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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                 to
 Commission File No. 001-33902
 FX Real Estate and Entertainment Inc.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    36-4612924
(I.R.S. Employer
Identification Number)
 650 Madison Avenue
New York, New York 10022
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, Par Value $0.01 Per Share
    
    The NASDAQ Global Market LLCSubscription Rights
    
    The NASDAQ Global Market LLC
 None
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



FX Real Estate and Entertainment Inc.
 Annual Report on Form 10-K
 December 31, 2007
 PagePART IItem 1.
    
    Business
    
    
    1Item 1A.
    
    Risk Factors
    
    
    24Item 1B.
    
    Unresolved Staff Comments
    
    
    37Item 2.
    
    Properties
    
    
    38Item 3.
    
    Legal Proceedings
    
    
    38Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    38PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    39Item 6.
    
    Selected Financial Data
    
    
    40Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    42Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    53Item 8.
    
    Financial Statements and Supplementary Data
    
    
    54Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    83Item 9A(T).
    
    Controls and Procedures
    
    
    83Item 9B.
    
    Other Information
    
    
    83PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    84Item 11.
    
    Executive Compensation
    
    
    84Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    84Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
    
    
    84Item 14.
    
    Principal Accountant Fees and Services
    
    
    84PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    85EX-3.2: AMENDED AND RESTATED BY-LAWSEX-10.36: 2007 LONG-TERM INCENTIVE COMPENSATION PLANEX-10.37: 2007 EXECUTIVE EQUITY INCENTIVE PLANEX-10.40: AMENDMENT NO.1 TO LICENSE AGREEMENTEX-10.41: AMENDMENT NO.1 TO LICENSE AGREEMENTEX-14.1: CODE OF ETHICSEX-21.1: LIST OF SUBSIDIARIESEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION




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PART I
 
 ITEM 1. BUSINESS
 In this Annual Report on Form 10-K, the words we, us, our, FXRE, and the Company
collectively refer to FX Real Estate and Entertainment Inc., and its consolidated, FX Luxury
Realty, LLC, BP Parent, LLC, Metroflag BP, LLC and Metroflag Cable, LLC. Some of the descriptive
material in this Annual Report on Form 10-K refers to the assets, liabilities, operations, results,
activities or other attributes of the historical business conducted by FX Luxury Realty and its
predecessors, including BP Parent, LLC, Metroflag BP, LLC, Metroflag Cable, LLC, Metroflag Polo,
LLC, CAP/TOR, LLC, Metroflag SW, LLC, Metroflag HD, LLC and Metroflag Management, LLC, as if it had
been conducted by us. We sometimes refer to these predecessor entities collectively herein as
Metroflag or the Metroflag entities.
 General
    Recent Developments
 Rights Offering
   1




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Conditional Option Agreement with 19X
 .
 Conditional Amendment to License Agreement with Elvis Presley Enterprises
  1 2 
 Approval Process
  The Company
 The Park Central Site
 2




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MGM Grand CityCenter CityCenter CityCenter CityCenter Planet Hollywood, The Bellagio,
Paris, The Monte Carlo New York New York
  
 MGM CityCenter, Cosmopolitan, Panorama Towers the Chateau
   Development Plans
  3




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Item
1A. Risk Factors
         4




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Zoning and Development Restrictions
     th th
   5




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History and Current Operations on Park Central Site
   Parcel 1.
 Parcel 2.
 Parcel 3.
  Parcel 4.
 Parcel 5.
 6




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Parcel 6.
 Transaction With and Involving Elvis Presley Enterprises
 Hotel(s) at Graceland
      7




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Elvis Presley License Agreement
 Grant of Rights
  Elvis Presley Experiences
 CityCenter.
  8




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CityCenter
 Royalty Payments and Minimum Guarantees
    Termination Rights
  Conditional Amendment
 9




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##### Table of Contents



1 2
  Conditional Option Agreement with 19X
   
    
    Beginning on the date of closing of 19Xs acquisition of CKX and for
the ensuing 48 months, we will have the right to acquire the Presley Interests for
$650 million.
    
    Beginning 48 months following the date of closing of 19Xs acquisition
of CKX and for the ensuing six month period, we will have the right to acquire the
Presley Interests for $700 million.
    
    Beginning 54 months following the date of closing of 19Xs acquisition
of CKX and for the ensuing six month period, we will have the right to acquire the
Presley Interests for $750 million
    
    Beginning 60 months following the date of closing of 19Xs acquisition
of CKX and for the ensuing six month period, we will have the right to acquire the
Presley Interests for $800 million
    
    Beginning 66 months following the date of closing of 19Xs acquisition
of CKX and for the ensuing six month period, we will have the right to acquire the
Presley Interests for $850 million
    10




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
    
    Year one annual payment  $15 million.
    
    Year two annual payment  $15 million.
    
    Year three annual payment  $20 million.
    
    Year four annual payment  $25 million.
    
    Year five annual payment  $30 million.
        11




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Muhammad Ali License Agreement
 Grant of Rights
  Royalty Payments and Minimum Guarantees
    Termination Rights
  12




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The Riviera
   Regulation and Licensing
 Hospitality
   13




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Gaming
 Nevada
 Introduction
  Policy Concerns of Gaming Laws
  
    
    preventing unsavory or unsuitable persons from being directly or indirectly involved
with gaming at any time or in any capacity;
    
    establishing and maintaining responsible accounting practices and procedures;
    
    maintaining effective controls over the financial practices of licensees, including
establishing minimum procedures for internal fiscal affairs, and safeguarding assets and
revenue, providing reliable recordkeeping and requiring the filing of periodic reports with
the Nevada Gaming Authorities;
    
    preventing cheating and fraudulent practices; and
    
    providing a source of state and local revenue through taxation and licensing fees.
  Owner and Operator Licensing Requirements
  14




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Company Registration Requirements
   Individual Licensing Requirements
   Redemption or Mandatory Sale of Securities Owned By an Unsuitable Person
  15




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Consequences of Violating Gaming Laws
  Requirements for Equity Security Holders
   
    
    voting on all matters voted on by stockholders or interest holders;
    
    making financial and other inquiries of management of the type normally made by
securities analysts for informational purposes and not to cause a change in its management,
policies or operations; and
    
    other activities that the Nevada Gaming Commission may determine to be consistent with
such investment intent.
   16




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Consequences of Being Found Unsuitable
  
    
    pay that person any dividend or interest upon any voting securities;
    
    allow that person to exercise, directly or indirectly, any voting right held by that
person relating to our company;
    
    pay remuneration in any form to that person for services rendered or otherwise; or
    
    fail to pursue all lawful efforts to require the unsuitable person to relinquish such
persons voting securities including, if necessary, the immediate purchase of the voting
securities for cash at fair market value.
 Requirements for Debt Security Holders
  
    
    pays to the unsuitable person any dividend, interest or any distribution whatsoever;
    
    recognizes any voting right by the unsuitable person in connection with the securities;
    
    pays the unsuitable person remuneration in any form; or
    
    makes any payment to the unsuitable person by way of principal, redemption, conversion,
exchange, liquidation or similar transaction.
 Approval of Public Offerings
   17




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
    
    The business history of the applicant, including its record of financial stability,
integrity, and success of its operations.
    
    The current business activities and interest of the applicant, as well as those of its
executive officers, promoters, lenders, and other sources of financing, or any other
individuals associated therewith.
    
    The current financial structure of the applicant, as well as changes which could
reasonably be anticipated to occur to such financial structure as a consequence of the
proposed action of the applicant.
    
    The gaming-related goals and objectives of the applicant, including a description of
the plans and strategy for achieving such goals and objectives.
    
    The adequacy of the proposed financing or other action to achieve the announced goals
and objectives.
    
    The equity investment, commitment or contribution of present or prospective directors,
officers, principal employees, investors, lenders, or other sources of financing.
    Approval of Changes in Control
  
    
    consolidation;
    
    stock or asset acquisitions;
    
    management or consulting agreements; or
    
    any act or conduct by a person by which the person obtains control of us.
  18




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Approval of Defensive Tactics
  
    
    assure the financial stability of corporate gaming operators and their affiliates;
    
    preserve the beneficial aspects of conducting business in the corporate form; and
    
    promote a neutral environment for the orderly governance of corporate affairs.
  Fees and Taxes
  
    
    a percentage of the gross revenue received;
    
    the number of gaming devices operated; or
    
    the number of table games operated.
  Foreign Gaming Investigations
  
    
    knowingly violates any laws of the foreign jurisdiction pertaining to the foreign
gaming operation;
    
    fails to conduct the foreign gaming operation in accordance with the standards of
honesty and integrity required of Nevada gaming operations;
    
    engages in any activity or enters into any association that is unsuitable because it
poses an unreasonable threat to the control of gaming in Nevada, reflects or tends to
reflect, discredit or disrepute upon the State of Nevada or gaming in Nevada, or is
contrary to the gaming policies of Nevada;
 19




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
    
    engages in activities or enters into associations that are harmful to the State of
Nevada or its ability to collect gaming taxes and fees; or
    
    employs, contracts with or associates with a person in the foreign operation who has
been denied a license or finding of suitability in Nevada on the ground of unsuitability.
 License for Conduct of Gaming and Sale of Alcoholic Beverages
  Competition
     
    
    Echelon Place an approximately $4.0 billion development by Boyd Gaming located north
of the Park Central site on the Las Vegas Strip.
    
