Note 1 – Summary of Significant Accounting Policies
Players Network (PNTV) was incorporated in the State of Nevada in March of 1993. Our business for most of our existence has been the ownership and operation of a digital 24-hour gaming and entertainment network called “PLAYERS NETWORK,” which specializes in producing television programming to serve the gaming industry. Our programming is broadcast directly into the guestrooms of casino and non-casino hotels on a customized private cable channel. Our format is designed to educate new players and promote casino games and activities. Our programming includes shows on basic gaming instruction, news, sports and racing, entertainment and tournaments.
In addition to the PLAYERS NETWORK, we distribute our programming through a Broadband Network, which was launched near the end of July 2005, and through cable television, broadcast and satellite television, Video on Demand, Pay-Per-View, DVD distribution, television syndication, radio, print, and out-of-home media including mobile devices, additional land-based locations, in-flight venues, and on-board sources.
Reclassifications
Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
PNTV maintains cash balances in interest and non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.
Income taxes
PNTV recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. PNTV provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.
Segment Reporting
Under FASB ASC 280-10-50, the Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.
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 consolidated financial statements as reflected herein. The carrying amounts of cash, accounts receivable, accounts payable, loan payable and convertible debentures reported on the balance sheet are estimated by management to approximate fair value primarily due to the short term nature of the instruments.
Revenue recognition
For revenue from product sales, the Company recognizes revenue using four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgment regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. 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 de termine that the product has been delivered or no refund will be required.
Players Network
Notes to Financial Statements
Network revenue consists of monthly network broadcast subscription revenue, which is recognized as the service is performed. 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. Stage rentals are recognized during the rental period.
Fixed assets
Fixed assets are stated at the lower of cost or estimated net recoverable amount. The cost of property, plant and equipment is depreciated using the straight-line method based on the lesser of the estimated useful lives of the assets or the lease term based on the following life expectancy:
Video Filming and broadcast equipment 10 years
Computer and office equipment 3-7 years
Repairs and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which have extend the useful life of an asset, are capitalized and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold, the cost and related accumulated depreciation and amortization are eliminated and any resulting gain or loss is reflected in operations.
Impairment of long-lived assets
Long-lived assets held and used by PNTV are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that carrying value exceeds discounted cash flows of future operations. PNTV did not recognize any impairment losses on the disposal of fixed assets during 2009 and 2008.
Advertising Costs
The Company expenses the cost of advertising as incurred. Advertising expense was $-0- and $7,965 for the years ended December 31, 2009 and 2008, respectively.
Allowance for Doubtful Accounts
We generate a portion of our revenues and corresponding accounts receivable from the Casino and Hotel industry. As of December 31, 2009, approximately 53% of our accounts receivable were attributed to Casinos and Hotels. We evaluate the collectability of our accounts receivable considering a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us, we record a specific reserve for bad debts against amounts due in order to reduce the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we recognize reserves for bad debts based on past write-off experience and the length of time the receivables are past due. Bad debts expense was $-0- and $8,400 for the years ended December 31, 2009 and 2008, respe ctively.
Basic and diluted loss per share
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For 2009 and 2008, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.
The Company adopted FASB guidance on stock based compensation on January 1, 2006. Under FASB ASC 718-10-30-2, all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. Stock and stock options issued for services and compensation totaled $1,547,563 and $535,214 for the years ended December 31, 2009 and 2008, respectively.
Recent Accounting Pronouncements
In June 2009, the Financial Accounting Standards Board (“FASB”) issued the FASB Accounting Standards Codification (the “ASC”). The ASC has become the single source of non-governmental accounting principles generally accepted in the United States (“GAAP”) recognized by the FASB in the preparation of financial statements. The ASC does not supersede the rules or regulations of the Securities and Exchange Commission (“SEC”), therefore, the rules and interpretive releases of the SEC continue to be additional sources of GAAP for the Company. The Company adopted the ASC as of July 1, 2009. The ASC does not change GAAP and did not have an effect on the Company’s financial position, results of operations or cash flows.
Players Network
Notes to Financial Statements
In May 2009, the FASB issued ASC 855-10 entitled “Subsequent Events”. Companies are now required to disclose the date through which subsequent events have been evaluated by management. Public entities (as defined) must conduct the evaluation as of the date the financial statements are issued, and provide disclosure that such date was used for this evaluation. ASC 855-10 provides that financial statements are considered “issued” when they are widely distributed for general use and reliance in a form and format that complies with GAAP. ASC 855-10 is effective for interim and annual periods ending after June 15, 2009 and must be applied prospectively. The adoption of ASC 855-10 during the period ended September 30, 2009 did not have a significant effect on the Company’s financial statements as of that date or for the period then ended. In connection with preparing the accompanying audited financial statements as of December 31, 2009, management evaluated subsequent events through the date that such financial statements were issued (filed with the Securities and Exchange Commission).
Note 2 – Going Concern
As shown in the accompanying financial statements, the Company has incurred recurring net losses of $1,959,073 and $779,949 in 2009 and 2008, respectively, and has an accumulated deficit of $17,858,237 and a working capital deficit of $863,851 as of December 31, 2009. 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. The Company, however, is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, therefore, without sufficient financing it would be unlikely for the Company 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. The 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
On November 30, 2009 the CEO accepted 500,000 shares of common stock in exchange for $45,000 of unpaid salary, the fair market value of the common stock.
On November 30, 2009 the Company granted 250,000 cashless stock options to the CEO as a bonus for services rendered. The options are exercisable until November 29, 2013 at an exercise price of $0.20 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 480% and a call option value of $0.0899, was $22,477.
On November 30, 2009 the Company granted 250,000 cashless stock options to the President of Programming as a bonus for services rendered. The options are exercisable until November 29, 2013 at an exercise price of $0.20 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 480% and a call option value of $0.0899, was $22,477.
On August 28, 2009 the Company granted cashless options to purchase 1,500,000 shares of its common stock to the CEO as a bonus for services rendered. The options are exercisable until August 27, 2013 at an exercise price of $0.15 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 438% and a call option value of $0.0998, was $149,646.
On August 28, 2009 the CEO was issued 200,000 shares of common stock in exchange for $20,000 of unpaid salary, the fair market value of the common stock.
On June 18, 2009 the board of directors granted a bonus of 250,000 shares of common stock to the CEO for services rendered. The fair market value of the shares based on the closing stock price at the grant date was $30,000. The shares were issued on July 1, 2009.
Players Network
Notes to Financial Statements
On May 7, 2009 the CEO accepted 347,547 shares of common stock in exchange for $48,657 of unpaid salary, the fair market value of the common stock.
On May 7, 2009 the President of Programming accepted 478,388 shares in exchange for $66,974 of unpaid salary, the fair market value of the common stock.
On January 9, 2009 the Company granted cashless options to purchase 250,000 shares of its common stock to the CEO as a bonus for services rendered. The options are exercisable until January 8, 2013 at an exercise price of $0.20 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1295, was $32,372.
On January 9, 2009 the Company granted cashless options to purchase 250,000 shares of its common stock to the President of Programming as a bonus for services rendered. The options are exercisable until January 8, 2013 at an exercise price of $0.20 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1295, was $32,372.
On January 9, 2009 the Company granted cashless options to purchase 300,000 shares of its common stock to the CEO as a bonus for services rendered. The options are exercisable until January 8, 2012 at an exercise price of $0.20 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1283, was $38,486.
On January 9, 2009 the Company granted cashless options to purchase 400,000 shares of its common stock to the President of Programming as a bonus for services rendered. The options are exercisable until January 8, 2012 at an exercise price of $0.20 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1283, was $51,315.
