UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	ACT OF 1934
For the quarterly period ended: September 30, 2014
For the quarterly period ended: June 30, 2014
Or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	ACT OF 1934
For the transition period from: _____________ to _____________

Commission File Number: 000-53539

———————

As Seen On TV, Inc.

(Exact name of registrant as specified in its charter)

———————

Florida	80-0149096
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

~~14044~~15505 ~~Icot~~Long ~~Boulevard~~Vista Drive, ~~Clearwater~~Austin, ~~Florida~~TX ~~33760~~78728

(Address of Principal Executive Office) (Zip Code)

(~~727~~512) ~~230~~238-~~1031~~1336

(Registrant’s telephone number, including area code)

———————

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.					þ	Yes	¨	No
					¨	Yes	þ	No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
					þ	Yes	¨	No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer	¨			Accelerated filer			¨
Non-accelerated filer	¨	(Do not check if a smaller		Smaller reporting company			þ
		reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
					¨	Yes	þ	No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class			Shares Outstanding as of ~~September~~May 196, ~~2014~~2016
Common Stock, $0.0001 Par Value Per Share			531,815,115

As Seen On TV, Inc. and Subsidiaries

TABLE OF CONTENTS

		Page
		Number
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	13
	Condensed Consolidated Balance Sheets as of June 30, 2014 (Unaudited) and December 31, 2013	1
	Condensed Consolidated Balance Sheets as of September 30, 2014 (Unaudited) and December 31, 2013	3
	Condensed Consolidated Statements of Operations (Unaudited) for the three and six month periods ending June 30, 2014 and June 30, 2013	3
	Condensed Consolidated Statements of Operations (Unaudited) for the three and nine month periods ended September 30, 2014 and September 30, 2013	5
	Condensed Consolidated Statement of Stockholders' Equity (Deficiency) (Unaudited) for the six months ended June 30, 2014	4
	Condensed Consolidated Statement of Stockholders' Equity (Deficiency) (Unaudited) for the nine months ended September 30, 2014	6
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the six month periods ending June 30, 2014 and June 30, 2013	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2014 and September 30, 2013	7
	Notes to Condensed Consolidated Financial Statements (Unaudited)	79
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3337
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4547
Item 4.	Controls And Procedures	4547
	PART II. OTHER FINANCIAL INFORMATION
Item 1.	Legal Proceedings.	4749
Item 1A.	Risk Factors	4749
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4749
Item 3.	Defaults Upon Senior Securities	4749
Item 4.	Mine Safety ~~Disclosure~~Disclosures	4749
Item 5.	Other Information	4749
Item 6.	Exhibits	4750
Signatures		4851

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

~~FINANCIAL~~As ~~STATEMENTS~~Seen on TV, Inc. and Subsidiaries

ASCondensed ~~SEEN~~Consolidated ONBalance ~~TV, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS~~Sheets

	June 30,			December 31,
	September 30,			December 31,
	2014			2013
	(Unaudited)
ASSETS
Current assets:
Current Assets:
Cash	$	198,~~968,086~~182		$	91,397
Accounts receivable, net		1,~~429~~693,~~041~~249			1,127,058
Affiliate receivable - related party		358,954			—
Inventories		5,345,341			879,178
Inventories		3,500,694			879,178
Prepaid expenses and other current assets		1,369,210			96,826
Note receivable on asset sale - current		225,000			—
Total current assets		8,505,982			2,194,459
Prepaid expenses and other current assets		2,337,033			96,826
Restricted cash - non current		67,843			–
Total current assets		9,818,808			2,194,459
Property, plant and equipment, net		538,119			100,732
Restricted cash - non current		61,244			—
Intangible assets, net		6,611,956			–
Notes receivable, including interest receivable – related party		1,003,164			—
Deposits		17,563			–
Note receivable on asset sale less current portion		675,000			—
Total Assets	$	15,741,463		$	2,295,191
Property and equipment, net		407,803			100,732
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT
Goodwill		16,421,922			—
Intangibles, net		11,427,926			—
Deposits		18,396			—
Total assets	$	39,834,263		$	2,295,191
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current Liabilities:
Accounts payable	$	69,~~060~~265,~~146~~991		$	2,193,664
Deferred revenue		25152,~~054~~223			37,030
Accrued expenses and other current liabilities		35,~~784~~952,~~114~~981			659,695
Accounts receivable financing arrangement		~~69,305~~99			473,960
Notes payable - related party		3,016,228			—
Notes Payable - current portion		18,545,767			–
Notes payable - current portion		17,699,077			—
Notes Payable - related party		3,000,143			–
Warrant liability		23,~~373~~039,~~884~~617			—–
Due to Infusion Brands International		—			20,138,733
Due to affiliates		–			20,138,733
Total current liabilities		3339,~~027~~956,~~808~~821			23,503,082
Notes payable		2,~~075~~151,~~993~~075			—–
Notes payable - related party		11,211,562			—–
Total liabilities		4653,~~315~~319,~~363~~458			23,503,082
Commitments and contingencies (Note 13)
Redeemable preferred stock (Note 14)		2,700,000			—–
Stockholders' equity:
Stockholders' deficit:
Preferred stock, $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively.		—			—
Preferred stock, $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively.		–			–
Common stock, $.0001 par value; 750,000,000 shares authorized and 531,815,115 and 71,741,250 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively.		53,182			7,174
Common stock, $.0001 par value; 750,000,000 shares authorized and 531,815,115 and 71,741,250 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively.		53,182			7,174
Additional paid-in capital		22,~~887~~972,~~977~~201			6,476,565
Accumulated deficit		(3044,~~980~~164,~~593~~324	)		(27,691,630	)
Total ASTV stockholders' equity (deficiency)		(8,039,434	)		(21,207,891	)
Total ASTV stockholders' deficit		(21,138,941	)		(21,207,891	)
Deficit relating to noncontrolling interest in Ronco Holdings, Inc.		(119,~~141~~139,~~666~~054	)		—–
Total stockholders' equity (deficiency)		(9,181,100	)		(21,207,891	)
Total stockholders' deficit		(40,277,995	)		(21,207,891	)
Total liabilities, redeemable preferred stock and stockholders' equity (deficiency)	$	39,834,263		$	2,295,191
Total liabilities, redeemable preferred stock and stockholders' deficit	$	15,741,463		$	2,295,191

~~(Continued)~~See accompanying notes to condensed consolidated financial statements

The following table ~~includes~~presents the assets and toliabilities of the Company's consolidated variable interest entity, which is included on the consolidated balance sheets above. The assets in the table below include those assets that can only be used to settle ~~liabilities~~obligations of the consolidated variable interest entity ~~(“VIE’)~~. ~~These~~ The ~~assets~~liabilities ~~and~~in ~~liabilities~~the ~~are~~table ~~included~~below ininclude third-party liabilities of the ~~June~~consolidated 30variable interest entity only, ~~2014~~and ~~consolidated~~for ~~balance~~which ~~sheet~~creditors ~~above. See~~or ~~Note~~beneficial 3interest ~~for~~holders ~~additional~~do ~~information~~not onhave recourse to the ~~consolidated~~Company, ~~VIE~~and exclude intercompany balances that eliminate in consolidation.

	June 30, 2014
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY:
Cash	$	15,889
Accounts receivable		1,840,384
Inventories		1,657,820
Prepaid expenses and other assets		229,468
Property and equipment		261,355
Goodwill		15,907,825
Intangible assets		3,635,426
Total assets	$	23,548,167
LIABILITIES OF CONSOLIDATED VARIABLE INTEREST ENTITY FOR WHICH CREDITORS OR BENEFICIAL INTEREST HOLDERS DO NOT HAVE RECOURSE TO THE COMPANY:
Accounts payable	$	2,159,648
Accrued expenses		2,882,220
Notes payable		15,205,734
Total liabilities	$	20,247,602

ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY:

See accompanying notes to condensed consolidated financial statements

Cash	$	64,922
Accounts receivable		1,111,499
Inventories		3,865,050
Prepaid expenses and other assets		31,979
Property and equipment		300,373
Intangible assets		3,570,371
Total assets	$	8,944,194

2LIABILITIES OF CONSOLIDATED VARIABLE INTEREST ENTITY FOR WHICH CREDITORS OR BENEFICIAL INTEREST HOLDERS DO NOT HAVE RECOURSE TO THE COMPANY:

AS SEEN ON TV, INC. AND SUBSIDIARIES

Accounts payable	$	4,944,040
Accrued expenses		3,399,398
Notes payable		16,157,495
Total liabilities	$	24,500,933

~~CONDENSED~~See ~~CONSOLIDATED~~accompanying ~~STATEMENTS~~notes OFto ~~OPERATIONS~~condensed consolidated financial statements

~~(UNAUDITED)~~4

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenues	$	3,385,371		$	3,813,904		$	6,580,947		$	9,190,171
Cost of revenues		2,037,233			2,747,362			4,077,838			6,671,863
Gross profit		1,348,138			1,066,542			2,503,109			2,518,308
Operating expenses:
Selling and marketing expenses		1,912,497			362,950			2,511,442			886,775
General and administrative expenses		2,993,567			1,285,166			4,536,731			2,692,626
Loss from operations		(3,557,926	)		(581,574	)		(4,545,064	)		(1,061,093	)
Other (income) expense:
Gain on warrant revaluation		(1,702,841	)		—			(1,702,841	)		—
Interest income		(32,365	)		—			(37,045	)		—
Interest expense		1,375,108			73,242			1,617,834			169,269
Other (income) expense		(1,912	)		(2,031	)		7,617			1,429
Net other (income) expense		(362,010	)		71,211			(114,435	)		170,698
Loss before provision for income taxes		(3,195,916	)		(652,785	)		(4,430,629	)		(1,231,791	)
Provision for income taxes		—			—			—			—
Net loss		(3,195,916	)		(652,785	)		(4,430,629	)		(1,231,791	)
Less: Net loss attributed to noncontrolling interest in Ronco Holdings, Inc.		1,016,403			—			1,141,666			—
Net loss attributable to As Seen On TV, Inc.		(2,179,513	)		(652,785	)		(3,288,963	)		(1,231,791	)
Basic and diluted loss per share	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Basic and diluted weighted-average number of common shares outstanding		526,759,358			71,282,482,			300,507,260			64,807,761

As Seen On TV, Inc. and Subsidiaries

~~See~~Condensed ~~accompanying~~Consolidated ~~notes~~Statements toof ~~condensed consolidated financial statements~~Operations

3(Unaudited)

AS SEEN ON TV, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY) FOR THE SIX MONTHS ENDED JUNE 30, 2014 (UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Revenues	$	4,024,354		$	765,690		$	10,605,601		$	9,955,861
Cost of revenues		5,141,020			595,979			11,100,277			7,998,801
Gross profit		(1,116,666	)		169,711			(494,676	)		1,957,060

Operating expenses:
Selling and marketing expenses		730,576			174,863			1,344,463			351,875
General and administrative expenses		3,765,144			1,027,498			8,341,287			3,698,924
Impairment loss on goodwill		19,177,171			–			19,177,171			–
Impairment loss on other intangible assets		2,793,415			–			2,793,415			–
Loss from operations		(27,582,972	)		(1,032,650	)		(32,151,012	)		(2,093,739	)

Other income (expense):
Change in fair value of warrants		(665,733	)		–			1,037,108			–
Interest expense		(1,663,199	)		(238,185	)		(3,294,488	)		(238,185	)
Interest income		33,565			–			70,303			–
Loss on inventory deposit		(200,000	)		–			(200,000	)		–
Loss on note receivable		(1,035,256	)		–			(1,035,256	)		–
Other income (expense)		9,292			7,658			(38,403	)		6,229
Net other income (expense)		(3,521,331	)		(230,527	)		(3,460,736	)		(231,956	)

Loss before provision for income taxes		(31,104,303	)		(1,263,177	)		(35,611,748	)		(2,325,695	)

Provision for income taxes		–			–			–			–

Net loss		(31,104,303	)		(1,263,177	)		(35,611,748	)		(2,325,695	)
Less: Net loss attributed to noncontrolling interest in Ronco Holdings, Inc.		17,942,343			–			19,139,054			–
Net loss attributable to As Seen On TV, Inc.		(13,161,960	)		(1,263,177	)		(16,472,694	)		(2,325,695	)

Basic and diluted loss per share	$	(0.02	)	$	(0.02	)	$	(0.04	)	$	(0.03	)

Basic and diluted weighted-average number of common shares outstanding		531,815,115			71,741,250			378,457,160			67,114,073

	Common Shares,
	$.0001 Par Value																Total
	Per Share				Additional						Total ASTV			Deficit Related to			Stockholders'
	Shares				Paid-In			Accumulated			Stockholders'			Noncontrolling			Equity
	Issued		Amount		Capital			Deficit			Deficit			Interest in Ronco			(Deficiency)
Balance at December 31, 2013		71,741,250	$	7,174	$	6,476,565		$	(27,691,630	)	$	(21,207,891	)	$	—		$	(21,207,891	)
Share based compensation		—		—		253,792			—			253,792			—			253,792
Affiliate capital contribution		—		—		10,181,201						10,181,201						10,181,201
Shares issued in connection with reverse acquisition		452,960,490		45,296		5,952,180			—			5,997,476			—			5,997,476
Shares issued under re-pricing agreement		7,113,375		712		(712	)		—			—			—			—
Warrants issued for services		—		—		24,951			—			24,951			—			24,951
Net loss attributable to noncontrolling interest		—		—		—			—			—			(1,141,666	)		(1,141,666	)
Net loss attributable to As Seen On TV, Inc.		—		—		—			(3,288,963	)		(3,288,963	)		—			(3,288,963	)
Balance at June 30, 2014		531,815,115	$	53,182	$	22,887,977		$	(30,980,593	)	$	(8,039,434	)	$	(1,141,666	)	$	(9,181,100	)

See accompanying notes to condensed consolidated financial statements

~~See accompanying notes to condensed consolidated financial statements~~5

4As Seen on TV, Inc. and Subsidiaries

~~AS SEEN ON TV, INC. AND SUBSIDIARIES~~Condensed ~~CONDENSED~~Consolidated ~~CONSOLIDATED~~Statement ~~STATEMENTS~~of OFStockholders' ~~CASH~~Equity ~~FLOWS~~ (~~UNAUDITED~~Deficiency)

	Six Months Ended June 30,
	2014			2013
Cash flows from operating activities
Net loss	$	(4,430,629	)	$	(1,231,791	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Accretion of discount on notes payable		847,259			—
Amortization of debt issuance costs		102,556			—
Change in allowance for inventory obsolescence		76,001			—
Change in allowance for sales returns		(59,518	)		(251,565	)
Change in allowance for uncollectible accounts		18,324			(15,755	)
Depreciation and amortization		285,456			19,940
Gain on warrant revaluation		(1,702,841	)		—
Warrants issued for services		24,951			—
Share-based compensation expense		253,792			468,830
Changes in operating assets and liabilities
Accounts receivable		125,537			1,241,399
Inventories		(1,180,148	)		331,507
Prepaid expenses and other current assets		(1,340,306	)		(94,309	)
Accounts payable		83,580			525,729
Accrued expenses and other current liabilities		847,719			113,456
Deferred revenue		(50,745	)		(198,574	)
Other		(44,510	)		(9,047	)
Net cash (used in) provided by operating activities		(6,143,522	)		899,820
Cash flows from investing activities
Decrease in restricted cash		22,118			—
Patent renewal costs		(9,500	)		—
Cash acquired in connection with acquisitions		150,398			—
Purchase of property and equipment		(130,823	)		—
Net cash provided by investing activities		32,193			—
Cash flows from financing activities
Capital contribution from Infusion Brands International		31,161			—
Funds borrowed from affiliated entities		—			370,134
Net payments made on accounts receivable factoring arrangement		(404,655	)		(1,427,536	)
Principal payments on notes payable		(45,321	)		—
Proceeds from senior secured note payable		8,406,833			—
Net cash provided by (used in) financing activities		7,988,018			(1,057,402	)
Net decrease in cash		1,876,689			(157,582	)
Cash at beginning of year		91,397			288,779
Cash at end of year	$	1,968,086		$	131,197

For the Nine Months Ended September 30, 2014

(~~Continued~~Unaudited)

	Common Shares,													Deficit Related
	$.0001 Par Value													to
	Per Share				Additional						Total ASTV			Noncontrolling			Total
	Shares				Paid-In			Accumulated			Stockholders'			Interest in			Stockholders'
	Issued		Amount		Capital			Deficit			Deficit			Ronco			Deficit
Balance at December 31, 2013		71,741,250	$	7,174	$	6,476,565		$	(27,691,630	)	$	(21,207,891	)	$	–		$	(21,207,891	)

Share based compensation		–		–		362,966			–			362,966			–			362,966
Affiliate capital contribution		–		–		10,181,202			–			10,181,202			–			10,181,202
Shares issued in connection with ASTV merger		452,960,490		45,296		5,952,180			–			5,997,476			–			5,997,476
Shares issued under re-pricing agreement		7,113,375		712		(712	)		–			–			–			–
Net loss attributable to noncontrolling interest		–		–		–			–			–			(19,139,054	)		(19,139,054	)
Net loss attributable to As Seen On TV, Inc.		–		–		–			(16,472,694	)		(16,472,694	)		–			(16,472,694	)

Balance at September 30, 2014		531,815,115	$	53,182	$	22,972,201		$	(44,164,324	)	$	(21,138,941	)	$	(19,139,054	)	$	(40,277,995	)

ASSee ~~SEEN ON TV, INC. AND SUBSIDIARIES~~accompanying ~~CONDENSED~~notes ~~CONSOLIDATED~~to ~~STATEMENTS~~condensed OFconsolidated ~~CASH~~financial ~~FLOWS (CONTINUED) (UNAUDITED)~~statements

	Six Months Ended June 30,
	2014		2013
Supplemental Cash Flow Information
Interest paid in cash	$	1,526,183	$	169,269
Income taxes paid in cash	$	—	$	—
Non Cash Investing and Financing Activities
Anti-dilutive shares issued	$	712	$	—
Capital contribution from Infusion Brands International	$	10,181,201	$	—
Common shares issued in connection with merger	$	5,997,476	$	—
Insurance premiums financed through note payable	$	138,139	$	—
Warrants issued with notes payable	$	2,407,930	$	—
Reclassification of accrued interest to principal balance of debt	$	211,562	$	—
Debt issuance costs withheld from debt proceeds	$	441,000	$	—

~~See~~As ~~accompanying~~Seen ~~notes~~on toTV, ~~condensed~~Inc. ~~consolidated~~and ~~financial statements~~Subsidiaries

6Condensed Consolidated Statements of Cash Flows

~~AS SEEN ON TV, INC. AND SUBSIDIARIES~~(Unaudited)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Nine Months Ended September 30,
	2014			2013
Cash flows from operating activities
Net loss	$	(35,611,748	)	$	(2,325,695	)
Adjustments to reconcile net loss to net cash used in operating activities
Accretion of discount on notes payable		1,858,675			–
Amortization of debt issuance costs		214,958			–
Change in allowance for sales refunds		1,493,106			(178,299	)
Change in allowance for uncollectible accounts		151,026			(15,274	)
Change in inventory allowance		794,485			–
Depreciation and amortization		601,900			25,137
Gain on warrant revaluation		(1,037,108	)		–
Impairment loss on goodwill		19,177,171			–
Impairment loss on other intangible assets		2,793,415			–
Loss on inventory deposit		200,000			–
Loss on note receivable		1,035,256			–
Share-based compensation expense		362,966			599,058
Changes in operating assets and liabilities
Accounts receivable		22,788			1,318,021
Inventories		(3,743,274	)		(54,529	)
Prepaid expenses and other current assets		(939,839	)		(815,126	)
Accounts payable		3,177,853			(779,626	)
Accrued expenses and other current liabilities		1,682,586			36,991
Deferred revenue		71,198			(159,840	)
Other		(2,000	)		(10,095	)
Net cash used in operating activities		(7,696,586	)		(2,359,277	)

Cash flows from investing activities
Decrease in restricted cash		15,619			–
Cash acquired in connection with acquisitions		150,398			–
Purchase of property and equipment		(275,730	)		–
Net cash used in investing activities		(109,713	)		–

Cash flows from financing activities
Capital contribution from Infusion Brands International		31,162			–
Funds borrowed from affiliated entities		–			2,857,207
Net payments made on accounts receivable factoring arrangement		(473,861	)		(786,626	)
Principal payments on notes payable		(151,050	)		–
Proceeds from senior secured note payable		8,406,833			–
Net cash provided by financing activities		7,813,084			2,070,581

Net increase (decrease) in cash		6,785			(288,696	)
Cash at beginning of year		91,397			288,779
Cash at end of year	$	98,182		$	83

~~Note~~See 1.accompanying notes ~~Basis~~to ofcondensed ~~Presentation~~consolidated ~~,Description~~financial ~~of Our Business, Liquidity and Going Concern~~ statements

~~Basis of Presentation~~7

OnAS ~~April~~SEEN 2,ON ~~2014, As Seen On~~ TV, ~~Inc~~INC. ~~(“ASTV”)~~AND ~~and~~SUBSIDIARIES CONDENSED ~~Infusion~~CONSOLIDATED ~~Brands,~~STATEMENTS ~~Inc.~~OF ~~(“Infusion”),~~CASH ~~entered~~FLOWS ~~into an Agreement and Plan of Merger~~ (~~“Merger Agreement”~~CONTINUED)~~. Under the terms of the Merger Agreement, ASTV issued 452,960,490 shares of common stock to Infusion Brands International, Inc.~~ (~~“IBI”~~UNAUDITED), parent of Infusion, in exchange for all the shares of Infusion. Following the transaction, IBI became an 85.2% owner of ASTV’s outstanding common stock and 75% owner of ASTV’s common shares on a fully diluted basis.

The merger has been accounted for as a reverse acquisition with Infusion treated for accounting purposes as the acquirer. As such, the financial statements of Infusion Brands, Inc. are treated as the historical financial statements of the Company, with the results of ASTV being included from April 2, 2014 and thereafter. For the periods prior to the closing of the reverse acquisition our discussion below relates to the historical business and operations of Infusion. See Note 4.

Supplemental Cash Flow Information
Cash paid for interest	$	1,559,597	$	238,185
Cash paid for income taxes	$	–	$	–

Non Cash Investing and Financing Activities
Capital contribution from Infusion Brands International	$	10,150,040	$	–
Common shares issued in connection with merger	$	5,997,476	$	–
Warrants issued with notes payable	$	2,407,930	$	–
Reclassification of accrued interest to principal balance of debt	$	211,562	$	–
Insurance premiums financed through note payable	$	138,140	$	–
Assumed note payable	$	102,500	$	–
Anti-dilutive shares issued	$	712	$	–

~~Concurrent~~See ~~with~~additional ~~the~~disclosure ~~April 2, 2014 Merger Agreement, Infusion assumed all assets and obligations~~ of ~~Infusion~~non ~~Brands~~cash ~~International,~~activity Inc. (“IBI”), including all rights held by IBI under a participation agreement between IBI and secured creditors of Ronco Holdings, Inc. (“Ronco”). Accordingly, while Infusion does not hold an equity position in Ronco, Ronco was deemed a Variable Interest Entity (“VIE”) with Infusion being the primary beneficiary therefore, the results of Ronco are included in the consolidated financial statements from March 6, 2014 and thereafter. See Note ~~3 for specifics of the participation agreement and VIE determination.~~ 4

~~Concurrent~~See ~~with~~accompanying notes ~~the aforementioned reverse merger, ASTV changed its fiscal year end from March 31st~~ to ~~December~~condensed ~~31st~~consolidated ~~to align with the fiscal year end of Infusion and Ronco. This was done to improve~~ financial ~~comparability as all entities are consolidated.~~ statements

The consolidated condensed results of operations include the revenues and expenses of Ronco subsequent to March 6, 2014, the date Ronco became a VIE, and ASTV’s business subsequent to April 2, 2014, the closing date of the reverse acquisition. 8

~~The~~AS ~~condensed~~SEEN ~~consolidated~~ON ~~financial statements as of June 30~~TV, 2014 and for the three and six month periods ended June 30, 2014 and 2013 are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of June 30, 2014, and the results of operations for the three and six month periods ended June 30, 2014 and 2013, the statement of shareholders' equity (deficiency) for the six months ended June 30, 2014 and the statements of cash flows for the six month periods ended June 30, 2014 and 2013INC. ~~The~~AND condensed consolidated results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results to be expected for the entire year. The condensed consolidated balance sheet as of December 31, 2013 has been derived from Infusion’s audited financial statements for the year ended December 31, 2013. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, these condensed consolidated financial statements should be read in conjunction with audited financial statements and the footnotes thereto for the fiscal year ended December 31, 2013 as filed with the Securities and Exchange Commission as exhibit 99.1 to Form 8-K/A on September 2, 2014. SUBSIDIARIES

~~Collectively~~NOTES ~~ASTV,~~TO ~~Infusion~~CONDENSED ~~and~~CONSOLIDATED ~~Ronco are referred to as the “Company” herein.~~FINANCIAL STATEMENTS

7Note 1. Basis of Presentation, Description of Our Business, Liquidity and Going Concern

ASBasis ~~SEEN~~of ~~ON TV, INC. AND SUBSIDIARIES~~Presentation

~~NOTES~~On TOApril ~~CONDENSED~~2, ~~CONSOLIDATED~~2014, ~~FINANCIAL~~As ~~STATEMENTS~~Seen On TV, Inc. (~~Continued~~“ASTV”) and Infusion Brands, Inc. (“Infusion”), entered into an Agreement and Plan of Merger (“Merger Agreement”). Under the terms of the Merger Agreement, ASTV issued 452,960,490 shares of common stock to Infusion Brands International, Inc. (“IBI”), parent of Infusion, in exchange for all the shares of Infusion. Following the transaction, IBI became an 85.2% owner of ASTV’s outstanding common stock and 75% owner of ASTV’s common shares on a fully diluted basis.

~~Description~~The merger has been accounted for as a reverse acquisition with Infusion treated for accounting purposes as the acquirer. As such, the financial statements of Infusion ~~Our~~Brands, ~~Business~~Inc. are treated as the historical financial statements of the Company, with the results of ASTV being included from April 2, 2014 and thereafter. For the periods prior to the closing of the reverse acquisition our discussion below relates to the historical business and operations of Infusion. See Note 4.

~~ASTV~~Concurrent with the April 2, 2014 Merger Agreement, Infusion assumed all assets and obligations of IBI, including all rights held by IBI under a participation agreement between IBI and secured creditors of Ronco Holdings, Inc. (“Ronco”). Accordingly, while Infusion did not at that time hold an equity position in Ronco, Ronco was deemed a Variable Interest Entity (“VIE”) with Infusion being the primary beneficiary, therefore, the results of Ronco are included in the consolidated financial statements from March 6, 2014 until September 30, 2014. On May 31, 2015, the Company acquired all of the remaining secured debt and 100% of the equity ownership of Ronco. From and after May 31, 2015 Ronco is reported as a wholly-owned subsidiary of the Company. See Note 3 for specifics of the participation agreement and VIE determination.

AsConcurrent ~~Seen~~with Onthe TVaforementioned reverse merger, ~~Inc.~~ASTV ischanged aits ~~direct~~fiscal ~~response~~year ~~marketing~~end ~~company~~from ~~and~~March ~~owner~~31st ofto ~~AsSeenOnTV.com~~December ~~and~~31st ~~eDiets.com.~~to Wealign ~~identify,~~with ~~develop~~the ~~and~~fiscal year ~~market~~end ~~consumer~~of ~~products~~Infusion ~~for global distribution via TV, Internet~~ and ~~retail channels~~Ronco. WeThis ~~also~~was ~~generate~~done ~~subscription~~to ~~based~~improve ~~revenue~~financial ~~from~~comparability ~~our~~of ~~nationwide~~the ~~weight-loss~~consolidated ~~oriented digital subscription service through eDiets~~group.~~com.~~

~~ASTV,~~The acondensed ~~Florida~~consolidated results ~~corporation~~of operations include the revenues and expenses of Ronco subsequent to March 6, ~~was~~2014, ~~organized~~the indate ~~November~~Ronco ~~2006.~~became ~~Our~~a ~~executive~~VIE, ~~offices~~and ASTV’s ~~are~~business ~~located~~subsequent into ~~Clearwater~~April 2, ~~Florida.~~2014, the closing date of the reverse acquisition.

The condensed consolidated financial have been prepared based on SEC rules that permit reduced disclosure for interim periods. These financial statements are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position and results of operations for the interim periods shown. The condensed consolidated results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the entire year. The condensed consolidated balance sheet as of December 31, 2013 has been derived from Infusion’s audited financial statements for the year ended December 31, 2013. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, these condensed consolidated financial statements should be read in conjunction with audited financial statements and the footnotes thereto for the fiscal year ended December 31, 2013 as filed with the Securities and Exchange Commission as exhibit 99.1 to Form 8-K/A on September 2, 2014.

~~Infusion~~Collectively ~~is a Nevada Corporation and a wholly-owned subsidiary of~~ ASTV. Infusion is a consumer products company that leverages direct response channels to satisfy unmet market demands and solve everyday problems. Infusion competes in three key product verticals – hardware, ~~home goods, and cleaning – with a portfolio of revenue-generating brands including DualSaw, DualTools™, and DOC Cleaning. With physical offices in North America, Europe and Asia,~~ Infusion ~~has worldwide reach~~ and ~~capability.~~Ronco ~~Its products~~ are ~~sold~~referred to ~~globally~~as ~~through a variety of national retailers, online retailers, catalogs, infomercials, and live shopping channels. Most of~~ the “Company's” ~~sales are generated in North America and Asia Pacific, to a large number of customers~~herein.

~~Ronco~~9

~~Ronco~~AS ~~was~~SEEN ~~organized~~ON ~~as a Corporation under the laws of the State of Delaware on January 11~~TV, ~~2011~~INC. ~~Ronco~~AND is located in Austin, Texas and is engaged in the development and retail sale of consumer products throughout the United States. Ronco is a provider of proprietary consumer products for the kitchen and home. Ronco’s product line sells throughout the year through infomercials, internet sales, wholesale distributors and direct retailers. SUBSIDIARIES

~~Segments~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~Commencing~~Description ~~with~~of ~~the~~Our reverse merger, the Company organized its business into four operating segments to align its organization based upon the Company’s management structure, products and services offered and funding requirements. The four operating segments that management defined were Power Tools & Cleaning, Housewares, eCommerce and Corporate. See Note 16 for further segment discussion.Business

~~Liquidity and Going Concern~~ASTV

AtAs ~~June~~Seen ~~30,~~On ~~2014~~TV, weInc. ~~had~~is the aparent ~~cash~~company ~~balance~~ of ~~approximately~~Ronco ~~$2.0~~Holdings, ~~million~~Inc, awhich ~~working~~owns ~~capital~~the ~~deficit~~Ronco ofbrand ~~approximately~~and ~~$23~~associated assets.2 ~~million~~Ronco is engaged in the development and anwholesale ~~accumulated~~and ~~deficit~~retail sale of ~~approximately~~consumer ~~$31~~products.7 ~~million.~~As WeSeen ~~have~~On ~~experienced~~TV, ~~losses~~Inc. ~~from~~is ~~operations~~also ~~since~~the ~~our~~owner ~~inception~~of ~~and~~several ~~defaulted~~other onsubsidiaries ~~our~~(TV ~~debt~~Goods Inc., ~~and~~Tru weHair, ~~have~~Inc., ~~relied~~and oneDiets, aInc.) ~~series~~that ofwere ~~private~~discontinued ~~placements~~as of ~~secured~~June ~~and~~26, ~~unsecured promissory notes~~2015. ~~The~~Ronco ~~Company~~ceased ~~cannot~~to ~~predict~~be ~~how~~a ~~long~~VIE itand ~~will~~became ~~continue~~a towholly-owned subsidiary ~~incur~~as ~~losses~~of orMay ~~whether~~31, ~~it will ever become profitable~~2015.

WeASTV, ~~have~~a ~~undertaken~~Florida corporation, was ~~and~~organized ~~will~~in ~~continue~~November to2006. ~~implement,~~Our ~~various~~executive ~~measures~~offices toare ~~address~~located ~~our~~in ~~financial condition~~Austin, ~~including:~~ TX.

· Infusion

~~Significantly~~Infusion ~~curtailing~~is ~~costs~~a Nevada Corporation and ~~consolidating~~a ~~operations~~wholly-owned subsidiary of ASTV. During the period covered by this report, ~~where~~Infusion ~~feasible~~was a consumer products company that competes in three key product verticals – hardware, home goods, and cleaning – with a portfolio of revenue-generating brands including DualSaw, DualTools™, and DOC Cleaning. Its products are sold globally through a variety of national retailers, online retailers, catalogs, infomercials, and live shopping channels. Infusion’s operations were discontinued effective June 26, 2015. See footnote 18.

· Ronco

~~Seeking~~Ronco ~~debt~~was organized as a Corporation under the laws of the State of Delaware on January 11, ~~equity~~2011. Ronco is located in Austin, Texas and ~~other~~is ~~forms~~engaged in the development and wholesale and retail sale of ~~financing,~~consumer ~~including~~products ~~funding~~throughout the United States. Ronco is a provider of proprietary consumer products for the kitchen and home. Ronco’s product line sells throughout the year through ~~strategic~~infomercials, ~~partnerships~~online sales, wholesale distributors and direct retailers.

·Segments

~~Reducing~~Commencing ~~operations~~with the reverse merger and until December 31, 2014, the Company organized its business into four operating segments to ~~conserve~~align ~~cash~~its organization based upon the Company’s management structure, products and services offered and funding requirements. The four operating segments that management defined were (1) Hardware, (2) Home Goods, (3) eCommerce, and (4) Corporate and Other. From and after January 1, 2015, the Company reorganized its business into five segments of which four segments are based on sales channel and 1 is based upon corporate finance and management activities. The five segments identified by management are (1) Retail, (1) Live Shopping, (3) Direct Response and (4) International/Royalty and (5) Corporate and Other. See Note 16 for further segment discussion.

·Liquidity and Going Concern

~~Deferring~~At ~~certain~~September ~~marketing~~30, ~~activities~~2014, we had a cash balance of approximately $98,000, a working capital deficit of approximately $31,451,000 and an accumulated deficit of approximately $44,164,000. We have experienced losses from operations since our inception and defaulted on our debt, and we have relied on a series of private placements of secured and unsecured promissory notes to fund operations. The Company cannot predict how long it will continue to incur losses or whether it will ever become profitable.

·We have undertaken, and will continue to implement, various measures to address our financial condition, including:

~~Investigating~~· ~~and~~Significantly ~~pursuing~~curtailing ~~transactions~~costs ~~with~~and ~~third~~consolidating ~~parties~~operations, ~~including~~where ~~strategic transactions and relationships~~feasible.

8· Seeking debt, equity and other forms of financing, including funding through strategic partnerships.

AS· ~~SEEN~~Reducing ONoperations ~~TV,~~to ~~INC.~~conserve ~~AND SUBSIDIARIES~~cash.

~~NOTES~~· TODeferring ~~CONDENSED~~certain ~~CONSOLIDATED~~marketing ~~FINANCIAL STATEMENTS (Continued)~~activities.

~~There~~· ~~can~~Investigating ~~be no assurance that we will be able to secure the additional funding we need. If our efforts to do so are unsuccessful, we will be required to further reduce or eliminate our operations~~ and~~/or~~ ~~seek~~pursuing ~~relief~~transactions ~~through~~with athird ~~filing under the U.S. Bankruptcy Code. These factors~~parties, ~~among~~including ~~others,~~strategic ~~raise~~transactions ~~substantial doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to the recoverability~~ and ~~classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties~~relationships.

~~Note~~There 2can be no assurance that we will be able to secure the additional funding we need. ~~Summary~~If our efforts to do so are unsuccessful, we will be required to further reduce or eliminate our operations and/or seek relief through a filing under the U.S. Bankruptcy Code. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to the recoverability and classification of ~~Significant~~asset ~~Accounting~~carrying ~~Policies~~amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties.

~~Accounting Estimates~~10

~~The~~AS ~~preparation~~SEEN ofON financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reported periods. The significant estimates included in the Company’s financial statements are the allowance for doubtful accountsTV, allowance for sales returns, inventory reserves, the estimated lives of property and equipment and intangible assets, the inputs used in determining the fair value of stock-based compensation and warrant liabilities, and the allocation of the consideration in the business combinationsINC. ~~Our~~AND ~~management believes the estimates utilized in preparing our consolidated financial statements are reasonable. Actual results could differ significantly from these estimates.~~SUBSIDIARIES

~~Restricted~~NOTES ~~Cash~~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~Restricted~~Note ~~cash~~2. ~~represents~~Summary ~~funds~~of ~~held~~Significant byAccounting ~~credit~~Policies ~~card processors.~~

~~Revenue~~Accounting ~~Recognition~~Estimates

WeThe ~~recognize~~preparation ~~revenue~~of ~~from~~financial statements ~~product sales~~ in ~~accordance~~conformity with ~~Financial~~accounting ~~Accounting~~principles ~~Standards~~generally ~~Board~~accepted ~~(“FASB”)~~in ~~ASC~~the ~~605~~United —States ~~Revenue~~of ~~Recognition. Revenue~~America ~~from~~requires ~~product~~management ~~sales~~to ismake estimates ~~recognized~~and ~~when~~assumptions ~~substantially~~that ~~all~~affect the ~~risks~~reported amount of assets and ~~rewards~~liabilities and disclosure of ~~ownership~~contingent ~~have~~assets ~~transferred~~and toliabilities at ~~our~~the ~~customers,~~date of the ~~selling~~financial ~~price~~statements. isEstimates ~~fixed~~also affect the reported amounts of revenue and ~~collection~~expenses isduring ~~reasonably~~the ~~assured~~reported periods. ~~Typically,~~The ~~these~~significant ~~criteria~~estimates ~~are~~included ~~met~~in ~~when~~the ~~our customer~~Company’s ~~order~~financial isstatements ~~received~~are ~~and~~the weallowance ~~receive~~for ~~acknowledgment~~doubtful accounts, allowance for sales returns, inventory reserves, the estimated lives of ~~receipt~~property byand aequipment ~~third~~and ~~party~~intangible ~~shipper~~assets, the inputs used in determining the fair value of stock-based compensation and ~~collection~~warrant isliabilities, ~~reasonably~~and ~~assured~~the allocation of the consideration in the business combinations. Our management believes the estimates utilized in preparing our consolidated financial statements are reasonable. Actual results could differ significantly from these estimates.

