In August 2016, the Financial Accounting Standards Board issued Statement of Cash Flows, Topic 230 (ASU No. 2016-15). This amendment provides guidance on the presentation and classification of specific cash flow items to improve consistency in practice. The standard provides guidance in a number of situations including, among others, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims and debt prepayment or extinguishment costs. The new standard is effective retrospectively for the Company for fiscal years and interim periods beginning after December 15, 2017,2018, with early adoption permitted. The Company elected to early adopt this standard in the firstsecond quarter of fiscal 2017, applying it retrospectively. The adoption of ASU 2016-15 had2018 and there was no impact on the Company's condensed consolidated financial statements.statements since there was no outstanding nonemployee share-based payment awards for which there is unrecognized compensation expense.

On August 28, During the fiscal 2017 fourth quarter, the Company entered into a channel sharing and facilities agreement (the “Channel Sharing Agreement”) with NRJ Boston OpCo, LLC and NRJ TV Boston License Co., LLC (collectively, “NRJ”) to allow NRJ to operate its local Boston television stationclosed on one-third of the spectrum used in the operation of the Company's television broadcast station, WWDP(TV), Norwell, Massachusetts (the “Station”), in perpetuity. The total consideration payable to the Company under the Channel Sharing Agreement is $3,500,000, of which $2,500,000 was paid in October 2017 upon the grant of a required construction permit by the FCC. The balance is payable upon the closing of the sale of substantially all of the remaining assets used by the Company in the operation of the Station or the transfer of the equipment necessary for channel sharing among the Company and NRJ to a newly formed entity.

On August 28, 2017, the Company also entered into an asset purchase agreement to sell substantially all of the assets primarily related to its television broadcast station, WWDP(TV), Norwell, Massachusetts (the “Station”), which included an intangible FCC broadcasting license asset. As of August 4, 2018, $667,000 of the sales price remained in escrow pending the Station to affiliates of WRNN-TV Associates Limited Partnership (“Buyers”). The purchase price for the Station's assets is $10,000,000 in cash, subject to an escrow holdback amount of $1,000,000, which is payable to the Company when the Station is being carried by certain designated carriers at or following the closing of the transaction.distribution carriers. The escrow holdback is payable backCompany has not recorded any additional gain relating to the Buyers in monthly installments beginning approximately 14 months after the closing if the station isremaining escrow amount and will not being carried by certain designated carriers. The asset purchase agreement includes customary representations, warranties, covenants and indemnification obligations of the parties. The sale of assets pursuant to the purchase agreement is expected to close in the fourth quarter of fiscal 2017 or the first quarter of fiscal 2018 following receipt of specified regulatory approvals from the FCC and satisfaction of other closing conditions in the asset purchase agreement. The Company plans to use the proceeds received from the transaction to pay in fullrecord the remaining amounts due undergain until the Company's term loan with GACP Finance Co., LLC, with the remaining proceeds used for general working capital purposes.contingency is resolved.

to, upon receipt of certain proceeds from dispositions of collateral. Borrowings under the term loan are also subject to mandatory prepayment in an amount equal to fifty percent (50%) of excess cash flow for such fiscal year, with any such payment not to exceed $2.0 million in any such fiscal year. The PNC Credit Facility is also subject to other mandatory prepayment in certain circumstances. In addition, if the total PNC Credit Facility is terminated prior to maturity, the Company would be required to pay an early termination fee of 3.0% if terminated on or before March 21, 2018,July 27, 2019, 1.0% if terminated on or before March 21, 2019,July 27, 2020, 0.5% if terminated on or before March 21, 2020,July 27, 2021, and no fee if terminated after March 21, 2020.July 27, 2021. As of October 28, 2017,August 4, 2018, the imputed effective interest rate on the PNC term loan was 7.7%5.8%.

if terminated on or before March 10, 2019; and no fee if terminated after March 10, 2019. Interest expense recorded under the GACP Credit Agreement for the three and nine-monthsix-month periods ended October 28,July 29, 2017 was $219,000$231,000 and $880,000 and $585,000 and $1,519,000 for the three and nine-month periods ended October 29, 2016.

