UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 15, 2011
FULLCIRCLE REGISTRY, INC.
(Exact name of registrant as specified in its charter)
| | |
Nevada | 333-51918 | 87-0653761 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | File Number) | Identification No.) |
| |
161 Alpine Drive, Shelbyville, Kentucky | 40065 |
(Address of principal executive offices) | (Zip Code) |
| |
(Registrant's telephone number, including area code) (502) 410-4500
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
. Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
. Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
. Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
. Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
This amendment relates to the filing of the required financial statements under Item 9.01 of Form 8-K in connection with a significant acquisition related to Indiana operations of CIA Theatres, LLC, reported under Item 2.01 on Form 8-K, for the event occurring on December 28, 2010, and filed on January 3, 2011.
ITEM 9.01. Financial Statements and Exhibits.
(a)
Financial statements of businesses acquired.
The following financial statements of The Indiana Operations of CIA Theatres, LLC for the nine months ended September 30, 2010 and year ended December 31, 2009, are included as exhibits hereto:
Report of Independent Auditor
Balance Sheets
Statements of Operations
Statements of Changes in Members’ Equity(Deficit)
Statements of Cash Flows
Notes to Financial Statements
(b)
Pro forma financial information .
The following unaudited proforma consolidated financial statements for the period ended September 30, 2010 and year ended December 31, 2009, are included as exhibits hereto:
Unaudited Pro forma Consolidated Balance Sheets
Unaudited Pro forma Consolidated Statements of Operations
Notes to Unaudited Pro Forma Consolidated Financial Information
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date:March 15, 2011
By:/s/ Norman L. Frohreich
Chief Financial Officer
Independent Auditors’ Report
To the Members of
The Indiana Operations of CIA Theaters, LLC
Indianapolis, IN
We have audited the accompanying balance sheets of the Indiana operations of CIA Theaters, LLC as of September 30, 2010 and December 31, 2009, and the related statements of operations, members’ equity (deficit), and cash flows for the nine months and year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these 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 audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Indiana operations of CIA Theaters, LLC as of September 30, 2010 and December 31, 2009, and the results of its operations and cash flows for the nine months and year then ended in conformity with accounting principles generally accepted in the United States of America.
/s/ Rodefer Moss & Co, PLLC
New Albany, Indiana
March 14, 2011
1
| | | | |
THE INDIANA OPERATIONS OF CIA THEATERS, LLC |
Balance Sheets |
September 30, 2010 and December 31, 2009 |
| | | | |
| | | | |
| | September 30, | | December 31, |
| | 2010 | | 2009 |
ASSETS | | | | |
Current Assets | | | | |
Cash and cash equivalents | $ | 58,684 | $ | 81,634 |
Inventories | | 3,200 | | 3,419 |
Note receivable, related party | | - | | 27,794 |
Prepaid expenses | | 4,979 | | 1,057 |
| | | | |
Total current assets | | 66,863 | | 113,904 |
| | | | |
Property and Equipment | | | | |
Land | | 568,679 | | 568,679 |
Building | | 3,612,264 | | 3,612,264 |
Improvements | | 81,882 | | 81,882 |
Equipment | | 943,451 | | 943,451 |
| | | | |
| | 5,206,276 | | 5,206,276 |
| | | | |
Less accumulated depreciation | | (456,801) | | (314,219) |
| | | | |
Property and equipment, net | | 4,749,475 | | 4,892,057 |
| | | | |
Other Assets | | | | |
Loan origination fees, net | | 11,970 | | 12,367 |
| | | | |
Total other assets | | 11,970 | | 12,367 |
| | | | |
Total assets | $ | 4,828,308 | $ | 5,018,328 |
See notes to financial statements.