    City Center an approximately $7.8 billion development by MGM Mirage located directly
across the street from the Park Central site.
    
    Cosmopolitan an approximately $3 billion development by Condo Hotel Company
currently under construction located north of the Park Central site on the northwest corner
of Harmon Avenue and the Las Vegas Strip.
 History of Our Company
  20




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21




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Intellectual Property
       22




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Employees
  Company Organization
  Available Information
   23




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ITEM 1A. RISK FACTORS
  Risks Related to Our Business
 Our current cash flow is not sufficient to meet our current obligations and we will need to obtain
additional financing.
   We are highly leveraged and we may have difficulty obtaining additional financing.
   
    
    It may be difficult for us to satisfy our obligations under our existing credit
facilities and our other indebtedness and contractual and commercial commitments, including
the payment of fees under our license agreements with subsidiaries of CKX, and, if we fail
to comply with requirements, an event of default could occur under our debt instruments and
our license agreements;
    
    We will be required to use a substantial portion of our cash flow from operations to
pay interest on our future indebtedness, which may require us to reduce funds available for
other purposes;
    
    We may have a limited ability to obtain additional financing, if needed, to fund
additional projects, working capital requirements, capital expenditures, debt service,
general corporate or other obligations;
    
    Our substantial indebtedness will increase our vulnerability to general adverse
economic and industry conditions; and
    
    We may be placed at a competitive disadvantage to our competitors who are not as highly
leveraged.
 24




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Even if we are able to raise additional financing, we might not be able to obtain it on terms
that are not unduly expensive or burdensome to us or disadvantageous to our existing
stockholders.
  Failure to comply with the terms of our secured credit facilities may lead to acceleration of
indebtedness and foreclosure on the collateral securing our indebtedness, including the Park
Central site.
  Our independent registered public accounting firm has rendered a report expressing substantial
doubt as to our ability to continue as a going concern.
  Because the historical financial statements and financial information of our predecessors are not
representative of our business plans going forward or indicative of our planned future
operating and financial results, they should not be relied upon.
  25




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We have no operating history with respect to our proposed business, so it will be difficult
for investors to predict our future success.
  Item 1A. Risk Factors
 Because we may be entirely dependent upon a limited number of properties for all of our cash flow,
we will be subject to greater risks than a company with more operating properties.
   
    
    local economic and competitive conditions;
    
    worker shortages;
    
    inaccessibility due to inclement weather, road construction or closure of primary
access routes;
    
    changes in local and state governmental laws and regulations, including gaming laws and
regulations;
    
    natural and other disasters;
    
    an increase in the cost of electrical power, particularly for Las Vegas as a result of,
among other things, power shortages in California or other western states with which Nevada shares a single regional power grid;
    
    water shortages in Las Vegas as a result of, among other things, population growth in
Southern Nevada;
    
    a decline in the number of visitors; and
    
    a decrease in gaming and non-gaming activities in general.
  26




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We are dependent upon the continued popularity of Elvis Presley and Muhammad Ali and
attractions featuring their names, images and likenesses which may, over time, decline in
popularity.
  The concentration of ownership of our capital stock with our affiliates will limit your ability
to influence corporate matters.
  There are conflicts of interest in our relationship with 19X, CKX and their respective
affiliates, which could result in decisions that are not in the best interests of our
stockholders.
  
    
    We are party to a shared services agreement with CKX pursuant to which employees of
each company, including members of senior management, provide services for each other;
    
    We are also party to two license agreements with subsidiaries of CKX related to our
right to use certain Elvis Presley and Muhammad Ali intellectual property; and
    
    We maintain a $7 million line of credit with CKX of which $6 million of principal and
$0.2 million of interest was outstanding as of December 31, 2007.
    
    We have entered into the conditional option agreement with 19X which, if and when
effective, will give us an option to acquire an 85% interest in the Elvis Presley business.
Because the 85% interest in question is owned by CKX, the option agreement will only become
effective upon the consummation of the acquisition of CKX by 19X.
  There are conflicts of interest in our relationship with Flag Luxury Properties and its
affiliates, which could result in decisions that are not in the best interests of our
stockholders.
 27




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
    
    Certain of our employees, including Mr. Kanavos, our President, are permitted to devote
a portion of their time to providing services for or on behalf of Flag Luxury Properties.
    
    Flag Luxury Properties holds a $45 million priority preferred distribution right in FX
Luxury Realty which entitles it to receive an aggregate amount of $45 million (together
with an accrued priority return of $0.6 million as of December 31, 2007) prior to any
distributions of cash by FX Luxury Realty from the proceeds of certain predefined capital
transactions. Until the preferred distribution is paid in full, we are required to use the
proceeds of certain predefined capital transactions to pay the amount then owed to Flag
Luxury Properties, including the payment of $30 million out of the proceeds of the rights
offering and, if applicable, the related investment agreements described elsewhere herein.
  We have potential business conflicts with certain of our executive officers because of their
relationships with CKX, 19X and/or Flag Luxury Properties and their ability to pursue
business activities for themselves and others that may compete with our business activities.
  
    
    Mr. Sillermans cross-ownership and dual management responsibilities relating to CKX,
19X, Flag Luxury Properties and us;
    
    Mr. Sillerman will benefit if the value of our common stock appreciates during the
applicable measurement period under the CKX-19X merger agreement because his affiliate,
19X, will pay less cash merger consideration per share to the CKX stockholders in the
acquisition of CKX by 19X. The cash merger consideration to be paid for the acquisition of
CKX by 19X will be reduced by no less than $0.75 per share regardless of the trading value
of our common stock if we complete the rights offering at the $10.00 per share price and
for total proceeds of not less than $90 million;
    
    Mr. Kanavos cross-ownership and dual management responsibilities relating to Flag
Luxury Properties and us;
    
    Employment agreements with certain of our executive officers specifically provide that
a certain percentage of their business activities may be devoted to Flag Luxury Properties,
CKX or 19X;
    
    Messrs. Sillerman and Kanavos will be entitled to receive their pro rata participation,
based on their ownership in Flag Luxury Properties, of the $45 million priority
distribution of cash from the proceeds of certain predefined capital transactions when
received by Flag Luxury Properties;
    
    Mr. Sillermans involvement in decisions related to which properties incorporate the
CKX intellectual property and therefore require license payments under our license
agreements with CKX subsidiaries; and
    
    If the option agreement with 19X becomes effective, Mr. Sillermans continued
involvement in 19Xs oversight of the Elvis Presley business during the pendancy of and
prior to our exercise of our option to acquire the Elvis Presley business.
  28




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We have entered into a number of related party transactions with CKX and Flag Luxury
Properties and their affiliates and may do so in the future, on terms that some stockholders
may consider not to be in their best interests.
   Our intellectual property rights may be inadequate to protect our business.
   If we lose the services of our key personnel, including Robert F.X. Sillerman, Paul Kanavos,
Barry Shier and certain other executives of CKX, our business would suffer.
  29




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The termination of the shared services agreement with CKX could materially adversely affect our
business.
  Our business may be harmed if we are not able to hire and retain enough additional management
and other personnel to manage our growth.
  Our executive officers will be free to compete against us upon termination of their employment.
  Terrorism and the uncertainty of war, as well as other factors affecting discretionary consumer
spending, may harm our future operating results.
   We are subject to environmental regulation, which creates uncertainty regarding future
environmental expenditures and liabilities.
   30




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Our hotel development, including our proposed Park Central site redevelopment and the Graceland
hotel(s), are subject to timing, budgeting and other risks which could materially adversely
affect our business.
  
    
    construction delays or cost overruns that may increase project costs;
    
    construction defects or noncompliance with construction specifications;
    
    receipt of zoning, occupancy and other required governmental permits and
authorizations;
    
    development costs incurred for projects that are not pursued to completion;
    
    so-called acts of God such as earthquakes, hurricanes, floods or fires that could delay
the development of a project;
    
    the availability and cost of capital and/or debt financing; and
    
    governmental restrictions on the nature or size of a project or timing of completion.
  Our subsidiaries will need to recruit a substantial number of new employees before our Las
Vegas and Memphis project(s) open, which they may or may not be able to do, and these
employees may seek unionization, either of which could materially adversely affect our
financial performance.
  We continue to explore opportunities to develop additional related businesses that could have
an adverse impact on our business if unsuccessful.
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We continue to need to enhance our internal controls and financial reporting systems to comply
with the Sarbanes-Oxley Act of 2002
   Risks Associated with Redevelopment of the Park Central Site
 The failure of our redeveloped Park Central site to compete effectively against other casino
and hotel facilities in Las Vegas and elsewhere could adversely affect our revenues and harm
our financial condition.
 Las Vegas Casino/Hotel Competition.
  32




