UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended September 30, 2014.

 

 

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from ______to _________.

 

Commission file number: 000-29363

(Exact name of registrant as specified in its charter)

 

Nevada		88-0343702
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

 

 

1771 E. Flamingo Road, #201-A Las Vegas, NV		89119
(Address of principal executive offices)		(Zip Code)

 

(702) 734-3457

(Issuer’s telephone number)

 

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 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 o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No o

 

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 o	Accelerated filer o
Non-accelerated filer o (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 o No x

 

The number of shares outstanding of the Registrant’s Common Stock on November 14, 2014 was 173,709,531.

 

PLAYERS NETWORK

FORM 10-Q

Quarterly Period Ended September 30, 2014

 

INDEX

 

		Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		3
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	4
	Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013	4
	Statements of Operations for the Three and Nine Months ended September 30, 2014 and 2013 (Unaudited)	5
	Statements of Cash Flows for the Nine Months ended September 30, 2014 and 2013 (Unaudited)	6
	Notes to the Condensed Consolidated financial statements (Unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40
SIGNATURES		41

 

 

SPECIAL NOTE REGARDING FORWARD—LOOKING STATEMENTS

 

On one or more occasions, we may make forward-looking statements in this Quarterly Report on Form 10-Q regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events. Words or phrases such as “anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “will continue” or similar expressions identify forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified in our Annual Report on Form 10-K. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made on related subjects in our subsequent annual and periodic reports filed with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K and Proxy Statements on Schedule 14A.

 

Unless the context requires otherwise, references to “we,” “us,” “our,” and the “Company” refer specifically to Players Network.

 

 

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

PLAYERS NETWORK

CONDENSED CONSOLIDATED BALANCE SHEETS

 

		September 30,				December 31,
		2014				2013
		(Unaudited)
Assets
Current assets:
Cash		$	39,794			$	4,696
Deferred television costs			–				116,454
Prepaid expenses			3,550				7,775
Total current assets			43,344				128,925
Investments, cost method			–				–
Fixed assets, net			77,423				62,759
Debt issuance costs, net			4,997				3,399
Total Assets		$	125,764			$	195,083
Liabilities and Stockholders' (Deficit)
Current liabilities:
Accounts payable		$	270,362			$	624,482
Accrued expenses			213,254				182,351
Deferred revenues			–				135,000
Deferred rent obligation			4,943				5,574
Convertible debentures, net of discounts of $472,555 and $53,579 at September 30, 2014 and December 31, 2013, respectively			97,058				82,421
Short term debt, currently in default			18,750				35,000
Derivative liabilities			1,189,488				648,298
Total current liabilities			1,793,855				1,713,126
Total Liabilities			1,793,855				1,713,126
Stockholders' (Deficit):
Series A convertible preferred stock, $0.001 par value, 2,000,000 shares authorized; 2,000,000 shares issued and outstanding			2,000				2,000
Series B convertible preferred stock, $0.001 par value, 10,873,347 shares authorized; 4,349,339 shares issued and outstanding			4,349				4,349
Common stock, $0.001 par value, 600,000,000 shares authorized; 166,906,471 and 138,011,812 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively			166,906				138,012
Additional paid-in capital			24,531,680				21,905,592
Subscriptions payable, consisting of 2,599,700 shares at September 30, 2014			52,592				–
Accumulated (deficit)			(26,242,551	)			(23,567,996	)
			(1,485,024	)			(1,518,043	)
Noncontrolling Interest			(183,067	)			–
Total Stockholders' (Deficit)			(1,668,091	)			(1,518,043	)
Total Liabilities and Stockholders' (Deficit)		$	125,764			$	195,083

 

See accompanying notes to financial statements.

 

 

PLAYERS NETWORK

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

		For the Three								For the Nine
		Months Ended								Months Ended
		September 30,								September 30,
		2014				2013				2014				2013
Revenue:		$	168			$	286			$	141,625			$	1,365
Expenses:
Direct operating costs			77,350				4,843				314,321				82,112
General and administrative			1,214,180				40,386				1,569,047				263,646
Officer salaries			97,261				45,850				524,917				164,965
Salaries and wages			–				20,142				–				38,567
Depreciation and amortization			7,469				5,737				19,984				17,210
Total operating expenses			1,396,260				116,958				2,428,269				566,500
Net operating loss			(1,396,092	)			(116,672	)			(2,286,644	)			(565,135	)
Other income (expense):
Other income			–				–				343,335				–
Loss on debt conversions			–				–				–				(1,625	)
Interest expense			(104,319	)			(80,060	)			(231,552	)			(312,720	)
Change in derivative liabilities			(245,450	)			(142,814	)			(682,761	)			(334,631	)
Total other income (expense)			(349,769	)			(222,874	)			(570,978	)			(648,976	)
Net loss		$	(1,745,861	)		$	(339,546	)		$	(2,857,622	)		$	(1,214,111	)
Less: Net loss attributable to the noncontrolling interest			183,067				–				183,067				–
Net loss attributable to Players Network		$	(1,562,794	)		$	(339,546	)		$	(2,674,555	)		$	(1,214,111	)
Weighted average number of common shares outstanding - basic and fully diluted			163,238,592				101,858,030				154,314,912				90,071,292
Net (loss) per share - basic and fully diluted		$	(0.01	)		$	(0.00	)		$	(0.02	)		$	(0.01	)

 

See accompanying notes to financial statements.

 

 

PLAYERS NETWORK

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

		For the Nine
		Months Ended
		September 30,
		2014				2013
Cash flows from operating activities
Net loss		$	(2,674,555	)		$	(1,214,111	)
Minority interest in net loss			(183,067	)			–
Adjustments to reconcile net (loss) to net cash used in operating activities:
Depreciation and amortization expense			19,984				17,210
Gain on debt settlements			(343,335	)			–
Change in fair market value of derivative liabilities			682,761				334,631
Amortization of convertible note payable discounts			164,651				279,772
Amortization of debt issuance costs			12,152				22,018
Stock issued for services			1,257,693				106,755
Stock issued for compensation, related party			158,115				144,787
Options and warrants granted for services			40,150				18,413
Options and warrants granted for services, related party			217,971				23,937
Decrease (increase) in assets:
Deferred television costs			116,454				–
Prepaid expenses			4,225				(1,685	)
Increase (decrease) in liabilities:
Accounts payable			(10,785	)			37,143
Accrued expenses			41,463				35,995
Deferred revenues			(135,000	)			–
Deferred rent obligation			(631	)			–
Net cash used in operating activities			(631,754	)			(195,135	)
Cash flows from investing activities
Purchase of fixed assets			(34,648	)			–
Net cash used in investing activities			(34,648	)			–
Cash flows from financing activities
Proceeds from convertible debentures			554,000				223,000
Repayments on convertible debentures			(63,500	)			–
Repayment of long term debt			(16,250	)			(40,000	)
Payments on debt issuance costs			(13,750	)			(10,000	)
Proceeds from sale of common stock of subsidiary			60,000				–
Proceeds from sale of common stock			181,000				21,000
Net cash provided by financing activities			701,500				194,000
Net increase (decrease) in cash			35,098				(1,135	)
Cash - beginning			4,696				2,076
Cash - ending		$	39,794			$	941
Supplemental disclosures:
Interest paid		$	43,466			$	751
Income taxes paid		$	–			$	–
Non-cash investing and financing activities:
Value of debt discounts		$	544,627			$	194,407
Value of shares issued for conversion of debt		$	106,447			$	189,853
Value of derivative adjustment due to debt conversions		$	686,198			$	294,666

 

See accompanying notes to financial statements.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 1 – Basis of Presentation

 

The interim condensed consolidated financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to not make the information presented misleading.

 

These statements reflect all adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. It is suggested that these interim condensed consolidated financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2013 and notes thereto included in the Company's 10-K annual report. The Company follows the same accounting policies in the preparation of interim reports.

 

Fair Value of Financial Instruments

Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short term nature of the instruments. In addition, the Company had debt instruments that required fair value measurement on a recurring basis.

 

Cost Method of Accounting for Investments

Investee companies not accounted for under the consolidation or the equity method of accounting are accounted for under the cost method of accounting. Under this method, the Company’s share of the earnings or losses of such Investee companies is not included in the Balance Sheet or Statement of Operations. However, impairment charges are recognized in the Statement of Operations. If circumstances suggest that the value of the Investee Company has subsequently recovered, such recovery is not recorded. Impairment analysis on our investments which are accounted for on the cost method of accounting resulted in complete impairment at December 31, 2013.

 

Revenue Recognition

The Company recognizes revenue from its internet television platform from internally generated products and from partnered merchants when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the selling price is fixed or determinable; and collectability is reasonably assured. These criteria are met when the customers purchase a product or access a web-based video, the product or web-based video has been electronically delivered to the purchaser and payment has been received. At that time, the Company's obligations to the customer is substantially complete. The Company records the net amount it retains from the sale of items from its internet television platform after paying any agreed upon percentage of the purchase price to the featured advertising merchant excluding any applicable taxes. Revenue is recorded on a net basis because the Company is acting as an agent of the partnered merchant in the transaction. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

 

Network revenue consists of monthly network broadcast subscription revenue, which is recognized over the period in which the subscription service is available. Broadcast television advertising revenue is recognized when advertisements are aired. Video production revenue is recognized as digital video film is completed and accepted by the customer and collection is reasonably assured.

 

Revenue from the distribution of domestic television series is recognized as earned using the following criteria:

 

·

Persuasive evidence of an arrangement exists;

·

The show/episode is complete, and in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery;

·

The license period has begun and the customer can begin its exploitation, exhibition or sale;

·

The price to the customer is fixed and determinable; and

·

Collectability is reasonably assured.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Due to practical limitations applicable to operating relationships with On-Demand networks, the Company has not considered collectability of advertising or television license revenues to be reasonably assured, and accordingly, the Company has not recognize such revenue unless payment has been received.

 

Audio/Video content licensing revenues were recognized when the underlying royalties from the sales of the related products were earned. The Company recognized minimum revenue guarantees, if any, ratably over the term of the license or as earned royalties based on actual sales of the related products, if greater.

 

Deferred revenues consist of the following at September 30, 2014 and December 31, 2013:

 

		September 30,				December 31,
		2014				2013
Deferred revenues on television pilot episodes		$	–			$	135,000
Deferred revenues on audio/video content licensing			–				–
Total deferred revenues		$	–			$	135,000

 

Deferred Rent Obligation

The Company has entered into operating lease agreements for its corporate office which contains provisions for future rent increases. In accordance with generally accepted accounting principles, the Company records monthly rent expense equal to the total of the payments due over the lease term, divided by the number of months of the lease terms. The difference between rent expense recorded and the amount paid is credited or charged to “Deferred rent obligation,” which is reflected as a separate line item in the accompanying Balance Sheets.

 

Derivative Liability

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Note and tainted Warrant), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument's contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument's settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

 

Deferred Television Costs

Deferred television costs as of September 30, 2014, included direct production and development costs stated at the lower of cost or net realizable value based on anticipated revenue. Production overhead is not included as the Company outsources its production costs to third party vendors. Capitalized television production costs for each pilot episode are to be expensed as revenues are recognized upon delivery and acceptance of the completed pilot episodes using the individual-film-forecast-computation method for each television show produced. The Company recognized $95,000 of revenues on November 1, 2012 with the completion of the first of three pilot episodes; and accordingly, recognized $75,617 of expenses related to the development of the pilot. The remaining $135,000 of revenues, and corresponding $116,454 of deferred television costs, was recognized on June 30, 2014 upon completion and delivery of the two final pilot episodes.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Deferred television costs consist of the following at September 30, 2014 and December 31, 2013:

 

		September 30,				December 31,
		2014				2013
Development and pre-production costs		$	–			$	–
In-production			–				68,264
Post production			–				48,190
Total deferred television costs		$	–			$	116,454

 

Due to practical limitations applicable to monetizing our developed content over On-Demand networks, the Company has not considered collectability of advertising or television license revenues to be reasonably assured, and accordingly, the Company has expensed production costs related to the development of our On-Demand and internet-based content as incurred.