2
| | | | |
| | September 30, | | December 31, |
| | 2010 | | 2009 |
LIABILITIES AND MEMBERS’ EQUITY (DEFICIT) | | | | |
Current Liabilities | | | | |
Accounts payable | $ | 37,114 | $ | 64,378 |
Accrued property taxes | | 162,594 | | 146,611 |
Other accrued expenses | | 68,167 | | 70,429 |
Note payable, due within one year | | 112,000 | | 104,000 |
| | | | |
Total current liabilities | | 379,875 | | 385,418 |
| | | | |
Note payable, due after one year | | 4,962,318 | | 5,046,566 |
| | | | |
Total liabilities | | 5,342,193 | | 5,431,984 |
| | | | |
Members’ Equity (Deficit) | | (513,885) | | (413,656) |
| | | | |
Total liabilities and members’ equity (deficit) | $ | 4,828,308 | $ | 5,018,328 |
See notes to financial statements.
3
| | | | |
THE INDIANA OPERATIONS OF CIA THEATERS, LLC |
Statements of Operations |
Nine Months Ended September 30, 2010 and Year Ended December 31, 2009 |
| | | | |
| | | | |
| | September 30, | | December 31, |
| | 2010 | | 2009 |
| | | | |
Revenues | | | | |
Admissions | $ | 682,133 | $ | 697,671 |
Concessions and other | | 259,092 | | 364,288 |
Rent income | | 102,555 | | 129,315 |
| | | | |
Total revenues | | 1,043,780 | | 1,191,274 |
| | | | |
Operating Expenses | | | | |
Other theatre operating costs | | 468,924 | | 530,439 |
Film exhibition costs | | 370,234 | | 373,970 |
Depreciation and amortization | | 142,980 | | 190,406 |
Concession costs | | 54,471 | | 79,128 |
Management fee expense | | 15,400 | | 69,457 |
| | | | |
Total operating expenses | | 1,052,009 | | 1,243,400 |
| | | | |
Income (loss) from operations | | (8,229) | | (52,126) |
| | | | |
Other Income (Expense) | | | | |
Interest expense | | (234,294) | | (315,965) |
| | | | |
Total other income (expense) | | (234,294) | | (315,965) |
| | | | |
Net income (loss) | $ | (242,523) | $ | (368,091) |
See notes to financial statements.
4
| | |
THE INDIANA OPERATIONS OF CIA THEATERS, LLC |
Statements of Changes in Members’ Equity (Deficit) |
Nine Months Ended September 30, 2010 and Year Ended December 31, 2009 |
| | |
| | |
| | |
| | |
| | |
| | |
Balances at December 31, 2008 | $ | (284,565) |
| | |
Net income (loss) | | (368,091) |
| | |
Capital contributions | | 239,000 |
| | |
Balances at December 31, 2009 | | (413,656) |
| | |
Net income (loss) | | (242,523) |
| | |
Capital contributions | | 142,294 |
| | |
Balances at September 30, 2010 | $ | (513,885) |
See notes to financial statements.
5
| | | | |
THE INDIANA OPERATIONS OF CIA THEATERS, LLC |
Statements of Cash Flows |
Nine Months Ended September 30, 2010 and Year Ended December 31, 2009 |
| | | | |
| | | | |
| | September 30, | | December 31, |
| | 2010 | | 2009 |
| | | | |
Cash Flows From Operating Activities | | | | |
| | | | |
Net Loss | $ | (242,523) | $ | (368,091) |
Adjustments to reconcile net loss to net cash used by | | | | |
operating activities: | | | | |
Depreciation and amortization | | 142,980 | | 190,406 |
Changes in assets and liabilities: | | | | |
Inventories | | 219 | | - |
Prepaid expenses | | (3,922) | | (1,057) |
Accounts payable | | (27,265) | | (41,323) |
Accrued property taxes | | 15,983 | | 50,420 |
Other accrued expenses | | (2,262) | | (8,119) |
| | | | |
Net cash flows from operating activities | | (116,790) | | (177,764) |
| | | | |
Cash Flows From Investing Activities | | | | |
| | | | |
Fixed assets purchased | | - | | (4,700) |
| | | | |
Net cash flows from investing activities | | - | | (4,700) |
| | | | |
Cash Flows From Financing Activities | | | | |
| | | | |
Capital contributions | | 142,294 | | 239,000 |
Note receivable, related party | | 27,794 | | 26,195 |
Principal payments on note payable | | (76,248) | | (96,667) |
| | | | |
Net cash flows from financing activities | | 93,840 | | 168,528 |
| | | | |
Net change in cash and cash equivalents | | (22,950) | | (13,936) |
| | | | |
Cash and cash equivalents at the beginning of the year | | 81,634 | | 95,570 |
| | | | |
Cash and cash equivalents at the end of the year | $ | 58,684 | $ | 81,634 |
| | | | |
Supplemental Disclosures | | | | |
Cash interest paid | $ | 234,451 | $ | 316,654 |
See notes to financial statements.
