PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
October 27, 2017, the Company received net proceeds of $73,000 in exchange for an unsecured convertible promissory note that
carries an 8% interest rate with a face value of $76,500 (“First Fourth Man Note”), which matures on October 27,
2018. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price
equal to seventy five percent (75%) of the lowest traded price of the Company’s common stock over the fifteen (15) trading
days preceding the conversion date. The note holder is limited to owning 4.99% of the Company’s issued and outstanding
shares. The Company paid total debt issuance costs of $3,500 that is being amortized over the life of the loan on the straight
line method, which approximates the effective interest method. The Company must at all times reserve at least 5 million shares
of common stock for potential conversions.
|
|
|
76,500
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
On
October 27, 2017, the Company received net proceeds of $73,000 in exchange for an unsecured convertible promissory note that
carries an 8% interest rate with a face value of $76,500 (“First Emunah Note”), which matures on October 27, 2018.
The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal
to seventy five percent (75%) of the lowest traded price of the Company’s common stock over the fifteen (15) trading
days preceding the conversion date. The note holder is limited to owning 4.99% of the Company’s issued and outstanding
shares. The Company paid total debt issuance costs of $3,500 that is being amortized over the life of the loan on the straight
line method, which approximates the effective interest method. The Company must at all times reserve at least 5 million shares
of common stock for potential conversions.
|
|
|
76,500
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
On
August 15, 2016, the Company entered into a definitive funding agreement with RxMM Health Limited (“RxMM”) in
which a convertible note was issued for a total gross investment of $2,500,000. In consideration of such investment, RxMM
would have received 50,000,000 callable warrants as a fee per the milestone schedule below, and would have been entitled to
20% of all adjusted gross revenue and 20% of the gross income generated by the Company through any of its medical marijuana
holdings or its media platform, of which would have reduced the principal until this debenture was either paid back or converted
into equity.
|
|
|
|
|
|
|
|
|
Debenture
Funding Milestone
|
Warrants
and Exercise Price Details
|
|
|
|
|
|
|
|
|
$400,000
|
10
million shares exercisable at $0.05 per share over 2 years
|
|
|
|
|
|
|
|
|
$400,001
- $800,000
|
15
million shares exercisable at $0.06 per share over 2 years
|
|
|
|
|
|
|
|
|
$800,001
- $1,600,000
|
15
million shares exercisable at $0.07 per share over 2 years
|
|
|
|
|
|
|
|
|
$1,600,001
- $2,500,000
|
10
million shares exercisable at $0.08 per share over 2 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
warrants were callable if the stock averaged 200% of the warrant strike price for any
thirty (30) day trading period. The convertible debenture, bearing interest at 5% per
annum, would have mature 24 months after the full investment was realized, and was convertible
into common stock at a 25% discount to the preceding 30 day average closing stock price.
The Company was required at all times to have authorized and reserved the number of shares
that was actually issuable upon full conversion of the note. The Company had received
the following payments on the funding agreement:
$
25,000 – August 19, 2016
$
175,000 – August 15, 2016
The
$200,000 of debt was sold and assigned to Group 10 on November 8, 2017, at which time the note was exchanged for a new
note (Second Group 10 Note).
|
|
|
-
|
|
|
|
200,000
|
|
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
July 28, 2016, the Company received proceeds of $35,000 in exchange for an unsecured convertible promissory note, bearing
interest at eight percent (8%) (“First EJR Note”), which matures on July 28, 2017. The principal and interest
is convertible into shares of common stock at the discretion of the note holder at a price equal to seventy eight percent
(78%) of the average of the closing traded prices during the ten (10) trading days prior to the conversion request date (the
“Variable Conversion Price”). The Company is required at all times to have authorized and reserved the number
of shares that is actually issuable upon full conversion of the note. On December 12, 2017, the noteholder converted $38,849,
consisting of $35,000 of principal and $3,849 of interest, in exchange for the issuance of 567,968 shares.
|
|
|
-
|
|
|
|
35,000
|
|
|
|
|
|
|
|
|
|
|
On
June 24, 2016, the Company received proceeds of $30,000 in exchange for an unsecured convertible promissory note, bearing
interest at eight percent (8%) (“First SH Note”), which matures on June 24, 2017. The principal and interest is
convertible into shares of common stock at the discretion of the note holder at a price equal to seventy eight percent (78%)
of the average of the closing traded prices during the ten (10) trading days prior to the conversion request date (the “Variable
Conversion Price”). In the event of default, the outstanding principal, unpaid interest and liquidated damages and fees
immediately prior to the occurrence of the event of default shall become immediately due and payable in cash, at the Lender’s
election, at a premium default rate determined by dividing the outstanding amount by the Variable Conversion Price on the
date of default. The Company was required at all times to have authorized and reserved the number of shares that is actually
issuable upon full conversion of the note. On June 16, 2017, the noteholder converted $32,350, consisting of $30,000 of principal
and $2,350 of interest, in exchange for the issuance of 392,155 shares.
|
|
|
-
|
|
|
|
30,000
|
|
|
|
|
|
|
|
|
|
|
On
April 24, 2014, the Company received net proceeds of $33,250 in exchange for an unsecured convertible promissory note that
carries an 8% interest rate with a face value of $35,000 (“Second LG Note”), which 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
|
|
|
|
|
|
|
|
|
|
|
Total
convertible debentures
|
|
|
1,165,300
|
|
|
|
300,000
|
|
Less:
unamortized debt discounts
|
|
|
(790,621
|
)
|
|
|
(241,634
|
)
|
Convertible
debentures
|
|
$
|
374,679
|
|
|
$
|
58,366
|
|
In
accordance with ASC 470-20 Debt with Conversion and Other Options, the Company recorded total discounts of $1,004,335 and $257,379
for the variable conversion features of the convertible debts incurred during the years ended December 31, 2017 and 2016, respectively.