 

Recent Accounting Pronouncements

In June 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. The new guidance requires that share-based compensation that require a specific performance target to be achieved in order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.

 

In June 2014, the FASB issued ASU No. 2014-10: Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not expected to have a material impact on our financial position or results of operations.

 

In July 2013, the FASB issued ASU No. 2013-11: Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The new guidance requires that unrecognized tax benefits be presented on a net basis with the deferred tax assets for such carryforwards. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on our financial position or results of operations.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 2 – Going Concern

 

As shown in the accompanying condensed consolidated financial statements, the Company has incurred recurring losses from operations resulting in an accumulated deficit of ($26,242,551), and as of September 30, 2014, the Company’s current liabilities exceeded its current assets by $1,750,511 and its total liabilities exceeded its total assets by $1,668,091. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new ventures to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. Management believes these factors will contribute toward achieving profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. These financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

 

Note 3 – Related Party

 

Officers

On August 31, 2014, the Company granted a $50,000 bonus to the Company’s CEO.

 

On August 18, 2014, the Company issued 200,000 shares of restricted common stock to its President of Programming as a compensation bonus. The total fair value of the common stock was $3,860 based on the closing price of the Company’s common stock on the date of grant.

 

On August 14, 2014, the Company’s subsidiary issued a total of 16% of its equity in the subsidiary in exchange for services provided related to the operations of the subsidiary. The total fair value of the common stock was $960,000 based on the fair value of stock sold to an independent third party. A total of 4% of these shares were issued to officers of Players Network.

 

On July 19, 2014, a total of 1,500,000 options held by the Company’s CEO expired.

 

On April 11, 2014, the Company issued 1,250,000 shares of restricted common stock to its CEO as a compensation bonus. The total fair value of the common stock was $27,500 based on the closing price of the Company’s common stock on the date of grant.

 

On February 20, 2014, the Company issued 4,000,000 shares of common stock to its CEO as a compensation bonus. The total fair value of the common stock was $120,000 based on the closing price of the Company’s common stock on the date of grant.

 

On February 20, 2014, the Company’s Board of Directors granted 8,000,000 fully vested cashless common stock options to the Company’s CEO as compensation for services provided. The options are exercisable until February 20, 2018 at an exercise price of $0.04 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 248% and a call option value of $0.0272, was $217,971.

 

Officer compensation expense was $524,917 and $164,965 at September 30, 2014 and 2013, respectively. The balance owed was $36,105 and $62,374 at September 30, 2014 and 2013, respectively.

 

Board of Directors

On August 18, 2014, the Company issued 350,000 shares of restricted common stock to one of its Directors as a compensation bonus. The total fair value of the common stock was $6,755 based on the closing price of the Company’s common stock on the date of grant.

 

On March 6, 2014, the Company cancelled 750,000 shares issued during 2013 for non-performance of services commensurate with the departure of one of the Company’s former employees.

 

 

Note 4 – Fair Value of Financial Instruments

 

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The Company has convertible notes that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

 

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

 

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

The following schedule summarizes the valuation of financial instruments at fair value on a non-recurring basis in the balance sheets as of September 30, 2014 and December 31, 2013, respectively:

 

		Fair Value Measurements at September 30, 2014
		Level 1				Level 2				Level 3
Assets
Cash		$	39,794			$	–			$	–
Total assets			39,794				–				–
Liabilities
Convertible debentures, net of discounts of $472,555			–				–				97,058
Short term debt			–				18,750				–
Derivative liability			–				–				1,189,488
Total liabilities			–				18,750				1,286,546
		$	39,794			$	(18,750	)		$	(1,286,546	)

 

		Fair Value Measurements at December 31, 2013
		Level 1				Level 2				Level 3
Assets
Cash		$	4,696			$	–			$	–
Total assets			4,696				–				–
Liabilities
Convertible debentures, net of discounts of $53,579			–				–				82,421
Short term debt			–				35,000				–
Derivative liability			–				–				648,298
Total liabilities			–				35,000				730,719
		$	4,696			$	(35,000	)		$	(730,719	)

 

There were no transfers of financial assets or liabilities between Level 1 and Level 2 inputs for the nine months ended September 30, 2014 and the year ended December 31, 2013.

 

Level 2 liabilities consist of a short term, unsecured, promissory note. No fair value adjustment was necessary during the nine months ended September 30, 2014 and the year ended December 31, 2013.

 

Level 3 liabilities consist of a total of $569,613 and $136,000 of convertible debentures and the related derivative liability as of September 30, 2014 and December 31, 2013, respectively. A discount of $472,555 and $53,579 was recognized at September 30, 2014 and December 31,2013, respectively.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 5 – Subsidiary Formation

 

On July 8, 2014, we formed a subsidiary, Green Leaf Farms Holdings, Inc. (“GLFH”), in which we retained 83% ownership, with the remaining 17% held by key experts and advisors. The subsidiary has been formed as a holding company to potentially own additional subsidiaries that may operate medical marijuana related businesses. These additional subsidiaries have yet to be formed, and, or, acquired, with the exception of Green Leaf Medical, LLC (“GLML”), which was formed on July 18, 2014 and has no activity to date. We have applied for a Medical Marijuana Dispensary special use permit with the City of Las Vegas, and a Cultivation and Processing special use permits in North Las Vegas and a license for all permits in the State of Nevada, and have currently been granted the two special use permits in North Las Vegas, however there can be no assurance we will be able to conduct these operations. As such, there is a risk that we may not be able to expand our operations into this field as intended.

 

Pursuant to ASC-805-50-45, “Transactions Between Entities Under Common Control”, the presentation of the financial statements pertain to financial statements of all consolidating subsidiaries for the period from January 1, 2014 through September 30, 2014.

 

Note 6 – Investments

 

On May 11, 2011, we acquired a 10% interest in ICI, and a 10% interest in ICB, Nevada entertainment companies that develop and operate a variety of entertainment shows in the United States, primarily in casinos within Las Vegas, NV and Atlantic City, NJ. We acquired the interests in exchange for $25,499 that was in turn spent on the development of a promotional video that was to be distributed on our website. In addition, we agreed to pay a license fee of 20% of the adjusted gross revenues that we were to earn from the distribution and sales related to the promotional video content. No such revenues have been earned to date.

 

On November 1, 2012, the Company elected to convert a note receivable of $22,477, consisting of $20,000 of principal and $2,477 of interest receivable in exchange for an additional 7.5% ownership interest in ICI, and 7.5% interest in ICB. The conversion resulted in a total ownership of 17.5% in both entities as of November 1, 2012. In 2011, both the investments and the note receivable had been written off as impaired due to valuation and collectability uncertainties, as a result the 17.5% investment in both entities are not on the balance sheets as of September 30, 2014 and December 31, 2013, respectively.

 

 

Note 7 – Fixed Assets

 

Fixed assets consist of the following at September 30, 2014 and December 31, 2013, respectively:

 

		September 30,				December 31,
		2014				2013
Office equipment		$	22,546			$	12,898
Website development costs			124,880				99,880
Furniture and fixtures			2,730				2,730
Less accumulated depreciation			(72,733	)			(52,749	)
		$	77,423			$	62,759

 

Depreciation and amortization expense totaled $19,984 and $17,210 for the nine months ended September 30, 2014 and 2013, respectively.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 8 – Accrued Expenses

 

As of September 30, 2014 and December 31, 2013 accrued expenses included the following:

 

		September 30,				December 31,
		2014				2013
Customer Deposits		$	13,500			$	13,500
Accrued Payroll, Officers			36,105				19,020
Accrued Payroll and Payroll Taxes			135,234				135,234
Accrued Interest			28,415				14,597
		$	213,254			$	182,351

 

 

Note 9 – Convertible Debentures

 

Convertible debentures consist of the following at September 30, 2014 and December 31, 2013, respectively:

 

		September 30,				December 31,
		2014				2013
On September 22, 2014, the Company received net proceeds of $35,000 in exchange for an unsecured convertible promissory note, bearing interest at twelve percent (12%) with a face value of $38,500 (“Second Vista Note”), which matures on June 1, 2016, as part of a larger financing agreement that enables the Company to draw total proceeds of $225,000 at the discretion of the lender. The financing carries a total face value of $250,000 and a $25,000 Original Issue Discount. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 120% of the outstanding balance at the time of default. The promissory note carries a $3,500 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 35 million shares of common stock for potential conversions as depicted in the First Vista Note.		$	38,500			$	–
On August 19, 2014, the Company received net proceeds of $40,000 in exchange for an unsecured convertible promissory note, bearing interest at 8% annually, with a face value of $80,000 (“Second WHC Note”), which matures on August 19, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty seven and a half percent (57.5%) of the average of the two (2) lowest closing bid prices of the Company’s common stock over the ten (10) trading days immediately preceding the conversion request date. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 150% of the outstanding balance at the time of default, and the interest rate increases to twenty two percent (22%) per annum. The promissory note carries a $5,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 12 million shares of common stock for potential conversions.			45,000				–
On July 15, 2014, the Company received net proceeds of $35,000 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $37,500 (“Third LG Note”), which matures on March 15, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the lowest trading price of the Company’s common stock for the twelve (12) trading days prior to, and including, the conversion date if received after 4PM Eastern Standard Time. The note also carries an additional “Back-end Note” with the same terms as the original note that enables the lender to lend the Company another $37,500, less $1,750 of debt issuance costs and $3,500 in due diligence fees, with a holding period that tacks to the original note for purposes of Rule 144 of the Securities Exchange Act of 1934. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event the Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 55% instead of 60% while that “Chill” is in effect. The Company paid total debt issuance cost of $2,500 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 9,513,000 shares of common stock for potential conversions.			37,500				–

 

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

On June 13, 2014, the Company received net proceeds of $75,000 in exchange for an unsecured convertible promissory note, bearing interest at 8% annually, with a face value of $80,000 (“First WHC Note”), which matures on June 13, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty two and a half percent (62.5%) of the average of the two (2) lowest closing bid prices of the Company’s common stock over the ten (10) trading days immediately preceding the conversion request date. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 150% of the outstanding balance at the time of default, and the interest rate increases to twenty two percent (22%) per annum. The promissory note carries a $5,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. In addition, the Company issued warrants to purchase 1.5 million shares of the Company’s common stock at a strike price of $0.05 per share exercisable over three years from the date of issuance. The Company must at all times reserve at least 24 million shares of common stock for potential conversions.			80,000				–
On June 2, 2014, the Company received net proceeds of $50,000 in exchange for an unsecured convertible promissory note, bearing interest at twelve percent (12%) with a face value of $55,000 (“First Vista Note”), which matures on June 1, 2016, as part of a larger financing agreement that enables the Company to draw total proceeds of $225,000 at the discretion of the lender. The financing carries a total face value of $250,000 and a $25,000 Original Issue Discount. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 120% of the outstanding balance at the time of default. The promissory note carries a $5,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 35 million shares of common stock for potential conversions.			55,000				–
On May 20, 2014, the Company received net proceeds of $100,000 in exchange for an unsecured convertible promissory note, bearing interest at 10% annually, with a face value of $113,000 (“First Typenex Note”), which matures on May 19, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the three (3) lowest (“Trading Prices”), whereby Trading Price is defined as the volume weighted average price (“VWAP”) of the Company’s common stock over the fifteen (15) trading days prior to the conversion request date. If the arithmetic average of the three (3) lowest Trading Prices is less than $0.01, then the Conversion Factor will be reduced to 60%. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 125% of the outstanding balance at the time of default, and the interest rate increases to twenty two percent (22%) per annum. The promissory note carries a $10,000 Original Issue Discount, and loan origination costs of $3,000, that are being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least three times the number of shares equal to the outstanding balance divided by the conversion price, but in any event not less than 22 million shares of common stock for potential conversions.			113,000				–

