cexe_sc13d.htm

0001354488-13-007045.txt : 20131230 0001354488-13-007045.hdr.sgml : 20131230 20131230095336 ACCESSION NUMBER: 0001354488-13-007045 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20131230 DATE AS OF CHANGE: 20131230 GROUP MEMBERS: ATLAS REAL ESTATE FUNDS INC. GROUP MEMBERS: BRETT TORINO GROUP MEMBERS: KANAVOS DYNASTY TRUST 2011 GROUP MEMBERS: PAUL C. KANAVOS GROUP MEMBERS: ROBERT F.X. SILLERMAN GROUP MEMBERS: TS 2013 LLC GROUP MEMBERS: TTERB LIVING TRUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Circle Entertainment, Inc. CENTRAL INDEX KEY: 0001410402 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 364612924 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-83515 FILM NUMBER: 131301619 BUSINESS ADDRESS: STREET 1: 650 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-838-3100 MAIL ADDRESS: STREET 1: 650 MADISON AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: FX Real Estate & Entertainment Inc. DATE OF NAME CHANGE: 20070822 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SILLERMAN ROBERT F X CENTRAL INDEX KEY: 0000940128 FILING VALUES: FORM TYPE: SC 13D/A MAIL ADDRESS: STREET 1: 150 EAST 58TH STREET CITY: NEW YORK STATE: NY ZIP: 10155 SC 13D/A 1 cexe_sc13d.htm SCHEDULE 13D/A cexe_sc13d.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(Amendment No. 23)*

Circle Entertainment Inc.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

17256R-105

(CUSIP Number)

Mitchell J. Nelson

Atlas Real Estate Funds, Inc.

70 East 55th Street

New York, New York 10022

Telephone: (212) 796-8199

(Name, address and telephone number of person

authorized to receive notices and communications)

December 30, 2013

(Date of event which requires filing of this statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box .o

NOTE: Schedules filed in paper format shall include a signed original and five copies of the Schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent.

————————————————

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes)

CUSIP No. 17256R-105

SCHEDULE 13D/A

Page 2 of 11 Pages

1	NAME OF REPORTING PERSONS Robert F.X. Sillerman
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF		7	SOLE VOTING POWER	9,350,263
SHARES BENEFICIALLY		8	SHARED VOTING POWER	23,910,664
OWNED BY EACH		9	SOLE DISPOSITIVE POWER	9,350,263
REPORTING PERSON WITH		10	SHARED DISPOSITIVE POWER	23,910,664
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 32,760,927
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 41.4%
14	TYPE OF REPORTING PERSON IN

CUSIP No. 17256R-105

SCHEDULE 13D/A

Page 3 of 11 Pages

1	NAME OF REPORTING PERSONS Paul C. Kanavos
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF		7	SOLE VOTING POWER	1,034,254
SHARES BENEFICIALLY		8	SHARED VOTING POWER	38,901,700
OWNED BY EACH		9	SOLE DISPOSITIVE POWER	1,034,254
REPORTING PERSON WITH		10	SHARED DISPOSITIVE POWER	38,901,700
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 39,935,954
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 49.0%
14	TYPE OF REPORTING PERSON IN

CUSIP No. 17256R-105

SCHEDULE 13D/A

Page 4 of 11 Pages

1	NAME OF REPORTING PERSONS Kanavos Dynasty Trust 2011
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF		7	SOLE VOTING POWER	-0-
SHARES BENEFICIALLY		8	SHARED VOTING POWER	11,056,870
OWNED BY EACH		9	SOLE DISPOSITIVE POWER	-0-
REPORTING PERSON WITH		10	SHARED DISPOSITIVE POWER	11,056,870
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 11,056,870
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 15.7%
14	TYPE OF REPORTING PERSON OO