~~The~~Restricted Company provides an allowance for returns based upon specific product warranty agreements and past experience and industry knowledge. All significant returns for the periods presented have been offset against gross sales. The Company also provides a reserve for warranties, which is not significant and is included in accrued expense. Cash

~~Accounts~~Restricted ~~Receivable~~cash ~~and~~represents ~~allowance~~funds held by credit card processors for ~~doubtful~~purposes ~~accounts~~of mitigating chargeback risk.

~~Accounts~~Revenue receivable consists of amounts due from the sale of our power tools, cleaning, and housewares products and dietary programs less an allowance for uncollectible accounts. The allowance for doubtful accounts which is based on an evaluation of our outstanding accounts receivable including the age of amounts due, the financial condition of our specific customers, knowledge of our industry and historical bad debt experience. This evaluation methodology has proved to provide a reasonable estimate of bad debt expense in the past and we intend to continue to employ this approach in our analysis of collectability. The allowance for doubtful accounts was approximately $22,000 and $15,000 as of June 30, 2014 and December 31, 2013, respectively.Recognition

~~Inventories~~We recognize revenue from product sales in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 605 — Revenue Recognition. Revenue from product sales is recognized when substantially all the risks and ~~Advances~~rewards of onownership ~~Inventory~~have ~~Purchases~~transferred to our customers, the selling price is fixed and collection is reasonably assured. Typically, these criteria are met when our customer’s order is received and we receive acknowledgment of receipt by a third party shipper and collection is reasonably assured.

~~Inventories~~The ~~are~~Company ~~stated~~provides atan allowance ~~the~~for ~~lower~~returns ofbased ~~cost~~upon orspecific ~~market.~~product ~~Cost~~warranty isagreements ~~determined~~and ~~using~~past aexperience ~~first-in,~~and ~~first-out,~~industry orknowledge. ~~FIFO,~~All ~~method.~~significant returns Wefor ~~review~~the ~~our~~periods ~~inventory~~presented ~~for~~have ~~excess~~been oroffset ~~obsolete~~against ~~inventory~~gross ~~and~~sales. ~~write-down~~The ~~obsolete~~Company oralso ~~otherwise~~provides ~~unmarketable~~a ~~inventory~~reserve tofor ~~its~~warranties, ~~estimated~~which is ~~net~~not ~~realizable~~significant ~~value.~~and is included in accrued expense.

9Accounts Receivable and Allowance for Doubtful Accounts

ASAccounts ~~SEEN~~receivable ONconsists of TVamounts due from the sale of our power tools, ~~INC~~cleaning, and housewares products and dietary programs, less an allowance for uncollectible accounts. ~~AND~~The ~~SUBSIDIARIES~~allowance for doubtful accounts is based on an evaluation of our outstanding accounts receivable, including the age of amounts due, the financial condition of our specific customers, knowledge of our industry and historical bad debt experience. This evaluation methodology has proved to provide a reasonable estimate of bad debt expense in the past and we intend to continue to employ this approach in our analysis of collectability. The allowance for doubtful accounts was approximately $414,000 and $224,000 as of September 30, 2014 and December 31, 2013, respectively.

~~NOTES~~Inventories TOand ~~CONDENSED~~Advances ~~CONSOLIDATED~~on ~~FINANCIAL~~Inventory Purchases ~~STATEMENTS (Continued)~~

~~Advances~~Inventories onare ~~inventory~~stated at ~~purchases~~the ~~represent~~lower ~~payments~~of ~~made~~cost toor ~~our~~market. ~~product~~Cost ~~suppliers~~is indetermined ~~advance~~using ofan ~~delivery~~average tocost ~~the~~method. ~~Company~~We ~~and~~review ~~are~~our ~~included~~inventory infor ~~prepaid~~excess ~~expenses~~or obsolete inventory and ~~other~~write-down ~~current~~obsolete ~~assets.~~or Itotherwise isunmarketable ~~common~~inventory ~~industry~~to ~~practice~~its toestimated ~~require~~net arealizable ~~substantial~~value. ~~deposit~~During ~~against~~the ~~products~~three ~~ordered~~and nine ~~before~~months ~~commencement~~ended ofSeptember ~~manufacturing~~30, ~~particularly~~2014, ~~with~~the ~~off-shore~~Company ~~suppliers.~~wrote ~~Additional~~down ~~advance~~approximately ~~payments~~$794,000 ~~may also be required upon achievement~~ of ~~certain~~inventory ~~agreed~~deemed ~~upon~~defective, ~~manufacturing~~obsolete or ~~shipment benchmarks~~ slow-moving.

~~In-bound~~Advances ~~freight-related~~on ~~costs~~inventory ~~from~~purchases represent ~~our~~payments ~~vendors~~made ~~are~~to ~~included~~our asproduct ~~part~~suppliers ofin ~~the~~advance ~~net cost~~ of ~~merchandise~~delivery ~~inventories.~~to ~~Other~~the ~~costs~~Company ~~associated with acquiring, storing~~ and ~~transporting merchandise inventories~~ are ~~expensed as incurred and~~ included in ~~cost~~prepaid ofexpenses ~~goods sold. The Company's inventories are acquired~~ and other ~~carried~~current ~~for~~assets. ~~retail~~It ~~sale~~is ~~and,~~common ~~accordingly,~~industry ~~the~~practice ~~carrying value is susceptible~~ to, ~~among~~require ~~other~~a ~~things,~~substantial ~~market~~deposit ~~trends~~against ~~and~~products ~~conditions~~ordered ~~and~~before ~~overall customer demand. The Company uses its best estimates~~ commencement of ~~all~~manufacturing, ~~available~~particularly ~~information~~with tooff-shore ~~establish reasonable inventory quantities~~suppliers. ~~However,~~Additional ~~these~~advance ~~conditions~~payments may ~~cause~~also ~~our~~be ~~inventories~~required toupon ~~become~~achievement ~~obsolete~~of ~~and/or~~certain agreed ~~excessive.~~upon ~~The~~manufacturing ~~Company reviews its inventories periodically for indications that reserves are necessary to reduce the carrying values to the lower of cost~~ or ~~market~~shipment ~~values~~benchmarks.

~~Property~~In-bound freight-related costs from our vendors are included as part of the net cost of merchandise inventories. Other costs associated with acquiring, storing and ~~Equipment~~transporting merchandise inventories are expensed as incurred and included in cost of goods sold. The Company's inventories are acquired and carried for wholesale and retail sale and, ~~net~~accordingly, the carrying value is susceptible to, among other things, market trends and conditions and overall customer demand. The Company uses its best estimates of all available information to establish reasonable inventory quantities. However, these conditions may cause our inventories to become obsolete and/or excessive. The Company reviews its inventories periodically for indications that reserves are necessary to reduce the carrying values to the lower of cost or market values.

We record property, equipment and leasehold improvements at historical cost. Expenditures for maintenance and repairs are recorded to expense; additions and improvements are capitalized. We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the remaining term of the lease. 11

WeAS ~~review~~SEEN ~~our~~ON ~~long-lived assets~~TV, ~~such as property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable from future undiscounted cash flows~~INC. ~~Impairment~~AND ~~losses are recorded for the excess, if any, of the carrying value over the fair value of the long-lived assets.~~ SUBSIDIARIES

~~Intangible~~NOTES ~~Asset~~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~Intangible~~Property ~~assets include acquired customer relationships, URLs~~ and patents trademarks. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets of five to nine years in accordance with ASC Topic 350 "Intangibles - Goodwill and Other”. Long-lived assetsEquipment, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. See Note 7.net

~~Goodwill~~We record property, equipment and ~~Indefinite~~leasehold ~~Lived~~improvements ~~Intangible~~at ~~Assets~~historical cost. Expenditures for maintenance and repairs are recorded to expense; additions and improvements are capitalized. We provide for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the remaining term of the lease.

~~Goodwill~~We ~~and~~review ~~indefinite~~our long-lived ~~intangible~~ assets, ~~are~~such ~~not~~as ~~amortized~~property ~~but is subject to periodic testing for impairment in accordance with ASC Topic 350 “Intangibles - Goodwill~~ and ~~Other”.~~equipment, ~~The test~~ for impairment ~~will~~whenever beevents ~~conducted annually~~ or ~~more~~changes ~~frequently~~in ~~if events occur or~~ circumstances ~~change~~indicate ~~indicating~~ that the ~~fair~~carrying ~~value~~ amount of ~~the~~an ~~goodwill~~asset may not be ~~below~~recoverable ~~its~~from ~~carrying~~future ~~amount.~~undiscounted ~~The~~cash ~~Company~~flows. ~~determined~~Impairment ~~that~~losses noare ~~events~~recorded ~~occurred~~for orthe ~~circumstances~~excess, ~~occurred~~if ~~through June 30~~any, of ~~2014~~the ~~that~~carrying ~~would~~value ~~indicate~~over ~~that~~ the fair value of ~~goodwill~~the ~~and indefinite~~ long-lived ~~intangible~~ assets ~~may be below its carrying amount~~. ~~However, if market conditions deteriorate, or if the Company is unable to execute on its strategies, it may be necessary to record impairment charges in the future.~~

~~Share-based~~Intangible ~~payments~~Assets

~~The~~Intangible ~~Company~~assets ~~recognizes~~include acquired ~~share-based~~customer ~~compensation~~relationships, ~~expense~~URLs, onpatents, ~~share~~and ~~based~~trademarks. ~~awards~~Intangible ~~under~~assets with finite lives are amortized using the ~~provisions~~straight-line method over the estimated economic lives of the assets in accordance with ASC ~~718~~Topic ~~Compensation~~350 "Intangibles - ~~Stock~~Goodwill ~~Compensation~~and Other”. Long-lived ~~Compensation~~assets, ~~expense~~including isintangible ~~recognized~~assets ~~over~~with ~~the~~finite ~~vesting~~lives, ~~period~~are ~~from~~reviewed for impairment whenever events or changes in circumstances indicate that the ~~date~~carrying amount of ~~grant~~such assets may not be recoverable. The Company determined certain of its other intangible assets were partially impaired as of September 30, 2014. See Note 7.

~~Calculating~~Goodwill ~~share-based compensation expense requires the input of highly subjective judgment~~ and ~~assumptions,~~Indefinite ~~including~~Lived estimates of expected life of the award, stock price volatility, forfeiture rates and risk-free interest rates. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future. Intangible Assets

10Goodwill and indefinite lived intangible assets are not amortized but are subject to periodic testing for impairment in accordance with ASC Topic 350 “Intangibles - Goodwill and Other”. The test for impairment is conducted annually or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. The Company determined the Company’s goodwill was fully impaired at September 30, 2014. See Note 7.

ASShare-based ~~SEEN ON TV, INC. AND SUBSIDIARIES~~payments

~~NOTES~~The TOCompany ~~CONDENSED~~recognizes share-based ~~CONSOLIDATED~~compensation ~~FINANCIAL~~expense ~~STATEMENTS~~on ~~(Continued)~~share based awards under the provisions of ASC 718 Compensation - Stock Compensation. Compensation expense is recognized over the vesting period from the date of grant.

~~Earnings~~Calculating ~~(Loss)~~share-based compensation ~~Per~~expense ~~Share~~requires the input of highly subjective judgment and assumptions, including estimates of expected life of the award, stock price volatility, forfeiture rates and risk-free interest rates. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future.

~~Basic~~Earnings ~~earnings~~ (~~loss~~Loss) ~~per~~Per share is based on the weighted effect of all common shares issued and outstanding and is calculated by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of common shares used in the basic earnings per share calculation plus the number of common shares, if any, that would be issued assuming conversion of all potentially dilutive securities outstanding. Share

~~The~~Basic ~~following~~earnings ~~securities~~(loss) ~~were~~per share ~~not~~is ~~included~~based inon the ~~computation~~weighted effect of ~~diluted~~all common shares issued and outstanding and is calculated by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of common shares used in the basic earnings per share ascalculation ~~their~~plus ~~effect~~the number of common shares, if any, that would be ~~anti-~~issued assuming conversion of all potentially dilutive: securities outstanding.

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Stock options		3,288,836		—		3,288,836		—
Warrants		93,458,239		—		93,458,239		—
Total dilutive securities		96,747,075		—		96,747,075		—

The following securities were not included in the computation of diluted net earnings per share as their effect would be anti-dilutive:

Concentration of Credit Risk

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Stock options		2,965,334		–		2,965,334		–
Warrants		93,420,733		–		93,420,733		–
Total dilutive securities		96,386,067		–		96,386,067		–

Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash and trade accounts receivable. Cash is held with financial institutions in the United States and from time to time we may have balances that exceed the amount of insurance provided by the Federal Deposit Insurance Corporation on such deposits. Credit is extended to our customers, based on an evaluation of a customer’s financial condition and collateral is not required. 12

~~Advertising~~AS ~~and~~SEEN ~~Infomercial~~ON ~~Production~~TV, ~~Costs~~INC. AND SUBSIDIARIES

~~Advertising~~NOTES ~~costs~~TO ~~are~~CONDENSED ~~expensed~~CONSOLIDATED ~~when~~FINANCIAL STATEMENTS ~~incurred. Direct response production costs consist of infomercial production costs. Such costs are deferred until the infomercial airs for the first time.~~ (Continued)

~~Product~~Concentration ~~Development~~of ~~Costs~~Credit Risk

~~Costs~~Financial instruments that potentially expose us to concentrations of ~~research,~~credit ~~new~~risk ~~product~~consist ~~development~~primarily of cash and ~~product~~trade ~~redesign~~accounts ~~are~~receivable. ~~charged~~Cash is held with financial institutions in the United States and from time to ~~expense~~time aswe ~~incurred~~may have balances that exceed the amount of insurance provided by the Federal Deposit Insurance Corporation on such deposits. Credit is extended to our customers, based on an evaluation of a customer’s financial condition and collateral is not required.

~~Patent~~Advertising ~~Renewal~~and Infomercial Production Costs

~~The~~Advertising ~~Company's~~costs ~~intellectual~~are ~~property~~expensed when ~~portfolio consists mainly of patents with respect to the technology and use of its products~~incurred. ~~Patent~~Direct ~~renewal~~response ~~and~~production ~~maintenance~~costs ~~fees~~consist ~~are due at various times over the life~~ of ~~the~~infomercial ~~patent~~production ~~to keep patent in force~~costs. ~~The~~Such ~~Company capitalizes these~~ costs ~~and~~are ~~amortizes~~deferred ~~them~~until ~~over~~ the ~~shorter~~infomercial airs offor the ~~economic~~first ~~life or remaining life of the patent~~time.

~~Fair~~Product ~~Value~~Development ~~Measurements~~ Costs

~~FASB~~Costs ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of ~~all financial instruments~~research, ~~whether~~new orproduct ~~not~~development ~~recognized,~~and product ~~for~~redesign ~~financial statement purposes. Disclosures about the fair value of financial instruments~~ are ~~based~~charged ~~on pertinent information available~~ to usexpense onas ~~June 30, 2014 and December 31, 2013, respectively~~incurred. ~~Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.~~

~~FASB~~Patent ~~ASC~~Renewal 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). Costs

11The Company's intellectual property portfolio consists mainly of patents with respect to the technology and use of its products. Patent renewal and maintenance fees are due at various times over the life of the patent to keep patent in force. The Company capitalizes these costs and amortizes them over the shorter of the economic life or remaining life of the patent.

ASFair ~~SEEN~~Value ONMeasurements ~~TV, INC. AND SUBSIDIARIES~~

~~NOTES~~FASB TOASC ~~CONDENSED~~820 ~~CONSOLIDATED~~— ~~FINANCIAL~~Fair Value ~~STATEMENTS~~Measurements ~~(Continued)~~and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to us on September 30, 2014 and December 31, 2013, respectively. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

~~The~~FASB ~~three~~ASC ~~levels~~820 specifies a hierarchy of valuation techniques based on whether the ~~fair~~inputs ~~value~~to ~~hierarchy~~those valuation techniques are asobservable ~~follows:~~or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

~~Level~~The 1three —levels ~~Quoted~~of ~~prices in active markets for identical assets or liabilities that~~ the ~~reporting~~fair ~~entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose~~ value ishierarchy are ~~based on quoted market prices such~~ as ~~exchange-traded instruments and listed equities.~~ follows:

Level 21 — ~~Inputs~~Quoted prices ~~other~~in ~~than~~active ~~quoted~~markets ~~prices~~for ~~included~~identical ~~within~~assets ~~Level~~or 1liabilities that ~~are~~the ~~observable~~reporting ~~for~~entity has the ~~asset~~ability orto ~~liability,~~access ~~either~~at ~~directly~~the ~~or indirectly~~measurement date. Level 21 ~~includes~~primarily consists of financial instruments ~~that~~whose ~~are~~value ~~valued~~is ~~using~~based ~~models~~on orquoted ~~other valuation methodologies. These models consider various assumptions, including volatility factors, current~~ market prices ~~and~~such ~~contractual~~as ~~prices for the underlying financial~~ exchange-traded instruments. ~~Substantially~~and ~~all~~listed ~~of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace~~equities.

Level 32 — ~~Unobservable~~Inputs other ~~inputs~~than quoted prices included within Level 1 that are observable for the asset or liability., ~~Financial~~either ~~instruments~~directly ~~are~~or ~~considered~~ indirectly. Level 32 ~~when~~includes ~~their~~financial ~~fair~~instruments ~~values~~that are ~~determined~~valued using ~~pricing~~models or other valuation methodologies. These models consider various assumptions, ~~discounted~~including ~~cash~~volatility ~~flows~~factors, orcurrent ~~similar~~market ~~techniques~~prices and atcontractual ~~least~~prices ~~one~~for ~~significant~~the ~~model~~underlying ~~assumption~~financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or ~~input~~are issupported by ~~unobservable.~~observable levels at which transactions are executed in the marketplace.

~~The~~Level ~~carrying~~3 ~~amounts~~— ~~reported~~Unobservable inputs infor the ~~consolidated~~asset ~~balance~~or ~~sheet~~liability. ~~for~~Financial ~~cash,~~instruments ~~accounts~~are ~~receivable,~~considered ~~notes~~Level ~~receivable,~~3 ~~accounts~~when ~~payable and accrued expenses approximate~~ their fair ~~value~~values ~~based on the short-term maturity of these instruments. The fair value of notes payable~~ are ~~based~~determined onusing ~~borrowing~~pricing models, ~~rates~~discounted ~~that~~cash ~~are~~flows ~~available~~or ~~to the Company for loans with~~ similar ~~terms,~~techniques ~~collateral~~ and ~~maturity.~~at ~~The~~least ~~estimated~~one ~~fair~~significant ~~value~~model ofassumption ~~notes~~or ~~payable~~input ~~approximates the carrying value. Determination of fair value of related party payables and receivables~~ is ~~not practicable due to their related party nature~~unobservable.

~~Accounting~~The ~~Standards~~carrying ~~Updates~~amounts reported in the condensed consolidated balance sheet for cash, accounts receivable, notes receivable, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments. The fair value of notes payable are based on borrowing rates that are available to the Company for loans with similar terms, collateral and maturity. The estimated fair value of notes payable approximates the carrying value. Determination of fair value of related party payables and receivables is not practicable due to their related party nature.

In May 2014, the FASB has issued No. 2014-09, Revenues from Contracts with Customers (Topic 606). The guidance in this update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. In addition, the existing requirements for the recognition of a gain or loss on the transfer of nonfinancial assets that are not in a contract with a customer (for example, assets within the scope of Topic 360, Property, Plant, and Equipment, and intangible assets within the scope of Topic 350, Intangibles-Goodwill and Other, are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this Update. Under the new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU No. 2014-09 are effective for public entities for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently evaluating the impact that this ASU will have on its financial statements. Reclassifications

InCertain ~~August~~amounts ~~2014,~~within the ~~Financial~~cost ~~Accounting~~of revenue, ~~Standards~~selling ~~Board~~and ~~(“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15~~marketing, ~~“Presentation~~general ofand ~~Financial~~administrative ~~Statements~~and -other ~~Going~~income ~~Concern~~ (~~Subtopic 205-40~~expense): ~~Disclosure~~categories ofon ~~Uncertainties~~the ~~about~~statement anof ~~Entity’s~~operations for ~~Ability~~the toperiod ~~Continue~~ended asJune a30, ~~Going Concern” (“ASU~~ 2014~~-15”).~~ ~~ASU~~have ~~2014-15~~been isreclassified ~~intended~~ to ~~define~~conform ~~management’s responsibility~~ to ~~evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of~~ the ~~term~~three ~~substantial doubt~~ and ~~requires~~nine anmonth ~~assessment for a~~ period ofended ~~one~~September year after the date that the financial statements are issued (or available to be issued). It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and requires an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for reporting periods beginning after December 1530, ~~2016, with early adoption permitted~~2014 presentation. These ~~Management~~reclassifications ishad ~~currently~~no ~~evaluating the~~ impact ofon the ~~adoption~~previously ofreported ~~ASU~~net ~~2014-14~~loss onor ~~our~~stockholders' ~~financial statements and disclosures~~deficit.

1213

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~Principles~~Accounting ofStandards ~~Consolidation~~Updates

In May 2014, the FASB has issued No. 2014-09, Revenues from Contracts with Customers (Topic 606). The ~~consolidated~~guidance ~~financial~~in ~~statements~~this ~~include~~update supersedes the ~~accounts~~revenue recognition ofrequirements in Topic 605, Revenue Recognition. In addition, the ~~Company~~existing ~~and~~requirements ~~its~~for ~~consolidated~~the ~~subsidiaries.~~recognition ~~Also~~of a ~~consolidated~~gain ~~are~~or loss on the transfer of nonfinancial assets that are not in a contract with a customer (for example, ~~liabilities~~assets ~~and~~within ~~results~~the scope of ~~operations~~Topic of360, ~~Ronco~~Property, asPlant, aand ~~variable~~Equipment, ~~interest~~and ~~entry~~intangible ~~effective~~assets ~~March~~within 6the scope of Topic 350, ~~2014~~Intangibles-Goodwill and Other, are amended to be consistent with the guidance on recognition and measurement (including the constraint on revenue) in this Update. ~~See~~Under ~~Note~~the 3new guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ~~All~~In ~~inter~~May 2015, the FASB has issued No. 2015-~~company~~14, ~~account~~Revenues ~~balances~~from Contracts with Customers (Topic 606), which deferred the effective date for annual and ~~transactions~~interim ~~have~~periods. ~~been~~This ~~eliminated~~standard inis ~~consolidation~~effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period.

~~Note~~The 3amendments in ASU No. 2014-09 ~~Variable~~are ~~Interest~~effective ~~Entity~~for public entities for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The Company is currently evaluating the impact that this ASU will have on its financial statements.

~~Ronco~~In ~~Holdings~~August 2014, ~~Inc~~the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, “Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a ~~distributor~~going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of ~~consumer~~the ~~products~~term ~~which~~substantial doubt and requires an assessment for a period of one year after the ~~Company~~date ~~believes~~that ~~could~~the ~~add~~financial ~~significantly~~statements are issued (or available to ~~its~~be ~~product~~issued). ~~lines~~It also requires certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans and ~~distribution~~requires ~~channels~~an express statement and other disclosures when substantial doubt is not alleviated. The new standard will be effective for reporting periods beginning after December 15, 2016, with early adoption permitted. Management is currently evaluating the impact of the adoption of ASU 2014-14 on our financial statements and disclosures.

OnIn ~~March~~February 62015, ~~2014,~~the ~~under~~FASB issued ~~the~~ASU ~~terms~~2015-02, ofConsolidation ~~the~~(Topic ~~Amended~~810) ~~and~~- ~~Restated~~Amendments ~~RFL~~to ~~Enterprises~~the ~~and~~Consolidation ~~Infusion~~Analysis. ~~Agreement~~The ~~(“Participation~~amendments ~~Agreement”),~~in ~~IBI~~this ~~agreed~~update require management to ~~the~~reevaluate ~~acquisition~~whether ofcertain ~~all~~legal ~~rights~~entities ~~with~~should ~~respect~~be toconsolidated. ~~secured~~Specifically, ~~debts~~the ~~held~~amendments by(1) ~~creditors~~modify the evaluation of ~~Ronco,~~whether ~~subject~~limited topartnerships anand ~~initial~~similar ~~payment~~legal ofentities ~~$2,000,000~~are ~~and~~variable ainterest ~~final~~entities ~~payment~~(“VIEs”) ofor voting $2interest entities,~~350,000~~ ~~within~~(2) ~~one~~eliminate ~~year.~~the ~~The~~presumption ~~initial~~that ~~payment~~a ~~was~~general ~~made~~partner inshould ~~March~~consolidate ~~2014~~a ~~and~~limited ~~on April 2~~partnership, ~~2014,~~(3) ~~concurrent~~affect the ~~with~~consolidation ~~execution~~analysis of ~~the~~reporting ~~merger~~entities ~~agreement~~that ~~between~~are ~~the~~involved ~~Company~~with ~~and~~VIEs, ~~Infusion~~particularly ~~(Note~~those ~~4),~~that ~~Infusion~~have ~~assumed~~fee ~~all~~arrangements ~~assets~~and related party relationships, and ~~obligations~~(4) ofprovide ~~IBI,~~a ~~including~~scope ~~all~~exception ~~rights~~from ~~held~~consolidation byguidance ~~IBI~~for ~~under~~reporting ~~the~~entities ~~Participation~~with ~~Agreement.~~interests in ~~These~~legal ~~rights~~entities ~~included~~that ~~the~~are ~~ability~~required to ~~designate~~comply awith ~~majority~~or ofoperate ~~the~~in ~~members~~accordance ofwith ~~Ronco’s~~requirements ~~board~~that ofare ~~directors,~~similar ~~which~~to ~~became~~those ~~effective~~ in ~~March~~Rule 2a-7 ~~2014~~of ~~upon~~ the ~~initial~~Investment ~~$2,000,000~~Company ~~payment.~~Act ~~The composition~~ of ~~management~~1940 ~~was~~for ~~the~~registered ~~same~~money ~~for~~market ~~both~~funds. ~~IBI~~The ~~and~~amendments ~~Infusion~~in onthis ~~March~~update 6,are ~~2014.~~effective ~~The~~for ~~power~~public business toentities ~~direct~~for ~~the~~fiscal ~~activities~~years, ~~that~~and ~~most~~interim ~~significantly~~periods ~~impacted~~within ~~Ronco’s~~those ~~economic~~fiscal ~~performance~~years, ~~was~~beginning ~~determined~~after toDecember ~~have~~15, ~~occurred~~2015. ~~when~~Early ~~the~~adoption is ~~Participation~~permitted. ~~Agreement~~The ~~was~~Company ~~signed~~is oncurrently ~~March~~evaluating 6,the ~~2014~~effect ~~with~~the ~~Infusion~~adoption ~~being~~of ~~deemed~~this ~~the~~amendment ~~primary~~will ~~beneficiary~~have on ~~that~~the ~~date~~Company’s financial statements.

AIn ~~VIE~~April is2015, ~~an entity that either (i) has insufficient equity to permit~~ the ~~entity~~FASB issued toASU ~~finance~~2015-03, ~~its~~Interest—Imputation ~~activities~~of ~~without~~Interest ~~additional subordinated financial support or~~ (iiSubtopic 835-30): ~~has~~Simplifying ~~equity investors who lack~~ the ~~characteristics~~Presentation of aDebt ~~controlling~~Issuance ~~financial interest~~Costs. ASU A2015-03 ~~VIE~~provides isauthoritative ~~consolidated~~guidance byrelated ~~its primary beneficiary. The primary beneficiary has both the power~~ to ~~direct~~ the ~~activities~~presentation ~~that~~of ~~most~~debt ~~significantly~~issuance ~~impact~~costs ~~the~~on ~~entity's economic performance and~~ the ~~obligation~~balance tosheet, ~~absorb~~requiring companies ~~losses or the right~~ to ~~receive~~present ~~benefits~~debt ~~from~~issuance ~~the~~costs ~~entity that could potentially be significant to the VIE. Management has concluded,~~ as a ~~result~~direct ofdeduction ~~the~~from ~~Participation Agreement, that Infusion is~~ the ~~primary~~carrying ~~beneficiary~~value of ~~Ronco~~debt. asThe ~~Infusion~~amendments ~~has~~in ~~the~~this ~~power~~update toare effective ~~direct~~for ~~the~~public ~~activities~~business ofentities ~~Ronco~~in ~~that~~fiscal ~~most~~years ~~significantly~~beginning ~~impact~~after ~~its~~December ~~economic~~15, ~~performance. Therefore~~2015, ~~Ronco~~and ~~was~~interim ~~consolidated~~periods ~~effective~~within ~~March~~those ~~6, 2014~~fiscal years. ~~Infusion’s~~The ~~initial~~new ~~consolidation~~guidance ofmust ~~Ronco~~be isapplied ~~accounted~~retrospectively ~~for~~to aseach aprior ~~business~~period ~~combination~~presented. ~~which~~The ~~requires~~Company ~~that~~is ~~the~~currently ~~assets~~evaluating ~~and~~the effect ~~liabilities~~the beadoption ~~recorded~~of atthis ~~fair~~amendment ~~value. This conclusion~~ will behave ~~re-evaluated~~on ~~during subsequent reporting periods if~~ the ~~relationship~~Company’s ~~between~~financial ~~Infusion and Ronco changes~~statements.

~~The~~In ~~liabilities~~July of2015, ~~Ronco~~the ~~consolidated~~FASB issued byASU 2015-11, Inventory (Topic 330): Simplifying the ~~Company~~Measurement doof ~~not~~Inventory. ~~represent~~ASU ~~additional~~2015-11 ~~claims~~applies onto ~~the~~all ~~Company’s~~inventory that ~~general~~is ~~assets;~~measured ~~rather~~using first-in, ~~they~~first-out ~~represent~~or ~~claims~~average ~~against~~cost. ~~the~~The ~~specific~~guidance ~~assets~~requires ofan ~~Ronco.~~entity ~~Similarly,~~to measure inventory at the ~~assets~~lower of cost ~~Ronco~~or ~~consolidated~~net byrealizable ~~the~~value. ~~Company~~ASU do2015-11 ~~not~~is ~~represent~~effective ~~additional~~prospectively ~~assets~~for ~~available~~fiscal toyears, ~~satisfy~~and ~~claims~~for ~~against~~interim ~~the~~periods ~~Company’s~~within ~~general~~those ~~assets~~years, beginning after December 15, 2016. ~~The~~Early ~~creditors~~application ofis ~~Ronco~~permitted. doThe ~~not~~Company ~~have~~is ~~recourse~~currently toevaluating the ~~Company,~~effect ~~thereby~~the ~~limiting~~adoption of ~~our~~this ~~liability~~amendment ~~risks~~will ~~associated~~have ~~with~~on ~~our~~the ~~variable~~Company’s ~~interests~~financial ~~in Ronco~~statements.

13In September 2015, the FASB issued ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments, which requires an acquirer to recognize adjustments identified during the measurement period in the reporting period in which the adjustment amounts are determined. The adjustment must include the cumulative effect of the adjustment as if the accounting had been completed on the acquisition date. The update should be applied prospectively and becomes effective January 1, 2016. Early application is permitted. The Company is currently evaluating the effect the adoption of this amendment will have on the Company’s financial statements.

~~AS SEEN ON TV, INC. AND SUBSIDIARIES~~14

~~NOTES~~AS TOSEEN ~~CONDENSED~~ON ~~CONSOLIDATED~~TV, ~~FINANCIAL~~INC. ~~STATEMENTS~~AND ~~(Continued)~~SUBSIDIARIES

ANOTES ~~summary~~TO ofCONDENSED ~~Ronco~~CONSOLIDATED ~~assets~~FINANCIAL STATEMENTS ~~and liabilities included in the Company’s condensed consolidated financial statements at June 30, 2014, is as follows:~~ (Continued)

Assets
Current assets:
Cash	$	15,889
Accounts receivable, net		1,497,513
Accounts receivable - related party		342,871
Inventories		1,657,820
Prepaid expenses and other assets		229,468
Total current assets		3,743,561
Property and equipment, net		261,355
Goodwill		15,907,825
Intangible assets, net		3,635,426
Total assets	$	23,548,167
Liabilities and Redeemable Preferred Stock
Current liabilities:
Accounts payable	$	2,159,648
Accrued expenses		2,882,220
Notes payable		11,620,143
Total current liabilities		16,662,011
Long-term notes payable - related party		3,585,591
Total liabilities	$	20,247,602
Redeemable preferred stock	$	2,700,000

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation and disclosure of financial assets and financial liabilities. ASU 2016-01 is effective for fiscal years, and for interim periods within those years, beginning after December 15, 2017 and, for most provisions, is effective using the cumulative-effect transition approach. Early application is permitted for certain provisions. The Company is currently evaluating the effect the adoption of this amendment will have on the Company’s financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which provides guidance for accounting for leases. The ~~condensed~~new ~~consolidated~~guidance ~~results~~requires ofcompanies to ~~operations~~recognize the assets and liabilities for the ~~three~~rights and ~~six~~obligations ~~month~~created ~~periods~~by ~~ended~~leased ~~June~~assets. ~~30,~~The ~~2014,~~accounting ~~include~~guidance ~~revenues~~for ~~attributable~~lessors will toremain ~~Ronco~~relatively oflargely ~~approximately~~unchanged. ~~$1,671,000~~ASU 2016-02 is effective for annual and ~~$2,285,000,~~interim ~~respectively~~periods beginning after December 15, 2018. ~~and~~Early aadoption ~~net~~is ~~loss~~permitted. ~~attributable~~The toCompany ~~Ronco~~is currently evaluating the effect the adoption of ~~approximately~~this ~~$1,016,000~~amendment ~~and~~will ~~$1,142,000,~~have ~~respectively~~on the Company’s financial statements.

~~Note~~Principles 4.of ~~Business~~Consolidation ~~Combinations~~

~~Reverse~~The ~~Acquisition~~consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. Also consolidated are the assets, liabilities and results of operations of Ronco as a variable interest entry effective March 6, 2014. See Note 3. All inter-company account balances and transactions have been eliminated in consolidation.

OnNote ~~April 2, 2014, As Seen On TV, Inc~~3. ~~(“ASTV”)~~Variable ~~and~~Interest ~~Infusion~~Entity Brands, Inc. (“Infusion”), entered into an Agreement and Plan of Merger (“Merger Agreement”). Under the terms of the Merger Agreement, ASTV issued 452,960,490 shares of its common stock to Infusion Brands International, Inc. (“IBI”), parent of Infusion, in exchange for all of the shares of Infusion. Following the transaction, IBI became an 85.2% owner of ASTV’s outstanding common shares and 75% owner of the ASTV’s common shares on a fully diluted basis. The Merger Agreement further provided IBI with the right to appoint a majority of the Company’s Board of Directors. Accordingly, the transaction was accounted for as a reverse acquisition under the provisions of ASC 805-40 Business Combinations – Reverse Acquisitions with Infusion becoming the acquirer for accounting purposes and ASTV becoming the accounting acquiree.

~~The~~Ronco ~~effective~~Holdings, consideration transferred to ASTV is determined based on the amount of shares that Infusion would have to issue to ASTV shareholders in order to provide the same ownership ratios as previously discussedInc. ~~The fair value of the consideration effectively transferred by Infusion should be based on the most reliable measure. In this case, the market price of ASTV shares provide~~ is a ~~more~~distributor ~~reliable basis for measuring the consideration effectively transferred than the estimated fair value~~ of ~~the~~consumer ~~shares~~products ofwhich ~~Infusion. The fair value of ASTV common stock is based on~~ the ~~closing~~Company ~~stock~~believes ~~price~~could onadd ~~April~~significantly 2,to ~~2014~~its ofproduct ~~$0.09~~lines ~~per~~and ~~share,~~distribution ~~the closing stock price on the effective date of the merger~~channels.

14On March 6, 2014, under the terms of the Amended and Restated RFL Enterprises and Infusion Agreement (“Participation Agreement”), IBI agreed to the acquisition of all rights with respect to secured debts held by creditors of Ronco, subject to an initial payment of $2,000,000 and a final payment of $2,350,000 within one year. The initial payment was made in March 2014 and on April 2, 2014, concurrent with execution of the merger agreement between the Company and Infusion (Note 4), Infusion assumed all assets and obligations of IBI, including all rights held by IBI under the Participation Agreement. These rights included the ability to designate a majority of the members of Ronco’s board of directors, which became effective in March 2014 upon the initial $2,000,000 payment. The composition of management was the same for both IBI and Infusion on March 6, 2014. The power to direct the activities that most significantly impacted Ronco’s economic performance was determined to have occurred when the Participation Agreement was signed on March 6, 2014 with Infusion being deemed the primary beneficiary on that date.

ASA ~~SEEN~~VIE ONis TVan entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. Management has concluded, ~~INC~~as a result of the Participation Agreement, that Infusion is the primary beneficiary of Ronco as Infusion has the power to direct the activities of Ronco that most significantly impact its economic performance. ~~AND~~Therefore, Ronco ~~SUBSIDIARIES~~was consolidated effective March 6, 2014. Infusion’s initial consolidation of Ronco is accounted for as a business combination which requires that the assets and liabilities be recorded at fair value. This conclusion will be re-evaluated during subsequent reporting periods if the relationship between Infusion and Ronco changes.