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

On May 9, 2014, the Company received $50,000 in exchange for an unsecured convertible promissory note that carries a 12% interest rate (“First Group 10 Note”), which matures on May 8, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to the lesser of (a) fifty eight percent (58%) of the average of the two lowest closing bid prices of the Company’s common stock for the seventeen (17) trading days prior to the conversion notice date, or (b) four and a half cents ($0.045) per share. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The promissory note carries a $2,500 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 20 million shares of common stock for potential conversions.			50,000				–
On April 24, 2014, the Company received net proceeds of $33,250 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $35,000 (“Second LG Note”), which matures on April 11, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty five percent (55%) of the average of the lowest closing bid prices of the Company’s common stock for the twelve (12) trading days prior to, and including, the conversion date. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid total debt issuance cost of $1,750 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 5 million shares of common stock for potential conversions. On October 31, 2014, the note holder sent demand for repayment. The note is currently in default.			35,000				–
On April 17, 2014, the Company received net proceeds of $40,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $44,000 (“Fourth JMJ Note”), which matures on April 16, 2015, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty five percent (55%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date, as amended within the original promissory note on April 10, 2014. The note carries a one-time twelve percent (12%) of principal interest charge in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The promissory note carries a $4,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 60 million shares of common stock for potential conversions.			44,000				–
On February 20, 2014, the Company received net proceeds of $40,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $44,000 (“Third JMJ Note”), which matures on February 19, 2015, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date, as amended within the original promissory note on April 10, 2014. An additional 5% discount applies on conversion shares that are ineligible for deposit into the DTC system and are only eligible for Xclearing deposit. The note carries a one-time twelve percent (12%) of principal interest charge if the note isn’t repaid within the first ninety (90) days, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The promissory note carries a $4,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 60 million shares of common stock for potential conversions, as noted in the First JMJ Note disclosure.			44,000				–

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

On January 8, 2014, the Company received net proceeds of $21,750 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $25,500 (“First GEL Note”), which matures on October 8, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the average of the two (2) lowest closing bid prices of the Company’s common stock for the ten (10) trading days prior to the conversion date. The note carries an additional “Back-end Note” with the same terms as the original note that enables the lender to lend the Company another $25,500, less $3,250 of debt issuance costs, with a holding period that tacks to the original note for purposes of Rule 144 of the Securities Exchange Act of 1934. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid total debt issuance cost of $3,250 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. On various dates between August 13, 2014 and September 23, 2014, the note holder elected to convert a total of $18,379 of principal in exchange for 1,891,598 shares of common stock. The Company must at all times reserve at least 6 million shares of common stock for potential conversions.			7,121				–
On January 8, 2014, the Company received net proceeds of $21,750 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $25,500 (“First LG Note”), which matures on October 8, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the average of the two (2) lowest closing bid prices of the Company’s common stock for the ten (10) trading days prior to the conversion date. The note carries an additional “Back-end Note” with the same terms as the original note that enables the lender to lend the Company another $25,500, less $3,250 of debt issuance costs, with a holding period that tacks to the original note for purposes of Rule 144 of the Securities Exchange Act of 1934. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid total debt issuance cost of $3,250 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 6 million shares of common stock for potential conversions. On July 7, 2014, the Company repaid $34,736 on the First LG Note, consisting of $25,500 of principal and $9,236 of interest and prepayment penalties. The convertible promissory note was subsequently cancelled as paid in full. The principal and interest was subsequently repaid in full prior to maturity with a cash payment of $34,736, consisting of $25,500 of principal and $9,236 of interest and prepayment penalties, on July 2, 2014 out of the proceeds from the June 26, 2014 convertible debt financing received from WHC Capital, LLC (“First WHC Note”).			–				–
Unsecured $12,500 convertible promissory note originated on October 28, 2013, carries an 8% interest rate (“Ninth Asher Note”), and matures on July 30, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to thirty one percent (31%) of the average of the lowest closing bid prices of the Company’s common stock for the ten (10) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid a debt issuance cost of $1,000 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The principal and interest was subsequently repaid in full prior to maturity with a cash payment of $19,240, consisting of $12,500 of principal and $6,740 of interest and prepayment penalties, on May 2, 2014 out of the proceeds from the April 24, 2014 convertible debt financing received from LG Capital Funding, LLC (“Second LG Capital Note”).			–				12,500

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Unsecured $25,500 convertible promissory note originated on July 30, 2013, carries an 8% interest rate (“Eighth Asher Note”), and matures on May 1, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to thirty five percent (35%) of the average of the lowest closing bid prices of the Company’s common stock for the ninety (90) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid a debt issuance cost of $2,500 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The principal and interest was repaid in full prior to maturity with a cash payment of $39,239, consisting of $25,500 of principal and $13,739 of interest and prepayment penalties, on January 31, 2014 out of the proceeds from the January 8, 2014 convertible debt financing received from GEL Properties, LLC (“First GEL Note”).			–				25,500
On June 4, 2013, the Company received net proceeds of $25,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $27,500 (“Second JMJ Note”), which matures on June 3, 2014, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date. An additional 5% discount applies on conversion shares that are ineligible for deposit into the DTC system and are only eligible for Xclearing deposit. The note carries a one-time twelve percent (12%) of principal interest charge if the note isn’t repaid within the first ninety (90) days, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company amortized the $2,500 original issuance discount over the life of the loan on the straight line method, which approximated the effective interest method. On May 12, 2014, the note holder elected to convert a total of $10,308, consisting of $7,008 of principal and $3,300 of accrued interest, in exchange for 805,058 shares of common stock. The Company must at all times reserve at least 60 million shares of common stock for potential conversions, as noted in the First JMJ Note disclosure.			20,492				27,500
On March 13, 2013, the Company received net proceeds of $55,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $60,500 (“First JMJ Note”), which matured on March 12, 2014, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. On November 27, 2014, an additional $10,000 was added to the principal balance of the note as liquidated damages related to a Standstill Agreement whereby JMJ agreed to refrain from exercising any conversions until February 22, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date. An additional 5% discount applies on conversion shares that are ineligible for deposit into the DTC system and are only eligible for Xclearing deposit. The note carries a one-time twelve percent (12%) of principal interest charge if the note isn’t repaid within the first ninety (90) days, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The principal interest charge of $7,260 is being amortized on the straight line method, which approximates the effective interest method, over the life of the loan. The Company recognized $1,881 and $-0- of interest expense related to these debt issuance costs during the three months ended March 31, 2014 and 2013, respectively. The Company amortized the $5,500 original issuance discount over the life of the loan on the straight line method, which approximated the effective interest method. The note holder elected to convert a total of $13,000 of principal in exchange for 1,000,000 shares of common stock on February 24, 2014, and $26,000 of principal in exchange for 2,000,000 shares of common stock on March 14, 2014. Another $27,300 of principal was subsequently converted in exchange for 2,100,000 shares on April 22, 2014, and the final conversion of $11,460 was executed on May 12, 2014, consisting of $4,200 of principal and $7,260 of accrued interest in exchange for 894,942 shares of common stock. The conversions were in accordance with the terms of the note; therefore no gain or loss has been recognized. The Company must at all times reserve at least 60 million shares of common stock for potential conversions.		$	–			$	70,500
Total convertible debentures			569,613				136,000
Less: unamortized debt discounts			(472,555	)			(53,579	)
Convertible debentures		$	97,058			$	82,421

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

In accordance with ASC 470-20 Debt with Conversion and Other Options, the Company recorded total discounts of $583,627 and $206,858 for the variable conversion features of the convertible debts incurred during the nine months ended September 30, 2014 and the year ended December 31, 2013, respectively. The discounts, including Original Issue Discounts of $39,000 and $8,500 during the nine months ended September 30, 2014 and the year ended December 31, 2013, respectively, are being amortized to interest expense over the term of the debentures using the effective interest method. The Company recorded $164,651 and $279,272 of interest expense pursuant to the amortization of the note discounts during the nine months ended September 30, 2014 and 2013, respectively.

 

In addition, a total of $13,750 and $11,000 of loan origination costs were incurred pursuant to the closings of convertible debentures during the nine months ended September 30, 2014, and the year ended December 31, 2013, respectively, which are being amortized to interest expense over the term of the debentures using the straight line method, which approximates the effective interest method. The Company recorded $12,152 and $22,018 of interest expense pursuant to the amortization of the loan origination costs during the nine months ended September 30, 2014 and 2013, respectively.

 

All of the convertible debentures carry default provisions that place a “maximum share amount” on the note holders. The maximum share amount that can be owned as a result of the conversions to common stock by the note holders is 4.99% of the Company’s issued and outstanding shares.

 

In accordance with ASC 815-15, the Company determined that the variable conversion feature and shares to be issued represented embedded derivative features, and these are shown as derivative liabilities on the balance sheet. The Company calculated the fair value of the compound embedded derivatives associated with the convertible debentures utilizing a lattice model.

 

The Company recorded interest expense pursuant to the stated interest rates on the convertible debentures in the amount of $53,154 and $15,615 for the nine months ended September 30, 2014 and 2013, respectively related to convertible debts.

 

 

Note 10 – Investment Agreement with Dutchess Opportunity Fund II, LP

 

On November 7, 2012, the Company entered into an Investment Agreement (“Investment Agreement”) with Dutchess Opportunity Fund, II, LP, a Delaware limited partnership (“Dutchess”), as amended on July 5, 2013. Pursuant to the terms of the Investment Agreement, Dutchess committed to purchase, in a series of purchase transactions (“Puts”), up to eight million five hundred thousand ($8,500,000) dollars of the Company’s common stock over a period of up to thirty-six (36) months from the effective date of the registration statement covering the Equity Line Financing with Dutchess, which was September 26, 2013.

 

The amount that the Company is entitled to request with each Put delivered to Dutchess is equal to, at its option, either (i) two hundred (200%) percent of the average daily volume (U.S. market only) of its common stock for three (3) trading days prior to the applicable Put Notice Date, multiplied by the average of the three (3) daily closing prices immediately preceding the Put Date or (ii) fifty thousand ($50,000) dollars. The purchase price to be paid by Dutchess for the shares of the Company’s common stock covered by each Put will be equal to ninety-five (95%) percent of the lowest daily volume weighted average price (“VWAP”) of the Company’s common stock during the period beginning on the Put Notice Date and ending on and including the date that is five (5) trading days after such Put Notice Date (“Pricing Period”). The “Put Notice Date” is the trading day immediately following the day on which Dutchess receives a Put Notice from the Company.

 

For each Put Notice submitted to Dutchess under the Investment Agreement, there is a Suspension Price of $0.01 for that Put. In the event the common stock falls below the Suspension Price, the put shall be temporarily suspended. The Put shall resume at such time as the common stock is above the Suspension Price, provided the dates for the Pricing Period for that particular put are still valid. In the event the Pricing Period has been complete, any shares above the Suspension Price due to Dutchess shall be sold to Dutchess by us at the volume weighted average price under the terms of the Investment Agreement.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

In conjunction with the Investment Agreement, the Company also entered into a registration rights agreement (“Registration Rights Agreement”) with Dutchess. Pursuant to the Registration Rights Agreement, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission (“SEC”) on September 26, 2013 covering 22,750,000 shares of the Company’s common stock underlying a portion of the Investment Agreement. In addition, during the term of the Registration Rights Agreement, the Company is obligated to maintain the effectiveness of this registration statement, as well as any subsequent registration statements that may be associated with the Investment Agreement and/or Registration Rights Agreement.

 

As of the filing date of this report, the Company had not sold any shares to Dutchess nor received any financing from Dutchess.

 

 

Note 11 – Short Term Debt

 

Short-term debt consists of the following at September 30, 2014 and December 31, 2013, respectively:

 

		September 30,				December 31,
		2014				2013
4% unsecured debenture, due June 7, 2012. Currently in default. On June 2, 2014, the Company and the lender entered into a settlement agreement whereby the note will be considered satisfactorily paid in full with the successful payment of four equal payments of $8,125 made in quarterly periods through December 22, 2014, of which the first two payments were delivered on June 27, 2014 and August 26, 2014, respectively, and two payments remain.		$	18,750			$	35,000

 

Accrued interest on the above promissory note totaled $3,832 and $2,892 at September 30, 2014 and December 31, 2013, respectively.