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Other Competition.
 Our ability to realize the full value of the Park Central site may be limited by our inability
to develop certain parcels in a timely enough fashion or on a cost effective basis because of
several existing long-term commercial leases.
   There are significant risks associated with major construction projects that may substantially
increase the costs of the redevelopment or prevent completion of our redevelopment plans on
schedule.
  
    
    shortages of materials or skilled labor;
    
    unforeseen engineering, environmental and/or geological problems;
    
    work stoppages;
    
    difficulties in obtaining licenses, permits and authorizations;
    
    weather interference;
    
    unanticipated cost increases; and
 33




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
    
    unavailability of construction equipment.
     Simultaneous redevelopment of our Park Central site and construction of an Elvis Presley-themed
hotel in Memphis may negatively effect our business and operations by stretching management
time and resources.
  Our business will be subject to extensive state and local regulation, and licensing and gaming
authorities have significant control over our operations, which could have a negative effect
on our business.
    34




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In the event that any of our senior executives, directors or key employees are unable to
obtain a gaming license and approval from the Nevada Gaming Authorities, they will be
terminated, and we will not benefit from their experience and expertise.
  Our casino business is expected to rely on customers to whom we may extend credit, and we may
not be able to collect gaming receivables from our credit players.
    Risks Related to Our Common Stock
 Substantial amounts of our common stock and other equity securities could be sold in the near
future, which could depress our stock price.
   35




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We do not anticipate paying cash dividends on our common stock in the foreseeable future, and the
lack of dividends may have a negative effect on our stock price.
  Our issuance of additional shares of our common stock, or options or warrants to purchase those
shares, would dilute proportionate ownership and voting rights.
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We may redeem or require you to sell your shares due to regulatory considerations, either as
required by gaming authorities or in our discretion, which may negatively affect an investment.
  Certain provisions of Delaware law and our charter documents could discourage a takeover that
stockholders may consider favorable.
  
    
    Our board of directors has the right to elect directors to fill a
vacancy created by the expansion of the board of directors or the
resignation, death or removal of a director, subject to the right of
the stockholders to elect a successor at the next annual or special
meeting of stockholders, which limits the ability of stockholders to
fill vacancies on our board of directors.
    
    Our stockholders may not call a special meeting of stockholders, which
would limit their ability to call a meeting for the purpose of, among
other things, voting on acquisition proposals.
    
    Our by-laws may be amended by our board of directors without
stockholder approval, provided that stockholders may repeal or amend
any such amended by-law at a special or annual meeting of
stockholders.
    
    Our by-laws also provide that any action required or permitted to be
taken by our stockholders at an annual meeting or special meeting of
stockholders may not be taken by written action in lieu of a meeting.
    
    Our certificate of incorporation does not provide for cumulative
voting in the election of directors, which could limit the ability of
minority stockholders to elect director candidates.
    
    Stockholders must provide advance notice to nominate individuals for
election to the board of directors or to propose matters that can be
acted upon at a stockholders meeting. These provisions may discourage
or deter a potential acquiror from conducting a solicitation of
proxies to elect the acquirors own slate of directors or otherwise
attempting to obtain control of our company.
    
    Our board of directors may authorize and issue, without stockholder
approval, shares of preferred stock with voting or other rights or
preferences that could impede the success of any attempt to acquire
our company.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  37




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ITEM 2. PROPERTIES
  Location
    
    Name of Property
    
    Type/Use of Property
    
    Approximate Size
    
    Owned or LeasedLas Vegas, NV
    
    Corporate Offices
    
    Office Operations
    
    4,653 sq. ft.
    
    Lease expires in 2008 (1)Las Vegas, NV
    
    Commercial Property
    
    Land and Building
    
    17.72 acres
    
    Owned                (2)
 
 (1)
    
    A new office lease was entered into in the first quarter of 2008 covering 10,709 square feet.
This lease will expire in 2013.(2)
    
    Constitutes the Park Central site, which is encumbered by the $475 million Park Central loan
described elsewhere herein. 
 ITEM 3. LEGAL PROCEEDINGS
    
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  38




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 Market Information
 ®
  Dividend Policy
  Securities Authorized for Issuance Under Equity Compensation Plans
   Recent Sales of Unregistered Securities
       39




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ITEM 6. SELECTED FINANCIAL DATA
    Metroflag (Predecessor)
    
    
    FX Real EstateJanuary 1 
    
    
    and Entertainment Inc.Year Ended December 31,
    
    
    
    
    
    
    May 10,
    
    
    May 11, 2007 2003
    
    
    2004
    
    
    2005
    
    
    2006
    
    
    2007
    
    
    December 31, 2007(a)(unaudited)Statement of
Operations Data:Revenue
    
    $
    6,505
    
    
    $
    10,703
    
    
    $
    4,888
    
    
    $
    5,581
    
    
    $
    2,079
    
    
    $
    3,070Operating expenses
(excluding
depreciation and
amortization)
    
    
    5,402
    
    
    
    7,968
    
    
    
    861
    
    
    
    1,290
    
    
    
    839
    
    
    
    30,016Depreciation and
amortization
    
    
    782
    
    
    
    1,534
    
    
    
    379
    
    
    
    358
    
    
    
    128
    
    
    
    116Operating income
(loss)
    
    
    321
    
    
    
    1,201
    
    
    
    3,648
    
    
    
    3,933
    
    
    
    1,112
    
    
    
    (27,062
    )Interest income
(expense), net
    
    
    (1,344
    )
    
    
    (4,247
    )
    
    
    (15,684
    )
    
    
    (26,275
    )
    
    
    (14,444
    )
    
    
    (30,657
    )Other income
(expense)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,358
    )Loss from
retirement of debt
    
    
    
    
    
    
    (5,000
    )
    
    
    (2,967
    )
    
    
    
    
    
    
    (3,507
    )
    
    
    Loss before equity
in earnings (loss)
of affiliates,
minority interest
and incidental
operations
    
    
    (1,023
    )
    
    
    (8,046
    )
    
    
    (15,003
    )
    
    
    (22,342
    )
    
    
    (16,839
    )
    
    
    (64,077
    )Equity in earnings
(loss) of affiliate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,969
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    680Loss from
incidental
operations(b)
    
    
    
    
    
    
    
    
    
    
    (9,242
    )
    
    
    (17,718
    )
    
    
    (7,790
    )
    
    
    (9,373
    )Net loss
    
    $
    (1,023
    )
    
    $
    (8,046
    )
    
    $
    (24,245
    )
    
    $
    (40,060
    )
    
    $
    (24,629
    )
    
    $
    (77,739
    )Basic and diluted
loss per common
share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (1.98
    )Average number of
common shares
outstanding
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,290,247
 
 (a)
    
    For the period May 11, 2007 to July 5, 2007, we accounted for our
interest in Metroflag under the equity method of accounting because we
did not have control with our then 50% ownership interest. Effective
July 6, 2007, with our purchase of the 50% of Metroflag that we did
not already own, we consolidated the results of Metroflag.(b)
    
    In 2005, Metroflag adopted a formal redevelopment plan covering
certain of the properties which resulted in the operations relating to
these properties being reclassified as incidental operations in
accordance with Statement of Financial Accounting Standards No. 67,
Accounting for the Costs and Initial Operations of Real Estate
Projects. In the fourth quarter of 2007, the Company recorded a
write-off of approximately $12.7 million for capitalized costs that
were deemed to be not recoverable based on changes made to the
Companys redevelopment plans for the Park Central site. 40




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##### Table of Contents



FX RealEstate andMetroflag (Predecessor)

    Entertainment Inc.As of December 31,

    As of December 31,(amounts in thousands)
    
    2003
    
    2004
    
    2005
    
    2006


    2007(unaudited)Balance Sheet Data:Cash and cash equivalents
    
    $
    1,885
    
    
    $
    1,741
    
    
    $
    3,457
    
    
    $
    1,643
    



    $
    2,559Other current assets
    
    
    982
    
    
    
    1,178
    
    
    
    4,255
    
    
    
    13,020
    


    
    112,550Investment in real estate, at cost
    
    
    65,725
    
    
    
    89,739
    
    
    
    202,639
    
    
    
    280,574
    

    

    561,653Total assets
    
    
    69,463
    
    
    
    103,599
    
    
    
    221,084
    
    
    
    296,607
    

    
    677,984Current liabilities (excluding
current portion of debt)
    
    
    670
    
    
    
