x
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QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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Nevada
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88-0343702
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(State
or other jurisdiction of
incorporation
or organization)
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(IRS
Employer
Identification
No.)
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4260
Polaris Avenue
Las
Vegas, Nevada 89103
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(702)
895-8884
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(Address
of principal executive offices)
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(Issuer’s
telephone number)
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Large
accelerated filer
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Accelerated
filer
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Non-accelerated
filer
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Smaller
reporting company x
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Page
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INDEX
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
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PART
I. FINANCIAL INFORMATION
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Item
1.
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Financial
Statements
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1
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Condensed
Balance Sheets as of March 31, 2009 and March 31, 2008
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1
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Condensed
Statements of Operations for Three Months ended March 31, 2009 and
2008
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2
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Condensed
Statements of Cash Flows for the Three Months ended March 31, 2009 and
2008
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3
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Notes
to the Condensed Financial Statements
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4
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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12
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Item
3.
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Quantitative
and Qualitative Disclosures About Market Risk.
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14
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Item
4T.
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Controls
and Procedures
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14
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PART
II. OTHER INFORMATION
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Item
1.
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Legal
Proceedings
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15
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Item
1A.
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Risk
Factors
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15
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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15
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Item
3.
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Defaults
Upon Senior Securities
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17
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Item
4.
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Submission
of Matters to a Vote of Security Holders.
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17
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Item
5.
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Other
Information
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17
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Item
6.
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Exhibits
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17
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SIGNATURES
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17
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March 31,
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December 31,
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|||||||
2009
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2008
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|||||||
(Unaudited)
|
||||||||
Assets
|
||||||||
Current
assets:
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||||||||
Cash
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$ | 1,865 | $ | - | ||||
Accounts
receivable, net of allowance for doubtful accounts of $5,000 as of March
31, 2009 and December 31, 2008
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10,150 | 44,670 | ||||||
Total
current assets
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12,015 | 44,670 | ||||||
Fixed
assets, net
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1,531 | 1,683 | ||||||
Total
Assets
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$ | 13,546 | $ | 46,353 | ||||
Liabilities
and Stockholders' Equity (Deficit)
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||||||||
Current
liabilities:
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||||||||
Checks
written in excess of available funds
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$ | - | $ | 2,176 | ||||
Accounts
payable
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474,034 | 393,090 | ||||||
Accrued
expenses
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420,811 | 353,551 | ||||||
Current
maturities of long term debt, net of discount of $14,600 and $26,297 at
March 31, 2009 and December 31, 2008, respectively
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430,000 | 423,303 | ||||||
Total
current liabilities
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1,324,845 | 1,172,120 | ||||||
Long
Term Debt, net of discount of $-0- and $-0- at March 31, 2009 and
December, 31, 2008, respectively
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25,000 | 25,000 | ||||||
Total
Liabilities
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1,349,845 | 1,197,120 | ||||||
Stockholders'
equity (deficit):
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||||||||
Preferred
stock, $0.001 par value, 2,000,000 shares authorized; 2,000,000 shares
issued and outstanding at March 31, 2009 and December 31,
2008
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2,000 | 2,000 | ||||||
Common
stock, $0.001 par value, 150,000,000 shares authorized; 37,007,842 and
35,092,342 shares issued and outstanding at March 31, 2009 and
December 31, 2008, respectively
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37,008 | 35,092 | ||||||
Additional
paid-in capital
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15,130,319 | 14,711,305 | ||||||
Accumulated
(deficit)
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(16,505,626 | ) | (15,899,164 | ) | ||||
Total
Stockholders' Equity (Deficit)
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(1,336,299 | ) | (1,150,767 | ) | ||||
Total
Liabilities and Stockholders' Equity (Deficit)
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$ | 13,546 | $ | 46,353 |
For the three months ending
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||||||||
March 31,
