SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 4
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS UNDER THE EXCHANGE ACT OF 1934
The Players Network
--------------------------------------------------------------------------------
(Exact name of registrant 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 offices) (Zip Code)
Issuer's telephone number, including area code (702) 895-8884
-----------------------
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be registered each class to be registered
None None
----------------------------------- -------------------------------------
----------------------------------- -------------------------------------
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.001 Per Share
--------------------------------------------------------------------------------
(Title of class)
<PAGE>
TABLE OF CONTENTS
PAGE
Part F/S .....................................................................
<PAGE>
Explanatory Note:
A signature was inadvertently omitted from the previous Independent Auditors'
Report. This amendment contains a signature on the Independent Auditors' Report.
Part F/S
THE PLAYERS NETWORK
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE>
THE PLAYERS NETWORK
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report
Balance Sheet as of December 31, 1999 and 1998
Statement of Operations
Years Ended December 31, 1999 and 1998
Statement of Cash Flows
Years Ended December 31, 1999 and 1998
Statement of Changes in Stockholders' Equity
Years Ended December 31, 1999 and 1998
Notes to Financial Statements
<PAGE>
FRIEDMAN
ALPREN & 1700 BROADWAY
GREEN LLP NEW YORK, NY 10019
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS 212-582-1600
FAX 212-265-4761
www.nyccpas.com
INDEPENDENT AUDITORS' REPORT
----------------------------
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
THE PLAYERS NETWORK
We have audited the accompanying balance sheet of THE PLAYERS NETWORK
as of December 31, 1999 and 1998, and the related statements of operations, cash
flows and changes in stockholders' equity for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of THE PLAYERS NETWORK
as of December 31, 1999 and 1998, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ FRIEDMAN ALPREN & GREEN LLP
March 20, 2000
<PAGE>
<TABLE>
THE PLAYERS NETWORK
BALANCE SHEET
DECEMBER 31, 1999 AND 1998
<CAPTION>
1999 1998
----------------- ------------------
<S> <C> <C>
ASSETS
Current assets
Cash $ 64,295 $ 1,823
Prepaid expenses 66,718 2,336
----------------- ------------------
Total current assets 131,013 4,159
Property and equipment - net 299,143 329,599
Capitalized video production costs - net 882,226 940,848
Capitalized web site development costs 135,900 -
Intangible and other assets 8,677 10,953
----------------- ------------------
Total assets $ 1,456,959 $ 1,285,559
================= ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 96,033 $ 92,957
Accrued expenses 115,109 31,696
Current portion of long-term liabilities 14,671 22,932
Installment purchase agreement 146,500 156,500
Notes payable, stockholders 160,397 411,304
----------------- ------------------
Total current liabilities 532,710 715,389
Long-term liabilities, less current portion 38,551 42,547
----------------- ------------------
Total liabilities 571,261 757,936
----------------- ------------------
Stockholders' Equity
Common stock, $.001 par value;
25,000,000 shares authorized,
6,741,251 and 4,666,821 shares
issued and outstanding 6,741 4,666
Additional paid-in capital 4,960,913 3,376,459
Accumulated deficit (4,081,956) (2,853,502)
----------------- ------------------
Stockholders' equity 885,698 527,623
----------------- ------------------
Total liabilities and stockholders' equity $ 1,456,959 $ 1,285,559
================= ==================
</TABLE>
<PAGE>
<TABLE>
THE PLAYERS NETWORK
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
1999 1998
-------------------- --------------------
<S> <C> <C>
Revenues
Network $ 227,925 $ 232,604
Advertising 130,731 11,806
Production and other 82,641 64,462
-------------------- --------------------
Total revenues 441,297 308,872
-------------------- --------------------
Operating expenses
Selling, general and administrative 1,363,306 911,074
Depreciation and amortization 260,408 121,969
-------------------- --------------------
Total operating expenses 1,623,714 1,033,043
-------------------- --------------------
Other expenses
Interest expense 46,037 67,859
-------------------- --------------------
Net loss $ (1,228,454) $ (792,030)
==================== ====================
Basic and diluted loss per share $ (0.23) $ (0.19)
Weighted average shares outstanding 5,258,891 4,070,204
</TABLE>
<PAGE>
<TABLE>
THE PLAYERS NETWORK
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
1999 1998
-------------------- --------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (1,228,454) $ (792,030)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation and amortization 260,408 121,969
