CIRCLE ENTERTAINMENT INC 70 East 55New York New York 10022 NOTICE OF S - PDF document

1 CIRCLE ENTERTAINMENT INC. 70 East 55New
CIRCLE ENTERTAINMENT INC. 70 East 55New York, New York 10022 NOTICE OF SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON WEDNESDAY, NOVEMBER 18, 2015 October 16, 2015 Dear Stockholders: By Order of the Bo Secretary CIRCLE ENTERTAINMENT INC. 70 EAST 55 STREET NEW YORK, NY 10022 212-796-8169 INFORMATION STATEMENT FOR THE CIRCLE ENTERTAINMENT INC. SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON NOVEMBER 18, 2015 WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY This Information Statement contains information related to the Company’s Special Meeting of Stockholders to be held at the offices of Greenberg Traurig, LLP, 200 Park Avenue, New York, New York at 11:00 a.m., Eastern Standard Time, on November 18, 2015 and any adjournments or postponements thereof. The Special Meeting (hereinafter referred to as the “special meeting”) will be held for the following purposes: To approve the dissolution of the Company; and To transact such other business as may properly come before the meeting and any adjournment or postponement of the meeting. As used in this Information Statement (hereinafter referred to as the “information statement”), unless the context otherwise requires, the terms “we,” “us,” “our,” the “Company,” and “Circle” refer to Circle Entertainment Inc., a Delaware corporation. A copy of the Company’s unaudited balance sheet as of September 30, 2015 is attached to this information statement as Appendix A. On May 15, 2015, the Company ceased filing with the Securities and Exchange Commission periodic and current reports under the Securities Exchange Act of 1934, as amended, in order to reduce the Company’s expenses in anticipation of dissolving and liquidating the Company. Even though the Company is no longer filing reports with the Securities and Exchange Commission, the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 is available free of charge at the Securities Exchange Commission’s website at http://www.sec.gov. You are encouraged to review the report, which contains historical business and financial information about the Company, to further understand why we are seeking stockholder approval of the Company’s dissolution at the special meeting. We are making this information statement and the preceding Notice of Special Meeting available to our stockholders for use at the special meeting. TABLE OF CONTENTS QUESTIONS AND ANSWERS CONCERNING THE SPECIAL MEETING AND OUR DISSOLUTION ............. 1PROPOSAL - APPROVAL OF OUR DISSOLUTION ........................................................................................General .......................................................................................................................Background of the Dissolution Proposal ........................................................................................Reasons for the Dissolution PrDissolution under Delaware Law ................................................................................................Summary of the Dissolution and Liquidation Process ............................................................................Interests of Directors and Executive Officers in Approval of Our Dissolution ..................................................Material United States Federal Income Tax Consequences of Our Dissolution and Liquidation ........................... 14eatment ...................

2 ........................................
.......................................................................................Required Vote .................................................................................................................Recommendation of our Board of Directors ......................................................................................SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ............................... 15APPENDIX A UNAUDITED BALANCE SHEET AS OF SEPTEMBER 30, 2015 ............................................. A-1 QUESTIONS AND ANSWERS CONCERNING What is the stockholder vote required to approve our dissolution? The affirmative vote of a majority in voting power of our outstanding shares of common stock and Series B convertible preferred stock (voting on an as-converted into common stock basis) entitled to vote on the record date is required to approve our dissolution. The holders of our outstanding common stock and outstanding Series B convertible preferred stock on the record date shall vote together as a single class at the special meeting. Banks and brokerage firms do not have authority to vote customers’ unvoted shares held by the firms in street name on the proposal to approve our dissolution. Broker non-votes and abstentions will have the same effect as a vote against this proposal. This proposal is sometimes referred to herein as the “Dissolution Proposal” What constitutes the presence of a quorum to properly convene and conduct business at the special meeting? The presence at the special meeting of the holders of a majority in voting power of shares of our common stock and Series B convertible preferred stock (voting on an as-converted into common stock basis) outstanding on the record date and entitled to vote at the special meeting will constitute a quorum. Abstentions are counted as present for the purpose of determining the presence of a quorum. A broker who holds shares in nominee or “street name” for a customer who is the beneficial owner of those shares may be prohibited from voting those shares in person on any proposal to be voted on at the special meeting without specific instructions from such customer with respect to such proposal. Do I need to vote at the special meeting to approve our dissolution? No, we are not asking you to vote at the special meeting to approve our dissolution, and we are not asking for a proxy and you are requested not to send us a proxy. The holders of outstanding shares of our common stock and the holders of outstanding shares of our Series B convertible preferred stock (voting on an as-converted into common stock basis as described in the next paragraph) will vote together as a single class at the special meeting. Each outstanding share of Series B convertible preferred stock is entitled to vote the number of shares of our common stock into which such share of Series B convertible preferred stock is convertible on the record date. Each outstanding share of common stock is entitled to one (1) vote. At the special meeting, certain of our stockholders (namely, Paul Kanavos, Robert F.X. Sillerman and Brett Torino), our directors and executive officers and their respective affiliates will be entitled to cast an aggregate of 71,028,153 votes (representing an aggregate of 70,954,425 outstanding shares of our common stock and 25 outstanding shares of our Series B convertible preferred stock), which vo

3 tes represent approximately 77 % of all
tes represent approximately 77 % of all of the votes entitled to be cast at the special meeting by the holders of outstanding shares of our common stock and Series B convertible preferred stock as of the record date. All of these persons have indicated they and their affiliates will vote their shares of our common stock and Series B convertible preferred stock in favor of our dissolution. As such, our dissolution will be approved by the required vote of ourstockholders, whether or not you or any of our other stockholders vote their shares in person or by proxy at the special meetinin favor of or against our dissolution. However, if you desire you may vote in person at the special meeting by ballot or grant a proxy to another person to vote in your place. If your shares of common stock or Series B convertible preferred stock are not held of record in your nameyou must obtain a proxy from the record holder, usually a broker or other nominee, in order to vote in person at the meeting. Are outstanding shares of our Series B convertible preferred stock automatically convertible by their terms into shares of our common stock without any action by the holders thereof? Yes, outstanding shares of our Series B convertible preferred stock are automatically convertible by their terms into shares of our common stock without any action by the holders thereof. As of the record, there are 850 shares of our Series B convertible preferred stock outstanding. These outstanding shares of Series B convertible preferred stock will automatically convert by their terms into shares of our common stock without any action by the holders on a rolling basis from October 20, 2015 through March 8, 2016, such that by March 8, 2016, there will be no outstanding shares of our Series B convertible preferred stock. Can I still sell my shares of Circle Entertainment Inc. common stock or Series B convertible preferred stock after our dissolution is approved by stockholders? Yes, but only until the filing of a Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State. Our common stock is quoted on the OTC Pink Sheets. We will request that our common stock cease being quoted at the close of business on the date we file the Certificate of Dissolution and that trading will be suspended on that date or as soon thereafter as is reasonably practicable. In addition, we intend to close our stock transfer books and discontinue recording transfers of shares of our common stock and Series B convertible preferred stock at the close of business on the date we file the Certificate of Dissolution. Thereafter, certificates representing shares of our common stock and Series B convertible preferred stock will not be assignable or transferable on our books except by will, intestate succession or operation of law. See “Proposal —Approval of Our Dissolution—Summary of the Dissolution and Liquidation Process—Quotation and Trading of the Common Stock.”How does the Board of Directors recommend I vote on the proposal to approve the dissolution of the Company? The Board of Directors recommends that you vote FOR the authorization and approval of the dissolution of the Company. Why is the Board of Directors recommending approval of the dissolution of the Company? We do not currently generate any revenue from our location-based entertainment line of business, which is inactive and will require sig