~~NOTES~~The TOliabilities ~~CONDENSED~~of ~~CONSOLIDATED~~Ronco consolidated ~~FINANCIAL~~by ~~STATEMENTS~~the ~~(Continued)~~Company do not represent additional claims on the Company’s general assets; rather, they represent claims against the specific assets of Ronco. Similarly, the assets of Ronco consolidated by the Company do not represent additional assets available to satisfy claims against the Company’s general assets. The creditors of Ronco do not have recourse to the Company, thereby limiting our liability risks associated with our variable interests in Ronco.

The Merger Agreement provided for merger consideration of the 452,960,490 shares of ASTV common stock as well as ASTV assuming all obligations of Infusion and all agreements relating to their indebtedness.15

~~The~~AS ~~estimate~~SEEN ofON ~~the~~TV, ~~consideration~~INC. ~~paid~~AND ~~by the Company in the transaction is as follows:~~SUBSIDIARIES

Fair Value of the ASTV common shares	(A)	$	6,456,713
Less:
Reduction in note payable to IBI	(B)		(450,000	)
Interest accrued on IBI note payable	(C)		(9,237	)
Consideration effectively transferred		$	5,997,476

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~———————~~A summary of Ronco assets and liabilities included in the Company’s condensed consolidated financial statements at September 30, 2014, is as follows:

(A)

Assets
Current assets:
Cash	$	64,922
Accounts receivable, net		1,111,499
Inventories		3,865,050
Prepaid expenses and other assets		31,979
Total current assets		5,073,450

Property and equipment, net		300,373
Intangible assets, net		3,570,371
Total assets	$	8,944,194

Liabilities and Redeemable Preferred Stock
Current liabilities:
Accounts payable	$	4,944,040
Accrued expenses		3,399,398
Notes payable		14,016,420
Total current liabilities		22,359,858

Long-term notes payable		2,141,075
Total liabilities	$	24,500,933

Redeemable preferred stock	$	2,700,000

~~Based~~The oncondensed ~~71,741,250~~consolidated results ~~common~~of ~~shares~~operations ~~with~~for athe ~~fair~~three ~~value~~and ofnine ~~$0.09~~month ~~per~~periods ~~share~~ended September 30, ~~the~~2014, ~~closing~~include ~~price~~revenues attributable to Ronco of approximately As$1,113,000, ~~Seen~~and On$3,398,000, TVrespectively, ~~Inc.~~and ~~common~~a ~~shares~~net onloss ~~April 2,~~attributable ~~2014,~~to ~~the~~Ronco ~~transaction~~of ~~closing~~approximately ~~date~~$17,942,000 and $19,139,000, respectively.

~~(B)~~Ronco ceased to be a VIE and became a wholly-owned subsidiary of ASTV as of May 31, 2015.

~~Represents~~Note ~~a series of notes issued by ASTV to IBI between December 23, 2013 and March 14, 2014 used for general working capital purposes~~4. InBusiness ~~the~~Combinations ~~event the merger transaction was not completed by June 30, 2014, all principal and related accrued interest became payable, which was forgiven when the transaction closed.~~

~~(C)~~Reverse Acquisition

~~Accrued~~On ~~interest~~April ~~related~~2, to2014, ASTV and Infusion entered into an Agreement and Plan of Merger (“Merger Agreement”). Under the terms of the Merger Agreement, ASTV issued 452,960,490 shares of its common stock to IBI, ~~notes~~the parent of Infusion, ~~accrued~~in atexchange 12for all of the shares of Infusion. Following the transaction, IBI became an 85.2% ~~per~~owner ~~annum~~of ASTV’s outstanding common shares and 75% owner of the ASTV’s common shares on a fully diluted basis. The Merger Agreement further provided IBI with the right to appoint a majority of the Company’s Board of Directors. Accordingly, the transaction was accounted for as a reverse acquisition under the provisions of ASC 805-40 Business Combinations – Reverse Acquisitions with Infusion becoming the acquirer for accounting purposes and ASTV becoming the accounting acquiree.

~~The~~ASTV’s ~~fair~~acquisition ~~value~~ of ~~assets~~Infusion ~~acquired~~Brands, Inc. ~~and~~was ~~liabilities~~effectuated ~~assumed~~to ~~were~~bring ~~based~~together ontwo ~~estimates~~experienced bycompanies ~~our~~in ~~management.~~the ~~The~~direct ~~Company~~response ~~expects~~space under the ~~allocation~~ownership toof bea ~~finalized~~public ~~within~~company to ~~twelve~~maximize ~~months of~~ the ~~effective~~cooperative ~~date~~opportunities ofamong the ~~merger.~~companies’ ~~The~~combined ~~following~~brands, ~~table~~to ~~summarizes~~realize ~~the~~cost ~~estimated~~savings ~~provisional~~due ~~fair~~to ~~value~~staffing ~~amounts~~and space ofsynergies, ~~assets~~and ~~acquired~~to ~~and~~better ~~liabilities~~position ~~assumed~~both oncompanies ~~the~~for ~~effective~~private ~~date~~and ofpublic ~~acquisition:~~capital markets access.

Cash and cash equivalents	$	53,966
Accounts receivable		4,560
Note receivable – current		225,000
Prepaid expenses and other current assets		271,804
Restricted cash – non current		83,462
Note receivable – non current		675,000
Property and equipment		43,798
Goodwill		514,097
Intangible assets		7,950,000
Deposits		2,185
Total assets acquired		9,823,872
Accounts payable		(625,413	)
Accrued expenses and other current liabilities		(361,471	)
Notes payable – current portion		(230,486	)
Warrant liability		(1,668,795	)
Current liabilities of discontinued operations		(904,788	)
Notes payable – non current		(35,443	)
Total liabilities assumed		(3,826,396	)
Net assets acquired	$	5,997,476

OfAS ~~the~~SEEN ~~$7,950,000~~ON ~~of acquired intangible assets $3~~TV,~~150,000~~ ~~was allocated to our eDiets subsidiary and included $1,200,000 of customer relationships, $1,100,000 of domain names and $850,000 allocated to trade names~~INC. ~~These~~AND intangibles are being amortized on a straight-line basis over a 5-year weighted average useful life. In addition, $4,800,000 of the purchase price was allocated to the Company’s asseenontv.com URLs and related websites which are not subject to amortization. SUBSIDIARIES

~~The~~NOTES ~~purchase~~TO ~~price~~CONDENSED ~~exceeded~~CONSOLIDATED ~~the~~FINANCIAL STATEMENTS ~~fair value of the net assets acquired by $514,097 which was recorded as goodwill and assigned to our eCommerce segment.~~ (Continued)

15The effective consideration transferred to ASTV is determined based on the amount of shares that Infusion would have to issue to ASTV shareholders in order to provide the same ownership ratios as previously discussed. The fair value of the consideration effectively transferred by Infusion should be based on the most reliable measure. In this case, the market price of ASTV shares provide a more reliable basis for measuring the consideration effectively transferred than the estimated fair value of the shares of Infusion. The fair value of ASTV common stock is based on the closing stock price on April 2, 2014 of $0.09 per share, the closing stock price on the effective date of the merger.

ASThe ~~SEEN~~Merger ONAgreement TVprovided for merger consideration of the 452,960,490 ~~INC.~~shares ~~AND~~of ~~SUBSIDIARIES~~ASTV common stock as well as ASTV assuming all obligations of Infusion and all agreements relating to their indebtedness.

~~NOTES~~The TOestimate ~~CONDENSED~~of ~~CONSOLIDATED~~the ~~FINANCIAL~~consideration ~~STATEMENTS~~paid ~~(Continued)~~by the Company in the transaction is as follows:

The condensed consolidated results of operations for the three and six month periods ended June 30, 2014, include post-combination revenues and net loss attributable to ASTV of approximately $189,000 and $600,000, respectively

Fair Value of the ASTV common shares	(A)	$	6,456,713
Less:
Reduction in note payable to IBI	(B)		(450,000	)
Interest accrued on IBI note payable	(C)		(9,237	)
Consideration effectively transferred		$	5,997,476

.———————

~~VIE~~(A) ~~Acquisition~~Based on 71,741,250 common shares with a fair value of $0.09 per share, the closing price of ASTV common shares on April 2, 2014, the transaction closing date.

~~Under the provisions of the Amended and Restated RFL Enterprises and Infusion Agreement~~ (~~“Participation Agreement”~~B) ~~dated~~Represents ~~March~~a 6,series ~~2014, RFL Enterprises LLC, Ronco Funding, LLC and IBI agreed the acquisition~~ of ~~all~~notes ~~rights~~issued ~~with respect to secured debts held~~ by ~~creditors~~ASTV ~~of Ronco Holdings, Inc. (“Ronco”) would be transferred~~ to IBI, ~~subject~~between toDecember ~~an initial payment of $2~~23,~~000,000~~ 2013 and aMarch ~~final payment of $2~~14,~~350,000~~ ~~within one year. The initial payment was made in March~~ 2014 ~~and~~used onfor ~~April~~general 2,working ~~2014,~~capital ~~concurrent~~purposes. ~~with~~In the ~~execution~~event of the merger ~~agreement~~transaction ~~between~~was ~~the~~not ~~Company~~completed ~~and~~by ~~Infusion~~June 30, ~~as discussed above~~2014, ~~Infusion assumed~~ all ~~assets~~principal and ~~obligations~~related ofaccrued ~~IBI,~~interest ~~including~~became ~~all rights held by IBI under the Participation Agreement. These rights included the ability to designate a majority of the members of Ronco Holdings board of directors~~payable, ~~effective~~which ~~with the initial payment of $2,000,000. Accordingly, while Infusion had not yet acquired an equity position, Ronco~~ was ~~deemed~~forgiven awhen ~~Variable Interest Entity under~~ the ~~provisions~~transaction ~~of ASC 810 – Consolidation with Infusion being the primary beneficiary~~closed. ~~Accordingly, Ronco was consolidated into the Company’s condensed consolidated statement of operations and balance sheet at June 30, 2014. See Note 3.~~

~~The~~(C) ~~fair~~Accrued ~~value~~interest ofrelated ~~assets~~to ~~and liabilities consolidated, as of March 6, 2014,~~ the ~~date~~IBI ~~of the Participation Agreement~~notes, ~~was~~accrued ~~based~~at on12% ~~estimates~~per ~~by our management~~annum. The Company expects the allocation to be finalized within twelve months of the effective date of the Participation Agreement. The following table summarizes the estimated provisional fair value amounts of assets and liabilities recorded as of the effective date:

Cash and cash equivalents	$	96,432
Accounts receivable		752,172
Inventories		1,517,374
Prepaid expenses and other current assets		332,613
Property and equipment		179,672
Goodwill		15,907,825
Intangible assets		3,700,000
Total assets		22,486,088
Accounts payable		(2,443,917	)
Accrued expenses and other current liabilities		(2,238,531	)
Notes payable – current portion		(10,165,040	)
Notes payable – related party - current portion		(3,016,228	)
Notes payable – non current portion		(1,922,372	)
Redeemable preferred stock		(2,700,000	)
Total liabilities and temporary equity		(22,486,088	)
Consideration paid	$	—

The fair value of assets acquired and liabilities assumed were determined by our management. The following table summarizes the fair value amounts of assets acquired and liabilities assumed on the effective date of acquisition:

Of the $3,700,000 of acquired intangible assets $2,000,000 was allocated to our patents and $1,700,000 allocated to our trademarks. The patents are being amortized on a straight-line basis over a 9-year weighted average useful life. The trademarks are an indefinite lived intangible asset not subject to amortization.

Cash and cash equivalents	$	53,966
Accounts receivable		4,560
Prepaid expenses and other current assets		271,804
Restricted cash – non current		83,462
Property and equipment		43,798
Goodwill		3,214,097
Intangible assets		6,150,000
Deposits		2,185
Total assets acquired		9,823,872

Accounts payable		(625,413	)
Accrued expenses and other current liabilities		(361,471	)
Notes payable – current portion		(230,486	)
Warrant liability		(1,668,795	)
Current liabilities of discontinued operations		(904,788	)
Notes payable – non current		(35,443	)
Total liabilities assumed		(3,826,396	)
Net assets acquired	$	5,997,476

~~The~~Of ~~purchase~~the ~~price~~$6,150,000 ~~exceeded~~of ~~the~~acquired intangible ~~fair~~assets ~~value~~$3,150,000 was allocated to our eDiets subsidiary and included $1,200,000 of ~~the~~customer ~~net~~relationships, ~~assets~~$1,100,000 of ~~acquired~~domain bynames and $15850,~~907~~000 allocated to trade names. These intangibles are being amortized on a straight-line basis over a 5-year weighted average useful life. In addition,~~825~~ ~~which~~$3,000,000 of the purchase price was ~~recorded~~allocated asto ~~goodwill~~the Company’s asseenontv.com URLs and ~~assigned~~related towebsites ~~our~~which ~~Housewares~~are ~~segment~~not subject to amortization. See note 18.

~~Pro~~The ~~Forma~~purchase ~~Results~~price exceeded the fair value of ~~Operations~~the net assets acquired by $3,214,097 which was recorded as goodwill and assigned to our eCommerce segment. The Company does not expect any of the goodwill to be tax deductible.

The condensed consolidated results of operations for the six months ended June 30, 2014, do not include the revenues or expenses of Ronco prior to March 6, 2014 nor ASTV’s business on or prior to April 2, 2014, the closing date of the reverse acquisition. 17

16AS SEEN ON TV, INC. AND SUBSIDIARIES

ASNOTES ~~SEEN~~TO ONCONDENSED ~~TV,~~CONSOLIDATED ~~INC.~~FINANCIAL STATEMENTS ~~AND SUBSIDIARIES~~(Continued)

~~NOTES~~The TOcondensed ~~CONDENSED~~consolidated results ~~CONSOLIDATED~~of ~~FINANCIAL~~operations ~~STATEMENTS~~for ~~(Continued)~~the three and nine month periods ended September 30, 2014, include post-combination revenues of approximately $155,000 and $344,000, respectively, and net loss attributable to ASTV of approximately $8,316,000 and $8,132,000, respectively.

~~The~~VIE following unaudited pro forma results for the six months periods ended June 30, 2014 and 2013 summarize the condensed consolidated results of operations of the Company, assuming the recognition of Ronco as a Variable Interest Entity and reverse acquisition had occurred on January 1, 2013 and after giving effect to the reverse acquisition adjustments, including amortization of intangibles fair valued during the transactions and transaction related costs: Acquisition

	Six Months Ended June 30,
	2014			2013
Net revenues	$	7,223,669		$	18,441,410
Net income (loss) attributable to As Seen On TV, Inc. stockholders		(4,510,615	)		15,463,691
Net loss per share:
Basic	$	(0.01	)	$	0.03
Diluted	$	(0.01	)	$	0.03
Weighted-average number of common shares outstanding:
Basic		531,815,115			524,242,972
Diluted		531,815,115			526,305,472

Under the provisions of the Participation Agreement dated March 6, 2014, RFL Enterprises LLC, Ronco Funding, LLC and IBI agreed the acquisition of all rights with respect to secured debts held by creditors of Ronco would be transferred to IBI, subject to an initial payment of $2,000,000 and a final payment of $2,350,000 within one year. The initial payment was made in March 2014 and on April 2, 2014, concurrent with the execution of the merger agreement between the Company and Infusion, as discussed above, Infusion assumed all assets and obligations of IBI, including all rights held by IBI under the Participation Agreement. These rights included the ability to designate a majority of the members of Ronco Holdings board of directors, effective with the initial payment of $2,000,000. Accordingly, while Infusion had not yet acquired an equity position, Ronco was deemed a Variable Interest Entity under the provisions of ASC 810 – Consolidation with Infusion being the primary beneficiary. Accordingly, Ronco was consolidated into the Company’s condensed consolidated statement of operations and balance sheet at September 30, 2014. See Note 3.

~~These~~The ~~unaudited~~fair ~~pro~~value ~~forma~~of ~~results have been prepared for comparative purposes only~~ assets and doliabilities ~~not~~consolidated, ~~purport~~as toof beMarch ~~indicative~~6, of2014, the ~~results~~date of ~~operations~~the ~~which~~Participation ~~would~~Agreement, ~~have~~was ~~actually~~determined ~~resulted~~by ~~had~~our ~~the~~management. ~~recognition~~The following oftable ~~Ronco~~summarizes ~~and~~ the ~~reverse~~fair ~~acquisition~~value ~~occurred~~amounts onof ~~January~~assets 1,and ~~2013,~~liabilities ~~nor~~recorded ~~are~~as ~~they indicative~~ of ~~future~~the ~~results~~effective ~~of operations.~~ date:

Note 5. Prepaid expenses and other current assets

Cash and cash equivalents	$	96,432
Accounts receivable		735,442
Inventories		1,517,374
Prepaid expenses and other current assets		130,671
Property and equipment		246,815
Goodwill		15,963,074
Intangible assets		3,700,000
Total assets		22,389,808

Accounts payable		(2,190,090	)
Accrued expenses and other current liabilities		(2,396,078	)
Notes payable - current portion		(10,165,040	)
Notes payable - related party - current portion		(3,016,227	)
Notes payable - Non current portion		(1,922,373	)
Redeemable preferred stock		(2,700,000	)
Total liabilities and temporary equity		(22,389,808	)
Consideration paid		–

~~Prepaid~~Of ~~expenses~~the ~~and~~$3,700,000 ~~other~~of ~~current~~acquired intangible assets ~~consist~~$2,000,000 ofwas ~~the~~allocated ~~following:~~to our patents and $1,700,000 allocated to our trademarks. The patents are being amortized on a straight-line basis over a 9-year weighted average useful life. The trademarks are an indefinite lived intangible asset not subject to amortization.

	June 30,		December 31,
	2014		2013
Advances on inventory	$	988,871	$	—
Debt issuance costs		338,665		—
Prepaid campaign production costs		499,700		—
Prepaid expenses - other		140,456		72,106
Prepaid insurance		369,341		24,720
	$	2,337,033	$	96,826

The purchase price exceeded the fair value of the net assets acquired by $15,963,074 which was recorded as goodwill and assigned to our Home Goods segment.

~~Note~~Pro 6.Forma ~~Property~~Results ~~and~~of ~~Equipment,~~Operations ~~net~~

The ~~following~~condensed ~~table~~consolidated results ~~summarizes~~of ~~our~~operations ~~property~~for ~~and~~the ~~equipment~~nine atmonths ~~June~~ended September 30, 2014 ~~and~~do ~~December~~not 31include the revenues or expenses of Ronco prior to March 6, ~~2013:~~2014 nor ASTV’s business on or prior to April 2, 2014, the closing date of the reverse acquisition.

				Additions
	December 31,			Participation			Reverse			Contribution and Assumption						June 30,
Description	2013			Agreement			Merger			Agreement			Purchases			2014
Equipment	$	—		$	123,089		$	11,660		$	—		$	101,647		$	236,396
Furniture and Fixtures		202,980			55,871			25,617			28,414			29,172			342,054
Leasehold Improvements		15,390			714			6,522			—			—			22,626
Total property and equipment		218,370			179,672			43,798			28,414			130,822			601,076
Accumulated depreciation		(117,638	)		(19,964	)		(4,924	)		(21,754	)		(28,993	)		(193,273	)
Property and equipment, net	$	100,732		$	159,708		$	38,874		$	6,660		$	101,829		$	407,803

17AS SEEN ON TV, INC. AND SUBSIDIARIES

ASNOTES ~~SEEN~~TO ONCONDENSED ~~TV,~~CONSOLIDATED ~~INC.~~FINANCIAL STATEMENTS ~~AND SUBSIDIARIES~~(Continued)

~~NOTES~~The TOfollowing ~~CONDENSED~~unaudited pro ~~CONSOLIDATED~~forma ~~FINANCIAL~~results ~~STATEMENTS~~for ~~(Continued)~~the nine month periods ended September 30, 2014 and 2013 summarize the condensed consolidated results of operations of the Company, assuming the recognition of Ronco as a Variable Interest Entity and reverse acquisition had occurred on January 1, 2013 and after giving effect to the reverse acquisition adjustments, including amortization of intangibles, and transaction related costs:

Depreciation expense for the three and six month periods ended June 30, 2014 was approximately $36,000 and $54,000, respectively. Depreciation expense for the three and six month periods ended June 30, 2013 was approximately $10,000 and $20,000, respectively.

	Nine Months Ended September 30,
	2014			2013
Net revenues	$	11,431,126		$	22,440,793
Net income (loss) attributable to As Seen On TV, Inc. stockholders		(9,029,410	)		18,035,853
Net loss per share
Basic	$	(0.02	)	$	0.03
Diluted	$	(0.02	)	$	0.03
Weighted-average number of common shares outstanding:
Basic		531,815,115			527,187,938
Diluted		531,815,115			528,312,938

~~Note~~These 7.unaudited ~~Intangible~~pro ~~Assets~~forma results have been prepared for comparative purposes only and ~~Goodwill~~do not purport to be indicative of the results of operations which would have actually resulted had the recognition of Ronco and the reverse acquisition occurred on January 1, 2013, nor are they indicative of future results of operations.

~~In connection with the March 6, 2014 Participation Agreement (see~~ Note ~~3) recognizing Ronco as a Variable Interest Entity, we recognized certain identifiable intangibles, other than goodwill, totaling $3,700,000 as well as goodwill totaling $15,907,825~~5. ~~Identifiable~~Prepaid ~~intangibles~~expenses ~~other than goodwill consists of patents of $2,000,000 with a weighted average amortization period of nine years,~~ and ~~trademarks~~other ofcurrent ~~$1,700,000~~assets ~~and goodwill, which are not subject to amortization.~~

InPrepaid ~~addition,~~expenses inand ~~connection with the Merger Agreement completed April 2, 2014 (see Note 4), we recognized certain identifiable intangibles~~ other ~~than~~current ~~goodwill~~assets ~~totaling $3,150,000. Identifiable intangibles other than goodwill consists~~ consist of eDiets’ customer relationships of $1,200,000, eDiets’ domain names of $1,100,000 and eDiets’ trade names of $850,000, which are being amortized over a weighted-average period of five years. In addition, we recognized a fair value of $4,800,000 related to the ~~Company’s asseenontv.com website and goodwill of $514,097, which are not subject to amortization.~~ following:

The fair values assigned to the intangible assets recognized in these transactions were based on estimates of our management and are subject to independent appraisal. The Company expects the allocations will be finalized within twelve months of the effective dates of the transaction.

	September 30,		December 31,
	2014		2013
Advances on inventory	$	328,773	$	–
Prepaid campaign production costs		463,024		–
Prepaid insurance		266,342		72,106
Debt issuance costs		226,262		–
Prepaid expenses - other		61,755		24,720
Other current assets		23,054		–
	$	1,369,210	$	96,826

~~The~~Note ~~following~~6. ~~table~~Property ~~summarizes~~and ~~our intangible assets at June 30~~Equipment, ~~2014:~~net

			Additions
Intangible Asset	December 31, 2013		Participation Agreement		Reverse Merger		Post Combination		Total		Accumulated Amortization			June 30, 2014
Finite lived intangibles:
Patents	$	—	$	2,000,000	$	—	$	9,500	$	2,009,500	$	(74,074	)	$	1,935,426
Customer relationships		—		—		1,200,000		—		1,200,000		(60,000	)		1,140,000
Domain names		—		—		1,100,000		—		1,100,000		(55,000	)		1,045,000
Trade names		—		—		850,000		—		850,000		(42,500	)		807,500
		—		2,000,000		3,150,000		9,500		5,159,500		(231,574	)		4,927,926
Indefinite lived intangibles:
Trademarks		—		1,700,000		—		—		1,700,000		—			1,700,000
asseenontv.com URL		—		—		4,800,000		—		4,800,000		—			4,800,000
		—		1,700,000		4,800,000		—		6,500,000		—			6,500,000
Intangible, net	$	—	$	3,700,000	$	7,950,000	$	9,500	$	11,659,500	$	(231,574	)	$	11,427,926

The following table summarizes our property and equipment at September 30, 2014 and December 31, 2013:

Of the $16,421,922 of consolidated goodwill, $15,907,825 was recognized in connection with the Participation Agreement and $514,097 was recognized in connection with the reverse merger.

				Additions
Description	December 31, 2013			Participation Agreement			Merger			Contribution Agreement			Purchases			September 30, 2014
Equipment	$	–		$	190,231		$	11,660		$	–		$	162,402		$	364,293
Furniture and Fixtures		202,980			55,871			25,617			28,414			–			312,882
Leashold Improvements		15,390			714			6,521			–			113,328			135,953
Total property and equipment		218,370			246,816			43,798			28,414			275,730			813,128
Accumulated depreciation		(117,638	)		(82,862	)		(9,847	)		(24,372	)		(40,290	)		(275,009	)
Property and equipment, net	$	100,732		$	163,954		$	33,951		$	4,042		$	235,440		$	538,119

18Depreciation expense for the three and nine month periods ended September 30, 2014 was approximately $79,700 and $157,400, respectively. For the three and nine month periods ended September 30, 2013 depreciation expense was approximately $4,300 and $13,000, respectively. Depreciation expense associated with tooling equipment of approximately $82,700 and $54,000 was included within cost of revenues for the three and nine month periods ended September 30, 2014, respectively.

~~AS SEEN ON TV, INC. AND SUBSIDIARIES~~19

~~NOTES~~AS TOSEEN ~~CONDENSED~~ON ~~CONSOLIDATED~~TV, ~~FINANCIAL~~INC. ~~STATEMENTS~~AND ~~(Continued)~~SUBSIDIARIES

ANOTES ~~summary~~TO ofCONDENSED ~~future~~CONSOLIDATED ~~amortization~~FINANCIAL STATEMENTS ~~expense is as follows:~~(Continued)

Year 1	$	853,278
Year 2		853,278
Year 3		853,278
Year 4		853,278
Year 5		695,778
Thereafter		819,036
	$	4,927,926

Note 7. Intangible Assets and Goodwill

In connection with the March 6, 2014 Participation Agreement (see Note 83) recognizing Ronco as a Variable Interest Entity, we recognized certain identifiable intangibles, other than goodwill, totaling $3,700,000 as well as goodwill totaling $15,963,074. ~~Accrued~~Identifiable ~~expenses~~intangibles other than goodwill consists of patents of $2,000,000 with a weighted average amortization period of nine years, and ~~other~~trademarks ~~current~~of ~~liabilities~~$1,700,000, which are not subject to amortization.

~~Accrued~~In ~~expenses~~addition, ~~and~~in connection with the Merger Agreement completed April 2, 2014 (see Note 4), we recognized certain identifiable intangibles other ~~current~~than ~~liabilities~~goodwill. Identifiable ~~consist~~intangibles other than goodwill consists of eDiets’ customer relationships of $1,200,000, eDiets’ domain names of $1,100,000, and eDiets’ trade names of $850,000, which are being amortized over a weighted-average period of five years. In addition, we recognized the Company’s asseenontv.com website of $3,000,000 and goodwill of $3,214,097, both are not subject to amortization. The website was subsequently sold following: the period covered by this report. See note 18.

	June 30,		December 31,
	2014		2013
Accrued compensation	$	432,311	$	281,287
Accrued interest		2,093,741		—
Accrued registration penalty		156,000		—
Accrued royalties		215,101		150,222
Accrued sales returns		239,033		—
Accrued sales taxes		516,426		1,417
Other accrued expenses		131,502		226,769
	$	3,784,114	$	659,695

The fair values assigned to the intangible assets recognized in these transactions were based on estimates of our management.

~~Note~~On 9September 30, 2014, the Company recognized an impairment loss on goodwill and other intangible assets of approximately $19,177,000 and $2,793,000, respectively. ~~Accounts~~The ~~Receivable~~Company ~~Financing~~determined ~~Arrangement~~that significant qualitative conditions existed on September 30, 2014 to warrant an impairment test as of that date, rather than waiting 12 months from the date goodwill was recognized to do an annual test. The following are the conditions that led to that determination:

On· ~~January~~Poor ~~28,~~overall ~~2011, Infusion entered into an accounts receivable sales and financing arrangement that provides for the assignment and sale of certain qualified accounts receivable to a~~ financial ~~institution.~~performance ~~The facility had an initial term~~ of ~~one~~each ~~year~~reporting and provides for cash advances in amounts of 75% of qualified accounts receivable balances assigned up to an amount of $1,000,000. The initial term may be extended in one year periods upon the mutual agreement of the Company and the lender. The lender receives an initial discount of 1.75% of the net realizable value of the qualified receivables for purchased receivables outstanding from 1-30 days. unit

~~Subsequently,~~· ~~the~~The ~~lender~~Company ~~receives~~was ~~an additional 1.0% discount for each 15 day period that the qualified receivable has not been collected. Further, the lender has a secured priority interest~~ in ~~the~~technical ~~accounts~~default ~~receivable~~on ~~that~~Senior ~~they~~Secured ~~finance.~~ Debt

~~This~~· ~~arrangement~~Insufficient ~~does~~working not qualify for sales accounting under current accounting standards and is, therefore, subject to accounting as a financing arrangement wherein we will carry the assigned receivables in our accounts until they are settled and advances that we receive from the lender will be reflected as liabilities. The discounts are classified as interest expense. capital

On· ~~October~~Decreased ~~10,~~share 2012, Infusion amended our accounts receivable and purchase order financing agreement to raise the cash advance rate from 75% to 80% of qualified accounts receivable balances assigned up to an amount of $4,000,000 (up from $1,000,000 previously). The initial discount rate has been lowered from 1.75% to 1.65% for the first 1 – 30 days and from 1% to 0.80% for each subsequent 15 day period. price

~~There~~The ~~was~~Company recognized an impairment loss on goodwill and other intangible assets of approximately $6919,177,000 and $~~474~~2,793,000, ~~outstanding~~respectively ~~under~~for ~~this~~the ~~arrangement~~three and asnine ofmonths ~~June~~ended September 30, 2014. ~~and~~Goodwill ~~December~~was ~~31,~~fully ~~2013,~~impaired ~~respectively.~~and ~~Accounts~~other ~~receivable~~intangible ~~assigned~~assets aswere ofpartially ~~June~~impaired. ~~30,~~See below ~~2014~~table ~~and~~for ~~December~~the ~~31,~~impairment ~~2013~~loss ~~was~~recognized ~~approximately~~on ~~$136,000~~other ~~and~~intangible ~~$920,000, respectively~~assets.

19The following table summarizes our intangible assets at September 30, 2014.

AS SEEN ON TV, INC. AND SUBSIDIARIES

Intangible Asset	December 31, 2013		Participation Agreement		Reverse Merger		Post Combination		Total		Accumulated Amortization			Impairment Loss			Carrying Value
Finite lived intangibles:
Patents	$	–	$	2,000,000	$	–	$	–	$	2,000,000	$	(129,629	)	$	–		$	1,870,371
Customer relationships		–		–		1,200,000		–		1,200,000		(120,000	)		(1,038,415	)		41,585
Domain names		–		–		1,100,000		–		1,100,000		(110,000	)		(990,000	)		–
Trade names		–		–		850,000		–		850,000		(85,000	)		(765,000	)		–
		–		2,000,000		3,150,000		–		5,150,000		(444,629	)		(2,793,415	)		1,911,956
Indefinite lived intangibles:
Trademarks		–		1,700,000		–		–		1,700,000		–			–			1,700,000
asseenontv.com URL		–		–		3,000,000		–		3,000,000		–			–			3,000,000
		–		1,700,000		3,000,000		–		4,700,000		–			–			4,700,000

Intangible, net	$	–	$	3,700,000	$	6,150,000	$	–	$	9,850,000	$	(444,629	)	$	(2,793,415	)	$	6,611,956

~~NOTES~~A TOsummary ~~CONDENSED~~of ~~CONSOLIDATED~~future ~~FINANCIAL~~amortization ~~STATEMENTS~~expense ~~(Continued)~~is as follows:

Note 10. Warrant Liabilities

Year 1	$	222,222
Year 2		222,222
Year 3		222,222
Year 4		222,222
Year 5		222,222
Thereafter		759,261
	$	1,870,371

Warrants acquired in connection with the reverse merger, contain provisions that protect holders from a decline in the issue price of our common stock (or “down-round” provisions) or that contain net settlement provisions. The Company accounts for these warrants as liabilities instead of equity. Down-round provisions reduce the exercise or conversion price of a warrant or convertible instrument if a company either issues equity shares for a price that is lower than the exercise or conversion price of those instruments or issues new warrants or convertible instruments that have a lower exercise or conversion price. Net settlement provisions allow the holder of the warrant to surrender shares underlying the warrant equal to the exercise price as payment of its exercise price, instead of physically exercising the warrant by paying cash. The Company evaluates whether warrants to acquire its common stock contain provisions that protect holders from declines in the stock price or otherwise could result in modification of the exercise price and/or shares to be issued under the respective warrant agreements based on a variable that is not an input to the fair value of a “fixed-for-fixed” option.20

OnAS ~~April~~SEEN 3,ON ~~2014~~TV, ~~the Company issued 30,136,713 warrants with an exercise price of $0~~INC.~~0001~~ inAND ~~connection with the $10,180,000 14% Senior Secured Promissory Note. As the note contained a variable share settlement provision, these warrants are recognized as a liability recorded at fair value.~~SUBSIDIARIES

~~The~~NOTES ~~Company~~TO ~~recognizes~~CONDENSED ~~these~~CONSOLIDATED ~~warrants~~FINANCIAL STATEMENTS ~~as liabilities at their fair value and remeasures them at fair value on each reporting date.~~ (Continued)

~~The~~Note ~~assumptions~~8. ~~used~~Accrued inexpenses ~~connection~~and ~~with~~other ~~the~~current ~~valuation~~liabilities ~~of warrants issued were as follows:~~

	June 30,	April 3,	April 2,
	2014	2014	2014
Number of shares underlying the warrants	77,862,807	30,136,713	47,726,094
Exercise price	$0.0001 - $0.80	$0.0001	$0.595 - $0.80
Volatility	111.17% - 199.57%	183.30%	134% - 158%
Risk-free interest rate	0.09% - 1.07%	0.11%	0.28% - 1.73%
Expected dividend yield	0.00%	0.00%	0.00%
Expected warrant life (years)	0.75 - 3.38	1	1.42 – 3.63
Stock price	$0.06	$0.08	$0.09

Accrued expenses and other current liabilities consist of the following:

			Acquisition
	September 30,		December 31,
			Measurement				Increase
	2014		2013
			Date				(Decrease)
Accrued interest	$	2,579,959	$	–
	December 31,		April 2,		Initial		in			June 30,
Accrued sales returns		1,525,160		–
	2013		2014		Measurement		Fair Value			2014
Accrued compensation		570,175		281,287
2011 Unit Offering	$	—	$	1,242,333	$	—	$	(899,807	)	$	342,526
Accrued sales taxes		417,360		1,417
2011 Unit Offering Placement Agent		—		156,367		—		(113,254	)		43,113
Accrued royalties		169,640		150,222
2012 Bridge Warrant		—		20,690		—		(2,988	)		17,702
Accrued registration penalty		156,000		–
2012 Bridge Warrant Placement Agent		—		4,138		—		(598	)		3,540
Accrued property taxes		125,103		26,834
2012 Unit Offering		—		137,178		—		(45,283	)		91,895
Accrued excise taxes		108,140		–
2012 Unit Offering Placement Agent		—		96,481		—		(34,436	)		62,045
Other accrued expenses		152,915		2,253
2013 Merger related notes converted		—		11,608		—		(3,738	)		7,870
Accrued professional fees		54,798		197,682
2014 Senior Note Purchase		—		—		2,407,930		(602,737	)		1,805,193
Accrued customs fees		48,002		–
	$	—	$	1,668,795	$	2,407,930	$	(1,702,841	)	$	2,373,884
Deferred lease obligation		45,729		–
	$	5,952,981	$	659,695

~~The~~Note ~~approximate $1,703,000 decrease in fair value of warrants is recognized as a gain in the Other (Income) Expense section of the Condensed Consolidated Statement of Operations~~9. ~~The~~Accounts ~~gain~~Receivable isFinancing ~~also recognized within the Corporate segment’s results of operations.~~Arrangement

20On January 28, 2011, Infusion entered into an accounts receivable sales and financing arrangement that provides for the assignment and sale of certain qualified accounts receivable to a financial institution. The facility had an initial term of one year and provides for cash advances in amounts of 75% of qualified accounts receivable balances assigned up to an amount of $1,000,000. The initial term may be extended in one year periods upon the mutual agreement of the Company and the lender. The lender receives an initial discount of 1.75% of the net realizable value of the qualified receivables for purchased receivables outstanding from 1-30 days.

ASSubsequently, ~~SEEN~~the ONlender receives ~~TV,~~an ~~INC~~additional 1.0% ~~AND~~discount ~~SUBSIDIARIES~~for each 15 day period that the qualified receivable has not been collected. Further, the lender has a secured priority interest in the accounts receivable that they finance.

~~NOTES~~This TOarrangement ~~CONDENSED~~does ~~CONSOLIDATED~~not qualify ~~FINANCIAL~~for ~~STATEMENTS~~sales ~~(Continued)~~accounting under current accounting standards because of the recourse nature of the financed receivables and is, therefore, subject to accounting as a financing arrangement wherein we will carry the assigned receivables in our accounts until they are settled and advances that we receive from the lender will be reflected as liabilities. The discounts are classified as interest expense.

~~Number~~On October 10, 2012, Infusion amended our accounts receivable and purchase order financing agreement to raise the cash advance rate from 75% to 80% of ~~Warrants~~qualified accounts ~~Subject~~receivable balances assigned up to ~~Remeasurement~~an amount of $4,000,000 (up from $1,000,000 previously). The initial discount rate was lowered from 1.75% to 1.65% for the first 1 – 30 days and from 1% to 0.80% for each subsequent 15 day period.

