UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
x
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended September 30, 2014.
o
TRANSITION REPORT UNDER 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) 734-3457
(Issuer’s telephone number)
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
o
Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, 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
o
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated
filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check
one):
|
Large accelerated filer
o
|
Accelerated filer
o
|
|
|
|
|
Non-accelerated
filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
x
|
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act)
Yes
o
No
x
The number of shares outstanding of the Registrant’s Common
Stock on November 14, 2014 was 173,709,531.
PLAYERS NETWORK
FORM 10-Q
Quarterly Period Ended September 30, 2014
INDEX
|
|
Page
|
|
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
3
|
|
PART I. FINANCIAL INFORMATION
|
|
|
Item 1.
|
Financial Statements
|
4
|
|
|
Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013
|
4
|
|
|
Statements of Operations for the Three and Nine Months ended September 30, 2014 and 2013 (Unaudited)
|
5
|
|
|
Statements of Cash Flows for the Nine Months ended September 30, 2014 and 2013 (Unaudited)
|
6
|
|
|
Notes to the Condensed Consolidated financial statements (Unaudited)
|
7
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
28
|
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
37
|
|
Item 4.
|
Controls and Procedures
|
37
|
|
|
|
|
|
PART II. OTHER INFORMATION
|
|
|
Item 1.
|
Legal Proceedings
|
38
|
|
Item 1A.
|
Risk Factors
|
38
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
38
|
|
Item 3.
|
Defaults Upon Senior Securities
|
39
|
|
Item 4.
|
Mine Safety Disclosures
|
39
|
|
Item 5.
|
Other Information
|
39
|
|
Item 6.
|
Exhibits
|
40
|
|
|
|
|
|
SIGNATURES
|
41
|
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 and periodic reports filed with the Securities and Exchange Commission on Forms 10-K, 10-Q and 8-K and Proxy Statements
on Schedule 14A.
Unless the context requires otherwise, references
to “we,” “us,” “our,” and the “Company” refer specifically to Players Network.
PART I –
FINANCIAL INFORMATION
Item 1. Financial Statements
PLAYERS NETWORK
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
39,794
|
|
|
$
|
4,696
|
|
|
Deferred television costs
|
|
|
–
|
|
|
|
116,454
|
|
|
Prepaid expenses
|
|
|
3,550
|
|
|
|
7,775
|
|
|
Total current assets
|
|
|
43,344
|
|
|
|
128,925
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments, cost method
|
|
|
–
|
|
|
|
–
|
|
|
Fixed assets, net
|
|
|
77,423
|
|
|
|
62,759
|
|
|
Debt issuance costs, net
|
|
|
4,997
|
|
|
|
3,399
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
125,764
|
|
|
$
|
195,083
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' (Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
270,362
|
|
|
$
|
624,482
|
|
|
Accrued expenses
|
|
|
213,254
|
|
|
|
182,351
|
|
|
Deferred revenues
|
|
|
–
|
|
|
|
135,000
|
|
|
Deferred rent obligation
|
|
|
4,943
|
|
|
|
5,574
|
|
|
Convertible debentures, net of discounts of $472,555 and $53,579 at September 30, 2014 and
December 31, 2013, respectively
|
|
|
97,058
|
|
|
|
82,421
|
|
|
Short term debt, currently in default
|
|
|
18,750
|
|
|
|
35,000
|
|
|
Derivative liabilities
|
|
|
1,189,488
|
|
|
|
648,298
|
|
|
Total current liabilities
|
|
|
1,793,855
|
|
|
|
1,713,126
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
1,793,855
|
|
|
|
1,713,126
|
|
|
|
|
|
|
|
|
|
|
|
|
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 B convertible preferred stock, $0.001 par value, 10,873,347 shares
authorized; 4,349,339 shares issued and outstanding
|
|
|
4,349
|
|
|
|
4,349
|
|
|
Common stock, $0.001 par value, 600,000,000 shares authorized; 166,906,471
and 138,011,812 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively
|
|
|
166,906
|
|
|
|
138,012
|
|
|
Additional paid-in capital
|
|
|
24,531,680
|
|
|
|
21,905,592
|
|
|
Subscriptions payable, consisting of 2,599,700 shares at September 30, 2014
|
|
|
52,592
|
|
|
|
–
|
|
|
Accumulated (deficit)
|
|
|
(26,242,551
|
)
|
|
|
(23,567,996
|
)
|
|
|
|
|
(1,485,024
|
)
|
|
|
(1,518,043
|
)
|
|
Noncontrolling Interest
|
|
|
(183,067
|
)
|
|
|
–
|
|
|
Total Stockholders' (Deficit)
|
|
|
(1,668,091
|
)
|
|
|
(1,518,043
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' (Deficit)
|
|
$
|
125,764
|
|
|
$
|
195,083
|
|
See accompanying notes to financial statements.
PLAYERS NETWORK
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
For the Three
|
|
|
For the Nine
|
|
|
|
|
Months Ended
|
|
|
Months Ended
|
|
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
$
|
168
|
|
|
$
|
286
|
|
|
$
|
141,625
|
|
|
$
|
1,365
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs
|
|
|
77,350
|
|
|
|
4,843
|
|
|
|
314,321
|
|
|
|
82,112
|
|
|
General and administrative
|
|
|
1,214,180
|
|
|
|
40,386
|
|
|
|
1,569,047
|
|
|
|
263,646
|
|
|
Officer salaries
|
|
|
97,261
|
|
|
|
45,850
|
|
|
|
524,917
|
|
|
|
164,965
|
|
|
Salaries and wages
|
|
|
–
|
|
|
|
20,142
|
|
|
|
–
|
|
|
|
38,567
|
|
|
Depreciation and amortization
|
|
|
7,469
|
|
|
|
5,737
|
|
|
|
19,984
|
|
|
|
17,210
|
|
|
Total operating expenses
|
|
|
1,396,260
|
|
|
|
116,958
|
|
|
|
2,428,269
|
|
|
|
566,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net operating loss
|
|
|
(1,396,092
|
)
|
|
|
(116,672
|
)
|
|
|
(2,286,644
|
)
|
|
|
(565,135
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
|
|
|
–
|
|
|
|
–
|
|
|
|
343,335
|
|
|
|
–
|
|
|
Loss on debt conversions
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(1,625
|
)
|
|
Interest expense
|
|
|
(104,319
|
)
|
|
|
(80,060
|
)
|
|
|
(231,552
|
)
|
|
|
(312,720
|
)
|
|
Change in derivative liabilities
|
|
|
(245,450
|
)
|
|
|
(142,814
|
)
|
|
|
(682,761
|
)
|
|
|
(334,631
|
)
|
|
Total other income (expense)
|
|
|
(349,769
|
)
|
|
|
(222,874
|
)
|
|
|
(570,978
|
)
|
|
|
(648,976
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(1,745,861
|
)
|
|
$
|
(339,546
|
)
|
|
$
|
(2,857,622
|
)
|
|
$
|
(1,214,111
|
)
|
|
Less: Net loss attributable to the noncontrolling interest
|
|
|
183,067
|
|
|
|
–
|
|
|
|
183,067
|
|
|
|
–
|
|
|
Net loss attributable to Players Network
|
|
$
|
(1,562,794
|
)
|
|
$
|
(339,546
|
)
|
|
$
|
(2,674,555
|
)
|
|
$
|
(1,214,111
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding - basic and fully diluted
|
|
|
163,238,592
|
|
|
|
101,858,030
|
|
|
|
154,314,912
|
|
|
|
90,071,292
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) per share - basic and fully diluted
|
|
$
|
(0.01
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.01
|
)
|
See accompanying notes to financial statements.
PLAYERS NETWORK
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
For the Nine
|
|
|
|
|
Months Ended
|
|
|
|
|
September 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(2,674,555
|
)
|
|
$
|
(1,214,111
|
)
|
|
Minority interest in net loss
|
|
|
(183,067
|
)
|
|
|
–
|
|
|
Adjustments to reconcile net (loss) to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
19,984
|
|
|
|
17,210
|
|
|
Gain on debt settlements
|
|
|
(343,335
|
)
|
|
|
–
|
|
|
Change in fair market value of derivative liabilities
|
|
|
682,761
|
|
|
|
334,631
|
|
|
Amortization of convertible note payable discounts
|
|
|
164,651
|
|
|
|
279,772
|
|
|
Amortization of debt issuance costs
|
|
|
12,152
|
|
|
|
22,018
|
|
|
Stock issued for services
|
|
|
1,257,693
|
|
|
|
106,755
|
|
|
Stock issued for compensation, related party
|
|
|
158,115
|
|
|
|
144,787
|
|
|
Options and warrants granted for services
|
|
|
40,150
|
|
|
|
18,413
|
|
|
Options and warrants granted for services, related party
|
|
|
217,971
|
|
|
|
23,937
|
|
|
Decrease (increase) in assets:
|
|
|
|
|
|
|
|
|
|
Deferred television costs
|
|
|
116,454
|
|
|
|
–
|
|
|
Prepaid expenses
|
|
|
4,225
|
|
|
|
(1,685
|
)
|
|
Increase (decrease) in liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
(10,785
|
)
|
|
|
37,143
|
|
|
Accrued expenses
|
|
|
41,463
|
|
|
|
35,995
|
|
|
Deferred revenues
|
|
|
(135,000
|
)
|
|
|
–
|
|
|
Deferred rent obligation
|
|
|
(631
|
)
|
|
|
–
|
|
|
Net cash used in operating activities
|
|
|
(631,754
|
)
|
|
|
(195,135
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
Purchase of fixed assets
|
|
|
(34,648
|
)
|
|
|
–
|
|
|
Net cash used in investing activities
|
|
|
(34,648
|
)
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
Proceeds from convertible debentures
|
|
|
554,000
|
|
|
|
223,000
|
|
|
Repayments on convertible debentures
|
|
|
(63,500
|
)
|
|
|
–
|
|
|
Repayment of long term debt
|
|
|
(16,250
|
)
|
|
|
(40,000
|
)
|
|
Payments on debt issuance costs
|
|
|
(13,750
|
)
|
|
|
(10,000
|
)
|
|
Proceeds from sale of common stock of subsidiary
|
|
|
60,000
|
|
|
|
–
|
|
|
Proceeds from sale of common stock
|
|
|
181,000
|
|
|
|
21,000
|
|
|
Net cash provided by financing activities
|
|
|
701,500
|
|
|
|
194,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
|
35,098
|
|
|
|
(1,135
|
)
|
|
Cash - beginning
|
|
|
4,696
|
|
|
|
2,076
|
|
|
Cash - ending
|
|
$
|
39,794
|
|
|
$
|
941
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures:
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
43,466
|
|
|
$
|
751
|
|
|
Income taxes paid
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
Value of debt discounts
|
|
$
|
544,627
|
|
|
$
|
194,407
|
|
|
Value of shares issued for conversion of debt
|
|
$
|
106,447
|
|
|
$
|
189,853
|
|
|
Value of derivative adjustment due to debt conversions
|
|
$
|
686,198
|
|
|
$
|
294,666
|
|
See accompanying notes to financial statements.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
Note 1 – Basis of Presentation
The interim condensed consolidated financial
statements 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. 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, 2013 and notes thereto included
in the Company's 10-K annual report. The Company follows the same accounting policies in the preparation of interim reports.
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.
Cost Method of Accounting for Investments
Investee companies not accounted for under
the consolidation or the equity method of accounting are accounted for under the cost method of accounting. Under this method,
the Company’s share of the earnings or losses of such Investee companies is not included in the Balance Sheet or Statement
of Operations. However, impairment charges are recognized in the Statement of Operations. If circumstances suggest that the value
of the Investee Company has subsequently recovered, such recovery is not recorded. Impairment analysis on our investments which
are accounted for on the cost method of accounting resulted in complete impairment at December 31, 2013.
Revenue
Recognition
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.
|
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
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.
Deferred revenues consist of the following
at September 30, 2014 and December 31, 2013:
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Deferred revenues on television pilot episodes
|
|
$
|
–
|
|
|
$
|
135,000
|
|
|
Deferred revenues on audio/video content licensing
|
|
|
–
|
|
|
|
–
|
|
|
Total deferred revenues
|
|
$
|
–
|
|
|
$
|
135,000
|
|
Deferred Rent Obligation
The Company has entered into operating lease
agreements for its corporate office 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.
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.
Deferred
Television Costs
Deferred television costs as of September 30,
2014, included direct production and development costs stated at the lower of cost or net realizable value based on anticipated
revenue. Production overhead is not included as the Company outsources its production costs to third party vendors. Capitalized
television production costs for each pilot episode are to be expensed as revenues are recognized upon delivery and acceptance of
the completed pilot episodes using the individual-film-forecast-computation method for each television show produced. The Company
recognized $95,000 of revenues on November 1, 2012 with the completion of the first of three pilot episodes; and accordingly, recognized
$75,617 of expenses related to the development of the pilot. The remaining $135,000 of revenues, and corresponding $116,454 of
deferred television costs, was recognized on June 30, 2014 upon completion and delivery of the two final pilot episodes.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
Deferred television costs consist of the following
at September 30, 2014 and December 31, 2013:
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Development and pre-production costs
|
|
$
|
–
|
|
|
$
|
–
|
|
|
In-production
|
|
|
–
|
|
|
|
68,264
|
|
|
Post production
|
|
|
–
|
|
|
|
48,190
|
|
|
Total deferred television costs
|
|
$
|
–
|
|
|
$
|
116,454
|
|
Due to practical limitations applicable to
monetizing our developed content over On-Demand networks, the Company has not considered collectability of advertising or television
license revenues to be reasonably assured, and accordingly, the Company has expensed production costs related to the development
of our On-Demand and internet-based content as incurred.
Recent Accounting Pronouncements
In June 2014, the Financial Accounting Standards
Board (FASB) issued Accounting Standards Update (ASU) No. 2014-12,
Compensation – Stock Compensation (Topic 718): Accounting
for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service
Period
. The new guidance requires that share-based compensation that require a specific performance target to be achieved in
order for employees to become eligible to vest in the awards and that could be achieved after an employee completes the requisite
service period be treated as a performance condition. As such, the performance target should not be reflected in estimating the
grant-date fair value of the award. Compensation costs should be recognized in the period in which it becomes probable that the
performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite
service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite
service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service
period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number
of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service
period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target
is achieved. This new guidance is effective for fiscal years and interim periods within those years beginning after December 15,
2015. Early adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted
or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the
beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The
adoption of ASU 2014-12 is not expected to have a material impact on our financial position or results of operations.
In June 2014, the FASB issued ASU No. 2014-10:
Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable
Interest Entities Guidance in Topic 810, Consolidation
, to improve financial reporting by reducing the cost and complexity
associated with the incremental reporting requirements of development stage entities. The amendments in this update remove all
incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting
by eliminating the cost and complexity associated with providing that information. The amendments in this Update also eliminate
an exception provided to development stage entities in Topic 810, Consolidation, for determining whether an entity is a variable
interest entity on the basis of the amount of investment equity that is at risk. The amendments to eliminate that exception simplify
U.S. GAAP by reducing avoidable complexity in existing accounting literature and improve the relevance of information provided
to financial statement users by requiring the application of the same consolidation guidance by all reporting entities. The elimination
of the exception may change the consolidation analysis, consolidation decision, and disclosure requirements for a reporting entity
that has an interest in an entity in the development stage. The amendments related to the elimination of inception-to-date information
and the other remaining disclosure requirements of Topic 915 should be applied retrospectively except for the clarification to
Topic 275, which shall be applied prospectively. For public companies, those amendments are effective for annual reporting periods
beginning after December 15, 2014, and interim periods therein. Early adoption is permitted. The adoption of ASU 2014-10 is not
expected to have a material impact on our financial position or results of operations.
In July 2013, the FASB issued ASU No. 2013-11:
Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward
Exists.
The new guidance requires that unrecognized tax benefits be presented on a net basis with the deferred tax assets for
such carryforwards. This new guidance is effective for fiscal years and interim periods within those years beginning after December
15, 2013. The adoption of ASU 2013-11 is not expected to have a material impact on our financial position or results of operations.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
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 ($26,242,551),
and as of September 30, 2014, the Company’s current liabilities exceeded its current assets by $1,750,511 and its total liabilities
exceeded its total assets by $1,668,091. 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.
Note 3 – Related Party
Officers
On August 31, 2014, the Company granted a $50,000
bonus to the Company’s CEO.
On August 18, 2014, the Company issued 200,000
shares of restricted common stock to its President of Programming as a compensation bonus. The total fair value of the common stock
was $3,860 based on the closing price of the Company’s common stock on the date of grant.
On August 14, 2014, the
Company’s subsidiary issued a total of 16% of its equity in the subsidiary in exchange for services provided related to
the operations of the subsidiary. The total fair value of the common stock was $960,000 based on the fair value of stock sold
to an independent third party. A total of 4% of these shares were issued to officers of Players Network.
On July 19, 2014, a total of 1,500,000 options
held by the Company’s CEO expired.
On April 11, 2014, the Company issued 1,250,000
shares of restricted common stock to its CEO as a compensation bonus. The total fair value of the common stock was $27,500 based
on the closing price of the Company’s common stock on the date of grant.
On February 20, 2014, the Company issued 4,000,000
shares of common stock to its CEO as a compensation bonus. The total fair value of the common stock was $120,000 based on the closing
price of the Company’s common stock on the date of grant.
On February 20, 2014, the Company’s Board
of Directors granted 8,000,000 fully vested cashless common stock options to the Company’s CEO as compensation for services
provided. The options are exercisable until February 20, 2018 at an exercise price of $0.04 per share. The estimated value using
the Black-Scholes Pricing Model, based on a volatility rate of 248% and a call option value of $0.0272, was $217,971.
Officer compensation expense was $524,917 and
$164,965 at September 30, 2014 and 2013, respectively. The balance owed was $36,105 and $62,374 at September 30, 2014 and 2013,
respectively.
Board of Directors
On August 18, 2014, the Company issued 350,000
shares of restricted common stock to one of its Directors as a compensation bonus. The total fair value of the common stock was
$6,755 based on the closing price of the Company’s common stock on the date of grant.
On March 6, 2014, the Company cancelled 750,000
shares issued during 2013 for non-performance of services commensurate with the departure of one of the Company’s former
employees.
Note 4 – 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.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
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.
The following schedule summarizes the valuation
of financial instruments at fair value on a non-recurring basis in the balance sheets as of September 30, 2014 and December 31,
2013, respectively:
|
|
|
Fair Value Measurements at September 30, 2014
|
|
|
|
|
Level 1
|
|
|
Level
2
|
|
|
Level 3
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
39,794
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Total assets
|
|
|
39,794
|
|
|
|
–
|
|
|
|
–
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible debentures, net of discounts of $472,555
|
|
|
–
|
|
|
|
–
|
|
|
|
97,058
|
|
|
Short term debt
|
|
|
–
|
|
|
|
18,750
|
|
|
|
–
|
|
|
Derivative liability
|
|
|
–
|
|
|
|
–
|
|
|
|
1,189,488
|
|
|
Total liabilities
|
|
|
–
|
|
|
|
18,750
|
|
|
|
1,286,546
|
|
|
|
|
$
|
39,794
|
|
|
$
|
(18,750
|
)
|
|
$
|
(1,286,546
|
)
|
|
|
|
Fair Value Measurements at December 31, 2013
|
|
|
|
|
Level
1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
4,696
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
Total assets
|
|
|
4,696
|
|
|
|
–
|
|
|
|
–
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible debentures, net of discounts of $53,579
|
|
|
–
|
|
|
|
–
|
|
|
|
82,421
|
|
|
Short term debt
|
|
|
–
|
|
|
|
35,000
|
|
|
|
–
|
|
|
Derivative liability
|
|
|
–
|
|
|
|
–
|
|
|
|
648,298
|
|
|
Total liabilities
|
|
|
–
|
|
|
|
35,000
|
|
|
|
730,719
|
|
|
|
|
$
|
4,696
|
|
|
$
|
(35,000
|
)
|
|
$
|
(730,719
|
)
|
There were no transfers of financial
assets or liabilities between Level 1 and Level 2 inputs for the nine months ended September 30, 2014 and the year ended
December 31, 2013.
Level 2 liabilities consist of a short term,
unsecured, promissory note. No fair value adjustment was necessary during the nine months ended September 30, 2014 and the
year ended December 31, 2013.
Level 3 liabilities consist of a total of
$569,613 and $136,000 of convertible debentures and the related derivative liability as of September 30, 2014 and
December 31, 2013, respectively. A discount of $472,555 and $53,579 was recognized at September 30, 2014 and
December 31,2013, respectively.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
Note 5 – Subsidiary Formation
On July 8, 2014, we formed a subsidiary, Green
Leaf Farms Holdings, Inc. (“GLFH”), in which we retained 83% ownership, with the remaining 17% held by key experts
and advisors. The subsidiary has been formed as a holding company to potentially own additional subsidiaries that may operate medical
marijuana related businesses. These additional subsidiaries have yet to be formed, and, or, acquired, with the exception of Green
Leaf Medical, LLC (“GLML”), which was formed on July 18, 2014 and has no activity to date. We have applied for a Medical
Marijuana Dispensary special use permit with the City of Las Vegas, and a Cultivation and Processing special use permits in North
Las Vegas and a license for all permits in the State of Nevada, and have currently been granted the two special use permits in
North Las Vegas, however there can be no assurance we will be able to conduct these operations. As such, there is a risk that we
may not be able to expand our operations into this field as intended.
Pursuant to ASC-805-50-45, “Transactions
Between Entities Under Common Control”, the presentation of the financial statements pertain to financial statements of
all consolidating subsidiaries for the period from January 1, 2014 through September 30, 2014.
Note 6 – Investments
On May 11, 2011, we acquired a 10% interest
in ICI, and a 10% interest in ICB, Nevada entertainment companies that develop and operate a variety of entertainment shows in
the United States, primarily in casinos within Las Vegas, NV and Atlantic City, NJ. We acquired the interests in exchange for $25,499
that was in turn spent on the development of a promotional video that was to be distributed on our website. In addition, we agreed
to pay a license fee of 20% of the adjusted gross revenues that we were to earn from the distribution and sales related to the
promotional video content. No such revenues have been earned to date.
On November 1, 2012, the Company elected to
convert a note receivable of $22,477, consisting of $20,000 of principal and $2,477 of interest receivable in exchange for an additional
7.5% ownership interest in ICI, and 7.5% interest in ICB. The conversion resulted in a total ownership of 17.5% in both entities
as of November 1, 2012. In 2011, both the investments and the note receivable had been written off as impaired due to valuation
and collectability uncertainties, as a result the 17.5% investment in both entities are not on the balance sheets as of September
30, 2014 and December 31, 2013, respectively.
Note 7 – Fixed Assets
Fixed assets consist of the following at September
30, 2014 and December 31, 2013, respectively:
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Office equipment
|
|
$
|
22,546
|
|
|
$
|
12,898
|
|
|
Website development costs
|
|
|
124,880
|
|
|
|
99,880
|
|
|
Furniture and fixtures
|
|
|
2,730
|
|
|
|
2,730
|
|
|
Less accumulated depreciation
|
|
|
(72,733
|
)
|
|
|
(52,749
|
)
|
|
|
|
$
|
77,423
|
|
|
$
|
62,759
|
|
Depreciation and amortization expense totaled
$19,984 and $17,210 for the nine months ended September 30, 2014 and 2013, respectively.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
Note 8 – Accrued Expenses
As of September 30, 2014 and December 31, 2013
accrued expenses included the following:
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Customer Deposits
|
|
$
|
13,500
|
|
|
$
|
13,500
|
|
|
Accrued Payroll, Officers
|
|
|
36,105
|
|
|
|
19,020
|
|
|
Accrued Payroll and Payroll Taxes
|
|
|
135,234
|
|
|
|
135,234
|
|
|
Accrued Interest
|
|
|
28,415
|
|
|
|
14,597
|
|
|
|
|
$
|
213,254
|
|
|
$
|
182,351
|
|
Note 9 – Convertible Debentures
Convertible debentures consist of the following
at September 30, 2014 and December 31, 2013, respectively:
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
On September 22, 2014, the Company received net proceeds of $35,000 in exchange for an unsecured convertible promissory note, bearing interest at twelve percent (12%) with a face value of $38,500 (“Second Vista Note”), which matures on June 1, 2016, as part of a larger financing agreement that enables the Company to draw total proceeds of $225,000 at the discretion of the lender. The financing carries a total face value of $250,000 and a $25,000 Original Issue Discount. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 120% of the outstanding balance at the time of default. The promissory note carries a $3,500 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 35 million shares of common stock for potential conversions as depicted in the First Vista Note.
|
|
$
|
38,500
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
On August 19, 2014, the Company received net proceeds of $40,000 in exchange for an unsecured convertible promissory note, bearing interest at 8% annually, with a face value of $80,000 (“Second WHC Note”), which matures on August 19, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty seven and a half percent (57.5%) of the average of the two (2) lowest closing bid prices of the Company’s common stock over the ten (10) trading days immediately preceding the conversion request date. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 150% of the outstanding balance at the time of default, and the interest rate increases to twenty two percent (22%) per annum. The promissory note carries a $5,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 12 million shares of common stock for potential conversions.
|
|
|
45,000
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
On July 15, 2014, the Company received net proceeds of $35,000 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $37,500 (“Third LG Note”), which matures on March 15, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the lowest trading price of the Company’s common stock for the twelve (12) trading days prior to, and including, the conversion date if received after 4PM Eastern Standard Time. The note also carries an additional “Back-end Note” with the same terms as the original note that enables the lender to lend the Company another $37,500, less $1,750 of debt issuance costs and $3,500 in due diligence fees, with a holding period that tacks to the original note for purposes of Rule 144 of the Securities Exchange Act of 1934. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event the Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 55% instead of 60% while that “Chill” is in effect. The Company paid total debt issuance cost of $2,500 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 9,513,000 shares of common stock for potential conversions.
|
|
|
37,500
|
|
|
|
–
|
|
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
On June 13, 2014, the Company received net proceeds of $75,000 in exchange for an unsecured convertible promissory note, bearing interest at 8% annually, with a face value of $80,000 (“First WHC Note”), which matures on June 13, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty two and a half percent (62.5%) of the average of the two (2) lowest closing bid prices of the Company’s common stock over the ten (10) trading days immediately preceding the conversion request date. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 150% of the outstanding balance at the time of default, and the interest rate increases to twenty two percent (22%) per annum. The promissory note carries a $5,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. In addition, the Company issued warrants to purchase 1.5 million shares of the Company’s common stock at a strike price of $0.05 per share exercisable over three years from the date of issuance. The Company must at all times reserve at least 24 million shares of common stock for potential conversions.
|
|
|
80,000
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
On June 2, 2014, the Company received net proceeds of $50,000 in exchange for an unsecured convertible promissory note, bearing interest at twelve percent (12%) with a face value of $55,000 (“First Vista Note”), which matures on June 1, 2016, as part of a larger financing agreement that enables the Company to draw total proceeds of $225,000 at the discretion of the lender. The financing carries a total face value of $250,000 and a $25,000 Original Issue Discount. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 120% of the outstanding balance at the time of default. The promissory note carries a $5,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 35 million shares of common stock for potential conversions.
|
|
|
55,000
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
On May 20, 2014, the Company received net proceeds of $100,000 in exchange for an unsecured convertible promissory note, bearing interest at 10% annually, with a face value of $113,000 (“First Typenex Note”), which matures on May 19, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the three (3) lowest (“Trading Prices”), whereby Trading Price is defined as the volume weighted average price (“VWAP”) of the Company’s common stock over the fifteen (15) trading days prior to the conversion request date. If the arithmetic average of the three (3) lowest Trading Prices is less than $0.01, then the Conversion Factor will be reduced to 60%. The debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. In the event of default, the outstanding balance immediately prior to the occurrence of the event of default shall immediately increase to 125% of the outstanding balance at the time of default, and the interest rate increases to twenty two percent (22%) per annum. The promissory note carries a $10,000 Original Issue Discount, and loan origination costs of $3,000, that are 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 three times the number of shares equal to the outstanding balance divided by the conversion price, but in any event not less than 22 million shares of common stock for potential conversions.
|
|
|
113,000
|
|
|
|
–
|
|
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
On May 9, 2014, the Company received $50,000 in exchange for an unsecured convertible promissory note that carries a 12% interest rate (“First Group 10 Note”), which matures on May 8, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to the lesser of (a) fifty eight percent (58%) of the average of the two lowest closing bid prices of the Company’s common stock for the seventeen (17) trading days prior to the conversion notice date, or (b) four and a half cents ($0.045) per share. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The promissory note carries a $2,500 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 20 million shares of common stock for potential conversions.
|
|
|
50,000
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
On April 24, 2014, the Company received net proceeds of $33,250 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $35,000 (“Second LG Note”), which matures on April 11, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty five percent (55%) of the average of the lowest closing bid prices of the Company’s common stock for the twelve (12) trading days prior to, and including, the conversion date. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid total debt issuance cost of $1,750 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 5 million shares of common stock for potential conversions. On October 31, 2014, the note holder sent demand for repayment. The note is currently in default.
|
|
|
35,000
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
On April 17, 2014, the Company received net proceeds of $40,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $44,000 (“Fourth JMJ Note”), which matures on April 16, 2015, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to fifty five percent (55%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date, as amended within the original promissory note on April 10, 2014. The note carries a one-time twelve percent (12%) of principal interest charge in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The promissory note carries a $4,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 60 million shares of common stock for potential conversions.
|
|
|
44,000
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
On February 20, 2014, the Company received net proceeds of $40,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $44,000 (“Third JMJ Note”), which matures on February 19, 2015, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date, as amended within the original promissory note on April 10, 2014. An additional 5% discount applies on conversion shares that are ineligible for deposit into the DTC system and are only eligible for Xclearing deposit. The note carries a one-time twelve percent (12%) of principal interest charge if the note isn’t repaid within the first ninety (90) days, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The promissory note carries a $4,000 Original Issue Discount that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The Company must at all times reserve at least 60 million shares of common stock for potential conversions, as noted in the First JMJ Note disclosure.
|
|
|
44,000
|
|
|
|
–
|
|
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
On January 8, 2014, the Company received net proceeds of $21,750 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $25,500 (“First GEL Note”), which matures on October 8, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the average of the two (2) lowest closing bid prices of the Company’s common stock for the ten (10) trading days prior to the conversion date. The note carries an additional “Back-end Note” with the same terms as the original note that enables the lender to lend the Company another $25,500, less $3,250 of debt issuance costs, with a holding period that tacks to the original note for purposes of Rule 144 of the Securities Exchange Act of 1934. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid total debt issuance cost of $3,250 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. On various dates between August 13, 2014 and September 23, 2014, the note holder elected to convert a total of $18,379 of principal in exchange for 1,891,598 shares of common stock. The Company must at all times reserve at least 6 million shares of common stock for potential conversions.
|
|
|
7,121
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
On January 8, 2014, the Company received net proceeds of $21,750 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value of $25,500 (“First LG Note”), which matures on October 8, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the average of the two (2) lowest closing bid prices of the Company’s common stock for the ten (10) trading days prior to the conversion date. The note carries an additional “Back-end Note” with the same terms as the original note that enables the lender to lend the Company another $25,500, less $3,250 of debt issuance costs, with a holding period that tacks to the original note for purposes of Rule 144 of the Securities Exchange Act of 1934. The note carries an eighteen percent (18%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid total debt issuance cost of $3,250 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 6 million shares of common stock for potential conversions. On July 7, 2014, the Company repaid $34,736 on the First LG Note, consisting of $25,500 of principal and $9,236 of interest and prepayment penalties. The convertible promissory note was subsequently cancelled as paid in full. The principal and interest was subsequently repaid in full prior to maturity with a cash payment of $34,736, consisting of $25,500 of principal and $9,236 of interest and prepayment penalties, on July 2, 2014 out of the proceeds from the June 26, 2014 convertible debt financing received from WHC Capital, LLC (“First WHC Note”).