Barter transactions (88,000)
Notes payable, stockholders 61,786 155,847
Common stock issued for services 250,186 116,400
Stock-based compensation, non-employees 703,120 324,537
-------------------- --------------------
(40,954) (73,277)
Changes in assets and liabilities:
Prepaid expenses 1,753 (176)
Accounts and other payables (6,924) (8,656)
Accrued expenses 16,413 31,695
-------------------- --------------------
Net cash used in operating activities (29,712) (50,414)
-------------------- --------------------
Investing activities
Increase in capitalized video production costs (110,319) (130,263)
Acquisition of equipment (7,125) (21,359)
Increase in intangible assets (240) (2,831)
-------------------- --------------------
Net cash used in investing activities (117,684) (154,453)
-------------------- --------------------
Financing activities
Proceeds from the issuance of common stock 222,125 93,000
Proceeds from equipment loan - 42,800
Payments on long-term liabilities (12,257) (7,904)
-------------------- --------------------
Net cash provided by financing activities 209,868 127,896
-------------------- --------------------
Net increase (decrease) in cash 62,472 (76,971)
Cash, beginning of year 1,823 78,794
-------------------- --------------------
Cash, end of year $ 64,295 $ 1,823
==================== ====================
Supplemental cash flow information
Interest paid $ 8,983 $ 7,013
Non-cash investing and financing activities
Capitalized web site costs paid with common stock and stock options $ 68,900 $ -
Capitalized web site costs resulting from barter transactions 67,000 -
Capitalized video production costs paid with common stock
and stock options 29,505 237,913
Capitalized video production costs resulting from barter transactions 21,865 -
Common stock issued in exchange for notes payable, stockholders 312,693 294,069
</TABLE>
<PAGE>
<TABLE>
THE PLAYERS NETWORK
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<CAPTION>
Common Stock Additional
------------ Paid-in Accumulated
Shares Amount Capital Deficit Total
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1998 3,981,458 $ 3,981 $ 2,311,226 $ (2,061,472) $ 253,735
Stock issued for cash 76,333 76 92,924 - 93,000
Stock issued for services 200,600 201 300,699 - 300,900
Stock based compensation from options and warrants - - 377,949 - 377,949
Stock issued at fair value to stockholder in
exchange for note 408,430 408 293,661 - 294,069
Net loss - - - (792,030) (792,030)
--------------------------------------------------------------------------------
Balance at December 31, 1998 4,666,821 4,666 3,376,459 (2,853,502) 527,623
Stock issued for cash 595,800 596 221,529 - 222,125
Stock issued for services 499,033 499 288,306 - 288,805
Stock-based compensation from options and warrants - - 762,906 - 762,906
Stock issued at fair value to stockholders in
exchange for notes 979,597 980 311,713 - 312,693
Net loss - - - (1,228,454) (1,228,454)
--------------------------------------------------------------------------------
Balance at December 31, 1999 6,741,251 $ 6,741 $ 4,960,913 $(4,081,956) $ 885,698
=================================================================================
</TABLE>
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Players Network (the "Company") was organized under the laws of the State of
Nevada on March 16, 1993. The Company is engaged in the development and
marketing of a customized, interactive, full-service gaming television network.
In addition, the Company is developing a web site for the purpose of selling
primarily gaming supplies and travel-related services over the Internet. This
web site will become operational during January 2000 and, accordingly, revenues
from this activity were immaterial during the years ended December 31, 1999 and
1998.
The Company filed a 15c2-11 with the National Association of Securities Dealers,
which became effective on March 30, 1998 and received the stock-trading symbol
PNTV. The Company's common stock was formerly listed on the Over the Counter
Bulletin Board, but is not currently listed.
Estimates:
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. Those estimates and
assumptions affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the reported revenues and
expenses. Actual results could differ from those estimates.
Capitalized video production costs:
Capitalized video production costs which are expected to benefit future periods
are capitalized as incurred. The individual film forecast method is used to
amortize these costs. Under this method, costs accumulated in the production of
a video are amortized in the proportion that gross realized revenues bear to
management's estimate of total gross revenues. Amortization expense of
approximately $221,000 and $84,000 was charged to operations for the years ended
December 31, 1999 and 1998, respectively. Accumulated amortization was
approximately $305,000 and $84,000 at December 31, 1999 and 1998, respectively.