    1,671
    
    
    
    2,613
    
    
    
    7,119
    

    
    24,945Debt
    
    
    63,737
    
    
    
    84,270
    
    
    
    200,705
    
    
    
    313,635
    

    
    512,694Total liabilities
    
    
    65,948
    
    
    
    87,201
    
    
    
    205,665
    
    
    
    321,346
    

    
    537,830Members equity/Stockholders equity
    
    
    3,515
    
    
    
    16,398
    
    
    
    15,419
    
    
    
    (24,739
    )

    
    139,974
 FORWARD LOOKING STATEMENTS
  41




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following managements discussion and analysis of financial condition and results of
operations of the Company (and its predecessor) should be read in conjunction with the historical
audited consolidated financial statements and footnotes of Metroflag and the Companys historical
audited consolidated financial statements and notes thereto included elsewhere in this Annual
Report. Our future results of operations may change materially from the historical results of
operations reflected in our historical audited consolidated financial statements.
       42




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##### Table of Contents



FX Real Estate and Entertainment Operating Results
        Metroflag Operating Results
     43




---



##### Table of Contents



Metroflag Results for the Years Ended December 31, 2007 and 2006
 January 1,
    
    
    May 11,2007
    
    
    2007Through
    
    
    through(amounts in thousands)
    
    May 10, 2007
    
    
    December 31, 2007
    
    
    2007
    
    
    2006
    
    
    VarianceRevenue
    
    $
    2,079
    
    
    $
    4,012
    
    
    $
    6,091
    
    
    $
    5,581
    
    
    $
    510Operating expenses
    
    
    (839
    )
    
    
    (13,712
    )
    
    
    (14,551
    )
    
    
    (1,290
    )
    
    
    (13,261
    )Depreciation and amortization
    
    
    (128
    )
    
    
    (171
    )
    
    
    (299
    )
    
    
    (358
    )
    
    
    59Income from operations
    
    
    1,112
    
    
    
    (9,871
    )
    
    
    (8,759
    )
    
    
    3,933
    
    
    
    (12,692
    )Interest expense, net
    
    
    (14,444
    )
    
    
    (37,294
    )
    
    
    (51,738
    )
    
    
    (26,275
    )
    
    
    (25,463
    )Loss from early retirement of debt
    
    
    (3,507
    )
    
    
    
    
    
    
    (3,507
    )
    
    
    
    
    
    
    (3,507
    )Loss from incidental operations
    
    
    (7,790
    )
    
    
    (12,371
    )
    
    
    (20,161
    )
    
    
    (17,718
    )
    
    
    (2,443
    )Net loss
    
    $
    (24,629
    )
    
    $
    (59,536
    )
    
    $
    (84,165
    )
    
    $
    (40,060
    )
    
    $
    (44,105
    )
 Revenue
  Operating Expenses
  Depreciation and Amortization Expense
  Interest Income/Expense
  Loss from Early Retirement of Debt
  Loss from Incidental Operations
  44




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##### Table of Contents



Metroflag Operating Results for the Years Ended December 31, 2006 and 2005
 Revenue
  Operating Expenses
  Depreciation and Amortization Expense
  Interest Income/Expense
  Loss from Forfeit on Deposit and Early Retirement of Debt
  Loss from Incidental Operations
  Liquidity and Capital Resources
 Introduction
 45




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##### Table of Contents



Our current cash flow is not sufficient to meet our current
obligations and we will need to obtain additional financing We are highly leveraged and we
may have difficulty obtaining additional financing
   Riv Loan 
 Park Central Loan 
 46




---



##### Table of Contents



CKX Line of Credit 
 Bear Stearns Margin Loan
 Debt Covenants
 Additional Sale of Common Stock 
 Preferred Priority Distribution
 47




---



##### Table of Contents



Shier Stock Purchase 
 Cash Flows for the period from May 11, 2007 to December 31, 2007
 Operating Activities
  Investing Activities
  Financing Activities
  Metroflag  Historical Cash Flow for the years ended December 31, 2006, and 2005
 Operating Activities
  Investing Activities
    Financing Activities
    48




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##### Table of Contents



Uses of Capital
    Capital Expenditures
    Dividends
 49




---



##### Table of Contents



Commitments and Contingencies
  Contractual Obligations
  Payments Due by Period(amounts in thousands)
    
    2008
    
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    Thereafter
    
    
    TotalDebt (including interest)
    
    $
    531,385
    
    
    $
    6,489
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    537,874Non-cancelable operating leases
    
    
    457
    
    
    
    482
    
    
    
    482
    
    
    
    482
    
    
    
    478
    
    
    
    198
    
    
    
    2,579Employment contracts
    
    
    3,900
    
    
    
    3,754
    
    
    
    3,941
    
    
    
    3,617
    
    
    
    3,798
    
    
    
    
    
    
    
    19,010Licensing agreements(a)
    
    
    20,000
    (b)
    
    
    10,000
    
    
    
    20,000
    
    
    
    20,000
    
    
    
    20,000
    
    
    
    100,000
    
    
    
    190,000Total(c)
    
    $
    555,742
    
    
    $
    20,725
    
    
    $
    24,423
    
    
    $
    24,099
    
    
    $
    24,276
    
    
    $
    100,198
    
    
    $
    749,463
 
 (a)
    
    We are required under the licensing agreements with Elvis Presley
Enterprises and Muhammad Ali Enterprises to make guaranteed minimum
annual royalty payments at fixed amounts through 2016, which are
reflected in the table above. After 2016, the annual amounts are
increased by 5% per year. This is not reflected in the table.(b)
    
    Includes $10 million payment attributable to 2007, the outside payment
date for which was extended to April 2008.(c)
    
    Does not include annual option payments due under our Option Agreement
with 19X, the effectiveness of which is conditioned upon the
completion of 19Xs pending acquisition of CKX. Inflation
  Application of Critical Accounting Policies
 Marketable Securities
 Accounting for Certain Investments in Debt and Equity Securities
 Financial Instruments
 Accounting
for Derivative Instruments and Hedging
 50




---



##### Table of Contents



Activities
  Real Estate Investments
  Accounting
for the Impairment or Disposal of Long-Lived Assets
 Incidental Operations
 Accounting for
Costs and Initial Operations of Real Estate Projects
    51




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##### Table of Contents



Income Taxes
 Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  Share-Based Payments
 Share-Based Payment
 Impact of Recently Issued Accounting Standards
 Fair Value Measurements (SFAS No. 157)
 The Fair Value Option for
Financial Assets and Financial Liabilities
 Business Combinations Noncontrolling Interests in Consolidated Financial Statements, an
amendment of ARB No. 51
 Off Balance Sheet Arrangements
  Seasonality
  52




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risk
   Foreign Exchange Risk
  53




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 Table of Contents to Financial Statements
 PageFX Real Estate and Entertainment Inc.Reports of Independent Registered Public Accounting Firms
    
    
    55Consolidated Balance Sheet as of December 31, 2007 and
Combined Balance Sheet (Predecessor) as of December 31, 2006
    
    
    58Consolidated Statement of Operations for the period from May
11, 2007 through December 31, 2007, and Combined Statements
of Operations (Predecessor) for the period from January 1,
2007 through May 10, 2007 and the years ended December 31,
2006 and 2005
    
    
    59Consolidated Statement of Cash Flows for the period from May
11, 2007 through December 31, 2007, and Combined Statements
of Cash Flows (Predecessor) for the period from January 1,
2007 through May 10, 2007 and the years ended December 31,
2006 and 2005
    
    
    60Consolidated Statement of Stockholders Equity for the period
from May 11, 2007 to December 31, 2007 and Combined Statement
of Members Equity (Predecessor) for the period from January
1, 2007 through May 10, 2007 and the years ended December 31,
2006 and 2005
    
    
    61Notes to Consolidated/Combined Financial Statements
    
    
    62
 54




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##### Table of Contents



FX Real Estate and Entertainment Inc.
 Report of Independent Registered Public Accounting Firm
      Ernst & Young LLP
 
 55




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
     Ernst & Young LLP
 
 56




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
     Ernst & Young LLP
 
 57




---



##### Table of Contents



FX Real Estate and Entertainment Inc.
 Balance Sheets
(amounts in thousands, except share data)
 PredecessorConsolidated
    
    
    CombinedDecember 31,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    2,559
    
    
    $
    1,643Restricted cash
    
    
    60,350
    
    
    
    11,541Marketable securities
    
    
    43,439
    
    
    
    Rent and other receivables, net of allowance for
doubtful accounts of $368 at December 31, 2007 and
$13 at December 31, 2006
    
    
    1,016
    
    
    
    428Deferred financing costs, net
    
    
    6,714
    
    
    
    41Prepaid expenses and other current assets
    
    
    1,031
    
    
    
    1,010Total current assets
    
    
    115,109
    
    
    
