UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended June 30, 2018.

 

[  ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ______to _________.

 

Commission file number: 000-29363

 

 

(Exact name of registrant as specified in its charter)

 

Nevada   88-0343702

(State or other jurisdiction of

incorporation or organization)

 

(IRS Employer

Identification No.)

 

1771 E. Flamingo Road, #201-A

Las Vegas, NV

  89119
(Address of principal executive offices)   (Zip Code)

 

(702) 840-3270

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [  ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer[  ] Accelerated filer[  ]
   

Non-accelerated filer[  ]

(Do not check if a smaller reporting company)

Smaller reporting company[X]
   
  Emerging growth company[  ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [X]

 

The number of shares outstanding of the Registrant’s Common Stock on January 25, 2019 was 678,072,453.

 

 

 

 
 

 

PLAYERS NETWORK

FORM 10-Q

Quarterly Period Ended June 30, 2018

 

INDEX
   
  Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS 1
PART I. FINANCIAL INFORMATION 2
Item 1. Financial Statements 2
  Balance Sheets as of June 30, 2018 (Unaudited) and December 31, 2017 2
  Statements of Operations for the Three and Six Months ended June 30, 2018 and 2017 (Unaudited) 3
  Statements of Cash Flows for the Six Months ended June 30, 2018 and 2017 (Unaudited) 4
  Notes to the Condensed Consolidated financial statements (Unaudited) 5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27
Item 3. Quantitative and Qualitative Disclosures About Market Risk 36
Item 4. Controls and Procedures 36
     
PART II. OTHER INFORMATION 36
Item 1. Legal Proceedings 36
Item 1A. Risk Factors 37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 37
Item 3. Defaults Upon Senior Securities 37
Item 4. Mine Safety Disclosures 38
Item 5. Other Information 38
Item 6. Exhibits 38
     
SIGNATURES 39

 

 
 

 

SPECIAL NOTE REGARDING FORWARD—LOOKING STATEMENTS

 

On one or more occasions, we may make forward-looking statements in this Quarterly Report on Form 10-Q regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events. Words or phrases such as “anticipates,” “may,” “will,” “should,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” “will likely result,” “will continue” or similar expressions identify forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified in our Annual Report on Form 10-K. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made on related subjects in our subsequent annual, periodic and current reports and other documents filed or furnished with the Securities and Exchange Commission.

 

Unless the context requires otherwise, references to “we,” “us,” “our,” and the “Company” refer specifically to Players Network.

 

1
 

 

PART I - FINANCIAL INFORMATION

 

Item 1 - Financial Statements

 

PLAYERS NETWORK

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   June 30,   December 31, 
   2018   2017 
   (Unaudited)      
Assets          
           
Current assets:          
Cash  $19,019   $65,840 
Accounts receivable   5,964    - 
Other current assets   126,320    83,180 
Inventory   77,969    255,486 
Current assets held for sale   3,778,038    - 
Total current assets   4,007,310    404,506 
           
Fixed assets, net   379,198    396,455 
Construction in progress   590,696    408,812 
           
Total Assets  $4,977,204   $1,209,773 
           
Liabilities and Stockholders’ (Deficit)          
           
Current liabilities:          
Accounts payable  $771,134   $702,865 
Accrued expenses   514,450    448,538 
Deferred rent obligations   32,123    28,809 
Convertible debentures, net of discounts of $1,820,149 and $790,621 at June 30, 2018 and December 31, 2017, respectively   341,651    374,679 
Short term debt, net of discounts of $192,673 and $432,190 at June 30, 2018 and December 31, 2017, respectively   1,122,327    775,810 
Derivative liabilities   5,396,061    9,530,296 
Current liabilities held for sale   4,205,681    - 
Total current liabilities   12,383,427    11,860,997 
           
Total Liabilities   12,383,427    11,860,997 
           
Stockholders’ (Deficit):          
Series A convertible preferred stock, $0.001 par value, 2,000,000 shares authorized; 2,000,000 shares issued and outstanding   2,000    2,000 
Series C convertible preferred stock, $0.001 par value, 12,000,000 shares authorized; 12,000,000 shares issued and outstanding   12,000    12,000 
Common stock, $0.001 par value, 1,200,000,000 shares authorized; 621,529,160 and 580,716,669 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively   621,529    580,717 
Additional paid-in capital   36,189,302    33,753,106 
Subscriptions payable, consisting of 3,418,508 and -0- shares at June 30, 2018 and December 31, 2017, respectively   145,640    - 
Accumulated (deficit)   (43,886,398)   (44,597,401)
    (6,915,927)   (10,249,578)
Noncontrolling Interest   (490,296)   (401,646)
Total Stockholders’ (Deficit)   (7,406,223)   (10,651,224)
           
Total Liabilities and Stockholders’ (Deficit)  $4,977,204   $1,209,773 

 

See accompanying notes to financial statements.

 

2
 

 

PLAYERS NETWORK

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
                 
Revenue:  $20,102   $2,979   $211,964   $3,070 
Cost of goods sold   22,873    2,208    228,049    2,208 
Gross profit (loss)   (2,771)   771    (16,085)   862 
                     
Expenses:                    
Direct operating costs   131,844    71,849    243,407    93,051 
General and administrative   694,784    734,430    1,179,179    1,152,866 
Officer salaries   72,317    43,750    141,267    122,100 
Depreciation and amortization   31,815    11,534    62,365    14,308 
Total operating expenses   930,760    861,563    1,626,218    1,382,325 
                     
Operating loss   (933,531)   (860,792)   (1,642,303)   (1,381,463)
                     
Other income (expense):                    
Other income   30    -    87    - 
Loss on debt extinguishment, net   (375,788)   -    (362,017)   - 
Goodwill impairment   (1,250,314)   -    (1,250,314)   - 
Interest expense, net   (500,055)   (271,380)   (1,099,440)   (419,915)
Change in derivative liabilities   (589,654)   (1,767,977)   5,112,148    (1,867,832)
Total other income (expense)   (2,715,781)   (2,039,357)   2,400,464    (2,287,747)
                     
Net income (loss) from continuing operations  $(3,649,312)  $(2,900,149)  $758,161   $(3,669,210)
                     
Discontinued operations:                    
Loss from discontinued operations   (135,808)   -    (135,808)   - 
Net income (loss)   (3,785,120)   (2,900,149)   622,353    (3,669,210)
Less: Net loss attributable to the noncontrolling interest   49,647    29,786    88,650    57,249 
Net income (loss) attributable to Players Network  $(3,735,473)  $(2,870,363)  $711,003   $(3,611,961)
                     
Weighted average number of common shares outstanding - basic   602,521,043    551,841,797    594,314,338    546,464,558 
Weighted average number of common shares outstanding - fully diluted   602,521,043    551,841,797    619,882,341    546,464,558 
                     
Net loss per share - basic  $(0.01)  $(0.01)  $0.00   $(0.01)
Net loss per share - fully diluted  $(0.01)  $(0.01)  $0.00   $(0.01)

 

See accompanying notes to financial statements.

 

3
 

 

PLAYERS NETWORK

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

   For the Six Months Ended 
   June 30, 
   2018   2017 
Cash flows from operating activities          
Net income (loss)  $711,003   $(3,611,961)
Minority interest in net loss   (88,650)   (57,249)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization expense   62,365    14,308 
Goodwill impairment expense   1,250,314    - 
Loss on debt extinguishment, net   362,017    - 
Change in fair market value of derivative liabilities   (5,737,388)   1,867,832 
Excess derivative   625,240    - 
Amortization of debt discounts   1,002,025    377,026 
Stock issued for services   54,550    174,925 
Stock issued for compensation, related party   11,940    121,100 
Options issued for services   -    78,813 
Options issued for compensation, related party   -    157,625 
Decrease (increase) in assets:          
Accounts receivable   (72,064)   - 
Other current assets   (48,140)   (40,142)
Inventory   385,875    (259,819)
Increase (decrease) in liabilities:          
Accounts payable   601,026    34,183 
Accrued expenses   190,257    75,151 
Deferred rent obligations   3,314    8,184 
Settlements payable   -    (30,000)
Net cash used in operating activities of continuing operations   (686,316)   (1,090,024)
Net cash provided by operating activities of discontinued operations   (302,395)   - 
Net cash used in operating activities   (988,711)   (1,090,024)
           
Cash flows from investing activities          
Value of net assets acquired from LCG Business Enterprises, LLC   135,982    - 
Cash paid for purchase of assets from LCG Business Enterprises, LLC   (1,000,000)   - 
Purchase of fixed assets and construction in progress   (226,992)   (167,321)
Net cash used in investing activities   (1,091,010)   (167,321)
           
Cash flows from financing activities          
Proceeds from convertible debentures   1,814,500    - 
Repayments of convertible debentures   (155,000)   - 
Proceeds from short term debt   127,000    385,000 
Repayment of short term debt   (10,000)   (10,000)
Proceeds from sale of common stock   256,400    800,000 
Net cash provided by financing activities   2,032,900    1,175,000 
           
Net increase (decrease) in cash   (46,821)   (82,345)
Cash - beginning   65,840    145,119 
Cash - ending  $19,019   $62,774 
           
Supplemental disclosures:          
Interest paid  $750   $200 
Income taxes paid  $-   $- 
           
Non-cash investing and financing activities:          
Value of shares issued for settlement of trade payables  $743,405   $- 
Value of debt discounts  $1,748,736   $- 
Value of shares issued for conversion of debt  $785,530   $72,350 
Value of warrants issued with short term debt  $-   $229,708 
Value of derivative adjustment due to debt conversions  $770,823   $59,415 

 

See accompanying notes to financial statements.

 

4
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 1 – Basis of Presentation

 

The interim condensed consolidated financial statements of Players Network (the “Company”) included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to not make the information presented misleading.

 

These statements reflect all adjustments, which in the opinion of management, are necessary for fair presentation of the information contained therein. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. It is suggested that these interim condensed consolidated financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2017 and notes thereto included in the Company’s annual report on Form 10-K filed with the SEC. The Company follows the same accounting policies in the preparation of interim reports.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the following entities, all of which are under common control and ownership:

 

    State of       Abbreviated
Name of Entity   Incorporation   Relationship   Reference
             
Players Network(1)   Nevada   Parent   PNTV
Green Leaf Farms Holdings, LLC(2)   Nevada   Subsidiary   GLFH
Players Michigan LLC(3)   Michigan   Subsidiary   SALINAS

 

(1)Players Network entity is in the form of a corporation.

 

(2)Majority-owned subsidiary formed on July 8, 2014, in which PNTV retained 84% ownership, with the remaining 16% held by key experts and advisors. An additional 1.6% was sold to an investor on December 8, 2014 and 3% was transferred back from a founding member on December 2, 2015, giving PNTV 85.4% ownership and minority interests ownership of 14.6%. The form of the entity was changed from a corporation to a limited liability company on May 9, 2017 at which time the name was changed from Green Leaf Farms Holdings, Inc. to Green Leaf Farms Holdings, LLC (“GLFH”).

 

(3)Players Michigan LLC is a wholly-owned subsidiary formed to acquire substantially all of the assets and liabilities of LCG Business Enterprises, LLC (“LCG”) pursuant to an Asset Purchase Agreement that closed on May 24, 2018. The parties to the Asset Purchase Agreement agreed to rescind the transaction on December 31, 2018.