6
THE INDIANA OPERATIONS OF CIA THEATERS, LLC
Notes to Financial Statements
Nine Months Ended September 30, 2010 and Year Ended December 31, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Company Activities- The Indiana operations of CIA Theaters, LLC (CIA Indiana) operates a 14 theatre cinema located in Indianapolis, Indiana.CIA Indiana operates motion picture theatres which generate revenues principally through admissions and concessions sales. CIA Indiana owns the land and the building in which the theatre operates. Also included in the building is a Save-A-Lot grocery store from which CIA Indiana receives rent income.
Management’s Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents - Cash is maintained in interest-bearing checking and sweep accounts which, at times may exceed the $250,000 coverage provided by the Federal Deposit Insurance Corporation (FDIC). CIA Indiana has not experienced any losses on such accounts and management believes CIA Indiana is not exposed to any significant risk on bank deposits.
For purposes of the statements of cash flows, CIA Indiana considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.
Revenue Recognition - Admissions and concessions revenue is recognized at the point of sale for tickets and concessions. Sales taxes collected from customers are included in revenue and are recorded in accrued expenses in the accompanying balance sheets.
Film Exhibition Costs - Film exhibition costs vary according to box office admissions and are accrued based on CIA Indiana’s terms and agreements with movie distributors. The agreements usually provide for a decreasing percentage of box office admissions to be paid to the movie studio over the first few weeks of the movie’s run, subject to a floor for later weeks.
Inventories - Inventories consist primarily of concessions and theatre supplies and are stated at the lower of cost (first-in, first-out method) or market.
Fixed Assets - Fixed assets are carried at cost and are depreciated and amortized on the straight-line method over their estimated useful lives as follows:
| |
Building | 40 years |
Leasehold improvements | 10 - 15 years |
Equipment | 5 - 10 years |
Depreciation and amortization expense for the nine months ended September 30, 2010 and the year ended December 31, 2009 was $142,980 and $190,406, respectively. Maintenance and repairs are charged to expense as incurred.
Income Taxes- CIA Indiana does not incur income taxes; instead, its earnings are included in the members’ personal income tax returns and taxed depending on their personal tax situations. The financial statements, therefore, do not include a provision for income taxes.
Advertising - Advertising costs are expensed as incurred. Advertising expenses totaled $122 and $27,765 for the nine months ended September 30, 2010 and the year ended December 31, 2009, respectively.
7
THE INDIANA OPERATIONS OF CIA THEATERS, LLC
Notes to Financial Statements
Nine Months Ended September 30, 2010 and Year Ended December 31, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)
Recent Accounting Pronouncements - In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles. SFAS No. 168 has become the single source of authoritative nongovernmental U.S. generally accepted accounting principles (GAAP), superseding existing FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force, and related accounting literature. SFAS No. 168 reorganizes the thousands of GAAP pronouncements into roughly 90 accounting topics and displays them using a consistent structure. Also included is relevant Commission guidance organized using the same topical structure in separate sections. SFAS No. 168 was effective for financial statements issued for reporting periods that end after September 15, 2009. CIA Indiana adopted the provisions of this guidance as of October 1, 2009. The adoption did not have an impact on CIA Indiana’s financial position, cash flows or results of operations.
