Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 14, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'PLAYERS NETWORK | ' |
Entity Central Index Key | '0001037131 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 173,709,531 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash | $39,794 | $4,696 |
Deferred television costs | 0 | 116,454 |
Prepaid expenses | 3,550 | 7,775 |
Total current assets | 43,344 | 128,925 |
Investments, cost method | 0 | 0 |
Fixed assets, net | 77,423 | 62,759 |
Debt issuance costs, net | 4,997 | 3,399 |
Total Assets | 125,764 | 195,083 |
Current liabilities: | ' | ' |
Accounts payable | 270,362 | 624,482 |
Accrued expenses | 213,254 | 182,351 |
Deferred revenues | 0 | 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): | ' | ' |
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 | 0 |
Accumulated (deficit) | -26,242,551 | -23,567,996 |
Total Players Network's Stockholders' (Deficit) | -1,485,024 | -1,518,043 |
Noncontrolling Interest | -183,067 | 0 |
Total Stockholders' (Deficit) | -1,668,091 | -1,518,043 |
Total Liabilities and Stockholders' (Deficit) | 125,764 | 195,083 |
Series A Preferred Stock | ' | ' |
Stockholders' (Deficit): | ' | ' |
Preferred stock, value | 2,000 | 2,000 |
Series B Preferred Stock | ' | ' |
Stockholders' (Deficit): | ' | ' |
Preferred stock, value | $4,349 | $4,349 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current liabilities: | ' | ' |
Discounts on convertible debentures | $472,555 | $53,579 |
Stockholders' (Deficit): | ' | ' |
Common Stock, Par Value | $0.00 | $0.00 |
Common Stock, Shares Authorized | 600,000,000 | 600,000,000 |
Common Stock, Shares Issued | 166,906,471 | 138,011,812 |
Common Stock, Shares Outstanding | 166,906,471 | 138,011,812 |
Subscriptions payable, shares | 2,599,700 | ' |
Series A Preferred Stock | ' | ' |
Stockholders' (Deficit): | ' | ' |
Convertible Preferred stock Par Value | $0.00 | $0.00 |
Convertible Preferred stock Authorized | 2,000,000 | 2,000,000 |
Convertible Preferred stock Issued | 2,000,000 | 2,000,000 |
Convertible Preferred stock Outstanding | 2,000,000 | 2,000,000 |
Series B Preferred Stock | ' | ' |
Stockholders' (Deficit): | ' | ' |
Convertible Preferred stock Par Value | $0.00 | $0.00 |
Convertible Preferred stock Authorized | 10,873,347 | 10,873,347 |
Convertible Preferred stock Issued | 4,349,339 | 4,349,339 |
Convertible Preferred stock Outstanding | 4,349,339 | 4,349,339 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Income Statement [Abstract] | ' | ' | ' | ' |
Revenue: | $168 | $286 | $14,625 | $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 | 0 | 20,142 | 0 | 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 | 0 | 0 | 343,335 | 0 |
Loss on debt conversions | 0 | 0 | 0 | -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 | 0 | 183,067 | 0 |
Net loss | ($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 | ($0.02) | ($0.01) |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities | ' | ' |
Net loss | ($2,674,555) | ($1,214,111) |
Minority interest in net loss | -183,067 | 0 |
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 | 0 |
Change in fair market value of derivative liabilites | 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 | 0 |
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 | 0 |
Deferred rent obligation | -631 | 0 |
Net cash used in operating activities | -631,754 | -195,135 |
Cash flows from investing activities | ' | ' |
Purchase of fixed assets | -34,648 | 0 |
Net cash used in investing activities | -34,648 | 0 |
Cash flows from financing activities | ' | ' |
Proceeds from convertible debentures | 554,000 | 223,000 |
Repayments on convertible debentures | -63,500 | 0 |
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 | 0 |
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 | 0 | 0 |
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 |
Note_1_Basis_of_Presentation
Note 1 - Basis of Presentation | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
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. | ||||||||
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. | |||||||||
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. |
Note_2_Going_Concern
Note 2 - Going Concern | 9 Months Ended |
Sep. 30, 2014 | |
