SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                   FORM 10-KSB

         ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
   X     OF 1934
--------

                  For the fiscal year ended December 31, 2003

                                       OR

         TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
         ACT OF 1934
--------

                        COMMISSION FILE NUMBER: 000-27841

                           CIRCLE GROUP HOLDINGS, INC.
                 (Name of Small Business Issuer in its Charter)

                      ILLINOIS                                  36-4197173
(State or Other Jurisdiction of Identification No.)         (I.R.S. Employer)

           1011 CAMPUS DRIVE                             (847) 549-6002
       MUNDELEIN, ILLINOIS 60060                 (Registrant's Telephone Number,
(Address of Principal Executive Offices,              Including Area Code)
          including Zip Code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                      None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                         Common Stock, $.00005 par value

         Check whether the issuer: (1) filed all reports required to be filed by
Section 13 of 15(d) of the Securities Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

Yes    X        No
   ---------      --------


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

         The issuer's revenues for its most recent fiscal year were:
$742,442.42.

         The aggregate market value of the voting stock of the issuer held by
non-affiliates of the issuer as of December 31, 2003 was $22,351,503. These
aggregate market values are estimated solely for purposes of this report and are
based on the closing price for the issuer's Common Stock, $.00005 par value on
December 31, 2003, as reported on the Over-the-Counter Bulletin Board. For the
purpose of this report, it has been assumed that all officers and directors of
the issuer, as well as all stockholders holding 10% or more of the issuer's
stock, are affiliates of the issuer. The statements made herein shall not be
construed as an admission for determining the affiliate status of any person.


<PAGE>


         The number of shares of the registrant's Common Stock outstanding as of
December 31, 2003 was 30,872,252.

         Transitional Small Business Disclosure Format:

Yes   X         No
   --------       --------





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<PAGE>


                                     PART I

         The Issuer has elected to follow Form 10-KSB, Transitional Small
Business Disclosure Format, Disclosure Alternative 2.

ITEM 6.  DESCRIPTION OF BUSINESS.

GENERAL

         Circle Group Holdings, Inc. ("Circle Group", the "Company", "we", "us",
"our") is a pioneer of emerging technology companies. We provide small business
infrastructure, funding and substantial intellectual capital to bring important
and timely life-changing technologies to the marketplace through all phases of
the commercialization process.

         Circle Group was formed by Gregory J. Halpern, its Chairman and Chief
Executive Officer, as an Illinois corporation in May 1994 under the original
name, Circle Group Entertainment Ltd. In 1997, The Company changed its name to
Circle Group Internet, Inc., and in 2002, it changed its name to Circle Group
Holdings, Inc. The Company had no business operations except for research and
development activities between May 1994 and January 1997. Since then, the
Company has participated in several public and private offerings and has
expanded its business. In 2002, the Company reorganized its business units into
three reportable segments: food product development, security product
development, and e-tailor and acquired FiberGel Technologies, Inc.
("FiberGel"), which owns an exclusive license to Z-Trim, an all-natural,
corn-based fat replacement.

         Circle Group operates through its FiberGel, Mini-Raman Lidar
Technology, ThraxVac Technology, The Brave Way Training Systems, Inc.,
Consulting CGI, On-Line Bedding Corp., and Z-Amaize Technologies, Inc.
divisions.

FIBERGEL TECHNOLOGIES, INC.

         The Company acquired FiberGel, formerly a wholly-owned subsidiary of
Utek Corporation ("Utek"), on August 27, 2002. Under the terms of the
acquisition, the Company issued 2,800,000 shares of its Common Stock to Utek
valued at $504,000 using an average market price of $0.18 per share. The Company
also issued a warrant to Utek to purchase 500,000 shares of the Common Stock at
an exercise price of $0.36 per share within 36 months of the date of
acquisition. The warrants were valued at $88,800 calculated using the
Black-Scholes option pricing model.

         FiberGel Technologies is currently the primary focus of the Company.
FiberGel owns the exclusive, worldwide license for all fields of use to Z-Trim,
an all-natural, corn-based fat replacement developed by the Agricultural
Research Service of the United States Department of Agriculture "USDA". Z-Trim
can be used to decrease fat and calories and increase insoluble healthy fiber in
foods. The target markets for Z-Trim include: dairy (cheeses, dips, spreads)
baked goods & confectionary (breads, cookies, candies, cakes, pies), cereals,
pasta, snack foods (chips, crackers, energy bars), meats (burgers, lunch meats,
deli meats, sausages, hot dogs, fish dogs), beverages (energy drinks, shakes,
beers, weight loss drinks), face and hand lotions.

         The Company successfully completed its Z-Trim prototype manufacturing
optimization program with achievements in two major areas by developing a wider
range of fiber based product formats and additional intellectual property --
including gel, emulsion and powder for its corn based Z-Trim functional fat
substitute as well as the same array of formats for an important new Z-Trim fat
replacement product directed to manufacturers of oat-based goods.

         FiberGel has been responding to industry inquiries and initiated
exclusive partnership discussions with major domestic and international
companies representing several food applications. As a result of new Z-Trim
product developments presented by the Company's technology team, led by Triveni
P. Shukla,


                                     - 3 -

<PAGE>


Ph.D., Vice President of Technology Development, the Company has been
able to expand the scope of its marketing partnership programs to include
numerous applications under the following major SIC classifications:

         o        311.200 Grains and oil seeds;
         o        311.300 Sugar and confectionary;
         o        311.400 Fruits and vegetables;
         o        311.500 Dairy products;
         o        311.600 Processed meat;
         o        311.700 Seafood;
         o        311.800 Bakeries and tortillas; and
         o        311.900 Others - flavors and seasonings.

         These expanded product lines allow FiberGel to take their commercial
fat substitute technology to a much wider corporate community. FiberGel is
providing potential domestic and international marketing partners with product
samples of Z-Trim and research consultation along with limited exclusivity
within their market specific segments.

         In addition to the Company's existing patent protection rights, it has
applied globally for 19 new application patents and 7 new process patents on
its Z-Trim product line. The Company also maintains a thorough Trade Secret
portfolio on its manufacturing process.

         The Company has received over 300 inquiries since September 2002
relating to the manufacture, food processing, distribution and sale of
FiberGel's primary product Z-Trim, which the Company has the right to produce
pursuant to an exclusive license from the USDA. FiberGel has entered into
non-disclosure agreements, sample agreements, and discussions with many food
industry companies to pursue potential opportunities for Z-Trim. FiberGel has
been shipping Z-Trim samples to many of these companies since July 2003.

         The Company has entered into an agreement with Nestle for its Z-Trim
product. The Company entered into a market development agreement with Swiss
based conglomerate DKSH which will assemble the Z-Trim marketing plan for Europe
and Asia and then begin marketing FiberGel products under exclusive limited
territorial rights in certain European countries in 2004.

         FiberGel currently has sample agreements and product testing with many
companies including, among others, Land O Lakes, J. M. Smucker, Kelloggs,
General Mills, Hershey Foods, McKee Foods, Heinz Iberica, Kerry Specialty
Ingredients, Ener-G Foods, Aurora Foods, Redi-Serve Foods, Wilbur Chocolate-
Cargill, Sees Candies, Barilla, Davisco, and Dole.

         FiberGel began selling Z-Trim, directly to consumers for use in home
cooking so they could create healthier fiber enriched meals at home and replace
up to 50% of the excess fat in most foods without sacrificing the taste and
texture they currently enjoy. Consumers can order a the 4 ounce size which makes
five pounds of FiberGel and comes with a 28-recipe cookbook, and a 16-minute DVD
Z-Trim cooking class. Additionally, FiberGel and The Cookie Garden, a
gourmet cookie manufacturing company, have released a new line of reduced-fat
gourmet cookies made with Z-Trim.

         FiberGel is planning to expand from its current contract manufacturing
facility to acquire its own wholly owned plant and equipment in spring 2004. The
Company is planning to launch a direct response campaign to the retail market
using commercial television by May 2004.

NAT TOOLS FOR GOOD HEALTH


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<PAGE>



         The Company acquired the worldwide exclusive license to the NAT Web,
the Nutrition Analysis Tool ("NAT") website developed by the Department of Food
Science and Human Nutrition at the University of Illinois. The University of
Illinois' NAT website is an interactive, web-based system designed to empower
individuals to select a nutrient-rich diet. This fully functional nutrient
analysis program utilizes the USDA nutrient database, including over 6,000 foods
as well as information from food companies. NAT provides information on the
relative composition of food and could aid consumers in their quest to achieve
or maintain good health via nutritious eating.

         Pioneered and developed by Dr. James Painter at the University of
Illinois in 1995, and a winner of several awards, the Nutritional Analysis Tools
and System ("NATS") is based upon the behavioral scientific discoveries that
keeping track daily of what we eat, plus how many calories we burn through
fitness activities, are among the most critical components in achieving and
sustaining long-term successful weight loss and health management. Using data
provided by the USDA, and most brand name food companies, NAT'S users can keep
track every day of the foods, calories, fats, proteins, carbohydrates and other
nutrients they consume. New members can join MYNATS for free and save all their
menus on the NATS database. Non-members can use NATS 2.0 to save all their data
to their own computers for free offline reference. NATS users can calculate
calories burned during the day. The web site provides visitors the ability to
enter a certain activity and the amount of calories they wish to burn, and then
calculates how long the given activity needs to be done. Visitors can also enter
how long they did an activity and the web site calculates how many calories they
burned or which activities a person can do to burn a certain amount of calories
in a given length of time.

         Acquiring the socially conscious NATS site is very significant to
Circle Group because it has the potential for providing a large consumer
audience, attracting as many as two million visitors per month from more than
eighty countries. With this audience, the Company can increase awareness through
cooperative advertising and marketing of healthy, calorie and fat reduced,
Z-Trim products launched by future food industry partners. Circle Group will
significantly expand NAT Web's audience by providing revenue generating products
and services that will enable NATS users to lead healthier lifestyles and to get
a handle on the weight and obesity problems they face today, or could encounter
in the future. Additional features include Nutrients Analysis and the Food
Suggestion Tool which can suggest foods based on specific dietary restrictions
or requirements. NATS offers a mobile cell phone version and is in development
of a future wireless handheld version.

         NATS Web site has been re-engineered by the Company and is now
available to the commercial marketplace to act as a conduit for providing
information about Z-Trim and other compatible products the Company has or will
launch in the future to its users. NATS has as many as two million monthly
consumer visits from 92 countries and, out of more than one million web pages,
appears in the first four relevancy positions in most search engines including
Google.com under the popular keywords "nutritional analysis" and "diet
analysis".

Z-AMAIZE TECHNOLOGIES, INC.

          The Company recently established Z-Amaize Technologies,
Inc.("Z-Amaize") as a wholly owned subsidiary, to market a new line of Z-Bind
industrial adhesive products for the plywood manufacturing industry.

         Z-Bind is an adhesive extending component that emerged from research
performed by the FiberGel product development group. In their research for
Z-Trim functional fat substitutes the group identified a number of co-products
which were derived from corn-based raw materials. It was discovered that every
pound of Z-Trim that the Company manufactures produces 13 gallons of waste which
can be used in Z-bind. Rather than discarding this waste, the Company is
focusing on opportunities for maximizing their value in the marketplace.

         The domestic plywood industry uses 1.2 million metric tons of resin
solids per year worth approximately $10 billion. The softwood plywood sector
uses 0.6 billion Kg of phenol formaldehyde resin solids and Canadian usage is
0.4 billion Kg. Because of significant cost pressure from the U.S. Environmental
Protection Agency ("EPA") emission regulations regarding manufacture of such
adhesives,


                                     - 5 -

<PAGE>

Z-Bind products represent an affordable alternative to plywood manufacturers
seeking superior and environmentally friendlier adhesives. The Company's goal is
to develop additional profit centers that provide a steady stream of income from
the Company's core Z-Trim manufacturing process.

