GALAXY NEXT GENERATION, INC. - Quarter Report: 2010 June (Form 10-Q)

FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

X . QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

. TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 333-51918

FULLCIRCLE REGISTRY, INC.

(Exact Name of Registrant as Specified in Its Charter)


NEVADA (State or Other Jurisdiction of Incorporation or Organization)		87-0653761 (I.R.S. Employer Identification No.)

161 Alpine Drive, Shelbyville, KY 40065

(Address of Principal Executive Offices) (Zip Code)

(502) 410-4500

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X . No .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	.	Accelerated filer	.
Non-accelerated filer	. (Do not check if a smaller reporting company)	Smaller reporting company	X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes . No X .

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 88,104,659 Class A common shares, 10,000 Class A preferred shares, and 300,600 Class B preferred shares as of June 30, 2010.

FORM 10-Q

FULLCIRCLE REGISTRY, INC.

Table of Contents


			Page
PART I.	Financial Information

	Item 1.	Unaudited Financial Statements	3

		Consolidated Balance Sheets for June 30, 2010 (unaudited) and December 31, 2009	4

		Consolidated Statements of Operations for the Three and Six Months Ended June 30 2010 and, 2009 (unaudited)	5

		Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2010, and 2009 (unaudited)	6

		Notes to Consolidated Financial Statements (unaudited)	7

	Item 2.	Management’s Discussion and Analysis or Plan of Operation	10

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17

	Item 4.	Controls and Procedures	18

PART II.	Other Information

	Item 1.	Legal Proceedings	19

	Item 1A.	Risk Factors	19

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19

	Item 3.	Defaults Upon Senior Securities	19

	Item 4.	Other Information	19

	Item 5.	Exhibits	19

	Signatures		20

PART I – FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS.

In the opinion of management, the accompanying unaudited financial statements of FullCircle Registry, Inc. (the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial statements and with the instructions to Form 10-Q and Regulation S-X for the six month period ended June 30, 2010. The financial statements reflect, in the opinion of management, all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods.

The information furnished herein was taken from the books and records of the Company without audit. However, such information reflects all adjustments, which are, in the opinion of management, necessary to properly reflect the results of the interim period presented. The information presented is not necessarily indicative of the results from operations expected for the full fiscal year.

FullCircle Registry, Inc.

Consolidated Balance Sheets


ASSETS

				June 30,		December 31,
				2010		2009
				(Unaudited)
Current assets:
	Cash		$	23,587	$	2,091

	Notes Receivable			10,000		-

Total Current Assets				33,587		2091

Other assets:
	Customer database and software, net			258,122		301,142
		Total other assets		258,122		301,142
		Total assets	$	291,709	$	303,233

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
	Accounts payable		$	53,081	$	62,067
	Accrued interest			102,311		85,675
	Accrued expenses			1,881		2,292
	Notes payable			65,000		65,000
	Notes payable-related party			102,964		403,564
		Total current liabilities		325,237		618,598

Total liabilities				325,237		618,598

Stockholders deficit:

	Preferred stock, authorized 5,000,000 shares
	of $.001 par value
	Issued and outstanding for Preferred A 10,000			10		10
	and 10,000 respectively.
	Issued and outstanding for Preferred B is
	300,600 and -0- respectively			300		-

	Common stock, authorized 200,000,000 shares
	of $.001 par value, issued and outstanding
	88,104,659 and 84,995,346 shares, respectively			88,105		84,996

	Additional paid-in capital			7,586,038		7,165,569

	Accumulated deficit			(7,707,981)		(7,565,940)

		Total Stockholders' deficit		(33,528)		(315,365)

Total liabilities and stockholders' deficit			$	291,709	$	303,233

he accompanying notes are an integral part of these consolidated financial statements.

FullCircle Registry, Inc.

Consolidated Statements of Operations

(unaudited)


				For the Three Months				For the Six Months
				Ended June 30,				Ended June 30
				2010		2009		2010		2009

Revenues			$	382	$	2,901	$	504	$	8,390

Cost of sales				45		0		95		146

Gross profit				337		2,901		409		8,244

Operating expenses

	Selling, general & administrative			59,438		67,126		126,511		118,810

		Total operating expenses		59,438		67,126		126,511		118,810

Operating loss				(59,101)		(64,225)		(126,102)		(110,566)

Other income (expense)

	Interest expense			(8,318)		(9,839)		(16,657)		(20,594)

	Miscellaneous Income			-		-		718		-

	Total other income (expense)			(8,318)		(9,839)		(15,939)		(20,594)

Net loss before income taxes				(67,419)		(74,064)		(142,041)		(131,160)

Income taxes				-		-		-		-

Net loss			$	(67,419)	$	(74,064)	$	(142,041)	$	(131,160)

Net basic and fully diluted loss per share			$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)

Weighted average shares outstanding				87,354,659		78,272,286		86,342,770		78,272,286

The accompanying notes are an integral part of these consolidated financial statements.

