Amended Current Report Filing (8-k/a)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

———————

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 2, 2014


AS SEEN ON TV, INC.
(Exact name of registrant as specified in its charter)
Florida	000-53539	80-0149096
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

14044 Icot Boulevard Clearwater, Florida 33760 (Address of principal executive offices) (Zip Code) (727) 230-1031 Registrant’s telephone number, including area code

———————

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 9.01

Financial Statements and Exhibits.

As previously reported on April 2, 2014, As Seen On TV, Inc. (the “Company”) entered into an Agreement and Plan of Merger with Infusion Brands International, Inc., a Nevada corporation (“IBI”), Infusion Brands, Inc. (“Infusion”), a Nevada corporation and a wholly owned subsidiary of IBI, and ASTV Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of the Company. All of the closing conditions included in the Merger Agreement were satisfied on April 2, 2014, and the merger closed. This Current Report on Form 8-K/A includes the audited financial statements of Infusion and the related pro forma financial statements for the Company in accordance with the Current Report on Form 8-K as filed on April 8, 2014.

(a)

Financial statements of businesses acquired.

The audited financial statements of Infusion at December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012 are filed as Exhibit 99.1 to this report. Also included herein are the audited financial statements of Ronco Holdings, Inc. at December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012 are filed as Exhibit 99.2 to this report.

(b)

Pro forma financial information.

The unaudited pro forma financial statements giving effect to the acquisition of Infusion and Ronco Holdings, Inc. are filed as Exhibit 99.3 to this report.

(d)

Exhibits


Exhibit No.		Description

99.1		Audited financial statements of Infusion Brands, Inc. at December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012
99.2		Audited financial statements of Ronco Holdings, Inc. at December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012
99.3		Unaudited pro forma financial statements giving effect to the acquisition of Infusion Brands, Inc. and Ronco Holdings, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



As Seen On TV, Inc.

By:		/s/ Robert DeCecco
		Robert DeCecco
		Chief Executive Officer

Date: August 29, 2014

EXHIBIT 99.1

INFUSION BRANDS, INC.
FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012

TABLE OF CONTENTS


Report of Independent Registered Public Accounting Firm	2
Balance Sheets as of December 31, 2013 and 2012	3
Statements of Operations for the Years Ended December 31, 2013 and 2012	4
Statements of Stockholder's Deficit for the Years Ended December 31, 2013 and 2012	5
Statements of Cash Flows for the Years Ended December 31, 2013 and 2012	6
Notes to Financial Statements for the Years Ended December 31, 2013 and 2012	7-18

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Infusion Brands, Inc.

We have audited the accompanying balance sheets of Infusion Brands, Inc. (the "Company") as of December 31, 2013 and 2012, and the related statements of operations, stockholder's deficit, and cash flows for each of the years in the two-year period ended December 31, 2013. The financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company's recurring losses from operations and negative cash flows from operations as well as its continued dependence on its Parent raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.

/s/ EisnerAmper LLP

Iselin, NJ

August 28, 2014

Infusion Brands, Inc.

Balance Sheets


	December 31,
	2013			2012
Assets
Current assets:
Cash	$	91,397		$	288,779
Accounts receivable, net of allowances of $223,872 and $453,586 as of 2013 and 2012, respectively.		1,127,058			903,259
Inventories, net		879,178			989,895
Prepaid expenses and other current assets		96,826			16,506
Total current assets		2,194,459			2,198,439

Property and equipment, net		100,732			135,505
Total assets	$	2,295,191		$	2,333,944

Liabilities and Shareholder's Deficit

Current liabilities:
Accounts payable	$	2,193,664		$	2,295,264
Accrued expenses		657,695			372,917
Accounts receivable financing arrangement		473,960			1,609,369
Deferred revenue		37,030			198,574
Other current liabilities		2,000			10,096
Due to Parent		20,138,733			15,736,752
Total current liabilities		23,503,082			20,222,972

Total liabilities		23,503,082			20,222,972

Commitments and contingencies (Note 8)

Shareholder's deficit:
Common Stock, $0.00001 par, 100 shares authorized and outstanding at 2013 and 2012		-			-
Paid-in capital		6,483,739			5,806,548
Accumulated deficit		(27,691,630	)		(23,695,576	)
Total shareholder's deficit		(21,207,891	)		(17,889,028	)

Total liabilities and shareholder's deficit	$	2,295,191		$	2,333,944

The accompanying notes are an integral part of the financial statements.

Infusion Brands, Inc.

Statements of Operations


	Years Ended December 31,
	2013			2012
Product sales	$	14,731,837		$	7,033,871
Cost of product sales		11,257,676			5,560,210
Gross profit		3,474,161			1,473,661

Operating expenses
Depreciation		39,490			37,227
Employment related		3,026,414			6,384,987
Professional fees		401,897			344,924
General and administrative		1,511,887			2,593,142
Selling and marketing		2,174,375			1,210,424
Total operating expenses		7,154,063			10,570,704

Loss from operations		(3,679,902	)		(9,097,043	)

Other income (expense)
Other income, net		14,642			758
Interest expense		(330,793	)		(352,496	)
Total other expense		(316,151	)		(351,738	)

Net loss	$	(3,996,053	)	$	(9,448,781	)

The accompanying notes are an integral part of the financial statements.

Infusion Brands, Inc.

Statements of Shareholder's Deficit


	Shares of				Additional					Total
	Common		Common		Paid in		Accumulated			Stockholder's
	Stock		Stock		Capital		Deficit			Deficit
Balance, December 31, 2011		100	$	-	$	1,962,056	$	(14,246,795	)	$	(12,284,739	)

Stock compensation expense		-		-		3,844,492		-			3,844,492
Net loss		-		-		-		(9,448,781	)		(9,448,781	)

Balance, December 31, 2012		100	$	-	$	5,806,548	$	(23,695,576	)	$	(17,889,028	)

Stock compensation expense		-		-		677,191		-			677,191
Net loss		-		-		-		(3,996,053	)		(3,996,053	)

Balance, December 31, 2013		100	$	-	$	6,483,739	$	(27,691,630	)	$	(21,207,891	)

The accompanying notes are an integral part of the financial statements.

