Edgar Filing: PLAYERS NETWORK

Filed by Securities Law Institute EDGAR Services (888) 546-6454 - Players - 10-QSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2006

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-29363

THE PLAYERS NETWORK

(Exact name of small business issuer as specified in its charter)

Nevada	88-0343702
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

4260 Polaris Avenue

Las Vegas, Nevada 89103

(Address of principal executive offices)

(702) 895-8884

(Issuer’s telephone number)

Copies of Communications to:

Stoecklein Law Group

402 West Broadway, Suite 400

San Diego, CA 92101

(619) 595-4882

Fax (619) 595-4883

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the last 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o

No x

The number of shares of Common Stock, $0.001 par value, outstanding on March 31, 2006, was 19,503,685 shares.

Transitional Small Business Disclosure Format (check one): Yes o No x

PART I.

FINANCIAL INFORMATION

Item 1.

Financial Statements

The Players Network

Balance Sheet

(unaudited)

	March 31, 2006
Assets
Current assets:
Cash	$	125,581
Accounts receivable, net		20,356
Note receiveable		30,625
Total current assets		176,562

Fixed assets, net		102,967

	$	279,529

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	303,993
Accrued expenses		11,643
Accrued salaries – related party		108,251
Total current liabilities		423,887

Note Payable		250,000
Stockholders’ Equity:

Common stock, $0.001 par value, 25,000,000 shares authorized, 19,503,685 shares issued and outstanding as of March 31, 2006		19,504
Additional paid-in capital		11,282,626
Unamortized share based compensation		(175,454)
Accumulated (deficit)		(11,521,034)
		(394,358)
	$	279,529

The accompanying notes are an integral part of these condensed financial statements.

The Players Network

Statements of Operations

(unaudited)

	For the Three Months Ended March 31,
	2006		2005
Revenue
Network	$	15,150	$	35,180
Advertising		--		20,160
Production and other		58,610		25,626
Total revenue		73,760		80,966


Expenses:
Direct operating costs		78,178		20,823
General and administrative expenses		107,790		51,650
Salaries and wages		32,439		--
Salaries and wages – related party		96,861		37,500
Consulting services		22,753		29,860
Consulting services – related party		50,667		--
Rent		20,111		18,999
Depreciation and amortization		18,032		12,701
Total expenses		426,831		171,533

Net operating (loss)		(353,071)		(90,567)


Other income (expense):
Interest income		375		--
Interest (expense)		(1,015)		(576)

Net (loss)	$	(353,711)	$	(91,142)

Weighted average number of common shares outstanding – basic and fully diluted		19,480,018		15,232,892

Net (loss) per share - basic & fully diluted	$	(0.02)	$	(0.01)

The accompanying notes are an integral part of these condensed financial statements.

The Players Network

Statements of Cash Flows

(unaudited)

	Three Months Ended March 31,
	2006		2005
Cash flows from operating activities
Net (loss)	$	(353,711)	$	(91,143)
Depreciation and amortization expense		18,032		12,701
Stock issued for services		14,605		28,000
Stock issued for services – related party		50,667		--
Adjustments to reconcile net (loss) to
net cash (used) by operating activities:
Accounts receivable		1,634		13,375
Prepaid expenses and other assets		13,158		(4,215)
Accounts payable		13,957		(13,444)
Accrued expenses		2,992		(7,092)
Accrued expenses - related party		60,862		16,500
Net cash (used) by operating activities		(177,804)		(45,318)

Cash flows from investing activities
Purchase of fixed assets		--		(1,182)
Net cash provided (used) in investing activities		--		(1,182)

Cash flows from financing activities
Proceeds from convertible debentures		250,000		--
Sale of common stock		--		65,000
Net cash provided by financing activities		250,000		65,000

Net decrease (increase) in cash		72,196		18,499
Cash – beginning		53,385		8,994
Cash – ending	$	125,581	$	27,493

Supplemental disclosures:
Interest paid	$	550	$	497
Income taxes paid	$	--	$	--

The accompanying notes are an integral part of these condensed financial statements.