Officer compensation expense was $257,281 and $460,000 at December 31, 2008 and 2007, respectively. The balance owed was $-0- and $39,967 at December 31, 2008 and 2007, respectively.
On August 28, 2009 the Company granted a total of 300,000 cashless stock options as compensation for service to two of the Company’s board of directors. The options are exercisable until August 27, 2013 at an exercise price of $0.15 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 438% and a call option value of $0.0998, was $29,930.
On May 7, 2009 the Company issued 120,000 shares of restricted common stock to a Director for consulting services rendered. The total fair value of the common stock was $16,800.
On January 9, 2009 the Company issued 50,000 shares of restricted common stock as prepaid compensation for service on the board of directors in 2009 to each of five of its directors totaling 250,000 shares. The fair value of the common stock in total was $32,500.
On January 9, 2009 the Company granted 50,000 cashless stock options as prepaid compensation for service on the board of directors in 2009 to each of five of its directors. The options are exercisable until January 8, 2013 at an exercise price of $0.20 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1295, was $32,372.
Note 4 – Property and Equipment
Property and equipment consist of the following:
Players Network
Notes to Financial Statements
| | | December 31, | |
| | | 2009 | | | 2008 | |
| | | | | | | |
| Computers and office equipment | | $ | 2,506 | | | $ | 22,151 | |
| | | | | | | | | |
| Less accumulated depreciation | | | (1,433 | ) | | | (20,468 | ) |
| | | $ | 1,073 | | | $ | 1,683 | |
Depreciation expense totaled $610 and $4,934 for 2009 and 2008, respectively.
Note 5 – Accrued Expenses
As of December 31, 2009 and 2008 accrued expenses included the following:
| | | December 31, | |
| | | 2009 | | | 2008 | |
| Customer Deposits | | $ | 13,500 | | | $ | 13,500 | |
| Accrued Payroll, Officer | | | 6,460 | | | | - | |
| Accrued Payroll and Payroll Taxes | | | 320,055 | | | | 282,012 | |
| Accrued Interest | | | 2,636 | | | | 58,039 | |
| | | $ | 342,651 | | | $ | 353,551 | |
Note 6 – Long Term Debt
Long-term debt consists of the following at December 31, 2009, and December 31, 2008:
| | | 2009 | | | 2008 | |
| 8% unsecured convertible debentures, due in September 2011, convertible into 500,000 shares of common stock at any time prior to maturity based on a conversion price of $0.05 per share. Accrued interest is convertible as well at a conversion price of $0.05 per share. | | $ | 25,000 | | | $ | 25,000 | |
| 8% unsecured convertible debentures, due in March 2009, convertible into 166,667 shares of common stock at any time prior to maturity based on a conversion price of $0.06 per share. Principal and accrued interest was converted into 183,068 shares of common stock on November 30, 2009. | | | - | | | | 10,000 | |
| 5% unsecured convertible debentures, due in September 2009, convertible into 333,333 shares of common stock at any time prior to maturity based on a conversion price of $0.15 per share. Principal and accrued interest was converted into 342,467 shares of common stock on August 28, 2009. | | | - | | | | 50,000 | |
| 5% unsecured convertible debentures, due in August 2009, convertible into 400,000 shares of common stock at any time prior to maturity based on a conversion price of $0.15 per share. Principal and accrued interest was converted into 410,959 shares of common stock on August 28, 2009. | | | - | | | | 60,000 | |
| 5% unsecured convertible debentures, due in June 2009, convertible into 200,000 shares of common stock at any time prior to maturity based on a conversion price of $0.15 per share. Principal and accrued interest was converted into 231,890 shares of common stock on August 28, 2009. | | | - | | | | 30,000 | |
| 5% unsecured convertible debentures, due in June 2009, convertible into 100,000 shares of common stock at any time prior to maturity based on a conversion price of $0.15 per share. Principal and accrued interest was converted into 102,740 shares of common stock on August 28, 2009. | | | - | | | | 15,000 | |
| 5% unsecured convertible debentures, due in May 2009, convertible into 166,667 shares of common stock at any time prior to maturity based on a conversion price of $0.15 per share. Principal and accrued interest was converted into 171,233 shares of common stock on August 28, 2009. | | | - | | | | 25,000 | |
Players Network
Notes to Financial Statements
| 5% unsecured convertible debentures, due in March 2009, convertible into 571,429 shares of common stock at any time prior to maturity based on a conversion price of $0.35 per share. Principal and accrued interest was converted into 587,084 shares of common stock on August 28, 2009. | | | - | | | | 200,000 | |
| 5% unsecured convertible debentures, due in February 2009, convertible into 71,429 shares of common stock at any time prior to maturity based on a conversion price of $0.35 per share. Principal and accrued interest was converted into 84,061 shares of common stock on August 28, 2009. | | | - | | | | 25,000 | |
| 5% unsecured convertible debentures, due in February 2009, convertible into 71,429 shares of common stock at any time prior to maturity based on a conversion price of $0.35 per share. Principal and accrued interest was converted into 84,061 shares of common stock on August 28, 2009. | | | - | | | | 25,000 | |
| Unsecured demand note, non interest bearing. The debt was forgiven on October 1, 2009. | | | - | | | | 4,600 | |
| Unsecured demand note, non interest bearing. | | | 3,000 | | | | - | |
Unsecured demand note due to a former Director of the Company. The non interest bearing debt was converted to 120,000 shares of common stock on January 9, 2009. | | | - | | | | 5,000 | |
| Total debt | | | 28,000 | | | | 474,600 | |
| Less: current portion | | | 3,000 | | | | 423,303 | |
| Less: discount on beneficial conversion feature | | | - | | | | 26,297 | |
| Long-term debt, less current portion | | | 25,000 | | | | 25,000 | |
| Less: discount on beneficial conversion feature | | | - | | | | - | |
| Long-term debt, less current portion and discount on BCF | | $ | 25,000 | | | $ | 25,000 | |
Future maturities of long-term debt are as follows as of December 31, 2009:
| 2010 | | $ | 3,000 | |
| 2011 | | | 25,000 | |
| Thereafter | | | - | |
| | | $ | 28,000 | |
Accrued interest on the above convertible notes totaled $2,636 and $58,039 at December 31, 2009 and 2008, respectively.
Interest expense totaled $69,647 and $89,434 for the years ended December 31, 2009 and 2008, respectively, of which $3,016 and $8,631, respectively, was incurred from credit card finance charges and accounts payable finance charges.
In addition, the Company recognized and measured the embedded beneficial conversion feature present in the convertible debt, by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature was calculated on the commitment date using the effective conversion price between the detachable common stock issued and the convertible debt. This intrinsic value is limited to the portion of the proceeds allocated to the convertible debt.
The aforementioned accounting treatment resulted in a total debt discount equal to ($167,952). The discount was amortized over a three-year period, from the date of issuance until the stated redemption date of the debt. As of December 31, 2009 the entire discount had been amortized and expensed accordingly.
During the years ended December 31, 2009 and 2008, the Company recorded financial expenses in the amount of $26,297 and $58,168, respectively, attributed to the amortization of the aforementioned debt discount.
According to the terms of the Convertible Promissory Notes, the estimated number of shares of common stock that would be received upon conversion of the outstanding principal and accrued interest was 552,712 shares at December 31, 2009.