 

The following presents components of interest expense by instrument type at September 30, 2014 and 2013, respectively:

 

		September 30,				September 30,
		2014				2013
Interest on convertible debentures		$	53,154			$	15,615
Amortization of discount on convertible debentures			164,651				273,251
Amortization of debt issuance costs			12,152				22,018
Interest on short term debt			940				1,050
Accounts payable related finance charges			655				786
		$	231,552			$	312,720

 

 

Note 12 – Derivative Liabilities

 

As discussed in Note 9 under Convertible Debentures, the Company issued convertible notes payable that provide for the issuance of convertible notes with variable conversion provisions. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted and all additional convertible debentures and warrants are included in the value of the derivative. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion option and warrants and shares to be issued were recorded as derivative liabilities on the issuance date.

 

The fair values of the Company’s derivative liabilities were estimated at the issuance date and are revalued at each subsequent reporting date, using a lattice model. The Company recognized current derivative liabilities of $1,189,488 and $648,298 at September 30, 2014 and December 31, 2013, respectively. The change in fair value of the derivative liabilities resulted in a loss of $682,761 and $334,631 for the nine months ended September 30, 2014 and 2013, respectively, which has been reported as other income (expense) in the statements of operations. The loss of $682,761 for the nine months ended September 30, 2014 consisted of a loss of $435,387 due to the value in excess of the face value of the convertible notes, a gain of $26,634 attributable to the fair value of preferred stock, a gain of $260,644 attributable to the fair value of warrants and a net loss in market value of $534,652 on the convertible notes. The loss of $334,631 for the nine months ended September 30, 2013 consisted of a loss of $125,158 due to the value in excess of the face value of the convertible notes, a gain of ($13,348) attributable to the fair value of preferred stock, a gain of ($22,191) attributable to the fair value of warrants and a net loss in market value of $245,012 on the convertible notes.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The following presents the derivative liability value by instrument type at September 30, 2014 and December 31, 2013, respectively:

 

		September 30,				December 31,
		2014				2013
Convertible debentures		$	1,049,743			$	221,275
Common stock warrants			134,500				395,144
Convertible preferred stock			5,245				31,879
		$	1,189,488			$	648,298

 

The following is a summary of changes in the fair market value of the derivative liability during the nine months ended September 30, 2014 and the year ended December 31, 2013, respectively:

 

	Derivative
	Liability
	Total
Balance, December 31, 2012	$	356,608
Increase in derivative value due to issuances of convertible promissory notes		351,721
Increase in derivative value attributable to tainted warrants		122,062
Change in fair market value of derivative liabilities due to the mark to market adjustment		305,512
Debt conversions		(487,605)
Balance, December 31, 2013	$	648,298
Increase in derivative value due to issuances of convertible promissory notes		980,014
Increase in derivative value attributable to issuance of warrants		20,633
Change in fair market value of derivative liabilities due to the mark to market adjustment		226,741
Debt conversions		(686,198)
Balance, September 30, 2014	$	1,189,488

 

Key inputs and assumptions used to value the convertible debentures and warrants issued during the nine months ended September 30, 2014 and the year ended December 31, 2013:

·

Stock prices on all measurement dates were based on the fair market value and would fluctuate with projected volatility.

·

The warrant exercise prices ranged from $0.04 to $0.41, exercisable over 2 to 10 year periods from the grant date.

·

The holders of the securities would convert monthly to the ownership limit starting at 4.99% increasing by 10% per month.

·

The holders would automatically convert the note at the maximum of 3 times the conversion price if the Company was not in default.

·

The monthly trading volume would reflect historical averages and would increase at 1% per month.

·

The Company would redeem the notes based on availability of alternative financing, increasing 2% monthly to a maximum of 10%.

·

The holder would automatically convert the note at maturity if the registration was effective and the Company was not in default.

·

The computed volatility was projected based on historical volatility.

 

 

Note 13 – Changes in Stockholders’ Equity (Deficit)

 

Convertible Preferred Stock

The Board, from the authorized capital of 25,000,000 preferred shares, has authorized and designated 2,000,000 shares of Series A preferred stock (“Series A”) and 10,873,347 shares of Series B preferred stock (“Series B”), of which 2,000,000 shares and 4,349,339 shares are issued and outstanding, respectively. A total of 12,126,653 shares remain undesignated.

 

The Series A shares carry 25:1 preferential voting rights, and are convertible into shares of common stock on a 1:1 basis.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The Series B shares are convertible at the option of the holder into shares of common stock at an initial ratio of one share of series B preferred stock into one share of common stock (1:1), as adjusted for the dilutive effects of additional stock subsequent to the original issuance of the series B shares on December 17, 2010. The Series B Preferred conversion ratio shall be adjusted to a price determined by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock Outstanding (meaning (1) outstanding Common Stock, (2) Common Stock issuable upon conversion of outstanding Preferred Stock, (3) Common Stock issuable upon exercise of outstanding stock options (including Common Stock issuable upon the conversion of shares or other securities issued pursuant to the exercise of outstanding stock options) and (4) Common Stock issuable upon exercise (and, in the case of warrants to purchase Preferred Stock or other securities, conversion) of outstanding warrants. Shares described in (1) through (4) above shall be included whether vested or unvested, whether contingent or non-contingent and whether exercisable or not yet exercisable.) immediately prior to such issuance plus the number of shares of Common Stock that the aggregate consideration received by this Corporation for such issuance would purchase at such Conversion Price; and the denominator of which shall be the number of shares of Common Stock Outstanding immediately prior to such issuance plus the number of shares of such Additional Stock. The maximum shares of common stock convertible are to be reserved from the authorized shares. As of November 14, 2014, the Series B shares were convertible into 10,377,058 shares of common stock based on a modified conversion ratio of approximately 2.385 due to the dilutive reset provisions, which were reserved from the authorized shares.

 

On June 2, 2014, the Company and the Series B Preferred Shareholder entered into a settlement agreement whereby an outstanding $35,000 promissory note will be satisfied with the successful payment of $32,500, consisting of four equal payments of $8,125 made in quarterly periods from June 27, 2014 through December 22, 2014, of which the first two payments were delivered on June 27, 2014 and August 26, 2014, respectively, and two payments remain. Upon successful payment of the settlement obligations, the shareholder has agreed to convert his 4,349,339 shares of Convertible Series B Preferred shares into 4,349,339 shares of common stock. Pursuant to the settlement agreement, the shareholder’s preferential voting rights have been suspended during the payment period.

 

Preferred Stock

No preferred shares were issued during the nine months ended September 30, 2014.

 

Common Stock Authorized

The Company amended its Articles of Incorporation on April 29, 2013 to increase the authorized shares of common stock from 150,000,000 shares to 600,000,000 shares, of which 173,709,531 shares were issued and outstanding and 232,762,339 shares were reserved as of the date of this filing.

 

Common Stock Sales

On August 14, 2014, the Company’s subsidiary sold 1% of its equity in exchange for proceeds of $60,000.

 

On August 14, 2014, the Company sold 2,500,000 shares of its common stock in exchange for proceeds of $50,000. The shares were issued on October 23, 2014, and were recorded as a subscription payable as of September 30, 2014.

 

On April 18, 2014, the Company sold 200,000 shares of its common stock and an equal number of warrants, exercisable at $0.06 per share over a twenty four month period pursuant to a unit offering in exchange for total proceeds of $6,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

 

On March 28, 2014, the Company sold 2,000,000 shares of its common stock and an equal number of warrants, exercisable at $0.06 per share over a twenty four month period pursuant to a unit offering in exchange for total proceeds of $50,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

 

On January 30, 2014, the Company sold 1,000,000 shares of its common stock and an equal number of warrants, exercisable at $0.07 per share over a twenty four month period pursuant to a unit offering in exchange for total proceeds of $40,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

 

On January 23, 2014, the Company sold 600,000 shares of its common stock for proceeds of $15,000.

 

On January 21, 2014, the Company sold 800,000 shares of its common stock for proceeds of $20,000.

 

Common Stock Issuances for Debt Conversions

On September 23, 2014, the Company issued 662,879 shares of common stock pursuant to the conversion of $7,000 of principal on the First GEL Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On September 9, 2014, the Company issued 719,424 shares of common stock pursuant to the conversion of $6,000 of principal on the First GEL Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On August 13, 2014, the Company issued 509,295 shares of common stock pursuant to the conversion of $5,379 of principal on the First GEL Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

   

On May 12, 2014, the Company issued 1,700,000 shares of common stock pursuant to the conversion of $21,769, consisting of $11,460 of outstanding principal and interest on the First JMJ Note and $10,309 of outstanding principal and interest on the Second JMJ Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

    

On April 22, 2014, the Company issued 2,100,000 shares of common stock pursuant to the conversion of $27,300 of outstanding principal on the First JMJ Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On March 14, 2014, the Company issued 2,000,000 shares of common stock pursuant to the conversion of $26,000 of outstanding principal on the First JMJ Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On February 24, 2014, the Company issued 1,000,000 shares of common stock pursuant to the conversion of $13,000 of outstanding principal on the First JMJ Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

Common Stock Issuances for Services

On August 18, 2014, the Company issued 377,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $7,276 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 100,000 shares of restricted common stock for services provided. The total fair value of the common stock was $1,930 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued another 100,000 shares of restricted common stock for services provided. The total fair value of the common stock was $1,930 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 300,000 shares of restricted common stock for services provided. The total fair value of the common stock was $5,790 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 200,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $3,860 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 350,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $6,755 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 300,000 shares of restricted common stock for video production services provided. The total fair value of the common stock was $5,790 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 200,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $3,860 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 2,000,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $38,600 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 350,000 shares of restricted common stock to one of its Directors as a compensation bonus. The total fair value of the common stock was $6,755 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 200,000 shares of restricted common stock to its President of Programming as a compensation bonus. The total fair value of the common stock was $3,860 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 550,000 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $10,615 based on the closing price of the Company’s common stock on the date of grant.

 

On August 18, 2014, the Company issued 200,000 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $3,860 based on the closing price of the Company’s common stock on the date of grant.

 

On August 14, 2014, the Company’s subsidiary issued a total of 16% of its equity in the subsidiary in exchange for services provided related to the operations of the subsidiary. The total fair value of the common stock was $960,000 based on the fair value of stock sold to an independent third party. A total of 4% of these shares were issued to officers of Players Network.

 

On June 27, 2014, the Company issued 700,000 shares of restricted common stock for video production services provided. The total fair value of the common stock was $20,650 based on the closing price of the Company’s common stock on the date of grant.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

On June 27, 2014, the Company issued 300,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $8,850 based on the closing price of the Company’s common stock on the date of grant.

 

On June 27, 2014, the Company issued 500,000 shares of restricted common stock for video production services provided. The total fair value of the common stock was $14,750 based on the closing price of the Company’s common stock on the date of grant.

 

On June 27, 2014, the Company issued 300,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was 8,850 based on the closing price of the Company’s common stock on the date of grant.

 

On June 15, 2014, the Company issued 198,864 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $4,693 based on the closing price of the Company’s common stock on the date of grant.

 

On June 15, 2014, the Company issued 198,864 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $4,693 based on the closing price of the Company’s common stock on the date of grant.

 

On April 14, 2014, the Company issued 350,000 shares of restricted common stock for video production services provided. The total fair value of the common stock was $10,150 based on the closing price of the Company’s common stock on the date of grant.

 

On April 11, 2014, the Company issued 200,000 shares of restricted common stock for business development services provided. The total fair value of the common stock was $4,400 based on the closing price of the Company’s common stock on the date of grant.

 

On April 11, 2014, the Company issued 170,000 shares of restricted common stock for video production services provided. The total fair value of the common stock was $3,740 based on the closing price of the Company’s common stock on the date of grant.