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured $12,500 convertible promissory note originated on October 28, 2013, carries an 8% interest rate (“Ninth Asher Note”), and matures on July 30, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to thirty one percent (31%) of the average of the lowest closing bid prices of the Company’s common stock for the ten (10) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid a debt issuance cost of $1,000 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The principal and interest was subsequently repaid in full prior to maturity with a cash payment of $19,240, consisting of $12,500 of principal and $6,740 of interest and prepayment penalties, on May 2, 2014 out of the proceeds from the April 24, 2014 convertible debt financing received from LG Capital Funding, LLC (“Second LG Capital Note”).
|
|
|
–
|
|
|
|
12,500
|
|
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Unsecured $25,500 convertible promissory note originated on July 30, 2013, carries an 8% interest rate (“Eighth Asher Note”), and matures on May 1, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to thirty five percent (35%) of the average of the lowest closing bid prices of the Company’s common stock for the ninety (90) trading days prior to the conversion date. The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company paid a debt issuance cost of $2,500 that is being amortized over the life of the loan on the straight line method, which approximates the effective interest method. The principal and interest was repaid in full prior to maturity with a cash payment of $39,239, consisting of $25,500 of principal and $13,739 of interest and prepayment penalties, on January 31, 2014 out of the proceeds from the January 8, 2014 convertible debt financing received from GEL Properties, LLC (“First GEL Note”).
|
|
|
–
|
|
|
|
25,500
|
|
|
|
|
|
|
|
|
|
|
|
|
On June 4, 2013, the Company received net proceeds of $25,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $27,500 (“Second JMJ Note”), which matures on June 3, 2014, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date. An additional 5% discount applies on conversion shares that are ineligible for deposit into the DTC system and are only eligible for Xclearing deposit. The note carries a one-time twelve percent (12%) of principal interest charge if the note isn’t repaid within the first ninety (90) days, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The Company amortized the $2,500 original issuance discount over the life of the loan on the straight line method, which approximated the effective interest method. On May 12, 2014, the note holder elected to convert a total of $10,308, consisting of $7,008 of principal and $3,300 of accrued interest, in exchange for 805,058 shares of common stock. The Company must at all times reserve at least 60 million shares of common stock for potential conversions, as noted in the First JMJ Note disclosure.
|
|
|
20,492
|
|
|
|
27,500
|
|
|
|
|
|
|
|
|
|
|
|
|
On March 13, 2013, the Company received net proceeds of $55,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $60,500 (“First JMJ Note”), which matured on March 12, 2014, as part of a larger financing agreement that enables the Company to draw total proceeds of $400,000 at the discretion of the lender. On November 27, 2014, an additional $10,000 was added to the principal balance of the note as liquidated damages related to a Standstill Agreement whereby JMJ agreed to refrain from exercising any conversions until February 22, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the lowest trading price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date. An additional 5% discount applies on conversion shares that are ineligible for deposit into the DTC system and are only eligible for Xclearing deposit. The note carries a one-time twelve percent (12%) of principal interest charge if the note isn’t repaid within the first ninety (90) days, and the debt holder is limited to owning 4.99% of the Company’s issued and outstanding shares. The principal interest charge of $7,260 is being amortized on the straight line method, which approximates the effective interest method, over the life of the loan. The Company recognized $1,881 and $-0- of interest expense related to these debt issuance costs during the three months ended March 31, 2014 and 2013, respectively. The Company amortized the $5,500 original issuance discount over the life of the loan on the straight line method, which approximated the effective interest method. The note holder elected to convert a total of $13,000 of principal in exchange for 1,000,000 shares of common stock on February 24, 2014, and $26,000 of principal in exchange for 2,000,000 shares of common stock on March 14, 2014. Another $27,300 of principal was subsequently converted in exchange for 2,100,000 shares on April 22, 2014, and the final conversion of $11,460 was executed on May 12, 2014, consisting of $4,200 of principal and $7,260 of accrued interest in exchange for 894,942 shares of common stock. The conversions were in accordance with the terms of the note; therefore no gain or loss has been recognized. The Company must at all times reserve at least 60 million shares of common stock for potential conversions.
|
|
$
|
–
|
|
|
$
|
70,500
|
|
|
|
|
|
|
|
|
|
|
|
|
Total convertible debentures
|
|
|
569,613
|
|
|
|
136,000
|
|
|
Less: unamortized debt discounts
|
|
|
(472,555
|
)
|
|
|
(53,579
|
)
|
|
Convertible debentures
|
|
$
|
97,058
|
|
|
$
|
82,421
|
|
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 $583,627 and $206,858 for the variable conversion features of the convertible
debts incurred during the nine months ended September 30, 2014 and the year ended December 31, 2013, respectively. The discounts,
including Original Issue Discounts of $39,000 and $8,500 during the nine months ended September 30, 2014 and the year ended December
31, 2013, respectively, are being amortized to interest expense over the term of the debentures using the effective interest method.
The Company recorded $164,651 and $279,272 of interest expense pursuant to the amortization of the note discounts during the nine
months ended September 30, 2014 and 2013, respectively.
In addition, a total of $13,750 and $11,000
of loan origination costs were incurred pursuant to the closings of convertible debentures during the nine months ended September
30, 2014, and the year ended December 31, 2013, respectively, which are being amortized to interest expense over the term of the
debentures using the straight line method, which approximates the effective interest method. The Company recorded $12,152 and $22,018
of interest expense pursuant to the amortization of the loan origination costs during the nine months ended September 30, 2014
and 2013, 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 $53,154 and $15,615 for the nine months ended September
30, 2014 and 2013, respectively related to convertible debts.
Note 10 – Investment Agreement with
Dutchess Opportunity Fund II, LP
On November 7, 2012, the Company entered into
an Investment Agreement (“Investment Agreement”) with Dutchess Opportunity Fund, II, LP, a Delaware limited partnership
(“Dutchess”), as amended on July 5, 2013. Pursuant to the terms of the Investment Agreement, Dutchess committed to
purchase, in a series of purchase transactions (“Puts”), up to eight million five hundred thousand ($8,500,000) dollars
of the Company’s common stock over a period of up to thirty-six (36) months from the effective date of the registration statement
covering the Equity Line Financing with Dutchess, which was September 26, 2013.
The amount that the Company is entitled to
request with each Put delivered to Dutchess is equal to, at its option, either (i) two hundred (200%) percent of the average daily
volume (U.S. market only) of its common stock for three (3) trading days prior to the applicable Put Notice Date, multiplied by
the average of the three (3) daily closing prices immediately preceding the Put Date or (ii) fifty thousand ($50,000) dollars.
The purchase price to be paid by Dutchess for the shares of the Company’s common stock covered by each Put will be equal
to ninety-five (95%) percent of the lowest daily volume weighted average price (“VWAP”) of the Company’s common
stock during the period beginning on the Put Notice Date and ending on and including the date that is five (5) trading days after
such Put Notice Date (“Pricing Period”). The “Put Notice Date” is the trading day immediately following
the day on which Dutchess receives a Put Notice from the Company.
For each Put Notice submitted to Dutchess under
the Investment Agreement, there is a Suspension Price of $0.01 for that Put. In the event the common stock falls below the Suspension
Price, the put shall be temporarily suspended. The Put shall resume at such time as the common stock is above the Suspension Price,
provided the dates for the Pricing Period for that particular put are still valid. In the event the Pricing Period has been complete,
any shares above the Suspension Price due to Dutchess shall be sold to Dutchess by us at the volume weighted average price under
the terms of the Investment Agreement.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
In conjunction with the Investment Agreement,
the Company also entered into a registration rights agreement (“Registration Rights Agreement”) with Dutchess. Pursuant
to the Registration Rights Agreement, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission
(“SEC”) on September 26, 2013 covering 22,750,000 shares of the Company’s common stock underlying a portion of
the Investment Agreement. In addition, during the term of the Registration Rights Agreement, the Company is obligated to maintain
the effectiveness of this registration statement, as well as any subsequent registration statements that may be associated with
the Investment Agreement and/or Registration Rights Agreement.
As of the filing date of this report, the Company
had not sold any shares to Dutchess nor received any financing from Dutchess.
Note 11 – Short Term Debt
Short-term debt consists of the following at
September 30, 2014 and December 31, 2013, respectively:
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
4% unsecured debenture, due June 7, 2012. Currently in default. On June 2, 2014, the Company and the lender entered into a settlement agreement whereby the note will be considered satisfactorily paid in full with the successful payment of four equal payments of $8,125 made in quarterly periods through December 22, 2014, of which the first two payments were delivered on June 27, 2014 and August 26, 2014, respectively, and two payments remain.
|
|
$
|
18,750
|
|
|
$
|
35,000
|
|
Accrued interest on the above promissory note
totaled $3,832 and $2,892 at September 30, 2014 and December 31, 2013, respectively.
The following presents components of interest
expense by instrument type at September 30, 2014 and 2013, respectively:
|
|
|
September 30,
|
|
|
September 30,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Interest on convertible debentures
|
|
$
|
53,154
|
|
|
$
|
15,615
|
|
|
Amortization of discount on convertible debentures
|
|
|
164,651
|
|
|
|
273,251
|
|
|
Amortization of debt issuance costs
|
|
|
12,152
|
|
|
|
22,018
|
|
|
Interest on short term debt
|
|
|
940
|
|
|
|
1,050
|
|
|
Accounts payable related finance charges
|
|
|
655
|
|
|
|
786
|
|
|
|
|
$
|
231,552
|
|
|
$
|
312,720
|
|
Note 12 – Derivative Liabilities
As discussed in Note 9 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 $1,189,488 and $648,298 at September 30, 2014 and December 31, 2013,
respectively. The change in fair value of the derivative liabilities resulted in a loss of $682,761 and $334,631 for the nine months
ended September 30, 2014 and 2013, respectively, which has been reported as other income (expense) in the statements of operations.
The loss of $682,761 for the nine months ended September 30, 2014 consisted of a loss of $435,387 due to the value in excess of
the face value of the convertible notes, a gain of $26,634 attributable to the fair value of preferred stock, a gain of $260,644
attributable to the fair value of warrants and a net loss in market value of $534,652 on the convertible notes. The loss of $334,631
for the nine months ended September 30, 2013 consisted of a loss of $125,158 due to the value in excess of the face value of the
convertible notes, a gain of ($13,348) attributable to the fair value of preferred stock, a gain of ($22,191) attributable to the
fair value of warrants and a net loss in market value of $245,012 on the convertible notes.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
The following presents the derivative liability
value by instrument type at September 30, 2014 and December 31, 2013, respectively:
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Convertible debentures
|
|
$
|
1,049,743
|
|
|
$
|
221,275
|
|
|
Common stock warrants
|
|
|
134,500
|
|
|
|
395,144
|
|
|
Convertible preferred stock
|
|
|
5,245
|
|
|
|
31,879
|
|
|
|
|
$
|
1,189,488
|
|
|
$
|
648,298
|
|
The following is a summary of changes in the
fair market value of the derivative liability during the nine months ended September 30, 2014 and the year ended December
31, 2013, respectively:
|
|
Derivative
|
|
|
|
Liability
|
|
|
|
Total
|
|
|
Balance, December 31, 2012
|
$
|
356,608
|
|
|
Increase in derivative value due to issuances of convertible promissory notes
|
|
351,721
|
|
|
Increase in derivative value attributable to tainted warrants
|
|
122,062
|
|
|
Change in fair market value of derivative liabilities due to the mark to market adjustment
|
|
305,512
|
|
|
Debt conversions
|
|
(487,605)
|
|
|
Balance, December 31, 2013
|
$
|
648,298
|
|
|
Increase in derivative value due to issuances of convertible promissory notes
|
|
980,014
|
|
|
Increase in derivative value attributable to issuance of warrants
|
|
20,633
|
|
|
Change in fair market value of derivative liabilities due to the mark to market adjustment
|
|
226,741
|
|
|
Debt conversions
|
|
(686,198)
|
|
|
Balance, September 30, 2014
|
$
|
1,189,488
|
|
Key inputs and assumptions
used to value the convertible debentures and warrants issued during the nine months ended September 30, 2014 and the
year ended December 31, 2013:
|
|
·
|
Stock prices
on all measurement dates were based on the fair market value and would fluctuate with projected volatility.
|
|
|
·
|
The warrant exercise prices ranged from
$0.04 to $0.41, 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 holders would automatically convert
the note at the maximum of 3 times the conversion price if the Company was not in default.
|
|
|
·
|
The monthly trading volume would reflect
historical averages and would increase at 1% per month.
|
|
|
·
|
The Company would redeem the notes based
on availability of alternative financing, increasing 2% monthly to a maximum of 10%.
|
|
|
·
|
The holder would automatically convert
the note at maturity if the registration was effective and the Company was not in default.
|
|
|
·
|
The computed volatility was projected
based on historical volatility.
|
Note 13 – Changes in Stockholders’
Equity (Deficit)
Convertible Preferred
Stock
The Board, from the authorized capital of 25,000,000
preferred shares, has authorized and designated 2,000,000 shares of Series A preferred stock (“Series A”) and 10,873,347
shares of Series B preferred stock (“Series B”), of which 2,000,000 shares and 4,349,339 shares are issued and outstanding,
respectively. A total of 12,126,653 shares remain undesignated.
The Series A shares carry 25:1 preferential
voting rights, and are convertible into shares of common stock on a 1:1 basis.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
The Series B shares are convertible at the
option of the holder into shares of common stock at an initial ratio of one share of series B preferred stock into one share of
common stock (1:1), as adjusted for the dilutive effects of additional stock subsequent to the original issuance of the series
B shares on December 17, 2010. The Series B Preferred conversion ratio shall be adjusted to a price determined by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock Outstanding (meaning (1) outstanding
Common Stock, (2) Common Stock issuable upon conversion of outstanding Preferred Stock, (3) Common Stock issuable upon exercise
of outstanding stock options (including Common Stock issuable upon the conversion of shares or other securities issued pursuant
to the exercise of outstanding stock options) and (4) Common Stock issuable upon exercise (and, in the case of warrants to purchase
Preferred Stock or other securities, conversion) of outstanding warrants. Shares described in (1) through (4) above shall be included
whether vested or unvested, whether contingent or non-contingent and whether exercisable or not yet exercisable.) immediately prior
to such issuance plus the number of shares of Common Stock that the aggregate consideration received by this Corporation for such
issuance would purchase at such Conversion Price; and the denominator of which shall be the number of shares of Common Stock Outstanding
immediately prior to such issuance plus the number of shares of such Additional Stock. The maximum shares of common stock convertible
are to be reserved from the authorized shares. As of November 14, 2014, the Series B shares were convertible into 10,377,058
shares of common stock based on a modified conversion ratio of approximately 2.385 due to the dilutive reset provisions, which
were reserved from the authorized shares.
On June 2, 2014, the Company and the Series
B Preferred Shareholder entered into a settlement agreement whereby an outstanding $35,000 promissory note will be satisfied with
the successful payment of $32,500, consisting of four equal payments of $8,125 made in quarterly periods from June 27, 2014 through
December 22, 2014, of which the first two payments were delivered on June 27, 2014 and August 26, 2014, respectively,
and two payments remain. Upon successful payment of the settlement obligations, the shareholder has agreed to convert his 4,349,339
shares of Convertible Series B Preferred shares into 4,349,339 shares of common stock. Pursuant to the settlement agreement, the
shareholder’s preferential voting rights have been suspended during the payment period.
Preferred Stock
No preferred shares were issued during the
nine months ended September 30, 2014.
Common Stock Authorized
The Company amended its Articles of Incorporation
on April 29, 2013 to increase the authorized shares of common stock from 150,000,000 shares to 600,000,000 shares, of which 173,709,531
shares were issued and outstanding and 232,762,339 shares were reserved as of the date of this filing.
Common Stock Sales
On August 14, 2014, the Company’s subsidiary
sold 1% of its equity in exchange for proceeds of $60,000.
On August 14, 2014, the Company sold 2,500,000
shares of its common stock in exchange for proceeds of $50,000. The shares were issued on October 23, 2014, and were recorded as
a subscription payable as of September 30, 2014.
On April 18, 2014, the Company sold 200,000
shares of its common stock and an equal number of warrants, exercisable at $0.06 per share over a twenty four month period pursuant
to a unit offering in exchange for total proceeds of $6,000. The proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On March 28, 2014, the Company sold 2,000,000
shares of its common stock and an equal number of warrants, exercisable at $0.06 per share over a twenty four month period pursuant
to a unit offering in exchange for total proceeds of $50,000. The proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On January 30, 2014, the Company sold 1,000,000
shares of its common stock and an equal number of warrants, exercisable at $0.07 per share over a twenty four month period pursuant
to a unit offering in exchange for total proceeds of $40,000. The proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On January 23, 2014, the Company sold 600,000
shares of its common stock for proceeds of $15,000.
On January 21, 2014, the Company sold 800,000
shares of its common stock for proceeds of $20,000.
Common Stock Issuances for Debt Conversions
On September 23, 2014, the Company issued 662,879
shares of common stock pursuant to the conversion of $7,000 of principal on the First GEL Note. The note was converted in accordance
with the conversion terms; therefore no gain or loss has been recognized.
On September 9, 2014, the Company issued 719,424
shares of common stock pursuant to the conversion of $6,000 of principal on the First GEL Note. The note was converted in accordance
with the conversion terms; therefore no gain or loss has been recognized.
On August 13, 2014, the Company issued 509,295
shares of common stock pursuant to the conversion of $5,379 of principal on the First GEL Note. The note was converted in accordance
with the conversion terms; therefore no gain or loss has been recognized.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
On May 12, 2014, the Company issued 1,700,000
shares of common stock pursuant to the conversion of $21,769, consisting of $11,460 of outstanding principal and interest on the
First JMJ Note and $10,309 of outstanding principal and interest on the Second JMJ Note. The note was converted in accordance with
the conversion terms; therefore no gain or loss has been recognized.
On April 22, 2014, the Company issued 2,100,000
shares of common stock pursuant to the conversion of $27,300 of outstanding principal on the First JMJ Note. The note was converted
in accordance with the conversion terms; therefore no gain or loss has been recognized.
On March 14, 2014, the Company issued 2,000,000
shares of common stock pursuant to the conversion of $26,000 of outstanding principal on the First JMJ Note. The note was converted
in accordance with the conversion terms; therefore no gain or loss has been recognized.
On February 24, 2014, the Company issued 1,000,000
shares of common stock pursuant to the conversion of $13,000 of outstanding principal on the First JMJ Note. The note was converted
in accordance with the conversion terms; therefore no gain or loss has been recognized.
Common Stock Issuances for Services
On August 18, 2014, the Company issued 377,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $7,276 based
on the closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 100,000
shares of restricted common stock for services provided. The total fair value of the common stock was $1,930 based on the closing
price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued another
100,000 shares of restricted common stock for services provided. The total fair value of the common stock was $1,930 based on the
closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 300,000
shares of restricted common stock for services provided. The total fair value of the common stock was $5,790 based on the closing
price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 200,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $3,860 based
on the closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 350,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $6,755 based
on the closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 300,000
shares of restricted common stock for video production services provided. The total fair value of the common stock was $5,790 based
on the closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 200,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $3,860 based
on the closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 2,000,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $38,600 based
on the closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 350,000
shares of restricted common stock to one of its Directors as a compensation bonus. The total fair value of the common stock was
$6,755 based on the closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 200,000
shares of restricted common stock to its President of Programming as a compensation bonus. The total fair value of the common stock
was $3,860 based on the closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 550,000
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $10,615 based on the
closing price of the Company’s common stock on the date of grant.
On August 18, 2014, the Company issued 200,000
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $3,860 based on the
closing price of the Company’s common stock on the date of grant.
On August 14, 2014, the
Company’s subsidiary issued a total of 16% of its equity in the subsidiary in exchange for services provided related to
the operations of the subsidiary. The total fair value of the common stock was $960,000 based on the fair value of stock sold
to an independent third party. A total of 4% of these shares were issued to officers of Players Network.
On June 27, 2014, the Company issued 700,000
shares of restricted common stock for video production services provided. The total fair value of the common stock was $20,650
based on the closing price of the Company’s common stock on the date of grant.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
On June 27, 2014, the Company issued 300,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $8,850 based
on the closing price of the Company’s common stock on the date of grant.
On June 27, 2014, the Company issued 500,000
shares of restricted common stock for video production services provided. The total fair value of the common stock was $14,750
based on the closing price of the Company’s common stock on the date of grant.
On June 27, 2014, the Company issued 300,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was 8,850 based
on the closing price of the Company’s common stock on the date of grant.
On June 15, 2014, the Company issued 198,864
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $4,693 based on the
closing price of the Company’s common stock on the date of grant.
On June 15, 2014, the Company issued 198,864
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $4,693 based on the
closing price of the Company’s common stock on the date of grant.
On April 14, 2014, the Company issued 350,000
shares of restricted common stock for video production services provided. The total fair value of the common stock was $10,150
based on the closing price of the Company’s common stock on the date of grant.
On April 11, 2014, the Company issued 200,000
shares of restricted common stock for business development services provided. The total fair value of the common stock was $4,400
based on the closing price of the Company’s common stock on the date of grant.
On April 11, 2014, the Company issued 170,000
shares of restricted common stock for video production services provided. The total fair value of the common stock was $3,740 based
on the closing price of the Company’s common stock on the date of grant.
On April 11, 2014, the Company issued 200,000
shares of restricted common stock for video production services provided. The total fair value of the common stock was $4,400 based
on the closing price of the Company’s common stock on the date of grant.
On April 11, 2014, the Company issued 1,250,000
shares of restricted common stock to its CEO as a compensation bonus. The total fair value of the common stock was $27,500 based
on the closing price of the Company’s common stock on the date of grant.
On April 11, 2014, the Company issued 200,000
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $4,400 based on the
closing price of the Company’s common stock on the date of grant.
On March 24, 2014, the Company issued 733,333
shares of restricted common stock for video production services provided. The total fair value of the common stock was $33,734
based on the closing price of the Company’s common stock on the date of grant.
On March 3, 2014, the Company issued 500,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $14,950 based
on the closing price of the Company’s common stock on the date of grant.
On February 20, 2014, the Company issued 300,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $9,000 based
on the closing price of the Company’s common stock on the date of grant.
On February 20, 2014, the Company issued 4,000,000
shares of common stock to its CEO as a compensation bonus. The total fair value of the common stock was $120,000 based on the closing
price of the Company’s common stock on the date of grant.
On January 13, 2014, the Company issued 500,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $24,500 based
on the closing price of the Company’s common stock on the date of grant.
On January 13, 2014, the Company issued 75,000
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $3,675 based on the
closing price of the Company’s common stock on the date of grant.
On January 13, 2014, the Company issued 50,000
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $2,450 based on the
closing price of the Company’s common stock on the date of grant.
On January 13, 2014, the Company issued 50,000
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $2,450 based on the
closing price of the Company’s common stock on the date of grant.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
On January 13, 2014, the Company issued 500,000
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $24,500 based on the
closing price of the Company’s common stock on the date of grant.
Common Stock Subscriptions Payable for Services
On April 15, 2014, the Company granted 99,700
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $2,952 based on the
closing price of the Company’s common stock on the date of grant. The shares have not yet been issued.
Common Stock Cancellations
On March 6, 2014, the Company cancelled 750,000
shares issued during 2013 for non-performance of services commensurate with the departure of one of the Company’s former
employees.
On March 6, 2014, the Company cancelled 150,000
shares issued during 2013 for non-performance of services commensurate with the departure of one of the Company’s Directors.
Note 14 – Warrants and Options
Options Granted
On April 11, 2014, the Company’s Board
of Directors granted 250,000 fully vested common stock options to a consultant as compensation for services provided. The options
are exercisable until April 10, 2016 at an exercise price of $0.05 per share. The estimated value using the Black-Scholes Pricing
Model, based on a volatility rate of 244% and a call option value of $0.0148, was $3,710.
On April 11, 2014, the Company’s Board
of Directors granted another 250,000 fully vested common stock options to a consultant as compensation for services provided. The
options are exercisable until April 10, 2016 at an exercise price of $0.05 per share. The estimated value using the Black-Scholes
Pricing Model, based on a volatility rate of 244% and a call option value of $0.0148, was $3,710.
On March 1, 2014, the Company’s Board
of Directors granted 600,000 common stock options as compensation for services to a consultant. The options vest ratably in monthly
increments over six (6) months beginning April 1, 2014. The options are exercisable until March 1, 2017 at an exercise price of
$0.08 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 247% and a call option
value of $0.0273, was $16,365. The options are being re-measured and expensed over the vesting period. The Company recognized $9,916
of stock based compensation expense during the nine months ended September 30, 2014.
On March 1, 2014, the Company’s Board
of Directors granted 600,000 common stock options as compensation for services to another consultant. The options vest ratably
in monthly increments over six (6) months beginning April 1, 2014. The options are exercisable until March 1, 2017 at an exercise
price of $0.08 per share. The estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 247% and a call
option value of $0.0273, was $16,365. The options are being re-measured and expensed over the vesting period. The Company recognized
$9,916 of stock based compensation expense during the nine months ended September 30, 2014.
On February 20, 2014, the Company’s Board
of Directors granted 8,000,000 fully vested cashless common stock options to the Company’s CEO as compensation for services
provided. The options are exercisable until February 20, 2018 at an exercise price of $0.04 per share. The estimated value using
the Black-Scholes Pricing Model, based on a volatility rate of 248% and a call option value of $0.0272, was $217,971.
Warrants Granted
On June 13, 2014, the Company issued warrants
to purchase 1,500,000 shares of common stock, exercisable at $0.05 per share over a thirty six month period pursuant to a convertible
debenture offering in exchange for net proceeds of $75,000 with an $80,000 face value. The proceeds received were allocated between
the debt and warrants on a relative fair value basis.
On April 18, 2014, the Company sold 200,000
shares of its common stock and an equal number of warrants, exercisable at $0.06 per share over a twenty four month period pursuant
to a unit offering in exchange for total proceeds of $6,000. The proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
On March 28, 2014, the Company sold 2,000,000
shares of its common stock and an equal number of warrants, exercisable at $0.06 per share over a twenty four month period pursuant
to a unit offering in exchange for total proceeds of $50,000. The proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
On January 30, 2014, the Company sold 1,000,000
shares of its common stock and an equal number of warrants, exercisable at $0.07 per share over a twenty four month period pursuant
to a unit offering in exchange for total proceeds of $40,000. The proceeds received were allocated between the common stock and
warrants on a relative fair value basis.
Options Expired
On August 26, 2014, a total of 240,000 options
held by an independent contractor expired.
On July 19, 2014, a total of 1,500,000 options
held by the Company’s CEO expired.
On February 8, 2014, a total of 400,000 options
amongst four option holders expired.
Warrants Expired
On April 18, 2014, a total of 869,565 warrants
held by the Company’s CEO expired.
Options and Warrants Exercised
No options or warrants were exercised during
the nine months ended September 30, 2014.
Note 15 – Gain on Debt Settlements
The Company recognized debt forgiveness in
the total amount of $343,335 and $-0- during the nine months ended September 30, 2014 and 2013, respectively, as presented
in other income within the Statements of Operations.
On January 6, 2014, we settled outstanding
trade accounts payable in the total amount of $349,670 with a payment of $10,000. The creditor forgave the remaining $339,670.
An additional $1,540 of trade accounts payable was forgiven from another creditor on February 24, 2014, with the payment
of $385, resulting in a $1,155 gain on settlement, along with another debt forgiveness of $2,510 on June 12, 2014, as forgiven
by our former transfer agent. All of these debt settlements were included in the $343,335 gain on debt settlements amount as presented
in other income at September 30, 2014.
Note 16 – 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 nine months ended September 30, 2014
and the year ended December 31, 2013, 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 September 30, 2014, the Company had approximately $17,800,000 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:
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
Deferred tax assets:
|
|
|
|
|
|
|
|
Net operating loss carry forwards
|
|
$
|
6,230,000
|
|
|
$
|
5,348,700
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax assets before valuation allowance
|
|
|
6,230,000
|
|
|
|
5,348,700
|
|
|
Less: Valuation allowance
|
|
|
(6,230,000
|
)
|
|
|
(5,348,700
|
)
|
|
Net deferred tax assets
|
|
$
|
–
|
|
|
$
|
–
|
|
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
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 September 30, 2014 and December 31, 2013, 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:
|
|
|
September 30,
|
|
|
December 31,
|
|
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal and state statutory rate
|
|
|
35%
|
|
|
|
35%
|
|
|
Change in valuation allowance on deferred tax assets
|
|
|
(35%
|
)
|
|
|
(35%
|
)
|
In accordance with FASB ASC 740, the Company
has evaluated its tax positions and determined there are no uncertain tax positions.
Note 17 – Non-Controlling Interest
Non-controlling interest represents the 17%
interest in the subsidiary held amongst eleven individuals, of whom the Company’s CEO, Mark Bradley and the Company’s
President of Programming, Michael Berk own 3% and 1%, respectively. The net loss attributable to the non-controlling interest totaled
$215,373 during the nine months ending September 30, 2014.