On May 23, 2017,Basic net loss per share is computed by dividing reported loss by the Company entered into Common Stock Purchase Agreements with certain accredited investors to which the Company sold, in the aggregate, 4,008,273weighted average number of shares of common stock in a registered direct offering pursuant to a shelf registration statement on Form S-3 (File No. 333-203209), filed withoutstanding for the SEC on May 13, 2015. The shares were sold at a price of $1.12reported period. Diluted net income per share except for shares purchased by investors who are directorsreflects the potential dilution that could occur if securities or executive officersother contracts to issue common stock were exercised or converted into common stock of the Company which were sold at a priceduring reported periods.

During the third quarter of fiscal 2016, Robert Rosenblatt was appointed as permanent Chief Executive Officer and entered into an executive employment agreement. In conjunction with the employment agreement, the Company granted, to Mr. Rosenblatt, 231,799 shares of market-based restricted stock performance units as part of the Company's long-term incentive program. The number of restricted stock units earned is based on the Company's total shareholder return ("TSR") relative to a group of industry peers over a three-year performance measurement period. The total grant date fair value was estimated to be $422,000, or $1.82 per share and is being amortized over the three-year performance period. Grant date fair values were determined using a Monte Carlo valuation model based on assumptions, which included a weighted average risk-free interest rate of 0.76%, a weighted average expected life of three years and an implied volatility of 77%. The percent of the target market-based performance vested restricted stock unit award that will be earned based on the Company's TSR relative to the peer group is as follows:

During the second quarters of fiscal 2017 and fiscal 2016, the Company granted a total of 472,720 and 167,142 shares of restricted stock to non-employee directors as part of the Company's annual director compensation program. Each restricted stock awardgrant vests or did vestvested on the day immediately preceding the next annual meeting of shareholders following the date of grant.

During the first quarters of fiscal 2017 and fiscal 2016, the Company granted a total of 561,981 and 179,156 shares of-0- market-based restricted stock performance units to certain executives as part of the Company's long-term incentive program.program during the second quarters of fiscal 2018 and fiscal 2017 and 747,000 and 562,000 market-based restricted stock performance units during the first six months of fiscal 2018 and fiscal 2017. The number of restricted stock units earned is based on the Company's total shareholder return ("TSR") relative to a group of industry peers over a three-year performance measurement period. Grant date fair values were determined using a Monte Carlo valuation model based on assumptions as follows:

ForCompany's fiscal 2017 financial statements, the three and nine month periods ended October 29, 2016,Tax Act did not have an impact on the income tax provision included a non-cash tax charge of approximately $197,000 and $592,000. The Company expects the continued tax amortization of its indefinite-lived intangible asset and resulting book versus tax asset carrying value difference to result in approximately $156,000 of additional non-cash incomeCompany's tax expense overor benefit due to the remainder of fiscal 2017.

UntilOn April 29, 2016, the Company was a party to an amended and restated shareholder agreement, dated February 25, 2009 (the “GE/NBCU Shareholder Agreement”), with GE Equity and NBCU, which provided for certain corporate governance and standstill matters (as described further below). NBCU is an indirect subsidiary of Comcast Corporation (“Comcast”). The Company has a significant cable distribution agreement with Comcast and believes that the terms of the agreement are comparable to those with other cable system operators.

In an SEC filing made on August 18, 2015, GE Equity disclosed that on August 14, 2015, it and ASF Radio, L.P. (“ASF Radio”), an independent third party to Evine, entered into a Stock Purchase Agreement pursuant to which GE Equity agreed to sell 3,545,049 shares of the Company’s common stock, which is all of the shares GE Equity then owned, to ASF Radio for $2.15 per share. According to the SEC filing, ASF Radio is an affiliate of Ardian, an independent private equity investment company. The closing of this sale (the “GE/ASF Radio Sale”) occurred on April 29, 2016. In connection with the GE/ASF Radio Sale, the GE/NBCU Shareholder Agreement was terminated and11, 2018, the Company entered into a transition and separation agreement with its Executive Vice President, Chief Operating Officer/Chief Financial Officer, under which his position terminated on April 16, 2018 and he served as a non-officer employee until June 1, 2018. On April 11, 2018, the Company announced the appointment of a new Shareholder Agreement (the “NBCU Shareholder Agreement”) with NBCU described below.