CUSIP No. 17256R-105

SCHEDULE 13D/A

Page 5 of 11 Pages

1	NAME OF REPORTING PERSONS Brett Torino
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION United States
NUMBER OF		7	SOLE VOTING POWER	176,238
SHARES BENEFICIALLY		8	SHARED VOTING POWER	38,235,221
OWNED BY EACH		9	SOLE DISPOSITIVE POWER	176,238
REPORTING PERSON WITH		10	SHARED DISPOSITIVE POWER	38,235,221
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 38,411,459
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 46.4%
14	TYPE OF REPORTING PERSON IN

CUSIP No. 17256R-105

SCHEDULE 13D/A

Page 6 of 11 Pages

1	NAME OF REPORTING PERSONS TTERB Living Trust
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Nevada
NUMBER OF		7	SOLE VOTING POWER	-0-
SHARES BENEFICIALLY		8	SHARED VOTING POWER	28,370,677
OWNED BY EACH		9	SOLE DISPOSITIVE POWER	-0-
REPORTING PERSON WITH		10	SHARED DISPOSITIVE POWER	28,370,677
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 28,370,677
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 35.2%
14	TYPE OF REPORTING PERSON OO

CUSIP No. 17256R-105

SCHEDULE 13D/A

Page 7 of 11 Pages

1	NAME OF REPORTING PERSONS TS 2013 LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Nevada
NUMBER OF		7	SOLE VOTING POWER	-0-
SHARES BENEFICIALLY		8	SHARED VOTING POWER	9,864,544
OWNED BY EACH		9	SOLE DISPOSITIVE POWER	-0-
REPORTING PERSON WITH		10	SHARED DISPOSITIVE POWER	9,864,544
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 9,864,544
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.7%
14	TYPE OF REPORTING PERSON OO

CUSIP No. 17256R-105

SCHEDULE 13D/A

Page 8 of 11 Pages

1	NAME OF REPORTING PERSONS Atlas Real Estate Funds, Inc.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) o (b) þ
3	SEC USE ONLY
4	SOURCE OF FUNDS
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) o
6	CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
NUMBER OF		7	SOLE VOTING POWER	-0-
SHARES BENEFICIALLY		8	SHARED VOTING POWER	5,501,611
OWNED BY EACH		9	SOLE DISPOSITIVE POWER	-0-
REPORTING PERSON WITH		10	SHARED DISPOSITIVE POWER	5,501,611
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 5,501,611
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.5%
14	TYPE OF REPORTING PERSON CO