	Number of Warrants
			April 2,
	December 31,		2014		Warrant				June 30,
	2013		Acquisition		Additions		Reductions		2014
2011 Unit Offering		—		33,277,837		—		—		33,277,837
2011 Unit Offering Placement Agent		—		4,726,891		—		—		4,726,891
2012 Bridge Warrant		—		1,137,735		—		—		1,137,735
2012 Bridge Warrant Placement Agent		—		227,546		—		—		227,546
2012 Unit Offering		—		6,300,213		—		—		6,300,213
2012 Unit Offering Placement Agent		—		1,561,544		—		—		1,561,544
2013 Merger related notes converted		—		494,328		—		—		494,328
2014 Senior Note Purchase		—		—		30,136,713		—		30,136,713
		—		47,726,094		30,136,713		—		77,862,807

There was approximately $100 and $474,000 outstanding under this arrangement as of September 30, 2014 and December 31, 2013, respectively. Accounts receivable assigned as of September 30, 2014 and December 31, 2013 was approximately $64,000 and $920,000, respectively.

Note 1110. ~~Related~~Warrant ~~Party~~Liabilities ~~Transactions~~

~~Pursuant~~Warrants toacquired in connection with the reverse merger, contain provisions that protect holders from a ~~Contribution~~decline ~~and~~in ~~Assumption~~the ~~Agreement~~issue ~~entered~~price ~~into~~of onour ~~March~~common ~~31,~~stock ~~2014~~(or ~~between~~“down-round” provisions) ~~Infusion~~or ~~and~~that ~~IBI,~~contain ~~Infusion~~net ~~received~~settlement ~~assets~~provisions. ofThe ~~approximately~~Company ~~$1,014,000,~~accounts ~~assumed~~for ~~$11~~these warrants as liabilities,~~000,000~~ not equity. Down-round provisions reduce the exercise or conversion price of ~~obligations,~~a ~~and~~warrant ~~recognized~~or convertible instrument if a ~~capital~~company ~~contribution~~either issues equity shares for a price that is lower than the exercise or conversion price of ~~approximately~~those ~~$10,181,000~~instruments ~~after~~or ~~all~~issues ~~amounts~~new ~~owed~~warrants byor ~~Infusion~~convertible toinstruments that ~~IBI~~have ~~were~~a ~~extinguished~~lower exercise or conversion price. ~~IBI~~Net ~~was~~settlement ~~Infusion’s~~provisions ~~Parent~~allow ~~prior~~the holder of the warrant to surrender shares underlying the ~~reverse~~warrant ~~merger~~equal ~~and~~to isthe ~~currently~~exercise ~~ASTV’s~~price ~~largest~~as ~~shareholder~~payment ~~with~~of ~~85.2%~~its ~~ownership~~exercise price, instead of ~~outstanding~~physically exercising the warrant by paying cash. The Company evaluates whether warrants to acquire its common stock. Acontain ~~summary~~provisions that protect holders from declines in the stock price or otherwise could result in modification of the ~~assets~~exercise ~~contributed~~price and/or ~~liabilities~~shares ~~assumed~~to ~~follows:~~be issued under the respective warrant agreements based on a variable that is not an input to the fair value of a “fixed-for-fixed” option.

Cash	$	31,161
Note receivable		711,220
Interest receivable		259,584
Property and equipment, net		6,660
Deposits		5,392
Total IBI assets contributed to Infusion		1,014,017
Note payable		(11,000,000	)
Total liabilities assumed		(11,000,000	)
Net liabilities assumed by Infusion		(9,985,983	)
Forgiveness of debt		20,167,184
Contribution to capital	$	10,181,201

~~Shadron~~AS ~~Stastney,~~SEEN anON ~~officer and member of our board of directors~~TV, ~~is a member in and chief operating officer of Vicis Capital, LLC, the investment advisor to Vicis Capital Master Fund~~INC. ~~Vicis~~AND ~~Capital Master Fund is the holder of our 6% Senior Secured Debenture. At June 30, 2014, the outstanding balance of the debenture is $11,211,562. See note 12.~~SUBSIDIARIES

~~Ronco~~NOTES isTO ~~indebted~~CONDENSED toCONSOLIDATED ~~CD3,~~FINANCIAL STATEMENTS ~~its sole shareholder, for approximately $3 million~~ (~~Note 12~~Continued)~~. The indebtedness is in the form of a promissory note. In addition, Ronco has an outstanding receivable from CD3 in the amount of $358,954 and contains no payment or interest terms.~~

~~Included~~On ~~within~~April ~~the~~3, ~~assets~~2014, ~~IBI~~the ~~contributed~~Company issued ~~to Infusion~~30,136,713 ~~there~~warrants iswith an ~~18%~~exercise ~~bearing~~price ~~note~~of ~~receivable~~$0.0001 ~~due~~in ~~from~~connection ~~CD3~~ with athe ~~past due outstanding principal amount of approximately~~ $~~711~~10,180,000 ~~with~~14% ~~accrued~~Senior ~~interest~~Secured ~~receivable~~Promissory ~~of approximately $259,000~~Note. As ~~of June 30, 2014,~~ the ~~outstanding~~note ~~principal~~contained ~~amount~~a ofvariable ~~approximately~~share ~~$711,000~~settlement ~~and accrued interest receivable of approximately $292~~provision,~~000~~ isthese ~~included~~warrants inare ~~the~~recognized ~~note~~as ~~receivable~~a ~~related~~liability ~~party~~recorded ~~caption~~at offair ~~the Condensed Consolidated Balance Sheet~~value.

21The Company recognizes these warrants as liabilities at their fair value and remeasures them at fair value on each reporting date.

ASThe ~~SEEN~~assumptions ONused ~~TV,~~in ~~INC.~~connection ~~AND~~with ~~SUBSIDIARIES~~the valuation of warrants issued were as follows:

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	September 30,	April 3,	April 2,
	2014	2014	2014
Number of shares underlying the warrants	77,862,807	30,136,713	47,726,094
Exercise price	$0.0001 - $0.80	$0.0001	$0.595 - $0.80
Volatility	151.64% - 216.02%	183.30%	134% - 158%
Risk-free interest rate	0.03% - 1.78%	0.11%	0.28% - 1.73%
Expected dividend yield	0.00%	0.00%	0.00%
Expected warrant life (years)	0.5 - 3.13	1	1.42 - 3.63
Stock price	$0.06	$0.08	$0.09

Note 12. Notes Payable

			Acquisition				Increase
			Measurement				(Decrease)
	December 31,		Date		Initial		in			September 30,
	2013		April 2, 2014		Measurement		Fair Value			2014
2011 Unit Offering	$	–	$	1,242,333	$	–	$	(329,803	)	$	912,530
2011 Unit Offering Placement Agent		–		156,367		–		(26,748	)		129,619
2012 Bridge Warrant		–		20,690		–		(2,070	)		18,620
2012 Bridge Warrant Placement Agent		–		4,138		–		(414	)		3,724
2012 Unit Offering		–		137,178		–		(25,090	)		112,088
2012 Unit Offering Placement Agent		–		96,481		–		(47,435	)		49,046
2013 Merger related notes converted		–		11,608		–		(2,808	)		8,800
2014 Senior Note Purchase		–		–		2,407,930		(602,740	)		1,805,190
	$	–	$	1,668,795	$	2,407,930	$	(1,037,108	)	$	3,039,617

								Contribution
								and
	December 31,		Participation			Reverse		Assumption										June 30,
	2013		Agreement			Merger		Agreement		Issuances			Accretion		Payments			2014
Current notes payable related party
16% Promissory Note- related party	$	—	$	3,016,228		$	—	$	—	$	—		$	—	$	—		$	3,016,228
Current notes payable - third party
14% Senior Secured Promissory Note		—		—			—		—		10,180,000			—		—			10,180,000
Less: discount on Senior Secured Promissory Note		—		—			—		—		(3,800,847	)		729,080		—			(3,071,767	)
1.5% Secured Promissory Note		—		8,620,000			—		—		—			—		—			8,620,000
18% Promissory Note		—		1,100,000			—		—		—			—		—			1,100,000
18% Promissory Note		—		445,040			—		—		—			—		—			445,040
3.68% to 8.39% Premium financing agreements		—		—			18,426		—		138,139			—		(45,321	)		111,244
0% Promissory note		—		—			—		—		102,500			—		—			102,500
0% Promissory note		—		—			102,060		—		—			—		—			102,060
10% Promissory note		—		—			100,000		—		—			—		—			100,000
0% Promissory note		—		—			10,000		—		—			—		—			10,000
Total third party current notes payable		—		10,165,040			230,486		—		6,619,792			729,080		(45,321	)		17,699,077
Total current notes payable		—		13,181,268			230,486		—		6,619,792			729,080		(45,321	)		20,715,305
Non current notes payable - related party
6% Senior Secured Debenture - related party		—		—			—		11,000,000		211,562			—		—			11,211,562
Non current notes payable - third party
0% contingent promissory note		—		3,770,000			—		—		—			—		—			3,770,000
Less: discount on Contingent Promissory Note		—		(1,847,628	)		—		—		—			118,178		—			(1,729,450	)
0% Promissory note		—		—			25,443		—		—			—		—			25,443
0% Promissory note		—		—			10,000		—		—			—		—			10,000
Total non current third party notes payable		—		1,922,372			35,443		—		—			118,178		—			2,075,993
Total non current notes payable		—		1,922,372			35,443		11,000,000		211,562			118,178		—			13,287,555
Total notes payable	$	—	$	15,103,640		$	265,929	$	11,000,000	$	6,831,354		$	847,258	$	(45,321	)	$	34,002,860

The approximate $1,037,000 decrease in fair value of warrants is recognized as a gain in the Other (Income) Expense section of the condensed consolidated statement of operations. The gain is also recognized within the Corporate segment’s results of operations.

~~The~~Number ~~following is a consolidated schedule~~ of ~~the~~Warrants ~~future~~Subject ~~payments~~to ~~required under notes payable.~~Remeasurement

2015	$	23,787,072
	Number of Warrants
2016		11,247,005
	December 31,		April 2, 2014		Warrant				September 30,
2017		—
	2013		Acquisition		Additions		Reductions		2014
2018		3,770,000
2011 Unit Offering		–		33,277,837		–		–		33,277,837
Thereafter		—
2011 Unit Offering Placement Agent		–		4,726,891		–		–		4,726,891
	$	38,804,077
2012 Bridge Warrant		–		1,137,735		–		–		1,137,735
2012 Bridge Warrant Placement Agent		–		227,546		–		–		227,546
2012 Unit Offering		–		6,300,213		–		–		6,300,213
2012 Unit Offering Placement Agent		–		1,561,544		–		–		1,561,544
2013 Merger related notes converted		–		494,328		–		–		494,328
2014 Senior Note Purchase		–		–		30,136,713		–		30,136,713
		–		47,726,094		30,136,713		–		77,862,807

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~16% Promissory~~ Note –11. Related Party Transactions

OnPursuant ~~January~~to ~~14, 2011, Ronco issued~~ a ~~promissory~~Contribution and ~~note~~Assumption toAgreement ~~CD3~~entered ~~Holdings,~~into ~~Inc.~~on ~~(“CD3~~March ~~Note”)~~31, ~~Ronco’s~~2014 ~~100%~~between ~~shareholder~~Infusion and ~~major creditor~~IBI, inInfusion ~~the~~received ~~amount~~assets of approximately $31,~~000~~014,000~~. The CD3 Note’s interest rate is 16% per annum and is payable quarterly in arrears. The note initially matured on January 14~~, assumed ~~2014. On December 31~~$11, ~~2012~~000,000 ~~the~~of ~~CD3 Note was modified so that beginning January 1~~obligations, ~~2012 no interest shall accrue~~ and ~~any~~recognized ~~accrued~~a ~~and~~capital ~~unpaid~~contribution ~~interest shall be added to principal. The original maturity date~~ of ~~January~~approximately 14$10, ~~2014 was extended to January 14~~181,000 ~~2015.~~after Atall ~~the~~amounts ~~date~~owed ofby Infusion ~~modification, $16,228 of accrued and unpaid interest was added~~ to ~~the~~IBI ~~principal~~were ~~balance~~extinguished. ~~This~~IBI ~~modification~~ was ~~considered~~Infusion’s aParent ~~troubled~~prior ~~debt~~to ~~restructuring.~~the Inreverse ~~accordance~~merger ~~with ASC 470, Debt, no gain was recognized~~ and nois ~~future~~currently ~~interest~~ASTV’s ~~expense~~largest shareholder ~~will~~with be85.2% ~~recognized~~ownership ~~as the total~~ of ~~the~~outstanding ~~future~~common ~~payments~~stock. ~~required~~A ~~under~~summary ~~the~~of ~~modified terms is equal to~~ the ~~carrying~~assets ~~value~~contributed ofand ~~the~~liabilities ~~CD3~~assumed ~~Note.~~ follows:

14% Senior Secured Promissory Note

Cash	$	31,161
Note receivable		711,220
Interest receivable		259,584
Property and equipment, net		6,660
Deposits		5,392
Total IBI assets contributed to Infusion		1,014,017

Note payable		(11,000,000	)
Total liabilities assumed		(11,000,000	)
Net liabilities assumed by Infusion		(9,985,983	)
Forgiveness of debt		20,167,185
Contribution to capital	$	10,181,202

OnPrior ~~April~~to 3June 30, 2014, Shadron ~~Infusion and ASTV entered into a Senior Note Purchase Agreement to obtain debt financing in the amount of $10~~Stastney,~~180,000.~~ Inan ~~connection~~officer ~~with the senior note, ASTV~~ and ~~Infusion~~member ~~granted a security interest in their respective assets by means~~ of ~~executing~~our aboard Security Agreement. The senior note's interest rate is 14% per annum and was paid in advance at the transaction closing. The senior note matures on April 3, 2015, and all outstanding principal becomes payable unless extended for six months subject to approval of ~~both parties. In connection with the senior note sale~~directors, awas ~~warrant constituting 4.99% of the Company’s common stock on~~ a ~~fully~~member ~~diluted~~in ~~basis was issued, which at April 2, 2014 represented approximately 30 million warrants with an exercise price of $0.0001~~ and ~~with~~chief aoperating ~~fair~~officer ~~value~~ of ~~approximately~~Vicis $2Capital,~~408~~ LLC,~~000.~~ ~~The~~the ~~fair~~investment ~~value~~advisor ofto ~~these~~Vicis ~~warrants~~Capital ~~was~~Master ~~recorded as a discount on the debt and a warrant liability~~Fund. ~~Due~~Vicis toCapital ~~the~~Master ~~provision~~Fund ~~requiring~~is the ~~warrant~~holder toof beour ~~maintained at a 4.99~~6% ofSenior ~~fully~~Secured ~~diluted shares this constitutes a variable share settlement provision which requires liability accounting~~Debenture. At InSeptember ~~addition~~30, ~~the senior note was issued with an original issue discount of approximately $1~~2014,~~393,000.~~ ~~The issuance of~~ the ~~warrants~~outstanding ~~and~~balance ~~recognition~~ of the ~~original~~debenture ~~issuance~~is ~~discount resulted in an overall discount on the senior note in the amount of approximately~~ $311,~~800~~211,~~000 which is being accreted to interest expense using the effective interest method over the term of the loan~~562. ~~Debt~~See ~~issuance~~note ~~costs of approximately $441,000 were incurred and paid and are being amortized to interest expense over the term of the loan using the effective interest method~~12. ~~Approximately, $339,000 of these costs are unamortized and are included in prepaid expenses and other current assets.~~

6%Ronco ~~Senior~~is ~~Secured~~indebted ~~Debenture~~to CD3 Holdings, Inc. (CD3), its sole shareholder, for approximately $3 million (See Note 12). The indebtedness is in the form of a promissory note. In addition, Ronco has an outstanding receivable from CD3 of approximately $343,000 and contains no payment or interest terms. The Company determined that receivable was uncollectible as of September 30, 2014, and, therefore, wrote the promissory note off to bad debt expense.

~~Pursuant~~Included towithin athe ~~Contribution~~assets IBI ~~and~~contributed ~~Assumption~~to ~~Agreement~~Infusion, ~~entered~~there ~~into~~is ~~between~~an ~~IBI~~18% ~~and~~bearing ~~Infusion~~note onreceivable ~~March~~due ~~31,~~from ~~2014,~~CD3 ~~Infusion~~with ~~assumed~~ a ~~Senior~~past ~~Secured~~due ~~Debenture~~outstanding ~~dated~~principal ~~March~~amount of 6,approximately ~~2014 totaling~~ $11711,000~~,000.~~ ~~The debenture is secured~~ with ~~the~~accrued ~~assets~~interest receivable of ~~Infusion~~approximately ~~and matures on June 30~~$324, ~~2016~~000. ~~From~~The ~~the~~Company ~~March~~determined ~~31,~~that ~~2014~~this ~~until~~note ~~June~~along with ~~30,~~its ~~2014~~accrued ~~the~~ interest ~~rate~~was isuncollectible 6%as ~~per~~of ~~annum,~~September ~~from July 1~~30, 2014. ~~until June 30~~Consequently, ~~2015~~ the ~~interest~~Company ~~rate~~recorded isa 9%loss ~~per~~within ~~annum, and from July 1, 2015 until June 30, 2016~~ the ~~interest~~other income ~~rate~~(expense) iscaption 12% per annum. Interest accrued on the outstanding principal balance is to be paid on the maturity date, provided that on June 30, 2014 and June 30, 2015 accrued interest is capitalized and added to the outstanding principal of the ~~debenture.~~condensed Atconsolidated ~~June~~statement ~~30, 2014, accrued interest~~ of ~~approximately $212,000 was added to the debenture’s outstanding principal~~operations.

~~1.5% Secured Promissory Note~~ 23

OnAS ~~January~~SEEN ~~14,~~ON ~~2011~~TV, Ronco issued a secured promissory note in the amount of $11,000,000 and issued a $10,000,000 promissory note (“Contingent Promissory Note”) to finance the acquisition of certain of Ronco Acquisition, LLC’s assets pursuant to an asset purchase agreementINC. ~~The~~AND note required interest at 1.5% per annum paid quarterly in arrears and matured on June 14, 2012. Ronco defaulted on the secured note on June 14, 2012 due to non payment. As a result of the default, the interest rate increased to 8%. The collateral for the secured note is substantially all of Ronco’s assets. The outstanding principal balance as of June 30, 2014 is $8,620,000. The contingent promissory note is further discussed below. SUBSIDIARIES

23NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

ASNote ~~SEEN ON TV, INC~~12. ~~AND~~Notes ~~SUBSIDIARIES~~Payable

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31,

Participation

Assumption

September 30,

2013

Agreement

Merger

Agreement

Issuances

Accretion

Payments

Re-Class

2014

Current notes payable related party

16% Promissory Note, maturing on January 14, 2014 - related party

–

3,016,227

–

(16,083

)

–

3,000,144

Current notes payable - third party

–

14% Senior Secured Promissory Note, maturing April 3, 2015

–

10,180,000

–

10,180,000

Less: discount on Senior Secured Promissory Note

–

(3,800,847

)

1,639,973

–

(2,160,874

)

1.5% Secured Promissory Note, maturing on June 14, 2012

–

8,620,000

–

8,620,000

18% Promissory Note, matured on June 30, 2014

–

1,100,000

–

1,100,000

18% Promissory Note, matured on March 14, 2014

–

445,040

–

445,040

3.68% to 8.39% Premium financing agreements

–

18,426

–

138,140

–

(104,035

)

–

52,531

0% Promissory note, maturing October 15, 2014

–

102,500

–

(22,500

)

–

80,000

10% Promissory note, matured June 30, 2013

–

100,000

–

100,000

0% Promissory note, maturing September 15, 2015

–

102,060

–

17,011

119,070

0% Promissory note, maturing April 1, 2015

–

10,000

–

10,000

Total third party current notes payable

–

10,165,040

230,486

–

6,619,793

1,639,973

(126,535

)

–

18,545,767

Total current notes payable

–

13,181,267

230,486

–

6,619,793

1,639,973

(142,618

)

–

21,545,911

Non current notes payable - related party

6% Senior Secured Debenture, maturing June 30, 2016 - related party

–

11,000,000

211,562

–

11,211,562

Non current notes payable - third party

0% contingent promissory note, maturing on December 5, 2017

–

3,770,000

–

3,770,000

Less: discount on Contingent Promissory Note

–

(1,847,628

)

–

218,702

–

(1,628,925

)

0% Promissory note, maturing September 15, 2015

–

25,443

–

(8,432

)

(17,011

)

–

0% Promissory note, maturing April 1, 2016

–

10,000

–

10,000

Total non current third party notes payable

–

1,922,372

35,443

–

218,702

(8,432

)

–

2,151,075

Total non current notes payable

–

1,922,372

35,443

11,000,000

211,562

218,702

(8,432

)

–

13,362,637

Total notes payable

–

15,103,639

265,929

11,000,000

6,831,355

1,858,675

(151,050

)

–

34,908,547

~~Contingent~~The ~~Promissory~~following ~~Note~~is a consolidated schedule of the future payments, based on a period end of September 30, required under notes payable.

The contingent promissory note is non-interest bearing and was issued in a conditional amount not to exceed $10,000,000 with contingent payments. On December 5, 2013, Ronco amended and restated the contingent promissory note’s contingent principal amount from $10,000,000 to $3,770,000 and modified the payment timing to the earlier of December 5, 2017 or the 3 year anniversary of the purchase of the secured note by any third party approved by Ronco from the holder of the secured note. As of December 5, 2013, this obligation became probable and estimable and, therefore, Ronco recorded the contingent promissory note as additional purchase price consideration as it was originally issued in connection with the acquisition of certain of Ronco Acquisition, LLC’s assets. Since the contingent promissory note is a zero interest loan, Ronco imputed interest at the Company’s borrowing rate of 18% and calculated a discount in the amount of approximately $1,925,000. Ronco will accrete this discount to interest expense using the effective interest method.

2015	$	23,706,784
2016		11,221,562
2017		–
2018		3,770,000
Thereafter		–
	$	38,698,346

1816% Promissory ~~Notes~~Note – Related Party

On ~~March~~January 1514, ~~2013~~2011, Ronco issued ~~entered into~~ a promissory note ~~for~~to CD3 (“CD3 Note”), Ronco’s 100% shareholder and major creditor, in the amount of $~~200~~3,000,000. The ~~promissory~~CD3 ~~note'~~Note’s interest rate is 1816% per annum and is payable ~~monthly~~quarterly in arrears. The note initially matured on January 14, 2014. On ~~September~~December 2631, ~~2013~~2012, ~~this~~the ~~promissory~~CD3 ~~note~~Note was ~~amended~~modified toso ~~provide~~that ~~for~~beginning ~~additional~~January ~~loan~~1, ~~proceeds~~2012 ofno ~~$250,000~~interest shall accrue and any accrued and unpaid interest shall be added to principal. The ~~note's~~original ~~principal~~maturity ~~amount~~date of January 14, 2014 was ~~amended~~extended to January 14, 2015. At the date of modification, $~~450~~16,~~000~~228 of accrued and ~~all~~unpaid ~~other~~interest ~~terms~~was ~~and~~added ~~conditions~~to ~~remained~~the ~~unchanged~~principal balance. ~~The~~This ~~note~~modification ~~matured~~was onconsidered a ~~March~~troubled ~~14,~~debt ~~2014~~restructuring. In accordance with anASC ~~outstanding~~470, ~~principal~~Debt, ~~balance~~no ofgain ~~approximately~~was ~~$445,000~~recognized and no future interest expense will be recognized as the total of the future payments required under the modified terms is ~~currently~~equal to the carrying value of the CD3 Note. Subsequent to January 14, 2015, the Company is in default ~~due~~and tothe ~~non~~note ~~payment.~~is still outstanding.

~~On June 30, 2013, Ronco entered into a promissory note for $1,100,000. The promissory note's interest rate is 18~~14% ~~per~~Senior ~~annum~~Secured ~~and~~Promissory isNote ~~payable monthly in arrears. The note matured on June 30, 2014 and is currently in default due to non payment.~~

~~Forbearance~~On April 3, 2014, Infusion and ASTV entered into a Senior Note Purchase Agreement to obtain debt financing in the amount of $10,180,000. In connection with the senior note, ASTV and Infusion granted a security interest in their respective assets by means of executing a Security Agreement. The senior note's interest rate is 14% per annum and was paid in advance at the transaction closing. The senior note matures on April 3, 2015, and all outstanding principal becomes payable unless extended for six months subject to approval of both parties. In connection with the senior note sale, warrants constituting 4.99% of the Company’s common stock on a fully diluted basis was issued, which at April 2, 2014 represented approximately 30 million warrants with an exercise price of $0.0001 and with a fair value of approximately $2,408,000. The fair value of these warrants was recorded as a discount on the debt and a warrant liability. Due to the provision requiring the warrants to be maintained at a 4.99% of fully diluted shares this constitutes a variable share settlement provision which requires liability accounting. In addition, the senior note was issued with an original issue discount of approximately $1,393,000. The issuance of the warrants and recognition of the original issuance discount resulted in an overall residual discount on the senior note in the amount of approximately $3,800,000 which is being accreted to interest expense using the effective interest method over the term of the loan. Debt issuance costs of approximately $441,000 were incurred and paid and are being amortized to interest expense over the term of the loan using the effective interest method. Approximately, $226,262 of these costs are unamortized and are included in prepaid expenses and other current assets. See discussion on the amendment of this note within the Financial Instrument Transaction section of Note 18.

On March 7, 2014, Ronco and certain creditors (“Creditor Parties”) entered into a Forbearance Agreement (“Agreement”) whereby each creditor will forbear from exercising its rights and remedies under the 1.5% Secured Promissory Note for up to 1 year provided Ronco does not default on the forbearance agreement. The occurrence of any one or more of the following events during the forbearance shall constitute a forbearance default: (1) Any representation or warranty of any company under the Agreement shall be false, misleading or incorrect in any material respect; (2) Any person, other than the Creditor Parties, shall at any time exercise for any reason any of its rights or remedies against Ronco or any of Ronco’s assets to the extent that the exercise of such rights or remedies by such person could be reasonably be expected to result in a material adverse effect on Ronco or on the property or assets of Ronco, or on any of the Creditor Parties interests; (3) Failure to comply with convenants of the agreement.24

~~Material~~AS ~~covenants~~SEEN ofON ~~the~~TV, ~~Agreement~~INC. ~~are~~AND ~~as follows:~~SUBSIDIARIES

·NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~Ronco~~6% ~~shall~~Senior ~~use~~Secured ~~its~~Debenture ~~reasonable~~- ~~best~~Related efforts to preserve intact its business organization and business relationships, and to operate its business in the ordinary course and to maintain its books, and records and accounts in accordance with generally accepted accounting principles, consistently applied.Party

·Pursuant to a Contribution and Assumption Agreement entered into between IBI and Infusion on March 31, 2014, Infusion assumed a Senior Secured Debenture dated March 6, 2014 totaling $11,000,000. The debenture is secured with the assets of Infusion and matures on June 30, 2016. From March 31, 2014 until June 30, 2014 the interest rate is 6% per annum, from July 1, 2014 until June 30, 2015 the interest rate is 9% per annum, and from July 1, 2015 until June 30, 2016 the interest rate is 12% per annum. Interest accrued on the outstanding principal balance is to be paid on the maturity date, provided that on June 30, 2014 and June 30, 2015 accrued interest is capitalized and added to the outstanding principal of the debenture. At September 30, 2014, accrued interest of approximately $212,000 has been added to the debenture’s outstanding principal.

~~Ronco~~1.5% ~~shall~~Secured ~~not~~Promissory ~~take~~Note ~~any of the following actions without the prior written consent of Creditor Parties’ agent:~~

On January 14, 2011, Ronco issued a secured promissory note in the amount of $11,000,000 and issued a $10,000,000 promissory note (“Contingent Promissory Note”) to finance the acquisition of certain of Ronco Acquisition, LLC’s assets pursuant to an asset purchase agreement. The note required interest at 1.5% per annum paid quarterly in arrears and matured on June 14, 2012. Ronco defaulted on the secured note on June 14, 2012 due to non payment. As a result of the default, the interest rate increased to 8%. The collateral for the secured note is substantially all of Ronco’s assets. The outstanding principal balance as of September 30, 2014 is $8,620,000. The contingent promissory note is further discussed below.

~~Sell,~~Contingent ~~exchange,~~Promissory ~~lease,~~Note transfer, assign or otherwise dispose of any assets, properties or rights of Ronco, except (i) sales of inventory in arm’s length transactions, (ii) the grant of licenses of any intellectual property, (iii) the sale of obsolete and worn-our equipment, in each cash in the ordinary course of Ronco’s business and consistent with past practice;

b)The contingent promissory note is non-interest bearing and was issued in a conditional amount not to exceed $10,000,000 with contingent payments. On December 5, 2013, Ronco amended and restated the contingent promissory note’s contingent principal amount from $10,000,000 to $3,770,000 and modified the payment timing to the earlier of December 5, 2017 or the 3 year anniversary of the purchase of the secured note by any third party approved by Ronco from the holder of the secured note. As of December 5, 2013, this obligation became probable and estimable and, therefore, Ronco recorded the contingent promissory note as additional purchase price consideration as it was originally issued in connection with the acquisition of certain of Ronco Acquisition, LLC’s assets. Since the contingent promissory note is a zero interest loan, Ronco imputed interest at the Company’s borrowing rate of 18% and calculated a discount in the amount of approximately $1,925,000. Ronco accretes this discount to interest expense using the effective interest method.

~~Assume,~~18% ~~incur~~Promissory orNotes ~~guarantee any indebtedness or modify the terms of any existing indebtedness;~~

c)On March 15, 2013, Ronco entered into a promissory note for $200,000. The promissory note's interest rate is 18% per annum and is payable monthly in arrears. On September 26, 2013, this promissory note was amended to provide for additional loan proceeds of $250,000. The note's principal amount was amended to $450,000 and all other terms and conditions remained unchanged. The note matured on March 14, 2014 with an outstanding principal balance of approximately $445,000 and is currently in default due to non payment.

~~Mortgage~~On June 30, ~~pledge~~2013, orRonco entered ~~subject~~into toa ~~liens~~promissory ~~any~~note ~~assets~~for $1,100,000. ~~properties~~The orpromissory ~~rights~~note's ofinterest ~~Ronco~~rate oris ~~related~~18% toper ~~the~~annum ~~Ronco~~and ~~business;~~is payable monthly in arrears. The note matured on June 30, 2014 and is currently in default due to non payment.

d)Forbearance Agreement

BeOn ~~party~~March 7, 2014, Ronco and certain creditors (“Creditor Parties”) entered into a Forbearance Agreement whereby each creditor will forbear from exercising its rights and remedies under the 1.5% Secured Promissory Note for up to 1 year provided Ronco does not default on the forbearance agreement. The occurrence of any ~~merger,~~one ~~acquisition,~~or ~~consolidation,~~more ~~recapitalization~~of the following events during the forbearance shall constitute a forbearance default: (1) Any representation or warranty of any company under the forbearance agreement shall be false, ~~liquidation~~misleading or incorrect in any material respect; (2) Any person, ~~dissolution~~other than the Creditor Parties, ~~reorganization~~shall at any time exercise for any reason any of its rights or ~~similar~~remedies ~~transaction~~against ~~involving~~Ronco or any of Ronco’s assets to the extent that the exercise of such rights or remedies by such person could be reasonably be expected to result in a material adverse effect on Ronco or on the property or assets of Ronco, or on any of the Creditor Parties interests; (3) Failure to comply with convenants of the agreement.

24Material covenants of the agreement are as follows:

AS· ~~SEEN~~Ronco ONshall TVuse its reasonable best efforts to preserve intact its business organization and business relationships, ~~INC.~~and ~~AND~~to ~~SUBSIDIARIES~~operate its business in the ordinary course and to maintain its books, and records and accounts in accordance with generally accepted accounting principles, consistently applied.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~25

~~Note~~AS ~~13.~~SEEN ~~Commitments~~ON ~~and~~TV, ~~Contingencies~~INC. AND SUBSIDIARIES

~~Lease~~NOTES ~~Agreements~~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~The~~· ~~Company,~~Ronco asshall ~~lessee,~~not ~~has~~take ~~entered~~any ~~into~~of ~~various~~the ~~operating~~following ~~lease~~actions ~~agreements~~without ~~for~~the ~~office~~prior ~~and~~written ~~warehouse~~consent ~~space.~~of ~~Future~~Creditor ~~minimum~~Parties’ ~~gross rental payments relating to these lease agreements are as follows~~agent:

Year 1	$	174,000
Year 2		140,000
Year 3		88,000
Year 4		71,000
Year 5		6,000
Thereafter		—
	$	479,000

Sell, exchange, lease, transfer, assign or otherwise dispose of any assets, properties or rights of Ronco, except (i) sales of inventory in arm’s length transactions, (ii) the grant of licenses of any intellectual property, (iii) the sale of obsolete and worn-out equipment, in each case in the ordinary course of Ronco’s business and consistent with past practice;

~~Rent~~b) ~~expense for the three and six month periods ended June 30~~Assume, ~~2014~~incur ~~was~~or ~~approximately~~guarantee ~~$166,000~~any ~~and~~indebtedness ~~$265,000,~~or ~~respectively.~~modify ~~Rent expense for~~ the ~~three~~terms ~~and~~of ~~six~~any ~~month~~existing ~~periods ended June 30, 2013 was approximately $27,000 and $50,000, respectively.~~indebtedness;

~~Registration~~c) ~~Rights~~Mortgage, pledge or subject to liens any assets, properties or rights of Ronco or related to the Ronco business;

~~Under~~d) ~~the~~Be ~~terms~~party ofto aany ~~2010~~merger, ~~private placement~~acquisition, ~~ASTV provided that it would use its best reasonable efforts to cause the related registration statement to become effective within 180 days of the termination date~~consolidation, ~~July 26~~recapitalization, ~~2010~~liquidation, of the offering. ASTV failed to comply with this registration rights provision and is obligated to make pro rata payments to the subscribers under the 2010 private placement in an amount equal to 1% per month of the aggregate amount invested by the subscribers up to a maximum of 6% of the aggregate amount invested by the subscribers. The maximum amount of penalty to which ASTV may be subject is $156dissolution,~~000.~~ ~~The~~reorganization ~~Company~~or ~~has~~similar atransaction ~~related~~involving ~~accrued liability of $156,000 at June 30, 2014~~Ronco.

~~Litigation~~See Financial Instrument Transactions and Extinguishment of Debt sections of Note 18 for discussion on the Company’s subsequent period acquisition of this note and the resulting gain on extinguishment.

~~From~~Note ~~time~~13. toCommitments ~~time, we are periodically a party to or otherwise involved in legal proceedings arising in the normal~~ and ~~ordinary~~Contingencies course of business. As of the date of this report, except as otherwise disclosed, we are not aware of any proceeding, threatened or pending, against us which, if determined adversely, would have a material effect on our business, results of operations, cash flows or financial position.

AtLease ~~June~~Agreements 30, 2014, there was a lawsuit pending against Ronco relating to a claim for breach of contract arising from the failure of Ronco to pay for goods tendered. The amount sought in the lawsuit was approximately $258,000. However, Ronco has asserted a counterclaim for fraud and a claim under the Texas Deceptive Trade Practices Act, alleging, in part, that the goods provided were not in good or sellable condition and, as such, no money is owed to plaintiff for the alleged damages sought for breach of contract. Ronco settled the lawsuit for $70,000 on July 17, 2014.

~~Sales~~The ~~Tax~~Company, as lessee, has entered into various operating lease agreements for office and warehouse space. Future minimum gross rental payments relating to these lease agreements subsequent to September 30, 2014 are as follows:

Included in Ronco’s accrued sales taxes are sales taxes collected from customers that have not yet been remitted to taxing authorities. This accrual as of June 30, 2014 includes estimates for interest and penalties for non-payments. Accrued sales taxes at June 30, 2014 and December 31, 2013 are approximately $383,000 and are included in “Accrued Expenses and Other Current Liabilities” in our Condensed Consolidated Balance Sheets.

Year 1	$	367,460
Year 2		404,199
Year 3		154,600
Year 4		22,750
Thereafter		–
	$	949,009

25Rent expense for the three and nine month periods ended September 30, 2014 was approximately $100,000 and $350,000, respectively. Rent expense for the three and nine month periods ended September 30, 2013 was approximately $186,000 and $57,000, respectively.

ASRegistration ~~SEEN~~Rights ~~ON TV, INC. AND SUBSIDIARIES~~

~~NOTES~~Under TOthe ~~CONDENSED~~terms ~~CONSOLIDATED~~of ~~FINANCIAL~~a ~~STATEMENTS~~2010 private ~~(Continued)~~placement, ASTV provided that it would use its best reasonable efforts to cause the related registration statement to become effective within 180 days of the termination date, July 26, 2010, of the offering. ASTV failed to comply with this registration rights provision and is obligated to make pro rata payments to the subscribers under the 2010 private placement in an amount equal to 1% per month of the aggregate amount invested by the subscribers up to a maximum of 6% of the aggregate amount invested by the subscribers. The maximum amount of penalty to which ASTV may be subject is $156,000. The Company has a related accrued liability of $156,000 at September 30, 2014.