Infusion Brands, Inc.

Statements of Cash Flows


	Year Ended December 31,
	2013			2012
Cash flows from operating activities
Net loss	$	(3,996,053	)	$	(9,448,781	)
Adjustments to reconcile net loss to net cash used in operating activities
Change in allowance for uncollectible accounts		(8,479	)		6,567
Change in allowance for sales refunds		(214,441	)		155,154
Change in allowance for inventory obsolescence		35,000			310,000
Depreciation		39,490			37,227
Stock compensation expense		677,191			3,844,492
Changes in operating assets and liabilities
Accounts receivable		(880	)		1,036,115
Inventories		75,717			(235,113	)
Prepaid expenses and other current assets		(80,320	)		29,864
Accounts payable		(101,601	)		186,651
Accrued expenses		284,778			125,007
Deferred revenue		(161,544	)		130,062
Other		(8,095	)		(1,106	)
Net cash used in operating activities		(3,459,237	)		(3,823,861	)

Cash flows from investing activities
Purchase of property and equipment		(4,717	)		(52,316	)
Net cash used in investing activities		(4,717	)		(52,316	)

Cash flows from financing activities
Net payments (made) received on accounts receivable factoring arrangement		(1,135,409	)		584,038
Funds borrowed from Parent		4,401,981			2,042,503
Net cash provided by financing activities		3,266,572			2,626,541

Net decrease in cash		(197,382	)		(1,249,636	)
Cash at beginning of year		288,779			1,538,415
Cash at end of year	$	91,397		$	288,779

Supplemental Cash Flow Information

Cash paid for interest	$	330,976		$	352,496
Cash paid for income taxes	$	-		$	-

The accompanying notes are an integral part of the financial statements.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 1 – Organization and Basis of presentation

Organization

Infusion Brands, Inc. (the "Company" or "Infusion") is a Nevada Corporation and a wholly-owned subsidiary of Infusion Brands International, Inc. ("Infusion International" or "Parent"). Infusion is a consumer products company that leverages direct response channels to satisfy unmet market demands and solve everyday problems. Infusion competes in three key product verticals – hardware, home goods, and cleaning – with a portfolio of revenue-generating brands including DualSaw, DualTools, and DOC Cleaning. With physical offices in North America, Europe and Asia, Infusion has worldwide reach and capability. Its products are sold globally through a variety of national retailers, online retailers, catalogs, infomercials, and live shopping channels. Most of the Company's sales are generated in North America and Asia Pacific, to a large number of customers. The Company has operated in one segment for all periods presented herein.

Basis of preparation of the financial statements

The accompanying financial statements have been prepared on accrual basis in accordance with generally accepted accounting principles in the United States (GAAP). All amounts are stated in United States dollars.

Note 2 – Going concern and management's plans

The preparation of financial statements in accordance with generally accepted accounting principles contemplates that operations will be sustained for a reasonable period. However, the Company has incurred and continues to incur net losses and operating cash flow deficiencies and has negative working capital of approximately $21,309,000 as of December 31, 2013. Since the Company's inception, the Company has been substantially dependent upon funds raised by Infusion International to sustain the Company's operating and investing activities. These are conditions that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period.

Notwithstanding the funding received by Infusion International, the Company's ability to continue as a going concern for a reasonable period is dependent upon achieving management's plans for the Company's operations and, ultimately, generating profits from those operations. The Company cannot give any assurances regarding the success of management's plans. The Company's financial statements do not include adjustments relating this uncertainty.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 3 – Summary of Significant Accounting Policies

Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and assumptions that affect the reported amounts in our financial statements. Significant estimates embodied in the accompanying financial statements include (i) estimating the collectability of accounts receivable, the recoverability of inventories, adequacy of the allowance for sales returns, the grant date fair value of equity based awards and (ii) developing cash flow projections for purposes of evaluating the recoverability of long-lived assets. All estimates are developed by management using the best available information at the time of the estimate. However, actual results could differ from those estimates.

Revenue recognition – The Company recognizes revenues from the product sales when the following four criteria have been met: (i) the product has been delivered and the Company has no significant remaining obligations; (ii) persuasive evidence of an arrangement exists; (iii) the price to the buyer is fixed or determinable; and (iv) collection is reasonably assured. Revenues from product sales are recorded net of provisions for estimated chargebacks, rebates, expected returns and cash discounts.

The Company ships most of its products FOB shipping point, although from time to time certain customers, will insist upon FOB destination. Among the factors the Company takes into account when determining the proper time at which to recognize revenue are (i) when title to the goods transfers and (ii) when the risk of loss transfers.

With respect to sales arrangements under which the buyer has a right to return the related product, revenue is recognized only if all the following conditions are met: the price is fixed or determinable at the date of sale; the buyer has paid, or is obligated to pay and the obligation is not contingent on resale of the product; the buyer's obligation would not be changed in the event of theft or physical destruction or damage of the product; the buyer has economic substance; the Company does not have significant obligations for future performance to directly bring about resale of the product by the buyer; and the amount of future returns can be reasonably estimated.

The Company provides a provision for product returns based on the experience with historical sales returns, in accordance with ASC Topic 605-15 with respect to sales of product when a right of return exists. Reported revenues are shown net of the returns provision. Such allowance for sales returns is included as a reduction in accounts receivable in the accompanying balance sheets.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 3 – Summary of Significant Accounting Policies (Continued)

Allowance for Doubtful Accounts: The allowance for doubtful accounts which is based on an evaluation of our outstanding accounts receivable including the age of amounts due, the financial condition of our specific customers, knowledge of our industry unit and historical bad debt experience. This evaluation methodology has proved to provide a reasonable estimate of bad debt expense in the past and we intend to continue to employ this approach in our analysis of collectability.

Inventories – Inventories are stated at the lower of cost (first-in, first-out basis) or market. The Company's inventories consist of retail merchandise that is in its finished form and ready for sale to end-user customers. 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 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. The Company recorded a reserve for slow-moving and excess inventory of $345,000 and $310,000 as of December 31, 2013 and 2012, respectively.