    14,663Investment in real estate, at cost:Land
    
    
    533,336
    
    
    
    222,598Building and improvements
    
    
    30,649
    
    
    
    77,951Furniture, fixtures and equipment
    
    
    2,626
    
    
    
    2,590Capitalized development costs
    
    
    6,026
    
    
    
    12,680Less: accumulated depreciation
    
    
    (10,984
    )
    
    
    (35,245
    )Net investment in real estate
    
    
    561,653
    
    
    
    280,574Acquired lease intangible assets, net
    
    
    1,222
    
    
    
    1,370Total assets
    
    $
    677,984
    
    
    $
    296,607LIABILITIES AND STOCKHOLDERS/MEMBERS EQUITYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    10,809
    
    
    $
    4,787Accrued license fees
    
    
    10,000
    
    
    
    Debt
    
    
    475,000
    
    
    
    Notes payable
    
    
    30,674
    
    
    
    Due to related parties
    
    
    3,022
    
    
    
    1,050Related party debt
    
    
    1,020
    
    
    
    Other current liabilities
    
    
    1,114
    
    
    
    559Unearned rent and related revenue
    
    
    
    
    
    
    723Total current liabilities
    
    
    531,639
    
    
    
    7,119Long-term debt
    
    
    
    
    
    
    295,000Related party debt
    
    
    6,000
    
    
    
    18,635Other long-term liabilities
    
    
    191
    
    
    
    592Total liabilities
    
    
    537,830
    
    
    
    321,346Contingently redeemable stockholders equity
    
    
    180
    
    
    
    Stockholders/members equity:Preferred stock authorized 75,000,000 shares
    
    
    
    
    
    
    Common stock, $0.01 par value: authorized
300,000,000 shares, 39,290,247 shares issued and
outstanding at December 31, 2007
    
    
    393
    
    
    
    Members equity
    
    
    
    
    
    
    (24,739
    )Additional paid-in-capital
    
    
    219,781
    
    
    
    Accumulated deficit
    
    
    (77,739
    )
    
    
    Accumulated other comprehensive loss
    
    
    (2,461
    )
    
    
    Total stockholders/members equity
    
    
    139,974
    
    
    
    (24,739
    )Total liabilities and stockholders/members equity
    
    $
    677,984
    
    
    $
    296,607
  58




---



##### Table of Contents



FX Real Estate and Entertainment Inc.
 Statements of Operations
(amounts in thousands, except share and per share data)
 PredecessorConsolidated

    
    CombinedPeriod from
    
    Period from
    
    
    Predecessor
    
    
    PredecessorMay 11, 2007

    
    January 1, 2007
    
    
    Combined
    
    
    CombinedThrough

    
    Through
    
    
    Year Ended
    
    
    Year EndedDecember 31, 2007

    
    May 10, 2007
    
    
    December 31, 2006
    
    
    December 31, 2005Revenue
    
    $
    3,070

    
    $
    2,079
    
    
    $
    5,581
    
    
    $
    4,888Operating expenses:License fees
    
    
    10,000

    
    
    
    
    
    
    
    
    
    
    Selling, general and administrative expenses
    
    
    6,874

    
    
    421
    
    
    
    104
    
    
    
    146Depreciation and amortization expense
    
    
    116

    
    
    128
    
    
    
    358
    
    
    
    379Operating and maintenance
    
    
    276

    
    
    265
    
    
    
    776
    
    
    
    395Real estate taxes
    
    
    194

    
    
    153
    
    
    
    410
    
    
    
    320Impairment of capitalized development costs
    
    
    12,672

    
    
    
    
    
    
    
    
    
    
    Total operating expenses
    
    
    30,132

    
    
    967
    
    
    
    1,648
    
    
    
    1,240Income (loss) from operations
    
    
    (27,062)

    
    
    1,112
    
    
    
    3,933
    
    
    
    3,648Interest income
    
    
    814

    
    
    113
    
    
    
    2,110
    
    
    
    4Interest expense
    
    
    (31,471)

    
    
    (14,557
    )
    
    
    (28,385
    )
    
    
    (15,688
    )Other income (expense)
    
    
    (6,358)

    
    
    
    
    
    
    
    
    
    
    Loss from retirement of debt
    
    
    

    
    
    (3,507
    )
    
    
    
    
    
    
    (2,967
    )Equity in earnings (losses) of affiliate
    
    
    (4,969)

    
    
    
    
    
    
    
    
    
    
    Minority interest
    
    
    680

    
    
    
    
    
    
    
    
    
    
    Loss from incidental operations
    
    
    (9,373)

    
    
    (7,790
    )
    
    
    (17,718
    )
    
    
    (9,242
    )Net loss
    
    $
    (77,739)

    
    $
    (24,629
    )
    
    $
    (40,060
    )
    
    $
    (24,245
    )Basic and diluted loss per share
    
    $
    (1.98)Basis and diluted average number of common
shares outstanding
    
    
    39,290,247
  59




---



##### Table of Contents



FX Real Estate and Entertainment Inc.
 Statements of Cash Flows
(amounts in thousands)
 Consolidated

    

    PredecessorPeriod

    
    Combinedfrom

    
    Period from
    
    
    Predecessor
    
    
    PredecessorMay 11, 2007

    
    January 1, 2007
    
    
    Combined
    
    
    CombinedThrough

    
    Through
    
    
    Year Ended
    
    
    Year EndedDecember 31, 2007

    
    May 10, 2007
    
    
    December 31, 2006
    
    
    December 31, 2005Cash flows from operating activities:Net loss
    
    $
    (77,739)

    
    $
    (24,629
    )
    
    $
    (40,060
    )
    
    $
    (24,245
    )Adjustments to reconcile net loss to cash
provided by operating activities:Depreciation and amortization
    
    
    10,983

    
    
    8,472
    
    
    
    19,670
    
    
    
    10,187Deferred financing cost amortization
    
    
    6,760

    
    
    41
    
    
    
    3,943
    
    
    
    1,415Loss on exercise of derivative
    
    
    6,358

    
    
    
    
    
    
    
    
    
    
    610Equity in loss of an unconsolidated affiliate
    
    
    4,969

    
    
    36
    
    
    
    
    
    
    
    1,017Minority interest
    
    
    (680)


    
    
    
    
    
    
    
    
    
    
    Impairment of capitalized development costs
    
    
    12,672

    
    
    
    
    
    
    
    
    
    
    Changes in operating assets and liabilities:Receivables
    
    
    120

    
    
    (171
    )
    
    
    (196
    )
    
    
    (1,129
    )Other current and non-current assets
    
    
    (573)

    
    
    (933
    )
    
    
    1,871
    
    
    
    (3,194
    )Accounts payable and accrued expenses
    
    
    2,985

    
    
    (2,486
    )
    
    
    2,174
    
    
    
    942Accrued license fees
    
    
    10,000

    
    
    
    
    
    
    
    
    
    
    Due to related parties
    
    
    1,188

    
    
    22
    
    
    
    230
    
    
    
    820Unearned revenue
    
    
    (767)

    
    
    991
    
    
    
    234
    
    
    
    138Other
    
    
    177

    
    
    27
    
    
    
    112
    
    
    
    44Net cash used in operating activities
    
    
    (23,547)

    
    
    (18,630
    )
    
    
    (12,022
    )
    
    
    (13,395
    )Cash flows used in investing activities:Restricted cash
    
    
    934

    
    
    11,541
    
    
    
    (9,787
    )
    
    
    (1,754
    )Capitalized development costs
    
    
    (1,233)

    
    
    
    
    
    
    
    
    
    
    Development of real estate including land
acquired
    
    
    

    
    
    (45
    )
    
    
    (5,206
    )
    
    
    (4,981
    )Acquisitions of real estate
    
    
    

    
    
    
    
    
    
    (92,396
    )
    
    
    (41,022
    )Deposits on land purchase
    
    
    

    
    
    
    
    
    
    4,807
    
    
    
    5,884Purchase of Riviera interests
    
    
    (21,842)

    
    
    
    
    
    
    
    
    
    
    Purchase of shares in Riviera
    
    
    (13,197)

    
    
    
    
    
    
    
    
    
    
    Purchase of additional interest in Metroflag
    
    
    (172,500)

    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in) investing
activities
    
    
    (207,838)

    
    
    11,496
    
    
    
    (102,582
    )
    
    
    (41,873
    )Cash flows provided by financing activities:Stockholders/Members capital contributions
/distributions
    
    
    100,000

    
    
    
    
    
    
    (98
    )
    
    
    23,266Issuance of common stock
    
    
    2,000

    
    
    
    
    
    
    
    
    
    
    Repayment of existing mandatorily redeemable
interest
    
    
    

    
    
    
    
    
    
    
    
    
    
    (5,000
    )Deferred financing costs
    
    
    (3,738)

    
    
    (10,536
    )
    
    
    (41
    )
    