FullCircle Registry, Inc.

Consolidated Statements of Cash Flows

(Unaudited)


				For the Six Months
				Ended June 30,
				2010		2009
Cash flows from operating activities

	Net loss		$	(142,041)	$	(131,160)

	Adjustments to reconcile net loss to net cash used in operating activities
		Depreciation & amortization		43,020		12,292
		Stock issued for services		3,279		-
	Change in assets and liabilities
		Increase (decrease) in accounts payable		(8,987)		34,230
		Increase (decrease) in accrued interest		16,636		18,994
		Increase (decrease) in accrued expenses		(411)		(1,809)
	Net cash used by operating activities			(88,504)		(67,453)

Cash flows from investing activities
	Net cash provided by investing activities			-		-

Cash flows from financing activities
	Loan to unrelated party			(10,000)		-
	Proceeds from notes payable - related party			-		20,000
	Proceeds from sale of common shares stock			120,000		40,000
	Net cash provided by financing activities			110,000		60,000

	Net increase (decrease) in cash			21,496		(7,453)

Cash and cash equivalents at beginning of period				2,091		22,331

Cash and cash equivalents at end of period			$	23,587	$	14,878

Supplemental cash flow information

Cash paid for:

	Interest		$	-	$	1,600
	Taxes		$	-	$	-

Non-cash transactions
	Stock issued for accounts payable and accrued interest		$	-	$	-
	Stock issued for notes payable		$	300,600	$	-
	Stock issued for services		$	3,279	$	-

The accompanying notes are an integral part of these consolidated financial statements.

NOTE 1. BASIS OF FINANCIAL STATEMENT PRESENTATION.

FullCircle Registry, Inc. has elected to omit substantially all footnotes to the financial statements for the three and six months ended June 30, 2010 since there have been no material changes (other than indicated in other footnotes) to the information previously reported by the Company in their Annual Report filed on the Form 10-K for the twelve months ended December 31, 2009.

The accompanying un-audited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its December 31, 2009, Annual Report on Form 10-K. Operating results for the three months ended June 30, 2010, are not necessarily indicative of the results that may be expected for the year ending December 31, 2010.

NOTE 2. GOING CONCERN.

The accompanying Consolidated Financial Statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has suffered recurring losses, negative working capital and is dependent upon raising capital to continue operations. The Company has incurred losses resulting in an accumulated deficit of $7,707,981, and $7,565,940 as of June 30, 2010 and December 31, 2009 respectively.

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.

Management's plans with regards to these issues are as follows:

Expanding revenues by purchasing, or otherwise acquiring, independent insurance agencies.

Expanding revenues by finding new customers who can benefit by utilizing the Company’s information retrieval service.

Using the 68,000 name prescription customer database to provide the foundation of the FullCircle Prescription Service business.

Attracting contractors and agents to independently market our prescription services.

Locating and working with new company partners who will provide additional similar products. Developing additional synergies to work with these companies allowing access to our database for marketing their products. In return these companies would market our products within their organizations.

Raising new investment capital, either in the form of equity or loans, sufficient to meet the Company's operating expenses until the revenues are sufficient to meet operating expenses on an ongoing basis.

Locating and merging with other profitable private companies where the owners are seeking liquidity and exit plans.

Management is continuing the process of renegotiating outstanding long and short-term obsolete debt. Presently, the Company cannot ascertain the eventual success of management's plans with any degree of certainty. No assurances can be given that the Company will be successful in raising immediate capital or that the Company will achieve profitability or positive cash flows.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3. STOCKHOLDER’S EQUITY

During the six month period ending June 30, 2010 the Company issued an aggregate amount of 3,000,000 restricted shares of the Company’s common stock for operating capital at .04 per share.

NOTE 4. SIGNIFICANT ACCOUNTING POLICIES

Change of Estimates

Effective July 1, 2009, in accordance with the provisions of GAAP the Company has revised its estimate of the useful life of the database asset from 15 years to 5 years from the date the assets was originally placed into service. According to GAAP this revised life is to be amortized prospectively over its remaining useful life and, therefore, has no impact on prior periods. The result substantially increases our G&A expenditures by $15,364 per quarter to $21,510 and increases our annual amortization by $61,456 to $86,040 per year.

Fair value of financial instruments.

On January 1, 2008, the Company adopted FASB ASC 820-10-50, “Fair Value Measurements. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement.

The carrying amounts reported in the balance sheets for the cash and cash equivalents, receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The carrying value of convertible notes payable approximates fair value because negotiated terms and conditions are consistent with current market rates as of June 30, 2010, December 31, 2009.