4 nificant capital and financing to develo
nificant capital and financing to develop and commercialize, and we do not have any definitive funding commitments in place (or the ability to complete equity and/or debt financings) to fund our short-term or long-term liquidity needs. Certain of our stockholders (namely, Paul Kanavos, Robert F.X. Sillerman and Brett Torino) financed substantially all of the Company’s short-term liquidity requirements from 2010 through 2014 by making demand loans and equity contributions to the Company, which allowed us to continue as a going concern. For instance, during 2011, these stockholders made demand loans to the Company totaling $7,050,000, and during 2014, these stockholders made capital contributions to the Company totaling $1,250,566. These stockholders have indicated that they are no longer willing to fund the Company’s short-term liquidity requirements beyond the special meeting. Accordingly, our Board of Directors believes that the dissolution and liquidation of the Company is advisable and in the best interests of the Company and its creditors and stockholders. See “Proposal —Approval of Our Dissolution—Background of the Dissolution Proposal” and “Proposal —Approval of Our Dissolution—Reasons for the Dissolution Proposal.”What will happen when our dissolution is approved? When our dissolution is approved, we intend to file a Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State. As of September 30, 2015, we had approximately $125,700 in cash. We do not have any cash equivalents or marketable securities. We currently estimate that we will reserve approximately $92,000 in cash, which will be used to pay our expenses until the filing of the Certificate of Dissolution. From and after the filing of a Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State, we will be prohibited from continuing the business for which we were organized and will be required to liquidate. In connection with our liquidation, Delaware law requires that we pay or make reasonable provision to pay claims and obligations of the Company before making distributions to our stockholders. In the event that the assets of the Company, after the payment or reasonable provision for the payment of the claims and obligatioof the Company, are available for distribution to our stockholders, such distributions will be required to be made in accordancwith the liquidation waterfalls set forth in our certificate of incorporation. Based on our current estimates of the assets of the Company, on the one hand, and the claims and obligations of the Company, on the other hand, we do not believe that there will be assets available for distribution to our stockholders. The claims and obligations of the Company include, but are not limited to, the following: operating expenses incurred prior to our dissolution; claims and obligations of our creditors; expenses incurred by us in connection with the dissolution and liquidation process; compensation, severance and related costs; and professional, legal, consulting and accounting fees. Delaware law provides that, from and after our dissolution, the Company must be liquidated in accordance with Delaware law. In furtherance of this requirement, we anticipate that our Board of Directors (or a committee thereof), will utilize the method of liquidating the Company provided by Sections 280 and 281(a) of the

5 General Corporation Law of the State of
General Corporation Law of the State of Delaware (the “DGCL”). Certain of our stockholders (namely, Paul Kanavos, Robert F.X. Sillerman and Brett Torino) are our principal creditors. As of the record date, we owed $11,083,000 under demand loans made by these stockholders to the Company during 2011 and 2012. In addition, as of the record date, we owed $2,841,584.56 for accrued and unpaid interest. Although we anticipate that our Board of Directors (or a committee thereof) will utilize the method of liquidating the Company provided by Sections 280 and 281(a) of the DGCL, we may also use the procedure established by Section 281(b) of the DGCL, and in furtherance thereof, may assign our assets and turn over the liquidation of the Company pursuant to an assignment for the benefit of creditors. We may also transfer all or any portion of our assets, together with related claims aobligations, to a liquidating trust. Our Board of Directors (or a committee thereof) may appoint one or more of its members, one or more of our officers or a third party to act as trustee or trustees of such liquidating trust. See “Proposal —Approval of Our Dissolution—Summary of the Dissolution and Liquidation Process.” Do you anticipate that stockholders will receive any liquidating distributions? We currently estimate that there will be no liquidating distributions to our stockholders. The existence, timing, and amount of any liquidating distribution will depend upon the expenses incurred in connection with dissolution and liquidation process, as well as the payment or the making of reasonable provision to pay our claims and obligations, as well as our abilityto convert our remaining assets to cash. We do not believe the value of our remaining assets will be sufficient to pay the expenses incurred in connection with the dissolution and liquidation process, pay or make reasonable provision to pay our claims and obligations and allow us to make any liquidating distributions to our stockholders. If in the highly unlikely event the Company will be permitted to distribute assets to its stockholders, such assets are required to be first distributed to holders of outstanding shares of our Series B convertible preferred stock (but only to the extent a holder’s shares of Series B convertible preferred stock are then outstanding and have not been previously automatically converted into shares of our common stock pursuant to our certificate of incorporation), in accordance with the senior liquidation preferences provided to them in our certificate of incorporation and then, to the extent assets remain available fodistribution to our stockholders, to the holders of outstanding shares of our common stock. See “Proposal —Approval of Our Dissolution—Summary of the Dissolution and Liquidation Process—No Expected Distributions to Stockholders.”When do you expect the dissolution process to be completed? Upon approval of our dissolution by our stockholders, we will work toward an orderly wind down of our business and affairs. Subject to stockholder approval of our dissolution, we currently expect to file a Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State as soon as reasonably practicable following stockholder approval of our dissolution. Notwithstanding the approval of the dissolution of the Company by our stockholders, however, our Board of Directors may abandon such d

6 issolution without further action by our
issolution without further action by our stockholders. After the effectiveness of our dissolution,pursuant to the Delaware law, our corporate existence will continue for a period of at least three years. During this period, we will not be permitted to continue the business for which the Company was organized, and may only wind up our business and affairs. Should I send in my stock certificates now? No. You should not forward your stock certificates before receiving instructions to do so. In the highly unlikely event of a distribution to all or certain of our stockholders in accordance with the liquidation waterfalls established by our certificate of incorporation, we may, in our discretion, require stockholders to (i) surrender their certificates evidencing their shares ocapital stock to us or (ii) furnish us with evidence satisfactory to us of the loss, theft or destruction of such certificates, together with such surety bond or other security or indemnity as may be required by and satisfactory to us. If surrender of stock certificates will be required following the Company’s dissolution, we will send you written instructions regarding such surrender. What are the material United States federal income tax consequences of the dissolution and liquidation? If in the highly unlikely event liquidation distributions are made to all or certain of our stockholders in accordance with the liquidation waterfalls set forth in our certificate of incorporation, any such liquidating distribution will be applieagainst and reduce each recipient stockholder’s tax basis in such stockholder’s shares of stock. Gain will be recognized as a result of a liquidating distribution to the extent that the aggregate value of the distribution and any prior liquidating distributions received by a recipient stockholder with respect to a share exceeds such stockholder’s basis for that share. A loss will generally be recognized if the aggregate value of all liquidating distributions with respect to a share is less than the stockholder’s tabasis for that share. Gain or loss recognized by a stockholder will be capital gain or loss provided the shares are held as capital assets, and will generally be long-term capital gain or loss if the stock has been held for more than one year.The tax consequences of our dissolution may vary depending upon the particular circumstances of each stockholder. We recommend that each stockholder consult its own tax advisor regarding the federal income tax consequences of our dissolution and liquidation as well as the state, local and foreign tax consequences. See “Proposal—Approval of Our Dissolution—Material United States Federal Income Tax Consequences of Our Dissolution and Liquidation.” What will happen if the dissolution is abandoned after being approved by stockholders? If the Company’s dissolution is abandoned after being approved by our stockholders, the dissolution and liquidation of the Company will not occur and our Board of Directors and management will explore other alternatives. However, our management and Board of Directors have considered other alternatives available to us and have been unable to identify any alternative or transaction that they believe would have a reasonable likelihood of providing any value to our stockholders aftesatisfaction of existing claims and obligations. We have no sources of capital to fund our liquidity requirements. As