    
    (5,716
    )Borrowings under loan agreements and notes
payable
    
    
    142,694

    
    
    306,543
    
    
    
    100,866
    
    
    
    194,134Retirement/repayment of mortgage loans
    
    
    

    
    
    (295,000
    )
    
    
    
    
    
    
    (146,890
    )Contribution from minority interest
    
    
    593

    
    
    
    
    
    
    
    
    
    
    (Repayments of) proceeds from Members loans
    
    
    (7,605)

    
    
    5,972
    
    
    
    12,063
    
    
    
    (2,809
    )Net cash provided by financing activities
    
    
    233,944

    
    
    6,979
    
    
    
    112,790
    
    
    
    56,985Net (decrease) /increase in cash and equivalents
    
    
    2,559

    
    
    (155
    )
    
    
    (1,814
    )
    
    
    1,717Cash and cash equivalents  beginning of period
    
    
    

    
    
    1,643
    
    
    
    3,457
    
    
    
    1,740Cash and cash equivalents  end of period
    
    $
    2,559

    
    $
    1,488
    
    
    
    1,643
    
    
    
    3,457Supplemental cash flow disclosures:Cash paid for interest
    
    $
    25,663

    
    $
    17,102
    
    
    $
    20,938
    
    
    $
    13,629Non-cash financing and investing activities:Financed acquisition of real property
    
    
    

    
    
    
    
    
    
    
    
    
    $
    80,000Contributions of assets for membership interests
    
    $
    103,421

    
    
    
    
    
    
    
    
    
    
    
  60




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##### Table of Contents



FX Real Estate and Entertainment Inc.
 Statement of Stockholders/Members Equity
(amounts in thousands, except share data)
 Common Stock
    
    
    
    
    
    
    
    
    
    
    Accumulated OtherMembers Equity
    
    
    Shares
    
    
    Amount
    
    
    Additional Paid-In-Capital
    
    
    Accumulated Deficit
    
    
    Comprehensive Loss
    
    
    TotalBalance at January 1, 2005
(Predecessor)
    
    $
    16,398
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    16,398Capital contributions
    
    
    104,774
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104,774Distributions paid
    
    
    (81,508
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (81,508
    )Net loss
    
    
    (24,245
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,245
    )Balance at December 31,
2005 (Predecessor)
    
    $
    15,419
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    15,419Capital contributions
    
    
    11,902
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,902Distributions paid
    
    
    (12,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,000
    )Net loss
    
    
    (40,060
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,060
    )Balance at December 31,
2006 (Predecessor)
    
    $
    (24,739
    )
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (24,739
    )Net loss
    
    
    (24,629
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24,629
    )Balance at May 10, 2007
(Predecessor)
    
    $
    (49,368
    )
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    (49,368
    )Balance at May 11, 2007
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital contributions
    
    
    
    
    
    
    202
    
    
    
    
    
    
    
    219,781
    
    
    
    
    
    
    
    
    
    
    
    219,781Reorganization of FXRE
    
    
    
    
    
    
    39,290,045
    
    
    
    393
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    393Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (77,739
    )
    
    
    
    
    
    
    (77,739
    )Unrealized loss on
available for sale
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,461
    )
    
    
    (2,461
    )Balance at December 31, 2007
    
    $
    
    
    
    
    39,290,247
    
    
    $
    393
    
    
    $
    219,781
    
    
    $
    (77,739
    )
    
    $
    (2,461
    )
    
    $
    139,974
  61




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##### Table of Contents



FX Real Estate and Entertainment Inc.
Notes to Consolidated Financial Statements
December 31, 2007
 1. Basis of Presentation
          62




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##### Table of Contents



2. Organization and Background
 Business of the Company
    Formation of the Company
    63




---



##### Table of Contents



CKX Investment
    (in thousands)Cash and other current assets
    
    $
    8,652Investments in Riv Shares and Riv Option
    
    
    46,061Investment in Park Central site
    
    
    88,269Total assets acquired
    
    
    142,982Current liabilities
    
    
    2,577Debt
    
    
    31,443Total liabilities assumed
    
    
    34,020Minority interest
    
    
    7,305Net assets acquired
    
    $
    101,657
     64




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##### Table of Contents



License Agreements
  Metroflag Acquisition
      Business Combinations
  65




---



##### Table of Contents



(in thousands)Current assets
    
    $
    93,034Investments in real estate
    
    
    584,004Other assets
    
    
    14,691Assets acquired
    
    
    691,729Current liabilities
    
    
    35,591Long-term debt
    
    
    475,000Other liabilities
    
    
    1,138Liabilities assumed
    
    
    511,729Net assets acquired
    
    $
    180,000
   Investment in Riviera
   The Repurchase Agreement and Contingently Redeemable Stock
  Classification and Measurement of Redeemable Securities.
 66




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##### Table of Contents



Rights Offering
   3. Going Concern
  67




---



##### Table of Contents



4. Summary of Significant Accounting Policies
 Cash and Cash Equivalents
  Restricted Cash
  Marketable Securities
 Accounting for Certain Investments in Debt and Equity Securities
 Fair Value of Financial Instruments
 Accounting for
Derivative Instruments and Hedging Activities
   Rental Revenues
   68




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##### Table of Contents



Real Estate Investments
     Business Combinations
   Accounting for the Impairment or Disposal of Long-Lived Assets
 69




---



##### Table of Contents



Loss Per Share/Common Shares Outstanding
 Earnings Per Share
 Incidental Operations
 Accounting for Costs and Initial Operations of Real Estate Projects
  PredecessorMay 11-

    
    January 1-
    
    
    Year Ended
    
    
    Year EndedDecember 31,


    
    May 10,
    
    
    December 31,
    
    
    December 31,(amounts in thousands)
    
    2007

    
    2007
    
    
    2006
    
    
    2005Revenues
    
    $
    7,854

    
    $
    5,326
    
    
    $
    13,688
    
    
    $
    11,910Depreciation
    
    
    (10,867)


    
    

    (8,343
    )
    
    
    (19,312
    )
    
    
    (9,803
    )Operating & other
    
    
    (6,360)

    
    
    (4,773
    )
    
    
    (12,094
    )
    
    
    (11,349
    )Net loss
    
    $
    (9,373)

    
    $
    (7,790
    )
    
    $
    (17,718
    )
    
    $
    (9,242
    )
 Deferred Financing Costs
  Share-Based Payments
 Share-Based Payment
 Income Taxes
    70




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##### Table of Contents



Risks and Uncertainties
   Use of Estimates
  Impact of Recently Issued Accounting Standards
 , Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 Business Combinations Noncontrolling Interests in Consolidated Financial Statements, an amendment
of ARB No. 51
 Reclassifications
  5. Debt and Notes Payable
  71




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##### Table of Contents



Predecessor
    6. Related Party Debt
   72




---



##### Table of Contents



7. License Agreements with Related Parties
 Elvis Presley License Agreement
 Grant of Rights
  Hotel at Graceland
  Royalty Payments and Minimum Guarantees
    Termination Rights
 73




---



##### Table of Contents



Muhammad Ali License Agreement
 Grant of Rights
  Royalty Payments and Minimum Guarantees
    Termination Rights
  Accounting for Minimum Guaranteed License Payments
 74




---



##### Table of Contents



8. Acquired Lease Intangibles
   PredecessorDecember 31, 2007
    
    
    December 31, 2006AssetsAbove-market leases
    
    $
    582
    
    
    $
    582In-place leases
    
    
    1,320
    
    
    
    1,319Accumulated amortization
    
    
    (680
    )
    
    
    (531
    )Net
    
    $
    1,222
    
    
    $
    1,370LiabilitiesBelow-market leases
    
    $
    111
    
    
    $
    111Accumulated accretion
    
    
    (72
    )
    
    
    (53
    )Net
    
    $
    39
    
    
    $
    58
  Amortization
    
    MinimumExpense
    
    Rent(in thousands)Years Ending December 31,2008
    
    $
    148
    
    
    $
    202009
    
    
    73
    
    
    
    132010
    
    
    57
    
    
    
    52011
    
    
    52
    
    
    
    12012
    
    
    50
    
    
    
    
 9. Derivative Financial Instruments
  10. Commitments and Contingencies
 Operating Leases
 75




---



##### Table of Contents



(in thousands)Years Ending December 31,2008
    
    $
    7,5862009
    
    
    1,7582010
    
    
    1,7542011
    
    
    1,7092012
    
    
    1,690Thereafter
    
    
    45,680Total
    
    $
    60,177
  Employment Agreements
  (in thousands)Year Ending December 31,2008
    
    $
    3,9002009
    
    
    3,7542010
    
    
    3,9412011
    
    
    3,6172012
    
    
    3,798Thereafter
    
    
    $
    19,010
 11. Stockholders Equity
   12. Share-Based Payments
 Equity Incentive Plan
  76




