Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2014 | Aug. 08, 2016 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2014 | ||
Entity Registrant Name | As Seen On TV, Inc. | ||
Entity Central Index Key | 1,432,967 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,014 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 542,815,115 | ||
Entity Public Float | $ 4,714,000 | ||
Current Reporting Status | No | ||
Seasoned Issuer | No | ||
Voluntary Filer | No |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets: | ||
Cash | $ 695,992 | $ 91,397 |
Accounts receivable, net | 3,179,996 | 1,127,058 |
Inventories | 5,610,048 | 879,178 |
Prepaid expenses and other current assets | 890,081 | 96,826 |
Total current assets | 10,376,117 | 2,194,459 |
Restricted cash - non current | 60,462 | 0 |
Property plant and equipment, net | 450,895 | 100,732 |
Intangible assets, net | 948,680 | 0 |
Deposits | 2,185 | 0 |
Total assets | 11,838,339 | 2,295,191 |
Current liabilities: | ||
Accounts payable | 11,489,229 | 2,193,664 |
Deferred revenue | 722,173 | 37,030 |
Accrued expenses and other current liabilities | 6,915,110 | 659,695 |
Accounts receivable financing arrangement | 269,975 | 473,960 |
Revolving loan | 1,709,586 | 0 |
Notes payable, related party - current portion | 3,000,143 | 0 |
Notes payable - current portion | 19,727,445 | 0 |
Warrant liability | 2,033,495 | 0 |
Due to affiliates | 0 | 20,138,733 |
Total current liabilities | 45,867,157 | 23,503,082 |
Notes payable | 2,248,875 | 0 |
Notes payable, related party | 11,211,562 | 0 |
Total liabilities | 59,327,594 | 23,503,082 |
Commitments and contingencies (Note 14) | ||
Redeemable preferred stock (Note 15) | 2,700,000 | 0 |
Stockholders' equity: | ||
Preferred stock, $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively. | 0 | 0 |
Common stock, $.0001 par value; 750,000,000 shares authorized and 531,815,115 and 452,960,490 shares issued and outstanding at December 31, 2014 and December 31, 2013, respectively. | 53,182 | 45,296 |
Additional paid-in capital | 23,825,124 | 6,438,443 |
Accumulated deficit | (49,565,017) | (27,691,630) |
Total ASTV stockholders' equity | (25,686,711) | (21,207,891) |
Noncontrolling interest in Ronco Holdings, Inc. | (24,502,544) | 0 |
Total stockholders' deficit | (50,189,255) | (21,207,891) |
Total liabilities, redeemable preferred stock and stockholders' defficit | $ 11,838,339 | $ 2,295,191 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value per share | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value per share | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 531,815,115 | 452,960,490 |
Common stock, shares outstanding | 531,815,115 | 452,960,490 |
Consolidated Balance Sheets of
Consolidated Balance Sheets of VIE - Ronco Holdings Inc [Member] - Variable Interest Entity, Primary Beneficiary [Member] | Dec. 31, 2014USD ($) | |
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | $ 8,415,243 | |
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 27,934,596 | [1] |
Cash [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 502,661 | |
Accounts Receivable [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 2,056,184 | |
Inventories [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 4,607,441 | |
Prepaid Expenses and Other Current Assets [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 81,772 | |
Property, Plant and Equipment [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 260,090 | |
Intangible Assets [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 907,095 | |
Accounts Payable [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 7,199,760 | |
Accrued Liabilities [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 3,621,191 | |
Line of Credit [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 1,709,586 | |
Notes Payable Current [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 13,165,183 | |
Total Current Liabilities [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 25,695,720 | |
Long-term notes payable [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 2,238,876 | |
Redeemable Preferred Stock [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | $ 2,700,000 | |
[1] | Excludes intercompany liabilities of $2,283,191 that eliminate in consolidation. |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | ||
Revenues | $ 18,903,353 | $ 14,731,837 |
Cost of revenues | 13,362,657 | 11,257,676 |
Gross profit | 5,540,696 | 3,474,161 |
Operating expenses: | ||
Selling and marketing expenses | 10,771,989 | 2,174,375 |
General and administrative expenses | 11,194,954 | 4,979,688 |
Impairment loss on goodwill | 20,007,174 | 0 |
Impairment loss on other intangible assets | 5,401,136 | 0 |
Loss on related party receivable | 488,457 | 0 |
Loss from operations | (42,323,014) | (3,679,902) |
Other (income) expense: | ||
Change in fair value of warrants | 2,043,230 | 0 |
Interest expense | (5,304,839) | (330,793) |
Interest income | 60,303 | 0 |
Loss on write off note receivable - related party | (1,036,465) | 0 |
Other income (expense) | (4,945) | 14,642 |
Net other income (expense) | (4,242,716) | (316,151) |
Loss before provision for income taxes | (46,565,730) | (3,996,053) |
Income tax benefit | 189,799 | 0 |
Net loss | (46,375,931) | (3,996,053) |
Less: Net loss attributed to noncontrolling interest in Ronco Holdings, Inc. | 24,502,544 | 0 |
Net loss attributable to As Seen On TV, Inc. | $ (21,873,387) | $ (3,996,053) |
Basic and diluted loss per share | $ (.04) | $ (.01) |
Basic and diluted weighted-average number of common shares outstanding | 537,898,875 | 452,960,490 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Parent [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, shares at Dec. 31, 2012 | 452,960,490 | |||||
Beginning balance, value at Dec. 31, 2012 | $ 45,296 | $ 5,761,252 | $ (23,695,577) | $ (17,889,029) | $ 0 | $ (17,889,029) |
Share based compensation | 677,191 | 677,191 | 677,191 | |||
Net loss attributable to noncontrolling interest | 0 | |||||
Net loss attributable to As Seen On TV, Inc. | (3,996,053) | (3,996,053) | (3,996,053) | |||
Ending balance, shares at Dec. 31, 2013 | 452,960,490 | |||||
Ending balance, value at Dec. 31, 2013 | $ 45,296 | 6,437,443 | (27,691,630) | (21,207,891) | 0 | (21,207,891) |
Share based compensation | 575,686 | 575,686 | 575,686 | |||
Affiliate capital contribution | 10,181,201 | 10,181,201 | 10,181,201 | |||
Shares issued for acquisition, shares | 71,741,250 | |||||
Shares issued for acquisition, value | $ 7,174 | 5,990,302 | 5,997,476 | 5,997,476 | ||
Shares issued under re-pricing agreement, shares | 7,113,375 | |||||
Shares issued under re-pricing agreement, value | $ 712 | 639,492 | 640,204 | 640,204 | ||
Net loss attributable to noncontrolling interest | (24,502,544) | (24,502,544) | ||||
Net loss attributable to As Seen On TV, Inc. | (21,873,387) | (21,873,387) | (21,873,387) | |||
Ending balance, shares at Dec. 31, 2014 | 531,815,115 | |||||
Ending balance, value at Dec. 31, 2014 | $ 53,182 | $ 23,825,124 | $ (49,565,017) | $ (25,686,711) | $ (24,502,544) | $ (50,189,255) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | ||
Net loss | $ (46,375,931) | $ (3,996,053) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Accretion of discount on notes payable | 2,984,006 | 0 |
Amortization of debt issuance costs | 328,678 | 0 |
Charges for inventory obsolescence | 924,435 | 35,000 |
Change in allowance for sales refunds | 110,631 | (214,441) |
Change in allowance for uncollectible accounts | 414,354 | (8,479) |
Depreciation and amortization | 724,426 | 39,490 |
Gain on warrant revaluation | (2,043,230) | 0 |
Impairment of goodwill | 20,007,174 | 0 |
Impairment loss on other intangible assets | 5,401,136 | 0 |
Loss on inventory deposit | 200,000 | 0 |
Loss on related party receivable | 488,457 | 0 |
Loss on impairment of notes receivable | 1,036,465 | 0 |
Share-based compensation expense | 575,686 | 677,191 |
Changes in operating assets and liabilities | ||
Accounts receivable | (2,215,748) | (880) |
Inventories | (4,137,931) | 75,717 |
Prepaid expenses and other current assets | (251,758) | (80,320) |
Accounts payable | 5,575,271 | (101,601) |
Accrued expenses and other current liabilities | 3,452,997 | 284,778 |
Deferred revenue | 641,148 | (161,544) |
Other | 28,392 | (8,095) |
Net cash used in operating activities | (12,131,342) | (3,459,237) |
Cash flows from investing activities | ||
Cash acquired in connection with acquisitions | 150,398 | 0 |
Sale of intangible asset | 3,000,000 | 0 |
Purchase of property and equipment | (277,132) | (4,717) |
Net cash provided by (used in) investing activities | 2,873,266 | (4,717) |
Cash flows from financing activities | ||
Capital contribution from Infusion Brands International | 31,161 | 0 |
Funds borrowed from affliated entities | 28,451 | 4,401,981 |
Net payments made on accounts receivable factoring arrangement | (203,985) | (1,135,409) |
Net borrowings on line of credit | 1,709,586 | 0 |
Principal payments on notes payable | (150,903) | 0 |
Proceeds from senior secured note payable | 8,406,833 | 0 |
Proceeds from other notes payable | 41,528 | 0 |
Net cash provided by financing activities | 9,862,671 | 3,266,572 |
Net increase (decrease) in cash | 604,595 | (197,382) |
Cash at beginning of year | 91,397 | 288,779 |
Cash at end of year | 695,992 | 91,397 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 330,976 | |
Cash paid for income taxes | 0 | |
Non Cash Investing and Financing Activities | ||
Capital contribution from Infusion Brands International | 0 | |
Common shares issued in connection with merger | 6,637,680 | 0 |
Debt issuance costs related to issuance of secured note payable | 441,221 | 0 |
Insurance premiums financed through note payable | 292,140 | 0 |
Original issue discount on senior secured note payable | 1,392,767 | 0 |
Reclassification of accrued interest to principal balance of debt | 211,562 | 0 |
Warrants issued with notes payable | $ 2,407,930 | $ 0 |
1. Basis of Presentation ,Descr
1. Basis of Presentation ,Description of Our Business, Liquidity and Going Concern | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation ,Description of Our Business, Liquidity and Going Concern | On April 2, 2014, As Seen On TV, Inc. (“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. 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. As a result, the consolidated balance sheets, statements of operations, statement of changes in stockholders’ equity and statements of cash flows of Infusion as of December 31, 2013 and for the year then ended are now reflected as those of the Company. See Note 4. 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 December 31, 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. Following the aforementioned reverse merger, ASTV changed its fiscal year end from March 31 st st The consolidated 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. Collectively ASTV, Infusion and Ronco are referred to as the “Company” herein. Description of Our Business ASTV As Seen On TV, Inc. is the parent company of Ronco Holdings, Inc, which owns the Ronco brand and associated assets. Ronco is engaged in the development and wholesale and retail sale of consumer products. As Seen On TV, Inc. is also the owner of several other subsidiaries (TV Goods Inc., Tru Hair, Inc., and eDiets, Inc.) that were discontinued as of June 26, 2015. Ronco ceased to be a VIE and became a wholly-owned subsidiary as of May 31, 2015. ASTV, a Florida corporation, was organized in November 2006. Our executive offices are located in Austin, TX. Infusion Infusion is a Nevada Corporation and a wholly-owned subsidiary of ASTV. During the period covered by this report, Infusion 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 19. Ronco Ronco was organized as a Corporation under the laws of the State of Delaware on January 11, 2011. Ronco is located in Austin, Texas and is engaged in the development and wholesale 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, online sales, wholesale distributors and direct retailers. Segments Commencing with the reverse merger and until December 31, 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 (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 17 for further segment discussion. Liquidity and Going Concern At December 31, 2014, we had a cash balance of approximately $696,000, a working capital deficit of approximately $35,491,000 and an accumulated deficit of approximately $49,565,000. 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: · Significantly curtailing costs and consolidating operations, where feasible. · Seeking debt, equity and other forms of financing, including funding through strategic partnerships. · Reducing operations to conserve cash. · Deferring certain marketing activities. · Investigating and pursuing transactions with third parties, including strategic transactions and relationships. There 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. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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 include the allowance for doubtful accounts, allowance for sales returns, inventory reserves, the estimated lives and carrying value of property and equipment, intangible assets, and goodwill, the inputs used in determining the fair value of stock-based compensation and warrant liabilities, and 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. Restricted Cash Restricted cash represents funds held by credit card processors for purposes of mitigating chargeback risk. Revenue Recognition We recognize revenue from product sales in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 605 — Revenue Recognition The Company provides an allowance for returns based upon specific product warranty agreements, 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. Accounts Receivable and Allowance for Doubtful Accounts Accounts 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 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. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based upon management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The allowance for doubtful accounts was approximately $712,000 and $224,000 as of December 31, 2014 and December 31, 2013, respectively. Inventories and Advances on Inventory Purchases Inventories, which are substantially all finished goods, are stated at the lower of cost or market. Cost is determined using an average cost method. We review our inventory for excess or obsolete inventory and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. During the year ended December 31, 2014, the Company wrote down approximately $924,000 of inventory deemed defective, obsolete or slow-moving. Advances on inventory purchases represent payments made to our product suppliers in advance of delivery to the Company and are included in prepaid expenses and other current assets. It is common industry practice to require a substantial deposit against products ordered before commencement of manufacturing, particularly with off-shore suppliers. Additional advance payments may also be required upon achievement of certain agreed upon manufacturing or shipment benchmarks. 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 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, 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. Shipping and handling costs are included within cost of sales. Property and Equipment, net We record property, equipment and leasehold improvements at historical cost less accumulated depreciation. Expenditures for maintenance and repairs are recorded to expense as incurred; additions and improvements are capitalized. We provide for depreciation using the straight-line method over 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. Major classes of depreciable assets at December 31, 2014 were equipment, furniture and fixtures and leasehold improvements with estimated useful lives of 3 years, 3 years and 10 years, respectively. We review our long-lived assets, 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. Impairment losses are recorded for the excess, if any, of the carrying value over the fair value of the long-lived assets. Goodwill and Intangible Assets Goodwill is not amortized but is 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 quantitative goodwill impairment test is a two-step process with step one requiring the comparison of the reporting unit's estimated fair value with the carrying amount of its net assets. If necessary, step two of the impairment test determines the amount of goodwill impairment to be recorded when the reporting unit's recorded net assets exceed its fair value. The Company estimates the fair value of the reporting unit using a market approach in combination with a discounted operating cash flow approach. Impairment is assessed by applying a fair value-based test for each unit with recorded goodwill. The estimates and judgments that most significantly affect the fair value calculations are assumptions, consisting of level three inputs, related to revenue and operating profit growth, discount rates and exit multiples. The Company determined the goodwill was fully impaired at September 30, 2014. See Note 7. Intangible assets include acquired customer relationships, Uniform Resource Locators (“URL”), patents, and trademarks. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets in accordance with ASC Topic 350 "Intangibles - Goodwill and Other”. Long-lived assets, including intangible assets with indefinite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company determined certain of its intangible assets were wholly or partially impaired as of September 30, 2014 and December 31, 2014. See Note 7. Share-based payments The Company recognizes share-based compensation expense on share based awards under the provisions of ASC 718 Compensation - Stock Compensation Calculating share-based compensation expense 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. Earnings (Loss) Per Share Basic earnings (loss) 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. The following securities were not included in the computation of the Company’s diluted net loss per share as their effect would be anti-dilutive: Year Ended December 31, 2014 2013 Stock options 2,561,994 – Restricted stock grants 25,174,888 – Warrants 63,284,020 – Total dilutive securities 91,020,902 – Concentrations Credit Risk 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. Inventory Suppliers Substantially all of the Company products are manufactured by multiple non-related companies in China. Although management believes it could obtain the majority of its inventory from other manufacturers at competitive prices and with competitive payment terms, if its relationship with a primary manufacturer were terminated, there can be no assurance that the termination of such relationship would not adversely affect the Company. Direct Response Advertising and Infomercial Production Costs Direct response advertising costs are expensed and classified as selling and marketing when the advertising first airs. Advertising cost expensed for the years ended December 31, 2014 and December 31, 2013 amounted to $5,252,000 and $568,000, respectively. Direct response production costs consist of infomercial production costs. Such costs are deferred until the infomercial airs for the first time. These costs are classified as selling and marketing expenses when expensed. Product Development Costs Costs of research, new product development and product redesign are charged to expense as incurred. Patent Renewal Costs The 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 expenses these costs as incurred. Operating Leases The Company records rent payments from operating leases, which generally call for escalating payments over the term of the leases, on a straight-line basis over the lease term, as required in FASB ASC Topic 840 - Leases. The difference between the rent payments and straight-line basis of such rent is recorded as deferred rent obligation and is included in accrued expenses and other current liabilities in the balance sheet. Fair Value Measurements FASB ASC 820 — Fair Value Measurements and Disclosures, FASB ASC 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). The three levels of the fair value hierarchy are as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all 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. Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The carrying 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. Accounting Standards Updates In May 2014, the FASB has issued No. 2014-09, Revenues from Contracts with Customers (Topic 606) Revenue Recognition Property, Plant, and Equipment Intangibles-Goodwill and Other Revenues from Contracts with Customers (Topic 606), In August 2014, 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 going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one 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 15, 2016, with early adoption permitted. Management has not early adopted this standard and is currently evaluating the impact of the adoption of ASU 2014-14 on our financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In September 2015, the FASB issued ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Principles of Consolidation The 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 entity effective March 6, 2014. See Note 3. All inter-company account balances and transactions have been eliminated in consolidation. Correction of Error & Fair Value Adjustments During the interim periods ended June 30, 2014 and September 30, 2014, the Company reported the fair value of merger consideration effectively transferred of $5,997,476 with respect to the reverse merger. However, the previously reported value of merger consideration incorrectly excluded 7,113,375 of shares issued in connection to the merger via re-pricing agreements. The fair value of these shares at the date of the merger was approximately $640,000. The exclusion of such shares resulted in an understatement of goodwill and paid-in-capital at June 30, 2014. For the three and nine months ended September 30, 2014, this error resulted in an understatement of the impairment of goodwill and as of September 30, 2014 additional paid-in-capital and accumulated deficit. Subsequent to the aforementioned interim periods, the Company revised its fair value estimate of the assets and liabilities acquired in connection with the reverse merger and VIE acquisition. The tables below present (1) the originally filed interim period data for impacted financial statement lines, (2) the fair value estimate adjustments, (3) the correction of error adjustments, and (4) the restated balances for impacted financial statement line items. As of June 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated Accounts receivable $ 1,429,041 $ (16,729 ) $ – $ 1,412,312 Note receivable on asset sale - current 225,000 (225,000 ) – – Prepaid expenses and other current assets 2,337,033 (201,942 ) – 2,135,091 Total current assets 9,818,808 (443,671 ) – 9,375,137 Note receivable on asset sale - less current portion 675,000 (675,000 ) – – Property and equipment, net 407,803 38,450 – 446,253 Goodwill 16,421,922 2,945,047 640,204 20,007,173 Intangibles, net 11,427,926 (1,800,000 ) – 9,627,926 Total assets 39,834,263 64,826 640,204 40,539,293 Accounts payable 6,060,146 (253,827 ) – 5,806,319 Accrued expenses and other current liabilities 3,784,114 157,547 – 3,941,661 Total current liabilities 33,027,808 (96,280 ) – 32,931,528 Deferred tax liability – 189,799 – 189,799 Total liabilities 46,315,363 93,519 – 46,408,882 Additional paid-in capital 22,887,977 – 640,204 23,528,181 Noncontrolling interest in Ronco Holdings, Inc. (1,141,666 ) (28,693 ) – (1,170,359 ) Total stockholders' deficit (9,181,100 ) (28,693 ) 640,204 (8,569,589 ) Total liabilities, redeemable preferred stock and stockholders' deficit $ 39,834,263 $ 64,826 $ 640,204 $ 40,539,293 As of September 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated Total assets $ 15,741,463 $ – $ – $ 15,741,463 Total current liabilities 39,956,821 – – 39,956,821 Deferred tax liability – 189,799 – 189,799 Total liabilities 53,319,458 189,799 – 53,509,257 Additional paid-in capital 22,972,201 – 640,204 23,612,405 Accumulative deficit (44,164,324 ) (189,799 ) (640,204 ) (44,994,327 ) Noncontrolling interest in Ronco Holdings, Inc. (19,139,054 ) – – (19,139,054 ) Total stockholders' deficit (40,277,995 ) (189,799 ) – (40,467,794 ) Total liabilities, redeemable preferred stock and stockholders' deficit $ 15,741,463 $ – $ – $ 15,741,463 Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated As Originally Filed Fair Value Adjustments* Correction of Error As Restated General and administrative expenses $ 2,993,567 $ 21,265 $ – $ 3,014,832 $ 4,536,731 $ 28,693 $ – $ 4,565,424 Loss from operations (3,557,926 ) (21,265 ) – (3,579,191 ) (4,545,064 ) (28,693 ) – (4,573,757 ) Loss before provision for income taxes (3,195,916 ) (21,265 ) – (3,217,181 ) (4,430,629 ) (28,693 ) – (4,459,322 ) Net loss (3,195,916 ) (21,265 ) – (3,217,181 ) (4,430,629 ) (28,693 ) – (4,459,322 ) Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. 1,016,403 21,265 – 1,037,668 1,141,666 28,693 – 1,170,359 Net loss attributable to As Seen On TV, Inc. (2,179,513 ) – – (2,179,513 ) (3,288,963 ) – – (3,288,963 ) Basic and diluted loss per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.01 $ 0.00 $ 0.00 $ 0.01 Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated As Originally Filed Fair Value Adjustments* Correction of Error As Restated General and administrative expenses $ 3,765,144 – $ – $ 3,765,144 $ 8,341,287 $ – $ – $ 8,341,287 Impairment loss on goodwill 19,177,171 189,799 640,204 20,007,174 19,177,171 189,799 640,204 20,007,174 Loss from operations (25,582,972 ) (189,799 ) (640,204 ) (26,412,975 ) (32,151,012 ) (189,799 ) (640,204 ) (32,981,015 ) Loss before provision for income taxes (31,104,303 ) (189,799 ) (640,204 ) (31,934,306 ) (35,611,748 ) (189,799 ) (640,204 ) (36,441,751 ) Net loss (31,104,303 ) (189,799 ) (640,204 ) (31,934,306 ) (35,611,748 ) (189,799 ) (640,204 ) (36,441,751 ) Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. 17,942,343 – – 17,942,343 19,139,054 – – 19,139,054 Net loss attributable to As Seen On TV, Inc. (13,161,960 ) (189,799 ) (640,204 ) (13,991,963 ) (16,472,694 ) (189,799 ) (640,204 ) (17,302,697 ) Basic and diluted loss per share $ (0.02 ) $ 0.00 $ 0.00 $ (0.02 ) $ (0.04 ) $ 0.00 $ 0.00 $ (0.04 ) *Subsequent changes to the value of assets acquired in connection with the reverse merger and VIE acquisition |
3. Variable Interest Entity
3. Variable Interest Entity | 12 Months Ended |
Dec. 31, 2014 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Variable Interest Entity | Ronco Holdings, Inc. is a distributor of consumer products which the Company believes could add significantly to its product lines and distribution channels. On 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. A VIE is an 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, 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. Therefore, Ronco was consolidated effective March 6, 2014. Infusion’s initial consolidation of Ronco is accounted for as a business combination which requires that the assets, liabilities, and noncontrolling interest be recorded at fair value. This conclusion will be re-evaluated during subsequent reporting periods if the relationship between Infusion and Ronco changes. The liabilities of Ronco consolidated by the 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. A summary of Ronco assets and liabilities included in the Company’s consolidated financial statements at December 31, 2014, is as follows: Assets Current assets: Cash $ 502,661 Accounts receivable, net 2,056,184 Inventories 4,607,441 Prepaid expenses and other assets 81,772 Total current assets 7,248,058 Property and equipment, net 260,090 Intangible assets, net 907,095 Total assets $ 8,415,243 Liabilities and Redeemable Preferred Stock Current liabilities: Accounts payable $ 7,199,760 Accrued expenses 3,621,191 Line of credit 1,709,586 Notes payable 13,165,183 Total current liabilities 25,695,720 Long-term notes payable 2,238,876 Total liabilities $ 27,934,596 Redeemable preferred stock $ 2,700,000 Note: Excludes intercompany liabilities of $2,283,191 that eliminate in consolidation The consolidated results of operations for the year ended December 31, 2014, include revenues attributable to Ronco of approximately $6,479,000 and a net loss attributable to Ronco of approximately $24,503,000. Ronco ceased to be a VIE and became a wholly-owned subsidiary of ASTV as of May 31, 2015. |
4. Business Combinations
4. Business Combinations | 12 Months Ended |
Dec. 31, 2014 | |
Business Combinations [Abstract] | |
Business Combinations | Reverse Acquisition On April 2, 2014, 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, the 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 ASTV’s acquisition of Infusion Brands, Inc. was effectuated to bring together two experienced companies in the direct response space under the ownership of a public company to maximize the cooperative opportunities among the companies’ combined brands, to realize cost savings due to staffing and space synergies, and to better position both companies for private and public capital markets access. The 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. 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. The estimate of the consideration paid by the Company in the transaction is as follows: Fair Value of the ASTV common shares (A) $ 7,096,917 Less: Reduction in note payable to IBI (B) (450,000 ) Interest accrued on IBI note payable (C) (9,237 ) Consideration effectively transferred $ 6,637,680 ——————— (A) Based on 78,854,625 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. (B) Represents a series of notes issued by ASTV to IBI between December 23, 2013 and March 14, 2014 used for general working capital purposes. In the 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) Accrued interest related to the IBI notes, accrued at 12% per annum. 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: 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 4,044,100 Intangible assets 6,150,000 Deposits 2,185 Total assets acquired 10,653,875 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 ) Deferred tax liability (189,799 ) Total liabilities assumed (4,016,195 ) Net assets acquired $ 6,637,680 Of the $6,150,000 of acquired intangible assets $3,150,000 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. These intangibles are being amortized on a straight-line basis over a 5-year weighted average useful life. In addition, $3,000,000 of the purchase price was allocated to the Company’s asseenontv.com URLs and related websites which are not subject to amortization. See note 7. The purchase price exceeded the fair value of the net assets acquired by $4,044,100 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 consolidated results of operations for the year ended December 31, 2014, include post-combination revenues of approximately $479,000 and net loss attributable to ASTV of approximately $9,491,000. VIE Acquisition 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 The fair value of assets and liabilities consolidated, as of March 6, 2014, the date of the Participation Agreement, was determined by our management. The following table summarizes the fair value amounts of assets and liabilities recorded as of the effective date: 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 $ – 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. See note 7. 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. Pro Forma Results of Operations The consolidated results of operations for the year ended December 31, 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. The following unaudited pro forma results for the year ended December 31, 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: Year Ended 2014 2013 Net revenues $ 19,546,075 $ 30,110,380 Net income (loss) attributable to As Seen On TV, Inc. stockholders (22,184,369 ) 18,555,935 Net loss per share Basic $ (0.04 ) $ 0.04 Diluted $ (0.04 ) $ 0.04 Weighted-average number of common shares outstanding: Basic 537,898,875 452,960,490 Diluted 537,898,875 454,085,490 These unaudited pro forma results have been prepared for comparative purposes only and 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. |
5. Prepaid expenses and other c
5. Prepaid expenses and other current assets | 12 Months Ended |
Dec. 31, 2014 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following: December 31, December 31, 2014 2013 Advances on inventory $ 282,499 $ – Debt issuance costs 116,917 – Prepaid insurance 271,287 20,720 Prepaid media 170,375 – Prepaid expenses - other 49,003 72,106 $ 890,081 $ 96,826 |
6. Property and Equipment, net
6. Property and Equipment, net | 12 Months Ended |
Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | The following table summarizes our property and equipment at December 31, 2014 and December 31, 2013: Additions Description December 31, 2013 Participation Agreement Merger Contribution Agreement Purchases December 31, 2014 Equipment $ – $ 190,231 $ 11,660 $ – $ 167,797 $ 369,688 Furniture and Fixtures 202,980 55,871 25,617 28,414 929 313,811 Leasehold Improvements 15,390 713 6,521 – 113,328 135,952 Total property and equipment 218,370 246,815 43,798 28,414 282,054 819,451 Accumulated depreciation (117,638 ) (117,062 ) (14,770 ) (25,270 ) (93,816 ) (368,556 ) Property and equipment, net $ 100,732 $ 129,753 $ 29,028 $ 3,144 $ 188,238 $ 450,895 Depreciation expense for the year ended December 31, 2014 and December 31, 2013 was approximately $224,000 and $39,490, respectively. Depreciation expense associated with tooling equipment of approximately $122,000 and $0 was included within cost of revenues for the year ended December 31, 2014 and December 31, 2013, respectively. |
7. Intangible Assets and Goodwi
7. Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | 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 $15,963,074. Identifiable intangibles other than goodwill consists of patents of $2,000,000 with a weighted average amortization period of nine years, and trademarks of $1,700,000, which are not subject to amortization. In addition, in connection with the Merger Agreement completed April 2, 2014 (see Note 4), we recognized certain identifiable intangibles other than goodwill. Identifiable 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 $4,044,100, both are not subject to amortization. The website was sold in October 2014. The fair values assigned to the intangible assets recognized in these transactions were based on estimates of our management using an income approach which utilized a significant number of nonobservable inputs. On September 30, 2014, the Company recognized an impairment loss on goodwill and other intangible assets of approximately $20,007,000 and $2,793,000, respectively. The Company determined 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: · Poor overall financial performance of each reporting unit · The Company was in technical default on Senior Secured Debt · Insufficient working capital · Decreased share price The Company recognized an additional impairment loss on its other intangible assets of approximately $2,608,000 on December 31, 2014. This additional impairment was with respect to Ronco’s patents and trademarks. As a result of the Company’s receiving a notice of default on its 14% Senior Secured Note (see Note 12), the Company re-assessed its projections and ability to maintain its patent renewal fees and consequently fully impaired its patents and partially impaired its trade names. For the year ended December 31, 2014, goodwill was fully impaired and other intangible assets were partially impaired. See below table for the impairment loss recognized on other intangible assets. The following table summarizes our goodwill and other intangible assets for the year ended December 31, 2014. Intangible Asset December 31, 2013 Participation Agreement Reverse Merger Post Combination Total Accumulated Amortization Impairment Loss Disposition Carrying Value Goodwill $ – $ 15,963,074 $ 4,044,100 $ – $ 20,007,173 $ – $ (20,007,174 ) $ – $ – Finite lived other intangibles: Patents – 2,000,000 – – 2,000,000 (185,184 ) (1,814,816 ) – – 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 (500,184 ) (4,608,231 ) – 41,585 Indefinite lived other intangibles: Trademarks – 1,700,000 – – 1,700,000 – (792,905 ) – 907,095 asseenontv.com URL – – 3,000,000 – 3,000,000 – – (3,000,000 ) – – 1,700,000 3,000,000 – 4,700,000 – (792,905 ) (3,000,000 ) 907,095 Intangible, net $ – $ 19,663,074 $ 10,194,100 $ – $ 29,857,173 $ (500,184 ) $ (25,408,310 ) $ (3,000,000 ) $ 948,680 A summary of future amortization expense is as follows for the years ended December 31: 2015 $ 11,603 2016 11,606 2017 11,606 2018 6,770 $ 41,585 |
8. Accrued expenses and other c
8. Accrued expenses and other current liabilities | 12 Months Ended |
Dec. 31, 2014 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following: December 31, December 31, 2014 2013 Accrued compensation $ 533,775 $ 281,287 Accrued interest 3,093,396 – Accrued professional fees 162,750 197,682 Accrued registration penalty 156,000 – Accrued royalties 169,640 150,222 Accrued sales returns 1,515,061 – Accrued sales taxes 541,635 1,417 Accrued product warranty 116,007 26,834 Accrued property taxes 125,103 – Accrues excise taxes 99,740 – Accrued customs fees 48,003 – Deferred lease obligation 135,036 – Other accrued expenses 218,964 2,253 $ 6,915,110 $ 659,695 |
9. Accounts Receivable Financin
9. Accounts Receivable Financing Arrangement | 12 Months Ended |
Dec. 31, 2014 | |
Line of Credit Facility [Abstract] | |
Accounts Receivable Financing Arrangement | Accounts Receivable Financing Arrangement On 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. Subsequently, the lender receives 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 accounts receivable that they finance. This arrangement does not qualify for sales 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. 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 qualified accounts receivable balances assigned up to 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. There was approximately $270,000 and $474,000 outstanding under this arrangement as of December 31, 2014 and December 31, 2013, respectively. Accounts receivable assigned as of December 31, 2014 and December 31, 2013 was approximately $409,000 and $920,000, respectively. Revolving Loan On or about October 10, 2014, Ronco entered into a Loan and Security Agreement (“Revolving Loan”). The Revolving Loan is based upon a borrowing base comprising of eligible accounts receivable and inventory balances. The maximum amount that can be outstanding is $4,000,000. The loan’s interest rate is Prime plus 4%, which is accrued daily and is payable monthly. As of December 31, 2014, the Revolving Loan’s balance was approximately $1,710,000. The Revolving Loan matured on or about October 10, 2015. The following are the major provisions of the Revolving Loan: Fees · A monthly collateral monitoring fee equal to 1.25% of the accounts receivable submitted on the borrowing base submitted on the borrowing base certificates. · A collateral monitoring fee equal to 1.50% of the eligible inventory submitted on the borrowing base certificates. Security interest To secure the payment and performance of all of the obligations when due, Ronco granted to the lender a security interest in all of the following: all right, title and interest of Ronco in and to all of the following, whether now owned or hereafter arising or acquired and wherever located: all accounts receivable; all inventory; all equipment; all deposit accounts; all general intangibles (including without limitation all payment intangibles and intellectual property); all investment property; all other property; and any and all claims, rights and interests in any of the above, and all guaranties and security for any of the above, and all substitutions and replacements for, additions, accessions, attachments, accessories, and improvements to, and proceeds (including proceeds of any insurance policies, proceeds of proceeds and claims against third parties) of, any and all of the above, and all Ronco’s books relating to any and all of the above. Financial covenants Ronco shall comply with each of the following covenants. Compliance shall be determined as of the end of each fiscal quarter, except as otherwise specifically provided below: · As of the last day of each fiscal quarter, a ratio of net income plus depreciation and amortization expenses plus interest plus lease expenses (to the extent included in debt service), in each case for the four (4) consecutive fiscal quarters then-ended, to debt service and non-financed capital expenditures calculated for the four (4) consecutive fiscal quarters then-ended of at least 1.0 to 1.0. · Ronco shall not make capital expenditures exceeding $100,000, in the aggregate in any fiscal year, without the prior written consent of Lender. The Company does not believe it was in compliance with these covenants as of December 31, 2014. No notice of noncompliance was ever received by the Company. However, on or about June 3, 2015, the Company paid off the outstanding balance of approximately $207,000 and terminated the agreement. |
10. Warrant Liabilities
10. Warrant Liabilities | 12 Months Ended |
Dec. 31, 2014 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrant Liabilities | 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, not 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. On April 3, 2014, the Company issued 30,136,713 warrants with an exercise price of $0.001 in 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. The Company recognizes these warrants as liabilities at their fair value and remeasures them at fair value on each reporting date. The assumptions used in connection with the valuation of warrants issued were as follows: December 31, April 3, April 2, 2014 2014 2014 Number of shares underlying the warrants 82,019,318 30,136,713 (a) 47,726,094 Exercise price $0.001 - $0.80 $ 0.001 $0.595 - $0.80 Volatility 112.99% - 207.33% 183.30% 134% - 158% Risk-free interest rate 0.04% - 1.05% 0.11% 0.28% - 1.73% Expected dividend yield 0.00% 0.00% 0.00% Expected warrant life (years) 0.25 - 2.88 1 1.42 - 3.63 Stock price $0.04 $0.08 $0.09 December 31, Acquisition Measurement Date Initial Increase December 31, 2013 April 2, 2014 Measurement Fair Value 2014 2011 Unit Offering $ – $ 1,242,333 $ – $ (738,272 ) $ 504,061 2011 Unit Offering Placement Agent – 156,367 – (84,769 ) 71,598 2012 Bridge Warrant – 20,690 – (19,389 ) 1,301 2012 Bridge Warrant Placement Agent – 4,138 – (3,878 ) 260 2012 Unit Offering – 137,178 – (105,314 ) 31,864 2012 Unit Offering Placement Agent – 96,481 – (44,242 ) 52,239 2013 Merger related notes converted – 11,608 – (7,736 ) 3,872 2014 Senior Note Purchase – – 2,407,930 (1,039,630 ) 1,368,300 $ – $ 1,668,795 $ 2,407,930 $ (2,043,230 ) $ 2,033,495 The approximate $2,043,000 decrease in fair value of warrants is recognized as a gain in the other (income) expense section of the consolidated statement of operations. The gain is also recognized within the Corporate and Other segment’s results of operations. Number of Warrants Subject to Remeasurement: Number of Warrants December 31, April 2, 2014 Warrant December 31, 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 – – 34,293,224 (a) – 34,293,224 – 47,726,094 34,293,224 – 82,019,318 (a) Warrant's original amount of 30,136,713 was adjusted subsequent to April 3, 2014 to maintain 4.99% of ASTV stock on a fully diluted basis. |
