-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AkA5JncBnKw0kijMQIfxaI9o/SirWADyK3afpkDSX6ndK5DtWkuhMJVQBGP2mt2J 1lAtb4uh2XxsBtAeUphSUg== 0001013762-04-000434.txt : 20040415 0001013762-04-000434.hdr.sgml : 20040415 20040414190429 ACCESSION NUMBER: 0001013762-04-000434 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040415 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FULLCIRCLE REGISTRY INC CENTRAL INDEX KEY: 0001127993 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 870653761 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 333-51918 FILM NUMBER: 04734371 BUSINESS ADDRESS: STREET 1: 500 WEST JEFFERSON STREET STREET 2: PNC PLAZA, SUITE 2310 CITY: LOUISVILLE STATE: KY ZIP: 40202 BUSINESS PHONE: 502 540-5112 FORMER COMPANY: FORMER CONFORMED NAME: EXCEL PUBLISHING INC DATE OF NAME CHANGE: 20001108 10KSB 1 dec31200310ksbfinal2.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB [ X ] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE ACT OF 1934 For the Fiscal Year ended December 31, 2003 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXHANGE ACT OF 1934 for the transition period from _____ to Commission File No. 333-51918 FULLCIRCLE REGISTRY, INC. (Exact name of small business issuer as specified in its charter) Nevada 87-0653761 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 500 West Jefferson Street, PNC Plaza, Suite 2310 Louisville, KY 40202 (Address of principal executive offices) (Issuer's telephone number): 502-540-5112 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: None Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the issuer 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 in this form, 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. [ ] The issuer's common stock is listed on the Over the Counter Bulletin Board under the symbol FLCR. The aggregate market value of the issuer's common stock held by non-affiliates at December 31, 2003 is deemed to be $6,731,704. At December 31, 2003 there were 52,128,476 shares of common stock of the registrant outstanding, par value $.001. The issuer's revenue for its most recent fiscal year was: $110,119.00. Documents Incorporated by Reference: None. Transitional Small Business Disclosure Format: Yes [ ] No [ X ]
FORM 10-KSB FULLCIRCLE REGISTRY, INC. INDEX Page PART I Item 1. Description of Business 3 Item 2. Description of Property 5 Item 3. Legal Proceedings 7 Item 4. Submission of Matters to a Vote of Security Holders 7 PART II Item 5. Market for Common Equity and Related Stockholder Matters 7 Item 6. Management's Discussion and Analysis or Plan of Operation 11 Item 7. Financial Statements 13 Item 8. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure 13 Item 8A. Controls and Procedures 13 PART III Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act 13 Item 10. Executive Compensation 15 Item 11. Security Ownership of Certain Beneficial Owners and Management 17 Item 12. Certain Relationships and Related Transactions 18 Item 13. Exhibits and Reports on Form 8-K 19 Item 14. Principal Accountant Fees and Services 19 Signatures 21
2 PART I Item 1. Description of Business Forward-Looking Statement Notice When used in this report, the words "may," "will," "expect," "anticipate," "continue," "estimate," "project," "intend," and similar expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding events, conditions, and financial trends that may affect the Company's future plans of operations, business strategy, operating results, and financial position. Persons reviewing this report are cautioned that any forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties and that actual results may differ materially from those included within the forward-looking statements as a result of various factors. History Our current business began with the formation of FullCircle Registry, Inc., a Nevada corporation, in 1991. Founder Steven Whitten (who resigned as Chief Executive Officer and Director in 2003) conceived of a company that would provide customers with secure storage and immediate access to their critical medical records, wishes (living will, do not resuscitate, etc.) and emergency contact information. FullCircle would obtain the customers' information, providing them with a user identification and PIN that is required to access the information. Customers can contact FullCircle's Emergency Response Personnel, who can make the information available to the consumer electronically through the internet, by mail, fax, and even courier, anywhere in the world, 24 hours a day, 7 days a week. Our Subsidiaries In December 2002, we acquired AskPhysicians.com, Inc, a Florida corporation. AskPhysicians.com operates a website whereby visitors can get basic medical health information and, for a nominal fee, pose questions to board-certified physicians. While this service does not replace traditional medical care, it offers an efficient way to inform consumers of treatment options. AskPhysicians.com is currently in development. Spoken Data is another subsidiary that is currently in development. Spoken Data is a text-to-voice service that will allow emergency personnel to access medical information in the event of an emergency. Medical conditions, drug allergies, blood type, family contact information, current medications or any other pertinent information can be made available via telephone to assist emergency personnel in their efforts to treat our registry members. We did not expend any resources on our Spoken Data or Askphysicians.com subsidiaries during 2003. Our Business FullCircle Registry is a technology-based company that provides emergency document and information retrieval services. We provide these services directly to subscribers and also offer our services through strategic alliances with health care providers. Subscribers join FullCircle by completing a simple, one page enrollment form that includes the primary subscriber's name and address, along with the names of his or her spouse and children to be included if a family membership is 3 purchased, and payment information. Payment options include payroll deduction, if FullCircle is offered by an employer, and no payment information is requested if it is an included prepaid benefit. When FullCircle receives the enrollment form, unique User ID's and Personal Identification Numbers ("PIN's") are assigned to each subscriber together with unique User ID's and PIN's for each family member. A complete membership package is generated and immediately mailed directly to the subscriber. This package contains a wallet-size ID Card for each member with the unique User ID and PIN for that member and all instructions and all forms needed for membership including medical history and emergency contact questionnaires, the BrightStar emergency identification tools and forms to create the appropriate advanced directives (such as living wills) for the applicable state. The subscriber and/or family members complete the documents and return them in the postage paid envelopes provided to them. When the completed documents are received by FullCircle, they are immediately scanned into a secure electronic database, linked to the customer's assigned User ID and PIN, and the service is activated. In addition, customers may store legal and other documents using the Company's "Electronic Safe Deposit Box" feature. These additional documents are also linked to the member's User ID and PIN, but require an additional password, known only to the member, to be accessed. Once activation occurs, members or emergency medical personnel acting in an emergency can access the appropriate information and documents by using the customer's ID Card directly via the internet or by calling FullCircle's Emergency Response Personnel 24-hours a day. Upon security verification, our Emergency Response Personnel can provide direction to the FullCircle website and/or immediately send the documents via fax, mail or courier. Members accessing personal information and stored documents in their "Electronic Safe Deposit Box" must use their assigned User ID and PIN along with their password. Our registry stores digital copies of subscribers' emergency documents and medical information to make them instantly available to the client or to emergency personnel. Our system is designed to allow medical personnel to quickly obtain critical information including special medical needs, treatment preferences and emergency contact information. Our registry has live customer support accessible by phone, fax or secure Internet connection twenty-four hours a day. Other services we provide include the Collar ID pet registry for missing pets and the BrightStar Photo ID Kit. By using BrightStar, parents may digitally store photographs and physical information about their children on our database so it may be rapidly distributed to law enforcement and the media in the event a child is abducted or missing. Call Center Our call center operates 24 hours a day, seven days a week to process emergency calls and provides access to information and documents to members, emergency personnel, or the authorities as applicable. FullCircle personnel handle all calls between 9:00 AM and 5:00 PM Monday through Friday. We contract with Answer Xact to handle all after-hours and weekend calls. The contract with Answer Xact is on a 30 day basis, renewable from month to month. We provide extensive training for all call center staff and have implemented a strict protocol that must be followed. Security Our security system includes designs, methodology and systems to prevent intrusion both to the physical space where documents, records and systems are stored as well as the virtual space where images and other data are stored. In each case, the system balances reasonable access against appropriate levels of security so that the system can be claimed to be virtually impenetrable while still allowing reasonably convenient access in fulfillment of the promise of making emergency information immediately accessible to the needs of our customers. Customer information is stored in both paper and digital form in an 4 ultra-secure, access controlled environment with 24-hour video surveillance, motion detectors, and numerous other security measures. Visitors to our operations center have to pass five video cameras, with the last video camera requiring identification by a staff member, prior to being granted access to the outer office. Direct access to the further secured document storage and retrieval area is limited to only a few individuals. Hardcopies and originals of all documents are catalogued and stored for immediate access as a backup in the event the computer system goes down. FullCircle's computer system is contained in its own autonomous network behind multiple layers