Capital Structure

In accordance with ASC 505, “Equity,” the Company’s capital structure is as follows:

Preferred stock, authorized 5,000,000 shares of $.001 par value, issued and outstanding preferred A shares 10,000 on June 30, 2010 and December 31, 2009 and Preferred B Shares 300,600 and zero on June 30, 2010 and December 31, 2009 respectively. Preferred A shares have no voting rights and Preferred B shares have voting rights of 10 votes per share. There is no publicly traded market for our preferred shares.

Common stock, authorized 200,000,000 shares of $.001 par value, issued and outstanding 88,104,659 on June 30, 2010 and 84,995,346 on December 31, 2009. The common stock has one vote per share. The common stock is traded on the OTCBB under the symbol FLCR.

The Company has not paid, nor declared, any dividends since its inception and does not intend to declare any such dividends in the foreseeable future. The Company's ability to pay dividends is subject to limitations imposed by Nevada law. Under Nevada law, dividends may be paid to the extent that the corporation's assets exceed its liabilities and it is able to pay its debts as they become due in the usual course of business.

Use of Estimates in the Preparation of Consolidated Financial Statements

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 5. SUBSEQUENT EVENTS

The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued and has determined that there are no such events that would have a material impact on the financial statements.

NOTE 6. MATERIAL TRANSACTIONS

On June 30, 2010 the company issued 300,600 shares of Preferred B stock for the principle of outstanding debt. Accrued interest amounts on the individual notes will continue to accrue interest at the agreed upon rates. The Preferred B stock was issued at $1.00 per share for a total of $300,600 of debt.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

General

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. Such factors are discussed under the “Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operations,” and also include general economic factors and conditions that may directly or indirectly impact the Company’s financial condition or results of operations.

Where this Form 10-Q 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 Registry, Inc., 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-Q 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-Q, 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. We have based these forward-looking statements on our current expectations and projections about future events, including, among other things:

Attracting immediate financing;

Delivering a quality product that meets customer expectations;

Obtaining and expanding market acceptance of the products we offer; and

Competition in our market.

Our Business

Our initial business began in 2000, with the formation of FullCircle Registry, Inc. We were initially a technology-based business that provided emergency document and information retrieval services. Our service included, providing customers with secure storage and immediate access to their critical medical records, legal documents (living wills, powers of attorney, “do not resuscitate” orders, etc.), and emergency contact information.

In December 2006, our Directors unanimously consented that the Company should become an insurance agency. An application for a business entity license was submitted to the Department of Insurance in the Commonwealth of Kentucky. On February 27, 2007, a business entity license for Life and Health was issued to the Company. After March 1, 2007, appointment applications were submitted to various carriers and brokerage agencies.

Our Corporate Information

Our principal executive offices are located at 161 Alpine Drive, Shelbyville, Kentucky, 40065 and our telephone number is (502) 410-4500. Our current website addresses are www.fullcircleregistry.com, www.fullcirclerx.com, and www.medshelp4U.com. Our website and the information contained therein or connected thereto shall not be deemed to be incorporated into this report. Our website will be immediately revised and updated upon receipt of funds to reflect our new business model (see discussion under the heading “S-1 Application,” below).

Because of the unavailability of funds the Company has refrained from expanding the business model. Funds are limited and we have had to be extremely conservative about expending Company funds on marketing, salaries and other expenses until funds are available.

The developments of all marketing expenditures, brochures, mailings, etc. have been discontinued because of the lack of capital. There may be some residual revenues from previous activities but at this time the Company cannot move forward with the business plan until we receive additional funding. We have protected and preserved cash by eliminating all-unnecessary expenditures.

Form S-1 Registration Statement

On June 23, 2010 the management of FullCircle filed the following Form 8-K:

Item 8.01. Other Events.

The management of FullCircle Registry, Inc. is very pleased to announce that we are now authorized to begin issuing a new Class B Preferred Stock, which have been registered with the Securities and Exchange Commission. The Registration of the Class B Preferred stock was made effective at 3:30 PM on June 22, 2010. We are in the process of printing our Prospectus. Once printing is complete, we will begin mailing them to potential investors.

Now that the Registration Statement has become effective, we will once again commence our business activities. We are currently in the process of refining our business plans and beginning the agency merger program. More information will be forthcoming.

The Company issued an additional three Form 8-K filings as follows:

As required by SEC rule, the Company filed Form 8-K on June 25, 2010 disclosing the conversion of debt of $150,600 into the new Preferred B Shares by management and large stockholders:

Item 8.01. Other Events.