11. Related Party Transactions
11. Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Since InfusionÂ’s inception, Infusion has been substantially dependent upon funds raised by its former parent, IBI, to sustain InfusionÂ’s operating and investing activities. The Due to Affiliates liability on the balance sheet represents the net funding advanced to Infusion from IBI with no specific repayment terms or interest. As of December 31, 2014 and December 31, 2013, the Due to Affiliates liability balance was $0 and $20,138,733, respectively. Pursuant to a Contribution and Assumption Agreement entered into on March 31, 2014 between Infusion and IBI, Infusion received assets of approximately $1,014,000, assumed $11,000,000 of obligations, and recognized a capital contribution of approximately $10,181,000 after all amounts owed by Infusion to IBI were extinguished. IBI was InfusionÂ’s Parent prior to the Infusion reverse merger and is currently ASTVÂ’s largest shareholder with 85.2% ownership of outstanding common stock. A summary of the assets contributed and liabilities assumed follows: 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 Prior to June 30, 2014, Shadron Stastney, an officer and member of our board of directors, was a member in and chief operating officer of Vicis Capital, LLC, the investment advisor to Vicis Capital Master Fund. Vicis Capital Master Fund is the holder of our 6% Senior Secured Debenture. At December 31, 2014, the outstanding balance of the debenture is $11,211,562. See note 12. Ronco is indebted to CD3 Holdings, Inc. (CD3), its sole shareholder, for approximately $3,000,000 (See Note 12). The indebtedness is in the form of a promissory note. In addition, Ronco has an outstanding receivable from CD3 of approximately $489,000 and contains no payment or interest terms. The Company determined that receivable was uncollectible and, therefore, wrote the promissory note off to bad debt expense. Included within the assets IBI contributed to Infusion, there is an 18% bearing note receivable due from CD3 with a past due outstanding principal amount of approximately $711,000 with accrued interest receivable of approximately $325,000. The Company determined that this note along with its accrued interest was uncollectible. Consequently, the Company recorded a loss within the other income (expense) caption of the consolidated statement of operations. |
12. Notes Payable
12. Notes Payable | 12 Months Ended |
Dec. 31, 2014 | |
Notes Payable [Abstract] | |
Notes Payable | December 31, 2013 Participation Agreement Merger Assumption Agreement Issuances Accretion Payments Re-Class December 31, 2014 Current notes payable related party 16% Promissory Note, maturing on January 14, 2015 - related party $ – $ 3,016,227 $ – $ – $ – $ – $ (16,083 ) $ – $ 3,000,144 Current notes payable - third party 14% Senior Secured Promissory Note, matured April 3, 2015 – – – – 10,180,000 – – – 10,180,000 Less: discount on Senior Secured Promissory Note – – – – (3,800,847 ) 2,667,503 – – (1,133,344 ) 1.5% Secured Promissory Note, matured 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 9% Promissory Note, maturing on December 22, 2015 – – – – 154,000 – – – 154,000 3.68% to 8.39% Premium financing agreements – – 18,426 – 138,140 – (103,887 ) – 52,679 0% Promissory note, matured October 15, 2014 – – – – 102,500 – (22,499 ) – 80,001 10% Promissory note, matured June 30, 2013 – – 100,000 – – – – – 100,000 0% Promissory note, maturing September 15, 2015 – – 102,060 – – – – 17,009 119,069 0% Promissory note, maturing April 1, 2015 – – 10,000 – – – – – 10,000 Total third party current notes payable – 10,165,040 230,486 – 6,773,793 2,667,503 (126,386 ) 17,009 19,727,445 Total current notes payable – 13,181,267 230,486 – 6,773,793 2,667,503 (142,469 ) 17,009 22,727,589 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 ) – – – 316,503 – – (1,531,125 ) 0% Promissory note, maturing September 15, 2015 – – 25,443 – – – (8,434 ) (17,009 ) – 0% Promissory note, maturing April 1, 2016 – – 10,000 – – – – – 10,000 Total non current third party notes payable – 1,922,372 35,443 – – 316,503 (8,434 ) (17,009 ) 2,248,875 Total non current notes payable – 1,922,372 35,443 11,000,000 211,562 316,503 (8,434 ) (17,009 ) 13,460,437 Total notes payable $ – $ 15,103,639 $ 265,929 $ 11,000,000 $ 6,985,355 $ 2,984,006 $ (150,903 ) – $ 36,188,026 The following is a consolidated schedule of the future payments, based on a period end of December 31, required under notes payable. 2015 $ 23,860,933 2016 11,221,562 2017 3,770,000 $ 38,852,495 16% Promissory Note – Related Party On January 14, 2011, Ronco issued a promissory note to CD3 (“CD3 Note”), Ronco’s 100% shareholder and major creditor, in the amount of $3,000,000. The CD3 Note’s interest rate is 16% per annum and is payable quarterly in arrears. The note initially matured on January 14, 2014. On December 31, 2012, the CD3 Note was modified so that beginning January 1, 2012 no interest shall accrue and any accrued and unpaid interest shall be added to principal. The original maturity date of January 14, 2014 was extended to January 14, 2015. At the date of modification, $16,228 of accrued and unpaid interest was added to the principal balance. This modification was considered a troubled debt restructuring. In accordance with ASC 470, Debt, no gain was recognized and no future interest expense will be recognized as the total of the future payments required under the modified terms is equal to the carrying value of the CD3 Note. Subsequent to January 14, 2015, the Company is in default and the note is still outstanding. 14% Senior Secured Promissory Note On April 3, 2014, Infusion and ASTV entered into a Senior Note Purchase Agreement (the “Note 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 were issued, which at April 2, 2014 represented approximately 30 million warrants with an exercise price of $0.001 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, $116,917 of these costs are unamortized and are included in prepaid expenses and other current assets at December 31, 2014. The warrants were increased subsequent to April 3, 2014 to 34,293,224 in order to maintain 4.99% of fully diluted shares. On December 10, 2014, the Company received a letter (the “Notice Letter”) from MIG7 Infusion, LLC (“MIG7”), the purchaser from the Company of the Note Agreement. The Notice Letter stated that MIG7 believed the Company to be in default of certain terms of Note Agreement. The Company acknowledged the existence of a number of technical events of default under the Note 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 Agreement to declare the entire principal balance under the underlying note to be immediately due and owing. See discussion on the amendment of this note within the Financial Instrument Transaction section of Note 19. 9% Unsecured Promissory Note On December 22, 2014, ASTV issued an unsecured promissory note in the amount of $154,000 to finance its Directors and Officers insurance. The note requires monthly principal and interest payments of approximately $13,500 beginning on December 22, 2014 and ending on December 22, 2015. The interest rate is 9% per annum. The note was subsequently paid in accordance with its terms. 6% Senior Secured Debenture - Related 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 December 31, 2014, accrued interest of approximately $212,000 has been added to the debenture’s outstanding principal. See Financial Instrument Transactions and Extinguishment of Debt sections of Note 19 for discussion on the Company’s subsequent period extinguishment of this note and the resulting gain on extinguishment. 1.5% Secured Promissory Note 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 December 31, 2014 is $8,620,000. The contingent promissory note is further discussed below. Contingent Promissory Note 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. 18% Promissory Notes 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. On June 30, 2013, Ronco entered into a promissory note for $1,100,000. The promissory note's interest rate is 18% per annum and is payable monthly in arrears. The note matured on June 30, 2014 and is currently in default due to non payment. Forbearance Agreement On 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 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 forbearance 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 covenants of the agreement. Material covenants of the agreement are as follows: · Ronco shall use its reasonable best 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. · Ronco shall not take any of the following actions without the prior written consent of Creditor Parties’ agent: a) 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; b) Assume, incur or guarantee any indebtedness or modify the terms of any existing indebtedness; c) Mortgage, pledge or subject to liens any assets, properties or rights of Ronco or related to the Ronco business; d) Be party to any merger, acquisition, consolidation, recapitalization, liquidation, dissolution, reorganization or similar transaction involving Ronco. See Financial Instrument Transactions and Extinguishment of Debt sections of Note 19 for discussion on the Company’s subsequent period acquisition of the 1.5% Secured Promissory Note and Contingent Promissory Note and the resulting gain on extinguishment. |
13. Assets and Liabilities Meas
13. Assets and Liabilities Measured at Fair Value | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value | Recurring Fair Value Measurements Liabilities measured at estimated fair value in the consolidated financial statements on a recurring basis include warrants that contain provisions that protect holders from a decline in the issue price of our common stock or that contain net settlement provisions. These warrants are accounted for as liabilities and are remeasured at fair value at each reporting period end. See Note 10 for specifics on the inputs used in determining fair value. At December 31, 2014, there were no assets that were subject to fair value on a recurring basis. No assets and liabilities were subject to fair value on a recurring basis at December 31, 2013. Liabilities measured at estimated fair value on a recurring basis and their corresponding level within the fair value hierarchy at December 31, 2014 is summarized as follows: Description Level 1 Level 2 Level 3 Total Warrants $ – $ – $ 2,033,495 $ 2,033,495 The following table presents the liabilities carried on the balance sheet by level within the hierarchy as of December 31, 2014 for which a recurring change in fair value has been recorded during the year ended December 31, 2014. Balance at December 31, 2013 Acquisition Measurement Date Issuance (Gain) Loss Recognized in Earnings from Change in Fair Value Balance at December 31, 2014 For the Year Ending December 31, 2014 Warrants $ – $ 1,668,795 $ 2,407,930 $ (2,043,230 ) $ 2,033,495 The gain recognized from the change in the warrants’ fair value was recorded in the other income (expense) section of the consolidated statements of operations within the financial statement line item of change in fair value of warrants. The fair value of these warrants utilized pricing models that utilized a significant number of nonobservable inputs. Nonrecurring Fair Value Measurements The following table presents the assets carried on the balance sheet by level within the hierarchy as of December 31, 2014 for which a nonrecurring change in fair value has been recorded during the year ended December 31, 2014. Description December 31, 2013 Level 1 Level 2 Level 3 Total Fair Value Total Losses Goodwill $ – $ – $ – $ – $ – $ 20,007,173 Patents – – – – – 1,814,816 Customer relationships – – – 41,585 41,585 1,038,415 Domain names – – – – – 990,000 Trade names – – – – – 765,000 Trademarks – – – 907,095 907,095 792,905 $ – $ – $ – $ 948,680 $ 948,680 $ 25,408,309 Goodwill and other intangible assets were impaired for a total impairment of approximately $25,408,000 during the year ended December 31, 2014. Income approaches were used to estimate fair value of goodwill and other intangible assets. These valuation techniques utilized a significant number of nonobservable inputs. The impairments are presented within the operating expense section of the consolidated statement of operations. See Note 7 for additional details of goodwill and intangible assets as well as the 2014 impairment losses recognized. |
14. Commitments and Contingenci
14. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Lease Agreements The 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 December 31, 2014 are as follows: 2015 $ 321,774 2016 341,618 $ 663,392 Rent expense for the year ended December 31, 2014 and December 31, 2013 was approximately $554,000 and $247,000, respectively. Registration Rights Under the terms of a 2010 private 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 December 31, 2014. Litigation From time to time, we are periodically a party to or otherwise involved in legal proceedings arising in the normal and ordinary course of business. As of the date of this report, except as otherwise disclosed below, 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. 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. On February 26, 2016, ASTV was sued for an alleged breach of an employment agreement by its former CFO, who resigned in 2014. The Company has filed a motion to dismiss. A loss contingency in the amount of $141,000 was recorded in the “Accrued Expenses and Other Current Liabilities” in our Consolidated Balance Sheets at December 31, 2014. On 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 recorded in the “Accrued Expenses and Other Current Liabilities” in our Consolidated Balance Sheets at December 31, 2014. On June 26, 2015, the Company ceased operations at all entities and subsidiaries other than As Seen on TV, Inc. and Ronco Holdings, Inc. From time-to-time, the Company receives payment demands and threatened litigation from certain of its unsecured creditors at those discontinued subsidiaries. We do not believe any liabilities at those discontinued subsidiaries are collectible due to lack of assets, and we do not believe any of those liabilities are legally collectible against either As Seen On TV, Inc. or Ronco Holdings, Inc. See note 19 for subsequent event litigation discussion. Sales Tax Included in accrued sales taxes are sales taxes collected from customers that have not yet been remitted to taxing authorities. This accrual as of December 31, 2014 includes estimates for interest and penalties for non-payments. Accrued sales taxes at December, 31, 2014 are approximately $394,000 and are included in “accrued expenses and other current liabilities” in our condensed consolidated balance sheets. |
15. Redeemable Preferred Stock
15. Redeemable Preferred Stock | 12 Months Ended |
Dec. 31, 2014 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | |
Redeemable Preferred Stock | Ronco has 200 authorized shares of Preferred Stock, $0.0001 par value. Ronco has designated 100 of such shares as Series A Preferred Stock with a stated value of $27,000 per share. 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 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 December 31, 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: Dividends 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. Liquidation Preference In the event of a liquidation or dissolution 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 remaining and lawfully available assets of any nature of Ronco, whether such assets are stated capital or surplus, an amount in cash per outstanding share of Series A Preferred Stock equal to its Stated Value. Voting Rights The holders of Series A Preferred Stock shall have no right to vote on any matter affecting Ronco, except the 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: · Any amendment or repeal of 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; · 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; · Redemption of any stock or series of Preferred Stock (other than the Series A Preferred Stock), except for the repurchase of stock from employees at fair market value; · 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); · Any merger 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; · A liquidation or dissolution unless holders of the Series A Preferred Stock shall receive the Stated Value for all of their outstanding shares. Transfer Restriction No transfer or other disposition of any shares of the Series A Preferred Stock, whether voluntary or involuntary, shall be valid unless such transfer or disposition is approved by Ronco at the Company’s sole discretion. As of December 31, 2014 the Series A Preferred Stock remains outstanding. |
16. Stockholders' Equity
16. Stockholders' Equity | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Capital Stock Preferred Stock The Company is authorized to issue up to 10,000,000 shares of preferred stock, $.0001 par value per share. The board of directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of preferred stock in series, and by filing a certificate pursuant to the applicable law of the state of Florida, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. No shares of preferred stock were issued or outstanding at December 31, 2014 and December 31, 2013, respectively. Common Stock At December 31, 2014 and December 31, 2013, the Company was authorized to issue up to 750,000,000 shares of common stock, $.0001 par value per share. At December 31, 2014 and December 31, 2013, the Company had 531,815,115 and 452,960,490 shares issued and outstanding, respectively. Holders are entitled to one vote for each share of common stock (or its equivalent). Retained Earnings Under Florida law, we may declare and pay dividends on our capital stock either out of our surplus, as defined in the relevant Florida statutes, or if there is no such surplus, out of our net profits for the year in which the dividend is declared and/or the preceding year. If, however, the capital of our Company computed in accordance with the relevant Florida statutes, has been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, we are prohibited from declaring and paying out of such net profits any dividends upon any shares of our capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired. We have no present intention to pay any cash dividends in the foreseeable future. Share Issuances On April 16, 2014, 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 provisions contained in the June 28, 2012 Seen On TV, LLC asset purchase agreement. Warrants A summary of warrants outstanding at December 31, 2014, is as follows: Warrant Description Number of Warrants (A) Exercise Prices Expiration Dates 2011 Bridge Warrant 8,789,064 (D) $0.64 September 1, 2016 2011 Bridge Warrant Placement Agent 1,165,875 (D) $0.64 September 1, 2016 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-$1.00 June 22, 2015 - June 22, 2017 2012 Bridge Warrant 1,137,735 (B)(E) $0.77 September 30, 2016 2012 Bridge Warrant Placement Agent 227,546 (B)(E) $0.77 September 30, 2016 2012 Unit Offering 6,300,213 (B)(E) $0.80 September 30, 2016 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 34,293,224 (C)(F) $0.001 April 3, 2015 (G) 97,577,244 ——————— (A) All warrants reflect post anti-dilution and repricing provisions applied. (B) Subject to potential further anti-dilution and repricing adjustment (See Note 10). (C) Subject to variable share settlement and potential extension in connection with Secured Promissory Note (See Note 12) (D) Expiration date was extended from November 30, 2014 to September 1, 2016 (E) Subsequent to December 31, 2014, the expiration date was extended to September 30, 2016. See Note 19. (F) Number of warrants increased due to the August 20, 2014 restricted stock grant in order to maintain 4.99% of fully diluted shares (G) Per a March 31, 2015 Note Amendment, the warrants expiration was extended until a recapitalization event takes place. See Note 19. Equity Compensation Plans 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”) with terms similar to the previously adopted 2010 Plans. 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 9,577,500 at December 31, 2014. 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 year ended December 31, 2014 and December 31, 2013 was approximately $576,000 and $677,000, respectively. Stock based compensation for all periods presented is included in general and administration expenses, in the accompanying condensed consolidated statements of operations. Of the stock based compensation recognized for the year ended December 31, 2014, approximately $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 year ended December 30, 2013 is attributable to IBI stock based awards granted to Infusion’s employees. Mr. Ronald C. Pruett Jr. (former Chief Executive Officer) elected to terminate his 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 $72,000, which was paid over a period of approximately three months beginning May 1, 2014. As part of the termination agreement, Mr. Pruett forfeited his 3,050,000 options. Mr. Henrik Sandell’s (former Chief Operating Officer) employment terminated effective June 1, 2014. Accordingly, Mr. Sandell’s vested options of 250,000 remained exercisable for 90 days following termination. Mr. Sandell never exercised the vested options; and, therefore, the options were returned to the option plan for potential future grants. On August 20, 2014, Mr. Mark Ethier, Chief Operating Officer, was granted 25,174,888 restricted shares of common stock. The shares shall vest in 25% increments each of the initial two years following the initial effective date of the agreement and the final 50% vesting three years following the initial effective date of the agreement. The grant date fair value was $0.06 per share. Stock compensation expense with respect to this grant was approximately $297,000 for the year ended December 31, 2014. The unrecognized stock compensation as of December 31, 2014 was approximately $1,213,000. On January 8, 2015, Mark Ethier resigned as an employee and officer of the Company, but remained as a director. The Company agreed to vest and issue to Mr. Ethier 6,000,000 shares of restricted common stock of the Company and the remainder of his restricted common stock grants were forfeited at that time. See Note 19. Options Information related to options granted under our option plans at December 31, 2014 and activity for the nine months then ended is as follows: Shares Weighted Weighted Aggregate Outstanding at December 31, 2013 – $ – – $ – April 2, 2014 Acquisition (A) 7,148,836 1.06 7.46 – Granted – – – – Exercised – – – – Forfeited (4,185,000 ) 0.68 – – Expired (281,842 ) 1.51 – – Outstanding at December 31, 2014 2,681,994 $ 1.57 $ 5.36 $ – Exercisable at December 31, 2014 2,561,994 $ 1.75 $ 5.14 $ – (A) Options acquired in connection with reverse merger The unamortized grant date fair value of unvested options at December 31, 2014, was approximately $85,000 and will be expensed over a weighted average period of 1.94 years. No tax benefits are attributable to our share based compensation expense recorded in the accompanying financial statements because we are in a net operating loss position and a full valuation allowance is maintained for all net deferred tax assets. For stock options, the amount of the tax deductions is generally the excess of the fair market value of our shares of common stock over the exercise price of the stock options at the date of exercise. 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. |