of hardware-based and software-based firewalls allowing only authorized Internet traffic to access the system. The system utilizes multiple layering of passwords and all transmissions use the high level of 128 bit Secure Socket Layer encryption. Access to the network is routed through the firewalls into one of the primary processing computers set up with multiple processors, redundant services including RAID 5 hard drive arrays, redundant power, auto-loading backups, and multi-homed internet connectivity. The computers and network are monitored offsite, 24 hours a day to insure accessibility. Brightstar Photo ID Registry In the event of a missing or abducted person or child, FullCircle Registry's BrightStar Photo ID Kit provides police and other authorities with instant access to key identification data. This critical information is stored on a secure server and aids police in properly identifying missing or abducted persons, especially during the most critical first minutes. The BrightStar Photo ID Kit incorporates all five identification elements as recommended by the National Center for Missing and Exploited Children and includes: member data; descriptive information, a color photograph (which can be updated on our system as necessary); an identifying marks chart, fingerprint chart, dental records, as well as friend and family contact information. FullCircle Registry makes this information available immediately worldwide, 24 hours a day, 7 days a week, via access through its website or toll-free telephone number. Business Strategy During 2003, Chris Whitten resigned as Chief Executive Officer and Director. One of our directors, Mr. Isaac Boutwell, was named Chief Executive Officer. Our current management is focused on streamlining operations and consolidating our debts. We intend to reemphasize increasing subscriptions, promoting our digital registry services and expanding our existing operations. Competition There are numerous companies, both large and small, who address, with a wide range of methodology, the need to access certain information in the event of an emergency. These companies provide services that range from printing information on bracelets to smart cards and implanted chips and tracking devices. FullCircle believes that they have shortcomings compared to our product, such as the limited amount of medical information that can be printed on a bracelet and the lack of support infrastructure (primarily device readers) that render higher technology solutions ineffective. Other companies offer telephonic and/or online access to certain data with various levels of security and efficiency. Each of these represents a form of competition. However, we do not believe that there are currently any competing businesses that provide the full range of services, flexibility, security and support infrastructure provided by FullCircle. 5 Intellectual Property On December 10, 2002, the United States Patent and Trademark Office issued us a registered trademark for FullCircle. The registration number is 2658050. We have developed proprietary software for the administrative support of health reimbursement plans, billing, commissions, general corporate accounting, and client-firm payroll integration. We have proprietary information, including internal marketing plans and methodology and trade secrets, and we claim copyrights on all published materials, developed for both internal and external distribution. We enter into confidentiality agreements with employees, consultants and sales agents who might have access to proprietary information. We have taken steps to enforce our intellectual property rights including prosecution of legal action where disclosure and/or misuse of confidential information was threatened. Research and Development FullCircle Registry owns Spoken Data technology, which can be used by FullCircle Registry members and health care expense reimbursement participants, as well as purchasers of other lines of business. It is not anticipated that we will expend any funds to implement Spoken Data technology to enhance consumer value in the near term. Continuing website maintenance and development is necessary for FullCircle's website in the short-term. We intend to enhance our website by including the full array of member services and updating information for investors. We do not anticipate expending any resources on our Spoken Data or Askphysicians.com subsidiaries in the near future. Employees We currently have 3 full-time employees working for us, and 12 independent sales representatives. Item 2. Description of Property Our principal executive offices are located at 2350 PNC Plaza, Louisville, Kentucky 40202, and our telephone number is (502) 540-5112. The facility is utilized in the following manner: o administrative offices; o professional offices; o storage and warehousing; and o product development. The facility consists of approximately 1,730 square feet of office and warehouse space, leased for $2,739.17 per month in 2003 and $3,003.00 per month in 2004. The lease expires on December 31, 2004. We believe that our existing facilities are adequate for our current use. We currently have 3 new websites that we anticipate will generate revenues in the future. These websites are: 1. ENCglobal.com 2. MyBrightstarKids.com 3. MyClubcard.com 6 Item 3. Legal Proceedings From time to time, we are a party to litigation or other legal proceedings that we consider to be a part of the ordinary course of our business. We are not involved currently in legal proceedings that could reasonably be expected to have a material adverse effect on our business, prospects, financial condition or results of operations. We may become involved in material legal proceedings in the future. Item 4. Submission of Matters to a Vote of Securities Holders None. PART II Item 5. Market for Common Equity and Related Stockholder Matters
CLOSING BID CLOSING ASK High Low High Low 2003 First Quarter 2.12 .60 2.15 .64 Second Quarter .59 .05 .64 .055 Third Quarter .12 .026 .13 .033 Fourth Quarter .19 .031 .21 .037 2002 January 2 through March 28 .75 .11 1.01 .35 April 1 through April 17 .19 .15 .35 .18 April 18 through June 28 9 2.60 10 2.65 (After a 1 for 15 reverse split) July 1 through September 30 2.21 1.01 2.50 1.05 October 1 through December 31 1.31 .43 1.38 .49
Recent Sales of Unregistered Securities Unless otherwise noted, the following shares were issued to an accredited investor in a private transaction exempt under Rule 506 of Regulation D promulgated under Section 4(2) of the Securities Act of 1933, as amended. In April 2002, a reverse merger adjustment of 753,360 shares of common stock was recorded. In April 2002, 53,330 shares of common stock were cancelled. In May 2002, the Company issued 1,400,000 shares of common stock at $0.50 share for services provided. On July 26, 2002, the Company issued 75,000 shares of its common stock in exchange for 1,000,000 shares of Electro-Luminescent Technologies, Inc. 7 On August 1, 2002, the Company issued to one entity consultant of the Company as consideration for consulting services 30,000 shares of its common stock. On August 15, 2002, the Company sold 210,750 shares of Series A Preferred stock to several private investors. On September 16, 2002, the Company issued to one entity consultant of the Company as consideration for consulting services 25,000 shares of its common stock. In October 2002, the Company issued 120,000 shares of common stock at $0.72 per share for services provided. On October 24, 2002, the Company issued 6,000,000 shares of its common stock in exchange for all of the issued and outstanding shares of Paradigm Solutions Group, LLC. On October 24, 2002, the Company issued 210,000 shares of its common stock in exchange for all of the issued and outstanding shares of Spoken Data. In October 2002, the Company issued 970,000 shares of common stock as incentive for preferred shareholders. On December 18, 2002, the Company issued 414,000 shares of its common stock upon the exercise of a warrant at an exercise price of $0.01 per share. The holder of the warrant used cash as consideration for the exercise price. The issuance was exempt from registration under Section 4(2) of the Securities Act of 1933, as amended. The individual to whom the shares were issued had a pre-existing relationship with the Company, was the president, chief executive officer, and director of the Company, and had access to the same information as would be included in a registration statement prepared by the Company. On December 20, 2002, the Company sold 20,000 shares of its common stock, at a price of $0.25 per share, to a private investor. The investor was an accredited investor. In December 2002, the Company issued 50,000 shares of common stock at $1.05 per share for services provided. On December 20, 2002, the Company issued to 2 individual consultants of the Company as consideration for lobbying services 25,000 shares of its common stock at $1.13 per share. On December 20, 2002, the Company issued 462,000 shares of its common stock in exchange for all of the issued and outstanding shares of AskPhysician.com, Inc. In December 2002, the Company sold 76,666 shares of common stock at $0.30 per share for cash. During April 2003, the Company issued 65,000 shares of common stock for notes payable and interest of $23,155. Under an arrangement whereby FullCircle Registry, Inc. received $200,000 in gross funding in February 2003 and another $400,000 in April 2003, which is secured by convertible debentures, certain holders exercised a portion of their conversion privilege in April 2003 resulting in the issuance of 258,181 shares in free-trading common stock. 