 

The consolidated financial statements herein contain the operations of the subsidiary listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. The parent company, PNTV and subsidiary, GLFH will be collectively referred to herein as the “Company”, “Players Network” or “PNTV”. The Company’s headquarters are located in Las Vegas, Nevada and substantially all of its customers are within the United States.

 

Fair Value of Financial Instruments

 

Under FASB ASC 820-10-05, the Financial Accounting Standards Board establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. This Statement reaffirms that fair value is the relevant measurement attribute. The adoption of this standard did not have a material effect on the Company’s financial statements as reflected herein. The carrying amounts of cash, accounts payable and accrued expenses reported on the balance sheets are estimated by management to approximate fair value primarily due to the short-term nature of the instruments. In addition, the Company had debt instruments that required fair value measurement on a recurring basis.

 

Inventory

 

Inventories are stated at the lower of cost or market. Cost is determined on a standard cost basis that approximates the first-in, first-out (FIFO) method. Market is determined based on net realizable value. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. Our cannabis products consist of prepackaged purchased goods ready for resale, and cannabis flower grown in-house under our cultivation license, along with produced edibles and extracts developed under our production license.

 

5
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Construction in Progress

 

The Company is constructing a grow house in its leased facility, which became operational during the second quarter of 2017 upon completion of the first phase of improvements, at which time depreciation commenced. On May 31, 2017, the Company placed in service $373,842 of leasehold improvements incurred during the first phase of construction. Phase 2 commenced in July and will be capitalized on the balance sheet under Construction in Progress. The total estimated cost to complete construction of the facility is approximately $1.7 million, and an additional $590,696 of construction costs have been capitalized as of June 30, 2018.

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured.

 

There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the six months ended June 30, 2018 and 2017, or the twelve months ended December 31, 2017.

 

Revenue is primarily generated through our subsidiary, Green Leaf Holdings, LLC. Green Leaf recognizes revenue from the sale of the following cannabis products and services to licensed dispensaries within the state of Nevada:

 

  Premium organic medical cannabis sold wholesale to licensed retailers
  Recreational marijuana cannabis products sold wholesale to distributors and retailers
  Extraction products such as oils and waxes derived from in-house cannabis production
  Processing and extraction services for licensed medical cannabis cultivators in Nevada
  High quality cannabis strains in the form of vegetative cuttings for sale to licensed medical cannabis cultivators in Nevada

 

Revenue from the sale of our cannabis products is recognized by our subsidiary at the point of sale, at which time payment is received. Management estimates an allowance for sales returns.

 

The Company also intends to recognize revenue from its internet television platform from internally generated products and from partnered merchants when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the selling price is fixed or determinable; and collectability is reasonably assured. These criteria are met when the customers purchase a product or access a web-based video, the product or web-based video has been electronically delivered to the purchaser and payment has been received. At that time, the Company’s obligations to the customer is substantially complete. The Company records the net amount it retains from the sale of items from its internet television platform after paying any agreed upon percentage of the purchase price to the featured advertising merchant excluding any applicable taxes. Revenue is recorded on a net basis because the Company is acting as an agent of the partnered merchant in the transaction. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

 

Network revenue consists of monthly network broadcast subscription revenue, which is recognized over the period in which the subscription service is available. Broadcast television advertising revenue is recognized when advertisements are aired. Video production revenue is recognized as digital video film is completed and accepted by the customer and collection is reasonably assured.

 

Deferred Rent Obligation

 

The Company has entered into operating lease agreements for its corporate office and GLFH’s warehouse which contains provisions for future rent increases. In accordance with generally accepted accounting principles, the Company records monthly rent expense equal to the total of the payments due over the lease term, divided by the number of months of the lease terms. The difference between rent expense recorded and the amount paid is credited or charged to “Deferred rent obligation,” which is reflected as a separate line item in the accompanying Balance Sheets.

 

6
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Basic and Diluted Loss Per Share

 

Basic earnings per share (“EPS”) are computed by dividing net income (the numerator) by the weighted average number of common shares outstanding for the period (the denominator). Diluted EPS is computed by dividing net income by the weighted average number of common shares and potential common shares outstanding (if dilutive) during each period. Potential common shares include stock options, warrants and restricted stock. The number of potential common shares outstanding relating to stock options, warrants and restricted stock is computed using the treasury stock method.

 

The reconciliation of the denominators used to calculate basic EPS and diluted EPS for the six months ended June 30, 2018 and 2017 are as follows:

 

   For the Six Months Ended 
   June 30, 
   2018   2017 
Weighted average common shares outstanding – basic   594,314,338    546,464,558 
Plus: Potentially dilutive common shares:          
Stock options and warrants   25,568,003    - 
Weighted average common shares outstanding – diluted   619,882,341    546,464,558 

 

For the six months ended June 30, 2017, potential dilutive securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share. Stock options and warrants excluded from the calculation of diluted EPS because their effect was anti-dilutive were 126,483,872 and 116,233,872 as of June 30, 2018 and 2017, respectively.

 

Derivative Liability

 

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Note and tainted Warrant), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument’s contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument’s settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

 

Recent Accounting Pronouncements

 

In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost (that is, the period of time over which share-based payment awards vest and the pattern of cost recognition over that period). The new guidance is effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

 

7
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. The amendment provides guidance on accounting for the impact of the Tax Cuts and Jobs Act (the “Tax Act”) and allows entities to complete the accounting under ASC 740 within a one-year measurement period from the Tax Act enactment date. This standard is effective upon issuance. The Tax Act has several significant changes that impact all taxpayers, including a transition tax, which is a one-time tax charge on accumulated, undistributed foreign earnings. The calculation of accumulated foreign earnings requires an analysis of each foreign entity’s financial results going back to 1986. The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

 

In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The guidance permits entities to reclassify tax effects stranded in Accumulated Other Comprehensive Income as a result of tax reform to retained earnings. This new guidance is effective for annual and interim periods in fiscal years beginning after December 15, 2018. Early adoption is permitted in annual and interim periods and can be applied retrospectively or in the period of adoption. The Company is currently in the process of evaluating the impact of adoption on its consolidated financial statements.

 

In May 2017, the FASB issued ASU No. 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Per ASU 2017-9, an entity should account for the effects of a modification unless all the following are met: (1) the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification, (2) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified, and (3) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The current disclosure requirements in Topic 718 apply regardless of whether an entity is required to apply modification accounting under the amendments in ASU 2017-9. ASU 2017-9 is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for (1) public business entities for reporting periods for which financial statements have not yet been issued and (2) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this ASU should be applied prospectively to an award modified on or after the adoption date. The adoption of ASU 2017-9 is not expected to have a material impact on the Company’s financial statements or related disclosures.

 

No other new accounting pronouncements, issued or effective during the six months ended June 30, 2018, have had or are expected to have a significant impact on the Company’s financial statements.

 

Note 2 – Going Concern

 

As shown in the accompanying condensed consolidated financial statements, the Company has incurred recurring losses from operations resulting in an accumulated deficit of $43,886,398, and as of June 30, 2018, the Company’s current liabilities exceeded its current assets by $8,376,117. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is actively pursuing new ventures to increase revenues. In addition, the Company is currently seeking additional sources of capital to fund short term operations. Management believes these factors will contribute toward achieving profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability to continue as a going concern. These financial statements also do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 3 – Asset Purchase Acquisition

 

Asset Purchase Acquisition – LCG Business Enterprises, LLC, May 24, 2018

 

On May 24, 2018, through the Company’s newly-formed wholly-owned Michigan subsidiary, Players Michigan LLC (“Players Michigan”), purchased all of the assets of LCG Business Enterprises, LLC, a California limited liability company (“LCG”), including all of LCG’s furniture, fixtures, equipment and inventory, in consideration for an aggregate of $5,000,000, of which $1,000,000 was paid in cash at the closing and $4,000,000 was financed through short-term seller financed debt of $4,000,000 to be paid in monthly increments of $1,000,000 over the subsequent four-month period.

 

LCG operated a California licensed commercial cannabis agricultural facility consisting of a 56,000 square foot commercial cannabis agricultural facility at 25600 Encinal Road, Salinas, California. With LCG’s operations, we expected to realize the benefits of increased efficiency, accountability, and productivity. As disclosed in Note 4, below, due to unanticipated operational and reporting issues discovered following the closing, Players Michigan and LCG rescinded the transaction on December 31, 2018.

 

In connection with the acquisition, LCG and the Company (through Players Michigan) entered into a Management Agreement, pursuant to which the shareholder of LCG agreed to provide management services to the Company following closing. Pursuant to the agreement, the seller was to be paid a percentage of net profits until the remaining purchase price was paid in full, as follows:

 

Percentage of   Payment
Net Profit   Period
30%   Between Closing and payment in full of Installment 2(1)
25%   Between the payment in full of Installment 2 and payment in full of Installment 3
20%   Between the payment in full of Installment 3 and payment in full of Installment 4
15%   Between the payment in full of Installment 4 and payment in full of Installment 5
0%   From and the payment in full of Installment 5 or, if earlier, the prepayment in full of the reaming unpaid portion of the Purchase Price

 

  (1) Installment number 2 was never paid, and the liability for these fees was terminated with the rescission agreement.

 

This acquisition was accounted for as a business combination under the purchase method of accounting, given that substantially all of the Company’s assets and ongoing operations were acquired. The purchase resulted in $1,250,314 of goodwill that was expensed as an impairment due to the discontinued operations. According to the purchase method of accounting, the Company recognized the identifiable assets acquired and liabilities assumed as follows:

 

   May 24, 
   2018 
Consideration:     
Cash paid at closing  $1,000,000 
Seller financed short-term debt(1)   4,000,000 
Fair value of total consideration exchanged  $5,000,000 
      
Fair value of identifiable assets acquired assumed:     
Cash  $135,982 
Inventory   3,516,000 
Equipment and fixtures   97,704 
Total fair value of assets assumed   3,749,686 
Consideration paid in excess of fair value (Goodwill)(2)  $1,250,314 

 

  (1)Consideration was financed through short-term seller financed debt of $4,000,000 to be paid in monthly increments of $1,000,000 over the subsequent four-month period, which was not paid and cancelled pursuant to a rescission agreement on December 31, 2018.
 
  (2) The consideration paid in excess of the net fair value of assets acquired and liabilities assumed has been recognized as goodwill and impaired as a result of the subsequent rescission and discontinuance of operations.

 

Supplemental pro forma results of operations of the combined entities could not be obtained due to the lack of financial record keeping.

