Nevada
|
|
88-0343702
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
(IRS
Employer
Identification
No.)
|
4260
Polaris Avenue
Las
Vegas, Nevada 89103
|
|
(702)
895-8884
|
(Address
of principal executive offices)
|
|
(Issuer’s
telephone number)
|
Large
accelerated filer ¨
|
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
|
|
Smaller
reporting company x
|
Page | ||
INDEX
|
||
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
1
|
|
PART
I. FINANCIAL INFORMATION
|
2
|
|
Item
1.
|
Financial
Statements
|
2
|
|
Condensed
Balance Sheets as of September 30, 2008 and December 31,
2007
|
2
|
|
Condensed
Statements of Operations for Nine Months ended September 30, 2008
and
2007
|
3
|
|
Condensed
Statements of Cash Flows for the Nine Months ended September 30,
2008 and
2007
|
4
|
|
Notes
to the Condensed Financial Statements
|
5
|
|
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
12
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk.
|
16
|
Item
4T.
|
Controls
and Procedures
|
16
|
|
|
|
PART
II. OTHER INFORMATION
|
17
|
|
Item
1.
|
Legal
Proceedings
|
17
|
Item
1A.
|
Risk
Factors
|
17
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
17
|
Item
3.
|
Defaults
Upon Senior Securities
|
18
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders.
|
18
|
Item
5.
|
Other
Information
|
18
|
Item
6.
|
Exhibits
|
18
|
SIGNATURES
|
19
|
September 30,
|
December 31,
|
||||||
2008
|
2007
|
||||||
(Unaudited)
|
|
||||||
Assets
|
|||||||
Current
assets:
|
|||||||
Cash
|
$
|
4,830
|
$
|
69,959
|
|||
Accounts
receivable, net of allowance for doubtful accounts
|
|||||||
of
$32,947 at September 30, 2008 and December 31, 2007
|
15,195
|
17,852
|
|||||
Prepaid
expenses
|
-
|
11,839
|
|||||
Total
current assets
|
20,025
|
99,650
|
|||||
Fixed
assets, net of accumulated depreciation of $20,089 and
|
|||||||
$15,534
at September 30, 2008 and December 31, 2007, respectively
|
2,063
|
5,294
|
|||||
$
|
22,088
|
$
|
104,944
|
||||
Liabilities
and Stockholders' Equity
|
|||||||
Current
liabilities:
|
|||||||
Deferred
revenues
|
$
|
-
|
$
|
33,333
|
|||
Accounts
payable
|
304,823
|
341,675
|
|||||
Accrued
expenses
|
340,341
|
303,173
|
|||||
Current
maturities of long term debt, net of discount of $51,634
and
|
|||||||
$-0-
at September 30, 2008 and December 31, 2007, respectively
|
393,366
|
5,000
|
|||||
Total
current liabilities
|
1,038,530
|
683,181
|
|||||
Long
term debt, net of discount of $24,406 and $84,705 at
|
|||||||
September
30, 2008 and December 31, 2007, respectively
|
594
|
345,295
|
|||||
Stockholders'
(deficit):
|
|||||||
Preferred
stock, $0.001 par value, 2,000,000 shares authorized;
|
|||||||
1,200,000
and 800,000 shares issued and outstanding, respectively
|
1,200
|
800
|
|||||
Common
stock, $0.001 par value, 150,000,000 shares authorized;
|
|||||||
33,792,342
and 29,267,569 shares issued and outstanding, respectively
|
33,793
|
29,267
|
|||||
Additional
paid-in capital
|
14,683,905
|
14,165,616
|
|||||
Accumulated
(deficit)
|
(15,735,934
|
)
|
(15,119,215
|
)
|
|||
(1,017,036
|
)
|
(923,532
|
)
|
||||
$
|
22,088
|
$
|
104,944
|
For the three months ended
|
For the nine months ended
|
||||||||||||
September 30,
|
September 30,
|
||||||||||||
2008
|
2007
|
2008
|
2007
|
||||||||||
|
|
|
|
||||||||||
Revenue
|
|||||||||||||
Network
|
$
|
5,056
|
$
|
39,764
|
$
|
44,066
|
$
|
57,723
|
|||||
Production
and other
|
13,739
|
49,995
|
170,644
|
182,442
|
|||||||||
Total
revenue
|
18,795
|
89,759
|
214,710
|
240,165
|
|||||||||
Expenses:
|
|||||||||||||
Direct
operating costs
|
28,915
|
92,727
|
122,876
|
256,241
|
|||||||||
General
and administrative
|
107,269
|
93,254
|
298,103
|
279,197
|
|||||||||
Officer
salaries
|
35,436
|
135,000
|
219,886
|
385,000
|
|||||||||
Salaries
and wages
|
12,258
|
23,211
|
54,671
|
70,165