Property and equipment – Property and equipment are recorded at cost and depreciated using the straight-line method over respective estimated useful lives of the assets. Furniture and office equipment are depreciated over a range between 1 year and 7 years. Leasehold improvements are amortized over the shorter of the useful life of the asset and the remaining term of the lease.

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. There were no related impairments noted during the years ended December 31, 2013 and 2012.

Share-based payments – The Company recognizes share-based compensation expense on share based awards under the provisions of ASC 718 Compensation - Stock Compensation. Compensation expense is recognized on that portion of option awards that are expected to ultimately vest over the vesting period from the date of grant. The common stock in question is the common stock of Infusion International.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 3 – Summary of Significant Accounting Policies (Continued)

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.

Fair Value Measurements - FASB ASC 820 — Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to us on December 31, 2013 and 2012, respectively. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

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.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 3 – Summary of Significant Accounting Policies (Continued)

The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts payable and accrued expenses approximate their fair value based on the short-term maturity of these instruments. Determination of fair value of related party payables is not practicable due to their related party nature.

Concentration of Credit Risk - Financial instruments that potentially expose the Company 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.

Advertising – Advertising costs are charged to expense as incurred. Advertising expenses were approximately $1,350,000 and $617,000 for the years ended December 31, 2013 and 2012, respectively.

Product Development Costs - Costs of research, new product development and product redesign are charged to expense as incurred.

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

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 4 – Property and Equipment


	December 31,
Description	2013			2012
Furniture and equipment	$	202,980		$	198,263
Leasehold improvements		15,390			15,390
Total property and equipment		218,370			213,653
Accumulated depreciation		(117,638	)		(78,148	)
Property and equipment, net	$	100,732		$	135,505

Depreciation and amortization expense for the years ended December 31, 2013 and 2012 was approximately $39,000 and $37,000, respectively.

Note 5 – Accrued Expenses

The Company's accrued expenses consisted of the following as of December 31, 2013 and 2012:


	December 31,
	2012		2011
Accrued expenses:
Commissions	$	31,474	$	-
Employment related		250,066		60,146
Professional service fees		197,682		190,100
Royalties		150,222		95,837
Sales tax		1,417		-
Warranty		26,834		26,834
Total accrued expenses	$	657,695	$	372,917

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 6 – Accounts Receivable Financing Arrangement

On January 28, 2011, the Company 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 has 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 receivable 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 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, we amended our accounts receivable and purchase order financing agreement to raise the cash advance rate from 75% to 80% of qualified accounts receivable balances assigned up to an amount of $4,000,000 (up from $1,000,000 previously). The initial discount rate has been lowered from 1.75% to 1.65% for the first 1 – 30 days and from 1% to 0.80% for each subsequent 15 day period.

There was approximately $474,000 and $1,609,000 outstanding under this arrangement as of December 31, 2013 and December 31, 2012, respectively. Accounts receivable assigned as of December 31, 2013 and 2012 was approximately $920,000 and $1,130,000, respectively.

Note 7 – Related party transactions

Since the Company's inception, the Company has been substantially dependent upon funds raised by its parent, Infusion International, to sustain the Company's operating and investing activities. The Due to Parent liability is the net funding advanced to the Company with no specific repayment terms or interest. As of December 31, 2013 and 2012, the net amount due to Infusion International is approximately $20,138,733 and $15,736,752.

Note 8 – Commitments and contingencies

Litigation, claims and assessments

The Company in the normal course of business is subject to routine litigation. As of December 31, 2013 and 2012, there is no material litigation against the Company.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 8 – Commitments and contingencies (Continued)

Other contingencies:

In connection with the Company's business, the Company enters into other arrangements from time to time that are routine and customary for the operation of the Company's business that include commitments, typically of a short duration. These arrangements include, among other things, infomercial development and production arrangements and royalty or contingent consideration to product manufacturers or infomercial hosts. As of December 31, 2013 and 2012, the Company does not believe that its routine and customary business arrangements are material for reporting purposes.

Note 9 – Equity

Common Stock

The Company's has authorized 100 shares of $0.00001 par value common stock. As of December 31, 2013, there were 100 shares issued and outstanding. All the outstanding stock is owned by Infusion International.

Share-based Compensation

Certain of the Company's employees and consultants received share-based compensation either in the form of Infusion International stock options or stock.

On August 6, 2012, Infusion International granted certain employees of the Company 79,425,000 shares of stock as a retention grant that was immediately vested. The fair market value of Infusion International's stock was approximately $0.03 per share.

On August 6, 2012, Infusion International entered into an option exchange agreement with certain employees of the Company whereby 58,445,792 options were exchanged with an equal number of Infusion International shares of common stock. These stock options contained performance based conditions that were improbable and therefore no related compensation expense had been recorded. The exchanged stock was issued subject to a vesting schedule whereby 33% vest immediately, 33% vest on August 6, 2013 and the remaining 34% vest on August 6, 2014. The exchange was accounted for as a modification of an equity award in accordance with ASC 718. Stock compensation expense for awards with a graded vesting schedule is recognized on an accelerated basis as though each separately vesting portion of the award is, in substance, a separate award. The fair market value of Infusion International's stock was approximately $0.03 per share on the date of grant. There were no stock options outstanding as of December 31, 2013 and 2012.

The total stock compensation recognized with respect to the above awards was approximately $677,000 and $3,844,000 for the years ended December 31, 2013 and 2012, respectively. At December 31, 2013, there was approximately $182,000 of unrecognized stock compensation that will be expensed over a weighted average period of 0.50 year.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 10 – Income Taxes

Infusion is a member of the consolidated income tax group within Infusion International for income tax reporting purposes. Accordingly, Infusion does not file separate income tax returns in the U.S. federal jurisdiction and for various states.