Note 18 – Subsequent Events
Convertible Debenture Proceeds
On November 5, 2014, the Company received net
proceeds of $100,000 in exchange for an unsecured convertible promissory note with a face value of $104,000 that carries an 8%
interest rate (“Tenth Asher Note”), which matures on July 29, 2015. The principal and interest is convertible into
shares of common stock at the discretion of the note holder at a price equal to sixty one percent (61%) of the average of the three
(3) lowest closing bid prices of the Company’s common stock over the ten (10) trading days prior to the conversion date.
The note carries a twenty two percent (22%) interest rate in the event of default, and the debt holder is limited to owning 4.99%
of the Company’s issued and outstanding shares. The Company paid a debt issuance cost of $4,000 that is being amortized over
the life of the loan on the straight line method, which approximates the effective interest method.
On October 13, 2014, the Company received net
proceeds of $70,000 in exchange for an unsecured convertible promissory note with a face value of $75,250 that carries an 8% interest
rate (“First Tangiers Note”), which matures on October 13, 2015. The note is part of total loan offering with a $236,500
face value and OID of 7.5% of any consideration paid. The principal and interest is convertible into shares of common stock at
the discretion of the note holder at a price equal to sixty percent (60%) of the average of the two lowest trading prices of the
Company’s common stock for the fifteen (15) trading days prior to, and including, the conversion date. In the event the Company
experiences a DTC “Chill” on its shares, the conversion price shall be decreased to fifty percent (50%), rather than
the sixty percent (60%) conversion rate while that “Chill” is in effect, and an additional 5% discount if the Depository
Trust Company’s (“DTC”) Fast Automated Securities Transfer (“FAST”) is not eligible for a cumulative
total conversion price equal to forty five percent (45%). The note carries a twenty percent (20%) interest rate and $1,000 per
day of liquidated damages in the event of default, and the debt holder is limited to owning 4.99% of the Company’s issued
and outstanding shares. The Company paid total debt issuance cost of $2,500 that is being amortized on the straight line method,
which approximates the effective interest method, over the life of the loan. The Company must at all times reserve at least 5 million
shares of common stock for potential conversions.
Common Stock Issuances for Debt Conversions
On November 10, 2014, the Company issued 1,889,466
shares of common stock pursuant to the conversion of $20,000 of 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.
On October 20, 2014, the Company issued 863,594
shares of common stock pursuant to the conversion of $8,549, consisting of $7,121 of outstanding principal and $1,428 of interest
on the First GEL Note. The note was converted in accordance with the conversion terms; therefore no gain or loss has been recognized.
Players Network
Notes to Condensed Consolidated Financial
Statements
(Unaudited)
Common Stock Issuances on Subscriptions
Payable
On October 23, 2014, the Company issued 2,500,000
shares of common stock in satisfaction of a subscriptions payable outstanding at September 30, 2014 for the $50,000 sale of common
stock on August 14, 2014.
Common Stock Issued for Services
On November 5, 2014, the Company issued 350,000
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $11,550 based on the
closing price of the Company’s common stock on the date of grant.
On November 5, 2014, the Company issued 300,000
shares of S-8 common stock for professional services provided. The total fair value of the common stock was $9,900 based on the
closing price of the Company’s common stock on the date of grant.
On November 5, 2014, the Company issued 300,000
shares of restricted common stock for video production services provided. The total fair value of the common stock was $9,900 based
on the closing price of the Company’s common stock on the date of grant.
On November 5, 2014, the Company issued 100,000
shares of restricted common stock for video production services provided. The total fair value of the common stock was $3,300 based
on the closing price of the Company’s common stock on the date of grant.
On November 5, 2014, the Company issued 500,000
shares of restricted common stock for professional services provided. The total fair value of the common stock was $16,500 based
on the closing price of the Company’s common stock on the date of grant.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
Overview and Outlook
Players Network is a media and entertainment
company engaged in the development of Digital Networks. We distribute broadband video and other social media content over a wide
variety of internet enabled devices and cable television channels. The Company has launched its proprietary scalable NexGenTV technology
platform. The platform is designed to deliver video content and develop digital social communities, including “
Vegas On
Demand TV
” , “Real Vegas TV” and “WeedTV”
Video On Demand
The Company operates a Video On Demand (“VOD”)
television channel, also named Vegas On Demand, which consists of original programming that is distributed over its own VOD channels
to approximately 23 million homes over the internet with distribution partners that include, Comcast, Hulu, Blinkx, Google, and
YouTube Video, , and various mobile platforms. Players Network has a fourteen year history of providing consumers with quality
‘Gaming and Las Vegas Lifestyle’ video content.
Vegas On Demand TV and Real Vegas TV offers
its audience the ability to connect to Vegas insiders through unique, high-quality programming that captures the excitement, sex
appeal, entertainment, and the non-stop adrenaline rush of the Las Vegas gaming lifestyle. Players Network’s content goes
beyond poker, casino action, sports betting, and racing, to lifestyle programs about entertainment and fine living that attract
young and sophisticated viewers that comprise the major digital media demographic. Whenever possible our content incorporates an
expert, insider or celebrity within the Vegas community in order to enhance promotional merchandising to prospective customers.
The Company plans to use both its platform
and original branded programming and events as a means to develop additional revenue streams, as well as marketing and membership
benefits of our social media platform. These revenue streams include branded entertainment, sponsorships for events, and media
placement, third party commissions for video and banner advertisements, merchandise and production sales and services.
Players Network has addressed the digital market
in an effort to grow as a New Media Company using “Vegas On Demand”, its flagship branded television channel destination,
which uses its scalable, custom Enterprise Web Platform to host “Vegas On Demand”, which can also be replicated to
launch thousands of channel destinations in any Lifestyle Category, for any Lifestyle Brand.
Proprietary Platform
PNTV’s enterprise platform efficiently
deploys, manages and distributes videos with integrated revenue-generating tools that go beyond traditional advertising. On our
platform, the viewer of a video is brought into a web environment encompassing that video’s lifestyle, where they are presented
with membership, merchandising, couponing, subscription, loyalty programs, contest and other marketing opportunities, including
the integration of live events. The platform also integrates branded sponsorships, and a game-like virtual economy supported by
our Cost Per Action (“CPA”) advertising network.
By providing companies and lifestyle brands
with their own channel destination on our enterprise web platform and offering our media and production expertise, we plan to provide
an integrated media, marketing and merchandising solution that aims to save our customers significant time and money that would
be required to replicate equivalent services.
We have also leveraged our existing library
of original content, and distribution network, to build this infrastructure hub and launch our initial digital lifestyle network:
“VegasOnDemand.tv”.
The ability to monetize video in so many ways,
coupled with an efficient, easy-to-use technical and administrative back-end dashboard, is a powerful feature of Player’s
platform. It allows the creation of unlimited, new channel destinations using our scalable Content Management System (“CMS”)
framework, with cost-competitive operations. Importantly, it allows content management by administrative and editorial level employees
without the expense of having a full-time technical engineering staff in-house.
The Company’s platform has two main membership
categories: 1) the consumer/user that visits our digital communities and partakes in viewing ad-supported and pay-per-view premium
videos, purchases products and connects with “insiders”, who are our 2) premium members.
Premium members must be industry insiders and/or
experts in their lifestyle category. For example, with regard to Vegas On Demand, Insiders are designed to be the “who’s-who”
of Vegas: entertainers, nightclub promoters, casino hosts, famous chefs, etc. who offer our members deals on transactions connected
to their sphere of influence. Deals may include being invited to a special VIP event, line passes, two-for-one offers, PPV video
discounts, etc.
Transactions can be purchased using credit
cards, or our incentivized Virtual Economy. When using our Virtual Economy, we set the value of the goods and services that are
redeemed through a points (virtual currency) system. Points can be bought or earned using our CPA advertising network. Our Virtual
Economy allows the Company to realize revenue every time Points are earned, as well as every time Points are redeemed.
Weed TV
During the 2
nd
quarter of 2014,
we launched our first Lifestyle Channel Destination, Weed TV located at the URL:
www.weedtv.com
. Weed TV is a Lifestyle
Channel Destination powered by PNTV’s NextGenTV(SM) enterprise platform. Weed TV will be the go to source for informational,
entertainment, products and services for people who relate to the marijuana lifestyle and social community. Weed TV will feature
daily stories sourced by
weedtv.com
correspondents and contributors from around the world. It will provide a wide variety
of editorial content, videos and entertainment including lead stories, political news, business news on the industry, financial
analysis from industry experts, growing tips, cooking tips, a “Weed101” section, medical uses, lifestyle features,
entertainment specials and merchandise shopping cart offering the latest products and services.
Green Leaf Farms Holdings and Subsidiary
On July 8, 2014, we formed a subsidiary, Green
Leaf Farms Holdings, Inc. (“GLFH”), in which we retained 80% ownership, with the remaining 20% held by key experts
and advisors. The subsidiary has been formed as a holding company to potentially own additional subsidiaries that may operate medical
marijuana related businesses. These additional subsidiaries have yet to be formed, and, or, acquired. We have applied for a Medical
Marijuana Dispensary special use permit with the City of Las Vegas, and a Cultivation and Processing special use permits in North
Las Vegas and a license for all permits in the State of Nevada, and have currently been granted the two special use permits in
North Las Vegas, however there can be no assurance we will be able to conduct these operations. As such, there is a risk that we
may not be able to expand our operations into this field as intended. The purpose of applying for these licenses is to offer a
fully integrate a digital strategy of Weed TV into a brick and mortar cash producing operation. Thus using our own media to promote
and market our own brands that will be built in the medical Marijuana industry. This approach set us apart from other competitors
in the market place whereby we can leverage our audience to build customers...
Video Production Pilot
During 2013, J&H Productions began to market
the first pilot episode we created per our agreement to produce a series of three reality shows centered on a family that is in
the Las Vegas nightlife and night club business. The agreement also provides for the production of forty short video segments to
be used to develop a new branded Channel Destination using the Company’s scalable platform. Capitalized television production
costs for each pilot episode have been expensed as revenues were recognized upon delivery and acceptance of the completed pilot
episodes using the individual-film-forecast-computation method for each television show produced. The feedback we received during
the marketing process has caused both parties to re-evaluate the project and completion of the final two episodes was delayed until
the second quarter of 2014, when all related deferred revenues and costs were recognized. The Company recognized $95,000 of revenues
and related expenses of $75,617 during 2012 with the completion of the first of three pilot episodes. An additional $135,000 of
revenues and $116,454 of related expenses were recognized with the completion of the project during the second quarter of 2014.
As we continue to expand our business and implement
our business strategy, our current monthly cash flow requirements will exceed our near term cash flow from operations. Our available
cash resources and anticipated cash flow from operations are insufficient to satisfy our anticipated costs associated with new
product development. There can be no assurance that we will be able to generate sufficient cash from operations in future periods
to satisfy our capital requirements. Therefore, we will have to continue to rely on external financing activities, including the
sale of our equity securities, to satisfy our capital requirements for the foreseeable future. Due, in part, to our lack of historical
earnings, our prior success in attracting additional funding has been limited to transactions in which our equity is used as currency.
Equity financings of the type we have had to pursue are dilutive to our stockholders and may adversely impact the market price
for our shares. However, we have no commitments for borrowings or additional sales of equity, the precise terms upon which we may
be able to attract additional funding is not known at this time, and there can be no assurance that we will be successful in consummating
any such future financing transactions on terms satisfactory to us, or at all.
Results of Operations for the Three Months
Ended September 30, 2014 and 2013:
|
|
|
For the Three
|
|
|
|
|
|
|
|
Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
|
Increase /
|
|
|
|
|
2014
|
|
|
2013
|
|
|
(Decrease)
|
|
|
Revenues
|
|
$
|
168
|
|
|
$
|
286
|
|
|
$
|
(118
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs
|
|
|
77,350
|
|
|
|
4,843
|
|
|
|
72,507
|
|
|
General and administrative
|
|
|
1,214,180
|
|
|
|
40,386
|
|
|
|
1,173,794
|
|
|
Salaries and wages
|
|
|
97,261
|
|
|
|
65,992
|
|
|
|
31,269
|
|
|
Depreciation and amortization
|
|
|
7,469
|
|
|
|
5,737
|
|
|
|
1,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
1,396,260
|
|
|
|
116,958
|
|
|
|
1,279,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Loss
|
|
|
(1,396,092
|
)
|
|
|
(116,672
|
)
|
|
|
1,279,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(349,769
|
)
|
|
|
(222,874
|
)
|
|
|
126,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
|
|
$
|
(1,745,861
|
)
|
|
$
|
(339,546
|
)
|
|
$
|
1,406,315
|
|
Revenues:
During the three months ended September 30,
2014 and 2013, we received revenues primarily from the sale of in-home media, advertising fees and the recognition of deferred
revenues on content development. Aggregate revenues for the three months ended September 30, 2014 were $168, compared to revenues
of $286 in the three months ended September 30, 2013, a decrease in revenues of $118, or 41%. Our revenues decreased primarily
due to diminished royalties from our online views.
Direct Operating Costs:
Direct operating costs were $77,350 for the
three months ended September 30, 2014 compared to $4,843 for the three months ended September 30, 2013, an increase of
$72,507, or 1,497%. Our direct operating costs increased due primarily to content production costs for our new media channel, Weed.tv,
which was launched during April of 2014.
General and Administrative:
General and administrative expenses were $1,214,180
for the three months ended September 30, 2014 compared to $40,386 for the three months ended September 30, 2013, an increase of
$1,173,794, or 2,906%. General and administrative expense increased primarily due to $960,000 of stock based compensation in our
newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation to our medical
marijuana endeavors incurred during the three months ended September 30, 2014 compared to the three months ended September
30, 2013. The fair value of the stock based compensation was determined by the sale of 1% of the equity in the subsidiary to an
independent third party.
Salaries and Wages:
Salaries and wages expense totaled $97,261
for the three months ended September 30, 2014 compared to $65,992 for the three months ended September 30, 2013, an increase of
$31,269, or 47%. The increase in salaries and wages was primarily due to a $50,000 bonus awarded to our CEO, as offset by staffing
reductions due to our diminished resources during the three months ended September 30, 2014, compared to the three months
ended September 30, 2013.
Depreciation and Amortization:
Depreciation and amortization expense was $7,469
for the three months ended September 30, 2014 compared to $5,737 for the three months ended September 30, 2013, an increase of
$1,732, or 30%. The increase in depreciation and amortization was primarily due to additional depreciation on a total of $34,648
of fixed asset additions acquired during 2014.
Net Operating Loss:
Net operating loss for the three months ended
September 30, 2014 was $1,396,092, or ($0.01) per share compared to a net operating loss of $116,672 for the three months ended
September 30, 2013, or ($0.00) per share, an increase of $1,279,420, or 1,097%. Net operating loss increased primarily due to $960,000
of stock based compensation in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services
performed in relation to our medical marijuana endeavors incurred during the three months ended September 30, 2014 compared
to the three months ended September 30, 2013. The fair value of the stock based compensation was determined by the sale of 1% of
the equity in the subsidiary to an independent third party. In addition, during the three months ended September 30, 2014,
we issued a total of 5,227,000 shares of common stock valued at $100,881 and the amortization of options valued at $12,898 in payment
of professional services in lieu of cash.
Other Income (Expense):
Other income (expense) was $(349,769) for the
three months ended September 30, 2014 compared to $(222,874) for the three months ended September 30, 2013, an increase
of $126,895, or 57%. Other expense increased on a net basis primarily due to a $102,636 increase in our $245,450 net loss related
to the change in derivative liabilities on our convertible debentures recognized during the three months ended September 30, 2014,
compared to the net loss of $142,814 related to the change in derivative liabilities recognized during the three months ended September
30, 2013, as well as, increased interest expense of $24,259 on our increased indebtedness during the three months ended September
30, 2014, compared to the three months ended September 30, 2013.
Net Loss:
The net loss for the three months ended September
30, 2014 was $1,745,861, or ($0.01) per share, compared to a net loss of $339,546, or ($0.00) per share, for the three months ended
September 30, 2013, an increased net loss of $1,406,315, or 414%. Net loss increased primarily due to $960,000 of stock based compensation
in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation to our
medical marijuana endeavors, the issuance of a total of 5,227,000 shares of common stock valued at $100,881 and the change in derivative
liabilities on our convertible debentures recognized during the three months ended September 30, 2014, compared to the three months
ended September 30, 2013.
Results of Operations for the Nine Months
Ended September 30, 2014 and 2013:
|
|
|
For the Nine
|
|
|
|
|
|
|
|
Months Ended
|
|
|
|
|
|
|
|
September 30,
|
|
|
Increase /
|
|
|
|
|
2014
|
|
|
2013
|
|
|
(Decrease)
|
|
|
Revenues
|
|
$
|
141,625
|
|
|
$
|
1,365
|
|
|
$
|
140,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs
|
|
|
314,321
|
|
|
|
82,112
|
|
|
|
232,209
|
|
|
General and administrative
|
|
|
1,569,047
|
|
|
|
263,646
|
|
|
|
1,305,401
|
|
|
Salaries and wages
|
|
|
524,917
|
|
|
|
203,532
|
|
|
|
321,385
|
|
|
Depreciation and amortization
|
|
|
19,984
|
|
|
|
17,210
|
|
|
|
2,774
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
2,428,269
|
|
|
|
566,500
|
|
|
|
1,861,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Operating Loss
|
|
|
(2,286,644
|
)
|
|
|
(565,135
|
)
|
|
|
1,721,509
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other income (expense)
|
|
|
(570,978
|
)
|
|
|
(648,976
|
)
|
|
|
(77,998
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (Loss)
|
|
$
|
(2,857,622
|
)
|
|
$
|
(1,214,111
|
)
|
|
$
|
1,643,511
|
|
Revenues:
During the nine months ended September 30,
2014 and 2013, we received revenues primarily from the sale of in-home media, advertising fees and the recognition of deferred
revenues on content development. Aggregate revenues for the nine months ended September 30, 2014 were $141,625, compared to revenues
of $1,365 in the nine months ended September 30, 2013, an increase in revenues of $140,260, or 10,275%. Our revenues increased
primarily due to the recognition of $135,000 of deferred revenues from the completion and delivery of the final two pilot episodes
of our “Naked Empire Series” project with HJ Productions. During the nine months ended September 30, 2014,
we also recognized a total of $5,950 from the first sales of advertising on our new media channel, “Weed.tv” within
our internet platform. We anticipate increased market saturation of our video content through our newly revamped websites and the
Company’s existing media channels as we continue to market our internet platform throughout the remainder of 2014, and into
2015.
Direct Operating Costs:
Direct operating costs were $314,321 for the
nine months ended September 30, 2014 compared to $82,112 for the nine months ended September 30, 2013, an increase of
$232,209, or 283%. Our direct operating costs increased due primarily to the recognition of deferred television costs of $116,454,
related to the completion and delivery of the final two pilot episodes of our Naked Empire Series project with HJ Productions,
and our increased website development costs as we continued to develop our new media channel, Weed.tv media channel, which was
launched during April of 2014.
General and Administrative:
General and administrative expenses were $1,569,047
for the nine months ended September 30, 2014 compared to $263,646 for the nine months ended September 30, 2013, an increase of
$1,305,401, or 495%. General and administrative expense increased primarily due to $960,000 of stock based compensation in our
newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation to our medical
marijuana endeavors incurred during the nine months ended September 30, 2014 compared to the nine months ended September
30, 2013. The fair value of the stock based compensation was determined by the sale of 1% of the equity in the subsidiary to an
independent third party.
Salaries and Wages:
Salaries and wages expense totaled $524,917
for the nine months ended September 30, 2014 compared to $203,532 for the nine months ended September 30, 2013, an increase of
$321,385, or 158%. The increase in salaries and wages was primarily due to non-cash, stock based compensation bonuses issued to
our CEO during the nine months ended September 30, 2014, consisting of 4 million shares of common stock with a fair value of $120,000,
and 8 million common stock options valued at $217,971, that were not present during the comparative nine months ended September
30, 2013.
Depreciation and Amortization:
Depreciation and amortization expense was $19,984
for the nine months ended September 30, 2014 compared to $17,210 for the nine months ended September 30, 2013, an increase of $2,774,
or 16%. The increase in depreciation and amortization was primarily due to additional depreciation on a total of $34,648 of fixed
asset additions incurred during the nine months ended September 30, 2014.
Net Operating Loss:
Net operating loss for the nine months ended
September 30, 2014 was $2,286,644, or ($0.01) per share compared to a net operating loss of $565,135 for the nine months ended
September 30, 2013, or ($0.01) per share, an increase of $1,721,509, or 305%. Net operating loss increased primarily due to $960,000
of stock based compensation in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services
performed in relation to our medical marijuana endeavors, and compensation bonuses issued to our CEO and increased advertising
and promotional fees and professional services, consisting primarily of non-cash, stock based compensation. During the nine months
ended September 30, 2014, we issued a total of 4 million shares of common stock with a fair value of $120,000, and 8
million common stock options valued at $217,971 to our CEO as a bonus, along with 8,899,728 shares of common stock valued at $228,642,
a subscriptions payable for 99,700 shares of common stock, valued at $2,592 and the amortization of options valued at $40,150 in
payment of professional services in lieu of cash.
Other Income (Expense):
Other income (expense) was $(570,978) for the
nine months ended September 30, 2014 compared to $(648,976) for the nine months ended September 30, 2013, a decrease
of $77,998, or 12%. Other expense decreased on a net basis primarily due to the $81,168 decrease in interest expense, consisting
primarily of the amortization of debt discounts related to our convertible debentures recognized during the nine months ended September
30, 2014, compared to the nine months ended September 30, 2013, and a gain of $343,335 on debt settlements that was realized
with the settlement of $353,720 of accounts payable in exchange for total payments of $10,385 during the nine months ended September
30, 2014, as diminished by an increase of $348,130 due to the change in derivative liability during the nine months ended September
30, 2014, compared to the nine months ended September 30, 2013.
Net Loss:
The net loss for the nine months ended September
30, 2014 was $2,857,622, or ($0.02) per share, compared to a net loss of $1,214,111, or ($0.01) per share, for the nine months
ended September 30, 2013, an increased net loss of $1,643,511, or 135%. Net loss increased primarily due to $960,000 of stock based
compensation in our newly formed subsidiary pursuant to the issuance common stock in our subsidiary for services performed in relation
to our medical marijuana endeavors, and to the $348,130 increase in our change in derivative liability, increased advertising and
compensation, consisting primarily of non-cash, stock based compensation, as diminished by the gain of $343,335 on debt settlements
incurred during the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013.
LIQUIDITY AND CAPITAL RESOURCES
The following table summarizes total assets,
accumulated deficit, stockholders’ equity and working capital at September 30, 2014 compared to December 31, 2013.
|
|
|
September 30,
|
|
|
December 31,
|
|
|
Increase /
|
|
|
|
|
2014
|
|
|
2013
|
|
|
(Decrease)
|
|
|
Total Assets
|
|
$
|
125,764
|
|
|
$
|
195,083
|
|
|
$
|
(69,319
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated (Deficit)
|
|
$
|
(26,242,551
|
)
|
|
$
|
(23,567,996
|
)
|
|
$
|
2,674,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity (Deficit)
|
|
$
|
(1,668,091
|
)
|
|
$
|
(1,518,043
|
)
|
|
$
|
(150,048
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital (Deficit)
|
|
$
|
(1,750,511
|
)
|
|
$
|
(1,584,201
|
)
|
|
$
|
(166,310
|
)
|
Our principal source of operating capital has
been provided from private sales of our common stock, revenues from operations, and debt and equity financings. At September 30,
2014, we had a negative working capital position of $1,750,511.
Debt Financing
On September 22, 2014, the Company received
net proceeds of $35,000 in exchange for an unsecured convertible promissory note, bearing interest at twelve percent (12%) with
a face value of $38,500 (“Second Vista Note”), which matures on June 1, 2016, as part of a larger financing
agreement that enables the Company to draw total proceeds of $225,000 at the discretion of the lender. The financing carries a
total face value of $250,000 and a $25,000 Original Issue Discount. The principal and interest is convertible into shares of common
stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the two (2) lowest closing
bid prices during the sixteen (16) trading days prior to the conversion request date.
On August 19, 2014, the Company received net
proceeds of $40,000 in exchange for an unsecured convertible promissory note, bearing interest at 8% annually, with a face value
of $80,000 (“Second WHC Note”), which matures on August 19, 2015. The principal and interest is convertible
into shares of common stock at the discretion of the note holder at a price equal to fifty seven and a half percent (57.5%) of
the average of the two (2) lowest closing bid prices of the Company’s common stock over the ten (10) trading days immediately
preceding the conversion request date.
On July 15, 2014, the Company received net
proceeds of $35,000 in exchange for an unsecured convertible promissory note that carries an 8% interest rate with a face value
of $37,500 (“Third LG Note”), which matures on March 15, 2015. The principal and interest is convertible into shares
of common stock at the discretion of the note holder at a price equal to sixty percent (60%) of the lowest trading price of the
Company’s common stock for the twelve (12) trading days prior to, and including, the conversion date if received after 4PM
Eastern Standard Time. The note also carries an additional “Back-end Note” with the same terms as the original note
that enables the lender to lend the Company another $37,500, less $1,750 of debt issuance costs and $3,500 in due diligence fees,
with a holding period that tacks to the original note for purposes of Rule 144 of the Securities Exchange Act of 1934. In the event
the Company experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 55% instead of 60%
while that “Chill” is in effect.
On June 13, 2014, the Company received net
proceeds of $75,000 in exchange for an unsecured convertible promissory note, bearing interest at 8% annually, with a face value
of $80,000 (“First WHC Note”), which matures on June 13, 2015. The principal and interest is convertible
into shares of common stock at the discretion of the note holder at a price equal to sixty two and a half percent (62.5%) of the
average of the two (2) lowest closing bid prices of the Company’s common stock over the ten (10) trading days immediately
preceding the conversion request date.
On June 2, 2014, the Company received net proceeds
of $50,000 in exchange for an unsecured convertible promissory note, bearing interest at twelve percent (12%) with a face value
of $55,000 (“First Vista Note”), which matures on June 1, 2016, as part of a larger financing agreement that
enables the Company to draw total proceeds of $225,000 at the discretion of the lender. The financing carries a total face value
of $250,000 and a $25,000 Original Issue Discount. The principal and interest is convertible into shares of common stock at the
discretion of the note holder at a price equal to sixty five percent (65%) of the average of the two (2) lowest closing bid prices
during the sixteen (16) trading days prior to the conversion request date.
On May 20, 2014, the Company received net proceeds
of $100,000 in exchange for an unsecured convertible promissory note, bearing interest at 10% annually, with a face value of $113,000
(“First Typenex Note”), which matures on May 19, 2015. The principal and interest is convertible into shares
of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the average of the three (3)
lowest (“Trading Prices”), whereby Trading Price is defined as the volume weighted average price (“VWAP”)
of the Company’s common stock over the fifteen (15) trading days prior to the conversion request date. If the arithmetic
average of the three (3) lowest Trading Prices is less than $0.01, then the Conversion Factor will be reduced to 60%.
On May 9, 2014, the Company received $50,000
in exchange for an unsecured convertible promissory note that carries a 12% interest rate (“First Group 10 Note”),
which matures on May 8, 2015. The principal and interest is convertible into shares of common stock at the discretion of the note
holder at a price equal to the lesser of (a) fifty eight percent (58%) of the average of the two lowest closing bid prices of the
Company’s common stock for the seventeen (17) trading days prior to the conversion notice date, or (b) four and a half cents
($0.045) per share.
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 matures on April 11, 2015. The principal and interest is convertible into shares
of common stock at the discretion of the note holder at a price equal to fifty five percent (55%) of the average of the lowest
closing bid prices of the Company’s common stock for the twelve (12) trading days prior to, and including, the conversion
date. The note carries an additional “Back-end Note” with the same terms as the original note that enables the lender
to lend the Company another $35,000, less $1,750 of debt issuance costs, with a holding period that tacks to the original note
for purposes of Rule 144 of the Securities Exchange Act of 1934.
On April 17, 2014, the Company received net
proceeds of $40,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $44,000
(“Fourth JMJ Note”), which matures on April 16, 2015, as part of a larger financing agreement that enables the Company
to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into shares of common
stock at the discretion of the note holder at a price equal to fifty five percent (55%) of the lowest trading price of the Company’s
common stock over the twenty five (25) trading days prior to the conversion request date, as amended within the original promissory
note on April 10, 2014.
On February 20, 2014, the Company received
net proceeds of $40,000 in exchange for a non-interest bearing, unsecured convertible promissory note with a face value of $44,000
(“Third JMJ Note”), which matures on February 19, 2015, as part of a larger financing agreement that enables
the Company to draw total proceeds of $400,000 at the discretion of the lender. The principal and interest is convertible into
shares of common stock at the discretion of the note holder at a price equal to sixty five percent (65%) of the lowest trading
price of the Company’s common stock over the twenty five (25) trading days prior to the conversion request date, as amended
within the original promissory note on April 10, 2014.
On January 8, 2014, the Company received $25,500
in exchange for an unsecured convertible promissory note that carries an 8% interest rate (“First GEL Note”), which
matures on October 8, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note
holder at a price equal to sixty percent (60%) of the average of the two (2) lowest closing bid prices of the Company’s common
stock for the ten (10) trading days prior to the conversion date.
On January 8, 2014, the Company received $25,500
in exchange for an unsecured convertible promissory note that carries an 8% interest rate (“First LG Note”), which
matures on October 8, 2014. The principal and interest is convertible into shares of common stock at the discretion of the note
holder at a price equal to sixty percent (60%) of the average of the two (2) lowest closing bid prices of the Company’s common
stock for the ten (10) trading days prior to the conversion date.
We have utilized these funds to repay $66,605
of previously issued convertible debentures, comply with our regulatory reporting requirements, and to expand our media distribution
platforms to launch Weed.tv. 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 outside consultants, and the Company expects to continue this practice.
In the nine months ended September 30, 2014, the Company granted a total of 11,276,061 shares of common stock valued at $352,335
in lieu of cash payments to employees and outside consultants, compared to the issuance of 2,872,000 shares of common stock valued
at $119,780 in lieu of cash payments to employees and outside consultants during the nine months ending September 30, 2013. 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 2014.