8 Under an arrangement whereby FullCircle Registry, Inc. received $200,000 in gross funding in February 2003 and another $400,000 in April 2003, which is secured by convertible debentures, certain holders exercised a portion of their conversion privilege in May 2003 resulting in the issuance of 980,000 shares in free-trading common stock. During May 2003, the Company issued 877,112 shares of common stock for notes payable and accrued interest at $0.16 per share. During May 2003, the Company issued 220,279 shares of common stock as compensation for services valued at $38,000. During the May 2003 meeting of the FullCircle Registry, Inc.'s board of directors, the board unanimously approved resolutions authorizing the issuance of common stock under a Stock Incentive Plan for employees, directors and independent contractors. The Company filed a Registration Statement on Form S-8 to register those shares on May 22, 2003. During May 2003, the Company issued 225,689 shares of common stock for notes payable and accrued interest at $0.16 per share. Under an arrangement whereby FullCircle Registry, Inc. received $200,000 in gross funding in February 2003 and another $400,000 in April 2003, which is secured by convertible debentures, certain holders exercised a portion of their conversion privilege in May 2003 resulting in the issuance of 1,192,886 shares in free-trading common stock at $0.03 per share. Under an arrangement whereby FullCircle Registry, Inc. received $200,000 in gross funding in February 2003 and another $400,000 in April 2003, which is secured by convertible debentures, certain holders exercised a portion of their conversion privilege in June 2003 resulting in the issuance of 714,608 shares in free-trading common stock at $0.03 per share. Under an arrangement whereby FullCircle Registry, Inc. received $200,000 in gross funding in February 2003 and another $400,000 in April 2003, which is secured by convertible debentures, certain holders exercised a portion of their conversion privilege in June 2003 resulting in the issuance of 734,550 shares in free-trading common stock at $0.04 per share. During June 2003, we issued 666,623 shares of common stock for services valued at $82,921. During June 2003, the Board of Directors and shareholders approved an increase in the number of authorized shares of common stock to 200,000,000. During July 2003, the Company issued 20,000 shares of common stock for settlement of accounts payable at $0.09 per share. Under an arrangement whereby FullCircle Registry, Inc. received $200,000 in gross funding in February 2003 and another $400,000 in April 2003, which is secured by convertible debentures, certain holders exercised a portion of their conversion privilege in July 2003 resulting in the issuance of 834,373 shares in free-trading common stock at $0.04 per share. Under an arrangement whereby FullCircle Registry, Inc. received $200,000 in gross funding in February 2003 and another $400,000 in April 2003, which is secured by convertible debentures, certain holders exercised a portion of their conversion privilege in July 2003 resulting in the issuance of 1,170,523 shares in free-trading common stock at $0.03 per share. 9 During July 2003, the Company sold 3,750,000 shares of common stock for cash at $0.04 per share. During July 2003, The Company received and cancelled the 6,000,000 shares of common stock that had been used to purchase its Paradigm subsidiary. During July 2003, the Company issued 40,000 shares of common stock for services at $0.06 per share. During August 2003, The Company issued 2,103,736 shares of common stock for convertible debentures and accrued interest at $0.02 per share. During August 2003, the Company issued 500,081 shares of common stock for services performed at $0.04 per share. In September of 2003, we issued 1,516,207 shares of common stock in exchange for the cancellation of convertible debentures and accrued interest at $0.02 per share. In September of 2003, we issued 2,812,498 shares of common stock in exchange for the cancellation of convertible debentures and accrued interest at $0.01 per share. In September of 2003, we issued 112,000 shares of common stock in exchange for services valued at $6,720. In September 2003, we issued 3,117,498 shares of common stock in exchange for services at $0.04 per share. In October 2003, the Company issued 1,406,249 shares of common stock for convertible debentures and interest at $0.01 per share. In November 2003, the Company issued 2,715,187 shares of common stock as payment of a penalty on a default of convertible debentures at $0.05 per share. In November 2003, the Company issued warrants for $13,343 in common stock. In November 2003, the Company issued 431,000 shares of common stock as compensation for services performed at $0.05 per share. In November 2003, the Company issued 10,000 shares of common stock for services performed at $0.05 per share. In December 2003, the Company issued 9,037,500 shares of common stock for 180,750 shares of preferred stock. In December 2003, the Company issued 39,000 shares of common stock for services performed at $0.15 per share. 10 Item 6. Management's Discussion and Analysis or Plan of Operation Results of Operations Years Ended December 31, 2003 and 2002 Fullcircle had revenues of $110,119 during the year ended December 31, 2003 compared to revenues of only $8,936 during 2002. The significant increase in revenues during fiscal 2003 is largely due to increased sales by our parent company, FullCircle. We also generated approximately $2,000 in revenue from ongoing operations of our subsidiary AskPhysicians.com. None of our other subsidiaries had any operations or generated any revenues during 2003. A cost of sales in 2003 of $126,779 yielded a gross loss before operating expenses of $16,660. In 2002, the Company had cost of sales of $2,286 and showed a gross profit of $6,650 before operating expenses. Operating expenses during 2003 were $1,611,611 and interest expenses were $38,423. As a result of these factors the Company realized an operating loss of $1,628,271 and a net loss of $1,671,911 for 2003. During the year ended December 31, 2002, operating expenses were $2,856,575, expenses associated with reorganization were $310,000, and interest expenses were $34,341 resulting in a net loss for the Company of $3,321,402. The approximately 50% decrease in net loss, year to year, during 2003 is attributable to higher expenses during 2002. During 2002, $1,839,625 of our general and administrative expenses were attributable to stock issuances. This represented more than 50% of our total expenses during 2002. Issuances of stock to investors, along with compensation to starting salespeople, development of marketing and other strategic partnerships, and the marketing of our product, all resulted in higher expenses during the early stages of our business model in 2002. Liquidity and Capital Resources At December 31, 2003 our total assets were $439,804 compared to total assets of $5,207,993 at December 31, 2002. The reduction in assets from the beginning of the year was due a reduction in goodwill and product rights associated with divesting ourselves of Paradigm Solutions in July of 2003. Total current assets at December 31, 2003 consisted of $479 in cash. Current assets at December 31, 2002 were $94,567 in commission advances. Total property and equipment at December 31, 2003 was $485,885 compared to property and equipment of $463,545 at December 31, 2002. Other assets at December 31, 2003 were $280,330 compared to $4,679,724 at December 31, 2002. The decrease in other assets is due to a reduction in goodwill from $4,464,718 at December 31, 2002 to $0 at December 31, 2003, and the elimination of $354,063 in product development and operating rights. The reductions in goodwill and product rights were due to divesting ourselves of Paradigm Solutions in July of 2003. Our liabilities decreased substantially from December 31, 2002 through December 31, 2003. Total liabilities at December 31, 2002 were $1,050,844 compared to total liabilities of $779,290 at December 31, 2003. The reduction in liabilities was due to selling Paradigm Solutions and canceling existing payables of $227,211, $19,435 in accrued expenses and $14,863 in deferred Paradigm revenues. Net cash provided by financing activities was $659,771 during the year ended December 31, 2003 and was primarily related to proceeds of $477,900 from convertible debentures. We also received $105,969 from notes payable. 11 From February 2003 through April 2003 we conducted a private placement of $600,000 in convertible debentures and warrants to buy 1,800,000 shares of our common stock. The debentures bear interest at 12% and mature one year from the date of issuance. The debentures may be converted for either $0.75 per share or 50% of the average three lowest trading prices for our common during the 20 trading days before the conversion date, whichever is lower. The warrants are exercisable until seven years from the date of issuance at a purchase price of $0.075. In addition, the exercise price of the warrants will be adjusted in the event we issue common stock at a price below market, with the exception of any securities issued as of the date of the warrant. The full principal amount of the convertible debentures are due upon default under the terms of convertible debentures. The investors hold a security interest in substantially all of our assets, intellectual property and registration rights with respect to the shares underlying the debentures and warrants. During 2003, we have been negotiating to reduce these convertible debentures and warrants through issuances of common stock. Through December 31, 2003 we have continued to reduce notes payable, convertible debentures and associated interest. During 2003, we issued stock for the conversion of debentures and related interest. Through the twelve months ended December 31, we have settled $203,015 in notes payable and $369,307 in convertible debentures through the issuance of stock. In November 2003, we defaulted on the convertible debenture agreement and a new note was signed pursuant to a settlement agreement. The balance of the new note is $345,533 at December 31, 2003 and is due in November 2004. We intend to continue decreasing our notes payable through the issuance of common stock. Our material funding requirements include operating debt, salaries, professional fees, and the maintenance of our office and equipment leases. We will also have ongoing operating costs related to maintaining our emergency data retrieval services, enhancing our registry, and hardware and software upgrades. During the second quarter of 2003, we executed a contract to provide a significant portion of these services in exchange for our common stock. As of December 31, 2003 we had no capital commitments. We are currently focused on increasing revenues from our registry operations and reducing debt through converting debentures and notes payable to common stock. We may also seek funding from unencumbered securities purchases or from lenders offering favorable terms. At this time, we have no contracts, agreements, or understandings for additional funding, nor can any assurance be given that we will be able to obtain this capital on acceptable terms, if at all. In such an event, this may have a materially adverse effect on our business, operating results and financial condition. If the need arises, we may offer a private placement or attempt to obtain funding through the use of various types of short term funding, loans or working capital financing arrangements from financial institutions. We will also continue to explore resale agreements, whereby other organizations bundle FullCircle Registry memberships into the consumer-driven products they are already selling. If successful, this will reduce sales expenses and broaden our client base. In addition, our overhead should not increase significantly since we will not have additional data entry expenses and will be able to negotiate and enter into agreements with multiple competitors within any given arena. Our resellers typically collect retail from their customers and remit wholesale to FullCircle, as a result, we will save the costs associated with billing and paying commissions. Finally, we can customize our services to provide components that augment the vendor's existing product, while still enabling the vendor to meet a competitive price point. We intend to continue exploring resale agreements and cross-marketing opportunities. 