UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended: September 30, 2003
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from _______ to
_________
Commission file number: 0-29363
THE PLAYERS NETWORK
(Exact name of small business issuer as specified in its charter)
Nevada 880343702
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
4620 Polaris Avenue, Las Vegas, Nevada 89103
(Address of principal executive officer) (Zip Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares of common stock, no par value, outstanding as
September 30, 2003: 14,090,225 shares
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
THE PLAYERS NETWORK
PERIOD ENDED SEPTEMBER 30, 2003
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements ___
Condensed financial statements of The Players Network:
Balance sheet as of September 30, 2003
Income statements for the nine months and three months ended
September 30, 2003 and September 30, 2002
Statements of cash flows for the nine months and three months
ended September 30, 2003 and September 30, 2002
Notes to financial statements ___
Item 2. Management's Discussion and Analysis
Item 3. Controls and Procedures ___
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ___
SIGNATURE ___
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
THE PLAYERS NETWORK
BALANCE SHEET
September 30, 2003
ASSETS
Current assets
Cash $ 11,055
Accounts receivable 17,114
Prepaid barter credits 34,703
Prepaid expenses and other current assets 10,344
-----------
Total current assets 73,216
Property and equipment,
net of $327,675 accumulated depreciation 233,067
Intangible assets
Video film library,
net of $1,364,359 accumulated amortization 470,414
Web site development costs,
net of $264,786 accumulated amortization 2,980
Trademark and other assets,
net of $1,828 accumulated amortization 8,874
-----------
Total assets $ 788,551
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt $ 3,907
Accounts payable 134,011
Accrued expenses 3,861
Accrued expenses due to stockholders 89,828
Deferred revenue 5,670
-----------
Total current liabilities 237,277
-----------
Stockholders' Equity
Common stock, $.01 par value; 25,000,000 shares
authorized, 14,090,225 shares issued and outstanding 14,090
Additional paid-in capital 7,498,364
Accumulated deficit (6,961,180)
-----------
Stockholders' equity 551,274
-----------
Total liabilities and stockholders' equity $ 788,551
===========
THE PLAYERS NETWORK
STATEMENT OF OPERATIONS
Nine and Three Months Ended September 30, 2003 and 2002
For the nine months ended For the three months ended
----------------------------- -----------------------------
2003 2002 2003 2002
----------------------------- -----------------------------
Revenues
Network $ 185,306 $ 331,754 $ 56,218 $ 78,428
Advertising 16,695 16,265 100 10,280
Production and other 41,479 111,915 26,316 98,816
----------------------------- -----------------------------
Total revenues 243,480 459,934 82,634 187,524
----------------------------- -----------------------------
Operating expenses
Cost of production 39,582 33,000 20,036 11,000
Selling, general and administrative 432,115 516,319 124,056 180,780
Impairment 30,894 54,000 0 0
Depreciation and amortization 253,950 316,070 74,605 104,860
----------------------------- -----------------------------
Total operating expenses 756,541 919,389 218,697 296,640
----------------------------- -----------------------------
Other expenses
Interest expense 7,183 21,149 480 5,060
Gain on sale of assets 1,159 0 0 0
Other expense 18,193 0 0
----------------------------- -----------------------------
Net Loss $ (520,244) $ (498,797) $(136,543) $(114,176)
============================= =============================
Basic and Diluted
Loss per share ($0.04) ($0.04) ($0.01) ($0.01)
Weighted average
shares outstanding 13,919,660 11,208,475 14,090,255 12,580,892
THE PLAYERS NETWORK
STATEMENT OF CASH FLOWS
Nine Months Ended June 30, 2003 and 2002
2003 2002
-------------------------------
Cash flows from operating activities
Net loss ($520,244) ($498,797)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation and amortization 246,405 316,071
Stock issued for services 93,940
Impairment 30,894
Net gain on assets sold (11,156)
Net change in unused barter credits (2,500) 65,256
Net changes to:
Accounts receivable (10,539) (35,464)
Prepaid assets (5,504) 11,598
Account payable (22,966) (9,490)
Accrued expenses 3,862 (23,404)
Accrued expenses due to stockholder 59,914
Deferred revenue (27,067) (30,485)
-------------------------------
Net cash used in operating activities (258,901) (110,775)
-------------------------------
Cash flows used in investing activities
Purchase of property and equipment (4,338)
Additions to video film library (18,250) (75,622)
Proceeds from reduction in deposits 5,868
-------------------------------
Net cash used in investing activities (16,720) (75,622)
-------------------------------
Cash flows provided by financing activities
Sales of common stock 200,000 120,077
Deposit for Acquistion 150,000
Proceeds from the sale of assets 26,500
Payment on installment debt (19,634) (61,671)
-------------------------------
Net cash provided by financing activities 206,866 208,406
-------------------------------
Net increase (decrease) in cash (68,755) 22,009
Cash at beginning of period 79,810 29,215
-------------------------------
Cash at end of period $11,055 $51,224
===============================
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of The Players Network
("PNTV") have been prepared in accordance with accounting principles generally
accepted in the United States of America and the rules of the Securities and
Exchange Commission ("SEC"), and should be read in conjunction with the audited
financial statements and notes thereto contained in PNTV's Annual Report filed
with the SEC on Form 10-KSB. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of
financial position and the results of operations for the interim periods
presented have been reflected herein. The results of operations for interim are
not necessarily indicative of the results to be expected for the full year.