CUSIP No. 17256R-105

SCHEDULE 13D

Page 9 of 11 Pages

This Amendment No. 23 amends the Statement of Beneficial Ownership on Schedule 13D originally filed with the Securities and Exchange Commission (“SEC”) on January 10, 2008 by Robert F.X. Sillerman (“Sillerman”), Sillerman Commercial Holdings Partnership, L.P., a Delaware limited partnership, and Sillerman Capital Holdings, L.P., a Delaware limited partnership (“Holdings”), with respect to the common stock, par value $0.01 per share (the “Common Stock”), of Circle Entertainment Inc. (formerly known as FX Real Estate and Entertainment Inc.), a Delaware corporation (the “Issuer”), as amended by Amendment No. 1 filed with the SEC on March 13, 2008 by Sillerman and Holdings, as amended by Amendment No. 2 filed with the SEC on May 15, 2008 by Sillerman and Holdings, as amended by Amendment No. 3 filed with the SEC on December 30, 2008 by Sillerman, Holdings, Paul C. Kanavos (“Kanavos”), Brett Torino (“Torino”), ONIROT Living Trust dated 6/20/2000 (“ONIROT”), TTERB Living Trust (“TTERB”) and Atlas Real Estate Funds, Inc. (“Atlas”), as amended by Amendment No. 4 filed with the SEC on September 10, 2009 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 5 filed with the SEC on November 9, 2009 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 6 filed with the SEC on November 18, 2009 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 7 filed with the SEC on December 24, 2009 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 8 filed with the SEC on December 29, 2009 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 9 filed with the SEC on January 29, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 10 filed with the SEC on February 10, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 11 filed with the SEC on February 19, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 12 filed with the SEC on March 18, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 13 filed with the SEC on April 12, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 14 filed with the SEC on April 23, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 15 filed with the SEC on May 6, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 16 filed with the SEC on June 8, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 17 filed with the SEC on July 12, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 18 filed with the SEC on August 19, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 19 filed with the SEC on October 1, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas, as amended by Amendment No. 20 filed with the SEC on December 3, 2010 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB and Atlas , as amended by Amendment No. 21 filed with the SEC on September 22, 2011 by Sillerman, Holdings, Kanavos, Torino, ONIROT, TTERB, Atlas and the Kanavos Dynasty Trust 2011 (“KDT”), and as amended by Amendment No. 22 filed with the SEC on October 3, 2013 by Sillerman, Holdings, Kanavos, KDT, Torino, ONIROT, TTERB, Atlas and TS 2013 LLC (“TS”) (as amended, the “Statement”). This Amendment No. 23 is being filed by Sillerman, Kanavos, KDT, Torino, TTERB, Atlas and TS. From and after the date hereof, all references in the Statement to the Statement or terms of similar import shall be deemed to refer to the Statement as amended by this Amendment No. 23. All capitalized terms used but not defined herein have the respective meanings ascribed to such terms in the Statement.

Sillerman, Holdings, Kanavos, KDT, Torino, TTERB, TS and Atlas (collectively, the “Reporting Persons”) have entered into a Fourth Amended and Restated Joint Filing Agreement, dated October 2, 2013, a copy of which has been filed as Exhibit 26 to the Statement, and which is incorporated herein by reference. Neither the fact of this filing nor anything contained herein shall be deemed an admission by the Reporting Persons that they constitute a "group" as such term is used in Section 13(d)(1)(k) of the rules and regulations under the Securities Exchange Act of 1934, as amended.

Items 4 and 7 of the Statement are hereby amended to the extent hereinafter expressly set forth.

CUSIP No. 17256R-105

SCHEDULE 13D

Page 10 of 11 Pages

Item 4.

Purpose of the Transaction.

Item 4 of the Statement is hereby amended to add the following information:

On December 30, 2013, Sillerman, Kanavos and Torino, through their newly formed corporate affiliate CEN Holdings, Inc., delivered a letter (the “Letter”) to the independent members of the Board of Directors of the Issuer in which Sillerman, Kanavos and Torino have proposed to acquire all of the Common Stock of the Issuer that they do not beneficially own for a purchase price of $0.03 per share pursuant to a short-form merger and related transactions (the “Proposal”).

The Letter acknowledges that the Board of Directors of the Issuer will establish a special committee composed solely of independent and disinterested members of the Board to negotiate the terms of the transactions contemplated by the Proposal.

No binding obligation on the part of Sillerman, Kanavos and Torino or the Issuer will arise with respect to the Letter or Proposal (other than as indicated below) unless and until a definitive agreement with the Issuer is executed and delivered.

Pursuant to the terms of the Letter, Sillerman, Kanavos and Torino have agreed to pay certain of the professional fees of the Issuer (including those of the special committee of the Board) incurred in connection with the transactions contemplated by the Proposal whether or not completed.

The foregoing description of the Letter and the Proposal is not complete and is qualified in its entirety by the full text of the Letter, which is filed herewith as Exhibit 99.27 and incorporated herein by reference.

ITEM 7. Material to be Filed as Exhibits.