12 FullCircle is able to sell medical care expense reimbursement models on a fee-for-service basis and our members are automatically included for participants in these plans. Recent guidance promulgated by the Internal Revenue Service provides us a proper framework in which to offer our, health reimbursement arrangements to the public. FullCircle intends to use only licensed, bonded and insured third party administrators to review and authorize reimbursements. Participants will have the convenience of an employer-funded debit cards to purchase health care products and services that are not reimbursable by their group health plan. We require additional capital to supplement our anticipated revenues and fund our continuing operations. We have relied upon advances from officers and shareholders and we have issued stock to finance our operations to this point. Fullcirlce currently owes $575,590 in notes payable to related parties. There are no agreements or understandings that additional funding will be forthcoming. Our auditors have expressed concern that the Company has experienced losses from operations and negative cash flows from operations since inception. We have negative working capital and a capital deficiency at December 31, 2003. These conditions raise substantial doubt about our ability to continue as a going concern. Item 7. Financial Statements The financial statements of the Company appear on Page 24. Item 8. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure. None. Item 8A. Controls and Procedures (a) Evaluation of Disclosure Controls and Procedures. The Company's management, with the participation of the chief executive officer and the chief financial officer, carried out an evaluation of the effectiveness of the Company's "disclosure, controls and procedures" (as defined in the Securities Exchange Act of 1934 (the "Exchange Act") Rules 13a-15(3) and 15-d-15(3) as of the end of the period covered by this annual report (the "Evaluation Date"). Based upon that evaluation, the chief executive officer and the chief financial officer concluded that, as of the Evaluation Date, the Company's disclosure, controls and procedures are effective, providing them with material information relating to the Company as required to be disclosed in the reports the Company files or submits under the Exchange Act on a timely basis. (b) Changes in Internal Control over Financial Reporting. There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer, that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting. PART III Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act. The following table sets forth the name, age, position and office term of each executive officer and director of the Company. 13
Name Age Positions Since Isaac Boutwell 71 Chief Executive Officer and Director 2002 Trent Oakley 45 Chief Financial Officer and Director 2003 David E. Allen 50 Director 2003 Alec Stone 62 Chairman of the Board 2003 Toby G. Wolcott 59 Director 2003
The Company has no audit committee financial expert, as defined under Section 228.401, serving on its audit committee because it has no audit committee and is not required to have an audit committee because it is not a listed security as defined in Section 240.10A-3. Issac M. Boutwell, Chief Executive Officer and Director. Mr. Boutwell was elected a director of FullCircle Registry in October 2002. Subsequent to the resignation of our former CEO, Chris Whitten in 2003, Mr. Boutwell was named Chief Executive Officer of FullCircle. Mr. Boutwell is the sole owner of two movie theatres in Kentucky, The Movie Palace in Elizabethtown, and The Dixie Dozen in Louisville, and has been an owner since 1980. Mr. Boutwell has also owned an 1800 acre commercial cattle ranch in Kentucky since 1982. Trent Oakley, Chief Financial Officer and Director. Mr. Oakley has been the Chief Financial Officer of FullCircle since 2003 and a Director since April 2003. Prior to joining FullCircle, Mr. Oakley was an independent marketing agent and sales manager for 10 years, contracting his services to various insurance companies including Transamerica Life, American United Life, and Guarantee Reserve Life. Mr. Oakley has also been a sales manager with John Hancock Financial Services from 1985 to 1992 and a marketing representative with Prudential Financial Services from 1993 to 1995. David E. Allen, Director. Mr. Allen was appointed a director of FullCircle Registry in April 2003. Since 1978, Mr. Allen has been the owner and general manager of Allen Air Conditioning and Heating. Alec Stone, Chairman of the Board of directors. Alec Stone was born on September 28, 1941. Mr. Stone has been an attorney in private practice since 1968 and currently serves as Chairman of the Board for FullCircle Registry, Inc. Mr. Stone is not currently serving on the Board of any other public company. Toby G. Wolcott, Director. Mr. Wolcott was elected a director of FullCircle Registry in April 2003. Mr. Wolcott currently is a sales representative for Business Technology solutions, a position he has held since July 2002. From August 2001 until July 2002, Mr. Wolcott was a sales representative for Tom Sexton & Assoc. From August 2000 until August 2001, Mr. Wolcott was a sales representative for Central School Supply. Mr. Wolcott has also been a sales representative for Panax from August 1998 until August 2000 and for Worldwide Visioneering from June 1996 until August 1998. 14 Item 10. Executive Compensation Compensation of Directors Directors receive 2,000 shares of common stock for each Board meeting that they attend in person. During 2003 Directors received the following shares of common stock for attending Board meetings: Name Shares Reason David Allen 20,000 Attendance at 10 Board Meetings W. Garriott Baker 18,000 Attendance at 9 Board Meetings Isaac Boutwell 20,000 Attendance at 10 Board Meetings John Bruington 18,000 Attendance at 9 Board Meetings Paul Crouse 2,000 Attendance at 1 Board Meeting Myron Feinberg 8,000 Attendance at 4 Board Meetings Trent Oakley 20,000 Attendance at 10 Board Meetings Chris Rhodes 8,000 Attendance at 4 Board Meetings Matthew Skiles 8,000 Attendance at 4 Board Meetings Alec Stone 12,000 Attendance at 6 Board Meetings Steven Whitten 6,000 Attendance at 3 Board Meetings Janice Whelan 16,000 Attendance at 8 Board Meetings Toby Wolcott 20,000 Attendance at 10 Board Meetings Total Shares 176,000 15 Compensation of Officers The following table lists the compensation received by our former and current officers over the last three years. SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation - ------------------------------------------------------------------------------------------------------------------------------------ Awards Payouts - ------------------------------------------------------------------------------------------------------------------------------------ Securities Restricted Underlying Name and Year Salary Bonus($) Other Annual Stock Awards Options/ LTIP Payouts ($) All Other Compen- Principal Position Ended ($) Compen- ($) SARs (#) sation ($) Of Former Officers. sation ($) - ------------------------------------------------------------------------------------------------------------------------------------ Anthony B. Ramon 12/31/03 0 0 0 0 Former CEO, resigned 12/31/02 0 0 0 0 10/08/01 12/31/01 47,153 0 0 0 Jim Reskin 12/31/03 0 0 35,245(1) 0 Former CEO, resigned 12/31/02 120,000 0 0 414,000(2) 4/9/03 12/31/01 60,000 0 0 0 Steve Whitten(11) 12/31/03 0 0 18,580(3) 0 Former CEO, resigned 12/31/02 0 0 0 0 9/30/03 12/31/01 0 0 0 0 Garriott Baker(12) 12/31/03 70,307.63 37,153.74(4) 7,950(5) 200,000(6) Former President, 12/31/02 72,000(7) 87,000 0 0 resigned 12/31/01 0 0 0 0 10/01/03 - ------------------------------------------------------------------------------------------------------------------------------------ Annual Compensation Long Term Compensation Awards Payouts - ------------------------------------------------------------------------------------------------------------------------------------ Securities Restricted Underlying Name and Year Salary Bonus($) Other Annual Stock Awards Options/ LTIP Payouts ($) All Other Compen- Principal Position Ended ($) Compen- ($) SARs (#) sation ($) Of Former Officers. sation ($) - ------------------------------------------------------------------------------------------------------------------------------------ Isaac Boutwell(13) 12/31/03 0 0 0 0 CEO and Director since 12/31/02 0 0 0 0 10/01/03 12/31/01 0 0 0 0 Trent Oakley(14) 12/31/03 40,250 37,553.06(8) 15,400(9) 200,000(10) CFO, Executive VP and 12/31/02 0 0 0 0 CMO since June 2003 12/31/01 0 0 0 0