At December 31, 2013, Infusion International had Federal and state net operating loss carryforwards of approximately $37,500,000 and $26,100,000, respectively, available to reduce future taxable income. At December 31, 2012, Infusion International had Federal and state net operating loss carryforwards of approximately $35,100,000 and $24,900,000, respectively, available to reduce future taxable income. The Federal net operating loss carryforwards will begin to expire in 2027 and the state net operating loss carryforwards will begin to expire in 2016. Under the provisions of the Internal Revenue Code, certain substantial changes in Infusion International's ownership may result in a limitation on the amount of net operating losses that may be utilized in future years.

As a result of the Federal and state net operating loss carryforward at Infusion International available to Infusion as a member of the consolidated income tax group, no provision for income taxes have been provided. Additionally, as Infusion International has provided a full valuation allowance equal to its net deferred tax assets as of December 31, 2013 and 2012, Infusion International has not recorded any deferred taxes.

Infusion International has no unrecognized income tax benefits as of December 31, 2013 and 2012. There have been no material changes in unrecognized tax benefits through December 31, 2013. The years 2010 through 2013 are considered open tax years in U.S. federal and state tax jurisdictions. Infusion International currently does not have any audit investigations in any jurisdiction.

Note 11 – Major customers and suppliers

Major customers are those customers that account for more than 10% of product sales. For the year ended December 31, 2013, 59% of product sales were derived from two customers and the accounts receivable from these two customers represented 57% of total accounts receivable at December 31, 2013. The Company also had one other customer that represented 23% of accounts receivable at December 31, 2013. For the year ended December 31, 2012, 72% of product sales were derived from three customers. The loss of any one of these customers would have a material adverse effect on the Company's financial results and operations.

For the year ended December 31, 2013, 70% of cost of product sales was derived from two suppliers and the accounts payable for these suppliers represented 37% of total accounts payable at December 31, 2013. In the event that the Company becomes unable to purchase products from these suppliers, the Company would need to find alternate suppliers.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 12 – Subsequent events

Debt Participation Agreement

On March 6, 2014, Ronco Holdings, Inc's ("Ronco") secured debt lender entered into an agreement with various affiliated entities whereby the Ronco's secured debt may be purchased by Infusion for $4,350,000 through a series of participations to occur prior to March 6, 2015. A related payment in the amount of $2,000,000 was made by Infusion during March 2014.

In addition, Infusion owns 100% of the membership interests of Ronco Funding, LLC. The sole assets of Ronco Funding LLC are a participation interest in the secured debt of Ronco and an option to procure the remaining interest in such secured debt for an additional $2,350,000. Ronco is a Delaware company. Infusion also holds the right to designate the majority of the board of directors of Ronco. Ronco products include, but are not limited to the Showtime Rotisserie & BBQ, 5-Tray Electric Food Dehydrator, Veg-o-Matic, Smart Juicer and Pocket Fisherman. Due to the ownership and rights to the Ronco secured debt and control over the Ronco's board of directors, for accounting purposes, Ronco will be treated as a variable interest entity, with Infusion being the primary beneficiary and the consolidation will be recorded at fair value.

Contribution and Assumption Agreement

On March 31, 2014, Infusion and Infusion International entered into a Contribution and Assumption Agreement ("Contribution Agreement") whereby Infusion International contributed to the capital of Infusion certain of its assets and liabilities. Under the Contribution Agreement, the Affiliate Payable to Infusion International was considered a capital contribution and extinguished.

The amount of assets contributed and liabilities assumed under the Contribution Agreement were approximately $1,014,000 and $11,062,000, respectively, and Infusion recognized a total capital contribution of approximately $10,048,000. Of the liabilities assumed, $11,000,000 represents Senior Secured Debenture dated March 6, 2014 issued to Vicis Capital Master Fund, majority shareholder of Infusion International.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 12 – Subsequent events (Continued)

ASTV Merger

On April 2, 2014, an Agreement and Plan of Merger (the "ASTV Merger Agreement") was entered into between As Seen On TV, Inc., a Florida corporation ("ASTV"), Infusion, and ASTV Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of ASTV. Effective April 2, 2014. ASTV Merger Sub, Inc. merged with and into Infusion, with Infusion continuing as the surviving corporation and becoming a direct wholly owned subsidiary of ASTV (the "ASTV Merger"). ASTV is a direct response marketing company and owner of AsSeenOnTV.com and eDiets.com. ASTV identifies, develops and markets consumer products for global distribution via TV, Internet and retail channels.

Pursuant to the terms of the Infusion Merger Agreement, ASTV issued to Infusion International 452,960,490 shares of its common stock in exchange for all of the outstanding shares of Infusion common stock. As a result, Infusion International became the majority shareholder of ASTV, owning approximately 85.2% of ASTV's outstanding common stock as of the date of the Infusion Merger and 75% of ASTV's outstanding common stock on a fully diluted basis. Pursuant to the terms of the Infusion Merger Agreement, ASTV also agreed to increase the size of its board of directors from 5 to 7, to cause three of its existing directors to resign and to appoint 5 new persons, designated by Infusion International, to the ASTV board of directors. Kevin Harrington, Randolph Pohlman and Ronald C. Pruett, Jr. resigned from the Company's board of directors and Robert DeCecco, Shadron Stastney, Dennis W. Healey, Mary Mather and Allen Clary were appointed to ASTV's board of directors. Mr. Clary subsequently resigned in June 2014 and Mr. Healey resigned in August 2014. Following these actions, ASTV's board of directors is now comprised of Robert DeCecco, chairperson, Kevin A. Richardson, II, Greg Adams, Shad Stastney, Mark Ethier, and Mary Mather. Greg Adams and Kevin Richardson, II are each considered "independent" within the meaning of meaning of Rule 5605 of the NASDAQ Marketplace Rules.

Under the Infusion Merger Agreement, ASTV agreed to assume from Infusion all obligations for indebtedness for borrowed money of Infusion outstanding at the closing of the Infusion Merger and all agreements relating to that indebtedness. This indebtedness is primarily comprised of a Senior Secured Debenture issued to Vicis Capital Master Fund in the principal amount of $11,000,000, bearing interest at a rate of 6% until June 30, 2014, 9% from July 1, 2014 until June 30, 2015, and 12% from July 1, 2015 until the maturity date of June 30, 2016 (the "Senior Secured Debenture"). The Senior Secured Debenture is collateralized by all assets of the Company and guaranteed by each other Credit Party (as defined below), which guaranty will be collateralized by substantially all of the assets of those other Credit Parties. The Senior Secured Debenture is subject to customary covenants and events of default.