During the nine months ended September 30,
2014, we issued a total of 8,691,598 shares of common stock pursuant to the conversion of $106,447 of indebtedness on convertible
debentures. The conversion prices of a total of $569,613 in outstanding convertible notes outstanding as of September 30, 2014,
is convertible at various prices discounted to market as depicted in the table below. As a result, any conversion of the Convertible
Notes and sale of shares of common stock issuable in connection with the conversion thereof will likely cause the value of our
common stock, if any, to decline in value, as described in greater detail under the Risk Factors below.
|
|
|
|
|
|
|
Potential issuable shares at various conversion prices
|
|
|
|
|
|
|
|
below the most recent market price of $0.03 per share
|
|
Lender /
|
|
Conversion
|
|
Principal
|
|
100%
|
|
75%
|
|
50%
|
|
25%
|
|
Origination
|
|
Terms
|
|
Borrowed
|
|
$0.03
|
|
$0.0225
|
|
$0.015
|
|
$0.0075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JMJ Financial
(Second JMJ Note)
June 4, 2013
|
|
Convertible into 65% of the average of the lowest trading price over the 25 trading days prior to the conversion request.
|
|
$
|
20,492
|
|
683,067
|
|
910,756
|
|
1,366,133
|
|
2,732,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GEL Properties, LLC
(First GEL Properties Note)
January 8, 2014
|
|
Convertible into 60% of the average of the two lowest closing bid prices over the 10 days prior to the conversion request.
|
|
$
|
7,121
|
|
237,367
|
|
316,489
|
|
474,733
|
|
949,467
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JMJ Financial
(Third JMJ Note)
February 20, 2014
|
|
Convertible into 65% of the average of the lowest trading price over the 25 trading days prior to the conversion request.
|
|
$
|
44,000
|
|
1,466,667
|
|
1,955,556
|
|
2,933,333
|
|
5,866,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JMJ Financial
(Fourth JMJ Note)
April 17, 2014
|
|
Convertible into 65% of the average of the lowest trading price over the 25 trading days prior to the conversion request.
|
|
$
|
44,000
|
|
1,466,667
|
|
1,955,556
|
|
2,933,333
|
|
5,866,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LG Capital Funding, LLC
(Second LG Capital Note)
April 24, 2014
|
|
Convertible into 55% of the average of the lowest closing bid prices over the 12 trading days prior to the conversion request.
|
|
$
|
35,000
|
|
1,166,667
|
|
1,555,556
|
|
2,333,333
|
|
4,666,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group 10 Funding
(First Group 10 Note)
May 9, 2014
|
|
Convertible at a price equal to the lesser of (a) fifty eight percent (58%) of the average of the two lowest closing bid prices of the Company’s common stock for the seventeen (17) trading days prior to the conversion notice date, or (b) four and a half cents ($0.045) per share.
|
|
$
|
50,000
|
|
1,666,667
|
|
2,222,222
|
|
3,333,333
|
|
6,666,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Typenex
(First Typenex Note)
May 20, 2014
|
|
Convertible into 65% of the average of the three (3) lowest (“Trading Prices”), whereby Trading Price is defined as the volume weighted average price (“VWAP”) of the Company’s common stock over the fifteen (15) trading days prior to the conversion request date. If the arithmetic average of the three (3) lowest Trading Prices is less than $0.01, then the Conversion Factor will be reduced to 60%.
|
|
$
|
113,000
|
|
3,766,667
|
|
5,022,222
|
|
7,533,333
|
|
15,066,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vista Capital
(First Vista Note)
June 2, 2014
|
|
Convertible into 65% of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date.
|
|
$
|
55,000
|
|
1,833,333
|
|
2,444,444
|
|
3,666,667
|
|
7,333,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WHC Capital
(First WHC Note)
June 13, 2014
|
|
Convertible into 62.5% of the average of the two (2) lowest closing bid prices over the 10 trading days prior to the conversion request.
|
|
$
|
80,000
|
|
2,666,667
|
|
3,555,556
|
|
5,333,333
|
|
10,666,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LG Capital Funding, LLC
(Third LG Capital Note)
July 15, 2014
|
|
Convertible into 55% of the average of the lowest closing bid prices over the 12 trading days prior to the conversion request.
|
|
$
|
37,500
|
|
1,250,000
|
|
1,666,667
|
|
2,500,000
|
|
5,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WHC Capital
(Second WHC Note)
August 19, 2014
|
|
Convertible into 57.5% of the average of the two (2) lowest closing bid prices over the 10 trading days prior to the conversion request.
|
|
$
|
45,000
|
|
1,500,000
|
|
2,000,000
|
|
3,000,000
|
|
6,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vista Capital Investments, LLC
(Second Vista Note)
September 22, 2014
|
|
Convertible into 65% of the average of the two (2) lowest closing bid prices during the sixteen (16) trading days prior to the conversion request date.
|
|
$
|
38,500
|
|
1,283,333
|
|
1,711,111
|
|
2,566,667
|
|
5,133,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
569,613
|
|
18,987,100
|
|
25,316,133
|
|
37,974,200
|
|
75,948,400
|
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, under the supervision
and with the participation of our management, including our principal executive officer and principal financial officer, whom are
one in 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 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, as appropriate to
allow timely decisions regarding required disclosure.
Inherent Limitations of Internal Controls
Our Principal Executive Officer does not expect
that our disclosure controls or internal controls will prevent all error and all fraud. Although our disclosure controls and procedures
were designed to provide reasonable assurance of achieving their objectives, a control system, no matter how well conceived and
operated, can provide only reasonable, not absolute assurance that the objectives of the system are met. Further, the design of
a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented if there exists in an individual a desire to do so. There can be no assurance that any
design will succeed in achieving its stated goals under all potential future conditions.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control
over financial reporting, other than those stated above, 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 may
become subject to lawsuits and other claims and proceedings that might arise from litigation matters or regulatory audits. 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. We are
not currently involved in any pending or threatened material litigation or other material legal proceedings, nor have we been made
aware of any penalties from regulatory audits, except as the legal action we initiated, as described below.
Players Network filed a civil suit in the Eighth
Judicial District Court in Clark County, Nevada on January 2, 2014, and served the suit on January 23, 2014, listed as case number
A-13-693908-B against Defendants, Comcast Corporation and Advanced Information Systems Inc. On February 27, 2014, the Defendant,
Comcast, and Players Network agreed to, and filed a stipulation with the court, whereby Comcast agreed to not file a motion to
transfer the venue from the Nevada Federal Court and Players Network agreed to dismiss the other defendant, Advanced Information
Systems, Inc., from the lawsuit. On Monday July 21, 2014, United States District Court Magistrate Judge George Foley, Jr. denied
Comcast’s Motion to Stay Discovery. Information and details will be forthcoming as permitted by public disclosure. The court
has established the discovery calendar. Discovery has been slated to begin December 4, 2014. Mr. Barney C. Ales and his firm based
in Las Vegas, Nevada have been retained as the Company's Special Counsel, for the litigation and ultimate trial of this matter.
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 sales of equity securities by
the Company occurred during the three month period ended September 30, 2014:
Common Stock Sales
On August 14, 2014, the Company sold 2,500,000
shares of its common stock in exchange for proceeds of $50,000. The shares were issued on October 23, 2014, and were recorded as
a subscription payable as of September 30, 2014. The issuance was exempt from registration pursuant to Section 4(a)(2) of the Securities
Act of 1933, the investor was accredited, and there was no solicitation in connection with the offering.
Common Stock Issuances for Debt Conversions
On September 23, 2014, the Company issued 662,879
shares of common stock pursuant to the conversion of $7,000 of principal on the First GEL Note. The shares of common stock issuable
upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933.
The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation
D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with our operations, and there was
no solicitation.
On September 9, 2014, the Company issued 719,424
shares of common stock pursuant to the conversion of $6,000 of principal on the First GEL Note. The shares of common stock issuable
upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933.
The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation
D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with our operations, and there was
no solicitation.
On August 13, 2014, the Company issued 509,295
shares of common stock pursuant to the conversion of $5,379 of principal on the First GEL Note. The shares of common stock issuable
upon conversion of the Note will be restricted securities as defined in Rule 144 promulgated under the Securities Act of 1933.
The issuance of the Note was exempt from the registration requirements of the Securities Act of 1933 pursuant to Rule 506 of Regulation
D promulgated thereunder. The purchaser was an accredited and sophisticated investor, familiar with our operations, and there was
no solicitation.
Item 3. Defaults Upon Senior Securities
On October 24, 2014, a note holder submitted
a conversion request to convert $10,000 of principal on the Second LG Note, which was inconsistent with the conversion terms as
stated in the convertible promissory note. The Company requested that the conversion notice be corrected and resubmitted, at which
time the note holder contended the conversion terms were intended to be based on 55% of the lowest closing bid price over the preceding
twelve trading days, as opposed to the stated 55% of the average of the lowest closing bid price of the Common Stock over the preceding
twelve trading days. On October 31, 2014, the note holder sent demand for repayment on the Second LG Note, consisting of $35,000
of principal and $1,214 of accrued interest outstanding as of September 30, 2014. As a result, we are in default on this convertible
promissory note. The note carries an 18% default interest rate and a penalty of $250 per day that the shares are not issued, beginning
on the 4th day after the conversion notice was delivered to the Company. This penalty increased to $500 per day beginning on the
10th day after the conversion notice was delivered to the Company.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
Item 6. Exhibits
|
3.1
|
Certificate of Amendment of Articles of Incorporation Increasing the Authorized Stock filed with the Nevada Secretary of State on May 6, 2013 (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)
|
|
|
|
|
3.2*
|
Articles of Incorporation for Green Leaf Farms Holdings, Inc. filed with the Nevada Secretary of State on July 8, 2014
|
|
|
|
|
3.3*
|
Articles of Organization for Green Leaf Medical, LLC. filed with the Nevada Secretary of State on July 18, 2014
|
|
|
|
|
10.1
|
Convertible Redeemable Note with GEL Properties, LLC (First GEL Note), January 8, 2014 (incorporated by reference to Exhibit 10.1 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
|
|
|
|
|
10.2
|
Collateralized Secured Back End Note with GEL Properties, LLC (First GEL Note), January 8, 2014 (incorporated by reference to Exhibit 10.2 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
|
|
|
|
|
10.3
|
Convertible Redeemable Back End Note with GEL Properties, LLC (First GEL Note), January 8, 2014 (incorporated by reference to Exhibit 10.3 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
|
|
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10.4
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Securities Purchase Agreement with GEL Properties, LLC (First GEL Note), January 8, 2014 (incorporated by reference to Exhibit 10.4 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.5
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Convertible Redeemable Note with LG Capital Funding, LLC (First LG Capital Note), January 8, 2014 (incorporated by reference to Exhibit 10.5 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.6
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Collateralized Secured Back End Note with LG Capital Funding, LLC (First LG Capital Note), January 8, 2014 (incorporated by reference to Exhibit 10.6 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.7
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Convertible Redeemable Back End Note with LG Capital Funding, LLC (First LG Capital Note), January 8, 2014 (incorporated by reference to Exhibit 10.7 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.8
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Securities Purchase Agreement with LG Capital Funding, LLC (First LG Capital Note), January 8, 2014 (incorporated by reference to Exhibit 10.8 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.9
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Subscription Agreement (W. Elsaesser), January 21, 2014 (incorporated by reference to Exhibit 10.9 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.10
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Subscription Agreement (E. Winfield), January 23, 2014 (incorporated by reference to Exhibit 10.10 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.11
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Subscription Agreement (I. Zalcberg), January 30, 2014 (incorporated by reference to Exhibit 10.11 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.12
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Warrant Agreement (I. Zalcberg), January 30, 2014 (incorporated by reference to Exhibit 10.12 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.13
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Subscription Agreement (I. Zalcberg), March 28, 2014 (incorporated by reference to Exhibit 10.13 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.14
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Warrant Agreement (I. Zalcberg), March 28, 2014 (incorporated by reference to Exhibit 10.4 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on March 31, 2014)
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10.15
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Convertible Note with Group 10 Holdings, LLC (First Group 10 Note), May 9, 2014 (incorporated by reference to Exhibit 10.15 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.16
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First Amendment to Convertible Note with Group 10 Holdings, LLC (First Group 10 Note), May 9, 2014 (incorporated by reference to Exhibit 10.16 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.17
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Convertible Note with Typenex Co-Investment, LLC (First Typenex Note), May 20, 2014 (incorporated by reference to Exhibit 10.17 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.18
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Securities Purchase Agreement with Typenex Co-Investment, LLC (First Typenex Note), May 20, 2014 (incorporated by reference to Exhibit 10.18 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.19
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Convertible Note with Vista Capital Investments, LLC (First Vista Note), June 2, 2014 (incorporated by reference to Exhibit 10.19 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.20
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Convertible Note with WHC Capital, LLC (First WHC Note), June 13, 2014 (incorporated by reference to Exhibit 10.20 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.21
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Securities Purchase Agreement with WHC Capital, LLC (First WHC Note), June 13, 2014 (incorporated by reference to Exhibit 10.21 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.22
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Warrant Agreement (WHC Capital, LLC), June 13, 2014 (incorporated by reference to Exhibit 10.22 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.23
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Subscription Agreement (M. Leivotes), April 8, 2014 (incorporated by reference to Exhibit 10.23 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.24
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Warrant Agreement (M. Leivotes), April 8, 2014 (incorporated by reference to Exhibit 10.24 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.25
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Stock Option Agreement (E. Henley), April 11, 2014 (incorporated by reference to Exhibit 10.25 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.26
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Stock Option Agreement (R. Brown), April 11, 2014 (incorporated by reference to Exhibit 10.26 of the Form 10-Q filed with the Securities and Exchange Commission by Players Network on August 19, 2014)
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10.27*
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Subscription Agreement (R. Donald), August 14, 2014
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10.28*
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Convertible Redeemable Note with LG Capital Funding, LLC (Third LG Capital Note), July 15, 2014
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10.29*
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Convertible Redeemable Back End Note with LG Capital Funding, LLC (Third LG Capital Note), July 15, 2014
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10.30*
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Collateralized Secured Promissory Note with LG Capital Funding, LLC (Third LG Capital Note), July 15, 2014
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10.31*
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Securities Purchase Agreement with LG Capital Funding, LLC (Third LG Capital Note), July 15, 2014
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10.32*
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Convertible Promissory Note with WHC Capital, LLC (Second WHC Note), August 19, 2014
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10.33*
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Securities Purchase Agreement with WHC Capital, LLC (Second WHC Note), August 19, 2014
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10.34*
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Investment Agreement with R. Donald and Green Leaf Farms Holdings, August 14, 2014
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21.1*
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Subsidiaries
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31.1*
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Certification of Mark Bradley, CEO and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
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32.1*
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Certification of Mark Bradley, CEO and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
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101.INS*
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XBRL Instance Document
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101.SCH*
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XBRL Schema Document
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101.CAL*
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XBRL Calculation Linkbase Document
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|
101.DEF*
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XBRL Definition Linkbase Document
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|
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|
101.LAB*
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XBRL Labels Linkbase Document
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|
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101.PRE*
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XBRL Presentation Linkbase Document
|
______
* Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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Date: November 17, 2014
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Players Network
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/s/ Mark Bradley
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Mark Bradley
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Chief Executive Officer
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(Principal Executive Officer and Principal Financial Officer)
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EXHIBIT 3.2
ARTICLES OF INCORPORATION
OF
GREEN LEAF FARMS HOLDINGS, INC
a NV Corporation
I, the
undersigned, being the original incorporator herein named, for the purpose of forming a Corporation under the General Corporation
Laws of the State of NV, to do business both within and without the State of NV, do make and file these Articles of Incorporation,
hereby declaring and certifying that the facts herein stated are true:
I.
NAME. The name of the corporation is:
GREEN LEAF FARMS HOLDINGS, INC
II.
REGISTERED AGENT. The street address of the corporation's registered agent and the principal or statutory address of this
corporation in the State of Nevada shall be:
NEVADA CORPORATE HEADQUARTERS,
INC.
101 Convention Center Dr., Ste 700
Las Vegas, NV 89109
This corporation
may maintain an office, or offices, in such other place or places within or without the State of Nevada as may be from time to
time designated by the Board of Directors, or by the bylaws of said corporation, and that this corporation may conduct all corporation
business of every kind and nature, including the holding of all meetings of directors and stockholders, outside the State of Nevada
as well as within the State of Nevada.
III.
SHARES OF STOCK
Section 3.01
Number
and Class.
The Corporation shall authorize the issuance of a single class of Capital Stock in the amount of seventy five thousand
(75,000) shares of Common Stock, at no par value.
Notwithstanding
the foregoing, these Articles hereby vest the Board of Directors of the Corporation with such authority as may be necessary to
prescribe such classes, series and numbers of each class or series of Stock. In addition the Board is hereby vested with such authority
as may be necessary to prescribe the voting powers, designations, preferences, limitations, restrictions and relative rights of
each class or series of Stock created. All classes of Stock may be issued from time to time without action by the Stockholders.
Section 3.02.
No Preemptive Rights.
Unless otherwise determined by the Board of Directors, holders of the Stock of the Corporation shall
not have any preference, preemptive right, or right of subscription to acquire any shares of the Corporation authorized, issued
or sold, or to be authorized, issued or sold, and convertible into shares of the Corporation, nor to any right of subscription
thereto.
Section
3.03.
Non-Assessability of Shares.
The Shares of the Corporation, after the amount of the subscription price has been paid,
in money, property or services, as the Directors shall determine, shall not be subject to assessment to pay the debts of the Corporation,
nor for any other purpose, and no Stock issued as fully paid shall ever be assessable or assessed, and the Articles of Incorporation
shall not be amended in this particular.
IV.
DIRECTORS
Section
4.01.
Governing Board.
The members of the Governing Board of the Corporation shall be styled as Directors.
Section
4.02.
Initial Board of Directors.
The initial Board of Directors shall consist of not less than one (1) and not
more than seven (7) members. The name and address of an initial member of the Board of Directors is as follows:
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NAME
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ADDRESS
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Dianna R. Temple
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P.O. Box 27740
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Las Vegas, Nevada 89126
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This individual shall serve
as Director until the first annual meeting of the Stockholders or until his successor(s) shall have been elected and qualified.
Section
4.03.
Change in Number of Directors.
The number of Directors may be increased or decreased by a duly adopted amendment to
the Bylaws of the Corporation.
V.
BUSINESS PURPOSE.
The corporation shall have unlimited power to engage in and do any lawful act concerning any or
all lawful business for which corporations may be organized under the Law and not limited by the Statutes of Nevada, or any other
state in which it conducts its business.
VI.
INCORPORATOR.
The name and address of the incorporator is Nevada Corporate Headquarters, Inc., P.O, Box 27740, Las Vegas, Nevada 89126.
VII.
PERIOD
OF DURATION.
The Corporation is to have a perpetual existence.
VIII.
PECUNIARY
INTEREST.
Any corporate officer, director, or shareholder of this corporation shall not, in the absence of fraud, be
prohibited from dealing with this corporation either as vendor, purchaser or otherwise. A pecuniary interest in any
transaction by any such director, shareholder or officer shall not disqualify him in any way from acting in his corporate
capacity. No director nor officer, nor any firm, association, or corporation of which he shall be a member, or in which he
may be pecuniarily interested, in any manner, shall be disqualified from dealing with the corporation as a result of the
association. No director nor officer, nor any firm, association, or corporation with which he is connected as aforesaid shall
be liable to account to this corporation or its shareholders for any profit realized by him from or though any such
transaction or contract, it being the express purpose and intent of the Article to permit this corporation to buy from, sell
to, or otherwise deal with the partnerships, firms, or corporations of directors and officers of the corporation, or any one
or more of them who may have pecuniary interest, and the contracts of this corporation, in the absence of fraud, shall not be
void or voidable or affecting in any manner by reason of such position. Furthermore, directors of this corporation may be
counted for a quorum of the Board of Directors of this corporation at a meeting even through they may be pecuniarily
interested in matters considered at a meeting; any action taken at such a meeting with reference to such matters by a
majority of the disinterested directors shall not be void or voidable by this corporation in the absence of fraud.
IX.
INDEMNITY.
Every person who was or is a party to, or is threatened to be made a party to, or is involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact that he, or a person of whom he is the legal representative,
is or was a Director or Officer of the Corporation, or is or was serving at the request of the Corporation as a Director or Officer
of another Corporation, or as its representative in a partnership, joint venture, trust or other enterprise, shall be indemnified
and held harmless to the fullest extent legally permissible under the laws of the State of NV from time to time against all expenses,
liability and loss (including attorneys' fees, judgments, fines and amounts paid or to be paid in settlement) reasonably incurred
or suffered by him in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any
manner desired by such person. The expenses of Officers and Directors incurred in defending a civil or criminal action, suit or
proceeding must be paid by the Corporation as they are incurred and in advance of the final disposition of the action, suit or
proceeding, upon receipt of an undertaking by or on behalf of the Director or Officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to be indemnified by the Corporation. Such right of indemnification
shall not be exclusive of any other right which such Directors, Officers or representatives may have or hereafter acquire, and,
without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under
any bylaw, agreement, vote of Stockholders, provision of law, or otherwise, as well as their rights under this Article.
Without limiting
the application of the foregoing, the Stockholders or Board of Directors may adopt bylaws from time to time with respect to indemnification,
to provide at all times the fullest indemnification permitted by the laws of the State of NV, and may cause the Corporation to
purchase and maintain insurance on behalf of any person who is or was a Director or Officer of the Corporation, or is or was serving
at the request of the Corporation as Director or Officer of another Corporation, or as its representative in a partnership, joint
venture, trust or other enterprises against any liability asserted against such person and incurred in any such capacity or arising
out of such status, whether or not the Corporation would have the power to indemnify such person.
The indemnification
provided in this Article shall continue as to a person who has ceased to be a Director, Officer, Employee or Agent, and shall inure
to the benefit of the heirs, executors and administrators of such person.
X.
AMENDMENTS.
Subject at all times to the express provisions of Section 3.03 which cannot be amended, this Corporation
reserves the right to amend, alter, change, or repeal any provision contained in these Articles of Incorporation or its Bylaws,
in the manner now or hereafter prescribed by statute or by these Articles of Incorporation or said Bylaws, and all rights conferred
upon the Stockholders are granted subject to this reservation.
Xl.
POWERS
OF DIRECTORS.
In furtherance and not in limitation of the powers conferred by statute the Board of Directors is expressly
authorized:
(1) Subject
to the Bylaws, if any, adopted by the Stockholders, to make, alter or repeal the Bylaws of the Corporation;
(2) To
authorize and cause to be executed mortgages and liens, with or without limit as to amount, upon the real and personal
property of the Corporation;
(3) To
authorize the guaranty by the Corporation of securities, evidences of indebtedness and obligations of other persons,
Corporations and business entities;
(4) To
set apart out of any of the funds of the Corporation available for distributions a reserve or reserves for any proper purpose
and to abolish any such reserve;
(5) By
resolution, to designate one or more committees, each committee to consist of at least one Director of the Corporation, which,
to the extent provided in the resolution or in the Bylaws of the Corporation, shall have and may exercise the powers of the Board
of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to
be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in
the Bylaws of the Corporation or as may be determined from time to time by resolution adopted by the Board of Directors; and
(6) To
authorize the Corporation by its Officers or agents to exercise all such powers and to do all such acts and things as may be exercised
or done by the Corporation, except and to the extent that any such statute shall require action by the Stockholders of the Corporation
with regard to the exercising of any such power or the doing of any such act or thing.
In
addition to the powers and authorities hereinbefore or by statute expressly conferred upon them, the Board of Directors may exercise
all such powers and do all such acts and things as may be exercised or done by the Corporation, except as otherwise provided herein
and by law.
IN WITNESS WHEREOF, I have hereunto set my hand on this July 8, 2014, hereby declaring and certifying that the facts
stated hereinabove are true.
/s/ Dianna R.
Temple
Dianna
R. Temple
(For Nevada Corporate Headquarters, Inc.)
I,
NEVADA CORPORATE HEADQUARTERS,
INC.
hereby accept as Registered Agent for the previously named Corporation on this July 8, 2014.
/s/ Trevor C.
Rowley
Trevor C. Rowley - Office Administrator
(On behalf of Nevada Corporate Headquarters, Inc.)
MINUTE BOOK
CERTIFICATE BOOK
AND
STOCK LEDGER
OF
GREEN LEAF FARMS
HOLDINGS, INC,
a NV Corporation
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Registered Agent:
|
Nevada Corporate Headquarters, Inc.
101 Convention Center Dr., Ste
700
Las Vegas, NV 89109
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Client Services Hot Line: (800) 508-1726
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Phone: (800) 398-1077
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Fax: (702) 940-5225
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www.nchinc.com
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RESOLUTION
WRITTEN CONSENT
OF ORIGINAL DIRECTORS OF
GREEN LEAF FARMS HOLDINGS, INC
The
undersigned, being all or a quorum of the original temporary director(s) of GREEN LEAF FARMS HOLDINGS, INC, a NV Corporation, named
in the original Articles of Incorporation, for purposes of incorporation only, which were filed with the Secretary of State of
NV on July 8th, 2014, do hereby consent, in writing, to the following resolution:
RESOLVED,
that this corporation shall be offered for sale and sold in its present shell form prior to the issuance or sale of any of the
corporation's capital stock and/or election of permanent directors and officers and without further organizational procedures or
the further conduct of any business, internal or otherwise any and all such matters, privileges and responsibilities being deferred
in favor of the new owners, directors and officers with the exceptions that the original Articles of Incorporation of this corporation
may be amended by a majority of the original incorporators to accommodate the request and pleasure of the buyer of this said corporate
shell and,
FURTHER,
the directors shall guarantee to, and indemnify the buyer of this corporation that there are no liabilities, taxes or encumbrances
of any kind or nature whatsoever outstanding against this corporation and resign as a director and officer of this corporation
transferring all right(s), title and interest in and to this corporation to the new owners, etc.
IN WITNESS WHEREOF,
the undersigned have executed this written consent as of the date hereof.
Dated
at Las Vegas, Nevada this 8th day of July, 2014.
/s/ Dianna R. Temple
Dianna R. Temple, Director
SAVE AND HOLD HARMLESS
INDEMNITY AGREEMENT
RECEIPT
TRANSFER AND ASSIGNMENT
NEVADA
CORPORATE HEADQUARTERS. Inc., hereby guarantees, represents and unequivocally states to purchaser(s) of GREEN LEAF FARMS HOLDINGS,
INC, a NV corporation shell, that there are absolutely no liabilities, taxes, debts or encumbrances of any kind, type or nature
whatsoever as of this date, accrued by said corporation, owing by said corporation, or outstanding against said corporation and,
FURTHER,
said Nevada Corporate Headquarters, Inc., agrees to save and hold harmless and to completely indemnify the purchaser of said corporation,
his heirs, transferees or assigns, any and all future shareholders, directors and officers of said corporation from any liability
whatsoever related to any liabilities of or on behalf of GREEN LEAF FARMS HOLDINGS, INC, a NV Corporation, legally obligated by
or against said corporation prior to date of resignation, sale and transfer to purchaser.
FURTHER, Nevada Corporate Headquarters,
Inc., hereby acknowledges receipt of a good and
valuable consideration, the receipt and sufficiency
of which is hereby acknowledged as full, complete and final payment of said corporate shell and,
THEREFORE,
said Nevada Corporate Headquarters, Inc. does also hereby acknowledge sale, transfer and assignment of all their total right,
title and interest in and to said corporation, effective as of the date hereof.
IN WITNESS WHEREOF, said officers have hereunto
set their hands this 8th day of July, 2014, at Las Vegas, Nevada.
NEVADA
CORPORATE HEADQUARTERS, INC.
by:
/s/ Dianna R. Temple
Dianna R. Temple, Director
CONSENT TO ACTION WITHOUT A MEETING
OF THE DIRECTORS OF
GREEN LEAF FARMS HOLDINGS, INC
In accordance
with the provisions of NV Corporate Law, Dianna R. Temple, a director of GREEN LEAF FARMS HOLDINGS, INC, hereby consents to the
following action:
RESOLVED
that________________________________________ is hereby appointed a director of GREEN LEAF FARMS HOLDINGS, INC, to serve
until his or her successor is duly elected and qualified.
IN WITNESS WHEREOF, the undersigned has
executed this written consent as of the date hereof.
Dated at Las Vegas, Nevada, this 8th day of July,
2014.
/s/ Dianna R. Temple
Dianna R. Temple, Director
RESIGNATION
I,
Dianna R. Temple, an original incorporator and member of the first Board of Directors of GREEN LEAF FARMS HOLDINGS, INC, a NV Corporation,
hereby tender and submit my resignation as a member of the Board of Directors of said corporation, such resignation to be effective
this 8th day of July, 2014.
/s/ Dianna R. Temple
Dianna R. Temple, Director
ACCEPTANCE
OF APPOINTMENT AS DIRECTOR
I,
__________________________, having been appointed a Director of
GREEN
LEAF FARMS HOLDINGS, INC,
a NV Corporation, do hereby accept said position effective as of the time of my appointment and
as acknowledged below.
Dated this_______________________
day of ____________________, ________
(#) (Month) (Year)
X
_____________________(Sign)
Director
CONSENT
TO ACTION WITHOUT A MEETING OF THE DIRECTORS
ELECTING/APPOINTING
ADDITIONAL DIRECTORS
OF
GREEN
LEAF FARMS HOLDINGS, INC
In
accordance with the provisions of NVCorporate Law; NO Stock having been issued, and therefore, NO Stockholders in existence or
of record yet, __________________________, being the Corporation's sole and only Director, and therefore, constituting a unanimous
quorum, hereby consents to the following action and unanimously:
RESOLVED,
that the following named persons, if any, are named as Directors:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
[Print
Name(s),
if appointed]
is/are hereby appointed Directors of the Corporation, each to serve until his or her successor is duly elected and qualified.
Dated this_______________________
day of ____________________, ________
(#) (Month) (Year)
X
_____________________(Sign)
Director
ACCEPTANCE
OF APPOINTMENT AS DIRECTOR
I,
__________________________, having been appointed a Director of
(Print
Name)
GREEN
LEAF FARMS HOLDINGS, INC,
a NV Corporation, do hereby accept said position, together with any office appertaining thereto
to which I have also been elected in connection with my position and title as Director effective immediately.
Dated this_______________________
day of ____________________, ________
(#) (Month) (Year)
X
_____________________(Sign)
Director
ACCEPTANCE
OF APPOINTMENT AS DIRECTOR
I,
__________________________, having been appointed a Director of
(Print
Name)
GREEN
LEAF FARMS HOLDINGS, INC
,
a NV Corporation, do hereby accept said position, together with any office appertaining
thereto to which I have also been elected in connection with my position and title as Director effective immediately.
Dated this_______________________
day of ____________________, ________
(#) (Month) (Year)
X
_____________________(Sign)
Director
WAIVER OF NOTICE
OF FIRST MEETING
OF BOARD OF
DIRECTORS OF
GREEN LEAF
FARMS HOLDINGS, INC
We,
the undersigned, being all the Directors, do hereby severally waive notice of the time, place and purpose of the First Meeting
of Directors of the Corporation, and consent that the meeting may be held on this_____ day of___________________________
(Month)
,
_________
(Year)
, and we further consent to the transaction of any business requisite to complete the organization of this
Corporation and any and all such other business that may properly come before the meeting.