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 4 – Discontinued Operations

 

On December 31, 2018, the Company agreed to a Release Agreement and Agreement to Rescind and Extinguish Asset Purchase Agreement and Side Letter Agreement (“Rescission Agreement”) with respect to the transactions under the Asset Purchase Agreement that had closed on May 24, 2018 disclosed in note 3 above. The Company decided to rescind the transaction primarily due to operational and reporting issues it discovered following the closing, and decided to discontinue its operations in that location. Subsequently, all of the assets, liabilities and operations of Players Michigan purchased from LCG were returned to LCG on December 31, 2018. Pursuant to the rescission agreement, LCG paid PNTV $250,000, and agreed to pay another $350,000 upon the subsequent transaction to any third party. In addition, LCG agreed to pay PNTV an additional 25% of the gross proceeds, less deductions for applicable sales and/or any fair market investment banking commissions paid by LCG, of any sale in excess of $5,000,000, up to a maximum value of $500,000. If LCG fails to close on a subsequent transaction and pay the applicable fees by April 1, 2019, LCG shall pay PNTV a guaranteed payment of $50,000 per month until the total amount of $350,000 has been paid. A tax benefit was not recorded on this loss due to limitations on current tax recognition. The results of operations from the Salinas business unit have been retrospectively presented as losses from discontinued operations as presented below for the three months ended June 30, 2018:

 

   For the Three 
   Months Ended 
   June 30, 2018 
     
Revenue:  $438,225 
Cost of goods sold   409,835 
Gross profit   28,390 
      
Expenses:     
General and administrative   90,760 
Professional fees   71,944 
Depreciation and amortization   1,494 
Total operating expenses   164,198 
      
Operating loss   (135,808)
      
Loss from discontinued operations  $(135,808)

 

The carrying value of the assets and liabilities of the discontinued operations were comprised of the following at June 30, 2018:

 

   June 30, 
   2018 
     
Assets of discontinued business unit:     
Cash  $302,395 
Accounts receivable   66,100 
Other current assets   5,000 
Inventory   3,307,642 
Fixed assets, net   96,901 
Total current assets held for sale  $3,778,038 
Liabilities of discontinued business unit:     
Accounts payable  $133,737 
Accrued expenses   71,944 
Short term debt owed to LCG   4,000,000 
Total current liabilities held for sale  $4,205,681 

 

As of June 30, 2018, we recognized an impairment loss of $1,250,314 on the goodwill derived from the acquisition in accordance with the identified discontinued operations.

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 5 – Related Party

 

Officers

 

On January 1, 2018, pursuant to his employment agreement, our chief financial officer at that time earned $11,940 of compensation that was required to be paid with 300,000 shares of our common stock based on the closing stock price on such date. The shares were subsequently issued on July 11, 2018.

 

Note 6 – Fair Value of Financial Instruments

 

Under FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required for items measured at fair value.

 

The Company has convertible notes that must be measured under the new fair value standard. The Company’s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:

 

Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

 

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The following schedule summarizes the valuation of financial instruments at fair value on a non-recurring basis in the balance sheets as of June 30, 2018 and December 31, 2017, respectively:

 

   Fair Value Measurements at June 30, 2018 
   Level 1   Level 2   Level 3 
Assets               
Cash  $19,019   $-   $- 
Total assets   19,019    -    - 
Liabilities               
Convertible debentures, net of discounts of $1,820,149   -    -    341,651 
Short term debt, net of discounts of $192,673   -    1,122,327    - 
Derivative liability   -    -    5,396,061 
Total liabilities   -    1,122,327    5,737,712 
   $19,019   $(1,122,327)  $(5,737,712)

 

   Fair Value Measurements at December 31, 2017 
   Level 1   Level 2   Level 3 
Assets               
Cash  $65,840   $-   $- 
Total assets   65,840    -    - 
Liabilities               
Convertible debentures, net of discounts of $790,621   -    -    374,679 
Short term debt, net of discounts of $432,190   -    775,810    - 
Derivative liability   -    -    4,016,985 
Total liabilities   -    775,810    4,391,664 
   $65,840   $(775,810)  $(4,391,664)

 

There were no transfers of financial assets or liabilities between Level 1 and Level 2 inputs for the six months ended June 30, 2018 and the year ended December 31, 2017.

 

Level 2 liabilities consisted of a total of $1,315,000 and $1,208,000 of short term, unsecured, promissory notes, net of discounts of $192,673 and $432,190 as of June 30, 2018 and December 31, 2017, respectively. No fair value adjustment was necessary during the six months ended June 30, 2018 and the year ended December 31, 2017.

 

Level 3 liabilities consist of a total of $2,161,800 and $1,165,300 of convertible debentures, net of discounts of $1,820,149 and $790,621 as of June 30, 2018 and December 31, 2017, respectively, in addition to the related derivative liabilities of $5,396,061 and $4,016,985 at June 30, 2018 and December 31, 2017, respectively.

 

Note 7 – Minority Interest

 

On July 8, 2014, we formed GLFH in which we retained 84% ownership, with the remaining 16% held by key experts and advisors as compensation for their services, including 3% to Mr. Bradley, CEO and 1% to Mr. Berk, President of Programming, and an additional 1% was sold to one of those individuals for $60,000. An additional 1.6% was sold to an investor on December 8, 2014 and 3% was transferred back from a founding member on December 2, 2015, giving PNTV 85.4% ownership and minority interests ownership of 14.6%. The form of the entity was changed from a corporation to a limited liability company on May 9, 2017. GLFH has received Cultivation and Production special use permits for medical marijuana in North Las Vegas, along with a license for the Cultivation and Production of recreational cannabis, in addition to the related permits in the State of Nevada, but they have not yet begun to generate significant revenues. The minority interest’s net loss for the six months ended June 30, 2018 was $88,650, and they have accumulated a net loss of $490, 296 as of June 30, 2018.

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 8 – Other Current Assets

 

Other current assets included the following as of June 30, 2018 and December 31, 2017, respectively:

 

   June 30, 2018   December 31, 2017 
Security deposits  $68,100   $52,100 
Prepaid expenses   58,220    31,080 
   $126,320   $83,180 

 

Note 9 – Inventory

 

Inventories, consisting of material, material overhead, labor, and manufacturing overhead, are stated at the lower of cost (first-in, first-out) or market and consist of the following at June 30, 2018:

 

   June 30, 2018   December 31, 2017 
Raw materials  $-   $76,677 
Finished goods   77,969    178,809 
   $77,969   $255,486 

 

Raw materials consist of cannabis plants and the materials that are used in our production process prior to being tested and packaged for consumption. Finished goods consist of pre-packaged materials previously purchased from other licensed cultivators and our manufactured edibles and extracts.

 

Note 10 – Fixed Assets and Construction in Progress

 

Fixed assets consist of the following at June 30, 2018 and December 31, 2017, respectively:

 

   June 30, 2018   December 31, 2017 
Office equipment  $147,145   $102,037 
Website development costs   99,880    99,880 
Furniture and fixtures   27,066    27,066 
Leasehold improvements   373,842    373,842 
Total   647,933    602,825 
Less accumulated depreciation   (268,735)   (206,370)
Fixed assets, net  $379,198   $396,455 

 

Construction in progress is stated at cost, which includes the cost of construction and other indirect costs attributable to the construction. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use. Construction in progress was $590,696 and $408,812 at June 30, 2018 and December 31, 2017, respectively.

 

Depreciation and amortization expense totaled $62,365 and $14,308 for the six months ended June 30, 2018 and 2017, respectively.

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 11 – Accrued Expenses

 

Accrued expenses consisted of the following at June 30, 2018 and December 31, 2017, respectively:

 

   June 30, 2018   December 31, 2017 
Accrued Payroll, Officers  $136,272   $113,393 
Accrued Payroll and Payroll Taxes   135,234    135,234 
Accrued Interest   160,444    117,411 
Refundable Advances   82,500    82,500 
   $514,450   $448,538 

 

Note 12 – Convertible Debentures

 

Convertible debentures consist of the following at June 30, 2018 and December 31, 2017, respectively:

 

   June 30, 2018   December 31, 2017 
         
On May 18, 2018, the Company received net proceeds of $1,100,000 in exchange for an unsecured convertible promissory note that carries a 12% interest rate with a face value of $1,100,000 (“First Grass Roots Investors Note”), which matures on May 18, 2019. The principal and interest are convertible into shares of common stock after 90 days at the discretion of the note holder at a price equal to 50% of the closing traded price if the average of the high and low trading price of the Company’s common stock is less than or equal to $0.15, 40% of the closing traded price if such average is more than $0.15 and less than $0.20, and 30% of the closing traded price if such average is more than $0.20. Interest is payable semi-annually. The note is currently in default.  $1,100,000   $               - 
           
On May 8, 2018, the Company issued a $108,000 unsecured promissory note to JSJ Investments, Inc., bearing interest at a rate of 8% per annum, with a maturity date of May 8, 2019 in exchange for net proceeds of $103,000. The note is convertible at 70% of the lowest VWAP during the ten (10) trading days prior to the conversion request date. The note is currently in default.   108,000    - 

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

On May 1, 2018, the Company issued a (i) $240,000 unsecured promissory note to SBI Investments, LLC, bearing interest at a rate of 5% per annum, with a maturity date of February 1, 2019, and (ii) a Warrant exercisable until May 1, 2021 to purchase 1,000,000 shares of the Company’s common stock at a price of $0.10 per share, in exchange for net proceeds of $225,000. The note is convertible at 70% of the lowest VWAP during the fifteen (15) trading days prior to the conversion request date. The note is currently in default.   240,000    - 
           
On April 17, 2018, the Company issued a $38,500 unsecured promissory note to Jefferson Street Capital, LLC, bearing interest at a rate of 8% per annum, with a maturity date of January 19, 2019 in exchange for net proceeds of $35,000. The note is convertible at 70% of the average of the three lowest closing traded prices during the ten (10) trading days prior to the conversion request date. The note is currently in default.   38,500    - 
           
On April 17, 2018, the Company issued a $136,500 unsecured promissory note to BlueHawk Capital, LLC, bearing interest at a rate of 8% per annum, with a maturity date of January 19, 2019 in exchange for net proceeds of $125,000. The note is convertible at 70% of the average of the three lowest closing traded prices during the ten (10) trading days prior to the conversion request date. The note is currently in default.   136,500    - 
           
On February 13, 2018, the Company received net proceeds of $120,000 in exchange for an unsecured convertible promissory note that carries a 10% interest rate with a face value of $122,400 (“Fifth Group 10 Note”), which matures on February 13, 2019. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to seventy percent (70%) of the average of the two lowest closing traded prices of the Company’s common stock over the fifteen (15) trading days preceding the conversion date. The Company paid total debt issuance costs of $2,400 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 30 million shares of common stock for potential conversions. The note is currently in default.   122,400    - 
           
On January 16, 2018, the Company received net proceeds of $120,000 in exchange for an unsecured convertible promissory note that carries a 10% interest rate with a face value of $122,400 (“Fourth Group 10 Note”), which matures on January 16, 2019. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy percent (70%) of the average of the two lowest closing traded prices of the Company’s common stock over the fifteen (15) trading days preceding the conversion date. The Company paid total debt issuance costs of $2,400 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 30 million shares of common stock for potential conversions. The note is currently in default.   122,400    - 
           
On December 15, 2017, the Company received net proceeds of $120,000 in exchange for an unsecured convertible promissory note that carries a 10% interest rate with a face value of $122,400 (“Third Group 10 Note”), which matures on December 15, 2018. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy percent (70%) of the average of the two lowest closing traded prices of the Company’s common stock over the fifteen (15) trading days preceding the conversion date. The Company paid total debt issuance costs of $2,400 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 30 million shares of common stock for potential conversions. On June 26, 2018 the noteholder converted $50,000 of principal in exchange for the issuance of 1,547,508 shares. The note is currently in default.   72,400    122,400 