7 such, wwould likely cease operations, ma
such, wwould likely cease operations, make an assignment for the benefit of creditors, turn the Company over to a third-party management company or liquidator or file for bankruptcy liquidation. Do I have appraisal rights? Under Delaware law, you do not have appraisal rights in connection with the Dissolution Proposal or the liquidation of the Company. Are there any other matters that will be presented for stockholder consideration at the special meeting other than the Dissolution ProposalOur Board of Directors does not know of any matter that will be presented for your consideration at the meeting other than the Dissolution Proposal described herein. Who can help answer my questions? If you would like additional copies, without charge, of this information statement or if you have questions about the proposed dissolution of the Company or the liquidation of the Company, including the procedures for voting your shares in person or by proxy at the special meeting, you should contact Mitchel J. Nelson, our Executive Vice President and General Counsel, at (646) 561-6386. PROPOSAL - APPROVAL OF OUR DISSOLUTION Our Board of Directors is presenting the dissolution of the Company for approval by our stockholders at the special meeting. The dissolution of the Company was approved and deemed advisable by our Board of Directors on September 24, 2015. Background of the Dissolution Proposal We were incorporated as FX Real Estate and Entertainment Inc. in Delaware in June 2007. On December 15, 2010, our former subsidiary which had owned property in Las Vegas, Nevada for redevelopment was reorganized and emerged from its Chapter 11 bankruptcy proceeding under new ownership pursuant to its plan of reorganization as confirmed by the bankruptcy court on November 8, 2010. As a result, we no longer have an ownership interest in such property. Effective January 11, 2011, we changed our name from FX Real Estate and Entertainment Inc. to Circle Entertainment Inc. Our principal executive offices are located at 70 East 55 Street, New York, New York 10022, and our telephone number is 212-796-8169. Until receipt of an acquisition proposal (as described below) from certain of our stockholders (as named below) on December 30, 2013, the Company had been pursuing the development and commercialization of its location-based entertainment line of business since September 10, 2010. We do not currently generate any revenue from our location-based entertainment line of business, which is inactive and will require significant capital and financing to develop and commercialiand we do not have any definitive funding commitments in place (or the ability to complete equity and/or debt financings) to fund our short-term or long-term liquidity needs, including making cash capital contributions to an Orlando, Florida project inwhich we have a minority ownership interest to fund the project’s development costs in excess of those budgeted therefor. Thus far, the development costs for the Orlando, Florida project have significantly exceeded the budgeted costs therefor and, as a result, to the extent there is one or more actual capital calls by the project to fund these excess development costs, we will be required to fund our ratable portion of such excess costs in order to maintain our minority ownership interest in the Orlando, Florida project. We are not able to fund our ratable portion of these excess costs i

8 f required to do so, and, unless we do s
f required to do so, and, unless we do so our minority ownership interest in the Orlando, Florida project will be significantly diluted in terms of ownership and value. As of the record date, the principal owners of the Orlando, Florida project (certain of our stockholders) have made loans to the project in the aggregate principal amount of approximately $14.56 million to fund such excess development costs. These loans are senior in all respects to our minority ownership interest in the project. On December 30, 2013, the independent members of our Board of Directors received a letter from certain of our stockholders, namely Paul C. Kanavos, the President, a non-independent member of the Board of Directors and a greater than 10% stockholder of the Company, Robert F.X. Sillerman, a non-independent member of the Board of Directors and a greater than 10% stockholder of the Company, and Brett Torino, a greater than 10% stockholder of the Company, in which Messrs. Kanavos, Sillerman and Torino proposed to acquire all of the shares of common stock of the Company that they did not beneficially own for a purchase price of $0.03 per share pursuant to a short-form merger and related transactions. On December 31, 2014, the acquisThese stockholders financed substantially all of the Company’s short-term liquidity requirements from 2010 through 2014 by making demand loans and equity contributions to the Company, which allowed us to continue as a going concern. For instance, during 2011, these stockholders made demand loans to the Company totaling $7,050,000, and during 2014, these stockholders made capital contributions to the Company totaling $1,250,566. These stockholders have indicated that they are no longer willing to fund the Company’s short-term liquidity requirements. The foregoing description of the Company and its inactive location-based entertainment line of business, the withdrawn acquisition proposal and certain of our stockholders’ financing of our short-term liquidity requirements is not complete and is qualified in its entirety by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, which is available free of charge at the Securities Exchange Commission’s website at http://www.sec.gov Our Board of Directors met and had several conference calls to review and discuss the strategic alternatives for the Company if the acquisition proposal did not result in a completed transaction. During those meetings, our Board of Directors reviewed the alternatives of a bankruptcy filing or a voluntary dissolution of the Company, the possible sale of the Company, or any other transaction which, whether initiated by the Company or another party, would satisfy the Company’s debts and maximize the value for its stockholders. The Company’s Board of Directors and its management have not been able to identify possible alternatives that might confer greater value on the Company’s stockholders. On May 15, 2015, the Company, with the approval of the Board of Directors, ceased filing with the Securities and Exchange Commission periodic and current reports under the Securities Exchange Act of 1934, as amended, in order to reduce the Company’s expenses in anticipation of dissolving and liquidating the Company. On August 21, 2015, the Board of Directors approved the initiation of a process to consider and prepare for the voluntary dissolution of the Com

9 pany. Because directors Paul C. Kanavos
pany. Because directors Paul C. Kanavos and Robert F.X. Sillerman are the principal creditors of the Company, they abstained from the Board of Directors’ vote to proceed with the initiation of a process to consider and prepare for the voluntary dissolution of the Company. On September 24, 2015, the Board of Directors held a special meeting for the purpose of considering the dissolution of the Company. Also present at the special meeting were representatives of Greenberg Traurig, LLP, our outside legal counsel.At the special meeting, outside legal counsel reviewed with the Board of Directors its fiduciary duties in considering the dissolution of the Company. After such review, the dissolution of the Company was unanimously approved and deemed advisable in the judgment of the Board of Directors (other than Messrs. Kanavos and Sillerman who abstained from voting because they are the Company’s principal creditors). On October 6, 2015 the Board of Directors, acting by unanimous written consent, approved the form of notice of and information statement for this special meeting of stockholders to consider and seek approval of the Company’s dissolution. Under the DGCL, from and after the filing of a Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State, we will be prohibited from continuing the business for which we were organized and will be required to liquidate. In connection with our liquidation, the DGCL requires that we pay or make reasonable provision to pay claims and obligations of the Company before making distributions to our stockholders. The outstanding debt obligations of the Company to certain of our stockholders (namely, Paul Kanavos, Robert F.X. Sillerman and Brett Torino) totals approximately $13.9 million as of the record date, there are additional accrued obligations for salaries and other overhead expenses of approximately $3.9 million as of the record date, and the holders of outstanding shares of our Series B convertible preferred stock (but onlyto the extent outstanding and not previously automatically converted into shares of our common stock pursuant to our certificatof incorporation), based on the senior liquidation preference to which they are entitled under our certificate of incorporationwill have priority over the holders of outstanding shares of our common stock in any liquidating distribution to our stockholders. Since the Company’s sole asset is its minority interest in a project in Orlando, Florida, the value of we believe is significantly less than the Company’s claims and obligations, the Board has determined to move forward with the Company’s dissolution and liquidation. If, prior to our dissolution, the Company receives an offer for a transaction that will, in the view of our Board, provide value to stockholders after payment of the Company’s claims and obligations, taking into account all factors that could affect valuation, including timing and certainty of payment or closing, credit market risks, proposed terms and other factors, the Company’s dissolution and liquidation could be abandoned in favor of such a transaction. Reasons for the Dissolution Proposal In arriving at its determination that the dissolution of the Company is advisable and in the best interests of the Company and its creditors and stockholders and is the preferred alternative for the Company, our Board of Directors carefully conside