Risks and Uncertainties [Abstract] | ' |
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
Note 3 - Related Party | 9 Months Ended |
Sep. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
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
Note 4 - Fair Value of Financial Instruments | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
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. | |||||||||||||
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. |
Note_5_Subsidiary_Formation
Note 5 - Subsidiary Formation | 9 Months Ended |
Sep. 30, 2014 | |
Noncontrolling Interest [Abstract] | ' |
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
Note 6 - Investments | 9 Months Ended |
Sep. 30, 2014 | |
Investments [Abstract] | ' |
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
Note 7 - Fixed Assets | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
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. |
Note_8_Accrued_Expenses
Note 8 - Accrued Expenses | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
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
Note 9 - Convertible Debentures | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
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 | – | |||||||
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 | – | |||||||
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 | – | |||||||
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 | |||||||
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 | |||||
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_w
Note 10 - Investment Agreement with Dutchess Opportunity Fund II, LP | 9 Months Ended |
Sep. 30, 2014 | |
Equity Method Investments and Joint Ventures [Abstract] | ' |
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. | |
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
Note 11 - Short Term Debt | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Short-term Debt [Abstract] | ' | ||||||||
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
Note 12 - Derivative Liabilities | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Derivative Liability [Abstract] | ' | ||||||||
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. | |||||||||
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_Stockholder
Note 13 - Changes in Stockholders' Equity (Deficit) | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Note 13 - Changes in Stockholders' Equity (Defict) | ' |
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. | |
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. | |
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. | |
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. | |
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
Note 14 - Warrants and Options | 9 Months Ended |
Sep. 30, 2014 | |
Warrants and Rights Note Disclosure [Abstract] | ' |
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. | |
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_Settlemen
Note 15 - Gain on Debt Settlements | 9 Months Ended |
Sep. 30, 2014 | |
Other income (expense): | ' |
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
Note 16 - Income Taxes | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
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 | $ | – | $ | – | |||||
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_NonControlling_Interes
Note 17 - Non-Controlling Interest | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
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
Note 18 - Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
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. | |
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. |
Note_1_Basis_of_Presentation_P
Note 1 - Basis of Presentation (Policies) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
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 | ' | ||||||||
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 | ' | ||||||||
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 | ' | ||||||||
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. | ||||||||
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 | ' | ||||||||
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 | ' | ||||||||
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 | |||||||||