~~Note 14. Redeemable Preferred Stock~~ Litigation

~~Ronco~~From ~~has~~time ~~200~~to ~~authorized~~time, ~~shares~~we ofare periodically ~~Preferred~~a ~~Stock,~~party ~~$0.0001~~to ~~par~~or ~~value.~~otherwise ~~Ronco~~involved ~~has~~in ~~designated~~legal ~~100~~proceedings ofarising ~~such~~in ~~shares~~the asnormal ~~Series~~and Aordinary ~~Preferred~~course ~~Stock~~of ~~with~~business. aAs ~~stated~~of the ~~value~~date of ~~$27~~this report,~~000~~ ~~per~~except ~~share.~~as Onotherwise ~~January~~disclosed 14below, ~~2011,~~we ~~Ronco~~are ~~issued~~not ~~100~~aware ~~shares~~ of ~~the~~any ~~Series~~proceeding, Athreatened ~~Preferred~~or ~~Stock~~pending, asagainst us ~~part~~which, ofif ~~the~~determined ~~consideration~~adversely, ~~for~~would ~~its~~have ~~purchase~~a ofmaterial ~~certain~~effect ~~assets~~on ofour ~~Ronco~~business, ~~Acquisition~~results of operations, ~~LLC.~~cash flows or financial position.

~~Redemption~~On July 17, 2014, Ronco settled a pending lawsuit relating to a claim for breach of contract arising from the failure of Ronco to pay for goods tendered. The amount sought in the lawsuit was approximately $258,000, and Ronco had asserted various counterclaims. However, Ronco agreed to make an immediate $70,000 settlement payment to avoid potential lengthy and costly litigation.

Ronco had the option to redeem all or part of the outstanding shares of Series A Preferred Stock at any time by paying the holders consideration per share equal to the Stated Value as follows: (1) A cash payment in the amount of $13,500 per share; and (2) the balance by issuing and delivering a non-interest bearing promissory note acceptable to the holders in an amount of $13,500 per share maturing on the first anniversary of the date in which the Series A Preferred Stock was redeemed. In the event Ronco did not redeem the Series A Preferred Stock by January 14, 2013, the holders of the Series A Preferred Stock shall have the right to cause Ronco to redeem all or part of the Series A Preferred Stock then outstanding. The redemption price is payable by Ronco by the issuance and delivery of a non-interest bearing promissory note in the amount of $27,000 per share redeemed, maturing as to 1/3 of the principal amount on the 13th day after the redemption date, as to the next 1/3 of the principal amount 210 days after the redemption date, and as to the balance thereafter 395 days after the redemption date. The holders of the Series A Preferred Stock must provide at least 15 days written notice to Ronco in order to redeem all or a part of the Series A Preferred Stock shares and the holder may exercise their rights on one occasion in any twelve month period. Therefore since none of these conditions occurred during the year ended December 31, 2013 and during the six months ended June 30, 2014 these shares do not reach the level of being considered mandatorily redeemable and are classified as mezzanine. 26

~~Other~~AS ~~material~~SEEN ~~features~~ON ofTV, ~~the~~INC. ~~Series~~AND ~~A Preferred Stock are as follows:~~ SUBSIDIARIES

~~Dividends~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~The~~On ~~holders~~February of26, ~~Series~~2016, AASTV was ~~Preferred~~sued ~~Stock~~for ~~shall~~an bealleged ~~entitled~~breach ~~to payment~~ of ~~dividends~~an onemployment ~~their~~agreement ~~shares~~by atits ~~such~~former ~~time~~CFO, ~~that~~who ~~Ronco~~resigned ~~may~~in ~~declare,~~2014. The ~~order,~~Company ~~pay~~has ~~or make~~ filed a ~~dividend~~motion orto ~~other~~dismiss. ~~distribution~~A onloss ~~shares~~contingency ofin the ~~Common~~amount ~~Stock, or other capital stock~~ of ~~Ronco~~$158,000 inhas ~~such~~been ~~amount~~recognized as ~~equals 10%~~ of ~~the~~September ~~aggregate amount of such dividends or other distributions inclusive of the dividends and/or other distributions paid or made to the holders of Common Stock~~30, ~~other capital stock and/or Series A Preferred Stock with respect to such dividends or other distributions~~2014.

~~Liquidation~~On ~~Preference~~January 5, 2016, ASTV settled an action filed in June 2014 by a former employee and director of the Company without admitting fault, liability or wrongdoing, and agreed to tender $30,000 and 5,000,000 shares of its restricted common stock, in consideration for a full release of the Company and its affiliates from all liability relating to the action and from all other potential future claims. As of January 5, 2016, the Company’s stock was trading for $0.01. A loss contingency in the amount of $80,000 was recognized as of September 30, 2014.

InOn ~~the~~June ~~event~~26, of2015, athe ~~liquidation~~Company ceased oroperations ~~dissolution~~at ~~and~~all ~~winding~~entities upand ofsubsidiaries ~~Ronco,~~other ~~whether~~than ~~voluntary~~As orSeen ~~involuntary~~on TV, ~~the~~Inc. ~~assets~~and of Ronco ~~shall~~Holdings, beInc. From ~~distributed first~~ time-to -time, the ~~holders~~Company ofreceives ~~record~~payment ofdemands ~~the~~and ~~Series~~threatened Alitigation ~~Preferred~~from ~~Stock,~~certain ~~who~~of ~~shall~~its beunsecured ~~entitled~~creditors toat ~~receive~~those ~~ratably~~discontinued insubsidiaries. We ~~full,~~do ~~out~~not ofbelieve ~~the~~any ~~remaining~~liabilities ~~and~~at ~~lawfully~~those ~~available~~discontinued ~~assets~~subsidiaries ofare ~~any~~collectible ~~nature~~due ofto ~~Ronco,~~lack ~~whether~~of ~~such~~ assets, ~~are~~and ~~stated~~we ~~capital~~do ornot ~~surplus,~~believe any anof ~~amount~~those inliabilities ~~cash~~are ~~per~~legally ~~outstanding~~collectible ~~share~~against ofeither ~~Series~~As ASeen ~~Preferred~~On ~~Stock~~TV, ~~equal~~Inc. toor ~~its~~Ronco ~~Stated~~Holdings, ~~Value~~Inc.

~~Voting~~Sales ~~Rights~~ Tax

~~The~~Included ~~holders~~in ofaccrued ~~Series~~sales Ataxes ~~Preferred~~are ~~Stock~~sales ~~shall~~taxes collected from customers that have nonot ~~right~~yet been remitted to ~~vote~~taxing onauthorities. ~~any~~This ~~matter~~accrual ~~affecting~~as ~~the~~of ~~Ronco~~September 30, ~~except~~2014 ~~the~~includes estimates ~~affirmative~~for ~~vote~~interest ofand ~~the~~penalties ~~holders~~for ofnon-payments. aAccrued ~~majority~~sales oftaxes ~~the~~at ~~Series~~September, A30, ~~Preferred~~2014 ~~Stock~~are ~~shall~~approximately be$383,000 ~~necessary~~and are ~~for~~included ~~Ronco~~in to“accrued ~~authorize~~expenses orand ~~effect~~other ~~any~~current ofliabilities” ~~the~~in ~~following:~~our condensed consolidated balance sheets.

·Note 14. Redeemable Preferred Stock

~~Any~~Ronco ~~amendment~~has or200 ~~repeal~~authorized shares of ~~any~~Preferred ~~provision~~Stock, of$0.0001 par value. Ronco’s ~~Certificate~~has designated 100 of ~~Incorporation~~such orshares ~~Bylaws,~~as ifSeries ~~such~~A ~~action~~Preferred ~~would~~Stock ~~adversely~~with ~~affect~~a ~~the~~stated value ~~rights~~of $27,000 ~~preferences~~per orshare. ~~privileges~~On January 14, 2011, Ronco issued 100 shares of the Series A Preferred Stock; as part of the consideration for its purchase of certain assets of Ronco Acquisition, LLC.

·Redemption

~~Creation~~Ronco had the option to redeem all or part of the outstanding shares of Series A Preferred Stock at any ~~new~~time ~~class~~by orpaying ~~series~~the holders consideration per share equal to the Stated Value as follows: (1) A cash payment in the amount of ~~stock~~$13,500 orper ~~other~~share; ~~security~~and ~~convertible~~(2) ~~into~~the orbalance ~~exercisable~~by orissuing ~~exchangeable~~and delivering ~~for~~a ~~any~~non-interest ~~class~~bearing orpromissory ~~series~~note acceptable to the holders in an amount of ~~stock~~$13,500 ~~having~~per ~~rights~~share maturing on the first anniversary of the date in which the Series A Preferred Stock was redeemed. In the event Ronco did not redeem the Series A Preferred Stock by January 14, ~~preferences~~2013, the holders of the Series A Preferred Stock shall have the right to cause Ronco to redeem all or ~~privileges~~part of ~~senior~~the Series A Preferred Stock then outstanding. The redemption price is payable by Ronco by the issuance and delivery of a non-interest bearing promissory note in the amount of $27,000 per share redeemed, maturing as to 1/3 of the principal amount on the 13th day after the redemption date, as to the next 1/3 of the principal amount 210 days after the redemption date, and as to the balance thereafter 395 days after the redemption date. The holders of the Series A Preferred Stock must provide at least 15 days written notice to Ronco in order to redeem all or ~~pari~~a ~~passu~~part ~~with~~of the Series A Preferred Stock; shares and the holder may exercise their rights on one occasion in any twelve month period. Therefore since none of these conditions occurred during the year ended December 31, 2013 and during the nine months ended September 30, 2014 these shares do not reach the level of being considered mandatorily redeemable and are classified as mezzanine equity.

·Other material features of the Series A Preferred Stock are as follows:

~~Redemption~~Dividends ~~of any stock or series of Preferred Stock Stock (other than the Series A Preferred Stock Stock), except for the repurchase of stock from employees at fair market value;~~

·The holders of Series A Preferred Stock shall be entitled to payment of dividends on their shares at such time that Ronco may declare, order, pay or make a dividend or other distribution on shares of the Common Stock, or other capital stock of Ronco, in such amount as equals 10% of the aggregate amount of such dividends or other distributions inclusive of the dividends and/or other distributions paid or made to the holders of Common Stock, other capital stock and/or Series A Preferred Stock with respect to such dividends or other distributions. No dividends have been declared.

Payment of a cash dividend or other distribution to holders of any class or series of capital stock unless immediately after giving effect to each such payment the Company shall have a reserve of not less than the full amount of the Redemption Price (as defined below); 27

·AS SEEN ON TV, INC. AND SUBSIDIARIES

~~Any~~NOTES ~~merger~~TO orCONDENSED ~~sale~~CONSOLIDATED ofFINANCIAL STATEMENTS all or substantially all of the assets or other corporate reorganization or acquisition unless the Series A Preferred Stock is redeemed in full in cash for the Stated Value in connection with such transaction; (Continued)

·Liquidation Preference

AIn ~~liquidation~~the event of a liquidation or dissolution ~~unless~~and winding up of Ronco, whether voluntary or involuntary, the assets of Ronco shall be distributed first to the holders of record of the Series A Preferred Stock, who shall be entitled to receive ratably in full, out of the ~~Stated~~remaining ~~Value~~and ~~for~~lawfully available ~~all~~assets of ~~their~~any nature of Ronco, whether such assets are stated capital or surplus, an amount in cash per outstanding ~~shares~~share of Series A Preferred Stock equal to its Stated Value.

26Voting Rights

ASThe ~~SEEN~~holders ONof TVSeries A Preferred Stock shall have no right to vote on any matter affecting Ronco, ~~INC.~~except ~~AND~~the ~~SUBSIDIARIES~~affirmative vote of the holders of a majority of the Series A Preferred Stock shall be necessary for Ronco to authorize or effect any of the following:

~~NOTES~~· TOAny ~~CONDENSED~~amendment ~~CONSOLIDATED~~or ~~FINANCIAL~~repeal ~~STATEMENTS~~of ~~(Continued)~~any provision of Ronco’s Certificate of Incorporation or Bylaws, if such action would adversely affect the rights, preferences or privileges of the Series A Preferred Stock;

~~Transfer~~· ~~Restriction~~Creation of any new class or series of stock, or other security convertible into or exercisable or exchangeable for any class or series of stock, having rights, preferences or privileges senior to or pari passu with the Series A Preferred Stock;

No· ~~transfer~~Redemption orof ~~other~~any ~~disposition~~stock or series of ~~any~~Preferred ~~shares~~Stock of(other than the Series A Preferred Stock), ~~whether~~except ~~voluntary~~for orthe ~~involuntary,~~repurchase ~~shall~~of bestock ~~valid~~from ~~unless~~employees ~~such transfer or disposition is approved by Ronco~~ at ~~the~~fair ~~Company’s~~market ~~sole discretion.~~ value;

As· Payment of ~~June~~a ~~30,~~cash ~~2014~~dividend or other distribution to holders of any class or series of capital stock unless immediately after giving effect to each such payment the ~~Series~~Company Ashall ~~Preferred~~have ~~Stock~~a ~~remains~~reserve ~~outstanding.~~of not less than the full amount of the Redemption Price (as defined below);

~~Note~~· ~~15.~~Any ~~Stockholders’~~merger ~~Equity~~or sale of all or substantially all of the assets or other corporate reorganization or acquisition unless the Series A Preferred Stock is redeemed in full in cash for the Stated Value in connection with such transaction;

~~Capital~~· A liquidation or dissolution unless holders of the Series A Preferred Stock shall receive the Stated Value for all of their outstanding shares.

~~Preferred~~Transfer ~~Stock~~Restriction

WeNo ~~are~~transfer ~~authorized~~or toother ~~issue up to 10,000,000 shares~~ disposition of ~~preferred stock, $.0001 par value per share. Our board of directors is authorized, subject to~~ any ~~limitations~~shares ~~prescribed by law, to provide for the issuance~~ of the ~~shares~~Series ofA ~~preferred~~Preferred ~~stock in series~~Stock, ~~and~~whether byvoluntary ~~filing~~or ~~a certificate pursuant to the applicable law of the state of Florida~~involuntary, toshall ~~establish from time to time the number of shares to~~ be ~~included~~valid inunless ~~each~~ such ~~series,~~transfer ~~and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations~~ or ~~restrictions~~disposition is ~~thereof.~~approved Noby ~~shares~~Ronco ~~of preferred stock were issued or outstanding~~ at ~~June~~the ~~30,~~Company’s ~~2014~~sole ~~and December 31, 2013, respectively~~discretion.

~~Common~~As of September 30, 2014 the Series A Preferred Stock remains outstanding.

AtNote ~~June 30, 2014 and December 31, 2013, we were authorized to issue up to 750,000,000 shares of common stock, $~~15.~~0001~~ ~~par~~Stockholders’ ~~value~~Equity ~~per share.~~

AtCapital ~~June~~Stock 30, 2014 and December 31, 2013, the Company had 531,815,115 and 71,741,250 shares issued and outstanding, respectively. Holders are entitled to one vote for each share of common stock (or its equivalent).

~~Share~~Preferred ~~Issuances~~Stock

OnThe ~~April~~Company 16is authorized to issue up to 10,000,000 ~~2014~~shares of preferred stock, ~~the~~$.0001 ~~Company~~par ~~issued~~value anper ~~aggregate~~share. The board of 7directors is authorized,~~113~~ subject to any limitations prescribed by law,~~375~~ to provide for the issuance of the shares of ~~common~~preferred stock in series, and by filing a certificate pursuant to the ~~seller~~applicable law of ~~Seen~~the Onstate ~~TV,~~of ~~LLC~~Florida, into ~~accordance~~establish ~~with~~from time to time the ~~anti-dilution~~number ~~protection~~of ~~provisions~~shares ~~contained~~to be included in each such series, and to fix the ~~June~~designation, 28powers, ~~2012~~preferences ~~Seen~~and Onrights TVof the shares of each such series and any qualifications, limitations ~~LLC~~or ~~asset~~restrictions ~~purchase~~thereof. ~~agreement~~No shares of preferred stock were issued or outstanding at September 30, 2014 and December 31, 2013, respectively.

~~Warrants~~Common Stock

AAt ~~summary~~September of30, ~~warrants~~2014 ~~outstanding~~and December at31, ~~June~~2013, 30the Company was authorized to issue up to 750,000,000 ~~2014~~shares of common stock, is$.0001 aspar ~~follows:~~value per share.

Warrant Description	Number of Warrants (A)		Exercise Prices	Expiration Dates
2011 Bridge Warrant	8,789,064		$0.64	August 29, 2014
2011 Bridge Warrant Placement Agent	1,165,875		$0.64	August 29, 2014
2011 Unit Offering	33,277,837	(B)	$0.59	October 28, 2016
2011 Unit Offering Placement Agent	4,726,891	(B)	$0.59	October 28, 2016
2010 Other Placements	337,500		$0.64-$1.80	July 26, 2014 - June 22, 2015
2012 Bridge Warrant	1,137,735	(B)	$0.77	September 7, 2015 - September 20, 2015
2012 Bridge Warrant Placement Agent	227,546	(B)	$0.77	September 7, 2015
2012 Unit Offering	6,300,213	(B)	$0.80	November 14, 2015
2012 Unit Offering Placement Agent	1,561,544	(B)	$0.70-$0.80	November 14, 2017
2012 Talent Compensation	4,875,000		$0.01-$2.00	November 19, 2015
2013 Merger related notes converted	494,328	(B)	$0.80	November 14, 2015
2013 eDiets Warrants	427,987		$1.40-$4.74	July 15, 2019 - September 11, 2019
2014 MIG7 Offering	30,136,713	(C)	$0.0001	April 3, 2015(c)
	93,458,233

At September 30, 2014 and December 31, 2013, the Company had 531,815,115 and 71,741,250 shares issued and outstanding, respectively. Holders are entitled to one vote for each share of common stock (or its equivalent).

~~———————~~Share Issuances

~~(A)~~On ~~All~~April ~~warrants~~16, ~~reflect~~2014, ~~post~~the Company issued an aggregate of 7,113,375 shares of common stock to the seller of Seen On TV, LLC, in accordance with the anti-dilution protection ~~and~~provisions ~~repricing~~contained ~~provisions~~in ~~applied.~~the June 28, 2012 Seen On TV, LLC asset purchase agreement.

~~(B) Subject to potential further ant-dilution and repricing adjustment (See Note 10).~~ 28

~~(C)~~AS ~~Subject~~SEEN toON ~~variable~~TV, ~~share~~INC. ~~settlement~~AND ~~and potential extension in connection with Secured Promissory Note (See Note 12)~~ SUBSIDIARIES

27NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

ASWarrants ~~SEEN ON TV, INC. AND SUBSIDIARIES~~

~~NOTES~~A TOsummary ~~CONDENSED~~of ~~CONSOLIDATED~~warrants ~~FINANCIAL~~outstanding ~~STATEMENTS~~at ~~(Continued)~~September 30, 2014, is as follows:

Equity Compensation Plans

Warrant Description	Number of Warrants ^(A)		Exercise Prices	Expiration Dates

2011 Bridge Warrant	8,789,064	^(D)	$0.64	November 30, 2014
2011 Bridge Warrant Placement Agent	1,165,875	^(D)	$0.64	November 30, 2014
2011 Unit Offering	33,277,837	^(B)	$0.59	October 28, 2016
2011 Unit Offering Placement Agent	4,726,891	^(B)	$0.59	October 28, 2016
2011 Other Placements	300,000		$0.64-$1.80	June 22, 2015 - June 22, 2017
2012 Bridge Warrant	1,137,735	^(B)(E)	$0.77	September 7, 2015 - September 20, 2015
2012 Bridge Warrant Placement Agent	227,546	^(B)(E)	$0.77	September 7, 2015
2012 Unit Offering	6,300,213	^(B)(E)	$0.80	November 14, 2015
2012 Unit Offering Placement Agent	1,561,544	^(B)(E)	$0.70-$0.80	November 14, 2017
2012 Talent Compensation	4,875,000		$0.01-$2.00	November 19, 2015
2013 Merger related notes converted	494,328	^(B)	$0.80	November 14, 2015
2013 eDiets Warrants	427,987		$1.40-$4.74	July 15, 2019 - September 11, 2019
2014 MIG7 Offering	30,136,713	^(C)	$0.0001	April 3, 2015^(c)
	93,420,733

~~In May 2010, ASTV adopted its 2010 Executive Equity Incentive Plan and 2010 Non Executive Equity Incentive Plan (collectively, the “2010 Plans”).~~ ———————

~~On September 24, 2012, ASTV’s board of directors adopted the 2013 Equity Compensation Plan~~ (~~the “2013 Plan” and, together with the 2010 Plans, the “Plans”~~A) ~~with~~All ~~terms~~warrants ~~similar~~reflect topost ~~the~~anti-dilution ~~previously~~and ~~adopted~~repricing ~~2010~~provisions ~~Plans~~applied. The 2013 Plan authorized the issuance of up to 3,000,000 options to purchase common stock. The 2013 Plan was modified in March 2013 authorizing the issuance of up to 6,000,000 options. On May 6, 2013, the 2013 Plan was further modified, increasing the shares of common stock reserved for issuance under such plan to 9,000,000 shares available for future grant under all Plans totaled 8,442,500 at June 30, 2014.

~~The~~(B) ~~fair~~Subject ~~value~~to ofpotential anfurther ~~option~~anti-dilution isand ~~estimated~~repricing onadjustment ~~the~~(See ~~date~~Note ~~of grant using the Black Scholes options pricing model using the assumptions established at that time~~10).

~~Stock~~(C) ~~based~~Subject ~~compensation~~to ~~for~~variable ~~the~~share ~~three~~settlement and ~~six~~potential ~~month~~extension periods ending June 30, 2014 was approximately $71,000 and $254,000, respectively. Stock based compensation for the three and six month periods ending June 30, 2013 was approximately $234,000 and $469,000, respectively. Stock based compensation for all periods presented are included in ~~general~~connection ~~and~~with ~~administration~~Secured ~~expenses,~~Promissory inNote ~~the~~(See ~~accompanying~~Note ~~condensed consolidated statements of operations.~~ 12)

Of(D) ~~the~~Expiration ~~stock~~date ~~based~~was ~~compensation~~extended ~~recognized~~from ~~for~~September ~~the three and six month periods ending June~~ 30, 2014, ~~approximately $0 and $182,000 is attributable~~ to ~~IBI~~November stock based awards granted to Infusion’s employees and recognized as a capital contribution. The remaining stock based compensation recognized is attributable to the options acquired in connection with the April 2, 2014 reverse merger. All of the stock based compensation recognized for the three and six month periods ending June 30, ~~2013 is attributable to IBI stock based awards granted to Infusion’s employees.~~ 2014

~~Mr. Ronald C. Pruett Jr.~~ (~~former Chief Executive Officer~~E) ~~elected~~Subsequent to ~~terminate~~September ~~his employment effective May 1~~30, 2014., ~~The~~the ~~termination~~expiration ~~agreement~~date ~~modified certain terms of his employment agreement and provided that Mr. Pruett~~ was ~~entitled~~extended to ~~receive~~June ~~the balance of additional salary due him totaling approximately $72~~30,~~000,~~ ~~which will be paid over a period of approximately three months beginning May 1, 2014~~2016. ~~As part of the termination agreement, Mr. Pruett forfeited his 3,050,000 options.~~

~~Mr.~~Equity ~~Henrik~~Compensation ~~Sandell’s~~Plans (former Chief Operating Officer) employment terminated effective June 1, 2014. Accordingly, Mr. Sandell’s vested options of 250,000 will remain exercisable for 90 days following termination and thereafter all options granted to Mr. Sandell, both vested and unvested, will be cancelled and returned to the option plan for potential future grants.

~~Options~~In May 2010, ASTV adopted its 2010 Executive Equity Incentive Plan and 2010 Non Executive Equity Incentive Plan (collectively, the “2010 Plans”).

~~Information~~On ~~related~~September 24, 2012, ASTV’s board of directors adopted the 2013 Equity Compensation Plan (the “2013 Plan” and, together with the 2010 Plans, the “Plans”) with terms similar to the previously adopted 2010 Plans. The 2013 Plan authorized the issuance of up to 3,000,000 options ~~granted~~to ~~under~~purchase ~~our~~common ~~option~~stock. ~~plans~~The at2013 ~~June~~Plan 30was modified in March 2013 authorizing the issuance of up to 6,000,000 ~~2014~~options. ~~and~~On ~~activity~~May ~~for~~6, 2013, the ~~six~~2013 ~~months~~Plan ~~then~~was ~~ended~~further ismodified, asincreasing ~~follows:~~the shares of common stock reserved for issuance under such plan to 9,000,000 shares available for future grant under all Plans totaled 8,482,500 at September 30, 2014.

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2013		—		$	—		—	$	—
April 2, 2014 Acquisition (A)		7,148,836			1.06		7.46		—
Granted		—			—		—		—
Exercised		—			—		—		—
Forfeited		(3,050,000	)		0.65		—		—
Expired		—			—		—		—
Outstanding at June 30, 2014		4,098,836		$	1.36		4.89	$	—
Exercisable at June 30, 2014		3,288,836		$	1.66		4.61	$	—

The fair value of an option is estimated on the date of grant using the Black Scholes options pricing model using the assumptions established at that time.

~~———————~~Stock based compensation for the three and nine month periods ended September 30, 2014 was approximately $109,000 and $363,000, respectively. Stock based compensation for the three and nine month periods ending September 30, 2013 was approximately $130,000 and $599,000, respectively. Stock based compensation for all periods presented is included in general and administration expenses, in the accompanying condensed consolidated statements of operations.

~~(A)~~Of ~~Options~~the stock based compensation recognized for the three and nine month periods ended September 30, 2014, approximately $0 and $182,000 is attributable to IBI stock based awards granted to Infusion’s employees and recognized as a capital contribution. The remaining stock based compensation recognized is attributable to the options acquired in connection with the April 2, 2014 reverse merger. All of the stock based compensation recognized for the three and nine month periods ended September 30, 2013 is attributable to IBI stock based awards granted to Infusion’s employees.

2829

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~The~~Mr. ~~unamortized~~Ronald ~~grant~~C. ~~date~~Pruett ~~fair~~Jr. (former ~~value~~Chief ofExecutive ~~unvested~~Officer) ~~options~~elected atto ~~June~~terminate 30his employment effective May 1, 2014,. The termination agreement modified certain terms of his employment agreement and provided that Mr. Pruett was entitled to receive the balance of additional salary due him totaling approximately $~~440~~72,000, ~~and~~which ~~will~~was bepaid ~~expensed~~ over a ~~weighted average~~ period of approximately three months beginning May 1, 2014.80 ~~years~~As part of the termination agreement, Mr. Pruett forfeited his 3,050,000 options.

NoMr. ~~tax~~Henrik ~~benefits~~Sandell’s (former ~~are~~Chief ~~attributable~~Operating toOfficer) ~~our~~employment ~~share~~terminated ~~based~~effective ~~compensation~~June ~~expense~~1, ~~recorded~~2014. inAccordingly, ~~the~~Mr. ~~accompanying~~Sandell’s ~~financial~~vested ~~statements~~options of ~~because~~250,000 weremained ~~are~~exercisable ~~in a net operating loss position and a full valuation allowance is maintained~~ for ~~all~~90 ~~net~~days ~~deferred~~following ~~tax~~termination. ~~assets~~Mr. ~~For~~Sandell ~~stock~~never ~~options,~~exercised the ~~amount~~vested ofoptions; ~~the~~and, ~~tax deductions is generally~~ therefore, the ~~excess~~options ofwere ~~the~~returned ~~fair~~to ~~market value of our shares of common stock over~~ the ~~exercise~~option ~~price~~plan offor ~~the~~potential ~~stock~~future ~~options at the date of exercise~~grants.

InOn ~~the~~August ~~event~~20, ~~of any stock split of our outstanding shares of common stock~~2014, ~~the board of directors in its discretion may elect to maintain the stated amount of shares reserved under the Plans without giving effect to such stock split~~Mr. ~~Subject~~Mark toEthier, ~~the~~Chief Operating ~~limitation on the aggregate number of shares issuable under the Plans~~Officer, ~~there~~was ~~is no maximum or minimum number of shares as to which a stock grant or plan option may be~~ granted ~~to any person. Grants under the Plans may either be (i) ISOs~~25,174,888 ~~(ii)~~shares ~~NSOs (iii) awards~~ of ~~our~~ common stock ~~or (iv) rights to make direct purchases of our common stock which may be subject to certain restrictions~~. ~~Any~~The ~~option~~shares ~~granted~~shall ~~under~~vest ~~the~~in ~~Plans~~25% ~~must~~increments ~~provide~~each ~~for an exercise price~~ of ~~not less than 100% of~~ the ~~fair~~initial ~~market~~two years ~~value~~following of the ~~underlying~~initial ~~shares~~effective ~~on the~~ date of ~~grant, but~~ the ~~exercise~~agreement ~~price~~and ofthe ~~any~~final ~~ISO granted to an eligible employee owning more than 10~~50% ofvesting ~~our~~three ~~outstanding~~years ~~common~~following ~~stock must not be less than 110% of fair market value on~~ the initial effective date of the ~~grant~~agreement. The ~~Plans~~grant ~~further~~date ~~provide that with respect to ISOs the aggregate~~ fair ~~market~~ value ofwas ~~the~~$0.06 ~~common~~per ~~stock~~share. ~~underlying~~Stock ~~the~~compensation ~~options~~expense ~~which~~with ~~are~~respect ~~exercisable~~to bythis ~~any~~grant ~~option~~was approximately ~~holder during any calendar year cannot exceed~~ $~~100~~93,000. ~~The~~for ~~term~~the ofthree ~~each plan option~~ and ~~the~~nine ~~manner~~month inperiod ~~which~~ended itSeptember ~~may~~30, be2014. ~~exercised~~The isunrecognized ~~determined~~stock ~~by the board of directors or the~~ compensation ~~committee,~~as ~~provided that no option may be exercisable more than 10 years after the date~~ of ~~its grant and~~September 30, in2014 ~~the~~was ~~case~~approximately ~~of an incentive option granted to an eligible employee owning more than 10% of the common stock~~$1, ~~no more than five years after the date of the grant~~417,000.

~~Note~~On 16January 8, 2015, Mark Ethier resigned as an employee and officer of the Company, but remained as a director. ~~Segment~~The ~~Reporting~~Company agreed to vest and issue to Mr. Ethier 6,000,000 shares of restricted common stock of the Company. See Note 18.

~~Commencing~~Options with the reverse merger on April 2, 2014, the Company organized its business into four operating segments to align its organization based upon the Company’s management structure, products and services offered and funding requirements. The four operating segments that management defined were Power Tools & Cleaning, Housewares, eCommerce and Corporate. Below is a description of each operating segment.

~~Power~~Information ~~Tools~~related &to options ~~Cleaning~~granted under our option plans at September 30, 2014 and activity for the nine months then ended is as follows:

The Power Tools & Cleaning segment focuses primarily on consumer products that leverage direct response and live shopping television channels. It competes in three key product verticals – hardware, home goods, and cleaning – with a portfolio of revenue-generating brands including DualSaw, DualTools™, and DOC Cleaning. Its products are sold globally through a variety of national retailers, online retailers, catalogs, infomercials, and live shopping channels.

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2013		–		$	–		–	$	–
April 2, 2014 Acquisition (A)		7,148,836			1.06		7.46		–
Granted		–			–		–		–
Exercised		–			–		–		–
Forfeited		(3,915,000	)		0.51		–		–
Expired		(28,502	)		11.29		–		–
Outstanding at September 30, 2014		3,205,334		$	1.44		5.06	$	–
Exercisable at September 30, 2014		2,965,334		$	1.58		4.77	$	–

~~Housewares~~ ———————

~~The~~(A) ~~Housewares~~Options ~~segment~~acquired ~~essentially represents the operations of Ronco, the Company’s VIE. This segment is engaged~~ in ~~the~~connection ~~development~~with ~~and~~reverse ~~retail sale of kitchen and home products throughout the United States~~merger. The Company’s product line sells throughout the year through infomercials, internet sales, wholesale distributors and direct retailers. The Ready Grill, Pocket Fisherman, and Chip-Tastic are among the products that this segment markets.

~~eCommerce~~The unamortized grant date fair value of unvested options at September 30, 2014, was approximately $170,000 and will be expensed over a weighted average period of 1.70 years.

~~The~~No ~~eCommerce~~tax ~~segment~~benefits ~~operates~~are attributable to our share based compensation expense recorded in the ~~direct~~accompanying ~~response~~financial ~~market.~~statements ~~This~~because ~~segment~~we ~~markets~~are ~~consumer~~in ~~products~~a ~~for~~net ~~global~~operating ~~distribution~~loss position ~~via~~and ~~Internet~~a ~~using~~full ~~its~~valuation ~~AsSeenOnTV.com~~allowance ~~URL~~is maintained for all net deferred tax assets. ~~This~~For ~~segment~~stock ~~also~~options, ~~generates~~the ~~subscription~~amount ~~based~~of ~~revenue~~the ~~from~~tax deductions ~~its~~is ~~nationwide~~generally ~~weight-loss~~the ~~oriented~~excess ~~digital~~of ~~subscription~~the ~~service~~fair ~~through~~market ~~its~~value ~~eDiets.com~~of ~~URL.~~our shares of common stock over the exercise price of the stock options at the date of exercise.

~~Corporate~~In the event of any stock split of our outstanding shares of common stock, the board of directors in its discretion may elect to maintain the stated amount of shares reserved under the Plans without giving effect to such stock split. Subject to the limitation on the aggregate number of shares issuable under the Plans, there is no maximum or minimum number of shares as to which a stock grant or plan option may be granted to any person. Grants under the Plans may either be (i) ISOs, (ii) NSOs (iii) awards of our common stock or (iv) rights to make direct purchases of our common stock which may be subject to certain restrictions. Any option granted under the Plans must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of grant, but the exercise price of any ISO granted to an eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant. The Plans further provide that with respect to ISOs the aggregate fair market value of the common stock underlying the options which are exercisable by any option holder during any calendar year cannot exceed $100,000. The term of each plan option and the manner in which it may be exercised is determined by the board of directors or the compensation committee, provided that no option may be exercisable more than 10 years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of the common stock, no more than five years after the date of the grant.

The Corporate segment is responsible for corporate governance, compliance, strategic planning, and debt and equity capital transactions. The Corporate segment also provides funding to other operating segments when needed.30

~~The~~AS ~~accounting~~SEEN ~~policies~~ON ofTV, ~~the segments are the same as those described in the summary of significant accounting policies~~INC. ~~The~~AND ~~Company evaluates performance based on operating earnings of the respective business segments.~~ SUBSIDIARIES

29NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

ASNote ~~SEEN ON TV, INC~~16. ~~AND~~Segment ~~SUBSIDIARIES~~Reporting

~~NOTES~~Commencing TOwith ~~CONDENSED~~the ~~CONSOLIDATED~~reverse merger ~~FINANCIAL~~on ~~STATEMENTS~~April ~~(Continued)~~2, 2014, the Company organized its business into four operating segments to align its organization based upon the Company’s management structure, products and services offered and funding requirements. The four operating segments that management defined were Hardware, Home Goods, eCommerce, and Corporate and Other. Below is a description of each operating segment.

~~The~~Hardware consolidated condensed results of operations include the revenues and expenses of Ronco subsequent to March 6, 2014, the date Ronco became a VIE, and ASTV’s business subsequent to April 2, 2014, the closing date of the reverse acquisition.

~~Summarized~~Building ~~financial~~upon ~~information~~Infusion Brands’ ~~concerning~~success with the iconic DualSaw™ and DualTools™ brands, the Company's ~~reportable~~had ~~segments~~developed ~~for~~and marketed additional products including the ~~three~~patented ~~months~~RS1000 ~~ended~~and ~~June~~RS1200 30DualSaw Reciprocating Saws™, ~~2014~~the OS2500 and ~~2013~~OS3000 ~~are~~DualSaw ~~shown~~Oscillating Saw™, and the PS7000 DualTools Polisher/Sander™,. Those products joined the DualSaw PrecisionCS3000™, DualSaw Everyday CS450™, and DualSaw Destroyer CS650™ in the ~~following~~consumer ~~tables~~line, as well as the Professional Series DualSaw CS450s and CS650s. The Company also has additional new hardware, lawn and garden and lithium-ion power tools and hand tool products.

	Three Months Ended June 30, 2014
	Power Tools
	& Cleaning			Housewares			eCommerce			Corporate		Total
Total revenue	$	1,525,104		$	1,671,145		$	189,122		$	—	$	3,385,371
Net (loss) gain	$	(2,178,871	)	$	(1,016,403	)	$	(734,121	)	$	733,749	$	(3,150,916	)
Depreciation and amortization	$	16,208		$	70,529		$	162,423		$	—	$	249,160
Interest expense	$	—		$	345,445		$	—		$	1,029,663	$	1,375,108

Home Goods

	Three Months Ended June 30, 2013
	Power Tools
	& Cleaning			Housewares		eCommerce		Corporate			Total
Total revenue	$	3,813,904		$	—	$	—	$	—		$	3,813,904
Net loss	$	(581,574	)	$	—	$	—	$	(71,211	)	$	(652,785	)
Depreciation and amortization	$	8,689		$	—	$	—	$	—		$	8,689
Interest expense	$	—		$	—	$	—	$	73,242		$	73,242

With the execution of the Participation Agreement and required consolidation of Ronco Holdings, Inc. in the first quarter of 2014, the Company entered the Home Goods space through a well known and respected brand in the direct response industry, Ronco®.

~~Summarized~~In ~~financial~~addition ~~information~~to ~~concerning~~Ronco® in the home goods vertical market, the Company's ~~reportable~~has ~~segments~~also ~~for~~developed the ~~six~~DOC™ ~~months~~cleaning ~~ended~~brand ~~June~~(Your 30Prescription for Clean™), as ~~2014~~well as HomeHero™ (cleaning) and ~~2013~~the ~~are~~Infusion ~~shown~~Collection in(cookware) ~~the~~brands. ~~following~~These ~~tables~~brands exist primarily for live shopping distribution, ~~followed~~where bythey have been and continue to be very successful, but also represent an opportunity for both direct response and retail distribution on a ~~reconciliation~~product-by-product ofbasis. ~~assets~~The Company plans to ~~consolidated~~opportunistically ~~assets~~develop isor assource ~~follows:~~multiple product offerings for these brands going forward.