Players Network
Notes to Financial Statements
During the year ended December 31, 2009 the Company recognized a loss on conversion of debt in the total amount of $20,178 due to the settlement of debt with the issuance of common stock as follows:
On January 9, 2009 a debt holder was issued 120,000 shares with a fair market value of $15,600 in repayment of a $5,000 loan that originated on April 4, 2007, resulting in a loss on conversion of debt in the amount of $10,600.
On April 1, 2009 a debt holder was issued 657,859 shares with a fair market value of $59,207 in repayment of a total of $49,629 of accrued interest on convertible promissory notes originated on various dates between March 7, 2006 and September 20, 2006, resulting in a loss on conversion of debt in the amount of $9,578.
Note 7 – 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 years ended December 31, 2009 and 2008, 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 December 31, 2009, the Company had approximately $10,310,000 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:
| | | December 31, | |
| | | 2009 | | | 2008 | |
| Deferred tax assets: | | | | | | |
| Net operating loss carry forwards | | $ | 3,609,000 | | | $ | 3,290,000 | |
| | | | | | | | | |
| Net deferred tax assets before valuation allowance | | | 3,609,000 | | | | 3,290,000 | |
| Less: Valuation allowance | | | (3,609,000 | ) | | | (3,290,000 | ) |
| 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 December 31, 2009 and 2008, 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:
| | | December 31, | |
| | | 2009 | | | 2008 | |
| | | | | | | |
| 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.
Players Network
Notes to Financial Statements
Note 8 – Stockholders’ Equity
No preferred shares were authorized or issued during the year ended December 31, 2009.
On December 8, 2008 the Company issued 400,000 shares of preferred stock to its CEO for unpaid compensation. The total fair value of the preferred stock was $12,000.
On December 8, 2008 the Company issued 400,000 shares of preferred stock to its President of Programming for unpaid compensation. The total fair value of the preferred stock was $12,000.
On April 29, 2008 the Company issued 200,000 shares of preferred stock to its CEO for unpaid compensation. The total fair value of the preferred stock on April 29, 2008 was $18,000.
On April 29, 2008 the Company issued 200,000 shares of preferred stock to its President of Programming for unpaid compensation. The total fair value of the preferred stock on April 29, 2008 was $18,000.
Common stock (2009)
On November 30, 2009 the Company issued 87,500 shares of free trading common stock to a consultant for accounting services rendered. The fair market value of the shares based on the closing stock price at the grant date was $7,875.
On November 30, 2009 the Company issued 25,000 shares of free trading common stock to a consultant for administrative services rendered. The fair market value of the shares based on the closing stock price at the grant date was $2,250.
On November 30, 2009 the Company issued 10,000 shares of free trading common stock to a consultant for administrative services rendered. The fair market value of the shares based on the closing stock price at the grant date was $900.
On November 30, 2009 the Company issued 10,000 shares of free trading common stock to an employee for administrative services rendered. The fair market value of the shares based on the closing stock price at the grant date was $900.
On November 30, 2009 the Company issued 75,000 shares of free trading common stock to a consultant for video production services rendered. The fair market value of the shares based on the closing stock price at the grant date was $6,750.
On November 30, 2009 the Company issued 183,068 shares of restricted common stock to a note holder per the conversion terms of the convertible promissory note. The shares were exchanged for a total of $10,984 of principal and accrued interest.
On November 30, 2009 the CEO accepted 500,000 shares of common stock in exchange for $45,000 of unpaid salary, the fair market value of the common stock.
On November 30, 2009 the Company issued 25,000 shares of restricted common stock to a consultant for administrative services rendered. The fair market value of the shares based on the closing stock price at the grant date was $2,250.
On November 30, 2009 the Company issued 10,000 shares of restricted common stock to a consultant for administrative services rendered. The fair market value of the shares based on the closing stock price at the grant date was $900.
On November 30, 2009 the Company issued 35,000 shares of restricted common stock to a consultant for administrative services rendered. The fair market value of the shares based on the closing stock price at the grant date was $3,150.
On November 30, 2009 the Company issued 30,000 shares of restricted common stock to an employee for administrative services rendered. The fair market value of the shares based on the closing stock price at the grant date was $2,700.
On November 30, 2009 the Company issued 125,000 shares of restricted common stock to a consultant for public relation services rendered. The fair market value of the shares based on the closing stock price at the grant date was $11,250.
On November 30, 2009 the Company issued 478,000 shares of restricted common stock to a video production company for video encoding and production services. The total fair value of the common stock was $43,020. In addition, the production company agreed to forgive $39,780 of unpaid accounts payable debt.
On November 30, 2009 the Company issued 100,000 shares of restricted common stock to a consultant for public relation services rendered. The fair market value of the shares based on the closing stock price at the grant date was $9,000.
On November 30, 2009 the Company issued 75,000 shares of restricted common stock to a consultant for video production services rendered. The fair market value of the shares based on the closing stock price at the grant date was $6,750.
Players Network
Notes to Financial Statements
On November 9, 2009 the Company issued 200,000 free trading (S-8) shares of common stock to a law firm for legal services rendered. The total fair value of the common stock was $22,000.
On November 9, 2009 the Company issued a total of 400,000 shares of free trading (S-8) common stock that were previously authorized and unissued.
On November 9, 2009 the Company issued 700,000 shares of restricted common stock to a consulting firm for public relations services rendered. The fair market value of the shares based on the closing stock price at the grant date was $77,000.
On October 27, 2009 the Company issued 30,000 shares of restricted common stock that had been previously authorized and unissued.
On October 23, 2009 the Company sold 170,000 shares of common stock, and warrants to purchase an additional 170,000 shares at $0.20 per share over a two year term, to an investor in exchange for proceeds of $25,500.
On October 19, 2009 the Company issued 600,000 shares of restricted common stock that had been previously authorized and unissued.
On October 7, 2009 the Company issued a total of 300,000 shares of free trading (S-8) common stock that were previously authorized and unissued.
On October 2, 2009 the Company issued 200,000 shares of free trading (S-8) common stock that were previously authorized and unissued.
On August 28, 2009 the Company granted 400,000 shares of free trading (S-8) common stock to a consultant for website development services rendered. The fair market value of the shares based on the closing stock price at the grant date was $40,000. The shares were issued on November 9, 2009.
On August 28, 2009 the Company granted 100,000 shares of restricted common stock to a consultant for video production services. The total fair value of the common stock was $10,000. The shares were issued on October 7, 2009.
On August 28, 2009 the Company granted 100,000 shares of restricted common stock to a consultant for administrative services provided. The total fair value of the common stock was $10,000. The shares were issued on October 7, 2009.
On August 28, 2009 the Company granted 200,000 shares of restricted common stock to a consultant for website development services. The total fair value of the common stock was $20,000. The shares were issued on October 2, 2009.
On August 28, 2009 the Company granted 30,000 shares of restricted common stock to a consultant for video production services. The total fair value of the common stock was $3,000. The shares were issued on October 27, 2009.
On August 28, 2009 the Company granted 600,000 shares of restricted common stock to a consulting firm for investor relation services rendered. The total fair value of the common stock was $60,000. The shares were issued on October 19, 2009.
On August 28, 2009 the Company granted 100,000 shares of free trading (S-8) common stock to a consultant for sales & marketing services rendered. The total fair value of the common stock was $10,000. The shares were issued on October 7, 2009.
On August 28, 2009 the Company issued 100,000 shares of free trading (S-8) common stock to a consultant for sales & marketing services rendered. The total fair value of the common stock was $10,000.
On August 28, 2009 the Company granted 200,000 shares of free trading (S-8) common stock to a consultant for accounting services rendered. The fair market value of the shares based on the closing stock price at the grant date was $20,000.