Infusion Brands, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 12 – Subsequent events (Continued)

Pursuant to the terms of the Infusion Merger Agreement, Infusion International may require the Company to file a registration statement registering the resale of the shares of the Company's common stock issued to Infusion International pursuant to the Infusion Merger. ASTV has also agreed, at its cost and subject to certain limitations, to maintain the same level of director indemnification and insurance coverage as those in place for Infusion and Infusion International immediately prior to the Infusion Merger.

The Infusion Merger transaction will be treated as a reverse merger under the acquisition method of accounting in accordance with the provisions of Financial Accounting Standards Board, Accounting Standards Codification ("FASB ASC") 805, whereby Infusion will be the accounting acquirer (legal acquiree) and ASTV will be treated as the accounting acquiree (legal acquirer).

Accordingly, effective with the merger closing, the historical financial records of ASTV will be those of the accounting acquirer adjusted to reflect the legal capital of the accounting acquiree.

Senior Note Purchase Agreement

On April 3, 2014, Infusion and ASTV entered into a Senior Note Purchase Agreement ("Senior Note") to obtain debt financing in the amount of $10,000,000. 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 is payable monthly. The Senior Note matures on April 3, 2015, and all outstanding principal becomes payable.

Loan and Security Agreement

On April 11, 2014, ASTV and Ronco entered into a Loan and Security Agreement ("Loan Agreement"). Ronco may borrow up to $3,000,000 for working capital subject to an Accounts Receivable and Inventory Borrowing Base calculation that is subject to ASTV's sole approval. Borrowings made are subject to an interest rate of Prime plus 4% per annum that shall accrue daily and be payable monthly. The Loan Agreement's maturity date is April 11, 2015. As part of the Agreement, Ronco has secured the payment of all borrowings by granting the Company a security interest in the assets of the Company.

Affiliate Funding

Ronco has borrowed for working capital needs approximately $1,310,000 from the Company through a series of payments to Ronco and to vendors on behalf of Ronco. Terms of the funding have yet to be determined.

EXHIBIT 99.1

Ronco Holdings, Inc.
Financial Statements
For the Years Ended December 31, 2013 and 2012

TABLE OF CONTENTS


Report of Independent Registered Public Accounting Firm	2
Balance Sheets as of December 31, 2013 and 2012	3
Statements of Operations for the Years Ended December 31, 2013 and 2012	4
Statements of Stockholders' Deficit for the Years Ended December 31, 2013 and 2012	5
Statements of Cash Flows for the Years Ended December 31, 2013 and 2012	6
Notes to Financial Statements for the Years Ended December 31, 2013 and 2012	7-25

Report of Independent Registered Public Accounting Firm

To the Shareholders
Ronco Holdings, Inc.
Austin, Texas

We have audited the accompanying balance sheets of Ronco Holdings, Inc. as of December 31, 2013 and 2012, and the related statements of operations, stockholders' deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal controls over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controls over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Ronco Holdings, Inc. as of December 31, 2013 and 2012 and the results of their operations and cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered significant recurring losses from operations, and its total liabilities exceeds its total assets. These factors raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Thomas Howell Ferguson P.A.
Tampa, FL
August 12, 2014

Ronco Holdings, Inc.

Balance Sheets


	December 31,
	2013			2012
Assets
Current assets:
Cash	$	202,429		$	320,309
Accounts receivable, net of allowance for doubtful accounts of $22,056 and $16,842 for 2013 and 2012, respectively.		1,644,488			1,425,630
Inventories		1,009,665			1,335,270
Prepaid expenses		339,759			442,294
Due from related party		278,574			-
Other assets		24,010			58,445
Total current assets		3,498,925			3,581,948

Property and equipment, net		147,372			68,618
Intangible assets, net		3,719,158			3,869,768
Total assets	$	7,365,455		$	7,520,334

Liabilities, Redeemable Preferred Stock and Stockholders' Deficit
Current liabilities:
Accounts payable	$	2,372,808		$	1,687,605
Accrued expenses		2,384,575			1,601,228
Notes payable		10,165,040			8,720,000
Due to related party		-			706,809
Total current liabilities		14,922,423			12,715,642

Long-term notes payable - related party		4,884,776			3,516,227
Total liabilities		19,807,199			16,231,869

Commitments and contingencies (Note 12)		-			-

Redeemable preferred stock (Note 9)		2,700,000			2,700,000

Stockholders' deficit:
Common stock, par value $0.0001, 800 shares authorized, issued and outstanding at December 31, 2013 and 2012		2,000			2,000
Accumulated deficit		(15,143,744	)		(11,413,535	)
Total stockholders' deficit		(15,141,744	)		(11,411,535	)
Total liabilities, redeemable preferred stock and stockholders' deficit	$	7,365,455		$	7,520,334

The accompanying notes are an integral part of the financial statements.

Ronco Holdings, Inc.

Statements of Operations


	Year Ended December 31,
	2013			2012
Product sales, net of discounts and allowances	$	8,851,317		$	13,895,776
Cost of product sales		(7,443,543	)		(13,818,441	)
Gross profit		1,407,774			77,335

Operating expenses
Employment related expense		770,335			924,047
General and administrative expense		730,860			743,489
Professional fees		126,245			296,539
Selling and marketing expense		518,548			445,252
Depreciation and amortization, less $13,114 and $1,284 for 2013 and 2012, respectively, included in cost of product sales		168,997			163,004
Impairment of intangible assets, including goodwill		1,844,894			5,897,803
Total operating expenses		4,159,879			8,470,134

Loss from operations		(2,752,105	)		(8,392,799	)

Other income (expense)
Interest expense, net		(978,104	)		(800,890	)
Total other income (expense)		(978,104	)		(800,890	)

Net loss	$	(3,730,209	)	$	(9,193,689	)

The accompanying notes are an integral part of the financial statements.

