Players Network Inc. (fka PNTV)

[lesgetrich]

But if this is going to a dollar doesn’t that mean the Kodiak deal kicks in and adds 93 million shares meaning that if this gets to a dollar the company would be worth close to 700 million dollars? Is that correct?

NOT TRUE! The Kodiak deal is like an open line of credit. If you have a $10,000 line of credit on a credit card do you take out all $10,000? Of course not! You take out what you need if and when you need it. That's how the Kodiak deal works. PNTV can't use the agreement until the price is at least $.175/share. At that point they can make Kodiak purchase up to 37,500,000 shares at a minimum price of $.14 or more depending on the average pps for the three days preceding their demand. It's not an all or nothing deal. They can demand/sell 1,000 shares at a time at different prices on different dates if they want. If the pps suddenly went to $1/share Kodiak would pay a maximum of $.50/share and fewer shares would be required to bring in the money PNTV needed.

Once PNTV sells Kodiak the first installment of shares, it sets the price for another 37,500,000 shares Kodiak can buy on a warrant to 140% of that first price. However, Kodiak is restricted from ever owning a total of more than 4.99% of PNTV's total outstanding shares (OS) by virtue of the warrants. The OS at the beginning of the deal was 587,497,236 shares. If 93 million shares were issued, it would be 680,620,166 shares. Multiplying those numbers by .0499 gives you a maximum of either 29 or 34 million shares as the maximum that Kodiak is allowed to own unless PNTV dramatically increases their OS by selling shares to other parties besides Kodiak. Another way to look at this is if PNTV sold Kodiak all 37,500,000 shares on put notices, the warrants would be worthless to Kodiak because they would own more than 4.99% of PNTV. The warrants expire after three years.

Consequently, it is unlikely that 93,000,000 shares will go to Kodiak anytime in the foreseeable future unless PNTV's OS reached roughly 2 billion shares within the next three years.