10 rethe dissolution and the liquidation pr
rethe dissolution and the liquidation process under Delaware law, as well as other available alternatives. As part of the evaluation process, the Board of Directors considered the risks, viability and timing of each alternative available to the Company. In approving the Company’s dissolution, our Board of Directors considered several of the factors set out above as well as the following factors: the fact that we do not have an active line of business and do not generate any revenue; the fact that we have no sources of financing to continue as a going concern; the fact that we have been unsuccessful in completing a going private transaction; the low probability that we would be presented with, or otherwise identify, within a reasonable period of time under current circumstances, any viable opportunities to engage in an alternative transaction that would provide value to our stockholders; the substantial costs and expenses associated with continuing as a going concern without an active line of business, including accounting and legal fees associates with being a publicly traded company; the dissolution and the liquidation process under Delaware law, including the provisions of Delaware law that permit our Board of Directors to abandon Company’s dissolution, including, without limitation, if the Board determines that, in light of any new proposals presented or changes in circumstances, dissolution and liquidation are no longer advisable and in our best interests and the best interests of our creditors and stockholders; the fact that Delaware law requires that the dissolution be approved by the affirmative vote of holders of a majority in voting power of shares of our outstanding capital stock; and the fact that approval of the Company’s dissolution by the requisite vote of our stockholders authorizes our Board of Directors and officers to implement the dissolution and liquidation of the Company without further stockholder approval. Our Board also considered the following negative factors in arriving at its conclusion that dissolving the Company is in the best interests of the Company and its creditors and stockholders: the remoteness of any liquidating distributions to stockholders; the risks associated with the sale of our remaining non-cash assets as part of the liquidation of the Company; that if an alternative transaction was identified it would not likely provide value to our stockholders; and the fact that upon the filing of a Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State, our stockholders would generally not be permitted to transfer shares of our capital stock. In view of the variety of factors considered in connection with its evaluation of the Company’s dissolution, our Board of Directors did not find it practical, and did not quantify or otherwise attempt, to assign relative weight to the specific faconsidered in reaching its conclusions. In addition, our Board of Directors did not undertake to make any specific determinatias to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to its ultimate determination, but rather conducted an overall analysis of the factors described above. In considering the factors described above, individual directors may have given different weight to different factors. If in the highly unlikely event the dissolution of the Company is not

11 approved by our stockholders, the dissol
approved by our stockholders, the dissolution and liquidation of the Company will not occur and our Board of Directors and management will continue to explore other alternatives. However, our management and Board of Directors have considered at length, with the assistance of legal advisors,potential alternatives available to us and have been unable to identify any alternative that they believe would have a reasonablikelihood of providing any value to our stockholders. In addition, we could make an assignment for the benefit of creditors, turn the Company over to a third-party management company or liquidator or file for bankruptcy protection. At this time, our Board of Directors has considered these and other options and has determined that it is in the best interests of the Company and its creditors and stockholders to dissolve and liquidate the Company. The Board of Directors, however, retains the right to consider other alternatives before the filing of the Certificate of Dissolution. Dissolution under Delaware Law Delaware law provides that a corporation may dissolve if the board of directors of the corporation deems it advisable, in its judgment, that the corporation be dissolved, and a majority of the outstanding stock of the corporation entitled to votethereon vote for the proposed dissolution. Following such approval, the dissolution of the corporation is affected by filing aCertificate of Dissolution with the Delaware Secretary of State. The corporation is dissolved upon the filing of its Certificaof Dissolution or upon such later date and time as stated in its Certificate of Dissolution. Section 278 of the DGCL provides that once a corporation is dissolved, it continues its corporate existence for the purposes of winding up and liquidating, but may not carry on the business for which it was organized. The process of winding up includes: the payment or the making of reasonable provision for the payment of claims and obligations of the corporation; subject to the limitations established by the DGCL, the distribution of any remaining assets to the stockholders of the corporation; and the taking of all other actions necessary to wind up and liquidate the corporation’s business and affairs. Summary of the Dissolution and Liquidation Process This section of the information statement describes material aspects of the proposed dissolution of the Company. While we believe that the description covers the material terms of the dissolution and the liquidation process under Delaware law, this summary may not contain all of the information that is important to you. You should carefully read this entire information statement, and the other documents attached as Appendix to this information statement for a more complete understanding of the Dissolution Proposal. On September 24, 2015, our Board of Directors (other than Messrs. Kanavos and Sillerman who abstained from the vote because of their principal creditor relationship with the Company) unanimously approved and deemed advisable, the dissolution of the Company. If our dissolution is approved by our stockholders, we will file a Certificate of Dissolution withthe Delaware Secretary of State dissolving Circle Entertainment Inc. Pursuant to the DGCL, we will continue to exist for three (3) years after our dissolution or for such longer period as the Delaware Court of Chancery shall direct, for the purpose of prosecu

12 ting and defending suits against us and
ting and defending suits against us and enabling us gradually to close our business, to dispose of our property, to discharge our liabilities and to distribute to our stockholders any remaining assets. The relative interests of our stockholders in any liquidating distributions we make will be fixed on the basis of the outstanding shares of our common stock and/or Series B convertible preferred stock owned by them and the relevant provisions of our certificate of incorporation governing liquidating distributions to our stockholders. We intend to cease thequotation of our common stock from the OTC Pink Sheets and close our stock transfer books and discontinue recording transfers of shares of our common stock and our Series B convertible preferred stock at the close of business on the date we file the Certificate of Dissolution with the Delaware Secretary of State, which is referred to herein as the “Final Record Dateand thereafter certificates representing shares of our common stock and Series B convertible preferred stock will not be assignable or transferable on our books except by will, intestate succession or operation of law. After the Final Record Date, in the highly unlikely event any liquidating distributions are made to stockholders, such liquidating distributions are requireto be made first to holders of outstanding shares of our Series B convertible preferred stock (but only to the extent a holder’shares of Series B convertible preferred stock are then outstanding and have not been previously automatically converted into shares of our common stock pursuant to our certificate of incorporation) in accordance with the senior liquidation preferences provided to them in our certificate of incorporation and then, to the extent assets remain available for distribution to our stockholders, to the holders of outstanding shares of our common stock, in each case to such holders as of the close of busineson the Final Record Date except as may be necessary to reflect subsequent transfers recorded on our books as a result of any assignments by will, intestate succession or operation of law. After stockholder approval of our dissolution and filing a Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State, our activities will be limited to: paying or making reasonable provision for the payment of our claims and obligations in accordance with the DGCL, which we anticipate will involve notifying our known creditors (including in connection with any pending action, suit or proceeding to which the Company is a party) (which creditors we refer to herein as our “known creditors”) and persons having contractual claims against the Company contingent upon the occurrence or non-occurrence of future events or otherwise conditional or un-matured (which persons we refer to herein as our “contingent creditors”) of our dissolution, and negotiating and compromising with such creditors; attempting to convert, sell or otherwise dispose of all of our remaining non-cash assets for cash or cash equivalents in an orderly fashion; terminating any of our remaining commercial agreements, relationships or outstanding obligations; paying our dissolution and liquidation expenses; if in the highly unlikely event there are assets legally available to pay one or more liquidating distributions to our stockholders, making such liquidating distributions to our stockholders of re