Dated this_______________________
day of ____________________, ________
(#) (Month) (Year)
(Sign) X
__________________________
Director
__________________________
Director
__________________________
Director
MINUTES OF FIRST MEETING OF BOARD
OF DIRECTORS OF
GREEN LEAF FARMS HOLDINGS, INC,
a NV Corporation
The first meeting of the Board of
Directors of GREEN LEAF FARMS HOLDINGS, INC
convened on the
______
day
of _____________, 20___, pursuant to waiver of notice and
consent to the holding
thereof executed by each director of the corporation. Present were all the directors:
___________________________________________________
___________________________________________________
___________________________________________________
was elected temporary Chairman
and _____________________________________ was elected temporary Secretary, each to serve only until the close of the
meeting.
The Chairman reported that the
Articles of Incorporation of the corporation had been filed in the office of the NV Secretary of State on July 8th, 2014, and
has received an official file number of E0350932014-4, and that as a consequence, the corporation is duly and validly
existing and in good standing under the laws of the state of NV and qualified to proceed with the transactions of business.
The Certificate of Incorporation of the corporation was then exhibited, on motion duly made, seconded and carried, said
Certificate of Incorporation was accepted and approved.
The Secretary
presented a proposed form of bylaws for the regulation and management of the affairs of the corporation. The bylaws were read and
considered, and upon motion duly made, seconded and carried, were adopted and ordered filed with the minutes of the meeting.
On motion
duly made, seconded and carried, the directors were recognized as the first directors of the corporation and it was further moved
that they were to hold office until the first annual meeting of stockholders or until their respective successors shall be duly
elected and qualified.
The
Chairman called for the nomination of officers of the corporation. Thereupon, the following persons were nominated for the
officers of the corporation:
President: ________________________
Vice President: ____________________
Secretary:_________________________
Treasurer: ________________________
No further nominations
being made, the nominations were closed and the directors proceeded to vote on the nominees. All of the directors present at the
meeting having voted and the vote having been counted, the Chairman announced the aforesaid nominees had been duly elected to the
offices set before their respective names. The permanent officers of the corporation then took charge of the meeting.
Upon motion duly made, seconded
and carried, the following resolutions were adopted: RESOLVED, that the Treasurer be and is hereby authorized to pay all fees and
expenses incident to and necessary for the organization of this corporation.
RESOLVED,
that the proper officers of this corporation be and hereby are authorized and directed on behalf of the corporation, to make and
file such certificates, reports, or other instruments as may be required by law to be filed in any state in which said officers
shall find it necessary or expedient to file same to register or authorize the corporation to transact business in such state.
RESOLVED,
that the Treasurer be and hereby is ordered to open a bank account in the name of this corporation with
_____________________ for deposit of funds belonging to the corporation, such funds to be withdrawn only by check of the
corporation signed by its President and/or _____________________.
RESOLVED,
that the actions taken by Nevada Corporate Headquarters, Inc. and Dianna R. Temple prior to the incorporation of the corporation,
but for and on behalf of the corporation, are hereby approved, ratified, and adopted as if done pursuant to corporate authorization.
RESOLVED, a form
of Stock Certificate was presented, examined, approved, and duly adopted for use by the corporation. A specimen was directed to
be inserted in the Corporate Record Book as evidence and sample thereof.
RESOLVED, that the
Board of Directors of this corporation deem it desirable and/or prudent to, from time to time, utilize an official corporate seal
(optional under NV law) and, therefore, the corporate seal presented to this Board, circular in form with the inscription of the
corporate name, NV, and the year of incorporation, be, and hereby is, adopted as the official seal of the corporation, and be it
FURTHER RESOLVED,
that the impression of said seal be made upon the specimen Stock Certificate inserted in the Corporate Record Book as evidence
and sample thereof.
RESOLVED,
that the fiscal year of the corporation shall commence on _____________________, and end on _____________________ of each
year hereafter.
FURTHER
RESOLVED, that Nevada Corporate Headquarters, Inc., 101 Convention Center Dr., Ste 700, Las Vegas, NV 89109, be, and hereby is,
appointed Registered Agent of this corporation, in charge of receiving official and legal documents on behalf of the corporation
and so authorized to discharge the duties of Registered Agent, and be it
FURTHER
RESOLVED, that the Secretary complete all initial registration documents including any initial reports, business licenses or publication
requirements by city, county or state agencies.
FURTHER
RESOLVED, that the Secretary forthwith supply the Registered Agent with a certified copy of the corporation bylaws and stock ledger
statement to be kept on file at the principal office as required by NV law (In the event this has not yet been done).
There being
no further business, upon motion duly made, seconded, and carried, the meeting was adjourned.
______________________________
Secretary
EXHIBIT 3.3
EXHIBIT 10.27
SUBSCRIPTION AGREEMENT
Players Network
1771 East Flamingo Road suite 201A
Las Vegas, Nevada 89119
Gentlemen:
The undersigned understands
that Players Network, a Nevada corporation (the "
Company
"), is offering for sale shares of its common stock, par
value $.001 per share ("
Shares
") set on the terms and conditions set forth in this Subscription Agreement. The
undersigned further understands that the offer and sale of the Shares being made without registration under the Securities Act
of 1933, as amended (the "
Securities Act
").
1.
1.1
Authorization
. On or prior to the Closing, the Company shall have authorized: (a) the sale and issuance to
the Purchaser of the Shares (collectively, the “
Securities
”); and (b) the sale and issuance of the shares of
Common Stock. The closing shall occur upon mutual execution of this Agreement and the undersigned tendering of the purchase price.
2.
1.2
Sale and Issuance
. Subject to the terms and conditions set forth in this Agreement, the Purchaser agrees to purchase
at the Closing, and the Company agrees to sell and issue to the Purchaser at the Closing, for an aggregate purchase price of Fifty
Thousand Dollars ($ 50,000,00), that number of Shares equal to 2,500,000 ($.02).
3.
1.3
Acceptance of Subscription and Issuance of the Securities
. It is understood and agreed that the Company shall
have the right to accept or reject this subscription in its sole discretion. Notwithstanding anything in this Agreement to the
contrary, the Company shall have no obligation to sell any Securities to any person who is a resident of a jurisdiction in which
the sale or issuance of the Securities would constitute a violation of the securities, "blue sky" or other similar laws
of such jurisdiction (collectively referred to as the "State Securities laws").
4.
1.4
Payment for the Securities
. At the Closing the Company shall deliver to the Purchaser a certificate or certificates,
registered in the name of the Purchaser as set forth in Schedule 2.4, representing the shares of Common Stock and a certificate,
substantially in the form of
Exhibit A
, representing the Warrant that the Purchaser is purchasing, against the purchase
price therefor.
5.
1.5
Representations and Warranties of the Company
. The Company represents and warrants that:
(a)
Organization, Good Standing and
Qualification
. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State
of Nevada and has all requisite corporate power and authority to own and operate its properties and to carry on its business as
now conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each
jurisdiction in which qualification is required, except where the failure to so qualify, individually or in the aggregate, would
not have a Material Adverse Effect.
(b)
Capitalization
. The authorized
capital of the Company consists, or will consist immediately prior to the Closing, of (a) 25,000,000 shares of Preferred Stock,
par value $0.001 (the "Preferred Stock"), of which (i) 2,000,000 shares have been designated Series A Preferred Stock,
and (ii) 8,600,000 shares have been designated Series B Preferred Stock, none of which are outstanding and (b) 600,000,000 shares
of common stock, par value $0.001 ("Common Stock"), of which approximately 165,000,000 shares are issued and outstanding.
No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. As of the Closing Date, except as a result of the purchase and sale of
the Securities and for stock options issued by the Company to its employees, directors and consultants, there are no outstanding
options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares
of Common Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue
additional shares of Common Stock or securities convertible into or exercisable for shares of Common Stock. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and non-assessable, have been issued in compliance with all
U.S. federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities.
(c)
SEC Reports; Financial Statements
.
The Company has filed all required SEC Reports for the two years preceding the Closing Date (or such shorter period as the Company
was required by law to file such material). As of their respective dates, the SEC Reports complied in all material respects with
the requirements of the Securities Act and the Exchange Act and the rules and regulations of the SEC promulgated there under, as
applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time
of filing. Such financial statements have been prepared in accordance with GAAP, except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP,
and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for
the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.
(d)
Authorization
. The Company
has all requisite power and authority to execute, deliver and perform its obligations under the Transaction Documents. All corporate
action on the part of the Company and its officers, directors and stockholders necessary for the authorization, execution and delivery
of the Transaction Documents and the performance of all obligations of the Company hereunder and thereunder, and the authorization,
issuance, sale and delivery of the Shares and the Warrants pursuant to this Agreement, has been taken or will be taken prior to
the Closing. The Transaction Documents have been duly executed and delivered by the Company, and assuming that they have been duly
executed and delivered by any party thereto other than the Company or its affiliates, constitute valid and legally binding obligations
of the Company, enforceable against the Company in accordance with their respective terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (b) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies, limited by applicable federal or state securities laws or the public policy underlying such laws.
(e)
Valid Issuance of Shares
.
The Shares have been duly authorized and, when issued, sold and delivered in accordance with the terms of this Agreement for the
consideration set forth herein, and, when issued, sold and delivered in accordance with the terms of this Agreement will be duly
and validly issued, fully paid, and nonassessable and free of all Liens and restrictions on transfer other than the restrictions
on transfer contained in this Agreement, and under applicable state and federal securities laws. No further approval of the security
holders or the Board of Directors of the Company will be required for the issuance and sale of the Securities.
(f)
Offering
. Subject in part
to the truth and accuracy of the Purchaser’s representations set forth in this Agreement, the offer, sale and issuance of
the Shares, the Warrants, the Warrant Shares and the Conversion Shares will be exempt from the registration requirements of the
Securities Act, and are exempt from registration and qualification under the registration, permit or qualification requirements
of all applicable securities laws of any state of the United States.
(g)
Material Changes
. Since the
date of the latest audited financial statements included within the SEC Reports, except as disclosed in the SEC Reports, (a) there
has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse
Effect, (b) the Company has not incurred any liabilities (contingent or otherwise) other than (i) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and (ii) liabilities not required to be reflected in
the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the SEC, (c) the Company
has not altered its method of accounting, (d) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
and (e) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
equity incentive plans. The Company does not have pending before the SEC any request for confidential treatment of information.
(h)
Litigation
. There is no action,
suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against
or affecting the Company, any of its directors, officers or employees or any of its properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “
Action
”),
which (a) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or the transactions contemplated by the Transaction Documents, or (b) would, if there were an unfavorable decision, have or reasonably
be expected to result in, individually or in the aggregate, a Material Adverse Effect.
(i)
Compliance
. The Company (a)
is not in default under or in violation of (and, to the Company’s knowledge, no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company under), nor has the Company received written
notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other
similar agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived) or any material contract filed by the Company with the SEC pursuant to the Securities Act, the Exchange
Act or the rules and regulations promulgated thereunder, (b) is in violation of any order of any court, arbitrator or governmental
body applicable to the Company, (c) is or has been in violation of any statute, rule or regulation of any governmental authority
applicable to the Company, including without limitation all foreign, federal, state and local laws applicable to its business.
(j)
Title to Assets
. The Company
has good and marketable title in fee simple to all real property owned by it that is material to the business of the Company and
good and marketable title in all personal property owned by it that is material to the business of the Company, in each case free
and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and Liens for the payment of federal, state or other
taxes, the payment of which is neither delinquent nor subject to penalties.
(k)
Patents and Trademarks
. The
Company owns, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, licenses and other similar rights that are necessary or material for use in connection with its business as
described in the SEC Reports and which the failure to so have would, individually or in the aggregate, have a Material Adverse
Effect (collectively, the “
Intellectual Property Rights
”). The Company has not received a written notice that
the Intellectual Property Rights used by the Company violates or infringes upon the rights of any Person. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of
the Intellectual Property Rights of the Company.
(l)
Regulatory Permits
. The Company
possesses all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities
necessary to conduct its business as described in the SEC Reports, except where the failure to possess such permits would not,
individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect (“
Material Permits
”),
and the Company has not received any written notice of proceedings relating to the revocation or modification of any Material Permit.
(m)
Transactions
with Affiliates and Employees
. Except as set forth in the SEC Reports, none of the officers or directors of the Company and,
to the knowledge of the Company, none of the employees of the Company, is presently a party to any transaction with the Company
or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess
of $120,000 other than (a) for payment of salary or consulting fees for services rendered, (b) reimbursement for expenses incurred
on behalf of the Company and (c) for other employee benefits, including stock option agreements under any equity incentive plan
of the Company.
(n)
Sarbanes-Oxley;
Internal Accounting Controls
. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which
are applicable to it as of the Initial Closing Date. The Company maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorizations,
(b) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (c) access to assets is permitted only in accordance with management’s general or specific authorization,
and (d) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company has established disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that material
information relating to the Company is made known to the certifying officers by others within those entities, particularly during
the period in which the Company’s most recently filed periodic report under the Exchange Act, as the case may be, is being
prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures
as of the date prior to the filing date of the most recently filed periodic report under the Exchange Act (such date, the “
Evaluation
Date
”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation
Date. Since the Evaluation Date, there have been no significant changes in the Company’s internal controls (as such term
is defined in Item 307(b) of Regulation S-K under the Exchange Act) or, to the Company’s knowledge, in other factors that
could materially affect the Company’s internal controls.
(o)
Disclosure
. The Company has
provided the Purchaser with all the information that the Purchaser has requested for deciding whether to purchase the Series B
Preferred Stock.
(p) Registration Rights. Except as provided
in the Investor’s Rights Agreement the Company has not granted or agreed to grant any registration rights, including piggyback
rights, to any person or entity.
(q)
Corporate
Documents
. Except for amendments necessary to satisfy representations and warranties or conditions contained herein (the form
of which amendments has been approved by the Purchaser), the Articles of Incorporation and Bylaws of the Company are in the form
previously provided to the Purchaser.
(r)
Tax Status
. The Company has
made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction
to which it is subject (unless and only to the extent that the Company has set aside on its books provisions reasonably adequate
for the payment of all unpaid and unreported taxes) and has paid all taxes and other governmental assessments and charges that
are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in
good faith and has set aside on its books provisions reasonably adequate for the payment of all taxes for periods subsequent to
the periods to which such returns, reports or declarations apply.
(s)
Investment Company
. The
Company is not, and is not an affiliate of, and immediately after receipt of payment for the Securities, will not be or be an affiliate
of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
(t)
Insurance
. The Company maintains
insurance underwritten by insurers of recognized financial responsibility, of the types and in the amounts that the Company reasonably
believes is adequate for its business as currently conducted, including, but not limited to, insurance covering all real and personal
property owned or leased by the Company against theft, damage, destruction, acts of vandalism and all other risks customarily insured
against, with such deductibles as are customary for companies in the same or similar business, all of which insurance is in full
force and effect.
(u)
Related Party Transactions
.
Except as set forth in the SEC Reports, no transaction has occurred between or among the Company, on the one hand, and its affiliates,
officers or directors on the other hand.
(v)
Foreign Corrupt Practices
.
Neither the Company, nor, to the knowledge of the Company, any director, officer, agent, employee or other Person acting on behalf
of the Company has, in the course of its actions for, or on behalf of, the Company
(w)
Full Disclosure
. No representation
or warranty of the Company made in this Agreement and the Investor’s Rights Agreement, including any schedules or exhibits
hereto or thereto, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact
necessary to make the statements or facts contained herein or therein not misleading.
6.
1.6
Representations and Warranties of the Undersigned
. The undersigned hereby represents and warrants to the Company
and to each officer, director, controlling person and agent of the Company that:
a.
Organization;
Validity; Enforcements
. (a) The Purchaser has power, authority and capacity to enter into this Agreement and to consummate
the transactions contemplated hereby, (b) the making and performance of this Agreement by the Purchaser and the consummation of
the transactions herein and therein contemplated will not violate or conflict with, result in the breach or violation of, or constitute,
either by itself or upon notice or the passage of time or both, a default under any material agreement, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which the Purchaser is a party, or any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any regulatory body, administrative agency or other governmental agency
or body applicable to the Purchaser, (c) no consent, approval, authorization or other order of any court, regulatory body, administrative
agency or other governmental agency or body is required on the part of the Purchaser for the execution and delivery of this Agreement
or the consummation of the transactions contemplated by this Agreement, (d) upon the execution and delivery of this Agreement,
this Agreement shall constitute a legal, valid and binding obligation of the Purchaser, enforceable in accordance with their terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally.
b.
Purchase Entirely for Own Account
. The Securities are being acquired for investment for the Purchaser’s
own account, not as a nominee or agent and not with a view to the resale or distribution of any part thereof.
c.
Information
. The Purchaser and his advisors, if any, have been furnished with all materials relating to the business,
finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested
by the Purchaser. The Purchaser and his advisors, if any, have been afforded the opportunity to ask questions of the Company; provided,
however, that neither such inquiries nor any other due diligence investigations conducted by the Purchaser or his representatives
shall modify, amend or affect the Purchaser’s right to rely on the Company’s representations and warranties contained
in Section 3. The Purchaser has sought such accounting, legal and tax advice as he has considered necessary to make an informed
investment decision with respect to his acquisition of the Securities.
d.
Investment
Experience
. The Purchaser understands that the purchase of the Securities involves substantial risk. The Purchaser is an investor
in securities of companies in the developmental stage and acknowledges that he can bear the economic risk of his investment and
has such knowledge and experience in financial or business matters that he is capable of evaluating the merits and risks of its
investment in the Securities. The Purchaser has undertaken an independent analysis of the merits and the risks of an investment
in the Securities, based on the Purchaser’s own financial circumstances.
e.
No General Solicitation
. The Purchaser acknowledges that he has not seen, received, been presented with, or been solicited
by any leaflet, public promotional meeting, newspaper or magazine article or advertisement, radio or television advertisement,
or any other form of advertising or general solicitation with respect to the Securities.
f.
Accredited
Purchaser
. The Purchaser is an “accredited investor” within the meaning of SEC Rule 501 of Regulation D, as presently
in effect and Purchaser has executed the Certificate of Accredited Investor Status, attached hereto as
Exhibit D
.
g.
Restricted
Securities
. The Purchaser understands that the Securities are characterized as “restricted securities” under the
federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering
and that under such laws and applicable regulations such securities may be resold without registration under the Securities Act
only in certain limited circumstances. In this connection, the Purchaser represents that he is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby. The Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of)
any of the Securities, nor will the Purchaser engage in any short sale that results in a disposition of any of the Securities
by the Purchaser, except in compliance with the Securities Act and the rules and regulations promulgated thereunder and any applicable
state securities law.
h.
Consultation
With Own Attorney
. The Purchaser has been advised to consult with his own attorney or attorneys regarding all legal matters
concerning an investment in the Company and the tax consequences of purchasing the Securities, and has done so, to the extent Purchaser
considers necessary.
i.
Tax Consequences
.
The Purchaser acknowledges that the tax consequences of investing in the Company will depend on particular circumstances, and
neither the Company, the Company’s officers, any other investors, nor the partners, shareholders, members, managers, agents,
officers, directors, employees, affiliates or consultants of any of them, will be responsible or liable for the tax consequences
to Purchaser of an investment in the Company. The Purchaser will look solely to and rely upon his own advisers with respect to
the tax consequences of this investment.
j.
Information
Provided by Purchaser
. All information which the Purchaser has provided to the Company concerning the Purchaser, his financial
position and his knowledge of financial and business matters, and any information found in the Certificate of Accredited Investor
Status, is truthful, accurate, correct, and complete as of the date set forth herein or therein.
k.
Legends
.
The Purchaser understands that, at all times until such time as (a) a registration statement registering the Shares and the Warrant
Shares has been declared effective or (b) the Shares and Warrant Shares may be sold pursuant to Rule 144 under the Securities
Act without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Shares
and the Warrant Shares will bear a restrictive legend in substantially the following form:
“NEITHER THESE
SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE OR EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT
IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED UNDER SUCH ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.”
a.
(l)
Reliance on Exemptions
. The Purchaser understands that the Securities are being offered and sold to him in reliance
upon specific exemptions from the registration requirements of the Securities Act, the rules and regulations promulgated thereunder
and state securities laws and that the Company is relying upon the truth and accuracy of, and the Purchaser’s compliance
with, the representations, warranties, agreements, acknowledgments and understandings of the Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of the Purchaser to acquire the Securities.
b.
(m)
No Government Review
. The Purchaser understands that no United States federal or state agency or any other government
or governmental agency has passed upon or made any recommendation or endorsement of the Securities.
2.
1.7
Waiver, Amendment
. Neither this Agreement nor any provisions hereof shall be modified, changed, discharged
or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination
is sought.
3.
1.8
Assignability
. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or
by reason hereof shall be assignable by either the Company or the undersigned without the prior written consent of the other party.
4.
1.9
Applicable Law
. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEVADA, REGARDLESS OF THE LAW THAT MIGHT BE APPLIED UNDER PRINCIPLES OF CONFLICTS OF LAW.
5.
1.10
Section and Other Headings
. The section and other headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this Agreement.
6.
1.11
Counterparts
. This Agreement may be executed in any number of counterparts, each of which when so executed
and delivered shall be deemed to be an original and all of which together shall be deemed to be one and the same agreement.
7.
1.12
Notices
. All notices and other communications provided for herein shall be in writing and shall be deemed
to have been duly given if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid:
(a)
If to the Company, to it
at the following address:
Players Network
1771 East Flamingo Rd 201A
Las Vegas, Nevada 89119
Attention: CEO
(b)
If to the undersigned, to
him at the address set forth on the signature page hereto; or at such other address as either party shall have specified by notice
in writing to the other.
1.
1.13
Binding Effect
. The provisions of this Agreement shall be binding upon and accrue to the benefit of the parties
hereto and their respective heirs, legal representatives, successors and assigns.
2.
1.14
Indemnification
. The undersigned acknowledges that he understands the meaning and legal consequences of the
representations, warranties, and covenants set forth herein and that the Company has relied and will rely upon such representations,
warranties and covenants. Therefore, he hereby agrees to indemnify and hold harmless the Company and the officers, directors, controlling
persons and agents of the Company from and against any and all loss, claim, damage, liability or expense, and any action in respect
thereof, joint or several, to which any such person may become subject, due to or arising out a breach of any such representation,
warranty, or covenant, together with all reasonable costs and expenses (including attorneys' fees) incurred by any such person
in connection with any action, suit, proceeding, demand, assessment, or judgment incident to any of the matters so indemnified
against.
3.
1.15
Survival
. All representations, warranties and covenants contained in this Agreement and the indemnification
contained in Section 1.14 shall survive (i) the acceptance of the subscription by the Company and (ii) the death
or disability of the undersigned.
4.
1.16
Notification of Changes
. The undersigned hereby covenants and agrees to notify the Company upon the occurrence
of any event prior to the closing of the purchase of the Securities pursuant to this Agreement that would cause any representation,
warranty, or covenant of the undersigned contained in this Agreement to be false or incorrect.
IN WITNESS WHEREOF, the undersigned has executed
this Subscription
Agreement this _____ day of ______________________,
2014
_________________________________
Signature
_________________________________
Print Name
_________________________________
Number and Street
_________________________________
City, State and Zip
_________________________________
SS# or Tax ID
Accepted as of
______________________ _____, 2014
Players Network
By_________________________________
Accredited Investor Certification
Please check response A or B as appropriate:
_____ A. I am not an accredited investor.
_____ B. I am an accredited investor
because I am (please check the appropriate response):
_____ I h
ave
an individual net worth (or joint net worth with spouse) in excess of $1,000,000; or
_____ I
had
an individual income (not including any amounts attributable to spouse or to property owned by spouse) of more than $200,000 in
each of the previous two calendar years and a reasonable expectation to reach the same income level in the current year; or I had
a joint income with spouse in excess of $300,000 in each of the previous two calendar years and a reasonable expectation to reach
the same income level in the current year; or
_____ I am a
bank
or savings and loan association, whether acting in its individual or fiduciary capacity; or
_____ I am a
broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; or
_____ I am a
n
insurance company; or
_____ I am a
n investment
company registered under the Investment Company Act of 1940, as amended, or a business development company as defined in said Act;
or
_____ I am a
Small
Business Investment Company licensed by the U.S. Small Business Administration; or
_____ I am a
plan established and maintained by a state, its political subdivisions or any agency or instrumentality thereof, for the benefit
of its employees, if such plan has total assets in excess of $5,000,000; or
_____ I am a
n
employee benefit plan within the meaning of Title I of the Employment Retirement Income Security Act of 1974 (“ERISA”),
if the investment decision with respect to this investment is made by a plan fiduciary which is either a bank, savings and loan
association, insurance company or registered investment advisor, or if the employee benefit plan has total assets in excess of
$5,000,000, or if a self-directed plan, its investment decisions are made solely by persons who are accredited investors; or
_____ I am a
private
business development company as defined in the Investment Advisors Act of 1940, as amended; or
_____ I am a
corporation, Massachusetts or similar business trust or partnership, or any tax exempt organization as defined in Section 501(c)(3)
of the Internal Revenue Code, not formed for the specific purpose of acquiring Investor Securities, with the total assets in excess
of $5,000,000; or
_____ I am a
trust
with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring Investor Securities, whose purchase
is directed.
IN WITNESS WHEREOF, the
undersigned has executed this Accredited Investor
Certification this _____ day of ______________________,
2014
_________________________________
Signature
_________________________________
Print Name
EXHIBIT 10.28
THIS NOTE AND THE COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT”)
US $37,500.00
PLAYERS NETWORK
8% CONVERTIBLE REDEEMABLE NOTE
DUE JULY 15, 2015
FOR
VALUE RECEIVED, Players Network (the “Company”) promises to pay to the order of LG CAPITAL FUNDING, LLC and its authorized
successors and permitted assigns ("
Holder
"), the aggregate principal face amount of Thirty Seven Thousand Five
Hundred Dollars exactly (U.S. $37,500.00) on July 15, 2015 ("
Maturity Date
") and to pay interest on the principal
amount outstanding hereunder at the rate of 8% per annum commencing on July 15, 2014. The interest will be paid to the Holder in
whose name this Note is registered on the records of the Company regarding registration and transfers of this Note. The principal
of, and interest on, this Note are payable at 1218 Union Street, Suite #2, Brooklyn, NY 11225
initially, and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time
to time. The Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity
Date, less any amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed
to such Holder at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall
constitute a payment of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note
to the extent of the sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below)
pursuant to paragraph 4(b) herein.
This Note is subject to
the following additional provisions:
1. This Note is exchangeable for an
equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same.
No service charge will be made for such registration or transfer or exchange, except that Holder shall pay any tax or other governmental
charges payable in connection therewith.
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2. The Company shall be entitled to
withhold from all payments any amounts required to be withheld under applicable laws.
3. This Note may be transferred or exchanged
only in compliance with the Securities Act of 1933, as amended ("
Act
") and applicable state securities laws. Any
attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment for transfer of
this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company's
records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent
shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the right of conversion set
forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prospective transferee of this
Note, also is required to give the Company written confirmation that this Note is being converted ("
Notice of Conversion
")
in the form annexed hereto as
Exhibit A
. The date of receipt (including receipt by telecopy) of such Notice of Conversion
shall be the Conversion Date.
4. (a) The Holder of this Note is
entitled, at its option, at any time after 180 days, to convert all or any amount of the principal face amount of this Note then
outstanding into shares of the Company's common stock (the "
Common Stock
") without restrictive legend of any nature,
at a price ("
Conversion Price
") for each share of Common Stock equal to 60% of the
lowest trading price
of the Common Stock as reported on the National Quotations Bureau OTCQB exchange which the Company’s shares are traded
or any exchange upon which the Common Stock may be traded in the future ("
Exchange
"), for the
twelve
prior
trading days including the day upon which a Notice of Conversion is received by the Company (provided such Notice
of Conversion is delivered by fax or other electronic method of communication to the Company after 4 P.M. Eastern Standard or Daylight
Savings Time if the Holder wishes to include the same day closing price). If the shares have not been delivered within 3 business
days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common
Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Once the Holder has received
such shares of Common Stock, the Holder shall surrender this Note to the Company, executed by the Holder evidencing such Holder's
intention to convert this Note or a specified portion hereof, and accompanied by proper assignment hereof in blank. Accrued, but
unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest whole share
. In the event the Company experiences
a DTC “Chill” on its shares, the conversion price shall be decreased to 45% instead of 55% while that “Chill”
is in effect.
(b) Interest on any unpaid principal
balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in cash only.
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(c) During the first six months this
Note is in effect, the Company may redeem this Note by paying to the Holder an amount as follows: (i) if the redemption occurs
within the first 60 days then an amount equal to 115% of the unpaid principal amount of this Note along with any prepaid and earned
interest, (ii) if the redemption occurs after the first 60 days but before the 121
st
day following the issuance of this
Note, then an amount equal to 125% of the unpaid principal amount of this Note along with any prepaid and earned interest and (iii)
if the redemption occurs after the first 120 days but before the 181
st
day following the issuance of this Note, then
an amount equal to 130% of the unpaid principal amount of this Note along with any prepaid and earned interest. This Note may not
be redeemed after 180 days. The redemption must be closed and paid for within 3 business days of the Company sending the redemption
demand or the redemption will be invalid and the Company may not redeem this Note.
(d) Upon (i) a transfer of all or substantially
all of the assets of the Company to any person in a single transaction or series of related transactions, (ii) a reclassification,
capital reorganization or other change or exchange of outstanding shares of the Common Stock, other than a forward or reverse stock
split or stock dividend, or (iii) any consolidation or merger of the Company with or into another person or entity in which the
Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of
the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares
of Common Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale Event"), then, in each case, the Company
shall, upon request of the Holder, redeem this Note in cash for 140% of the principal amount, plus accrued but unpaid interest
through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note
(together with the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the
Conversion Price.
(e) In case of any Sale Event (not
to include a sale of all or substantially all of the Company’s assets) in connection with which this Note is not redeemed
or converted, the Company shall cause effective provision to be made so that the Holder of this Note shall have the right thereafter,
by converting this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property
(including cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder
of the number of shares of Common Stock that could have been purchased upon exercise of the Note and at the same Conversion Price,
as defined in this Note, immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale
Events. If the consideration received by the holders of Common Stock is other than cash, the value shall be as determined by the
Board of Directors of the Company or successor person or entity acting in good faith.