	Six Months Ended June 30, 2014
	Power Tools
	& Cleaning			Housewares			eCommerce			Corporate		Total
Total revenue	$	4,106,533		$	2,285,290		$	189,124		$	—	$	6,580,947
Net (loss) gain	$	(3,153,258	)	$	(1,141,668	)	$	(734,121	)	$	598,416	$	(4,430,629	)
Depreciation and amortization	$	28,995		$	94,038		$	162,423		$	—	$	285,456
Interest expense	$	—		$	457,956		$	—		$	1,159,878	$	1,617,834
Total assets held at June 30, 2014	$	5,650,111		$	23,245,131		$	9,606,683		$	10,214,375	$	48,716,300

eCommerce

30eCommerce include the monetization of the Company’s eDiets.com and asseenontv.com URLs. Through its eDiets.com asset, management during this time period believed there would be existing and new cross-marketing and synergistic opportunities for development and distribution of health and wellness products, as well as subscription and transactional technology revenues, either alone or with strategic partners. During this time period and until October 28, 2014, the Company also owned the URL asseenontv.com, one of the leading marketplace for products sold in the As Seen On TV category.

ASCorporate ~~SEEN~~and ~~ON TV, INC. AND SUBSIDIARIES~~Other

~~NOTES~~The TOCorporate ~~CONDENSED~~segment ~~CONSOLIDATED~~is responsible ~~FINANCIAL~~for ~~STATEMENTS~~corporate ~~(Continued)~~governance, compliance, strategic planning, and debt and equity capital transactions. The Corporate segment also provides funding to other operating segments when needed.

	Six Months Ended June 30, 2013
	Power Tools
	& Cleaning			Housewares		eCommerce		Corporate			Total
Total revenue	$	9,190,171		$	—	$	—	$	—		$	9,190,171
Net loss	$	(1,061,093	)	$	—	$	—	$	(170,698	)	$	(1,231,791	)
Depreciation and amortization	$	19,940		$	—	$	—	$	—		$	19,940
Interest expense	$	—		$	—	$	—	$	169,269		$	169,269
Total assets held	$	2,295,191		$	—	$	—	$	—		$	2,295,191

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on operating earnings of the respective business segments.

	For the Six Months Ended June 30,
	2014			2013
Reconciliation of Total Assets Held
Total assets for reportable segments	$	48,716,300		$	2,295,191
Elimination of intersegment funding receivables		(7,957,276	)		—
Elimination of intersegment notes receivable		(851,237	)		—
Elimination of intersegment interest receivable		(4,373	)		—
Elimination of intersegment deferred financing fee		(23,750	)		—
Elimination of intersegment accrued fees		(45,401	)
Total consolidated assets	$	39,834,263		$	2,295,191

~~Intersegment Transactions~~ 31

AsAS ofSEEN ~~June~~ON 30TV, ~~2014, the Corporate segment has provided funding to the Power Tools & Cleaning, Housewares, and eCommerce segments in the amount of $7,410,176, $522,100 and $25,000, respectively~~INC. AND SUBSIDIARIES

OnNOTES ~~April~~TO ~~11,~~CONDENSED ~~2014,~~CONSOLIDATED ~~the~~FINANCIAL STATEMENTS ~~Housewares segment and the Corporate segment entered into a Loan and Security Agreement~~ (~~"Loan Agreement"~~Continued). The Housewares segment may borrow up to $3,000,000 for working capital subject to an Accounts Receivable and Inventory Borrowing Base calculation. Borrowings made are subject to an interest rate of Prime plus 4% per annum that shall accrue daily and be payable monthly. The Loan Agreement's maturity date is April 11, 2015. As part of the Agreement, the Housewares segment has secured the payment of all borrowings by granting the Corporate segment a security interest in the assets of the Company. At June 30, 2014, the outstanding balance of the Loan Agreement was $651,237.

OnSummarized ~~May~~financial 5,information concerning ~~2014,~~ the ~~Housewares~~Company's ~~segment~~reportable ~~issued~~segments ~~a promissory note~~ for ~~$200,000 to~~ the ~~Corporate~~three ~~segment.~~months ~~The~~ended ~~note~~September ~~requires~~30, ~~monthly~~2014 ~~interest payments at an interest rate of 14% per annum. All outstanding principal~~ and ~~unpaid~~2013 ~~interest~~are isshown ~~due~~in onthe ~~December 31, 2014~~following tables.

	Three Months Ended September 30, 2014
										Corporate
										&
	Hardware			Home Goods			eCommerce			Other			Total
Total revenue	$	1,115,815		$	2,753,173		$	155,366		$	–		$	4,024,354
Net loss	$	(3,273,373	)	$	(18,242,393	)	$	(6,640,857	)	$	(2,947,680	)	$	(31,104,303	)
Depreciation and amortization	$	17,529		$	107,802		$	162,522		$	–		$	287,853
Interest expense	$	–		$	–		$	–		$	1,035,256		$	(1,035,256	)

AS SEEN ON TV, INC. AND SUBSIDIARIES

	Three Months Ended September 30, 2013
								Corporate
								&
	Hardware			Home Goods		eCommerce		Other			Total
Total revenue	$	765,690		$	–	$	–	$	–		$	765,690
Net loss	$	(1,032,650	)	$	–	$	–	$	(230,527	)	$	(1,263,177	)
Depreciation and amortization	$	8,689		$	–	$	–	$	–		$	8,689
Interest expense	$	–		$	–	$	–	$	238,185		$	238,185

~~NOTES~~Summarized TOfinancial ~~CONDENSED~~information concerning ~~CONSOLIDATED~~the ~~FINANCIAL~~Company's ~~STATEMENTS~~reportable ~~(Continued)~~segments for the nine months ended September 30, 2014 and 2013 are shown in the following tables, followed by a reconciliation of assets to consolidated assets is as follows:

Note 17. Income Taxes

	Nine Months Ended September 30, 2014
										Corporate
										&
	Hardware			Home Goods			eCommerce			Other			Total
Total revenue	$	5,223,319		$	5,038,462		$	343,820		$	–		$	10,605,601
Net loss	$	(5,464,365	)	$	(20,420,109	)	$	(7,328,018	)	$	(2,399,256	)	$	(35,611,748	)
Depreciation and amortization	$	46,524		$	230,532		$	324,844		$	–		$	601,900
Interest expense	$	–		$	(1,456,391	)	$	–		$	2,491,647		$	1,035,256
Total assets held	$	4,890,469		$	8,960,441		$	4,748,416		$	44,738,534		$	63,337,860

As a result of the reverse acquisition and VIE acquisition, it is expected that ASTV’s net operating loss carry forwards of approximately $31,222,000 will be limited under IRC Section 382, and none of the VIE’s historical net operating loss carry forwards of approximately $10,476,000 will be available to offset any future taxable income of the Company’s consolidated tax group. Infusion has approximately $25,217,000 of historical net operating loss carry forwards that are not expected to be limited under IRC Section 382. A full valuation allowance has been established for consolidated net deferred tax assets as it is more likely than not deferred tax assets will not be realized. The Company does not expect to generate taxable income during the year ended December 31, 2014.

	Nine Months Ended September 30, 2013
								Corporate
								&
	Hardware			Home Goods		eCommerce		Other			Total
Total revenue	$	9,955,861		$	–	$	–	$	–		$	9,955,861
Net loss	$	(2,093,739	)	$	–	$	–	$	(231,956	)	$	(2,325,695	)
Depreciation and amortization	$	25,137		$	–	$	–	$	–		$	25,137
Interest expense	$	–		$	–	$	–	$	238,185		$	238,185
Total assets held	$	2,025,334		$	–	$	–	$	–		$	2,025,334

We have no unrecognized income tax benefits as of June 30, 2014 and December 31, 2013. There have been no material changes in unrecognized tax benefits through June 30, 2014. The calendar years 2013, 2012 and 2011 are considered open tax years in U.S. federal and state tax jurisdictions. ASTV received a Form 4564 Information Document Request with respect to the tax year ended March 31, 2013.32

~~Note~~AS ~~18.~~SEEN ~~Subsequent~~ON ~~Events~~TV, INC. AND SUBSIDIARIES

~~Ronco's~~NOTES ~~promissory~~TO ~~note~~CONDENSED ~~issued~~CONSOLIDATED ~~June~~FINANCIAL STATEMENTS ~~30, 2013 in the amount of $1,100,000 that matured on June 30, 2014 is currently outstanding and in default due to nonpayment.~~ (Continued)

Effective July 1, 2014 (the “Effective Date”), the board of directors of the Company appointed Mark Ethier as Chief Operating Officer and President of the Company. In addition, he has been appointed to serve on the board of directors to fill the recent vacancy on the board. On the Effective Date the Company entered into a three year employment agreement, as amended and restated, with Mr. Ethier. The employment agreement provides for a base salary in the amount of $180,000 per annum, although from the Effective Date through October 31, 2014 the rate shall be reduced to $72,000. Mr. Ethier shall also be entitled to an annual bonus as determined by the board of directors. Furthermore, under the employment agreement, Mr. Ethier was granted a number of restricted shares of common stock of the Company equivalent to 4% of outstanding shares of the Company (on a fully diluted basis) on the date of grant, which equals 25,174,888 shares. Subject to Mr. Ethier’s continued employment in good standing, the grant shall vest in 1/4th increments on each of the first two year anniversaries of the Effective Date, and the final 1/2 vesting on the third anniversary of the Effective Date. The employment agreement provides for ordinary executive benefits and perquisites, and imposes standard non-competition and non-solicitation covenants. The employment agreement also contain a provision which provides that for 360 days following any change in control, the termination or resignation of the officer will be treated as a termination without cause. As such, the officer would be entitled to severance compensation for the remaining compensation left for the term of his employment agreement, and all unvested stock, stock equivalents or stock options would immediately vest in full, free of Company-imposed restrictions.

	For the Nine Months Ended September 30,
	2014			2013
Assets
Total assets for reportable segments	$	63,337,860		$	25,137
Elimination of intersegment funding receivables		(46,654,020	)		–
Elimination of intersegment notes receivable		(851,237	)		–
Elimination of intersegment interest receivable		(34,828	)		–
Elimination of intersegment deferred financing fee		(16,250	)		–
Elimination of intersegment accrued fees		(40,062	)		–
Total consolidated assets	$	15,741,463		$	25,137

OnIntersegment ~~July~~Transactions 9, 2014, Mr. Dennis W. Healey, As Seen On TV, Inc.’s Chief Financial Officer and a member of our Board of Directors, tendered his resignation from all positions with our company, to become effective on August 8, 2014. In accordance with provisions of his employment agreement, Mr. Dennis W. Healey will receive $160,000, inclusive of accrued benefits, as severance over the next year in accordance with the Company’s normal payroll schedule.

On August 28, 2014, the Company extended by 1 month the expiration dates of warrants to purchase up to an aggregate of 9,954,939 shares of Common Stock with an exercise price of $0.64 per share (the “Warrants”). As ~~a result~~ of ~~the extension, the expiration date of the Warrants has been changed to~~ September 30, 2014 ~~from August 29~~, ~~2014. The Warrants were originally issued by~~ the ~~Company~~Corporate onsegment ~~August~~has ~~29,~~provided ~~2011~~funding to ~~six purchasers of~~ the ~~Company’s~~Hardware, ~~securities~~Home ~~under a Securities Purchase Agreement dated August 29~~Goods, ~~2011 (the “Offering”)~~ and aeCommerce ~~registered~~segments ~~broker~~in ~~dealer that acted as placement agent for~~ the ~~Offering.~~amounts ~~The~~of ~~modification~~approximately $7,384,000, ~~charge~~$882,000 ~~expected~~and ~~from~~$61,000, ~~this transaction is expected to be immaterial~~respectively.

32On April 11, 2014, the Home Goods segment and the Corporate segment entered into a Loan and Security Agreement ("Loan Agreement"). The Home Goods segment may borrow up to $3,000,000 for working capital subject to an Accounts Receivable and Inventory Borrowing Base calculation. Borrowings made are subject to an interest rate of Prime plus 4% (7.25% at September 30, 2014) per annum that shall accrue daily and be payable monthly. The Loan Agreement's maturity date is April 11, 2015. As part of the Agreement, the Home Goods segment has secured the payment of all borrowings by granting the Corporate segment a security interest in the assets of the Company. At September 30, 2014, the outstanding balance of the Loan Agreement was $651,237.

~~ITEM~~On 2May 5, 2014, the Home Goods segment issued a promissory note for $200,000 to the Corporate segment. The note requires monthly interest payments at an interest rate of 14% per annum. All outstanding principal and unpaid interest is due on December 31, 2014.

~~MANAGEMENT’S~~Note ~~DISCUSSION~~17. ~~AND~~Income ~~ANALYSIS~~Taxes ~~OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~Forward-Looking~~As ~~Statements~~a result of the reverse acquisition and VIE acquisition, it is expected that ASTV’s net operating loss carry forwards of approximately $31,222,000 will be limited under IRC Section 382, and none of the VIE’s historical net operating loss carry forwards of approximately $10,476,000 will be available to offset any future taxable income of the Company’s consolidated tax group. Infusion has approximately $25,217,000 of historical net operating loss carry forwards that are not expected to be limited under IRC Section 382. A full valuation allowance has been established for consolidated net deferred tax assets as it is more likely than not deferred tax assets will not be realized. The Company does not expect to generate taxable income during the year ended December 31, 2014.

~~The~~We ~~following~~have ~~discussion~~no ~~and~~unrecognized income ~~analysis~~tax ofbenefits ~~our~~as ~~financial~~of ~~condition~~September 30, 2014 and ~~results~~December 31, of2013. ~~operations~~There ~~should~~have bebeen ~~read~~no inmaterial ~~conjunction~~changes ~~with~~in ~~our~~unrecognized tax ~~unaudited~~benefits ~~interim~~through ~~condensed~~September ~~consolidated~~30, ~~financial~~2014. ~~statements~~The ~~and~~calendar ~~the~~years ~~notes thereto~~2013, ~~which~~2012 and 2011 are ~~included~~considered open tax years in ~~this~~U.S. ~~report,~~federal asand ~~well~~state astax ~~our~~jurisdictions. ~~audited~~ASTV ~~consolidated~~received ~~financial~~a ~~statements~~Form ~~for~~4564 Information Document Request with respect to the tax year ended ~~December~~ March 31, 2013. On March 2, ~~which~~2015, ~~are~~the ~~included~~IRS incompleted ~~our~~its ~~Form~~review ~~8-K/A~~and ~~Exhibit~~issued ~~99.1,~~an ~~filed~~unfavorable ~~August~~adjustment 29in the amount of approximately $182,000 ~~2014~~related to certain fees that should have been capitalized.

~~This~~Note discussion contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934 (the “Exchange Act”), as amended, regarding business strategies, market potential, future financial performance, our raw material costs, the activities of our competitors and other matters18. ~~Statements~~Subsequent ~~preceded~~Events by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts. The forward-looking statements are not historical facts, but rather are based on expectations, estimates, assumptions and projections about our industry, business and future financial results, based on information available at the time this report is filed with the Securities and Exchange Commission, or with respect to any document incorporated by reference, available as of the time such document was prepared. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including but not limited to: (i) by our reliance on the North American home improvement, repair and new home construction activity levels, (ii) the North American and global economies, (iii) risk associated with entering into potential strategic acquisitions and integrating acquired property, (iv) our ability to remain competitive, innovative and protect our intellectual property, (v) our reliance on key customers and suppliers, (vi) the cost and availability associated with our supply chains and the availability of raw materials, (vii) compliance with tax, environmental and federal, state and international laws and industry regulatory standards and (viii) the risk of doing business internationally. These and other factors are discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, 2014. We undertake no obligation to, and expressly disclaim any such obligation to, update or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise, except as required by law.

~~Overview~~The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the condensed financial statements, other than listed below.

~~References~~Executive ~~to “the Company,” “we,” “our”~~ and ~~“us”~~Director refer to As Seen on TV, Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires. The Company is a leading consumer products company that leverages direct response to satisfy unmet market demands and solve everyday problems. We compete in three key product verticals — power tools & cleaning, housewares and ecommerce — with a wide portfolio of revenue-generating brands including Ronco, DualTool®, DOC Cleaning, and well-known digital brands AsSeenOnTV.com and eDiets.com. With physical offices in North America, Europe and Asia, the Company has worldwide reach and capability. Our products are sold globally through a variety of national retailers, online retailers, catalogs, infomercials, and live shopping channels. Departures

~~As Seen~~ On ~~TV,~~November ~~Inc. (“ASTV”)~~18, ~~previously a direct response and retail marketing company and owner of AsSeenOnTV.com and eDiets.com, effective April 2,~~ 2014, ~~merged~~Mary Mather ~~with~~resigned ~~Infusion~~as Brands, Inc (“Infusion’). Under the terms of the merger agreement, ASTV issued 452,960,490 shares of its common stock to Infusion Brands International, Inc. (“IBI”), parent of Infusion, in exchange for all of the shares of Infusion. Following the transaction, IBI became an ~~85.2%~~officer ~~owner of ASTV’s outstanding common shares~~ and ~~75%~~from ~~owner of~~ the ~~ASTV’s~~board ~~common~~of ~~shares~~directors ~~on a fully diluted basis. The merger agreement further provided IBI with the right to appoint a majority~~ of the Company’s ~~Board of Directors. Accordingly, the transaction was accounted for as a reverse acquisition with Infusion becoming the acquirer for accounting purposes~~ and ~~ASTV~~its ~~becoming the accounting acquiree. Concurrent with the April 2~~subsidiaries, ~~2014~~effective ~~merger~~November ~~agreement~~30, ~~Infusion assumed all assets and obligations of IBI, including all rights held by IBI under a participation agreement between IBI and secured creditors of Ronco Holdings, Inc~~2014. (“Ronco”). Accordingly, while Infusion does not hold an equity position in Ronco, Ronco was deemed a Variable Interest Entity (“VIE”) with Infusion being the primary beneficiary. See Note 3 of Part 1 for specifics of the participation agreement and VIE determination.

33On January 5, 2015, Kevin Richardson, II, and Greg Adams resigned from the board of directors of the Company.

~~With~~On ~~the~~January ~~completion~~8, of2015, ~~the~~pursuant to ~~merger~~a ~~the~~letter ~~Company~~agreement, isMark ~~now~~Ethier aresigned ~~multi-brand~~as ~~consumer~~an ~~products~~employee ~~company~~and ~~with~~officer ~~international~~of ~~distribution~~the ~~that~~Company, ~~leverages~~but ~~direct~~remained ~~response~~as ~~programming~~a todirector. ~~build~~The ~~brand~~Company agreed ~~awareness,~~to ~~creating~~vest ~~demand~~and ~~not~~issue ~~just~~to ~~for~~Mr. ~~our~~Ethier ~~individual products~~6,000,000 ~~but~~shares ~~also~~of ~~for~~restricted ~~our~~common ~~brands.~~stock Weof ~~currently~~the ~~focus~~Company. onAs inof ~~three~~the ~~key~~same ~~product verticals: housewares~~date, ~~through~~the ~~our~~board of ~~Ronco™~~directors ~~and~~reduced ~~Ronco~~its ~~Wonder~~size ~~brands;~~to ~~Power~~two ~~Tools~~seats, and ~~Cleaning,~~appointed ~~through~~Shad ~~our~~Stastney ~~DualTools™~~as ~~and~~interim ~~Doc~~president ~~lines of products;~~ and ~~eCommerce~~chief ~~through~~executive ~~our~~officer. ~~eDiet~~Both Mr. ~~product~~Ethier and ~~subscription~~Mr. ~~based~~Stastney ~~platform~~are ~~and~~the ~~AsSeenOnTV.com.~~Company’s current directors.

~~Housewares~~33

~~With~~AS ~~the~~SEEN ~~acquisition~~ON ~~by Infusion Brands~~TV, ~~Inc~~INC. ofAND its interest in Ronco Holdings, Inc. in the first quarter of 2014, the Company entered the housewares space through a well known and respected brands in direct response. Ronco™ has over its life brought to the market such iconic products as the Ronco Pocket Fisherman™ and Ronco Veg-o-Matic™, and currently offers products including the Showtime Rotisserie™, E-Z Store Rotisserie™, Ronco Chip-tastic™ Microwave Potato Chip Maker, Ronco Pasta Maker, Ronco E-Z Store Dehydrator™ and its newest innovation, the Ronco Ready Grill™. The Company plans to make Ronco™ a cornerstone of its business going forward, with 7 full-length infomercials planned in the next 12 months to support its products and continue to build its brand awareness. Management believes Ronco’s focus on “healthy, delicious cooking made easy” is precisely what a growing segment of the consumer market seeks.SUBSIDIARIES

~~Power~~NOTES ~~Tools~~TO ~~and~~CONDENSED ~~Cleaning~~CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Building upon Infusion Brands’ success with the iconic DualSaw™ and its brand, DualTools™, the Company has developed, and continues to develop, innovative hardware and tool product offerings for both direct response and retail distribution. Current products include the RS1000 and RS1200 DualSaw Reciprocating Saws™, the OS3000 DualSaw Oscillating Saw™, and the PS7000 DualTools Polisher/Sander™, all of which will be supported by direct response advertising. Those products join the DualSaw PrecisionCS3000, DualSaw Everyday CS450, and DualSaw Destroyer CS650 in the consumer line, as well as the Professional Series DualSaw CS450s and CS650s. The Company also has a pipeline of innovative new hardware and tool products, and plans to deliver those products regularly to the market, with a goal of a new product every quarter. The existing innovations have already established DualTools™ as an award-winning innovation driver in the hardware and tools space, and management believes that reputation and brand value will only be expanded and enhanced as the product pipeline is rolled out.Restructuring

InOn ~~addition~~or toabout ~~DualTools™~~December 15, 2014, the Company ~~has~~undertook ~~developed~~a ~~the~~reduction ~~DOC~~in ~~cleaning~~force ~~brand~~that ~~(Your~~eliminated ~~Prescription~~7 ~~for~~full ~~Clean™),~~time asemployees. ~~well~~The asterminated ~~the~~employees ~~HomeHero™~~were ~~brand.~~generally offered ~~These~~full ~~brands~~pay ~~currently~~and ~~exist~~benefits ~~primarily~~ for ~~home~~one ~~shopping~~month ~~distribution,~~from ~~where they have been~~ and ~~continue~~after toDecember be15, ~~very successful~~2014, ~~but~~and ~~also~~the ~~represent~~agreements angenerally ~~opportunity~~contained ~~for~~a ~~both~~full ~~direct~~release of ~~response~~claims ~~and retail distribution on a product-~~by~~-product~~ ~~basis.~~the ~~The~~terminated ~~Company~~employees, ~~plans~~as towell ~~opportunistically~~as ~~develop~~other orstandard ~~acquire additional product offerings for these brands going forward~~provisions.

~~eCommerce~~On or about January 12, 2015, the Company undertook an additional reduction in force that eliminated an additional 9 full time employees. The terminated employees were generally offered full pay and benefits for one month from and after January 12, 2015, and the agreements generally contained a full release of claims by the terminated employees, as well as other standard provisions.

~~Both~~On asFebruary ~~a complement to Ronco™~~19, ~~with its focus on Healthy~~2015, ~~Delicious Cooking Made Easy™, and through~~ the Company ~~eDiets~~entered ~~and~~into ~~AsSeenOnTV.com,~~a ~~assets~~mutual ~~previously~~termination ~~owned by ASTV, management believes there may be existing and new cross-marketing and synergistic opportunities for development and distribution~~ of ~~health~~net ~~and~~lease ~~wellness~~agreement ~~products and subscription transaction based technology revenues, either alone or~~ with ~~strategic~~respect ~~partners.~~to ~~This~~the ~~will~~leased beproperty aat ~~growing~~14044 ~~area~~Icot ofBoulevard, ~~focus~~Clearwater, Florida ~~for the Company in the future~~33760.

~~Strategic~~On ~~Differentiation~~March 3, 2015, the Company and Oak Lawn Marketing International Inc. (“OLM”) executed the Fifth Amendment to the Exclusive Product Rights Agreement dated April 10, 2012 whereby ASTV assumed all rights and obligations under the Exclusive Product Rights Agreements, and OLM became the exclusive worldwide (including North America) distribution of the DualSaw and DualTools brands. OLM separately holds the exclusive rights to the Ronco brand internationally.

~~Management~~On ~~feels~~June ~~the~~26, ~~key~~2015, ~~differentiating factors of~~ the Company’s ceased ~~strategy~~operations ~~vis-à-vis~~at ~~other~~all ~~brands~~entities orand ~~competitors~~subsidiaries inother ~~its~~than ~~space are~~ (i) ~~its~~As ~~opportunistic~~Seen ~~use~~on ~~of direct response television and home shopping distribution to develop~~TV, ~~test and build brands (rather than just one-off product offerings)~~Inc., and (ii) ~~its~~Ronco ~~use~~Holdings, ~~of direct response television in lieu of traditional advertising~~Inc.

~~First,~~Financial ~~management~~Instrument believes that by focusing its product offerings within certain verticals, and under pre-existing brands, the values of those brands will be expanded at no incremental cost versus the advertising already required for one-off product sales. Effectively, by focusing its efforts within certain brands, the Company can both sell products, and build brands, with the same advertising dollars. Additionally, by including home shopping as a key part of its distribution, it is able to cheaply measure and adjust its advertising early in the product process, all the while increasing product awareness while generating sales.Transactions

34Warrant Extension

~~Second,~~On ~~management~~November ~~believes~~30, ~~that its planned use of direct response television is the most cost-effective method of advertising and brand-building in its particular verticals. By using direct response advertising~~2014, the Company ~~offsets,~~extended ~~either partially or fully,~~ the ~~costs~~expiration dates of ~~its~~certain ~~advertising~~previously ~~through~~extended ~~the~~warrants ~~product~~to ~~sales~~purchase ~~generated~~up ~~directly by that advertising, while still creating the product and brand awareness required by or attractive~~ to ~~other~~an ~~distribution~~aggregate ~~outlets,~~of ~~including particularly “brick-and-mortar” retail. Thus~~9, ~~even if the direct response television does not generate a net profit on its own (which in many cases it may)~~954,939 itshares of ~~functions as “subsidized” product support advertising for retail as well, making it~~ the ~~most cost-effective product support advertising available. The~~ Company’s isCommon ~~also~~Stock ~~able~~ to ~~assess,~~December ~~manage and scale direct response advertising much more efficiently than with other methods. The advertising can be run initially on a very limited basis~~31, ~~with immediate sales feedback, and can be adjusted and scaled to improve response until that response is sufficient to justify a higher spend~~2014. ~~And of course, with a very successful direct response television campaign, the campaign itself can be a profit center, in effect earning revenue while advertising.~~

~~Areas~~On December 31, 2014, the Company further extended the expiration dates of ~~Strategic~~certain ~~Emphasis~~previously extended warrants to purchase up to an aggregate of 9,954,939 shares of the Company’s Common Stock to September 1, 2015.

~~Key~~On ~~priorities~~August ~~for~~25, ~~the~~2015, the Company ~~include~~further ~~profitable~~extended ~~revenue~~the ~~growth,~~expiration ~~product~~dates ~~innovation,~~of ~~brand~~certain ~~line~~previously ~~expansion~~extended warrants to purchase up to an aggregate of 9,954,939 shares ~~personnel~~of ~~development~~the ~~and~~Company’s ~~cash~~Common ~~management.~~Stock to December 31, 2015.

~~Revenue~~On ~~Growth~~November 13, 2015, the Company extended the expiration dates of certain warrants to purchase up to an aggregate of 9,227,038 shares of the Company’s Common Stock to June 30, 2016.

~~Consistent~~On December 31, ~~predictable~~2015, ~~and~~the Company ~~profitable~~further ~~top~~extended ~~line~~the ~~revenue~~expiration ~~growth~~dates isof ~~the~~certain ~~highest~~previously ~~priority~~extended ~~for~~warrants to purchase up to an aggregate of 9,954,939 shares of the ~~Company~~company’s Common Stock to September 1, 2016.

~~The~~Note ~~Company anticipates our revenue to be driven by the following key initiatives:~~Amendment

·On March 31, 2015, the Company and MIG7 entered into Amendment No. 2 to the Note Purchase Agreement, and a Restated Senior Secured Promissory Note (the “Amended Note”). In relevant part, these amendments (a) contained a qualified forbearance of the events of default noted in the Notice Letter, (b) resulted in MIG7 lending an additional $1,900,000 of cash proceeds to the Credit Parties; (c) set the outstanding principal amount, including compounded interest through April 27, 2015, to $12,676,193; (d) capitalized all interest as of April 27, 2015, into the new principal balance referenced above, and provided that interest accrued thereafter until April 2, 2016, is payable on the Maturity Date, and accrued interest after April 2, 2016, is to be paid quarterly; and (e) extended the Maturity Date of the Note to April 3, 2017, with an extension until April 3, 2018 if the Company (i) undertakes an offering of common stock within 15 months of the date of Amendment No. 2 that results in net proceeds of at least $14 million, and (ii) at least $10,000,000 of such offering proceeds are applied to the repayment of the Note. The Amendment No. 2 also added additional terms and conditions, including an obligation to issue to MIG7 shares of convertible preferred stock of the Company to MIG7 convertible into 60% of the fully diluted shares of capital stock of the Company, to convert certain warrants of the Company into 9% of the fully diluted capital stock of the Company, and the issue to management 30% of the fully diluted capital stock of the Company. The Amendment No. 2 also added additional events of default, including certain revenue and EBITDA milestones, among others.

By leveraging our direct response programming as a driver to create brand awareness and demand for our brands, we will continue to focus on driving sales through traditional retail and distribution partners. By increasing our retail and distributor revenue, domestically and internationally, and less focused on revenue driven by direct response programming, we create more predictable long-term revenue rather than short-term success of any one direct response product campaign which is typically non-recurring revenue from year to year.34

·AS SEEN ON TV, INC. AND SUBSIDIARIES

ByNOTES ~~identifying~~TO ~~qualified~~CONDENSED ~~international~~CONSOLIDATED ~~distribution~~FINANCIAL STATEMENTS partners that can drive our brands forward in regions where we do not have a corporate sales team deployed. Such partners will need to be devoted to distributing our brand and have deep expertise in the market they serve, as well as the category of our brand.(Continued)

ToOther accomplish the stated goals of establishing and leveraging new retail partners and international distributors, the Company has attended key International Trade Shows and Industry Conferences to date in the previous 12 months:Transactions

·On or about May 14, 2015, the Company, either directly or through its specified wholly-owned subsidiaries, (i) acquired all of the senior secured debt of Ronco Holdings, Inc., in exchange for a payment of $1,400,000 and an obligation to pay up to an additional $900,000 to LV Administrative Services (“LV”), (ii) acquired 100% of the equity of Ronco Holdings, Inc. from CD3 Holdings, Inc.; (iii) caused Ronco Holdings, Inc., to enter into an agreement with P2Binvestor Incorporated, a Colorado corporation (“P2Bi”), whereby P2Bi would provide up to $3,000,000 of senior secured receivables and inventory financing to Ronco Holdings, Inc. (the “P2Bi Credit Line”), (iv) entered into an Accommodation Agreement with MIG7, certain debt holders of the Company and management of the Company whereby MIG7 subordinated its security interests to the P2Bi Credit Line, and whereby those certain debt holders and management agreed to personal guarantees of specified portions of the P2Bi Credit Line, and (v) Ronco Holdings, Inc. terminated its existing senior secured receivables financing arrangement with Farwest.

~~Koelnmesse~~Note ~~International Hardware Show - Cologne, Germany~~Issuances

·Subsequent to September 30, 2014, the Company has sold approximately $1,285,000 in promissory notes to an accredited investor. The notes are payable on demand and accrue interest at 16%.

~~Las~~Extinguishment ~~Vegas~~of ~~International Hardware Show - Las Vegas, Nevada~~Debt

·On January 11, 2015, the Company and Vicis Capital Master Fund, holder of that certain Senior Secured Note dated March 6, 2014 in the original principal amount of $11,000,000 (the “Vicis Note”), entered into a full mutual release of claims, which included the release of the Company’s obligation to pay any amounts due on the Vicis Note, whether principal or interest.

~~Electronic~~With ~~Retailers~~respect ~~Association~~to the third-party debt ~~Hong~~that ~~Kong~~was acquired by the Company in May of 2015, a gain on extinguishment of approximately $13,800,000 was recognized.

·Asset Disposition

~~China~~On ~~Import~~October 28, 2014, the Company received a cash payment of $3,000,000 under an Asset Purchase Agreement dated October 28, 2014 by and ~~Export~~between ~~Fair~~the Company and a third-party ~~Canton~~private purchaser, in consideration of the Company’s sale and transfer of its right, title and interest in the domain name www.asseenontv.com and other related assets, contracts and liabilities. The Company also retained the right to certain revenue share payments through December 31, 2014 not to exceed $200,000 in the aggregate. The Company realized $87,500 of revenue share subsequent to the asset disposition.

·Default on Securities

~~Electronic~~On ~~Retailers~~December ~~Association~~10, -2014, ~~Berlin~~the Company received a letter (the “Notice Letter”) from MIG7 Infusion, LLC (“MIG7”), the purchaser from the Company of a secured note in the original principal amount of $10,000,000 pursuant to a note purchase agreement dated April 3, 2014, as amended May 1, 2014 (the “Note Purchase Agreement”). The Notice Letter stated that MIG7 believed the Company to be in default of certain terms of the Note Purchase Agreement. The Company acknowledged the existence of a number of technical events of default under the Note Purchase Agreement, which having remained outstanding for a period of time greater than 30 days, resulted in an increase in the interest payable under the note from 14% to 18% per annum, and further resulting in the right of MIG7 under the Note Purchase Agreement to declare the entire principal balance under the underlying note to be immediately due and owing.

·Legal Proceedings

~~Shanghai~~On ~~Hardware~~January ~~Conference~~5, –2016 ~~China~~the Company settled an action initially filed in June 2014 by a former employee and director of the Company, in the U.S. District Court for the Eastern District of Pennsylvania based on certain stock options granted to the former employee and other matters relating to the former employee’s dismissal from the Company. The action was filed against the Company and certain of its former executive officers. Without admitting fault, liability or wrongdoing the Company and former employee agreed to settle the action in consideration of the Company tendering $30,000 to the former employee and issuing the former employee 5,000,000 shares of its common stock. In consideration of the cash payment and stock, the former employee released the Company and its affiliates, including but not limited to past and present officers and directors, from all liability relating to the action and from all other potential future claims. A loss contingency in the amount of $80,000 was recognized as of September 30, 2014 in the “Accrued Expenses and Other Current Liabilities” in our Condensed Consolidated Balance Sheets.

~~One or more of the Company’s products are already offered through the following marquis domestic distribution channels, among others:~~35

·AS SEEN ON TV, INC. AND SUBSIDIARIES

~~Target~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

·On February 26, 2016, ASTV was sued for an alleged breach of an employment agreement by its former CFO, who resigned in 2014, in an action filed in the Sixth Judicial Circuit in and for Pinellas County, Florida. The Company has filed a motion to dismiss. A loss contingency in the amount of $158,000 was recognized as of September 30, 2014 in the “Accrued Expenses and Other Current Liabilities” in our Condensed Consolidated Balance Sheets.

~~WalMart~~On April 29th, 2016, the Company received notice (but not official service) that Infusion Brands, Inc., its discontinued subsidiary, may be named as a defendant in Flint v. Infusion Brands, Inc., et al, a purported class action case filed but not yet served in federal court for the Eastern District of Michigan. The suit alleges that the plaintiff and ~~Walmart~~other similarly situated plaintiffs were damaged when Infusion Brands, Inc.~~com~~ ceased to sell replacement parts and accessories for a former product, the DualTools PS7000, a polisher/sander. Lowe’s, Inc. has also sought indemnification from Infusion Brands, Inc. for its costs related to the action. Infusion Brands, Inc., as a discontinued subsidiary, has no assets and no ability to pay any judgment that may be rendered.

·Segments

~~Bed~~Commencing January 1, ~~Bath~~2015, the Company re-organized its business into 5 segments of which 4 are based on sales channel and ~~Beyond~~1 is based upon corporate financing and management, to better reflect the differing requirements and approaches of the sales efforts and buyers in each of those channels. The 5 segments that management defined were (1) Retail, (2) Live Shopping, (3) Direct Response, (4) International/Royalty and (5) Corporate and Other. Below is a description of each segment.

·Retail

~~Sears~~The Retail segment includes those sales efforts to and revenue from buyers who resell our products at retail, both physical (brick and mortar) and through their online portals. This segment includes customers such as Walmart, Bed Bath & Beyond, Target, and Home Depot.

·Live Shopping

~~Kohl’s~~The Live Shopping segment includes those sales efforts to and revenue from customers who operate “Live shopping” channels, both domestic and international. This segment includes customers such as QVC, HSN, Evine, TSC (Canada), and HSE24 (Europe).

·Direct Response

~~HSN (~~The ~~Home~~Direct ~~Shopping~~Response ~~Network)~~segment includes those sales efforts in and revenue from the direct response market. “Direct Response” is the process of advertising directly to customers by purchasing media, whether radio, television or online, then monetizing that media cost by direct sales to such customers prompted by that media, either by telephone or online.

·International/Royalty

~~Lowe~~The International/Royalty segment includes those sales efforts to and revenue from those international (and limited domestic) sales where the Company receives its revenue as a royalty, rather than by selling product directly. The Company’s primary contracts in this area are with Oak Lawn Marketing Incorporated, which distributes the Company’s Ronco brand internationally, and its legacy DualTools and DualSaw brands worldwide.