17. Segment Reporting
17. Segment Reporting | 12 Months Ended |
Dec. 31, 2014 | |
Segment Reporting [Abstract] | |
Segment Reporting | Commencing 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 Hardware, Home Goods, eCommerce, and Corporate and Other. Below is a description of each operating segment. Hardware Building upon Infusion Brands’ success with the iconic DualSaw™ and DualTools™ brands, the Company had developed and marketed additional products including the patented RS1000 and RS1200 DualSaw Reciprocating Saws™, the OS2500 and OS3000 DualSaw Oscillating Saw™, and the PS7000 DualTools Polisher/Sander™,. Those products joined 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 additional new hardware, lawn and garden and lithium-ion power tools and hand tool products. Home Goods 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®. In addition to Ronco® in the home goods vertical market, the Company has also developed the DOC™ cleaning brand (Your Prescription for Clean™), as well as HomeHero™ (cleaning) and the Infusion Collection (cookware) brands. These brands exist primarily for live shopping distribution, where they have been and continue to be very successful, but also represent an opportunity for both direct response and retail distribution on a product-by-product basis. The Company plans to opportunistically develop or source multiple product offerings for these brands going forward. eCommerce eCommerce 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. Corporate and Other 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. 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. 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. Summarized financial information concerning the Company's reportable segments for the year ended December 31, 2014 and 2013 are shown in the following tables. Year Ended December 31, 2014 Hardware Home Goods Ecommerce Corporate & Other Total Total revenue $ 6,980,056 $ 11,444,747 $ 478,550 $ – $ 18,903,353 Net (loss) gain $ (9,469,209 ) $ (25,491,577 ) $ (8,527,455 ) $ (2,887,690 ) $ (46,375,931 ) Depreciation and amortization $ 65,657 $ 333,727 $ 324,942 $ – $ 724,326 Interest expense $ – $ (1,270,044 ) $ – $ (4,034,795 ) $ (5,304,839 ) Total assets held $ 5,124,929 $ 8,423,993 $ 183,740 $ 49,237,993 $ 62,970,655 Year Ended December 31, 2013 Hardware Home Goods Ecommerce Corporate & Other Total Total revenue $ 14,731,837 $ – $ – $ – $ 14,731,837 Net (loss) gain $ (3,679,902 ) $ – $ – $ (316,151 ) $ (3,996,053 ) Depreciation and amortization $ 39,490 $ – $ – $ – $ 39,490 Interest expense $ – $ – $ – $ 330,793 $ 330,793 Total assets held $ 2,295,191 $ – $ – $ – $ 2,295,191 For the Year Ended 2014 2013 Assets Total assets for reportable segments $ 62,970,655 $ 2,295,191 Elimination of intersegment funding receivables (50,172,300 ) – Elimination of intersegment notes receivable (851,237 ) – Elimination of intersegment interest receivable (54,587 ) – Elimination of intersegment deferred financing fee (45,442 ) – Elimination of intersegment accrued fees (8,750 ) – Total consolidated assets $ 11,838,339 $ 2,295,191 Intersegment Transactions During the year ended December 31, 2014, the Corporate and Other segment has provided funding to the Hardware, Home Goods, and eCommerce segments in the amounts of approximately $10,436,000, $1,432,000 and $49,000, respectively. On April 11, 2014, the Home Goods segment and the Corporate and Other 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 December 31, 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 December 31, 2014, the outstanding balance of the Loan Agreement was approximately $651,000. On May 5, 2014, the Home Goods segment issued a promissory note for $200,000 to the Corporate and Other 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. |
18. Income Taxes
18. Income Taxes | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The below tables present the Company’s current year income tax provision and the temporary differences that result from the differences in recognition criteria of certain income and expense items for financial reporting purposes and income tax purposes. For the Year Ended December 31, 2014 2013 Current: Federal income tax – – State income tax – – Deferred: Federal income tax (171,490 ) – State income tax (18,309 ) – Total provision for income taxes (189,799 ) – Temporary differences that give rise to deferred tax assets and liabilities are summarized as follows: For the Year Ended December 31, 2014 2013 Deferred tax assets: Allowance for uncollectible accounts receivable 53,416 84,243 Inventory valuation reserve 190,590 129,824 Accrued sales returns 543,211 – Accrued royalties 63,835 56,528 Accrued commissions 17,020 34,161 Accrued paid time off 14,993 9,615 Accrued wages 145,772 60,365 Warranty reserve 14,175 10,097 Fixed assets 6,152 19,481 Unearned revenue 260,980 – Net operating loss carryforward 16,125,758 9,530,417 Gross deferred tax asset 17,435,902 9,934,731 Less deferred tax asset valuation allowance (17,420,253 ) (9,934,731 ) Deferred tax asset -net 15,649 – Deferred tax liabilities: Intangible assets (15,649 ) – Gross deferred tax liability (15,649 ) – Net deferred tax asset – – As of December 31, 2014, realization of the Company’s net deferred tax assets of approximately $17,420,000 was not considered more likely than not, and accordingly, a valuation allowance of an equal amount was provided. A schedule of net operating loss carry forwards by entity follows: ASTV Infusion Year of Expiration Year Generated U.S. Losses Year of Expiration Year Generated U.S. Losses 3/31/2030 3/31/2010 474,949 12/31/2027 12/31/2007 4,377,277 3/31/2031 3/31/2011 3,432,653 12/31/2028 12/31/2008 5,283,433 3/31/2032 3/31/2012 229,859 12/31/2029 12/31/2009 126,976 3/31/2033 3/31/2013 229,859 12/31/2030 12/31/2010 3,386,963 3/31/2034 3/31/2014 229,859 12/31/2031 12/31/2011 4,521,359 12/31/2034 12/31/2014 3,783,761 12/31/2032 12/31/2012 4,111,085 12/31/2033 12/31/2013 2,636,040 12/31/2034 12/31/2014 10,029,390 Total: 8,380,940 Total: 34,472,523 Ronco’s net operating losses have been excluded from the above table as Infusion and ASTV are unable to utilize them as Ronco is not a member of either Infusion’s or ASTV’s consolidated group. All of Ronco’s results of operations represent the noncontrolling interest and are therefore shown as an adjustment to the Company’s income tax provision. If there is an ownership change, as defined under Internal Revenue Code section 382, the use of net operating loss and credit carry-forwards may be subject to limitations. On April 2, 2014, ASTV underwent such an ownership change. Accordingly, ASTV’s historical net operating losses are subject to an annual limitation of approximately $230,000. As a result of this annual limitation, ASTV expects to lose approximately $16,547,000 of historical net operating losses. If additional ownership changes occur in the future, the use of the net operating losses listed above could be subject to further limitations. The Company determined that there were no uncertain tax positions, and accordingly no associated interest and penalties were required to be accrued at December 31, 2014 and December 31, 2013, respectively. The Company does not believe that there are any tax positions for which a material change in unrecognized tax benefit or liability is reasonably possible in the next twelve months. The Company believes that there are no uncertain tax positions which, if recognized, would impact the effective tax rate. The Company has evaluated its open years by major jurisdiction and concluded that the tax years 2012, 2013, 2014 and 2015 remain open to examination by federal and state tax authorities. Infusion is delinquent in filing its tax returns for the tax years 2013, 2014 and 2015. ASTV is delinquent in filing its tax returns for the nine month period ended December 31, 2014 and for tax year 2015. Below is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2014 and December 31, 2013. 2014 2013 Tax provision at U.S. federal statutory rate (15,447,342 ) 34.00% $ (1,358,659 ) 34.00% State income tax provision net of federal tax (714,285 ) 1.57% (145,057 ) 3.63% Adjustment for noncontrolling interest 8,228,061 -18.11% – 0.00% Goodwill impairment 1,092,793 -2.41% – 0.00% Gain on warrant remeasurement (759,593 ) 1.67% – 0.00% Gain on sale of intangible asset 54,666 -0.12% – 0.00% Stock compensation 133,747 -0.29% – 0.00% Meals and entertainment 7,391 -0.02% 9,479 -0.24% Net Operating Loss 382 Adj. 10,019,081 -22.05% – 0.00% Change in valuation allowance (2,804,318 ) 6.17% 1,494,237 -37.39% Provision for income taxes (189,799 ) 0.42% $ – 0% |
19. Subsequent Events
19. Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | 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. Executive and Director Departures/Additions On January 5, 2015, Kevin Richardson, II, and Greg Adams resigned from the board of directors of the Company. On January 8, 2015, pursuant to a letter agreement, Mark Ethier resigned as an employee and officer of the Company, but remained as a director. The Company agreed to vest and issue to Mr. Ethier 6,000,000 shares of restricted common stock of the Company. As of the same date, the board of directors reduced its size to two seats, and appointed Shad Stastney as interim president and chief executive officer. Both Mr. Ethier and Mr. Stastney remain Company directors. On 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. On January 6, 2016, Jason Post accepted the position of Principal Financial and Accounting Officer. Restructuring On or about January 12, 2015, the Company undertook a reduction in force that eliminated 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. On February 19, 2015, the Company entered into a mutual termination of net lease agreement with respect to the leased property at 14044 Icot Boulevard, Clearwater, Florida 33760. On 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. On June 26, 2015, the Company ceased operations at all entities and subsidiaries other than (i) As Seen on TV, Inc., and (ii) Ronco Holdings, Inc. Financial Instrument Transactions Warrant Extension On August 25, 2015, the Company further extended the expiration dates of certain previously extended warrants to purchase up to an aggregate of 9,954,939 shares of the Company’s Common Stock to December 31, 2015. On November 13, 2015, the Company extended the expiration dates of certain warrants to purchase up to an aggregate of 7,665,494 shares of the Company’s Common Stock to June 30, 2016. On December 31, 2015, the Company further extended the expiration dates of certain previously extended warrants to purchase up to an aggregate of 9,954,939 shares of the company’s Common Stock to September 1, 2016. On June 8, 2016, the Company issued 6,000,000 shares of Common Stock to its former Chief Operating Officer in connection with a letter agreement dated January 8, 2015. On June 30, 2016, the Company extended the expiration dates of certain warrants to purchase up to an aggregate of 7,665,494 shares of the Company’s Common Stock to September 30, 2016. Note 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. The warrants’ expiration date of April 3, 2015 was extended until the aforementioned recapitalization is completed. Other 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 an aggregate amount of $950,000 in royalties to LV Administrative Services (“LV”) with respect to certain intellectual property, (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. No payments have been made with respect to the aforementioned royalty obligation. Note Issuances Subsequent to December 31, 2014, the Company has sold a series of promissory notes in total of approximately $1,937,000 to an accredited investor. The notes are payable on demand and accrue interest ranging from 16% to 24% per annum. Approximately, $452,000 has been repaid along with interest of approximately $65,000. Extinguishment of 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. With respect to the third-party debt that was acquired by the Company in May of 2015 (as discussed in the Other Transaction subsection above), a gain on extinguishment of approximately $13,800,000 was recognized. Legal Proceedings On January 5, 2016 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 recorded in the “Accrued Expenses and Other Current Liabilities” in our Consolidated Balance Sheets at December 31, 2014. 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 $141,000 was recorded in the “Accrued Expenses and Other Current Liabilities” in our Consolidated Balance Sheets at December 31, 2014. On April 29, 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 other similarly situated plaintiffs were damaged when Infusion Brands, Inc. 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. On June 9, 2016, ASTV was sued for an alleged failure to pay for goods sold and delivered to Infusion Brands, Inc. in 2015 in an action filed in the Sixth Judicial Circuit in and for Pinellas County, Florida. The lawsuit names AS SEEN ON TV, INC f/k/a INFUSION BRANDS, INC as defendant, although only Infusion Brands, Inc. was obligated to, or received goods from, the plaintiff, and although ASTV is not a successor-in-interest to Infusion Brands, Inc., and is not obligated in any way for its liabilities. The Company intends to file a motion to dismiss ASTV from the litigation. Infusion Brands, Inc., as a discontinued subsidiary, has no assets and no ability to pay any judgment that may be rendered in the event the litigation continues with respect to Infusion Brands, Inc. Segments Commencing January 1, 2015, the Company re-organized its business into five segments of which four are based on sales channel and one 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 five 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 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 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 The Direct Response 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 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 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. |
2. Summary of Significant Acc27
2. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Accounting Estimates | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) 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 include the allowance for doubtful accounts, allowance for sales returns, inventory reserves, the estimated lives and carrying value of property and equipment, intangible assets, and goodwill, the inputs used in determining the fair value of stock-based compensation and warrant liabilities, and 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. |
Restricted Cash | Restricted Cash Restricted cash represents funds held by credit card processors for purposes of mitigating chargeback risk. |
Revenue Recognition | Revenue Recognition We recognize revenue from product sales in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 605 — Revenue Recognition The Company provides an allowance for returns based upon specific product warranty agreements, 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. |
Accounts Receivable and allowance for doubtful accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts 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 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. If the financial condition of the CompanyÂ’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Based upon managementÂ’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The allowance for doubtful accounts was approximately $712,000 and $224,000 as of December 31, 2014 and December 31, 2013, respectively. |
Inventories and Advances on Inventory Purchases | Inventories and Advances on Inventory Purchases Inventories, which are substantially all finished goods, are stated at the lower of cost or market. Cost is determined using an average cost method. We review our inventory for excess or obsolete inventory and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. During the year ended December 31, 2014, the Company wrote down approximately $924,000 of inventory deemed defective, obsolete or slow-moving. Advances on inventory purchases represent payments made to our product suppliers in advance of delivery to the Company and are included in prepaid expenses and other current assets. It is common industry practice to require a substantial deposit against products ordered before commencement of manufacturing, particularly with off-shore suppliers. Additional advance payments may also be required upon achievement of certain agreed upon manufacturing or shipment benchmarks. 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 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, 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. Shipping and handling costs are included within cost of sales. |
Property and Equipment, net | Property and Equipment, net We record property, equipment and leasehold improvements at historical cost less accumulated depreciation. Expenditures for maintenance and repairs are recorded to expense as incurred; additions and improvements are capitalized. We provide for depreciation using the straight-line method over 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. Major classes of depreciable assets at December 31, 2014 were equipment, furniture and fixtures and leasehold improvements with estimated useful lives of 3 years, 3 years and 10 years, respectively. We review our long-lived assets, 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. Impairment losses are recorded for the excess, if any, of the carrying value over the fair value of the long-lived assets. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is not amortized but is 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 quantitative goodwill impairment test is a two-step process with step one requiring the comparison of the reporting unit's estimated fair value with the carrying amount of its net assets. If necessary, step two of the impairment test determines the amount of goodwill impairment to be recorded when the reporting unit's recorded net assets exceed its fair value. The Company estimates the fair value of the reporting unit using a market approach in combination with a discounted operating cash flow approach. Impairment is assessed by applying a fair value-based test for each unit with recorded goodwill. The estimates and judgments that most significantly affect the fair value calculations are assumptions, consisting of level three inputs, related to revenue and operating profit growth, discount rates and exit multiples. The Company determined the goodwill was fully impaired at September 30, 2014. See Note 7. Intangible assets include acquired customer relationships, Uniform Resource Locators (“URL”), patents, and trademarks. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets in accordance with ASC Topic 350 "Intangibles - Goodwill and Other”. Long-lived assets, including intangible assets with indefinite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company determined certain of its intangible assets were wholly or partially impaired as of September 30, 2014 and December 31, 2014. See Note 7. |
Share-based payments | Share-based payments The Company recognizes share-based compensation expense on share based awards under the provisions of ASC 718 Compensation - Stock Compensation Calculating share-based compensation expense 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. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) 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. The following securities were not included in the computation of the Company’s diluted net loss per share as their effect would be anti-dilutive: Year Ended December 31, 2014 2013 Stock options 2,561,994 – Restricted stock grants 25,174,888 – Warrants 63,284,020 – Total dilutive securities 91,020,902 – |
Concentrations | Concentrations Credit Risk 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 customerÂ’s financial condition and collateral is not required. Inventory Suppliers Substantially all of the Company products are manufactured by multiple non-related companies in China. Although management believes it could obtain the majority of its inventory from other manufacturers at competitive prices and with competitive payment terms, if its relationship with a primary manufacturer were terminated, there can be no assurance that the termination of such relationship would not adversely affect the Company. |
Direct Response Advertising and Infomercial Production Costs | Direct Response Advertising and Infomercial Production Costs Direct response advertising costs are expensed and classified as selling and marketing when the advertising first airs. Advertising cost expensed for the years ended December 31, 2014 and December 31, 2013 amounted to $5,252,000 and $568,000, respectively. Direct response production costs consist of infomercial production costs. Such costs are deferred until the infomercial airs for the first time. These costs are classified as selling and marketing expenses when expensed. |
Product Development Costs | Product Development Costs Costs of research, new product development and product redesign are charged to expense as incurred. |
Patent Renewal Costs | Patent Renewal Costs The 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 expenses these costs as incurred. |
Operating Leases | Operating Leases The Company records rent payments from operating leases, which generally call for escalating payments over the term of the leases, on a straight-line basis over the lease term, as required in FASB ASC Topic 840 - Leases. The difference between the rent payments and straight-line basis of such rent is recorded as deferred rent obligation and is included in accrued expenses and other current liabilities in the balance sheet. |
Fair Value Measurements | Fair Value Measurements FASB ASC 820 — Fair Value Measurements and Disclosures, FASB ASC 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). The three levels of the fair value hierarchy are as follows: Level 1 — Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all 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. Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable. The carrying 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. |
Accounting Standards Updates | Accounting Standards Updates In May 2014, the FASB has issued No. 2014-09, Revenues from Contracts with Customers (Topic 606) Revenue Recognition Property, Plant, and Equipment Intangibles-Goodwill and Other Revenues from Contracts with Customers (Topic 606), In August 2014, 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 going concern and to provide related footnote disclosures. Specifically, ASU 2014-15 provides a definition of the term substantial doubt and requires an assessment for a period of one 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 15, 2016, with early adoption permitted. Management has not early adopted this standard and is currently evaluating the impact of the adoption of ASU 2014-14 on our financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810) - Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In September 2015, the FASB issued ASU 2015-16, Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) |
Principles of Consolidation | Principles of Consolidation The 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 entity effective March 6, 2014. See Note 3. All inter-company account balances and transactions have been eliminated in consolidation. |
Correction of Error & Fair Value Adjustments | Correction of Error & Fair Value Adjustments During the interim periods ended June 30, 2014 and September 30, 2014, the Company reported the fair value of merger consideration effectively transferred of $5,997,476 with respect to the reverse merger. However, the previously reported value of merger consideration incorrectly excluded 7,113,375 of shares issued in connection to the merger via re-pricing agreements. The fair value of these shares at the date of the merger was approximately $640,000. The exclusion of such shares resulted in an understatement of goodwill and paid-in-capital at June 30, 2014. For the three and nine months ended September 30, 2014, this error resulted in an understatement of the impairment of goodwill and as of September 30, 2014 additional paid-in-capital and accumulated deficit. Subsequent to the aforementioned interim periods, the Company revised its fair value estimate of the assets and liabilities acquired in connection with the reverse merger and VIE acquisition. The tables below present (1) the originally filed interim period data for impacted financial statement lines, (2) the fair value estimate adjustments, (3) the correction of error adjustments, and (4) the restated balances for impacted financial statement line items. As of June 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated Accounts receivable $ 1,429,041 $ (16,729 ) $ – $ 1,412,312 Note receivable on asset sale - current 225,000 (225,000 ) – – Prepaid expenses and other current assets 2,337,033 (201,942 ) – 2,135,091 Total current assets 9,818,808 (443,671 ) – 9,375,137 Note receivable on asset sale - less current portion 675,000 (675,000 ) – – Property and equipment, net 407,803 38,450 – 446,253 Goodwill 16,421,922 2,945,047 640,204 20,007,173 Intangibles, net 11,427,926 (1,800,000 ) – 9,627,926 Total assets 39,834,263 64,826 640,204 40,539,293 Accounts payable 6,060,146 (253,827 ) – 5,806,319 Accrued expenses and other current liabilities 3,784,114 157,547 – 3,941,661 Total current liabilities 33,027,808 (96,280 ) – 32,931,528 Deferred tax liability – 189,799 – 189,799 Total liabilities 46,315,363 93,519 – 46,408,882 Additional paid-in capital 22,887,977 – 640,204 23,528,181 Noncontrolling interest in Ronco Holdings, Inc. (1,141,666 ) (28,693 ) – (1,170,359 ) Total stockholders' deficit (9,181,100 ) (28,693 ) 640,204 (8,569,589 ) Total liabilities, redeemable preferred stock and stockholders' deficit $ 39,834,263 $ 64,826 $ 640,204 $ 40,539,293 As of September 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated Total assets $ 15,741,463 $ – $ – $ 15,741,463 Total current liabilities 39,956,821 – – 39,956,821 Deferred tax liability – 189,799 – 189,799 Total liabilities 53,319,458 189,799 – 53,509,257 Additional paid-in capital 22,972,201 – 640,204 23,612,405 Accumulative deficit (44,164,324 ) (189,799 ) (640,204 ) (44,994,327 ) Noncontrolling interest in Ronco Holdings, Inc. (19,139,054 ) – – (19,139,054 ) Total stockholders' deficit (40,277,995 ) (189,799 ) – (40,467,794 ) Total liabilities, redeemable preferred stock and stockholders' deficit $ 15,741,463 $ – $ – $ 15,741,463 Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated As Originally Filed Fair Value Adjustments* Correction of Error As Restated General and administrative expenses $ 2,993,567 $ 21,265 $ – $ 3,014,832 $ 4,536,731 $ 28,693 $ – $ 4,565,424 Loss from operations (3,557,926 ) (21,265 ) – (3,579,191 ) (4,545,064 ) (28,693 ) – (4,573,757 ) Loss before provision for income taxes (3,195,916 ) (21,265 ) – (3,217,181 ) (4,430,629 ) (28,693 ) – (4,459,322 ) Net loss (3,195,916 ) (21,265 ) – (3,217,181 ) (4,430,629 ) (28,693 ) – (4,459,322 ) Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. 1,016,403 21,265 – 1,037,668 1,141,666 28,693 – 1,170,359 Net loss attributable to As Seen On TV, Inc. (2,179,513 ) – – (2,179,513 ) (3,288,963 ) – – (3,288,963 ) Basic and diluted loss per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.01 $ 0.00 $ 0.00 $ 0.01 Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated As Originally Filed Fair Value Adjustments* Correction of Error As Restated General and administrative expenses $ 3,765,144 – $ – $ 3,765,144 $ 8,341,287 $ – $ – $ 8,341,287 Impairment loss on goodwill 19,177,171 189,799 640,204 20,007,174 19,177,171 189,799 640,204 20,007,174 Loss from operations (25,582,972 ) (189,799 ) (640,204 ) (26,412,975 ) (32,151,012 ) (189,799 ) (640,204 ) (32,981,015 ) Loss before provision for income taxes (31,104,303 ) (189,799 ) (640,204 ) (31,934,306 ) (35,611,748 ) (189,799 ) (640,204 ) (36,441,751 ) Net loss (31,104,303 ) (189,799 ) (640,204 ) (31,934,306 ) (35,611,748 ) (189,799 ) (640,204 ) (36,441,751 ) Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. 17,942,343 – – 17,942,343 19,139,054 – – 19,139,054 Net loss attributable to As Seen On TV, Inc. (13,161,960 ) (189,799 ) (640,204 ) (13,991,963 ) (16,472,694 ) (189,799 ) (640,204 ) (17,302,697 ) Basic and diluted loss per share $ (0.02 ) $ 0.00 $ 0.00 $ (0.02 ) $ (0.04 ) $ 0.00 $ 0.00 $ (0.04 ) *Subsequent changes to the value of assets acquired in connection with the reverse merger and VIE acquisition |
2. Summary of Significant Acc28
2. Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Year Ended December 31, 2014 2013 Stock options 2,561,994 – Restricted stock grants 25,174,888 – Warrants 63,284,020 – Total dilutive securities 91,020,902 – |
Restated financial statements | As of June 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated Accounts receivable $ 1,429,041 $ (16,729 ) $ – $ 1,412,312 Note receivable on asset sale - current 225,000 (225,000 ) – – Prepaid expenses and other current assets 2,337,033 (201,942 ) – 2,135,091 Total current assets 9,818,808 (443,671 ) – 9,375,137 Note receivable on asset sale - less current portion 675,000 (675,000 ) – – Property and equipment, net 407,803 38,450 – 446,253 Goodwill 16,421,922 2,945,047 640,204 20,007,173 Intangibles, net 11,427,926 (1,800,000 ) – 9,627,926 Total assets 39,834,263 64,826 640,204 40,539,293 Accounts payable 6,060,146 (253,827 ) – 5,806,319 Accrued expenses and other current liabilities 3,784,114 157,547 – 3,941,661 Total current liabilities 33,027,808 (96,280 ) – 32,931,528 Deferred tax liability – 189,799 – 189,799 Total liabilities 46,315,363 93,519 – 46,408,882 Additional paid-in capital 22,887,977 – 640,204 23,528,181 Noncontrolling interest in Ronco Holdings, Inc. (1,141,666 ) (28,693 ) – (1,170,359 ) Total stockholders' deficit (9,181,100 ) (28,693 ) 640,204 (8,569,589 ) Total liabilities, redeemable preferred stock and stockholders' deficit $ 39,834,263 $ 64,826 $ 640,204 $ 40,539,293 As of September 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated Total assets $ 15,741,463 $ – $ – $ 15,741,463 Total current liabilities 39,956,821 – – 39,956,821 Deferred tax liability – 189,799 – 189,799 Total liabilities 53,319,458 189,799 – 53,509,257 Additional paid-in capital 22,972,201 – 640,204 23,612,405 Accumulative deficit (44,164,324 ) (189,799 ) (640,204 ) (44,994,327 ) Noncontrolling interest in Ronco Holdings, Inc. (19,139,054 ) – – (19,139,054 ) Total stockholders' deficit (40,277,995 ) (189,799 ) – (40,467,794 ) Total liabilities, redeemable preferred stock and stockholders' deficit $ 15,741,463 $ – $ – $ 15,741,463 Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated As Originally Filed Fair Value Adjustments* Correction of Error As Restated General and administrative expenses $ 2,993,567 $ 21,265 $ – $ 3,014,832 $ 4,536,731 $ 28,693 $ – $ 4,565,424 Loss from operations (3,557,926 ) (21,265 ) – (3,579,191 ) (4,545,064 ) (28,693 ) – (4,573,757 ) Loss before provision for income taxes (3,195,916 ) (21,265 ) – (3,217,181 ) (4,430,629 ) (28,693 ) – (4,459,322 ) Net loss (3,195,916 ) (21,265 ) – (3,217,181 ) (4,430,629 ) (28,693 ) – (4,459,322 ) Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. 1,016,403 21,265 – 1,037,668 1,141,666 28,693 – 1,170,359 Net loss attributable to As Seen On TV, Inc. (2,179,513 ) – – (2,179,513 ) (3,288,963 ) – – (3,288,963 ) Basic and diluted loss per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 0.01 $ 0.00 $ 0.00 $ 0.01 Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 As Originally Filed Fair Value Adjustments* Correction of Error As Restated As Originally Filed Fair Value Adjustments* Correction of Error As Restated General and administrative expenses $ 3,765,144 – $ – $ 3,765,144 $ 8,341,287 $ – $ – $ 8,341,287 Impairment loss on goodwill 19,177,171 189,799 640,204 20,007,174 19,177,171 189,799 640,204 20,007,174 Loss from operations (25,582,972 ) (189,799 ) (640,204 ) (26,412,975 ) (32,151,012 ) (189,799 ) (640,204 ) (32,981,015 ) Loss before provision for income taxes (31,104,303 ) (189,799 ) (640,204 ) (31,934,306 ) (35,611,748 ) (189,799 ) (640,204 ) (36,441,751 ) Net loss (31,104,303 ) (189,799 ) (640,204 ) (31,934,306 ) (35,611,748 ) (189,799 ) (640,204 ) (36,441,751 ) Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. 17,942,343 – – 17,942,343 19,139,054 – – 19,139,054 Net loss attributable to As Seen On TV, Inc. (13,161,960 ) (189,799 ) (640,204 ) (13,991,963 ) (16,472,694 ) (189,799 ) (640,204 ) (17,302,697 ) Basic and diluted loss per share $ (0.02 ) $ 0.00 $ 0.00 $ (0.02 ) $ (0.04 ) $ 0.00 $ 0.00 $ (0.04 ) *Subsequent changes to the value of assets acquired in connection with the reverse merger and VIE acquisition |
3. Variable Interest Entity (Ta
3. Variable Interest Entity (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Schedule of Variable Interest Entity's Consolidated Balance Sheet | A summary of Ronco assets and liabilities included in the CompanyÂ’s consolidated financial statements at December 31, 2014, is as follows: Assets Current assets: Cash $ 502,661 Accounts receivable, net 2,056,184 Inventories 4,607,441 Prepaid expenses and other assets 81,772 Total current assets 7,248,058 Property and equipment, net 260,090 Intangible assets, net 907,095 Total assets $ 8,415,243 Liabilities and Redeemable Preferred Stock Current liabilities: Accounts payable $ 7,199,760 Accrued expenses 3,621,191 Line of credit 1,709,586 Notes payable 13,165,183 Total current liabilities 25,695,720 Long-term notes payable 2,238,876 Total liabilities $ 27,934,596 Redeemable preferred stock $ 2,700,000 |
4. Business Combinations (Table
4. Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Infusion [Member] | |
Business Acquisition [Line Items] | |
Schedule of the Estimate of Consideration Paid by Company in Merger | Fair Value of the ASTV common shares (A) $ 7,096,917 Less: Reduction in note payable to IBI (B) (450,000 ) Interest accrued on IBI note payable (C) (9,237 ) Consideration effectively transferred $ 6,637,680 ——————— (A) Based on 78,854,625 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. (B) Represents a series of notes issued by ASTV to IBI between December 23, 2013 and March 14, 2014 used for general working capital purposes. In the 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) Accrued interest related to the IBI notes, accrued at 12% per annum. |
Schedule of the Fair Value of Assets Acquired and Liabilities Assumed | 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 4,044,100 Intangible assets 6,150,000 Deposits 2,185 Total assets acquired 10,653,875 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 ) Deferred tax liability (189,799 ) Total liabilities assumed (4,016,195 ) Net assets acquired $ 6,637,680 |
Ronco Holdings Inc [Member] | |
Business Acquisition [Line Items] | |
Schedule of the Fair Value of Assets Acquired and Liabilities Assumed | 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 $ – |
Schedule of Pro Forma Information | Year Ended 2014 2013 Net revenues $ 19,546,075 $ 30,110,380 Net income (loss) attributable to As Seen On TV, Inc. stockholders (22,184,369 ) 18,555,935 Net loss per share Basic $ (0.04 ) $ 0.04 Diluted $ (0.04 ) $ 0.04 Weighted-average number of common shares outstanding: Basic 537,898,875 452,960,490 Diluted 537,898,875 454,085,490 |
5. Prepaid expenses and other31
5. Prepaid expenses and other current assets (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | December 31, December 31, 2014 2013 Advances on inventory $ 282,499 $ – Debt issuance costs 116,917 – Prepaid insurance 271,287 20,720 Prepaid media 170,375 – Prepaid expenses - other 49,003 72,106 $ 890,081 $ 96,826 |
6. Property and Equipment, net
6. Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Additions Description December 31, 2013 Participation Agreement Merger Contribution Agreement Purchases December 31, 2014 Equipment $ – $ 190,231 $ 11,660 $ – $ 167,797 $ 369,688 Furniture and Fixtures 202,980 55,871 25,617 28,414 929 313,811 Leasehold Improvements 15,390 713 6,521 – 113,328 135,952 Total property and equipment 218,370 246,815 43,798 28,414 282,054 819,451 Accumulated depreciation (117,638 ) (117,062 ) (14,770 ) (25,270 ) (93,816 ) (368,556 ) Property and equipment, net $ 100,732 $ 129,753 $ 29,028 $ 3,144 $ 188,238 $ 450,895 |
7. Intangible Assets and Good33
7. Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Intangible Asset December 31, 2013 Participation Agreement Reverse Merger Post Combination Total Accumulated Amortization Impairment Loss Disposition Carrying Value Goodwill $ – $ 15,963,074 $ 4,044,100 $ – $ 20,007,173 $ – $ (20,007,174 ) $ – $ – Finite lived other intangibles: Patents – 2,000,000 – – 2,000,000 (185,184 ) (1,814,816 ) – – 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 (500,184 ) (4,608,231 ) – 41,585 Indefinite lived other intangibles: Trademarks – 1,700,000 – – 1,700,000 – (792,905 ) – 907,095 asseenontv.com URL – – 3,000,000 – 3,000,000 – – (3,000,000 ) – – 1,700,000 3,000,000 – 4,700,000 – (792,905 ) (3,000,000 ) 907,095 Intangible, net $ – $ 19,663,074 $ 10,194,100 $ – $ 29,857,173 $ (500,184 ) $ (25,408,310 ) $ (3,000,000 ) $ 948,680 |
Schedule of Future Amortization Expense | 2015 $ 11,603 2016 11,606 2017 11,606 2018 6,770 $ 41,585 |
8. Accrued expenses and other34
8. Accrued expenses and other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | December 31, December 31, 2014 2013 Accrued compensation $ 533,775 $ 281,287 Accrued interest 3,093,396 – Accrued professional fees 162,750 197,682 Accrued registration penalty 156,000 – Accrued royalties 169,640 150,222 Accrued sales returns 1,515,061 – Accrued sales taxes 541,635 1,417 Accrued product warranty 116,007 26,834 Accrued property taxes 125,103 – Accrues excise taxes 99,740 – Accrued customs fees 48,003 – Deferred lease obligation 135,036 – Other accrued expenses 218,964 2,253 $ 6,915,110 $ 659,695 |
10. Warrant Liabilities (Tables
10. Warrant Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Warrant Valuation Assumptions | December 31, April 3, April 2, 2014 2014 2014 Number of shares underlying the warrants 82,019,318 30,136,713 (a) 47,726,094 Exercise price $0.001 - $0.80 $ 0.001 $0.595 - $0.80 Volatility 112.99% - 207.33% 183.30% 134% - 158% Risk-free interest rate 0.04% - 1.05% 0.11% 0.28% - 1.73% Expected dividend yield 0.00% 0.00% 0.00% Expected warrant life (years) 0.25 - 2.88 1 1.42 - 3.63 Stock price $0.04 $0.08 $0.09 |
Schedule of Warrant Liabilities at Fair Value | December 31, Acquisition Measurement Date Initial Increase December 31, 2013 April 2, 2014 Measurement Fair Value 2014 2011 Unit Offering $ – $ 1,242,333 $ – $ (738,272 ) $ 504,061 2011 Unit Offering Placement Agent – 156,367 – (84,769 ) 71,598 2012 Bridge Warrant – 20,690 – (19,389 ) 1,301 2012 Bridge Warrant Placement Agent – 4,138 – (3,878 ) 260 2012 Unit Offering – 137,178 – (105,314 ) 31,864 2012 Unit Offering Placement Agent – 96,481 – (44,242 ) 52,239 2013 Merger related notes converted – 11,608 – (7,736 ) 3,872 2014 Senior Note Purchase – – 2,407,930 (1,039,630 ) 1,368,300 $ – $ 1,668,795 $ 2,407,930 $ (2,043,230 ) $ 2,033,495 |
Schedule of Warrant Subject to Remeasurement | Number of Warrants December 31, April 2, 2014 Warrant December 31, 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 – – 34,293,224 (a) – 34,293,224 – 47,726,094 34,293,224 – 82,019,318 |
11. Related Party Transactions
11. Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Summary of Assets Contributed and Liabilities Assumed | 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 |
12. Notes Payable (Tables)
12. Notes Payable (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Notes Payable [Abstract] | |