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||||||||
2009
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2008
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|||||||
Revenue
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||||||||
Network
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$ | 14,720 | $ | 17,385 | ||||
Production
and other
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15,635 | 106,012 | ||||||
Total
revenue
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30,355 | 123,397 | ||||||
Expenses:
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||||||||
Direct
operating costs
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181,072 | 156,577 | ||||||
General
and administrative
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126,114 | 119,723 | ||||||
Officer
salaries and wages
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230,493 | 121,996 | ||||||
Salaries
and wages
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10,950 | 24,312 | ||||||
Board
of director services
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38,922 | 6,981 | ||||||
Rent
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18,749 | 18,749 | ||||||
Depreciation
and amortization
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152 | 1,680 | ||||||
Total
operating expenses
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606,452 | 450,018 | ||||||
Net
operating (loss)
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(576,097 | ) | (326,621 | ) | ||||
Other
income (expense):
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||||||||
Interest
expense
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(30,365 | ) | (7,007 | ) | ||||
Financing
costs
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- | (13,792 | ) | |||||
Forgiveness
of debt
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- | 86,706 | ||||||
Total
other income (expense)
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(30,365 | ) | 65,907 | |||||
Net
(loss)
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$ | (606,462 | ) | $ | (260,714 | ) | ||
Weighted
average number of common shares outstanding - basic and fully
diluted
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36,559,798 | 29,559,783 | ||||||
Net
(loss) per share - basic and fully diluted
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$ | (0.02 | ) | $ | (0.01 | ) |
For the three months ending
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||||||||
March 31,
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||||||||
2009
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2008
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|||||||
Cash
flows from operating activities
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||||||||
Net
(loss)
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$ | (606,462 | ) | $ | (260,714 | ) | ||
Adjustments
to reconcile net (loss) to net cash (used) by operating
activities:
|
||||||||
Depreciation
and amortization expense
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152 | 1,680 | ||||||
Forgiveness
of debt
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- | (86,706 | ) | |||||
Amortization
of beneficial conversion feature
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11,697 | 13,792 | ||||||
Stock
issued for services
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135,915 | 33,950 | ||||||
Stock
issued for compensation, related party
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32,500 | 40,800 | ||||||
Loss
on stock issued for debt
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10,600 | - | ||||||
Options
and warrants granted for services
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186,915 | 157,633 | ||||||
Decrease
(increase) in assets:
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||||||||
Accounts
receivable
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34,520 | 1,533 | ||||||
Prepaid
expenses and other current assets
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- | 11,609 | ||||||
Increase
(decrease) in liabilities:
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||||||||
Checks
written in excess of deposits
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(2,176 | ) | - | |||||
Deferred
revenues
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- | (16,666 | ) | |||||
Accounts
payable
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80,944 | 40,060 | ||||||
Accrued
expenses
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67,260 | 36,078 | ||||||
Net
cash (used) in operating activities
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(48,135 | ) | (26,951 | ) | ||||
Cash
flows from financing activities
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||||||||
Proceeds
from sale of common stock
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50,000 | - | ||||||
Net
cash provided by financing activities
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50,000 | - | ||||||
Net
decrease (increase) in cash
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1,865 | (26,951 | ) | |||||
Cash
– beginning
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- | 69,959 | ||||||
Cash
– ending
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$ | 1,865 | $ | 43,008 | ||||
Supplemental
disclosures:
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||||||||
Interest
paid
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$ | 1,076 | $ | - | ||||
Income
taxes paid
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$ | - | $ | - | ||||
Non-cash
transactions:
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||||||||
Stock
issued for debt
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$ | 5,000 | $ | - |
2009
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2008
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|||||||
8%
unsecured convertible debentures, due in September 2011, convertible into
500,000 shares of common stock at any time prior to maturity based on a
conversion price of $0.05 per share. Accrued interest is convertible as
well at a conversion price of $0.05 per share.
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$ | 25,000 | $ | 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.
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10,000 | 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.
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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.
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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.
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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.
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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.
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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.
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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.
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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 $0.35 per share.
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25,000 | 25,000 | ||||||
Unsecured
demand note, non interest bearing.
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4,600 | 4,600 | ||||||
Unsecured
demand note due to a former Director of the Company. The non interest
bearing debt was converted to stock on January 9, 2009.