THE PLAYERS NETWORK

NOTES TO FINANCIAL STATEMENTS

Note 1 - Basis of Presentation

The consolidated interim 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 make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these consolidated interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2005 and notes thereto included in the Company's 10-KSB annual report. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for the interim periods are not indicative of annual results.

Note 2 – Going concern

The accompanying financial statements have been prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company has accumulated net losses from operations of $11,521,034. For us to continue as a going concern we must seek additional sources of capital, and we must attain future profitable operations. We are currently initiating our business plan and are in the process of raising additional capital. The accompanying financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.

Note 3 – Reclassifications

Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation.

Note 4 – Convertible Agreements

During the three months ended March 31, 2006, the Company entered into three convertible debenture agreements for a total of $250,000 and bearing interest at a rate of 5% per annum and maturing three years from agreement date. The principal balance of the notes together with accrued interest is convertible at the election of the holder into shares of the Company’s common stock at a conversion price of $0.35 per share.

THE PLAYERS NETWORK

NOTES TO FINANCIAL STATEMENTS

Note 5 – Related party transactions

In February, 2006, the Company granted options to purchase 600,000 shares of its common stock to officers and directors of the Company in exchange for services at a weighted average exercise price of $0.50 per share. The estimated value using the Black-Scholes pricing Model is $226,121.

Note 6 – Stockholders’ Equity

On February 2, 2006, the Company issued 20,000 shares and 10,000 shares of common stock for services which were unissued as of December 9, 2005.

On February 7, 2006, the Company issued 30,000 shares of its common stock for services valued at $9,600.

Note 7 – Warrants & Options

The following is a summary of information about the Stock Options outstanding at March 31, 2006.

Shares Underlying

Shares Underlying Options Outstanding

Options 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

0.28- 0.78

2,910,170

2 years

0.42

2,910,170

0.42

The fair value of each option and warrant grant are estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants under the fixed option plan:

	2006			2005

Average risk-free interest rates		5.25	%		0	%
Average expected life (in years)		2			0
Volatility		168	%		0	%

The Black-Scholes option valuation model was developed for use in estimating the fair value of short-term traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including expected

THE PLAYERS NETWORK

NOTES TO FINANCIAL STATEMENTS

stock price volatility. Because the Company’s employee stock options have characteristics significantly different from those of traded options and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion the existing models do not necessarily provide a reliable single measure of the fair value of its employee stock options. During 2006 and 2005, there were no options granted with an exercise price below the fair value of the underlying stock at the grant date.

The weighted average fair value of options granted with exercise prices at the current fair value of the underlying stock during the period ended March 31, 2006 was approximately $0.377 per option.

The following is a summary of activity of outstanding stock options under the 2004 Stock Option Plan:


			Weighted
			Average
	Number		Exercise
	Of Shares		Price

Balance, December 31, 2005		3,343,500	$	0.49
Options granted		600,000		0.50
Options cancelled		(1,033,330)		0.58


Balance, March 31, 2006		2,910,170		0.42

Exercisable, March 31, 2006		2,910,170	$	0.42

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

•

increased competitive pressures from existing competitors and new entrants;

•

general economic and business conditions, and trends in the travel and entertainment industries;

•

trends in hotel/casino occupancy rates and business and leisure travel patterns, including the potential impacts that wars, terrorist activities, or other geopolitical events might have on such occupancy rates and travel patterns;

•

uncertainties inherent in our efforts to renew or enter into agreements on acceptable terms with its significant hotel/casino customers;

•

the regulatory and competitive environment of the industry in which we operate;

•

the potential impact that any negative publicity, lawsuits, or boycotts by opponents of gaming or other gaming related activities distributed by us could have on the willingness of hotel/casino industry participants to deliver such content to guests;

•

the potential for increased government regulation and enforcement actions, and the potential for changes in laws that would restrict or otherwise inhibit our ability to make gaming related programming content available over our network systems;

•

increases in interest rates or our cost of borrowing or a default under any material debt agreements;

•

deterioration in general or regional economic conditions;