The discounts, including Original Issue Discounts of $57,800 and $-0- during the years ended December 31, 2017 and 2016, respectively,
are being amortized to interest expense over the term of the debentures using the effective interest method. The Company recorded
$437,439 and $357,612 of interest expense pursuant to the amortization of the note discounts during the years ended December 31,
2017 and 2016, respectively.
All
of the convertible debentures carry default provisions that place a “maximum share amount” on the note holders. The
maximum share amount that can be owned as a result of the conversions to common stock by the note holders is 4.99% of the Company’s
issued and outstanding shares.
In
accordance with ASC 815-15, the Company determined that the variable conversion feature and shares to be issued represented embedded
derivative features, and these are shown as derivative liabilities on the balance sheet. The Company calculated the fair value
of the compound embedded derivatives associated with the convertible debentures utilizing a lattice model.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
Company recorded interest expense pursuant to the stated interest rates on the convertible debentures in the amount of $25,794
and $31,330 for the years ended December 31, 2017 and 2016, respectively related to convertible debts.
Note
12 – Short Term Debt
Short
term debt consists of the following at December 31, 2017 and 2016, respectively:
|
|
December
31, 2017
|
|
|
December
31, 2016
|
|
|
|
|
|
|
|
|
On
December 28, 2017, the Company received net proceeds of $80,000 in exchange for an unsecured convertible promissory note that
carries a 5% interest rate with a face value of $90,000 (“First RDP Note”), which matured on February 26, 2018.
The Company is required to have fully paid all principal and accrued interest due and owing to SK L-58, LLC, the certain Promissory
Note dated September 19, 2017 in the principal amount of $50,000, as shown below. The note carries an eighteen percent (18%)
interest rate in the event of default. The Company paid total debt issuance cost of $10,000 that is being amortized over the
life of the loan on the straight line method, which approximates the effective interest method. In addition, the Note Holder
was awarded 10,000,000 warrants, exercisable at $0.03 per share over a period of four months, commencing on August 11, 2019.
The warrants are cancellable in exchange for $1 if this note and the SK L-58, LLC note dated September 19, 2017 are repaid
in full. This note is currently in default.
|
|
$
|
90,000
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
On
September 19, 2017, the Company issued a $50,000 unsecured promissory note to SK L-58, LLC bearing interest at a rate of 5%
per annum, with a maturity date of November 3, 2017. Upon an event of default, the Company is required to issue to lender
warrants to acquire one million shares at an exercise price of $0.05 per share every 30 days the note is unpaid. Each warrant
issued as a result of an Event of Default will become and remain exercisable for the four (4) complete calendar month period
beginning on the first day of the thirty second (32
nd
) month following an Event of Default. This note is currently
in default.
|
|
|
50,000
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
On
April 25, 2017, the Company issued an unsecured promissory note to an individual at par for proceeds of $10,000, bearing interest
at a rate of 24% per annum, with a maturity date of May 31, 2017. A total of $10,200, consisting of $10,000 of principal and
$200 was repaid on May 8, 2017.
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
On
April 21, 2017, the Company entered issued a $25,000 unsecured promissory note to SK L-43, LLC bearing interest at a rate
of 5% per annum, with a maturity date of July 20, 2017. In accordance with the default provisions, the principal balance of
the note and unpaid interest were converted into common stock at $0.04 per share, along with an equal number of warrants,
exercisable at $0.08 per share with a call feature entitling the Company to require exercise if the average stock price over
the 30 preceding trading days following the six month anniversary of the warrant date exceeds $0.16 per share. On July 1,
2017 the Note was assigned by the holder to SK L-54, LLC, SK L-55, LLC and SK L-56, LLC. On July 20, 2017, the note went into
default and the note holders received an aggregate of 632,706 shares in satisfaction of the $25,000 of principal and $308
of interest. The shares were so issued on October 2, 2017.
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
On
April 5, 2017, the Company issued a $50,000 unsecured promissory note to SK L-43, LLC bearing interest at a rate of 5% per
annum, with a maturity date of July 5, 2017. In accordance with the default provisions, the principal balance of the note
and unpaid interest were converted into common stock at $0.04 per share, along with an equal number of warrants, exercisable
at $0.08 per share with a call feature entitling the borrower to require exercise if the average stock price over the 30 preceding
trading days following the six month anniversary of the warrant date exceeds $0.16 per share. On July 5, 2017, the note went
into default and the note holder received 1,265,411 shares in satisfaction of the $50,000 of principal and $616 of interest.
The shares were so issued on October 2, 2017.
|
|
|
-
|
|
|
|
-
|
|
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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 vested four months following its date of issuance and is exercisable for a period
of two years thereafter.
|
|
|
925,000
|
|
|
|
925,000
|
|
|
|
|
|
|
|
|
|
|
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 GLFH. 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 matured 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 is in default and carries a default rate of 10% and remains
outstanding.
|
|
|
143,000
|
|
|
|
143,000
|
|
|
|
|
|
|
|
|
|
|
Total
notes payable
|
|
|
1,208,000
|
|
|
|
1,068,000
|
|
Less:
unamortized debt discounts
|
|
|
(432,190
|
)
|
|
|
(885,331
|
)
|
|
|
|
775,810
|
|
|
|
182,669
|
|
Less:
current maturities
|
|
|
(775,810
|
)
|
|
|
(142,940
|
)
|
Long
term debt
|
|
$
|
-
|
|
|
$
|
39,729
|
|
The
Company recorded $463,141 and $14,336 of interest expense pursuant to the amortization of the note discounts during the years
ended December 31, 2017 and 2016, respectively.