The management of FullCircle Registry, Inc. is pleased to announce that three debt holders, Isaac Boutwell, Chairman, Alec Stone, Past Chairman, and Norman Frohreich, Director and CEO, have agreed to convert company debt to newly-issued shares of Preferred Class B Stock in FullCircle Registry, Inc.

The conversion of their debt will be as follows:


		Number of Shares of Class B
	Present Obligation	Preferred Stock Received
Isaac Boutwell, Chairman	$50,600.00	50,600
Alec Stone, Shareholder	$50,000.00	50,000
Norman Frohreich, CEO	$50,000.00	50,000
Total	$150,600.00	150,600

The satisfaction of $150,600.00 in outstanding debt will have a direct impact on FullCircle Registry’s balance sheet as FullCircle Registry enters into its expansion phase.

As required by SEC rule, the Company filed Form 8-K on June 30, 2010 disclosing Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Item 5.03 Amendments to Articles of Incorporation or Bylaws

In accordance with the Bylaws of FullCircle Registry, Inc. (the “Company”), the Board of Directors is authorized to provide for the issuance of the shares of preferred stock in one or more series and, by filing a certificate pursuant to the applicable law of the State of Nevada, to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, preferences and the relative, participating, optional or other special rights, if any, and the qualifications, limitations or restrictions thereof, of the shares of each such series.

In accordance with the powers granted to it under the Company’s Bylaws, the Board of Directors has designated a new class of preferred stock, the Class B Preferred Stock in connection with the Form S-1 Registration Statement of the Company, which was made effective June 22, 2010.

A copy of the Certificate of Designation of Class B Preferred Stock, which has been filed with the Secretary of State of the State of Nevada as of June 25, 2010, is attached hereto.

As required by SEC rule, the Company filed Form 8-K on July 2, 2010 disclosing the June 30, 2010 conversion of debt of $150,000 into the new Preferred B Shares by other large shareholders. With this conversion the Company has eliminated a total of $300,600 in debt since the Preferred B share issue was approved.

Item 8.01. Other Events.

The management of FullCircle Registry, Inc. is pleased to announce that two debt holders, Carl Austin and Robert Swan, have agreed to convert certain company debt to newly-issued shares of Preferred Class B Stock in FullCircle Registry, Inc.

The conversion of their debt will be as follows:


		Number of Shares of Class B
	Present Obligation	Preferred Stock Received
Carl Austin, Shareholder	$100,000.00	100,000
Robert Swan, Shareholder	$50,000.00	50,000
Total	$150,000.00	150,000

The satisfaction of $150,000.00 in outstanding debt will have a direct impact on FullCircle Registry’s balance sheet as FullCircle Registry enters into its expansion phase.

With the approval of our Form S-1 registration statement we can now focus on bringing in the capital to roll out our business plan. A shareholder letter was released on July 28, 2010. We are now in the process of printing and releasing our Prospectus mailings.

Business Plan

Going forward, our operations will be focused on three distinct phases:

Phase One

We will use the funding obtained through selling our preferred shares to launch our business plans as identified in the Prospectus. We have several merger and acquisition activities in discussion and will issue letters of intent when our funding occurs. Most of the Phase One activities are discussed in detail in the Prospectus.

Phase One of our business plan is to simply increase our activities in the two companies that we have formed: FullCircle Prescription Services, Inc. and FullCircle Insurance Agency, Inc. It is our intent to bring into our Company executive talent to manage each of these companies as separate entities. There will be synergies developed within each company that can take advantage of our other partner company. Essentially, the agencies will be able to sell the prescription services products to those books of business. Now that our S-1 application is approved, we are engaged in locating a president for each company who will report to the CEO and our Board.

We have a number of insurance agencies identified, and we are now proceeding in the negotiation process to attempt to bring them inside FullCircle. It is our plan to bring in ten agencies the first year after funding is received. Our plan becomes stronger today than before because of the confusion that has occurred in the new health care laws. We believe that our timing is right to provide these exit plans.

To date, many of our negotiations were predicated on the approval of the S-1 and the funding that the Preferred B Shares would provide. Before we can complete negotiations and announce any targeted mergers, we must issue the Prospectus and fill the offering of $1,000,000 to be in a position to launch our business plans. Many of these negotiations are contingent on available capital. As indicated above, we have filled $300,600 of our offering already by retiring the notes of several insiders.

In addition, during the Phase One rollout we plan to re-energize our medical records business that caused the original founding of our Company. At that time, the plan was ahead of its time. It is our belief that the medical records industry should be serving hospitals, doctors and clinics, not individuals. We expect to provide significant capital into the medical records business, understanding the mandate placed on this by our President for all records to be electronic by 2014. It is estimated that less than 20% of all medical records are electronic at this time. It is important for FullCircle to take advantage of any opportunities that exist.