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. | |||||||||
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 | ' | ||||||||
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. |
Note_1_Basis_of_Presentation_T
Note 1 - Basis of Presentation (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Deferred revenues | ' | ||||||||
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 television costs | ' | ||||||||
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 |
Note_4_Fair_Value_of_Financial1
Note 4 - Fair Value of Financial Instruments (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
Valuation of financial instruments at fair value on a non-recurring basis | ' | ||||||||||||
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 | ) | ||||||
Note_7_Fixed_Assets_Tables
Note 7 - Fixed Assets (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||
Fixed assets | ' | ||||||||
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 |
Note_8_Accrued_Expenses_Tables
Note 8 - Accrued Expenses (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Payables and Accruals [Abstract] | ' | ||||||||
Accrued Expenses | ' | ||||||||
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_
Note 9 - Convertible Debentures (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Convertible Debentures | ' | ||||||||
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 | – | |||||||
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 | – | |||||||
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 | – | |||||||
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 | |||||||
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 | |||||
Note_11_Short_Term_Debt_Tables
Note 11 - Short Term Debt (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Short-term Debt [Abstract] | ' | ||||||||
Short-term debt | ' | ||||||||
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 | |||||
Interest expense by instrument | ' | ||||||||
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_Liabilities1
Note 12 - Derivative Liabilities (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Derivative Liability [Abstract] | ' | ||||||||
Derivative liability value | ' | ||||||||
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 | ||||||
Fair market value of the derivative liability | ' | ||||||||
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 |
Note_16_Income_Taxes_Tables
Note 16 - Income Taxes (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Components of deferred tax asset | ' | ||||||||
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 | $ | – | $ | – | |||||
Reconciliation income tax benefit | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Federal and state statutory rate | 35% | 35% | |||||||
Change in valuation allowance on deferred tax assets | (35% | ) | (35% | ) |
Note_1_Basis_of_Presentation_D
Note 1 - Basis of Presentation (Details-Deferred revenues) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Deferred revenues | ' | ' |
Total deferred revenues | $0 | $135,000 |
Deferred revenues on television pilot episodes | ' | ' |
Deferred revenues | ' | ' |
Total deferred revenues | 0 | 135,000 |
Deferred revenues on audio and video content licensing | ' | ' |
Deferred revenues | ' | ' |
Total deferred revenues | $0 | $0 |
Note_1_Basis_of_Presentation_D1
Note 1 - Basis of Presentation (Details-Deferred television costs) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Deferred television costs | ' | ' |
Development and pre-production costs | $0 | $0 |
In-production | 0 | 68,264 |
Post production | 0 | 48,190 |
Total deferred television costs | $0 | $116,454 |
Note_2_Going_Concern_Details_N
Note 2 - Going Concern (Details Narrative) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Risks and Uncertainties [Abstract] | ' | ' |
Accumulated deficit | ($26,242,551) | ($23,567,996) |
Current liabilities exceeded current assets (Working Capital) | -1,750,511 | ' |
Total liabilities exceeded its total assets | ($1,668,091) | ' |
Note_3_Related_Party_Details_N
Note 3 - Related Party (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Officer compensation expense | $524,917 | $164,965 |
Balance Owed to officers | 36,105 | 62,374 |
Restricted stock issued as compensation, shares issued | 10,480,333 | ' |
