This Statement of Beneficial Ownership on Schedule 13D (this “Statement”) relates to the common stock, $0.01 par value (the “Common Stock”), of Circle Entertainment Inc., a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at 650 Madison Avenue, New York, New York 10022.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This Statement is being filed jointly by Harvey Silverman (“HS”) and Silverman Partners, L.P., a New York limited partnership of which HS is the general partner (the “Partnership” and together with HS, the “Reporting Persons”).
(b), (c), (f) The following table sets forth the name, address and citizenship/place of organization for each of the Reporting Persons:
Reporting Person
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Address
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Citizenship/Place of Organization
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HS
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650 Madison Avenue, New York, New York 10022
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United States
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Partnership
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791 Park Avenue, New York, New York 10021
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New York
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The principal business of each of the Reporting Persons is set forth in the following table:
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Principal Business
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HS
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HS is a private investor and he has served as a director of the Issuer since October 2007.
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Partnership
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The Partnership’s principal business is the acquisition, ownership, disposition and reinvestment of investment assets and related business activities.
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HS serves as the general partner of the Partnership.
(d), (e) Neither of the Reporting Persons has, during the last five years, been (1) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (2) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
CUSIP No. 17256R-105
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SCHEDULE 13D
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Page 5 of 7 Pages
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Reporting Persons acquired the shares of Common Stock reported herein pursuant to the following transactions:
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On November 30, 2007 and January 10, 2008, as a result of distribution’s received on the Reporting Persons’ ownership interests in Flag Luxury Properties, LLC, a Delaware limited liability company (“Flag”), and HS’s ownership interest in CKX, Inc., a publicly traded company (“CKX”), the Reporting Persons acquired an aggregate of 1,577,016 shares of Common Stock in connection with a series of transactions involving Flag, CKX and the Issuer described in the Issuer’s final prospectus dated December 31, 2007 to its Registration Statement on Form S-1 (Registration No. 333-145672), as filed with the Securities and Exchange Commission on January 3, 2008.
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On July 15, 2008, the Partnership purchased from the Issuer in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended, 285,715 units at an aggregate purchase price of $1,000,002.50 or $3.50 per unit. Each unit consisted of (x) one share of Common Stock, (y) one warrant to purchase one share of Common Stock at an exercise price of $4.50 per share and (z) one warrant to purchase one share of Common Stock at $5.50 per share. The warrants were immediately exercisable on the date of purchase for a term of ten years. The Partnership used working capital to fund the purchase of the units. The Partnership purchased the units from the Issuer for investment purposes and to provide the Issuer with working capital.
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On October 1, 2008, HS acquired 12,297 shares of Common Stock under the Issuer's 2007 Long-Term Incentive Compensation Plan in lieu of cash payments of $16,750 for fees earned by (a) attending meetings of the Issuer's board of directors during the second and third fiscal quarters of 2008 and (b) serving as a member of the Issuer's board of directors' audit committee, compensation committee and nominating and corporate governance committee (including as chairman) and attending meetings of certain of such committees during the second and third fiscal quarters of 2008.
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On October 21, 2008, HS acquired stock options to purchase up to 48,897 shares of Common Stock in lieu of a cash payment of $80,000 for his 2008 annual retainer fee for serving as a director of the Issuer. These stock options were granted under the Issuer’s 2007 Long-Term Incentive Compensation Plan at exercise prices of $5.00 per share for 25,641 of the shares and $6.00 per share for 23,256 of the shares and became immediately exercisable on the grant date for a term of 10 years.
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On January 29, 2010, HS acquired stock options to purchase up to 455,556 shares of Common Stock in lieu of cash payments for 75% of his 2009 annual retainer fee of $80,000 for serving as a director of the Issuer and fees for serving as a member of the Issuer’s board of directors’ audit committee, compensation committee and nominating and corporate governance committee (including as chairman) and attending board of directors’ and committee meetings during 2009. These stock options were granted under the Issuer’s 2007 Long-Term Incentive Compensation Plan at an exercise price of $0.18 per share and became immediately exercisable on the grant date for a term of 10 years.