Ronco Holdings, Inc.

Statements of Stockholders' Deficit


	Shares of				Additional					Total
	Common		Common		Paid in		Accumulated			Stockholders’
	Stock		Stock		Capital		Deficit			Deficit
Balance, December 31, 2011		800	$	-	$	2,000	$	(2,219,846	)	$	(2,217,846	)

Net loss		-		-		-		(9,193,689	)		(9,193,689	)

Balance, December 31, 2012		800		-		2,000		(11,413,535	)		(11,411,535	)

Net loss		-		-		-		(3,730,209	)		(3,730,209	)

Balance, December 31, 2013		800	$	-	$	2,000	$	(15,143,744	)	$	(15,141,744	)

The accompanying notes are an integral part of the financial statements.

Ronco Holdings, Inc.

Statements of Cash Flows


	Year Ended December 31,
	2013			2012
Cash flows from operating activities:
Net loss	$	(3,730,209	)	$	(9,193,689	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Allowance for bad debts		78,719			131,000
Allowance for sales returns		76,913			-
Accretion of contingent note discount		23,655			-
Depreciation and amortization		182,111			164,288
Impairment on intangibles		1,844,894			5,897,803
Changes in operating assets and liabilities
(Increase) decrease in accounts receivable		(297,577	)		616,228
Decrease in inventory		325,605			1,729,390
(Increase) decrease in prepaid expenses		102,535			(92,132	)
(Increase) decrease in other assets		34,435			(58,445	)
Increase in related party receivable		(278,574	)		-
Increase (decrease) in related party payable		(706,809	)		390,034
Increase in accounts payable		685,203			102,947
Increase in accrued expenses		706,434			1,189,026
Net cash (used in) provided by operating activities		(952,665	)		876,450

Cash flows from investing activities:
Purchase of property and equipment		(100,520	)		(63,629	)
License renewals on patents		(9,735	)		(36,282	)
Net cash used in investing activities		(110,255	)		(99,911	)

Cash flows from financing activities:
Proceeds from issuance of note payable		1,050,040			500,000
Payments on debt		(105,000	)		(1,180,000	)
Net cash (used in) provided by financing activities		945,040			(680,000	)

Net increase (decrease) in cash		(117,880	)		96,539
Cash at the beginning of period		320,309			223,770
Cash at the end of period	$	202,429		$	320,309

Supplemental Cash Flow Information

Cash paid for interest	$	277,145		$	25,406
Cash paid for income taxes	$	-		$	-

The accompanying notes are an integral part of the financial statements.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 1 – Organization and Basis of Presentation

Ronco Holdings, Inc. (the "Company" or "Ronco") was organized as a Corporation under the laws of the State of Delaware on January 11, 2011. The Company is located in Austin, Texas and is engaged in the development and retail sale of consumer products throughout the United States. On January 14, 2011 the Company purchased all the assets of the Ronco Acquisition, LLC, but did not assume any liabilities.

The Company is a provider of proprietary consumer products for the kitchen and home. The Company's product line sells throughout the year through infomercials, internet sales, wholesale distributors and direct retailers. Both knife and rotisseries sales peak during the months of October through December due to increase in media buys and retailers buying inventory for the current holiday season.

Basis of preparation of financial statements – The accompanying financial statements have been prepared on accrual basis in accordance with the generally accepted accounting principles in the United States (GAAP). All amounts are stated in United States dollars.

Note 2 - Going Concern and Management's Plans

The preparation of financial statements in accordance with GAAP contemplates that operations will be sustained for a reasonable period. However, we have negative working capital in the amount of $11,423,498 as of December 31, 2013 and have incurred operating losses of $3,730,209 and $9,193,689 during the years ended December 31, 2013 and 2012, respectively. The Company has an accumulated deficit of $15,143,744 as of December 31, 2013. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

Management began implementing strategic plans designed to alleviate ongoing net operating losses. The principal focus of these plans was an intensified emphasis on profitable consumer products business, using a distribution model that is efficient and responsive to consumer needs. Management believes that the planned model will provide more profitable revenue streams as well as current and long-term profitability by curtailing the cost structure, and allowing for longer product life. However, the Company does have debt requirements for 2014 that are significant. We cannot give any assurances regarding the success of management's plans. Our financial statements do not include adjustments relating to the recoverability of recorded assets or liabilities that might be necessary should we be unable to continue as a going concern.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 3 - Summary of Significant Accounting Policies

Use of estimates – The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts in our financial statements. Significant estimates embodied in the Company's financial statements include estimating the collectability of accounts receivable, recoverability of inventories, valuation of intangible assets, and the allowance for sales returns. All estimates were developed by our management using the best available information at the time of the estimate. However, actual results could differ from those estimates.

Cash and cash equivalents – The Company considers all bank accounts and other highly liquid investments, with a remaining maturity at the date of purchase/investment of three months or less to be cash equivalents. Cash and cash equivalents consist of cash and cash on deposit with banks.

Revenue recognition – We derive revenue from retail product sales and recognize revenue when evidence of the arrangement exists, in the case of products when the product is shipped to a customer, when our sales price is fixed or determinable, and when we have concluded that amounts are collectible from the customers. Estimated amounts for product sales returns and allowances are recorded at the time of sale. Shipping costs billed to customers are included as a component of product sales. The associated cost of shipping is included as a component of cost of product sales.

The Company recorded sales discounts and an allowance for sales returns of $190,748 and $194,698 as of December 31, 2013, respectively. The Company recorded sales discounts and an allowance for sales returns of $138,213 and $271,611 as of December 31, 2012, respectively.

Accounts receivable – Accounts receivable represents normal trade obligations from customers that are subject to normal trade collection terms, without discounts or rebates. We may require deposits or retainers when we consider a customer's credit risk to warrant the collection of such. Notwithstanding these collections, we periodically evaluate the collectability of our accounts receivable and consider the need to establish an allowance for doubtful accounts based upon our historical collection experience and specifically identifiable information about our customers.