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

On November 8, 2017, the Company amended the two notes with Black Mountain Equities, Inc. (“First Black Mountain Note”) and Gemini Master Fund, Ltd. (“First Gemini Note”). The amended notes extended the maturity dates to December 9, 2017, increased the principal amount owed by $8,250 each, and established conversion features. The principal and interest became convertible into shares of common stock at the discretion of the note holder at a price equal to seventy percent (70%) of the lowest volume weighted average price (“VWAP”) over the fifteen (15) trading days preceding the conversion date, as limited to $40,000 of conversion during any 10 day trading period. The notes were originally entered into on May 8, 2017, 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 various dates between December 11, 2017 and April 17, 2018, the noteholders converted an aggregate $339,873, consisting of $316,500 of principal and $23,373 of interest, in exchange for the issuance of 6,875,717 shares. The note has been satisfied in full.   -    266,500 
           
On November 8, 2017, the Company issued a $200,000 promissory note (“Second Group 10 Note”) in exchange for the debt acquired from Rxmm, as note below. The new note matures on November 8, 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 percent (70%) of the average of the two lowest closing traded prices of the Company’s common stock over the ten (10) trading days preceding the conversion date. The Company must at all times reserve at least 50 million shares of common stock for potential conversions. On various dates between December 6, 2017 and February 5, 2018, the noteholder converted $200,000 of principal in exchange for the issuance of 3,658,652 shares. The note has been satisfied in full.   -    150,000 
           
On November 7, 2017, the Company received net proceeds of $120,000 in exchange for an unsecured convertible promissory note with a face value of $122,400 (“First Group 10 Note”), which matures on November 7, 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 percent (70%) of the average of the two lowest closing traded prices of the Company’s common stock over the fifteen (15) trading days preceding the conversion date. The Company paid total debt issuance costs of $2,400 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 50 million shares of common stock for potential conversions. On various dates between May 15, 2018 and May 30, 2018, the noteholders converted an aggregate $128,000, consisting of $122,400 of principal and $5,600 of interest, in exchange for the issuance of 4,378,352 shares. The note has been satisfied in full.   -    122,400 

 

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Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

On November 8, 2017, provisions within two notes with Black Mountain Equities, Inc. (“Second Black Mountain Note”) and Gemini Master Fund, Ltd. (“Second Gemini Note”) established conversion features. The principal and interest became 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 during the fifteen (15) trading days preceding the conversion date. The notes were originally entered into 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 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 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 various dates between March 22, 2018 and May 30, 2018, the noteholders converted $167,657, consisting of $158,000 of principal and $9,657 of interest, in exchange for the issuance of 5,244,756 shares. The Second Gemini note has been satisfied in full, and $155,000 of cash was repaid on the Second Black Mountain leaving $3,000 of principal outstanding. The note is currently in default.   3,000    316,000 
           
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 are 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 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. On June 1, 2018, a penalty of $15,300 was added to the principal balance of the note due to default provisions. The note is currently in default.   91,800    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 are 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. On June 1, 2018, a penalty of $15,300 was added to the principal balance of the note due to default provisions. The note is currently in default.   91,800    76,500 
           
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 are 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. 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   2,161,800    1,165,300 
Less: unamortized debt discounts   (1,820,149)   (790,621)
Convertible debentures  $341,651   $374,679 

 

17
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

In accordance with ASC 470-20 Debt with Conversion and Other Options, the Company recorded total discounts of $1,802,036 and $1,004,335 for the variable conversion features of the convertible debts incurred during the six months ended June 30, 2018 and the year ended December 31, 2017. The discounts are being amortized to interest expense over the term of the debentures using the effective interest method. The Company recorded $772,508 and $42,294 of interest expense pursuant to the amortization of the note discounts during the six months ended June 30, 2018 and 2017, respectively.

 

All of the convertible debentures carry default provisions that place a “maximum share amount” on the note holders. The maximum share amount that can be owned as a result of the conversions to common stock by the note holders is 4.99% of the Company’s issued and outstanding shares.

 

In accordance with ASC 815-15, the Company determined that the variable conversion feature and shares to be issued represented embedded derivative features, and these are shown as derivative liabilities on the balance sheet. The Company calculated the fair value of the compound embedded derivatives associated with the convertible debentures utilizing a lattice model.

 

The Company recorded interest expense pursuant to the stated interest rates on the convertible debentures in the amount of $64,685 and $8,903 for the six months ended June 30, 2018 and 2017, respectively related to convertible debts.

 

Note 13 – Short Term Debt

 

Short-term debt consists of the following at June 30, 2018 and December 31, 2017, respectively:

 

   June 30, 2018   December 31, 2017 
On June 18, 2018, the Company received proceeds of $100,000 in exchange for an unsecured promissory note maturing on August 8, 2018, carrying a fixed interest amount of $5,000 (“First Irani Note”). The note is currently in default.  $100,000   $- 
           
On March 23, 2018, the Company received proceeds of $17,000 in exchange for an unsecured promissory note due on demand, carrying a fixed interest amount of $750. The Company repaid a total of $10,000 between March 29, 2018 and April 19, 2018.   7,000    - 
           
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 under 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 issued 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    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 (32nd) month following an Event of Default. This note is currently in default.   50,000    50,000 

 

18
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

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 31st 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. The note is currently in default.

   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 short term debt   1,315,000    1,208,000 
Less: unamortized debt discounts   (192,673)   (432,190)
Short term debt  $1,122,327   $775,810 

 

The Company recorded $229,517 and $229,599 of interest expense pursuant to the amortization of the note discounts during the six months ended June 30, 2018 and 2017, respectively.

 

The Company recorded interest expense pursuant to the stated interest rate on the above promissory notes in the amount of $31,499 and $23,128 at June 30, 2018 and 2017, respectively.

 

The following presents components of interest expense by instrument type at June 30, 2018 and 2017, respectively:

 

   June 30, 2018   June 30, 2017 
Interest on convertible debentures  $64,685   $8,903 
Amortization of debt discounts   1,002,025    377,026 
Interest on short term debt   31,499    31,809 
Accounts payable related finance charges   1,231    2,177 
   $1,099,440   $419,915 

 

19
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 14 – Derivative Liabilities

 

As discussed in Note 12 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 $5,396,061 and $9,530,296 at June 30, 2018 and December 31, 2017, respectively. The change in fair value of the derivative liabilities resulted in a gain of $5,112,148 and a loss of $1,867,832 for the six months ended June 30, 2018 and 2017, respectively, which has been reported as other expense in the statements of operations. The gain of $5,112,148 for the six months ended June 30, 2018 consisted of a gain of $5,685 attributable to the value in excess of discounts on new warrants, a gain of $5,761,228 attributable to the fair value of warrants, a loss of $625,240 on excess derivative value and a net loss in market value of $23,840 on the convertible notes. The loss of $1,867,832 for the six months ended June 30, 2017 consisted of a loss of $1,792,445 attributable to the fair value of warrants and a net loss in market value of $75,387 on the convertible notes.

 

The following presents the derivative liability value by instrument type at June 30, 2018 and December 31, 2017, respectively:

 

   June 30, 2018   December 31, 2017 
Convertible debentures  $2,723,524   $1,033,644 
Common stock warrants   2,672,537    8,496,652 
   $5,396,061   $9,530,296 

 

The following is a summary of changes in the fair market value of the derivative liability during the six months ended June 30, 2018 and the year ended December 31, 2017, respectively:

 

   Derivative 
   Liability 
   Total 
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 
Increase in derivative value attributable to issuance of convertible notes   2,373,976 
Increase in derivative value attributable to issuance of warrants   89,546 
Change in fair market value of derivative liabilities due to the mark to market adjustment   (5,737,388)
Debt conversions and redemptions   (860,369)
Balance, June 30, 2018  $5,396,061 

 

Key inputs and assumptions used to value the convertible debentures and warrants issued during the six months ended June 30, 2018 and the year ended December 31, 2017:

 

  Stock prices on all measurement dates were based on the fair market value and would fluctuate with projected volatility.
  The projected volatility curve for each valuation period was based on the historical volatility of the Company in the range of 116% to 138%.
  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 $3,439,887 to $2,188,776 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%.

 

20
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 15 – Changes in 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

 

Common Stock Authorized

 

The Company has authorized 1,200,000,000 shares of common stock, of which 678,072,453 shares were issued and outstanding and 206,605,359 shares were reserved as of the date of this filing.

 

Common Stock Sales

 

On June 29, 2018, the Company sold 1,021,000 units at $0.05 per unit, consisting of 1,021,000 shares of common stock and 1,021,000 warrants exercisable at $0.075 per share over the following 3 years to an individual investor for proceeds of $51,050. The shares were subsequently issued on September 10, 2018.

 

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 were subsequently issued on April 30, 2018.

 

Common Stock Issuances for Settlement of Trade Payables

 

On June 1, 2018, the Superior Court of the State of California, County of Los Angeles, Central District, entered an 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, in accordance with the Settlement Agreement, in the matter entitled RAI Capital, LLC, Plaintiff (“RAI”), v. Players Network, Inc., Defendant. RAI commenced the Action against the Company to recover $398,217 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 provided for the full and final settlement of the Action, whereby the Company issued RAI 13,298,837 shares in settlement of $398,217 of outstanding payables. The total fair value of the common stock was $743,405 based on the closing price of the Company’s common stock on the date of grant, resulting in a loss of $345,188.

 

Common Stock Issuances for Debt Conversions

 

On June 26, 2018, a noteholder elected to convert $50,000 of outstanding principal on the Third Group 10 Note in exchange for 1,547,508 shares of common stock. The shares were subsequently issued on July 3, 2018. The note was converted in accordance with the conversion terms; therefore, no gain or loss has been recognized.

 

On May 30, 2018, the Company issued 2,591,362 shares of common stock pursuant to the conversion of $78,000, consisting of $72,400 of outstanding principal and $5,600 of unpaid 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 May 30, 2018, the Company issued 2,118,721 shares of common stock pursuant to the conversion of $61,973, consisting of $58,000 of outstanding principal and $3,973 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 May 15, 2018, the Company issued 1,786,990 shares of common stock pursuant to the conversion of $50,000 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.

 

21
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

On May 14, 2018, the Company issued 2,009,451 shares of common stock pursuant to the conversion of $53,205, consisting of $50,000 of outstanding principal and $3,205 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 April 17, 2018, the Company issued 707,156 shares of common stock pursuant to the conversion of $24,998, consisting of $13,250 of outstanding principal and $11,748 of unpaid interest, 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 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.

 

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.

 

Exercise of Warrants

 

On June 5, 2018, the holder of the Second Black Mountain Note exercised warrants to purchase 7,954,546 shares of common stock on a cashless basis at $0.0264, resulting in the issuance of 4,389,180 shares.

 

On May 31, 2018, the holder of the First Emunah Note exercised warrants to purchase 1,000,000 shares of common stock at $0.03535 per share for proceeds of $35,350.

 

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 were subsequently issued on April 30, 2018.

 

22
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Common Stock Awarded for Services

 

On April 19, 2018, the Company awarded 500,000 shares of common stock to BlueHawk Capital, LLC pursuant to a consulting agreement. The total fair value of the common stock was $29,000 based on the closing price of the Company’s common stock on the date of grant. The Company subsequently issued the shares on July 11, 2018.

 

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 Company subsequently issued 300,000 shares on April 30, 2018 and the remaining 50,000 shares on September 10, 2018.