On August 28, 2009 the Company issued 125,000 shares of restricted common stock to a video production firm for services rendered. The total fair value of the common stock was $12,500.
Players Network
Notes to Financial Statements
On August 28, 2009 the Company issued 10,000 shares of restricted common stock to a video production firm for services rendered. The total fair value of the common stock was $1,000.
On August 28, 2009 the Company issued 25,000 shares of restricted common stock to a consultant for video production services. The total fair value of the common stock was $2,500.
On August 28, 2009 the Company granted 5,000 shares of restricted common stock to a consultant for administrative services provided. The total fair value of the common stock was $500.
On August 28, 2009 the Company granted 25,000 shares of restricted common stock to a consultant for administrative services provided. The total fair value of the common stock was $2,500.
On August 28, 2009 the Company issued 500,000 shares of restricted common stock to a video production company for video encoding and production services. The total fair value of the common stock was $50,000. In addition, the production company agreed to forgive $10,000 of unpaid accounts payable debt.
On August 28, 2009 the CEO was issued 200,000 shares of common stock in exchange for $20,000 of unpaid salary, the fair market value of the common stock.
On August 28, 2009 the Company issued 200,000 shares of restricted common stock to a consultant for sales & marketing services rendered. The total fair value of the common stock was $20,000.
On August 28, 2009 the Company issued 300,000 shares of restricted common stock to a consultant for investor relation services rendered. The total fair value of the common stock was $30,000.
On August 28, 2009 the Company issued 84,041 shares of restricted section 144 common stock to a note holder per the conversion terms of the convertible promissory note. The shares were exchanged for a total of $29,414 of principal and accrued interest.
On August 28, 2009 the Company issued 315,931 shares of restricted section 144 common stock to a note holder per the conversion terms of the convertible promissory note. The shares were exchanged for a total of $64,205 of principal and accrued interest.
On August 28, 2009 the Company issued 1,614,483 shares of restricted section 144 common stock to a note holder per the conversion terms of the convertible promissory note. The shares were exchanged for a total of $359,589 of principal and accrued interest.
On August 28, 2009 the Company sold 50,000 shares of common stock, and warrants to purchase an additional 100,000 shares at $0.15 per share over a two year term, to an investor in exchange for proceeds of $5,000.
On August 15, 2009 the Company sold 200,000 shares of common stock to an investor in exchange for proceeds of $20,000.
On July 29, 2009 the Company issued 200,000 free trading (S-8) shares of common stock to a law firm for legal services rendered. The total fair value of the common stock was $24,000.
On July 22, 2009 the Company sold 100,000 shares of common stock, and warrants to purchase an additional 100,000 shares at $0.15 per share over a three year term, to an investor in exchange for proceeds of $10,000.
On July 20, 2009 the Company sold 30,000 shares of common stock, and warrants to purchase an additional 30,000 shares at $0.15 per share over a three year term, to an investor in exchange for proceeds of $3,000.
On July 17, 2009 the Company issued 100,000 free trading (S-8) shares of common stock that had been previously authorized and unissued.
On July 15, 2009 the Company sold 25,000 shares of common stock, and warrants to purchase an additional 25,000 shares at $0.15 per share over a three year term, to an investor in exchange for proceeds of $2,500.
Players Network
Notes to Financial Statements
On July 7, 2009 the Company sold 75,000 shares of common stock, and warrants to purchase an additional 75,000 shares at $0.15 per share over a three year term, to an investor in exchange for proceeds of $7,500.
On July 1, 2009 the Company issued 35,000 free trading (S-8) shares of common stock that were previously authorized and unissued.
On July 1, 2009 the Company issued a total of 150,000 shares of restricted common stock that had been previously authorized and unissued.
On July 1, 2009 the Company issued 250,000 shares of restricted common stock to the Company’s CEO that had been previously authorized and unissued.
On June 18, 2009 the board of directors granted a bonus of 250,000 shares of restricted common stock to the CEO for services rendered. The fair market value of the shares based on the closing stock price at the grant date was $30,000. The shares were issued on July 1, 2009.
On June 18, 2009 the Company granted 100,000 shares of restricted common stock to a consultant for services rendered. The fair market value of the shares based on the closing stock price at the grant date was $12,000. The shares were issued on July 1, 2009.
On June 18, 2009 the Company granted 50,000 shares of restricted common stock to a consultant for administrative services provided. The total fair value of the common stock was $6,000. The shares were issued on July 1, 2009.
On June 18, 2009 the Company granted 100,000 shares of restricted common stock to a consultant for accounting services rendered. The fair market value of the shares based on the closing stock price at the grant date was $12,000. The shares were issued on July 19, 2009.
On June 18, 2009 the Company granted 35,000 shares of free trading (S-8) common stock to a consultant for website development services rendered. The fair market value of the shares based on the closing stock price at the grant date was $4,200. The shares were issued on July 19, 2009.
On June 18, 2009 the Company issued 100,000 shares of restricted common stock to a consultant for sales & marketing services rendered. The total fair value of the common stock was $12,000.
On June 18, 2009 the Company issued 15,000 shares of restricted common stock to a consultant for sales & marketing services rendered. The total fair value of the common stock was $1,800.
On June 18, 2009 the Company issued 100,000 shares of restricted common stock to a consultant for sales & marketing services rendered. The total fair value of the common stock was $12,000.
On June 6, 2009 the Company sold 20,000 shares of common stock, and warrants to purchase an additional 20,000 shares at $0.15 per share over a two year term, to an investor in exchange for proceeds of $2,000.
On May 7, 2009 the CEO accepted 347,547 shares of restricted common stock in exchange for $48,657 of unpaid salary, the fair market value of the common stock.
On May 7, 2009 the President of Programming accepted 478,388 shares of restricted common stock in exchange for $66,974 of unpaid salary, the fair market value of the common stock.
On May 7, 2009 the Company issued 100,000 free trading (S-8) shares of common stock to an accountant for accounting services rendered. The total fair value of the common stock was $14,000.
On May 7, 2009 the Company issued 50,000 free trading (S-8) shares of common stock to a consultant for website design services rendered. The total fair value of the common stock was $7,000.
On May 7, 2009 the Company issued 120,000 shares of restricted common stock to a Director for consulting services rendered. The total fair value of the common stock was $16,800.
Players Network
Notes to Financial Statements
On May 7, 2009 the Company issued 20,000 shares of restricted common stock to a company for investor relation services rendered. The total fair value of the common stock was $2,800.
On May 7, 2009 the Company issued 10,000 shares of restricted common stock to a consultant for investor relation services rendered. The total fair value of the common stock was $1,400.
On May 7, 2009 the Company issued 100,000 shares of restricted common stock to a consultant for investor relation services rendered. The total fair value of the common stock was $14,000.
On May 7, 2009 the Company issued 75,000 shares of restricted common stock to a consultant for services rendered. The total fair value of the common stock was $10,500.
On May 7, 2009 the Company issued 30,000 shares of restricted common stock to a consultant for services rendered. The total fair value of the common stock was $4,200.
On May 7, 2009 the Company issued 30,000 shares of restricted common stock to a consultant for video editing services rendered. The total fair value of the common stock was $4,200.
On May 7, 2009 the Company issued 20,000 shares of restricted common stock to a consultant for administrative services rendered. The total fair value of the common stock was $2,800.
On May 7, 2009 the Company issued 15,000 shares of restricted common stock to a consultant for video editing services rendered. The total fair value of the common stock was $2,100.