         Z-Amaize is devoted to serving a significant industry with better and
more affordable adhesive solutions. Soft wood resin glues, used in plywood,
chipboard and fiberboard, are already being extended with soy bean protein,
casein, starch, oil cakes, corn flour, corn gluten protein, many seed gums and
wheat flour for softening, filling, viscosity control and EPA compliance. Z-Bind
has lignin from corn bran in addition to soluble fiber glue. It is compatible
with lignin and tannin modified glues. The potential resin solids market that
consumes adhesive extenders is approximately 352 million pounds.

         The Company has successfully tested Z-Bind at Forintek and is talking
to several large companies regarding the purchasing of the Company's Z-Bind
waste stream.

MINI-RAMAN LIDAR

         The Company has also acquired the worldwide rights to all fields of
use for the Mini-Raman Lidar technology. The Mini-Raman Lidar system was
patented and developed by the U.S. Department of Energy at Brookhaven National
Laboratory. It is a short-range tool to screen unknown biological, chemical,
narcotic and hazardous substances without having to come in contact with them.
When commercially developed, this tool will give first responders the ability to
detect substances on surfaces as well as in bulk quantity from a distance of
three to fifteen feet. The Mini-Raman Lidar is a standoff technology that,
unlike other typical devices, does not require physical collection of toxic
materials to identify their composition.

THRAXVAC

         The Company also recently acquired the worldwide rights to all fields
of use for the ThraxVac technology, which provides a way to capture ambient
anthrax or Clostridial endospores, and simultaneously trigger activation of the
spore, which marks the beginning of the spores' loss of high resistivity. By
using heat and moisture to activate the spore, the dormancy is broken and the
spore begins to germinate thereby becoming vulnerable to injury. The stream of
newly activated spores are then exposed to alpha particle bombardment via a
polonium source, which damages the DNA containing protoplast causing spore death
and an inability to complete germination and produce toxin. The collection
devices will be both portable and as part of an HVAC system using a HEPA
filtering system with polonium 210 inserts to provide a "continuous killing
repository" for the collected spores.

BRAVE WAY TRAINING SYSTEMS

         The Brave Way Training Systems, a wholly owned subsidiary of the
Company, is a security training and product company. The Brave Way offers
proven, highly effective, low-cost self-defense courses and videos with a
uniquely targeted curriculum focusing on personal safety and self-defense
including rape prevention. Courses are offered for police officers and security
personnel through The Brave Way's state certified law enforcement training for
students and teachers, individuals, Airline Personnel, Hospital personnel,
through park districts, clubs, churches and other organizations as well as
corporations. The Brave Way instructors have multiple backgrounds and experience
in martial arts, security, self-defense, and military.

ON-LINE BEDDING CORP.

         On-Line Bedding Corp. ("On-Line Bedding"), a wholly-owned subsidiary
of the Company, founded in 1981, is a distributor of pillows, blankets and other
bedding products to airlines, hospitals, government, and other commercial and
institutional customers. On-Line Bedding subcontracts the production of pillows,
blankets and other bedding products to manufacturers. On-Line Bedding's
customers include hospitals, nursing homes, hotels and motels, and
transportation-based


                                     - 6 -

<PAGE>

companies such as airlines, railroads and motor coach companies. On-Line Bedding
purchases its raw materials from various suppliers, and contracts production of
its airline pillows and blankets with third party manufacturers. It maintains
several sources for its products and has never experienced any difficulty in
obtaining raw materials. It warehouses a limited inventory, and drop ships its
products from manufacturers or wholesale suppliers in multiple locations
throughout the United States to reduce freight costs for its customers. On-Line
Bedding's primary accounts include AMTRAK, as well as certain domestic and
international airlines. On-Line Bedding is on an electronic invoice system with
the United States military for a specialty pillow, which has been regularly
purchased by the U.S. Armed Forces. On-Line Bedding is also an authorized pillow
and related product vendor for a hospital purchasing group of over 500 members
in eight states.

PRINCIPAL PRODUCTS AND SERVICES

         Z-Trim is currently our principal product. As more fully described
above, the Company, through FiberGel, owns the exclusive, worldwide license for
all fields of use to Z-Trim, an all-natural, corn-based fat replacement
developed by the Agricultural Research Service of the United States Department
of Agriculture "USDA". Z-Trim can be used to decrease fat and calories and
increase insoluble healthy fiber in foods.

RESEARCH AND DEVELOPMENT ACTIVITIES

         The Company estimates that it spent $191,000 and $26,000 on research
and development activities for fiscal years 2003 and 2002, respectively.

EMPLOYEES AND LABOR RELATIONS

         As of December 31, 2003 we employed ten persons full time and one
person part-time. While the Company believes that this staffing level will be
sufficient to manage the Company and carry on its business as currently
conducted, we may need to increase staffing to meet future operational
requirements. None of our employees are represented by a labor union and we are
not governed by any collective bargaining agreements. We believe that relations
with our employees are good.

COMPETITION

         Although we compete with other food specialty firms providing products
in the same ingredient category we believe that Z-Trim represents a better, more
comprehensive fat replacement solution than those of other companies.

MARKETING

         Our fundamental marketing strategy is to focus on several core target
markets based on the wide array of current industry inquiries we have already
received in the dairy, bakery, cereal, confectionary, processed meats, snack
foods, and beverages industries. In our e-tailer division we have no on-going
marketing campaign and all current business is generated from existing
relationships and word of mouth referrals.

OPERATING SEGMENTS

         Circle Group Holdings, Inc. operates three reportable segments, food
product development, defense product development, and e-tailer. FiberGel, and
Z-Amaize make up the food product development segment, Mini-Raman Lidar
Technology, ThraxVac Technology, and The Brave Way Training Systems Inc. make up
the defense product development segment, and On-Line Bedding makes up the
e-tailer segment. Circle Group provides business-consulting services for the
Company's subsidiaries.


                                     - 7 -

<PAGE>

         The Company's management reviews the operating companies' income to
evaluate segment performance and allocate resources. Our operating companies'
income for the reportable segments excludes income taxes and amortization of
goodwill. Provision for income taxes is centrally managed at the corporate level
and, accordingly, such items are not presented by segment since they are
excluded from the measure of segment profitability reviewed by the Company's
management. Goodwill and the related amortization are principally attributable
to the business consulting segment.

         For financial data on these reportable segments, you should refer to
the Consolidated Financial Statements and the notes thereto.

RISK FACTORS

         The following risks are material risks that we face. If any of the
following risks occur, the business of the Company and its operating results
could be seriously harmed.

         WE HAVE A HISTORY OF OPERATING LOSSES AND CANNOT GUARANTEE PROFITABLE
OPERATIONS IN THE FUTURE. ANY FAILURE ON OUR PART TO ACHIEVE PROFITABILITY MAY
CAUSE US TO REDUCE OR EVENTUALLY CEASE OPERATIONS. We reported a net loss of
$3,188,690 for the twelve months ending December 31, 2003 and a net loss of
$3,587,684 for the twelve months ending December 31, 2002. At December 31, 2003
and 2002, respectively, we reported accumulated deficits of $20,082,234 and
$16,484,550. If we continue to incur significant losses our cash reserves may be
depleted earlier than currently anticipated, and we may be required to limit our
future growth objectives to levels corresponding with our then available cash
reserves.

         OUR SUCCESS IS DEPENDENT ON MARKET ACCEPTANCE OF OUR PRODUCT. We have
not conducted, nor have others made available to us, results of market research
indicating how much market demand exists for Z-Trim, our fat replacement
product. We are relying on the current concerns over obesity, weight-health
issues, and the rising cost of health care to drive demand for Z-Trim in the
marketplace.

         WE MAKE NO PROJECTIONS REGARDING THE VIABILITY OF OUR FAT REPLACEMENT
PRODUCT AND WE CANNOT ASSURE YOU THAT WE WILL ACHIEVE THE RESULTS DESCRIBED. We
make no projection with respect to our future income, assets or business. No
expert has reviewed our business plan for accuracy or reasonableness. It is
likely that our actual business and results of operations will differ from those
presented herein.

         WE MAY NEED ADDITIONAL FUNDING AND SUCH FUNDING MAY NOT BE AVAILABLE.
IF SUCH FUNDING IS AVAILABLE, IT MAY NOT BE OFFERED ON SATISFACTORY TERMS. We
may require additional financing to fund ongoing operations if our sales and
revenue growth are insufficient to meet our operating costs. Our inability to
obtain necessary capital or financing to fund these needs will adversely affect
our ability to fund operations and continue as a going concern. Our inability to
obtain necessary capital or financing to fund these needs could adversely affect
our business, results of operations and financial condition. Additional
financing may not be available when needed or may not be available on terms
acceptable to us. If adequate funds are not available, we may be required to
delay, scale back or eliminate one or more of our business segments, which may
affect our overall business, results of operations and financial condition.


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         THE LOSS OF SERVICE OF KEY MANAGEMENT COULD HAVE A NEGATIVE IMPACT ON
OUR PERFORMANCE. Our success depends to a significant degree upon the
performance of our founder and chief executive officer, Gregory J. Halpern. The
loss of service of Mr. Halpern could have a material adverse effect on our
operating performance and viability as a going concern.

         OUR MANAGEMENT CURRENTLY BENEFICIALLY OWNS A SIGNIFICANT PERCENTAGE
OF OUR COMMON STOCK. Ownership of Circle Group is concentrated in management.
Gregory J. Halpern, our Chairman and Chief Executive Officer, owns 42.0% of the
Company's Common Stock and all of the directors and officers collectively own
49.3%. Holders of our Common Stock can be out-voted by management in most
circumstances and thereby management can control the composition of the board of
directors and the policies of Circle Group.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

         This Annual Report on Form 10-KSB contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. The
forward-looking statements are principally contained in the section entitled
"Description of Business." These statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance
or achievements to differ, perhaps materially, from any future results,
performance or achievements expressed or implied by the forward-looking
statements. Forward-looking statements include, but are not limited to,
statements about:

         o        Our product development efforts;

         o        The commercialization of our products;

         o        Anticipated operating losses and capital expenditures;

         o        Our estimates regarding our needs for additional financing;

         o        Our estimates for future revenues and profitability; and

         o        Sources of revenues and anticipated revenues, including
                  contributions from corporate collaborations, license
                  agreements and other collaborative efforts for the development
                  and commercialization of our product candidates, and the
                  continued viability and duration of those agreements and
                  efforts.

         In some cases, you can identify forward-looking statements by terms
such as "may," "will," "should," "could," "would," "expect," "plan,"
"anticipate," "believe," "estimate," "project," "predict," "intend," "potential"
and similar expressions intended to identify forward-looking statements. These
statements reflect our current views with respect to future events and are based
on assumptions and subject to risks and uncertainties. Given these
uncertainties, you should not place undue reliance on these forward-looking
statements. We discuss many of these risks in greater detail in the foregoing
section under the heading "Risk Factors." Also, these forward-looking statements
represent our estimates and assumptions only as of the date of this Annual
Report.

         You should read this Annual Report and the documents that we reference
in this Annual Report with the understanding that our actual future results may
be materially different from what we expect. We do not intend to update any of
these statements or to publicly announce the result of any revisions to any of
these forward-looking statements. We qualify all of our forward-looking
statements by these cautionary statements.


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ITEM 7.  DESCRIPTION OF PROPERTY.

         Circle Group is headquartered in approximately 22,000 square feet of
leased space at 1011 Campus Drive, Mundelein, Illinois. This space is leased for
$11,880 per month pursuant to non-cancelable operating leases that expire in
2004. All subsidiaries and divisions of the Company are operated out of this
space.