 

On January 1, 2018, pursuant to his employment agreement, our chief financial officer at that time earned $11,940 of compensation that was required to be paid with 300,000 shares of our common stock based on the closing stock price on such date. The shares were subsequently issued on July 11, 2018.

 

Note 16 – Options and Warrants

 

Warrants Granted

 

On June 29, 2018, the Company sold 1,021,000 units at $0.05 per unit, consisting of 1,021,000 shares of common stock and 1,021,000 warrants exercisable at $0.075 per share over the following 3 years, to an individual investor for proceeds of $51,050. The shares were subsequently issued on September 10, 2018.

 

On June 1, 2018, a warrant holder was issued warrants to purchase 3,000,000 shares of common stock at $0.055 per share over the following 5 years as an inducement to exercise his warrants on March 28, 2018.

 

On May 31, 2018, the holder of the First Emunah Note exercised warrants to purchase 1,000,000 shares of common stock at $0.03535 per share for proceeds of $35,350.

 

On May 14, 2018, warrants issued to Black Mountain Equities, Inc. were adjusted pursuant to terms within their promissory note, resulting in the issuance of an additional 6,454,545 warrants exercisable at $0.0264 over the remaining term, in addition to the repricing of an aggregate 2,800,000 previously outstanding warrants to $0.0264 per share.

 

On May 14, 2018, warrants issued to Gemini Master Fund, Ltd. were adjusted pursuant to terms within their promissory note, resulting in the issuance of an additional 5,154,545 warrants exercisable at $0.0264 over the remaining term, in addition to the repricing of an aggregate 2,800,000 previously outstanding warrants to $0.0264 per share.

 

On May 1, 2018, the Company issued warrants exercisable until May 1, 2021 to purchase 1,000,000 shares of the Company’s common at a price of $0.10 per share, in exchange for net proceeds of $225,000 pursuant to a convertible note offering to SBI Investments, LLC.

 

On April 17, 2018, class A and B warrants issued to Emunah Funding LLC and Fourth Man LLC were adjusted pursuant to terms within their respective notes, resulting in the issuance of an additional 2,594,714 warrants exercisable at $0.03535 over the remaining term, in addition to the repricing of an aggregate 6,528,340 previously outstanding warrants to $0.03535 per share. All of these warrants were subsequently exchanged for two $75,000 convertible notes on October 15, 2018.

 

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 were subsequently issued on April 30, 2018.

 

On March 12, 2018, the Company sold 333,333 units at $0.15 per unit, consisting of 333,333 shares of common stock and 333,333 warrants exercisable at $0.15 per share over the following 3 years, to an individual investor for proceeds of $50,000. The shares were subsequently issued on April 30, 2018

 

23
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Warrants Exercised

 

On June 5, 2018, the holder of the Second Black Mountain Note exercised warrants to purchase 7,954,546 shares of common stock on a cashless basis at $0.0264, resulting in the issuance of 4,389,180 shares.

 

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.

 

Options Expired

 

On February 20, 2018, a total of 8,000,000 options with a strike price of $0.04 per share expired.

 

On June 1, 2018, a total of 3,000,000 options with a strike price of $0.08 per share expired.

 

Note 17 – 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 six months ended June 30, 2018 and the year ended December 31, 2017, 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 June 30, 2018, the Company had approximately $31,364,000 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:

 

   June 30 2018   December 31, 2017 
Deferred tax assets:          
Net operating loss carry forwards  $6,586,440   $9,328,900 
           
Net deferred tax assets before valuation allowance   6,586,440    9,328,900 
Less: Valuation allowance   (6,586,440)   (9,328,900)
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 June 30, 2018 and December 31, 2017, 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:

 

   June 30, 2018   December 31, 2017 
         
Federal and state statutory rate   21%   35%
Change in valuation allowance on deferred tax assets   (21)%   (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 $88,650 and $57,249 during the six months ended June 30, 2018 and 2017, respectively. The net loss attributable to the parent was and $518,540 and $334,870 during the six months ended June 30, 2018 and 2017, respectively.

 

24
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 19 – Subsequent Events

 

Rescission of Salinas Acquisition

 

On December 31, 2018, the Company and LCG Business Enterprises, LLC (“LCG”) agreed to rescind the May 24, 2018 purchase of substantially all the assets of LCG , consisting primarily of a 56,000 square foot commercial cannabis agricultural facility at 25600 Encinal Road, Salinas, California. The Company decided to rescind the transaction primarily due to operational and reporting issues it discovered following the closing. Subsequently, all of the assets, liabilities and operations of this subsidiary were returned to LCG on December 31, 2018.

 

Proposed Jujuy, Argentina Joint Venture

 

In October 2018, Green Leaf and the Province of Jujuy, Argentina (the “Province”) entered into a Memorandum of Understanding that contemplates the formation of an entity jointly owned by the Province and Green Leaf that will cultivate, manufacture and distribute cannabis and cannabis products on land provided to the joint venture by the Province. Pursuant to the Memorandum of Understanding, among other things, Green Leaf will be responsible for providing the necessary funding for the development of the project and the hiring and training of local personnel for the project, and the Province will provide all of the necessary permits as well as the use of land in Jujuy, Argentina at no cost to the joint venture for a 99-year period. The Company’s management believes this venture presents a significant opportunity for the Company and its stockholders, particularly given the favorable agricultural climate in Jujuy, Argentina and the local cost of labor in that market. However, the Memorandum of Understanding is subject to the negotiation and execution of definitive agreements, and there can be no assurance that the transactions contemplated by Memorandum of Understanding will be effected.

 

Convertible Debt Financing

 

On October 15, 2018, the Company issued an unsecured convertible promissory note that carries a 3% interest rate with a face value of $75,000 (“Second Fourth Man Note”), which matures on October 15, 2019. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy one percent (71%) of the three lowest daily volume weighted average prices of the Company’s common stock over the ten (10) trading days preceding the conversion date. The note holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The note was issued in exchange for the cancellation of warrants previously awarded on October 27, 2017, consisting of the class A warrant in respect to the right to purchase 1,000,000 shares and the class B warrant to purchase 75,000 shares.

 

On October 15, 2018, the Company issued an unsecured convertible promissory note that carries a 3% interest rate with a face value of $75,000 (“Second Emunah Note”), which matures on October 15, 2019. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy one percent (71%) of the three lowest daily volume weighted average prices of the Company’s common stock over the ten (10) trading days preceding the conversion date. The note holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The note was issued in exchange for the cancellation of warrants previously awarded on October 27, 2017, consisting of the class A warrant in respect to the right to purchase 1,000,000 shares and the class B warrant to purchase 75,000 shares.

 

On July 13, 2018, the Company received net proceeds of $47,250 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $76,500 (“First BHP Note”), which matures on April 13, 2019. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy percent (70%) of the average of the three (3) lowest closing bid traded prices of the Company’s common stock over the ten (10) 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 $2,750 and 100,000 shares of common stock that is being amortized over the life of the loan on the straight-line method, which approximates the effective interest method. The Company must at all times reserve at least 12 million shares of common stock for potential conversions.

 

Common Stock Issued on Subscriptions Payable

 

On various dates between July 3, 2018, and September 10, 2018, a total of 3,418,508 shares were issued that have been classified as Subscriptions Payable on our financial statements with respect to shares issued pursuant to stock sales in the prior period valued at an aggregate $145,640.

 

Common Stock Issuances for Debt Conversions

 

On various dates between July 16, 2018 and January 9, 2019, the Company issued an aggregate 22,807,918 shares of common stock pursuant to the conversion of $574,287, consisting of $545,723 of outstanding principal and $28,565 of unpaid interest, on convertible notes.

 

Common Stock Sales

 

On December 14, 2018, the Company sold 416,667 units at $0.06 per unit, consisting of 416,667 shares of common stock and 416,667 warrants exercisable at $0.12 per share over the following 3 years to an individual investor for proceeds of $25,000.

 

On September 24, 2018, the Company sold 1,000,000 units at $0.065 per unit, consisting of 1,000,000 shares of common stock and 1,000,000 warrants exercisable at $0.085 per share over the following 3 years to an individual investor for proceeds of $65,000. The shares were subsequently issued on December 14, 2018.

 

On November 30, 2018, the Company sold 300,000 units at $0.05 per unit, consisting of 300,000 shares of common stock and 300,000 warrants exercisable at $0.08 per share over the following 3 years to an individual investor for proceeds of $15,000.

 

On November 5, 2018, the Company sold 2,000,000 units at $0.06 per unit, consisting of 2,000,000 shares of common stock and 2,000,000 warrants exercisable at $0.12 per share over the following 3 years to an individual investor for proceeds of $120,000.

 

25
 

 

Players Network

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Exercise of Warrants

 

On December 19, 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.

 

Common Stock Awarded for Services, Officers and Directors

 

On July 11, 2018, the Company issued an aggregate total of 4,800,000 shares of common stock to the three board members for services provided. The total fair value of the common stock was $191,040 based on the closing price of the Company’s common stock on the date of grant.

 

On July 11, 2018, the Company issued an additional 400,000 shares of common stock to one of its board members as a bonus for services provided. The total fair value of the common stock was $15,920 based on the closing price of the Company’s common stock on the date of grant.

 

On July 11, 2018, the Company issued 3,000,000 shares of common stock to its CEO in satisfaction of unpaid compensation. The total fair value of the common stock was $119,400 based on the closing price of the Company’s common stock on the date of grant.

 

Common Stock Awarded for Services

 

On various dates between July 11, 2018 and November 9, 2018, the Company issued a total of 15,400,000 shares of common stock to 27 consultants for services provided. The aggregate fair value of the common stock was $741,990 based on the closing price of the Company’s common stock on the respective grant dates.

 

26
 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

Overview and Outlook

 

Players Network is actively pursuing the cultivation and processing of medical and recreational marijuana in North Las Vegas pursuant to two medical marijuana establishments (MME) licenses that were granted by the city of North Las Vegas for cultivation and production to its majority-owned subsidiary, Green Leaf Farms Holdings LLC, in which the Company holds an 85.4% interest. We also distribute content relating to the cannabis industry at WeedTV.com.

 

Green Leaf Cannabis Business

 

Green Leaf was granted two Medical Marijuana Establishment (MME) licenses by the City of North Las Vegas and State of Nevada; one for cultivation, and one for production of extracts, along with cultivation and production licenses for recreational cannabis that went into effect on July 1, 2017.

 

The cannabis industry is one of the fastest growing markets in the America, and Nevada is uniquely positioned to become one of, if not the largest market in the country. The sale of cannabis in Nevada for medical purposes has been legal since 2015, and on July 1, 2017, the recreational use of cannabis became legal in the State of Nevada.

 

It is estimated that there are 43,000 Nevada State issued medical marijuana cardholders. Nevada also offers reciprocity to Out-of-State medical cannabis cardholders. With nearly one million medical marijuana cardholders residing in states adjacent to Nevada, and more than 52 million annual visitors to Nevada, the market for medical marijuana is substantial, and with the recent passage of recreational marijuana laws that were implemented in the summer of 2017, Nevada is expected to generate $1.8 billion in revenue from cannabis in 2018. As large as the medical marijuana market is, it is dwarfed by Nevada’s adult recreational marijuana market.