Subsequent Events - On December 31, 2010, the Indiana operations of CIA Theaters, LLC was purchased by FullCircle Entertainment, Inc., a wholly owned subsidiary of FullCircle Registry, Inc.
NOTE 2 - NOTE PAYABLE
CIA Indiana has a note payable, secured by substantially all of its assets, to First Federal Savings Bank that matures in May 2013. Interest is charged at 6%. The principal balance for the nine months ended September 30, 2010 and the year ended December 31, 2009 was $5,074,318 and $5,150,566, respectively.
Scheduled principal maturities of long-term debt are as follows:
| | |
Year Ending December 31, | | |
2011 | $ | 113,000 |
2012 | | 120,000 |
2013 | | 4,813,115 |
The obligation is also guaranteed by CIA Indiana’s members.
NOTE 3 - LEASE AGREEMENTS
As lessee, CIA Indiana rents some of its equipment under a month-to-month operating lease from an entity of which one of the members is an owner. Rent expense under the lease was $11,234 for the nine months ended September 30, 2010.
As lessor, CIA Indiana leases a portion of the real estate to Save-A-Lot grocery store. The rent income was $102,555 and $129,315 for the nine months ended September 30, 2010 and the year ended December 31, 2009, respectively.
Schedule of rent income obligations of Save-A-Lot to CIA Indiana are as follows:
| | |
Year Ending December 31, | | |
2011 | $ | 136,740 |
2012 | | 136,740 |
2013 | | 136,740 |
2014 | | 79,765 |
8
THE INDIANA OPERATIONS OF CIA THEATERS, LLC
Notes to Financial Statements
Nine Months Ended September 30, 2010 and Year Ended December 31, 2009
NOTE 4 - RELATED PARTY TRANSACTIONS
There was a note receivable from one of the members of CIA Indiana in the amount of $27,794 for the year ended December 31, 2009 which was repaid during 2010.
CIA Indiana sources its labor force from an entity of which one of the members is an owner. Outside payroll services to this entity totaled $172,207 and $231,141 for the nine months ended September 30, 2010 and the year ended December 31, 2009, respectively.
CIA Indiana also paid management fees of $15,400 and $69,457 for the nine months ended September 30, 2010 and the year ended December 31, 2009, respectively, to two separate entities owned by members.
9
| | | | | | | | | |
UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEETS |
September 30, 2010 |
| | FullCircle Registry, Inc. | | CIA Theatres, LLC | | Proforma Adjustments | Notes | | Proforma as adjusted |
ASSETS | | | | | | | | | |
Current assets | | | | | | | | | |
Cash and equivalents | $ | 8,116 | $ | 58,684 | $ | (58,684) | a | $ | 8,116 |
Inventories | | - | | 3,200 | | (3,200) | a | | - |
Notes receivable | | 10,000 | | - | | - | a | | 10,000 |
Prepaid expenses | | - | | 4,979 | | (4,979) | a | | - |
| | 18,116 | | 66,863 | | (66,863) | | | 18,116 |
| | | | | | | | | |
Property and equipment, net | | - | | 4,749,475 | | 750,525 | b | | 5,500,000 |
| | | | | | | | | |
Other assets | | | | | | | | | |
Customer database and software, net | | 236,612 | | - | | | | | 236,612 |
Loan origination fees, net | | - | | 11,970 | | (11,970) | a | | - |
| | 236,612 | | 11,970 | | (11,970) | | | 236,612 |
| $ | 254,728 | $ | 4,828,308 | $ | 671,692 | | $ | 5,754,728 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | | | | | | | | | |
Current liabilities | | | | | | | | | |
Accounts payable | $ | 44,628 | | 37,114 | $ | (37,114) | a | $ | 44,628 |
Accrued interest | | 106,240 | | - | | | | | 106,240 |
Accrued expenses | | 1,206 | | 230,761 | | (230,761) | a | | 1,206 |
Notes payable | | 65,000 | | 112,000 | | | | | 177,000 |
Notes payable-related parties | | 102,964 | | - | | | | | 102,964 |
| | 320,038 | | 379,875 | | (267,875) | | | 432,038 |
Long-term liabilities | | | | | | | | | |
Notes payable-related parties | | - | | 4,962,318 | | (26,477) | c | | 4,935,841 |
| | | | | | | | | |
Stockholders' equity (deficit) | | | | | | | | | |
Preferred stock | | 310 | | - | | | | | 310 |
Common stock | | 91,105 | | - | | 4,522 | d | | 95,627 |
Additional paid in capital | | 7,628,038 | | - | | 447,637 | d | | 8,075,675 |
Retained earning/accumulated deficit | | (7,784,763) | | - | | | | | (7,784,763) |
Member's equity (deficit) | | - | | (513,885) | | 513,885 | e | | - |
| | (65,310) | | (513,885) | | 966,044 | | | 386,849 |
| $ | 254,728 | $ | 4,828,308 | $ | 671,692 | | $ | 5,754,728 |
See accompanying notes to the unaudited proforma consolidated financial statements.