Item 7 of the Statement is hereby amended to add the following exhibit:

Exhibit Number		Description
99.27		Letter, dated December 30, 2013, from CEN Holdings, Inc. to the Independent Directors of the Issuer

CUSIP No. 17256R-105

SCHEDULE 13D

Page 11 of 11 Pages

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: December 30, 2013	By:	/s/ Robert F.X. Sillerman
		Robert F.X. Sillerman

Dated: December 30, 2013	By:	/s/ Paul C. Kanavos
		Paul C. Kanavos

	Kanavos Dynasty Trust 2011

	Deutsche Bank Trust Company Delaware, as Trustee

Dated: December 30, 2013	By:	/s/ Susan F. Rodriguez
	Name:	Susan F. Rodriguez
	Title:	Assistant Vice President

	By:	/s/ Jeanne M. Nardone
	Name:	Jeanne M. Nardone
	Title:	Vice President

Dated: December 30, 2013		/s/ Brett Torino
		Brett Torino

	TTERB Living Trust

Dated: December 30, 2013		/s/ Brett Torino
	By:	Brett Torino, as Trustee

	TS 2013 LLC By: ONIROT Living Trust dated 6/20/2000

Dated: December 30, 2013	By:	/s/ Brett Torino
	By:	Brett Torino, as Trustee

	Atlas Real Estate Funds, Inc.

Dated: December 30, 2013	By:	/s/ Paul Kanavos
	Name:	Paul Kanavos
	Title:	President

EX-99.27 2 cexe_ex9927.htm LETTER, DATED DECEMBER 30, 2013, FROM CEN HOLDINGS, INC. cexe_ex9927.htm

Exhibit 99.27

CEN HOLDINGS, INC.

c/o TS 2013 LLC

4455 Wagon Trail Avenue

Las Vegas, Nevada 89118-4430

December 30, 2013

Independent Directors of

Circle Entertainment Inc.

430 Park Avenue, 6th Floor

New York, New York 10022

Gentlemen:

The undersigned, CEN Holdings, Inc. (“CEN Holdings”), is a Delaware corporation formed by Robert F.X. Sillerman, Paul C. Kanavos, Brett Torino and certain other persons (collectively, the “CEN Founders”) who collectively hold over 75% of the outstanding shares of the common stock of Circle Entertainment Inc., a Delaware corporation (“Circle”).

As you know, certain of the CEN Founders have been involved with Circle since its founding in various capacities, including as stockholders, directors and officers. In such capacities, the CEN Founders are aware that:

●

Circle’s only asset is a minority interest in an entity known as I Drive Live Parent LLC (“I Drive Live Parent”), which is controlled by the CEN Founders. I Drive Live Parent is attempting to develop a location-based entertainment business using financing obtained with the benefit of guarantees provided by certain of the CEN Founders.

●	Circle has been a loss corporation since its inception in 2007. As its public filings disclose, for financial reporting purposes under generally accepted accounting principles Circle has an accumulated deficit of more than $111 million.

Independent Directors of Circle Entertainment, Inc.

December 30, 2013

Page 2

●

For tax purposes, Circle has incurred approximately $168 million in net operating losses (NOLs) which may be used to offset future taxable income (if any) of Circle before such NOLs begin to expire in 2027. The Internal Revenue Code (IRC) limits the amount of these NOLs that may be available should Circle or its shareholders undertake a transaction that results in a change of control. Under section 382 of the IRC, the amount of Circle’s NOLs available after a change in control is limited to an annual deduction equal to the market value of Circle multiplied by the long term AFR rate. Circle’s market cap, based upon today’s trading price of approximately $$0.04, is approximately $2,603,000 and the long term AFR for December 2013 is 3.32%. Consequently, under these circumstances an acquirer of Circle would only be able to utilize at most approximately $86,420 per year of the NOLs before they begin to expire in 2027.

●	Circle has never generated material operating revenues and, because its location-based entertainment line of business remains in the development stage, it is uncertain when, if ever, Circle will generate material operating revenues.

●

Circle’s only current source of cash is I Drive Live Parent, which has agreed, under the terms of a Funding Agreement (the “I Drive Live Funding Agreement”), to provide Circle with monthly advances to pay Circle’s overhead expenses. Such I Drive Live Funding Agreement will expire at or around the end of 2014.