ITEM 8.         DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES.

<TABLE>
<CAPTION>
        AGE                  NAME                                           POSITION
        ---          --------------------              ----------------------------------------------------
        <S>          <C>                               <C>
        45           Gregory J. Halpern                Chief Executive Officer and Chairman of the Board of
                                                       Directors

        51           Michael J. Theriault              Chief Operating Officer

        53           Dana L. Dabney                    Director, Secretary and Chief Financial Officer

        74           Edward L. Halpern                 Director

        51           Steve H. Salgan                   Director

        51           Stanford J. Levin                 Director

        54           Alan G. Orlowsky                  Director
</TABLE>

         GREGORY J. HALPERN. Since founding Circle Group in 1994, Mr. Halpern
has served as its Chairman and Chief Executive Officer. From May 1994 until
March 1999, Mr. Halpern also served as Circle Group's President. Mr. Halpern has
over 20 years of experience in computer programming and pioneering emerging
technologies. In 1983, Mr. Halpern developed a computer-animated imaging
application to stimulate the immune system for treatment of chronic illness and
founded Health Imaging Corporation to distribute the application to the
healthcare delivery market. In 1984, he developed and patented a technique for
using electronic stimulation to stop pain and founded Pain Prevention, Inc. to
market the technology as an electronic anesthesia for the dental healthcare
community. Mr. Halpern has served as an officer and director of PPI Capital
since its inception in 1984. Mr. Halpern also served as an officer and director
of PPI Capital Group, Inc., a Utah corporation of which he was a principal
shareholder, from 1989 to May 1998. Gregory J. Halpern is the son of Edward L.
Halpern.

         MICHAEL J. THERIAULT. Mr. Theriault has served as our Chief Operating
Officer since June 1999. His professional experience includes progressive
operations, programming, design, support, consulting, project management, and
department management experience in manufacturing, insurance, medical,
consulting, and mortgage banking industries on both mainframe and personal
computer equipment. From September 1989 until May 1999, Mr. Theriault was
employed by Recon Optical, Inc., for whom he served as Supervisor of Business
Systems from June 1997 until May 1999, and Senior Systems and Programming
Specialist and Senior Project Leader of Manufacturing from September 1989 until
June 1997.

         DANA L. DABNEY. Mr. Dabney has been a member of the board of directors
of Circle Group and has held various offices, including vice president of sales
and marketing and secretary, since January 1997. Currently Mr. Dabney serves as
the Company's Chief Financial Officer. During the first two years of development
of Circle Group, Mr. Dabney was also employed as a mortgage broker. From 1994
until December 1997, Mr. Dabney was employed by State Financial Bank in
Richmond, Illinois, and from January 1998 until December 1998 he was employed by
Mortgage Market Corporation in Illinois.


                                     - 10 -

<PAGE>

         EDWARD L. HALPERN. Mr. Halpern has been a director of the Company since
March 1999 and was our Chief Operating Officer from January 1999 until March
1999. Mr. Halpern founded On-Line Bedding in 1981 and served as its President,
Chief Executive Officer and sole director until it was acquired by Circle Group
in January 1999. Mr. Halpern has continued his duties with On-Line Bedding since
Circle Group acquired it. Edward L. Halpern is the father of Gregory J. Halpern.

         STEVE H. SALGAN, M.D. Dr. Salgan has been a director since March 2000.
Since January 1998, Dr. Salgan has been president of Steven H. Salgan, M.D.,
Ltd., a practice specializing in primary care internal medicine and
general/family medicine. He has been a member of the American Association of
Professional Ringside Physicians since 1997 and a member of the Internal
Medicine Subcommittee for Quality Assurance of Saint Margaret Mercy Hospital in
Hammond, Indiana since 1996.

         STANFORD J. LEVIN. Mr. Levin has been a director since March 2000.
Since 1988, Mr. Levin has been the proprietor of Levin Enterprises, an auto
brokerage company located in Indiana. From January 1986 until June 1988, Mr.
Levin was a public school teacher. From May 1981 until May 1985, he was employed
by Hohman Professional Corp., a real estate development and management company
where his duties included commercial real estate management and overseeing
renovations. From June 1975 until May 1981, he was employed by Yale Corporation
of Hammond, a real estate management company, where his responsibilities
included commercial real estate management.

         ALAN G. ORLOWSKY, J.D., C.P.A. is the president of A.G Orlowsky, Ltd, a
law firm established in 1980,specializing in tax, financial, and estate planning
services. Alan worked for the I.R.S. and Deloitte & Touche as a tax professional
and he taught Accounting, Taxation, and Business Law at Northeastern Illinois
University School of Business and Loyola University of Chicago School of
Business.

         The term of office of each director expires at each annual meeting of
stockholders and upon the election and qualification of his successor. There are
no arrangements with any director or officer regarding any election or
appointment to any office of Circle Group. Other than the father-son
relationship between Edward L. Halpern and Gregory J. Halpern described above,
there is no family relationship between any director or executive officer of
Circle Group.

ITEM 9.  REMUNERATION OF DIRECTORS AND OFFICERS.

         The following table sets forth the aggregate remuneration of each of
the three highest paid persons who are officers or directors as a group of
Circle Group during the last fiscal year:

    NAME OF                  CAPACITIES IN WHICH                   AGGREGATE
  INDIVIDUAL                 REMUNERATION WAS                     REMUNERATION
                             RECEIVED
--------------------         -------------------                  ------------
Edward L. Halpern            Director                             $120,000.00


Michael J. Theriault         Chief Operating                      $ 50,000.00
                             Officer


Dana L. Dabney               Chief Financial                      $ 34,000.00
                             Officer


         The table above includes all cash remuneration during the last fiscal
year and is presented on an accrual basis. There are currently no employment
agreements between the officers and the company.


                                     - 11 -

<PAGE>


2002 STOCK INCENTIVE PLAN

         The Company has an incentive stock option plan, whereby options to
purchase Common Stock are available for grant to the Company's stockholders and
its employees, directors and other service providers. The purpose of the Plan is
to promote the long-term growth and profitability of the Company by (i)
providing key people with incentives to improve stockholder value and to
contribute to the growth and financial success of the Company and (ii) enabling
the Company to attract, retain and reward the best-available persons. This Plan
is a continuation, and amendment and restatement, of the Circle Group Internet,
Inc. 1999 Stock Option Plan, the provisions of which shall continue to control
with respect to any options outstanding thereunder that are intended to qualify
as "incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code to the extent necessary to preserve such status.

         The Plan permits the granting of stock options (including incentive
stock options qualifying under Code section 422 and nonqualified stock options),
stock appreciation rights, restricted or unrestricted stock awards, phantom
stock, performance awards, other stock-based awards, or any combination of the
foregoing. The Plan is administered by the Board or by such committee or
committees as may be appointed by the Board from time to time (the Board,
committee or committees hereinafter referred to as the "Administrator").

         Subject to adjustments as provided in Section 7(d) of the Plan, the
shares of Common Stock that may be issued with respect to Awards granted under
the Plan shall not exceed an aggregate of 2,060,000 shares of Common Stock. The
Company shall reserve such number of shares for Awards under the Plan, subject
to adjustments as provided in Section 7(d) of the Plan. If any Award, or portion
of an Award, under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited or otherwise terminated, surrendered or canceled
as to any shares, or if any shares of Common Stock are surrendered to the
Company in connection with any Award (whether or not such surrendered shares
were acquired pursuant to any Award), or if any shares are withheld by the
Company, the shares subject to such Award and the surrendered and withheld
shares shall thereafter be available for further Awards under the Plan;
provided, however, that any such shares that are surrendered to or withheld by
the Company in connection with any Award or that are otherwise forfeited after
issuance shall not be available for purchase pursuant to incentive stock options
intended to qualify under Code section 422.

ITEM 10           SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS.

         The following table sets forth information as to the record ownership
of our Common Stock, as of February 26, 2004, by all of the officers and
directors as a group and each person who owns more than 10% or more of our
Common Stock:

<TABLE>
<CAPTION>
NAME OF OWNER               ADDRESS                           AMOUNT OWNED                % OF CLASS
----------------------------------------------------------------------------------------------------
<S>                          <C>                               <C>                           <C>
Gregory J. Halpern           1011 Campus Drive                 13,899,200                    42.0%
                             Mundelein, IL 60060
----------------------------------------------------------------------------------------------------
Edward L. Halpern            1011 Campus Drive                   800,000                       *
                             Mundelein, IL 60060
----------------------------------------------------------------------------------------------------
All of the officers and      1011 Campus Drive                 16,330,950                    49.3%
directors as a group (7      Mundelein, IL 60060
persons)
----------------------------------------------------------------------------------------------------
</TABLE>
*owns less than 10%



                                     - 12 -

<PAGE>
         The following table sets forth the information as to options, warrants
and other rights held as of February 26, 2004, to purchase our Common Stock:

<TABLE>
<CAPTION>
                                            TITLE AND AMOUNT
                                          OF SECURITIES CALLED
                                            FOR  BY OPTIONS,
 NAME OF HOLDER                            WARRANTS OR RIGHTS                EXERCISE PRICE PER SHARE
--------------------                      --------------------            ------------------------------
<S>                                              <C>                      <C>
Gregory J. Halpern                                 225,000                30,000 at $0.30 and 195,000 at
                                                                          $1.25
Edward L. Halpern                                  145,000                95,000 at $0.30 and 50,000 at
                                                                          $1.25
Michael J. Theirault                               390,000                80,000 at $0.05 and 185,000 at
                                                                          $0.030 and 125,000 at $1.25
Dana L. Dabney                                     260,000                70,000 at $0.05 and 90,000 at
                                                                          $0.030 and 100,000 at $1.25
All of the officers and directors                 1,330,000               Range from $0.05 - $2.30
as a group (7 persons)
</TABLE>


ITEM 11           INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN TRANSACTIONS.

         On August 2, 2002 and November 7, 2002, the Company borrowed $149,000
and $70,000, respectively, from Gregory J. Halpern, the Chairman of the Board of
Directors, and signed two promissory notes in favor of Gregory J. Halpern in
return. The notes were payable upon demand and provided for interest to be paid
monthly at the rate of 5% per annum.


                                     - 13 -
<PAGE>
                                     PART II

ITEM 1.           MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON
                  EQUITY AND OTHER SHAREHOLDER MATTERS.

         The following table sets forth, for the periods indicated, the high and
low closing prices for our Common Stock, as quoted for trading on the
Over-the-Counter Bulletin Board under the symbol "CRGQ." Our Common Stock began
trading on the OTCBB in the second quarter of 2002. The last reported sale price
of our Common Stock on December 31, 2003 was $2.08 per share. As our Common
Stock is traded in the over-the-counter market, the prices set forth in the
below table reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not represent actual transactions.

2002                                             High                    Low
----                                             ----                    ----
1st Quarter                                        *                       *
2nd Quarter                                      0.75                    0.30
3rd Quarter                                      0.75                    0.10
4th Quarter                                      0.14                    0.03

2003                                             High                    Low
----                                             ----                    ----
1st Quarter                                      0.51                    0.05
2nd Quarter                                      1.17                    0.48
3rd Quarter                                      3.55                    0.75
4th Quarter                                      2.75                    1.80

2004
----
1st Quarter (through February 20, 2004)          8.92                    1.90

---------------------
*Not traded

           As of February 19, 2004, there were 2,675 record holders of the
Common Stock. Circle Group has never paid any dividends on its Common Stock and
does not anticipate paying any dividends in the foreseeable future.