Notes to the financial statements which would substantially duplicate the
disclosure contained in the audited financial statements for 2002 as reported in
the 10-KSB have been omitted.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that PNTV will
continue as a going concern. PNTV has suffered recurring losses from operations,
which raises substantial doubt about its ability to continue as a going concern.
Management's plans include the ongoing attempts to sell additional stock and
increase its broadcasting market revenues. The consolidated financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Item 2. Management's Discussion and Analysis
Overview
We produce television programming and videos related to gaming instruction and
information for hotel casinos on a private cable channel known as "PLAYERS
NETWORK." We also are a 24-hour digital web broadcaster featuring live and
previously recorded content. We are evolving from a subscription based model to
a traditional advertising based advertising model. Our programming is now
available in 16 non-casino properties in Las Vegas. Our programming is also now
on the "Dish Network" and is being sold on CDs and VHS tapes in mass
merchandisers such as Target and Walgreen.
At September 30, 2003, we had an accumulated operating deficit of $6,961,180 and
stockholders' equity of $551,274.
We expect operating losses and negative operating cash flows to continue for at
least the next twelve months, because of expected additional costs and expenses
related to brand development; marketing and other promotional activities; hiring
of management, sales and other personnel; the expansion of infrastructure and
customer support services; strategic relationship development; and potential
acquisitions of related complementary businesses.
Liquidity and Capital Resources
Our principal source of operating capital has been provided by private sales of
our common stock and stockholder loans, as well as revenues from the operations.
At September 30, 2003, we had a negative working capital position of
approximately $164,000, of which $100,000 are amounts due to officers and
directors. In addition, $5,700 of current liabilities are deferred revenue,
which consists of monthly network services that are billed in advance and
installation charges that are amortized over the life of network contracts,.
Although the Company has experienced no revenue growth, this may not be
indicative of future operating results and there can be no assurance that it
will achieve or maintain profitability. Due to these factors, the Company
believes that period-to-period comparisons of its results of operations are not
necessarily a good indication of future performance. The results of operations
in some future periods may be below the expectations of analysts and investors.
We anticipate capital expenditures in excess of $100,000 to expand our operation
during the next twelve months. We believe that the current cash flows generated
from its revenues will not be sufficient to fund our anticipated expansion of
operations. We may require additional funding to finance our operations through
private sales and public debt or equity offerings. However, there is no
assurance that we can obtain such financing.
At September 30, 2003, we had three full time employees and three part time
consultants.
Recent Events:
In September 2003 we signed an agreement to be featured as part of Ed McMahon's
Players Club which will be promoted through a series of infomercials. As part of
joining the club members will receive a free Black Jack video for which we will
paid $2.50. Later the members will be given to option to buy two other videos
"Craps" and "Roulette".
In July 2003 we signed an agreement with Morningstar Entertainment Inc. to
distribute our videos to mass marketers such as Target, Wal-Mart and Walgreens.
Our videos will be appearing in stores across North America in November 2003.