Property and equipment:
Property and equipment are carried at cost. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets. When assets
are retired or otherwise disposed of, the cost and the related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
recognized in that period. The cost of repairs and maintenance is charged to
operations as incurred and significant renewals or betterments are capitalized.
Useful lives for property and equipment are as follows:
Office furniture 10 years
Office equipment 3-10 years
Video equipment 10 years
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
Capitalized web site development costs:
The Company has capitalized certain costs associated with the development of its
e-commerce web site, PLAYERSNETWORK.COM. The Company follows the guidance
promulgated by Statement of Position 98-1, "Accounting for Software Developed
for Internal Use," which requires that all costs incurred to establish
technological feasibility should be expensed as incurred. After technological
feasibility was established, development costs are capitalized and amortized
over the estimated useful life. Total costs capitalized through December 31,
1999 were $135,900. These costs will be amortized on a straight-line basis over
a period of three years. There was no amortization expense in 1999.
Intangible assets:
The Company has applied for trademark protection for its videos. Trademark costs
of approximately $2,700 are amortized using the straight-line method over a
period of ten years.
Long-lived assets:
The Company makes reviews for the potential impairment of long-lived assets and
certain identifiable intangibles, such as capitalized video production costs and
capitalized web site development costs, whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. An impairment loss would be recognized when estimated future cash
flows expected to result from the use of the asset and its eventual disposition
is less than its carrying amount. The Company has identified approximately
$2,000 of impairment losses for finance costs in 1999. Such losses were written
off and included in the 1999 financial statements.
Income taxes:
The Company applies the asset and liability method of accounting for income
taxes. Under the asset and liability method, deferred tax assets and liabilities
are recognized for the estimated future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. A valuation allowance has been
established until realization of deferred tax assets is reasonably assured.
Deferred tax assets and liabilities are measured using the enacted tax rates in
effect for the year in which those temporary differences are expected to be
recovered or settled.
Basic and diluted loss per share:
The basic loss per share is computed by dividing the net loss by the weighted
average number of common shares outstanding for the period. Diluted loss per
share is the same as basic loss per share because the assumed exercise of
potential common stock would have an anti-dilutive effect.
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
Barter transactions:
The Company accounts for barter transactions, where advertising is both rendered
and received, in accordance with EITF 99-17, "Accounting for Advertising Barter
Transactions", which requires the recognition of revenue and expense only if the
fair value of the advertising surrendered is determinable based on the Company's
experience in receiving cash or other consideration readily convertible to cash.
The Company accounts for other barter transactions in accordance with EITF
93-11, "Accounting for Barter Transaction Involving Credits", and APB No. 29,
"Accounting for Nonmonetary Transactions", which require that the fair value of
the nonmonetary asset exchanged be used in recording the nonmonetary
transactions.
Revenue recognition:
Network revenue consists of initial, subscription and renewal fees. The Company
adopted the revenue recognition policy to comply fully with the guidance in SAB
101, by recognizing the network revenue on a straight-line basis over the
contractual term. Costs and expenses associated with network revenue are not
significant and treated as a period expense. Advertising revenue is recognized
when advertisements are aired. Production and other revenues, which consist of
video production, stage rental and other production-related revenues, are
recognized when video production is completed and the stage rental period has
expired. The Company did not recognize any significant initial and renewal fees
revenue for the year 1999.
Advertising costs:
The Company's policy is to expense advertising costs as a period expense.
Advertising costs of $35,755 and $475 were charged to operations during the
years ended December 31, 1999 and 1998, respectively.
Stock-based compensation:
The Company has adopted Statement of Financial Accounting Standard No. 123 (SFAS
123), "Accounting for Stock-Based Compensation". In accordance with SFAS 123,
the Company records stock-based compensation for stock instruments issued to
nonemployees in exchange for goods or services based on the fair value of goods
and services received or the fair value of stock instruments surrendered. The
Company measures compensation expense for its stock-based employee compensation
plans using the intrinsic value method prescribed by APB No. 25, "Accounting for
Stock Issued to Employees".