13 cord as of the Final Record Date (except
cord as of the Final Record Date (except as may be necessary to reflect subsequent transfers recorded on our books as a result of any assignments by will, intestate succession or operation of law) in accordance with the liquidation waterfalls provided in our certificate of incorporation; and preparing and filing tax returns. We had approximately $125,700 in cash as of September 30, 2015. We do not have any cash equivalents or marketable securities. We currently estimate that we will reserve approximately $92,000 in cash, which will be used to pay our expenses until the filing of the Certificate of Dissolution. From and after the filing of a Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State, we will be prohibited from continuing the business for which we were organized and will be required to liquidate. In connection with our liquidation, Delaware law requires that we pay or make reasonable provision to pay claims and obligations of the Company before making distributions to our stockholders. In the event that the assets of the Company, after the payment or the making of reasonable provision for the payment of the claims and obligations of the Company, are available for distribution to our stockholders, such distributions will be required to be made in accordance with the liquidation waterfalls set forth in our certificate of incorporation. Based on our current estimates of the assets of the Company, on the one hand, and the claims and obligations of the Company, on the other hand, we do not believe that there will be assets available for distribution to our stockholders. The claims and obligations of the Company include, but are not limited to, the following: operating expenses incurred prior to our dissolution; claims and obligations of our creditors; expenses incurred by us in connection with the dissolution and liquidation process; compensation, severance and related costs; and professional, legal, consulting and accounting fees. Delaware law provides that, from and after our dissolution, the Company must be liquidated in accordance with Delaware law. In furtherance of this requirement, we anticipate that our Board of Directors (or a committee thereof), will utilize the procedure for liquidating the Company provided by Sections 280 and 281(a) of the DGCL. If we utilize the procedurefor liquidating the Company provided by Sections 280 and 281(a) of the DGCL, we will notify our known creditors and our contingent creditors of our dissolution, negotiate and compromise with such creditors and petition the Delaware Court of Chancery to finally determine the amount and form of security that will be sufficient or reasonably likely to be sufficient (asmay be required by the DGCL) to provide compensation for (i) claims against us which have not been compromised and agreed between our known creditors (other than in connection with any pending action, suit or proceeding to which the Company is a party) and our contingent creditors, (ii) claims against us which are the subject of a pending action, suit or proceeding to whwe are a party and (iii) claims that have not been made known to us or that have not arisen but that, based on the facts known to us, are likely to arise or become known to us within five (5) years after the date of our dissolution or such longer period the Delaware Court of Chancery may determine not to exceed ten (1

14 0) years after the date of our dissoluti
0) years after the date of our dissolution Although we anticipate that our Board of Directors (or a committee thereof) will utilize the method of liquidating the Company provided by Sections 280 and 281(a) of the DGCL, we may also use the procedure established by Section 281(b) of the DGCL, and in furtherance thereof, may assign our assets and turn over the liquidation of the Company pursuant to an assignment for the benefit of creditors. We may also transfer all or any portion of our assets, together with related claims aobligations, to a liquidating trust. Our Board of Directors (or a committee thereof) may appoint one or more of its members, one or more of our officers or a third party to act as trustee or trustees of such liquidating trust. During the liquidation of our assets, we may pay our officers, directors, employees and agents, or any of them, compensation for services rendered in connection with our liquidation. See “Interests of Directors and Executive Officers in Approval of Our Dissolution.” Such compensation is not expected to be materially different from the compensation that would be paid to an outside party for similar services. Approval of Our Dissolution The Company’s dissolution must be approved by the affirmative vote of a majority in voting power of outstanding shares of our common stock and Series B convertible preferred stock (voting on an as-converted into common stock basis) entitled to vote on the record date, voting together as a single class. The approval of our dissolution by the requisite vote of our stockholders will constitute adoption of our dissolution and a grant of full and complete authority for our Board of Directors and officers, without further stockholder action, to proceed with the dissolution and liquidation of the Company in accordance with any applicable provision of the DGCL, including the authority to dispose of all of our remaining non-cash assets. 10 Dissolution and Liquidation After the Company’s dissolution is approved by the requisite vote of our stockholders, the steps set forth below will be completed at such times as our Board of Directors (or a committee thereof), in its discretion and in accordance with the DGCL, deems necessary, appropriate or advisable in our best interests and the best interests of our creditors and stockholders:the filing of a Certificate of Dissolution with the Delaware Secretary of State; the cessation of all of the Company’s business activities except those relating to winding up and liquidating the Company’s business and affairs, including, but not limited to, prosecuting and defending suits by or against us; the collection, sale, exchange or other disposition of all or substantially all of the Company’s non-cash property and assets, in one transaction or in several transactions; the payment of or the making of reasonable provision to pay the claims of our known creditors (other than in connection with any pending action, suit or proceeding to which the Company is a party) and contingent creditors; the making of such provision as will be reasonably likely to be sufficient to provide compensation for any claim against us which is the subject of a pending action, suit or proceeding to which we are a party; the making of such provision as will be reasonably likely to be sufficient to provide compensation for claims that have not been made known to us or that have not arisen but that, b

15 ased on facts known to us, are likely to
ased on facts known to us, are likely to arise or become known to us within five (5) years after the date of our dissolution (or such longer period as the Delaware Court of Chancery may determine not to exceed ten (10) years after the date of our dissolution); if in the highly unlikely event any assets remain after the foregoing, any liquidating distributions to our stockholders are required to be made in accordance with the liquidation waterfalls provided in our certificate of incorporation (with the holders of outstanding shares of our Series B convertible preferred stock (but only to the extent a holder’s shares of Series B convertible preferred stock are then outstanding and have not been previously automatically converted into shares of our common stock pursuant to our certificate of incorporation) having senior liquidation preferences over the holders of outstanding shares of our common stock); and the taking of any and all other actions permitted or required by the DGCL and any other applicable laws and regulations. Sale of Our Remaining Assets From and after the Company’s dissolution, our Board of Directors (or a committee thereof) will be permitted to sell of all of our remaining non-cash assets without further stockholder approval. Stockholder approval of our dissolution will constitute approval of any and all such future asset dispositions on such terms as are approved by our Board of Directors (or acommittee thereof) in its sole discretion. No Expected Distributions to Stockholders As of September 30, 2015, we had approximately $125,700 in cash. We do not have any cash equivalents or marketable securities. We currently estimate that we will reserve approximately $92,000, which will be used to pay our expenses until the filing of the Certificate of Dissolution. From and after the filing of a Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State, we will be prohibited from continuing the business for which we were organized and will be required to liquidate. In connection with our liquidation, Delaware law requires that we pay or make reasonable provision to pay claims and obligations of the Company before making distributions to our stockholders. In the event that the assets of the Company, after the payment or the making of reasonable provision for the payment of the claims and obligations of the Company, are available for distribution to our stockholders, such distributions will be required to be made in accordance with the liquidation waterfalls set forth in our certificate of incorporation. Based on our current estimatof the assets of the Company, on the one hand, and the claims and obligations of the Company, on the other hand, we do not believe that there will be assets available for distribution to our stockholders. Payment or the Making of Reasonable Provision for Payment of our Claims and Obligations Under the DGCL, we are required, in connection with our dissolution and liquidation, to pay or make reasonable provision for payment of all of our claims and obligations. Following the approval of our dissolution by our stockholders and the filing of the Certificate of Dissolution affecting our dissolution with the Delaware Secretary of State, we intend to notif 11 our known creditors and contingent creditors of our dissolution and negotiate and compromise with such creditors. Our principal creditors are certain

16 of our stockholders to whom we owed as o
of our stockholders to whom we owed as of the record date approximately $13.9 million under demand loans they made to us during 2011 and 2012 and our executive officers to whom we owed as of the record date $3.7 million for accrued and unpaid salary. We intend to negotiate and compromise with our known creditors and contingent creditors based upon estimates and opinions of management and the Board of Directors (or a committee thereof) and/or consultation with outside experts and a review of our estimated operating expenses and future estimated liabilities, estimated legal, accounting and consulting fees, operating lease expenses, payroll and other taxes payable, miscellaneous office expenses, and expenses accrued in our financialstatements. We do not expect our assets to be sufficient to pay or make reasonable provision to pay all of our claims and obligations. Quotation and Trading of the Common Stock If our stockholders approve our dissolution, we intend to close our stock transfer books and cease the quotation of our shares of common stock on the OTC Pink Sheets on the Final Record Date. We will cease recording stock transfers and issuing stock certificates (other than replacement certificates) at such time. Accordingly, it is expected that trading in the shares of our common stock will cease after the Final Record Date. It is possible that the quotation of our common stock on the OTC Pink Sheets will effectively terminate before then if we are unable to meet the requirements for continued quotation thereon. After our common stock is no longer quoted on the Pink Sheets and our transfer books have been closed, generally our stockholders will not be able to transfer their shares. Final Record Date The Final Record Date will be the date upon which we file the Certificate of Dissolution with the Delaware Secretary of State. We intend to close our stock transfer books and discontinue recording transfers of shares of our capital stock on thFinal Record Date, and thereafter certificates representing shares of our capital stock will not be assignable or transferable on our books except by will, intestate succession or operation of law. After the Final Record Date, we will not issue any new stock certificates, other than replacement certificates. It is anticipated that no further trading of our shares of common stowill occur after the Final Record Date. See “—Summary of the Dissolution and Liquidation Process—Quotation and Trading of the Common Stock.” If in the highly unlikely event any liquidating distributions are made to our stockholders on or after the Final Record Date, such assets are required to be first distributed to holders outstanding shares of our Series B convertible preferred stoc(but to the extent then outstanding and not previously automatically converted into our common stock pursuant to our certificatof incorporation) in accordance with the senior liquidation preferences provided to them in our certificate of incorporation anthen, to the extent assets remain available for distribution to our stockholders, to the holders of outstanding shares of our common stock, in each case to such holders as of the Final Record Date (except as may be necessary to reflect subsequent transfers recorded on our books as a result of any assignments by will, intestate succession or operation of equent tthe Final Record Date, we may at our election require stockholders to sur