Concentration of Credit Risk - Financial instruments that potentially expose the Company 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.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 3 - Summary of Significant Accounting Policies (Continued)

As of December 31, 2013, the Company did not have balances in excess of the federally insured limits of $250,000. The Company performs ongoing credit evaluation of its customers. Accordingly, the Company believes that credit risk from its trade receivables is limited.

Inventories – Inventories consist of retail merchandise that is in its finished form and ready for sale to end-user customers. Inventories are recorded at the lower of average cost or market. Our inventories are acquired and carried for retail sale and, accordingly, the carrying value is susceptible to, among other things, market trends and conditions and overall customer demand. We use our best estimates of all available information to establish reasonable inventory quantities. However, these conditions may cause our inventories to become obsolete and/or excessive. We review our inventories periodically for indications that reserves are necessary to reduce the carrying values to the lower of cost or market values.

Property and equipment – Property and equipment are recorded at our cost. We depreciate property and equipment, other than land, using the straight-line method over lives that we believe the assets will have utility. The Company's property and equipment are depreciated over 5 years. We allocate depreciation expense related to assets directly associated with our product sales to cost of product sales. Our expenditures for additions, improvements and renewals are capitalized, while normal expenditures for maintenance and repairs are charged to expense. We evaluate the carrying value of property and equipment for impairment annually or at more frequent intervals should circumstances indicate impairment may be present. Our evaluation is a two-step process. The first step is to compare our undiscounted cash flows, as projected over the remaining useful lives of the assets, to their respective carrying values. In the event that the carrying values are not recovered by future undiscounted cash flows, as a second step, we compare the carrying values to the related fair values and, if the fair value is lower, we record an impairment adjustment. For purposes of fair value, we generally use a discounted cash flow approach, using risk-adjusted discount rates.

Income taxes – Our principal corporate taxing jurisdictions are the United States, and the State of Texas. Deferred taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 3 - Summary of Significant Accounting Policies (Continued)

Advertising – We expense advertising costs when incurred.

Fair value measurements – The Company follows ASC Topic 820, Fair Value Measurements. The statement clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:


	·	Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

	·	Level 2 – Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

	·	Level 3 – Inputs are unobservable inputs which reflect the reporting entity's own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

Fair value of financial instruments – The carrying amount of significant financial instruments, which include accounts receivable, accounts payable, accrued expenses, and notes payable approximate fair value as of December 31, 2013 and 2012, due to the short-term maturities.

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 capitalizes these costs and amortizes them over the shorter of the economic life or remaining life of the patent. Patent renewal fees incurred and capitalized during the year ended December 31, 2013 and 2012 were $9,735 and $36,282, respectively.

Goodwill and Indefinite Life Intangible Assets - Goodwill represents the excess of cost over fair value of net assets of businesses acquired. In accordance with FASB ASC 350-20 Goodwill and Other Intangible Assets, the value assigned to goodwill and indefinite lived intangible assets, including trademarks and trade names, is not amortized to expense, but rather they are evaluated at least on an annual basis to determine if there are potential impairments. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit goodwill is less than the carrying value. If the fair value of an indefinite lived intangible (such as trademarks and trade names) is less than its carrying amount, an impairment loss is recorded. Fair value is determined based on discounted cash flows, market multiples or appraised values, as appropriate.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 3 - Summary of Significant Accounting Policies (Continued)

Discounted cash flow analysis requires assumptions about the timing and amount of future cash inflows and outflows, risk, the cost of capital, and terminal values. Each of these factors can significantly affect the value of the intangible asset. The estimates of future cash flows, based on reasonable and supportable assumptions and projections, require management's judgment. Any changes in key assumptions about the Company's business and their prospects, or changes in market conditions, could result in an impairment charge. Some of the more significant estimates and assumptions inherent in the intangible asset valuation process include: the timing and amount of projected future cash flows; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset's life cycle and the competitive trends impacting the asset, including consideration of any technical, legal or regulatory trends.

In the year ended December 31, 2013, the Company determined that there was no impairment of trademarks, trade names or goodwill. In the year ended December 31, 2012, the Company determined that there was an impairment of trademarks, trade names and goodwill. In performing the related valuation analysis, the Company used various valuation methodologies including probability weighted discounted cash flows, comparable transaction analysis, and market capitalization and comparable company multiple comparison. The impairment is detailed in Note 6 below.

Impairment of Long-Lived Assets and Finite Life Intangibles - Long-lived assets, including, intangible assets subject to amortization consist of patents that have been acquired are amortized using the straight-line method over their useful life of twelve years and are reviewed for impairment in accordance with FASB ASC 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

The Company determined that there was no impairment of intangible assets during the years ended December 31, 2013 or 2012. In performing the related valuation analysis the Company used various valuation methodologies including probability weighted discounted cash flows, comparable transaction analysis, and market capitalization and comparable company multiple comparison. The impairment is detailed in Note 6 below.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 3 - Summary of Significant Accounting Policies (Continued)

Our evaluation related to tangible and intangible long-lived assets provides a two-step process. The first step is to compare our undiscounted cash flows, as projected over the remaining useful lives of the assets, to their respective carrying values. In the event that the carrying values are not recovered by future undiscounted cash flows, as a second step, we compare the carrying values to the related fair values and, if lower, we record an impairment adjustment. For purposes of fair value, we generally use replacement costs for tangible fixed assets and discounted cash flows, using risk-adjusted discount rates, for intangible assets.

Subsequent Events – Our management evaluates subsequent events under ASC 855 Subsequent Events. The standard establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. Specifically, it sets forth the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date, and the disclosures that an entity should make about events or transactions that occurred after the balance sheet date.

Note 4 – Property and Equipment

Our property and equipment consists of the following as of:


	December 31,
Description	2013			2012
Manufacturing equipment and tooling	$	91,138		$	55,618
Office equipment and furnishings		68,704			3,704
Computer equipment and software		21,388			21,388
Other		877			877
Total property and equipment		182,107			81,587
Accumulated depreciation		(34,735	)		(12,969	)
Property and equipment, net	$	147,372		$	68,618

Depreciation expense for the year ended December 31, 2013 and 2012 was $21,766 and $9,431, respectively.