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##### Table of Contents



Executive Equity Incentive Plan
  Stock Option Grants
      Risk-free rate
    
    
    3.74
    %Volatility
    
    
    39.0
    %Weighted average expected life
    
    6.13 yearsDividend yield
    
    
    0.0
    %
    13. Income Taxes
  Period from May 11, 2007throughDecember 31, 2007(in thousands)Current provision (benefit)Federal
    
    $
    State
    
    
    Deferred provision (benefit)FederalState
    
    
    Total income tax expense
    
    $
    
 77




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##### Table of Contents



Period from May 11, 2007throughDecember 31, 2007(in thousands)Expense (benefit) at statutory federal rate
    
    $
    (27,209
    )Effect of state and local income taxes
    
    
    Non-consolidated subsidiaries
    
    
    2,609Income/loss taxed directly to FXLR LLCs historical partners
    
    
    10,165Other permanent differences
    
    
    Valuation allowance
    
    
    14,435Income tax expense
    
    $
    
  December 31,2007(in thousands)Deferred income tax assets:Fixed assets
    
    $
    17,300Deferred revenue
    
    
    288Bad debt
    
    
    129Net operating loss carryforwards
    
    
    13,303Marketable securities
    
    
    861Total deferred income tax assets, gross
    
    
    31,881Less: valuation allowance
    
    
    (31,454
    )Total deferred income tax assets, net
    
    
    427Deferred tax liabilities:Total deferred income tax liabilities
    
    
    (427
    )Total deferred income tax assets (liabilities), net
    
    $
    
   Accounting for Uncertainty in Income Taxes
   14. Litigation
  78




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##### Table of Contents



15. Related Party Transactions
 Shared Services Agreements
   79




---



##### Table of Contents



however
   Preferred Priority Distribution
  16.
Quarterly Financial Information (unaudited)
  Period May 11, 2007 (inception) through December 31, 2007
  May 11, 2007 through
    
    Quarter Ended
    
    Quarter EndedJune 30, 2007
    

September 30, 2007
    

December 31, 2007
    
    TotalRevenue
    
    $
    
    
    
    $
    1,346
    
    
    $
    1,724
    
    
    $
    3,070Operating expenses (excluding
depreciation and amortization)
    
    
    1,838
    
    
    
    7,824
    
    
    
    20,354
    
    
    
    30,016Depreciation and amortization
    
    
    
    
    
    
    86
    
    
    
    30
    
    
    
    116Operating loss
    
    
    (1,838
    )
    
    
    (6,564
    )
    
    
    (18,660
    )
    
    
    (27,062
    )Interest income (expense), net
    
    
    189
    
    
    
    (15,520
    )
    
    
    (15,326
    )
    
    
    (30,657
    )Other expense
    
    
    (377
    )
    
    
    (5,981
    )
    
    
    
    
    
    
    (6,358
    )Equity in earnings (loss) of
affiliate
    
    
    (4,455
    )
    
    
    (514
    )
    
    
    
    
    
    
    (4,969
    )Minority interest
    
    
    244
    
    
    
    335
    
    
    
    101
    
    
    
    680Loss from incidental operations
    
    
    
    
    
    
    (5,113
    )
    
    
    (4,260
    )
    
    
    (9,373
    )Net loss
    
    
    (6,237
    )
    
    
    (33,357
    )
    
    
    (38,145
    )
    
    
    (77,739
    )Basic and diluted loss per
common share
    

    $
    (0.16
    )
    
    $
    (0.85
    )
    
    $
    (0.97
    )
    

    $
    (1.98
)Average number of common
shares outstanding(a)
    

    
    39,290,247
    
    
    
    39,290,247
    
    
    
    39,290,247
    
    

    
    39,290,247
   (a)
    
    Average number of common shares outstanding for the interim periods
reflects the actual shares outstanding at December 31, 2007 and reflects the
reclassification of the Companys common stock on November 29, 2007. 17. Subsequent Events (unaudited)
     80




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##### Table of Contents



Conditional Option Agreement with 19X
   
    
    Beginning on the date of the closing of 19Xs acquisition of CKX and for the ensuing 48
months, the Company will have the right to acquire the Presley Interests for $650 million.
    
    Beginning 48 months following the date of the closing of 19Xs acquisition of CKX and for
the ensuing six month period, the Company will have the right to acquire the Presley
Interests for $700 million.
    
    Beginning 54 months following the date of the closing of 19Xs acquisition of CKX and for
the ensuing six month period, the Company will have the right to acquire the Presley
Interests for $750 million
    
    Beginning 60 months following the date of the closing of 19Xs acquisition of CKX and for
the ensuing six month period, the Company will have the right to acquire the Presley
Interests for $800 million
    
    Beginning 66 months following the date of the closing of 19Xs acquisition of CKX and for
the ensuing six month period, the Company will have the right to acquire the Presley
Interests for $850 million
    
    
    Year one annual payment- $15 million.
    
    Year two annual payment  $15 million.
    
    Year three annual payment  $20 million.
    
    Year four annual payment  $25 million.
    
    Year five annual payment  $30 million.
  81




---



##### Table of Contents



Conditional Amendment to Elvis Presley Enterprises License Agreement
  1 2
     82




---



##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM
9A(T). CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
 Managements Annual Report on Internal Control Over Financial Reporting
     Changes in Internal Control over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION
  83




---



##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
   
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 ITEM 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  84




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES
  (1) Financial Statements
  (2)
Financial Statement Schedule
  85




---



##### Table of Contents



Financial Statement Schedule
 SCHEDULE II
 FX Real Estate and Entertainment Inc.
 VALUATION AND QUALIFYING ACCOUNTS
 FOR THE PERIOD FROM MAY 11, 2007 THROUGH DECEMBER 31, 2007
 (DOLLARS IN THOUSANDS)
 Balance at
    
    
    Additions ChargedBeginning of
    
    
    (Credited) to Costs
    
    
    Additions Charged
    
    
    
    
    
    
    Balance atDescription
    
    Period
    
    
    And Expenses
    
    
    to Other Accounts
    
    
    Deductions
    
    
    End of PeriodAllowance for
doubtful accounts
    
    $
    
    
    
    $
    387
    
    
    $
    61
    
    
    $
    (80
    )
    
    $
    368Deferred taxes
valuation allowance
    
    
    
    
    
    
    14,435
    
    
    
    17,019
    
    
    
    
    
    
    
    31,454Total
    
    $
    
    
    
    $
    14,822
    
    
    $
    17,080
    
    
    $
    (80
    )
    
    $
    31,822
 Exhibits
  ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation.(1)3.2
    
    Amended and Restated By-Laws.4.1
    
    Specimen Common Stock Certificate.(1)4.1
    
    Subscription Form (including Rights Certificate) (7)10.1
    
    Membership Interest Purchase Agreement, dated as of
June 1, 2007, by and among FX Luxury Realty, LLC,
CKX, Inc. and Flag Luxury Properties, LLC.(2)10.2
    
    Amendment No. 1 to Membership Interest Purchase
Agreement, dated as of June 18, 2007, by and among
FX Luxury Realty, LLC, CKX, Inc. and Flag Luxury
Properties, LLC.(2)10.3
    
    Repurchase Agreement, dated as of June 1, 2007, by
and among FX Luxury Realty, LLC, CKX, Inc., Flag
Luxury Properties, LLC, Robert F.X. Sillerman, Brett
Torino and Paul C. Kanavos.(2)10.4
    
    Amendment to Repurchase Agreement, dated as of June
18, 2007, by and among FX Luxury Realty, LLC, CKX,
Inc., Flag Luxury Properties, LLC, Robert F.X.
Sillerman, Brett Torino and Paul C. Kanavos.(2)10.5
    
    Fourth Amended and Restated Limited Liability
Company Operating Agreement of FX Luxury Realty,
LLC, dated as of March 3, 2008.(7)10.6
    
    Amended and Restated Credit Agreement, Senior
Secured Term Loan Facility (First Lien), dated as of
July 6, 2007, among BP Parent, LLC, Metroflag BP,
LLC, Metroflag Cable, LLC, Credit Suisse, Cayman
Islands Branch and Credit Suisse Securities (USA)
LLC.(2)10.7
    
    Amended and Restated Credit Agreement, Senior
Secured Term Loan Facility (Second Lien), dated as
of July 6, 2007, among BP Parent, LLC, Metroflag BP,
LLC, Metroflag Cable, LLC, Credit Suisse, Cayman
Islands Branch and Credit Suisse Securities (USA)
LLC.(2)10.8
    
    License Agreement, dated as of June 1, 2007, between
Elvis Presley Enterprises, Inc. and FX Luxury
Realty, LLC.(2)10.9
    
    License Agreement, dated as of June 1, 2007, between
Muhammad Ali Enterprises LLC and FX Luxury Realty,
LLC.(2)10.10
    