17 render certificates representing their s
render certificates representing their shares of stockStockholders should not forward their stock certificates before receiving instructions to do so. If surrender of stock certificates should be required, all distributions otherwise payable, if any, to stockholders who have not surrendered their stock certificamay be held in trust for such stockholders, without interest, until the surrender of their certificates (subject to escheat pursuant to the laws relating to unclaimed property). If a stockholder’s certificate evidencing his or her ownership has been lost, stoor destroyed, the stockholder may be required to furnish us with satisfactory evidence of the loss, theft or destruction thereotogether with a surety bond or other indemnity, as a condition to the receipt of any distribution. Absence of Appraisal Rights Under the DGCL, our stockholders are not entitled to appraisal rights for their shares of common stock and/or their Series B convertible preferred stock in connection with the Company’s dissolution and liquidation. Treatment of Equity Awards and Employee Stock Purchase Plan Pursuant to the terms of the 2007 Executive Equity Incentive Plan and 2007 Long-Term Incentive Compensation Plan (collectively, the “Equity Incentive Plans”), under which stock options to acquire shares of our common stock have been granted, all outstanding stock options, whether currently vested or unvested, will terminate immediately prior to our dissolution. Information regarding the treatment of the equity awards held by our executive officers is set forth under the heading “of Directors and Executive Officers in Approval of Our Dissolution.” In accordance with the Equity Incentive Plans, we will 12 give notice to holders of outstanding stock options of our plans to dissolve and liquidate, and allow these holders to exercisetheir vested stock options prior to our dissolution. Unless and until an option is exercised and payment of the applicable exercise price is made, option holders are not entitled to any cash distributions with respect to their options. We intend to terminate the Equity Incentive Plans effective upon our dissolution. Authority of Officers and Directors After the Final Record Date, we expect that our Board of Directors (or some subset thereof) and our officers (or some subset thereof) will continue in their positions for the purpose of winding up the business and affairs of the Company. Our Board of Directors (or a committee thereof) may appoint officers, hire employees and retain independent contractors and agents in connection with the winding up process, and may pay compensation to or otherwise compensate our directors, officers, employees, independent contractors and agents above their regular compensation in recognition of the extraordinary efforts they may be required to undertake in connection with our dissolution and liquidation. Adoption of the Company’s dissolution by the requisite vote of our stockholders will constitute approval by our stockholders of any such compensation. The approval of the Company’s dissolution by our stockholders also will authorize, without further stockholder action, our Board of Directors (or a committee thereof) to do and perform, or to cause our officers to do and perform, any and all actsand to make, execute, deliver or adopt any and all agreements, resolutions, conveyances, certificates and other documents of every kind t

18 hat our Board of Directors (or a committ
hat our Board of Directors (or a committee thereof) deems necessary, appropriate or desirable, in the absolute discretion of the Board of Directors (or a committee thereof), to implement our dissolution and liquidation in accordance with the DGCL, including, without limitation, all filings or acts required by any state or federal law or regulation to wind up our affairs. Professional Fees and Expenses It is specifically contemplated that we will obtain legal and accounting advice and guidance from one or more law and accounting firms in implementing our dissolution and liquidation, and we will pay all fees and expenses reasonably incurred by us in connection with or arising out of the implementation of our dissolution and liquidation, including the prosecution, defense, settlement or other resolution of any claims or suits by or against us, the discharge and disclosure of outstanding claims and obligation, filing and resolution of claims with local, county, state and federal tax authorities, and the advancement and reimbursement of any fees and expenses payable by us pursuant to the indemnification we provide in our certificate of incorporation and bylaws, the DGCL or otherwise. In addition, in connection with and for the purpose of implementing and assuring completion of our dissolution and liquidation, we may, in the absolute discretion of the Board of Directors (or a committee thereof), pay any brokerage, agency, professional and other fees and expenses of persons rendering services to us in connection with the collection, sale, exchange or other disposition of our property and assets and the implementation of ourdissolution and liquidation. Indemnification and Insurance We will continue to indemnify our officers, directors, employees, agents and trustees, if any, in accordance with our certificate of incorporation and bylaws, and any contractual arrangements, for actions taken in connection with our dissolutionand liquidation. We will continue and maintain the Company’s existing directors’ and officers’ liability insurance policy. Abandonment of the Dissolution Notwithstanding the approval of our dissolution by our stockholders, our Board may abandon such dissolution without further action by our stockholders. The Company’s dissolution would be void upon the effective date of any such abandonment. Regulatory Approvals No United States federal or state regulatory requirements must be complied with or approvals obtained in connection with our dissolution and liquidation. Interests of Directors and Executive Officers in Approval of Our Dissolution Members of our Board of Directors and our executive officers may have interests in the approval of our dissolution that are different from, or are in addition to, the interests of our stockholders generally. Our Board of Directors was aware these interests and considered them, among other matters, in approving the Company’s dissolution. 13 If in the highly unlikely event there are any liquidating distributions to our stockholders then the members of our Board of Directors and our executive officers will be entitled to the same distributions as our stockholders based on their ownership of outstanding shares of our Series B convertible preferred stock (but only to the extent then outstanding and not previously automatically converted into shares of our common stock pursuant to our certificate of incorporation) and common

19 stock, which is summarized below. Other
stock, which is summarized below. Other than as set forth below, it is not currently anticipated that our dissolution and liquidation will result in any material benefit to any of our executive officers or to directors who participated in the vote to approve our dissolution. Equity Ownership As of the record date, certain of our stockholders (namely, Paul Kanavos, Robert F.X. Sillerman and Brett Torino), certain of our directors and executive and their respective affiliates will be entitled to cast an aggregate of 71,028,153 vote(representing an aggregate of 70,954,425 shares of our common stock and 25 shares of our Series B convertible preferred stock), which votes represent approximately 77 % of all of the votes entitled to be cast at the special meeting by the holders outstanding shares of our common stock and Series B convertible preferred stock as of the record date. All of these persons have indicated they and their affiliates will vote their shares of our common stock and Series B convertible preferred stock infavor of the Company’s dissolution. As such, the Company’s dissolution will be approved by the required vote of our stockholders, whether or not you or any of our other stockholders vote their shares in person or by proxy at the special meetinin favor of or against the Company’s dissolution. For more information about our directors’ and executive officers’ and their affiliates’ specific ownership of our shares, reference is made to the section entitled “Security Ownership of Certain Beneficial Ownership and Management” included elsewhere in this information statement. Principal Creditors As of the record date, certain of our stockholders (namely, Paul Kanavos, Robert F.X. Sillerman and Brett Torino and their affiliates) were owed approximately $13.9 million under demand loans they made to us during 2011 and 2012 to finance our short-term liquidity requirements which allowed us to continue as a going concern. These stockholders are our principal creditors. As of the record date, we owed our executive officers accrued and unpaid salary of approximately $3.7 million in the aggregate. As of the record date, we owed our non-employee directors accrued and unpaid directors’ fees of approximately $2.5 million in the aggregate. We only have a few other creditors who are owed approximately $91,000 in the aggregate as of the record date. Our Board of Directors (or a committee thereof) will seek to negotiate and compromise the claims of our creditors, including those of the above stockholders in connection with our liquidation. Compensation Arrangements with our Executive Officers; Retention of Certain of our Executive OfficersWe do not have any severance or change in control arrangements in place with Paul C. Kanavos, our President, except in the case of death or disability. Mr. Kanavos is owed accrued and unpaid salary of approximately $2.2 million and is compensated at an annual salary of $600,000. We do not have any severance or change in control arrangements in place with Gary McHenry, our Chief Financial Officer. Mr. McHenry is compensated at an annual salary of $150,000. We do not have any severance or change of control arrangements in place with Mitchell J. Nelson, our Executive Vice President and General Counsel. Mr. Nelson is owed accrued and unpaid salary of approximately $925,000 and is compensated at an annual salary of $150,000. We do not intend t