 

On April 11, 2014, the Company issued 200,000 shares of restricted common stock for video production services provided. The total fair value of the common stock was $4,400 based on the closing price of the Company’s common stock on the date of grant.

 

On April 11, 2014, the Company issued 1,250,000 shares of restricted common stock to its CEO as a compensation bonus. The total fair value of the common stock was $27,500 based on the closing price of the Company’s common stock on the date of grant.

 

On April 11, 2014, the Company issued 200,000 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $4,400 based on the closing price of the Company’s common stock on the date of grant.

 

On March 24, 2014, the Company issued 733,333 shares of restricted common stock for video production services provided. The total fair value of the common stock was $33,734 based on the closing price of the Company’s common stock on the date of grant.

 

On March 3, 2014, the Company issued 500,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $14,950 based on the closing price of the Company’s common stock on the date of grant.

 

On February 20, 2014, the Company issued 300,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $9,000 based on the closing price of the Company’s common stock on the date of grant.

 

On February 20, 2014, the Company issued 4,000,000 shares of common stock to its CEO as a compensation bonus. The total fair value of the common stock was $120,000 based on the closing price of the Company’s common stock on the date of grant.

 

On January 13, 2014, the Company issued 500,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $24,500 based on the closing price of the Company’s common stock on the date of grant.

 

On January 13, 2014, the Company issued 75,000 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $3,675 based on the closing price of the Company’s common stock on the date of grant.

 

On January 13, 2014, the Company issued 50,000 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $2,450 based on the closing price of the Company’s common stock on the date of grant.

 

On January 13, 2014, the Company issued 50,000 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $2,450 based on the closing price of the Company’s common stock on the date of grant.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

On January 13, 2014, the Company issued 500,000 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $24,500 based on the closing price of the Company’s common stock on the date of grant.

 

Common Stock Subscriptions Payable for Services

On April 15, 2014, the Company granted 99,700 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $2,952 based on the closing price of the Company’s common stock on the date of grant. The shares have not yet been issued.

 

Common Stock Cancellations

On March 6, 2014, the Company cancelled 750,000 shares issued during 2013 for non-performance of services commensurate with the departure of one of the Company’s former employees.

 

On March 6, 2014, the Company cancelled 150,000 shares issued during 2013 for non-performance of services commensurate with the departure of one of the Company’s Directors.

 

 

Note 14 – Warrants and Options

 

Options Granted

On April 11, 2014, the Company’s Board of Directors granted 250,000 fully vested common stock options to a consultant as compensation for services provided. The options are exercisable until April 10, 2016 at an exercise price of $0.05 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 244% and a call option value of $0.0148, was $3,710.

 

On April 11, 2014, the Company’s Board of Directors granted another 250,000 fully vested common stock options to a consultant as compensation for services provided. The options are exercisable until April 10, 2016 at an exercise price of $0.05 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 244% and a call option value of $0.0148, was $3,710.

 

On March 1, 2014, the Company’s Board of Directors granted 600,000 common stock options as compensation for services to a consultant. The options vest ratably in monthly increments over six (6) months beginning April 1, 2014. The options are exercisable until March 1, 2017 at an exercise price of $0.08 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 247% and a call option value of $0.0273, was $16,365. The options are being re-measured and expensed over the vesting period. The Company recognized $9,916 of stock based compensation expense during the nine months ended September 30, 2014.

 

On March 1, 2014, the Company’s Board of Directors granted 600,000 common stock options as compensation for services to another consultant. The options vest ratably in monthly increments over six (6) months beginning April 1, 2014. The options are exercisable until March 1, 2017 at an exercise price of $0.08 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 247% and a call option value of $0.0273, was $16,365. The options are being re-measured and expensed over the vesting period. The Company recognized $9,916 of stock based compensation expense during the nine months ended September 30, 2014.

 

On February 20, 2014, the Company’s Board of Directors granted 8,000,000 fully vested cashless common stock options to the Company’s CEO as compensation for services provided. The options are exercisable until February 20, 2018 at an exercise price of $0.04 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 248% and a call option value of $0.0272, was $217,971.

 

Warrants Granted

On June 13, 2014, the Company issued warrants to purchase 1,500,000 shares of common stock, exercisable at $0.05 per share over a thirty six month period pursuant to a convertible debenture offering in exchange for net proceeds of $75,000 with an $80,000 face value. The proceeds received were allocated between the debt and warrants on a relative fair value basis.

 

On April 18, 2014, the Company sold 200,000 shares of its common stock and an equal number of warrants, exercisable at $0.06 per share over a twenty four month period pursuant to a unit offering in exchange for total proceeds of $6,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

On March 28, 2014, the Company sold 2,000,000 shares of its common stock and an equal number of warrants, exercisable at $0.06 per share over a twenty four month period pursuant to a unit offering in exchange for total proceeds of $50,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

 

On January 30, 2014, the Company sold 1,000,000 shares of its common stock and an equal number of warrants, exercisable at $0.07 per share over a twenty four month period pursuant to a unit offering in exchange for total proceeds of $40,000. The proceeds received were allocated between the common stock and warrants on a relative fair value basis.

 

Options Expired

On August 26, 2014, a total of 240,000 options held by an independent contractor expired.

 

On July 19, 2014, a total of 1,500,000 options held by the Company’s CEO expired.

 

On February 8, 2014, a total of 400,000 options amongst four option holders expired.

 

Warrants Expired

On April 18, 2014, a total of 869,565 warrants held by the Company’s CEO expired.

 

Options and Warrants Exercised

No options or warrants were exercised during the nine months ended September 30, 2014.

 

 

Note 15 – Gain on Debt Settlements

 

The Company recognized debt forgiveness in the total amount of $343,335 and $-0- during the nine months ended September 30, 2014 and 2013, respectively, as presented in other income within the Statements of Operations.

 

On January 6, 2014, we settled outstanding trade accounts payable in the total amount of $349,670 with a payment of $10,000. The creditor forgave the remaining $339,670. An additional $1,540 of trade accounts payable was forgiven from another creditor on February 24, 2014, with the payment of $385, resulting in a $1,155 gain on settlement, along with another debt forgiveness of $2,510 on June 12, 2014, as forgiven by our former transfer agent. All of these debt settlements were included in the $343,335 gain on debt settlements amount as presented in other income at September 30, 2014.

 

 

Note 16 – Income Taxes

 

The Company accounts for income taxes under FASB ASC 740-10, which requires use of the liability method. FASB ASC 740-10-25 provides that deferred tax assets and liabilities are recorded based on the differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes, referred to as temporary differences.

 

For the nine months ended September 30, 2014 and the year ended December 31, 2013, the Company incurred a net operating loss and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At September 30, 2014, the Company had approximately $17,800,000 of federal net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2025.

 

The components of the Company’s deferred tax asset are as follows:

 

		September 30,				December 31,
		2014				2013
Deferred tax assets:
Net operating loss carry forwards		$	6,230,000			$	5,348,700
Net deferred tax assets before valuation allowance			6,230,000				5,348,700
Less: Valuation allowance			(6,230,000	)			(5,348,700	)
Net deferred tax assets		$	–			$	–

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at September 30, 2014 and December 31, 2013, respectively.

 

A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:

 

		September 30,				December 31,
		2014				2013
Federal and state statutory rate			35%				35%
Change in valuation allowance on deferred tax assets			(35%	)			(35%	)

 

In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

 

 

Note 17 – Non-Controlling Interest

 

Non-controlling interest represents the 17% interest in the subsidiary held amongst eleven individuals, of whom the Company’s CEO, Mark Bradley and the Company’s President of Programming, Michael Berk own 3% and 1%, respectively. The net loss attributable to the non-controlling interest totaled $215,373 during the nine months ending September 30, 2014.

 

 

Note 18 – Subsequent Events

 

Convertible Debenture Proceeds

On November 5, 2014, the Company received net proceeds of $100,000 in exchange for an unsecured convertible promissory note with a face value of $104,000 that carries an 8% interest rate (“Tenth Asher Note”), which matures on July 29, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty one percent (61%) of the average of the three (3) lowest closing bid prices of the Company’s common stock over the ten (10) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid a debt issuance cost of $4,000 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method.

 

On October 13, 2014, the Company received net proceeds of $70,000 in exchange for an unsecured convertible promissory note with a face value of $75,250 that carries an 8% interest rate (“First Tangiers Note”), which matures on October 13, 2015. The note is part of total loan offering with a $236,500 face value and OID of 7.5% of any consideration paid. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the average of the two lowest trading prices of the Company’s common stock for the fifteen (15) trading days prior to, and including, the conversion date. In the event the Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to fifty percent (50%), rather than the sixty percent (60%) conversion rate while that “Chill” is in effect, and an additional 5% discount if the Depository Trust Company’s (“DTC”) Fast Automated Securities Transfer (“FAST”) is not eligible for a cumulative total conversion price equal to forty five percent (45%). The note carries a twenty percent (20%) interest rate and $1,000 per day of liquidated damages in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid total debt issuance cost of $2,500 that is being amortized on the straight line method, which approximates the effective interest method, over the life of the loan. The Company must at all times reserve at least 5 million shares of common stock for potential conversions.

 

Common Stock Issuances for Debt Conversions

On November 10, 2014, the Company issued 1,889,466 shares of common stock pursuant to the conversion of $20,000 of principal on the First Group 10 Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

On October 20, 2014, the Company issued 863,594 shares of common stock pursuant to the conversion of $8,549, consisting of $7,121 of outstanding principal and $1,428 of interest on the First GEL Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.

 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Common Stock Issuances on Subscriptions Payable

On October 23, 2014, the Company issued 2,500,000 shares of common stock in satisfaction of a subscriptions payable outstanding at September 30, 2014 for the $50,000 sale of common stock on August 14, 2014.

 

Common Stock Issued for Services

On November 5, 2014, the Company issued 350,000 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $11,550 based on the closing price of the Company’s common stock on the date of grant.

 

On November 5, 2014, the Company issued 300,000 shares of S-8 common stock for professional services provided. The total fair value of the common stock was $9,900 based on the closing price of the Company’s common stock on the date of grant.

 

On November 5, 2014, the Company issued 300,000 shares of restricted common stock for video production services provided. The total fair value of the common stock was $9,900 based on the closing price of the Company’s common stock on the date of grant.

 

On November 5, 2014, the Company issued 100,000 shares of restricted common stock for video production services provided. The total fair value of the common stock was $3,300 based on the closing price of the Company’s common stock on the date of grant.

 

On November 5, 2014, the Company issued 500,000 shares of restricted common stock for professional services provided. The total fair value of the common stock was $16,500 based on the closing price of the Company’s common stock on the date of grant.

 

 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

Overview and Outlook

 

Players Network is a media and entertainment company engaged in the development of Digital Networks. We distribute broadband video and other social media content over a wide variety of internet enabled devices and cable television channels. The Company has launched its proprietary scalable NexGenTV technology platform. The platform is designed to deliver video content and develop digital social communities, including “Vegas On Demand TV” , “Real Vegas TV” and “WeedTV”

 

Video On Demand

The Company operates a Video On Demand (“VOD”) television channel, also named Vegas On Demand, which consists of original programming that is distributed over its own VOD channels to approximately 23 million homes over the internet with distribution partners that include, Comcast, Hulu, Blinkx, Google, and YouTube Video, , and various mobile platforms. Players Network has a fourteen year history of providing consumers with quality ‘Gaming and Las Vegas Lifestyle’ video content.

 

Vegas On Demand TV and Real Vegas TV offers its audience the ability to connect to Vegas insiders through unique, high-quality programming that captures the excitement, sex appeal, entertainment, and the non-stop adrenaline rush of the Las Vegas gaming lifestyle. Players Network’s content goes beyond poker, casino action, sports betting, and racing, to lifestyle programs about entertainment and fine living that attract young and sophisticated viewers that comprise the major digital media demographic. Whenever possible our content incorporates an expert, insider or celebrity within the Vegas community in order to enhance promotional merchandising to prospective customers.

