PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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 matured 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. On various dates between November 10, 2014 and
February 2, 2015, the note holder elected to convert a total of $53,536, consisting of $50,000 of principal and $3,536 of
interest, in exchange for 5,346,392 shares of common stock in complete satisfaction of the debt. The convertible promissory
note was subsequently cancelled as paid in full. The Company had to reserve at least 20 million shares of common stock for
potential conversions. The Note was satisfied in full and the reserved shares have been released.
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
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 matured 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
|
|
|
|
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 matured 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 reserved at least 60 million shares of common stock for potential conversions. This Note was sold and assigned
to Collier Investments, LLC and, on June 24, 2015, was exchanged in the aggregate with two other JMJ Notes for the First Collier
Note in the amount of $119,052, consisting of $108,492 of principal and $10,560 of interest. The Note was satisfied in full
and the reserved shares have been released.
|
|
|
-
|
|
|
|
-
|
|
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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 matured 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 reserved at least 60 million shares of common stock
for potential conversions, as noted in the First JMJ Note disclosure. This Note was sold and assigned to Collier Investments,
LLC and, on June 24, 2015, was exchanged in the aggregate with two other JMJ Notes for the First Collier Note in the amount
of $119,052, consisting of $108,492 of principal and $10,560 of interest. The Note was satisfied in full and the reserved
shares have been released.
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
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 matured 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 reserved at least 60 million shares of common stock for potential conversions, as noted in the First JMJ
Note disclosure. This Note was sold and assigned to Collier Investments, LLC and, on June 24, 2015, was exchanged in the aggregate
with two other JMJ Notes for the First Collier Note in the amount of $119,052, consisting of $108,492 of principal and $10,560
of interest. The Note was satisfied in full and the reserved shares have been released.
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
Total
convertible debentures
|
|
300,000
|
|
|
671,940
|
|
Less:
unamortized debt discounts
|
|
(241,634
|
)
|
|
(287,802
|
)
|
Convertible
debentures
|
|
$
|
58,366
|
|
|
$
|
384,138
|
|
In
accordance with ASC 470-20 Debt with Conversion and Other Options, the Company recorded total discounts of $257,379 and $559,626
for the variable conversion features of the convertible debts incurred during the years ended December 31, 2016 and 2015, respectively.
The discounts, including Original Issue Discounts of $-0- and $23,500 during the years ended December 31, 2016 and 2015, respectively,
are being amortized to interest expense over the term of the debentures using the effective interest method. The Company recorded
$357,612 and $820,287 of interest expense pursuant to the amortization of the note discounts during the years ended December 31,
2016 and 2015, 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.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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 $31,330
and $135,314 for the years ended December 31, 2016 and 2015, respectively related to convertible debts.
Note
11 – Short Term Debt
Short
term debt consists of the following at December 31, 2016 and 2015, respectively:
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
On
July 1, 2016, the Company issued a promissory note to PNTV Investors, LLC in the amount of $25,000 for an advance that was
received on December 16, 2015 as the Company and an investor developed terms to a potential partnership agreement with Green
Leaf Farms Holdings. The unsecured promissory note bears interest at 8% per annum (“First PNTV Investors Note”),
which matured on December 15, 2016, and carried default provisions that enable the holder to purchase 4,285,000 shares of
stock at $0.007 per share in the event of default. On November 2, 2016, the note was assigned to SK L-43, LLC and rolled into
a long term note.
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
On
various dates between January 11, 2016 and April 20, 2016, the Company received aggregate refundable advances of $143,000
as the Company and an investor developed terms to a potential partnership agreement with Green Leaf Farms Holdings. On June
1, 2016, the Company issued a promissory note in exchange for those deposits. The unsecured promissory note bears interest
at 4% per annum (“First ZG Note”), which matures on January 3, 2017, and awarded the lender options to acquire
up to 5,000,000 shares of common stock, exercisable at $0.01 per share over a four (4) week period from the origination date,
which expired on July 1, 2016, in addition to options to acquire up to another 3,000,000 shares of common stock, exercisable
at $0.08 per share over a twenty four (24) month period from the origination date. The aggregate fair value of the options
is $6,996 and is being amortized over the earlier of the life of the loan, or the life of the options, as a debt discount.
The note carries a default rate of 10%.
|
|
|
143,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
On
March 8, 2016, the Company received proceeds of $45,000 in exchange for a non-interest bearing, unsecured promissory note
(“First SCP Note”), which matures on June 8, 2016, and detachable warrants to acquire up to 9,000,000 shares of
common stock, exercisable at $0.005 per share over a period from the origination date until four (4) months after the note
is repaid. The fair value of the warrants is $7,400 and is being amortized over the life of the loan as a debt discount. The
note carried a default rate of 18% and an additional 1,000,000 warrants issued each 30 day period the note remains unpaid.
On August 5, 2016, the note was repaid out of the proceeds of the exercised warrant.
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Non-interest
bearing, unsecured debenture, due on demand. Originated on December 9, 2015, included a $1,000 loan origination cost. On March
8, 2015, a partial payment of $2,500 was repaid, and the remaining $2,500 and an additional $99 of interest was repaid on
September 27, 2016.
|
|
|
-
|
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
10%
unsecured debenture, due on demand. Originated on August 6, 2015. On June 30, 2016, the Company issued 2,500,000 shares of
common stock in exchange for $3,500 of outstanding principal and $228 of interest. The total fair value of the common stock
was $8,000 based on the closing price of the Company’s common stock on the date of grant, resulting in a loss on debt
extinguishment of $4,272.
|
|
|
-
|
|
|
|
3,500
|
|
|
|
|
|
|
|
|
|
|
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 was considered satisfactorily paid in full with the successful payment of four equal payments of
$8,125 made in quarterly periods, which were delivered on June 27, 2014, August 26, 2014, November 17, 2014 and February 2,
2015, resulting in a gain on debt extinguishment of $6,482. Pursuant to the terms of the settlement agreement, the note was
subsequently cancelled as paid in full, and 4,349,339 shares of series B preferred stock held by the lender were exchanged
for 4,349,339 shares of common stock.