The
Company recorded interest expense pursuant to the stated interest rate on the above promissory notes in the amount of $77,100
and $12,131 during the years ended December 31, 2017 and 2016, respectively.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
following presents components of interest expense, net, by instrument type at December 31, 2017 and 2016, respectively:
|
|
December
31, 2017
|
|
|
December
31, 2016
|
|
Interest
on convertible debentures
|
|
$
|
25,794
|
|
|
$
|
31,330
|
|
Amortization
of debt discounts
|
|
|
1,318,977
|
|
|
|
357,612
|
|
Loss
on debt conversions
|
|
|
-
|
|
|
|
4,272
|
|
Interest
on short and long term debt
|
|
|
77,100
|
|
|
|
12,131
|
|
Accounts
payable related finance charges
|
|
|
2,699
|
|
|
|
4,303
|
|
Interest
income
|
|
|
(27
|
)
|
|
|
-
|
|
|
|
$
|
1,424,543
|
|
|
$
|
409,648
|
|
Note
13 – Derivative Liabilities
As
discussed in Note 11 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 $9,530,296 and $482,674 at December
31, 2017 and 2016, respectively. The change in fair value of the derivative liabilities resulted in a loss of $7,594,136 and $231,519
for the years ended December 31, 2017 and 2016, respectively, which has been reported as other expense in the statements of operations.
The loss of $7,594,136 for the year ended December 31, 2017 consisted of a loss of $3,372,408 attributable the fair value of convertible
notes, a loss of $4,307,449 attributable to the fair value of warrants and a net gain in market value of $85,721 on the convertible
notes. 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
following presents the derivative liability value by instrument type at December 31, 2017 and 2016, respectively:
|
|
December
31, 2017
|
|
|
December
31, 2016
|
|
Convertible
debentures
|
|
$
|
1,033,644
|
|
|
$
|
462,489
|
|
Common
stock warrants
|
|
|
8,496,652
|
|
|
|
20,185
|
|
|
|
$
|
9,530,296
|
|
|
$
|
482,674
|
|
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
following is a summary of changes in the fair market value of the derivative liability during the years ended December 31, 2017
and 2016, respectively:
|
|
Derivative
|
|
|
|
Liability
|
|
|
|
Total
|
|
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
|
|
Increase
in derivative value attributable to issuance of convertible notes
|
|
|
956,320
|
|
Increase
in derivative value attributable to issuance of warrants
|
|
|
4,321,045
|
|
Change
in fair market value of derivative liabilities due to the mark to market adjustment
|
|
|
4,221,728
|
|
Debt
conversions and redemptions
|
|
|
(451,471
|
)
|
Balance,
December 31, 2017
|
|
$
|
9,530,296
|
|
Key
inputs and assumptions used to value the convertible debentures and warrants issued during the years ended December 31, 2017 and
2016:
|
●
|
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 $0.24, 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 average below $8,018,283 in the period 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.
|
|
|
|
|
●
|
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
5% to a maximum of 50%.
|
|
|
|
|
●
|
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, 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. 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
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.
Common
Stock Authorized
The
Company has authorized 1,200,000,000 shares of common stock, of which 589,994,130 shares were issued and outstanding and 203,467,564
shares were reserved as of the date of this filing.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Common
Stock Sales (2017)
On
September 21, 2017, the Company sold 200,000 units at $0.17 per unit, consisting of 200,000 shares of common stock and 200,000
warrants exercisable at $0.17 per share over the following 3 years to an individual investor for proceeds of $22,000.
On
September 7, 2017, the Company sold 300,000 units at $0.07 per unit, consisting of 300,000 shares of common stock and 300,000
warrants exercisable at $0.11 per share over the following 3 years, along with another 300,000 warrants exercisable at $0.15 per
share over the following 3 years, to an individual investor for proceeds of $21,000.
On
September 6, 2017, the Company sold 500,000 units at $0.11 per unit, consisting of 500,000 shares of common stock and 500,000
warrants exercisable at $0.17 per share over the following 3 years to an individual investor for proceeds of $55,000.
On
August 21, 2017, the Company sold 1,000,000 units at $0.11 per unit, consisting of 1,000,000 shares of common stock and 1,000,000
warrants exercisable at $0.17 per share over the following 3 years to an individual investor for proceeds of $110,000.
On
August 8, 2017, the Company sold 208,333 units at $0.12 per unit, consisting of 208,333 shares of common stock and 208,333 warrants
exercisable at $0.18 per share over the following 3 years to an individual investor for proceeds of $25,000.
On
July 17, 2017, the Company sold 1,875,000 units at $0.16 per unit, consisting of 1,875,000 shares of common stock and 1,875,000
warrants exercisable at $0.21 per share over the following 3 years, along with another 1,875,000 warrants exercisable at $0.24
per share over the following 3 years, to an individual investor for proceeds of $300,000.
On
June 29, 2017, the Company sold 500,000 units at $0.10 per unit, consisting of 500,000 shares of common stock and 500,000 warrants
exercisable at $0.15 per share over the following 3 years, to an individual investor for proceeds of $50,000. The proceeds received
were allocated between the common stock and warrants on a relative fair value basis.
On
June 21, 2017, the Company sold 1,000,000 units at $0.10 per unit, consisting of 1,000,000 shares of common stock and 1,000,000
warrants exercisable at $0.15 per share over the following 3 years, to an individual investor for proceeds of $100,000. The proceeds
received were allocated between the common stock and warrants on a relative fair value basis.
On
June 13, 2017, the Company sold 1,000,000 units at $0.05 per unit, consisting of 1,000,000 shares of common stock and 1,000,000
warrants exercisable at $0.15 per share over the following 3 years, along with another 1,000,000 warrants exercisable at $0.20
per share over the following 3 years, to an individual investor for proceeds of $50,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value basis.
On
June 13, 2017, the Company sold 1,000,000 units at $0.075 per unit, consisting of 1,000,000 shares of common stock and 1,000,000
warrants exercisable at $0.15 per share over the following 3 years, along with another 1,000,000 warrants exercisable at $0.20
per share over the following 3 years, to another individual investor for proceeds of $75,000. The proceeds received were allocated
between the common stock and warrants on a relative fair value basis.