 

Green Leaf offers the following products and services:

 

Premium organic medical cannabis sold wholesale to licensed retailers
Recreational marijuana cannabis products sold wholesale to distributors and retailers
Extraction products such as oils and waxes derived from in-house cannabis production
Processing and extraction services for licensed medical cannabis cultivators in Nevada
High quality cannabis strains in the form of vegetative cuttings for sale to licensed medical cannabis cultivators in Nevada

 

Media Content Distribution; Weed TV

 

Historically, we have distributed video and other media content over cable television channels and a wide variety of internet enabled devices, focusing primarily on the gaming industry and Las Vegas lifestyle. Our current media operations are focused on our recently launched Web site, WeedTV.com, and its related social media presence.

 

Weed TV is a source of informational entertainment, products and services for people who relate to the marijuana lifestyle and social community. Weed TV content is currently available at www.weedtv.com. We plan to continuously add features and content to Weed TV, including a directory of businesses that cater to the marijuana business, such as dispensaries, smoke shops, doctors, financial institutions, manufacturers and more.

 

Future Outlook

 

Green Leaf plans to focus on developing high quality products and to employ a strong branding strategy to sell its custom cannabis strains. The quality and consistency of our branded products would help build consumer loyalty. The growing facility, with modular construction would allow us to scale efficiency from both a cost and operational standpoint.

 

Proposed Jujuy, Argentina Joint Venture

 

In October 2018, Green Leaf and the Province of Jujuy, Argentina (the “Province”) entered into a Memorandum of Understanding that contemplates the formation of an entity jointly owned by the Province and Green Leaf that will cultivate, manufacture and distribute cannabis and cannabis products on land provided to the joint venture by the Province. Pursuant to the Memorandum of Understanding, among other things, Green Leaf will be responsible for providing the necessary funding for the development of the project and the hiring and training of local personnel for the project, and the Province will provide all of the necessary permits as well as the use of land in Jujuy, Argentina at no cost to the joint venture for a 99-year period. The Company’s management believes this venture presents a significant opportunity for the Company and its stockholders, particularly given the favorable agricultural climate in Jujuy, Argentina and the local cost of labor in that market. However, the Memorandum of Understanding is subject to the negotiation and execution of definitive agreements, and there can be no assurance that the transactions contemplated by Memorandum of Understanding will be effected.

 

27
 

 

Results of Operations for the Three Months Ended June 30, 2018 and 2017:

 

The following tables and narrative discussion set forth key components of our results of operations for the period indicated and key components of our income and expenses for the period indicated. Our subsequent discontinued operations necessitated that we present our historical operations related to those operations as a single line item within the statement of operations. The following discussion of our results of operations is based on our continuing operations and, therefore, excludes any results or discussion of our discontinued operation.

 

   For the Three Months Ended     
   June 30,   Increase / 
   2018   2017   (Decrease) 
             
Revenues  $20,102   $2,979   $17,123 
Cost of goods sold   22,873    2,208    20,665 
Gross profit (loss)   (2,771)   771    (3,542)
                
Direct operating costs   131,844    71,849    59,995 
General and administrative   694,784    734,430    (39,646)
Officer salaries   72,317    43,750    28,567 
Depreciation and amortization   31,815    11,534    20,281 
                
Total operating expenses   930,760    861,563    69,197 
                
Operating loss   (933,531)   (860,792)   (72,739)
                
Total other income (expense)   (2,715,781)   (2,039,357)   676,424 
                
Net loss from continuing operations  $(3,649,312)  $(2,900,149)  $749,163 

 

Revenues:

 

During the three months ended June 30, 2018 and 2017, we received revenues from the sale of cannabis products, in-home media, advertising fees and the recognition of deferred revenues on content development. Our sales primarily consisted of the resale of raw materials that we previously purchased from other licensed production and cultivation facilities and resold to licensed dispensaries as we progressed in the development of our facility. Aggregate revenues for the three months ended June 30, 2018 were $20,102, compared to revenues of $2,979 during the three months ended June 30, 2017, an increase in revenues of $17,123, or 575%.

 

Cost of Goods Sold

 

Cost of goods sold for the three months ended June 30, 2018 were $22,873, compared to $2,208 during the three months ended June 30, 2017, an increase of $20,665, or 936%. Cost of sales consists primarily of labor, depreciation and maintenance on cultivation and production equipment, in addition to raw materials sold and consumed in our cultivation and production operations. The increased cost of sales in the current period was due to increased operations in the current year.

 

Direct Operating Costs:

 

Direct operating costs were $131,844 for the three months ended June 30, 2018, compared to $71,849 for the three months ended June 30, 2017, an increase of $59,995, or 84%. Our direct operating costs increased primarily due to expanded work on WeedTV and our cannabis cultivation operations during the three months ended June 30, 2018.

 

General and Administrative:

 

General and administrative expenses were $694,784 for the three months ended June 30, 2018, compared to $734,430 for the three months ended June 30, 2017, a decrease of $39,646, or 5%. General and administrative expense decreased primarily due to decreased insurance and administrative costs during the three months ended June 30, 2018 compared to the three months ended June 30, 2017.

 

Officer Salaries:

 

Officer salaries expense totaled $72,317 for the three months ended June 30, 2018, compared to $43,750, for the three months ended June 30, 2017, an increase of $28,567, or 65%. Our officer salaries increased due to the employment of a Chief Financial Officer during the three months ended June 30, 2018 that was not present during the comparative three months ended June 30, 2017.

 

28
 

 

Depreciation and Amortization:

 

Depreciation and amortization expense was $31,815 for the three months ended June 30, 2018, compared to $11,534 for the three months ended June 30, 2017, an increase of $20,281, or 176%. Depreciation increased primarily due to placing our leasehold improvements and other equipment purchases into service for the three months ended June 30, 2018 compared to the three months ended June 30, 2017.

 

Operating Loss:

 

Operating loss for the three months ended June 30, 2018 was $933,531 or ($0.00) per share, compared to an operating loss of $860,792 for the three months ended June 30, 2017, or ($0.00) per share, an increase of $72,739, or 8%. Operating loss increased primarily due to increased operating costs and depreciation as we ramped up efforts to get our cannabis facility operational during the three months ended June 30, 2018 compared to the three months ended June 30, 2017.

 

Other Income (Expense):

 

Other expense, on a net basis, was $2,715,781 for the three months ended June 30, 2018, compared to other expense of $2,039,357 for the three months ended June 30, 2017, an increase of $676,424, or 33%. Other expense increased, on a net basis, primarily due to a loss on debt extinguishment of $375,788 and the goodwill impairment of $1,250,314 in the current period, and by increased interest expense on debt financing of $228,675, as diminished by a decreased change in derivative liability of $1,178,323 during the three months ended June 30, 2018, compared to the three months ended June 30, 2017.

 

Net Loss from Continuing Operations:

 

The net loss from continuing operations for the three months ended June 30, 2018 was $3,649,312, or $0.01 per share, compared to a net loss from continuing operations of $2,900,149, or ($0.01) per share, for the three months ended June 30, 2017, an increase of $749,163, or 26%. Net loss from continuing operations increased primarily due to increased non-cash charges presented as other expenses, above, during the three months ended June 30, 2018, compared to the three months ended June 30, 2017.

 

29
 

 

Results of Operations for the Six Months Ended June 30, 2018 and 2017:

 

The following tables and narrative discussion set forth key components of our results of operations for the period indicated and key components of our income and expenses for the period indicated. Our subsequent discontinued operations necessitated that we present our historical operations related to those operations as a single line item within the statement of operations. The following discussion of our results of operations is based on our continuing operations and, therefore, excludes any results or discussion of our discontinued operation.

 

   For the Six Months Ended     
   June 30,   Increase / 
   2018   2017   (Decrease) 
         
Revenues  $211,964   $3,070   $208,894 
Cost of goods sold   228,049    2,208    225,841 
Gross profit (loss)   (16,085)   862    (16,947)
                
Direct operating costs   243,407    93,051    150,356 
General and administrative   1,179,179    1,152,866    26,313 
Officer salaries   141,267    122,100    19,167 
Depreciation and amortization   62,365    14,308    48,057 
                
Total operating expenses   1,642,303    1,382,325    243,893 
                
Operating loss   (1,642,303)   (1,381,463)   260,840 
                
Total other income (expense)   2,400,464    (2,287,747)   4,688,211 
                
Net loss  $758,161   $(3,669,210)  $4,427,371 

 

Revenues:

 

During the six months ended June 30, 2018 and 2017, we received revenues from the sale of cannabis products, in-home media, advertising fees and the recognition of deferred revenues on content development. Our sales primarily consisted of the resale of raw materials that we previously purchased from other licensed production and cultivation facilities and resold to licensed dispensaries as we progressed in the development of our North Las Vegas facility. Aggregate revenues for the six months ended June 30, 2018 were $211,964, compared to revenues of $3,070 during the six months ended June 30, 2017, an increase in revenues of $208,894, or 6,804%.

 

Cost of Goods Sold

 

Cost of goods sold for the six months ended June 30, 2018 were $228,049, compared to $2,208 during the six months ended June 30, 2017, an increase of $225,841, or 10,228%. Cost of sales consists primarily of labor, depreciation and maintenance on cultivation and production equipment, in addition to raw materials sold and consumed in our cultivation and production operations. The increased cost of sales in the current period was due to the commencement of operations in the current year.

 

Direct Operating Costs:

 

Direct operating costs were $243,407 for the six months ended June 30, 2018, compared to $93,051 for the six months ended June 30, 2017, an increase of $150,356, or 162%. Our direct operating costs increased primarily due to increased focus on WeedTV and our cannabis cultivation operations during the six months ended June 30, 2018.

 

General and Administrative:

 

General and administrative expenses were $1,179,179 for the six months ended June 30, 2018, compared to $1,152,866 for the six months ended June 30, 2017, an increase of $26,313, or 2%.

 

Officer Salaries:

 

Officer salaries expense totaled $141,267 for the six months ended June 30, 2018, compared to $122,100, for the six months ended June 30, 2017, an increase of $19,167, or 16%. Our officer salaries increased due to the employment of a Chief Financial Officer during the six months ended June 30, 2018 that was not present in the comparative period, which was offset by stock-based compensation bonuses paid during the six months ended June 30, 2017 that was not paid during the six months ended June 30, 2018.

 

30
 

 

Depreciation and Amortization:

 

Depreciation and amortization expense was $62,365 for the six months ended June 30, 2018, compared to $14,308 for the six months ended June 30, 2017, an increase of $48,057, or 336%. Depreciation increased primarily due to placing our leasehold improvements and other equipment purchases into service for the six months ended June 30, 2018 compared to the six months ended June 30, 2017.

 

Operating Loss:

 

Operating loss for the six months ended June 30, 2018 was $1,642,303 or ($0.00) per share, compared to an operating loss of $1,381,463 for the six months ended June 30, 2017, or ($0.00) per share, an increase of $260,840 or 19%. Operating loss increased primarily due to increased operating costs and depreciation as we significantly ramped up efforts to get our cannabis facility operational during the six months ended June 30, 2018, compared to the six months ended June 30, 2017.

 

Other Income (Expense):

 

Other income, on a net basis, was $2,400,464 for the six months ended June 30, 2018, compared to other expenses of $2,287,747 for the six months ended June 30, 2017, an increase of $4,688,211, or 205%. Other income increased, on a net basis, primarily due to the increased change in derivative liabilities of $6,979,980, or 374%, as offset by losses on debt extinguishment of $362,017, goodwill impairment of $1,250,314 and an increased interest expense on debt financing of $679,525, or 162% during the six months ended June 30, 2018, compared to the six months ended June 30, 2017.