Phase Two

Exit plan issues for baby boomers are a MAJOR problem today. With existing credit restrictions many entrepreneurs cannot find, and will not be able to find, buyers for their businesses. It is our opinion that this will become one of the major issues for business owners over the next decade. Phase Two is the merger program with any company that would have an ability to improve the balance sheet of FullCircle. This phase will be to bring in larger private companies providing exit plans for those owners. This has proven to be a very successful process with other companies and, given the difficulty of credit today, we believe that we will be in a position to have successful, profitable companies merge with FullCircle. The management of those companies will continue with their existing infrastructure and will remain autonomous. FullCircle’s role will be to provide financing with other necessary offerings.

Once Phase One is started, we will be immediately sourcing additional companies for exit plans to merge into FullCircle. The intent here is to provide an exit plan (liquidity) to any profitable, viable business that can increase the balance sheet of FullCircle. It is expected that we will source and merge with at least four additional unrelated companies during our first year.

Management will provide more discussions about this phase in future shareholder letters.

Phase Three

Obviously, our long term mission is to move the stock price into a level that would qualify us for a listing on the Nasdaq. This can only be accomplished after our market price and market capitalization meet the required levels to obtain that listing.

Shareholder Meeting

Management is tentatively planning on holding a shareholder meeting in the month of November, 2010. Once this meeting date and location has been identified, we will be issuing proper notification to the shareholders.

Our Business and Strategy

We have formed two wholly-owned subsidiaries to begin the new business plan as specifically summarized below.

FullCircle Insurance Agency, Inc.

It is our plan to acquire, or otherwise merge with, small insurance agencies and incorporate them into the FullCircle family of businesses. We plan to offer a five to ten-year exit plan to agency owners, which may include issuance of shares of FullCircle Registry, Inc., to give them the ability to exit their business with the potential to meet or exceed the value of their business and participate financially in the growth of the Company. This plan should facilitate the transfer of loyalties from agency owner’s customers as well as provide the proper environment to attract new talent.

We are developing our plans and infrastructure for our new agencies. Initial plans for our FullCircle wheel of products and services that are in development are: Prescription assistance services, Life insurance, Health insurance (Group and Individual), Auto and Home insurance, Medical Record Storage and our ENC products. As our name, “FullCircle,” implies, we intend to become a full service, one-stop shop for all insurance needs of our clients.

As agencies are acquired, we will begin adding our products and services to their portfolios. By adding our additional products and services, we expect to increase the gross revenue with each new agency acquisition when assimilation is completed and new products are installed. With the additional sales force, we expect to experience higher commission rates because we will receive higher performance payout levels with each of our chosen insurance companies.

The number, diversity and sophistication of the insurance products available in the insurance marketplace have grown significantly in recent years. Our clients increasingly require sophisticated insurance planning services such as ours to support their complex needs. We believe we are well positioned for significant growth and have a multi-faceted growth strategy that builds on our new and existing client relationships, insurance products, brands and our role in the insurance process.

We have formed the FullCircle Insurance Agency, Inc. to be our vehicle for this business plan. At this time we have not begun operations since we are awaiting funding.

There can be no assurance that the objectives will be realized if any of the assumptions underlying its plans prove to be incorrect. The Directors of FullCircle have studied, and are familiar with, the current insurance market; however, investors should be aware that no independent market studies have been conducted by us regarding the proposed business plans, nor are any such studies currently planned.

FullCircle Prescription Services, Inc.

FullCircle Prescription Services, Inc. has been established for the purpose of handling our new prescription services program. We have, at very little expense, been contacting potential contractors and agents to help move the project forward but are limited as to how aggressive we can be given limited capital.

Our launch with our FullCircleRx plan has been delayed waiting on funds, but FullCircle Prescription Services, Inc. has begun limited operations.

We have entered into an arrangement with a worldwide pharmacy located in Canada to assist our customers in shopping the world.

In summary the marketing of our FullCircleRx prescription assistance program is:

AMPO client name database mailings.

Churches as contractors for fund raising projects.

Large marketing media like RV Trader, Auto Trader, etc.

Database sharing with organizations that do similar medical marketing but not in our niche or do not have prescription assistance programs.

Leasing or selling rights to our database as it continues to grow and evolve.

Insurance agents and agencies.

Small businesses without health benefits.

Web marketing. Fertility drugs, birth control drugs, Medicare Donut Hole problems, etc.

Word of mouth (incentives for existing customers to send us new customers).

Contractor and agent campaign through mailings and advertising.

Prescription gift card for friends and families to assist the elderly in the cost of their medications.

City, County, and State government employees.

Multipurpose FullCircle FullServices Health Card

We have entered into an agreement with Acap Security, Inc. (http://acapsecurity.com) for an exclusive co-branded FullCircle FullServices Health Card between PinPay, Global Health Management, and FullCircle. Global Health Management, LLC is the servicing company that provides our clients their medications. PinPay is owned by Acap Security.