| | | | | | | | | |
UNAUDITED PROFORMA CONSOLIDATED BALANCE SHEETS |
December 31, 2009 |
| | FullCircle Registry, Inc. | | CIA Theatres, LLC | | Proforma Adjustments | Notes | | Proforma as adjusted |
ASSETS | | | | | | | | | |
Current assets | | | | | | | | | |
Cash and equivalents | $ | 2,091 | $ | 81,634 | $ | (81,634) | a | $ | 2,091 |
Inventories | | - | | 3,419 | | (3,419) | a | | - |
Notes receivable, related parties | | - | | 27,794 | | (27,794) | a | | - |
Prepaid expenses | | - | | 1,057 | | (1,057) | a | | - |
| | 2,091 | | 113,904 | | (113,904) | | | 2,091 |
| | | | | | | | | |
Property and equipment, net | | - | | 4,892,057 | | 607,943 | b | | 5,500,000 |
| | | | | | | | | |
Other assets | | | | | | | | | |
Customer database and software, net | | 301,142 | | - | | | | | 301,142 |
Loan origination fees, net | | - | | 12,367 | | (12,367) | a | | - |
| | 301,142 | | 12,367 | | (12,367) | | | 301,142 |
| | | | | | | | | |
| $ | 303,233 | $ | 5,018,328 | $ | 481,672 | | $ | 5,803,233 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | | | | | | | | | |
Current liabilities | | | | | | | | | |
Accounts payable | $ | 62,067 | $ | 64,378 | $ | (64,378) | a | $ | 62,067 |
Accrued interest | | 85,675 | | - | | | | | 85,675 |
Accrued expenses | | 2,292 | | 217,040 | | (217,040) | a | | 2,292 |
Notes payable | | 65,000 | | 104,000 | | | | | 169,000 |
Notes payable-related parties | | 403,564 | | - | | | | | 403,564 |
| | 618,598 | | 385,418 | | (281,418) | | | 722,598 |
| | | | | | | | | |
Long-term liabilities | | | | | | | | | |
Notes payable-related parties | | - | | 5,046,566 | | (102,725) | c | | 4,943,841 |
| | | | | | | | | |
Stockholders' equity (deficit) | | | | | | | | | |
Preferred stock | | 10 | | - | | | | | 10 |
Common stock | | 84,996 | | - | | 4,522 | d | | 89,518 |
Additional paid in capital | | 7,165,569 | | - | | 447,637 | d | | 7,613,206 |
Retained earning/accumulated deficit | | (7,565,940) | | - | | | | | (7,565,940) |
Member's equity (deficit) | | - | | (413,656) | | 413,656 | e | | - |
| | (315,365) | | (413,656) | | 865,815 | | | 136,794 |
| | | | | | | | | |
| $ | 303,233 | $ | 5,018,328 | $ | 481,672 | | $ | 5,803,233 |
See accompanying notes to the unaudited proforma consolidated financial statements.