                      EQUITY COMPENSATION PLAN INFORMATION

<TABLE>
<CAPTION>
                                                                                                NUMBER OF SHARES
                                                                                               REMAINING AVAILABLE
                                                                        WEIGHTED-AVERAGE       FOR FUTURE ISSUANCE
                                                                        EXERCISE PRICE OF         UNDER EQUITY
                                              NUMBER OF SHARES TO BE      OUTSTANDING         COMPENSATION PLANS
                                             ISSUED UPON EXERCISE OF        OPTIONS,          (EXCLUDING SECURITIES
                                               OUTSTANDING OPTIONS,       WARRANTS AND          REFLECTED IN 1ST
               PLAN CATEGORY                   WARRANTS AND RIGHTS           RIGHTS                  COLUMN)
----------------------------------------     -----------------------    ----------------       --------------------
<S>                                                 <C>                      <C>                     <C>
Equity compensation plans approved by               1,901,000                $0.13                    99,060
   security holders (1).................
Equity compensation plans not approved by
   security holders (2).................
Total...................................            1,901,000                $0.13                    99,060
</TABLE>
(1)  These plans consist of the 2002 Stock Incentive Plan.

(2) The Company does not maintain any equity compensation plans that have not
been approved by the stockholders



                                     - 14 -
<PAGE>

ITEM 2.          LEGAL PROCEEDINGS.

         The Company filed a lawsuit in the United States District Court for the
Southern District of Florida in August 2002 alleging a legal malpractice claim
against its prior legal counsel. The Company issued a demand in the amount of
$3.2 million and mediation is being staged. The case is scheduled for trial in
June 2004 and the outcome is uncertain.

         The Company filed a lawsuit in September 2002 in the United States
District Court for the Northern District of Illinois alleging a breach of
contract and fraud against a public relations firm. The allegations arose out of
an agreement under which the firm was to generate media coverage for the
Company. The Company further alleges that it paid the firm $538,000 pursuant to
the agreement. The firm filed a counter-claim alleging that it performed its
contractual duties and that the Company owes $537,837.77 under the contract. The
claim was settled at no additional cost to either party by consent decree on
December 4, 2003.

ITEM 3.          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.

         On November 6, 2002, the Company dismissed its certifying accounting
firm McGladrey & Pullen, LLP, and engaged Spector & Wong LLP as the Company's
independent public accountants, as recommended by the Audit Committee and
approved by the Company's Board of Directors. The accountants' report on the
financial statements for the Company's fiscal years ended December 31, 2001 and
2000 expressed an unqualified opinion on those financial statements. During such
fiscal years and the subsequent interim periods prior to November 6, 2002, there
were no disagreements with the former accounting firm on any matter of
accounting principles or practices, financial disclosure or auditing scope of
procedure, which disagreements, if not resolved to McGladrey & Pullen's
satisfaction, would have caused McGladrey & Pullen to make reference to the
subject matter of the disagreements in connection with McGladrey & Pullen's
reports.


                                     - 15 -

<PAGE>

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters were submitted to the vote of the stockholders during the
last quarter of fiscal year 2003.

ITEM 5.           COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

         Section 16(a) of the Securities Exchange Act of 1934, as amended, (the
"Exchange Act") requires the Company's executive officers, directors and persons
who beneficially own greater than 10% of a registered class of the Company's
equity securities ("Reporting Persons") to file certain reports with the
Securities and Exchange Commission with respect to ownership and changes in
ownership of the Common Stock and other equity securities of the Company
("Section 16 Reports"). The Reporting Persons are required by regulation to
furnish the Company with copies of all Section 16 Reports they file.

         To the Company's knowledge, based solely upon the review of the copies
of the Section 16 Reports furnished to the Company, all Section 16(a) filing
requirements applicable to the Reporting Persons were complied with.

ITEM 6.           REPORTS ON FORM 8-K.

         The Company filed a Current Report on Form 8-K on October 7, 2003 in
connection with a press release, dated the same date, in which it announced its
third quarter results for the fiscal year 2003.


                                     - 16 -
<PAGE>

                                    PART F/S

         The following financial statements of the Company are included herein:

         AUDITED ANNUAL FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31,
         2003 AND 2002:

         Independent Auditors' Report

         Consolidated Balance Sheets

         Consolidated Statements of Operations

         Consolidated Statements of Stockholders' Equity

         Consolidated Statements of Cash Flows

         Notes to Consolidated Financial Statements


                                     - 17 -


<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


To the Board of Directors and Stockholders
of Circle Group Holdings, Inc and subsidiaries

We have audited the accompanying consolidated balance sheets of Circle Group
Holdings, Inc. and subsidiaries as of December 31, 2003 and 2002, and the
related consolidated statements of operations, changes in stockholders' equity,
and cash flows for the years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provided a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial positions of Circle
Group Holdings, Inc. and its subsidiaries as of December 31, 2003 and 2002, and
the consolidated results of its operations and its cash flows for the years then
ended, in conformity with accounting principles generally accepted in the United
States.



/s/ Harold Y. Spector
---------------------
Spector & Wong, LLP
Pasadena, California
February 23, 2004


                                       F-1
<PAGE>


CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------

ASSETS                                                      2003          2002
--------------------------------------------------------------------------------
Current Assets
  Cash and cash equivalents                              $1,383,718   $  122,459
  Accounts receivable, net of allowance for doubtful
     accounts 2003 $6,096; 2002 $0                           69,157       32,828
  Prepaid expenses and other assets                          16,332        6,321
  Employee loans and advances                                    --        6,245
  Inventories                                                18,049       23,924
                                                         ----------   ----------
           TOTAL CURRENT ASSETS                           1,487,256      191,777
                                                         ----------   ----------
Property and equipment, net of accumulated
   depreciation 2003 $823,196; 2002 $681,719                718,087      862,824
                                                         ----------   ----------
Other Assets
  Deposits                                                   11,090       11,090
  Purchased intangible assets, net                          597,583           --
                                                         ----------   ----------
                                                            608,673       11,090
                                                         ----------   ----------
           TOTAL ASSETS                                  $2,814,016   $1,065,691
                                                         ==========   ==========


                 See notes to consolidated financial statements

                                       F-2


<PAGE>


CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY                                  2003           2002
--------------------------------------------------------------------------------------------
<S>                                                             <C>             <C>
Current Liabilities
  Accounts payable and other liabilities                        $    311,778    $    399,251
  Notes payable to related parties                                    25,000         232,600
  Capital lease obligations, current portion                          26,667          21,893
                                                                ------------    ------------
                                                                     363,445         653,744
Long-Term Liabilities,
  Capital lease obligations, net of current portion                   74,202          99,480
                                                                ------------    ------------
          TOTAL LIABILITIES                                          437,647         753,224
                                                                ------------    ------------
Minority deficit                                                     (11,326)             --

Stockholders' Equity
  Common stock, $.00005 par value; 50,000,000 shares
   authorized; issued and outstanding 2003 30,872,252 shares;
   2002 23,711,043 shares                                              1,544           1,186
  Common stock to be issued                                               79              --
  Additional paid-in capital                                      25,753,263      20,404,784
  Unamortized expenses (contra-equity)                              (445,867)             --
  Accumulated deficit                                            (22,910,055)    (20,082,234)
  Treasury stock, at cost                                            (11,269)        (11,269)
                                                                ------------    ------------
                                                                   2,387,695         312,467
                                                                ------------    ------------
    TOTAL LIABILITIES AND STOCKHOLDERS'
      EQUITY                                                    $  2,814,016    $  1,065,691
                                                                ============    ============
</TABLE>


                 See notes to consolidated financial statements

                                       F-3

<PAGE>


CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

For the years ended December 31,                                       2003           2002
-----------------------------------------------------------------------------------------------------------------
<S>                                                              <C>             <C>
Revenues:
  Products                                                       $    659,664    $    488,758
  Services                                                             82,778          75,427
                                                                 ------------    ------------
    TOTAL REVENUES                                                    742,442         564,185
                                                                 ------------    ------------
Cost of revenues:
  Products                                                            529,860         380,383
  Services                                                            443,103       1,408,239
                                                                 ------------    ------------
    Total cost of revenues                                            972,963       1,788,622
                                                                 ------------    ------------
Operating expenses:
  Selling, general and administrative                               2,863,349       1,970,700
  Reduction of long-lived assets                                           --         143,144
  Impairment of goodwill                                                   --         542,800
                                                                 ------------    ------------
    Total operating expenses                                        2,863,349       2,656,644
                                                                 ------------    ------------
            OPERATING (LOSS)                                       (3,093,870)     (3,881,081)
                                                                 ------------    ------------

Other income (expenses):
  Other income                                                        151,370          41,393
  Gain (loss) on disposal of long-lived assets                        155,554          (7,563)
  Gain on sales of securities                                              --          19,325
  Gain on sales of impaired investment in associated companies             --         235,022
  Interest income                                                       5,002          24,270
  Interest expense                                                    (45,877)        (19,050)
                                                                 ------------    ------------
    Total other income (expenses)                                     266,049         293,397
                                                                 ------------    ------------
            NET (LOSS)                                           $ (2,827,821)   $ (3,587,684)
                                                                 ------------    ------------
NET LOSS PER SHARE - BASIC AND DILUTED                           $      (0.10)   $      (0.17)
                                                                 ------------    ------------
Weighted Average Number of Shares                                  26,981,440      21,640,464
</TABLE>


                 See notes to consolidated financial statements

                                       F-4

<PAGE>


CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR YEARS ENDED DECEMBER 31, 2003 AND 2002
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                               Common
                                                             Stock and
                                                             Additional
                                              Shares of        Paid-in     Unamortized    Accumulated    Treasury
                                             Common Stock      Capital       Expenses       Deficit        Stock          Total
----------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>             <C>            <C>          <C>             <C>          <C>
Balance at December 31, 2001                  $19,862,447     $18,479,742    $      --    $(16,494,550)   $(11,269)    $ 1,973,923

  Stock issued for services                       882,096         917,178            0               0           0         917,178
  Stock issued for acquisition of subsidiary    2,800,000         504,000            0               0           0         504,000
  Stock issued in private placement               166,500         416,250            0               0           0         416,250
  Warrants issued for acquistion of subsidiary          0          88,800            0               0           0          88,800
  Net loss                                              0               0            0      (3,587,684)          0      (3,587,684)
                                              -----------     -----------    ---------    ------------    --------       ---------
Balance at December 31, 2002                   23,711,043      20,405,970            0     (20,082,234)    (11,269)        312,467

  Stock issued for services                       934,046       1,407,552     (333,750)              0           0       1,073,802
  Stock issued for acquisition of license
    rights                                      1,208,333         620,000            0               0           0         620,000
  Stock issued for cash                         1,260,000         250,000            0               0           0         250,000
  Stock subscription                            2,742,857         978,250            0               0           0         978,250
  Exercise of stock warrants and options        1,119,573         331,987            0               0           0         331,987
  Retirement of common stock                     (103,600)        (58,750)           0               0           0         (58,750)
  Equity adjustments related to subsidiary
    equity transactions                                 0       1,100,000            0               0           0       1,100,000
  Warrants issued for services                          0         719,877     (112,117)              0           0         607,760
  Net loss                                              0               0            0      (2,827,821)          0      (2,827,821)
                                              -----------     -----------    ---------    ------------    --------       ---------
BALANCE AT DECEMBER 31, 2003                  $30,872,252     $25,754,886    $(445,867)   $(22,910,055)   $(11,269)      2,387,695
                                              ===========     ===========    =========    ============    ========       =========
</TABLE>


                 See notes to consolidated financial statements

                                       F-5

<PAGE>


CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

For the years ended December 31,                                             2003           2002
----------------------------------------------------------------------------------------------------
Cash Flow From Operating Activities:
<S>                                                                       <C>            <C>
  Net (loss)                                                              $(2,827,821)   $(3,587,684)