 

Net Income (Loss) from Continuing Operations:

 

The net income from continuing operations for the six months ended June 30, 2018 was $758,161, or $0.00 per share, compared to a net loss from continuing operations of $3,669,210, or ($0.01) per share, for the six months ended June 30, 2017, an increase of $4,427,371, or 121%. Net income increased primarily due to an increased change in our derivative liabilities during the six months ended June 30, 2018, compared to the six months ended June 30, 2017.

 

31
 

 

LIQUIDITY AND CAPITAL RESOURCES

 

The following table summarizes total assets, accumulated deficit, stockholders’ equity and working capital at June 30, 2018 compared to December 31, 2017.

 

   June 30,   December 31,   Increase / 
   2018   2017   (Decrease) 
             
Total Assets  $4,977,204   $1,209,773   $3,767,431 
                
Total Liabilities  $12,383,427   $11,860,997   $522,430 
                
Accumulated (Deficit)  $(43,886,398)  $(44,597,401)  $(711,003)
                
Stockholders’ Equity (Deficit)  $(7,406,223)  $(10,651,224)  $(3,245,001)
                
Working Capital (Deficit)  $(8,376,117)  $(11,456,491)  $(3,080,374)

 

Our principal source of operating capital has been provided from equity investments and debt financings. At June 30, 2018, we had a negative working capital position of $8,376,117.

 

Debt Financing

 

On October 15, 2018, the Company issued an unsecured convertible promissory note that carries a 3% interest rate with a face value of $75,000, which matures on October 15, 2019. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy one percent (71%) of the three lowest daily volume weighted average prices of the Company’s common stock over the ten (10) trading days preceding the conversion date.

 

On October 15, 2018, the Company issued an unsecured convertible promissory note that carries a 3% interest rate with a face value of $75,000, which matures on October 15, 2019. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy one percent (71%) of the three lowest daily volume weighted average prices of the Company’s common stock over the ten (10) trading days preceding the conversion date.

 

On July 13, 2018, the Company received net proceeds of $47,250 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $76,500 which matures on April 13, 2019. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy percent (70%) of the average of the three (3) lowest closing bid traded prices of the Company’s common stock over the ten (10) trading days preceding the conversion date.

 

On June 18, 2018, the Company received proceeds of $100,000 in exchange for an unsecured promissory note maturing on August 8, 2018, carrying a fixed interest amount of $5,000.

 

On May 18, 2018, the Company received net proceeds of $1,100,000 in exchange for an unsecured convertible promissory note that carries a 12% interest rate with a face value of $1,100,000, which matures on May 18, 2019. The principal and interest are convertible into shares of common stock after 90 days at the discretion of the note holder at a price equal to 50% of the closing traded price if the average of the high and low trading price of the Company’s common stock is less than or equal to $0.15, 40% of the closing traded price if such average is more than $0.15 and less than $0.20, and 30% of the closing traded price if such average is more than $0.20.

 

On May 8, 2018, the Company issued a $108,000 unsecured promissory note to JSJ Investments, Inc., bearing interest at a rate of 8% per annum, with a maturity date of May 8, 2019 in exchange for net proceeds of $103,000. The note is convertible at 70% of the lowest VWAP during the ten (10) trading days prior to the conversion request date.

 

On May 1, 2018, the Company issued a (i) $240,000 unsecured promissory note to SBI Investments, LLC, bearing interest at a rate of 5% per annum, with a maturity date of February 1, 2019, and (ii) a Warrant exercisable until May 1, 2021 to purchase 1,000,000 shares of the Company’s common at a price of $0.10 per share, in exchange for net proceeds of $225,000. The note is convertible at 70% of the lowest VWAP during the fifteen (15) trading days prior to the conversion request date.

 

On April 17, 2018, the Company issued a $38,500 unsecured promissory note to Jefferson Street Capital, LLC, bearing interest at a rate of 8% per annum, with a maturity date of January 19, 2019 in exchange for net proceeds of $35,000. The note is convertible at 70% of the average of the three lowest closing traded prices during the ten (10) trading days prior to the conversion request date.

 

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On April 17, 2018, the Company issued a $136,500 unsecured promissory note to BlueHawk Capital, LLC, bearing interest at a rate of 8% per annum, with a maturity date of January 19, 2019 in exchange for net proceeds of $125,000. The note is convertible at 70% of the average of the three lowest closing traded prices during the ten (10) trading days prior to the conversion request date.

 

On March 23, 2018, the Company received proceeds of $17,000 in exchange for an unsecured promissory note due on demand, carrying a fixed interest amount of $750. The Company repaid $3,000 of principal on March 29, 2018.

 

On February 13, 2018, the Company received net proceeds of $120,000 in exchange for an unsecured convertible promissory note that carries a 10% interest rate with a face value of $122,400, which matures on February 13, 2019. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy percent (70%) of the average of the two lowest closing traded prices of the Company’s common stock over the fifteen (15) trading days preceding the conversion date.

 

On January 16, 2018, the Company received net proceeds of $120,000 in exchange for an unsecured convertible promissory note that carries a 10% interest rate with a face value of $122,400, which matures on January 16, 2019. The principal and interest are convertible into shares of common stock at the discretion of the note holder at a price equal to seventy percent (70%) of the average of the two lowest closing traded prices of the Company’s common stock over the fifteen (15) trading days preceding the conversion date.

 

Common Stock Sales

 

On June 29, 2018, the Company sold 1,021,000 units at $0.05 per unit, consisting of 1,021,000 shares of common stock and 1,021,000 warrants exercisable at $0.075 per share over the following 3 years to an individual investor for proceeds of $51,050.

 

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.

 

We have utilized these funds for our current and planned operations, and to comply with our regulatory reporting requirements. Although our revenues are expected to grow as we expand our operations, our revenues are not expected to exceed our investment and operating costs in the next twelve months, and we do not have funds sufficient to fund our operations at their current level for the next twelve months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of operations. To address these risks, we must, among other things, seek growth opportunities through investment and acquisitions in our industry, effectively monitor and manage our claims for payments that are owed to us, implement and successfully execute our business strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. We cannot assure that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition and results of operations.

 

To conserve on the Company’s capital requirements, the Company has issued shares in lieu of cash payments to directors, employees and outside consultants, and the Company expects to continue this practice. In the six months ended June 30, 2018, the Company incurred a total of $66,490 in stock-based compensation, consisting of the issuance of 300,000 shares valued at $25,550 and 800,000 unissued shares valued at $40,940, including 300,000 shares valued at $11,940 owed to our former CFO. In comparison, we incurred , a total of $532,463 in stock-based compensation for the six months ended June 30, 2017, consisting of 2,000,000 shares of common stock valued at $34,600 as a bonus to our CEO, as well as an aggregate 5,000,000 shares of common stock valued at $86,500 to our directors and an aggregate 4,620,000 shares valued at $174,925 to other service providers. The Company is not now in a position to determine an approximate number of shares that the Company may issue for the preceding purpose in the remainder of 2018 and 2019.

 

As of January 25, 2019, we had ten convertible notes outstanding with a cumulative outstanding principal balance of $1,816,078. Repayment of the notes must be done at a premium to the then-outstanding balance, resulting in the need for approximately $2,000,000 in liquid capital. If, rather than repay these notes, we allow them to convert into our common stock, such conversions would be effected at a discount to the market price of our common stock, and such shares of common stock could be sold into the open market immediately following such conversion. The potential dilutive effects of these conversions at various conversion prices below our most recent market price of $0.04 per share is as follows:

 

    100%   75%   50%   25%
Potential conversion prices  $0.04   $0.03   $0.02   $0.01 
                     
Potential dilutive shares   45,401,938    60,535,917    90,803,875    181,607,750 

 

33
 

 

Off-Balance Sheet Arrangements

 

As of June 30, 2018, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations liquidity, capital expenditures or capital resources.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

The Company has had recurring net losses, an accumulated deficit, and a working capital deficiency. These conditions raise substantial doubt about its ability to continue as a going concern. Management plans to try to increase sales and improve operating results through the expansion of the distribution channels of our programming with a view to increasing advertising and sponsorship revenues. Management believes that funds generated from operations will not be sufficient to cover cash needs in the foreseeable future, and we will continue to rely on expected increased revenues and private equity to cover our cash needs, although there can be no assurance in this regard. In the event sales do not materialize at the expected rates, management would seek additional financing or would conserve cash by further reducing expenses. There can be no assurance that we will be successful in achieving these objectives, becoming profitable or continuing our business without either a temporary interruption or a permanent cessation.

 

The unaudited consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

Critical Accounting Policies

 

We have identified the following policies below as critical to our business and results of operations. Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations. For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment. Specific risks associated with these critical accounting policies are described in the following paragraphs.

 

Principles of Consolidation

 

The accompanying consolidated financial statements include the accounts of the following entities, all of which are under common control and ownership:

 

    State of         Abbreviated 
Name of Entity   Incorporation    Relationship    Reference 
                
Players Network(1)   Nevada    Parent    PNTV 
Green Leaf Farms Holdings, LLC(2)   Nevada    Subsidiary    GLFH 
Players Michigan LLC(3)   Michigan    Subsidiary    SALINAS 

  

(1)Players Network entity is in the form of a corporation.

(2)Majority-owned subsidiary formed on July 8, 2014, in which PNTV retained 84% ownership, with the remaining 16% held by key experts and advisors. An additional 1.6% was sold to an investor on December 8, 2014 and 3% was transferred back from a founding member on December 2, 2015, giving PNTV 85.4% ownership and minority interests ownership of 14.6%. The form of the entity was changed from a corporation to a limited liability company on May 9, 2017 at which time the name was changed from Green Leaf Farms Holdings, Inc. to Green Leaf Farms Holdings, LLC (“GLFH”).

(3)Players Michigan LLC is a wholly-owned subsidiary formed to acquire substantially all of the assets and liabilities of LCG Business Enterprises, LLC (“LCG”) pursuant to an Asset Purchase Agreement that closed on May 24, 2018, which was subsequently sold back to LCG on December 31, 2018. The parties to the Asset Purchase Agreement agreed to rescind the transaction on December 31, 2018.

 

The consolidated financial statements herein contain the operations of the subsidiary listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements. The parent company, PNTV and subsidiary, GLFH will be collectively referred to herein as the “Company”, “Players Network” or “PNTV”. The Company’s headquarters are located in Las Vegas, Nevada and substantially all of its customers are within the United States.

 

34
 

 

Revenue Recognition

 

Effective January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. For the comparative periods, revenue has not been adjusted and continues to be reported under ASC 605 — Revenue Recognition. Under ASC 605, revenue is recognized when the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) the performance of service has been rendered to a customer or delivery has occurred; (3) the amount of fee to be paid by a customer is fixed and determinable; and (4) the collectability of the fee is reasonably assured.

 

There was no impact on the Company’s financial statements as a result of adopting Topic 606 for the six months ended June 30, 2018 and 2017, or the twelve months ended December 31, 2017.