| | | | | | | | | |
UNAUDITED PROFORMA CONSOLIDATED STATEMENTS OF INCOME |
Period ended September 30, 2010 |
| | FullCircle Registry, Inc. | | CIA Theatres, LLC | | Proforma Adjustments | Notes | | Proforma as adjusted |
| | | | | | | | | |
Revenues | $ | 928 | $ | 1,043,780 | | | | $ | 1,044,708 |
| | | | | | | | | |
Costs of sales | | 160 | | 1,036,609 | | 20,000 | f | | 1,056,769 |
| | | | | | | | | |
Gross profit (loss) | | 768 | | 7,171 | | (20,000) | | | (12,061) |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Selling, general & administrative | | 199,744 | | 15,400 | | | | | 215,144 |
Gain on settlement of debt | | - | | - | | | | | - |
Total operating expenses | | 199,744 | | 15,400 | | - | | | 215,144 |
| | | | | | | | | |
Operating loss | | (198,976) | | (8,229) | | (20,000) | | | (227,205) |
| | | | | | | | | |
Miscellaneous income | | 718 | | - | | | | | 718 |
Interest expense | | (20,565) | | (234,294) | | | | | (254,859) |
| | | | | | | | | |
Net loss before income taxes | | (218,823) | | (242,523) | | (20,000) | | | (481,346) |
| | | | | | | | | |
Income taxes | | - | | - | | - | | | - |
| | | | | | | | | |
Net loss | $ | (218,823) | $ | (242,523) | $ | (20,000) | | $ | (481,346) |
| | | | | | | | | |
Net basic and fully diluted loss per share | $ | (0.00) | | | | | | $ | (0.01) |
| | | | | | | | | |
Weighted average shares outstanding | | 86,936,520 | | | | 4,521,588 | | | 91,458,108 |
See accompanying notes to the unaudited proforma consolidated financial statements.
| | | | | | | | | |
UNAUDITED PROFORMA CONSOLIDATED STATEMENTS OF INCOME |
Year ended December 31, 2009 |
| | FullCircle Registry, Inc. | | CIA Theatres, LLC | | Proforma Adjustments | Notes | | Proforma as adjusted |
| | | | | | | | | |
Revenues | $ | 9,524 | $ | 1,191,274 | | | | $ | 1,200,798 |
| | | | | | | | | |
Costs of sales | | 351 | | 1,173,943 | | 25,000 | f | | 1,199,294 |
| | | | | | | | | |
Gross profit (loss) | | 9,173 | | 17,331 | | (25,000) | | | 1,504 |
| | | | | | | | | |
Operating expenses: | | | | | | | | | |
Selling, general & administrative | | 216,027 | | 69,457 | | | | | 285,484 |
Gain on settlement of debt | | (57,206) | | - | | | | | (57,206) |
Total operating expenses | | 158,821 | | 69,457 | | - | | | 228,278 |
| | | | | | | | | |
Operating loss | | (149,648) | | (52,126) | | (25,000) | | | (226,774) |
| | | | | | | | | |
Interest expense | | (39,219) | | (315,965) | | | | | (355,184) |
| | | | | | | | | |
Net loss before income taxes | | (188,867) | | (368,091) | | (25,000) | | | (581,958) |
| | | | | | | | | |
Income taxes | | - | | - | | - | | | - |
| | | | | | | | | |
Net loss | $ | (188,867) | $ | (368,091) | $ | (25,000) | | $ | (581,958) |
| | | | | | | | | |
Net basic and fully diluted loss per share | $ | (0.00) | | | | | | $ | (0.01) |
| | | | | | | | | |
Weighted average shares outstanding | | 78,105,765 | | | | 4,521,588 | | | 82,627,353 |
See accompanying notes to the unaudited proforma consolidated financial statements
13
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The unaudited pro forma consolidated statements of income for the period ended September 30, 2010 and year ended December 31, 2009 give effect to FullCircle Registry, Inc.'s wholly-owned subsidiary (the Company) acquisition of certain assets of the Indiana Operations of CIA Theatres, LLC. (CIA Indiana) as if the acquisition of certain assets had been completed on January 1, 2010 and January 1, 2009, respectively.