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- | 5,000 | ||||||
Total
debt
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469,600 | 474,600 | ||||||
Less:
current portion
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430,000 | 423,303 | ||||||
Less:
discount on beneficial conversion feature
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14,600 | 26,297 | ||||||
Long-term
debt, less current portion
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25,000 | 25,000 | ||||||
Less:
discount on beneficial conversion feature
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- | - | ||||||
Long-term
debt, less current portion and discount on BCF
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$ | 25,000 | $ | 25,000 |
2009
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$ | 444,600 | ||
2010
|
- | |||
2011
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25,000 | |||
Thereafter
|
- | |||
$ | 469,600 |
Shares
Underlying Options Outstanding
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Shares
Underlying
Options
Exercisable
|
||||||||||||||||
Weighted
|
|||||||||||||||||
Shares
|
Average
|
Weighted
|
Shares
|
Weighted
|
|||||||||||||
Underlying
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Remaining
|
Average
|
Underlying
|
Average
|
|||||||||||||
Range of
|
Options
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Contractual
|
Exercise
|
Options
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Exercise
|
||||||||||||
Exercise Prices
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Outstanding
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Life
|
Price
|
Exercisable
|
Price
|
||||||||||||
$ |
0.15
- 1.00
|
7,611,333
|
1.92
years
|
$
|
0.26
|
7,611,333
|
$
|
0.26
|
2009
|
2008
|
|||||||
Average
risk-free interest rates
|
2.05 | % | 2.02 | % | ||||
Average
expected life (in years)
|
3 | 2 | ||||||
Volatility
|
294 | % | 180 | % |
Weighted
|
||||||||
Average
|
||||||||
Number
|
Exercise
|
|||||||
of Shares
|
Price
|
|||||||
Balance,
December 31, 2008
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6,661,333
|
0.28
|
||||||
Options
expired
|
(800,000)
|
(0.43)
|
||||||
Options
cancelled
|
-0-
|
-0-
|
||||||
Options
granted
|
2,000,000
|
0.22
|
||||||
Options
exercised
|
-0-
|
-0-
|
||||||
Balance,
March 31, 2009
|
7,861,333
|
0.28
|
||||||
Exercisable,
March 31, 2009
|
7,861,333
|
$
|
0.28
|
For the Three Months Ended
March 31,
|
Increase /
(Decrease)
|
|||||||||||
2009
|
2008
|
|||||||||||
Revenues
|
$ | 30,355 | $ | 123,397 | $ | (93,042 | ) | |||||
Direct
operating costs
|
181,072 | 156,577 | 24,495 | |||||||||
General
and administrative
|
126,114 | 119,723 | 6,391 | |||||||||
Salaries
and wages
|
241,443 | 146,308 | 95,135 | |||||||||
Consulting
services
|
38,922 | 6,981 | 31,941 | |||||||||
Rent
|
18,749 | 18,749 | - | |||||||||
Depreciation
and amortization
|
152 | 1,680 | (1,528 | ) | ||||||||
Total
Operating Expenses
|
606,452 | 450,018 | 156,434 | |||||||||
Net
Operating (Loss)
|
(576,097 | ) | (326,621 | ) | (249,476 | ) | ||||||
Total
other income (expense)
|
(30,365 | ) | 65,907 | (96,272 | ) | |||||||
Net
(Loss)
|
$ | (606,462 | ) | $ | (260,714 | ) | $ | (345,748 | ) |
March 31, 2009
|
March 31, 2008
|
|||||||
Total
Assets
|
$ | 13,546 | $ | 46,353 | ||||
Accumulated
(Deficit)
|
$ | (16,505,626 | ) | $ | (15,899,164 | ) | ||
Stockholders’
Equity
|
$ | (1,336,299 | ) | $ | (1,150,767 | ) | ||
Working
Capital (Deficit)
|
$ | (1,312,830 | ) | $ | (1,127,450 | ) |
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
|
|
Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of
2002.*
|
Players
Network
|
/s/
Mark Bradley
|
Mark
Bradley
|
Chief
Executive Officer
(Principal
Executive Officer)
|