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. The proceeds received were allocated
between the common stock and warrants on a relative fair value basis.
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.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Exercise
of Warrants (2017)
On
June 23, 2017, a warrant holder exercised warrants to purchase 2,500,000 shares of common stock at $0.04 per share for proceeds
of $100,000.
On
June 9, 2017, a warrant holder exercised warrants to purchase 1,500,000 shares of common stock at $0.05 per share for proceeds
of $75,000.
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.
Common
Stock Issuances for Debt Conversions (2017)
On
December 12, 2017, the Company issued 567,968 shares of common stock pursuant to the conversion of $38,849, consisting of $35,000
of outstanding principal and $3,849 of unpaid interest, on the First EJR Note. The note was converted in accordance with the conversion
terms; therefore no gain or loss has been recognized, and the note has been paid off in full.
On
December 11, 2017, the Company issued 757,576 shares of common stock pursuant to the conversion of $40,000 of outstanding principal
on the First Gemini Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
December 11, 2017, the Company issued 757,576 shares of common stock pursuant to the conversion of $40,000 of outstanding principal
on the First Black Mountain Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has
been recognized.
On
December 6, 2017, the Company issued 908,760 shares of common stock pursuant to the conversion of $50,000 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 20, 2017, a promissory note went into default and the default provisions called for the automatic conversion into shares
of common stock at a conversion rate of $0.04 per share, along with the issuance of the same number of warrants, exercisable at
$0.08 per share. The warrants vest on April 30, 2019, and are exercisable for 4 months thereafter. On July 1, 2017, the note was
assigned to three different parties. Pursuant to the conversion, the note holders received an aggregate 632,706 shares in satisfaction
of $25,000 of principal and $308 of interest on the debt. The note was converted in accordance with the conversion terms; therefore
no gain or loss has been recognized, and the settlement terms have been fully realized paying off the debt in full.
On
July 5, 2017, a promissory note went into default and the default provisions called for the automatic conversion into shares of
common stock at a conversion rate of $0.04 per share, along with the issuance of the same number of warrants, exercisable at $0.08
per share. The warrants vest on April 30, 2019, and are exercisable for 4 months thereafter. Pursuant to the conversion, the note
holder received 1,265,411 shares in satisfaction of $50,000 of principal and $616 of interest on the debt. The note was converted
in accordance with the conversion terms; therefore no gain or loss has been recognized, and the settlement terms have been fully
realized paying off the debt in full.
On
June 16, 2017, the Company issued 392,155 shares of common stock pursuant to the conversion of $32,350, consisting of $30,000
of outstanding principal and $3,250 of unpaid interest, on the First Howard Note. The note was converted in accordance with the
conversion terms; therefore no gain or loss has been recognized, and the settlement terms have been fully realized paying off
the debt in full.
On
April 18, 2017, the Company issued 2,009,419 shares of common stock pursuant to the conversion of $40,000 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, and the settlement terms have been fully realized paying off the debt in full.
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.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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 Issued for Services (2017)
On
December 11, 2017, the Company issued a total of 1,500,000 shares of common stock to eleven service providers for services provided.
The total fair value of the common stock was $142,500 based on the closing price of the Company’s common stock on the date
of grant.
On
December 11, 2017, the Company issued 100,000 shares of common stock to its CFO as a bonus for services performed. The total fair
value of the common stock was $9,500 based on the closing price of the Company’s common stock on the date of grant.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
October 1, 2017, pursuant to the CFO’s employment agreement, Mr. Lawrence earned $12,960 of compensation that was paid with
the issuance of 157,091 shares of common stock based on the closing stock price.
On
September 11, 2017, the Company issued 150,000 shares of common stock to its CFO as a bonus for services performed. The total
fair value of the common stock was $15,000 based on the closing price of the Company’s common stock on the date of grant.
On
September 11, 2017, the Company issued a total of 2,835,000 shares of common stock to sixteen service providers for services provided.
The total fair value of the common stock was $283,500 based on the closing price of the Company’s common stock on the date
of grant.
On
August 7, 2017, the Company entered into an Equity Purchase Agreement and a Registration Rights Agreement with Kodiak Capital
Group, LLC (“Kodiak”), and agreed to issue Kodiak 500,000 shares of Common Stock as a Commitment upon the execution
of the Purchase Agreement in consideration for the Kodiak’s commitment to purchase shares of Common Stock thereunder. The
total fair value of the common stock was $56,450 based on the closing price of the Company’s common stock on the date of
grant.
On
July 4, 2017, the Board of Directors appointed Geoffrey Lawrence to serve as the Company’s Chief Financial Officer and Chief
Compliance Officer, effective July 1, 2017. Mr. Lawrence was issued 250,000 shares of common stock as a signing bonus. The total
fair value of the common stock was $42,200 based on the closing price of the Company’s common stock on the date of grant.
On
July 4, 2017, the Company issued a total of 605,000 shares of common stock to six service providers for services provided on behalf
of our subsidiary, GLFH. The total fair value of the common stock was $102,124 based on the closing price of the Company’s
common stock on the date of grant.
On
July 4, 2017, the Company issued a total of 1,225,000 shares of common stock to seven service providers for services provided.
The total fair value of the common stock was $206,780 based on the closing price of the Company’s common stock on the date
of grant.
On
May 1, 2017, the Company issued a total of 1,220,000 shares of common stock to four service providers for services provided on
behalf of our subsidiary, GLFH. The total fair value of the common stock was $76,250 based on the closing price of the Company’s
common stock on the date of grant.
On
May 1, 2017, the Company issued a total of 1,050,000 shares of common stock to five service providers for services provided. The
total fair value of the common stock was $65,625 based on the closing price of the Company’s common stock on the date of
grant.
On
April 20, 2017, the Company issued 350,000 shares of common stock in lieu of cash for video editing services to a consultant.