Results of Operations - Nine Months Ended September 30, 2003 and 2002
Revenues decreased 47% to $243,000 from $460,000 in 2003 versus 2002. PNTV had
$185,300 in Network and Television Revenue, $16,700 in Advertising Revenue and
$41,500 in Production and Other Revenue in 2003, compared to $332,800 in Network
Revenue, $16,300 in Advertising Revenue and $111,900 in Production and Other
Revenue in 2002. We are changing our revenue model from one of paid subscription
to a traditional cable network model of revenues from the sale of advertisement.
We are currently installing sixteen new hotel clients using this model. We
anticipate advertising revenues to increase accordingly. In addition, we started
to sell our videos through mass market distributors and infomercials.
Video production expense increased 20% to $39,500 from $33,000 for 2003 and
2002, respectively. The increase is due the preparation of our existing video
for distribution through mass merchandisers and infomercials. However we have
had a reduction in video production over the past 12 months.
Selling and administrative expenses decreased 18% to $432,000 from $518,300 in
2003 and 2002, respectively. While selling, general and administrative expenses
decreased there was an increase in payroll expense to $218,000 (of which $71,000
was accrued and unpaid) from $201,000, while consulting expense decreased to $0
from $67,000 and travel expenses decreased to $18,000 from $39,000 for 2003 and
2002, respectively.
Depreciation and amortization decreased 20% to $254,000 from $317,000 in 2003
and 2002, respectively. This is due to our charging off production for our hotel
customers over the life of the network agreement as video production expense and
not amortizing this production. Our gaming instruction videos have long "shelf
life" and continue to be amortized over their estimated useful lives.
Interest expense decreased 66% to $7,200 from $21,100 for 2003 and 2002,
respectively, due to the shareholder loans converted into common stock in May
2002.
Impairment charges were $30,100 and $54,000 and $30,100 for 2003 and 2002,
respectively. Impairment charges are for assets that we determine are worth less
than the value recorded on our books.
Critical Accounting Policies
Video Library
Our Video Library consist of over 500 completed videos. The library consists of
gaming instruction which were produced at our own expense, videos produced for
gaming equipment manufacturers and videos produced for our network hotel
customers. For gaming instruction and equipment video, we record the cost of
production and amortize the cost over the estimated useful life (7 years). We
amortize hotel customer production over the life of the hotel network agreement,
which usually run 24 to 36 months. This policy recognizes that customized video
for hotel customers are subject to a shorter "shelf life" than gaming
instruction video. We review our library catalogue quarterly and determine which
videos are no longer of value. At September 30, 2003, we had a net carrying
value for our Video of $470,000.
Risk Factors and Cautionary Statements
Forward-looking statements in this report are made pursuant to the "safe harbor"
provisions of the Private Securities Litigation Reform Act of 1995. We wish to
advise readers that actual results may differ substantially from such
forward-looking statements. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
expressed in or implied by the statements, including, but not limited to, the
following: our ability to meet our cash and working capital needs, our ability
to successfully market our product, and other risks detailed in our periodic
report filings with the Securities and Exchange Commission.
Item 3. Controls and Procedures
As of the end of the period covered by this report, the Company
conducted an evaluation, under the supervision and with the participation of the
Chief Executive Officer and Chief Financial Officer, of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation,
the Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in Securities and Exchange Commission rules
and forms. There was no change in the Company's internal control over financial
reporting during the Company's most recently completed fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed with this Quarterly Report or are
incorporated herein by reference:
Exhibit
Number Description
------ -----------
31.01 Certification pursuant to Rule 13a-14(a) of the Securities
Exchange Act of 1934.
32.01 Certification Pursuant to 18 U.S.C. Section 1350, as pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
During the quarter ended September 30, 2003, the Company filed
one Current Report on Form 8-K on July 7th reporting that KO
Ventures, LLC had advised the Company that KO would not be in
a position to continue to make its agreed installment
investments in the Company's Common Stock.
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
THE PLAYERS NETWORK
(Registrant)
By: /s/ Mark Bradley
--------------------------
Mark Bradley,
Chief Executive Officer
By: /s/ Seth Horn
--------------------------
Seth Horn,
Chief Financial Officer
Dated: November 5, 2003