•

loss of customers or sales weakness;

•

competitive threats posed by rapid technological changes;

•

uncertainties inherent in our ability to execute upgrades of video systems, including uncertainties associated with operational, economic and other factors;

•

the ability of vendors to deliver required equipment, software and services;

•

inability to achieve future sales levels or other operating results;

•

the unavailability of funds for capital expenditures; and

•

operational inefficiencies in distribution or other systems.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Factors That May Affect Our Results of Operation” in this document and in our Annual Report on Form 10-KSB for the year ended December 31, 2005.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

OVERVIEW AND OUTLOOK

We were incorporated under the laws of the State of Nevada on March 16, 1993 to conduct business as a television and video production company and programming distributor. We own and operate a digital 24-hour gaming and entertainment network called "PLAYERS NETWORK" which specializes in producing television programming to serve the gaming industry. We broadcast our programming directly into the guestrooms of casino hotels via a Private Network, directly to consumers through PlayersNetwork.com’s Broadband website, and through VOD (Video on Demand) over Cable TV. Our programming include shows about gaming instruction, gaming news, wagering on sports and racing, gaming entertainment, tournaments, events and travel.

Although we will continue the PLAYERS NETWORK and our production of programming for ourselves and third parties, in the future we intend to focus on distributing our programming through a new Broadband Network (which was launched near the end of July 2005), and through cable television, broadcast and satellite television, Video On Demand, Pay-Per-View, DVD distribution, television syndication, radio, print, and out-of-home media including mobile devices, additional land-based locations, in-flight venues, and on-board sources. During fiscal 2005, this change in focus increased our costs, required additional financing and affected our financial model in terms of margins, cash flow requirements, and other areas. Moreover, this increase in costs and additional financing will most likely continue to affect our financial model through 2006 and possibly beyond. We have an extremely limited history with respect to the direction that its business is now taking and there can be no assurance that we will be able to succeed in implementing our strategy, or that we will be able to achieve positive cash flow or profitable operations as a result of these changes in its business.

We have a library of 200 gambling and gaming lifestyle videos, including 30 new, originally-produced hours of programming from the 2005 World Series of Poker®, at which Players Network had exclusive rights to produce and air live programming from the event’s Lifestyle Show. The growing programming library is an asset which represents long-term revenue opportunities in advertising, sponsorship, direct sales and product integration, domestic and international program sales, broadband syndication, subscription fees and increased home video sales.

Current Operations

During the first quarter of 2006, we entered into various agreements, which we hope will further expand our distribution of our programming. In February 2006, we entered into a co-marketing agreement with Beautiful People, LLC, which will allow cross marketing between the two companies. Beautiful People has agreed to provide an advertising link with our Player’s Network website and we have agreed to provide their ads on our Comcast VOD channel. We also entered into an agreement with Fat Elvis Advertising to assist us in our website development. At the end of the quarter we entered into a business proposal with Sullivan Media Group for one broadcast production and an agreement with Firstcom Music for use of Broadcast Synchronization and internet streaming for a one year term.

At March 31, 2006, we had an accumulated deficit of approximately $11,521,034, current assets of $176,562 and $423,886 in current liabilities, resulting in a working capital deficit of $247,324. We expect operating losses and negative operating cash flows to continue for at least the rest of 2006, because of expected additional costs and expenses related to brand development; marketing and other promotional activities; strategic relationship development; and potential acquisitions of related complementary businesses.