The total fair value of the common stock was $15,750 based on the closing price of the Company’s common stock on the date
of grant.
On
February 2, 2017, we issued 1,000,000 shares of common stock valued at $11,400 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.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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 Issued in Reserve for Legal Matters (2017)
On
August 24, 2017, the Company issued a total of 5,005,435 shares to the Clerk of Courts in the State of Nevada to hold as security
in connection with the Court’s issuance of a preliminary injunction in favor of the Company against a former service provider.
The preliminary injunction enjoins the former service provider from transferring 1,500,000 shares of common stock held by him
that were issued for services. The 5,005,435 shares are being held by the Court as security pending adjudication of the matter,
in which the Company seeks the return of the 1,500,000 shares.
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.
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 JSBarkats, 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.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Common
Stock Cancellations (2017)
On
November 20, 2017, the Company cancelled 750,000 shares previously issued to a service provider and reissued 250,000 shares. The
shares were returned to treasury.
Contributed
Capital (2016)
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 (2017)
On
August 7, 2017, the Company awarded fully vested cashless options to our CFO, Geoffrey Lawrence, to acquire up to 2,000,000 shares
of common stock, exercisable at $0.17 per share over a thirty six (36) month period from the origination date. The estimated value
using the Black-Scholes Pricing Model, based on a volatility rate of 273% and a call option value of $0.0894, was $178,765.
On
July 4, 2017, the Company awarded fully vested cashless options to our CEO, Mark Bradley, to acquire up to 1,750,000 shares of
common stock, exercisable at $0.17 per share over a thirty six (36) month period from the origination date. The estimated value
using the Black-Scholes Pricing Model, based on a volatility rate of 226% and a call option value of $0.1409, was $246,621.
On
July 4, 2017, the Company awarded fully vested cashless options to the Company’s President of Programming, Michael Berk,
to acquire up to 1,750,000 shares of common stock, exercisable at $0.17 per share over a thirty six (36) month period from the
origination date. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 226% and a call option
value of $0.1409, was $246,621.
On
July 4, 2017, the Company awarded fully vested cashless options to our Director, Brett Pojunis, to acquire up to 3,000,000 shares
of common stock, exercisable at $0.17 per share over a thirty six (36) month period from the origination date. The estimated value
using the Black-Scholes Pricing Model, based on a volatility rate of 226% and a call option value of $0.1409, was $422,779.
On
July 4, 2017, the Company awarded fully vested cashless options to a consultant to acquire up to 1,750,000 shares of common stock,
exercisable at $0.17 per share over a thirty six (36) month period from the origination date. The estimated value using the Black-Scholes
Pricing Model, based on a volatility rate of 226% and a call option value of $0.1409, was $246,621.
On
May 1, 2017, the Company’s Board of Directors granted 2,000,000 fully vested cashless common stock options to a member of
the Board as compensation for services provided. The options are exercisable until May 1, 2020 at an exercise price of $0.07 per
share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 234% and a call option value of
$0.0525, was $105,083.
On
May 1, 2017, the Company’s Board of Directors granted 1,000,000 fully vested cashless common stock options to another member
of the Board as compensation for services provided. The options are exercisable until May 1, 2020 at an exercise price of $0.07
per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 234% and a call option value
of $0.0525, was $52,542.
On
May 1, 2017, the Company’s Board of Directors granted 1,000,000 fully vested cashless common stock options to a consultant
as compensation for services provided. The options are exercisable until May 1, 2020 at an exercise price of $0.07 per share.
The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 234% and a call option value of $0.0525,
was $52,542.
On
May 1, 2017, the Company’s Board of Directors granted 500,000 fully vested cashless common stock options to a consultant
as compensation for services provided. The options are exercisable until May 1, 2020 at an exercise price of $0.07 per share.
The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 234% and a call option value of $0.0525,
was $26,271.
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 Expired (2017)
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.
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.
The
following is a summary of information about the Common Stock Options outstanding at December 31, 2017.
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$0.04
– $0.17
|
|
|
25,750,000
|
|
|
|
1.51
years
|
|
|
$
|
0.10
|
|
|
|
25,750,000
|
|
|
$
|
0.10
|
|
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, 2017
|
|
|
December
31, 2016
|
|
|
|
|
|
|
|
|
Average
risk-free interest rates
|
|
|
1.35
|
%
|
|
|
0.59
|
%
|
Average
expected life (in years)
|
|
|
2.47
|
|
|
|
1.42
|
|
Volatility
|
|
|
235
|
%
|
|
|
227
|
%
|
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 2017 and 2016, 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, 2017 and 2016 was approximately $0.14 and $0.08 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, 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
|
|
Options
expired
|
|
|
(2,350,000
|
)
|
|
|
(0.08
|
)
|
Options
granted
|
|
|
14,750,000
|
|
|
|
0.14
|
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2017
|
|
|
25,750,000
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
Exercisable,
December 31, 2017
|
|
|
25,750,000
|
|
|
$
|
0.10
|
|
The
Company expensed $1,577,845 and $-0- from the amortization of common stock options during the years ended December 31, 2017 and
2016, respectively.
Note
16 – Common Stock Warrants
Warrants
Granted (2017)
On
December 28, 2017, the Company received net proceeds of $80,000 in exchange for an unsecured convertible promissory note that
carries a 5% interest rate with a face value of $90,000 (First RDP Note), which matured on February 26, 2018. In addition, the
Note Holder was awarded 10,000,000 warrants, exercisable at $0.03 per share over a period of four months, commencing on August
11, 2019. The warrants are cancellable in exchange for $1 if this note and the SK L-58, LLC note dated September 19, 2017 are
repaid in full.