Schedule of Notes Payable | December 31, 2013 Participation Agreement Merger Assumption Agreement Issuances Accretion Payments Re-Class December 31, 2014 Current notes payable related party 16% Promissory Note, maturing on January 14, 2015 - related party $ – $ 3,016,227 $ – $ – $ – $ – $ (16,083 ) $ – $ 3,000,144 Current notes payable - third party 14% Senior Secured Promissory Note, matured April 3, 2015 – – – – 10,180,000 – – – 10,180,000 Less: discount on Senior Secured Promissory Note – – – – (3,800,847 ) 2,667,503 – – (1,133,344 ) 1.5% Secured Promissory Note, matured 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 9% Promissory Note, maturing on December 22, 2015 – – – – 154,000 – – – 154,000 3.68% to 8.39% Premium financing agreements – – 18,426 – 138,140 – (103,887 ) – 52,679 0% Promissory note, matured October 15, 2014 – – – – 102,500 – (22,499 ) – 80,001 10% Promissory note, matured June 30, 2013 – – 100,000 – – – – – 100,000 0% Promissory note, maturing September 15, 2015 – – 102,060 – – – – 17,009 119,069 0% Promissory note, maturing April 1, 2015 – – 10,000 – – – – – 10,000 Total third party current notes payable – 10,165,040 230,486 – 6,773,793 2,667,503 (126,386 ) 17,009 19,727,445 Total current notes payable – 13,181,267 230,486 – 6,773,793 2,667,503 (142,469 ) 17,009 22,727,589 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 ) – – – 316,503 – – (1,531,125 ) 0% Promissory note, maturing September 15, 2015 – – 25,443 – – – (8,434 ) (17,009 ) – 0% Promissory note, maturing April 1, 2016 – – 10,000 – – – – – 10,000 Total non current third party notes payable – 1,922,372 35,443 – – 316,503 (8,434 ) (17,009 ) 2,248,875 Total non current notes payable – 1,922,372 35,443 11,000,000 211,562 316,503 (8,434 ) (17,009 ) 13,460,437 Total notes payable $ – $ 15,103,639 $ 265,929 $ 11,000,000 $ 6,985,355 $ 2,984,006 $ (150,903 ) – $ 36,188,026 |
Schedule of Future Payments | 2015 $ 23,860,933 2016 11,221,562 2017 3,770,000 $ 38,852,495 |
13. Assets and Liabilities Me38
13. Assets and Liabilities Measured at Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | |
Liabilities measured at fair value | Description Level 1 Level 2 Level 3 Total Warrants $ – $ – $ 2,033,495 $ 2,033,495 |
Change in fair value of liabilities | Balance at December 31, 2013 Acquisition Measurement Date Issuance (Gain) Loss Recognized in Earnings from Change in Fair Value Balance at December 31, 2014 For the Year Ending December 31, 2014 Warrants $ – $ 1,668,795 $ 2,407,930 $ (2,043,230 ) $ 2,033,495 |
Schedule of nonrecurring fair value assets | Description December 31, 2013 Level 1 Level 2 Level 3 Total Fair Value Total Losses Goodwill $ – $ – $ – $ – $ – $ 20,007,173 Patents – – – – – 1,814,816 Customer relationships – – – 41,585 41,585 1,038,415 Domain names – – – – – 990,000 Trade names – – – – – 765,000 Trademarks – – – 907,095 907,095 792,905 $ – $ – $ – $ 948,680 $ 948,680 $ 25,408,309 |
14. Commitments and Contingen39
14. Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule Of Future Minimum Rental Payments | 2015 $ 321,774 2016 341,618 $ 663,392 |
16. Stockholders' Equity (Table
16. Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Warrants Outstanding | Warrant Description Number of Warrants (A) Exercise Prices Expiration Dates 2011 Bridge Warrant 8,789,064 (D) $0.64 September 1, 2016 2011 Bridge Warrant Placement Agent 1,165,875 (D) $0.64 September 1, 2016 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-$1.00 June 22, 2015 - June 22, 2017 2012 Bridge Warrant 1,137,735 (B)(E) $0.77 September 30, 2016 2012 Bridge Warrant Placement Agent 227,546 (B)(E) $0.77 September 30, 2016 2012 Unit Offering 6,300,213 (B)(E) $0.80 September 30, 2016 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 34,293,224 (C)(F) $0.001 April 3, 2015 (G) 97,577,244 ——————— (A) All warrants reflect post anti-dilution and repricing provisions applied. (B) Subject to potential further anti-dilution and repricing adjustment (See Note 10). (C) Subject to variable share settlement and potential extension in connection with Secured Promissory Note (See Note 12) (D) Expiration date was extended from November 30, 2014 to September 1, 2016 (E) Subsequent to December 31, 2014, the expiration date was extended to September 30, 2016. See Note 19. (F) Number of warrants increased due to the August 20, 2014 restricted stock grant in order to maintain 4.99% of fully diluted shares (G) Per a March 31, 2015 Note Amendment, the warrants expiration was extended until a recapitalization event takes place. See Note 19. |
Schedule of Stock Options Activity | Shares Weighted Weighted Aggregate Outstanding at December 31, 2013 – $ – – $ – April 2, 2014 Acquisition (A) 7,148,836 1.06 7.46 – Granted – – – – Exercised – – – – Forfeited (4,185,000 ) 0.68 – – Expired (281,842 ) 1.51 – – Outstanding at December 31, 2014 2,681,994 $ 1.57 $ 5.36 $ – Exercisable at December 31, 2014 2,561,994 $ 1.75 $ 5.14 $ – (A) Options acquired in connection with reverse merger |
17. Segment Reporting (Tables)
17. Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Segment Reporting [Abstract] | |
Schedule of Business Segments | Year Ended December 31, 2014 Hardware Home Goods Ecommerce Corporate & Other Total Total revenue $ 6,980,056 $ 11,444,747 $ 478,550 $ – $ 18,903,353 Net (loss) gain $ (9,469,209 ) $ (25,491,577 ) $ (8,527,455 ) $ (2,887,690 ) $ (46,375,931 ) Depreciation and amortization $ 65,657 $ 333,727 $ 324,942 $ – $ 724,326 Interest expense $ – $ (1,270,044 ) $ – $ (4,034,795 ) $ (5,304,839 ) Total assets held $ 5,124,929 $ 8,423,993 $ 183,740 $ 49,237,993 $ 62,970,655 Year Ended December 31, 2013 Hardware Home Goods Ecommerce Corporate & Other Total Total revenue $ 14,731,837 $ – $ – $ – $ 14,731,837 Net (loss) gain $ (3,679,902 ) $ – $ – $ (316,151 ) $ (3,996,053 ) Depreciation and amortization $ 39,490 $ – $ – $ – $ 39,490 Interest expense $ – $ – $ – $ 330,793 $ 330,793 Total assets held $ 2,295,191 $ – $ – $ – $ 2,295,191 |
Reconciliation of Assets to Consolidated Assets | For the Year Ended 2014 2013 Assets Total assets for reportable segments $ 62,970,655 $ 2,295,191 Elimination of intersegment funding receivables (50,172,300 ) – Elimination of intersegment notes receivable (851,237 ) – Elimination of intersegment interest receivable (54,587 ) – Elimination of intersegment deferred financing fee (45,442 ) – Elimination of intersegment accrued fees (8,750 ) – Total consolidated assets $ 11,838,339 $ 2,295,191 |
18. Income Taxes (Tables)
18. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | For the Year Ended December 31, 2014 2013 Current: Federal income tax – – State income tax – – Deferred: Federal income tax (171,490 ) – State income tax (18,309 ) – Total provision for income taxes (189,799 ) – |
Schedule of deferred tax assets | For the Year Ended December 31, 2014 2013 Deferred tax assets: Allowance for uncollectible accounts receivable 53,416 84,243 Inventory valuation reserve 190,590 129,824 Accrued sales returns 543,211 – Accrued royalties 63,835 56,528 Accrued commissions 17,020 34,161 Accrued paid time off 14,993 9,615 Accrued wages 145,772 60,365 Warranty reserve 14,175 10,097 Fixed assets 6,152 19,481 Unearned revenue 260,980 – Net operating loss carryforward 16,125,758 9,530,417 Gross deferred tax asset 17,435,902 9,934,731 Less deferred tax asset valuation allowance (17,420,253 ) (9,934,731 ) Deferred tax asset -net 15,649 – Deferred tax liabilities: Intangible assets (15,649 ) – Gross deferred tax liability (15,649 ) – Net deferred tax asset – – |
Schedule of net operating loss carryforwards | ASTV Infusion Year of Expiration Year Generated U.S. Losses Year of Expiration Year Generated U.S. Losses 3/31/2030 3/31/2010 474,949 12/31/2027 12/31/2007 4,377,277 3/31/2031 3/31/2011 3,432,653 12/31/2028 12/31/2008 5,283,433 3/31/2032 3/31/2012 229,859 12/31/2029 12/31/2009 126,976 3/31/2033 3/31/2013 229,859 12/31/2030 12/31/2010 3,386,963 3/31/2034 3/31/2014 229,859 12/31/2031 12/31/2011 4,521,359 12/31/2034 12/31/2014 3,783,761 12/31/2032 12/31/2012 4,111,085 12/31/2033 12/31/2013 2,636,040 12/31/2034 12/31/2014 10,029,390 Total: 8,380,940 Total: 34,472,523 |
Reconciliation of income taxes | 2014 2013 Tax provision at U.S. federal statutory rate (15,447,342 ) 34.00% $ (1,358,659 ) 34.00% State income tax provision net of federal tax (714,285 ) 1.57% (145,057 ) 3.63% Adjustment for noncontrolling interest 8,228,061 -18.11% – 0.00% Goodwill impairment 1,092,793 -2.41% – 0.00% Gain on warrant remeasurement (759,593 ) 1.67% – 0.00% Gain on sale of intangible asset 54,666 -0.12% – 0.00% Stock compensation 133,747 -0.29% – 0.00% Meals and entertainment 7,391 -0.02% 9,479 -0.24% Net Operating Loss 382 Adj. 10,019,081 -22.05% – 0.00% Change in valuation allowance (2,804,318 ) 6.17% 1,494,237 -37.39% Provision for income taxes (189,799 ) 0.42% $ – 0% |
1. Basis of Presentation ,Des43
1. Basis of Presentation ,Description of Our Business, Liquidity and Going Concern (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2014USD ($)Integer | Dec. 31, 2013USD ($) | Dec. 31, 2012USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Number of operating segments | Integer | 5 | ||
Cash | $ 695,992 | $ 91,397 | $ 288,779 |
Working capital deficit | $ (31,491,000) |
2. Summary of Significant Acc44
2. Summary of Significant Accounting Policies (Details - Antidiluted shares) - shares | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 91,020,902 | 0 |
Employee Stock Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 2,561,994 | 0 |
Restricted Stock Grant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 25,174,888 | 0 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities | 63,284,020 | 0 |
2. Summary of Significant Acc45
2. Summary of Significant Accounting Policies (Details- Restated financials balance sheet items) - USD ($) | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Accounts receivable | $ 3,179,996 | $ 1,127,058 | ||
Prepaid expenses and other current assets | 890,081 | 96,826 | ||
Total current assets | 10,376,117 | 2,194,459 | ||
Property and equipment, net | 450,895 | 100,732 | ||
Intangibles, net | 948,680 | 0 | ||
Total assets | 11,838,339 | 2,295,191 | ||
Accounts payable | 11,489,229 | 2,193,664 | ||
Total current liabilities | 45,867,157 | 23,503,082 | ||
Total liabilities | 59,327,594 | 23,503,082 | ||
Additional paid-in capital | 23,825,124 | 6,438,443 | ||
Accumulated deficit | (49,565,017) | (27,691,630) | ||
Noncontrolling interest in Ronco Holdings, Inc. | (24,502,544) | 0 | ||
Total stockholders' deficit | (25,686,711) | (21,207,891) | ||
Total liabilities, redeemable preferred stock and stockholders' deficit | $ 11,838,339 | $ 2,295,191 | ||
Correction of Error [Member] | ||||
Accounts receivable | $ 0 | |||
Note receivable on asset sale - current | 0 | |||
Prepaid expenses and other current assets | 0 | |||
Total current assets | 0 | |||
Note receivable on asset sale - less current portion | 0 | |||
Property and equipment, net | 0 | |||
Goodwill | 640,204 | |||
Intangibles, net | 0 | |||
Total assets | $ 0 | 640,204 | ||
Accounts payable | 0 | |||
Accrued expenses and other current liabilities | 0 | |||
Total current liabilities | 0 | 0 | ||
Deferred tax liability | 0 | 0 | ||
Total liabilities | 0 | 0 | ||
Additional paid-in capital | 640,204 | 640,204 | ||
Accumulated deficit | (640,204) | |||
Noncontrolling interest in Ronco Holdings, Inc. | 0 | 0 | ||
Total stockholders' deficit | 0 | 640,204 | ||
Total liabilities, redeemable preferred stock and stockholders' deficit | 0 | 640,204 | ||
As Originally Filed [Member] | ||||
Accounts receivable | 1,429,041 | |||
Note receivable on asset sale - current | 225,000 | |||
Prepaid expenses and other current assets | 2,337,033 | |||
Total current assets | 9,818,808 | |||
Note receivable on asset sale - less current portion | 675,000 | |||
Property and equipment, net | 407,803 | |||
Goodwill | 16,421,922 | |||
Intangibles, net | 11,427,926 | |||
Total assets | 15,741,463 | 39,834,263 | ||
Accounts payable | 6,060,146 | |||
Accrued expenses and other current liabilities | 3,784,114 | |||
Total current liabilities | 39,956,821 | 33,027,808 | ||
Deferred tax liability | 0 | 0 | ||
Total liabilities | 53,319,458 | 46,315,363 | ||
Additional paid-in capital | 22,972,201 | 22,887,977 | ||
Accumulated deficit | (44,164,324) | |||
Noncontrolling interest in Ronco Holdings, Inc. | (19,139,054) | (1,141,666) | ||
Total stockholders' deficit | (40,277,995) | (9,181,100) | ||
Total liabilities, redeemable preferred stock and stockholders' deficit | 15,741,463 | 39,834,263 | ||
Fair Value Adjustments [Member] | ||||
Accounts receivable | (16,729) | |||
Note receivable on asset sale - current | (225,000) | |||
Prepaid expenses and other current assets | (201,942) | |||
Total current assets | (443,671) | |||
Note receivable on asset sale - less current portion | (675,000) | |||
Property and equipment, net | 38,450 | |||
Goodwill | 2,945,047 | |||
Intangibles, net | (1,800,000) | |||
Total assets | 0 | 64,826 | ||
Accounts payable | (253,827) | |||
Accrued expenses and other current liabilities | 157,547 | |||
Total current liabilities | 0 | (96,280) | ||
Deferred tax liability | 189,799 | 189,799 | ||
Total liabilities | 189,799 | 93,519 | ||
Additional paid-in capital | 0 | 0 | ||
Accumulated deficit | (189,799) | |||
Noncontrolling interest in Ronco Holdings, Inc. | 0 | (28,693) | ||
Total stockholders' deficit | (189,799) | (28,693) | ||
Total liabilities, redeemable preferred stock and stockholders' deficit | 0 | 64,826 | ||
As Restated [Member] | ||||
Accounts receivable | 1,412,312 | |||
Note receivable on asset sale - current | 0 | |||
Prepaid expenses and other current assets | 2,135,091 | |||
Total current assets | 9,375,137 | |||
Note receivable on asset sale - less current portion | 0 | |||
Property and equipment, net | 446,253 | |||
Goodwill | 20,007,173 | |||
Intangibles, net | 9,627,926 | |||
Total assets | 15,741,463 | 40,539,293 | ||
Accounts payable | 5,806,319 | |||
Accrued expenses and other current liabilities | 3,941,661 | |||
Total current liabilities | 39,956,821 | 32,931,528 | ||
Deferred tax liability | 189,799 | 189,799 | ||
Total liabilities | 53,509,257 | 46,408,882 | ||
Additional paid-in capital | 23,612,405 | 23,528,181 | ||
Accumulated deficit | (44,994,327) | |||
Noncontrolling interest in Ronco Holdings, Inc. | (19,139,054) | (1,170,359) | ||
Total stockholders' deficit | (40,467,794) | (8,569,589) | ||
Total liabilities, redeemable preferred stock and stockholders' deficit | $ 15,741,463 | $ 40,539,293 |
2. Summary of Significant Acc46
2. Summary of Significant Accounting Policies (Details- Restated financials income statement items) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
General and administrative expenses | $ 11,194,954 | $ 4,979,688 | ||||
Impairment loss on goodwill | 20,007,174 | 0 | ||||
Loss from operations | (42,323,014) | (3,679,902) | ||||
Loss before provision for income taxes | (46,565,730) | (3,996,053) | ||||
Net loss | (46,375,931) | (3,996,053) | ||||
Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. | (24,502,544) | 0 | ||||
Net loss attributable to As Seen On TV, Inc. | $ (21,873,387) | $ (3,996,053) | ||||
Basic and diluted loss per share | $ (.04) | $ (.01) | ||||
Correction of Error [Member] | ||||||
General and administrative expenses | $ 0 | $ 0 | $ 0 | $ 0 | ||
Impairment loss on goodwill | 640,204 | 640,204 | ||||
Loss from operations | (640,204) | 0 | 0 | (640,204) | ||
Loss before provision for income taxes | (640,204) | 0 | 0 | (640,204) | ||
Net loss | (640,204) | 0 | 0 | (640,204) | ||
Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. | 0 | 0 | 0 | 0 | ||
Net loss attributable to As Seen On TV, Inc. | $ (640,204) | $ 0 | $ 0 | $ (640,204) | ||
Basic and diluted loss per share | $ 0 | $ 0 | $ 0 | $ 0 | ||
As Originally Filed [Member] | ||||||
General and administrative expenses | $ 3,765,144 | $ 2,993,567 | $ 4,536,731 | $ 8,341,287 | ||
Impairment loss on goodwill | 19,177,171 | 19,177,171 | ||||
Loss from operations | (25,582,972) | (3,557,926) | (4,545,064) | (32,151,012) | ||
Loss before provision for income taxes | (31,104,303) | (3,195,916) | (4,430,629) | (35,611,748) | ||
Net loss | (31,104,303) | (3,195,916) | (4,430,629) | (35,611,748) | ||
Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. | 17,942,343 | 1,016,403 | 1,141,666 | 19,139,054 | ||
Net loss attributable to As Seen On TV, Inc. | $ (13,161,960) | $ (2,179,513) | $ (3,288,963) | $ (16,472,694) | ||
Basic and diluted loss per share | $ (.02) | $ 0 | $ 0.01 | $ (.04) | ||
Fair Value Adjustments [Member] | ||||||
General and administrative expenses | $ 0 | $ 21,265 | $ 28,693 | $ 0 | ||
Impairment loss on goodwill | 189,799 | 189,799 | ||||
Loss from operations | (189,799) | (21,265) | (28,693) | (189,799) | ||
Loss before provision for income taxes | (189,799) | (21,265) | (28,693) | (189,799) | ||
Net loss | (189,799) | (21,265) | (28,693) | (189,799) | ||
Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. | 0 | 21,265 | 28,693 | 0 | ||
Net loss attributable to As Seen On TV, Inc. | $ (189,799) | $ 0 | $ 0 | $ (189,799) | ||
Basic and diluted loss per share | $ 0 | $ 0 | $ 0 | $ 0 | ||
As Restated [Member] | ||||||
General and administrative expenses | $ 3,765,144 | $ 3,014,832 | $ 4,565,424 | $ 8,341,287 | ||
Impairment loss on goodwill | 20,007,174 | 20,007,174 | ||||
Loss from operations | (26,412,975) | (3,579,191) | (4,573,757) | (32,981,015) | ||
Loss before provision for income taxes | (31,934,306) | (3,217,181) | (4,459,322) | (36,441,751) | ||
Net loss | (31,934,306) | (3,217,181) | (4,459,322) | (36,441,751) | ||
Net loss attributable to noncontrolling interest in Ronco Holdings, Inc. | 17,942,343 | 1,037,668 | 1,170,359 | 19,139,054 | ||
Net loss attributable to As Seen On TV, Inc. | $ (13,991,963) | $ (2,179,513) | $ (3,288,963) | $ (17,302,697) | ||
Basic and diluted loss per share | $ (0.02) | $ 0 | $ 0.01 | $ (.04) |
2. Summary of Significant Acc47
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for doubtful accounts | $ 712,000 | $ 224,000 |
Inventory write down | 924,435 | 35,000 |
Impairment of goodwill | 20,007,174 | 0 |
Advertising costs | $ 5,252,000 | $ 568,000 |
Sales Revenue, Net [Member] | One customer [Member] | ||
Concentration percentage | 13.00% | |
Sales Revenue, Net [Member] | Two customers [Member] | ||
Concentration percentage | 59.00% | |
Equipment [Member] | ||
Estimated useful lives of property and equipment | 3 years | |
Furniture and Fixtures [Member] | ||
Estimated useful lives of property and equipment | 3 years | |
Land Improvements [Member] | ||
Estimated useful lives of property and equipment | 10 years |
3. Variable Interest Entity (De
3. Variable Interest Entity (Details - Ronco) - Ronco Holdings Inc [Member] - Variable Interest Entity, Primary Beneficiary [Member] | Dec. 31, 2014USD ($) | |
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | $ 8,415,243 | |
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 27,934,596 | [1] |
Cash [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 502,661 | |
Accounts Receivable [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 2,056,184 | |
Inventories [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 4,607,441 | |
Prepaid Expenses and Other Current Assets [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 81,772 | |
Current Assets [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 7,248,058 | |
Property, Plant and Equipment [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 260,090 | |
Intangible Assets [Member] | ||
ASSETS OF CONSOLIDATED VARIABLE INTEREST ENTITY THAT CAN ONLY BE USED TO SETTLE THE OBLIGATIONS OF CONSOLIDATED VARIABLE INTEREST ENTITY: | ||
Total assets | 907,095 | |
Accounts Payable [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 7,199,760 | |
Accrued Liabilities [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 3,621,191 | |
Notes Payable Current [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | 13,165,183 | |
Line of Credit [Member] | ||
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) | ||
Total liabilities | $ 1,709,586 | |
[1] | Excludes intercompany liabilities of $2,283,191 that eliminate in consolidation. |
3. Variable Interest Entity (49
3. Variable Interest Entity (Details Narrative) - Ronco [Member] | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Revenues from related party | $ 6,479,000 |
Net loss attibutable to Ronco | $ (24,503,000) |
4. Business Combinations (Detai
4. Business Combinations (Details - Merger consideration) - Infusion [Member] | 12 Months Ended | |
Dec. 31, 2014USD ($) | ||
Business Acquisition [Line Items] | ||
Fair value of common shares | $ 7,096,917 | [1] |
Reduction in note payable to IBI | (450,000) | [2] |
Interest accrued on IBI note payable | (9,237) | [3] |
Consideration effectively transferred | $ 6,637,680 | |
[1] | Based on 78,854,625 common shares with a fair value of $0.09 per share, the closing price of ASTV common shares on April 2, 2014, the transaction closing date. | |
[2] | Represents a series of notes issued by ASTV to IBI between December 23, 2013 and March 14, 2014 used for general working capital purposes. In the event the merger transaction was not completed by June 30, 2014, all principal and related accrued interest became payable, which was forgiven when the transaction closed. | |
[3] | Accrued interest related to the IBI notes, accrued at 12% per annum. |
4. Business Combinations (Det51
4. Business Combinations (Details - Acquisition) - USD ($) | 26 Months Ended | ||
Mar. 06, 2016 | Apr. 02, 2014 | Mar. 06, 2014 | |
As Seen On TV, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 53,966 | ||