·Corporate and Other

~~Menard’s~~The Corporate segment is responsible for corporate governance, compliance, strategic planning, and debt and equity capital transactions. The Corporate segment also provides funding to other operating segments when needed.

35On May 2, 2015, the board of directors of the company, acting by unanimous written consent, expanded the size of the board of directors to 3 members, and added Fredrick Schulman to fill newly-created vacant seat. The board also appointed Mr. Schulman as chairman of audit committee, where he will be the only initial member.

Through meetings with buyers and key industry executives around the globe, the Company is also positioning itself to enhance its brands around the world. Such meetings have already translated to sales in new markets and distribution channels such as with our newest channel partners in the following territories, among others:36

·ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Australia~~Forward-Looking /Statements ~~New Zealand~~

·The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the notes thereto, which are included in this report, as well as our audited consolidated financial statements for the year ended December 31, 2013, which are included in our Form 8-K/A Exhibit 99.1, filed August 29, 2014.

~~France~~This discussion contains forward-looking statements that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Act of 1934 (the “Exchange Act”), as amended, regarding business strategies, market potential, future financial performance, our raw material costs, the activities of our competitors and other matters. Statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and not historical facts. The forward-looking statements are not historical facts, but rather are based on expectations, estimates, assumptions and projections about our industry, business and future financial results, based on information available at the time this report is filed with the Securities and Exchange Commission, or with respect to any document incorporated by reference, available as of the time such document was prepared. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including but not limited to: (i) by our reliance on the North American home improvement, repair and new home construction activity levels, (ii) the North American and global economies, (iii) risk associated with entering into potential strategic acquisitions and integrating acquired property, (iv) our ability to remain competitive, innovative and protect our intellectual property, (v) our reliance on key customers and suppliers, (vi) the cost and availability associated with our supply chains and the availability of raw materials, (vii) compliance with tax, environmental and federal, state and international laws and industry regulatory standards and (viii) the risk of doing business internationally. These and other factors are discussed in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended March 31, 2014. We undertake no obligation to, and expressly disclaim any such obligation to, update or clarify any forward-looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or changes to future results over time or otherwise, except as required by law.

·Overview

~~Germany~~References to “the Company,” “we,” “our” and “us” refer to As Seen on TV, Inc. and its consolidated subsidiaries as a whole, unless the context otherwise requires. The Company is a leading consumer products company that leverages direct response to satisfy unmet market demands and solve everyday problems. We compete in three key product vertical markets — Hardware, Home Goods and eCommerce — with a wide portfolio of revenue-generating brands including Ronco, DualTool®, and DOC Cleaning. With physical offices in North America, Europe and Asia, the Company has worldwide reach and capability. Our products are sold globally through a variety of national retailers, online retailers, catalogs, infomercials, and live shopping channels.

·As Seen On TV, Inc. (“ASTV”), previously a direct response and retail marketing company and owner of AsSeenOnTV.com and eDiets.com, effective April 2, 2014, merged with Infusion Brands, Inc (“Infusion’). Under the terms of the merger agreement, ASTV issued 452,960,490 shares of its common stock to Infusion Brands International, Inc. (“IBI”), parent of Infusion, in exchange for all of the shares of Infusion. Following the transaction, IBI became an 85.2% owner of ASTV’s outstanding common shares and 75% owner of the ASTV’s common shares on a fully diluted basis. The merger agreement further provided IBI with the right to appoint a majority of the Company’s Board of Directors. Accordingly, the transaction was accounted for as a reverse acquisition with Infusion becoming the acquirer for accounting purposes and ASTV becoming the accounting acquiree. Concurrent with the April 2, 2014 merger agreement, Infusion assumed all assets and obligations of IBI, including all rights held by IBI under a participation agreement between IBI and secured creditors of Ronco Holdings, Inc. (“Ronco”). From and after that date and until May 31, 2015, Ronco was deemed a Variable Interest Entity (“VIE”) with Infusion being the primary beneficiary. See Note 3 of Part 1 for specifics of the participation agreement and VIE determination. On May 31, 2015, ASTV acquired the remainder of the secured debt of Ronco and 100% of its equity ownership, and therefore from and after May 31, 2015, Ronco is a wholly-owned subsidiary of ASTV.

~~Mexico~~Ronco Holdings, Inc. is the owner of one of the pre-eminent brands in the history of direct response, Ronco®. With over $2 billion of brand revenues since its inception, Ronco® has over its life brought to market such iconic products as the Ronco Pocket Fisherman™, Ronco Veg-o-Matic®, and the Ronco Showtime® Rotisserie and currently offers products including the Showtime Rotisserie®, E-Z Store Rotisserie®, Ronco Chip-tastic® Microwave Potato Chip Maker, Ronco 5 Minute Pasta Wizard™, Ronco Turbo Dehydrator™, , the award-winning, patented innovation, the Ronco Ready Grill™, and its newest innovation, the Ronco Pizza and More™. Prior to the launch of the Ronco Ready Grill™, Ronco had not developed any significant innovation in over 10 years. The launch of the Ronco Ready Grill™, followed by the Ronco Pizza and More™ has reignited the Ronco® brand. This will accelerate with the addition of more innovative new products going forward, as well as the redesign and reimagination of many classic Ronco products consumers have loved from the past. Management has also segmented Ronco into three distinct brands going forward: Ronco® (household appliances), Ronco Wonder™ (gadgets & cleaning) and Ronco Classics™ (classic, beloved original Ronco products including, but not limited to the Veg-O-Matic® and Pocket Fisherman®) This sub-brand strategy allows Management to both introduce a new and broader range of products under the valuable Ronco® brand umbrella, while still delivering on its core Ronco® brand promise of “Healthy, Delicious Cooking Made Easy™”.

·37

~~Japan~~From April 2, 2014 until December 31, 2014, management organized its business into segments based on product verticals. Those product verticals, chosen for their record of success in direct response, were Home Goods, Hardware, eCommerce, and Corporate and Other.

~~All~~Home of the Company's international distribution partners are provided the right to market and co-brand the Company’s products in exchange for acquiring those products directly from the Company as supplier.Goods

~~While~~With the ~~newer~~acquisition of ~~relationships~~its ~~listed~~interest ~~above~~in ~~may~~Ronco ~~not~~Holdings, ~~materially~~Inc. ~~benefit~~in the ~~Company~~first ~~until~~quarter ~~2015, the impact~~ of ~~these~~2014, ~~new distribution partner relationships is critical to~~ the Company’s ~~ability~~entered tothe ~~grow~~Home ~~stable~~Goods ~~and~~space ~~predictable~~through ~~revenue~~one ~~streams in future periods. Moreover, since many~~ of ~~these~~the most ~~channel~~well ~~partners~~known are already selling certain items from our product lines, we believe we will be able to reduce our execution risk since any new products will be launched as a product line extensions to an existing trusted brand, with a built in customer base. In addition, unlike product lines, which can over time experience price pressure both domestically and ~~internationally,~~respected ~~leading~~brands ~~to a reduction~~ in ~~gross~~the ~~margins~~history ~~from prior periods, we believe our pipeline~~ of ~~patent~~direct ~~pending product innovations will increase margins due to the fact that we will have a first to market lead with our newest patent pending innovations~~response, ~~leading to more profitable revenue as we roll out new products under our existing brands~~Ronco®.

~~While~~In ~~the~~addition ~~growth~~to Ronco® ~~prospects~~in ofthe ~~Company-owned~~home orgoods ~~exclusively licensed products appear promising~~vertical, the ~~cost~~Company ofhas ~~developing,~~also ~~marketing~~developed ~~and~~the ~~distributing~~DOC™ ~~new~~cleaning ~~brands~~brand ~~and~~(Your ~~product~~Prescription ~~lines~~for isClean™), as ~~anticipated~~well toas beHomeHero™ ~~significant. While~~(cleaning) ~~less~~and ~~expensive at~~ the ~~outset,~~Infusion ~~growing~~Collection (cookware) brands. ~~organically~~These ~~will~~brands ~~almost~~exist ~~always~~primarily befor ~~inherently~~live ~~higher~~shopping distribution, ~~risk~~where ~~and~~they ~~take~~have ~~more~~been ~~working~~and ~~capital~~continue to ~~launch~~be ~~than~~very ansuccessful, ~~already~~but ~~well-established~~also ~~brand.~~represent ~~Therefore,~~an ~~the~~opportunity ~~Company~~for ~~will~~both ~~continue~~direct toresponse and ~~look~~retail ~~for~~distribution ~~strategic~~on ~~brand~~a ~~acquisitions~~product-by-product orbasis. ~~licensing~~The ~~opportunities~~Company ~~which~~plans ~~could~~to ~~add~~opportunistically ~~accretive~~develop ~~revenue~~or ~~and~~source ~~earnings~~multiple toproduct offerings ~~the~~for ~~Company~~these ~~with~~brands ~~much~~going ~~less execution risk~~forward.

~~Product Innovation and Brand Line Expansion~~ Hardware

~~Innovation~~Building upon Infusion Brands’ success with the iconic DualSaw™ and ~~sourcing~~DualTools™ ofbrands, ~~new~~the Company had developed and marketed additional products including the patented RS1000 and RS1200 DualSaw Reciprocating Saws™, asthe ~~well~~OS2500 asand ~~product~~OS3000 ~~line~~DualSaw ~~extensions~~Oscillating Saw™, ofand ~~current~~the ~~brands~~PS7000 DualTools Polisher/Sander™,. ~~has~~Those ~~been~~products joined the DualSaw PrecisionCS3000™, DualSaw Everyday CS450™, and ~~will~~DualSaw ~~continue~~Destroyer toCS650™ bein ~~critical~~the toconsumer line, as well as the Professional Series DualSaw CS450s and CS650s. The Company’s ~~overall~~also ~~revenue~~has ~~growth~~additional new hardware, lawn and garden and lithium-ion power tool and hand tool products.

In the past several months, the Company has put in place an experienced product development team to oversee the development of existing products, as well as the development or acquisition of new products which fit within our existing brands, and which we believe will be attractive to our distribution channels. By coupling our innovative, internally-developed products with opportunistic acquisitions of other products to be brought to market under our brands, we feel we can more fully exploit our growing relationships with our distributors, and therefore more fully monetize the brand value we are creating. As a result, that will be a growing area of focus for us as well.eCommerce

IneCommerce ~~addition~~includes the tomonetization ~~all~~ of the ~~product~~Company’s ~~innovations~~eDiets.com ~~already~~and ~~scheduled~~asseenontv.com toURLs. beThrough ~~introduced~~its ~~over~~eDiets.com ~~the~~asset, ~~next~~management 6during ~~months,~~this time ~~with~~period ~~the~~believed ~~help~~there ofwould ~~our~~be ~~innovation~~existing ~~partner~~ and ~~shareholder,~~new ~~Nottingham~~cross-~~Spirk,~~marketing and ~~our~~synergistic ~~factory~~opportunities ~~partners~~for indevelopment ~~China~~and distribution of health and wellness products, ~~the~~as ~~Company~~well ~~has~~as ~~been~~subscription ~~hard~~and attransactional ~~work~~technology ~~designing~~revenues, ~~engineering~~either alone or with strategic partners. During this time period and ~~producing~~until October 28, 2014, the ~~next~~Company ~~generation~~also owned the URL asseenontv.com, one of ~~Ronco™~~the ~~and~~leading marketplace ~~DualTools™~~for products, tosold bein ~~introduced~~the ~~under~~As ~~those~~Seen ~~brands~~On TV category. ~~Moreover~~On October 28, ~~the~~2014, ~~Company~~that ~~has~~URL ~~invented~~and orassociated ~~sourced~~assets were sold to a third-party ~~number~~private ofcompany. ~~newly~~Prior ~~patented~~to ~~and~~the ~~pending~~sale, ~~products~~this inURL ~~other~~generated ~~categories~~royalty revenue.

~~Personnel~~Corporate ~~Development~~and Other

InThe ~~addition~~Corporate segment tois ~~the~~responsible ~~experienced~~for ~~product~~corporate ~~management~~governance, ~~team put in place as noted above~~compliance, ~~the~~strategic ~~Company plans to make the addition and development of key personnel a focus area for the foreseeable future. The Company has recently added key members to its executive and management teams~~planning, and ~~has~~debt ~~also reassigned~~ and ~~promoted~~equity ~~other~~capital ~~key employees and executives~~transactions. ~~Particular areas of focus for personnel addition and development are sales, product development and distribution.~~ The Corporate ~~Company~~segment ~~feels,~~also ~~with~~provides ~~its~~funding ~~newly-augmented team and certain key additions, it is very well-positioned~~ to ~~execute~~other ~~its~~operating ~~business~~segments ~~plan~~when ~~as laid out here~~needed.

~~Cash~~Commencing ~~Management~~January 1, 2015, the Company re-organized its business into 5 segments of which 4 are based on sales channel and 1 is based upon corporate financing and management, to better reflect the differing requirements and approaches of the sales efforts and buyers in each of those channels. The 5 segments that management defined were (1) Retail, (2) Live Shopping, (3) Direct Response, (4) International/Royalty and (5) Corporate and Other. Below is a description of each segment.

~~The~~Retail Company is intent on wisely using the cash resources available to us. We are keenly aware of the risks inherent with developing and bringing new products to market, and we focus on minimizing those costs for products which may ultimately prove unsuccessful, while still allowing us to maximize the profitability for those products which ultimately prove successful. We utilize accounts receivable, purchase order financing to finance our retail and live shopping sales and media funding to fuel our direct response programming campaigns. In addition, we run as cost effectively as possible without hindering our ability to execute and scale the underlying business.

36The Retail segment includes those sales efforts to and revenue from buyers who resell our products at retail, both physical (brick and mortar) and through their online portals. Although historically the Ronco brand was sold only through direct response, over the past decade, both Ronco and other similar direct response sellers have received an increasingly large percentage, and in many cases a majority, of their revenue by monetizing the brand and product identities created by direct response advertising through retail sales. The Retail segment is expected to be the largest (in terms of revenue) for the Company for the foreseeable future.

The ~~consolidated~~Company’s ~~financial~~customers in ~~results of~~ the ~~Company~~Retail ~~for~~segment ~~the~~include ~~six~~both ~~months~~large ~~ended~~retailers, ~~June~~including 30Walmart, ~~2014include~~Bed ~~ASTV’s~~Bath ~~results~~& ~~from~~Beyond, ~~April 2~~Target, ~~2014~~Home ~~through~~Depot ~~June~~and 30Amazon, ~~2014,~~and smaller ~~Infusion’s~~retailers. ~~results~~The ~~from~~customers ~~January~~in 1,the ~~2014~~Retail tosegment ~~June~~purchase ~~30,~~goods ~~2014~~both for their physical (“brick and mortar”) locations, and ~~Ronco~~for their online portals, which represents a regularly increasing percentage of all the Company’s ~~results~~Retail ~~from~~sales. Management ~~March~~expects 6,continued ~~2014~~growth toin ~~June~~the 30Retail segment as additional products are introduced and as additional direct response advertising is run, ~~2014~~which supports those sales. ~~The~~Management ~~prior~~also ~~year~~expects ~~results~~continued ~~presented~~growth ~~are~~of ~~those~~online sales as a percentage of ~~Infusion~~Retail sales, ~~since~~which ~~they~~represents ~~are~~an opportunity for the ~~accounting~~Company ~~acquirer~~to capture an increasing percentage of those online sales through its own portal, www.ronco.com. Information on this website is not a part of this report.

~~Consolidated Results of Operations~~38

	For the Three Months Ended									For the Six Months Ended
	June 30,						Increase			June 30,						Increase
	2014			2013			(Decrease)			2014			2013			(Decrease)
Revenues	$	3,385,371		$	3,813,904		$	(428,533	)	$	6,580,947		$	9,190,171		$	(2,609,224	)
Cost of revenues		2,037,233			2,747,362			(710,129	)		4,077,838			6,671,863			(2,594,025	)
Gross profit		1,348,138			1,066,542			281,596			2,503,109			2,518,308			(15,199	)
Gross profit %		39.82	%		27.96	%		11.86	%		38.04	%		27.40	%		10.64	%
Operating expenses:
Selling and marketing expenses		1,912,497			362,950			1,549,547			2,511,442			886,775			1,624,667
General and administrative expenses		2,993,567			1,285,166			1,708,401			4,536,731			2,692,626			1,844,105
Loss from operations		(3,557,926	)		(581,574	)		2,931,352			(4,545,064	)		(1,061,093	)		3,483,971
Other (income) expense:
Gain on warrant revaluation		(1,702,841	)		—			1,702,841			(1,702,841	)		—			1,702,841
Interest income		(32,365	)		—			32,365			(37,045	)		—			37,045
Interest expense		1,375,108			73,242			(1,301,866	)		1,617,834			169,269			(1,448,565	)
Other (income) expense		(1,912	)		(2,031	)		(119	)		7,617			1,429			(6,188	)
Net other (income) expense		(362,010	)		71,211			433,221			(114,435	)		170,698			285,133
Provision of income taxes		—			—			—			—			—			—
Net loss		(3,195,916	)		(652,785	)		2,543,131			(4,430,629	)		(1,231,791	)		3,198,838
Less: Net loss attributed to noncontrolling interest		1,016,403			—			1,016,403			1,141,666			—			1,141,666
Net loss attributable to As Seen On TV, Inc.	$	(2,179,513	)	$	(652,785	)	$	(1,526,728	)	$	(3,288,963	)	$	(1,231,791	)	$	(2,,057,172	)
Basic and diluted loss per share	$	(0.00	)	$	(0.01	)				$	(0.01	)	$	(0.02	)

Management anticipates continued growth in the Retail segment, both from the introduction of existing Ronco products to new retail customers, and from the introduction of new products across all customers.

~~The~~Live ~~following~~Shopping discussion of consolidated results of operations and segment results refers to the three and six months ended June 30, 2014 compared to the three and six months ended June 30, 2013. Consolidated results of operations should be read in conjunction with segment results of operations.

~~Revenues~~The Live Shopping segment includes those sales efforts to and revenue from customers who operate “live shopping” channels, both domestic and international. Live Shopping is most similar to the Company’s historic direct response business, but instead of paying for the media itself and charging the wholesale price direct to the ultimate customer, the Company instead sells the goods at wholesale (as in the Retail segment) to the live shopping channels, and those channels effectively pay the cost of the media time to demonstrate and sell the products. This segment includes customers such as QVC, HSN, Evine, TSC (Canada), and HSE24 (Europe), among others.

~~The~~Although ~~decrease~~virtually inall of ~~revenue~~Ronco’s ~~for~~historic ~~the~~products ~~three~~are ~~and~~available ~~six~~to ~~months~~be ~~ended~~sold ~~June~~through ~~30,~~the ~~2014~~Live ~~relates~~Shopping tosegment, the ~~high~~Live ~~volume~~Shopping ofsegment ~~international~~also ~~sales~~affords the ~~that~~Company ~~occurred~~the inopportunity ~~this~~to ~~same~~source, ~~period~~test, inrebrand ~~2013~~and ~~that~~sell ~~was~~many ~~not~~other ~~replicated~~non-core inproducts ~~2014~~that ashappen ~~well~~to asfit ~~less domestic sales as~~ a ~~result~~desire ofon ~~reduced marketing capital. During~~ the ~~three~~part of ~~and~~one ~~six~~or ~~months~~more ~~ended~~live ~~June~~shopping ~~30,~~channels ~~2013,~~based ~~Infusion~~on ~~had~~their ~~only~~particular ~~one~~market ~~infomercial~~research ~~produced~~or ~~and~~trend ~~available to its main international distributor~~analyses. ~~This~~For ~~international~~those ~~distributor~~particular ~~purchased approximately $4~~sales,~~200,000~~ the inCompany ~~product~~may ~~for~~use the ~~six~~Ronco ~~months~~brand, ~~ended~~an ~~June~~affiliated 30brand, ~~2013,~~one ~~but~~of ~~has~~the ~~not~~Company’s ~~re-ordered~~other ~~comparable~~historic ~~levels~~brands of(including ~~product~~DualTools or ~~subsequent~~the toInfusion ~~June 30~~Collection), ~~2013~~or ~~nor~~a ~~has~~one-off ~~been~~brand. ~~able~~These totypes ~~market~~of ~~other~~ products ~~due~~are togenerally ~~lack~~in ofor ~~infomercials.~~very Wenearly ~~are~~ in ~~process~~production ofwhen ~~building~~sourced, and ~~nine~~therefore ~~new~~are ~~infomercials~~much ~~that~~faster wefrom ~~will~~sourcing ~~be able~~ to market tothan ~~international~~newly-designed ~~DRTV companies to increase our international revenue~~products.

37Management anticipates continued growth in the Live Shopping segment as current products receive continued airings, and as additional products are introduced by Ronco and are sourced and added for the Company’s other brands.

WeDirect ~~have~~Response made a material change in our domestic sales strategy. We have hired an Executive Vice President of Sales, a Vice President of National Sales, a Vice President of Retail National Sales, a new National Sales Manager/Coordinator, and a Vice President of Product Development. We expect this new sales team, after an implementation period, to have a positive effect on revenue generation through new sales channels, strategic partnerships, products, and marketing efforts, but until then we expect revenue to be volatile.

~~Cost~~The Direct Response segment includes those sales efforts in and revenue from the direct response market. “Direct Response” is the process of ~~revenues~~advertising directly to customers by purchasing media, whether radio, television or online, then monetizing that media cost by direct sales to such customers prompted by that media, either by telephone or online.

The ~~decrease~~Ronco inbrand ~~cost~~was ofthe first ~~revenue~~direct ~~for~~response brand, and Ron Popeil, its founder, effectively created the ~~three~~direct ~~and~~response ~~six~~market. ~~months~~From ~~ended~~its ~~June~~founding 30through today, ~~2014~~the ~~directly~~Ronco ~~relates~~brand has sold over $2 billion of products through direct response, spending over $500 million on direct response advertising to ~~the~~do ~~decrease~~so, also creating in ~~revenues~~the process a lasting brand recognition with consumers. ~~The~~Until ~~disproportional~~2004, ~~decrease~~all inRonco ~~cost~~products were sold via direct response. Since then, as a result both of ~~revenue~~the isincrease ~~due~~of tomedia ~~different~~costs ~~margins~~and bythe proliferation of sales ~~channel~~channels ~~and~~(including particularly online), the ~~decrease~~direct inresponse ~~lower~~business ~~margin~~has ~~international~~become ~~revenue~~less profitable viewed alone, but continues to be profitable as part of a strategy which uses direct response to fund all or a portion of its own media costs, and ~~the~~monetizes ~~increase~~that inmedia not just through direct response, ~~revenue~~but also through retail and online sales. This is how management views and approaches direct response, and in that light, continues to view it as a key part of the Company’s overall sales strategy.

~~Gross~~Given management’s view of the best use of direct response, it is anticipated that direct response will be used for a relatively small number of the Company’s products in any given year, and only in those situations where the net profit or cost of the direct response campaign, taken as a whole with any associated retail and online sales, meets management’s requirements for an acceptable net margin.

The increase in gross profit percentage for the three months ended June 30, 2014 relates to the increase in direct response revenue which has a higher gross margin than all other sales channels and the decrease in lower margin international sales. The increase in gross profit percentage for the six months ended June 30, 2014 is due to the decrease in lower margin international sales. International/Royalty

~~Operating~~The ~~expenses~~International/Royalty segment includes those sales efforts to and revenue from those international (and limited domestic) sales where the Company receives its revenue as a royalty, rather than by selling product directly, resulting in no investment in inventory and very minimal, if any, sales and marketing expense by the Company. The Company’s primary contracts in this area are with Oak Lawn Marketing Incorporated (“OLM”), which distributes the Company’s Ronco and Dual Tools brands internationally.

~~Operating~~The ~~expenses~~Company’s ~~for~~contracts with ~~the~~OLM ~~three~~generally ~~and~~provide ~~six~~that ~~months~~OLM ~~ended~~will ~~June~~be ~~30,~~directly ~~2014~~responsible ~~increased~~for ~~due~~all ~~to additional~~ costs ~~from the combination~~ of Asgoods ~~Seen~~and onall ~~TV,~~sales ~~Inc., Infusion Brands, Inc.~~ and ~~Ronco~~marketing ~~Holdings,~~expenses ~~Inc.~~for its ~~as compared to Infusion Brands~~sales, ~~Inc.~~with ~~only in 2013. For~~ the ~~three~~Company’s ~~and~~only ~~six~~requirement ~~months~~being ~~ended~~to ~~June~~provide ~~30,~~those ~~2014,~~media ~~there~~assets ~~was~~it anhas ~~approximate~~on $1hand,~~200,000~~ ~~increase~~with inoccasional ~~selling~~minimal editing. ~~costs~~As ~~relating~~a ~~to media spends for direct response television infomercials~~result, ~~along with~~ the ~~related~~Company ~~telemarketing~~views &the ~~fulfillment~~International/Royalty ~~costs.~~segment ~~Combining~~as ~~general~~having ~~and~~the ~~administrative~~potential ~~costs~~ for ~~the~~meaningful ~~group~~contribution ~~resulted in increases of approximately $757,000~~ and growth ~~$929,000~~going ~~increase in employment related costs~~forward, ~~$381,000~~particularly ~~and~~since ~~$535,000~~it inrequires ~~professional~~little ~~fees,~~to ~~$140,000~~no ~~and~~incremental ~~$147,000~~investment inover ~~insurance~~what ~~costs,~~is ~~$75,000~~already ~~and~~being ~~$76,000~~made into ~~travel~~sell products ~~costs~~through ~~and~~other ~~$191~~channels,~~000~~ and ~~$155,000~~therefore innearly ~~facility~~all ~~costs~~of ~~during~~ the ~~three~~revenue ~~and~~generated ~~six~~is ~~months~~net ~~ended~~margin ~~June~~for ~~30,~~the ~~3014, respectively~~Company.

~~Loss~~Corporate ~~from~~and ~~operations~~Other

The ~~increased~~Corporate ~~loss~~segment ~~from~~is responsible ~~operations~~for iscorporate ~~largely~~governance, ~~related~~compliance, tostrategic ~~the~~planning, ~~increases~~and indebt ~~operating~~and ~~expense~~equity ascapital ~~described~~transactions. ~~above~~The Corporate segment also provides funding to other operating segments when needed.

~~Net Other (income) expense~~39

The ~~increase~~consolidated infinancial results ~~net~~of ~~other~~the ~~income~~Company isfor ~~due~~the tonine anmonths ~~increase~~ended inSeptember ~~interest~~30, ~~expense~~2014 ofinclude ~~approximately~~ASTV’s $1results from April 2,~~300,000~~ ~~and~~2014 $1through September 30,~~500~~ 2014,~~000~~ ~~for~~Infusion’s ~~the~~results ~~three~~from ~~and~~January ~~six~~1, ~~month~~2014 ~~periods~~to ~~ended~~September ~~June~~ 30, 2014, ~~respectively,~~and ~~offset~~Ronco’s byresults anfrom ~~approximate~~March ~~gain~~6, of2014 $1to September 30,~~703,000~~ on2014. ~~the~~The ~~revaluation~~prior ofyear ~~the~~results ~~warrants~~presented ~~assumed~~are inthose ~~connection~~of ~~with~~Infusion, since they are the ~~reverse~~accounting ~~acquisition~~acquirer.

~~Net~~Consolidated ~~loss~~Results of Operations

The increase for the three and six month periods ending June 30, 2014 resulted from the increase in operating expenses and interest expense, offset by the warrant revaluation gain.

	For the Three Months Ended September 30,						Increase			For the Nine Months Ended September 30,						Increase
	2014			2013			(Decrease)			2014			2013			(Decrease)
Revenues	$	4,024,354		$	765,690		$	3,258,664		$	10,605,601		$	9,955,861		$	649,740
Cost of revenues		5,141,020			595,979			4,545,041			11,100,277			7,998,801			3,101,476
Gross profit		(1,116,666	)		169,711			(1,286,377	)		(494,676	)		1,957,060			(2,451,736	)
Gross profit %		-27.75%			22.16%			-49.91%			-4.66%			19.66%			-24.32%

Operating expenses:
Selling and marketing expenses		730,576			174,863			555,713			1,344,463			351,875			992,588
General and administrative expenses		3,765,144			1,027,498			2,737,646			8,341,287			3,698,924			4,642,363
Impairment loss on goodwill		19,177,171			–			19,177,171			19,177,171			–			19,177,171
Impairment loss on other intangible assets		2,793,415			–			2,793,415			2,793,415			–			2,793,415
Loss from operations		(27,582,972	)		(1,032,650	)		26,550,322			(32,151,012	)		(2,093,739	)		(30,057,273	)

Other income (expense):
Change in fair value of warrants		(665,733	)		–			665,733			1,037,108			–			1,037,108
Loss on inventory deposit		(200,000	)		–			200,000			(200,000	)		–			200,000
Loss on note receivable		(1,035,256	)		–			1,035,256			(1,035,256	)		–			1,035,256
Interest income		33,565			–			33,565			70,303			–			70,303
Interest expense		(1,663,199	)		(238,185	)		1,425,014			(3,294,488	)		(238,185	)		3,056,303
Other income (expense)		9,292			7,658			1,634			(38,403	)		6,229			44,632
Net other income (expense)		(3,521,331	)		(230,527	)		3,290,804			(3,460,736	)		(231,956	)		3,228,780

Provision of income taxes		–			–			–			–			–			–

Net loss		(31,104,303	)		(1,263,177	)		29,841,126			(35,611,748	)		(2,325,695	)		(33,286,053	)
Less: Net loss attributed to noncontrolling interest		17,942,343			–			17,942,343			19,139,054			–			19,139,054
Net loss attributable to As Seen On TV, Inc.	$	(13,161,960	)	$	(1,263,177	)	$	11,898,783		$	(16,472,694	)	$	(2,325,695	)	$	14,146,999

Basic and diluted loss per share	$	(0.02	)	$	(0.02	)				$	(0.04	)	$	(0.03	)

~~Net~~The ~~loss~~following ~~attributable~~discussion of consolidated results of operations and segment results refers to ~~noncontrolling~~the ~~interest~~three and nine mont$11hs ended September 30, 2014 compared to the three and nine months ended September 30, 2013. Consolidated results of operations should be read in conjunction with segment results of operations.

The net loss attributable to noncontrolling interest of approximately $1,016,000 and $1,142,000 for the three and six month period ended June 30, 2014 represents 100% of Ronco’s net loss for the same periods. Revenues

~~Net~~The ~~loss~~increase ~~attributable~~in revenue for the three months ended September 30, 2014 mainly relates to Asan ~~Seen~~approximate On$350,000 TVincrease in Hardware revenue and to the approximate $2,753,000 ~~Inc~~increase in Home Goods revenue. Of the increase in Home Goods revenue, approximately $1,640,000 is attributable to a DRTV cutlery campaign; the remaining increase is attributable to the VIE acquisition of Ronco.

~~Net~~For ~~loss for~~ the ~~three~~nine ~~and~~month ~~six months~~ period ended ~~June~~September 30, 2014, ~~was~~Hardware ~~primarily~~revenue decreased approximately $4,7320,000 due to ~~increased~~lower ~~operating~~international ~~expenses~~and domestic retail revenue. The Company’s main international distributor who markets products through DRTV has not re-ordered at the 2013 level, ~~warrant~~which accounted ~~revaluation~~for ~~and~~a ~~interest~~decrease ~~expense~~of approximately $4,200,000. Despite this decrease, the Company added approximately $5,038,000 in new Home Goods revenue. Of this new revenue, approximately $1,640,000 is attributable to a domestic DRTV cutlery campaign; the remaining increase is attributable to the VIE acquisition of Ronco.

~~Loss~~Cost ~~per~~of ~~common share~~revenues

~~Although~~The ~~net~~increase ~~loss~~in ~~increased~~cost ~~approximately~~of revenue ~~$2,543,000 and $3,199,000~~ for the three and ~~six~~nine ~~month~~months ~~periods~~ ended ~~June~~September 30, 2014, ~~loss~~relates ~~per~~to ~~share~~the onincrease ain ~~basic~~revenues and ~~diluted~~the ~~basis~~write ~~remained~~off atof ~~$0.01~~certain inventory ~~due~~as todefective, ~~the~~obsolete ~~increase~~or inslow-moving. ~~number~~During ofthe ~~shares~~three ~~outstanding~~and ofnine ~~455,476,876~~months ~~and~~ended ~~235~~September 30,~~699~~ 2014,~~499~~ ~~for~~ the ~~three~~Hardware and ~~six~~Home Goods ~~month~~wrote ~~periods~~off ~~ended~~$633,000 ~~June~~and 30$161,000 ~~2014~~of inventory, respectively.

3840

~~Segment~~Gross ~~Analysis~~profit

~~Commencing~~The ~~with~~decrease ~~the~~in ~~reverse~~gross ~~merger,~~profit percentage for the ~~Company~~three ~~organized~~and ~~its~~nine ~~business~~months ~~into~~ended ~~four~~September ~~operating~~30, ~~segments~~2014 relates to ~~align~~negative ~~its~~margin ~~organization~~on ~~based~~Hardware ~~upon~~and ~~the~~Home ~~Company’s~~Goods ~~management~~revenue. The ~~structure,~~Home ~~products~~Goods ~~and~~negative ~~services~~margin ~~offered~~was ~~and~~a ~~funding~~result ~~requirements.~~of ~~The~~the ~~four~~domestic DRTV cutlery campaign operating ~~segments~~at ~~that~~a ~~management~~loss ~~defined~~as ~~were~~well ~~Power~~as ~~Tools~~expenses &incurred on ~~Cleaning~~various DRTV test campaigns. During the three and nine months ended September 30, ~~Housewares~~2014, ~~eCommerce~~the Hardware and ~~Corporate.~~Home ~~Below~~Goods iswrote aoff $633,000 ~~description~~and $161,000, respectively, of ~~each~~inventory ~~operating~~as ~~segment.~~it was determined defective, obsolete or slow-moving.

~~Power~~Operating ~~Tools & Cleaning~~ expenses

~~The~~Operating ~~Power~~expenses ~~Tools~~for the &three ~~Cleaning~~and ~~segment~~nine ~~focuses~~months ~~primarily~~ended onSeptember ~~consumer~~30, ~~products~~2014 ~~that~~mainly ~~leverage~~increased ~~direct~~due ~~response~~to ~~and~~the ~~live~~inclusion ~~shopping~~of ~~television~~costs ~~channels.~~from Itthe ~~competes~~combination inof ~~two~~As ~~key~~Seen on ~~product~~TV, ~~verticals~~Inc., –Infusion ~~hardware~~Brands, Inc. and ~~cleaning~~Ronco –Holdings, ~~with~~Inc. aas ~~portfolio~~compared ofto ~~revenue-generating~~Infusion ~~brands including DualSaw~~Brands, ~~DualTools™,~~Inc. ~~and~~only ~~DOC~~in ~~Cleaning~~2013. ~~Its~~For ~~products~~the ~~are~~three ~~sold~~and nine ~~globally~~months ~~through~~ended aSeptember ~~variety~~30, of2014, ~~national~~Infusion’s ~~retailers,~~operating ~~online~~expenses ~~retailers,~~increased ~~catalogs,~~approximately ~~infomercials~~$1,073,000 and ~~live~~$1,437,000, ~~shopping channels~~respectively.

~~Housewares~~The increase in Infusion’s operating expenses for the three months ended September 30, 2014 is attributable to an approximate increase of $477,000 in selling expenses of which approximately $426,000 relates to the production of various DRTV infomercials. The remaining increase is mainly attributable to the approximate increase of $210,000 in legal and audit professional fees associated with the merger and acquisition as well as an increase of $178,000 in professional fees associated with product research and development.

The ~~Housewares~~increase ~~segment~~in ~~essentially~~Infusion’s operating ~~represents~~expenses for the ~~operations~~nine ofmonths ~~the~~ended ~~Company’s~~September ~~VIE.~~30, ~~This~~2014 ~~segment~~ is ~~engaged~~attributable into the ~~development~~approximate ~~and~~increase ~~retail~~of ~~sale~~$665,000 in selling expenses of ~~kitchen~~which ~~and~~approximately ~~home~~$538,000 ~~products~~relates ~~throughout~~to the ~~United~~production ~~States.~~of ~~The~~various ~~Company’s~~DRTV ~~product~~infomercials ~~line~~and ~~sells~~approximately ~~throughout~~$200,000 ~~the~~relates to ~~year~~costs ~~through~~associated ~~infomercials,~~with ~~internet~~attending ~~sales,~~various ~~wholesale~~domestic ~~distributors~~ and ~~direct~~international ~~retailers~~tradeshows. The ~~Ready~~remaining ~~Grill,~~increase ~~Showtime~~is ~~Rotisserie,~~due ~~Pocket~~to ~~Fisherman,~~legal EZand ~~Store~~audit professional ~~Turbo~~fees ~~Dehydrator,~~associated ~~Veg-O-Matic,~~with ~~Chip-Tastic~~the merger and ~~Smart~~acquisition ~~Juicer,~~as ~~among~~well ~~others~~as ~~several~~professional offees ~~the~~associated ~~products~~with ~~that~~product ~~this~~research ~~segment markets~~and development.

~~eCommerce~~ASTV represented approximately $6,775,000 and $7,638,000 of the increase in operating expenses for the three and nine months ended September 30, 2014, respectively. During the three and nine months ended September 30, 2014, ASTV recognized an impairment loss on goodwill of approximately $3,214,000 and an impairment loss of approximately $2,793,000 on other intangible assets.