Results of Operations for the Three Months Ended March 31, 2006 and 2005:

	For the Three Months Ended March 31,		Increase / (Decrease)
	2006	2005	$	%
Revenues	$ 73,760	$ 80,966	$ (7,206)	(9%)

Direct Operating Costs	78,178	20,823	57,355	275%
General and administrative expenses	107,790	51,650	56,140	109%
Salaries and wages (total)	129,300	37,500	91,800	245%
Consulting services (total)	73,420	29,860	43,560	146%
Rent	20,111	18,999	1,112	6%
Depreciation and Amortization	18,032	12,701	5,331	42%

Total Expenses	426,831	171,533	255,298	149%

Net Operating (Loss)	$ (353,071)	$ (90,567)	$ 262,504	290%

Total other income (expense)	(640)	(576)	64	--

Net (Loss)	$ (353,711)	$ (91,143)	$ 262,568	296%

Revenues:

Revenues for the three months ended March 31, 2006 were $73,760 compared to revenues of $80,966 in the three months ended March 31, 2005. This resulted in a decrease in revenues of $7,206, or 9%, from the same period one year ago. Historically we receive revenues from three sources: fees received from customers of our Players Network, advertising fees, and fees from third party programming production. Revenues from each of the three sources declined during the quarter. However, the primary decrease in revenues was related to the change in our business focus, which caused us to spend less time and attention on our historical sources of revenue.

General and Administrative expenses:

General and administrative expenses were $107,790 for the three months ended March 31, 2006 versus $51,650 for the three months ended March 31, 2005, which resulted in an increase of $56,140 or 109%. General and administrative expenses increased comparatively for the three months ended March 31, 2006 to the comparative period in 2005 due to additional personnel and administrative overhead, as well as business restructuring expenses as we shifted our business focus into new outlets.

Total Operating expenses:

Total operating expenses were $426,831 for the three months ended March 31, 2006 versus $171,533 for the three months ended March 31, 2005. This resulted in an increase of $255,298, or 149%. In addition to our general and administrative expenses increasing, we also saw significant increases in our salaries and consulting fees as compared to the same period in

2005. Additionally, we had a large increase in direct operating costs. All of these increases are a result of our change in business directions. Cumulatively these expenses resulted in our overall large increase of total operating expenses. We hope that all of these expenses will be a positive step, especially when taking into consideration all the new outlets and business opportunities we have recently entered into.

Net Loss:

The net loss for the three months ended March 31, 2006 was $353,711, versus a net loss of $91,143 for the three months ended March 31, 2005, an increase in net loss of $262,568. During the end of 2005, we entered into an agreement with Comcast, which allowed a new outlet of our programming over Comcast’s Video on Demand channel. As a result of this agreement, we have continued to experience overall increase in operations and have entered into a new line of programming. In connection with this new medium and our expansion in business endeavors, we experienced a greater net loss as a result of higher our operating expenses, salaries and consulting fees. Although, we have experienced an increase in net loss, we believe the expansion and addition of these new endeavors are necessary for the growth of our business.

LIQUIDITY AND CAPITAL RESOURCES

The following table summarizes total assets, accumulated deficit, stockholders’ equity and working capital at March 31, 2006 compared to December 31, 2005.

	March 31, 2006	December 31, 2005
Total Assets	$279,529	$240,156

Accumulated (Deficit)	$(11,521,034)	$(11,167,323)

Stockholders’ Equity	$279,529	$(105,919)

Working Capital (Deficit)	$(247,324)	$(226,917)

Our principal source of operating capital has been provided from private sales of our common stock, revenues from the operations and debt financing. At March 31, 2006, we had a working capital deficit of approximately $247,324.

As we continue the shift in our business focus and attempt to expand operational activities, we expect to continue to experience net negative cash flows from operations in amounts not now determinable, and will be required to obtain additional financing to fund operations through common stock offerings and debt borrowings to the extent necessary to provide working capital. We have and expect to continue to have substantial capital expenditure and working capital needs. We do not now have funds sufficient to fund our operations at their current level for the next 12 months. We need to raise additional cash to fund our operations and

implement our business plan. We need approximately $1.0 million dollars to maintain our current level of operations. We need approximately $1.5 million additional dollars ($2.5 million in total) to enable us to pursue our business plan for fiscal 2006.

Satisfaction of our cash obligations for the next 12 months

A critical component of our operating plan impacting our continued existence is to efficiently manage our operations while controlling costs, our ability to obtain additional capital through equity and/or debt financing, and expansion of our services into additional hotels and casinos. In the event we experience any significant problems with our operations or cannot obtain the necessary capital to pursue our operating plan, we may have to significantly curtail our operations. This would materially impact our ability to continue operations.