On
October 27, 2017, the Company entered into a Securities Purchase Agreement with Black Mountain Equities, Inc. and Gemini Master
Fund, Ltd. (the “Investors”), pursuant to which the Company sold to each Investor, for a purchase price of $150,000,
(i) a Promissory Note (a “Note”) in the principal amount of $158,000, and (ii) a Series A Warrant exercisable until
October 27, 2022 to purchase 1,000,000 shares of the Company’s common at a price of $0.15 per share (a “Series A Warrant”)
, and (iii) a Series B Warrant exercisable until October 27, 2022 to purchase 75,000 shares of the Company’s common at a
price of $0.15 per share (a “Series B Warrant”), resulting in aggregate gross proceeds to the Company of $300,000.
The Series A and B Warrants carry ratchet provisions, which ratcheted on February 7, 2018 to 3,036,437 warrants at a strike price
of $0.0494 and 227,733 warrants at a strike price of $0.0494, respectively. Each Note matured on March 14, 2018, bears interest
at a rate of 10% per annum payable at maturity, and is subject to acceleration in the event the Company becomes delinquent in
its reporting obligation with the Securities and Exchange Commission and upon other customary events of default set forth in the
Notes. The Warrants can be exercised on a cashless basis by the Investors, and the Company can require the Investors to exercise
the Warrants on a cashless basis at any time following the six-month anniversary of the issuance date, provided that at such time
(i) the volume weighted average price of the common stock has been greater than $0.25 for a period of thirty (30) consecutive
trading days, and (ii) trading in the common stock has not been suspended by the Securities and Exchange Commission or the OTC
Bulletin Board (or other exchange or market on which the Common Stock is trading).
On
September 21, 2017, the Company sold 200,000 units at $0.17 per unit, consisting of 200,000 shares of common stock and 200,000
warrants exercisable at $0.17 per share over the following 3 years to an individual investor for proceeds of $22,000.
On
September 14, 2017, the Company entered into a Securities Purchase Agreement with Black Mountain Equities, Inc. and Gemini Master
Fund, Ltd. (the “Investors”), pursuant to which the Company sold to each Investor, for a purchase price of $150,000,
(i) a Promissory Note (a “Note”) in the principal amount of $158,000, and (ii) a Warrant exercisable until September
14, 2022 to purchase 1,500,000 shares of the Company’s common at a price of $0.14 per share (a “Warrant”), resulting
in aggregate gross proceeds to the Company of $300,000. Each Note matured on December 9, 2017, bears interest at a rate of 10%
per annum payable at maturity, and is subject to acceleration in the event the Company becomes delinquent in its reporting obligation
with the Securities and Exchange Commission and upon other customary events of default set forth in the Notes. The Warrants can
be exercised on a cashless basis by the Investors, and the Company can require the Investors to exercise the Warrants on a cashless
basis at any time following the six-month anniversary of the issuance date, provided that at such time (i) the volume weighted
average price of the common stock has been greater than $0.25 for a period of thirty (30) consecutive trading days, and (ii) trading
in the common stock has not been suspended by the Securities and Exchange Commission or the OTC Bulletin Board (or other exchange
or market on which the Common Stock is trading).
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
September 7, 2017, the Company sold 300,000 units at $0.07 per unit, consisting of 300,000 shares of common stock and 300,000
warrants exercisable at $0.11 per share over the following 3 years, along with another 300,000 warrants exercisable at $0.15 per
share over the following 3 years, to an individual investor for proceeds of $21,000.
On
September 6, 2017, the Company sold 500,000 units at $0.11 per unit, consisting of 500,000 shares of common stock and 500,000
warrants exercisable at $0.17 per share over the following 3 years to an individual investor for proceeds of $55,000.
On
August 21, 2017, the Company sold 1,000,000 units at $0.11 per unit, consisting of 1,000,000 shares of common stock and 1,000,000
warrants exercisable at $0.17 per share over the following 3 years to an individual investor for proceeds of $110,000.
On
August 8, 2017, the Company sold 208,333 units at $0.12 per unit, consisting of 208,333 shares of common stock and 208,333 warrants
exercisable at $0.18 per share over the following 3 years to an individual investor for proceeds of $25,000.
On
July 20, 2017, a promissory note went into default and the default provisions called for the automatic conversion into shares
of common stock at a conversion rate of $0.04 per share, along with the issuance of the same number of warrants, exercisable at
$0.08 per share. The warrants were issued on September 1, 2017 and vest on April 30, 2019, and are exercisable for 4 months thereafter.
On July 1, 2017, the note was assigned to three different parties. Pursuant to the conversion, the note holders received an aggregate
632,706 shares in satisfaction of $25,000 of principal and $308 of interest on the debt.
On
July 17, 2017, the Company sold 1,875,000 units at $0.16 per unit, consisting of 1,875,000 shares of common stock and 1,875,000
warrants exercisable at $0.21 per share over the following 3 years, along with another 1,875,000 warrants exercisable at $0.24
per share over the following 3 years, to an individual investor for proceeds of $300,000.
On
July 5, 2017, a promissory note went into default and the default provisions called for the automatic conversion into shares of
common stock at a conversion rate of $0.04 per share, along with the issuance of the same number of warrants, exercisable at $0.08
per share. The warrants were issued on September 1, 2017 and vest on April 30, 2019, and are exercisable for 4 months thereafter.
Pursuant to the conversion, the note holder received 1,265,411 shares in satisfaction of $50,000 of principal and $616 of interest
on the debt.
On
June 29, 2017, the Company sold 500,000 units at $0.10 per unit, consisting of 500,000 shares of common stock and 500,000 warrants
exercisable at $0.15 per share over the following 3 years, to an individual investor for proceeds of $50,000.
On
June 21, 2017, the Company sold 1,000,000 units at $0.10 per unit, consisting of 1,000,000 shares of common stock and 1,000,000
warrants exercisable at $0.15 per share over the following 3 years, to an individual investor for proceeds of $100,000.