The GE/NBCU Shareholder Agreement that was terminated April 29, 2016 provided that GE Equity was entitled to designate nominees for three members of the Company's Board of Directors so long as the aggregate beneficial ownership of GE Equity and NBCU (and their affiliates) was at least equal to 50% of their beneficial ownershipChief Financial Officer, effective as of February 25, 2009 (i.e., beneficial ownershipApril 16, 2018. In conjunction with this executive change as well as other executive and management terminations made during the first six months of approximately 8.7 million common shares) (the “50% Ownership Condition”), and two members of the Company's Board of Directors so long as their aggregate beneficial ownership was at least 10% of the shares of “adjusted outstanding common stock,” as defined in the GE/NBCU Shareholder Agreement (the “10% Ownership Condition”). In addition, the GE/NBCU Shareholder Agreement provided that GE Equity may designate any of its director-designees to be an observer of the audit, human resources and compensation, and corporate governance and nominating committees of the Company's Board of Directors. Neither GE Equity nor NBCU currently has, or during fiscal 2017 had, any designees serving on the Company's Board of Directors or committees.

The GE/NBCU Shareholder Agreement required that2018, the Company obtain the consent of GE Equity before the Company (i) exceed certain thresholds relatingrecorded charges to the issuance of securities, the payment of dividends, the repurchase or redemption of common stock, acquisitions (including investmentsincome totaling $0 and joint ventures) or dispositions, and the incurrence of debt; (ii) enter into any business different than the business in which the Company and its subsidiaries are currently engaged; and (iii) amend the Company's articles of incorporation to adversely affect GE Equity and NBCU (or their affiliates); provided, however, that these restrictions would no longer apply when both (1) GE Equity is no longer entitled to designate three director nominees, and (2) GE Equity and NBCU no longer hold any Series B preferred stock. The Company was also prohibited from taking any action that would cause any ownership interest by us in television broadcast stations from being attributable to GE Equity, NBCU or their affiliates.

On January 31, 2017, the Company purchased from NBCU 4,400,000 shares of the Company's common stock, representing approximately 6.7% of shares then outstanding,$1,024,000 for approximately $5 million or $1.12 per share, pursuant to the Repurchase Letter Agreement. Following the Company's share purchase, the direct equity ownership of NBCU in the Company consisted of 2,741,849 shares of common stock, or 4.5% of the Company's outstanding common stock. The NBCU Shareholder Agreement was terminated pursuant to the Repurchase Letter Agreement.

The Company entered into a service agreement with Newgistics, Inc. ("Newgistics") in fiscal 2004. Newgistics provides offsite customer returns consolidation and delivery services to the Company. The Company's Chief Executive Officer, Robert Rosenblatt, was a member of Newgistics' Board of Directors until October 2017, when Newgistics was acquired by a third party. The Company made payments to Newgistics totaling approximately $1,010,000 and $3,296,000 during the three and nine-month periodssix-months ended October 28, 2017 and payments totaling approximately $1,255,000 and $3,789,000 during the three and nine-month periods ended October 29, 2016.

One of the Company's directors, Thomas Beers, has a minority interest in one of the Company's on air food suppliers. The Company made inventoryAugust 4, 2018, which relate primarily to severance payments to this supplier totaling approximately $199,000 and $1,025,000 during the three and nine-month periods ended October 28, 2017 and payments totaling approximately $412,000 and $1,635,000 during the three and nine-month periods ended October 29, 2016.

Asbe made as a result of the Company's distribution facility expansion, consolidationexecutive officer and technology upgrade initiative, the Company incurred $0 in incremental expenses during the threeother management terminations and nine month periods ended October 28, 2017 and approximately $150,000 and $530,000 in incremental expenses during the three and nine month periods ended October 29, 2016 related primarily to increased labor and trainingother direct costs associated with the Company’s warehouseCompany's 2018 executive and management system migration.