 

The Company plans to use both its platform and original branded programming and events as a means to develop additional revenue streams, as well as marketing and membership benefits of our social media platform. These revenue streams include branded entertainment, sponsorships for events, and media placement, third party commissions for video and banner advertisements, merchandise and production sales and services.

 

Players Network has addressed the digital market in an effort to grow as a New Media Company using “Vegas On Demand”, its flagship branded television channel destination, which uses its scalable, custom Enterprise Web Platform to host “Vegas On Demand”, which can also be replicated to launch thousands of channel destinations in any Lifestyle Category, for any Lifestyle Brand.

 

Proprietary Platform

PNTV’s enterprise platform efficiently deploys, manages and distributes videos with integrated revenue-generating tools that go beyond traditional advertising. On our platform, the viewer of a video is brought into a web environment encompassing that video’s lifestyle, where they are presented with membership, merchandising, couponing, subscription, loyalty programs, contest and other marketing opportunities, including the integration of live events. The platform also integrates branded sponsorships, and a game-like virtual economy supported by our Cost Per Action (“CPA”) advertising network.

 

By providing companies and lifestyle brands with their own channel destination on our enterprise web platform and offering our media and production expertise, we plan to provide an integrated media, marketing and merchandising solution that aims to save our customers significant time and money that would be required to replicate equivalent services.

 

We have also leveraged our existing library of original content, and distribution network, to build this infrastructure hub and launch our initial digital lifestyle network: “VegasOnDemand.tv”.

 

The ability to monetize video in so many ways, coupled with an efficient, easy-to-use technical and administrative back-end dashboard, is a powerful feature of Player’s platform. It allows the creation of unlimited, new channel destinations using our scalable Content Management System (“CMS”) framework, with cost-competitive operations. Importantly, it allows content management by administrative and editorial level employees without the expense of having a full-time technical engineering staff in-house.

 

The Company’s platform has two main membership categories: 1) the consumer/user that visits our digital communities and partakes in viewing ad-supported and pay-per-view premium videos, purchases products and connects with “insiders”, who are our 2) premium members.

 

 

Premium members must be industry insiders and/or experts in their lifestyle category. For example, with regard to Vegas On Demand, Insiders are designed to be the “who’s-who” of Vegas: entertainers, nightclub promoters, casino hosts, famous chefs, etc. who offer our members deals on transactions connected to their sphere of influence. Deals may include being invited to a special VIP event, line passes, two-for-one offers, PPV video discounts, etc.

 

Transactions can be purchased using credit cards, or our incentivized Virtual Economy. When using our Virtual Economy, we set the value of the goods and services that are redeemed through a points (virtual currency) system. Points can be bought or earned using our CPA advertising network. Our Virtual Economy allows the Company to realize revenue every time Points are earned, as well as every time Points are redeemed.

 

Weed TV

During the 2^nd quarter of 2014, we launched our first Lifestyle Channel Destination, Weed TV located at the URL: www.weedtv.com. Weed TV is a Lifestyle Channel Destination powered by PNTV’s NextGenTV(SM) enterprise platform. Weed TV will be the go to source for informational, entertainment, products and services for people who relate to the marijuana lifestyle and social community. Weed TV will feature daily stories sourced by weedtv.com correspondents and contributors from around the world. It will provide a wide variety of editorial content, videos and entertainment including lead stories, political news, business news on the industry, financial analysis from industry experts, growing tips, cooking tips, a “Weed101” section, medical uses, lifestyle features, entertainment specials and merchandise shopping cart offering the latest products and services.

 

Green Leaf Farms Holdings and Subsidiary

On July 8, 2014, we formed a subsidiary, Green Leaf Farms Holdings, Inc. (“GLFH”), in which we retained 80% ownership, with the remaining 20% held by key experts and advisors. The subsidiary has been formed as a holding company to potentially own additional subsidiaries that may operate medical marijuana related businesses. These additional subsidiaries have yet to be formed, and, or, acquired. We have applied for a Medical Marijuana Dispensary special use permit with the City of Las Vegas, and a Cultivation and Processing special use permits in North Las Vegas and a license for all permits in the State of Nevada, and have currently been granted the two special use permits in North Las Vegas, however there can be no assurance we will be able to conduct these operations. As such, there is a risk that we may not be able to expand our operations into this field as intended. The purpose of applying for these licenses is to offer a fully integrate a digital strategy of Weed TV into a brick and mortar cash producing operation. Thus using our own media to promote and market our own brands that will be built in the medical Marijuana industry. This approach set us apart from other competitors in the market place whereby we can leverage our audience to build customers...

 

Video Production Pilot

During 2013, J&H Productions began to market the first pilot episode we created per our agreement to produce a series of three reality shows centered on a family that is in the Las Vegas nightlife and night club business. The agreement also provides for the production of forty short video segments to be used to develop a new branded Channel Destination using the Company’s scalable platform. Capitalized television production costs for each pilot episode have been expensed as revenues were recognized upon delivery and acceptance of the completed pilot episodes using the individual-film-forecast-computation method for each television show produced. The feedback we received during the marketing process has caused both parties to re-evaluate the project and completion of the final two episodes was delayed until the second quarter of 2014, when all related deferred revenues and costs were recognized. The Company recognized $95,000 of revenues and related expenses of $75,617 during 2012 with the completion of the first of three pilot episodes. An additional $135,000 of revenues and $116,454 of related expenses were recognized with the completion of the project during the second quarter of 2014.

 

As we continue to expand our business and implement our business strategy, our current monthly cash flow requirements will exceed our near term cash flow from operations. Our available cash resources and anticipated cash flow from operations are insufficient to satisfy our anticipated costs associated with new product development. There can be no assurance that we will be able to generate sufficient cash from operations in future periods to satisfy our capital requirements. Therefore, we will have to continue to rely on external financing activities, including the sale of our equity securities, to satisfy our capital requirements for the foreseeable future. Due, in part, to our lack of historical earnings, our prior success in attracting additional funding has been limited to transactions in which our equity is used as currency. Equity financings of the type we have had to pursue are dilutive to our stockholders and may adversely impact the market price for our shares. However, we have no commitments for borrowings or additional sales of equity, the precise terms upon which we may be able to attract additional funding is not known at this time, and there can be no assurance that we will be successful in consummating any such future financing transactions on terms satisfactory to us, or at all.

 

 

Results of Operations for the Three Months Ended September 30, 2014 and 2013:

 

		For the Three
		Months Ended
		September 30,								Increase /
		2014				2013				(Decrease)
Revenues		$	168			$	286			$	(118	)
Direct operating costs			77,350				4,843				72,507
General and administrative			1,214,180				40,386				1,173,794
Salaries and wages			97,261				65,992				31,269
Depreciation and amortization			7,469				5,737				1,732
Total Operating Expenses			1,396,260				116,958				1,279,302
Net Operating Loss			(1,396,092	)			(116,672	)			1,279,420
Total other income (expense)			(349,769	)			(222,874	)			126,895
Net (Loss)		$	(1,745,861	)		$	(339,546	)		$	1,406,315

 

Revenues:

 

During the three months ended September 30, 2014 and 2013, we received revenues primarily from the sale of in-home media, advertising fees and the recognition of deferred revenues on content development. Aggregate revenues for the three months ended September 30, 2014 were $168, compared to revenues of $286 in the three months ended September 30, 2013, a decrease in revenues of $118, or 41%. Our revenues decreased primarily due to diminished royalties from our online views.

 

Direct Operating Costs:

 

Direct operating costs were $77,350 for the three months ended September 30, 2014 compared to $4,843 for the three months ended September 30, 2013, an increase of $72,507, or 1,497%. Our direct operating costs increased due primarily to content production costs for our new media channel, Weed.tv, which was launched during April of 2014.

 

General and Administrative:

 

General and administrative expenses were $1,214,180 for the three months ended September 30, 2014 compared to $40,386 for the three months ended September 30, 2013, an increase of $1,173,794, or 2,906%. General and administrative expense increased primarily due to $960,000 of stock based compensation in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation to our medical marijuana endeavors incurred during the three months ended September 30, 2014 compared to the three months ended September 30, 2013. The fair value of the stock based compensation was determined by the sale of 1% of the equity in the subsidiary to an independent third party.

 

Salaries and Wages:

 

Salaries and wages expense totaled $97,261 for the three months ended September 30, 2014 compared to $65,992 for the three months ended September 30, 2013, an increase of $31,269, or 47%. The increase in salaries and wages was primarily due to a $50,000 bonus awarded to our CEO, as offset by staffing reductions due to our diminished resources during the three months ended September 30, 2014, compared to the three months ended September 30, 2013.

 

Depreciation and Amortization:

 

Depreciation and amortization expense was $7,469 for the three months ended September 30, 2014 compared to $5,737 for the three months ended September 30, 2013, an increase of $1,732, or 30%. The increase in depreciation and amortization was primarily due to additional depreciation on a total of $34,648 of fixed asset additions acquired during 2014.

 

 

Net Operating Loss:

 

Net operating loss for the three months ended September 30, 2014 was $1,396,092, or ($0.01) per share compared to a net operating loss of $116,672 for the three months ended September 30, 2013, or ($0.00) per share, an increase of $1,279,420, or 1,097%. Net operating loss increased primarily due to $960,000 of stock based compensation in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation to our medical marijuana endeavors incurred during the three months ended September 30, 2014 compared to the three months ended September 30, 2013. The fair value of the stock based compensation was determined by the sale of 1% of the equity in the subsidiary to an independent third party. In addition, during the three months ended September 30, 2014, we issued a total of 5,227,000 shares of common stock valued at $100,881 and the amortization of options valued at $12,898 in payment of professional services in lieu of cash.

 

Other Income (Expense):

 

Other income (expense) was $(349,769) for the three months ended September 30, 2014 compared to $(222,874) for the three months ended September 30, 2013, an increase of $126,895, or 57%. Other expense increased on a net basis primarily due to a $102,636 increase in our $245,450 net loss related to the change in derivative liabilities on our convertible debentures recognized during the three months ended September 30, 2014, compared to the net loss of $142,814 related to the change in derivative liabilities recognized during the three months ended September 30, 2013, as well as, increased interest expense of $24,259 on our increased indebtedness during the three months ended September 30, 2014, compared to the three months ended September 30, 2013.

 

Net Loss:

 

The net loss for the three months ended September 30, 2014 was $1,745,861, or ($0.01) per share, compared to a net loss of $339,546, or ($0.00) per share, for the three months ended September 30, 2013, an increased net loss of $1,406,315, or 414%. Net loss increased primarily due to $960,000 of stock based compensation in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation to our medical marijuana endeavors, the issuance of a total of 5,227,000 shares of common stock valued at $100,881 and the change in derivative liabilities on our convertible debentures recognized during the three months ended September 30, 2014, compared to the three months ended September 30, 2013.

 

 

Results of Operations for the Nine Months Ended September 30, 2014 and 2013:

 

		For the Nine
		Months Ended
		September 30,								Increase /
		2014				2013				(Decrease)
Revenues		$	141,625			$	1,365			$	140,260
Direct operating costs			314,321				82,112				232,209
General and administrative			1,569,047				263,646				1,305,401
Salaries and wages			524,917				203,532				321,385
Depreciation and amortization			19,984				17,210				2,774
Total Operating Expenses			2,428,269				566,500				1,861,769
Net Operating Loss			(2,286,644	)			(565,135	)			1,721,509
Total other income (expense)			(570,978	)			(648,976	)			(77,998	)
Net (Loss)		$	(2,857,622	)		$	(1,214,111	)		$	1,643,511

 

Revenues:

 

During the nine months ended September 30, 2014 and 2013, we received revenues primarily from the sale of in-home media, advertising fees and the recognition of deferred revenues on content development. Aggregate revenues for the nine months ended September 30, 2014 were $141,625, compared to revenues of $1,365 in the nine months ended September 30, 2013, an increase in revenues of $140,260, or 10,275%. Our revenues increased primarily due to the recognition of $135,000 of deferred revenues from the completion and delivery of the final two pilot episodes of our “Naked Empire Series” project with HJ Productions. During the nine months ended September 30, 2014, we also recognized a total of $5,950 from the first sales of advertising on our new media channel, “Weed.tv” within our internet platform. We anticipate increased market saturation of our video content through our newly revamped websites and the Company’s existing media channels as we continue to market our internet platform throughout the remainder of 2014, and into 2015.

