Replies to post #4992 on Galaxy Next Generation Inc (GAXYQ)

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Implementing New Operational and Strategic Plans

At the close of 2016, the Company was prioritizing the implementation of several strategies:

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The planned launch of our new “Cinema Lounge” food service, the first phase of our Dine-In Cinema LITE strategy, which has since been implemented.
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New organizational structure to add senior staff positions as well as concession personnel. The theater has been running very lean during times of poor performance. The pace of increased ticket sales toward the end of 2016 has shown the need to add employees in order to assure quality of service.
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Repair of digital projector systems, which began in late 2016, has been completed. We once again have all 14 theaters back in operation after approximately three years of neglect due to limited financial resources.
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The additional theaters have permitted resumed presentation of films from India as well as Spanish language versions of popular Hollywood films. Offering multi-language films and hosting multi-cultural events to target the local demographic is a key part of our future strategy.

We plan to offer updates to shareholders on the success of our Cinema Lounge food service as well as other strategic improvements on www.fullcircleregistry.com and through Press releases.

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Past Sources of Funding

Prior to 2010, when the Company created FullCircle Entertainment, the Company’s funding came from sales of the Company’s stock, loans from shareholders, loans form Board members/major shareholders and other debt secured by the Company’s Board members/major shareholders as guarantors.

On January 3rd, 2015, we issued a put for $100,000 to Kodiak Capital under our Stock Purchase Agreement with that firm. During the subsequent five-day trading period our stock dropped from $.0465 to $.0035. Consequently, the put price of our shares was lowered to $.00391, which provided only $47,500 in funding. Based on this difficult situation with the market price of our stock, and the effect of possible short selling activity, the Company refrained from further funding requests from Kodiak Capital. Our arrangement with Kodiak Capital expired on June 30, 2015.



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In July, 2015, we entered into discussions with Local Initiatives Support Corporation (“LISC”) for the purpose of receiving funding assistance for the business model change of our theater in Indianapolis. The funding from LISC never materialized. LISC’s funding model focuses on helping build local communities by working with Community Development Corporations. Their various forms of funding include a limited number of grants, but are mostly debt instruments Combined with their general lending focus on working with community groups, not individual businesses, LISC proved not to be a good match for FullCircle Entertainment. Their review of our funding request determined that the Georgetown 14 Cinemas net revenues could not support an additional debt burden. However, there may be future opportunities to seek funding from LISC for specific purposes, such as a façade grant when FullCircle Entertainment is prepared to do exterior renovations to the Georgetown 14 Cinemas.

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Present Sources of Funding

In September 2016, the Company’s new management was assigned the task of refining the theater’s “dine-in cinema” business strategy. At that time, management determined that the Company needed to move quickly to turn around Georgetown 14 Cinemas and create a new direction that could excite and secure new sources of funding.

Previously, when FullCircle Entertainment experienced revenue shortfalls, the Company’s issued stock to pay certain vendors for services in lieu of cash payments. Management has determined that using stock in lieu of cash for vendor services is a practice which needlessly dilutes current shareholder interests.

Instead, management sought other sources of funding. Initially, the funding burden fell solely on the Company’s founders and Board members, who once again stepped forward to provide funding in the form of loans represented by promissory notes. The Board has also assisted in presenting FullCircle Entertainment’s “Round One” investment proposal to individual promissory note investors, principally from Kentucky where the Company is headquartered. These promissory note investors receive 6.25% interest, compounded annually with interest to be paid quarterly. Payment of the interest on these promissory notes is a line item in FullCircle Entertainment’s budget, which is prioritized to provide timely interest payments to our investors. From September 1, 2016 through December 31, 2016, FullCircle Entertainment received $91,942 in funding promissory notes from our founders and $50,000 from other individual investors located in Kentucky.

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Future Sources of Funding

Our need for future funding sources has been greatly reduced from our previous projections requiring $1.5 million to complete the original concepts for our “In-Theater Dining” conversion. Our new “Dine-In Cinema LITE” concept will require approximately one-third of this projected capital. The savings from our new “LITE” model come from: 1) reducing the size of the planned kitchen to 25% of the initial plan (estimated cost $250,000), to a smaller space more the size of a large food truck (approximately $30,000), 2) retaining a theater that had previously been planned to be used for the larger kitchen, and retaining the revenues from that theater, 3) leasing, not purchasing, recliner seating, and 4) reducing the anticipated number of recliner seats by approximately 90%, with a strategy to install rows of recliners in selected theaters instead of completely changing out all current stadium seating.

While the new “LITE” concept reduces the Company’s overall need for capital, our rapid rollout of this concept also increases our potential to use theater revenues to pay for improvements needed to complete the theater transition. The Company plans to use anticipated increased rising theater profits to both supplement planned improvements and to ensure that we meet our payment obligations to our note holders

FullCircle Entertainment is now preparing an updated investment proposal for additional individual promissory note investors.
In the future, the Company may also consider sales of Company stock if the market value of the Company’s shares supports this strategy.

At this time, we have no contracts, agreements, or understandings for additional funding, nor can any assurance be given that we will be able to obtain this capital on acceptable terms. In such an event, this may have a materially adverse effect on our business, operating results and financial condition.

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Proposed and Potential Sale of Property

In connection with the restructuring, a property appraisal of both the leased property and the theater property was obtained. The appraisal estimated the value of our 40,910 square-foot theater building at $2,850,000 and the 18,000 square-foot leased property at $1,450,000. The Company has completed a survey in preparation for the sale of the leased property and is discussing terms of sale with several potential buyers.

It is the Company’s firm intent to sell the 18,000 square-foot leased property in 2017, with a target sales price of $1,200,000, and is currently classified as an asset held for sale net of estimated selling costs.

In February, 2016 we received a Letter of Intent from a real estate developer for an option to purchase a portion of the south end of our parking lot for a proposed mixed-use building, housing retail shops and apartments. At this time, the developer is engaged in preliminary site planning and a pro forma. If this purchase for the development moves forward, it will provide some working capital, or shared leasing revenue, and may improve the value of our remaining property. The area being discussed is about one acre in size.