Options expired | 2,140,000 | ' |
Stock cancelled for non-performance of services | 900,000 | ' |
Former employees | ' | ' |
Stock cancelled for non-performance of services | 750,000 | ' |
Chief Executive Officer [Member] | ' | ' |
Officer compensation expense | 50,000 | ' |
Restricted stock issued as compensation, shares issued | 5,250,000 | ' |
Restricted stock issued as compensation, amount | 147,500 | ' |
Options expired | 1,500,000 | ' |
Options granted for compensation, options granted | 8,000,000 | ' |
Options granted for compensation, value | 217,971 | ' |
President of Programming [Member] | ' | ' |
Restricted stock issued as compensation, shares issued | 200,000 | ' |
Restricted stock issued as compensation, amount | 3,860 | ' |
Director [Member] | ' | ' |
Restricted stock issued as compensation, shares issued | 350,000 | ' |
Restricted stock issued as compensation, amount | $6,750 | ' |
Note_4_Fair_Value_of_Financial2
Note 4 - Fair Value of Financial Instruments (Details) (Fair Value, Measurements, Nonrecurring [Member], USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Fair Value, Inputs, Level 1 [Member] | ' | ' |
Assets | ' | ' |
Cash | $39,794 | $4,696 |
Total assets | 39,794 | 4,696 |
Liabilities | ' | ' |
Convertible debentures, net of discounts | 0 | 0 |
Short term debt | 0 | 0 |
Derivative liabilities | 0 | 0 |
Total Liabilities | 0 | 0 |
Net fair value disclosure | 39,794 | 4,696 |
Fair Value, Inputs, Level 2 [Member] | ' | ' |
Assets | ' | ' |
Cash | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ' | ' |
Convertible debentures, net of discounts | 0 | 0 |
Short term debt | 18,750 | 35,000 |
Derivative liabilities | 0 | 0 |
Total Liabilities | 18,750 | 35,000 |
Net fair value disclosure | -18,750 | -35,000 |
Fair Value, Inputs, Level 3 | ' | ' |
Assets | ' | ' |
Cash | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ' | ' |
Convertible debentures, net of discounts | 97,058 | 82,421 |
Short term debt | 0 | 0 |
Derivative liabilities | 1,189,488 | 648,298 |
Total Liabilities | 1,286,546 | 730,719 |
Net fair value disclosure | ($1,286,546) | ($730,719) |
Note_4_Fair_Value_of_Financial3
Note 4 - Fair Value of Financial Instruments (Details Narrative) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Transfers between Level 1 and Level 2 | $0 | ' |
Fair Value, Inputs, Level 3 | ' | ' |
Convertible debentures | 569,613 | 136,000 |
Unamortized debt discount | $472,555 | $53,579 |
Note_7_Fixed_Assets_Details
Note 7 - Fixed Assets (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Less accumulated amortization | ($72,733) | ($52,749) |
Fixed assets, net | 77,423 | 62,759 |
Office Equipment [Member] | ' | ' |
Fixed assets, gross | 22,546 | 12,898 |
Software Development [Member] | ' | ' |
Fixed assets, gross | 124,880 | 99,880 |
Furniture and Fixtures [Member] | ' | ' |
Fixed assets, gross | $2,730 | $2,730 |
Note_6_Fixed_Assets_Details_Na
Note 6 - Fixed Assets (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Property, Plant and Equipment [Abstract] | ' | ' | ' | ' |
Depreciation and amortization expense | $7,469 | $5,737 | $19,984 | $17,210 |
Note_7_Accrued_Expenses_Detail
Note 7 - Accrued Expenses (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Accrued expenses | ' | ' |
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 |
Accrued expenses | $213,254 | $182,351 |
Note_9_Convertible_Debentures_1
Note 9 - Convertible Debentures (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Total convertible debentures | $569,613 | $136,000 |
Less: unamortized debt discounts | -472,555 | -53,579 |
Convertible debenture | 97,058 | 82,421 |
Convertible Debentures 1 [Member] | ' | ' |
Total convertible debentures | 38,500 | 0 |
Convertible Debentures 2 [Member] | ' | ' |
Total convertible debentures | 45,000 | 0 |
Convertible Debentures 3 [Member] | ' | ' |
Total convertible debentures | 37,500 | 0 |
Convertible Debentures 4 [Member] | ' | ' |
Total convertible debentures | 80,000 | 0 |
Convertible Debentures 5 [Member] | ' | ' |
Total convertible debentures | 55,000 | 0 |
Convertible Debentures 6 [Member] | ' | ' |
Total convertible debentures | 113,000 | 0 |
Convertible Debentures 7 [Member] | ' | ' |
Total convertible debentures | 50,000 | 0 |
Convertible Debentures 8 [Member] | ' | ' |