|
|||||||||
Consulting
services
|
-
|
166,528
|
118,825
|
464,022
|
|||||||||
Consulting
services, related party
|
-
|
5,000
|
26,289
|
118,690
|
|||||||||
Rent
|
19,012
|
18,803
|
57,297
|
50,759
|
|||||||||
Depreciation
and amortization
|
1,326
|
5,087
|
4,555
|
28,022
|
|||||||||
Total
operating expenses
|
204,216
|
539,610
|
902,502
|
1,652,096
|
|||||||||
Net
operating (loss)
|
(185,421
|
)
|
(449,851
|
)
|
(687,792
|
)
|
(1,411,931
|
)
|
|||||
Other
income (expense):
|
|||||||||||||
Interest
expense
|
(8,344
|
)
|
(8,364
|
)
|
(22,968
|
)
|
(27,289
|
)
|
|||||
Loss
on disposal of fixed assets
|
-
|
(31,477
|
)
|
-
|
(31,477
|
)
|
|||||||
Gain
on debt settlement
|
33,000
|
-
|
137,706
|
74,610
|
|||||||||
Financing
costs
|
(16,081
|
)
|
(13,792
|
)
|
(43,665
|
)
|
(41,376
|
)
|
|||||
Total
other income (expenses)
|
8,575
|
(53,633
|
)
|
71,073
|
(25,532
|
)
|
|||||||
Net
(loss)
|
$
|
(176,846
|
)
|
$
|
(503,484
|
)
|
$
|
(616,719
|
)
|
$
|
(1,437,463
|
)
|
|
Weighted
average number of common
|
|||||||||||||
shares
outstanding - basic and fully diluted
|
31,584,592
|
27,561,728
|
30,459,350
|
25,533,089
|
|||||||||
Net
(loss) per share - basic & fully diluted
|
$
|
(0.01
|
)
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
$
|
(0.06
|
)
|
For the nine months ended
|
|||||||
September 30,
|
|||||||
2008
|
2007
|
||||||
|
|
||||||
Cash
flows from operating activities
|
|||||||
Net
(loss)
|
$
|
(616,719
|
)
|
$
|
(1,437,463
|
)
|
|
Adjustments
to reconcile net (loss) to
|
|||||||
net
cash (used in) operating activities:
|
|||||||
Loss
on disposal of fixed assets
|
-
|
31,477
|
|||||
Gain
on debt settlements
|
(137,706
|
)
|
(74,610
|
)
|
|||
Depreciation
and amortization expense
|
4,555
|
28,022
|
|||||
Stock
issued for services
|
161,950
|
368,515
|
|||||
Stock
issued for services, related party
|
159,375
|
322,729
|
|||||
Options
issued for services
|
99,405
|
266,681
|
|||||
Options
issued for services, related party
|
67,485
|
-
|
|||||
Amortization
of warrants
|
-
|
88,211
|
|||||
Amortization
of beneficial conversion feature
|
43,665
|
41,376
|
|||||
Decrease
(increase) in assets:
|
|||||||
Accounts
receivable
|
2,657
|
1,300
|
|||||
Prepaid
expenses
|
11,839
|
1,290
|
|||||
Increase
(decrease) in liabilities:
|
|||||||
Deferred
revenues
|
(33,333
|
)
|
36,667
|
||||
Accounts
payable
|
100,854
|
(90,578
|
)
|
||||
Accrued
expenses
|
37,168
|
121,199
|
|||||
Net
cash (used in) operating activities
|
(98,805
|
)
|
(295,184
|
)
|
|||
Cash
flows from investing activities
|
|||||||
Purchase
of fixed assets
|
(1,324
|
)
|
-
|
||||
Net
cash provided by (used in) investing activities
|
(1,324
|
)
|
-
|
||||
Cash
flows from financing activities
|
|||||||
Proceeds
from sale of common stock
|
-
|
322,200
|
|||||
Proceeds
from long term debt
|
35,000
|
12,500
|
|||||
Repayments
of long term debt
|
-
|
(5,000
|
)
|
||||
Net
cash provided by financing activities
|
35,000
|
329,700
|
|||||
Net
increase in cash
|
(65,129
|
)
|
34,516
|
||||
Cash
- beginning
|
69,959
|
16,507
|
|||||
Cash
- ending
|
$
|
4,830
|
$
|
51,023
|
|||
Supplemental
disclosures:
|
|||||||
Interest
paid
|
$
|
6,631
|
$
|
5,532
|
|||
Income
taxes paid
|
$
|
-
|
$
|
-
|
|||
Non-cash
transactions:
|
|||||||
Stock
issued for services
|
$
|
161,950
|
$
|
368,515
|
|||
Stock
issued for services, related party
|
$
|
159,375
|
$
|
322,729
|
|||
Stock
options issued for services
|
$
|
99,405
|
$
|
266,681
|
|||
Stock
options issued for services, related party
|
$
|
67,485
|
$
|
-
|
2008
|
2007
|
||||||
8%
unsecured convertible debentures, due in September 2011, convertible
into
166,667 shares of common stock at any time prior to maturity based
on a
conversion price of $0.15 per share. Accrued interest is convertible
as
well at a conversion price of $0.15 per share.