●	Certain of Circle’s officers have agreed to defer a portion of their compensation as may be needed if sufficient funds are not otherwise available to Circle to pay certain of its ongoing expenses.

●	For Circle to continue the development of its location-based entertainment line of business, Circle will need significant additional capital, without which Circle’s rights, assets and prospects are likely to be materially impaired.

●	Despite repeated and continuous efforts on the part of certain of the CEN Founders, there are no commitments or understandings with any person or entity for an investment of additional financial resources into Circle, nor is there any feasible prospect for any such investment.

●

Even if Circle obtained a third party investment of additional financial resources sufficient for its needs, the number of common shares that Circle would likely be required to issue to such third party in connection with the investment would cause an impairment of Circle’s ability to utilize the NOLs under applicable tax law, as discussed above.

Independent Directors of Circle Entertainment, Inc.

December 30, 2013

Page 3

●	Certain of the CEN Founders and their affiliates have supported the business and operations of Circle by, among other things,

●	Making loans to Circle from time to time in an aggregate amount in excess of $12 million, which loans are evidenced by unsecured demand promissory notes (the “Demand Notes”).

●	Obligating their affiliate, I Drive Live Parent, to make advances to fund certain of Circle’s operating expenses.

●	Providing personal guaranties to certain of Circle’s business partners and financing sources.

●	Purchasing from Circle shares of Circle’s Series A Convertible Preferred Stock for an aggregate purchase price of $1,500,000.

●	Purchasing from Circle shares of Circle’s Series B Convertible Preferred Stock for an aggregate purchase price of $480,000.

●	In their audit report with respect to Circle’s financial statements for the fiscal year ended December 31, 2012, Circle’s independent public accountants stated that there was substantial doubt about Circle’s ability to continue as a going concern.

●	Because Circle’s common stock is registered under the U.S. securities laws, Circle incurs substantial additional management, legal and accounting expenses to comply with such laws and the regulations promulgated under such laws.

●	Circle’s shares are not listed on any national exchange, but are traded on the OTC bulletin board; trading in Circle’s shares is sporadic, with recent average daily volume below 5,000 shares; and the market price of the shares has been as low as $0.03 per share in recent months.

●

Although Circle, as a public company, has access to the public equity markets which would permit it to raise funds from a public offering of its shares, because its shares currently have minimal trading value with very small public float and low average daily trading volume, such an offering is not feasible.

Independent Directors of Circle Entertainment, Inc.

December 30, 2013

Page 4

Because of Circle’s substantial liabilities, inadequate financial resources and uncertain business prospects, the CEN Founders believe that Circle’s common stock is essentially worthless. Moreover, given Circle’s lack of a viable business and financing plan, and the other factors cited above, the CEN Founders have no present intention to continue providing financial support to Circle under circumstances that include a relatively large number of Circle’s public stockholders obtaining a benefit, through ownership of a small percentage of Circle shares, from financial and other support provided by a few large stockholders. The CEN Founders also believe that the use of small demand loans from related parties as a financing source, and management salary deferrals, do not allow Circle to focus on the long-term planning that is needed to successfully pursue its goal of developing a location-based entertainment line of business. Further, the CEN Founders believe that Circle derives no significant benefit from continuing to have its common stock registered for public sale but instead incurs a substantial net cost as a result of such registration in terms of the expenditure of management time and effort and substantial continuing out-of-pocket legal and accounting expenses.