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Total
short term debt
|
|
|
143,000
|
|
|
|
8,500
|
|
Less:
unamortized debt discounts
|
|
|
(60
|
)
|
|
|
-
|
|
Short
term debt
|
|
$
|
142,940
|
|
|
$
|
8,500
|
|
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Note
12 – Long Term Debt
Long
term debt consists of the following at December 31, 2016 and 2015, respectively:
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
On
November 21, 2016, the Company entered into a letter agreement with SK L-43, LLC providing
for the making of loans by the SK L-43 to the Company, at SK L-43’s option (i)
in the aggregate principal amount of $925,000 by December 15, 2016, and (ii) in the amounts
of $1,500,000 each on or before each of April 1, 2017 and May 1, 2017. Advances under
the letter agreement are unsecured; bear interest at a rate of 5% per annum, payable
on December 31
st
of each year; mature two years from the making of the applicable
Advance; and are subject to acceleration upon customary events of default set forth in
the promissory notes. To date, SK L-43 has advanced to the Company the following loans:
$125,000
– November 02, 2016 (including $25,000 assigned from PNTV Investors Note)
$267,000
– November 21, 2016
$267,000
– December 02, 2016
$266,000
– December 19, 2016
Pursuant
to the advances above, SK L-43 was issued warrants to purchase up to 92,500,002 shares of the Company’s common stock
as additional consideration for making the loans at various exercise prices of $0.03 and $0.06 per share. For each additional
loan of $1,500,000 each on or before each of April 1, 2017 and May 1, 2017, SK L-43 will also be entitled to additional
warrants to purchase 42,857,142 shares of the Company’s common stock. These additional warrants will have an exercise
price equal to 125% of the average closing price of the Company’s common stock over the thirty trading days immediately
preceding the date of the applicable additional loan; provided, however, that if during the 90 trading day period following
the date of such additional loan, the average closing price of the Company’s common stock (the “Post-Advance
Closing Average”) is equal to or less than 80% of the Pre-Advance Closing Average, the exercise price for such additional
warrant will be equal to 125% of the Post-Advance Closing Average.
Each
warrant will vest and become exercisable four months following its date of issuance and remain exercisable for a period
of two years thereafter; provided, however, that if the Company’s common stock on each of the 30 trading days preceding
the vesting date of a warrant equals or exceeds 300% of the exercise price for such warrant, then the Company will have
the right to reduce the length of the exercise period for such warrant to 45 days following delivery of notice to SK L-43.
|
|
$
|
925,000
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Total
long term debt
|
|
|
925,000
|
|
|
|
-
|
|
Less:
unamortized debt discounts
|
|
|
(885,271
|
)
|
|
|
-
|
|
Long
term debt
|
|
$
|
39,729
|
|
|
$
|
-
|
|
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Note
13 – Derivative Liabilities
As
discussed in Note 10 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 $482,674 and $1,038,504 at December
31, 2016 and 2015, respectively. The change in fair value of the derivative liabilities resulted in a loss of $231,519 and a loss
of $13,091 for the years ended December 31, 2016 and 2015, respectively, which has been reported as other income (expense) in
the statements of operations. The loss of $231,519 for the year ended December 31, 2016 consisted of a loss of $4,417 due to the
value in excess of the face value of the convertible notes, a loss of $17,604 attributable to the fair value of warrants and a
net loss in market value of $209,498 on the convertible notes. The loss of $13,091 for the year ended December 31, 2015 consisted
of a loss of $306,538 due to the value in excess of the face value of the convertible notes, a gain of $2,793 attributable to
the fair value of preferred stock, a gain of $110,477 attributable to the fair value of warrants and a net gain in market value
of $180,177 on the convertible notes.
The
following presents the derivative liability value by instrument type at December 31, 2016 and 2015, respectively:
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
Convertible
debentures
|
|
$
|
462,489
|
|
|
$
|
1,038,225
|
|
Common
stock warrants
|
|
|
20,185
|
|
|
|
279
|
|
|
|
$
|
482,674
|
|
|
$
|
1,038,504
|
|
The
following is a summary of changes in the fair market value of the derivative liability during the years ended December 31, 2016
and 2015, respectively:
|
|
Derivative
|
|
|
|
Liability
|
|
|
|
Total
|
|
Balance,
December 31, 2014
|
|
$
|
1,417,187
|
|
Increase
in derivative value due to issuances of convertible promissory notes
|
|
|
524,626
|
|
Change
in fair market value of derivative liabilities due to the mark to market adjustment
|
|
|
13,091
|
|
Debt
conversions
|
|
|
(916,400
|
)
|
Balance,
December 31, 2015
|
|
$
|
1,038,504
|
|
Increase
in derivative value due to issuances of convertible promissory notes
|
|
|
261,796
|
|
Increase
in derivative value attributable to issuance of warrants
|
|
|
7,400
|
|
Change
in fair market value of derivative liabilities due to the mark to market adjustment
|
|
|
227,102
|
|
Debt
conversions
|
|
|
(1,052,128
|
)
|
Balance,
December 31, 2016
|
|
$
|
482,674
|
|
Key
inputs and assumptions used to value the convertible debentures and warrants issued during the years ended December 31, 2016 and
2015:
|
●
|
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 $0.03 to $0.18, 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
monthly trading volume would reflect historical averages and would increase at 1% per month.
|
|
●
|
The
holder would automatically convert the notes at maturity at the greater of 2 times the conversion price or stock price if
the registration was effective and the Company was not in default.
|
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
●
|
An
event of default for the convertible note would occur 0% of the time, increasing to 1% per month to a maximum of 5%.
|
|
●
|
Alternative
financing for the convertible note would be initially available to redeem the note 0% of the time and increase monthly by
1% to a maximum of 10%.
|
|
●
|
The
computed volatility was projected based on historical volatility.
|
Note
14 –Stockholders’ Equity (Deficit)
Convertible
Preferred Stock
The
Board, from the authorized capital of 50,000,000 preferred shares, as amended on July 22, 2015, has authorized and designated
2,000,000 shares of series A preferred stock (“Series A”) and 12,000,0000 shares of series C preferred stock (“Series
C”), of which 2,000,000 shares and 12,000,000 shares are issued and outstanding, respectively. On July 22, 2015, the series
B class of stock was terminated. A total of 36,000,000 shares remained 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 C shares carry 50:1 preferential voting rights, and are convertible into shares of common stock on a 1:1 basis.
Series
B Preferred Stock Cancellation
On
June 2, 2014, the Company and the Series B Preferred shareholder entered into a settlement agreement whereby an outstanding $35,000
promissory note was satisfied with the successful payment of $32,500, consisting of four equal payments of $8,125, which were
delivered on June 27, 2014, August 26, 2014, November 17, 2014 and February 2, 2015. On March 31, 2015, upon successful payment
of the settlement obligations, the shareholder converted his 4,349,339 shares of Convertible Series B Preferred shares into 4,349,339
shares of common stock.
Series
C Preferred Stock Issuances
On
March 2, 2016, we issued a total of 6,250,000 shares of the Company’s series C preferred stock to Mark Bradley, the Company’s
Chief Executive Officer, in lieu of $18,750 of unpaid compensation pursuant to the terms of the new employment agreement. The
total fair value of the Series C shares was $192,000 based on an independent valuation on the date of grant, resulting in additional
compensation expense of $173,250.
On
July 21, 2015, we issued an aggregate of 5,750,000 shares of the Company’s newly created series C preferred stock to Mark
Bradley, the Company’s Chief Executive Officer, in lieu of $17,250 of unpaid compensation pursuant to the terms of the new
employment agreement. The total fair value of the Series C shares was $164,000 based on an independent valuation on the date of
grant, resulting in additional compensation expense of $146,750.
common
stock Authorized
The
Company has authorized 1,200,000,000 shares of common stock, as amended on July 22, 2015, of which 547,394,239 shares were issued
and outstanding and 54,831,889 shares were reserved as of April 14, 2017.
common
stock Sales (2016)
On
October 14, 2016, the Company sold 1,500,000 shares of its common stock to an accredited investor in exchange for proceeds of
$12,000.
On
September 15, 2016, the Company sold 16,750,000 shares of its common stock to an accredited investor in exchange for proceeds
of $117,250.
On
March 2, 2016, the Company sold 14,000,000 shares of its common stock to an accredited investor in exchange for proceeds of $61,600.
On
February 1, 2016, the Company sold 15,000,000 shares of its common stock to an accredited investor in exchange for proceeds of
$63,000.
common
stock Sales (2015)
On
December 3, 2015, the Company sold 7,500,000 shares of its common stock in exchange for proceeds of $6,000.
On
November 19, 2015, the Company sold 2,800,000 shares of its common stock in exchange for proceeds of $3,000.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Exercise
of Warrants (2016)
On
August 5, 2016, the Company issued 9,000,000 shares of its common stock pursuant to the exercise of an equal number warrants in
exchange for proceeds of $45,000 that were used to repay the corresponding First SCP Note. No warrants were exercised during the
year ended December 31, 2015.
common
stock Issuances for Debt Conversions (2016)
On
November 3, 2016, the Company issued 12,182,508 shares of common stock pursuant to the conversion of $86,709 of outstanding principal
on the Fourth Vista Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
In addition, Vista Capital forgave the remaining principal and interest on all outstanding Vista Notes, resulting in a gain on
debt extinguishment of $92,110.
On
October 24, 2016, the Company issued 1,461,187 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the WHC Notes settlement in lieu of cash. The note was converted in accordance with the conversion terms; therefore no gain
or loss has been recognized.
On
September 23, 2016, the Company issued 7,238,041 shares of common stock pursuant to the conversion of $16,512 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
September 22, 2016, the Company issued 13,813,364 shares of common stock pursuant to the conversion of $29,975 of outstanding
principal on the First Collier Note. The note was converted in accordance with the conversion terms; therefore no gain or loss
has been recognized.
On
August 30, 2016, the Company issued 4,667,667 shares of common stock pursuant to the conversion of $7,000 of outstanding principal
on the First Tangiers Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
August 24, 2016, the Company issued 5,000,000 shares of common stock pursuant to the conversion of $7,800 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
August 24, 2016, the Company issued 10,000,000 shares of common stock pursuant to the conversion of $18,900 of outstanding principal
on the First Collier Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
July 20, 2016, the Company issued 4,995,098 shares of common stock pursuant to the conversion of $10,190 of outstanding principal
on the First Tangiers Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
July 15, 2016, the Company issued 969,696 shares of common stock pursuant to the conversion of $2,000 of outstanding principal
on the Second WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
June 15, 2016, the Company issued 5,000,000 shares of common stock pursuant to the conversion of $9,100 of outstanding principal
on the First Collier Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
April 8, 2016, the Company issued 2,777,778 shares of common stock pursuant to the conversion of $5,000 of outstanding principal
on the First Tangiers Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
March 31, 2016, the Company issued 2,500,000 shares of common stock in exchange for $3,500 of outstanding principal and $228 of
interest. The total fair value of the common stock was $8,000 based on the closing price of the Company’s common stock on
the date of grant, resulting in a loss on debt extinguishment of $4,272.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
March 14, 2016, the Company issued 7,812,500 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
Common
Stock Issuances for Debt Conversions (2015)
On
December 24, 2015, the Company issued 3,660,000 shares of common stock pursuant to the conversion of $3,513 of outstanding principal
on the First TJC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
September 24, 2015, the Company issued 6,410,256 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First Tangiers Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
August 24, 2015, the Company issued 7,000,000 shares of common stock pursuant to the conversion of $7,000 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
August 4, 2015, the Company issued 20,000,000 shares of common stock pursuant to the conversion of $40,600 of outstanding principal
on the First Collier Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
July 30, 2015, the Company issued 7,194,245 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the Second Group 10 Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
July 28, 2015, the Company issued 6,666,667 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
June 23, 2015, the Company issued 5,641,026 shares of common stock pursuant to the conversion of $11,000 of outstanding principal
on the First Tangiers Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
June 18, 2015, the Company issued 4,383,562 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
June 15, 2015, the Company issued 2,976,191 shares of common stock pursuant to the conversion of $7,500 of outstanding principal
on the First Tangiers Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
June 11, 2015, the Company issued 5,684,421 shares of common stock pursuant to the conversion of $15,121, consisting of $6,000
of outstanding principal and $9,121 of interest, on the First Typenex Note. The note was converted in accordance with the conversion
terms; therefore no gain or loss has been recognized.
On
June 9, 2015, the Company issued 11,269,231 shares of common stock pursuant to the conversion of $29,300 of outstanding principal
on the First KBM Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
May 29, 2015, the Company issued 5,882,353 shares of common stock pursuant to the conversion of $20,000 of outstanding principal
on the First KBM Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
May 21, 2015, the Company issued 3,191,489 shares of common stock pursuant to the conversion of $15,000 of outstanding principal
on the First KBM Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
May 15, 2015, the Company issued 1,727,116 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First Tangiers Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
May 13, 2015, the Company issued 2,500,000 shares of common stock pursuant to the conversion of $15,000 of outstanding principal
on the First KBM Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
May 7, 2015, the Company issued 2,112,676 shares of common stock pursuant to the conversion of $15,000 of outstanding principal
on the First KBM Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
April 29, 2015, the Company issued 2,360,140 shares of common stock pursuant to the conversion of $13,500 of outstanding principal
on the First Typenex Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
April 27, 2015, the Company issued 2,336,449 shares of common stock pursuant to the conversion of $15,000 of outstanding principal
on the First Tangiers Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
April 16, 2015, the Company issued 2,750,000 shares of common stock pursuant to the conversion of $14,479 of outstanding principal
on the First Vista Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
April 14, 2015, the Company issued 1,975,309 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
April 2, 2015, the Company issued 1,975,309 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
April 1, 2015, the Company issued 2,428,058 shares of common stock pursuant to the conversion of $13,500 of outstanding principal
on the First Typenex Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
March 23, 2015, the Company issued 1,777,778 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
March 10, 2015, the Company issued 2,000,000 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First Vista Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
March 10, 2015, the Company issued 1,861,042 shares of common stock pursuant to the conversion of $15,000 of outstanding principal
on the First Typenex Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
February 24, 2015, the Company issued 2,068,966 shares of common stock pursuant to the conversion of $18,000 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
February 20, 2015, the Company issued 1,463,557 shares of common stock pursuant to the conversion of $15,000 of outstanding principal
on the First Typenex Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
February 10, 2015, the Company issued 1,000,000 shares of common stock pursuant to the conversion of $9,685 of outstanding principal
on the First Vista Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
February 5, 2015, the Company issued 1,479,290 shares of common stock pursuant to the conversion of $15,000 of outstanding principal
on the First Typenex Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been
recognized.
On
February 2, 2015, the Company issued 1,133,914 shares of common stock pursuant to the conversion of $9,536 of outstanding debt,
consisting of $6,000 of principal and $3,536 of interest, 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
January 27, 2015, the Company issued 1,190,477 shares of common stock pursuant to the conversion of $10,000 of outstanding principal
on the First WHC Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
January 2, 2015, the Company issued 1,415,571 shares of common stock pursuant to the conversion of $14,000 of outstanding 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.
common
stock Issued for Services (2016)
On
October 14, 2016, the Company has agreed to issue 1,000,000 shares of common stock to the landlord of our leased facility as payment
for deferring our rent on behalf of our subsidiary, GLFH. The total fair value of the common stock was $11,400 based on the closing
price of the Company’s common stock on the date of grant. The shares were subsequently issued on February 2, 2017.
On
October 14, 2016, the Company issued 1,250,000 shares of common stock for professional services to a consultant for services provided
on behalf of our subsidiary, GLFH. The total fair value of the common stock was $14,250 based on the closing price of the Company’s
common stock on the date of grant.
On
October 14, 2016, the Company issued 750,000 shares of common stock for cultivation services to an independent contractor for
services provided on behalf of our subsidiary, GLFH. The total fair value of the common stock was $8,550 based on the closing
price of the Company’s common stock on the date of grant.
On
October 14, 2016, the Company issued 500,000 shares of common stock for construction services to a contractor for services provided
on behalf of our subsidiary, GLFH. The total fair value of the common stock was $5,700 based on the closing price of the Company’s
common stock on the date of grant.
On
October 14, 2016, the Company issued 500,000 shares of common stock for cultivation services to an independent contractor for
services provided on behalf of our subsidiary, GLFH. The total fair value of the common stock was $5,700 based on the closing
price of the Company’s common stock on the date of grant.
On
October 14, 2016, the Company issued 500,000 shares of common stock for production services to an independent contractor for services
provided on behalf of our subsidiary, GLFH. The total fair value of the common stock was $5,700 based on the closing price of
the Company’s common stock on the date of grant.
On
October 14, 2016, the Company issued 500,000 shares of common stock for website development services to an independent contractor.
The total fair value of the common stock was $5,700 based on the closing price of the Company’s common stock on the date
of grant.
On
October 14, 2016, the Company has issued 2,500,000 shares of common stock to a vendor as payment for $20,000 of outstanding video
editing services. The total fair value of the common stock was $28,500 based on the closing price of the Company’s common
stock on the date of grant.
On
September 2, 2016, the Company issued 20,400,000 shares of common stock to its CEO in satisfaction of unpaid compensation. The
total fair value of the common stock was $102,000 based on the closing price of the Company’s common stock on the date of
grant.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
September 2, 2016, the Company issued 3,000,000 shares of common stock to each of its three Directors for services performed.
The total fair value of the common stock was $45,000 based on the closing price of the Company’s common stock on the date
of grant.
On
July 15, 2016, as part of its engagement letter with JS Barkats, securities counsel, the Company issued 2,000,000 shares of common
stock for services to JS Barkats, PLLC. The total fair value of the common stock was $7,000 based on the closing price of the
Company’s common stock on the date of grant.
common
stock Issuances for Services (2015)
On
December 29, 2015, the Company issued 3,000,000 shares of restricted common stock to Mr. Michael Berk for director services provided.
The total fair value of the common stock was $5,400 based on the closing price of the Company’s common stock on the date
of grant.
On
December 29, 2015, the Company issued 3,000,000 shares of restricted common stock to Mr. Doug Miller for director services provided.
The total fair value of the common stock was $5,400 based on the closing price of the Company’s common stock on the date
of grant.
On
December 29, 2015, the Company issued 3,000,000 shares of restricted common stock for website development services provided. The
total fair value of the common stock was $5,400 based on the closing price of the Company’s common stock on the date of
grant.
On
December 29, 2015, the Company issued 3,000,000 shares of restricted common stock for consulting services provided. The total
fair value of the common stock was $5,400 based on the closing price of the Company’s common stock on the date of grant.
On
December 29, 2015, the Company issued 1,500,000 shares of restricted common stock for video production services provided. The
total fair value of the common stock was $2,700 based on the closing price of the Company’s common stock on the date of
grant.
On
December 29, 2015, the Company issued 500,000 shares of restricted common stock for legal services provided. The total fair value
of the common stock was $900 based on the closing price of the Company’s common stock on the date of grant.
On
October 26, 2015, the Company issued 2,500,000 shares of S-8 common stock for professional services provided. The total fair value
of the common stock was $6,000 based on the closing price of the Company’s common stock on the date of grant.
On
April 29, 2015, the Company issued 656,735 shares of common stock pursuant to a forbearance agreement as financing costs in consideration
for penalties on the April 29, 2015 conversion on the First Typenex Note. The total fair value of the common stock was $10,508
based on the closing price of the Company’s common stock on the date of grant.
On
April 15, 2015, the Company issued 500,000 shares of restricted common stock for professional services provided. The total fair
value of the common stock was $6,000 based on the closing price of the Company’s common stock on the date of grant.
On
April 15, 2015, the Company issued 500,000 shares of restricted common stock for platform development services provided. The total
fair value of the common stock was $6,000 based on the closing price of the Company’s common stock on the date of grant.
On
April 15, 2015, the Company issued 1,500,000 shares of restricted common stock for video production services provided. The total
fair value of the common stock was $18,000 based on the closing price of the Company’s common stock on the date of grant.
On
April 15, 2015, the Company issued 600,000 shares of S-8 common stock for professional services provided. The total fair value
of the common stock was $7,200 based on the closing price of the Company’s common stock on the date of grant.
On
April 15, 2015, the Company issued 500,000 shares of S-8 common stock for professional services provided. The total fair value
of the common stock was $6,000 based on the closing price of the Company’s common stock on the date of grant.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
April 15, 2015, the Company issued 500,000 shares of S-8 common stock for professional services provided. The total fair value
of the common stock was $6,000 based on the closing price of the Company’s common stock on the date of grant.
On
January 25, 2015, the Company issued 500,000 shares of restricted common stock for professional services provided. The total fair
value of the common stock was $8,200 based on the closing price of the Company’s common stock on the date of grant.
On
January 25, 2015, the Company issued 500,000 shares of restricted common stock for professional services provided. The total fair
value of the common stock was $8,200 based on the closing price of the Company’s common stock on the date of grant.
On
January 25, 2015, the Company issued 500,000 shares of restricted common stock for professional services provided. The total fair
value of the common stock was $8,200 based on the closing price of the Company’s common stock on the date of grant.
On
January 25, 2015, the Company issued 500,000 shares of restricted common stock for professional services provided. The total fair
value of the common stock was $8,200 based on the closing price of the Company’s common stock on the date of grant.
On
January 25, 2015, the Company issued 500,000 shares of restricted common stock for platform development services provided. The
total fair value of the common stock was $8,200 based on the closing price of the Company’s common stock on the date of
grant.
On
January 25, 2015, the Company issued 1,600,000 shares of restricted common stock for video production services provided. The total
fair value of the common stock was $26,240 based on the closing price of the Company’s common stock on the date of grant.
On
January 25, 2015, the Company issued 1,500,000 shares of common stock to its CEO as compensation for services as a Director. The
total fair value of the common stock was $24,600 based on the closing price of the Company’s common stock on the date of
grant.
On
January 25, 2015, the Company issued 1,500,000 shares of common stock to its President of Programming as compensation for services
as a Director. The total fair value of the common stock was $24,600 based on the closing price of the Company’s common stock
on the date of grant.
On
January 25, 2015, the Company issued 1,500,000 shares of common stock to one of its Directors as compensation for services as
a Director. The total fair value of the common stock was $24,600 based on the closing price of the Company’s common stock
on the date of grant.
On
January 25, 2015, the Company issued 500,000 shares of S-8 common stock for professional services provided. The total fair value
of the common stock was $8,200 based on the closing price of the Company’s common stock on the date of grant.
On
January 25, 2015, the Company issued 500,000 shares of S-8 common stock for professional services provided. The total fair value
of the common stock was $8,200 based on the closing price of the Company’s common stock on the date of grant.
Contributed
Capital
During
May of 2016, a note holder and potential investor in Green Leaf Farms Holdings contributed $14,000 to pay an installment on a
debt settlement agreement with Tangiers Investment Group.
Note
15 – common stock Options
Common
Stock Options Granted (2016)
On
June 1, 2016, the Company awarded a lender fully vested options to acquire up to 5,000,000 shares of common stock, exercisable
at $0.01 per share over a four (4) week period from the origination date, which expired on July 1, 2016. The estimated value using
the Black-Scholes Pricing Model, based on a volatility rate of 227% and a call option value of $0.0001, was $432.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
June 1, 2016, the Company awarded the same lender fully vested options to acquire up to 3,000,000 shares of common stock, exercisable
at $0.08 per share over a twenty four (24) month period from the origination date. The estimated value using the Black-Scholes
Pricing Model, based on a volatility rate of 227% and a call option value of $0.0022, was $6,564.
Common
Stock Options Granted (2015)
No
options were granted during the year ended December 31, 2015.
Common
Stock Options Expired (2016)
On
July 1, 2016, a total of 5,000,000 options with a strike price of $0.01 per share expired.
On
April 11, 2016, a total of 500,000 options amongst two option holders with a strike price of $0.05 per share expired.
Common
Stock Options Expired (2015)
On
February 29, 2015, a total of 450,000 options amongst two option holders with a strike price of $0.08 per share expired.
The
following is a summary of information about the common stock Options outstanding at December 31, 2016.
|
|
Shares
Underlying
|
|
Shares
Underlying Options Outstanding
|
|
Options
Exercisable
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Average
|
|
Weighted
|
|
|
Shares
|
|
|
Weighted
|
|
Range of
|
|
Underlying
|
|
|
Remaining
|
|
Average
|
|
|
Underlying
|
|
|
Average
|
|
Exercise
|
|
Options
|
|
|
Contractual
|
|
Exercise
|
|
|
Options
|
|
|
Exercise
|
|
Prices
|
|
Outstanding
|
|
|
Life
|
|
Price
|
|
|
Exercisable
|
|
|
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.01
– $0.08
|
|
|
13,350,000
|
|
|
1.02
years
|
|
$
|
0.06
|
|
|
|
13,350,000
|
|
|
$
|
0.06
|
|
The
fair value of each option grant is 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:
|
|
December
31,
2016
|
|
|
December
31,
2015
|
|
|
|
|
|
|
|
|
Average risk-free interest
rates
|
|
|
0.59
|
%
|
|
|
N/A
|
%
|
Average expected life (in years)
|
|
|
1
|
|
|
|
N/A
|
|
Volatility
|
|
|
227
|
%
|
|
|
N/A
|
%
|
The
Black-Scholes option pricing 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 common 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 common stock options. During 2016 and 2015, there were no options granted with an exercise price below the fair
value of the underlying stock at the grant date.
The
weighted average fair value of options granted with exercise prices at the current fair value of the underlying stock during the
years ended December 31, 2016 and 2015 was approximately $0.001 and $0.05 per option, respectively.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
following is a summary of activity of outstanding common stock options:
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
|
Number
|
|
|
Exercise
|
|
|
|
of
Shares
|
|
|
Price
|
|
|
|
|
|
|
|
|
Balance, December 31,
2014
|
|
|
11,300,000
|
|
|
$
|
0.05
|
|
Options expired
|
|
|
(450,000
|
)
|
|
|
(0.08
|
)
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015
|
|
|
10,850,000
|
|
|
|
0.05
|
|
Options expired
|
|
|
(5,500,000
|
)
|
|
|
(0.01
|
)
|
Options granted
|
|
|
8,000,000
|
|
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
Balance, December
31, 2016
|
|
|
13,350,000
|
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
|
|
Exercisable,
December 31, 2016
|
|
|
13,350,000
|
|
|
$
|
0.06
|
|
No
expense was recognized from the amortization of common stock options during the years ended December 31, 2016 and 2015.
Note
16 – common stock Warrants
Warrants
Granted (2016)
On
November 21, 2016, the Company entered into a letter agreement (“Financing Agreement”) with SK L-43, LLC providing
for the making of loans by the Investor to the Company, at the Investor’s option (i) in the aggregate principal amount of
$925,000 by December 15, 2016 (the “Initial Advances”), and (ii) in the amounts of $1,500,000 each on or before each
of April 1, 2017 and May 1, 2017 (the “Additional Advances” and, together with the Initial Advances, the “Advances”).
Pursuant
to the Financing Agreement, SK L-43, LLC was issued warrants to purchase shares of the Company’s common stock as additional
consideration, as follows:
Advance
Date
|
|
Advance
Amount
|
|
|
Warrant
A (Number of Warrant Shares)
|
|
|
Warrant
A Exercise Price
|
|
|
Warrant
B (Number of Warrant Shares)
|
|
|
Warrant
B Exercise Price
|
|
|
Warrant
C (Number of Warrant Shares)
|
|
|
Warrant
C Exercise Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 02, 2016
|
|
$
|
125,000.00
|
|
|
|
4,166,667
|
|
|
$
|
0.03
|
|
|
|
4,166,667
|
|
|
$
|
0.06
|
|
|
|
4,166,667
|
|
|
$
|
0.06
|
|
November 21, 2016
|
|
$
|
267,000.00
|
|
|
|
8,900,000
|
|
|
$
|
0.03
|
|
|
|
8,900,000
|
|
|
$
|
0.06
|
|
|
|
8,900,000
|
|
|
$
|
0.06
|
|
December 02, 2016
|
|
$
|
267,000.00
|
|
|
|
8,900,000
|
|
|
$
|
0.03
|
|
|
|
8,900,000
|
|
|
$
|
0.06
|
|
|
|
8,900,000
|
|
|
$
|
0.06
|
|
December 19,
2016
|
|
$
|
266,000.00
|
|
|
|
8,866,667
|
|
|
$
|
0.03
|
|
|
|
8,866,667
|
|
|
$
|
0.06
|
|
|
|
8,866,667
|
|
|
$
|
0.06
|
|
Total
|
|
$
|
925,000.00
|
|
|
|
30,833,334
|
|
|
|
|
|
|
|
30,833,334
|
|
|
|
|
|
|
|
30,833,334
|
|
|
|
|
|
Each
Warrant will vest and become exercisable four months following its date of issuance and remain exercisable for a period of two
years thereafter; provided, however, that if the Company’s common stock on each of the 30 trading days preceding the vesting
date of a Warrant equals or exceeds 300% of the exercise price for such Warrant, then the Company will have the right to reduce
the length of the exercise period for such Warrant to 45 days following delivery of notice to SK L-43, LLC.
On
March 8, 2016, the Company granted detachable warrants pursuant to a $45,000 promissory note to acquire up to 9,000,000 shares
of common stock, exercisable at $0.005 per share over a period from the origination date until four (4) months after the note
is repaid. The fair value of the warrants is $7,400 and was amortized over the life of the loan as a debt discount. The note carried
a default rate of 18% and an additional 1,000,000 warrants issued each 30 day period the note remained unpaid, however, the note
was repaid out of the proceeds from the exercised warrants on August 5, 2016.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Common
Stock Warrants Granted (2015)
No
warrants were granted during the year ended December 31, 2015.
Common
Stock Warrants Expired (2016)
On
April 8, 2016, a total of 200,000 warrants with a strike price of $0.06 per share expired.
On
March 28, 2016, a total of 2,000,000 warrants with a strike price of $0.06 per share expired.
On
January 30, 2016, a total of 1,000,000 warrants with a strike price of $0.07 per share expired.
Common
Stock Warrants Expired (2015)
On
April 19, 2015, a total of 120,000 warrants held by our CEO with a strike price of $0.15 per share expired.
On
February 14, 2015, a total of 80,000 warrants held by our CEO with a strike price of $0.15 per share expired.
On
January 15, 2015, a total of 250,000 warrants with a strike price of $0.15 per share expired.
On
January 1, 2015, a total of 300,000 warrants with a strike price of $0.08 per share expired.
Common
Stock Warrants Exercised
On
August 5, 2016, the Company issued 9,000,000 shares of its common stock pursuant to the exercise of an equal number warrants in
exchange for proceeds of $45,000 that were used to repay the corresponding First SCP Note.
No
warrants were exercised during the year ended December 31, 2015.
The
following is a summary of information about the common stock Warrants outstanding at December 31, 2016.
|
|
Shares
Underlying
|
|
Shares
Underlying Warrants Outstanding
|
|
Warrants
Exercisable
|
|
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Average
|
|
Weighted
|
|
|
Shares
|
|
|
Weighted
|
|
Range of
|
|
Underlying
|
|
|
Remaining
|
|
Average
|
|
|
Underlying
|
|
|
Average
|
|
Exercise
|
|
Warrants
|
|
|
Contractual
|
|
Exercise
|
|
|
Warrants
|
|
|
Exercise
|
|
Prices
|
|
Outstanding
|
|
|
Life
|
|
Price
|
|
|
Exercisable
|
|
|
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.03
- $0.18
|
|
|
102,700,002
|
|
|
2.6
years
|
|
$
|
0.05
|
|
|
|
102,700,002
|
|
|
$
|
0.05
|
|
The
fair value of each warrant grant is 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:
|
|
December
31,
2016
|
|
|
December
31,
2015
|
|
|
|
|
|
|
Average risk-free interest
rates
|
|
|
1.13
|
%
|
|
N/A
|
Average expected life (in years)
|
|
|
2.4
|
|
|
N/A
|
Volatility
|
|
|
238
|
%
|
|
N/A
|
The
Black-Scholes option pricing 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 common stock warrants 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 common stock warrants. During 2016 and 2015, there were no warrants granted with an exercise price below the
fair value of the underlying stock at the grant date.
The
weighted average fair value of warrants granted with exercise prices at the current fair value of the underlying stock during
the years ended December 31, 2016 and 2015 was approximately $0.01 and $0.05 per warrant, respectively.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
following is a summary of activity of outstanding common stock warrants:
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
|
Number
|
|
|
Exercise
|
|
|
|
of
Shares
|
|
|
Price
|
|
|
|
|
|
|
|
|
Balance, December 31,
2014
|
|
|
14,150,000
|
|
|
$
|
0.050
|
|
Warrants expired
|
|
|
(750,000
|
)
|
|
|
(0.120
|
)
|
|
|
|
|
|
|
|
|
|
Balance, December 31, 2015
|
|
|
13,400,000
|
|
|
|
0.050
|
|
Warrants expired
|
|
|
(3,200,000
|
)
|
|
|
(0.065
|
)
|
Warrants granted
|
|
|
101,500,002
|
|
|
|
0.046
|
|
Warrants exercised
|
|
|
(9,000,000
|
)
|
|
|
(0.005
|
)
|
|
|
|
|
|
|
|
|
|
Balance, December
31, 2016
|
|
|
102,700,002
|
|
|
$
|
0.050
|
|
|
|
|
|
|
|
|
|
|
Exercisable,
December 31, 2016
|
|
|
102,700,002
|
|
|
$
|
0.050
|
|
Note
17 – Gain on Debt Extinguishment
The
Company recognized debt forgiveness in the total amount of $165,615 and $11,282 during the years ended December 31, 2016 and 2015,
respectively, as presented in other income within the Statements of Operations.
Debt
Extinguishments (2016)
On
November 3, 2016, $92,110 of outstanding debts, consisting of $62,409 of principal and $29,701 of interest, was forgiven on outstanding
debts owed to Vista Capital Investments, LLC.
On
September 22, 2016, the Company entered into a payoff agreement to pay WHC Capital, LLC a total of $100,000 in five installments
ranging between $15,000 and $25,000 payable from October 21, 2016 through February 21, 2017 in satisfaction of a total of $114,002
of principal and unpaid interest on two convertible notes originally entered into with WHC on August 24, 2015 and August 19, 2014,
resulting in a gain of $14,002 on debt extinguishment. In addition, $20,000 of outstanding debts, consisting of $12,980 of principal
and $7,020 of interest, was forgiven on outstanding debts owed to Vista Capital Investments, LLC, which is a company under common
control with WHC Capital.
On
March 2, 2016, the Company repaid $30,000 of principal on the First Collier Note, and an additional $20,000 of principal was forgiven
on the Second Vista Capital Note that are held by common ownership.
On
January 21, 2016, the Company entered into a settlement agreement with Tangiers Investment Group. Pursuant to the agreement, the
Company is obligated to repay a total of $80,000 in various monthly installments of between $6,000 and $20,000 from February 8,
2016 through June 26, 2016 in satisfaction of a total of approximately $85,820, consisting of $75,500 of principal and $10,320
of interest on the First and Second Tangiers Notes, resulting in a gain of $5,820 on debt extinguishment. The convertible promissory
notes were subsequently cancelled as paid in full on August 30, 2016.
On
January 6, 2016, the Company repaid the first and second TJC convertible notes with an aggregate payment of $51,000 in satisfaction
of a total of approximately $50,890 of principal and $1,229 of interest, resulting in a gain of $1,119 on the debt extinguishment.
The convertible promissory notes were subsequently cancelled as paid in full.
On
January 4, 2016, the Company entered into a settlement agreement with JSJ Investments. Pursuant to the agreement, the Company
is obligated to repay a total of $70,000 in six monthly installments of approximately $11,667 from January 21, 2016 through June
21, 2016 in satisfaction of a total of approximately $82,564, consisting of $75,000 of principal and $7,564 of interest on the
First JSJ Note, resulting in a gain of $12,564 on debt extinguishment. The convertible promissory note was subsequently cancelled
as paid in full on June 21, 2016.
The
Company and one of our lenders entered into a settlement agreement whereby an outstanding $35,000 promissory note was satisfied
with the successful payment of $32,500, consisting of four equal payments of $8,125, which were delivered on June 27, 2014, August
26, 2014, November 17, 2014 and February 2, 2015, resulting in a $6,482 gain on settlement, consisting of $2,500 of principal
and $3,982 of accrued interest, as presented in other income at September 30, 2016.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Debt
Extinguishments (2015)
On
December 29, 2015, we settled outstanding trade accounts payable in the total amount of $7,500 with the issuance of 1,500,000
shares of common stock valued at $2,700. The creditor forgave the remaining $4,800, resulting in a gain on debt settlements of
$4,800 as presented in other income at December 31, 2015.
The
Company and one of our lenders entered into a settlement agreement whereby an outstanding $35,000 promissory note was satisfied
with the successful payment of $32,500, consisting of four equal payments of $8,125, which were delivered on June 27, 2014, August
26, 2014, November 17, 2014 and February 2, 2015, resulting in a $6,482 gain on settlement, consisting of $2,500 of principal
and $3,982 of accrued interest, as presented in other income at December 31, 2015.
Note
18 – 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, 2016 and 2015, 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, 2016, the Company had approximately $22,179,000 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,
|
|
|
|
2016
|
|
|
2015
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
|
Net
operating loss carry forwards
|
|
$
|
7,763,000
|
|
|
$
|
7,203,700
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets before valuation
allowance
|
|
$
|
7,763,000
|
|
|
$
|
7,203,700
|
|
Less:
Valuation allowance
|
|
|
(7,763,000
|
)
|
|
|
(7,203,700
|
)
|
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 December 31, 2016 and 2015, 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,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
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
19 – Future Minimum Lease Payments
Effective
July 1, 2013, we leased our office space in Las Vegas, Nevada under a 3-year operating lease expiring August 31, 2016. The lease
provides for increases in future minimum annual rental payments based on defined annual increases beginning with monthly payments
of $2,997 and culminating in a monthly payment of $3,191 in 2016. The lease contains provisions for future rent increases and
rent free periods for the first two months of the lease. The total amount of rental payments due over the lease term is being
charged to rent expense according to the straight-line method over the term of the lease. The difference between rent expense
recorded and the amount paid was credited or charged to “Deferred rent obligation,” in the accompanying Balance Sheets.