|
$
|
25,000
|
$
|
-
|
|||
8%
unsecured convertible debentures, due in March 2009, convertible
into
166,667 shares of common stock at any time prior to maturity based
on a
conversion price of $0.06 per share. Accrued interest is convertible
as
well at a conversion price of $0.06 per share.
|
10,000
|
-
|
|||||
5%
unsecured convertible debentures, due in September 2009, convertible
into
333,333 shares of common stock at any time prior to maturity based
on a
conversion price of $0.15 per share. Accrued interest is convertible
as
well at a conversion price of $0.15 per share.
|
50,000
|
50,000
|
|||||
5%
unsecured convertible debentures, due in August 2009, convertible
into
400,000 shares of common stock at any time prior to maturity based
on a
conversion price of $0.15 per share. Accrued interest is convertible
as
well at a conversion price of $0.15 per share.
|
60,000
|
60,000
|
|||||
5%
unsecured convertible debentures, due in June 2009, convertible into
200,000 shares of common stock at any time prior to maturity based
on a
conversion price of $0.15 per share. Accrued interest is convertible
as
well at a conversion price of $0.15 per share.
|
30,000
|
30,000
|
|||||
5%
unsecured convertible debentures, due in June 2009, convertible into
100,000 shares of common stock at any time prior to maturity based
on a
conversion price of $0.15 per share. Accrued interest is convertible
as
well at a conversion price of $0.15 per share.
|
15,000
|
15,000
|
|||||
5%
unsecured convertible debentures, due in May 2009, convertible into
166,667 shares of common stock at any time prior to maturity based
on a
conversion price of $0.15 per share. Accrued interest is convertible
as
well at a conversion price of $0.15 per share.
|
25,000
|
25,000
|
|||||
5%
unsecured convertible debentures, due in March 2009, convertible
into
571,429 shares of common stock at any time prior to maturity based
on a
conversion price of $0.35 per share. Accrued interest is convertible
as
well at a conversion price of $0.35 per share.
|
200,000
|
200,000
|
|||||
5%
unsecured convertible debentures, due in February 2009, convertible
into
71,429 shares of common stock at any time prior to maturity based
on a
conversion price of $0.35 per share. Accrued interest is convertible
as
well at a conversion price of $0.35 per share.
|
25,000
|
25,000
|
|||||
5%
unsecured convertible debentures, due in February 2009, convertible
into
71,429 shares of common stock at any time prior to maturity based
on a
conversion price of $0.35 per share. Accrued interest is convertible
as
well at a conversion price of $0.35 per share.
|
25,000
|
25,000
|
|||||
Unsecured
demand note due to a former Officer of the Company. The non interest
bearing debt is expected to be repaid in the near term.