(1) Jim Reskin received 225,689 shares worth $35,245 as compensation during 2003. (2) Mr. Reskin's employment contract granted him options to purchase five percent (5%) of the then-outstanding shares of common stock at the time of execution, at an exercise price of $0.01 a share. On April 17, 2002, Mr. Reskin exercised his option for 3% of the then-outstanding shares of common stock of the company, for a total of 384,000 shares of common stock, for a total exercise price of $3,840. On December 18, 2002, Mr. Reskin exercised his option for the remaining 2% of the then-outstanding shares of common stock of the company, for a total of 414,000 shares of common stock, for a total exercise price of $4,140. 16 (3) Steve Whitten received 115,000 shares worth 18,580 as compensation during 2003. (4) B-Advisors, an entity controlled by Garrriott Baker, received payments totaling $37,153.74 in 2003. (5) Mr Baker received 80,000 shares worth $7,950 as compensation during 2003. (6) Mr. Baker exercised 200,000 stock options at a price of $0.001 per share for a total of $200. (7) Mr. Baker signed an employment agreement on July 1, 2002 to be the President of Paradigm Solutions Group, LLC for an annual salary of $72,000. Mr. Baker also received an office allowance of $250 per month during 2002. Additionally, Mr. Baker was entitled to receive additional monthly compensation at a minimum of $7,000, based upon the number of active participants in the HealthIER Plan. Mr. Baker received $7,000 a month, and an additional $1.00 for each HealthIER Plan participant that exceeds $7,000. (8) Trent Oakley, Inc., an entitiy owned by Trent Oakley received $5,000 in payments for consulting services in 2003. Additionally, Progressive Management Solutions, an entity owned by Trent Oakley, received $32,553.06 in commissions and for consulting services in 2003. (9) Mr. Oakley received 95,000 shares worth $15,400 as compensation during 2003. (10) Mr. Oakley exercised 200,000 stock options at a price of $0.001 per share for a total of $200. (11) Steve Whitten also received an additional 6,000 shares compensation for duties performed as a Director of the Company. (12) Mr. Baker also received an additional 18,000 shares compensation for duties performed as a Director of the Company. (13) Mr. Boutwell received 20,000 shares compensation for duties performed as a Director of the Company. (14) Mr. Oakley also received an additional 20,000 shares compensation for duties performed as a Director of the Company. Item 11. Security Ownership of Certain Beneficial Owners and Management. The following table sets forth as of December 31, 2003, the name and shareholdings of each person known to us that either directly or beneficially holds more than 5% of our 52,128,476 issued and outstanding shares of common stock, par value $.001. The table also lists the name and shareholdings of each director and of all officers and directors as a group. Except as otherwise indicated, the persons named in the table have sole voting and dispositive power with respect to all shares beneficially owned, subject to community property laws where applicable. 17
Number of Shares Beneficially Name and Address Title of Class Owned % of Shares Isaac Boutwell (1)(2) Common 3,689,820 7.07% 1815 Cann School Lane East View, KY 42732 Trent Oakley (1)(2) Common 467,218 0.89% 8210 Smithtown Rd. Louisville, KY 40218 David E. Allen (1) Common 74,967 0.1% 5350 Stiles Rd. Howardstown, KY 40051 Alec Stone (1) Common 6,781,422 13% 830 Lawrence St. Brandenburg, KY 40108 Toby G. Wolcott (1) Common 20,000 0.04% 7521 Newton Dr. Louisville, KY 40228 AJW Partners, LLC Common 2,715,187(3) 5.2% C/0 1044 Northern Blvd Suite 30 Rosyln, NY 11576 W Paul Crause Common 3,000,000 5.8% 4181 Waterbrook Way Greenwood, IN 46143 George Harman Common 5,032,730 9.7% 3033 Ring Rd. Elizabethtown, KY 42701 Superior Solutions Group, LLC Common 5,665,030 10.9% 5172 E 65th St. Suite 105 Indianapolis, IN 46220 - ----------------------------------------------------------------------------------------------------------- All Executive Officers and Directors as a group (5 persons) 11,033,427 21.16%
(1) Director (2) Officer (3) AJW Offshore LTD holds 1,152,325 shares, AJW Partners, LLC holds 781,431 shares, and AJW Qualified Partners, LLC holds 781,431 shares for a total of 2,715,187 shares. Item 12. Certain Relationships and Related Transactions. The Company entered into a lease agreement for office space whereby we make direct payments to the lessor although the lease is held in the name of a minority shareholder. The monthly lease payment is $3,003 and the lease expires in December 2004. Rent expense was approximately $44,000 and $40,781 for 2003 and 2002, respectively. 18 The Company has notes payable due to Isaac Boutwell of $126,072 and $0 as of December 31, 2003 and 2002, respectively. The Company has notes payable due to shareholders of $449,518 and $616,126, respectively. Item 13. Exhibits and Reports on Form 8-K. Exhibits:
Exhibit Number Title Location 31.1 Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Attached Certification of the Principal Financial Officer pursuant 31.2 to Section 302 of the Sarbanes-Oxley Act of 2002 Attached Certification of the Principal Executive Officer pursuant 32.1 to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Attached Certification of the Principal Financial Officer pursuant 32.2 to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Attached
Item 14. Principal Accountant Fees and Services Audit Fee The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal account for the audit of FullCircle's annual financial statement and review of financial statements included in FullCircle's 10-QSB reports and services normally provided by the accountant in connection with statutory and regulatory filings or engagements were $21,400 for fiscal year ended 2002 and $33,500 for fiscal year ended 2003. Audit-Related Fees There were no fees for other audit related services for fiscal year ended 2003. Tax Fees There were no fees for tax compliance, tax advice and tax planning for the fiscal years 2003 and 2002. All Other Fees 19 There were no other aggregate fees billed in either of the last two fiscal years for products and services provided by the principal accountant, other than the services reported above. We do not have an audit committee currently serving and as a result our board of directors performs the duties of an audit committee. Our board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. We do not rely on pre-approval policies and procedures. 20 SIGNATURES In accordance with the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FULLCIRCLE REGISTRY, INC. Date: April 14,2004 /s/Isaac Boutwell --------------- Isaac Boutwell Chief Executive Officer Date: April 14,2004 /s/Trent Oakley ----------------- Trent Oakley Chief Financial 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 and on the dates indicated. Date: April 14, 2004 /s/Isaac Boutwell ---------------- Isaac Boutwell Director Date: April 14, 2004 /s/Trent Oakley ---------------- Trent Oakley Director Date: April 14, 2004 By:________________ Alec Stone Director Date: April 14, 2004 /S/ David E. Allen ----------------- David E. Allen Director Date: April 14, 2004 By:_______________ Toby G. Wolcott Director 21 C O N T E N T S
Independent Auditor's Report................................................................................... 23 Consolidated Balance Sheets.................................................................................... 24 Consolidated Statements of Operations.......................................................................... 26 Consolidated Statements of Stockholders' Equity................................................................ 27 Consolidated Statements of Cash Flows.......................................................................... 33 Notes to the Consolidated Financial Statements................................................................. 35
22 INDEPENDENT AUDITOR'S REPORT To the Board of Directors and Stockholders of FullCircle Registry, Inc. We have audited the accompanying consolidated balance sheets of FullCircle Registry, Inc. and Subsidiaries as of December 31, 2003 and 2002 and the related consolidated statements of operations, 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 audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated 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 provide 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 position of FullCircle Registry, Inc. and Subsidiaries as of December 31, 2003 and 2002 and the consolidated results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has recurring operating losses, negative working capital and is dependent on financing to continue operations. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in the Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /S/ Chisholm, Bierwolf & Nilson, LLC Bountiful, Utah February 6, 2004 23 FullCircle Registry, Inc. Consolidated Balance Sheets ASSETS
December 31, ---------------------------------------------------- 2003 2002 ---------------------------------------------------- CURRENT ASSETS: Cash $ 479 $ - Commission advances - 94,567 ---------------------------------------------------- Total Current Assets 479 94,567 ---------------------------------------------------- PROPERTY AND EQUIPMENT: Computers and equipment 84,936 62,596 Office furniture and fixtures 10,153 10,153 Software 390,796 390,796 ---------------------------------------------------- 485,885 463,545 ---------------------------------------------------- Less: Accumulated depreciaton - software (279,592) (180,898) Accumulated depreciaton (47,298) (28,945) ---------------------------------------------------- Total Property and Equipment 158,995 253,702 ---------------------------------------------------- OTHER ASSETS: Net assets from discontinued operations - 96,256 Investments available for sale 279,330 117,750 Goodwill - 4,464,718 Deposits 1,000 1,000 ---------------------------------------------------- Total Other Assets 280,330 4,679,724 ---------------------------------------------------- TOTAL ASSETS $ 439,804 $ 5,027,993 ====================================================
The accompanying notes are an integral part of these financial statements. 24 FullCircle Registry, Inc. Consolidated Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY December 31, ------------------------------------------------ 2003 2002 ------------------- ---------------------------- CURRENT LIABILITIES: Bank overdraft $ - $ 988 Accounts payable 115,381 133,995 Accounts payable - related party - 17,725 Accrued expenses 48,555 86,752 Current protion of long-term liabilities 606,896 311,384 ------------------- ---------------------------- Total Current Liabilities 770,832 550,844 ------------------- ---------------------------- LONG-TERM LIABILITIES: Notes payable 26,250 195,258 Notes payable-related party 575,590 616,126 Capital lease 13,514 - Less: current portion of long-term liabilities (606,896) (311,384) ------------------- ---------------------------- Total Long Term Liabilities 8,458 500,000 ------------------- ---------------------------- Total Liabilities 779,290 1,050,844 ------------------- ---------------------------- STOCKHOLDERS' EQUITY: Preferred stock, authorized 5,000,000 shares of $.001 par value, issued and outstanding 30,000 and 210,750 shares, respectively 30 211 Common stock, authorized 200,000,000 shares of $.001 par value, issued and outstanding 52,128,476 and 22,577,696 shares, respectively 52,128 22,578 Additional paid in capital 5,584,540 8,420,213 Accumulated comrehensive income 161,580 - Retained earnings (deficit) (6,137,764) (4,465,853) ------------------- ---------------------------- Total Stockholders' Equity (339,486) 3,977,149 ------------------- ---------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 439,804 $ 5,027,993 =================== ============================
The accompanying notes are an integral part of these financial statements. 25 FullCircle Registry, Inc. Consolidated Statements of Operations