We have also received an MISO agreement (Master Independent Sales Organization) from PinPay, Inc. PinPay is committed to provide significant focus support for FullCircle to bring the Health, Insurance and Pharmaceutical industries throughout the world to the PinPay program. www.pinpay.net is currently engaged in beta testing with banks and clients internationally. Once these beta tests are concluded, we will be released to begin approaching the health and insurance related companies worldwide. FullCircle currently has health industry professionals standing by to begin signing the health industry as merchants and agents as well.

FullCircle FullServices Health Card

The expansion of Shop the World with PinPay will include a real card that can be loaded with a cafeteria of different plans and programs. Some could be free and we would experience revenue as they are used and some would be annual fee based. We are in the stages of finalizing this plan and will be able to begin when funding is available. The plan tentatively includes the addition of the following services:

FullCircleRx Shop the World

FullCircleRx Pharmacy Discount Plan (like other pharmacy cards that are sold for $25 to $30 per year memberships) this is for immediate need drugs like antibiotics, etc.)

FullCircle Insurance Services Card (call for any quote on any kind of insurance and we will shop for our members)

FullCircle Mini-Med card (for those without insurance, it provides near insurance level costs for medical, dental, vision, hospitalization)

Current Status of Business Activity

The Company was forced to discontinue the marketing of our plans because there were insufficient funds to fuel this development. We continued to work on back office infrastructure and materials to be ready to launch our plans. Now that we have receive approval to proceed with our offering we will begin the preparation to roll out our business plans.

We are continuing to work with our business partners in the development of our materials. Once funding is available we will be ready to announce these developments and then engage the personnel that are ready to work with these partners.

We are continuing to work with our auditors, attorneys, and accountant to obtain funding. Our team provides immediate responses for any requests from our professional support team and the SEC. The process of the application is extremely cumbersome, complicated, detailed, and expensive.

FullCircle Prescription Services, Inc. was informed that PinPay is ready and able to support the FullCircle Prescription Gift Card. At this time we do not have sufficient funds to launch the Prescription Gift Card web pages. We are still targeting on hitting the Christmas Gift Card season by November provided funds are available.

Risks Affecting Us

Our business is subject to numerous risks. We have a limited history of operations as an insurance agency, have a history of operating losses, and may not achieve or maintain profitability. We are dependent upon the sale of our products and services to generate a significant percentage of our revenue. The insurance industry is a highly competitive market, and we will be competing against companies that have much longer operating histories, more established brands and greater resources than we do. We rely on third party insurance companies in our marketing and selling of services to a significant portion of our client base.

Our Strategy

Independent Insurance Agency Acquisitions

Norman L. Frohreich, President and CEO, was retained to formulate and direct the expansion of the new insurance business model and the growth of FullCircle Registry, Inc. It is Mr. Frohreich’s vision to emulate the H&R Block and Edward Jones business models and launch an insurance agency merger plan in rural America. Thus, we plan to expand the business model to include markets outside the greater Louisville area.

It is our plan to acquire, or otherwise merge with, small insurance agencies with a five to ten-year exit plan as well as offer shares of FullCircle Registry, Inc. to these agency owners to give them the ability to exit their business with the potential to meet or exceed the value of their business and participate financially in the growth of the Company.

The target model for an insurance agency acquisition is:

Agency in a town with a population less than 40,000.

Agency that has gross revenues of $50,000 to $150,000.

Agency owner that is over the age of 55.

Our research suggests that these smaller agencies are not targets for acquisition by larger companies, and, therefore, their individual owners have limited options for an exit strategy.

We are planning on moving cautiously initially. We have only 10 agencies targeted for merger during the first year after funding is available. We will need ample time to develop the infrastructure and to train the individuals to manage these agencies once acquired. We expect that some of the owners will continue to work and will phase out over time; others will want to exit immediately. We will have to be flexible to move as needed as each situation emerges.

We have several strong licensed insurance industry veterans to provide the training and leadership for this task. We currently have the space in our corporate office to establish a training center for our initial needs. Initially we expect to operate in just a five state area: Kentucky, Indiana, Illinois, Ohio and Tennessee. Once the model is developed and operating, we expect to move into other regional offices so that we can service these agencies from a close proximity. We believe we can operate up to 25 agencies per regional office.

Once the agencies are acquired, we will begin the process of adding our products to their portfolios and services. We expect to receive additional income from our other core products.