  Adjustments to reconcile net (loss) to net cash (used in) operations:
   Minority deficit                                                           (11,326)             0
   Depreciation and amortization                                              170,201        200,438
   (Gain) loss on disposal of long-lived assets                              (155,554)         7,563
   Write-off of employee advances and loans                                     5,148          3,873
   Stocks and warrants issued for services                                  1,632,812        917,178
   Realized gain on securities and investments                                      0       (254,347)
   Write-off of goodwill                                                            0        542,800
   Write-off of long-lived assets                                                   0        143,144
   (Increase) decrease in:
     Accounts receivable, net                                                 (36,329)        42,225
     Prepaid expenses and other assets                                        (10,010)        12,387
     Inventories                                                                5,875         22,652
     Deposits                                                                       0          2,528
   Increase (decrease) in:
     Accounts payable and other liabilities                                   (87,474)       115,979
----------------------------------------------------------------------------------------------------
           CASH FLOWS (USED IN) OPERATING ACTIVITIES                       (1,314,478)    (1,831,264)
----------------------------------------------------------------------------------------------------

Cash Flow From Investing Activities:
  Employee loans and advances                                                  (8,904)         9,605
  Purchase of property and equipment                                           (3,868)        (3,555)
  Proceeds from disposition of property and equipment                           6,375        135,725
  Proceeds from sale of intangible assets                                     150,000              0
  Capitalized software development costs                                            0        (34,498)
  Proceeds from sales of investments                                                0        577,567
----------------------------------------------------------------------------------------------------
           CASH FLOWS PROVIDED BY INVESTING ACTIVITIES                        143,603        684,844
----------------------------------------------------------------------------------------------------

Cash Flow From Financing Activities:
  Net proceeds from sales of stock                                            250,000        416,250
  Net proceeds from stock subscription                                        978,250              0
  Net proceeds from subsidiary stock offering                               1,100,000              0
  Exercise of warrants and options                                            138,487              0
  Proceeds on officers' loans                                                       0        232,600
  (Repayments) to officers                                                    (14,100)             0
  (Repayments) on capital lease obligations                                   (20,503)        (9,479)
----------------------------------------------------------------------------------------------------
           CASH FLOWS PROVIDED BY FINANCING ACTIVITIES                      2,432,134        639,371
----------------------------------------------------------------------------------------------------

           NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS             1,261,259       (507,049)

Cash and cash equivalents, at beginning of year                               122,459        629,508
----------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, AT END OF YEAR                                 $ 1,383,718    $   122,459
----------------------------------------------------------------------------------------------------

Supplemental Disclosures of Cash Flow Information:
      Interest paid                                                       $    43,640    $    16,741
Supplemental Schedules of Noncash Investing and Financing Activities:
  Common stocks and warrants issued to acquire:
           License rights                                                 $   620,000    $         0
           Subsidiary                                                     $         0    $   592,800
  Retirement of common stock to reduce employee loan                      $    10,000    $         0
  Stock option exercised to retire note payable to related party          $   193,500    $         0
  Capital lease obligations incurred for property and equipment           $         0    $   130,852
  Conversion of note receivable into investment                           $         0    $   132,000

</TABLE>

                 See notes to consolidated financial statements

                                       F-6

<PAGE>


CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 1.  NATURE OF BUSINESS

         Circle Group Holdings, Inc. (the "Company") operates FiberGel
Technologies, Inc. ("FiberGel"), Mini-Raman Lidar Technology, The Brave Way
Training Systems, Inc., Consulting CGI, and On-Line Bedding Corp. divisions. As
part of the transition to the Company's new sales and marketing business model,
Circle Group has sought to dispose of certain corporate assets that do not
enhance the restructured operations, including, but not limited to, CGI Capital,
Inc., its e-finance operating segment and registered broker-dealer, and
Veridisc, its software development division.

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         The accompanying consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America (GAAP). The consolidated financial statements include the accounts of
the Company and its subsidiaries. Significant intercompany balances have been
eliminated in consolidation.

Use of estimates: The preparation of the accompanying consolidated financial
statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Revenue recognition: The Company generally recognizes product revenue when
persuasive evidence of an arrangement exists, delivery has occurred, the fee is
fixed or determinable, and collectibility is probable. In instances where the
final acceptance of the product is specified by the customer, revenue is
deferred until all acceptance criteria have been met. No provisions were
established for estimated product returns and allowances based on the Company's
historical experience.

         Revenue from web design services is recognized when the services are
completed, providing that the collectibility is reasonably assured.
Non-marketable equity securities received in lieu of cash for business
consulting services are recorded in the deferred revenue account at estimated
value when received. Revenue from these service contracts are recognized over
the life of the contract when it has been determined that there are no
uncertainties regarding the realizability of converting these equity securities
to cash. This generally occurs after the client has completed a public offering
or is acquired by a publicly traded company. Cash revenues received in advance
from business consulting contracts are deferred and recognized over the life of
the contract.

Allowance for doubtful accounts: Management of the Company makes judgments as to
its ability to collect outstanding receivables and provide allowances for the
portion of receivables when collection becomes doubtful. Provisions are made
based upon a specific review of all significant outstanding invoices. For those
invoices not specifically reviewed, provisions are provided at differing rates,
based upon the age of the receivable. In determining these percentages,
management analyzes its historical collection experience and current economic
trends. If the historical data the Company use to calculate the allowance for
doubtful accounts does not reflect the future ability to collect outstanding
receivables, additional provisions for doubtful accounts may be needed and the
future results of operations could be materially affected.


                                       F-7
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Valuation - Investments: The Company occasionally accepts common stock for its
business consulting services. At the date stock is received, the Company values
the stock as follows:

     a.  Common stock accepted as payment in a transaction from an associated
         company where there has been no prior public offering, but whose shares
         have been offered and sold in a significant private placement within
         the last 90 days, is initially valued based upon the last sale price of
         shares in the private placement.

     b.  Common stock accepted as payment in a transaction from an associated
         company where there has been no public or significant private placement
         offering, is initially valued after considering the following criteria:
         market multiples analysis; acquisition multiples analysis; calculation
         of market capitalization based on the contemplated private placement
         sale price; realization of business plan objectives and management team
         expertise and ability to execute the business plan.

         Other non-marketable equity investments are initially recorded at
estimated value. Associated companies not accounted for under either the
consolidation or the equity method of accounting are accounted for under the
cost method of accounting. Under this method, the Company's share of the
earnings and losses of these companies is not included in the Company's
consolidated statements of operations.

         The Company records its ownership interest in equity securities of its
associated companies accounted for under the cost method at cost unless the
securities have readily determinable fair values based on quoted market prices,
in which case these interests would be accounted for in accordance with
Statement of Financial Accounting Standards (SFAS) No. 115, "Accounting for
Certain Investments in Debt and Equity Securities."

Impairment valuation: On a continuous basis, but no less frequently than at the
end of each quarterly reporting period, the Company evaluates the carrying value
for financial statement purposes of its interests in each of its associated
companies for impairment. These evaluations of impairment are based on
achievement of business plan objectives and milestones of each associated
company, the fair value of each ownership interest relative to its carrying
value, the financial condition and prospects of the associated company, and
other relevant factors. The business plan objectives and milestones that are
considered include, among others, those related to financial performance, such
as achievement of planned financial results and completion of capital raising
activities. For financial statement purposes, the fair value of the Company's
ownership interests in privately held associated companies is generally
determined based on the prices paid by third parties for ownership interests in
the associated companies, to the extent third party ownership interests exist,
or based on the achievement of business plan objectives and the milestones
described above.

Cash and cash equivalents: For purposes of the statement of cash flows, the
Company considers all highly liquid investments with a maturity of three months
or less to be cash equivalents.

Fair value of financial instruments: All financial instruments are carried at
amounts that approximate estimated fair value.


                                       F-8
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Concentrations: Cash and cash equivalents are maintained with several financial
institutions. Deposits held with banks may exceed the amount of insurance
provided on such deposits. Generally, these deposits may be redeemed upon demand
and therefore bear minimal risk.

Inventories: Inventories consist of finished goods and are stated at the lower
of cost or market, using the first-in, first-out method.

Property and equipment: Property and equipment are stated at cost. Maintenance
and repair costs are expensed as incurred. Depreciation is calculated on the
accelerated and straight-line methods over the estimated useful lives of the
assets. Estimated useful lives of five to seven years are used for machinery and
equipment, office equipment and furniture, and automobile. Estimated useful
lives of up to five years are used for computer equipment and related software.
Depreciation and amortization of leasehold improvements are computed using the
shorter of the remaining lease terms or five years.

Goodwill and purchased intangible assets: Goodwill is measured as the excess of
the cost of acquisition over the sum of the amounts assigned to identifiable
assts acquired less liabilities assumed. Prior to January 1, 2002, goodwill was
amortized on a straight-line basis over a fifteen-year period. With the
Company's adoption of SFAS No. 142, "Goodwill and Other Intangible Assets", on
January 1, 2002, goodwill is no longer amortized but is subject to annual
impairment testing. Goodwill is reviewed for possible impairment when events or
changed circumstances may affect the underlying basis of the net assets. Such
reviews include an analysis of current results and consideration of projected
operating cash flows. During the year ended December 31, 2002, the Company
recognized an impairment of the goodwill of $542,800.

         Purchased intangible assets are carried at cost less accumulated
amortization. Amortization is computed over the estimated useful lives of the
respective assets, generally from five to twenty years.

Impairment of Long-Lived Assets: Long-lived assets and certain identifiable
intangible assets to be held and used are reviewed for impairment whenever
events or changes in circumstance indicate that the carrying amount of such
assets may not be recoverable. Determination of recoverability is based on an
estimate of undiscounted future cash flows resulting from the use of the asset
and its eventual disposition. Measurement of an impairment loss for long-lived
assets and certain identifiable intangible assets that management expects to
hold and use is based on the fair value of the asset. Long-lived assets and
certain identifiable intangible assets to be disposed of are reported at the
lower of carrying amount or fair value costs to sell. During the year ended
December 31, 2002, the Company recognized an impairment of the long-lived assets
of $143,144 related to its software development segments.

Income (Loss) Per Common Share Basic net income (loss) per share includes no
dilution and is computed by dividing net income (loss) available to common
stockholders by the weighted average number of common stock outstanding for the
period. Diluted earnings per share is computed by dividing net income by the
weighted average number of shares outstanding and, when, diluted, potential
shares from options and warrants to purchase common stock using the treasury
stock method. Diluted net loss per common share does not differ from basic net
loss per common share since potential shares of common stock are anti-dilutive
for all periods presented. The weighted average equivalent shares excluded from
diluted net loss per share totaled 4,125,223 for the year ended December 31,
2003. There were no dilutive securities for the year ended December 31, 2002
since all outstanding options and warrants are "out-of-money"; it means their
exercise prices are greater than the closing bid price of the Company's stock as
of that date.


                                       F-9
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income taxes: The Company and its subsidiaries are included in the consolidated
federal income tax return filed by the Parent. Federal income taxes are
calculated as if the companies filed on a separate return basis, and the amount
of current tax expense or benefit calculated is either remitted to or received
from the Parent. The amount of current and deferred taxes payable or refundable
is recognized as of the date of the financial statements, utilizing currently
enacted tax laws and rates. Deferred tax expenses or benefits are recognized in
the financial statements for the changes in deferred tax liabilities or assets
between years.

Advertising costs: The Company expenses all advertising costs as incurred.

Web Site development costs: The Company accounts for costs incurred for web site
development under Emerging Issues Task Force (EITF) 00-2, "Accounting for Web
Site Development Costs. Generally," all costs incurred in the planning and
operational phases are expensed as incurred. For costs incurred in other phases,
such as application and infrastructure development, graphics development and
content development, the Company applies SOP 98-1 in determining whether to
capitalize or expense these costs.