Comprehensive income:
SFAS 130, "Reporting Comprehensive Income", requires the disclosure of
comprehensive income (loss), which consists of net income or net loss and other
comprehensive income. Other comprehensive income (loss) consists of unrealized
gains and losses that are not recorded in the traditional statement of
operations and, instead, are presented as a separate section of stockholders'
equity on the balance sheet. During the years ended December 31, 1999 and 1998,
the Company had no other comprehensive income.
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
New accounting pronouncement:
SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities",
was issued in June 1998 and was subsequently amended by SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133". SFAS No. 133 addresses the accounting
for derivative instruments, including certain derivative instruments embedded in
other contracts, and hedging activities. Adoption of these pronouncements is
required for the period beginning on July 1, 2000. The Company does not expect
these pronouncements to have a material impact on the results of its operations.
Reclassifications:
Certain reclassifications have been made to the prior year financial statements
to conform to the current year presentation.
2. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
1999 1998
-------------- --------------
<S> <C> <C>
Furniture and equipment $ 21,334 $ 14,209
Video equipment 359,622 359,622
Work in process 21,359 21,359
-------------- --------------
Total cost 395,190
Accumulated depreciation (103,172) (65,591)
-------------- --------------
Net book value $ 299,143 $ 329,599
============== ==============
</TABLE>
Work in process consists of the construction cost of the video production booth,
which will be completed in the year 2000.
The cost of equipment held under capital leases totaled $33,121 at December 31,
1999 and 1998, respectively. The related accumulated depreciation was $18,312
and $9,156 at December 31, 1999 and 1998, respectively.
Depreciation expense charged to operations amounted to $37,581 and $37,257 for
the years ended December 31, 1999 and 1998, respectively.
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
3. INSTALLMENT EQUIPMENT PURCHASE
During 1997, the Company entered into an agreement with a vendor to purchase
video equipment for $326,500. The purchase has been executed through the
exchange of 50,000 shares of common stock valued at $75,000, cash payment of
$176,500 to be made in 1998, and $75,000 of deferred advertising services to be
performed over a 3 year period. In addition, the vendor was given options to
purchase an additional 20,000 shares of common stock at $2.50 per share and
30,000 shares at $3.00 per share. The options expired and were never exercised.
The Company made $30,000 in payments of the installment agreement and performed
$10,000 of advertising services.
4. NOTES PAYABLE, STOCKHOLDERS
The Company had short-term notes payable to the president and two other
stockholders aggregating $160,397 and $411,304, including accrued interest, as
of December 31, 1999 and 1998, respectively. The notes are unsecured, payable on
demand and bear interest at 10% per annum. Each of the note holders has the
option to convert the debt instrument into shares of common stock at the average
prevailing price per share at any time prior to repayment. During the years
ended December 31, 1999 and 1998, these notes were issued in lieu of payments of
salary to the president and interest accrued on these notes. Notes totaling
$312,693 were converted into 979,597 common shares at various times throughout
1999 using the market value when the conversions were made. Notes payable to the
president of $160,397 at December 31, 1999 were converted to 542,634 common
shares in January 2000.
5. LONG-TERM LIABILITIES
The Company has the following long-term liabilities:
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Capital lease obligation payable to Advanta Business Services,
collateralized by specified video equipment, payable in monthly
installments of $228 including
interest at 24.84%. $ 5,075 $ 6,376
Capital lease obligation payable to Granite Financial Services,
collateralized by specified video equipment, payable in monthly
installments of $661 including
interest at 18.39%. 14,515 19,283
Equipment loan payable to Granite Financial Services, collateralized by
specified video equipment, payable in monthly installments of $1,022
including
interest at 16.4%. 33,632 39,820
----------- -----------
$ 53,222 $ 65,479
=========== ===========
</TABLE>
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
Future minimum payments at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
Year Ending
<S> <C>
2000 $ 22,944
2001 22,944
2002 14,502
2003 7,154
------------
Less: amount representing interest 14,322
------------
53,222
Less: current portion 14,671
------------
$ 38,551
============
</TABLE>
6. STOCKHOLDERS' EQUITY
Common stock:
During the year ended December 31, 1998, the Company issued 123,000 shares in
exchange for capitalized video production costs valued at $184,500 and 77,600
shares in exchange for services valued at $116,400. In addition, the president
of the Company converted $294,069 of debt owed to him for 408,430 shares.
During the year ended December 31, 1999, the Company issued 28,700 of shares in
exchange for capitalized video production costs valued at $18,949 and 470,333
shares in exchange for services valued at $269,856. In addition, stockholders
converted $312,692 of notes into 979,597 common shares.
