audit-related

fees” include professional services in relation to a Form S-3 filing.

include consultation related to tax compliance and tax structuring.

other fees” include fees billed for professional services rendered in connection with the SEC investigation.

above audit services, audit-related services and tax services were pre-approved by the Audit Committee, which concluded that the

provision of such services by Friedman, LLP or BDO USA, LLP was compatible with the maintenance of that firm’s independence

in the conduct of its auditing functions.

The Audit Committee’s outside auditor independence policy provides for pre-approval

of all services performed by the outside auditors.

above audit services, audit-related services and tax services were pre-approved by the Audit Committee, which concluded that the provision

of such services by Friedman, LLP was compatible with the maintenance of that firm’s independence in the conduct of its auditing

The Audit Committee’s outside auditor independence policy provides for pre-approval of all services performed by the

outside auditors.

Exhibits, Financial Statement Schedules.

6 unchanged sentences

Amended and Restated Bylaws (Incorporated by reference from Form 8-K filed with the SEC on March 16, 2016.) *

Consolidated, Amended and Restated Promissory Note for $62,539,366.08 with Centennial Bank (Incorporated by reference from Form 8-K filed with the SEC on December 19, 2017) *

Amended and Restated Promissory Note for $10,558,311.35 with Centennial Bank (Incorporated by reference from Form 8-K filed with the SEC on December 19, 2017) *

Amended and Restated Promissory Note for $8,147,572.57 with Centennial Bank (Incorporated by reference from Form 8-K filed with the SEC on December 19, 2017) *

The description of our common stock

Consolidated, Amended and Restated Promissory Note for $99,145,838.22 with Centennial Bank (Incorporated by reference from Form 8-K filed with the SEC on October 4, 2021) *

12% Unsecured Promissory Note (form of interest-only version of the note) (Incorporated by reference from Form 8-K filed with the SEC on October 18, 2021) *

12% Unsecured Promissory Note (form of amortizing payment schedule version of the note) (Incorporated by reference from Form 8-K filed with the SEC on October 18, 2021) *

10-Year Secured Promissory Note for $11,000,000 by Big Sky Hospitality Holdings, Inc.

to Family Dog, LLC (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

20-Year Secured Promissory Note for $8,000,000 by Big Sky Hospitality Holdings, Inc.

to Family Dog, LLC (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

10-Year Promissory Note for $1,200,000 by RCI Holdings, Inc.

to 3480 South Galena, LLC (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

IP Promissory Note for $1,000,000 by Big Sky Hospitality Holdings, Inc.

to Club Licensing, LLC (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

The description of our common stock (Incorporated by reference from Form 10-K filed with the SEC on December 14, 2020) *

Employment Agreement with Eric S.

(Incorporated by reference from Form 8-K filed with the SEC on May 4, 2018.) *

Employment Agreement with Travis Reese.

(Incorporated by reference from Form 8-K filed with the SEC on May 4, 2018.) *

Employment Agreement with Phillip K.

(Incorporated by reference from Form 8-K filed with the SEC on May 4, 2018.) *

(Incorporated by reference from Form 8-K filed with the SEC on July 2, 2021) *

Employment Agreement with Bradley Chhay (Incorporated by reference from Form 8-K filed with the SEC on July 2, 2021) *

Employment Agreement with Travis Reese (Incorporated by reference from Form 8-K filed with the SEC on July 2, 2021) *

Asset Purchase Agreement with Glenarm Restaurant Concepts, LLC dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Asset Purchase Agreement with Glendale Restaurant Concepts, LLC dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Asset Purchase Agreement with Illinois Restaurant Concepts, LLC dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Asset Purchase Agreement with Indy Restaurant Concepts, LLC dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Asset Purchase Agreement with MRC, LLC dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Asset Purchase Agreement with Raleigh Restaurant Concepts, LLC dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Asset Purchase Agreement with Stout Restaurant Concepts, LLC dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Asset Purchase Agreement with VCG Restaurants Denver, LLC dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Asset Purchase Agreement with Market Entertainment, Inc.

dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Asset Purchase Agreement with OG1, LLC dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Stock Purchase Agreement with HWL-3 LLLP (for the purchase of Kenkev, Inc.) dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Real Estate Purchase and Sale Agreement with Real Property Sellers dated July 23, 2021 (Incorporated by reference from Form 8-K filed with the SEC on July 28, 2021) *

Loan Agreement between RCI Holdings, Inc.

and Centennial Bank (Incorporated by reference from Form 8-K filed with the SEC on December 19, 2017) *

and Centennial Bank (Incorporated by reference from Form 8-K filed with the SEC on October 4, 2021) *

Absolute Unconditional and Continuing Guaranty of RCI Hospitality Holdings, Inc.

to Centennial Bank (Incorporated by reference from Form 8-K filed with the SEC on December 19, 2017) *

(Incorporated by reference from Form 8-K filed with the SEC on October 4, 2021) *

Absolute Unconditional and Continuing Guaranty of Eric S.

Langan to Centennial Bank (Incorporated by reference from Form 8-K filed with the SEC on December 19, 2017) *

Letter from BDO USA, LLP to the Securities and Exchange Commission (Incorporated by reference from Form 8-K filed with the SEC on July 18, 2019) *

Langan (Incorporated by reference from Form 8-K filed with the SEC on October 4, 2021) *

Intellectual Property Purchase Agreement between Big Sky Hospitality Holdings, Inc.

and Club Licensing, LLC (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

Guaranty by RCI Hospitality Holdings, Inc.

in favor of Family Dog (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

Guaranty by RCI Hospitality Holdings, Inc.

in favor of 3480 South Galena LLC (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

Guaranty by RCI Hospitality Holdings, Inc.

in favor of Club Licensing, LLC (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

Lock-Up Agreement between RCI Hospitality Holdings, Inc.

and Family Dog, LLC (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

Lock-Up Agreement by RCI Hospitality Holdings, Inc.

in favor of Club Licensing, LLC (Incorporated by reference from Form 8-K filed with the SEC on October 21, 2021) *

Consent of Friedman LLP

5 unchanged sentences

pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 of 18 U.S.C.

Instance Document

Taxonomy Extension Schema

Taxonomy Extension Calculation Linkbase

Taxonomy Extension Definitions Linkbase

Taxonomy Extension Label Linkbase

Taxonomy Extension Presentation Linkbase

XBRL Instance Document

XBRL Taxonomy Extension Schema

XBRL Taxonomy Extension Calculation Linkbase

XBRL Taxonomy Extension Definitions Linkbase

XBRL Taxonomy Extension Label Linkbase

XBRL Taxonomy Extension Presentation Linkbase

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Incorporated by reference from our previous filings with the SEC.

Form 10-K Summary.

accordance with the requirements of Section 13 of 15(d) of the Exchange Act, the Registrant has caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized, on December 14, 2020.

accordance with the requirements of Section 13 of 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its

behalf by the undersigned, thereunto duly authorized, on December 14, 2021.

Hospitality Holdings, Inc.

Executive Officer and President

to the requirements of the Exchange Act, this report has been signed below by the following persons in the capacities and on the

dates indicated:

to the requirements of the Exchange Act, this report has been signed below by the following persons in the capacities and on the dates

Chief Executive Officer, and President

1 unchanged sentence

Financial Officer and Principal Accounting Officer

December 14, 2021

and Executive Vice President

Nourdean Anakar

December 14, 2021

Yura Barabash

December 14, 2021

Elaine Martin

December 14, 2021

Arthur Allan Priaulx

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures