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Item 1.01
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Entry into a Material Definitive Agreement.
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On May 31, 2018, Players Network (the
“Company”) entered into a Revised Stipulation for Settlement of Claims (the “Settlement Agreement”) with
RAI Capital, LLC (“RAI”), pursuant to which the Company agreed to issue common stock to RAI in exchange for the settlement
of outstanding claims against the Company in the aggregate amount of $398,217.30 (the “Claim Amount”). RAI had previously
purchased the claims from certain vendors of the Company.
On June 1, 2018, the Superior Court
of the State of California, County of Los Angeles, Central District (the “Court”), entered an order (the “Order”)
approving the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as
amended (the “Securities Act”), in accordance with the Settlement Agreement, in the matter entitled RAI Capital, LLC,
Plaintiff, v. Players Network, Inc., Defendant (the “Action”). RAI commenced the Action against the Company to recover
the Claim Amount, consisting of past-due obligations and accounts payable of the Company which RAI had purchased from certain vendors
of the Company pursuant to the terms of separate receivable purchase agreements between RAI and such vendors. The Order provides
for the full and final settlement of the Action.
Pursuant to the terms of the Settlement
Agreement approved by the Order, the Company agreed to issue to RAI shares (the “Settlement Shares”) of the Company’s
common stock (“Common Stock”), including an initial issuance of 13,298,837 Settlement Shares (the “Initial Issuance”).
The Settlement Agreement provides that the final number of Settlement Shares (the “Final Amount”) will be sum of (a)
one-seventh of the Claim Amount (b) divided by 80% of the arithmetic average of the individual volume weighted average prices of
any five trading days selected by RAI during the ten trading days preceding each of the seven “Calculation Dates”.
The Calculation Dates are the date of the Initial Issuance, and six subsequent dates that are each separated by intervals of three
weeks. Following the last Calculation Date, if the sum of the Initial Issuance and any additional issuances to RAI under the Settlement
Agreement is less than the Final Amount, the Company will issue additional shares of Common Stock to RAI, up to the Final Amount,
and (b) if the sum of the Initial Issuance and any additional issuances exceeds the Final Amount, RAI will return such excess number
of shares of Common Stock to the Company for cancellation.
After the Initial Issuance, and until
the date that is 12 trading days following the last Calculation Date, RAI may sell no more than an aggregate of $75,000 of Common
Stock every 12 trading days, except that on any day that the Common Stock trades over $150,000, RAI may trade up to an additional
fifteen percent (15%) of that day's trading volume.
The Settlement Agreement provides that
in no event will the Company issue shares of Common Stock to RAI if such shares, when aggregated with all shares of Common Stock
then beneficially owned or controlled by RAI or its affiliates at such time, exceed 4.99% of the total number of shares of Common
Stock outstanding after such issuance.
The description of the Settlement Agreement
does not purport to be complete and is qualified in its entirety by reference to the Settlement Agreement, which is filed as Exhibit
10.1 to this Current Report on Form 8-K and incorporated herein by reference.