Note 5 - Notes Payable

12 Months Ended

Dec. 31, 2017

NOTE 5. NOTES PAYABLE

The Company's notes payable obligations to unrelated parties are as follows as of December 31, 2017 and 2016:

		2017		2016
Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 8% interest annually and is due on demand.	$	20,000	$	20,000

Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 8% interest annually and is due on demand.		10,000		10,000

Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 6.25% interest annually and due on demand		60,000		25,000

Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 6.25% interest annually and is scheduled to mature in August 2018.		25,000		-

Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 6.25% interest annually and is scheduled to mature in December 2018.		25,000		25,000

Note payable to an individual in which the note accrues interest on the original principal balance at a rate of 10% interest annually and is due on demand.		25,000		-

Digital equipment note payable to a financial institution in which interest payable at 7% annually through December, 2016; secured by the digital equipment The note payable was modified during the year ended December 31, 2017, see Mortgage and Digital Note Refinancing note below.		-		242,450

Mortgage payable assumed in acquisition, less current portion; interest was payable at 4.75% monthly payments of $34,435 through December 31, 2016. The note payable was modified during the year ended December 31, 2017, see Mortgage and Digital Note Refinancing note below. After the modification, the mortgage payable’s interest payable changed to 2.656% annually with monthly payment of $15,223 through July 15, 2020. The mortgage payable is secured by the building and land as well as guarantees by related parties.		4,546,390		4,373,001

Note payable to a financial institution in acquisition of vehicle with monthly installment of $153. This mortgage payable was paid off subsequent to December 31, 2017.		6,979		-

Total Non-Related Party Notes Payable		4,718,369		4,695,451

Current Portion of Non-Related Party Notes Payable		229,164		110,688

Long-term Portion of Non-Related Party Notes Payable	$	4,489,205	$	4,584,763

Future minimum principal payments on the non-related party notes payable are as follows:

Year Ending December 31,

2018		229,164
2019		63,990
2020		4,425,215
Total	$	4,718,369

The Company's notes payable obligations to related parties are as follows as of December 31, 2017 and 2016:

		2017		2016
Note payable to a related party in which the note accrues interest on the original principal balance at a rate of 15% interest annually and is due on demand.	$	151,891	$	151,891

Notes payable to a related party in which the note accrues interest on the original principal balance at a rate of 12% interest annually and is due on demand. The note payable principal and interest at the election of the lender can be converted to restricted shares of common voting stock at $.04 per share.		50,000		50,000

Various notes payable to a related party in which the note accrues interest on the original principal balance at a rate of 10% interest annually and is due on demand. The notes payable principal and interest at the election of the lenders can be converted to restricted shares of common voting stock at $.04 per share.		803,888		803,888

Various notes payable to a related party in which the note accrues interest on the original principal balance at a rate of 8% interest annually and is due on demand.		91,626		76,626

Various notes payable to a related party in which the note accrues interest on the original principal balance at a rate of 6.25% interest annually and was scheduled to mature in October 2017 and is currently due on demand.		91,000		25,000

Note payable to a related party in which the note accrues interest on the original principal balance at a rate of 6.25% interest annually and is due in August 2019.		8,000		-

Note payable to a related party in which the note bears no interest and is scheduled to mature on demand.		25,000		-

Note payable to a related party in which the note accrues interest on the original principal balance at a rate of 9% interest annually and is scheduled to mature in October 2019.		125,000		-

Various notes payable to a related party in which the note accrues interest on the original principal balance at a rate of 10% interest annually through December 31, 2016 at which time the interest rate is reduced to 6.25% interest annually. The notes are scheduled to mature at various date through July 2021.		211,534		118,927

Total Related Party Notes Payable		1,557,938		1,226,332

Current Portion of Related Party Notes Payable		1,376,612		1,159,390

Long-term Portion of Related Party Notes Payable	$	181,326	$	66,942

Future minimum principal payments on the related party notes payable are as follows:

Year Ending December 31,

2018		1,376,612
2019		150,248
2020		19,054
2021		12,024
Total	$	1,557,938

Mortgage Note Payable and Digital Equipment Refinancing

On July 31, 2015, the Company entered into a change in terms agreement with the Company’s lender whereby the lender agreed to modify the payment schedule from a monthly fixed principal and interest payment in the amount of $34,435 to interest-only payments of $17,310 beginning with payment due date of June 15, 2015 thru November 15, 2015. The normal payment of principal and interest of $34,435 was to resume on December 15, 2015.

In late 2015, both the property mortgage loan and the equipment loan were transferred to another lender, Kirkland Financial. Due to the continued declined in net revenues, FullCircle Entertainment was unable to resume principle and interest payments as had been agreed with the previous lender. Interest-only payments were made in December, 2015 as well as January and February, 2016. Beginning in March, 2016, the Company was unable to make the interest-only payments on the property mortgage loan, but continued to pay the full principle and interest on the equipment loan.

Delinquent property mortgage loan payments continued to accrue until September, 2016. The Company made renegotiation of the Kirkland Financial property mortgage loan. In December 2016, Kirkland Financial responded with a restructured loan agreement which reduced the combined property and equipment monthly payment from $46,094 to $15,223. The amended single loan obligation, which became effective on January 15, 2017 currently calls for monthly payments of $15,223 at an interest rate of 2.5% with a final balloon payment due of $4,410,562 on July 15, 2020.