Minority Deficit: Minority deficit represents the other stockholders'
proportionate share (in loss) of the equity of FiberGel Technologies, Inc. At
December 31, 2003, the Company owned all issued and outstanding common stock
amounting to 94.5% of the voting rights.

Stock-based Compensation: SFAS No. 148. "Accounting for Stock-Based Compensation
- Transition and Disclosure, an Amendment of FASB Statement No. 123," amends the
disclosure requirements of SFAS No. 123, "Accounting for Stock-Based
Compensation," to require more prominent disclosures in both annual and interim
financial statements regarding the method of accounting for stock-based employee
compensation and the effect of the method used on reported results.

         The Company accounts for equity-based instruments issued or granted to
employees using the intrinsic method of accounting in accordance with Accounting
Principles Board (APB) Opinion No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"). Under the intrinsic value method, because the exercise
price of the Company's employee stock options equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized in
the Company's Consolidated Statements of Operations.

         The Company is required under SFAS 123 to disclose pro forma
information regarding option grants to its employees based on specified
valuation techniques that produce estimated compensation charges. The pro forma
information is as follows:

    For years ended December 31,                2003            2002
    ----------------------------------------------------------------------------
    Net loss - as reported                  $(2,827,821)   $  (3,587,684)
    Pro forma compensation expense
                                                171,063        1,502,564
                                            -----------    -------------
    Pro forma net loss                      $(2,998,884)   $  (5,090,248)
                                            ===========    =============
    Basic and diluted net loss per share:
      As reported                           $     (0.10)   $       (0.17)
      Pro forma                             $     (0.11)   $       (0.24)



                                      F-10
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         The value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model, which was developed for use in
estimating the value of traded options that have no vesting restrictions and are
fully transferable. Because the Company's employee stock options have
characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the
estimate, in management's opinion, the existing valuation models do not provide
a reliable measure of the fair value of the Company's employee stock options.
(For additional information regarding this pro forma information, see Note 13 to
the Consolidated Financial Statements.)

         The Company accounts for stock issued to non-employees in accordance
with the provisions of SFAS No. 123 and the EITF Issue No. 00-18, "Accounting
for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
in Conjunction with Selling, Goods or Services." SFAS No. 123 states that equity
instruments that are issued in exchange for the receipt of goods or services
should be measured at the fair value of the consideration received or the fair
value of the equity instruments issued, whichever is more reliably measurable.
Under the guidance in Issue 00-18, the measurement date occurs as of the earlier
of (a) the date at which a performance commitment is reached or (b) absent a
performance commitment, the date at which the performance necessary to earn the
equity instruments is complete (that is, the vesting date).

New Accounting Standards: In May 2003, the Financial Accounting Standards Board
(FASB) issued SFAS No. 150, "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity." This Statement requires that
certain instruments that were previously classified as equity on the Company's
statement of financial position now be classified as liabilities. The Statement
is effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. The Company currently has no instruments impacted
by the adoption of this statement and therefore the adoption did not have an
effect on the Company's consolidated financial position, results of operations
or cash flows.

         In April 2003, the FASB issued Statement of SFAS No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities," which is
generally effective for contracts entered into or modified after June 30, 2003
and for hedging relationships designated after June 30, 2003. SFAS No. 149
clarifies under what circumstances a contract with an initial net investment
meets the characteristic of a derivative as discussed in SFAS No. 133, clarifies
when a derivative contains a financing component, amends the definition of an
"underlying" to conform it to the language used in FASB Interpretation No. 45,
"Guarantor Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others" and amends certain other existing
pronouncements. The Company does not have any derivative financial instruments.
The Company does not anticipate that the adoption of SFAS No. 149 will have an
impact on its consolidated balance sheets or statements of operations and cash
flows.


                                      F-11
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

         In January 2003, the FASB issued Interpretation No. 46, Consolidation
of Variable Interest Entities, an interpretation of Accounting Research Bulletin
No. 51. Interpretation 46 establishes accounting guidance for consolidation of
variable interest entities that function to support the activities of the
primary beneficiary. Interpretation 46 applies to any business enterprise, both
public and private, that has a controlling interest, contractual relationship or
other business relationship with a variable interest entity. The Company
currently has no contractual relationship or other business relationship with a
variable interest entity and therefore the adoption did not have an effect on
its consolidated financial position or results of operations. However, if the
Company enters into any such arrangement with a variable interest entity in the
future, its consolidated financial position or results of operations may be
adversely impacted.

Reclassifications: Certain reclassifications have been made to prior year
balances in order to conform to the current year presentation.

NOTE 3.  EMPLOYEE LOAN

The Company has made advances to and on behalf of the former CFO and the former
CFO has made repayments to the Company. At the end of March 2003, the Company
converted $30,840 into a note receivable bearing interest at 4% per annum,
compounded annually. The former CFO agreed to make monthly payments of $2,000 to
be taken from his compensation for remaining as a principal of CGI Capital, Inc.
(a subsidiary of the Company, "Broker-Dealer"), until the sale of Broker-Dealer
is completed. The former CFO shall then make monthly payments of $500 until the
entire loan amount is paid-off. The former CFO also agreed to surrender his
20,000 shares of the Company's stock in exchange for a reduction of the note
amount by $10,000. As of December 31, 2003, the Company wrote off the balance of
$5,148 which was deemed to be uncollectible by management.

NOTE 4.  PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows for the years ended
December 31, 2003 and 2002:

                                                2003              2002
                                      -----------------------------------
      Machinery and equipment               $  147,016        $  154,144
      Computer equipment and software          298,222           294,354
      Office equipment and furniture           515,515           515,515
      Leasehold Improvements                   580,530           580,530
                                      -----------------------------------
                                             1,541,283         1,544,543
      Less: accumulated depreciation          (823,196)         (681,719)
                                      -----------------------------------
                                            $  718,087        $  862,824
                                      ===================================


                                      F-12
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 5.  PURCHASED INTANGIBLE ASSETS, NET

The following is a summary of intangible assets, net:

                                    Gross
                                   Carrying  Accumulated
                                    Amount  Amortization     Net
                                   -------------------------------
        License Rights to
         Mini Raman Lidar patent   $420,000   $(15,750)   $404,250
              NAT website           200,000     (6,667)    193,333
                                   -------------------------------
        Total intangibles          $620,000   $(22,417)   $597,583
                                   ===============================

On March 26, 2003, Utek Corporation ("Utek") assigned the Company an exclusive
license to a chemical detection technology developed by the U.S. Department of
Energy's Brookhaven National Laboratory ("Brookhaven") in a stock transaction.
Brookhaven Lab's patent-pending technology, known as Mini-Raman Lidar, is a
short-range tool to screen unknown chemical, narcotic and hazardous substances
without having to come in contact with the substances. Under the assignment, the
Company issued 821,429 and 178,571 unregistered shares of the Company's stock to
Utek and Brookhaven Lab, respectively, with a total valuation of $420,000.

On July 7, 2003, Utek assigned the Company an exclusive license to a Nutrition
Analysis Tool (NAT) website developed by the Department of Food Science and
Human Nutrition at the University of Illinois in a stock transaction. The
University of Illinois' NAT website is an interactive, web-based system designed
to empower individuals to select a nutrient rich diet. This fully functional
nutrient analysis program utilizes the USDA nutrient database, including 6,000
foods as well as information from food companies. The Company looks forward to
exploring the potential synergies between NAT and FiberGel. Under the
assignment, the Company issued 130,208 and 78,125 unregistered shares of the
Company's stock to Utek and University of Illinois, respectively, with a total
valuation of $200,000.

The acquired license rights are amortized using the straight-line method over
the term of the agreements, which range up to twenty years. Amortization of
intangibles was $22,417 for year ended December 31, 2003. There was no purchased
intangible assets and therefore, no amortization for the year ended December 31,
2002.

Based on the carrying amount of the intangibles as of December 31, 2003, and
assuming no impairment of the underlying assets, the estimated future
amortization is as follows:

              Years ended December 31,
              ------------------------
              2004                                      $  34,333
              2005                                         34,333
              2006                                         34,333
              2007                                         34,333
              Thereafter                                  460,251
                                                        ----------
              Total amortization                        $ 597,583
                                                        ==========


                                      F-13
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 6.  INVESTMENTS

As of December 31, 2003 and 2002, the carrying value of investments was $0. In
2002, the Company sold three of the investments back to the clients and
recognized a net gain of $235,022.

                                 December 31, 2003         December 31, 2002
                               -------------------------------------------------
                                Carrying      Cost       Carrying        Cost
                                  Value       Basis        Value         Basis
                               -------------------------------------------------
Stocks received for services   $        0   $2,723,538   $        0   $2,723,538
Equity securities
                                        0    1,000,000            0    1,000,000
                               -------------------------------------------------
  Total investments            $        0   $3,723,538   $        0   $3,723,538
                               =================================================


NOTE 7.  NOTE PAYABLES TO RELATED PARTIES

At December 31, 2003 and 2002, note payables to related parties consist of
following:

                                                        2003      2002
                                                     --------------------
1.)Payable to a related party, interest accrued at
   5%, due on demand. Unsecured. (A)                 $      0   $200,500
2.)Payable to a related party, interest accrued at
   5%, due on demand. Unsecured                        25,000     25,000
3.)Payable to a related party, interest accrued at
   6.75%, due on demand. Unsecured. (B)
                                                            0      7,100
                                                     -------------------
                                                     $ 25,000   $232,600
                                                     ===================

(A) In August 2003, the Chairman of the Board of Director exercised his 645,000
stock options at $0.30 per share. The total proceed of $193,500 was debited
against the note payable and accrued interest owed to the Chairman.

(B) On November 15, 2002, the Company entered a stock sale agreement and issued
a promissory note of $7,100 to an officer. The agreement provided that the
Company directed its transfer agent to remove the restrictive legend and allow
the sale of up to 200,000 shares of the Company's common stock under the
Securities Act of 1933 (the "Act") in reliance upon the exemption there from
contained in Section 4(1) of the Act and Rule 144 promulgated by the SEC there
under, owned by the officer. The Company will borrow, and the officer will loan
80% of any and all proceeds from the sale of the stock to the Company. As of
December 31, 2002, the officer sold all his 200,000 shares at a fair market
value of $0.0355 per share, and advanced 80% of the total proceeds of $7,100, or
$5,680 to the Company. The note bears interest at 6.75% per annum, and is due on
demand. The Company also granted the officer non-statutory stock options to
purchase 400,000 shares of common stock of the Company at an exercise price of
$0.035 per share. The options expire on November 15, 2007.


                                      F-14
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 8.  SALE AND LEASEBACK

In August 2002, the Company sold certain property and equipment to an unrelated
party for $121,500 and leased the equipment back from the party under three
lease agreements that were classified as capital leases in accordance with SFAS
13, "Accounting for Leases." The capitalized cost and accumulated depreciation
of the leased back property and equipment at December 31, 2003 and 2002 was as
follows:

                                                 2003           2002
                                           ----------------------------
         Machinery and equipment            $   13,352      $   13,352
         Computer equipment and software        19,584          19,584
         Office equipment and furniture         97,917          97,917
                                           ----------------------------
                                               130,853         130,853
         Less: accumulated depreciation        (39,256)        (13,085)
                                           ----------------------------
                                            $   91,597      $  117,768
                                           ============================



The following table presents the future minimum lease payments under the capital
leases together with the present value of the minimum lease payments as of
December 31, 2003:

            Year Ending December 31,
            ------------------------
            2004                                            $ 42,270
            2005                                              42,270
            2006                                              35,296
            Thereafter                                        12,869
                                                            ---------
            Total minimum lease payments                     132,705
            Lease amount representing interest                31,836
                                                            ---------
            Present value of minimum lease payments          100,869
            Less: current portion                             26,667
                                                            ---------
            Non-current portion                             $ 74,202
                                                            =========

The leases bear interest rate ranging from 17.29% to 20.88%.