On April 27, 2009 the Company sold 100,000 shares of common stock, and warrants to purchase an additional 100,000 shares at $0.15 per share over a three year term, to an investor in exchange for proceeds of $10,000.
On April 1, 2009 the Company issued 150,000 shares of common stock to a consultant for sales & marketing services rendered. The total fair value of the common stock was $13,500.
On April 1, 2009 the Company issued 50,000 shares of common stock to a consultant for administrative services provided. The total fair value of the common stock was $4,500.
On April 1, 2009 the Company issued 441,913 shares of restricted section 144 common stock to a note holder per the conversion terms of the convertible promissory note. The shares were exchanged for a total of $49,629 of accrued interest. The total fair value of the common stock was $59,207 resulting in a loss on conversion of $9,578 which is included in the total of $20,178.
On April 1, 2009 the Company issued 215,946 shares of restricted section 144 common stock to a convertible promissory note holder as an additional financing cost. The total fair value of the common stock was $9,578.
On March 12, 2009 the Company issued 250,000 shares of common stock, along with warrants to purchase another 250,000 shares at $0.15 per share and 50,000 shares at $1.00 per share, exercisable for 36 months, in exchange for cash proceeds of $25,000.
On February 16, 2009 the Company issued 250,000 shares of common stock, along with warrants to purchase another 250,000 shares at $0.15 per share, exercisable for 36 months, in exchange for cash proceeds of $25,000.
On January 9, 2009 the Company issued 12,000 shares of restricted common stock to a consultant for video production services rendered. The total fair value of the common stock was $1,560.
On January 9, 2009 the Company issued 2,000 shares of restricted common stock to a consultant for video production services rendered. The total fair value of the common stock was $260.
On January 9, 2009 the Company issued 120,000 shares of restricted common stock to a debt holder for payment in lieu of cash on a $5,000 interest free demand note. The total fair value of the common stock was $15,600, resulting in a loss on conversion of $10,600, which is included in the total of $20,178.
On January 9, 2009 the Company issued 50,000 shares of free trading (S-8) common stock to a consultant for accounting services provided. The total fair value of the common stock was $6,500.
Players Network
Notes to Financial Statements
On January 9, 2009 the Company issued 26,500 shares of free trading (S-8) common stock to a consultant for sales & marketing services rendered. The total fair value of the common stock was $3,445.
On January 9, 2009 the Company issued 5,000 shares of free trading (S-8) common stock to a consultant for website production services rendered. The total fair value of the common stock was $650.
On January 9, 2009 the Company issued 50,000 shares of restricted common stock as prepaid compensation for service on the board of directors in 2009 to each of five of its directors totaling 250,000 shares. The fair value of the common stock in total was $32,500.
On January 9, 2009 the Company issued 500,000 shares of restricted common stock to a video production company for video encoding and production services. The total fair value of the common stock was $65,000.
On January 9, 2009 the Company issued 10,000 shares of restricted common stock to a consultant for video production services rendered. The total fair value of the common stock was $1,300.
On January 9, 2009 the Company issued 10,000 shares of restricted common stock to a consultant for video production services rendered. The total fair value of the common stock was $1,300.
On January 9, 2009 the Company issued 10,000 shares of restricted common stock to an employee as a bonus for services rendered. The total fair value of the common stock was $1,300.
On January 9, 2009 the Company issued 5,000 shares of restricted common stock to a consultant for video production services rendered. The total fair value of the common stock was $650.
On January 9, 2009 the Company issued 5,000 shares of restricted common stock to a consultant for commissions earned on sound stage rentals. The total fair value of the common stock was $650.
On January 9, 2009 the Company issued 5,000 shares of restricted common stock to a consultant for website production services rendered. The total fair value of the common stock was $650.
On January 9, 2009 the Company issued 50,000 shares of restricted common stock to a consultant for accounting services provided. The total fair value of the common stock was $6,500.
On January 9, 2009 the Company issued 125,000 shares of restricted common stock to a consultant for administrative services provided. The total fair value of the common stock was $16,250.
On January 9, 2009 the Company issued 100,000 shares of restricted common stock to a consultant for equity promotion & marketing services rendered. The total fair value of the common stock was $13,000. These shares were cancelled on June 26, 2009 for non-performance.
On January 9, 2009 the Company issued 100,000 shares of restricted common stock to a consultant for equity promotion & marketing services rendered. The total fair value of the common stock was $13,000.
On January 9, 2009 the Company issued 30,000 shares of restricted common stock to a consultant for video production services rendered. The total fair value of the common stock was $3,900.
On December 8, 2008 the Company issued 60,000 shares of common stock to its CEO for unpaid compensation. The total fair value of the common stock was $1,800.
On December 8, 2008 the Company issued 60,000 shares of common stock to its President of Programming for unpaid compensation. The total fair value of the common stock was $1,800.
On December 8, 2008 the Company issued common stock as compensation for service on the board of directors to two of its directors totaling 200,000 shares. The fair value of the common stock was $6,000.
Players Network
Notes to Financial Statements
On December 8, 2008 the Company issued 100,000 shares of common stock to a consultant for administrative services rendered. The total fair value of the common stock was $3,000.
On December 8, 2008 the Company issued 40,000 shares of common stock to a consultant for services rendered. The total fair value of the common stock was $1,200.
On December 8, 2008 the Company issued 20,000 shares of common stock to an employee as a bonus for services rendered. The total fair value of the common stock was $600.
On December 8, 2008 the Company issued 5,000 shares of common stock to a consultant for administrative services rendered. The total fair value of the common stock was $150.
On December 8, 2008 the Company issued 10,000 shares of common stock to a consultant for video production services rendered. The total fair value of the common stock was $300.
On December 8, 2008 the Company issued 50,000 shares of common stock to a consultant for video production services rendered. The total fair value of the common stock was $1,500.
On December 8, 2008 the Company issued 100,000 shares of common stock to a consultant for sales & marketing services rendered. The total fair value of the common stock was $3,000.
On December 8, 2008 the Company issued 300,000 shares of common stock to a consultant for prepaid equity promotion and marketing services. The fair market value of the shares was $10,500. The expense is being amortized over the six month life of the agreement. At December 31, 2008 $8,750 remained unamortized, and $1,750 had been expensed as share-based marketing expense.
On December 8, 2008 the Company issued 300,000 shares of common stock to a consultant for prepaid equity promotion and marketing services. The fair market value of the shares was $10,500. The expense is being amortized over the six month life of the agreement. At December 31, 2008 $8,750 remained unamortized, and $1,750 had been expensed as share-based marketing expense.
On December 8, 2008 the Company issued 5,000 shares of common stock to a consultant for equity promotion & marketing services rendered. The total fair value of the common stock was $150.
On November 17, 2008, the Company cancelled 50,000 shares of common stock to a consultant for services which had not been performed as agreed upon.
On September 9, 2008 the Company issued 300,000 shares of common stock to a consultant for services rendered. The total fair value of the common stock on September 9, 2008 was $12,000 related to business development activities.
On September 9, 2008 the Company issued 300,000 shares of common stock to a consultant for video production services rendered. The total fair value of the common stock on September 9, 2008 was $12,000.
On September 9, 2008 the Company issued 200,000 shares of common stock to a consultant for video production services rendered. The total fair value of the common stock on September 9, 2008 was $8,000.
On September 9, 2008 the Company issued 20,000 shares of common stock to a consultant for video production services rendered. The total fair value of the common stock on September 9, 2008 was $800.
On September 9, 2008 the Company issued 75,000 shares of common stock to a consultant for administrative services rendered. The total fair value of the common stock on September 9, 2008 was $3,000.