 

Direct Operating Costs:

 

Direct operating costs were $314,321 for the nine months ended September 30, 2014 compared to $82,112 for the nine months ended September 30, 2013, an increase of $232,209, or 283%. Our direct operating costs increased due primarily to the recognition of deferred television costs of $116,454, related to the completion and delivery of the final two pilot episodes of our Naked Empire Series project with HJ Productions, and our increased website development costs as we continued to develop our new media channel, Weed.tv media channel, which was launched during April of 2014.

 

General and Administrative:

 

General and administrative expenses were $1,569,047 for the nine months ended September 30, 2014 compared to $263,646 for the nine months ended September 30, 2013, an increase of $1,305,401, or 495%. General and administrative expense increased primarily due to $960,000 of stock based compensation in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation to our medical marijuana endeavors incurred during the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. The fair value of the stock based compensation was determined by the sale of 1% of the equity in the subsidiary to an independent third party.

 

Salaries and Wages:

 

Salaries and wages expense totaled $524,917 for the nine months ended September 30, 2014 compared to $203,532 for the nine months ended September 30, 2013, an increase of $321,385, or 158%. The increase in salaries and wages was primarily due to non-cash, stock based compensation bonuses issued to our CEO during the nine months ended September 30, 2014, consisting of 4 million shares of common stock with a fair value of $120,000, and 8 million common stock options valued at $217,971, that were not present during the comparative nine months ended September 30, 2013.

 

 

Depreciation and Amortization:

 

Depreciation and amortization expense was $19,984 for the nine months ended September 30, 2014 compared to $17,210 for the nine months ended September 30, 2013, an increase of $2,774, or 16%. The increase in depreciation and amortization was primarily due to additional depreciation on a total of $34,648 of fixed asset additions incurred during the nine months ended September 30, 2014.

 

Net Operating Loss:

 

Net operating loss for the nine months ended September 30, 2014 was $2,286,644, or ($0.01) per share compared to a net operating loss of $565,135 for the nine months ended September 30, 2013, or ($0.01) per share, an increase of $1,721,509, or 305%. Net operating loss increased primarily due to $960,000 of stock based compensation in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation to our medical marijuana endeavors, and compensation bonuses issued to our CEO and increased advertising and promotional fees and professional services, consisting primarily of non-cash, stock based compensation. During the nine months ended September 30, 2014, we issued a total of 4 million shares of common stock with a fair value of $120,000, and 8 million common stock options valued at $217,971 to our CEO as a bonus, along with 8,899,728 shares of common stock valued at $228,642, a subscriptions payable for 99,700 shares of common stock, valued at $2,592 and the amortization of options valued at $40,150 in payment of professional services in lieu of cash.

 

Other Income (Expense):

 

Other income (expense) was $(570,978) for the nine months ended September 30, 2014 compared to $(648,976) for the nine months ended September 30, 2013, a decrease of $77,998, or 12%. Other expense decreased on a net basis primarily due to the $81,168 decrease in interest expense, consisting primarily of the amortization of debt discounts related to our convertible debentures recognized during the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013, and a gain of $343,335 on debt settlements that was realized with the settlement of $353,720 of accounts payable in exchange for total payments of $10,385 during the nine months ended September 30, 2014, as diminished by an increase of $348,130 due to the change in derivative liability during the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013.

 

Net Loss:

 

The net loss for the nine months ended September 30, 2014 was $2,857,622, or ($0.02) per share, compared to a net loss of $1,214,111, or ($0.01) per share, for the nine months ended September 30, 2013, an increased net loss of $1,643,511, or 135%. Net loss increased primarily due to $960,000 of stock based compensation in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation to our medical marijuana endeavors, and to the $348,130 increase in our change in derivative liability, increased advertising and compensation, consisting primarily of non-cash, stock based compensation, as diminished by the gain of $343,335 on debt settlements incurred during the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013.

 

LIQUIDITY AND CAPITAL RESOURCES

 

The following table summarizes total assets, accumulated deficit, stockholders’ equity and working capital at September 30, 2014 compared to December 31, 2013.

 

		September 30,				December 31,				Increase /
		2014				2013				(Decrease)
Total Assets		$	125,764			$	195,083			$	(69,319	)
Accumulated (Deficit)		$	(26,242,551	)		$	(23,567,996	)		$	2,674,555
Stockholders’ Equity (Deficit)		$	(1,668,091	)		$	(1,518,043	)		$	(150,048	)
Working Capital (Deficit)		$	(1,750,511	)		$	(1,584,201	)		$	(166,310	)

 

Our principal source of operating capital has been provided from private sales of our common stock, revenues from operations, and debt and equity financings. At September 30, 2014, we had a negative working capital position of $1,750,511.

 

 

Debt Financing

On September 22, 2014, the Company received net proceeds of $35,000 in exchange for an unsecured convertible promissory note, bearing interest at twelve percent (12%) with a face value of $38,500 (“Second Vista Note”), which matures on June 1, 2016, as part of a larger financing agreement that enables the Company to draw total proceeds of $225,000 at the discretion of the lender. The financing carries a total face value of $250,000 and a $25,000 Original Issue Discount. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date.

 

On August 19, 2014, the Company received net proceeds of $40,000 in exchange for an unsecured convertible promissory note, bearing interest at 8% annually, with a face value of $80,000 (“Second WHC Note”), which matures on August 19, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty seven and a half percent (57.5%) of the average of the two (2) lowest closing bid prices of the Company’s common stock over the ten (10) trading days immediately preceding the conversion request date.

 

On July 15, 2014, the Company received net proceeds of $35,000 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $37,500 (“Third LG Note”), which matures on March 15, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the lowest trading price of the Company’s common stock for the twelve (12) trading days prior to, and including, the conversion date if received after 4PM Eastern Standard Time. The note also carries an additional “Back-end Note” with the same terms as the original note that enables the lender to lend the Company another $37,500, less $1,750 of debt issuance costs and $3,500 in due diligence fees, with a holding period that tacks to the original note for purposes of Rule 144 of the Securities Exchange Act of 1934. In the event the Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 55% instead of 60% while that “Chill” is in effect.

 

On June 13, 2014, the Company received net proceeds of $75,000 in exchange for an unsecured convertible promissory note, bearing interest at 8% annually, with a face value of $80,000 (“First WHC Note”), which matures on June 13, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty two and a half percent (62.5%) of the average of the two (2) lowest closing bid prices of the Company’s common stock over the ten (10) trading days immediately preceding the conversion request date.

 

On June 2, 2014, the Company received net proceeds of $50,000 in exchange for an unsecured convertible promissory note, bearing interest at twelve percent (12%) with a face value of $55,000 (“First Vista Note”), which matures on June 1, 2016, as part of a larger financing agreement that enables the Company to draw total proceeds of $225,000 at the discretion of the lender. The financing carries a total face value of $250,000 and a $25,000 Original Issue Discount. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date.

 

On May 20, 2014, the Company received net proceeds of $100,000 in exchange for an unsecured convertible promissory note, bearing interest at 10% annually, with a face value of $113,000 (“First Typenex Note”), which matures on May 19, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the three (3) lowest (“Trading Prices”), whereby Trading Price is defined as the volume weighted average price (“VWAP”) of the Company’s common stock over the fifteen (15) trading days prior to the conversion request date. If the arithmetic average of the three (3) lowest Trading Prices is less than $0.01, then the Conversion Factor will be reduced to 60%.

 

On May 9, 2014, the Company received $50,000 in exchange for an unsecured convertible promissory note that carries a 12% interest rate (“First Group 10 Note”), which matures on May 8, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to the lesser of (a) fifty eight percent (58%) of the average of the two lowest closing bid prices of the Company’s common stock for the seventeen (17) trading days prior to the conversion notice date, or (b) four and a half cents ($0.045) per share.

 

On April 24, 2014, the Company received net proceeds of $33,250 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $35,000 (“Second LG Note”), which matures on April 11, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty five percent (55%) of the average of the lowest closing bid prices of the Company’s common stock for the twelve (12) trading days prior to, and including, the conversion date. The note carries an additional “Back-end Note” with the same terms as the original note that enables the lender to lend the Company another $35,000, less $1,750 of debt issuance costs, with a holding period that tacks to the original note for purposes of Rule 144 of the Securities Exchange Act of 1934.

 

On April 17, 2014, the Company received net proceeds of $40,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $44,000 (“Fourth JMJ Note”), which matures on April 16, 2015, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty five percent (55%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date, as amended within the original promissory note on April 10, 2014.

 

 

On February 20, 2014, the Company received net proceeds of $40,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $44,000 (“Third JMJ Note”), which matures on February 19, 2015, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date, as amended within the original promissory note on April 10, 2014.

 

On January 8, 2014, the Company received $25,500 in exchange for an unsecured convertible promissory note that carries an 8% interest rate (“First GEL Note”), which matures on October 8, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the average of the two (2) lowest closing bid prices of the Company’s common stock for the ten (10) trading days prior to the conversion date.

 

On January 8, 2014, the Company received $25,500 in exchange for an unsecured convertible promissory note that carries an 8% interest rate (“First LG Note”), which matures on October 8, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the average of the two (2) lowest closing bid prices of the Company’s common stock for the ten (10) trading days prior to the conversion date.

 

We have utilized these funds to repay $66,605 of previously issued convertible debentures, comply with our regulatory reporting requirements, and to expand our media distribution platforms to launch Weed.tv. Although our revenues are expected to grow as we expand our operations, our revenues are not expected to exceed our investment and operating costs in the next twelve months, and we do not have funds sufficient to fund our operations at their current level for the next twelve months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of operations. To address these risks, we must, among other things, seek growth opportunities through investment and acquisitions in our industry, effectively monitor and manage our claims for payments that are owed to us, implement and successfully execute our business strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. We cannot assure that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition and results of operations.

 

To conserve on the Company's capital requirements, the Company has issued shares in lieu of cash payments to outside consultants, and the Company expects to continue this practice. In the nine months ended September 30, 2014, the Company granted a total of 11,276,061 shares of common stock valued at $352,335 in lieu of cash payments to employees and outside consultants, compared to the issuance of 2,872,000 shares of common stock valued at $119,780 in lieu of cash payments to employees and outside consultants during the nine months ending September 30, 2013. The Company is not now in a position to determine an approximate number of shares that the Company may issue for the preceding purpose in the remainder of 2014.

 

During the nine months ended September 30, 2014, we issued a total of 8,691,598 shares of common stock pursuant to the conversion of $106,447 of indebtedness on convertible debentures. The conversion prices of a total of $569,613 in outstanding convertible notes outstanding as of September 30, 2014, is convertible at various prices discounted to market as depicted in the table below. As a result, any conversion of the Convertible Notes and sale of shares of common stock issuable in connection with the conversion thereof will likely cause the value of our common stock, if any, to decline in value, as described in greater detail under the Risk Factors below.