|
5,000
|
5,000
|
|||||
Total
debt
|
470,000
|
435,000
|
|||||
Less:
current portion
|
393,636
|
5,000
|
|||||
Less:
discount on beneficial conversion feature
|
51,364
|
-
|
|||||
Long-term
debt, less current portion
|
25,000
|
430,000
|
|||||
Less:
discount on beneficial conversion feature
|
24,406
|
84,705
|
|||||
Long-term
debt, less discount on beneficial conversion feature
|
$
|
594
|
$
|
345,295
|
2008
|
$
|
5,000
|
||
2009
|
440,000
|
|||
2010
|
-
|
|||
2011
|
25,000
|
|||
Thereafter
|
-
|
|||
$
|
470,000
|
Shares Underlying
|
|||||||||||||||||||
Shares Underlying Options and Warrants Outstanding
|
Options and Warrants
Exercisable
|
||||||||||||||||||
Weighted
|
|||||||||||||||||||
Shares
|
Average
|
Weighted
|
Shares
|
Weighted
|
|||||||||||||||
Underlying
|
Remaining
|
Average
|
Underlying
|
Average
|
|||||||||||||||
Range of
|
Options
|
Contractual
|
Exercise
|
Options
|
Exercise
|
||||||||||||||
Exercise Prices
|
Outstanding
|
Life
|
Price
|
Exercisable
|
Price
|
||||||||||||||
$ |
0.15
- 0.50
|
6,927,333
|
3.14
years
|
$
|
0.28
|
6,927,333
|
$
|
0.28
|
|
2008
|
2007
|
|||||
Average
risk-free interest rates
|
2.02
|
%
|
5.07
|
%
|
|||
Average
expected life (in years)
|
2
|
2
|
|||||
Average
Volatility
|
180
|
%
|
194
|
%
|
|
Weighted
|
||||||
|
Average
|
||||||
|
Number
|
Exercise
|
|||||
|
Of Shares
|
Price
|
|||||
Balance,
December 31, 2007
|
8,776,499
|
$
|
0.29
|
||||
Options
cancelled
|
-0-
|
-0-
|
|||||
Options
expired
|
(2,974,166
|
)
|
(0.27
|
)
|
|||
Options
vested during the period
|
1,125,000
|
0.20
|
|||||
Balance,
September 30, 2008
|
6,927,333
|
0.28
|
|||||
Exercisable,
September 30, 2008
|
6,927,333
|
$
|
0.28
|
For the Three Months Ended
September
30,
|
Increase /
(Decrease)
|
|||||||||
2008
|
2007
|
|||||||||
Revenues
|
$
|
18,795
|
$
|
89,759
|
$
|
(70,964
|
)
|
|||
Direct
operating costs
|
28,915
|
92,727
|
(63,812
|
)
|
||||||
General
and administrative
|
107,269
|
93,254
|
14,015
|
|||||||
Salaries
and wages
|
47,694
|
158,211
|
(110,517
|
)
|
||||||
Consulting
services
|
-
|
171,528
|
(171,528
|
)
|
||||||
Rent
|
19,012
|
18,803
|
209
|
|||||||
Depreciation
and amortization
|
1,326
|
5,087
|
(3,761
|
)
|
||||||
Total
Operating Expenses
|
204,216
|
539,610
|
(335,394
|
)
|
||||||
Net
Operating (Loss)
|
(185,421
|
)
|
(449,851
|
)
|
(264,430
|
)
|
||||
Total
other income (expense)
|
8,575
|
(53,633
|
62,208
|
|||||||
Net
(Loss)
|
$
|
(176,846
|
)
|
$
|
(503,484
|
)
|
$
|
(326,638
|
)
|
For
the Nine Months Ended
September
30,
|
Increase /
(Decrease)
|
|||||||||
2008
|
2007
|
|||||||||
Revenues
|
$
|
214,710
|
$
|
240,165
|
$
|
(25,455
|
)
|
|||
Direct
operating costs
|
122,876
|
256,241
|
(133,365
|
)
|
||||||
General
and administrative
|
298,103
|
279,197
|
18,906
|
|||||||
Salaries
and wages
|
274,557
|
455,165
|
(180,608
|
)
|
||||||
Consulting
services
|
145,114
|
582,712
|
(437,598
|
)
|
||||||
Rent
|
57,297
|
50,759
|
6,538
|
|||||||
Depreciation
and amortization
|
4,555
|
28,022
|
(23,467
|
)
|
||||||
Total
Operating Expenses
|
902,502
|
1,652,096
|
(749,594
|
)
|
||||||
Net
Operating (Loss)
|
(687,792
|
)
|
(1,411,931
|
)
|
(724,139
|
)
|
||||
Total
other income (expense)
|
71,073
|
(25,532
|
)
|
96,605
|
||||||
Net
(Loss)
|
$
|
(616,719
|
)
|
$
|
(1,437,463
|
)
|
$
|
(820,744
|
)
|
September 30, 2008
|
September 30, 2007
|
||||||
Total
Assets
|
$
|
22,088
|
$
|
61,521
|
|||
Accumulated
(Deficit)
|
$
|
(15,735,934
|
)
|
$
|
(14,759,246
|
)
|
|
Stockholders’
Equity
|
$
|
(1,017,036
|
)
|
$
|
(1,029,929
|
)
|
|
Working
Capital (Deficit)
|
$
|
(1,018,505
|
)
|
$
|
(606,902
|
)
|
31.1
|
Certifications
pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange
Act
of 1934, as amended, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Players
Network
|
|
/s/
Mark Bradley
|
Mark
Bradley
|
Chief
Executive Officer
(Principal
Executive Officer)
|