5. No provision of this Note shall alter
or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note
at the time, place, and rate, and in the form, herein prescribed.
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6. The Company hereby expressly waives
demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor, notice of acceleration
or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereto.
7. The Company agrees to pay all costs
and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder in collecting any amount due
under this Note.
8. If one or more of the following described
"Events of Default" shall occur:
(a) The Company shall default in the
payment of principal or interest on this Note or any other note issued to the Holder by the Company; or
(b) Any of the representations or warranties
made by the Company herein or in any certificate or financial or other written statements heretofore or hereafter furnished by
or on behalf of the Company in connection with the execution and delivery of this Note, or the Securities Purchase Agreement under
which this note was issued shall be false or misleading in any respect; or
(c) The Company shall fail to perform
or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company under this Note or
any other note issued to the Holder; or
(d) The Company shall (1) become insolvent;
(2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors
or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for
its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief, consent to the filing of
such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable;
or
(e) A trustee, liquidator or receiver
shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged
within sixty (60) days after such appointment; or
(f) Any governmental agency or any court
of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial
portion of the properties or assets of the Company; or
(g) Unless previously disclosed in the
Company’s filings with the Securities and Exchange Commission, one or more money judgments, writs or warrants of attachment,
or similar process, in excess of fifty thousand dollars ($50,000) in the aggregate, shall be entered or filed against the Company
or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15)
days or in any event later than five (5) days prior to the date of any proposed sale thereunder.
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(h) The Company shall have defaulted
on or breached any term of any other note of similar debt instrument into which the Company has entered and failed to cure such
default within the appropriate grace period; or
(i) The Company shall have its Common
Stock delisted from an exchange (including the OTCBB exchange) or, if the Common Stock trades on an exchange, then trading in the
Common Stock shall be suspended for more than 10 consecutive days;
(j) If a majority of the members of
the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;
(k) The Company shall not deliver to
the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business days of its receipt of
a Notice of Conversion; or
(l) The Company shall not replenish
the reserve set forth in Section 12, within 3 business days of the request of the Holder; or
(m) The Company shall not be “current”
in its filings with the Securities and Exchange Commission; or
(n) The Company shall lose the “bid”
price for its stock in a market (including the OTCQB marketplace or other exchange).
Then, or at any time thereafter, unless cured,
and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall
not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder
may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any kind (other
than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments contained
to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce any and
all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event of Default,
interest shall accrue at a default interest rate of 16% per annum or, if such rate is usurious or not permitted by current law,
then at the highest rate of interest permitted by law. In the event of a breach of Section 8(k) the penalty shall be $250 per day
the shares are not issued beginning on the 4
th
day after the conversion notice was delivered to the Company. This penalty
shall increase to $500 per day beginning on the 10
th
day. The penalty for a breach of Section 8(n) shall be an increase
of the outstanding principal amounts by 20%. In case of a breach of Section 8(i), the outstanding principal due under this Note
shall increase by 50%. If this Note is not paid at maturity, the outstanding principal due under this Note shall increase by 10%.
If the Holder shall commence an action or proceeding
to enforce any provisions of this Note, including, without limitation, engaging an attorney, then if the Holder prevails in such
action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred in the
investigation, preparation and prosecution of such action or proceeding.
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9. In case any provision of this Note
is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall
be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or impaired thereby.
10. Neither this Note nor any term hereof
may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and the Holder.
11. The
Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously
has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information
indicating it is no longer a “shell issuer. Further. The Company will instruct its counsel to either (i) write a 144- 3(a)
(9) opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder’s counsel.
12. The
Company shall issue irrevocable transfer agent instructions reserving 9,513,000 shares of its Common Stock for conversions under
this Note (the “Share Reserve”). The reserve shall be replenished as needed to allow for conversions of this Note.
Upon full conversion of this Note, any shares remaining in the Share Reserve shall be cancelled. The Company shall pay all costs
associated with issuing and delivering the shares.
13. The Company will give the Holder
direct notice of any corporate actions, including but not limited to name changes, stock splits, recapitalizations etc. This notice
shall be given to the Holder as soon as possible under law.
14. This
Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be
performed within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and
the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of
New York. This Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement
shall be effective as an original.
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IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed by an officer thereunto duly authorized.
Dated: _______________
PLAYERS NETWORK
By: __________________________________
Title: _________________________________
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EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered
Holder in order to Convert the Note)
The undersigned hereby
irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of Players Network (“Shares”)
according to the conditions set forth in such Note, as of the date written below.
If Shares are to be issued
in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with
respect thereto.
Date of Conversion:
_________________________________
Applicable Conversion Price: _________________________________
Signature: _________________________________
[Print Name of Holder and Title of Signer]
Address: _________________________________
_________________________________
SSN or EIN: _________________________________
Shares are to be registered in the following name: _________________________
Name: ___________________________________
Address: _________________________________
Tel: _____________________________________
Fax: _____________________________________
SSN or EIN: _______________________________
Shares are to be sent or delivered to the following account:
Account Name: ____________________________
Address: _________________________________
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EXHIBIT 10.29
THIS NOTE AND THE COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT”)
US $37,500.00
PLAYERS NETWORK
8% CONVERTIBLE REDEEMABLE NOTE
DUE JULY 15, 2015
BACK END NOTE
FOR
VALUE RECEIVED, Players Network (the “Company”) promises to pay to the order of LG CAPITAL FUNDING, LLC and its authorized
successors and permitted assigns ("
Holder
"), the aggregate principal face amount of Thirty Seven Thousand Five
Hundred Dollars exactly (U.S. $37,500.00) on July 15, 2015 ("
Maturity Date
") and to pay interest on the principal
amount outstanding hereunder at the rate of 8% per annum commencing on July 15, 2014. The interest will be paid to the Holder in
whose name this Note is registered on the records of the Company regarding registration and transfers of this Note. The principal
of, and interest on, this Note are payable at 1218 Union Street, Suite #2, Brooklyn, NY 11225,
initially,
and if changed, last appearing on the records of the Company as designated in writing by the Holder hereof from time to time. The
Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date, less any
amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder
at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment
of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the
sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph
4(b) herein.
This Note is subject to
the following additional provisions:
1. This Note is exchangeable for an
equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same.
No service charge will be made for such registration or transfer or exchange, except that Holder shall pay any tax or other governmental
charges payable in connection therewith.
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2. The Company shall be entitled to
withhold from all payments any amounts required to be withheld under applicable laws.
3. This Note may be transferred or exchanged
only in compliance with the Securities Act of 1933, as amended ("
Act
") and applicable state securities laws. Any
attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to due presentment for transfer of
this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company's
records as the owner hereof for all other purposes, whether or not this Note be overdue, and neither the Company nor any such agent
shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the right of conversion set
forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prospective transferee of this
Note, also is required to give the Company written confirmation that this Note is being converted ("
Notice of Conversion
")
in the form annexed hereto as
Exhibit A
. The date of receipt (including receipt by telecopy) of such Notice of Conversion
shall be the Conversion Date.
4. (a) The Holder of this Note is entitled, at its option,
after the expiration of the requisite Rule 144 holding period and after full cash payment for the promissory note issued by the
Holder to the Company simultaneously with the issuance by the Company of this Note (the “Holder Issued Note”)),
to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's common
stock (the "
Common Stock
") without restrictive legend of any nature, at a price ("
Conversion Price
")
for each share of Common Stock equal to 60% of the
lowest trading price
of the Common Stock as reported on the National
Quotations Bureau OTCQB exchange which the Company’s shares are traded or any exchange upon which the Common Stock may be
traded in the future ("
Exchange
"), for the
twelve
prior
trading days including the day upon
which a Notice of Conversion is received by the Company (provided such Notice of Conversion is delivered by fax or other electronic
method of communication to the Company after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to include the
same day closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescinded.
Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days
of receipt by the Company of the Notice of Conversion. Once the Holder has received such shares of Common Stock, the Holder shall
surrender this Note to the Company, executed by the Holder evidencing such Holder's intention to convert this Note or a specified
portion hereof, and accompanied by proper assignment hereof in blank. Accrued but unpaid interest shall be subject to conversion.
No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable
shall be rounded to the nearest whole share
. In the event the Company experiences a DTC “Chill” on its shares, the
conversion price shall be decreased to 55% instead of 60% while that “Chill” is in effect.
(b) Interest on any unpaid principal
balance of this Note shall be paid at the rate of 8% per annum. Interest shall be paid by the Company in Common Stock ("Interest
Shares"). The Holder may, at any time, send in a Notice of Conversion to the Company for Interest Shares based on the formula
provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a portion of the accrued interest
calculated on the unpaid principal balance of this Note to the date of such notice.
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(c) This Note may not be prepaid, except
that if the $37,500 Rule 144 convertible redeemable note issued by the Company of even date herewith is redeemed by the Company
within 6 months of the issuance date of such Note, all obligations of the Company under this Note and all obligations of the Holder
under the Holder Issued Note will each be automatically be deemed satisfied and this Note and the Holder Issued Note will be automatically
be deemed cancelled and of no further force or effect.
(d) Upon (i) a transfer of all or substantially
all of the assets of the Company to any person in a single transaction or series of related transactions, (ii) a reclassification,
capital reorganization or other change or exchange of outstanding shares of the Common Stock, other than a forward or reverse stock
split or stock dividend, or (iii) any consolidation or merger of the Company with or into another person or entity in which the
Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of
the Company and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares
of Common Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale Event"), then, in each case, the Company
shall, upon request of the Holder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest
through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note
(together with the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the
Conversion Price.
(e) In case of any Sale Event (not
to include a sale of all or substantially all of the Company’s assets) in connection with which this Note is not redeemed
or converted, the Company shall cause effective provision to be made so that the Holder of this Note shall have the right thereafter,
by converting this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property
(including cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder
of the number of shares of Common Stock that could have been purchased upon exercise of the Note and at the same Conversion Price,
as defined in this Note, immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale
Events. If the consideration received by the holders of Common Stock is other than cash, the value shall be as determined by the
Board of Directors of the Company or successor person or entity acting in good faith.
5. No provision of this Note shall alter
or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note
at the time, place, and rate, and in the form, herein prescribed.
6. The Company hereby expressly waives
demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor, notice of acceleration
or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereto.
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7. The Company agrees to pay all costs
and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder in collecting any amount due
under this Note.
8. If one or more of the following described
"Events of Default" shall occur:
(a) The Company shall default in the
payment of principal or interest on this Note or any other note issued to the Holder by the Company; or
(b) Any of the representations or warranties
made by the Company herein or in any certificate or financial or other written statements heretofore or hereafter furnished by
or on behalf of the Company in connection with the execution and delivery of this Note shall be false or misleading in any respect;
or
(c) The Company shall fail to perform
or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company under this Note or
any other note issued to the Holder and not cure such breach within 10 days; or
(d) The Company shall (1) become insolvent;
(2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors
or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for
its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief, consent to the filing of
such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable;
or
(e) A trustee, liquidator or receiver
shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged
within sixty (60) days after such appointment; or
(f) Any governmental agency or any court
of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial
portion of the properties or assets of the Company; or
(g) Unless previously disclosed in the
Company’s filings with the Securities and Exchange Commission, one or more money judgments, writs or warrants of attachment,
or similar process, in excess of Fifty thousand dollars ($50,000) in the aggregate, shall be entered or filed against the Company
or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15)
days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or
(h) The Company shall have defaulted
on or breached any term of any other note of similar debt instrument into which the Company has entered and failed to cure such
default within the appropriate grace period; or
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(i) The Company shall have its Common
Stock delisted from an exchange (including the OTCBB exchange) or, if the Common Stock trades on an exchange, then trading in the
Common Stock shall be suspended for more than 10 consecutive days;
(j) Intentionally Deleted;
(k) The Company shall not deliver to
the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business days of its receipt of
a Notice of Conversion; or
(l) The Company shall not replenish
the reserve set forth in Section 12, within 5 business days of the request of the Holder ; or
(m) The Company’s Common Stock
has a closing bid price of less than $0.01 per share for at least 5 consecutive trading days; or
(n) The aggregate dollar trading volume
of the Company’s Common Stock is less than fifty thousand dollars ($50,000.00) in any 5 consecutive trading days; or
(o) The Company shall cease to be “current”
in its filings with the Securities and Exchange Commission; or
(p) The Company shall lose
the “bid” price for its stock in a market (including the OTCBB marketplace or other exchange)
Then, or at any time thereafter, unless cured
(except for 8(m) and 8(n) which are incurable defaults, the
sole remedy
of which is to allow the Holder to cancel both this
Note and the Holder Issued Note, and in each and every such case, unless such Event of Default shall have been waived in writing
by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the
Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest or
(further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or
in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without expiration
of any period of grace, enforce any and all of the Holder's rights and remedies provided herein or any other rights or remedies
afforded by law. Upon an Event of Default, interest shall be accrue at a default interest rate of 16% per annum or, if such rate
is usurious or not permitted by current law, then at the highest rate of interest permitted by law. Further, if the Note becomes
due and payable, the Holder may use the outstanding principal and interest due under the Note to offset any payment obligations
it may have to the Company. In the event of a breach of 8(k) the penalty shall be $250 per day the shares are not issued beginning
on the 4
th
day after the conversion notice was delivered to the Company. This penalty shall increase to $500 per day
beginning on the 10
th
day. Once cash funded, the penalty for a breach of Section 8(p) shall be an increase of the outstanding
principal amounts by 20%. Once cash funded, in the event of a breach of Section 8(i), the outstanding principal due under this
Note shall increase by 50%. If this Note is not paid at maturity, the outstanding principal due under this Note shall increase
by 10%.
______
Initials
If the Holder shall commence an action or proceeding
to enforce any provisions of this Note, including, without limitation, engaging an attorney, then, if the Holder prevails in such
action, the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred in the
investigation, preparation and prosecution of such action or proceeding.
9. In case any provision of this Note
is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall
be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or impaired thereby.
10. Neither this Note nor any term hereof
may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and the Holder.
11. The Company represents that it is
not a “shell” issuer and has never been a “shell” issuer or that if it previously has been a “shell”
issuer that at least 12 months have passed since the Company has reported form 10 type information indicating it is no longer a
“shell issuer. Further. The Company will instruct its counsel to either (i) write a 144- 3(a) (9) opinion to allow for salability
of the conversion shares or (ii) accept such opinion from Holder’s counsel.
12. Prior to cash funding of this Note,
The Company will issue irrevocable transfer agent instructions reserving 3x the number of shares of Common Stock necessary to allow
the holder to convert this note based on the discounted conversion price set forth in Section 4(a) herewith. The reserve shall
be replenished as needed to allow for conversions of this Note. Upon full conversion of this Note, the reserve representing this
Note shall be cancelled. The Company will pay all transfer agent costs associated with issuing and delivering the shares.
13. The Company will give the Holder
direct notice of any corporate actions including but not limited to name changes, stock splits, recapitalizations etc. This notice
shall be given to the Holder as soon as possible under law.
14. This Note shall be governed by and
construed in accordance with the laws of New York applicable to contracts made and wholly to be performed within the State of New
York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby mutually waive
trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York. This Agreement may be executed
in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be effective as an original.
______
Initials
IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed by an officer thereunto duly authorized.
Dated: _______________
PLAYERS NETWORK
By: __________________________________
Title: _________________________________
______
Initials
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered
Holder in order to Convert the Note)
The undersigned hereby
irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of Players Network (“Shares”)
according to the conditions set forth in such Note, as of the date written below.
If Shares are to be issued
in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with
respect thereto.
Date of Conversion:
_________________________________
Applicable Conversion Price: _________________________________
Signature: _________________________________
[Print Name of Holder and Title of Signer]
Address: _________________________________
_________________________________
SSN or EIN: _________________________________
Shares are to be registered in the following name: _________________________
Name: ___________________________________
Address: _________________________________
Tel: _____________________________________
Fax: _____________________________________
SSN or EIN: _______________________________
Shares are to be sent or delivered to the following account:
Account Name: ____________________________
Address: _________________________________
______
Initials
EXHIBIT 10.30
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND
THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. LENDERS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE
AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
LG CAPITAL FUNDING, LLC
COLLATERALIZED SECURED PROMISSORY NOTE
BACK END NOTE
|
$37,500
.00
|
Brooklyn, NY
|
|
|
July 15, 2014
|
1.
Principal and Interest
FOR
VALUE RECEIVED, LG Capital Funding, LLC, a New York Limited Liability Company (the "Company") hereby absolutely and unconditionally
promises to pay to
Players Network
(the “Lender"), or
order, the principal amount of Thirty Seven Thousand Five Hundred Dollars ($37,500) no later than March 15, 2015, unless the Lender
does not meet the “current information requirements” required under Rule 144 of the Securities Act of 1933, as amended,
in which case the Company may declare the offsetting note issued by the Lender on the same date herewith to be in Default (as defined
in that note) and cross cancel its payment obligations under this Note as well as the Lenders payment obligations under the offsetting
note. This Full Recourse Note shall bear simple interest at the rate of 8%.
2.
Repayments and Prepayments;
Security
.
a. All principal
under this Note shall be due and payable no later than March 15, 2015, unless
the Lender does not meet the “current information requirements” required under Rule 144 of the Securities Act of 1933,
as amended, in which case the Company may declare the offsetting note issued by the Lender on the same date herewith to be in Default
(as defined in that note) and cross cancel its payment obligations under this Note as well as the Lenders payment obligations under
the offsetting note.
b. The Company may
pay this Note at any time. This note may not be assigned by the Lender, except by operation of law.
c. This Note shall
initially be secured by the pledge of the $37,500.00 8% convertible promissory note issued to the Company by the Lender on even
date herewith (the “Lender Note”).
The Company may exchange this collateral for other collateral with an appraised
value of at least $37,500.00, by providing 3 days prior written notice to the Lender
.
If the Lender does not object to the
substitution of collateral in that 3 day period, such substitution of collateral shall be deemed to have been accepted by the Lender
.
All collateral shall be retained by New Venture Attorneys, P.C., which shall act as the escrow agent for the collateral for the
benefit of the Lender. The Company may not effect any conversions under the Lender Note until it has made full cash payment for
the portion of the Lender Note being converted.
______
Lender Initials to Acceptance of bolded section
above.
3.
Events of Default; Acceleration
.
a. The principal amount
of this Note is subject to prepayment in whole or in part upon the occurrence and during the continuance of any of the following
events (each, an “Event of Default”): the initiation of any bankruptcy, insolvency, moratorium, receivership or reorganization
by or against the Company, or a general assignment of assets by the Company for the benefit of creditors. Upon the occurrence of
any Event of Default, the entire unpaid principal balance of this Note and all of the unpaid interest accrued thereon shall be
immediately due and payable. The Company may offset amounts due to the Lender under this Note by similar amounts that may be due
to the Company by the Lender resulting from breaches under the Lender Note.
b. No remedy herein
conferred upon the Lender is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and in
addition to every other remedy hereunder, now or hereafter existing at law or in equity or otherwise. The Company accepts and agrees
that this Note is a full recourse note and that the Holder may exercise any and all remedies available to it under law.
4.
Notices
.
a. All notices, reports
and other communications required or permitted hereunder shall be in writing and may be delivered in person, by telecopy with written
confirmation, overnight delivery service or U.S. mail, in which event it may be mailed by first-class, certified or registered,
postage prepaid, addressed (i) if to a Lender, at such Lender’s address as the Lender shall have furnished the Company
in writing and (ii) if to the Company at such address as the Company shall have furnished the Lender(s) in writing.
b. Each such notice,
report or other communication shall for all purposes under this Note be treated as effective or having been given when delivered
if delivered personally or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly
maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or, if sent by electronic communication
with confirmation, upon the delivery of electronic communication.
5.
Miscellaneous
.
a. Neither this Note
nor any provisions hereof may be changed, waived, discharged or terminated orally, but only by a signed statement in writing.
b. No failure or delay
by the Lender to exercise any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege preclude any other right, power or privilege. The provisions of this Note are severable and if any one
provision hereof shall be held invalid or unenforceable in whole or in part in any jurisdiction, such invalidity or unenforceability
shall affect only such provision in such jurisdiction. This Note expresses the entire understanding of the parties with respect
to the transactions contemplated hereby. The Company and every endorser and guarantor of this Note regardless of the time, order
or place of signing hereby waives presentment, demand, protest and notice of every kind, and assents to any extension or postponement
of the time for payment or any other indulgence, to any substitution, exchange or release of collateral, and to the addition or
release of any other party or person primarily or secondarily liable.
c. If Lender retains
an attorney for collection of this Note, or if any suit or proceeding is brought for the recovery of all, or any part of, or for
protection of the indebtedness respected by this Note, then the Company agrees to pay all costs and expenses of the suit or proceeding,
or any appeal thereof, incurred by the Lender, including without limitation, reasonable attorneys' fees.
d. This Note shall
for all purposes be governed by, and construed in accordance with the laws of the State of New York (without reference to conflict
of laws).
e. This Note shall
be binding upon the Company's successors and assigns, and shall inure to the benefit of the Lender's successors and assigns.
IN WITNESS WHEREOF, the Company has caused this
Note to be executed by its duly authorized officer to take effect as of the date first hereinabove written.
LG CAPITAL FUNDING, LLC
By: ____________________________
Title: ___________________________
APPROVED:
PLAYERS NETWORK
By: ____________________________
Title: ___________________________
EXHIBIT 10.31
SECURITIES PURCHASE AGREEMENT
This
SECURITIES PURCHASE
AGREEMENT
(the “Agreement”), dated as of July 15, 2014, by and between
Players Network
, a Nevada corporation,
with headquarters located at 1771 E. Flamingo Road, #201-A, Las Vegas, NV 89119 (the “Company”), and
LG Capital
Funding, LLC.
, a New York Limited Liability Company, with its address at 1218 Union Street, Suite #2, Brooklyn, NY 11225 (the
“Buyer”).
WHEREAS
:
A.
The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “1933 Act”);
B. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement
two 8% convertible notes of the Company, in the forms attached hereto as Exhibit A and B in the aggregate principal amount of $75,000.00
(with the first note being in the amount of $37,500.00 and the second note being in the amount of $37,500.00 (together with any
note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof,
the “Note”), convertible into shares of common stock, $0.001 par value per share, of the Company (the “Common
Stock”), upon the terms and subject to the limitations and conditions set forth in such Note. The first of the two notes
(the “First Note”) shall be paid for by the Buyer as set forth herein. The second of the note (the “Second Note”)
shall initially be paid for by the issuance of an offsetting $37,500.00 secured note issued to the Company by the Buyer (“Buyer
Note”), provided that prior to conversion of the Second Note, the Buyer must have paid off the Buyer Note in cash such that
the Second Note may not be converted until it has been paid for in cash.
C. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is
set forth immediately below its name on the signature pages hereto; and
NOW THEREFORE
, the
Company and the Buyer severally (and not jointly) hereby agree as follows:
1.
Purchase and Sale of Note.
a.
Purchase of Note
. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer
agrees to purchase from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the
signature pages hereto.
b.
Form
of Payment
. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the Note to be issued and
sold to it at the Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds
to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note in the principal
amount equal to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and
(ii) the Company shall deliver such duly executed Note on behalf of the
Company, to the Buyer, against delivery of such Purchase Price.
c.
Closing Date
. The date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing
Date”) shall be on or about July 9, 2014, or such other mutually agreed upon time. The closing of the transactions contemplated
by this Agreement (the “Closing”) shall occur on the Closing Date at such location as may be agreed to by the parties.
Subsequent Closings shall occur when the Buyer Note is repaid. The closing of the Second Note shall be on or before the dates specified
in the Buyer Note.
The Company may opt out of a closing on the Second Note by giving the Purchaser written notice of its
intent to opt out at least 15 days prior to the six month anniversary of the Second Note
2.
Buyer’s Representations and Warranties.
The Buyer represents and warrants to the Company that:
a.
Investment Purpose
. As of the date hereof, the Buyer is purchasing the Note and the shares of Common Stock issuable
upon conversion of or otherwise pursuant to the Note, such shares of Common Stock being collectively referred to herein as the
“Conversion Shares” and, collectively with the Note, the “Securities”) for its own account and not with
a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration
under the 1933 Act;
provided
,
however
, that by making the representations herein, the Buyer does not agree to hold
any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an exemption under the 1933 Act.
b.
Accredited Investor Status
. The Buyer is an “accredited investor” as that term is defined in Rule 501(a)
of Regulation D (an “Accredited Investor”).
c.
Reliance on Exemptions
. The Buyer understands that the Securities are being offered and sold to it in reliance upon
specific exemptions from the registration requirements of United States federal and state securities laws and that the Company
is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and
the eligibility of the Buyer to acquire the Securities.
d.
Information
. The Buyer and its advisors, if any, have been, and for so long as the Note remain outstanding will continue
to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to
the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any,
have been, and for so long as the Note remain outstanding will continue to be, afforded the opportunity to ask questions of the
Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will
not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure
to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives
shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section
3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware
of any facts that may constitute a breach of any of the Company's representations and warranties made herein.
e.
Governmental Review
. The Buyer understands that no United States federal or state agency or any other government
or governmental agency has passed upon or made any recommendation or endorsement of the Securities.
f.
Transfer
or Re-sale
. The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being
registered under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless
(a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall
have delivered to the Company, at the cost of the Buyer, an opinion of counsel that shall be in form, substance and scope
customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may
be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company,
(c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the
1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities
only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to
Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule)
(“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Buyer, an opinion of
counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion
shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in
accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under
circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as
that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register
such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities
may be pledged as collateral in connection with a
bona
fide
margin account or other lending arrangement.
g.
Legends
. The Buyer understands that the Note and, until such time as the Conversion Shares have been registered under
the 1933 Act may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular
date that can then be immediately sold, the Conversion Shares may bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the certificates for such Securities):
“NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES.”
The legend set forth above
shall be removed and the Company shall issue a certificate without such legend to the holder of any Security upon which it is stamped,
if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective
registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction
as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company
with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect
that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted
by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by
a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any.
In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities
pursuant to an exemption from registration, such as Rule 144 or Regulation S, within 2 business days, it will be considered an
Event of Default under the Note.
h.
Authorization; Enforcement
. This Agreement has been duly and validly authorized. This Agreement has been duly executed
and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in
accordance with its terms.
i.
Residency
. The Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the
signature pages hereto.
3.
Representations and Warranties of the Company
. The Company represents and warrants to the Buyer that, except as otherwise
disclosed in the Company’s public filings and reports with the Securities and Exchange Commission:
a.
Organization and Qualification
. The Company and each of its subsidiaries, if any, is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority
(corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased,
used, operated and conducted.
b.
Authorization; Enforcement
. (i) The Company has all requisite corporate power and authority to enter into and perform
this Agreement, the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance
with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Note by the Company and the consummation
by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance
and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by
the Company’s Board of Directors and no further consent or authorization of the Company, its Board of Directors, or its shareholders
is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such
authorized representative is the true and official representative with authority to sign this Agreement and the other documents
executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery
by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms.
c.
Issuance of Shares
. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the
Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens,
claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights
of shareholders of the Company and will not impose personal liability upon the holder thereof.
d.
Acknowledgment of Dilution
. The Company understands and acknowledges the potentially dilutive effect to the Common
Stock upon the issuance of the Conversion Shares upon conversion of the Note. The Company further acknowledges that its obligation
to issue Conversion Shares upon conversion of the Note in accordance with this Agreement, the Note is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.
e.
No Conflicts
. The execution, delivery and performance of this Agreement, the Note by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation
for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate
of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default
(or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company
or any of its subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or
its securities are subject) applicable to the Company or any of its subsidiaries or by which any property or asset of the Company
or any of its subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate, have a material adverse effect). All consents, authorizations,
orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained
or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the Over-the-Counter
Quotations Bureau (the “OTCQB”) and does not reasonably anticipate that the Common Stock will be delisted by the OTCQB
in the foreseeable future, nor are the Company’s securities “chilled” by FINRA. The Company and its subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.
f.
Absence of Litigation
. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court,
public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its
subsidiaries, threatened against or affecting the Company or any of its subsidiaries, or their officers or directors in their capacity
as such, that could have a material adverse effect. Schedule 3(f) contains a complete list and summary description of any pending
or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its subsidiaries, without
regard to whether it would have a material adverse effect. The Company and its subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.
g.
Acknowledgment Regarding Buyer’ Purchase of Securities
. The Company acknowledges and agrees that the Buyer
is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated
hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer
or any of its respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is
not advice or a recommendation and is merely incidental to the Buyer’ purchase of the Securities. The Company further represents
to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation
of the Company and its representatives.
h.
No Integrated Offering
. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf,
has directly or indirectly made any offers or sales in any security or solicited any offers to buy any security under circumstances
that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities
to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.
i.
Title to Property
. The Company and its subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by them which is material to the business of the Company and its subsidiaries,
in each case free and Clean of all liens, encumbrances and defects except such as are described in Schedule 3(i) or such as would
not have a material adverse effect. Any real property and facilities held under lease by the Company and its subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as would not have a material adverse effect.
j.
Breach of Representations and Warranties by the Company
. If the Company breaches any of the representations or warranties
set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be
considered an Event of default under the Note.
4.
COVENANTS
.
a.
Expenses
. At the Closing, the Company shall reimburse Buyer for expenses incurred by them in connection with the
negotiation, preparation, execution, delivery and performance of this Agreement and the other agreements to be executed in connection
herewith (“Documents”), including, without limitation, reasonable attorneys’ and consultants’ fees and
expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Documents
or any consents or waivers of provisions in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs
of restructuring the transactions contemplated by the Documents. When possible, the Company must pay these fees directly, otherwise
the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice
by the Buyer or the submission of an invoice by the Buyer. The Company’s obligation with respect to this transaction is to
reimburse Buyer’ expenses shall be $1,750 in legal fees, which shall be deduced from the Note.
b.
Listing
. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange
or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance)
and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed,
such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long
as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCQB or any equivalent replacement
exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New
York Stock Exchange (“NYSE”), or the American Stock Exchange (“AMEX”) and will comply in all respects with
the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority
(“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any notices
it receives from the OTCQB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the
continued eligibility of the Common Stock for listing on such exchanges and quotation systems.
c.
Corporate Existence
. So long as the Buyer beneficially owns any Note, the Company shall maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or
sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i)
assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith
and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTCQB, Nasdaq, Nasdaq SmallCap, NYSE
or AMEX.
d.