20 o retain Mr. Kanavos after our dissoluti
o retain Mr. Kanavos after our dissolution. We intend to retain Messrs. McHenry and Nelson after our dissolution to assist us with implementing our liquidation. Mr. McHenry will be compensated at his current salary level, while Mr. Nelson will be compensated at an annual salary of $150,000. Each of Messrs. McHenry and Nelson will be retained for minimum term of 6 months, which thereafter will be terminable by the Company upon 30 days’ advance written notice. Board Compensation Employee directors do not receive any separate compensation for their board service. Non-employee directors receive the compensation described below. For 2014, non-employee directors accrued an annual fee of $80,000 plus $1,000 for attendance at each meeting of our Board of Directors and $750 for attending each meeting of a committee of which he is a member. The chairperson of the Audit Committee received an additional annual fee of $20,000 and each of the other members of the Audit Committee received an 14 additional fee of $10,000 for serving on the Audit Committee. The chairpersons of each other committee received an additional annual fee of $10,000 and each of the other members of such committees received an additional annual fee of $5,000. All fees described above are payable half in cash and half in equity awards or options under the Equity Incentive Plans, though each non-employee director will have the option to elect, on an annual basis, to receive 100% of his compensation in equity awards or stock options. The Company pays non-employee directors on a quarterly basis and prices all grants of common stock at the closing price on the last day of the quarter for which such fees relate or options therefore on the date granted. During 2014, 2013 an2012 (as well as 2011 and 2010), fees earned were not paid. Fees earned thus far in 2015 have not been paid. As of the record date, we owed our non-employee directors accrued and unpaid directors’ fees of approximately $2.5 million in the aggregate. The Board of Directors has authorized that the Director Compensation Policy shall cease and be terminated as of the effective time of our dissolution. Material United States Federal Income Tax Consequences of Our Dissolution and Liquidation Federal Income Taxation of our Stockholders If in the highly unlikely event liquidation distributions are made to all or certain of our stockholders in accordance with the liquidation preferences provided to them in our certificate of incorporation, any such liquidating distribution will bapplied against and reduce each recipient stockholder’s tax basis in such stockholder’s shares of stock. Gain will be recognizas a result of a liquidating distribution to the extent that the aggregate value of the distribution and any prior liquidating distributions received by a recipient stockholder with respect to a share exceeds such stockholder’s basis for that share. A lwill generally be recognized if the aggregate value of all liquidating distributions with respect to a share is less than the stockholder’s tax basis for that share. Gain or loss recognized by a stockholder will be capital gain or loss provided the shaare held as capital assets, and will generally be long-term capital gain or loss if the stock has been held for more than one year. Although we currently do not intend to make distributions of property other than cash, if any, in the event of a distributio

21 n oproperty, the stockholder’s tax basis
n oproperty, the stockholder’s tax basis in such property immediately after the distribution will be the fair market value of suchproperty at the time of distribution. After the close of our taxable year, we will provide stockholders and the Internal Revenue Service with a statement of the amount of cash distributed to our stockholders and our best estimate as to the value of any property distributed to them during that year. There is no assurance that the Internal Revenue Service will not challenge our valuation of any property. Aa result of such a challenge, the amount of gain or loss recognized by stockholders might be changed. Distributions of propertother than cash to stockholders could result in tax liability to any given stockholder exceeding the amount of cash received, requiring the stockholder to meet the tax obligations from other sources or by selling all or a portion of the assets received.Tax Consequences The tax consequences of our dissolution and liquidation may vary depending upon the particular circumstances of the stockholder. We recommend that each stockholder consult his, her or its own tax advisor regarding the federal income tax consequences of our dissolution and liquidation as well as the state, local and foreign tax consequences. Accounting Treatment Upon our dissolution, we will change our basis of accounting to the liquidation basis of accounting. Under the liquidation basis of accounting, assets are stated at their estimated net realizable values, and liabilities are stated at theiestimated settlement amounts. Recorded liabilities will include the estimated expenses associated with carrying out our liquidation. For periodic reporting, a statement of net assets in liquidation will summarize the liquidation value per outstanding share. Valuations presented in the statement will represent management’s estimates, based on present facts and circumstances, of the net realizable values of assets, satisfaction amounts of liabilities, and expenses associated with carrying out our liquidation based upon management assumptions. The valuation of assets and liabilities will necessarily require many estimates and assumptions, and there will be substantial uncertainties in carrying out our liquidation in accordance with the DGCL. Ultimate values realized for our assetsand ultimate amounts paid to satisfy our claims and obligations are expected to differ from estimates recorded in annual or interim financial statements. 15 Required Vote The affirmative vote of a majority in voting power of outstanding shares of our common stock and Series B convertible preferred stock (voting on an as-converted into common stock basis) entitled to vote on the record date, voting together as a single class, is required to approve our dissolution. Recommendation of our Board of Directors On September 24, 2015, our Board of Directors (other than Messrs. Kanavos and Sillerman who abstained from the vote because of their principal creditor relationships with the Company) unanimously adopted resolutions: (1) authorizing, approving and deeming advisable the dissolution of the Company and (2) submitting the dissolution of the Company to the stockholders of the Company for their consideration and vote. Our Board of Directors recommends that our stockholders vote the approval of our dissolution. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following

22 table sets forth certain information re
table sets forth certain information regarding the beneficial ownership of shares of our common stock as of October 15, 2015, the record date, by: each person or entity known by us to beneficially own more than 5% of the outstanding shares of our common each of our executive officers; each of our directors; and all of our directors and executive officers, named as a group. Beneficial ownership is determined, even though we no longer file reports with the Securities and Exchange Commission, in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to the securities. Unless otherwise noted, each beneficial owner has sole voting and investing power over the shares shown as beneficially owned except to the extent authority is shared by spouses under applicable law. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, any shares of common stock subject to common stock purchase warrants or stock options held by that person that are exercisable as of the record date will become exercisable within 60 days thereafter are deemed to be outstanding, while such shares are not deemed outstanding for purposes of computing percentage ownership of any other person. As of the record date, there were 85,305,292 shares of our common stock outstanding. Name and Address of Beneficial Owner(1)OwnedPercentage ofCommonStockBeneficial Owners of 5% or More Robert F.X. Sillerman (2) (12) 23,967,539 25.8%Paul C. Kanavos (3) (5) (11) (12) 27,928,725 30.1%Brett Torino (4) (5) 25,391,880 27.3% Directors and Executive Officers (not otherwise included above): Gary McHenry (11) 0 0 David M. Ledy (6) (12) 1,301,593 1.4%Michael J. Meyer (7) (12) 481,306 * Mitchell J. Nelson (8) (11) 455,571 * Andrew Perel (12) 0 0 Harvey Silverman (9) (12) 3,377,926 3.6%All directors and executive officers as a group (8 individuals) (10) 57,352,660 61.9%________________ * Represents less than 1%. (1)Except as otherwise set forth below, the business address and telephone number of each of the persons listed above is c/o Circle Entertainment Inc., 70 East 55th Street, New York, New York 10022, telephone (212) 796-8199. 16 (2)Sillerman beneficially owns (i) directly 12,864,424 shares of common stock (consisting of: (A) 12,364,424 shares of common stock owned by Sillerman; (B) 250,000 shares of common stock issuable upon the exercise of stock options held by Sillerman that are presently exercisable at $5.00 per share; and (C) 250,000 shares of common stock issuable upon the exercise of stock options held by Sillerman that are presently exercisable at $6.00 per share; and (ii) indirectly 11,103,115 shares of common stock (consisting of: (A) 5,558,429 shares of common stock owned of record by Laura Baudo Sillerman, Sillerman’s spouse; (B) 43,250 shares of common stock issuable upon the exercise of warrants held by Sillerman’s spouse that are presently exercisable at $0.5778 per share; and (C) 5,501,436 shares of common stock owned of record by Atlas). Excludes (D) 17,636 shares of common stock issuable upon the conversion of Series B Convertible Preferred Shares (without giving effect to any accrued but unpaid dividends thereon) held by Sillerman’s spouse that are convertibl