We expect to receive assistance from our major insurance company executive — many have already indicated they are aware of agent-owners who are looking for exit strategies. Research shows that the average age of the owners of the independent insurance agencies in our country is 54 years old. Our information suggests that over 20% of the agencies nationally have no exit plan. Like other businesses, the independent insurance agents of rural America are having a problem “selling” their books of business. Many major insurance companies are beginning to acquire larger agencies but the smaller rural agencies are being passed over. Our goal is to merge with hundreds of these agencies over the next several years. We have been in contact with a number of agencies that are looking for an exit plan.

We believe we are well positioned for significant growth and have a multi-faceted growth strategy that builds on our new client relationships, insurance products, brands and integral role in the insurance and estate planning process. The number, diversity and sophistication of the insurance products available in the insurance marketplace have grown significantly in recent years. Our clients increasingly require sophisticated insurance and estate planning services such as ours to support their complex needs.

Employees, Contractors, Agents, and Agreements

The Company currently has three employees and five independent contractors. Subsequent to the June 30, 2010 ending quarter, the Board of Directors accepted the resignation of Trent Oakley who held the position of CEO in 2006 and 2007 and in 2008, 2009 and 2010 the position of Executive Vice President.

Now that we have approval of our Form S-1 registration statement we will begin to recruit more contract employees and agents.

Results of Operations for the Three Month and Six Months Periods Ended June 30, 2010 and 2009.

Revenues during the three months ended June 30, 2010 were $382 with a cost of sales of $45 yielding a gross profit of $337 compared to $2,901 in revenues for the same period in 2009 with cost of sales of $0 yielding a gross profit of $2,901 for the same period in 2009. Revenues during the six months ended June 30, 2010 were $504 with a cost of sales of $95 yielding a gross profit of $409 compared to $8,390 in revenues for the same period in 2009 with cost of sales of $146 yielding a gross profit of $8,244 for the same period in 2009. In 2010 the lack of revenues reflected the Company’s lack of operating capital to energize our business model. Both segments of the Company’s business plan are currently not operational. Once funding is available both segments of our business should provide higher revenues.

Operating expenses and selling, general and administrative costs during the current three-month period were $59,438 resulting in an operating loss of $59,101 compared to operating expenses of $67,126 for the three months ended June 30, 2009 resulting in an operating loss of $64,225 in the same period in 2009. Operating expenses and selling, general and administrative costs during the current six-month period were $126,511 resulting in an operating loss of $126,102 compared to operating expenses of $118,810 for the six months ended June 30, 2009 resulting in an operating loss of $110,566 in the same period in 2009. Operating expenses for the six month period have increased because of our new depreciation plan for our database and additional operating expenses have occurred for SEC compliance.

Interest expense for the three months ended June 30, 2010 was $8,318 resulting in a net loss from continuing operations of $67,419. For the three months ended June 30, 2009 the Company had interest expense of $9,839 and recognized a net loss of $74,064. Interest expense for the six months ended June 30, 2010 was $16,657 resulting in a net loss from continuing operations of $142,041. For the six months ended June 30, 2009 the Company had interest expense of $20,594 and recognized a net loss of $131,160. Interest expense for 2010 is lower because the Company exchanged three notes for shares in December 2009.

Liquidity and Capital Resources

At June 30, 2010 the Company had total assets of $291,709 compared to total assets of $303,233 at December 31, 2009. The Company had total assets consisting of $23,587 in cash, $0 in property and equipment, and $258,122 investment in the 68,000 name database. Total assets at December 31, 2009 consisted of $2,091 in cash, $0 in property and equipment, and $301,142 investment in our customer database.

At June 30, 2010, the Company had $325,237 in total liabilities. Total liabilities include $53,081 in accounts payable, $102,311 in accrued interest, $1,881 in accrued expenses, $65,000 in notes payable and 102,964 in notes payable to related parties. Total liabilities at December 31, 2009 were $618,598, which was comprised of $62,067 in accounts payable, $85,675 in accrued interest, $2,292 in accrued expenses, $65,000 in notes payable and $403,564 in notes payable to related parties.

Net cash used by operating activities for the six months ended June 30, 2010 was $88,504 compared to $67,453 for the same period in 2009. During the six months ended June 2009, $0 was used for investments, and $110,000 was provided by financing activities. For the same period in 2009 $0 was used for investments and $60,000 was provided by financing activities.

As of June 30, 2010 we had no capital commitments. We are currently focused on increasing revenues from our 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. No assurance can be given that we will be able to obtain the total capital necessary to fund our new business plans. In such an event, this may have a materially adverse effect on our business, operating results and financial condition. 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.

FullCircle currently owes $102,964 in notes payable to related parties, and other notes payable of $65,000. 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 June 30, 2010. These conditions raise substantial doubt about our ability to continue as a going concern.

Once funding is available from the preferred share offering and we can commence our plan to acquire and/or merge with insurance agencies, we anticipate that our revenues from the sale of insurance products will recommence.