On September 9, 2008 the Company issued 25,000 shares of common stock to an employee as a bonus for services rendered. The total fair value of the common stock on September 9, 2008 was $1,000.
On September 9, 2008 the Company issued 5,000 shares of common stock to a consultant for administrative services rendered. The total fair value of the common stock on September 9, 2008 was $200.
Players Network
Notes to Financial Statements
On September 9, 2008 the Company issued 150,000 shares of common stock to a stock to a law firm for professional services rendered. The total fair value of the common stock on September 9, 2008 was $6,000.
On September 9, 2008 the Company issued 100,000 shares of common stock to a consultant for web based video production services rendered. The total fair value of the common stock on September 9, 2008 was $4,000.
On September 9, 2008 the Company issued 764,000 shares of common stock to its CEO for unpaid compensation. The total fair value of the common stock on September 9, 2008 was $30,560.
On September 9, 2008 the Company issued 764,000 shares of common stock to its President of Programming for unpaid compensation. The total fair value of the common stock on September 9, 2008 was $30,560.
On July 16, 2008 the Company issued 200,000 shares of common stock to a law firm for professional services rendered. The total fair value of the common stock on July 16, 2008 was $10,000.
On July 16, 2008 the Company issued 250,000 shares of common stock to a consultant for services rendered related to business development activities. The total fair value of the common stock on July 16, 2008 was $12,500.
On July 16, 2008 the Company issued 250,000 shares of common stock to a consultant for services rendered related to business development activities. The total fair value of the common stock on July 16, 2008 was $12,500.
On April 29, 2008 the Company issued 200,000 shares of preferred stock to its CEO for unpaid compensation. The total fair value of the preferred stock on April 29, 2008 was $18,000.
On April 29, 2008 the Company issued 200,000 shares of preferred stock to its President of Programming for unpaid compensation. The total fair value of the preferred stock on April 29, 2008 was $18,000.
On April 29, 2008 the Company issued 227,273 shares of common stock to its President of Programming for unpaid compensation. The total fair value of the common stock on April 29, 2008 was $20,455.
On April 29, 2008 the Company issued 300,000 shares of common stock to one of its vendors as partial payment on the Company’s outstanding accounts payable debt. The total fair value of the common stock on April 29, 2008 was $27,000. The vendor also agreed to forgive an additional $18,000 of accounts payable debt in accordance with the issuance.
On March 11, 2008, the Company issued 50,000 shares of common stock to a consultant for services as part of a public relations agreement. These shares were valued at $10,000.
On February 13, 2008 the Company issued 100,000 shares of common stock to its CEO for unpaid compensation. The total fair value of the common stock on February 13, 2008 was $11,000.
On February 13, 2008 the Company issued 180,000 shares of common stock to its President of Programming for unpaid compensation. The total fair value of the common stock on February 13, 2008 was $19,800.
On February 13, 2008 the Company issued 100,000 shares of common to one of its directors for consulting services. The total fair value of the common stock on February 13, 2008 was $10,000.
On February 13, 2008, the Company issued 100,000 shares of common stock to a consultant for services. These shares were valued at $10,000.
On February 13, 2008, the Company issued 5,000 shares of common stock to a consultant for commissions related to the Company’s sound stage rentals. These shares were valued at $500.
On February 13, 2008, the Company issued 20,000 shares of common stock to an employee as a bonus for services performed. These shares were valued at $2,000.
On February 13, 2008, the Company issued 12,000 shares of common stock to an employee as a bonus for services performed. These shares were valued at $1,200.
Players Network
Notes to Financial Statements
On February 13, 2008, the Company issued a total of 27,500 shares of common stock to four different consultants for services. These shares were valued at $2,750.
The Company issued 924,000 shares of common stock and 600,000 shares of preferred stock to the CEO for compensation for a total value of $73,360 for the year ended December 31, 2008.
The Company issued 1,231,273 shares of common stock and 600,000 shares of preferred stock to the President of programming for compensation for a total value of $102,615 for the year ended December 31, 2008.
Note 9 – Warrants and Options
Options and Warrants Granted (2009)
Options issued for Compensation
On November 30, 2009 the Company granted 250,000 cashless stock options to the CEO as a bonus for services rendered. The options are exercisable until November 29, 2013 at an exercise price of $0.20 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 480% and a call option value of $0.0899, was $22,477.
On November 30, 2009 the Company granted 250,000 cashless stock options to the President of Programming as a bonus for services rendered. The options are exercisable until November 29, 2013 at an exercise price of $0.20 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 480% and a call option value of $0.0899, was $22,477.
On August 28, 2009 the Company granted cashless options to purchase 1,500,000 shares of its common stock to the CEO as a bonus for services rendered. The options are exercisable until August 27, 2013 at an exercise price of $0.15 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 438% and a call option value of $0.0998, was $149,646.
On January 9, 2009 the Company granted cashless options to purchase 250,000 shares of its common stock to the CEO as a bonus for services rendered. The options are exercisable until January 8, 2013 at an exercise price of $0.20 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1295, was $32,372.
On January 9, 2009 the Company granted cashless options to purchase 250,000 shares of its common stock to the President of Programming as a bonus for services rendered. The options are exercisable until January 8, 2013 at an exercise price of $0.20 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1295, was $32,372.
On January 9, 2009 the Company granted cashless options to purchase 300,000 shares of its common stock to the CEO as a bonus for services rendered. The options are exercisable until January 8, 2012 at an exercise price of $0.20 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1283, was $38,486.
On January 9, 2009 the Company granted cashless options to purchase 400,000 shares of its common stock to the President of Programming as a bonus for services rendered. The options are exercisable until January 8, 2012 at an exercise price of $0.20 per share. The estimated value expensed using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1283, was $51,315.
Options issued for Services
On November 30, 2009 the Company granted 250,000 cashless stock options to a consultant as compensation for video production services. The options are exercisable until November 29, 2013 at an exercise price of $0.20 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 480% and a call option value of $0.0899, was $22,477.
Players Network
Notes to Financial Statements
On August 28, 2009 the Company granted 150,000 stock options to a consultant as compensation for video production services. The options are exercisable until August 27, 2011 at an exercise price of $0.15 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 438% and a call option value of $0.0965, was $14,480.
On August 28, 2009 the Company granted 200,000 stock options to a consultant as compensation for investor relations services. The options are exercisable until August 27, 2012 at an exercise price of $0.20 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 438% and a call option value of $0.0990, was $19,796.
On August 28, 2009 the Company granted 200,000 stock options to a consultant as compensation for investor relations services. The options are exercisable until August 27, 2012 at an exercise price of $0.15 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 438% and a call option value of $0.0991, was $19,823.
On August 28, 2009 the Company granted a total of 300,000 cashless stock options as compensation for service to two of the Company’s board of directors. The options are exercisable until August 27, 2013 at an exercise price of $0.15 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 438% and a call option value of $0.0998, was $29,930.
On January 9, 2009 the Company granted 50,000 cashless stock options as compensation for service on the board of directors in 2009 to each of five of its directors. The options are exercisable until January 8, 2013 at an exercise price of $0.20 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 417% and a call option value of $0.1295, was $32,372.
Options and Warrants Granted (2008)
Options issued for Compensation
On February 15, 2008 the Company granted cashless options to purchase 250,000 shares of its common stock to the Company’s CEO as a bonus for services performed at an exercise price of $0.20 per share, exercisable over 36 months from the grant date. The estimated value using the Black-Scholes pricing Model, based on a 180% volatility rate and a call option value of $0.09, was $23,271.