The Company incurred a loss of $16,413 from the disposition:

            Selling price                                     $ 121,500

            Cost of equipment                    342,171
            Accumulated depreciation            (204,258)
                                               ---------
            Book value of equipment                             137,913
                                                              ---------
            Loss on disposition of equipment                  $ (16,413)
                                                              =========

The Company accounts for the disposition in accordance with SFAS 28, "Accounting
for Sales with Leasebacks", and accordingly, the loss on the sale was recognized
in the period of the sale and leaseback.


                                      F-15
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 9.  ACQUISITION

On August 27, 2002, the Company acquired FiberGel, a wholly owned subsidiary of
Utek Corporation ("Utek"). FiberGel owns the exclusive, worldwide licensee to
Z-Trim-an all natural, carbohydrate-based fat replacement developed by the
United States Department of Agriculture's (USDA) Agricultural Research Service.
Under the terms of the acquisition, the Company issued 2,800,000 shares of the
Company's common stock valued at $504,000 using an average market price of $0.18
per share. The average market price was based on the average closing price for a
range of trading days around the announcement date of the acquisition (August
27, 2002). The Company also issued a warrant to Utek to purchase 500,000 shares
of the Company's common stock at an exercise price of $0.36 per share within 36
months of the date of acquisition. The warrants were valued at $88,800
calculated using the Black-Scholes option-pricing model.

The total purchase cost of the acquisition is summarized as follows:

       Value of common stock issued                       $504,000
       Value of warrant issued                              88,800
                                                          --------
         Total purchase price                             $592,800
                                                          ========

The purchase price allocation is as follows:

       Licensing agreement                                $ 50,000
       Goodwill                                            542,800
                                                          --------
         Total purchase price                             $592,800
                                                          ========


The acquisition was accounted for as a purchase transaction in accordance with
SFAS 141, and accordingly the assets acquired were recorded at their estimated
fair value at the date of the acquisition. No tangible assets were acquired and
no liabilities were assumed from the acquisition. The results of operations of
FiberGel have been included in the Company's financial statements subsequent to
the date of acquisition. Pro forma results of operations have not been presented
because the effect of the acquisition was not material.

FiberGel entered into a license agreement with the USDA for the development and
commercialization of Z-Trim in the United States and Canada. Upon execution of
the agreement, FiberGel paid the USDA a license execution fee of $50,000, which
is capitalized as an intangible asset. Because the FiberGel acquisitions have
not met the performance targets established at the time of acquisition, and
because market conditions used as a basis of estimating terminal values continue
to remain depressed, the Company performed an impairment assessment of its
goodwill and identifiable intangible assets recorded in connection with the
acquisitions. As a result, management recorded an impairment charge during the
year ended December 31, 2002 in the amount of $592,800. The Company assessed the
recoverability of goodwill and the license agreement using estimated
undiscounted cash flows. Those cash flows include an estimated terminal value
based on hypothetical sales of an acquisition at the end of the related goodwill
and license agreement amortization period. As of December 31, 2002, the
remaining balance of goodwill and license agreement was $0.


                                      F-16
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 10. SALE OF SUBSIDIARY

During the third quarter of 2003, the Company sold 20% of its ownership in CGI
Capital to Rothschild, Owen, Hayes & Partners, Inc. (the "Purchaser") for
$15,000 in cash, and expected to sell the remaining 80% by the end of the year,
subject to the NASD approval. A gain of $8,635 was realized during the third
quarter, and the Company's consolidated financial statements for all periods
presented have been reclassified to reflect CGI Capital and the e-finance
business as a discontinued business segment in accordance with SFAS 144.

At December 31, 2003, the purchaser declined to purchase the remaining 80%
ownership in CGI Capital and surrendered the 20% ownership it has acquired.
Accordingly, the Company reversed the gain of $8,635 in the fourth quarter and
recognized the cash proceeds as other income. The Company also reclassified the
operations CGI Capital and the e-finance business segment back to continuing
operations.

NOTE 11. INCOME TAXES

The deferred net tax assets consist of the following at December 31, 2003 and
2002:

                                                          2003          2002
                                                     --------------------------
Tax Benefit on net operating loss carryforward       $ 6,722,333    $ 5,536,616
Temporary differene in depreciation and amortization      20,476         23,933
Temporary differene in goodwill                          213,547        229,378
Less: valulation allowance                            (6,956,356)    (5,789,927)
                                                     --------------------------
  Net deferred tax assets                            $        --    $        --
                                                     ==========================

At December 31, 2003, net federal operating losses of approximately $18 million
are available for carry-forward against future years' taxable income and expire
through 2023. The Company's ability to utilize its federal net operating loss
carryforwards is uncertain and thus a valuation reserve has been provided
against the Company's net deferred tax assets.

NOTE 12. STOCKHOLDERS' EQUITY

Stock Subscriptions: During the year the Company entered into two stock
subscription agreements to conduct a self-underwritten offering of the Company's
common stocks with detachable warrants up to $1.45 million. The number of shares
issuable to the holder will equal the amount paid by the holder divided by the
lesser of $0.25 or 50% of the closing price on the day of closing, but in no
event less than $0.20. One warrant will be issued to purchaser for every share
purchased. Warrants will be exercisable at a price equal to $1.50 and will
expire on February 28, 2005. The expiration date will be extended for one year
if the closing price on February 28, 2005 is not at least $1.50 and will be
extended to February 28, 2007 if the closing price on the extended expiration
date is not at least $1.50. The Company agreed to pay the underwriters a 9%
compensation of the total amount raised, plus a flat non-accountable expense
allowance to cover legal, escrow fees and miscellaneous costs not to exceed
$7,500.

         As of December 31, 2003, the Company had received net proceeds of
$978,250, net of offering costs of $96,750 from the underwriters and had issued
2,742,857 shares of common stocks. The Company expects to issue the balance of
approximately 1.5 million shares in the first quarter of 2004.


                                      F-17
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 12. STOCKHOLDERS' EQUITY (CONTINUED)

Private Placement Offering: In April 2003, the Company conducted a
self-underwritten offering of the Company's common stocks up to $4,000,000. The
stock was sold for $0.25 per share with a minimum purchase of 100,000 shares or
$25,000 per unit. As of December 31, 2003, the Company sold and issued 560,000
shares and received $140,000 in proceeds under the offering.

         The Company also sold 700,000 shares of common stock for $110,000 in
cash.

Retirement of common stock: During 2003, the Company retired 103,600 shares of
common stock and recognized other income of $48,750. 18,600 shares were retired
from its former employees due to employment termination; 65,000 shares were
retired from a consultant due to service not performed and 20,000 shares were
retired to reduce an employee loan of $10,000 as discussed in Note 3.

Subsidiary Stock Transactions: On July 23, 2003, the Board of Directors approved
the redemption of all 1,000 shares of FiberGel which was acquired in 2002, and
the issuance of twenty million (20,000,000) shares of common stock of FiberGel
with a par value of $0.00005 per share. The Board of Directors also approved to
increase the authorized common stock to fifty million (50,000,000) shares.

         The Company conducted a private placement offering of FiberGel's
common stock to raise $5,000,000. The stock was sold for $1 per share with a
minimum purchase of 50,000 shares for $50,000 per unit. One warrant to purchase
the Company's common stock at an exercise price of $2 per share will be issued
to purchaser for every FiberGel's share purchased.

         The Company complies with the requirement of SEC Staff Accounting
Bulletin No. 51, "Accounting for Sales of Stock by a Subsidiary," which requires
that the difference between the carrying amount of parent's investment in a
subsidiary and the underlying net book value of the subsidiary after the
issuance of stock by the subsidiary be reflected as either a gain or loss in the
statement of operations or reflected as an equity transaction. The Company has
elected to record gains or losses resulting from the sale of subsidiary's stock
as equity transactions.

         As of December 31, 2003, the Company had sold 1.1 million shares of
FiberGel's common stock and recorded an additional credit to stockholders'
equity in the amount of $1,100,000.

NOTE 13. STOCK OPTIONS AND WARRANTS

The Company established a Stock Option Plan (the Plan) effective January 2, 1999
that provides for the issuance of qualified options to all employees and
non-qualified options to consultants and other service providers. During 2000,
the Company amended the Plan and reserved 4,000,000 shares of common stock for
issuance under the amended Plan. As of December 31, 2003 and 2002, there were
1,901,000 and 4,048,000 outstanding options, respectively. The range of exercise
prices is from $0.035 to $5.50. The options are vesting immediately and may be
exercised no later than three years from the date of issuance.


                                      F-18
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 13. STOCK OPTIONS AND WARRANTS (CONTINUED)

The fair value of each option was estimated on the date of grant using the
Black-Scholes option-pricing model. Weighted-average assumptions for options
granted for the year ended December 31, 2003 and 2002 are as follows:

                                                          2003     2002
                                                       -----------------
      Weighted average fair value per option granted   $  0.05    $  0.16
      Risk-free interest rate                             1.17%      1.75%
      Expected dividend yield                             0.00%      0.00%
      Expected lives                                      3.00       3.00
      Expected volatility                                73.30%    279.00%

A summary of the status of stock options issued by the Company as of December
31, 2003 and 2002 is presented in the following table.

                                          2003                    2002
                                  ----------------------------------------------
                                              Weighted                  Weighted
                                   Number      Average     Number        Average
                                     of       Exercise       of         Exercise
                                   Shares       Price      Shares        Price
                                  ----------------------------------------------
Outstanding at beginning of Year  4,048,000    $ 1.47     1,818,000    $  4.94
Granted                             474,000      0.05     3,030,000       0.22
Exercised                          (858,433)     0.27            --         --
Expired and Cancelled            (1,762,567)     3.13      (800,000)      4.63
                                  ---------               ---------
Outstanding at end of Year        1,901,000    $ 0.13     4,048,000    $  1.47
                                  =========               =========
Exercisable at end of Year        1,901,000    $ 0.13     4,048,000    $  1.47
                                  =========               =========


The following table sets forth additional information about stock options
outstanding at December 31, 2003:

                                      Weighted
                                      Average      Weighted
     Range of                        Remaining      Average
     Exercise       Options         Contractual     Exercise           Options
      Prices      Outstanding           Life          Price          Exercisable
  ------------------------------------------------------------------------------
   $0.01-$1.50     1,901,000          2.2 years     $  0.13          1,901,000


The Company has warrants outstanding to purchase 6,340,000 shares of the
Company's common stock at prices ranging from $0.05 to $2.30 per share. These
warrants expire at various dates through December 2006.


                                      F-19
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 14. NET LOSS PER SHARE

The following table sets forth the computation of basic and diluted net loss per
share:

                                                  2003           2002
                                             ----------------------------
    Numerator:
      Net loss                               $ (2,827,821)   $ (3,587,684)
    Denominator:
      Weighted average of common shares        26,981,440      21,640,464

    Basic and diluted net loss per share     $      (0.10)   $      (0.17)
                                             ------------    ------------

NOTE 15. SEGMENT REPORTING

The Company evaluates its reporting segments in accordance with SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information". The Chief
Executive Officer has been identified as the Chief Operating Decision Maker as
defined by SFAS No. 131. The Chief Executive Officer allocates resources to each
segment based on their business prospects, competitive factors, net sales and
operating results.

During the first quarter of fiscal 2003, the Company changed the structure of
its internal organization to include four principal operating segments: (i) Food
Product Development, (ii) Security Training and Products, (iii) E-tailer, and
(iv) Business Consulting. The food product development segment owns the
exclusive, worldwide license to Z-Trim. The Security training offers cost
effective self-defense training courses and products with a uniquely targeted
curriculum. The e-tailer segment is a distributor of pillows, blankets, and
other bedding products. The business-consulting segment develops distinctive web
sites and provides business-consulting services for the Company's wholly owned
subsidiaries. The Company no longer reports segment information in the e-finance
and software development division. The Company also has other subsidiaries that
do not meet the quantitative thresholds of a reportable segment.