On
June 13, 2017, the Company sold 1,000,000 units at $0.05 per unit, consisting of 1,000,000 shares of common stock and 1,000,000
warrants exercisable at $0.15 per share over the following 3 years, along with another 1,000,000 warrants exercisable at $0.20
per share over the following 3 years, to an individual investor for proceeds of $50,000.
On
June 13, 2017, the Company sold 1,000,000 units at $0.075 per unit, consisting of 1,000,000 shares of common stock and 1,000,000
warrants exercisable at $0.15 per share over the following 3 years, along with another 1,000,000 warrants exercisable at $0.20
per share over the following 3 years, to another individual investor for proceeds of $75,000.
On
May 8, 2017, the Company entered into a Securities Purchase Agreement with Black Mountain Equities, Inc. and Gemini Master Fund,
Ltd. (the “Investors”), pursuant to which the Company sold to each Investor, for a purchase price of $150,000, (i)
a Promissory Note (a “Note”) in the principal amount of $165,000, and (ii) a Warrant exercisable until May 31, 2022
to purchase 1,500,000 shares of the Company’s common at a price of $0.14 per share (a “Warrant”), resulting
in aggregate gross proceeds to the Company of $300,000. Each Note matures on November 8, 2017, bears interest at a rate of 10%
per annum payable at maturity, and is subject to acceleration in the event the Company becomes delinquent in its reporting obligation
with the Securities and Exchange Commission and upon other customary events of default set forth in the Notes. The Warrants can
be exercised on a cashless basis by the Investors, and the Company can require the Investors to exercise the Warrants on a cashless
basis at any time following the six-month anniversary of the issuance date, provided that at such time (i) the volume weighted
average price of the common stock has been greater than $0.25 for a period of thirty (30) consecutive trading days, and (ii) trading
in the common stock has not been suspended by the Securities and Exchange Commission or the OTC Bulletin Board (or other exchange
or market on which the Common Stock is trading).
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.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
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.
Common
Stock Warrants Expired (2017)
On
August 9, 2017, a total of 200,000 warrants with a strike price of $0.18 per share expired.
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 Exercised (2017)
On
June 23, 2017, a warrant holder exercised warrants to purchase 2,500,000 shares of common stock at $0.04 per share for proceeds
of $100,000.
On
June 9, 2017, a warrant holder exercised warrants to purchase 1,500,000 shares of common stock at $0.05 per share for proceeds
of $75,000.
Common
Stock Warrants Exercised (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.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
following is a summary of information about the Common Stock Warrants outstanding at December 31, 2017.
|
|
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
- $0.24
|
|
|
151,284,792
|
|
|
|
1.9
years
|
|
|
$
|
0.03
|
|
|
|
151,284,792
|
|
|
$
|
0.03
|
|
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, 2017
|
|
|
December
31, 2016
|
|
|
|
|
|
|
|
|
Average
risk-free interest rates
|
|
|
1.37
|
%
|
|
|
1.13
|
|
Average
expected life (in years)
|
|
|
2.58
|
|
|
|
2.40
|
|
Volatility
|
|
|
221
|
%
|
|
|
238
|
|
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 2017 and 2016, 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, 2017 and 2016 was approximately $0.085 and $0.05 per warrant, respectively.
The
following is a summary of activity of outstanding common stock warrants:
|
|
|
|
|
Weighted
|
|
|
|
|
|
|
Average
|
|
|
|
Number
|
|
|
Exercise
|
|
|
|
of
Shares
|
|
|
Price
|
|
|
|
|
|
|
|
|
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
|
|
Warrants
expired
|
|
|
(200,000
|
)
|
|
|
(0.180
|
)
|
Warrants
granted
|
|
|
52,784,790
|
|
|
|
0.085
|
|
Warrants
exercised
|
|
|
(4,000,000
|
)
|
|
|
(0.040
|
)
|
|
|
|
|
|
|
|
|
|
Balance,
December 31, 2017
|
|
|
151,284,792
|
|
|
$
|
0.030
|
|
|
|
|
|
|
|
|
|
|
Exercisable,
December 31, 2017
|
|
|
151,284,792
|
|
|
$
|
0.030
|
|
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Note
17 – Gain (Loss) on Debt Extinguishment
The
Company recognized a loss of $62,641 and a gain of $165,615 during the years ended December 31, 2017 and 2016,
respectively, as presented in other income within the Statements of Operations.
Debt
Extinguishments (2017)
On
November 8, 2017, $200,000 of outstanding debts owed to Rxmm Health Pty Ltd. were purchased and assigned by Group 10 Holdings.
Subsequent to the assignment, the notes were exchanged for a $200,000 convertible note, convertible at 70% of the average of the
two lowest closing traded prices during the ten (10) trading days prior to the conversion request date, resulting in a gain on
extinguishment of $62,641 due to the net change in derivative liability.
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 December 31, 2016.
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, 2017 and 2016, 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, 2017, the Company had approximately $26,654,000 of federal net operating losses. The net operating
loss carry forwards, if not utilized, will begin to expire in 2025.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
The
components of the Company’s deferred tax asset are as follows:
|
|
December
31,
|
|
|
|
2017
|
|
|
2016
|
|
Deferred
tax assets:
|
|
|
|
|
|
|
|
|
Net
operating loss carry forwards
|
|
$
|
9,328,900
|
|
|
$
|
7,763,000
|
|
|
|
|
|
|
|
|
|
|
Net
deferred tax assets before valuation allowance
|
|
$
|
9,328,900
|
|
|
$
|
7,763,000
|
|
Less:
Valuation allowance
|
|
|
(9,328,900
|
)
|
|
|
(7,763,000
|
)
|
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, 2017 and 2016, 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,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
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
18 – Non-Controlling Interest
Non-controlling
interest represents a minority interest in GLFH of 15.6% held by ten individuals. The net loss attributable to the non-controlling
interest totaled $124,899 and $61,998 during the years ended December 30, 2017 and 2016, respectively. The net loss attributable
to the parent was and $730,575 and $335,426 during the years ended December 31, 2017 and 2016, respectively.