On February 15, 2008 the Company granted cashless options to purchase 250,000 shares of its common stock to the Company’s President of Programming as a bonus for services performed at an exercise price of $0.20 per share, exercisable over 36 months from the grant date. The estimated value using the Black-Scholes pricing Model, based on a 180% volatility rate and a call option value of $0.09, was $23,271.
Options issued for Services
On February 15, 2008 the Company granted cashless options to purchase 100,000 shares of its common stock to a director of the Company in exchange for services at an exercise price of $0.20 per share, exercisable over 36 months from the grant date. The estimated value using the Black-Scholes pricing Model was $9,308.
On February 15, 2008 the Company granted 100,000 stock options to a consultant for services as part of a 30 day public relations agreement at an exercise price of $0.20 per share, exercisable over 36 months from the grant date. The estimated value using the Black-Scholes pricing Model, based on a 180% volatility rate and a call option value of $0.09, was $9,308.
On February 15, 2008 the Company granted 100,000 stock options to a consultant for services rendered at an exercise price of $0.20 per share, exercisable over 36 months from the grant date. The estimated value using the Black-Scholes pricing Model, based on a 180% volatility rate and a call option value of $0.09, was $9,308.
On February 15, 2008 the Company granted 150,000 stock options to a consultant for services rendered at an exercise price of $0.20 per share, exercisable over 12 months from the grant date. The estimated value using the Black-Scholes pricing Model, based on a 180% volatility rate and a call option value of $0.06, was $8,597.
On February 15, 2008 the Company granted 50,000 stock options to a consultant for services rendered at an exercise price of $0.20 per share, exercisable over 12 months from the grant date. The estimated value using the Black-Scholes pricing Model, based on a 180% volatility rate and a call option value of $0.06, was $2,866.
Players Network
Notes to Financial Statements
On February 15, 2008 the Company granted cashless options to purchase 25,000 shares of its common stock to each of all five of the Company’s directors in exchange for their services as board members. The options carry an exercise price of $0.20 per share, exercisable over 36 months from the grant date. The estimated value using the Black-Scholes pricing Model, based on a 180% volatility rate and a call option value of $0.09, was $2,327 each.
Stock options issued to the CEO for bonus and service on the Board of Directors totaled 25,598 for the year ended December 31, 2008.
Stock options issued to the President of programming for bonus and service on the Board of Directors totaled 25,598 for the year ended December 31, 2008.
Options and Warrants Cancelled
No options or warrants were cancelled during the years ended December 31, 2009 and 2008.
Options and Warrants Expired
During the year ended December 31, 2009, 1,320,000 options and 1,231,333 warrants that were outstanding as of December 31, 2008 expired. The expiration of the options and warrants had no impact on the current period operations.
During the year ended December 31, 2008, 2,123,500 options and 1,116,666 warrants that were outstanding as of December 31, 2007 expired. The expiration of the options and warrants had no impact on the current period operations.
Options Exercised
No options were exercised during the years ended December 31, 2009 and 2008.
The following is a summary of information about the Stock Options outstanding at December 31, 2009.
| | | | | | | | | | | | | | | | | Shares Underlying |
| Shares Underlying Options Outstanding | | Options Exercisable |
| | | |
| | | | | | | Weighted | | | | | | | | | | |
| | | | | Shares | | Average | | Weighted | | Shares | | Weighted |
| | | | | Underlying | | Remaining | | Average | | Underlying | | Average |
| Range of | | Options | | Contractual | | Exercise | | Options | | Exercise |
| Exercise Prices | | Outstanding | | Life | | Price | | Exercisable | | Price |
| | | | | | | | | | | |
| $ | 0.15 - 1.00 | | | | 9,830,000 | | | 2.27 years | | $ | 0.23 | | | | 9,830,000 | | | $ | 0.23 | |
The fair value of each option and warrant grant are estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:
| | 2009 | | 2008 |
| | | | |
| Average risk-free interest rates | | | 2.94 | % | | | 2.05 | % |
| Average expected life (in years) | | | 2.27 | | | | 1.58 | |
| Volatility | | | 288 | % | | | 180 | % |
The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. During 2009 and 2008, there were no options granted with an exercise price below the fair value of the underlying stock at the grant date.
Players Network
Notes to Financial Statements
The weighted average fair value of options granted with exercise prices at the current fair value of the underlying stock during 2009 was approximately $0.18 per option, and during 2008 was approximately $0.20 per option.
The following is a summary of activity of outstanding stock options:
| | | | | | | Weighted |
| | | | | | | Average |
| | | Number | | Exercise |
| | | of Shares | | Price |
| | | | | |
| Balance, December 31, 2008 | | | 6,661,333 | | | | 0.28 | |
| Options expired | | | (2,551,333) | | | | (0.30) | |
| Options cancelled | | | -0- | | | | -0- | |
| Options granted | | | 5,720,000 | | | | 0.18 | |
| Options exercised | | | -0- | | | | -0- | |
| | | | | | | | | |
| Balance, December 31, 2009 | | | 9,830,000 | | | | 0.23 | |
| | | | | | | | | |
| Exercisable, December 31, 2009 | | | 9,830,000 | | | $ | 0.23 | |
Note 10 – Operating Lease
The Company leases its office facilities under a month to month, cancelable operating sublease agreement from one of its vendors that provide video production and editing services. The monthly rental amount under the agreement is $2,000. The Company also leases storage space under a month to month, cancelable operating lease agreement. The monthly rental amount under the agreement is $1,000. Lease expense totaled $65,028 and $76,046 during 2009 and 2008, respectively.
Note 11 – Commitments
On October 10, 2005 the Company entered into a ten-year distribution agreement with Comcast Programming Development, Inc (“Comcast”), an affiliated entity of Comcast Corporation. Pursuant to the terms of the agreement, Comcast will carry PNTV’s Gaming Channel on its Digital VOD Cable Platform, which will provide programming directly related to the gaming industry and targeting the existing approximately $70 billion market. The Company will own and operate the channel 100%. Pursuant to the agreement, the Company formed a wholly owned subsidiary, Players Network on Demand. Comcast has the option to purchase up to 40% of the common stock in the subsidiary for fair market value after an eighteen-month period.
Note 12 – Concentrations in Sales to Few Customers
The largest customer accounted for 28% and 24% of revenues for the year ended December 31, 2009 and 2008, respectively, as well as, 47% and 47% of the Company’s accounts receivable balance at December 31, 2009 and 2008, respectively. An adverse change in the Company’s relationship with these customers could negatively affect the Company’s revenues and their results of operations.
Note 13 – Company is Dependent on Few Major Suppliers
The Company is dependent on third-party vendors for all of its video content production and services. In 2009 and 2008, purchases from the Company’s two largest vendors accounted for approximately 60% and 80% of direct operating costs, respectively. The Company is dependent on the ability of its vendors to provide services and content on a timely basis and on favorable pricing terms. The loss of certain suppliers could have a material adverse effect on the Company. The Company believes that its relationships with its suppliers are satisfactory.
Players Network
Notes to Financial Statements
Note 14 – Fair Value of Financial Instruments
The Company adopted FASB ASC 820-10 on January 1, 2008. 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 various financial instruments that must be measured under the new fair value standard including: cash and debt. The Company currently does not have non-financial assets or non-financial liabilities that are required to be measured at fair value on a recurring basis, with the exception of intangible assets. 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. The fair value of the Company’s cash is based on quoted prices and therefore classified as Level 1.