Factors That May Impact Future Results

At the time of this report, 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 the next nine 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 three months. Consequently, the Company is currently seeking convertible debt and/or additional equity financing in the aggregate amount of at least $1,000,000, to fund the Company’s expansion needs. Management is currently negotiating with existing shareholders and other accredited investors in order to obtain working capital necessary to meet current and future obligations and commitments.

Management is confident that these efforts will produce financing to further the growth of the Company. Nevertheless, there can be no assurance that the Company will be able to raise additional capital on satisfactory terms or at all. In the event that the Company is unable to obtain capital on acceptable terms or in sufficient amounts, the impact thereof would have a material adverse impact on the Company’s business, operating results, and financial condition as well as its ability to service debt requirements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon its financial statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements may have required the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures. On an ongoing basis, the Company evaluates estimates, including those related to bad debts, inventories, fixed assets, income taxes, contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances; the results of which form the basis of the Company’s judgments on the carrying value of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Other Business Opportunities

Insurance Products

We will continue to recruit independent licensed agents when funds are available through a stock offering or otherwise. We feel that we have a very unique recruiting proposition when it comes to obtaining quality agents for the Company. We will be able to offer attractive commission rates while giving the agent the opportunity for ownership in the Company through a Company stock incentive plan. This ownership by the agent will also help serve as retention tool in an industry where turnover is the norm.

Inactive products and services

Our other products that have been previously discussed are currently inactive. We have elected to narrow our focus to utilize our limited people and financial resources to bring our best services to the surface for optimal revenues. Consequently, Electronic Medical Records Storage, AskPhysicians, Spoken Data, Bright Star, MyClubCard, Living Wills, and Collar ID pet registry products and services are being reserved for later use once our strongest products, services and plans materialize.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out a formal evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report.

Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are not effective since the following material weaknesses exist:

The Company’s management is relying on external consultants for purposes of preparing its financial reporting package; the officers may not be able to identify errors and irregularities in the financial reporting package before its release as a continuous disclosure document.

ii.

The foregoing material weaknesses identified in our disclosure controls and procedures were identified by our external consultants responsible for the preparation of our financial reporting package. The aforementioned material weaknesses did not impact our financial reporting or result in a material misstatement of our financial statements. As of August 9, 2010 we have not taken action to correct the material weaknesses identified in our disclosure controls and procedures.

Once the Company has sufficient personnel available, our Board of Directors will nominate an audit committee and audit committee financial expert and we will appoint additional personnel to assist with the preparation of our financial statements; which will allow for proper segregation of duties as well as additional manpower for proper documentation.

Our internal controls over financial reporting are designed by, or under the supervision of, our Chief Executive Officer and Principal Accounting Officer, or persons performing similar functions, and effected by our Board of Directors, management and other personnel, 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. Our internal control over financial reporting includes those policies and procedures that:

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets.

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Conclusions

Based upon the Evaluation, our Chairman and Principal officer has concluded that as a result of material weaknesses described above our disclosure controls and procedures are not effective as of June 30, 2010, based on Internal Control over Financial Reporting - Guidance for Smaller Public Companies issued by COSO.

We are a small business, with no viable business or revenues

The Company does not have the resources to employ a dedicated staff with extensive expertise in all facets of SEC disclosure and GAAP compliance. As is the case with many small businesses, the Company will continue to work with its external attorneys and accountants as it relates to new accounting principles and changes to SEC disclosure requirements. The Company has found that this approach worked well in the past and believes it to be the most cost effective solution available for the foreseeable future.

Changes in Internal Controls.

There were no changes in the Company’s internal control over financial reporting identified in connection with the Company’s evaluation of controls that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company’s attorney was notified on May 15, 2008 that FullCircle Registry had been named in a lawsuit against AMPOII, LLC. On August 12, 2009, the Court dismissed this case.

ITEM 1A. RISK FACTORS.

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

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.

During the six month period ending June 30, 2010, in an effort to secure additional operating capital, and to pay down accounts payable, the Company issued 3,000,000 restricted shares for $120,000 at .04 per share. Also, the Company issued 109,213 restricted shares for services at .03 per share during the six month period.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. OTHER INFORMATION.

There are no further disclosures. We are building the business model and as soon as relevant information on our progress becomes available we will issue the necessary Forms 8-K and issue press releases.

ITEM 5. EXHIBITS


Exhibit
Number	Title	Location

31.1	Certification of Chief Executive Officer/Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002	Attached

32.1	Certification of Chief Executive Officer/Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002*	Attached

*The Exhibit attached to this Form 10-Q shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

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: August 13, 2010

/s/ Norman L. Frohreich

Norman L. Frohreich

President

Chief Executive Officer

Chief Financial Officer