Accounts receivble | 4,560 | ||
Prepaid expenses and other current assets | 271,804 | ||
Restricted cash - non current | 83,462 | ||
Property and equipment | 43,798 | ||
Goodwill | 4,044,100 | ||
Intangible assets | 6,150,000 | ||
Deposits | 2,185 | ||
Total assets acquired | 10,653,875 | ||
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) | ||
Deferred tax liability | (189,799) | ||
Total liabilities assumed and temporary equity | (4,016,195) | ||
Net assets acquired | $ 6,637,680 | ||
Ronco Holdings Inc [Member] | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 96,432 | ||
Accounts receivble | 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 acquired | 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 | (1,922,373) | ||
Redeemable preferred stock | (2,700,000) | ||
Total liabilities assumed and temporary equity | (22,389,808) | ||
Net assets acquired | |||
Consideration paid | $ 0 |
4. Business Combinations (Det52
4. Business Combinations (Details - Pro forma information) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Business Combinations [Abstract] | ||
Net revenues | $ 19,546,075 | $ 30,110,380 |
Net income (loss) attributable to As Seen On TV, Inc. stockholders | $ (22,184,369) | $ 18,555,935 |
Net loss per share: Basic | $ (.04) | $ .04 |
Net loss per share: Diluted | $ (0.04) | $ 0.04 |
Weighted-average number of common shares outstanding: Basic | 537,898,875 | 452,960,490 |
Weighted-average number of common shares outstanding: Diluted | 537,878,875 | 454,085,490 |
4. Business Combinations (Det53
4. Business Combinations (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Apr. 02, 2014 | Mar. 06, 2014 | |
Business Acquisition [Line Items] | ||||
Revenues | $ 18,903,353 | $ 14,731,837 | ||
Net loss | (21,873,387) | $ (3,996,053) | ||
Post-Combination [Member] | ||||
Business Acquisition [Line Items] | ||||
Revenues | 479,000 | |||
Net loss | $ 9,491,000 | |||
Infusion [Member] | ||||
Business Acquisition [Line Items] | ||||
Stock issued for acquisition, shares | 452,960,490 | |||
Ownership percentage | 85.20% | |||
Stock price | $ 0.09 | |||
As Seen On TV, Inc. [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 6,150,000 | |||
As Seen On TV, Inc. [Member] | Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 1,200,000 | |||
As Seen On TV, Inc. [Member] | Internet Domain Names [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 1,100,000 | |||
As Seen On TV, Inc. [Member] | Trade Names [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 850,000 | |||
As Seen On TV, Inc. [Member] | eDiets [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 3,150,000 | |||
Ronco Holdings Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 3,700,000 | |||
Ronco Holdings Inc [Member] | Trademarks [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | 1,700,000 | |||
Ronco Holdings Inc [Member] | Patents [Member] | ||||
Business Acquisition [Line Items] | ||||
Intangible assets | $ 2,000,000 |
5. Prepaid expenses and other54
5. Prepaid expenses and other current assets (Details) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Advances on inventory | $ 282,499 | $ 0 |
Debt issuance costs | 116,917 | 0 |
Prepaid insurance | 271,287 | 24,720 |
Prepaid media | 170,375 | 0 |
Prepaid expenses - other | 49,003 | 72,106 |
Prepaid expenses and other current assets | $ 890,081 | $ 96,826 |
6. Property and Equipment, ne55
6. Property and Equipment, net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 819,451 | $ 218,370 |
Accumulated depreciation | (368,556) | (117,638) |
Property, plant and equipment, net | 450,895 | 100,732 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 369,688 | 0 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 313,811 | 202,980 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 135,952 | $ 15,390 |
Participation Agreement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 246,816 | |
Accumulated depreciation | (117,062) | |
Property, plant and equipment, net | 129,753 | |
Participation Agreement [Member] | Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 190,231 | |
Participation Agreement [Member] | Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 55,871 | |
Participation Agreement [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 713 | |
Merger [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 43,798 | |
Accumulated depreciation | (14,770) | |
Property, plant and equipment, net | 29,028 | |
Merger [Member] | Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 11,660 | |
Merger [Member] | Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 25,617 | |
Merger [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 6,521 | |
Contribution Agreement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 28,414 | |
Accumulated depreciation | (25,270) | |
Property, plant and equipment, net | 3,144 | |
Contribution Agreement [Member] | Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 0 | |
Contribution Agreement [Member] | Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 28,414 | |
Contribution Agreement [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 0 | |
Purchases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 282,054 | |
Accumulated depreciation | (93,816) | |
Property, plant and equipment, net | 188,238 | |
Purchases [Member] | Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 167,797 | |
Purchases [Member] | Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | 929 | |
Purchases [Member] | Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, additions | $ 113,328 |
6. Property and Equipment, ne56
6. Property and Equipment, net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Depreciation | $ 224,000 | $ 39,490 |
Cost of Revenue [Member] | Tooling Equipment [Member] | ||
Depreciation | $ 122,000 | $ 0 |
7. Intangible Assets and Good57
7. Intangible Assets and Goodwill (Details - Intangible Assets) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Finite lived intangibles, gross | $ 5,150,000 | $ 0 |
Accumulated amortization | (500,184) | 0 |
Accumulated impairment loss, finite lived intangible assets | (4,608,231) | 0 |
Disposition of finite lived intangible assets | 0 | |
Finite lived intangibles, net | 41,585 | 0 |
Indefinite lived intangibles, gross | 4,700,000 | 0 |
Accumulated impairment loss, indefinite lived intangible assets | (792,905) | |
Disposition of indefinite lived intangible assets | (3,000,000) | |
Indefinite lived intangibles, net | 907,095 | 0 |
Total intangibles including goodwill gross | 29,857,173 | |
Accumulated amortization intangible assets | (500,184) | |
Impairment loss, intangible assets | (25,408,310) | |
Disposition, intangible assets | (3,000,000) | |
Total intangibles including goodwill, net | 948,680 | $ 0 |
Trademarks [Member] | ||
Indefinite lived intangibles, gross | 1,700,000 | |
Accumulated impairment loss, indefinite lived intangible assets | (792,905) | |
Indefinite lived intangibles, net | 907,095 | |
asseenontv.com URL [Member] | ||
Indefinite lived intangibles, gross | 3,000,000 | |
Disposition of indefinite lived intangible assets | (3,000,000) | |
Indefinite lived intangibles, net | 0 | |
Patents [Member] | ||
Finite lived intangibles, gross | 2,000,000 | |
Accumulated amortization | (185,164) | |
Accumulated impairment loss, finite lived intangible assets | (1,814,816) | |
Customer Relationships [Member] | ||
Finite lived intangibles, gross | 1,200,000 | |
Accumulated amortization | (120,000) | |
Accumulated impairment loss, finite lived intangible assets | (1,038,415) | |
Finite lived intangibles, net | 41,585 | |
Domain Names [Member] | ||
Finite lived intangibles, gross | 1,100,000 | |
Accumulated amortization | (110,000) | |
Accumulated impairment loss, finite lived intangible assets | (990,000) | |
Trade Names [Member] | ||
Finite lived intangibles, gross | 850,000 | |
Accumulated amortization | (85,000) | |
Accumulated impairment loss, finite lived intangible assets | (765,000) | |
Participation Agreement [Member] | ||
Goodwill | 15,963,074 | |
Finite lived intangibles, gross | 2,000,000 | |
Indefinite lived intangibles, gross | 1,700,000 | |
Total intangibles including goodwill, net | 19,663,074 | |
Participation Agreement [Member] | Trademarks [Member] | ||
Indefinite lived intangibles, gross | 1,700,000 | |
Participation Agreement [Member] | Patents [Member] | ||
Finite lived intangibles, gross | 2,000,000 | |
Reverse Merger [Member] | ||
Goodwill | 4,044,100 | |
Finite lived intangibles, gross | 3,150,000 | |
Indefinite lived intangibles, gross | 3,000,000 | |
Total intangibles including goodwill, net | 10,194,100 | |
Reverse Merger [Member] | asseenontv.com URL [Member] | ||
Indefinite lived intangibles, gross | 3,000,000 | |
Reverse Merger [Member] | Customer Relationships [Member] | ||
Finite lived intangibles, gross | 1,200,000 | |
Reverse Merger [Member] | Domain Names [Member] | ||
Finite lived intangibles, gross | 1,100,000 | |
Reverse Merger [Member] | Trade Names [Member] | ||
Finite lived intangibles, gross | $ 850,000 |
7. Intangible Assets and Good58
7. Intangible Assets and Goodwill (Details - amortization) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,015 | $ 11,603 | |
2,016 | 11,606 | |
2,017 | 11,606 | |
2,018 | 6,770 | |
Future amortization expense | $ 41,585 | $ 0 |
7. Intangible Assets and Good59
7. Intangible Assets and Goodwill (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | ||
Impairment loss on goodwill | $ 20,007,174 | $ 0 |
Ronco Holdings Inc [Member] | Other intangible assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment loss on other intangible assets | $ 2,608,000 |
8. Accrued expenses and other60
8. Accrued expenses and other current liabilities (Details) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 533,775 | $ 281,287 |
Accrued interest | 3,093,396 | 0 |
Accrued professional fees | 162,750 | 197,682 |
Accrued registration penalty | 156,000 | 0 |
Accrued royalties | 169,640 | 150,222 |
Accrued sales returns | 1,515,061 | 0 |
Accrued sales taxes | 541,635 | 1,417 |
Accrued product warranty | 116,007 | 26,834 |
Accrued property taxes | 125,103 | 0 |
Accrued excise taxes | 99,740 | 0 |
Accrued customs fees | 48,003 | 0 |
Deferred lease obligation | 135,036 | 0 |
Other accrued expenses | 218,964 | 2,253 |
Accrued expenses and other current liabilities | $ 6,915,110 | $ 659,695 |
9. Accounts Receivable Financ61
9. Accounts Receivable Financing Arrangement (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Line of Credit Facility [Abstract] | ||
Accounts receivable financing arrangement | $ 269,975 | $ 473,960 |
Accounts receivable assigned to financing agreement | 409,000 | 920,000 |
Credit line maximum borrowing amount | $ 4,000,000 | |
Credit line interest rate | Prime plus 4% | |
Line of credit outstanding | $ 1,709,586 | $ 0 |
Credit line expiration date | Oct. 10, 2015 |
10. Warrant Liabilities (Detail
10. Warrant Liabilities (Details - assumptions) - Warrant [Member] - $ / shares | Apr. 03, 2014 | Apr. 02, 2014 | Dec. 31, 2014 |
Class of Warrant or Right [Line Items] | |||
Number of shares underlying the warrants | 30,136,713 | 47,726,094 | 82,019,318 |
Exercise price | $ 0.001 | ||
Volatility | 183.30% | ||
Risk-free interest rate | 0.11% | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected warrant life (years) | 1 year | ||
Stock price | $ 0.08 | $ 0.09 | $ .04 |
Minimum [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise price | $ 0.595 | $ 0.0001 | |
Volatility | 134.00% | 112.99% | |
Risk-free interest rate | 0.28% | 0.04% | |
Expected warrant life (years) | 1 year 5 months 1 day | 3 months | |
Maximum [Member] | |||
Class of Warrant or Right [Line Items] | |||
Exercise price | $ 0.80 | $ 0.80 | |
Volatility | 158.00% | 207.33% | |
Risk-free interest rate | 1.73% | 1.05% | |
Expected warrant life (years) | 3 years 7 months 17 days | 2 years 10 months 17 days |
10. Warrant Liabilities (Deta63
10. Warrant Liabilities (Details - Warrants) | 12 Months Ended | |
Dec. 31, 2014USD ($)shares | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value at acquisition measurement date | $ 1,668,795 | |
Fair value at initial measurement | 2,407,930 | |
Increase (Decrease) in Fair Value | (2,043,230) | |
Warrant [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value, beginning balance | 0 | |
Fair value at acquisition measurement date | 1,668,795 | |
Fair value at initial measurement | 2,407,930 | |
Increase (Decrease) in Fair Value | (2,043,230) | |
Fair value, ending balance | $ 2,033,495 | |
Number of Warrants | ||
Number of warrants, beginning balance | shares | 0 | |
Number of warrants, acquisition | shares | 47,726,094 | |
Number of warrants, additions | shares | 34,293,224 | |
Number of warrants, reductions | shares | 0 | |
Number of warrants, ending balance | shares | 82,019,318 | |
Warrant [Member] | 2011 Unit Offering [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value, beginning balance | $ 0 | |
Fair value at acquisition measurement date | 1,242,333 | |
Fair value at initial measurement | 0 | |
Increase (Decrease) in Fair Value | (738,272) | |
Fair value, ending balance | $ 504,061 | |
Number of Warrants | ||
Number of warrants, beginning balance | shares | 0 | |
Number of warrants, acquisition | shares | 33,277,837 | |
Number of warrants, additions | shares | 0 | |
Number of warrants, reductions | shares | 0 | |
Number of warrants, ending balance | shares | 33,277,837 | |
Warrant [Member] | 2011 Unit Offering Placement Agent [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value, beginning balance | $ 0 | |
Fair value at acquisition measurement date | 156,367 | |
Fair value at initial measurement | 0 | |
Increase (Decrease) in Fair Value | (84,769) | |
Fair value, ending balance | $ 71,598 | |
Number of Warrants | ||
Number of warrants, beginning balance | shares | 0 | |
Number of warrants, acquisition | shares | 4,726,891 | |
Number of warrants, additions | shares | 0 | |
Number of warrants, reductions | shares | 0 | |
Number of warrants, ending balance | shares | 4,726,891 | |
Warrant [Member] | 2012 Bridge Warrant [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value, beginning balance | $ 0 | |
Fair value at acquisition measurement date | 20,690 | |
Fair value at initial measurement | 0 | |
Increase (Decrease) in Fair Value | (19,389) | |
Fair value, ending balance | $ 1,301 | |
Number of Warrants | ||
Number of warrants, beginning balance | shares | 0 | |
Number of warrants, acquisition | shares | 1,137,735 | |
Number of warrants, additions | shares | 0 | |
Number of warrants, reductions | shares | 0 | |
Number of warrants, ending balance | shares | 1,137,735 | |
Warrant [Member] | 2012 Bridge Warrant Placement Agent [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value, beginning balance | $ 0 | |
Fair value at acquisition measurement date | 4,138 | |
Fair value at initial measurement | 0 | |
Increase (Decrease) in Fair Value | (3,878) | |
Fair value, ending balance | $ 260 | |
Number of Warrants | ||
Number of warrants, beginning balance | shares | 0 | |
Number of warrants, acquisition | shares | 227,546 | |
Number of warrants, additions | shares | 0 | |
Number of warrants, reductions | shares | 0 | |
Number of warrants, ending balance | shares | 227,546 | |
Warrant [Member] | 2012 Unit Offering [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value, beginning balance | $ 0 | |
Fair value at acquisition measurement date | 137,178 | |
Fair value at initial measurement | 0 | |
Increase (Decrease) in Fair Value | (105,314) | |
Fair value, ending balance | $ 31,864 | |
Number of Warrants | ||
Number of warrants, beginning balance | shares | 0 | |
Number of warrants, acquisition | shares | 6,300,213 | |
Number of warrants, additions | shares | 0 | |
Number of warrants, reductions | shares | 0 | |
Number of warrants, ending balance | shares | 6,300,213 | |
Warrant [Member] | 2012 Unit Offering Placement Agent [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value, beginning balance | $ 0 | |
Fair value at acquisition measurement date | 96,481 | |
Fair value at initial measurement | 0 | |
Increase (Decrease) in Fair Value | (44,242) | |
Fair value, ending balance | $ 52,239 | |
Number of Warrants | ||
Number of warrants, beginning balance | shares | 0 | |
Number of warrants, acquisition | shares | 1,561,544 | |
Number of warrants, additions | shares | 0 | |
Number of warrants, reductions | shares | 0 | |
Number of warrants, ending balance | shares | 1,561,544 | |
Warrant [Member] | 2012 Merger Related Notes Converted [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value, beginning balance | $ 0 | |
Fair value at acquisition measurement date | 11,608 | |
Fair value at initial measurement | 0 | |
Increase (Decrease) in Fair Value | (7,736) | |
Fair value, ending balance | $ 3,872 | |
Number of Warrants | ||
Number of warrants, beginning balance | shares | 0 | |
Number of warrants, acquisition | shares | 494,328 | |
Number of warrants, additions | shares | 0 | |
Number of warrants, reductions | shares | 0 | |
Number of warrants, ending balance | shares | 494,328 | |
Warrant [Member] | Senior 2014 Note Purchase [Member] | ||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||
Fair value, beginning balance | $ 0 | |
Fair value at acquisition measurement date | 0 | |
Fair value at initial measurement | 2,407,930 | |
Increase (Decrease) in Fair Value | (1,039,630) | |
Fair value, ending balance | $ 1,368,300 | |
Number of Warrants | ||
Number of warrants, beginning balance | shares | 0 | |
Number of warrants, acquisition | shares | 0 | |
Number of warrants, additions | shares | 34,293,224 | [1] |
Number of warrants, reductions | shares | 0 | |
Number of warrants, ending balance | shares | 34,293,224 | |
[1] | Warrant's original amount of 30,136,713 was adjusted subsequent to April 3, 2014 to maintain 4.99% of ASTV stock on a fully diluted basis. |
11. Related Party Transaction64
11. Related Party Transactions (Details) - Infusion Brands Inc [Member] | Mar. 31, 2014USD ($) |
Related Party Transaction [Line Items] | |
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 |
11. Related Party Transaction65
11. Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transaction [Line Items] | ||
Note receivable plus accrued interest written off | $ 1,036,465 | $ 0 |
Vicis Capital Master Fund [Member] | ||
Related Party Transaction [Line Items] | ||
Interest rate | 6.00% | |
Outstanding principal balance | $ 11,211,562 | |
CD3 Holdings [Member] | ||
Related Party Transaction [Line Items] | ||
Outstanding principal balance | 711,000 | |
Accrued interest | 325,000 | |
Note receivable plus accrued interest written off | $ 1,036,465 |
12. Notes Payable (Details - No
12. Notes Payable (Details - Notes payable) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | ||
Notes payable - related party | $ 3,000,143 | $ 0 |
Current notes payable - third party | 19,727,445 | 0 |
Total current notes payable | 22,727,589 | 0 |
Notes payable - related party, noncurrent | 11,211,562 | 0 |
Notes payable - thrid party, noncurrent | 2,248,875 | 0 |
Total noncurrent notes payable | 13,460,437 | 0 |
Total notes payable | 36,188,026 | 0 |
Accretion | 2,984,006 | 0 |
6% Senior Secured Debenture [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - related party, noncurrent | 11,211,562 | |
Issuances | $ 211,562 | |
Other information: | ||
Interest rate | 6.00% | |
Maturity date | Jun. 30, 2016 | |
0% Contingent Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - thrid party, noncurrent | $ 3,770,000 | |
Discount on notes | (1,847,628) | |
Accretion | $ 316,503 | |
Other information: | ||
Interest rate | 0.00% | |
Maturity date | Dec. 5, 2017 | |
0% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - thrid party, noncurrent | $ 0 | |
Payments | (8,434) | |
Reclass | $ (17,009) | |
Other information: | ||
Interest rate | 0.00% | |
Maturity date | Sep. 15, 2015 | |
0% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - thrid party, noncurrent | $ 10,000 | |
Other information: | ||
Interest rate | 0.00% | |
Maturity date | Apr. 1, 2016 | |
16% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Payments | $ (16,083) | |
Other information: | ||
Maturity date | Jan. 14, 2015 | |
14% Senior Secured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | $ 10,180,000 | |
Discount on Senior Secured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | (1,133,344) | |
1.5% Secured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | $ 8,620,000 | |
Other information: | ||
Interest rate | 1.50% | |
Maturity date | Jun. 14, 2012 | |
18% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | $ 1,100,000 | |
Other information: | ||
Interest rate | 18.00% | |
Maturity date | Jun. 30, 2014 | |
18% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | $ 445,040 | |
Other information: | ||
Interest rate | 18.00% | |
Maturity date | Mar. 14, 2014 | |
3.68% to 8.39% Premium financing agreements [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | $ 52,531 | |
Issuances | 138,140 | |
Payments | $ (103,887) | |
Other information: | ||
Interest rate | 3.68% to 8.39% | |
0% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | $ 80,000 | |
Issuances | 102,500 | |
Payments | $ (22,499) | |
Other information: | ||
Interest rate | 0.00% | |
Maturity date | Oct. 15, 2014 | |
10% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | $ 100,000 | |
Other information: | ||
Interest rate | 10.00% | |
Maturity date | Jun. 30, 2013 | |
0% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | $ 119,070 | |
Reclass | $ 17,011 | |
Other information: | ||