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 table provides a summary of the fair values of assets and liabilities:
| | | | | | Fair Value Measurements at | |
| | | | | | December 31, 2009 | |
| | | Carrying | | | | | | | | | | |
| | | Value | | | | | | | | | | |
| | | December 31, | | | | | | | | | | |
| | | 2009 | | | Level 1 | | | Level 2 | | | Level 3 | |
| Assets: | | | | | | | | | | | | |
| Cash | $ | - | | $ | - | | $ | - | | $ | - | |
| | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | |
| Checks written in excess of funds | $ | 1,719 | | $ | 1,719 | | $ | - | | $ | - | |
| Current maturities of long term debt | | 3,000 | | | | | | | | | 3,000 | |
| Long term debt | | 25,000 | | | | | | | | | 25,000 | |
| Total | $ | 29,719 | | $ | 1,719 | | $ | - | | $ | 28,000 | |
The Company believes that the market rate of interest as at December 31, 2009 was not materially different to the rate of interest at which the debts were issued. Accordingly, the Company believes that the fair value of the debt approximated their carrying value at December 31, 2009.
Note 15 – Forgiveness of Debt
The Company recognized debt forgiveness in the total amount of $54,380 during the year ended December 31, 2009 as a result of the issuance of a total of 978,000 shares with a fair market value of $93,020 as payment on accounts payable invoices totaling $142,800, resulting in a gain of $49,780, as well as, the forgiveness of $4,600 of accounts payable invoices from another vendor.
The Company recognized debt forgiveness in the total amount of $137,706 during the year ended December 31, 2008 as a result of the issuance of a total of 600,000 shares with a fair market value of $39,000 as payment on accounts payable invoices totaling $90,000, resulting in a gain of $51,000, as well as, $66,805 of accounts payable invoices recognized as debt forgiveness due to the expiration of the statute of limitations in Nevada, and $19,901 as a result of the settlement of a lawsuit with a former employee.
Players Network
Notes to Financial Statements
Note 16 – Subsequent Events
Stock issuances
On January 8, 2010 the Company issued 150,000 shares of free trading common stock to a consultant for video production services rendered. The total fair value of the common stock was $9,000.
On January 8, 2010 the Company issued 200,000 shares of free trading common stock to a consultant for web development services provided. The total fair value of the common stock was $12,000.
On January 8, 2010 the Company issued 50,000 shares of free trading common stock to a consultant for administrative services provided. The total fair value of the common stock was $3,000.
On January 8, 2010 the Company issued 100,000 shares of free trading common stock to a consultant for accounting services provided. The total fair value of the common stock was $6,000.
On January 8, 2010 the Company issued 100,000 shares of free trading common stock to a consultant for business development services provided. The total fair value of the common stock was $6,000.
On January 8, 2010 the Company issued 100,000 shares of free trading common stock to a law firm for legal services provided. The total fair value of the common stock was $6,000.
On January 8, 2010 the Company issued 67,000 shares of free trading common stock to a law firm for legal services provided. The total fair value of the common stock was $4,000.
On January 8, 2010 the Company issued 50,000 shares of free trading common stock to an employee for administrative services provided. The total fair value of the common stock was $3,000.
On January 8, 2010 the Company issued 25,000 shares of free trading common stock to an employee for administrative services provided. The total fair value of the common stock was $1,500.
On January 8, 2010 the Company issued 200,000 shares of restricted common stock to a consultant for web development services provided. The total fair value of the common stock was $12,000.
On January 8, 2010 the Company issued 100,000 shares of restricted common stock to a consultant for business development services provided. The total fair value of the common stock was $6,000.
On January 8, 2010 the Company issued 500,000 shares of free trading common stock to a consultant for business development services provided. The total fair value of the common stock was $30,000.
On March 1, 2010 the Company issued 400,000 shares of common stock, along with warrants to purchase 200,000 shares at $0.20 per share, exercisable for 36 months and warrants to purchase another 200,000 shares at $0.50 per share, exercisable for 36 months, to the Company’s major vendor in exchange for cash proceeds of $20,000. In addition, $10,000 of the proceeds was allocated to be used to repay a portion of the accounts payable balance back to the vendor.
On March 1, 2010 the Company issued 994,199 shares of restricted common stock to the Company’s major vendor as payment on outstanding accounts payable invoices in the total amount of $62,000. The total fair value of the common stock was $49,710, resulting in debt forgiveness of $12,290.
On March 1, 2010 the Company issued 700,000 shares of common stock to its CEO for unpaid compensation. The total fair value of the common stock on March 1, 2010 was $35,000.
On March 1, 2010 the Company issued 100,000 shares of free trading common stock to a consultant for accounting services provided. The total fair value of the common stock was $5,000.
On March 1, 2010 the Company issued 100,000 shares of restricted common stock as prepaid compensation for service on the board of directors in 2010. The fair value of the common stock in total was $5,000.
Players Network
Notes to Financial Statements
On March 1, 2010 the Company issued 100,000 shares of restricted common stock as prepaid compensation for service on the board of directors in 2010. The fair value of the common stock in total was $5,000.
On March 1, 2010 the Company issued 100,000 shares of restricted common stock as prepaid compensation for service on the board of directors in 2010. The fair value of the common stock in total was $5,000.
On March 1, 2010 the Company issued 75,000 shares of restricted common stock as prepaid compensation for service on the board of directors in 2010 to one of its directors. The fair value of the common stock in total was $3,750.
On March 1, 2010 the Company issued 100,000 shares of restricted common stock to a consultant for business development services provided. The total fair value of the common stock was $5,000.
On March 11, 2010 the Company issued 400,000 shares of common stock, along with warrants to purchase 200,000 shares at $0.20 per share, exercisable for 36 months and warrants to purchase another 200,000 shares at $0.50 per share, exercisable for 36 months, to the Company’s major vendor in exchange for cash proceeds of $20,000. In addition, $10,000 of the proceeds was allocated to be used to repay a portion of the accounts payable balance back to the vendor.
Stock cancellations
On January 8, 2010 the Company cancelled 100,000 shares for non-performance of services.
Options issuances
On March 1, 2009 the Company granted 100,000 cashless stock options as prepaid compensation for service on the board of directors in 2010 to each of three of its directors. The options are exercisable until March 1, 2013 at an exercise price of $0.10 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 431% and a call option value of $0.0892, was $26,766.
On March 1, 2009 the Company granted 75,000 cashless stock options as prepaid compensation for service on the board of directors in 2010 to one of its directors. The options are exercisable until March 1, 2013 at an exercise price of $0.10 per share. The total estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 431% and a call option value of $0.0892, was $6,691.
In accordance with ASC 855-10, all subsequent events have been reported through the filing date of April 6, 2010.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | PLAYERS NETWORK |
| | | |
| | By: | /s/ Mark Bradley |
Date: April 6, 2010 | Mark Bradley, Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below appoints Mark Bradley his attorney in fact, with full power of substitution and re-substitution, to sign any and all amendments to this Report on Form 10-K of Players Network, and to file them, with all their exhibits and other related documents, with the Securities and Exchange Commission, ratifying and confirming all that their attorney in fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue of this appointment. In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Name | | Title | | Date |
| | | | | |
| /s/ Mark Bradley | | Director & Chief Executive Officer (Principal | | April 6, 2010 |
| Mark Bradley | | Executive Officer, Principal Financial Officer & Principal Accounting Officer) | | |
| | | | | |
| /s/ Michael Berk | | Director and President of Programming | | |
| Michael Berk | | | | |
| | | | | |
| /s/ Doug Miller | | Director | | |
| Doug Miller | | | | |
| | | | | |
| | | Director | | |
| John J. English | | | | |