Stock warrants:
On January 15, 1996, the Company issued 90,000 warrants to five specific
stockholders of record, with a 30-day call option at $.001 per warrant. The
warrants expire on January 14, 2000 and carry an exercise price of $2.50 per
share.
On December 4, 1997, the Company's president and principal stockholder received
350,000 warrants with an exercise price of $1.50 per share and a 60-month
expiration period.
In 1999, the Company's president and principal stockholder received 150,000
warrants with an exercise price of $1.25 per share expiring December 31, 2000.
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
Stock Options:
On January 20, 1997, the Company approved the issuance of 50,000 stock options
as part of the purchase of video equipment (see Note 3).
On January 1, 1998, the Company issued 452,000 stock options for services that
expire in 12 to 24 months and carry an exercise price of $2.50. In addition, the
Company approved 299,500 stock options from February to December 1998 that
expire in 12 to 24 months and carry exercise prices that range from $.60 to
$2.50.
During 1999, the Company issued 659,000 stock options for services that expire
in 24 months and with exercise prices ranging from $.75 to $2.50.
As of December 31, 1999, none of the warrants or options had been exercised.
7. INCOME TAXES AND DEFERRED INCOME TAXES
Income taxes and components of deferred tax assets are as follows:
<TABLE>
<CAPTION>
1999 1998
---------------- ----------------
<S> <C> <C>
Deferred tax assets
Net operating loss carryforwards $ 1,074,444 $ 931,515
Stock-based compensation 588,399 110,343
---------------- ----------------
1,041,858
Less - Valuation allowance (1,662,843) (1,041,858)
---------------- ----------------
Net deferred tax asset $ -0- $ -0-
================ ================
</TABLE>
The Company has available net operating loss carryforwards of approximately
$3,160,000, which expire as follows: 2010, $9,000; 2011, $1,732,000; 2012,
$531,000; 2018, $339,000 and 2019, $549,000.
8. COMMITMENTS
Effective December 4, 1997, the Company entered into a five-year employment
agreement with its president, who is responsible for the day-to-day operations
of the Company's business, the implementation of policies and creative direction
of the Company. The agreement provides for an annual base salary of $70,000,
adjusted annually for cost of living increases. As Executive Producer and
Creator, the president will also be entitled to a 5% fee on any Company
royalties received on the production content developed and produced by him.
Unpaid and accrued salaries of approximately $62,000 and $115,000 are included
in notes payable to stockholders at December 31, 1999 and 1998, respectively.
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
The Company entered into numerous "Hotel Affiliate Sales Agreements" with
various hotels to provide an in-house gaming channel over a privately operated
cable television distribution system. The Company agrees to install digital
playback equipment and provide the programming, maintenance and service to this
equipment at no additional cost. The term of these agreements ranges from 12
months to 24 months with renewal options.
On July 8, 1998, the Company entered into an "Independent Consulting/Finders Fee
Agreement" with an independent sales/marketing consultant to enhance the
Company's business, for a term of 24 months. The Company agreed to pay the
independent contractor a base fee of $52,000 per year in cash and 25,000 shares
of restricted stock. He also received a 10% commission on all upfront money for
production and equipment along with a 3% commission on the gross/net revenues as
defined. The agreement was terminated in March 1999.
Effective January 1, 1999, the Company entered into an agreement with a director
to act as the Chairman of the Board of Directors in exchange for 50,000 shares
of restricted stock and 50,000 options that expire in 24 months and carry an
exercise price of $1.50.