No Integration
. The Company shall not make any offers or sales of any security (other than the Securities) under
circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the
offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder
approval provision applicable to the Company or its securities.
e.
Breach of Covenants
. If the Company breaches any of the covenants set forth in this Section 4, and in addition to
any other remedies available to the Buyer pursuant to this Agreement, it will be considered an event of default under the Note.
5.
Governing Law; Miscellaneous
.
a.
Governing Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of New York or in the federal courts located in the state
and county of New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon
forum non conveniens
.
The Company and Buyer waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith
is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision
which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of
any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by law.
b.
Counterparts; Signatures by Facsimile
. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts
have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to
the other party hereto by facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this
Agreement.
c.
Headings
. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect
the interpretation of, this Agreement.
d.
Severability
. In the event that any provision of this Agreement is invalid or unenforceable under any applicable
statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall
be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision hereof.
e.
Entire Agreement; Amendments
. This Agreement and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein,
neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No
provision of this Agreement may be waived or amended other than by an instrument in writing signed by the majority in interest
of the Buyer.
f.
Notices
. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:
If to the Company,
to:
Players Network
1771 E. Flamingo
Road, Suite # 201-A
Las Vegas,
NV 89119
Attn: Mark Bradley, CEO
If to the Buyer:
LG CAPITAL FUNDING, LLC
1218 Union Street,
Suite #2,
Brooklyn, NY
11225
Attn: Joseph
Lerman
Each party shall provide
notice to the other party of any change in address.
g.
Successors and Assigns
. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other. Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any person that purchases
Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the
1934 Act, without the consent of the Company.
h.
Third Party Beneficiaries
. This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
i.
Survival
. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement
shall survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The
Company agrees to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage
arising as a result of or related to any breach or alleged breach by the Company of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses
as they are incurred.
j.
Further Assurances
. Each party shall do and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions
contemplated hereby.
k.
No Strict Construction
. The language used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be applied against any party.
l.
Remedies
. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to
the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity
of showing economic loss and without any bond or other security being required.
IN WITNESS WHEREOF, the
undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.
Players Network
By: _______________________________
Mark Bradley
Chief Executive Officer
LG CAPITAL FUNDING, LLC.
By: _______________________________
Name: Joseph Lerman
Title: Manager
AGGREGATE SUBSCRIPTION AMOUNT:
|
Aggregate Principal Amount of Note:
|
$75,000.00
|
Aggregate Purchase Price:
Note 1: $37,500.00 less $1,750.00 in legal
fees and $3,500.00 in due diligence fees to Brighton Capital Limited.
Note 2: $37,500.00 less $1,750.00 in legal
fees $3,500.00 in due diligence fees to Brighton Capital Limited.
EXHIBIT A
144 NOTE - $37,500
EXHIBIT B
BACK END NOTE 1
$37,500
EXHIBIT 10.32
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS NOTE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.
Principal Amount: $45,000
Date: August 19, 2014
CONVERTIBLE PROMISSORY NOTE
Players Network, a Nevada Corporation.
,
(hereinafter called the “Issuer” or “PNTV”), hereby promises to pay to the order of
WHC Capital, LLC
,
a Delaware Limited Liability Company, or its registered assigns (the “Holder”) the sum of $45,000, together with any
interest as set forth herein, on August 19, 2015 (the “Maturity Date”), and to pay interest on the unpaid principal
balance hereof at the rate of Eight percent (8%) (the “Interest Rate”) per annum from the date hereof (the “Issue
Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise.
This Note may not be prepaid in whole or in part
except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note which is not paid when due shall
bear interest at the rate of twenty two percent (22%) per annum from the due date thereof until the same is paid (“Default
Interest”). Interest shall commence accruing on the date that the Note is fully paid and shall be computed on the basis of
a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not converted into common stock)
shall be made in lawful money of the United States of America.
All payments shall be made at such address as the
Holder shall hereafter give to the Issuer by written notice made in accordance with the provisions of this Note. Whenever any amount
expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall instead be due on the
next succeeding day which is a business day and, in the case of any interest payment date which is not the date on which this Note
is paid in full, the extension of the due date thereof shall not be taken into account for purposes of determining the amount of
interest due on such date. As used in this Note, the term “business day” shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in the city of New York, New York are authorized or required by law or executive order
to remain closed. Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in
the supporting documents of same date (attached hereto).
This Note is free from all taxes,
liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar
rights of shareholders of the Issuer and will not impose personal liability upon the holder thereof.
The following terms shall apply to this Note:
ARTICLE I. CONVERSION RIGHTS
1.1
Conversion
Right
. The Holder shall have the right and at any time during the period beginning on the date of this Note to convert all
or any part of the outstanding and unpaid principal amount of this Note into fully paid and non- assessable shares of Common Stock,
as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Issuer into which such
Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined
as provided herein (a “Conversion”);
provided
,
however
, that in no event shall the Holder be entitled
to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number
of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion
of any other security of the Issuer subject to a limitation on conversion or exercise analogous to the limitations contained herein)
and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the
determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than
4.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso,
provided
,
further
,
however
, that the limitations on conversion may be waived by the Holder upon, at the election of the Holder, not less than
61 days’ prior notice to the Issuer, and the provisions of the conversion limitation shall continue to apply until such
61st day (or such later date, as determined by the Holder, as may be specified in such notice of waiver). The number of shares
of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined
below) by the applicable Conversion Price then in effect on the date specified in the notice of conversion, (the “Notice
of Conversion”), delivered to the Issuer by the Holder in accordance with the Sections below; provided that the Notice of
Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to
the Issuer before 6:00 p.m., New York, New York time on such conversion date (the “Conversion Date”).
The term “Conversion Amount” means, with
respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion
plus
(2) at the Issuer’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates provided
in this Note to the Conversion Date,
plus
(3) at the Issuer’s option, Default Interest, if any, on the amounts referred
to in the immediately preceding clauses (1) and/or (2)
plus
(4) at the Holder’s option, any amounts owed to the Holder.
1.2
Conversion Price
.
(a)
Calculation
of Conversion Price
. Holder, at its discretion, shall have the right to convert this Note in its entirety or in part(s)
into common stock of the Company valued at a Forty Two and a half percent (42.5%) discount off of the average of the two (2) lowest
closing bid prices for the Company’s common stock during the Ten (10) trading days immediately preceding a conversion date,
as reported by Quotestream.
(b)
Conversion Price During Major Announcements
. Notwithstanding anything contained in the
preceding section to the contrary, in the event the Issuer (i) makes a public announcement that it intends to consolidate or merge
with any other corporation (other than a merger in which the Issuer is the surviving or continuing corporation and its capital
stock is unchanged) or sell or transfer all or substantially all of the assets of the Issuer or (ii) any person, group or entity
(including the Issuer) publicly announces a tender offer to purchase 50% or more of the Issuer’s Common Stock (or any other
takeover scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement
Date”), then the Conversion Price shall, effective upon the Announcement Date and continuing through the Adjusted Conversion
Price Termination Date (as defined below), be equal to the lower of (x) the Conversion Price which would have been applicable
for a Conversion occurring on the Announcement Date and (y) the Conversion Price that would otherwise be in effect. From and after
the Adjusted Conversion Price Termination Date, the Conversion Price shall be determined as set forth in this Section. For purposes
hereof, “Adjusted Conversion Price Termination Date” shall mean, with respect to any proposed transaction or tender
offer (or takeover scheme) for which a public announcement as contemplated by this Section has been made, the date upon which
the Issuer (in the case of clause (i) above) or the person, group or entity (in the case of clause (ii) above) consummates or
publicly announces the termination or abandonment of the proposed transaction or tender offer (or takeover scheme) which caused
this Section 1.2(b) to become operative.
1.3
Authorized
Shares
. The Issuer covenants that during the period the conversion right exists, the Issuer will reserve from its authorized
and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note. The Issuer is required at all times to have authorized and reserved five times the number
of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from
time to time)(the “Reserved Amount”). The Reserved Amount shall be increased from time to time in accordance with
the Issuer’s obligations.
The Issuer represents that upon issuance, such shares will be duly and validly issued, fully paid
and non-assessable. In addition, if the Issuer shall issue any securities or make any change to its capital structure which would
change the number of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the
Issuer shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common
Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Notes.
The Issuer (i) acknowledges
that
it has irrevocably instructed its transfer agent
to issue certificates for the Common Stock issuable upon conversion of
this Note, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are charged
with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance
with the terms and conditions of this Note.
If, at any time the Issuer does
not maintain the Reserved Amount it will be considered an Event of Default as defined in this Note.
1.4
Method of Conversion
.
(a)
Mechanics of Conversion
.
This Note may be converted by the Holder in whole or in part at any time from time to time after the Issue Date, by (A) submitting
to the Issuer a Notice of Conversion (by facsimile, e-mail or other reasonable means of communication dispatched on the Conversion
Date prior to 6:00 p.m., New York, New York time).
(b)
Surrender of Note
Upon Conversion
. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note in accordance with
the terms hereof, the Holder shall not be required to physically surrender this Note to the Issuer unless the entire unpaid principal
amount of this Note is so converted. The Holder and the Issuer shall maintain records showing the principal amount so converted
and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Issuer, so as not
torequire physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of
the Issuer shall,
prima facie,
be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing,
if any portion of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically
surrenders this Note to the Issuer, whereupon the Issuer will forthwith issue and deliver upon the order of the Holder a new Note
of like tenor, registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing
in the aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge
and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted
principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.
(c)
Payment of Taxes
.
The Issuer shall not be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery
of shares of Common Stock or other securities or property on conversion of this Note in a name other than that of the Holder (or
in street name), and the Issuer shall not be required to issue or deliver any such shares or other securities or property unless
and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the
Holder’s account) requesting the issuance thereof shall have paid to the Issuer the amount of any such tax or shall have
established to the satisfaction of the Issuer that such tax has been paid.
(d)
Delivery of Common
Stock Upon Conversion
. Upon receipt by the Issuer from the Holder of a facsimile transmission or e-mail (or other reasonable
means of communication) of a Notice of Conversion meeting the requirements for conversion as provided in this Section, the Issuer
shall issue and deliver or cause to be issued and delivered to or upon the order of the Holder certificates for the Common Stock
issuable upon such conversion within three (3) business days after such receipt (the “Deadline”) (and, solely in the
case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and
the Purchase Agreement.
(e)
Obligation of Issuer to Deliver Common
Stock
. Upon receipt by the Issuer of a Notice of Conversion, the Holder shall be deemed to be the holder of record of the Common
Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued and unpaid interest on this Note
shall be reduced to reflect such conversion, and, unless the Issuer defaults on its obligations under this Article I, all rights
with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock
or other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion
as provided herein, the Issuer’s obligation to issue and deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the Holder to enforce the same, any waiver or consent with respect
to any provision thereof, the recovery of any judgment against any person or any action to enforce the same, any failure or delay
in the enforcement of any other obligation of the Issuer to the holder of record, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder of any obligation to the Issuer, and irrespective of any other circumstance
which might otherwise limit such obligation of the Issuer to the Holder in connection with such conversion. The Conversion Date
specified in the Notice of Conversion shall be the Conversion Date so long as the Notice of Conversion is received by the Issuer
before 6:00 p.m., New York, New York time, on such date.
(f)
Delivery
of Common Stock by Electronic Transfer
. In lieu of delivering physical certificates representing the Common Stock
issuable upon conversion, provided the Issuer is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, the Issuer shall use its best efforts to cause its transfer agent to
electronically transmit the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s
Broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.
(g)
Failure to Deliver
Common Stock Prior to Deadline
. Without in any way limiting the Holder’s right to pursue other remedies, including actual
damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this Note is
not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure shall
be governed by such Section) the Issuer shall pay to the Holder $2,000 per day in cash, for each day beyond the Deadline that the
Issuer fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month following the
month in which it has accrued or, at the option of the Holder (by written notice to the Issuer by the first day of the month following
the month in which it has accrued), shall be added to the principal amount of this Note, in which event interest shall accrue thereon
in accordance with the terms of this Note and such additional principal amount shall be convertible into Common Stock in accordance
with the terms of this Note. The Issuer agrees that the right to convert is a valuable right to the Holder. The damages resulting
from a failure, attempt to frustrate, interference with such conversion right are difficult if not impossible to qualify. Accordingly
the parties acknowledge that the liquidated damages provision contained in this Section are justified. Any delay or failure of
performance by the Issuer hereunder shall be excused if and to the extent caused by Force Majeure. For purposes of this agreement,
Force Majeure shall mean a cause or event that is not reasonably foreseeable and/or caused by the Issuer, including acts of God,
fires, floods, explosions, riots wars, hurricanes, etc.
1.5
Concerning
the Shares
. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred unless (i)
such shares are sold pursuant to an effective registration statement under the Act or (ii) the Issuer or its transfer agent
shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144
under the Act (or a successor rule) (“Rule 144”) or (iv) such shares are transferred to an
“affiliate” (as defined in Rule 144) of the Issuer who agrees to sell or otherwise transfer the shares only in
accordance with this Section 1.5 and who is an Accredited Investor. Except as otherwise provided herein (and subject to the
removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note have
been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of
securities as of a particular date that can then be immediately sold, each certificate for shares of Common Stock
issuable upon conversion of this Note that has not been so included in an effective registration statement or that has not
been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall bear a
legend substantially in the following form, as appropriate:
“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO
WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY
THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
The legend set forth above shall be
removed and the Issuer shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Issuer or
its transfer agent shall have received an opinion of counsel, in form, substance and scope customary for opinions of counsel
in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made without
registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or (ii)
in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder
under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any
restriction as to the number of securities as of a particular date that can then be immediately sold. In the event that the
Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to
an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default
pursuant to this note.
1.6
Effect of Certain Events
.
(a)
Effect
of Merger, Consolidation, Etc
. At the option of the Holder, the sale, conveyance or disposition of all or substantially
all of the assets of the Issuer, the effectuation by the Issuer of a transaction or series of related transactions in which
more than 50% of the voting power of the Issuer is disposed of, or the consolidation, merger or other business combination of
the Issuer with or into any other Person (as defined below) or Persons when the Issuer is not the survivor shall either: (i)
be deemed to be an Event of Default (as defined in Article III) pursuant to which the Issuer shall be required to pay to the
Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in
Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual,
corporation, limited liability company, partnership, association, trust or other entity or
organization.
(b)
Adjustment Due to Merger, Consolidation, Etc
. If, at any time when this Note is
issued and outstanding and prior to conversion of all of the Notes, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization, or other similar event, as a result of which shares of Common Stock of the Issuer
shall be changed into the same or a different number of shares of another class or classes of stock or securities of the
Issuer or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Issuer other
than in connection with a plan of complete liquidation of the Issuer, then the Holder of this Note shall thereafter have the
right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified herein and in lieu
of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which the
Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such
transaction (without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions
shall be made with respect to the rights and interests of the Holder of this Note to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities or
assets thereafter deliverable upon the conversion hereof. The Issuer shall not affect any transaction described in this
Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event
at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if
there is no such record date, the consummation of, such merger, consolidation, exchange of shares,
recapitalization, reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to
convert this Note) and (b) the resulting successor or acquiring entity (if not the Issuer) assumes by written instrument the
obligations of this Section 1.6(b). The above provisions shall similarly apply to successive consolidations, mergers,
sales, transfers or share exchanges.
(c)
Adjustment
Due to Distribution
. If the Issuer shall declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or
distribution to the Issuer’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this
Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets
which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such
Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such
Distribution.
(d)
Adjustment Due to Dilutive Issuance
. If, at
any time when any Notes are issued and outstanding, the Issuer issues or sells, or in accordance with this Section hereof is deemed
to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share (before deduction of
reasonable expenses or commissions or underwriting discounts or allowances in connection therewith) less than the Conversion Price
in effect on the date of such issuance (or deemed issuance) of such shares of Common Stock (a “Dilutive Issuance”),
then immediately upon the Dilutive Issuance, the Conversion Price will be reduced to the amount of the consideration per share
received by the Issuer in such Dilutive Issuance.
The Issuer shall be deemed to
have issued or sold shares of Common Stock if the Issuer in any manner issues or grants any warrants, rights or options (not
including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common Stock
or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants,
rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”)
and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion
Price then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding
sentence, the “price per share for which Common Stock is issuable upon the exercise of such Options” is
determined by dividing (i) the total amount, if any, received or receivable by the Issuer as consideration for the issuance
or granting of all such Options, plus the minimum aggregate amount of additional consideration, if any, payable to the Issuer
upon the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the exercise of such
Options, the minimum aggregate amount of additional consideration payable upon the conversion or exchange thereof at the time
such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common
Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible Securities, if applicable). No
further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock upon the exercise of
such Options or upon the conversion or exchange of Convertible Securities issuable upon exercise of such Options.
Additionally, the Issuer shall be deemed
to have issued or sold shares of Common Stock if the Issuer in any manner issues or sells any Convertible Securities, whether
or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share
for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the
Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price per share
for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount, if
any, received or receivable by the Issuer as consideration for the issuance or sale of all such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the Issuer upon the conversion or exchange thereof at
the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of Common
Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion
Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.
(e)
Purchase Rights
. If,
at any time when any Notes are issued and outstanding, the Issuer issues any convertible securities or rights to purchase stock,
warrants, securities or other property (the “Purchase Rights”) pro rata to the record holders of any class of Common
Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon
complete conversion of this Note (without regard
to any limitations on conversion contained herein) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights or, if no such record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.
(f)
Notice of Adjustments
.
Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described in this Section
1.6, the Issuer, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish to the Holder of
a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment
is based. The Issuer shall, upon the written request at any time of the Holder, furnish to such Holder a like certificate setting
forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number of shares of Common
Stock and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note.
1.7
Trading Market Limitations
.
Unless permitted by the applicable rules and regulations of the principal securities market on which the Common Stock is then listed
or traded, in no event shall the Issuer issue upon conversion of or otherwise pursuant to this Note and the other Notes issued
pursuant to the Purchase Agreement more than the maximum number of shares of Common Stock that the Issuer can issue pursuant to
any rule of the principal United States securities market on which the Common Stock is then traded (the “Maximum Share Amount”),
which shall be 4.99% of the total shares outstanding on the Closing Date (as defined in the Purchase Agreement), subject to equitable
adjustment from time to time for stock splits, stock dividends, combinations, capital reorganizations and similar events relating
to the Common Stock occurring after the date hereof. Once the Maximum Share Amount has been issued, if the Issuer fails to eliminate
any prohibitions under applicable law or the rules or regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over the Issuer or any of its securities on the Issuer’s ability to issue
shares of Common Stock in excess of the Maximum Share Amount, in lieu of any further right to convert this Note, this will be considered
an Event of Default under Section 3.3 of the Note.
1.8
Status as Shareholder
.
Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot
be issued because their issuance would exceed such Holder’s allocated portion of the Reserved Amount or Maximum Share Amount)
shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a Holder of such converted portion
of this Note shall cease and terminate, excepting only the right to receive certificates for such shares of Common Stock and to
any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Issuer to comply
with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received certificates for all shares of Common
Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect to a conversion of any portion of
this Note for any reason, then (unless the Holder otherwise elects to retain its status as a holder of Common Stock by so notifying
the Issuer) the Holder shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note
and the Issuer shall, as soon as practicable, return such unconverted Note to the Holder or, if the Note has not been surrendered,
adjust its records to reflect that such portion of this Note has not been converted. In all cases, the Holder shall retain all
of its rights and remedies (including, without limitation, (i) the right to receive Conversion Default Payments pursuant to Section
1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion Default and (ii) the right to have
the Conversion Price with respect to subsequent conversions determined in accordance with Section 1.3) for the Issuer’s failure
to convert this Note.
1.9
Prepayment
. Maker may
prepay this Note in accordance with the following schedule: If within one hundred and eighty (180) of execution, one hundred and
thirty percent (130%) of all outstanding principal and interests in one installment; on or after one hundred and eighty days, Maker
may prepay this note with premium where both the Maker and the Holder have agreed to said prepayment and premium in writing.
ARTICLE II. CERTAIN COVENANTS
2.1
Distributions on Capital
Stock
. So long as the Issuer shall have any obligation under this Note, the Issuer shall not without the Holder’s written
consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other
securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of
Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital
stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Issuer’s
disinterested directors.
2.2
Restriction on Stock
Repurchases
. So long as the Issuer shall have any obligation under this Note, the Issuer shall not without the Holder’s
written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise)
in any one transaction or series of related transactions any shares of capital stock of the Issuer or any warrants, rights or options
to purchase or acquire any such shares.
2.3
Borrowings
. So long
as the Issuer shall have any obligation under this Note, the Issuer shall not, without the Holder’s written consent, create,
incur, assume guarantee, endorse, contingently agree to purchase or otherwise become liable upon the obligation of any person,
firm, partnership, joint venture or corporation, except by the endorsement of negotiable instruments for deposit or collection,
or suffer to exist any liability for borrowed money, except (a) borrowings in existence or committed on the date hereof and of
which the Issuer has informed Holder in writing prior to the date hereof, (b) indebtedness to trade creditors or financial institutions
incurred in the ordinary course of business or (c) borrowings, the proceeds of which shall be used to repay this Note.
2.4
Sale of Assets
.
So long as the Issuer shall have any obligation under this Note, the Issuer shall not, without the Holder’s written consent,
sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business. Any consent
to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.
2.5
Advances and Loans
.
So long as the Issuer shall have any obligation under this Note, the Issuer shall not, without the Holder’s written consent,
lend money, give credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers,
directors, employees, subsidiaries and affiliates of the Issuer, except loans, credits or advances (a) in existence or committed
on the date hereof and which the Issuer has informed Holder in writing prior to the date hereof, (b) made in the ordinary course
of business or (c) not in excess of $25,000.
ARTICLE III. EVENTS OF DEFAULT
If any of the following events of default (each, an “Event
of Default”) shall occur:
3.1
Failure
to Pay Principal or Interest
. The Issuer fails to pay the principal hereof or interest thereon when due on this Note,
whether at maturity, upon acceleration or otherwise.
3.2
Conversion
and the Shares
. The Issuer fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that
it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance
with the terms of this Note, fails to transfer or cause its transfer agent to transfer (issue) (electronically or in
certificated form) any certificate for shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note, the Issuer directs its transfer agent not to transfer or delays, impairs,
and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate for
shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required
by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer
agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any
certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and
when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor the
obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement
or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall
have delivered a Notice of Conversion. It is an obligation of the Issuer to remain current in its obligations to its transfer
agent. It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a
balance owed by the Issuer to its transfer agent. If at the option of the Holder, the Holder advances any funds to the
Issuer’s transfer agent in order to process a conversion, such advanced funds shall be paid by the Issuer to the Holder
within forty eight (48) hours of a demand from the Holder.
3.3
Breach of Covenants
.
The Issuer breaches any material covenant or other material term or condition contained in this Note and any collateral documents
including but not limited to the Purchase Agreement and such breach continues for a period of ten (10) days after written notice
thereof to the Issuer from the Holder.
3.4
Breach
of Representations and Warranties
. Any representation or warranty of the Issuer made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the
Purchase Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the
passage of time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase
Agreement.
3.5
Receiver or Trustee
.
The Issuer or any subsidiary of the Issuer shall make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee
shall otherwise be appointed.
3.6
Judgments
. Any
money judgment, writ or similar process shall be entered or filed against the Issuer or any subsidiary of the Issuer or any of
its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20)
days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.
3.7
Bankruptcy
. Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy
law or any law for the relief of debtors shall be instituted by or against the Issuer or any subsidiary of the Issuer.
3.8
Delisting of Common
Stock
. The Issuer shall fail to maintain the listing of the Common Stock in good standing on at least one of the OTC Tiers
or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or
the American Stock Exchange.
3.9
Failure to
Comply with the Exchange Act
. The Issuer shall fail to comply with the reporting requirements of the Exchange Act; and/or
the Issuer shall cease to be subject to the reporting requirements of the Exchange Act.
3.10
Liquidation
. Any
dissolution, liquidation, or winding up of Issuer or any substantial portion of its business.
3.11
Cessation
of Operations
. Any cessation of operations by Issuer or Issuer admits it is otherwise generally unable to pay its debts as
such debts become due, provided, however, that any disclosure of the Issuer’s ability to continue as a “going concern”
shall not be an admission that the Issuer cannot pay its debts as they become due.
3.12
Maintenance
of Assets
. The failure by Issuer to maintain any material intellectual property rights, personal, real property or other
assets which are necessary to conduct its business (whether now or in the future).
3.13
Financial
Statement Restatement
. The restatement of any financial statements filed by the Issuer with the SEC for any date or
period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the result of
such restatement would, by comparison to the original financial statement, have constituted a material adverse effect on the
rights of the Holder with respect to this Note or supporting documents.
3.14
Reverse
Splits
. The Issuer effectuates a reverse split of its Common Stock without at least twenty (20) days prior written notice
to the Holder.
3.15
Replacement of Transfer
Agent
. In the event that the Issuer proposes to replace its transfer agent, the Issuer fails to provide, prior to the effective
date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to
the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved
Amount) signed by the successor transfer agent to Issuer and the Issuer.
3.16
Cross-Default
.
Notwithstanding anything to the contrary contained in this Note or the other related or companion documents, a breach or default
by the Issuer of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable
notice and cure or grace periods, shall, at the option of the Issuer, be considered a default under this Note and the Other Agreements,
in which event the Holder shall be entitled (but in no event required) to apply all rights and remedies of the Holder under the
terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. “Other Agreements”
means, collectively, all agreements and instruments between, among or by: (1) the Issuer, and, or for the benefit of, (2) the
Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other
Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted
with each other loan transaction and with all other existing and future debt of Issuer to the Holder.
Upon the
occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely with respect to failure to
pay the principal hereof or interest thereon when due at the Maturity Date), the Note shall become immediately due and
payable and the Issuer shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the
Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN
SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE ISSUER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION
OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon
the occurrence and during the continuation of any Event of Default specified in Sections 3.1 (solely with respect to failure
to pay the principal hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event pursuant to
Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or 3. 15 exercisable through the
delivery of written notice to the Issuer by such Holders (the “Default Notice”), and upon the occurrence of an
Event of Default specified the remaining sections of Articles III (other than failure to pay the principal hereof or interest
thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable and the
Issuer shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of (i) 150%
times
the
sum
of (w) the then outstanding principal amount of this Note
plus
(x) accrued and unpaid interest on the unpaid principal
amount of this Note to the date of payment (the “Mandatory Prepayment Date”)
plus
(y) Default Interest, if
any, on the amounts referred to in clauses (w) and/or (x)
plus
(z) any amounts owed to the Holder pursuant to Sections
1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment
plus
the amounts
referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii) the
“parity value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of
Common Stock issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the
Trading Day immediately preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of
determining the lowest applicable Conversion Price, unless the Default Event arises as a result of a breach in respect of
a specific Conversion Date in which case such Conversion Date shall be the Conversion Date),
multiplied by
(b) the
highest Closing Price for the Common Stock during the period beginning on the date of first occurrence of the Event of
Default and ending one day prior to the Mandatory Prepayment Date (the “Default Amount”) and all other amounts
payable hereunder shall immediately become due and payable, all without demand, presentment or notice, all of which hereby
are expressly waived, together with all costs, including, without limitation, legal fees and expenses, of collection, and the
Holder shall be entitled to exercise all other rights and remedies available at law or in equity.
If the Issuer fails to pay
the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder shall have
the right at any time, so long as the Issuer remains in default (and so long and to the extent that there are sufficient authorized
shares), to require the Issuer, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares
of Common Stock of the Issuer equal to the Default Amount divided by the Conversion Price then in effect.
ARTICLE IV. MISCELLANEOUS
4.1
Failure
or Indulgence Not Waiver
. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.
4.2
Notices
.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such
party shall have specified most recently by written notice. Any notice or other communication required or permitted to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation
generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day
during normal business hours where such notice is to be received), or the first business day following such delivery (if
delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second
business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
If to the Issuer, to:
_______________
_______________
_______________
Attn:
Facsimile:
If to the Holder:
WHC Capital,
LLC.
200 Stonehinge Lane, Suite 3
Carle Place, NY. 11514
Tel: 718.530.0182
4.3
Amendments
. This Note
and any provision hereof may only be amended by an instrument in writing signed by the Issuer and the Holder. The term “Note”
and all reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant
to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.
4.4
Assignability
.
This Note shall be binding upon the Issuer and its successors and assigns, and shall inure to be the benefit of the Holder
and its successors and assigns. Each transferee of this Note must be an “accredited investor” (as defined in Rule
501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as collateral in
connection with a
bona
fide
margin account or other lending arrangement.
4.5
Cost of Collection
.
If default is made in the payment of this Note, the Issuer shall pay the Holder hereof costs of collection, including
reasonable attorneys’ fees.
4.6
Governing
Law
. This Note shall be governed by and construed in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the other concerning the transactions
contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state
and county of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon
forum non
conveniens
. The Issuer and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other
party its reasonable attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered
in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be
deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or
enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and
consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any other manner permitted by law.
4.7
Certain
Amounts
. Whenever pursuant to this Note the Issuer is required to pay an amount in excess of the outstanding principal
amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on
such interest, the Issuer and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this
Note may be difficult to determine and the amount to be so paid by the Issuer represents stipulated damages and not a penalty
and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from
the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such
shares pursuant to this Note. The Issuer and the Holder hereby agree that such amount of stipulated damages is not plainly
disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert
this Note into shares of Common Stock.
4.8
Purchase Agreement
.
By its acceptance of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.
4.9
Notice
of Corporate Events
. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder of
Common Stock unless and only to the extent that it converts this Note into Common Stock. The Issuer shall provide the Holder
with prior notification of any meeting of the Issuer’s shareholders (and copies of proxy materials and other
information sent to shareholders). In the event of any taking by the Issuer of a record of its shareholders for the purpose
of determining shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe
for, purchase or otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any
share of any class or any other securities or property, or to receive any other right, or for the purpose of determining
shareholders who are entitled to vote in connection with any proposed sale, lease or conveyance of all or substantially all
of the assets of the Issuer or any proposed liquidation, dissolution or winding up of the Issuer, the Issuer shall mail a
notice to the Holder, at least twenty (20) days prior to the record date specified therein (or thirty (30) days prior to the
consummation of the transaction or event, whichever is earlier), of the date on which any such record is to be taken for the
purpose of such dividend, distribution, right or other event, and a brief statement regarding the amount and character of
such dividend, distribution, right or other event to the extent known at such time. The Issuer shall make a public
announcement of any event requiring notification to the Holder hereunder substantially simultaneously with the notification
to the Holder in accordance with the terms of this Section 4.9.