Total convertible debentures | 35,000 | 0 |
Convertible Debentures 9 [Member] | ' | ' |
Total convertible debentures | 44,000 | 0 |
Convertible Debentures 10 [Member] | ' | ' |
Total convertible debentures | 44,000 | 0 |
Convertible Debentures 11 [Member] | ' | ' |
Total convertible debentures | 7,121 | 0 |
Convertible Debentures 12 [Member] | ' | ' |
Total convertible debentures | 0 | 0 |
Convertible Debentures 13 [Member] | ' | ' |
Total convertible debentures | 0 | 12,500 |
Convertible Debentures 14 [Member] | ' | ' |
Total convertible debentures | 0 | 25,500 |
Convertible Debentures 15 [Member] | ' | ' |
Total convertible debentures | 20,492 | 27,500 |
Convertible Debentures 16 [Member] | ' | ' |
Total convertible debentures | $0 | $70,500 |
Note_9_Convertible_Debentures_2
Note 9 - Convertible Debentures (Details Narratives) (USD $) | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Convertible Debentures 1 [Member] | Convertible Debentures 2 [Member] | Convertible Debentures 3 [Member] | Convertible Debentures 4 [Member] | Convertible Debentures 5 [Member] | Convertible Debentures 6 [Member] | Convertible Debentures 7 [Member] | Convertible Debentures 8 [Member] | Convertible Debentures 9 [Member] | Convertible Debentures 10 [Member] | Convertible Debentures 11 [Member] | Convertible Debentures 12 [Member] | Convertible Debentures 13 [Member] | Convertible Debentures 14 [Member] | Convertible Debentures 15 [Member] | Convertible Debentures 16 [Member] | |||
Proceeds from convertible debentures | $554,000 | $223,000 | $35,000 | $40,000 | $35,000 | $75,000 | $50,000 | $100,000 | $50,000 | $33,250 | $40,000 | $40,000 | $21,750 | $21,750 | $12,500 | $25,500 | $25,000 | $55,000 |
Stated interest rate | ' | ' | 12.00% | 8.00% | 8.00% | 8.00% | 12.00% | 10.00% | 12.00% | 8.00% | ' | ' | 8.00% | 8.00% | 8.00% | 8.00% | ' | ' |
Maturity date | ' | ' | 1-Jun-16 | 19-Aug-15 | 15-Mar-15 | 13-Jun-15 | 1-Jun-16 | 19-May-15 | 8-May-15 | 11-Apr-15 | 16-Apr-15 | 19-Feb-15 | 8-Oct-14 | 8-Oct-14 | 30-Jul-14 | 1-May-14 | 3-Jun-14 | 14-Mar-14 |
Discounts on convertible debt | 583,627 | 206,858 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense pursuant to the amortization | 164,651 | 279,772 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loan origination costs | 13,750 | 11,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of loan origination costs | 12,152 | 22,018 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest expense on convertible debt | $53,154 | $15,615 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Note_11_Short_Term_Debt_Detail
Note 11 - Short Term Debt (Details-Short term debt) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Short-term Debt [Abstract] | ' | ' |
4% unsecured debenture, due June 7, 2012. Currently in default | $18,750 | $35,000 |
Note_11_Short_Term_Debt_Detail1
Note 11 - Short Term Debt (Details-Interest expense) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Interest expense | $104,319 | $80,060 | $231,552 | $312,720 |
Interest on convertible debentures | ' | ' | ' | ' |
Interest expense | ' | ' | 53,154 | 15,615 |
Amortization of discount on convertible debentures | ' | ' | ' | ' |
Interest expense | ' | ' | 164,651 | 273,251 |
Amortization of debt issuance costs | ' | ' | ' | ' |
Interest expense | ' | ' | 12,152 | 22,018 |
Interest on short term debt | ' | ' | ' | ' |
Interest expense | ' | ' | 940 | 1,050 |
Accounts payable related finance charges | ' | ' | ' | ' |
Interest expense | ' | ' | $655 | $786 |
Note_11_Short_Term_Debt_Detail2
Note 11 - Short Term Debt (Details Narrative) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Short-term Debt [Abstract] | ' | ' |
Accrued interest on promissory note | $3,832 | $2,892 |
Note_12_Derivative_Liabilities2
Note 12 - Derivative Liabilities (Details-Derivative liability) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Derivative Liabilities | $1,189,488 | $648,298 | $356,608 |
Convertible Debentures | ' | ' | ' |
Derivative Liabilities | 1,049,743 | 221,275 | ' |
Common stock warrants | ' | ' | ' |
Derivative Liabilities | 134,500 | 395,144 | ' |
Convertible Preferred Stock | ' | ' | ' |
Derivative Liabilities | $5,245 | $31,879 | ' |
Note_12_Derivative_Liabilities3