9. STOCK OPTIONS AND WARRANTS
The Company has issued stock options and warrants to purchase the Company's
common stock to officers, key employees, directors and outsiders as compensation
and for services rendered. The stock options and warrants are summarized as
follows:
<TABLE>
<CAPTION>
Weighted Weighted
Number Average Number Average
of Exercise of Exercise
Options Price Warrants Price
------- ----- -------- -----
<S> <C> <C> <C> <C>
Outstanding at January 1, 1998 495,500 $ 2.46 990,000 $ 3.96
Issued 751,500 2.19 - -
Exercised - - (100,000) 1.75
Expired (250,000) 2.37 (450,000) 6.67
Cancelled - - - -
----------- -----------
Outstanding at December 31, 1998 997,000 2.26 440,000 1.70
Issued 659,000 .81 150,000 1.25
Exercised - - - -
Expired (415,500) 2.45 - -
Cancelled - - - -
----------- -----------
Outstanding at December 31, 1999 1,240,500 1.43 590,000 1.75
=========== ===========
Stock options exercisable at:
December 31, 1999 1,240,500 1.43
December 31, 1998 997,000 2.26
Warrants exercisable at:
December 31, 1999 590,000 1.75
December 31, 1998 440,000 1.70
</TABLE>
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
Summary information about the Company's stock options and warrants outstanding
at December 31, 1999 is as follows:
<TABLE>
<CAPTION>
Outstanding and Weighted Average
Weighted Average Exercisable at Contractual Periods
Exercise Price December 31, 1999 in Years
-------------- ----------------- --------
<S> <C> <C> <C>
OPTIONS
$ .60 12,000 1.83
.75 634,000 1.93
1.75 263,000 2.00
2.50 331,500 2.02
-------------
$ 1.43 1,240,500 1.95
======= ============= =====
WARRANTS
$ 1.25 150,000 2.00
1.50 350,000 2.87
2.50 90,000 4.00
-------------
$ 1.75 590,000 2.96
======= ============= =====
</TABLE>
The Company accounts for stock options and warrants issued to non-employees
under the fair value method, pursuant to SFAS No. 123, "Accounting for
Stock-Based Compensation". The fair value of these stock options and warrants
was calculated at the date of issuance using a Black-Scholes Option Valuation
Model assuming risk-free interest rates of 6.22% and 5.95% and a volatility
factor of expected market price of the Company's common stock of 172.87%. Under
the provisions of SFAS No. 123, compensation expense arising from the issuance
of stock options and warrants for the years ended December 31, 1999 and 1998 was
$703,120 and $324,537, respectively, which was included in selling, general and
administrative expenses.
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
The Company also measures compensation in accordance with the provisions of
Accounting Principles Board Opinion No. 25 in accounting for stock options
issued to employees. Accordingly, compensation cost of $2,884 and $602 has been
recorded for stock options issued to employees for the years ended December 31,
1999 and 1998, respectively, using the intrinsic value method. In addition, the
fair value of each stock option and warrant issued has been estimated on the
issuance date using the Black-Scholes Option Valuation Model. The following
assumptions were made in estimating the fair value:
Dividend yield 0%
Risk-free interest rate 5.95% and 6.22%
Expected life 1 and 2 years
Expected volatility 172.87%
Had compensation cost been determined under SFAS No. 123, net loss per share for
the years ended December 31, 1999 and 1998 would have been increased as follows:
<TABLE>
<CAPTION>
1999 1998
---------------- -----------------
<S> <C> <C>
Net loss
As reported $ (1,228,454) $ (792,030)
Pro forma (1,622,939) (1,036,539)
Basic and diluted loss per share
As reported $ (.23) $ (.19)
Pro forma (.31) (.25)
</TABLE>
10. BARTER TRANSACTIONS
In 1999, the Company transferred software acquired from a vendor to a video
postproduction company in exchange for $88,000 in postproduction services, of
which the Company utilized approximately $22,000 of services. These transactions
are reflected in the financial statements for the year ended December 31, 1999.
In connection with two subscription agreements with hotels, the Company receives
up to $5,000 per month in complimentary room and food services. In 1999, the
Company utilized approximately $13,600 in room and food services. These
transactions are reflected in the 1999 financial statements.
The Company entered into an agreement to render advertising services, in
exchange for various services for approximately $350,000. For the year ended
December 31, 1999, unrendered advertising services of $67,000 have been accrued
and reflected in the 1999 financial statements.
<PAGE>
THE PLAYERS NETWORK
NOTES TO FINANCIAL STATEMENTS
11. MAJOR CUSTOMERS
Sales to three customers were approximately 60% and 58% of total revenues for
the years ended December 31, 1999 and 1998, respectively.
12. SUBSEQUENT EVENTS
In January and February 2000, the Company issued approximately 665,000 shares of
common stock for approximately $295,000.
<PAGE>
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on behalf of the
undersigned, thereunto duly authorized.
Dated: September 7, 2000
The Players Network
By: /s/ Mark Bradley
-----------------------------------------
Its: Chief Executive Officer