The unaudited pro forma consolidated balance sheet as of September 30, 2010 and December 31, 2009, gives effect to the acquisition as if the transaction had occurred on September 30, 2010 and December 31, 2009, respectively.
The unaudited pro forma consolidated financial information should be read in conjunction with the Company's historical consolidated financial statements and accompanying notes included in the Company's periodic reports previously filed with the Securities and Exchange Commission, along with the historical financial statements included elsewhere in this Form 8-K/A. The unaudited pro forma consolidated financial information may not necessarily reflect the financial position or results of operations which would have been obtained if these transactions had been consummated on the dates indicated in the unaudited pro forma consolidated financial information.
The unaudited pro forma consolidated financial data are based on preliminary estimates and assumptions set forth in the notes to such information that we believe are reasonable. Pro forma adjustments are necessary to reflect the estimated purchase price and changes in our capital structure and to adjust amounts related toCIA Indiana’s assets and liabilities to a preliminary estimate of their fair values. Pro forma adjustments are also necessary to reflect the income tax effects related to the pro forma adjustments.
The pro forma adjustments and allocation of purchase price are preliminary and are based on management's estimates of the fair value of the assets acquired. The final purchase price allocation will be completed after asset valuations are finalized. This final valuation will be based on the actual assets of CIA Indiana that exist as of the date of the completion of the transaction. Any final adjustments may change the allocation of purchase price which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma consolidated financial data. In addition, the impact of integration activities could cause material differences in the information presented.
The unaudited pro forma financial information is presented for informational purposes only and is based on certain assumptions that we believe are reasonable and does not purport to represent our financial condition or our results of operations had the business combination occurred on or as of the dates noted above nor is the financial information necessarily indicative of future consolidated financial position or results of operations.
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NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
FINANCIAL INFORMATION
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited pro forma consolidated financial information is presented on a basis consistent with the Company's historical consolidated financial statements. The Company acquired certain assets of CIA Indiana which represents substantially all of the assets related to the Indiana operations of CIA Theatres. Assets and liabilities of CIA Indiana not acquired by the Company have been eliminated in pro-forma adjustments as further described below.
NOTE 2 - PURCHASE PRICE
Purchase Price Summary
For purposes of the pro forma financial information, the following table presents the components of the purchase price consideration.
| | |
Common stock | $ | 452,159 |
Notes payable assumed | | 5,047,841 |
| $ | 5,500,000 |
Purchase Price Allocation
The following represents the preliminary allocation of the purchase price to the acquired assets of CIA Indiana and is for illustrative purposes only. The allocation is preliminary and is based on CIA Indiana’s assets as of
the respective balance sheet date.
| | |
Land | $ | 660,000 |
Facilities and equipment | | 4,840,000 |
Property and equipment | $ | 5,500,000 |
NOTE 3 - PRO FORMA ADJUSTMENTS
The following pro forma adjustments are reflected in the accompanying unaudited pro forma consolidated financial information:
a)
To remove assets and liabilities of CIA Indiana not acquired or assumed by the Company.
b)
To adjust the value of property and equipment of CIA Indiana acquired by the Company.
c)
To adjust value of borrowings assumed by the Company in the acquisition.
d)
To record the common stock granted by the Company as consideration in the acquisition
e)
To eliminate the members’ equity section of the sellers' balance sheet.
f)
Reflects adjustment to historical depreciation for estimated depreciation on facilities and equipment acquired.
NOTE 4 - ADDITIONAL INFORMATION
The pro forma adjustments reflected in the accompanying unaudited pro forma financial information and outlined in Note 3 reflect only those required by and permissible under the rules and regulations of the U.S. Securities and Exchange Commission.
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