The Company's management reviews the operating companies' income to evaluate
segment performance and allocate resources. Operating companies' income for the
reportable segments excludes income taxes, minority interest and amortization of
goodwill. Provision for income taxes is centrally managed at the corporate level
and, accordingly, such items are not presented by segment since they are
excluded from the measure of segment profitability reviewed by the Company's
management. Goodwill and the related amortization are principally attributable
to the business-consulting segment. The segments' accounting policies are the
same as those described in the summary of significant accounting policies.


                                      F-20
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 15. SEGMENT REPORTING (CONTINUED)

A. Reportable Segment Data at December 31, 2003 and 2002, was as follows:

                                               2003           2002
---------------------------------------------------------------------
Sales to External Customers:
  Food Product Development                 $         0    $         0
  Security Training and Products                19,280          2,978
  E-tailer                                     657,783        485,780
  Business Consulting                           65,379         70,427
---------------------------------------------------------------------
   Total Sales to External Customers       $   742,442    $   559,185
---------------------------------------------------------------------
Net Profit (Loss):
  Food Product Development                 $  (303,946)   $   (50,000)
  Security Training and Products                10,094        (30,769)
  E-tailer                                     (23,986)       (32,154)
  Business Consulting                       (2,496,279)    (2,939,839)
---------------------------------------------------------------------
   Net (Loss)                              $(2,814,117)   $(3,052,762)
---------------------------------------------------------------------
Total Assets:
  Food Product Development                 $    11,000    $         0
  Security Training and Products                 9,903          1,922
  E-tailer                                     161,157        153,432
  Business Consulting                        2,601,245        866,121
---------------------------------------------------------------------
   Total Assets                            $ 2,783,305    $ 1,021,475
---------------------------------------------------------------------

B. Reconciliation of Segment Information

                                               2003           2002
---------------------------------------------------------------------
Revenues:
  Total revenues for reportable segments   $   742,442    $   559,185
  Other Revenue                                      0          5,000
  Elimination of intersegment revenues               0              0
---------------------------------------------------------------------
        Consolidated total                 $   742,442    $   564,185
---------------------------------------------------------------------
Net Profit (Loss):
  Total reportable segments' net loss      $(2,814,117)   $(3,052,762)
  Other segments                               (13,704)         7,878
  Unallocated amounts:
     Impairment of goodwill                          0       (542,800)
---------------------------------------------------------------------
        Net Loss                           $(2,827,821)   $(3,587,684)
---------------------------------------------------------------------
Assets:
  Total assets for reportable assets       $ 2,783,305    $ 1,021,475
  Other segments
                                                30,711         44,216
---------------------------------------------------------------------
        Consolidated Assets                $ 2,814,016    $ 1,065,691
---------------------------------------------------------------------


                                      F-21
<PAGE>

CIRCLE GROUP HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------

NOTE 16. NET CAPITAL REQUIREMENTS

CGI Capital, Inc. is subject to the SEC Uniform Net Capital Rule (SEC Rule
15c3-1) that requires the maintenance of minimum net capital and requires that
the ratio of aggregate indebtedness to net capital, both as defined, shall not
exceed 15 to 1. Rule 15c3-1 also provides that equity capital may not be
withdrawn or cash dividends paid if the resulting net capital ratio would exceed
10 to 1. CGI Capital, Inc. was in compliance with such requirements at December
31, 2003 and 2002.

NOTE 17. GUARANTEES

The Company from time to time enters into certain types of contracts that
contingently require the Company to indemnify parties against third party
claims. These contracts primarily relate to: (i) divestiture agreements, under
which the Company may provide customary indemnifications to purchasers of the
Company's businesses or assets; (ii) certain real estate leases, under which the
Company may be required to indemnify property owners for environmental and other
liabilities, and other claims arising from the Company's use of the applicable
premises; and (iii) certain agreements with the Company's officers, directors
and employees, under which the Company may be required to indemnify such persons
for liabilities arising out of their employment relationship.

The terms of such obligations vary. Generally, a maximum obligation is not
explicitly stated. Because the obligated amounts of these types of agreements
often are not explicitly stated, the overall maximum amount of the obligations
cannot be reasonably estimated. Historically, the Company has not been obligated
to make significant payments for these obligations, and no liabilities have been
recorded for these obligations on its consolidated balance sheet as of December
31, 2003

In general, the Company offers a one-year warranty for most of the products it
sold. To date, the Company has not incurred any material costs associated with
these warranties.

NOTE 18. COMMITMENTS AND CONTINGENCIES

Lease Commitments: The Company leases its office facilities for $11,880 per
month under a noncancelable-operating lease that expires in 2004. Taxes,
insurance and maintenance are billed when due. Rent expense for the years ended
December 31, 2003 and 2002, was both $142,560.

         As of December 31, 2003, the minimum commitments under these leases are
$95,040. The Company intends to renew the lease on a month-to-month basis.

Pending litigations: The Company's former landlord is seeking to collect on a
note in the amount of $44,593 signed by the Company's former CFO allegedly on
behalf of the Company for back rent the landlord claims was owed under the
lease, and to collect $43,790 in back rent that the landlord claims is owed
because the landlord underestimated the real property taxes for property tax
year 2000. The Company intends to vigorously contest the claims on the basis
that at the time the former CFO signed the note; he was no longer working for
the Company, and therefore, had no legal authority to bind the Company. The
Company also intends to vigorously challenge the plaintiff's interpretation of
that clause and to argue that the Company should not be liable due to the
landlord's negligence in providing an exceedingly low estimate of taxes. In the
opinion of the Company's legal counsel, it is not possible to evaluate the
likelihood of an unfavorable outcome.


                                      F-22
<PAGE>

NOTE 18. COMMITMENTS AND CONTINGENCIES

         A complaint was brought by a former public relations consultant for the
Company who is claiming that the Company allegedly owes him $20,282 for public
relations services over the two-month period covering October and November 2002.
Management intends to contest this claim on the basis that the Company already
paid plaintiff $11,000 and this payment represents a fair value for the services
rendered; however, management has indicated to counsel that it may be willing to
make some settlement offer on this claim if the plaintiff can provide sufficient
proof as to the nature and amount of additional services that plaintiff claims
to have rendered on the Company behalf. In the opinion of the Company's legal
counsel, it is difficult to evaluate the likelihood of an unfavorable outcome.

         The Company is currently party to various legal proceedings and claims,
either asserted or unasserted, which arise in the ordinary course of business.
While the outcome of these matters cannot be predicted with certainty,
management do not believe that the outcome of any of these claims or any of the
above mentioned legal matters will have a material adverse effect on the
Company's consolidated financial position, results of operations, or cash flows.

NOTE 19. SUBSEQUENT EVENTS

Withdrawal from Registration as a Broker-Dealer
-----------------------------------------------

On January 27, 2004, CGI Capital, Inc. filed an application of withdrawal from
registration as a broker or dealer. The application is subject to SEC approval.

Intent to Purchase of a Real Property
-------------------------------------

The Company intended to purchase a real property located in Mundelein, Illinois
to build a manufacturing facility for FiberGel Technologies, Inc. The proposed
purchase price is $2,050,000 and as part of the purchase price, the seller shall
receive an option to purchase 60,000 shares of the Company's common stock at an
exercise price of $4.45 per share, exercisable at any time after twelve months
after closing.


                                      F-23

<PAGE>


PART III

ITEM 1.           INDEX TO EXHIBITS.

EXHIBIT NO.       DESCRIPTION

2.1               Articles of Incorporation of Circle Group Holdings, Inc.
                  [Incorporated by reference to Exhibit 2.1 to Circle Group's
                  Form 10-SB (SEC File No. 000-27841)]

2.2               Bylaws of Circle Group Holdings, Inc. [Incorporated by
                  reference to Exhibit 2.2 to Circle Group's Form 10-SB (SEC
                  File No. 000-27841)]

3.1               Specimen Certificate for Common Stock [Incorporated by
                  reference to Exhibit 3.1 to Circle Group's Form 10-SB (SEC
                  File No. 000-27841)]

6.1               Gregory J. Halpern Employment Agreement, dated January 2, 1999
                  and Addendum [Incorporated by reference to Exhibit 6.1 to
                  Circle Group's Form 10-SB (SEC File No. 000-27841)]

6.3               Michael Theriault Employment Agreement, dated June 1, 1999
                  [Incorporated by reference to Exhibit 6.3 to Circle Group's
                  Form 10-SB (SEC File No. 000-27841)]

6.4               Dana Dabney Employment Agreement, dated January 2, 1999
                  [Incorporated by reference to Exhibit 6.4 to Circle Group's
                  Form 10-SB (SEC File No. 000-27841)]

6.5               Circle Group Internet Inc. 1999 Stock Option Plan
                  [Incorporated by reference to Exhibit 6.5 to Circle Group's
                  Form 10-SB (SEC File No. 000-27841)]

6.6               Industrial Lease Agreement between CLO Enterprises and Circle
                  Group Holdings, Inc., dated May 20, 1999 [Incorporated by
                  reference to Exhibit 6.6 to Circle Group's Form 10-SB (SEC
                  File No. 000-27841)]

6.7               Industrial Lease Agreement between CLO Enterprises and Circle
                  Group Holdings, Inc., dated June 18, 1999 [Incorporated by
                  reference to Exhibit 6.7 to Circle Group's Form 10-SB (SEC
                  File No. 000-27841)]

6.8               Stock Purchase Agreement, dated December 20, 2002, by and
                  between CGI Capital and Rothschild Owens Hayes & Partners,
                  Inc.

6.13              Asset Purchase Agreement, dated August 27, 2002, by and
                  between Circle Group Holdings, Inc. and Utek Corporation
                  [Incorporated by reference to Circle Group's Current Report on
                  Form 8-K filed on September 11, 2002]

10.1              Consent of Spector and Wong, LLP*

31.1              Certification of Principal Executive Officer of the Company
                  Pursuant to Section 302 of Sarbanes-Oxley Act of 2002*

31.2              Certification of Principal Financial Officer of the Company
                  Pursuant to Section 302 of Sarbanes-Oxley Act of 2002*

32.1              Certification of Principal Executive Officer of the Company
                  Pursuant to Section 906 of Sarbanes-Oxley Act of 2002*


                                     - 17 -

<PAGE>

32.2              Certification of Principal Executive Officer of the Company
                  Pursuant to Section 906 of Sarbanes-Oxley Act of 2002*

--------------------
*Filed herewith


                                     - 18 -

<PAGE>



                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized as of March 1, 2004.

                           CIRCLE GROUP HOLDINGS, INC.

                           By: /s/ Gregory J. Halpern
                               ----------------------
                               Gregory J. Halpern
                               Chairman of the Board, President
                               and Chief Executive Officer

         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities as of
March 1, 2004.

/s/GREGORY J. HALPERN
---------------------
Gregory J. Halpern
Director, President and Chief Executive Officer
(principal executive officer)

/s/ DANA L. DABNEY
------------------
Dana L. Dabney
Director, Chief Financial Officer and
Vice President (principal financial
or accounting officer)

/s/ STEVE H. SALGAN
-------------------
Steve H. Salgan
Director

/s/ EDWARD L. HALPERN
---------------------
Edward L. Halpern
Director

/s/ STANFORD J. LEVIN
---------------------
Stanford J. Levin
Director

/s/ ALAN G. ORLOWSKY
--------------------
Alan G. Orlowsky
Director


                                     - 19 -