 

The Company recognizes revenue from its internet television platform from internally generated products and from partnered merchants when the following criteria are met: persuasive evidence of an arrangement exists; delivery has occurred; the selling price is fixed or determinable; and collectability is reasonably assured. These criteria are met when the customers purchase a product or access a web-based video, the product or web-based video has been electronically delivered to the purchaser and payment has been received. At that time, the Company’s obligations to the customer is substantially complete. The Company records the net amount it retains from the sale of items from its internet television platform after paying any agreed upon percentage of the purchase price to the featured advertising merchant excluding any applicable taxes. Revenue is recorded on a net basis because the Company is acting as an agent of the partnered merchant in the transaction. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company defers any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

 

Network revenue consists of monthly network broadcast subscription revenue, which is recognized over the period in which the subscription service is available. Broadcast television advertising revenue is recognized when advertisements are aired. Video production revenue is recognized as digital video film is completed and accepted by the customer and collection is reasonably assured.

 

Revenue from the distribution of domestic television series is recognized as earned using the following criteria:

 

  Persuasive evidence of an arrangement exists;
  The show/episode is complete, and in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery;
  The license period has begun and the customer can begin its exploitation, exhibition or sale;
  The price to the customer is fixed and determinable; and
  Collectability is reasonably assured.

 

Due to practical limitations applicable to operating relationships with On-Demand networks, the Company has not considered collectability of advertising or television license revenues to be reasonably assured, and accordingly, the Company has not recognize such revenue unless payment has been received.

 

Audio/Video content licensing revenues were recognized when the underlying royalties from the sales of the related products were earned. The Company recognized minimum revenue guarantees, if any, ratably over the term of the license or as earned royalties based on actual sales of the related products, if greater.

 

Revenue from the sale of our cannabis products is recognized by our subsidiary at the point of sale, at which time payment is received. Management estimates an allowance for sales returns.

 

35
 

 

Derivative Liability

 

The Company evaluates its convertible instruments, options, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for under ASC Topic 815, “Derivatives and Hedging.” The result of this accounting treatment is that the fair value of the derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statement of operations as other income (expense). Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Equity instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815 are reclassified to liabilities at the fair value of the instrument on the reclassification date. We analyzed the derivative financial instruments (the Convertible Note and tainted Warrant), in accordance with ASC 815. The objective is to provide guidance for determining whether an equity-linked financial instrument is indexed to an entity’s own stock. This determination is needed for a scope exception which would enable a derivative instrument to be accounted for under the accrual method. The classification of a non-derivative instrument that falls within the scope of ASC 815-40-05 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” also hinges on whether the instrument is indexed to an entity’s own stock. A non-derivative instrument that is not indexed to an entity’s own stock cannot be classified as equity and must be accounted for as a liability. There is a two-step approach in determining whether an instrument or embedded feature is indexed to an entity’s own stock. First, the instrument’s contingent exercise provisions, if any, must be evaluated, followed by an evaluation of the instrument’s settlement provisions. The Company utilized multinomial lattice models that value the derivative liability within the notes based on a probability weighted discounted cash flow model. The Company utilized the fair value standard set forth by the Financial Accounting Standards Board, defined as the amount at which the assets (or liability) could be bought (or incurred) or sold (or settled) in a current transaction between willing parties, that is, other than in a forced or liquidation sale.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risks

 

Not applicable.

 

Item 4. Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures

 

We carried out an evaluation as of June 30, 2018, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, who are one and the same, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(f) and 15d–15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

In the ordinary course of business, we are subject to lawsuits and other claims and proceedings that arise from litigation matters or regulatory audits, including with respect to convertible securities we issue from time to time to fund our operations. Such matters are subject to uncertainty and outcomes are often not predictable with assurance. Our management does not presently expect that such matters will have a material adverse effect on the Company’s financial condition or results of operations.

 

Michael Pratter

 

The legal action commenced on November 3, 2016 by Michael S. Pratter in the Eighth Judicial District Court, Clark County, Nevada, against Players Network, Green Leaf Farms Holdings, and our Chief Executive Officer in which a substantial counterclaim was filed against Mr. Pratter was settled on May 22, 2018 to the satisfaction of the parties; the terms of which are confidential.

 

36
 

 

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 discovery stages. We believe LG Funding’s claims are without merit.

 

Black Mountain and Gemini

 

We are a defendant in a case pending in the United States District Court for the Southern District of California, that was commenced by Black Mountain Equities, Inc. and Gemini Special Opportunities Fund, LP (“Plaintiffs”) in July 2018, in which Black Mountain and Gemini are seeking a declaratory judgment as to the correct exercise price under warrants held by them. Plaintiffs have obtained a default judgment against us, which we have requested be set aside. The parties are waiting for the Court to enter a decision on the matter.

 

Marc A. Manus

 

We are a defendant in a case pending in the United States District Court for the District of Maryland that was commenced by Marc A. Manus in January 2019, in which Mr. Manus seeks monetary damages and declaratory and injunctive relief due to our failure to timely file periodic reports with the Securities and Exchange Commission. We believe the complaint is without merit. This case is currently in its preliminary stages.

 

Katheryn Peterson

 

We are the plaintiff and counter defendant in a case pending in the Eighth Judicial District Court of the State of Nevada, that was commenced by us and Green Leaf on December 7, 2015 against Katherine Petersen, Petersen Family Trust and Randy Donald, in which we assert, among other things, that the defendants breached a contract with us by failing to fund an agreed upon investment. Defendant Petersen filed an answer and counterclaim asserting, among other things, that we misrepresented certain facts to induce her into investing in the Company and that we breached contractual and fiduciary duties to her, and requests declaratory relief as to ownership interest in Green Leaf. The case is currently in the discovery stages. We believe we will succeed on the merits of our case and that Defendant Petersen’s counterclaims are without merit.

 

Item 1A. Risk Factors

 

As a smaller reporting company, we are not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

The following issuances of equity securities by the Company were exempt from the registration requirements of the Securities Act of 1933 pursuant to Section 4(a)(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder, during the three-month period ended June 30, 2018:

 

Common Stock Issuances for Debt Conversions

 

On June 26, 2018, a noteholder elected to convert $50,000 of outstanding principal on the Third Group 10 Note in exchange for 1,547,508 shares of common stock. The shares were subsequently issued on July 3, 2018.

 

On May 30, 2018, the Company issued 2,591,362 shares of common stock pursuant to the conversion of $78,000, consisting of $72,400 of outstanding principal and $5,600 of unpaid interest, on the First Group 10 Note.

 

On May 30, 2018, the Company issued 2,118,721 shares of common stock pursuant to the conversion of $61,973, consisting of $58,000 of outstanding principal and $3,973 of unpaid interest, on the Second Gemini Note.

 

On May 15, 2018, the Company issued 1,786,990 shares of common stock pursuant to the conversion of $50,000 of outstanding principal on the First Group 10 Note.

 

On May 14, 2018, the Company issued 2,009,451 shares of common stock pursuant to the conversion of $53,205, consisting of $50,000 of outstanding principal and $3,205 of unpaid interest, on the Second Gemini Note.

 

On April 17, 2018, the Company issued 707,156 shares of common stock pursuant to the conversion of $24,998, consisting of $13,250 of outstanding principal and $11,748 of unpaid interest, on the First Gemini Note.

 

Exercise of Warrants

 

On June 5, 2018, the holder of the Second Black Mountain Note exercised warrants to purchase 7,954,546 shares of common stock on a cashless basis at $0.0264, resulting in the issuance of 4,389,180 shares.

 

On May 31, 2018, the holder of the First Emunah Note exercised warrants to purchase 1,000,000 shares of common stock at $0.03535 per share for proceeds of $35,350.

 

Common Stock Sales

 

On June 29, 2018, the Company sold 1,021,000 units at $0.05 per unit, consisting of 1,021,000 shares of common stock and 1,021,000 warrants exercisable at $0.075 per share over the following 3 years to an individual investor for proceeds of $51,050.

 

Item 3. Defaults Upon Senior Securities

 

Substantially all outstanding convertible notes include default provisions that the Company remain current in their filing requirements with the Securities and Exchange Commission. The Company intends to remedy these default provisions with the submission of this, and other, filings. Any other notes in default due to them being outstanding beyond their maturity date, etc. will remain in default after the filing requirements are cured.

 

37
 

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

Item 6. Exhibits

 

3.1 March 26, 1998 – Articles of Incorporation (incorporated by reference to Exhibit 2.(A)(1) of the Form 10-SB filed with the Securities and Exchange Commission by Players Network on February 7, 2000)
   
3.2 March 26, 1998 – Bylaws of the Company (incorporated by reference to Exhibit 2.(A)(2) of the Form 10-SB filed with the Securities and Exchange Commission by Players Network on February 7, 2000)
   
3.3 June 9, 1994 – Certificate of Amendment of Articles of Incorporation adopting name change to Players Network filed with the Nevada Secretary of State (incorporated by reference to Exhibit 5.1 of the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission by Players Network on September 13, 2004)
   
3.4 June 4, 2007 – Certificate of Amendment of Articles of Incorporation Increasing the Authorized Stock filed with the Nevada Secretary of State (incorporated by reference to Exhibit 3.1 of the Form 8-K filed with the Securities and Exchange Commission by Players Network on June 8, 2007)
   
3.5 May 6, 2013 – Certificate of Amendment of Articles of Incorporation Increasing the Authorized Stock filed with the Nevada Secretary of State (incorporated by reference to Exhibit 3.5 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on May 13, 2013)
   
3.6 July 8, 2014 - Articles of Incorporation for Green Leaf Farms Holdings, Inc. filed with the Nevada Secretary of State (incorporated by reference to Exhibit 3.2 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on November 18, 2014)
   
3.7 July 18, 2014 - Articles of Organization for Green Leaf Medical, LLC. filed with the Nevada Secretary of State (incorporated by reference to Exhibit 3.3 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on November 18, 2014)
   
31.1* Certification of Mark Bradley, CEO and Principal Executive and Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
   
32.1* Certification of Mark Bradley, CEO and Principal Executive and Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
   
101.INS* XBRL Instance Document
   
101.SCH* XBRL Schema Document
   
101.CAL* XBRL Calculation Linkbase Document
   
101.DEF* XBRL Definition Linkbase Document
   
101.LAB* XBRL Labels Linkbase Document
   
101.PRE* XBRL Presentation Linkbase Document

 

* Filed herewith

 

38
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Date: January 30, 2019  
   
  Players Network
   
  /s/ Mark Bradley
  Mark Bradley
  Chief Executive Officer
  (Principal Executive Officer and Principal Financial Officer)

 

39
 


 

Exhibit 31.1

 

CERTIFICATIONS

 

I, Mark Bradley, certify that:

 

1. I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2018 of Players Network;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation: and

 

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: January 30, 2019

 

/s/ Mark Bradley  
By: Mark Bradley, Chief Executive Officer  
(Principal Executive Officer and Principal Financial Officer)  

 

   
 


 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Mark Bradley, Chief Executive Officer and Principal Financial Officer of Players Network, a Nevada corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The quarterly report on Form 10-Q of Players Network. (the “Registrant”) for the quarter ended June 30, 2018 (the “Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: January 30, 2019

 

/s/ Mark Bradley  
Name: Mark Bradley  
Title: Chief Executive Officer and Principal Financial Officer  

 

   
 

 


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pntv-20180630.xsd
Attachment: XBRL SCHEMA FILE


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pntv-20180630_pre.xml
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