 

 

							Potential issuable shares at various conversion prices
							below the most recent market price of $0.03 per share
Lender /		Conversion		Principal			100%		75%		50%		25%
Origination		Terms		Borrowed			$0.03		$0.0225		$0.015		$0.0075
JMJ Financial (Second JMJ Note) June 4, 2013		Convertible into 65% of the average of the lowest trading price over the 25 trading days prior to the conversion request.		$	20,492		683,067		910,756		1,366,133		2,732,267
GEL Properties, LLC (First GEL Properties Note) January 8, 2014		Convertible into 60% of the average of the two lowest closing bid prices over the 10 days prior to the conversion request.		$	7,121		237,367		316,489		474,733		949,467
JMJ Financial (Third JMJ Note) February 20, 2014		Convertible into 65% of the average of the lowest trading price over the 25 trading days prior to the conversion request.		$	44,000		1,466,667		1,955,556		2,933,333		5,866,667
JMJ Financial (Fourth JMJ Note) April 17, 2014		Convertible into 65% of the average of the lowest trading price over the 25 trading days prior to the conversion request.		$	44,000		1,466,667		1,955,556		2,933,333		5,866,667
LG Capital Funding, LLC (Second LG Capital Note) April 24, 2014		Convertible into 55% of the average of the lowest closing bid prices over the 12 trading days prior to the conversion request.		$	35,000		1,166,667		1,555,556		2,333,333		4,666,667
Group 10 Funding (First Group 10 Note) May 9, 2014		Convertible at a price equal to the lesser of (a) fifty eight percent (58%) of the average of the two lowest closing bid prices of the Company’s common stock for the seventeen (17) trading days prior to the conversion notice date, or (b) four and a half cents ($0.045) per share.		$	50,000		1,666,667		2,222,222		3,333,333		6,666,667
Typenex (First Typenex Note) May 20, 2014		Convertible into 65% of the average of the three (3) lowest (“Trading Prices”), whereby Trading Price is defined as the volume weighted average price (“VWAP”) of the Company’s common stock over the fifteen (15) trading days prior to the conversion request date. If the arithmetic average of the three (3) lowest Trading Prices is less than $0.01, then the Conversion Factor will be reduced to 60%.		$	113,000		3,766,667		5,022,222		7,533,333		15,066,667

 

 

Vista Capital (First Vista Note) June 2, 2014		Convertible into 65% of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date.		$	55,000		1,833,333		2,444,444		3,666,667		7,333,333
WHC Capital (First WHC Note) June 13, 2014		Convertible into 62.5% of the average of the two (2) lowest closing bid prices over the 10 trading days prior to the conversion request.		$	80,000		2,666,667		3,555,556		5,333,333		10,666,667
LG Capital Funding, LLC (Third LG Capital Note) July 15, 2014		Convertible into 55% of the average of the lowest closing bid prices over the 12 trading days prior to the conversion request.		$	37,500		1,250,000		1,666,667		2,500,000		5,000,000
WHC Capital (Second WHC Note) August 19, 2014		Convertible into 57.5% of the average of the two (2) lowest closing bid prices over the 10 trading days prior to the conversion request.		$	45,000		1,500,000		2,000,000		3,000,000		6,000,000
Vista Capital Investments, LLC (Second Vista Note) September 22, 2014		Convertible into 65% of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date.		$	38,500		1,283,333		1,711,111		2,566,667		5,133,333
				$	569,613		18,987,100		25,316,133		37,974,200		75,948,400

 

 

Item 3. Quantitative and Qualitative Disclosures about Market Risks

 

Not applicable.

 

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, whom are one in the same, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(e)). Based upon that evaluation, our principal executive officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer, as appropriate to allow timely decisions regarding required disclosure.

 

Inherent Limitations of Internal Controls

Our Principal Executive Officer does not expect that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

 

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting, other than those stated above, during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

In the ordinary course of business, we may become subject to lawsuits and other claims and proceedings that might arise from litigation matters or regulatory audits. Such matters are subject to uncertainty and outcomes are often not predictable with assurance. Our management does not presently expect that such matters will have a material adverse effect on the Company’s financial condition or results of operations. We are not currently involved in any pending or threatened material litigation or other material legal proceedings, nor have we been made aware of any penalties from regulatory audits, except as the legal action we initiated, as described below.

 

Players Network filed a civil suit in the Eighth Judicial District Court in Clark County, Nevada on January 2, 2014, and served the suit on January 23, 2014, listed as case number A-13-693908-B against Defendants, Comcast Corporation and Advanced Information Systems Inc. On February 27, 2014, the Defendant, Comcast, and Players Network agreed to, and filed a stipulation with the court, whereby Comcast agreed to not file a motion to transfer the venue from the Nevada Federal Court and Players Network agreed to dismiss the other defendant, Advanced Information Systems, Inc., from the lawsuit. On Monday July 21, 2014, United States District Court Magistrate Judge George Foley, Jr. denied Comcast’s Motion to Stay Discovery. Information and details will be forthcoming as permitted by public disclosure. The court has established the discovery calendar. Discovery has been slated to begin December 4, 2014. Mr. Barney C. Ales and his firm based in Las Vegas, Nevada have been retained as the Company's Special Counsel, for the litigation and ultimate trial of this matter.

 

 

Item 1A. Risk Factors

 

As a smaller reporting company, we are not required to provide the information required by this Item.

 

 

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

 

The following sales of equity securities by the Company occurred during the three month period ended September 30, 2014:

 

Common Stock Sales

On August 14, 2014, the Company sold 2,500,000 shares of its common stock in exchange for proceeds of $50,000. The shares were issued on October 23, 2014, and were recorded as a subscription payable as of September 30, 2014. The issuance was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, the investor was accredited, and there was no solicitation in connection with the offering.

 

Common Stock Issuances for Debt Conversions

On September 23, 2014, the Company issued 662,879 shares of common stock pursuant to the conversion of $7,000 of principal on the First GEL Note. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with our operations, and there was no solicitation.

 

On September 9, 2014, the Company issued 719,424 shares of common stock pursuant to the conversion of $6,000 of principal on the First GEL Note. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with our operations, and there was no solicitation.

 

On August 13, 2014, the Company issued 509,295 shares of common stock pursuant to the conversion of $5,379 of principal on the First GEL Note. The shares of common stock issuable upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933. The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with our operations, and there was no solicitation.

 

 

Item 3. Defaults Upon Senior Securities

 

On October 24, 2014, a note holder submitted a conversion request to convert $10,000 of principal on the Second LG Note, which was inconsistent with the conversion terms as stated in the convertible promissory note. The Company requested that the conversion notice be corrected and resubmitted, at which time the note holder contended the conversion terms were intended to be based on 55% of the lowest closing bid price over the preceding twelve trading days, as opposed to the stated 55% of the average of the lowest closing bid price of the Common Stock over the preceding twelve trading days. On October 31, 2014, the note holder sent demand for repayment on the Second LG Note, consisting of $35,000 of principal and $1,214 of accrued interest outstanding as of September 30, 2014. As a result, we are in default on this convertible promissory note. The note carries an 18% default interest rate and a penalty of $250 per day that the shares are not issued, beginning on the 4th day after the conversion notice was delivered to the Company. This penalty increased to $500 per day beginning on the 10th day after the conversion notice was delivered to the Company.

 

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

 

Item 5. Other Information

 

None.

 

 

Item 6. Exhibits

 

3.1	Certificate of Amendment of Articles of Incorporation Increasing the Authorized Stock filed with the Nevada Secretary of State on May 6, 2013 (incorporated by reference to Exhibit 3.5 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on May 13, 2013)
3.2*	Articles of Incorporation for Green Leaf Farms Holdings, Inc. filed with the Nevada Secretary of State on July 8, 2014
3.3*	Articles of Organization for Green Leaf Medical, LLC. filed with the Nevada Secretary of State on July 18, 2014
10.1	Convertible Redeemable Note with GEL Properties, LLC (First GEL Note), January 8, 2014 (incorporated by reference to Exhibit 10.1 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.2	Collateralized Secured Back End Note with GEL Properties, LLC (First GEL Note), January 8, 2014 (incorporated by reference to Exhibit 10.2 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.3	Convertible Redeemable Back End Note with GEL Properties, LLC (First GEL Note), January 8, 2014 (incorporated by reference to Exhibit 10.3 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.4	Securities Purchase Agreement with GEL Properties, LLC (First GEL Note), January 8, 2014 (incorporated by reference to Exhibit 10.4 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.5	Convertible Redeemable Note with LG Capital Funding, LLC (First LG Capital Note), January 8, 2014 (incorporated by reference to Exhibit 10.5 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.6	Collateralized Secured Back End Note with LG Capital Funding, LLC (First LG Capital Note), January 8, 2014 (incorporated by reference to Exhibit 10.6 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.7	Convertible Redeemable Back End Note with LG Capital Funding, LLC (First LG Capital Note), January 8, 2014 (incorporated by reference to Exhibit 10.7 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.8	Securities Purchase Agreement with LG Capital Funding, LLC (First LG Capital Note), January 8, 2014 (incorporated by reference to Exhibit 10.8 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.9	Subscription Agreement (W. Elsaesser), January 21, 2014 (incorporated by reference to Exhibit 10.9 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.10	Subscription Agreement (E. Winfield), January 23, 2014 (incorporated by reference to Exhibit 10.10 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.11	Subscription Agreement (I. Zalcberg), January 30, 2014 (incorporated by reference to Exhibit 10.11 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.12	Warrant Agreement (I. Zalcberg), January 30, 2014 (incorporated by reference to Exhibit 10.12 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.13	Subscription Agreement (I. Zalcberg), March 28, 2014 (incorporated by reference to Exhibit 10.13 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.14	Warrant Agreement (I. Zalcberg), March 28, 2014 (incorporated by reference to Exhibit 10.4 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
10.15	Convertible Note with Group 10 Holdings, LLC (First Group 10 Note), May 9, 2014 (incorporated by reference to Exhibit 10.15 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)

 

 

10.16	First Amendment to Convertible Note with Group 10 Holdings, LLC (First Group 10 Note), May 9, 2014 (incorporated by reference to Exhibit 10.16 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.17	Convertible Note with Typenex Co-Investment, LLC (First Typenex Note), May 20, 2014 (incorporated by reference to Exhibit 10.17 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.18	Securities Purchase Agreement with Typenex Co-Investment, LLC (First Typenex Note), May 20, 2014 (incorporated by reference to Exhibit 10.18 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.19	Convertible Note with Vista Capital Investments, LLC (First Vista Note), June 2, 2014 (incorporated by reference to Exhibit 10.19 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.20	Convertible Note with WHC Capital, LLC (First WHC Note), June 13, 2014 (incorporated by reference to Exhibit 10.20 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.21	Securities Purchase Agreement with WHC Capital, LLC (First WHC Note), June 13, 2014 (incorporated by reference to Exhibit 10.21 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.22	Warrant Agreement (WHC Capital, LLC), June 13, 2014 (incorporated by reference to Exhibit 10.22 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.23	Subscription Agreement (M. Leivotes), April 8, 2014 (incorporated by reference to Exhibit 10.23 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.24	Warrant Agreement (M. Leivotes), April 8, 2014 (incorporated by reference to Exhibit 10.24 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.25	Stock Option Agreement (E. Henley), April 11, 2014 (incorporated by reference to Exhibit 10.25 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.26	Stock Option Agreement (R. Brown), April 11, 2014 (incorporated by reference to Exhibit 10.26 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
10.27*	Subscription Agreement (R. Donald), August 14, 2014
10.28*	Convertible Redeemable Note with LG Capital Funding, LLC (Third LG Capital Note), July 15, 2014
10.29*	Convertible Redeemable Back End Note with LG Capital Funding, LLC (Third LG Capital Note), July 15, 2014
10.30*	Collateralized Secured Promissory Note with LG Capital Funding, LLC (Third LG Capital Note), July 15, 2014
10.31*	Securities Purchase Agreement with LG Capital Funding, LLC (Third LG Capital Note), July 15, 2014
10.32*	Convertible Promissory Note with WHC Capital, LLC (Second WHC Note), August 19, 2014
10.33*	Securities Purchase Agreement with WHC Capital, LLC (Second WHC Note), August 19, 2014
10.34*	Investment Agreement with R. Donald and Green Leaf Farms Holdings, August 14, 2014
21.1*	Subsidiaries

 

 

31.1*	Certification of Mark Bradley, CEO and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32.1*	Certification of Mark Bradley, CEO and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document
101.CAL*	XBRL Calculation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document
101.LAB*	XBRL Labels Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document

______

* Filed herewith

 

 

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Date: November 17, 2014
	Players Network
	/s/ Mark Bradley
	Mark Bradley
	Chief Executive Officer
	(Principal Executive Officer and Principal Financial Officer)