    Promissory Note, dated June 1, 2007, between FX
Luxury Realty, LLC, as Payor, and Column
 86




---



##### Table of Contents



ExhibitNumber
    
    DescriptionFinancial,
Inc., as Payee.(2)10.11
    
    Guaranty, dated as of June 1, 2007, by Robert F.X.
Sillerman for the benefit of Column Financial,
Inc.(2)10.12
    
    Employment Agreement between the registrant and
Mitchell J. Nelson, dated as of December 31, 2007.
(6)10.13
    
    Employment Agreement between the registrant and Paul
C. Kanavos, dated as of December 31, 2007.(6)10.14
    
    Employment Agreement between the registrant and
Thomas P. Benson, dated as of January 10, 2008. (6)10.15
    
    Employment Agreement between the registrant and
Brett Torino, dated as of December 31, 2007. (6)10.16
    
    Form of Waiver of Rights, dated June 1, 2007.(2)10.17
    
    Form of Lock-Up Agreement, dated June 1, 2007.(2)10.18
    
    Promissory Note, dated June 1, 2007, between FX
Luxury Realty, as Payor, and Flag Luxury Properties,
as Payee.(3)10.19
    
    Contribution and Exchange Agreement, dated as of
September 26, 2007, between FX Real Estate and
Entertainment Inc., CKX, Inc., Flag Luxury
Properties, LLC, Richard G. Cushing, as Trustee of
CKX FXLR Stockholder Distribution Trust I and CKX
FXLR Stockholder Distribution Trust II, and FX
Luxury Realty, LLC.(2)10.20
    
    Stock Purchase Agreement, dated as of September 26,
2007, by and among FX Real Estate and Entertainment
Inc., CKX, Inc. and Flag Luxury Properties, LLC.(2)10.21
    
    Amendment No. 2 to Membership Interest Purchase
Agreement, dated as of September 27, 2007, by and
among FX Luxury, LLC, CKX, Inc., Flag Luxury
Properties, LLC and FX Real Estate and Entertainment
Inc.(2)10.22
    
    Amendment No. 2 to Repurchase Agreement, dated as of
September 27, 2007, by and among FX Luxury, LLC,
CKX, Inc., Flag Luxury Properties, LLC and FX Real
Estate and Entertainment Inc.(2)10.23
    
    Line of Credit Agreement, dated as of September 26,
2007, between CKX, Inc. and FX Real Estate and
Entertainment Inc.(2)10.24
    
    Pledge Agreement, dated as of September 26, 2007, by
and among CKX, Inc., Flag Luxury Properties, LLC and
FX Real Estate and Entertainment Inc.(2)10.25
    
    Promissory Note, dated September 26, 2007, between
CKX, Inc. and FX Real Estate and Entertainment
Inc.(2)10.26
    
    CKX FXLR Stockholder Distribution Trust I Agreement,
by and between CKX, Inc. and Richard G. Cushing, as
Trustee acting on behalf and for the benefit of
certain future CKX Beneficiaries, dated as of June
18, 2007.(3)10.27
    
    CKX FXLR Stockholder Distribution Trust II
Agreement, by and between CKX, Inc. and Richard G.
Cushing, as Trustee acting on behalf and for the
benefit of certain future CKX Stockholders, dated as
of June 18, 2007.(3)10.28
    
    CKX FXLR Stockholder Distribution Trust III
Agreement, by and between CKX, Inc. and Richard G.
Cushing, as Trustee acting on behalf and for the
benefit of certain future CKX Stockholders, dated as
of September 27, 2007.(3)10.29
    
    Promissory Note, dated June 1, 2007, between FX
Luxury Realty, as Payor, and Flag Luxury Properties,
as Payee.(3)10.30
    
    Employment Agreement between the registrant and Barry Shier, dated as of December 31, 2007.(4)10.31
    
    Stock Purchase Agreement by and between FX Real Estate and Entertainment Inc. and Barry A. Shier, dated
as of January 3, 2008.(4)10.32
    
    Employment Agreement by and between the registrant and Robert F.X. Sillerman, dated as of January 7,
2008.(4)10.33
    
    Shared Services Agreement by and between CKX, Inc. and the registrant.(1)10.34
    
    Investment Agreement by and between the registrant and The Huff Alternative Fund, L.P. and The Huff
Alternative Parallel Fund, L.P., dated as of January 9, 2008.(5)10.35
    
    Investment Agreement by and between the registrant and Robert F.X. Sillerman, dated as of January 9,
2008.(5)10.36
    
    2007 Long-Term Incentive Compensation Plan10.37
    
    2007 Executive Equity Incentive Plan10.38
    
    Call Agreement, dated as of March 3, 2008, by and between 19X, Inc. and the registrant (7)10.39
    
    Letter Agreement, dated March 3, 2008, by and between 19X, Inc. and the registrant and Form of Amendment
No. 2 to License Agreement by and between Elvis Presley Enterprises, Inc. and FX
 87




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##### Table of Contents



ExhibitNumber
    
    DescriptionLuxury Realty, LLC (7)10.40
    
    Amendment No. 1 to License
Agreement, dated as of November 16, 2007, between Elvis Presley Enterprises, Inc.
and FX Luxury Realty, LLC10.41
    
    Amendment No. 1 to License Agreement, dated as of November 16, 2007, between Muhammad Ali Enterprises LLC and
FX Luxury Realty, LLC14.1
    
    Code of Ethics21.1
    
    List of Subsidiaries31.1
    
    Certification of Principal Executive Officer.31.2
    
    Certification of Principal Financial Officer32.1
    
    Section 1350 Certification of Principal Executive Officer32.2
    
    Section 1350 Certification of Principal Financial Officer
 
 
    
    Filed herewith(1)
    
    Incorporated by reference to Amendment No. 4 to the registrants Registration Statement on Form
S-1 (Registration No. 333-145672), filed with the Commission on December 6, 2007.(2)
    
    Incorporated by reference to Amendment No. 1 to the registrants Registration Statement on Form
S-1 (Registration No. 333-145672), filed with the Commission on October 9, 2007.(3)
    
    Incorporated by reference to Amendment No. 2 to the registrants Registration Statement on Form
S-1 (Registration No. 333-145672), filed with the Commission on November 13, 2007.(4)
    
    Incorporated by reference from the registrants Current Report on Form 8-K dated January 9, 2008.(5)
    
    Incorporated by reference from the registrants Current Report on Form 8-K dated January 10, 2008(6)
    
    Incorporated by reference from the registrants Registration Statement on Form S-1 (Registration
No. 333-149032), filed with the Commission on February 4, 2008(7)
    
    Incorporated by reference to Amendment No. 1 to registrants Registration Statement on Form S-1
(Registration No. 333-149032), filed with the Commission on March 3, 2008  88




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##### Table of Contents



SIGNATURES
  FX Real Estate and Entertainment Inc.
 By:
    
    /s/ ROBERT F.X. SILLERMAN
    
    March 24, 2008Robert F.X. SillermanChief Executive Officer and Chairman of the BoardBy:
    
    /s/ THOMAS P. BENSON
    
    March 24, 2008Thomas P. BensonChief Financial Officer, Executive Vice President and Treasurer
 POWER OF ATTORNEY
   By:
    
    /s/ ROBERT F.X. SILLERMAN
    
    March 24, 2008Robert F.X. Sillerman, Chairman of the BoardBy:
    
    /s/ PAUL C. KANAVOS
    
    March 24, 2008Paul C. Kanavos, DirectorBy:
    
    /s/ BARRY A. SHIER
    
    March 24, 2008Barry A. Shier, DirectorBy:
    
    /s/ THOMAS P. BENSON
    
    March 24, 2008Thomas P. Benson, DirectorBy:
    
    /s/ DAVID M. LEDY
    
    March 24, 2008David M. Ledy, DirectorBy:
    
    /s/ HARVEY SILVERMAN
    
    March 24, 2008Harvey Silverman, Director
 89




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##### Table of Contents



INDEX TO EXHIBITS
  ExhibitNumber
    
    Description3.2
    
    Amended and Restated By-Laws10.36
    
    2007 Long-Term Incentive Compensation Plan10.37
    
    2007 Executive Equity Incentive Plan10.40
    
    Amendment No. 1 to License
Agreement, dated as of November 16, 2007, between
Elvis Presley Enterprises, Inc. and FX Luxury Realty, LLC10.41
    
    Amendment No. 1 to License Agreement, dated as of November 16, 2007, between
Muhammad Ali Enterprises LLC and FX Luxury Realty, LLC14.1
    
    Code of Ethics21.1
    
    List of Subsidiaries31.1
    
    Certification of Principal Executive Officer.31.2
    
    Certification of Principal Financial Officer32.1
    
    Section 1350 Certification of Principal Executive Officer32.2
    
    Section 1350 Certification of Principal Financial Officer