For the Years Ended December 31, --------------------------------------- 2003 2002 --------------------------------------- Revenues $ 110,119 $ 8,936 Cost of sales 126,779 2,286 --------------------------------------- Gross Profit (16,660) 6,650 Operating Expenses Selling, general & administrative 1,611,611 2,856,575 --------------------------------------- Total Operating Expenses 1,611,611 2,856,575 --------------------------------------- Operating Income (Loss) (1,628,271) (2,849,925) Other Income (Expense) Reorganization expense - (310,000) Gain on settlement of debt 43,848 - Interest expense (38,423) (34,341) --------------------------------------- Total Other Income (Expense) 5,425 (344,341) --------------------------------------- Net Income (Loss) from Continuing Operations (1,622,846) (3,194,266) Discontinued Operations Gain (loss) from operations (net of income taxes of $0) (49,065) (127,136) Gain (loss) on disposal (net of income taxes of $0) - - --------------------------------------- Total Gain (Loss) From Discontinued Operations (49,065) (127,136) Net Income (Loss) $ (1,671,911) $ (3,321,402) ======================================= Net Income (Loss) Per Share $ (0.05) $ (0.22) ======================================= Weighted Average Shares Outstanding 31,529,839 15,022,714 =======================================
The accompanying notes are an integral part of these financial statements. 26
FullCircle Registry, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (Deficit) Preferred Stock Common Stock Additional Retained Accumulated --------------------------------------------------------- Paid-in Earnings Comprehensive Shares Amount Shares Amount Capital (Deficit) Income ----------------------------------------------------------------------------------------------- Balance, December 31, 2001 - $ - 12,000,000 12,000 $ 14,103 $(1,144,451) - April 2002 - reverse merger adjustment - - 753,360 753 (753) - - April 2002 - stock cancelled - - (53,330) (53) 53 - - May 2002 - stock issued for services at $0.50 per share - - 1,400,000 1,400 698,600 - - July 2002 - stock issued for services at $1.90 per share - - 30,000 30 56,970 - - July 2002 - stock issued for acquisition of ELTI - - 75,000 75 117,675 - - August 2002 - stock issued for cash at $5.00 per share 210,750 211 - - 1,053,539 - - Note forgiveness by shareholders, contribution - - - - 728,693 - - September 2002 - stock issued for services at $1.70 per share - - 25,000 25 42,475 - - October 2002 - stock issued for services at $0.72 per share - - 120,000 120 86,280 - - October 2002 - stock issued for acquisition of Paradigm - - 6,000,000 6,000 4,014,000 - - October 2002 - stock issued for acquisition of Spoken Data - - 210,000 210 140,490 - - October 2002 - stock issued as incentive for preferred shareholders - - 970,000 970 885,006 - - December 2002 - stock issued for exercies of options at $0.01 per share - - 414,000 414 3,726 - - December 2002 - stock issued for cash at $0.25 per share - - 20,000 20 4,980 - - December 2002 - stock issued for services at $1.05 per share - - 50,000 50 52,450 - - December 2002 - stock issued for services at $1.13 per share - - 25,000 25 28,225 - - December 2002 - stock issued for acquisition of AskPhysician.com - - 462,000 462 470,778 - - December 2002 - stock issued for cash at $0.30 per share - - 76,666 77 22,923 - - Net income (loss) for the year ended December 31, 2002 - - - - - (3,321,402) - ------------------------------------------------------------------------------------------------------ Balance, December 31, 2002 210,750 $ 211 22,577,696 $ 22,578 $ 8,420,213 $(4,465,853) $ -
26 FullCircle Registry, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
Preferred Stock Common Stock Additional Retained Accumulated -------------------------------------------------- Paid-in Earnings Comprehensive Shares Amount Shares Amount Capital (Deficit) Income ----------------------------------------------------------------------------------------------- April 2003 - stock issued for notes payable and accrued interest at $0.36 per share - - 65,000 65 23,155 - - April 2003 - stock issued for convertible debentures and accrued interest at $0.11 per share - - 258,181 258 28,916 - - May 2003 - stock issued for convertible debentures and accrued interest at $0.08 per share - - 980,000 980 72,520 - - May 2003 - stock issued for notes payable and accrued interest at $0.16 per share - - 877,112 877 142,809 - - May 2003 - stock issued for deferred compensation at $0.16 per share - - 220,279 220 37,780 - - May 2003 - stock issued for notes payable at $0.16 per share - - 225,689 226 35,884 - - May 2003 - stock issued for convertible debentures and accrued interest at $0.03 per share - - 1,192,886 1,193 28,807 - - June 2003 - stock issued for convertible debentures and accrued interest at $0.03 per share - - 714,608 715 17,150 - - June 2003 - stock issued for convertible debentures and accrued interest at $0.04 per share - - 734,550 735 31,806 - - June 2003 - stock issued for services at $.12 per share - - 666,623 667 79,328 - - July 2003 - stock issued for settlement of accounts payable at $0.09 per share - - 20,000 20 1,780 - - July 2003 - stock issued for convertible debentures and accrued interest at $0.04 per share - - 834,373 834 31,707 - - July 2003 - stock issued for convertible debentures and accrued interest at $0.03 per share - - 1,170,523 1,171 31,370 - - July 2003 - stock issued for cash at $0.04 per share - - 3,750,000 3,750 146,250 - - July 2003 - stock received and canceled from sale of subsidiary - - (6,000,000) (6,000) (3,973,246) - - July 2003 - stock issued for services at $0.06 per share - - 40,000 40 2,360 - - August 2003 - stock issued for convertible debentures and accrued interest at $0.02 per share - - 2,103,736 2,103 42,298 - - August 2003 - stock issued for services at $0.04 per share - - 500,081 500 19,503 - - September 2003 - stock issued for convertible debentures and accrued interest at $0.02 per share - - 1,516,207 1,516 21,227 - -
27 FullCircle Registry, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
Preferred Stock Common Stock Additional Retained Accumulated ------------------------------------------------ Paid-in Earnings Comprehensive Shares Amount Shares Amount Capital (Deficit) Income ------------------------------------------------------------------------------------------ September 2003 - stock issued for convertible debentures and accrued interest at $0.01 per share - - 2,812,498 2,812 33,188 - - September 2003 - stock issued for services at $0.06 per share - - 112,000 112 6,608 - - September 2003 - stock issued for services at $0.04 per share - - 3,117,498 3,117 121,583 - - October 2003 - stock issued for convertible debentures and accrued interest at $0.01 per share - - 1,406,249 1,406 16,594 - - November 2003 - stock issued for penalty on default of convertible debentures at $0.05 per share - - 2,715,187 2,715 133,044 - - November 2003 - warrants issued - - - - 13,343 - - November 2003 - stock issued for services at $0.05 per share - - 431,000 431 21,119 - - December 2003 - stock issued for services at $0.05 per share - - 10,000 10 490 - - December 2003 - stock issued for preferred stock (180,750) (181) 9,037,500 9,038 (8,857) - - 31 December 2003 - stock issued for services at $0.15 per share - - 39,000 39 5,811 - - Net change in unrealized gain (loss) on available for sale investments - - - - - - 161,580 Net income (loss) for the year ended December 31, 2003 - - - - - (1,671,911) - ------------------------------------------------------------------------------------------ Balance, December 31, 2003 30,000 $ 30 52,128,476 $ 52,128 $ 5,584,540 $(6,137,764) $ 161,580 ==========================================================================================
32 FullCircle Registry, Inc. Consolidated Statements of Cash Flows
For the Years Ended December 31, -------------------------------------------- 2003 2002 -------------------------------------------- Cash Flows from Operating Activities Net Income (Loss) $ (1,671,911) $ (3,321,402) Less: Net Income (Loss) from Discontinued Operations (49,065) (127,136) -------------------------------------------- Net Income (Loss) from Continuing Operations $ (1,622,846) $ (3,194,266) Adjustments to Reconcile Net Loss to Net Cash Provided by Operations: Depreciation and amortization 112,746 402,794 Stock issued for services 299,718 1,839,625 Stock issued for penalty on default of convertible debentures 135,759 - Note payable issued for finance charges 119,714 - Deposits - 717 Write off of goodwill 168,110 - Warrants issued 13,343 - Convertible debentures issued for services 122,100 - Gain on settlement of debt (43,848) Change in Assets and Liabilities (Increase) decrease in commission advances 94,567 (94,567) Increase (decrease) in bank overdraft (988) 988 Increase (decrease) in accounts payable 710 (18,296) Increase (decrease) in accrued expenses 27,459 (23,834) -------------------------------------------- Net Cash Provided(Used) by Continuing Operating Activities (573,456) (1,086,839) -------------------------------------------- Cash Flows from Investing Activities Cash acquired from subsidiaries - 3,130 Cash paid in sale of subsidiary (40,000) - Cash paid for notes receivable (45,000) 20,000 Cash paid for property and equipment (836) (7,444) -------------------------------------------- Net Cash Provided (Used) by Investing Activities (85,836) 15,686 -------------------------------------------- Cash Flows from Financing Activities Cash received from line of credit - 9,731 Cash paid for line of credit - (34,865) Cash received from convertible debentures 477,900 - Cash received from notes payable - 550,977 33 FullCircle Registry, Inc. Consolidated Statements of Cash Flows (continued) Cash paid for notes payable - (656,831) Cash received from issuance of treasury stock - 100,000 Cash received from notes payable -related party 105,969 - Cash paid for capital leases (4,577) - Cash paid for notes payable -related party (69,521) - Cash received from issuance of stock 150,000 1,098,890 -------------------------------------------- Net Cash Provided(Used) by Financing Activities 659,771 1,067,902 -------------------------------------------- Increase (Decrease) in Cash from Continuing Operations 479 (3,251) Cash and Cash Equivalents at Beginning of Period - 3,251 -------------------------------------------- Cash and Cash Equivalents at End of Period $ 479 $ - ============================================ Cash Paid For: Interest $ 5,724 $ 17,910 ============================================ Income Taxes $ - $ - ============================================ Non-Cash Activities: Stock issued for services $ 299,718 $ 1,839,625 ============================================ Stock issued for investments $ - $ 5,059,690 ============================================ Note payable issued for investments $ - $ 500,000 ============================================ Forgiveness of convertible debentures $ - $ 728,693 ============================================ Stock issued for accounts payable $ 18,845 $ - ============================================ Stock issued for notes payable and interest $ 203,015 $ - ============================================ Stock issued for convertible debentures and interest $ 369,307 $ - ============================================ Convertible debentures issued for services $ 122,100 $ - ============================================ Warrants issued $ 13,343 $ - ============================================ Stock issued for penalty on default of convertible debentures $ 135,759 $ - ============================================ Note payable issued for finance charges $ 119,714 $ - ============================================ Forgiveness of note payable and accrued interest $ 43,848 $ - ============================================