We anticipate incurring operating losses over the next twelve months. Our operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in our industry. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks we must, among other things, implement and successfully execute our business and marketing strategy, continue to develop and upgrade technology and products, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

During the first quarter of 2006, we secured debt financing for a principal amount of $250,000 in the form of 5% convertible debentures due in three years from the date of execution. Upon the maturity date, the entire unpaid principal amount will be automatically converted into shares of our common stock at a conversion price of $0.35 per share. The debentures will bear interest on the unpaid principal amount at the rate of 5% per annum, which will be due and payable annually.

To conserve our capital requirements, we have issued shares in lieu of cash payments to employees and outside consultants, and we expect to continue this practice for the next twelve months. At this point in time we are not in a position to determine an approximate number of shares that the Company may issue. As a consequence, the additional issuance of shares may have a substantial dilutive impact on our current stockholders.

Summary of product and research and development that we will perform for the term of our plan.

We anticipate capital expenditures in excess of $1,000,000 to expand our operations during the next twelve months. We believe that the current cash flows generated from 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.

Significant changes in the number of employees.

We currently have three full time employees and one part time employee as well as eleven contract personnel that support and operate our operations. As our operating activities increase, we may need to hire additional technical, operational and administrative personnel as appropriate. None of our employees are subject to any collective bargaining agreements; however, we have entered into an employment agreement with Mark Bradley and Michael Berk. We intend to use the services of independent consultants and contractors to perform various professional services when and as they are deemed necessary. We believe that the use of third-party service providers may enhance our ability to contain general and administrative expenses.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results or operations, liquidity, capital expenditures or capital resources that is material to investors.

Going concern

Our financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. We have had repetitive years of net losses, and have an accumulated deficit of $11,521,034 as of March 31, 2006. In order to obtain the necessary capital, we have raised funds via stock sales and convertible debentures. However, we must seek additional sources of capital, and we must attain future profitable operations for us to continue as a going concern. We will continue to initiate our business plan and raise additional capital. We have not made any adjustments to our financial statements that might be necessary should we be unable to continue as a going concern.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements; we believe the following critical accounting policies involve the most complex, difficult and subjective estimates and judgments:

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates

Revenue recognition

For revenue from product sales, the Company recognizes revenue in accordance with SEC Staff

Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” (“SAB 101”). SAB 101 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectibility of those amounts. 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 as the service is performed. 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. Stage rentals are recognized during the rental period.

Cash and cash equivalents

The Company maintains a cash balances in interest and non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

Income taxes

The Company applies recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not

Impairment of long-lived assets

Long-lived assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that carrying value exceeds discounted cash flows of future operations. PNTV recognized impairment losses of $15,496 and $209,338 during 2005 and 2004, respectively.

Stock-based compensation

In December 2004, the FASB issued SFAS No. 123 (revised 2004). Share-Based Payment is a revision of SFAS No. 123, Accounting for Stock-Based Compensation. SFAS No. 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and amends SFAS No. 95, Statement of Cash Flows. Generally, the approach in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. PNTV adopted SFAS No. 123 (R) during the fourth quarter of 2005. Stock issued for services

totaled $2,350,765 and $162,648 for the years ended December 31, 2005 and 2004, respectively.

Recently Issued Accounting Pronouncement

In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections” (“SFAS No. 154”) which supersedes APB Opinion No. 20, “Accounting Changes” and SFAS No. 3 “Reporting Accounting Changes in Interim Financial Statements”. SFAS No. 154 changes the requirements for accounting for and reporting of changes in accounting principle. The statement requires the retroactive application to prior periods’ financial statements of changes in accounting principles, unless it is impracticable to determine either the period specific effects or the cumulative effect of the change. SFAS No. 154 does not change the guidance for reporting the correction of an error in previously issued financial statements or the change in an accounting estimate. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not believe SFAS No. 154 will have an immediate significant impact on its financial position or results of operations.