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.
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.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
Future
minimum lease payments required under operating leases according to our fiscal year-end are as follows:
Year
Ending
|
|
|
|
|
December
31,
|
|
|
Amount
|
|
2018
|
|
|
$
|
337,693
|
|
2019
|
|
|
|
347,824
|
|
2020
|
|
|
|
358,258
|
|
2021
|
|
|
|
107,526
|
|
Thereafter
|
|
|
|
-
|
|
|
|
|
$
|
1,151,301
|
|
Rent
expense was $379,305 and $278,589 for the years ended December 31, 2017 and 2016, respectively.
Note
20 – Legal Proceedings
Michael
Pratter
On
November 3, 2016, Michael S. Pratter commenced an action in the Eighth Judicial District Court, Clark County, Nevada, against
Players Network, Green Leaf Farms Holdings, and our Chief Executive Officer. In his complaint, Pratter asserts several causes
of action, including for breach of contract and fraud, relating to his claim that he provided consulting services to us for which
he was not fully paid. We are defending ourselves vigorously in this matter and believe that Pratter’s claims are without
merit, and that in fact we over-paid Pratter. In November 2017 we filed a Counterclaim against Mr. Pratter in this proceeding
in which we asserted ten causes of action, which relate in part to Mr. Pratter’s representations that he would provide us
with legal services when in fact he was not licensed to practice law in the State of Nevada and had been disbarred by the California
State Bar. Among other relief, our Counterclaim seeks disgorgement of all amounts paid to Mr. Pratter during his engagement by
us, including the return of 1.5 million shares of our Common Stock we had issued to him. Previously, in August 2017, following
our motion and our posting of treasury shares with the Clerk of the Court as security, the Court approved our application for
a temporary restraining order and preliminary injunction under which Mr. Pratter is prohibited from transferring the 1.5 million
shares of Common Stock we had issued to him, until further order of the Court.
LG
Capital Funding
We
are a defendant in case pending in the Supreme Court of the State of New York, Kings County, that was commenced by LG Capital
Funding LLC, in February 2015, in which LG Capital asserts that we are in default of our obligations to honor its conversion rights
under a $35,000 promissory note, due to a typographical error in the note. LG Capital seeks declaratory relief as to conversion
formula under the promissory note and monetary damages in the amount of principal and accrued interest under the promissory note.
This case is currently in the preliminary discovery stages. We believe LG Funding’s claims are without merit.
Note
21 – Subsequent Events
Common
Stock Sales
On
March 12, 2018, the Company sold 333,333 units at $0.15 per unit, consisting of 333,333 shares of common stock and 666,700 warrants
exercisable at $0.15 per share over the following 3 years to an individual investor for proceeds of $50,000. The shares have not
yet been issued.
Exercise
of Warrants
On March 28, 2018, a warrant
holder exercised warrants to purchase 3,000,000 shares of common stock at $0.04 per share for proceeds of $120,000. The shares
have not yet been issued.
Common
Stock Awarded for Services
On
April 1, 2018, pursuant to the CFO’s employment agreement, Mr. Lawrence earned $12,960 of compensation to be paid
with the issuance of 129,960 shares of common stock based on the closing stock price. The shares have not yet been issued.
On
March 12, 2018, the Company issued a total of 350,000 shares of common stock to a consultant for services provided. The total
fair value of the common stock was $25,550 based on the closing price of the Company’s common stock on the date of grant.
The shares have not yet been issued.
On
January 1, 2018, pursuant to the CFO’s employment agreement, Mr. Lawrence earned $12,960 of compensation to be paid
with the issuance of 100,077 shares of common stock based on the closing stock price. The shares have not yet been issued.
Common
Stock Issuances for Debt Conversions
On
March 22, 2018, the Company issued 1,116,584 shares of common stock pursuant to the conversion of $52,479, consisting of $50,000
of outstanding principal and $2,479 of unpaid interest, on the Second Gemini Note. The note was converted in accordance with the
conversion terms; therefore no gain or loss has been recognized.
On
March 14, 2018, the Company issued 851,064 shares of common stock pursuant to the conversion of $40,000 of outstanding principal
on the First Gemini Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
March 14, 2018, the Company issued 529,246 shares of common stock pursuant to the conversion of $24,875, consisting of $13,250
of outstanding principal and $11,625 of unpaid interest, on the First Black Mountain Note. The note was converted in accordance
with the conversion terms; therefore no gain or loss has been recognized, and the note has been paid off in full.
PLAYERS
NETWORK
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
On
February 20, 2018, the Company issued 801,603 shares of common stock pursuant to the conversion of $40,000 of outstanding principal
on the First Gemini Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
February 7, 2018, the Company issued 809,716 shares of common stock pursuant to the conversion of $40,000 of outstanding principal
on the First Black Mountain Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has
been recognized.
On
February 5, 2018, the Company issued 1,009,489 shares of common stock pursuant to the conversion of $50,000 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
January 22, 2018, the Company issued 806,452 shares of common stock pursuant to the conversion of $40,000 of outstanding principal
on the First Gemini Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
On
January 22, 2018, the Company issued 806,452 shares of common stock pursuant to the conversion of $40,000 of outstanding principal
on the First Black Mountain Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has
been recognized.
On
January 16, 2018, the Company issued 955,474 shares of common stock pursuant to the conversion of $50,000 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
January 8, 2018, the Company issued 806,452 shares of common stock pursuant to the conversion of $40,000 of outstanding principal
on the First Black Mountain Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has
been recognized.
On
January 2, 2018, the Company issued 784,929 shares of common stock pursuant to the conversion of $50,000 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.
Common
Stock Options Expired
On
February 20, 2018, a total of 8,000,000 options with a strike price of $0.04 per share expired.