Therefore, on behalf of the CEN Founders, CEN Holdings would like to discuss with the independent directors of Circle the possibility of effecting a going-private transaction in which minority stockholders of Circle would receive cash in consideration for their shares in Circle. The proposed transaction would provide the minority stockholders liquidity for their shares – in an amount that is fair, taking into consideration Circle’s history, current financial condition and future prospects. As a result of going private, Circle would eliminate the expenses associated with being a public company and would have greater flexibility in planning and decision-making with a long-term view in order to better position itself to complete the development of its location-based entertainment line of business. In addition, for any minority stockholder whose tax basis exceeds the merger consideration, the proposed transaction should give such minority stockholder evidence of a loss for tax purposes. Moreover, the CEN Founders believe that such transaction, if properly structured, would not impair Circle’s ability to utilize the NOLs in the event it is able to generate future taxable income; on the other hand, the CEN Founders believe that the ability to use such NOLs would be substantially impaired if any other purchaser caused a change of control of Circle under applicable tax rules.

The proposed going-private transaction would have the following principal elements:

1. Private Placement. CEN Holdings or one of its affiliates would purchase directly from Circle, in a private placement transaction (the “Private Placement”), a number of newly-issued shares of Common Stock that, upon issuance, would cause the number of shares of Circle common stock owned by CEN Holdings and its affiliates (including the CEN Founders) to exceed 90% of the resulting number of outstanding shares of Circle common stock. Based on our preliminary estimate, we believe that, to achieve this 90%-plus ownership target, the number of shares to be issued in the Private Placement would be approximately 179,000,000 newly-issued shares. We would anticipate that the purchase price in the Private Placement would be the amount described in paragraph 3 below and that all of the purchase price would be paid by the conversion and extinguishment of certain of the Demand Notes.

Independent Directors of Circle Entertainment, Inc.

December 30, 2013

Page 5

2. Concentration of 90% Share Ownership and Short-Form Merger. Promptly following the closing of the Private Placement, CEN Holdings and its affiliates would cause all of their shares of Circle common stock to be owned by a newly formed corporation (the “Parent”) owned by CEN Holdings, and the Parent would effect a short-form merger with Circle in accordance with Section 253 of the Delaware General Corporation Law (“DGCL”) pursuant to which the Parent would be merged with and into Circle (the “Merger”). As a result of the Merger, all shares of Circle common stock held by Circle’s minority stockholders at the effective time of the Merger would (by operation of law and without any shareholder vote) be cancelled in exchange for the right to receive an amount in cash for each such share equal to the merger consideration described below. Outstanding options and warrants would be cancelled in the Merger and each holder of an “in-the-money” option or warrant (of which we believe there are none) would receive a cash payment per share equal to the excess of the merger consideration over the applicable exercise price. Upon the Merger, holders of shares of Circle preferred stock would be entitled to receive the liquidation preference for their shares, plus any accrued and unpaid preferred dividends, in accordance with the applicable certificate of designation. As a result of the Merger, the Company would be a private company wholly-owned by CEN Holdings, and would thereafter cease to be subject to the reporting requirements and governance duties associated with being a public company.

3. Purchase Price; Merger Consideration; Appraisal Rights. We propose that the purchase price in the Private Placement would be three cents ($0.03) per share, which, given the negative equity value of Circle and its limited prospects, the CEN Founders believe reflects a generous premium over the current value of Circle’s common shares (which value, as noted above, the CEN Founders believe to be zero). In addition, we propose that the consideration to Circle’s minority stockholders in connection with the Merger shall be the same three cents ($0.03) per share. Minority stockholders of Circle whose shares are cancelled in the Merger will be entitled to seek appraisal rights in accordance with Section 262 of the DGCA. These appraisal rights will permit such stockholders to seek a court adjudication of the fair value of their shares of Circle common stock in the event they believe the merger consideration does not provide them with fair value.

Independent Directors of Circle Entertainment, Inc.