working capital levels; our ability to remain compliant with our credit facilities covenants; customer acceptance of our branding strategy and our repositioning as a video commerce company; the market demand for television station sales;our ability to respond to changes in consumer shopping patterns and preferences, and changes in technology and consumer viewing patterns; changes to our management and information systems infrastructure; challenges to our data and information security; changes in governmental or regulatory requirements, including without limitation, regulations of the Federal Communications Commission and Federal Trade Commission, and adverse outcomes from regulatory proceedings; litigation or governmental proceedings affecting our operations; significant public events (including disasters, weather events or events attracting significant television coverage) that are difficult to predict, or other significant television-covering events causingeither cause an interruption of television coverage or that directly compete with thedivert viewership offrom our programming; disruptions in our distribution of our network broadcast to our customers; our ability to protect our intellectual property rights; our ability to obtain and retain key executives and employees; our ability to attract new customers and retain existing customers; changes in shipping costs; expenses relating to the actions of activist or hostile shareholders; our ability to offer new or innovative products and customer acceptance of the same; changes in customer viewing habits of television programming; and the risks identified under “Risk Factors” in our most recently filed Form 10-K and any additional risk factors identified in our periodic reports since the date of such report. More detailed information about those factors is set forth in our filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this filing. We are under no obligation (and expressly disclaim any such obligation) to update or alter our forward-looking statements whether as a result of new information, future events or otherwise.

Consolidated net sales for the first nine months of fiscal 2017 were approximately $455.5 million compared to $475.7 million for the first nine months of fiscal 2016, which represents a 4% decrease.$753,000. We reported an operating loss of approximately $1.4$1.1 million and a net loss of approximately $6.3$5.2 million for the first ninesix months of fiscal 2017. The operating and net loss for the first ninesix months of fiscal 2017 included charges relating to executive and management transition costs totaling $2.0$1.1 million. The net loss for the first ninesix months of fiscal 2017 also included a loss on debt extinguishment of $1.1 million. We had an operating loss of $5.8 million and a net loss of $10.8 million for the first nine months of fiscal 2016. The operating and net loss for the first nine months of fiscal 2016 included charges relating to executive and management transition costs totaling $4.4 million and distribution facility consolidation and technology upgrade costs totaling $530,000.$913,000.

Thefirst six months of fiscal 2018 was primarily driven by offering a higher average selling price ("ASP") per net unit was $58assortment in the fiscal 2017 third quarter, a 3% decrease from the prior year quarter. The decrease in the ASP was primarily driven by a sales mix shift into our beauty category, which typically has a lower average selling price,jewelry & watches and out of our watches product category. In addition, we experienced ASP decreases within our fashionhome &

Our digital sales penetration, or, the percentage of net sales that are generated from our evine.com website and mobile platforms, which are primarily ordered directly online, was 51.5%52.6% and 50.8%52.8% compared to 49.0%48.1% and 48.6%49.4% for the thirdsecond quarter and first ninesix months of fiscal 20172018 compared to fiscal 2016.2017. Overall, we continue to deliver strong digital sales penetration. We believe the increase in penetration during the periods was driven by our improved digital marketing initiatives and an enhanced responsive customer experience on mobile devices. Our mobile penetration increased to 51.2%55.7% and 49.5%52.5% of total digital orders in the thirdsecond quarter and first ninesix months of fiscal 20172018 versus 45.9%49.4% and 45.5%48.7% of total digital orders for the comparable prior year periods.

Net loss for the first ninesix months of fiscal 2017 includes executive and management transition costs of $2.0$1.1 million, interest expense of $4.0$2.8 million and a loss on debt extinguishment of $1.1 million. Net loss for$913,000.

For the third quarter and first nine monthssecond quarters of fiscal 2016, net loss reflects an income tax provision of $205,0002018 and $615,000, which included a non-cash expense charge of $197,000 and $592,000, respectively,fiscal 2017, relating to changes in our long-term deferred tax liability related to the tax amortization of our previously owned indefinite-lived intangible FCC license asset that was not available to offset existing deferred tax assets in determining changes to our income tax valuation allowance. The remaining income tax provision for both quarters relates to state income taxes payable on certain income for which there is no loss carryforward benefit available. During the fourth quarter of fiscal 2017, we sold our indefinite-lived intangible FCC license asset in connection with the sale of our television broadcast station, WWDP(TV).