The accompanying notes are an integral part of these financial statements. 34 FULLCIRCLE REGISTRY, INC. Notes to Consolidated Financial Statements December 31, 2003 and 2002 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES a. Organization FullCircle Registry, Inc. (the Company), formerly Excel Publishing, Inc., (Excel) was incorporated on June 7, 2000 in the State of Nevada. On April 10, 2002, the Company merged with FullCircle Registry, Inc. a private Delaware corporation (FullCircle). Per the terms of the agreement, Excel agreed to deliver 12,000,000 shares of the Company's common stock to the shareholders of FullCircle in exchange for 100% of FullCircle's shares. The merger was treated as a reverse merger with FullCircle being the accounting acquirer, therefore, all historical financial information prior to the acquisition date is that of FullCircle. Pursuant to the merger, the Company changed their name from Excel Publishing, Inc. to FullCircle Registry, Inc. FullCircle Registry, Inc. was incorporated as WillRequest.com, Inc. under the laws of the State of Delaware on January 20, 2000. In July 2000, the Company changed its name from WillRequest.com, Inc. to FullCircle Registry, Inc. The Company was formed to provide a digital safe deposit box containing vital medical and legal information of its customers. The Company is currently focusing on raising capital to develop its operations In July of 2002, the Company issued 75,000 shares of common stock to acquire 100% of the shares of Electronic Luminescent Technologies, Inc. ("ELTI") a Florida Corporation. ELTI was in possession of a license agreement for a "Bicycle Illumination System". Subsequent to the merger, ELTI transfered its interest in the license for 1,000,000 shares (a 10% interest) in GloTech Industries. (See investments available for sale). On October 10, 2002, the Company issued 210,000 shares of common stock for all issued and outstanding stock of Spoken Data Technologies, a Florida corporation (SDT). SDT is in possession of text-to-voice software technology developed by the University of New Brunswick. The Company intends to incorporate this technology with its digital medical and legal information database. Also on October 10, 2002, the Company issued 6,000,000 shares of common stock and a note payable for $500,000 for all issued and outstanding shares of Paradigm Solutions Group, LLC. (Paradigm), a Delaware Limited Liability Company. Paradigm promotes the HEalthier Plan, a medical reimbursement plan designed to assist employers to make use of qualified IRS tax free medical reimbursement programs. On December 20, 2002, the Company issued 462,000 shares of common stock for all issued and outstanding shares of AskPhysicians.com, Inc. (APC) a Florida corporation. APC possesses a website where the public can ask questions of a physician and receive online advice. On July 29, 2003, the Company entered into a sales agreement for its wholly-owned subsidiary, Paradigm. Pursuant to the agreement, the 6,000,000 shares of common stock originally issued by the Company for the acquisition of Paradigm were returned to the Company and canceled. The assets and liabilities of Paradigm have been presented on the financial statements as discontinued operations. The Company has recorded the sale as a cost of treasury stock, therefore, no gain or loss has been recognized. 35 FULLCIRCLE REGISTRY, INC. Notes to Consolidated Financial Statements December 31, 2003 and 2002 NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) b. Accounting Method The Company recognizes income and expenses on the accrual basis of accounting. The Company has chosen a fiscal year end of December 31. c. Earnings (Loss) Per Share The computation of earnings per share of common stock is based on the weighted average number of shares outstanding at the date of the consolidated financial statements. Common stock equivalents have not been included in the weighted average number of shares outstanding because of its anti-dilutive effects.
December 31, -------------------------------------- 2003 2002 Numerator - loss $ (1,671,911) $ (3,321,402) Denominator - weighted average of shares outstanding 31,529,839 15,022,714 -------------------------------------- Loss per share $ (0.05) $ (0.22) ======================================
d. Cash and Cash Equivalents The Company considers all highly liquid investments with maturities of three months or less to be cash equivalents. e. Provision for Income Taxes No provision for income taxes has been recorded due to net operating loss carryforwards totaling approximately $6,000,000 that will be offset against future taxable income. These NOL carryforwards begin to expire in the year 2020. No tax benefit will be recorded until the Company generates taxable income. Deferred tax assets and the valuation account is as follows at December 31, 2003 and 2002:
December 31, -------------------------------------- 2003 2002 Deferred tax asset: NOL carryforward $ 2,040,000 $ 1,518,000 Valuation allowance (2,040,000) (1,518,000) -------------------------------------- Total $ - $ - ======================================
f. Use of Estimates in the Preparation of Consolidated Financial Statements 36 FULLCIRCLE REGISTRY, INC. Notes to Consolidated Financial Statements December 31, 2003 and 2002 The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements and expenses during the reporting period. In these Consolidated Financial Statements, assets, liabilities and expenses involve extensive reliance on management's estimates. Actual results could differ from those estimates. NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) g. Property and Equipment Expenditures for property and equipment and for renewals and betterments, which extend the originally estimated economic life of assets or convert the assets to a new use, are capitalized at cost. Expenditures for maintenance, repairs and other renewals of items are charged to expense. When items are disposed of, the cost and accumulated depreciations are eliminated from the accounts, and any gain or loss is included in the results of operations. The provision for depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Depreciation expense for the periods ended December 31, 2003 and 2002 is $112,746 and $102,794, respectively. h. Principles of Consolidation For the years ended December 31, 2003 and 2002, the consolidated financial statements include the books and records of FullCircle Registry, Inc., Electronic Luminescent Technologies, Inc., Spoken Data Technologies, Paradigm Solutions Group, LLC (2002 only) and AskPhysicians.com, Inc. All inter-company transactions and accounts have been eliminated in the consolidation. NOTE 2 - GOING CONCERN The accompanying Consolidated Financial Statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses negative working capital and is dependent upon raising capital to continue operations. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. It is management's plan to generate additional working capital by increasing revenue as a result of new sales and marketing initiatives and by raising additional capital from investors. NOTE 3 - LONG-TERM LIABILITIES Long-term liabilities are detailed in the following schedules as of December 31, 2003 and 2002:
2003 2002 Notes Payable - Related Party: Note payable to a shareholder pursuant to a settlement agreement for default on convertible debenture agreement, non interest bearing, principal due as follows: 1 month at $15,000; 37 FULLCIRCLE REGISTRY, INC. Notes to Consolidated Financial Statements December 31, 2003 and 2002 NOTE 3 - LONG-TERM LIABILITIES (Continued) 3 months at $20,000 per month; $40,000 per month, thereafter, matures November 2004 $ 345,533 $ - Note payable to a shareholder, bears interest at 7.0% per annum, principal and interest due July 2002 - 80,000 Note payable to shareholders bearing interest at 7.0% per annum, principal and interest due December 2004 - 500,000 Note payable to a shareholder bears interest at 8.0% per annum principal and interest due on demand $ 53,985 $ 36,126 Note payable to a shareholder, non-interest bearing, principal due January 2004 50,000 - Note payable to an officer, non-interest bearing, principal due January 2004 50,000 - Note payable to an officer, bears interest at 8% per annum, principal and interest due on demand 76,072 - Notes payable Note payable to an individual bears interest at 8.0% per annum principal and interest due on demand - 34,000 Note payable to various individuals bears interest at 7.0% per annum principal and interest due on demand 26,250 161,258 ------------ ------------- Total Notes Payable 601,840 811,384 ------------ ------------- Capital Leases Capital lease payable to a leasing company, bears interest at 10% per annum, monthly payments due of $515, matures June 2006, secured by equipment $ 13,514 $ - ------------ ------------- Total Capital Leases 13,514 - ------------ ------------- Total Long-Term Liabilities: 615,354 811,384 38 FULLCIRCLE REGISTRY, INC. Notes to Consolidated Financial Statements December 31, 2003 and 2002 NOTE 3 - LONG-TERM LIABILITIES (Continued) Less current portion: (606,896) (311,384) ------------ ------------- Net Long-Term Liabilities $ 8,458 $ 500,000 ============ ============= Future minimum principal payments on notes payable are as follows: 2004 $ 606,896 2005 5,587 2006 2,871 ------------ Total Long-Term Liabilities $ 615,354 ============