23 e at $0.4725 per share. (3)Kanavos benef
e at $0.4725 per share. (3)Kanavos beneficially owns (i) directly 16,327,169 shares of common stock (consisting of: (A) 354,254 shares of common stock owned of record by Kanavos; (B) 15,222,915 shares of common stock owned of record by Kanavos and his spouse, Dayssi Olarte de Kanavos, as joint tenants; (C) 500,000 shares of common stock owned of record by the Paul C. Kanavos 2008 GRAT; (D) 125,000 shares of common stock issuable upon the exercise of stock options held by Kanavos that are presently exercisable at $5.00 per share; (E) 125,000 shares of common stock issuable upon the exercise of stock options held by Kanavos that are presently exercisable at $6.00 per share and (F) 43,250 shares of common stock issuable upon the exercise of warrants held by Kanavos and his spouse that are presently exercisable at $0.5778 per share; and (ii) indirectly 11,058,306 shares of common stock (consisting of: (A) 5,556,870 shares of common stock held by the Kanavos Dynasty Trust 2011, a trust formed by Kanavos for the benefit of his spouse and children; and (B) 5,501,436 shares of common stock (consisting of the shares of common stock owned of record by Atlas). Kanavos’ beneficial ownership excludes 500,000 shares of common stock owned of record by his spouse’s GRAT, the Dayssi Olarte de Kanavos 2008 GRAT. Excludes 17,636 shares of common stock issuable upon the conversion of Series B Convertible Preferred Shares (without giving effect to any accrued but unpaid dividends thereon) held by Kanavos and his spouse that are convertible at $0.4725 per share. (4)Torino beneficially owns (i) directly 176,238 shares of common stock (consisting of 176,238 shares of common stock owned of record by Torino) and (ii) indirectly 25,215,641 shares of common stock (consisting of: (A) 11,889,745 shares of common stock owned of record by TTERB; (B) 43,250 shares of common stock issuable upon the exercise of warrants held by TTERB that are presently exercisable at $0.5778 per share; (C) 5,501,436 shares of common stock owned of record by Atlas; and (D) 7,781,210 shares of common stock owned of record by TS 2013, LLC. Excludes 17,636 shares of common stock issuable upon the conversion of Series B Convertible Preferred Shares (without giving effect to any accrued but unpaid dividends thereon) held by TTERB that are convertible at $0.4725 per share. (5)Messrs. Kanavos and Torino hold 2,071,471 and 3,117,155, respectively, of the shares reported above through the Private Clients and Asset Management business group of (“PCAM”) of Deutsche Bank AG and its subsidiaries and affiliates (collectively, “DBAG”). Deutsche Bank AG and Deutsche Bank Trust Company Americas has filed a Schedule 13G dated February 11, 2011 for such shares held by PCAM wherein it indicates PCAM holds such shares in the capacity of an investment adviser. According to the Schedule 13G, the filing does not reflect securities, if any, beneficially owned by any other business group of DBAG and the filing should not be construed as an admission that PCAM is, for purposes of Section 13(d) under the Securities Exchange Act, the beneficial owner of any of the shares covered by the filing. The address of DBAG is Theodor-Heuss-Allee 70, 60468 Frankfurt am Main, Federal Republic of Germany. (6)Includes: (i) 1,077,696 shares of common stock owned of record by Mr. Ledy; (ii)175,000 shares of common stock issuable upon the exercise of stock options held

24 by Mr. Ledy that are presently exercisa
by Mr. Ledy that are presently exercisable at $0.18 per share; (iii) 25,641 shares of common stock issuable upon the exercise of stock options held by Mr. Ledy that are presently exercisable at $5.00 per share; and (iv) 23,256 shares of common stock issuable upon the exercise of stock options held by Mr. Ledy that are presently exercisable at $6.00 per share. (7)Includes: (i) 32,695 shares of common stock owned of record by Mr. Meyer; and (ii) 448,611 shares of common stock issuable upon the exercise of stock options held by Mr. Meyer that are presently exercisable at $0.18 per share. (8)Includes (i) 95,571 shares of common stock held by LMN 134 Family Company, LLC, a family company of which Mr. Nelson is manager; (ii) 100,000 shares of common stock issuable upon the exercise of stock options held by Mr. Nelson that are presently exercisable at $5.00 per share; and (iii) 100,000 shares of common stock issuable upon the exercise of stock options held by Mr. Nelson that are presently exercisable at $6.00 per share. 17 (9)Includes: (i) 2,394,861 shares of common stock owned of record by Mr. Silverman; (ii) 478,612 shares of common stock owned of record by Silverman Partners, L.P., of which Mr. Silverman is the sole general partner; (iii) 48,897 shares of common stock issuable upon the exercise of stock options held by Mr. Silverman that are presently exercisable, 25,641 shares at $5.00 per share and 23,256 shares at $6.00 per share; and (iv) 455,556 shares of common stock issuable upon the exercise of stock options held by Silverman that are presently exercisable at $0.18 per share. (10)Includes an aggregate of 2,213,461 shares of common stock underlying presently exercisable warrants and options described above in notes 2, 3, 6, 7, 8 and 9. (11)The named person is an executive officer. (12)The named person is a director. A-1 APPENDIX A UNAUDITED BALANCE SHEET AS OF SEPTEMBER 30, 2015 September 30, Unaudited Current assets: Cash and cash equivalents $ 130,754 Prepaid expenses and other current assets 279,248 Total current assets 410,002 Investment in real estate: Furniture, fixtures and equipment 158,269 Leasehold improvements 213,765 Capitalized development costs --- Less: accumulated depreciation (132,721) et investment in real estate 239,313 Other assets, net --- Total assets $ 649,315 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable and accrued expenses $ 6,420,452 Due to related parties 2,967,990 Loans payable to related parties 11,083,000 Total current liabilities 20,471,442 Other long-term liabilities --- Total liabilities 20,471,442 Commitments and contingencies --- Stockholders’ deficit: Preferred stock, $0.01 par value: authorized 75,000,000 shares, 0 Shares Series A Convertible Preferred Stock issued and outstanding at September 30, 2015 and 1,550 Sharesof Series B Convertible Preferred Stock issued and outstanding at September 30, 2015 40 Common stock, $0.01 par value: authorized 300,000,000 shares, 83,138,176 shares issued and outstanding at September 30, 2015 650,762 Additional paid-in-capital 98,063,459 Accumulated deficit (118,536,388) Total stockholders’ deficit (19,822,127) Total liabilities and stockholders’ deficit