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On September 23, 2010, HS purchased from the Issuer in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended, 100 units at an aggregate purchase price of $100,000 or $1,000 per unit. Each unit consisted of (x) one share of newly issued Series B Convertible Preferred Stock, $0.01 par value per share, of the Issuer (the “Series B Convertible Preferred Shares”), and (y) one warrant to purchase up to 14,306.15 shares of Common Stock at an exercise price of $0.2097 per share. HS used personal funds to fund the purchase of the units. HS purchased the units from the Issuer for investment purposes and to provide the Issuer with working capital.
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ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons’ response to Items 3 is hereby incorporated by reference in this Item 4.
The Reporting Persons have no present plan or proposal that would relate to or result in any of the actions set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D.
CUSIP No. 17256R-105
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SCHEDULE 13D
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Page 6 of 7 Pages
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the date of this Statement, HS beneficially owns (i) directly 3,927,432 shares of Common Stock (consisting of: (A) 1,396,416 shares of Common Stock owned by HS; (B) 48,897 shares of Common Stock issuable upon the exercise of stock options held by HS that are presently exercisable at $5.00 per share for 25,641 of the shares and $6.00 per share for 23,256 of the shares; (C) 455,556 shares of Common Stock issuable upon the exercise of stock options held by HS that are presently exercisable at $0.18 per share; (D) 595,948 shares of Common Stock issuable upon the conversion of Series B Convertible Preferred Shares held by HS that are convertible at $0.1678 per share
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; and (E) 1,430,615 shares of Common Stock issuable upon the exercise of warrants held by HS that are presently exercisable at $0.2097 per share); and (ii) indirectly 1,050,042 shares of Common Stock (consisting of: (A) 478,612 shares of Common Stock owned of record by the Partnership, of which HS is the general partner; (B) 285,715 shares of Common Stock issuable upon the exercise of warrants held by the Partnership that are presently exercisable at $4.50 per share; and (C) 285,715 shares of Common Stock issuable upon the exercise of warrants held by the Partnership that are presently exercisable at $5.50 per share), which shares of Common Stock represent in the aggregate approximately 7.3% of the 68,178,607 shares of Common Stock deemed outstanding for such purpose, calculated based upon the sum of (x) 65,076,161 shares of Common Stock outstanding as of the date of this Statement and (y) the 3,102,446 shares of Common Stock issuable upon exercise of the aforesaid stock options, Series B Convertible Preferred Shares and warrants.
(b) HS possesses sole voting and sole dispositive power over 3,927,432 shares of Common Stock and possesses shared voting power and dispositive power over 1,050,042 shares of Common Stock.
(c) During the sixty days immediately preceding the date of this Statement, the Reporting Persons have not effected any transactions in the Common Stock.
(d) HS shares the power to direct receipt of dividends from, or proceeds from the sale of, 1,050,042 shares of Common Stock indirectly owned by HS. HS has sole power to direct receipt of dividends from, or proceeds from the sale of, 3,927,432 shares the Common Stock owned directly by HS.
(E) INAPPLICABLE.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
The Reporting Persons’ response to Item 3 of this statement is hereby incorporated by reference in this Item 6.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Inapplicable.
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The Series B Convertible Preferred Shares are convertible, at the option of the holder, into shares of Common Stock at the above conversion price if at any time the closing price of the shares of Common Stock is at least the conversion price for ten (10) consecutive trading days. Each time, for a period of 60-days thereafter, the Series B Convertible Preferred Shares are convertible into the number of shares of Common Stock equal to the then current stated value (initially $1,000, subject to increase periodically to include any accrued and unpaid dividends) divided by the conversion price. Upon the earlier of: (x) consummation of the Issuer’s sale (or series of related sales) of its capital stock (or securities convertible into its capital stock) from which the Issuer generates net proceeds of at least $25 million or (y) September 21, 2015 the Series B Convertible Preferred Shares shall automatically convert into the number of shares of Common Stock equal to the then current stated value divided by the conversion price. If at any time the closing price of the shares of Common Stock is at least $1.40 for fifteen (15) consecutive trading days, the Issuer may redeem the outstanding Series B Convertible Preferred Shares at the then current stated value. The Series B Convertible Preferred Shares are redeemable each time in whole or in part for a period of 120-days thereafter.
CUSIP No. 17256R-105
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SCHEDULE 13D
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Page 7 of 7 Pages
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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: May 26, 2011
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/s/
Harvey Silverman
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Harvey Silverman
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Silverman Partnership, L.P.
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Dated: May 26, 2011
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/s/
Harvey Silverman
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By: Harvey Silverman
Its: General Partner
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