~~The~~Ronco ~~eCommerce~~represented ~~segment~~approximately $17,421,000 ~~operates~~and in$18,541,000 of the ~~direct~~increase ~~response~~in ~~market.~~operating ~~This~~expenses ~~segment~~for ~~markets~~the ~~consumer~~three ~~products~~and ~~for~~nine ~~global~~months ~~distribution~~ended ~~via~~September ~~Internet~~30, ~~using~~2014, ~~its AsSeenOnTV~~respectively.~~com~~ During ~~URL.~~the ~~This~~three ~~segment~~and ~~also~~nine ~~generates~~months ~~subscription~~ended ~~based~~September ~~revenue~~30, ~~from~~2014, ~~its~~Ronco ~~nationwide~~recognized ~~weight-loss~~an ~~oriented~~impairment ~~digital~~loss ~~subscription~~on ~~service~~goodwill ~~through~~of ~~its~~approximately ~~eDiets~~$15,963,000.~~com URL.~~

~~Corporate~~Loss from operations

The ~~Corporate~~increased ~~segment~~loss from operations is ~~responsible~~largely ~~for~~related ~~corporate~~to ~~governance,~~the ~~compliance,~~increases ~~strategic~~in ~~planning,~~operating ~~and~~expense ~~debt~~ and ~~equity~~reduction ~~capital~~in ~~transactions.~~gross ~~The~~margin ~~Corporate~~as ~~segment~~described ~~also provides funding to other operating segments when needed~~above.

~~The~~Net ~~following~~Other ~~tables~~(income) ~~provide a summary of our segment information for the three and six month period ended June 30, 2014 and 2013:~~expense

~~Power~~The ~~Tools~~increase &in ~~Cleaning~~net other expense for the three month period ended September 30, 2014 is due to an increase in interest expense of approximately $1,596,489, an increase in the loss associated with the change in fair value of warrants subject to remeasurement of approximately $666,000, and recognition of a loss of approximately $1,035,000 on a note receivable determined worthless and uncollectible. For the nine month period ended September 30, 2014, the increase in net other expense is due to an increase in interest expense of approximately $3,059,000 and recognition of an approximate loss of $1,035,000 on the aforementioned note receivable offset by an approximate gain of $1,037,000 on the revaluation of said warrants.

	For the Three Months Ended									For the Six Months Ended
	June 30,						Increase			June 30,						Increase
	2014			2013			(Decrease)			2014			2013			(Decrease)
Revenues	$	1,525,104		$	3,813,904		$	(2,288,800	)	$	4,106,533		$	9,190,171		$	(5,083,638	)
Cost of revenues		1,201,816			2,747,362			(1,545,546	)		2,904,783			6,671,863			(3,767,080	)
Gross profit		323,288			1,066,542			(743,254	)		1,201,750			2,518,308			(1,316,558	)
Gross profit %		21.20	%		27.96	%		-6.76	%		29.26	%		27.40	%		1.86	%
Operating expenses:
Selling and marketing expenses		1,095,115			362,950			732,165			1,562,891			886,775			676,116
General and administrative expenses		1,407,044			1,285,166			121,878			2,792,117			2,692,626			99,491
Loss from operations		(2,178,871	)		(581,574	)		1,597,297			(3,153,258	)		(1,061,093	)		2,092,165
Provision for income taxes		—			—			—			—			—			—
Net loss	$	(2,178,871	)	$	(581,574	)	$	1,597,297		$	(3,153,258	)	$	(1,061,093	)	$	2,092,165

The increase in interest expense for both periods was due to the increase in the Company’s notes payable as a result of the reverse merger, VIE acquisition, Assumption Agreement, and new financing issuances.

39Net loss

~~Revenues~~The increase in net loss for the three and nine month periods ended September 30, 2014 resulted from the decreased gross profit and increase in operating expenses, interest expense, and the loss recognized on a note receivable offset by the warrant revaluation gain, as described above.

~~The~~Net ~~decrease~~loss inattributable ~~revenue for the three and months ended June 30, 2014 relates~~ to approximately $1,800,000 of international sales that occurred in this same period in 2013 that was not replicated in 2014, coupled with reduced domestic retail sales of approximately $576,000 and increased live shopping revenue of approximately $120,000. The decrease in revenue for the six months ended June 30, 2014 relates to approximately $4,200,000 of international sales that occurred in this same period in 2013 that was not replicated in 2014, coupled with reduced domestic retail sales of approximately $805,000 and reduced live shopping revenue of approximately $71,000. noncontrolling interest

The ~~decrease~~net inloss ~~international revenue is due~~ attributable to ~~the~~noncontrolling ~~Company’s~~interest ~~main international distributor not re-ordering comparable levels~~ of ~~product~~approximately ~~subsequent~~$17,942,000 toand ~~June 30~~$19, ~~2013~~139,000 ~~nor~~for ~~marketing~~the ~~additional~~three ~~products to existing~~ and ~~new~~nine ~~markets~~month ~~due~~periods toended ~~lack~~September of30, 2014 ~~infomercials.~~represents We100% ~~are in process~~ of ~~building~~Ronco’s ~~nine~~net ~~new~~loss ~~infomercials~~for ~~that we will be able to market to international DRTV companies to increase our international revenue. The decrease in domestic revenue is attributable to decreased marketing capital available during~~ the ~~comparable~~same periods.

We have made a material change in our domestic sales strategy. We have hired an Executive Vice President of Sales, a Vice President of National Sales, a Vice President of Retail National Sales, a new National Sales Manager/Coordinator, and a Vice President of Product Development. We expect this new sales team, after an implementation period, to have a positive effect on revenue generation for this segment through new sales channels, strategic partnerships, products, and marketing efforts, but until then we expect revenue to be volatile.41

~~Cost~~Net ofloss ~~revenues~~attributable to As Seen On TV, Inc.

~~The~~Net ~~decrease~~loss ~~in cost of revenue~~ for the three and ~~six~~nine months ended ~~June~~September 30, 2014 ~~relates~~was primarily due to ~~the~~decreased ~~proportional~~gross ~~decrease~~profit, inincreased ~~revenues.~~operating expenses and interest expense, as described above.

~~Gross~~Loss ~~profit~~per common share

~~For~~Loss ~~the~~per ~~three~~share ~~and~~on ~~six~~a ~~month~~basic and ~~period~~diluted ~~ended~~basis ~~June~~was ~~30,~~$0.01 ~~2014,~~for ~~gross~~the ~~profit~~three ~~percentage~~months ~~decreased~~ended ~~approximately~~September 630, 2014.~~76%~~ ~~and~~Loss ~~increased~~per ~~approximately~~share ~~1.86%~~on ~~due~~a tobasic ~~product~~ and ~~distribution~~diluted ~~channel~~basis ~~mix~~increased $0.01 ~~For~~for the ~~three~~nine ~~and~~months ~~six month period~~ ended ~~June~~September 30, ~~2013,~~2014 ~~gross~~due ~~profit~~to ~~was~~the ~~consistent~~increase atin ~~approximately~~net ~~27%~~loss.

~~Operating~~Segment ~~expenses~~Analysis

~~The~~Commencing ~~increase~~with inthe ~~selling costs is related primarily to media costs~~reverse merger, ~~which~~the ~~were~~Company uporganized ~~approximately~~its ~~$593,000~~business ~~and~~into ~~$548,000~~four ~~for~~operating ~~the~~segments ~~three~~to ~~and~~align ~~six~~its ~~month~~organization ~~period~~based ~~ended~~upon ~~June 30, 2014, respectively. For~~ the ~~three~~Company’s management ~~month period ended June 30~~structure, ~~2014,~~products ~~trade~~and ~~show~~services ~~costs~~offered ~~were~~and ~~approximately~~funding ~~$71,000 with no corresponding cost in 2013~~requirements. ~~Major~~The ~~contributors~~four ~~for~~operating ~~the~~segments ~~six~~that ~~month~~management ~~period ended June 30, 2014, packaging costs rose by approximately $85,000 as new products~~ defined were ~~brought to market~~Hardware, ~~retail~~Home ~~rep commissions decreased approximately $140~~Goods,~~000,~~ ~~brand royalties decreased approximately $81~~eCommerce,~~000~~ ~~due~~and toCorporate ~~decreased sales of product with royalty agreements~~ and ~~trade show costs were approximately $153,000 with no corresponding cost in 2013~~Other. ~~General~~Below ~~and~~is ~~administrative~~a ~~costs~~description ~~for~~of ~~the~~each ~~three~~operating ~~and six month period ended June 30, 2014 primarily increased due to professional fee costs in connection with the merger that was effective April 2, 2014~~segment.

~~Net loss~~Hardware

The increased loss from operations for the three and six month period ended June 30, 2014 is largely related to the decreases in gross profit and increases in operating expense as outlined above.

	For the Three Months Ended September 30,						Increase			For the Nine Months Ended September 30,						Increase
	2014			2013			(Decrease)			2014			2013			(Decrease)
Revenues	$	1,115,815		$	765,690		$	350,125		$	5,223,319		$	9,955,861		$	(4,732,542	)
Cost of revenues		1,914,067			595,979			1,318,088			5,000,084			7,998,801			(2,998,717	)
Gross profit		(798,252	)		169,711			(967,963	)		223,235			1,957,060			(1,733,825	)
Gross profit %		-71.54%			22.16%			-93.70%			4.27%			19.66%			-15.38%

Operating expenses:
Selling and marketing expenses		651,396			174,863			476,533			1,016,655			351,875			664,780
General and administrative expenses		1,623,725			1,027,498			596,227			4,470,945			3,698,924			772,021
Loss from operations		(3,073,373	)		(1,032,650	)		2,040,723			(5,264,365	)		(2,093,739	)		3,170,626

Other income (expense)
Loss on inventory deposit		(200,000	)		–			200,000			(200,000	)		–			200,000
Net other income (expense)		(200,000	)		–			200,000			(200,000	)		–			200,000

Provision for income taxes		–			–			–			–			–			–

Net loss	$	(3,273,373	)	$	(1,032,650	)	$	2,240,723		$	(5,464,365	)	$	(2,093,739	)	$	3,370,626

40Revenues

~~Housewares~~The increase in revenue for the three months ended September 30, 2014 is attributable to an increase in product sales through the live shopping revenue. The decrease in revenue for the nine months ended September 30, 2014 relates to approximately $4,200,000 of international sales that occurred in this same period in 2013 that were not replicated in 2014. The decrease in international revenue is due to the Company’s main international distributor not re-ordering comparable levels of product subsequent to September 30, 2013, nor marketing additional products to existing and new markets due to lack of infomercials.

	For the Three Months Ended								For the Six Months Ended
	June 30,					Increase			June 30,					Increase
	2014			2013(1)		(Decrease)			2014			2013(1)		(Decrease)
Revenues	$	1,671,145		$	—	$	1,671,145		$	2,285,290		$	—	$	2,285,290
Cost of revenues		824,975			—		824,975			1,162,613			—		1,162,613
Gross profit		846,170			—		846,170			1,122,677			—		1,122,677
Gross profit %		50.63	%				50.63	%		49.13	%				49.13	%
Operating expenses:
Selling and marketing expenses		782,464			—		782,464			913,633			—		913,633
General and administrative expenses		708,640			—		708,640			866,731			—		866,731
Loss from operations		(644,934	)		—		644,934			(657,687	)		—		657,687
Other (income) expense:
Interest expense		371,469			—		371,469			479,300			—		479,300
Other (income) expense		—			—		—			4,681			—		4,681
Net other (income) expense		371,469			—		371,469			483,981			—		483,981
Income tax provision		—			—		—			—			—		—
Net loss	$	(1,016,403	)	$	—	$	1,016,403		$	(1,141,668	)	$	—	$	1,141,668

Cost of revenues

~~———————~~During the three and nine month period ended September 30, 2014, the Hardware segment wrote off approximately $925,000 of inventory which was deemed damaged, obsolete or slow-moving. The remaining change in cost of revenue for the three and nine months ended September 30, 2014 relates to the proportional change in revenues.

~~(1)~~Gross ~~Segment operations began March 6, 2014.~~profit

~~Revenues~~For the three and nine month period ended September 30, 2014, gross profit percentage was negative. The main reason for this is due to the inventory that was written off on September 30, 2014.

~~Revenues consist of product sales. Product sales are made through a combination of distribution channels.~~42

~~Cost~~Operating ~~of Revenues~~expenses

~~Cost~~Operating expenses consist of ~~revenues~~selling ~~represents~~and ~~direct~~marketing ~~product~~and ~~cost,~~general ~~shipping~~and administrative expenses. Selling and ~~freight~~marketing expenses mainly consist of infomercial production costs and ~~credit~~expenses ~~card~~related ~~fees~~to attendance at various domestic and international tradeshows. For the three months ended September 30, 2014, infomercial production costs increased approximately $473,000 and tradeshow expense increased approximately $199,000, contributing to the overall increase in selling and marketing expenses. For the nine months ended September 30, 2014, infomercial production costs increased approximately $425,000 and tradeshow expense increased approximately $46,000,

~~Operating~~General ~~Expenses~~and administrative expenses for the three and nine months ended September 30, 2014 were as follows:

Operating expenses consist of selling and marketing and general and administrative expenses. Selling and marketing expenses mainly consist of TV media purchases, telemarketing, and sales commissions. General and administrative expenses mainly consist of payroll related costs, occupancy and professional services.

	Three Months Ended						Nine Months Ended
	September 30,				Increase		September 30,				Increase
	2014		2013		(Decrease)		2014		2013		(Decrease)
Employee expenses	$	694,745	$	650,582	$	44,163	$	1,973,999	$	2,331,326	$	(357,327	)
Contract labor		63,101		37,126		25,975		162,209		97,205		65,004
Occupancy		104,620		89,256		15,364		285,110		286,565		(1,455	)
Depreciation and amortization		17,529		9,916		7,613		46,524		29,854		16,670
Bad debt expense		31,186		4,297		26,889		37,161		4,778		32,383
Legal and accounting professional services		389,685		821		388,864		1,125,166		291,556		833,610
Travel		151,644		143,933		7,711		435,002		377,866		57,136
Insurance		85,692		64,175		21,517		232,772		187,004		45,768
Office related		85,523		27,392		58,131		173,002		92,770		80,232
Total	$	1,623,725	$	1,027,498	$	596,227	$	4,470,945	$	3,698,924	$	772,021

~~Net~~The ~~other~~increase ~~expense~~in total general and administrative expenses for the three and nine months ended September 30, 2014 is mainly due to legal and audit professional fees associated with the merger, legal services with respect to intellectual property and professional fees relating to product development.

Net ~~other expense is mainly interest expense attributable to debt service on pre-Participation Agreement debt balances which relates to Ronco’s operations.~~loss

41For the three month period ended September 30, 2014, the approximate $2,240,000 increase in net loss is due the increase in cost of sales as a result of the inventory write offs and to the increase in operating expenses discussed above.

~~eCommerce~~For the nine month period ended September 30, 2014, the approximate $2,063,000 increase in net loss is due to less gross profit and increased operating expenses as discussed above.

	For the Three Months Ended								For the Six Months Ended
	June 30,					Increase			June 30,					Increase
	2014			2013(1)		(Decrease)			2014			2013(1)		(Decrease)
Revenues	$	189,122		$	—	$	189,122		$	189,122		$	—	$	189,122
Cost of revenues		10,442			—		10,442			10,442			—		10,442
Gross profit		178,680			—		178,680			178,680			—		178,680
Gross profit %		94.48	%				94.48	%		94.48	%				94.48	%
Operating expenses:
Selling and marketing expenses		34,918			—		34,918			34,918			—		34,918
General and administrative expenses		877,883			—		877,883			877,883			—		877,883
Loss from operations		(734,121	)		—		734,121			(734,121	)		—		734,121
Income tax provision		—			—		—			—			—		—
Net loss	$	(734,121	)	$	—	$	734,121		$	(734,121	)	$	—	$	734,121

Home Goods

———————

	For the Three Months Ended September 30,					Increase			For the Nine Months Ended September 30,					Increase
	2014			2013⁽¹⁾		(Decrease)			2014			2013⁽¹⁾		(Decrease)
Revenues	$	2,753,173		$	–	$	2,753,173		$	5,038,462		$	–	$	5,038,462
Cost of revenues		3,206,095			–		3,206,095			6,066,014			–		6,066,014
Gross profit		(452,922	)		–		(452,922	)		(1,027,552	)		–		(1,027,552	)
Gross profit %		-16.45%					-16.45%			-20.39%					-20.39%

Operating expenses:
Selling and marketing expenses		79,180			–		79,180			327,708			–		327,708
General and administrative expenses		1,378,948			–		1,378,948			2,250,356			–		2,250,356
Impairment loss on goodwill		15,963,074			–		15,963,074			15,963,074			–		15,963,074
Loss from operations		(17,874,124	)		–		17,874,124			(19,568,690	)		–		19,568,690

Other income (expense):
Interest expense		(368,269	)		–		368,269			(851,419	)		–		851,419
Other income (expense)		–			–		–			–			–		–
Net other income (expense)		(368,269	)		–		368,269			(851,419	)		–		851,419

Income tax provision		–			–		–			–			–		–

Net loss	$	(18,242,393	)	$	–	$	18,242,393		$	(20,420,109	)	$	–	$	20,420,109

(1) Segment operations began ~~April~~March 26, 2014.

~~Revenues~~43

~~eCommerce operations commenced in our second quarter with the completion of the reverse acquisition effective April 2, 2014.~~ Revenues in this segment reflect royalty fees of $87,500 earned under a contractual relationship related to our As Seen On TV.com URL website and represent the minimum due quarterly under the arrangement. While there can be no assurance, it is hoped that these royalty fees will increase in the future as website related revenues for those utilizing our website increases. In addition, revenues of this segment reflect the Company’s subscription web-based diet and wellness component. Revenues are generated from monthly billings to our customer credit cards providing them with access to diet and/or wellness related resources and content. Future growth in this area is heavily dependent upon additional marketing expenditures which is planned for in the future, the timing of which is dependent upon future liquidity.

~~Cost~~Revenues consist of ~~revenues~~product sales. Product sales are made through a combination of distribution channels.

Cost of revenues in the eCommerce segment consists primarily of web-site related fees, hosting fees and dietary consulting services. Selling and marketing related costs contain commissions and web promotional materials.Revenues

~~Operating~~Cost ~~expenses~~of revenues mainly include product cost, TV advertising, shipping, telemarketing, fulfillment and commissions. For the three months ended September 30, 2014, product cost, TV advertising and shipping made up most of the cost of sales in the amount of approximately $1,138,000, $1,103,000 and $392,000, respectively. For the nine months ended September 30, 2014, these costs were approximately $2,100,000, $2,420,000 and $703,000, respectively.

~~Operating~~Gross expenses mainly consist of general and administrative expenses are mainly comprised of administrative salaries, professional fees, insurance costs and rents. While there can be no assurance, these costs are expected to decline as a percentage of eCommerce related revenues given increased marketing expenditures in this segment as discussed above.Profit

42Gross profit for the Home Goods segment was negative for the three and nine months ended September 30, 2014 due to the Company spending considerable amounts on DRTV advertising for its main cutlery campaign as well as various other product test campaigns. Advertising expense for the three and nine months ended September 30, 2014 was approximately $1,103,000 and $2,400,000, respectively. This substantial advertising offset the margin on sales made through other sales channels. In addition, the Home Goods segment wrote down approximately $159,000 of obsolete or slow moving inventory for the three and nine month period ended September 30, 2014.

~~Corporate~~Operating Expenses

	For the Three Months Ended									For the Six Months Ended
	June 30,						Increase			June 30,						Increase
	2014			2013			(Decrease)			2014			2013			(Decrease)
Revenues	$	—		$	—		$	—		$	—		$	—		$	—
Operating expenses		—			—			—			—			—			—
Loss from operations		—			—			—			—			—			—
Other (income) expense:
Gain on warrant revaluation		(1,702,841	)		—			(1,702,841	)		(1,702,841	)		—			(1,702,841	)
Interest income		(58,389	)		—			(58,389	)		(58,389	)		—			(58,389	)
Interest expense		1,029,663			73,242			956,421			1,159,878			169,269			990,609
Other (income) expense		(1,912	)		(2,031	)		(119	)		2,936			1,429			1,507
Net other (income) expense		(733,479	)		71,211			(804,690	)		(598,416	)		170,698			(769,114	)
Income tax provision		—			—			—			—			—			—
Net gain (loss)	$	733,479		$	(71,211	)	$	(804,690	)	$	598,416		$	(170,698	)	$	(769,114	)

Operating expenses consist of selling and marketing and general and administrative expenses. Selling and marketing expenses mainly consist of professional fees associated with sales consulting, product development and public relations. General and administrative expenses for the three and nine months ended September 30, 2014 were as follows:

Revenues

	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Employee expenses	$	417,823	$	–	$	876,669	$	–
Occupancy		144,106		–		278,322		–
IT services		42,702		–		89,218		–
Depreciation and amortization		53,792		–		147,829		–
Bad debt expense		612,487		–		612,486		–
Legal and accounting professional services		62,540		–		143,650		–
Travel		18,850		–		70,159		–
Other		26,648		–		32,023		–
	$	1,378,948	$	–	$	2,250,356	$	–

The ~~Corporate~~Home Goods segment isrecognized aan ~~cost~~impairment loss ~~center~~on ~~and~~goodwill ~~consequently~~in ~~does~~the ~~not~~amount ~~generate~~of ~~revenues~~approximately $15,963,000.

Net ~~Other~~other ~~(income)~~ expense

AsNet aother ~~result~~expense ofis ~~consolidated~~mainly ~~notes payable increasing by approximately $34,000,000,~~ interest expense attributable ~~increased~~to ~~approximately~~debt ~~$956,000~~balances ~~and $990,000 for the three and six month period ended June 30, 2014, respectively. The Corporate segment also recognized a gain~~ of ~~approximately $1,703,000 on~~ the ~~revaluation~~Company’s ~~of the warrants assumed in connection with the reverse merger for the three and six month period ended June 30, 2014~~VIE. ~~No such gain was recognized in the same prior periods. Overall, net other expense decreased approximately $805,000 and $769,000 for the three and six month periods ended June 30, 2014.~~

~~Net gain (loss)~~eCommerce

The decrease in the net loss for the Corporate segment of approximately $805,000 and $769,000 for the three and six month period ended June 30, 2014, respectively, is attributable to the gain on the revaluation of warrants that offset interest expense for the periods.

	For the Three Months Ended September 30,					Increase		For the Nine Months Ended September 30,					Increase
	2014			2013⁽¹⁾		(Decrease)		2014			2013⁽¹⁾		(Decrease)
Revenues	$	155,366		$	–	$	155,366	$	343,820		$	–	$	343,820
Cost of revenues		20,858			–		20,858		34,179			–		34,179
Gross profit		134,508			–		134,508		309,641			–		309,641
Gross profit %		86.57%					86.57%		90.06%					90.06%

Operating expenses:
General and administrative expenses		767,853			–		767,853		1,630,147			–		1,630,147
Impairment loss on goodwill		3,214,097			–		3,214,097		3,214,097			–		3,214,097
Impairment loss on other intangible assets		2,793,415			–		2,793,415		2,793,415			–		2,793,415
Loss from operations		(6,640,857	)		–		6,640,857		(7,328,018	)		–		7,328,018

Income tax provision		–			–		–		–			–		–

Net loss	$	(6,640,857	)	$	–	$	6,640,857	$	(7,328,018	)	$	–	$	7,328,018

~~Off~~(1) Segment ~~Balance~~operations ~~Sheet~~began ~~Arrangements~~April 2, 2014.

~~We do not have any off balance sheet arrangements as of June 30, 2014.~~44

~~Liquidity and Capital Resources~~Revenues

WeeCommerce ~~reported~~operations acommenced with ~~net~~the ~~loss~~completion of ~~approximately $4,028,000 for~~ the ~~six~~reverse ~~month period ended June 30, 2014~~acquisition. AtRevenues ~~June 30, 2014, we had a working capital deficit of approximately $23.2 million, an accumulated deficit of approximately $31.7 million and cash used~~ in ~~operations~~this ~~for~~segment ~~the~~reflect ~~six~~royalties ~~months~~earned ~~ended~~under ~~June~~a ~~30,~~contractual ~~2014~~relationship related ofto ~~approximately $6,095,000. Based on~~ our ~~recurring~~As ~~losses~~Seen ~~from~~On operations and negative cash flows from operations, the report of our independent registered public accounting firm on Infusion’s financial statements for the fiscal year ended December 31, 2013 contained an explanatory paragraph regarding our ability to continue as a going concernTV. ~~The~~com ~~reports~~URL ofwebsite ~~ASTV’s~~ and ~~Ronco’s~~subscription ~~independent~~web-based ~~registered~~diet ~~public accounting firm on each of their respective financial statements for the fiscal years ended March 31, 2014~~ and ~~December~~wellness ~~31,~~revenue ~~2013,~~related ~~respectively, contained explanatory paragraphs of ASTV’s and Ronco’s ability~~ to ~~continue~~our ~~as going concerns~~eDiets.com ~~These factors, among others, raise substantial doubt about our ability to continue as a going concern~~URL. The ~~Our~~subscription ~~financial~~revenue ~~statements~~is dogenerated ~~not include any adjustments that might result~~ from ~~the~~monthly ~~outcome~~billings ofto ~~this~~our ~~uncertainty.~~customers’ ~~There~~credit ~~are~~cards noproviding ~~assurances~~them wewith ~~will~~access ~~be successful in our efforts~~ to diet ~~increase our revenues~~ and ~~report profitable operations~~ /or towellness ~~continue~~related asresources aand ~~going concern, in which event investors would lose their entire investment in our Company~~content.

43Royalty revenue for the three and nine month periods ended September 30, 2014 was approximately $90,000 and $181,000, respectively. Royalty fees will no longer be generated subsequent to the October 28, 2014 sale of As Seen On TV.com URL.

WeSubscription ~~have~~based ~~experienced~~revenue for ~~losses~~the ~~from~~three ~~operations since our inception~~ and ~~cannot~~nine ~~predict~~month ~~how~~periods ~~long~~ended weSeptember ~~will~~30, ~~continue~~2014 towas ~~incur~~approximately ~~losses~~$55,000 orand ~~whether~~$150,000, ~~we ever become profitable~~respectively. WeThis ~~have~~revenue is ~~relied~~expected onto adecline ~~series~~as ~~of private placements of secured and unsecured promissory notes;~~ the ~~most~~membership ~~recent~~base ~~promissory~~runs ~~note~~off ~~sale~~due ~~was~~to alack ~~senior~~of ~~secured~~available ~~promissory~~resource ~~note~~investment ~~on April 3, 2014~~ in ~~the~~customer ~~amount~~acquisition ~~of $10,180,000 whereby the Company received net proceeds of approximately $8,400,000 after debt issuance costs~~ and content ~~original issuance discount~~development.

~~The~~Cost ~~Ronco is currently in default on $1,545,000~~ of its outstanding 18% promissory notes. Ronco is also in default on its 1.5% Secured Promissory Note with a current outstanding balance of $8,620,000; however, on March 7, 2014, Ronco and certain creditors entered into a forbearance agreement whereby each creditor will forbear from exercising its rights and remedies under the 1.5% Secured Promissory Note for up to 1 year provided Ronco does not default on the forbearance agreement.revenues

~~Currently,~~Cost ~~the~~of ~~Company~~revenues ~~does~~in ~~not~~the eCommerce ~~have~~segment aconsists ~~line~~primarily of ~~credit~~web-site torelated ~~draw~~fees, ~~upon. The~~hosting ~~Company’s~~fees ~~commitments~~ and ~~contingencies~~dietary ~~will~~consulting ~~either utilize future operating cash flow or require the sale of debt or equity securities to fulfill the commitments~~services.

WeOperating ~~have undertaken, and will continue to implement, various measures to address our financial condition, including:~~expenses

·Operating expenses of the eCommerce segment consist of general and administrative expenses mainly comprised of administrative salaries, professional fees, insurance costs and intangible asset amortization. During the three and nine month period ended September 30, 2014, the eCommerce segment recognized an impairment of approximately $3,214,000 on its goodwill and an impairment of approximately $2,793,000 on other intangible assets.

~~Significantly~~Corporate ~~curtailing costs~~ and ~~consolidating operations, where feasible.~~Other

	For the Three Months Ended September 30,						Increase		For the Nine Months Ended September 30,						Increase
	2014			2013			(Decrease)		2014			2013			(Decrease)
Revenues	$	–		$	–		$	–	$	–		$	–		$	–
Operating expenses		–			–			–		–			–			–
Loss from operations		–			–			–		–			–			–

Other income (expense):
Change in fair value of warrants		(665,733	)		–			665,733		1,037,108			–			1,037,108
Interest income		65,172			–			65,172		118,881			–			118,881
Interest expense		(1,326,537	)		(238,185	)		1,088,352		(2,491,647	)		(238,185	)		2,253,462
Loss on note receivable		(1,035,256	)		–			1,035,256		(1,035,256	)		–			1,035,256
Other income (expense)		14,674			7,658			7,016		(28,342	)		6,229			34,571
Net other income (expense)		(2,947,680	)		(230,527	)		2,717,153		(2,399,256	)		(231,956	)		2,167,300

Income tax provision		–			–			–		–			–			–

Net loss	$	(2,947,680	)	$	(230,527	)	$	2,717,153	$	(2,399,256	)	$	(231,956	)	$	2,167,300

~~Seeking debt, equity and other forms of financing, including funding through strategic partnerships.~~ Revenues

·The Corporate segment is a cost center and consequently does not generate revenues.

~~Reducing~~Net ~~operations~~Other to(income) ~~conserve cash.~~expense

·As a result of notes payable increasing by approximately $35,000,000, interest expense increased approximately $1,260,000 and $2,256,000 for the three and nine month period ended September 30, 2014, respectively. The increase in notes payable is due to the debt assumed via the reverse merger, VIE acquisition, Assumption Agreement and new financing issuances.

~~Deferring~~The ~~certain~~Corporate ~~marketing~~segment ~~activities~~also recognized a loss of approximately $666,000 and a gain of approximately $1,037,000 on the change in fair value of warrants subject to remeasurement for the three and nine month period ended September 30, 2014, respectively. Changes in the share price of ASTV common stock was the most significant fair value input that contributed to such gain and loss.

·45

~~Investigating~~An ~~and~~approximate ~~pursuing~~loss ~~transactions~~of $1,035,000 ~~with~~was ~~third~~recognized ~~parties,~~on ~~including~~a ~~strategic~~note ~~transactions~~receivable and ~~relationships.~~it’s accrued interest during three and nine month period ended September

~~There~~Net can be no assurance that we will be able to secure the additional funding we need. If our efforts to do so are unsuccessful, we will be required to further reduce or eliminate our operations and/or seek relief through a filing under the U.S. Bankruptcy Code. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties.loss

The ~~following~~increase ~~table~~in ~~summarizes~~the ~~our~~net loss ~~cash~~for ~~flows~~the Corporate segment for the ~~six~~three month ~~periods~~period ended ~~June~~September 30, 2014 is attributable to an increase of approximately $1,260,000 in interest expense, to an approximate $1,035,000 loss recognized on a note receivable, and ~~2013~~to a loss of approximately $666,000 in the change in fair value of warrants subject to remeasurement. For the nine month period ended September 30, 2014, the increase in net loss is attributable to the increase of approximately $2,256,000 in interest expense and an approximate loss of $1,035,000 recognized on a note receivable offset by an approximate gain of $1,037,000 recognized on the revaluation of the warrants.

	June 30, 2014			June 30, 2013
Net cash (used in) provided by operating activities	$	(6,143,522	)	$	899,820
Net cash provided by investing activities		32,,193			—
Net cash provided by (used in) financing activities		7,988,018			(1,057,402	)
	$	1,876,689		$	(157,582	)

Off Balance Sheet Arrangements

~~The~~We ~~approximate~~do ~~$7,043,000~~not ~~increase~~have inany ~~net~~off ~~cash~~balance ~~used~~sheet inarrangements as ~~operations~~of isSeptember ~~primarily attributable to operational losses~~30, ~~growth in inventory, deposits on inventory and prepaid expenses~~2014.

~~The~~Liquidity ~~approximate~~and ~~$32,000~~Capital ~~increase in net cash provided by investing activities predominately represents purchases of fixed assets.~~Resources

~~The~~We ~~approximate~~reported a net loss of approximately $935,~~045~~612,000 ~~increase~~for the nine month period ended September 30, 2014. At September 30, 2014, we had a working capital deficit of approximately $31,450,000, an accumulated deficit of approximately $44,164,000 and cash used in operations for the nine months ended September 30, 2014 of approximately $7,697,000. Based on our recurring losses from operations and negative cash ~~provided~~flows from byoperations, ~~financing~~these ~~activities~~factors, isamong ~~related~~others, raise substantial doubt about our ability to continue as a going concern. Our condensed consolidated financial statements do not include any adjustments that might result from the ~~aforementioned~~outcome ~~April~~of ~~2014~~this ~~senior~~uncertainty. ~~secured~~There are ~~promissory~~no ~~note~~assurances we will be successful in our efforts to increase our revenues and report profitable operations or to continue as a ~~decrease~~going concern, in ~~net~~which ~~payments~~event ~~made~~investors onwould ~~our~~lose ~~accounts~~their ~~receivable~~entire ~~factoring~~investment ~~arrangement~~in our Company.

AWe ~~summary~~have experienced losses from operations since our inception and cannot predict how long we will continue to incur losses or whether we ever become profitable. We have relied on a series of ~~future~~private ~~minimum~~placements ~~rental~~of ~~payments~~secured ~~required~~and ~~under~~unsecured promissory notes; the ~~Company’s~~most ~~operating~~recent ~~leases~~promissory ~~that~~note ~~have~~sale was ~~initial~~a orsenior ~~remaining~~secured ~~non-cancelable~~promissory ~~lease~~note ~~terms~~on April 3, 2014 in ~~excess~~the amount of ~~one~~$10,180,000 ~~year~~whereby ~~from~~the ~~June~~Company 30received net proceeds of approximately $8,400,000 ~~2014~~after ~~are~~debt asissuance ~~follows:~~costs and original issuance discount.

Year 1	$	174,000
Year 2		140,000
Year 3		88,000
Year 4		71,000
Year 5		6,000
Thereafter		—
	$	479,000

During the reporting period, we utilize an accounts receivable and purchase order financing agreement to generate cash flow to fund inventory purchases and operations. We are able to obtain cash advances from 75% to 80% of qualified accounts receivable balances assigned up to an amount of $4,000,000.

44Currently, the Company does not have a line of credit to draw upon. The Company’s commitments and contingencies will either utilize future operating cash flow or require the sale of debt or equity securities to fulfill the commitments.

~~The~~We ~~following~~have isundertaken, aand will ~~consolidated~~continue ~~schedule~~to ofimplement, ~~the~~various ~~future~~measures ~~payments~~to ~~required~~address ~~under~~our ~~notes~~financial ~~payable.~~condition, including:

2015	$	23,787,072
2016		11,247,005
2017		—
2018		3,770,000
Thereafter		—
	$	38,804,077

Significantly curtailing costs and consolidating operations, where feasible.

~~ITEM~~· 3Seeking debt, equity and other forms of financing, including funding through strategic partnerships.

~~QUANTITATIVE~~· ~~AND~~Reducing ~~QUALITATIVE~~operations ~~DISCLOSURES~~to ~~ABOUT~~conserve ~~MARKET RISK~~cash.

~~Not~~· ~~applicable~~Deferring tocertain ~~smaller~~marketing ~~reporting companies~~activities.

~~ITEM~~· 4Investigating and pursuing transactions with third parties, including strategic transactions and relationships.

~~CONTROLS~~There ~~AND~~can ~~PROCEDURES~~be no assurance that we will be able to secure the additional funding we need. If our efforts to do so are unsuccessful, we will be required to further reduce or eliminate our operations and/or seek relief through a filing under the U.S. Bankruptcy Code. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result from the outcome of these uncertainties.

~~Evaluation~~The offollowing ~~Disclosure~~table ~~Controls~~summarizes our cash flows for the nine month periods ended September 30, 2014 and ~~Procedures~~2013.

Our management carried out an evaluation with the participation of our chief executive officer who serve as our principal executive officer and principal financial and accounting officer, required by Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934 (the “Exchange Act”) of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation our chief executive officer concluded that our disclosure controls and procedures were not effective at June 30, 2014 so as to ensure that the information relating to our company required to be disclosed in our SEC reports (i) is recorded, process, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our chief executive officer, to allow timely decisions regarding required disclosures due to the existence of material weaknesses.

	September 30, 2014			September 30, 2013
Net cash used in operating activities	$	(7,696,586	)	$	(2,359,277	)
Net cash used in investing activities		(109,713	)		–
Net cash provided by financing activities		7,813,084			2,070,581
Net increase (decrease) in cash	$	6,785		$	(288,696	)

~~The material weaknesses are as follows:~~46

·The Aapproximate ~~lack of sufficient resources including a designated chief financial officer and an insufficient level of monitoring and oversight~~$5, ~~which restricted the Company’s ability to gather~~337,000 increase ~~analyze~~in ~~and~~net ~~report~~cash ~~information~~used ~~relative to the financial statement assertions~~ in aoperations ~~timely~~is ~~manner,~~primarily ~~including~~attributable ~~insufficient documentation and review of selection of generally accepted accounting principles. · The limited size of the accounting departments makes it impractical~~ to achieve an appropriate level of segregation of duties. Specifically, due to lack of personnel, (1) effective controls were not designed and implemented to ensure accounting functions were properly segregated for and (2) we experienced problems with the post-acquisition integration of Infusion and Ronco Holdings, as their accounting processes, systems and procedures differ from our historical operations. · Due to a lack of adequate staffing within the finance department and adequate staffing within operational ~~departments that provide information to the finance department~~losses, wegrowth ~~did~~in ~~not establish and maintain effective controls over certain of our period-end financial close and reporting processes. Specifically~~inventory, ~~effective~~deposits ~~controls~~on ~~were not designed~~ inventory and ~~implemented~~prepaid ~~to ensure that journal entries were p~~

Filing Compare · As Seen On TV, Inc.