FACTORS THAT MAY AFFECT OUR RESULTS OF OPERATION

RISKS RELATING WITH OUR BUSINESS AND MARKETPLACE

We will need additional capital in the future to finance our planned growth, which may not be able to raise or it may only be available on terms unfavorable to us or our stockholders, which may result in our inability to fund our working capital requirements and harm our operational results.

We have and expect to continue to have substantial capital expenditure and working capital needs. We believe that current cash on hand, anticipated revenues from operations and the other sources of liquidity are not sufficient to fund our operations through fiscal 2006. These continuing losses may be greater than current levels. If our revenues do not increase substantially or if our expenses exceed our expectations, we may never become profitable. Even if we do achieve profitability, we may not sustain profitability on a quarterly or annual basis in the future.

If operating difficulties or other factors, many of which are beyond our control, cause our revenues or cash flows from operations to decrease, we may be limited in our ability to spend the capital necessary to enhance our operations. If our resources or cash flows do not satisfy our operational needs, we will require additional financing, in addition to anticipated cash generated from our operations, to fund our planned growth. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our business or otherwise respond to competitive pressures would be significantly limited. In such a capital restricted situation, we may maintain a status quo operational position and curtail any expansion plans.

If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders would be reduced, and these newly issued securities might have rights, preferences or privileges senior to those of existing stockholders.

The current change in our business focus presents a number of challenges and may not prove to

be successful or allow for us to become profitable.

Historically, we have distributed our programming by means of multiple platforms including television syndication, Video On Demand, DVD sales, our Web site, and our proprietary 24-hour private network inside Las Vegas and Atlantic City gaming hotels. We recently decided to change our focus and broaden our distribution channels. In the future, we intend to focus on distributing our programming through a new Broadband Network, and through cable television, broadcast and satellite television, Video On Demand, Pay-Per-View, DVD distribution, radio, print, and out-of-home media including mobile devices, additional land-based locations, in-flight venues, and on-board sources. This change in focus is expected to increase our costs, to require the additional financing being sought hereby, and to affect our financial model in terms of margins, cash flow requirements, and other areas. We have an extremely limited history with respect to the direction our business is now taking. There can be no assurance that we will be able to succeed in implementing our strategy, or that we will be able to achieve positive cash flow or profitable operations as a result of these changes in our business.

Our current management resources may not be sufficient for the future and we have no assurance that we can attract qualified personnel.

There can be no assurance that the current level of management is sufficient to perform all responsibilities necessary or beneficial for management to perform. Our success in attracting additional qualified personnel will depend on many factors, including our ability to provide them with competitive compensation arrangements, equity participation and other benefits. There is no assurance that (if we need to) we will be successful in attracting highly qualified individuals in key management positions.

Our business is speculative, among other reasons, because our revenues are derived from the acceptance of our programming. Predicting what type of programming will be popular is difficult and our failure to develop appealing programming could materially adversely affect our business.

Our programming is the key to our success. It represents the catalyst for generating our revenues, and is subject to a number of uncertainties. Our success depends on the quality of our programming and the quality of other programming released into marketplace at or near the same time as ours, the availability of alternative forms of entertainment and leisure time activities, general economic conditions and other tangible and intangible factors, all of which can change and cannot be predicted with certainty. There can be no assurance that our current or future programming will appeal to consumer or persons who would pay to broadcast it. Any failure to develop appealing programming would materially and adversely affect our business, results of operations and financial condition.

We may be adversely affected by changing consumer preferences..

Gambling appears to have become more accepted by and popular with many more persons in recent years. However, the gambling industry is subject to shifting consumer preferences and perceptions. A dramatic shift in consumer acceptance or interest in gaming could materially adversely affect us.

RISKS FACTORS RELATING TO OUR COMMON STOCK

Because our common stock is deemed a low-priced “Penny” Stock, an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment of our common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

•

Deliver to the customer, and obtain a written receipt for, a disclosure document;

•

Disclose certain price information about the stock;

•

Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

•

Send monthly statements to customers with market and price information about the penny stock; and

•

In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

Since our shares are thinly traded and trading on the OTC Bulletin Board, trading volumes and prices may be sporadic because it is not an exchange, stockholders may have difficulty reselling their shares.