Note 12 - Derivative Liabilities (Details-Fair market value) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Summary of changes in the fair market value of the derivative liability | ' | ' |
Derivative liability - beginning balance | $648,298 | $356,608 |
Increase in derivative value due to issuances of convertible promissory notes | 980,014 | 351,721 |
Increase in derivative value attributable to tainted warrants | 20,633 | 122,062 |
Change in fair market value of derivative liabilities due to the mark to market adjustment | 226,741 | 305,512 |
Debt conversion | -686,198 | -487,605 |
Derivative liability - ending balance | $1,189,488 | $648,298 |
Note_12_Derivative_Liabilities4
Note 12 - Derivative Liabilities (Details Narratives) (USD $) | 9 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | |
Derivative Liabilities | ' | ' | ' | ' |
Current derivative liabilities | $1,189,488 | ' | $648,298 | $356,608 |
Loss from change in fair value of derivative liabilities | 682,761 | 334,631 | ' | ' |
Loss due to value in excess of face value of convertible notes | -435,387 | -125,158 | ' | ' |
Gain (loss) attributable to fair value of preferred stock | 26,634 | 13,348 | ' | ' |
Gain (loss) attributable to fair value of warrants | 260,644 | 22,191 | ' | ' |
Net loss in market value on convertible notes | ($534,652) | ($245,012) | ' | ' |
Note_13_Changes_in_Stockholder1
Note 13 - Changes in Stockholders' Equity (Deficit) (Details Narrative) (USD $) | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Equity [Abstract] | ' | ' | ' |
Common stock issued, shares issued | 7,100,000 | ' | ' |
Warrants issued | 3,200,000 | ' | ' |
Proceeds from stock and warrants issued | $181,000 | $21,000 | ' |
Stock issued for debt conversions, common stock issued | 8,691,598 | ' | ' |
Amount converted, value | 106,448 | ' | ' |
Restricted common stock issued for services, restricted stock issued | 10,480,333 | ' | ' |
Common stock issued for services, shares issued | 6,022,728 | ' | ' |
Common stock issued for services, amount | 453,216 | ' | ' |
Common stock issued for services, to be issued | 99,700 | ' | ' |
Common stock issued for services, to be issued, value | 2,952 | ' | ' |
Common stock subscribed, value | $52,592 | ' | $0 |
Common stock cancelled, shares | 900,000 | ' | ' |
Note_14_Warrants_and_Options_D
Note 14 - Warrants and Options (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Warrants issued | 1,500,000 |
Warrants issued with common stock | 3,200,000 |
Options expired | 2,140,000 |
Warrants expired | 869,565 |
Options exercised | 0 |
Warrants exercised | 0 |
Consultant | ' |
Options granted | 250,000 |
Fair value of options granted | 3,710 |
Another Consultant | ' |
Options granted | 250,000 |
Fair value of options granted | 3,710 |
Consultant 3 | ' |
Options granted | 600,000 |
Fair value of options granted | 16,365 |
Stock based compensation expense | 9,916 |
Consultant 4 | ' |
Options granted | 600,000 |
Fair value of options granted | 16,365 |
Stock based compensation expense | 9,916 |
Chief Executive Officer [Member] | ' |
Options granted | 8,000,000 |
Fair value of options granted | 217,971 |
Note_15_Gain_on_Debt_Settlemen1
Note 15 - Gain on Debt Settlements (Details Narrative) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Other income (expense): | ' | ' | ' |
Debt forgiveness | $343,335 | $0 | $0 |
Note_16_Income_Taxes_DetailsDe
Note 16 - Income Taxes (Details-Deferred tax assets) (USD $) | Sep. 30, 2014 | Dec. 31, 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 | $0 | $0 |
Note_16_Income_Taxes_DetailsTa
Note 16 - Income Taxes (Details-Tax rates) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Reconciliation between amounts of income tax benefit | ' | ' |
Federal and state statutory rate | 35.00% | 35.00% |
Change in valuation allowance on deferred tax assets | -35.00% | -35.00% |
Note_16_Income_Taxes_Details_N
Note 16 - Income Taxes (Details Narratives) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Federal net operating losses | $17,800,000 |
Operating loss carry forwards expiration dates | 31-Dec-25 |
Note_17_NonControlling_Interes1
Note 17 - Non-Controlling Interest (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Percentage owned in subsidiary | 17.00% |
Net loss attributable to the non-controlling interest | ($215,373) |