The lease is now on a month-to-month basis.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
October 14, 2015, Green Leaf Farms Holding, Inc. (“GLFH”) and SFC Leasing, LLP entered into a settlement and release
of claims agreement that terminated GLFH’s lease that originated on April 16, 2015 for property located at 203 E. Mayflower
Avenue in North Las Vegas. The Company paid a total of $83,000 on this lease prior to the termination. The Company subsequently
obtained a new building location in order to transition its provisional medical marijuana production and cultivation licenses
to an approved status, which is necessary to implement their plan to enter into the medical marijuana industry. Pursuant to NAC
453A.324, the State of NV has imposed a deadline for the timeline to implement operations, which is currently approximately May
of 2016. If GLFH is not making significant progress towards being fully operational by then their licenses may be revoked.
On
March 4, 2016, GLFH leased a commercial building from Belmont NLV, LLC that originated on April 17, 2016 for its medical marijuana
production and cultivation business in North Las Vegas. The 5-year operating lease expires on April 16, 2021 and is renewable
for another 5 year term, required a $50,000 security deposit and includes an option to purchase the building for $3.8 million
during the third, fourth and fifth years of the lease. The lease provides for increases in future minimum annual rental payments
based on defined annual increases beginning with monthly payments of $26,786 and culminating in a monthly payment of $30,148 in
2021. The lease contains provisions for future rent increases. The total amount of rental payments due over the lease term is
being charged to rent expense according to the straight-line method over the term of the lease. The difference between rent expense
recorded and the amount paid will be credited or charged to “Deferred rent obligation,” in the Balance Sheets.
Future
minimum lease payments required under operating leases according to our fiscal year-end are as follows:
Year Ending
|
|
|
|
December
31,
|
|
Amount
|
|
2017
|
|
$
|
327,857
|
|
2018
|
|
|
337,693
|
|
2019
|
|
|
347,824
|
|
2020
|
|
|
358,258
|
|
2021
|
|
|
107,526
|
|
Thereafter
|
|
|
-
|
|
|
|
$
|
1,479,158
|
|
Rent
expense was $278,589 and $118,123 for the years ended December 31, 2016 and 2015, respectively.
Note
20 – Non-Controlling Interest
Non-controlling
interest originally represented 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, through December 8, 2014.
On December 9, 2014, one of the non-officer, minority investors exercised an option to purchase an additional 1.6% interest in
the Company’s subsidiary from the parent in exchange for proceeds of $160,000 and 3% was transferred back to Players Network
from a founding member on December 2, 2015, thereby resulting in a minority interest in the subsidiary of 15.6% amongst ten individuals.
The net loss attributable to the non-controlling interest totaled $61,998 and $29,520 during the years ended December 31, 2016
and 2015, respectively.
Effects
of changes in Players Network’s ownership interest in its subsidiary during the years ended December 31, 2016 and 2015 are
as follows:
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
December
31,
2016
|
|
|
December
31,
2015
|
|
|
|
|
|
|
|
|
Net loss attributable to
parent
|
|
$
|
(335,426
|
)
|
|
$
|
(129,313
|
)
|
Transfers to (from) the non-controlling
interest:
|
|
|
|
|
|
|
|
|
Decrease
in parent’s paid-in capital for return of 3% interest in subsidiary
|
|
|
-
|
|
|
|
(180,000
|
)
|
Change from net
loss attributable to the parent and transfers to the non-controlling interest
|
|
$
|
(335,426
|
)
|
|
$
|
(309,313
|
)
|
Note
21 – Legal Proceedings
Players
Network filed a civil suit in the Eighth Judicial District Court in Clark County, Nevada on January 2, 2014, and served the suit
on January 23, 2014, listed as case number A-13-693908-B against Defendants, Comcast Corporation and Advanced Information Systems
Inc. We have currently completed the Discovery process, and summary judgment pleadings are being prepared by both parties. Additional
information and details will be forthcoming as permitted by public disclosure. Mr. Barney C. Ales and his firm based in Las Vegas,
Nevada have been retained as the Company’s Special Counsel, for the litigation and ultimate trial of this matter.
Note
22 – Subsequent Events
Common
Stock Sales
On
January 26, 2017, the Company sold 14,000,000 units, consisting of 14,000,000 shares of common stock and 14,000,000 warrants exercisable
at $0.05 per share over the following 2 years, to its CEO in exchange for proceeds of $350,000.
Common
Stock Issued for Services
On
February 2, 2017, we issued 1,000,000 shares of common stock to the landlord of our leased facility as payment on a subscription
payable from an October 14, 2016 award.
On
January 22, 2017, the Company issued 2,000,000 shares of common stock to its CEO for board services performed. The total fair
value of the common stock was $34,600 based on the closing price of the Company’s common stock on the date of grant.
On
January 22, 2017, the Company issued 2,000,000 shares of common stock one of its three Directors for board services performed.
The total fair value of the common stock was $34,600 based on the closing price of the Company’s common stock on the date
of grant.
On
January 22, 2017, the Company issued 3,000,000 shares of common stock one of its three Directors for board services performed.
The total fair value of the common stock was $51,900 based on the closing price of the Company’s common stock on the date
of grant.
On
January 22, 2017, the Company issued 200,000 shares of common stock for professional services to a consultant for services provided.
The total fair value of the common stock was $3,460 based on the closing price of the Company’s common stock on the date
of grant.
On
January 22, 2017, the Company issued 500,000 shares of common stock for professional services to a consultant for services provided
on behalf of our subsidiary, GLFH. The total fair value of the common stock was $8,650 based on the closing price of the Company’s
common stock on the date of grant.
On
January 22, 2017, the Company issued 150,000 shares of common stock for administrative services to a consultant on behalf of our
subsidiary, GLFH. The total fair value of the common stock was $2,595 based on the closing price of the Company’s common
stock on the date of grant.
On
January 22, 2017, the Company issued 150,000 shares of common stock for administrative services to a consultant for services provided.
The total fair value of the common stock was $2,595 based on the closing price of the Company’s common stock on the date
of grant.
Common
Stock Options Expired
On
March 1, 2017, a total of 1,200,000 warrants with a strike price of $0.08 per share expired.
On
January 8, 2017, a total of 1,150,000 warrants with a strike price of $0.08 per share expired.
[_____________________]
SHARES OF COMMON STOCK
OF
PLAYERS NETWORK
PRELIMINARY
PROSPECTUS
YOU
SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE
TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING
AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Until
[●], 2017, all dealers that effect transactions in these securities whether or not participating in this offering may be
required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
The
Date of This prospectus is [●], 2017