Our common shares are currently listed for public trading on the Over-the-Counter Bulletin Board. The trading price of our common shares has been subject to wide fluctuations. Trading prices of our common shares may fluctuate in response to a number of factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with limited business operations. There can be no assurance that trading prices and price earnings ratios previously experienced by our common shares will be matched or maintained. Broad market and industry factors may adversely affect the market price of our common shares, regardless of our operating performance.

In the past, following periods of volatility in the market price of a company’s securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of management’s attention and resources.

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Item 3.

Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer/Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-14(c). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness 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 as amended (the “Exchange Act”)). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures as of the end of the fiscal quarter covered by this Quarterly Report on Form 10-QSB were effective at a reasonable assurance level 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.

However, due to the limited number of Company employees engaged in the authorization, recording, processing and reporting of transactions, there has been an inherent lack of segregation of duties. The Company has periodically assessed and will continue to assess the cost versus benefit of adding the resources that would remedy or mitigate this situation. Management does not expect that the Company’s disclosure controls and procedures will prevent or detect all errors and/or potential fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, but not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to errors or fraud will not occur.

There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation.

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

Item 2. Changes in Securities and Use of Proceeds

On February 2, we issued 20,000 shares and 10,000 shares of our restricted common stock to Randall C. Heinrich and Fat Elvis, respectively, for services provided to the company.

On February 7, 2006, we issued 30,000 shares of our restricted common stock to David Alan Berry for services provided to the company.

We believe that the issuance of all the shares described above was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The shares were issued directly by the Company and did not involve a public offering or general solicitation. Each individual/entity was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make its investment decision, including the financial statements and Exchange Act reports. We reasonably believe that the individuals/entities immediately prior to issuing the shares, had such knowledge and experience in financial and business matters that they were capable of evaluating the merits and risks of their investment. Additionally, the individuals/entities had the opportunity to speak with our management on several occasions prior to its investment decision.

Options Issued

In February 2006, we issued 250,000 options to purchase shares of our common stock to Michael Berk at $0.38 per share. We issued 250,000 options to Mark Bradley, our CEO, to purchase shares of our common stock at $0.38 per share. We also issued 100,000 options to Morden C. Lazarus to purchase shares of common stock at $0.38 per share.

We believe that the issuance of all the options described above was exempt from the registration and prospectus delivery requirements of the Securities Act of 1933 by virtue of Section 4(2). The shares were issued directly by the Company and did not involve a public offering or general solicitation. Each individual was afforded an opportunity for effective access to files and records of the Company that contained the relevant information needed to make their investment decision, including the financial statements and Exchange Act reports. We reasonably believe that the individuals immediately prior to issuing the options, had such knowledge and experience in financial and business matters that they were capable of evaluating the merits and risks of their investment. Additionally, the individuals had the opportunity to speak with our management on several occasions prior to its investment decision.

Item 3.

Defaults by the Company upon its Senior Securities

None.

Item 4.

Submission of Matters to a Vote of Security Holders

None.

Item 5. Other Information

During the first quarter, we received notification from Mr. James Caan of his resignation from our Advisory Board and termination of his consulting agreement to act as our spokesperson.

Item 6. Exhibits and Reports on Form 8-K

(a)

EXHIBITS

3.1(i)**	Articles of Incorporation, filed with the Commission on February 7, 2000.
3.1(ii)**	Bylaws of the Company, filed with the Commission on February 7, 2000.
31*	Certification of Mark Bradley, CEO and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32*	Certification of Mark Bradley, CEO and Principal Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act

Filed herewith

** Filed as an exhibit to the Company’s Registration Statement on Form 10-SB filed with the Commission on February 7, 2000, File No. 000-29363.

(b)

REPORTS ON FORM 8-K

None.

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
		(Principal Executive Officer,
		Principal Financial Officer and
		Principal Accounting Officer)

Dated: May 22, 2006