Revenues during the twelve months ended December 31, 2010 were $1,283 with cost of sales of $95 yielding a gross profit of $1,188 compared to revenues of $9,524 with cost of sales of $351 yielding a gross profit of $9,173 for the same period in 2009.
Operating expenses and other costs during the twelve-month period ending December 31, 2010 were $276,101 resulting in an operating loss of $274,913 compared to the operating expenses of $158,821 for the twelve months ending December 31, 2009 with an operating loss of $149,648.
Interest expense for the twelve months ending December 31, 2010 was $24,243 resulting in a net loss from continuing operations of $298,438. By comparison, interest expense for the twelve months ended December 31, 2009 was $39,219 resulting in a net loss from continuing operations of $188,867.
The major portion of our 2009 operating expenses were the result of SEC compliance requirements for our 2008 10K, three 10Q filings, and the four amendments of the S-1 Preferred Share Offering. In addition, in 2009, we expensed $55,312 for the amortization of our database, which was included in our total operating expenses.
As of December 31, 2010, the Company had assets in the amount of $5,731,840 compared to assets in the amount of $303,233 at December 31, 2009. The Company had total assets principally consisting of $6,738 in cash, $10,000 note receivable, $5.5 million in property and equipment related to the acquired movie theatres and $215,102 investment in the 68,000 name database. Total assets at December 31, 2009 consisted of $2,091 in cash and $301,142 investment in the customer database.
At the time of this filing, we had insufficient cash reserves and receivables necessary to meet forecast operating requirements. In the event we are unsuccessful in our efforts to raise additional funds, we will be required to significantly reduce cash outflows and, possibly, discontinue our operations. We need to raise immediate capital to continue our operations and implement our plans to respond to competitive pressures or otherwise to respond to unanticipated requirements. Our failure to obtain immediate financing or inability to obtain financing on acceptable terms could require us to limit our plans, incur indebtedness that has high rates of interest or substantial restrictive covenants, issue equity securities that will dilute your holdings or discontinue all or a portion of our remaining operations.
The current expansion of the Company’s business demands that significant financial resources be raised to fund capital expenditures, working capital needs, debt service and the cash flow deficits expected to be generated over then next six months by operating losses. Current cash balances and the realization of accounts receivable will not be sufficient to fund the Company’s current business plan beyond the next six months. Consequently, the Company is pursuing funding with our common stock. Upon the state of Kentucky approving our request to issue preferred shares we will resume the process of locating investors for those shares.
Where this Form 10-K includes “forward-looking” statements within the meaning of Section 27A of the Securities Act, we desire to take advantage of the “safe harbor” provisions thereof. Therefore, FullCircle is including this statement for the express purpose of availing itself of the protections of such safe harbor provisions with respect to all of such forward-looking statements. The forward-looking statements in this Form 10-K reflect our current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ from those anticipated. In this Form 10-K, the words “anticipates,” “believes,” “expects,” “intends,” “future” and similar expressions identify forward-looking statements. We undertake no obligation to publicly revise these forward-looking statements to reflect events or circumstances that may arise after the date hereof. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by this section.
The Company has adopted a code of ethics that applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller. Our Code of Ethics was included as an exhibit to our annual report on Form 10-K for the year ended December 31, 2004.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.
On December 28, 2010, FullCircle decided that it would not retain Chisholm, Bierwolf, Nilson & Morrill, LLC (“Chisholm”) as our independent registered public accounting firm for the fiscal year ending December 31, 2010. The change in accountants did not result from any dissatisfaction with the quality of professional services rendered by Chisholm. During the December 31, 2009 fiscal year, and in the subsequent interim period, there were no disagreements between Chisholm and FullCircle on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of Chisholm, would have caused Chisholm to make reference to the subject matter of the disagreement in its reports on the consolidated financial statements for such years. There were no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.