4.10
Remedies
. The Issuer
acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent
and purpose of the transaction contemplated hereby. Accordingly, the Issuer acknowledges that the remedy at law for a breach of
its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Issuer of the
provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and
in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of
this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without
any bond or other security being required.
IN WITNESS WHEREOF, Issuer has caused
this Note to be signed in its name by its duly authorized officer:
Players Network, a Nevada
Company.
By: _______________________________
Print:______________________________
Title/Date:_________________________
EXHIBIT 10.33
SECURITIES PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT
(“Agreement”) is made as of the 19th
day of August, 2014 by and between
Players Network
., a Nevada
Corporation,(the “Company”), and
WHC Capital, LLC
(the “Investor”).
Recitals
A. The Investor wishes
to purchase from the Company, and the Company wishes to sell and issue to the Investor, upon the terms and conditions stated in
this Agreement, $45,000 of convertible securities, in the form attached hereto as Exhibit A (the “Note”);
In consideration of the
mutual promises made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1.
Definitions
. In addition to those terms defined above and elsewhere in this Agreement,
for the purposes of this Agreement, the following terms shall have the meanings set forth below:
“
Affiliate
”
means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries Controls, is
controlled by, or is under common control with, such Person.
“
Business Day
”
means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business.
“
Common Stock
Equivalents
” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument
that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“
Company’s
Knowledge
” means the actual knowledge of the executive officers (as defined in Rule 405 under the 1933 Act) of the Company,
after due inquiry.
“
Confidential
Information
” means trade secrets, confidential information and know-how (including but not limited to ideas, formulae,
compositions, processes, procedures and techniques, research and development information, computer program code, performance specifications,
support documentation, drawings, specifications, designs, business and marketing plans, and customer and supplier lists and related
information).
“
Control
”
(including the terms “controlling”, “controlled by” or “under common control with”) means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
“
Intellectual
Property
” means all of the following: (i) patents, patent applications, patent disclosures and inventions (whether or
not patentable and whether or not reduced to practice); (ii) trademarks, service marks, trade dress, trade names, corporate names,
logos, slogans and Internet domain names, together with all goodwill associated with each of the foregoing; (iii) copyrights and
copyrightable works; (iv) registrations, applications and renewals for any of the foregoing; and (v) proprietary computer software
(including but not limited to data, data bases and documentation).
“
Material Adverse
Effect
” means a material adverse effect on (i) the assets, liabilities, results of operations, condition (financial or
otherwise), business, or prospects of the Company and its Subsidiaries taken as a whole, or (ii) the ability of the Company to
perform its obligations under the Transaction Documents.
“
Person
”
means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company,
joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically
listed herein.
“
Purchase Price
” means
Forty Thousand Dollars ($40,000), representing a $5,000
Issuance discount on the Convertible note for due diligence and documentation fees.
“
SEC
”
means the United States Securities and Exchange Commission.
“
Securities
”
means the Debentures, the Incentive Shares and the Shares.
“
Shares
”
means the shares of Common Stock issuable upon conversion of the Debenture.
“
Subsidiary
”
of any Person means another Person, an amount of the voting securities, other voting ownership or voting partnership interests
of which is sufficient to elect at least a majority of its Board of Directors or other governing body (or, if there are no such
voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first Person.
“
Transaction Documents
”
means this Agreement, the Note, the Company Representation Letter and the Irrevocable Transfer Agent Instructions.
“
1933 Act
”
means the Securities Act of 1933, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
“
1934 Act
”
means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.
2.
Purchase and Sale of the Debenture
.
Subject to the terms and conditions of this Agreement, the Company shall sell and issue to the Investor (i) Convertible Note(s)
in the principal amount of $45,000.
3.
Closing
. Upon confirmation
that the other conditions to closing specified herein have been satisfied or duly waived by the Investor, the Company shall deliver
to the Investor, a Note registered the name of the Investor, and the Investor shall cause a wire transfer in same day funds to
be sent to the account of the Company as instructed in writing by the Company, in an amount representing the Purchase Price for
the Note(the “Closing Date”).
4.
Representations and Warranties
of the Company
. The Company hereby represents and warrants to the Investor that, except as set forth in the schedules delivered
herewith (collectively, the “Disclosure Schedules”):
4. 1
Organization, Good Standing
and Qualification
. Each of the Company and its Subsidiaries is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to carry on its business
as now conducted and to own its properties. Each of the Company and its Subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property
makes such qualification or leasing necessary unless the failure to so qualify has not and could not reasonably be expected to
have a Material Adverse Effect. The Company’s Subsidiaries are listed on the Company’s public disclosures filed with
the SEC.
4.2
Authorization
. The Company
has full power and authority and, has taken all requisite action on the part of the Company, its officers, directors and stockholders
necessary for (i) the authorization, execution and delivery of the Transaction Documents, (ii) authorization of the performance
of all obligations of the Company hereunder or thereunder, and (iii) the authorization, issuance (or reservation for issuance)
and delivery of the Securities The Transaction Documents constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability, relating to or affecting creditors’ rights generally.
4.3
Capitalization
.
Schedule
4.3
sets forth (a) the authorized capital stock of the Company on the date hereof; (b) the number of shares of capital stock
issued and outstanding; (c) the number of shares of capital stock issuable pursuant to the Company’s stock plans; and (d)
the number of shares of capital stock issuable and reserved for issuance pursuant to securities (other than the Securities) exercisable
for, or convertible into or exchangeable for any shares of capital stock of the Company. All of the issued and outstanding shares
of the Company’s capital stock have been duly authorized and validly issued and are fully paid, nonassessable and free of
pre-emptive rights. Except as described on
Schedule 4.3
, all of the issued and outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully paid, nonassessable and free of pre-emptive rights, were
issued in full compliance with applicable state and federal securities law and any rights of third parties and are owned by the
Company, beneficially and of record, subject to no lien, encumbrance or other adverse claim. Except as described on
Schedule
4.3
, no Person is entitled to pre-emptive or similar statutory or contractual rights with respect to any securities of the
Company. Except as described on
Schedule 4.3
, there are no outstanding warrants, options, convertible securities or other
rights, agreements or arrangements of any character under which the Company or any of its Subsidiaries is or may be obligated to
issue any equity securities of any kind and except as contemplated by this Agreement, neither the Company nor any of its Subsidiaries
is currently in negotiations for the issuance of any equity securities of any kind.
Except as described on
Schedule 4.3
, the issuance and sale of the Securities hereunder will not obligate the Company to issue shares of Common
Stock or other securities to any other Person (other than the Investor) and will not result in the adjustment of the exercise,
conversion, exchange or reset price of any outstanding security.
Except as described on
Schedule 4.3
, the Company does not have outstanding stockholder purchase rights or “poison pill” or any similar
arrangement in effect giving any Person the right to purchase any equity interest in the Company upon the occurrence of certain
events.
4.4
Valid Issuance
. The Note
has been duly and validly authorized and, when issued and paid for pursuant to this Agreement, shall be free and clear of all encumbrances
and restrictions (other than those created by the Investor), except for restrictions on transfer set forth in the Transaction Documents
or imposed by applicable securities laws. Upon the due conversion of the Debenture, the Shares will be validly issued, fully paid
and non-assessable free and clear of all encumbrances and restrictions, except for restrictions on transfer set forth in the Transaction
Documents or imposed by applicable securities laws and except for those created by the Investor. The Company has reserved a sufficient
number of shares of Common Stock for issuance upon the exercise of the Debenture, free and clear of all encumbrances and restrictions,
except for restrictions on transfer set forth in the Transaction Documents or imposed by applicable securities laws and except
for those created by the Investor.
4.5
Consents
. T
he
execution, delivery and performance by the Company of the Transaction Documents, and the offer, issuance and sale of the Securities
require no consent of, action by or in respect of, or filing with, any Person, governmental body, agency, or official other than
filings that have been made pursuant to applicable state securities laws, and post-sale filings pursuant to applicable state and
federal securities laws which the Company undertakes to file within the applicable time periods. Subject to the accuracy of the
representations and warranties of the Investor set forth in Section 5 hereof, the Company has taken all action necessary to exempt
(i) the issuance and sale of the Securities, (ii) the issuance of the Shares upon due conversion of the Debenture, and (iii) the
other transactions contemplated by the Transaction Documents from the provisions of any shareholder rights plan or other “poison
pill” arrangement, any anti-takeover, business combination or control share law or statute binding on the Company or to which
the Company or any of its assets and properties may be subject and any provision of the Company’s Articles of Incorporation
or By-laws that is or could reasonably be expected to become applicable to the Investor as a result of the transactions contemplated
hereby, including without limitation, the issuance of the Securities and the ownership, disposition or voting of the Securities
by the Investor or the exercise of any right granted to the Investor pursuant to this Agreement or the other Transaction Documents.
4.6
Delivery of SEC Filings; Business
.
The Company has made available to the Investor through the EDGAR system, true and complete copies of the Company’s most recent
Annual Report on Form 10-K for its last fiscal year (the “10-K”), and all other reports filed by the Company pursuant
to the 1934 Act since the filing of the 10-K and prior to the date hereof (collectively, the “SEC Filings”). The SEC
Filings are the only filings required of the Company pursuant to the 1934 Act for such period. The Company and its Subsidiaries
are engaged in all material respects only in the business described in the SEC Filings and the SEC Filings contain a complete and
accurate description in all material respects of the business of the Company and its Subsidiaries, taken as a whole.
4.7
Use of Proceeds
. The net
proceeds of the sale of the Note hereunder shall be used by the Company for working capital and general corporate purposes.
4.8
No Conflict, Breach, Violation
or Default
. The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of
the Securities will not conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a
default under (i) the Company’s Articles of Incorporation or the Company’s Bylaws, both as in effect on the date hereof
(true and complete copies of which have been made available to the Investor through the EDGAR system), or (ii)(a) any statute,
rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company,
any Subsidiary or any of their respective assets or properties, or (b) any agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or a Subsidiary is bound or to which any of their respective assets or properties
is subject.
4.9
Brokers and Finders
. No Person
will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim against
or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement, arrangement
or understanding entered into by or on behalf of the Company.
4.10
No Directed Selling Efforts
or General Solicitation
. Neither the Company nor any Person acting on its behalf has conducted any general solicitation or
general advertising (as those terms are used in Regulation D) in connection with the offer or sale of any of the Securities.
4.11
No Integrated Offering
.
Neither the Company nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any Company security or solicited any offers to buy any security, under circumstances that would adversely affect
reliance by the Company on Section 4(2) for the exemption from registration for the transactions contemplated hereby or would require
registration of the Securities under the 1933 Act.
4.12
Private Placement
. The offer
and sale of the Securities to the Investor as contemplated hereby is exempt from the registration requirements of the 1933 Act.
5.
Representations and Warranties
of the Investor
. The Investor hereby represents and warrants to the Company that:
5.1
Organization and Existence
.
Such Investor is a validly existing corporation, limited partnership or limited liability company and has all requisite corporate,
partnership or limited liability company power and authority to invest in the Securities pursuant to this Agreement.
5.2
Authorization
. The execution,
delivery and performance by such Investor of the Transaction Documents to which such Investor is a party have been duly authorized
and will each constitute the valid and legally binding obligation of such Investor, enforceable against such Investor in accordance
with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws
of general applicability, relating to or affecting creditors’ rights generally.
5.3
Purchase Entirely for Own Account
.
The Securities to be received by such Investor hereunder will be acquired for such Investor’s own account, not as nominee
or agent, and not with a view to the resale or distribution of any part thereof in violation of the 1933 Act, and such Investor
has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the 1933
Act
without prejudice, however, to such Investor’s right at all times to sell or otherwise
dispose of all or any part of such Securities in compliance with applicable federal and state securities laws
.
Nothing
contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time. Such
Investor is not a broker-dealer registered with the SEC under the 1934 Act or an entity engaged in a business that would require
it to be so registered.
5.4
Investment Experience
. Such
Investor acknowledges that it can bear the economic risk and complete loss of its investment in the Securities and has such knowledge
and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment contemplated
hereby.
5.5
Disclosure of Information
.
Such Investor has had an opportunity to receive all information related to the Company requested by it and to ask questions of
and receive answers from the Company regarding the Company, its business and the terms and conditions of the offering of the Securities.
Such Investor acknowledges receipt of copies of the SEC Filings. Neither such inquiries nor any other due diligence investigation
conducted by such Investor shall modify, amend or affect such Investor’s right to rely on the Company’s representations
and warranties contained in this Agreement.
5.6
Restricted Securities
. Such
Investor understands that the Securities are characterized as “restricted securities” under the U.S. federal securities
laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under such
laws and applicable regulations such securities may be resold without registration under the 1933 Act only in certain limited circumstances.
5.7
Legends
. It is understood
that, except as provided below, certificates evidencing the Securities may bear the following or any similar legend:
(a) “The securities represented
hereby may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933,
as amended, (ii) such securities may be sold pursuant to Rule 144(i), or (iii) the Company has received an opinion of counsel reasonably
satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or qualification
under applicable state securities laws.”
(b) If required by the authorities of
any state in connection with the issuance of sale of the Securities, the legend required by such state authority.
5.8
Accredited Investor
. Such
Investor is an accredited investor as defined in Rule 501(a) of Regulation D, as amended, under the 1933 Act.
5.9
No General Solicitation
.
Such Investor did not learn of the investment in the Securities as a result of any public advertising or general solicitation.
5.10
Brokers and Finders
. No
Person will have, as a result of the transactions contemplated by the Transaction Documents, any valid right, interest or claim
against or upon the Company, any Subsidiary or an Investor for any commission, fee or other compensation pursuant to any agreement,
arrangement or understanding entered into by or on behalf of such Investor.
6.
Conditions to Closing
.
6.1
Conditions to the Investor’s
Obligations
. The obligation of the Investor to purchase the Note at Closing is subject to the fulfillment to such Investor’s
satisfaction, on or prior to the Closing Date, of the following conditions, any of which may be waived by the Investor:
(a) The representations and warranties
made by the Company in Section 4 hereof qualified as to materiality shall be true and correct at all times prior to and on the
Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in which case such
representation or warranty shall be true and correct as of such earlier date, and, the representations and warranties made by the
Company in Section 4 hereof not qualified as to materiality shall be true and correct in all material respects at all times prior
to and on the Closing Date, except to the extent any such representation or warranty expressly speaks as of an earlier date, in
which case such representation or warranty shall be true and correct in all material respects as of such earlier date. The Company
shall have performed in all material respects all obligations and conditions herein required to be performed or observed by it
on or prior to the Closing Date.
(b) The Company shall have obtained
any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the purchase and
sale of the Securities, and the consummation of the other transactions contemplated by the Transaction Documents, all of which
shall be in full force and effect.
(c) No judgment, writ, order, injunction,
award or decree of or by any court, or judge, justice or magistrate, including any bankruptcy court or judge, or any order of or
by any governmental authority, shall have been issued, and no action or proceeding shall have been instituted by any governmental
authority, enjoining or preventing the consummation of the transactions contemplated hereby or in the other Transaction Documents.
(d) The Company shall have executed
and delivered the Convertible note and supporting documentation.
(e) The Company shall have executed
and delivered the Irrevocable Transfer Agent Instructions.
(f) No stop order or suspension of trading
shall have been imposed by the public markets on which the Company’s common stock is traded or quoted, the SEC or any other
governmental or regulatory body with respect to public trading in the Common Stock.
6.2
Conditions to Obligations of
the Company
. The Company's obligation to sell and issue the Note at Closing is subject to the fulfillment to the satisfaction
of the Company on or prior to the Closing Date of the following conditions, any of which may be waived by the Company:
(a) The representations and warranties
made by the Investor in Section 5 hereof, other than the representations and warranties contained in Sections 5.3, 5.4, 5.5, 5.6,
5.7, 5.8 and 5.9 (the “Investment Representations”), shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made
on and as of said date. The Investment Representations shall be true and correct in all respects when made, and shall be true and
correct in all respects on the Closing Date with the same force and effect as if they had been made on and as of said date. The
Investor shall have performed in all material respects all obligations and conditions herein required to be performed or observed
by them on or prior to the Closing Date.
(b) The Investor shall have delivered
the Purchase Price to the Company in accordance with the schedule outlined herein.
6.3
Termination of Obligations to
Effect Closing; Effects
.
(a) The obligations of the Company,
on the one hand, and the Investor, on the other hand, to effect the Closing shall terminate as follows:
(i) Upon the mutual written consent
of the Company and the Investor;
(ii) By the Company if any of the conditions
set forth in Section 6.2 shall have become incapable of fulfillment, and shall not have been waived by the Company;
(iii) By the Investor if any of the
conditions set forth in Section 6.1 shall have become incapable of fulfillment, and shall not have been waived by the Investor;
or
provided, however, that, except in the case
of clause (i) above, the party seeking to terminate its obligation to effect the Closing shall not then be in breach of any of
its representations, warranties, covenants or agreements contained in this Agreement or the other Transaction Documents if such
breach has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.
7.
Survival and Indemnification
.
7.1
Survival
. The
representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing of the transactions
contemplated by this Agreement.
7.2
Indemnification
.
The Company agrees to indemnify and hold harmless each Investor and its Affiliates and their respective directors, officers, employees
and agents from and against any and all losses, claims, damages, liabilities and expenses (including without limitation reasonable
attorney fees and disbursements and other expenses incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof) (collectively, “Losses”) to which
such Person may become subject as a result of any breach of representation, warranty, covenant or agreement made by or to be performed
on the part of the Company under the Transaction Documents, and will reimburse any such Person for all such amounts as they are
incurred by such Person.
7.3
Conduct
of Indemnification Proceedings
.
Promptly after receipt by any Person (the
“
Indemnified Person”)
of notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any action, proceeding
or investigation in respect of which indemnity may be sought pursuant to Section 7.2, such Indemnified Person shall promptly notify
the Company in writing and the Company shall assume the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person, and shall assume the payment of all fees and expenses;
provided
,
however
,that the failure
of any Indemnified Person so to notify the Company shall not relieve the Company of its obligations hereunder except to the extent
that the Company is materially prejudiced by such failure to notify. In any such proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person
unless: (i) the Company and the Indemnified Person shall have mutually agreed to the retention of such counsel; or (ii) in the
reasonable judgment of counsel to such Indemnified Person representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. The Company shall not be liable for any settlement of any proceeding
effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Company shall indemnify and hold harmless such Indemnified Person from and against
any loss or liability (to the extent stated above) by reason of such settlement or judgment. Without the prior written consent
of the Indemnified Person, which consent shall not be unreasonably withheld, the Company shall not affect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified
Person from all liability arising out of such proceeding.
8.
Miscellaneous
.
8.1
Successors and Assigns
. This
Agreement may not be assigned by a party hereto without the prior written consent of the Company or the Investor, as applicable,
provided, however, that an Investor may assign its rights and delegate its duties hereunder in whole or in part to an Affiliate
or to a third party acquiring some or all of its Securities in a private transaction without the prior written consent of the Company,
after notice duly given by such Investor to the Company. The provisions of this Agreement shall inure to the benefit of and be
binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
8.2
Counterparts;
This Agreement
may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement may also be executed via facsimile, which shall be deemed an original.
8.3
Titles and Subtitles
. The
titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting
this Agreement.
8.4
Notices
. Unless otherwise
provided, any notice required or permitted under this Agreement shall be given in writing and shall be deemed effectively given
as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if
given by fax, then such notice shall be deemed given upon receipt of confirmation of complete transmittal, (iii) if given by mail,
then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after
such notice is deposited in first class mail, postage prepaid, and (iv) if given by an internationally recognized overnight air
courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices shall be addressed
to the party to be notified at the address as follows, or at such other address as such party may designate by ten days’
advance written notice to the other party:
If to the Company:
Players Network.
_______________________
_______________________
Attn: __________________
Fax:
If to the Investor:
WHC Capital,
LLC
200 Stonehinge
Lane
Suite 3
Carle Place,
NY 11514
718.530.0184
8.5
Expenses
. The parties hereto
shall pay their own costs and expenses in connection herewith. In the event that legal proceedings are commenced by any party to
this Agreement against another party to this Agreement in connection with this Agreement or the other Transaction Documents, the
party or parties which do not prevail in such proceedings shall severally, but not jointly, pay their pro rata share of the reasonable
attorneys’ fees and other reasonable out-of-pocket costs and expenses incurred by the prevailing party in such proceedings.
8.6
Amendments and Waivers
. Any
term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor.
Any amendment or waiver effected in accordance with this paragraph shall be binding upon each holder of any Securities purchased
under this Agreement at the time outstanding, each future holder of all such Securities, and the Company.
8.7
Severability
. Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the remaining provisions hereof but shall be interpreted as
if it were written so as to be enforceable to the maximum extent permitted by applicable law, and any such prohibition or unenforceability
in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted
by applicable law, the parties hereby waive any provision of law which renders any provision hereof prohibited or unenforceable
in any respect.
8.8
Entire Agreement
. This Agreement,
including the Exhibits and the Disclosure Schedules, and the other Transaction Documents constitute the entire agreement among
the parties hereof with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter hereof and thereof.
8.9
Further Assurances
. The parties
shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required
to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.
8.10
Governing Law; Consent to Jurisdiction;
Waiver of Jury Trial
. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State
of New York, without regard to principles of conflicts of law. THE COMPANY AND INVESTOR WAIVE ANY RIGHT TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTEOR ANY TRANSACTION CONTEMPLATED HEREIN, INCLUDING CLAIMS BASED ON
CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER COMMON LAW OR STATUTORY BASIS. Each party hereby submits to the exclusive jurisdiction
of the state and federal courts located in the County of New York, State of New York. If the jury waiver set forth in this Section
is not enforceable, then any dispute, controversy or claim arising out of or relating to this Agreement or any of the transactions
contemplated herein will be finally settled by binding arbitration in New York, New York in accordance with the thencurrent Commercial
Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules. The arbitrator
shall apply New York law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory
arbitration. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding
the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to
compel arbitration in accordance with this paragraph. The expenses of the arbitration, including the arbitrator’s fees and
expert witness fees, incurred by the parties to the arbitration, may be awarded to the prevailing party, in the discretion of the
arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator. Unless and until the
arbitrator decides that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment
of the arbitrator’s fees as and when billed by the arbitrator.
[signature page follows]
IN WITNESS WHEREOF, the
parties have executed this Agreement or caused their duly authorized officers to execute this Agreement as of the date first above
written.
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The Company:
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Players Network.
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By: __________________________
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Name: ________________________
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Title: _________________________
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The Investor:
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WHC CAPITAL, LLC,
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By: __________________________
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Authorized Signatory
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Disclosure Schedules
EXHIBIT 10.34
INVESTMENT AGREEMENT
This
Investment Agreement made this __ day of August, 2014, by and among Players Network Inc., a Nevada corporation, Green Leaf Farms
Holdings, LLC, a Nevada limited liability company and Randall C. Donald, or his nominee.
RECITALS
:
Whereas Players Network Inc. (“Players”)
is a public reporting company and subject to a separate Subscription Agreement, of even date hereof, Randall C. Donald (“Investor”)
has agreed to purchase, and Players has agreed to sell, Two Million Five Hundred Thousand (2,500,000) shares in Players for the
sum of Fifty Thousand Dollars ($50,000) all as more particularly set forth in the Subscription Agreement attached hereto and incorporated
herein by this reference as exhibit 1; and
Whereas Green Leaf Farms Holdings,
LLC, is a Nevada limited liability company (“Green Leaf”), and wishes to obtain an investment in the amount of Sixty
Thousand Dollars ($60,000) from Investor on the terms and conditions set forth herein; and
Whereas Players is currently a
member in Green Leaf, holding a Seventy Eight Percent (78%) membership interest in that company, and Investor is currently a member
of Green Leaf, holding a One Percent (1%) interest therein; and
Whereas, Investor is the President
of Design Builders, Ltd., a Nevada corporation, licensed to do business as a general contractor in the State of Nevada; and
Whereas Green Leaf and Players,
as its majority member, are timely making an applications with the City of North Las Vegas and the State of Nevada seeking to be
licensed as a medial marijuana grower, retail seller and/or other medial marijuana related businesses (collectively “Licenses”);
and
Whereas Green Leaf and Players
have agreed to use the Green Leaf investment proceeds, Sixty Thousand Dollars ($60,000), solely for expenses related to the applications
for the Licenses as more specifically set forth in paragraph 2 below; and
Whereas Randy Donald is willing
to invest in both Players and Green Leaf only if he is guarantied that said sum will only be used for the Permitted Use of Funds
and on the other terms and conditions set forth herein.
NOW, THEREFORE,
in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1.
Purchase
of Green Leaf Membership
. Green hereby sells, and Investor hereby purchases a one percent (1%) membership interest in Green
Leaf for a purchase price of Sixty Thousand Dollars ($60,000). (The parties acknowledge that Investor already owns a one percent
(1%) membership interest in Green Leaf and upon consummation of this transaction herein, Investor will own two percent (2%)).
The parties agree that an operating agreement will be prepared for Green Leaf forthwith, and must be unanimously approved in writing
by all of the members in Green Leaf, including Investor.
2.
Permitted
Use of Funds
. Green Leaf and Players agree that the $60,000 investment proceed tendered by Investor for his membership interest
in Green Leaf shall only be used to: cover any remaining application fees for the Licenses for both state and local jurisdictions;
pay any required down payments to lock up real property contemplated for use by Green Leaf for any of the Licenses it may receive,
including a parcel at APEX consisting of 3.2 acres, or “like” parcel in North Las Vegas, and; to cover other appropriate
operational expenses for Green Leaf (“Permitted Use of Funds”). Green Leaf agrees to provide Investor with an accounting
of the use of such funds within forty-eight hours of his request in writing for the same.
3.
Construction
of Facilities
. Players and Green Leaf agree that Design Builders shall have the exclusive right to construct all facilities,
and improvements thereto, to be used by Green Leaf in connection with all of the businesses of Green Leaf in any jurisdiction
(including, but not limited to, all medical marijuana growing, producing, selling and other facilities (collectively “Marijuana
Businesses”).
4.
Failure
to Secure Licenses
. If Green Leaf is not granted all necessary Licenses and permits for the Marijuana Businesses, or upon
the expiration of one (1) year from the mutual execution of this Agreement, whichever is first to occur, Investor shall: receive
all refundable deposits paid by Green Leaf in connection with the applications for all such Licenses and permits; receive all
refundable deposits paid by Green Leaf in connection with any real property deposits. Additionally, Players shall tender to Investor
Sixty Thousand Dollars ($60,000) in shares in Players, discounted by twenty percent (20%) of their then current market price based
on a 10-day moving average, with a maximum price of two and one-half cents (.025) per share. By way of example, if the shares
are then trading at two and one-half cents (.025) per share on the 10-day moving average, the Investor shall receive the number
of shares at two cents (.02) per share.
5.
Taking
Green Leaf Public
. Subject to all regulatory, shareholder and member approval, as the case may be, if and when Green Leaf
is granted any of the Licenses, Players and Green Leaf thereafter agree to file a Form 10 on behalf of Green Leaf taking it public.
Thereafter, Players and Green Leaf agree to merge.
6.
Enforcement
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This Agreement and the Subscription Agreement, exhibit 1, constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and supersede all prior agreements and understandings, oral, written and implied, between the parties
hereto with respect to the subject matter hereof.
7.
Severability
.
If any provision or provisions of this Agreement shall be held by a court of competent jurisdiction to be invalid, void, illegal
or otherwise unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions
of this Agreement (including without limitation, each portion of any section of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected
or impaired thereby and shall remain enforceable to the fullest extent permitted by applicable law; and (b) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing
any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
8.
Modification
and Waiver
. No supplement, modification, termination or amendment of this Agreement shall be binding unless executed in writing
by all of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.
9.
Assignment
.
Investor may, in his sole and absolute discretion, assign his rights hereunder to an entity in which he is a shareholder, partner
or member, or to a trust in which he is a trustee. The parties agree that the Investor is only an investor in Green Leaf and will
have no involvement in the Marijuana Businesses operations.
10.
Notices
.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given
if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed,
or (ii) mailed by certified or registered mail with postage prepaid, on the second business day after the date on which it
is so mailed:
If to Green Leaf,
to:
If to the Players,
to:
If to Investor, to:
Randall C. Donald, 513 Regents Gate Drive, Henderson, NV 89012
or to such other address
as may have been furnished by any party to the others as the case may be.
11.
Identical
Counterparts
. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to
be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party
against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
12.
Headings
.
The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.
13.
Governing
Law
. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of
the State of Nevada without application of the conflict of law principles thereof. The parties further agree that Clark County,
Nevada shall be the proper forum for any litigation filed in connection with this Agreement.
14.
Attorney’s
Fees
. If any party in connection with this Agreement initiates litigation, the prevailing parting in such litigation shall
be entitled to its or their actual attorney’s fees and costs incurred in connection therewith.
The parties hereto have set their hands this ___ day of August,
2014.
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PLAYERS
NETWORK INC.
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GREEN
LEAF FARMS HOLDINGS, LLC
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By: ____________________________
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By: ____________________________
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Mark
Bradley C.E.O.
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Mark Bradley, Managing Member
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_______________________________
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Randall C. Donald
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EXHIBIT 21.1
Subsidiaries
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State of
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Abbreviated
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Name of Entity
(1)
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Incorporation
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Relationship
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Reference
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Players Network
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Nevada
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Parent
(1)
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Players
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Green Leaf Farms Holdings, Inc.
(2)
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Nevada
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Subsidiary
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GLFH
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Green Leaf Medical, LLC
(3)(4)
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Nevada
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Subsidiary
(3)
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GLML
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(1)
All entities
are in the form of Corporations, with the exception of GLML, which is a Limited Liability Corporation.
(2)
Players Network owns
83% of Green Leaf Farms Holdings, Inc. and Officers of Players Network, Mark Bradley and Michael Berk, own 3% and 1%,
respectively.
(3)
Green Leaf Medical,
LLC is a wholly owned subsidiary of Green Leaf Farms Holdings, Inc.
(4)
Entity formed for
prospective purposes, but has not incurred any income or expenses to date.
EXHIBIT 31.1
CERTIFICATION PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Mark Bradley, certify that:
1. I have reviewed this report on Form 10-Q
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 quarterly 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 quarter
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 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: November 17, 2014
/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 report on Form 10-Q of Players Network.
(the "Registrant") for the quarter ended September 30, 2014 (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: November 17, 2014
/s/ Mark Bradley
Name: Mark Bradley
Title: Chief Executive Officer and
Principal Financial Officer