Interest rate | 0.00% | |
Maturity date | Sep. 15, 2015 | |
0% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | $ 10,000 | |
Other information: | ||
Interest rate | 0.00% | |
Maturity date | Apr. 1, 2015 | |
Current Notes Payable - Third Party [Member] | ||
Debt Instrument [Line Items] | ||
Issuances | $ 6,773,793 | |
Accretion | 2,667,503 | |
Payments | (126,386) | |
Current Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Issuances | 6,773,793 | |
Accretion | 2,667,503 | |
Payments | (142,469) | |
Non-Current Notes Payable - Related Party [Member] | ||
Debt Instrument [Line Items] | ||
Issuances | 211,562 | |
Accretion | 0 | |
Payments | 0 | |
Non-Current Notes Payable - Third Party [Member] | ||
Debt Instrument [Line Items] | ||
Issuances | 0 | |
Accretion | 218,702 | |
Payments | (8,432) | |
Non-Current Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Issuances | 211,562 | |
Accretion | 218,702 | |
Payments | (8,432) | |
Notes Payable [Member] | ||
Debt Instrument [Line Items] | ||
Issuances | 6,773,793 | |
Accretion | 2,667,503 | |
Payments | (142,469) | |
Participation Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - related party | 3,016,227 | |
Current notes payable - third party | 10,165,040 | |
Total current notes payable | 13,181,267 | |
Notes payable - thrid party, noncurrent | 1,922,372 | |
Total noncurrent notes payable | 1,922,372 | |
Total notes payable | 15,103,639 | |
Participation Agreement [Member] | 0% Contingent Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - thrid party, noncurrent | 3,770,000 | |
Discount on notes | (1,847,628) | |
Participation Agreement [Member] | 16% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - related party | $ 3,000,144 | |
Other information: | ||
Interest rate | 16.00% | |
Participation Agreement [Member] | 1.5% Secured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | 8,620,000 | |
Participation Agreement [Member] | 18% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | 1,100,000 | |
Participation Agreement [Member] | 18% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | 445,040 | |
Merger [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | 230,486 | |
Total current notes payable | 230,486 | |
Notes payable - thrid party, noncurrent | 35,443 | |
Total noncurrent notes payable | 35,443 | |
Total notes payable | 265,929 | |
Merger [Member] | 0% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - thrid party, noncurrent | 25,443 | |
Merger [Member] | 0% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - thrid party, noncurrent | 10,000 | |
Merger [Member] | 3.68% to 8.39% Premium financing agreements [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | 18,426 | |
Merger [Member] | 10% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | 100,000 | |
Merger [Member] | 0% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | 102,060 | |
Merger [Member] | 0% Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | 10,000 | |
Assumption Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Current notes payable - third party | 0 | |
Total current notes payable | 0 | |
Notes payable - related party, noncurrent | 11,000,000 | |
Notes payable - thrid party, noncurrent | 0 | |
Total noncurrent notes payable | 11,000,000 | |
Total notes payable | 11,000,000 | |
Assumption Agreement [Member] | 6% Senior Secured Debenture [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - related party, noncurrent | $ 11,000,000 | |
Issuances [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - related party | $ 0 | |
Current notes payable - third party | 6,773,793 | |
Total current notes payable | 6,773,793 | |
Notes payable - related party, noncurrent | 211,562 | |
Notes payable - thrid party, noncurrent | 0 | |
Total noncurrent notes payable | 211,562 | |
Total notes payable | 6,985,355 | |
Issuances [Member] | 14% Senior Secured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Issuances | 10,180,000 | |
Issuances [Member] | Discount on Senior Secured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Issuances | (3,800,847) | |
Accretion [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - related party | 0 | |
Current notes payable - third party | 2,667,503 | |
Total current notes payable | 2,667,503 | |
Notes payable - related party, noncurrent | 0 | |
Notes payable - thrid party, noncurrent | 316,503 | |
Total noncurrent notes payable | 316,503 | |
Total notes payable | 2,984,006 | |
Accretion [Member] | Discount on Senior Secured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Accretion | 2,667,503 | |
Payments [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - related party | (16,083) | |
Current notes payable - third party | (126,386) | |
Total current notes payable | (142,469) | |
Notes payable - related party, noncurrent | 0 | |
Notes payable - thrid party, noncurrent | (8,434) | |
Total noncurrent notes payable | (8,434) | |
Total notes payable | (150,903) | |
Re-Class [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable - related party | 0 | |
Current notes payable - third party | 0 | |
Total current notes payable | 17,009 | |
Notes payable - related party, noncurrent | 0 | |
Notes payable - thrid party, noncurrent | (17,009) | |
Total noncurrent notes payable | (17,009) | |
Total notes payable | $ 0 |
12. Notes Payable (Details - Fu
12. Notes Payable (Details - Future loan payments) | Dec. 31, 2014USD ($) |
Notes Payable [Abstract] | |
2,015 | $ 23,860,933 |
2,016 | 11,221,562 |
2,017 | 3,770,000 |
Total | $ 38,852,495 |
13. Assets and Liabilities Me68
13. Assets and Liabilities Measured at Fair Value (Details - Fair Value) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Fair value warrants | $ 2,033,495 | $ 0 |
Fair Value, Measurements, Recurring [Member] | ||
Fair value warrants | 2,033,495 | |
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair value warrants | 0 | |
Fair Value, Inputs, Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair value warrants | 0 | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair value warrants | $ 2,033,495 |
13. Assets and Liabilities Me69
13. Assets and Liabilities Measured at Fair Value (Details - Change in fair value) | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Fair Value Disclosures [Abstract] | |
Balance beginning | $ 0 |
Acquisition as measurement date | 1,668,795 |
Issuance | 2,407,930 |
(Gain) loss recognized in earnings from change in fair value | (2,043,230) |
Ending balance | $ 2,033,495 |
13. Assets and Liabilities Me70
13. Assets and Liabilities Measured at Fair Value (Details - Nonrecurring) - Fair Value, Measurements, Nonrecurring [Member] | 12 Months Ended |
Dec. 31, 2014USD ($) | |
Fair value assets on a nonrecurring basis | $ 948,680 |
Total nonrecurring losses | 25,408,309 |
Goodwill [Member] | |
Fair value assets on a nonrecurring basis | 0 |
Total nonrecurring losses | 20,007,173 |
Patents [Member] | |
Fair value assets on a nonrecurring basis | 0 |
Total nonrecurring losses | 1,814,816 |
Customer Relationships [Member] | |
Fair value assets on a nonrecurring basis | 41,585 |
Total nonrecurring losses | 1,038,415 |
Domain Names [Member] | |
Fair value assets on a nonrecurring basis | 0 |
Total nonrecurring losses | 990,000 |
Trade Names [Member] | |
Fair value assets on a nonrecurring basis | 0 |
Total nonrecurring losses | 765,000 |
Trademarks [Member] | |
Fair value assets on a nonrecurring basis | 9,907,095 |
Total nonrecurring losses | 792,905 |
Fair Value, Inputs, Level 1 [Member] | |
Fair value assets on a nonrecurring basis | 0 |
Fair Value, Inputs, Level 2 [Member] | |
Fair value assets on a nonrecurring basis | 0 |
Fair Value, Inputs, Level 3 [Member] | |
Fair value assets on a nonrecurring basis | $ 948,680 |
14. Commitments and Contingen71
14. Commitments and Contingencies (Details - Minimum lease payments) | Dec. 31, 2014USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,015 | $ 321,774 |
2,016 | 341,618 |
Total | $ 663,392 |
13. Commitments and Contingenci
13. Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating Leased Assets [Line Items] | ||
Rent expense | $ 554,000 | $ 247,000 |
Accrued penalty liability | 156,000 | |
Litigation settlement expense | 70,000 | |
Accrued sales tax | 394,000 | |
Former CFO [Member] | ||
Operating Leased Assets [Line Items] | ||
Litigation contingency accrued | 141,000 | |
Former Employee and Director [Member] | ||
Operating Leased Assets [Line Items] | ||
Litigation contingency accrued | $ 80,000 |
15. Redeemable Preferred Stock
15. Redeemable Preferred Stock (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value per share | $ 0.0001 | $ 0.0001 |
Ronco Holdings Inc [Member] | ||
Preferred stock, shares authorized | 200 | |
Preferred stock, par value per share | $ 0.0001 | |
Ronco Holdings Inc [Member] | Series A Preferred Stock [Member] | ||
Preferred stock, shares authorized | 100 | |
Shares issued for purchase of assets | 100 | |
Amount per share of cash payment or promissory note issued to redeem stock | $ 13,500 | |
Amount per share of promissory note issued to redeem stock, holders right to cause redemption | $ 27,000 | |
Percentage of dividends paid to holders of stock upon payment of dividends | 10.00% |
16. Stockholders' Equity (Detai
16. Stockholders' Equity (Details - Warrants) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2014$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 97,577,244 |
2011 Bridge Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 8,789,064 |
Exercise price | $ 0.64 |
Expiration Dates | Sep. 1, 2016 |
2011 Bridge Warrant Placement Agent [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 1,165,875 |
Exercise price | $ 0.64 |
Expiration Dates | Sep. 1, 2016 |
2011 Unit Offering [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 33,277,837 |
Exercise price | $ 0.59 |
Expiration Dates | Oct. 28, 2016 |
2011 Unit Offering Placement Agent [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 4,726,891 |
Exercise price | $ 0.59 |
Expiration Dates | Oct. 28, 2016 |
2011 Other Placements [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 300,000 |
2011 Other Placements [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Expiration Dates | Jun. 22, 2015 |
2011 Other Placements [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price | $ 1 |
Expiration Dates | Jun. 22, 2017 |
2010 Other Placements [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price | $ 0.64 |
2012 Bridge Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 1,137,735 |
Exercise price | $ 0.77 |
2012 Bridge Warrant [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Expiration Dates | Sep. 30, 2016 |
2012 Bridge Warrant Placement Agent [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 227,546 |
Exercise price | $ 0.77 |
Expiration Dates | Sep. 30, 2016 |
2012 Unit Offering [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 6,300,213 |
Exercise price | $ 0.80 |
Expiration Dates | Sep. 30, 2016 |
2012 Unit Offering Placement Agent [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 1,561,544 |
Expiration Dates | Nov. 14, 2017 |
2012 Unit Offering Placement Agent [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price | $ 0.70 |
2012 Unit Offering Placement Agent [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price | $ 0.80 |
2012 Talent Compensation [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 4,875,000 |
Expiration Dates | Nov. 19, 2015 |
2012 Talent Compensation [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price | $ 0.01 |
2012 Talent Compensation [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price | $ 2 |
2012 Merger Related Notes Converted [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 494,328 |
Exercise price | $ 0.80 |
Expiration Dates | Nov. 14, 2015 |
2013 eDiets Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 427,987 |
2013 eDiets Warrants [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price | $ 1.40 |
Expiration Dates | Jul. 15, 2019 |
2013 eDiets Warrants [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price | $ 4.74 |
Expiration Dates | Sep. 11, 2019 |
2014 MIG7 Offering [Member] | |
Class of Warrant or Right [Line Items] | |
Number of warrants outstanding | shares | 34,293,224 |
Exercise price | $ 0.0001 |
Expiration Dates | Apr. 3, 2015 |
16. Stockholders' Equity (Det75
16. Stockholders' Equity (Details - Option Activity) - Options [Member] | 12 Months Ended |
Dec. 31, 2014USD ($)$ / sharesshares | |
Shares | |
Outstanding | 0 |
April 2, 2014 Acquisition | 7,148,836 |
Granted | |
Exercised | |
Forfeited | (4,185,000) |
Expired | (281,842) |
Outstanding | 2,681,994 |
Exercisable | 2,561,994 |
Weighted Average Exercise Price | |
Outstanding | $ / shares | $ 0 |
April 2, 2014 Acquisition | $ / shares | 1.06 |
Forfeited | $ / shares | .68 |
Expired | $ / shares | 1.51 |
Outstanding | $ / shares | 1.57 |
Exercisable | $ / shares | $ 1.75 |
Weighted Average Remaining Contractual Life | |
April 2, 2014 Acquisition | 7 years 5 months 16 days |
Outstanding | 5 years 4 months 10 days |
Exercisable | 5 years 1 month 21 days |
Aggregate Intrinsic Value | |
Outstanding | $ | $ 0 |
Granted | $ / shares | $ 0 |
Outstanding | $ | $ 0 |
Exercisable | $ | $ 0 |
16. Stockholders' Equity (Det76
16. Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share based compensation | $ 575,686 | $ 677,191 |
Options [Member] | ||
Options forfeited | 4,185,000 | |
Unrecognized compensation expense | $ 85,000 | |
Weighted average period of unvested options | 1 year 11 months 1 day | |
Infusion Brands Inc [Member] | ||
Share based compensation | $ 182,000 | |
Ronald C. Pruett, Jr. [Member] | ||
Severance expense | $ 72,000 | |
Options forfeited | 3,050,000 | |
2013 Plan [Member] | ||
Options authorized | 9,000,000 | |
Options available for grant | 9,577,500 | |
Seller of ASTV [Member] | ||
Stock issued for asset purchase, shares | 7,113,375 | |
Mark Ethier [Member] | ||
Share based compensation | $ 297,000 | |
Restricted stock granted, shares | 25,174,888 | |
Unrecognized compensation expense | $ 1,213,000 |
17. Segment Reporting (Details
17. Segment Reporting (Details - Segment financial information) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Total revenue | $ 18,903,353 | $ 14,731,837 |
Net (loss) gain | (46,375,931) | (3,996,053) |
Depreciation and amortization | 724,426 | 39,490 |
Interest expense | (5,304,839) | 330,793 |
Assets | 11,838,339 | 2,295,191 |
Hardware [Member] | ||
Assets | 5,124,929 | 2,295,191 |
Home Goods [Member] | ||
Assets | 8,423,993 | 0 |
Ecommerce [Member] | ||
Assets | 183,740 | 0 |
Corporate Segment [Member] | ||
Assets | 49,237,993 | 0 |
Operating Segments [Member] | Hardware [Member] | ||
Total revenue | 6,980,056 | 14,731,837 |
Net (loss) gain | (9,469,209) | (3,679,902) |
Depreciation and amortization | 65,657 | 39,490 |
Interest expense | 0 | 0 |
Operating Segments [Member] | Home Goods [Member] | ||
Total revenue | 11,444,747 | 0 |
Net (loss) gain | (25,491,577) | 0 |
Depreciation and amortization | 333,727 | 0 |
Interest expense | (1,270,044) | 0 |
Operating Segments [Member] | Ecommerce [Member] | ||
Total revenue | 478,550 | 0 |
Net (loss) gain | (8,527,455) | 0 |
Depreciation and amortization | 324,942 | 0 |
Interest expense | 0 | 0 |
Operating Segments [Member] | Corporate Segment [Member] | ||
Total revenue | 0 | 0 |
Net (loss) gain | (2,887,690) | (316,151) |
Depreciation and amortization | 0 | 0 |
Interest expense | (4,034,795) | $ 330,793 |
All segments [Member] | ||
Assets | $ 62,970,655 |
17. Segment Reporting (Detail78
17. Segment Reporting (Details - Segment assets) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Assets | $ 11,838,339 | $ 2,295,191 |
All segments [Member] | ||
Assets | 62,970,655 | |
Intersegment Eliminations [Member] | Funding Receivables [Member] | ||
Assets | (50,172,300) | 0 |
Intersegment Eliminations [Member] | Notes Receivable [Member] | ||
Assets | (851,237) | 0 |
Intersegment Eliminations [Member] | Interest Receivable [Member] | ||
Assets | (54,587) | 0 |
Intersegment Eliminations [Member] | Deferred Financing Fee [Member] | ||
Assets | (45,442) | 0 |
Intersegment Eliminations [Member] | Accrued Fees [Member] | ||
Assets | (8,750) | 0 |
Hardware [Member] | ||
Assets | 5,124,929 | 2,295,191 |
Home Goods [Member] | ||
Assets | 8,423,993 | 0 |
Ecommerce [Member] | ||
Assets | 183,740 | 0 |
Corporate Segment [Member] | ||
Assets | $ 49,237,993 | $ 0 |
17. Segment Reporting (Detail79
17. Segment Reporting (Details Narrative) | Dec. 31, 2014USD ($) |
Credit line maximum | $ 4,000,000 |
Loan Agreement [Member] | |
Credit line maximum | 3,000,000 |
Credit line balance | 651,237 |
Hardware [Member] | |
Funding to segments | 10,436,000 |
Home Goods [Member] | |
Funding to segments | 1,432,000 |
Promissory note | 200,000 |
Ecommerce [Member] | |
Funding to segments | $ 49,000 |
18. Income Taxes (Details - Inc
18. Income Taxes (Details - Income tax expense) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Current: | ||
Federal income tax | $ 0 | $ 0 |
State income tax | 0 | 0 |
Deferred: | ||
Federal income tax | (171,490) | 0 |
State income tax | (18,309) | 0 |
Total provision for income taxes | $ (189,799) | $ 0 |
18. Income Taxes (Details - Def
18. Income Taxes (Details - Deferred tax assets) - USD ($) | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Allowance for uncollectible accounts receivable | $ 53,416 | $ 84,243 |
Inventory valuation reserve | 190,590 | 129,824 |
Accrued sales returns | 543,211 | 0 |
Accrued royalties | 63,835 | 56,528 |
Accrued commissions | 17,020 | 34,161 |
Accrued paid time off | 14,993 | 9,615 |
Accrued wages | 145,772 | 60,365 |
Warranty reserve | 14,175 | 10,097 |
Fixed assets | 6,152 | 19,481 |
Unearned revenue | 260,980 | 0 |
Net operating loss carryforward | 16,125,758 | 9,530,417 |
Gross deferred tax asset | 17,435,902 | 9,934,731 |
Less deferred tax asset valuation allowance | (17,420,253) | (9,934,731) |
Deferred tax asset -net | 15,649 | 0 |
Deferred tax liabilities: | ||
Intangible assets | (15,649) | 0 |
Gross deferred tax liability | (15,649) | 0 |
Net deferred tax asset | $ 0 | $ 0 |
18. Income Taxes (Details - NOL
18. Income Taxes (Details - NOLs) | 12 Months Ended |
Dec. 31, 2014USD ($) | |
As Seen On TV, Inc. [Member] | |
Net operating loss carryforwards | $ 8,380,940 |
As Seen On TV, Inc. [Member] | 3/31/2010 [Member] | |
Net operating loss carryforwards | $ 474,949 |
Year of expiration | Mar. 31, 2030 |
As Seen On TV, Inc. [Member] | 3/31/2011 [Member] | |
Net operating loss carryforwards | $ 3,432,653 |
Year of expiration | Mar. 31, 2031 |
As Seen On TV, Inc. [Member] | 3/31/2012 [Member] | |
Net operating loss carryforwards | $ 229,859 |
Year of expiration | Mar. 31, 2032 |
As Seen On TV, Inc. [Member] | 3/31/2013 [Member] | |
Net operating loss carryforwards | $ 229,859 |
Year of expiration | Mar. 31, 2033 |
As Seen On TV, Inc. [Member] | 3/31/2014 [Member] | |
Net operating loss carryforwards | $ 229,859 |
Year of expiration | Mar. 31, 2034 |
As Seen On TV, Inc. [Member] | 12/31/2014 [Member] | |
Net operating loss carryforwards | $ 3,783,761 |
Year of expiration | Dec. 31, 2034 |
Infusion [Member] | |
Net operating loss carryforwards | $ 34,472,523 |
Infusion [Member] | 12/31/2007 [Member] | |
Net operating loss carryforwards | $ 4,377,277 |
Year of expiration | Dec. 31, 2027 |
Infusion [Member] | 12/31/2008 [Member] | |
Net operating loss carryforwards | $ 5,283,433 |
Year of expiration | Dec. 31, 2028 |
Infusion [Member] | 12/31/2009 [Member] | |
Net operating loss carryforwards | $ 126,976 |
Year of expiration | Dec. 31, 2029 |
Infusion [Member] | 12/31/2010 [Member] | |
Net operating loss carryforwards | $ 3,386,963 |
Year of expiration | Dec. 31, 2030 |
Infusion [Member] | 12/31/2011 [Member] | |
Net operating loss carryforwards | $ 4,521,359 |
Year of expiration | Dec. 31, 2031 |
Infusion [Member] | 12/31/2012 [Member] | |
Net operating loss carryforwards | $ 4,111,085 |
Year of expiration | Dec. 31, 2032 |
Infusion [Member] | 12/31/2013 [Member] | |
Net operating loss carryforwards | $ 2,636,040 |
Year of expiration | Dec. 31, 2033 |
Infusion [Member] | 12/31/2014 [Member] | |
Net operating loss carryforwards | $ 10,029,390 |
Year of expiration | Dec. 31, 2034 |
18. Income Taxes (Details - Rec
18. Income Taxes (Details - Reconciliation) - USD ($) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of effective tax rate | ||
Tax provision at U.S. federal statutory rate | $ (15,447,342) | $ (1,358,659) |
State income tax provision net of federal tax | (714,285) | (145,057) |
Adjustment for noncontrolling interest | 8,228,061 | 0 |
Goodwill impairment | 1,092,793 | 0 |
Gain on warrant remeasurement | (759,593) | 0 |
Gain on sale of intangible asset | 54,666 | 0 |
Stock compensation | 133,747 | 0 |
Meals and entertainment | 7,391 | 9,479 |
Net Operating Loss 382 Adj. | 10,019,081 | 0 |
Change in valuation allowance | (2,804,318) | 1,494,237 |
Provision for income taxes | $ (189,799) | $ 0 |
Reconciliation of effective tax rate percents | ||
Tax provision at U.S. federal statutory rate | 34.00% | 34.00% |
State income tax provision net of federal tax | 1.57% | 3.63% |
Adjustment for noncontrolling interest | (18.11%) | 0.00% |
Goodwill impairment | (2.41%) | 0.00% |
Gain on warrant remeasurement | 1.67% | 0.00% |
Gain on sale of intangible asset | (0.12%) | 0.00% |
Stock compensation | (0.29%) | 0.00% |
Meals and entertainment | (0.02%) | (0.24%) |
Net Operating Loss 382 Adj. | (22.05%) | 0.00% |
Change in valuation allowance | 6.17% | (37.39%) |
Provision for income taxes | 0.42% | 0.00% |