NOTE 4 - RELATED PARTY The Company entered into a lease agreement for office space with a shareholder. The monthly lease payment is $3,003 and the lease expires in December 2004. Rent expense was approximately $44,000 and $40,781 for 2003 and 2002, respectively. The Company has notes payable due to an officer of $126,072 and $0 as of December 31, 2003 and 2002, respectively [see Note 3]. The Company has notes payable due to shareholders of $449,518 and $616,126, respectively [See Note 3]. NOTE 5 - COMMITMENTS AND CONTINGENCIES The Company entered into a lease agreement for office space with a shareholder [see Note 4 ] Future minimum operating lease payments are as follows: 2004 $ 36,036 ---------------- Total $ 36,036 ================ NOTE 6 - GOODWILL/ACQUISITIONS The Company has adopted Statement of Financial Accounting Standards (SFAS) No. 141 (SFAS 141), "Business Combinations" and No. 142 (SFAS 142), "Goodwill and Other Intangible Assets", which establishes new standards for the treatment of goodwill and other intangible assets. SFAS 142 prescribes that amortization of goodwill will cease as of the adoption date (January 1, 2002). Additionally, the Company will be required to perform an impairment test on goodwill and other intangible assets annually, and whenever events and circumstances occur that might affect the carrying value of such assets. The Company has performed an internal impairment test of goodwill and has recorded impairments as described below. 39 FULLCIRCLE REGISTRY, INC. Notes to Consolidated Financial Statements December 31, 2003 and 2002 NOTE 6 - GOODWILL/ACQUISITIONS(con't) In July of 2002, the Company issued 75,000 shares of common stock valued at $117,750 to acquire 100% of the shares of Electronic Luminescent Technologies, Inc. ("ELTI") a Florida Corporation. As such, ELTI became a wholly owned subsidiary of the Company. This transaction was accounted for on the purchase method of accounting using generally accepted accounting principles. Goodwill was not recorded in this transaction and the asset was subsequently exchanged for 1,000,000 shares of GloTech stock. (see investments available-for-sale. There were no operations of this subsidiary during 2003 and 2002. On October 10, 2002, the Company issued 210,000 shares of common stock valued at $140,700, for all issued and outstanding stock of Spoken Data Technologies, a Florida corporation (SDT) As such, SDT became a wholly owned subsidiary of the Company. This transaction was accounted for on the purchase method of accounting using generally accepted accounting principles. Goodwill was not recorded in this transaction as the software assets acquired were valued at the market price of the stock issued. There were no operations of this subsidiary during 2003 and 2002. On October 10, 2002, the Company issued 6,000,000 shares of common stock valued at $4,020,000, and a note payable for $500,000 for all issued and outstanding shares of Paradigm Solutions Group, LLC. (Paradigm), a Delaware Limited Liability Company. As such, Paradigm became a wholly owned subsidiary of the Company. This transaction was accounted for on the purchase method of accounting using generally accepted accounting principles. Goodwill was recorded of $4,296,608 upon acquisition, and was deemed by management to not be impaired as of December 31, 2002. On July 29, 2003, Paradigm was sold and the original 6,000,000 shares issued by the Company were returned and cancelled. The original goodwill of $4,296,608 was recorded as a cost of treasury stock. On December 20, 2002, the Company issued 462,000 shares of common stock valued at $471,240, for all issued and outstanding shares of AskPhysicians.com, Inc. (APC) a Florida corporation. As such, APC became a wholly owned subsidiary of the Company. This transaction was accounted for on the purchase method of accounting using generally accepted accounting principles. Goodwill was recorded of $468,110 upon acquisition. For the years ended December 31, 2003 and 2002, the Company has recognized an impairment of $168,110 and $300,000, respectively. The operations of this subsidiary have been included in the consolidated financial statements of the Company from the date of the acquisition. Goodwill consists of the following at December 31, 2003 and 2002: Paradigm $ 4,296,608 APC 468,110 ----------------- Total 4,764,718 Less impairment of APC (300,000) ----------------- Goodwill at December 31, 2002 $ 4,464,718 Less Impariment of APC (168,110) Less Sale of Paradigm (4,296,608) ----------------- 40 FULLCIRCLE REGISTRY, INC. Notes to Consolidated Financial Statements December 31, 2003 and 2002 NOTE 6 - GOODWILL/ACQUISITIONS(con't) Goodwill at December 31, 2003 $ - ================== NOTE 7 - INVESTMENTS AVAILABLE-FOR-SALE Management determines the appropriate classification of marketable equity security investments at the time of purchase and reevaluates such designation as of as of each balance sheet date. Unrestricted marketable equity securities have been classified as available for sale. Available for sale securities are carried at fair market value, with unrealized gains and losses, net of tax, reported as a net amount in accumulated comprehensive income. Realized gains and losses and declines in value judged to be other than temporary on available for sale securities are included in investment income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available for sale are included in investment income. As of December 31, 2003 and 2002, the Company owns shares of a public company. The shares were restricted at December 31, 2002, so no unrealized gain or loss was recognized. Investments in securities are summarized as follows at December 31, 2003 and 2002:
Unrealized Realized Fair Cost Gain/(Loss) Gain/(Loss) Value ----------------- -------------------- ---------------- ----------- Available-for-sale securities December 31, 2003 $ 117,750 $ 161,580 $ - $ 279,330 December 31, 2002 $ 117,750 $ - $ - $ 117,750 ================= ==================== ================ ===========
NOTE 8 - WARRANTS During the year ended December 31, 2003, the Company issued 1,800,000 warrants to purchase shares of common stock. These warrants were issued at an exercise price of $0.075. The following tables summarize the information regarding warrants outstanding at December 31, 2003. All the warrants are exercisable at December 31, 2003. Warrants outstanding at December 31, 2002 - Warrants granted 1,800,000 Warrants expired - ------------- Warrants outstanding at December 31, 2003 1,800,000 ============= Weighted average exercise price of warrants outstanding at December 31, 2003 $ 0.075 ============= 41 FULLCIRCLE REGISTRY, INC. Notes to Consolidated Financial Statements December 31, 2003 and 2002 NOTE 8 - WARRANTS(continued) Number of Weighted Warrants Average Weighted Outstanding at Remaining Average December 31 Contractual Exercise Exercise Price 2003 Life Price -------------- ----------------- ----------- ----------- $0.075 1,800,000 6 years $0.075 NOTE 8 - WARRANTS (Continued) The Company applies SFAS No. 123, for warrants issued, which requires the Company to estimate the fair value of each warrants issued at the grant date by using the Black-Scholes pricing model with the following assumptions, Risk-free interest rate 4% Life 7 years Volatility 215% Dividend Yield 0.0 As a results of applying SFAS No. 123, the Company has recognized an expense of $13,343 and $0 during the years ended December 31, 2003 and 2002, respectively. The expense is included in the general and administrative amount in the statement of operations. NOTE 9 - DISCONTINUED OPERATIONS The following details the net assets from discontinued operations of Paradigm Solutions Group as of December 31, 2002: Assets Cash $ 1,697 Accounts Receivable 2,005 Product Development/Operating Rights 354,063 ------------- Total Assets $ 357,765 ============= Liabilities: Accounts Payable $ 227,211 Accrued Expenses 19,435 Deferred Revenues 14,863 ------------- Total Liabilities $ 261,509 ============= Net Assets from Discontinued Operations $ 96,256 ============= The losses recognized from discontinued operations of Paradigm are from the date of acquisition on October 10, 2002 through the date of the sale on July 29, 2003. 42 EX-31 3 dec31200310ksbex311.txt Exhibit 31.1 Certification Pursuant to pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended I, Isaac Boutwell, Chief Executive Officer of FullCircle Registry, Inc. (the "Company"), certify that: 1. I have reviewed this annual report on Form 10-KSB of the Company; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. As the registrant's certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. As the registrant's certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely Exhibit 31.1 (continued) Certification Pursuant to pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended b) affect the registrant's ability to record, process, summarize and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/Isaac Boutwell -------------- Isaac Boutwell Chief Executive Officer Date: April 14, 2004 EX-31 4 dec31200310ksbex312.txt Exhibit 31.2 Certification Pursuant to pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended I, Trent Oakley Chief Financial Officer of FullCircle Registry, Inc. (the "Company"), certify that: 1. I have reviewed this annual report on Form 10-KSB of the Company; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. As the registrant's certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. As the registrant's certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely Exhibit 31.2 (continued) Certification Pursuant to pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended b) affect the registrant's ability to record, process, summarize and report financial information; and any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. /s/Trent Oakley --------------- Trent Oakley Chief Financial Officer Date: April 14, 2004 EX-32 5 dec31200310ksbex321.txt Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of FullCircle Registry, Inc. a Nevada corporation (the "Company"), on Form 10-KSB for the annual period ending December 31, 2003 as filed with the Securities and Exchange Commission (the "Report"), I, Isaac Boutwell, Chief Executive Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350), that to my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/Isaac Boutwell ---------------- Isaac Boutwell Chief Executive Officer Date: April 14, 2004 EX-32 6 dec31200310ksbex322.txt Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of FullCircle Registry, Inc. a Nevada corporation (the "Company"), on Form 10-KSB for the annual period ending December 31, 2003 as filed with the Securities and Exchange Commission (the "Report"), I, Trent Oakley, Chief Financial Officer of the Company, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350), that to my knowledge: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/Trent Oakley --------------- Trent Oakley Chief Financial Officer Date: April 14, 2004 -----END PRIVACY-ENHANCED MESSAGE-----