December 30, 2013

Page 6

4. Agreements; SEC Filings. The Private Placement and subsequent Merger would be effected in accordance with such terms and conditions, and pursuant to such documentation, as are customary for transactions of the nature contemplated hereby. Without limitation, such documentation would include a Schedule 13E-3 containing the disclosures required by the rules promulgated by the Securities and Exchange Commission (the “SEC”) under Section 13(e)-3 of the Securities and Exchange Act of 1934. Among other things, such Schedule 13E-3 would contain information relating to the Private Placement, CEN Holdings’ intention to effect the Merger, and the merger consideration to be paid to minority stockholders in connection with the Merger. As promptly as practicable following the signing of a definitive transaction document between Circle and CEN Holdings with respect to the Private Placement, CEN Holdings, the Parent and Circle would file such Schedule 13E-3 with the SEC and mail such Schedule 13E-3 to Circle’s shareholders. Pursuant to the requirements of applicable SEC rules, a period of at least 20 calendar days would need to elapse after filing and mailing the Schedule 13E-3 before the parties complete the Private Placement and give effect to the Merger.

5. Terms; Approvals. The terms of the proposed transaction as described above, including the per-share purchase price in the Private Placement and the merger consideration, are subject to further review and analysis by CEN Holdings and will require the approval of its board of directors and shareholders. In addition, as acknowledged in paragraph 6 below, the purchase price and other material terms of the Private Placement are subject to the approval of the board of directors of Circle.

6. Special Committee. We acknowledge that the board of directors of Circle will establish a special committee composed solely of independent and disinterested members of the Circle board of directors to negotiate the terms of any transaction that may result from this proposal. Such special committee would, among other things, be authorized to engage independent legal counsel and an independent financial advisor at the expense of Circle, subject to the provisions of paragraph 9 hereof.

7. Access and Cooperation; Confidentiality. We expect that Circle will provide to CEN Holdings and its representatives full access to Circle and its subsidiaries, officers, personnel, counsel, auditors, books and records in order to review and investigate the assets, liabilities, business and prospects of Circle and its subsidiaries. CEN Holdings and its representatives will use commercially reasonable efforts to keep confidential all nonpublic information they obtain in the course of such review and investigation, and such information shall be kept confidential except for the content of the public filings which we are required to make or which our counsel deems reasonably necessary or desirable.

8. Publicity. The CEN Founders intend to immediately file an amendment to their Schedule 13D filing with the SEC to disclose their intention to pursue the transactions outlined herein. Except as set forth herein or as otherwise required by law, rule or regulation, neither CEN Holdings, on the one hand, nor Circle, including the special committee, on the other hand, will, directly or indirectly through their respective representatives or otherwise, publicly disclose or otherwise make known publicly any facts related to the transactions proposed herein without the prior written consent of the other party.

Independent Directors of Circle Entertainment, Inc.

December 30, 2013

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9. Costs. We understand that Circle’s financial resources may be inadequate to bear the costs reasonably expected to arise in connection with the transaction proposed hereby. Therefore, CEN Holdings hereby undertakes to pay, for and on behalf of Circle and without any right of recovery or reimbursement from Circle, promptly upon receipt of appropriate invoices and other customary documentation, the reasonable fees and expenses of the special committee and its legal counsel and financial advisor, and the reasonable fees and expenses of legal counsel to Circle, in each case in connection with the transactions contemplated hereby, through the date on which a transaction contemplated hereby is consummated or, if earlier, the date we notify Circle that we no longer wish to proceed with such transaction. Except as expressly provided in the preceding sentence, each of the parties to the transactions contemplated hereby shall bear its own costs related thereto, including the fees and expenses of its financial advisors, lawyers and accountants.

10. Expression of Intent Only. This letter is an expression only of the present intent of CEN Holdings, and, except for paragraph 9 hereof which shall be binding, nothing herein shall create any legally binding obligation on our part. No obligations with respect to any of the transactions set forth herein shall arise unless and until mutually satisfactory definitive agreements concerning such transactions shall have been entered into by the parties thereto.

	Very truly yours, CEN HOLDINGS, INC.

	By:	/s/ Paul C. Kanavos
		Name: Paul C. Kanavos
		Title: President