Substantially all the assets of Ronco Holdings, Inc. serve as collateral under our Secured Promissory Note.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 5 – Accrued Expenses

Our accrued expenses consisted of the following:


	December 31,
	2013		2012
Accrued expenses:
Interest	$	1,655,659	$	954,700
Payroll		45,257		-
Sales returns allowance		194,698		271,611
Sales tax payable		488,961		374,917
Total accrued expenses	$	2,384,575	$	1,601,228

Note 6 – Intangible Assets and Impairment

In connection with our purchase of Ronco Acquisition, LLC in January 2011, our intangible assets at December 31, 2013 and 2012 consist of trademarks and trade names, patents and goodwill. Trademarks and trade names and goodwill have indefinite estimated lives and, therefore, are not amortized. The Company has determined that its patents have a useful life of 12 years and are amortized using the straight-line method. We evaluate the carrying value of identifiable intangible assets for impairment annually or at more frequent intervals should circumstances indicate impairment may be present.

Based on our impairment analyses of identifiable intangibles and goodwill, impairment losses of $1,844,894 and $5,897,803 were recognized during the years ended December 31, 2013 and 2012, respectively. See Note 8 for further information on the Company's determination of fair value of goodwill and intangible assets.

The following table summarizes the intangible assets as of December 31, 2013 and 2012:

December 31, 2013:


	Gross		Additional
	Carrying		Purchase			Accumulated		Impairment		Carrying
Intangible Asset	Amount		Price			Amortization		Loss		Value
Patents	$	1,780,018	$	-		$	453,964	$	-	$	1,326,054
Trademarks and tradenames		1,409,800		-			-		-		1,409,800
Goodwill		983,304		1,844,894	(1)		-		1,844,894		983,304
Total	$	4,173,122	$	1,844,894		$	453,964	$	1,844,894	$	3,719,158

(1) See Contingent Note Payable discussion within footnote 7 Notes Payable.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 6 – Intangible Assets and Impairment (Continued)

December 31, 2012:


	Gross		Additional
	Carrying		Purchase		Accumulated		Impairment		Carrying
Intangible Asset	Amount		Price		Amortization		Loss		Value
Patents	$	1,770,282	$	-	$	293,618	$	-	$	1,476,664
Trademarks and tradenames		3,872,000		-		-		2,462,200		1,409,800
Goodwill		4,418,907		-		-		3,435,603		983,304
	$	10,061,189	$	-	$	293,618	$	5,897,803	$	3,869,768

Amortization expense related to intangible assets was approximately $160,345 and $154,857 for the year ended December 31, 2013 and 2012, respectively.

The weighted-average remaining amortization period for the patents is 9 years. The schedule of future amortization expense is as follows:


2014	$	147,339
2015		147,339
2016		147,339
2017		147,339
2018		147,339
Thereafter		589,357
	$	1,326,054

Note 7 – Notes Payable

Notes payable consisted of the following as of:


	December 31,
	2013			2012
1.5% Secured Promissory Note, maturing on June 14, 2012	$	8,620,000		$	8,720,000
16% Promissory Note, maturing on January 14, 2014		3,016,227			3,016,227
18% Promissory Note, maturing on March 14, 2014		445,040			-
18% Promissory Note, maturing on June 30, 2014		1,100,000			500,000
0% contingent promissory note due December 5, 2017		3,770,000			-
Total promissory notes		16,951,267			12,236,227
Less: discount		(1,901,451	)		-
Less: current maturities		(10,165,040	)		(8,720,000	)
Total long-term promissory notes	$	4,884,776		$	3,516,227

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 7 – Notes Payable (Continued)

The following is a schedule of the future payments required under the Company's notes payable.


2014	$	10,165,040
2015		3,016,227
2016		-
2017		3,770,000
Thereafter		-
	$	16,951,267

CD3 Note

On January 14, 2011, the Company issued a promissory note to CD3 Holdings, Inc. ("CD3 Note"), the Company's parent, 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 matures 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, $16,227 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.

Secured Note

On January 14, 2011, the Company issued a secured promissory note ("Secured 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 Secured Note's principal is subject to potential adjustment as provided by the asset purchase agreement. The asset purchase agreement provides for potential adjustments and/or offsets to the principal based upon the aggregate dollar amount of the accounts receivable collected within 90 days of closing as well as inventory and cash transferred to the Company from the seller. However, in no event shall the aforementioned adjustments reduce principal below $5,500,000. The note requires interest at 1.5% per annum paid quarterly in arrears and matures on June 14, 2012. The collateral for the Secured Note is substantially all of the Company's assets.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 7 – Notes Payable (Continued)

On September 30, 2011, the Company amended the Secured Note to increase the principal amount to $11,700,000. The note's interest rate and maturity date were unchanged. A conditional provision was added to the note whereby if the Company were to repay principal in the amount of at least $6,000,000 on or before December 31, 2011, the remaining principal amount due on the maturity date would be reduced by $200,000.

The Company was unable to meet this provision as of December 31, 2011 and ultimately defaulted on the Secured Note on June 14, 2012. As a result of the default, the interest rate increased to 8%. Accrued interest under this note was $1,454,607 and $761,676 as of December 31, 2013 and 2012, respectively.

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, the Company 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 the Company from the holder of the Secured Note. As of this date, this obligation became probable and estimable and, therefore, the Company 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, the Company imputed interest at the Company's borrowing rate of 18% and calculated a discount in the amount of $1,925,106. The Company will accrete this discount and recognize interest expense. Upon recognition, the Company recorded the Contingent Promissory Note and goodwill in the amount of $1,844,894.

The contingent payments of the original note were as follows:


	·	5% of the Company's gross operating income in excess of $15,000,000 during each of the first four annual periods commencing after January 14, 2011, which aggregate payments for all such periods shall not exceed $2,000,000;

	·	10% of the Company's gross operating income in excess of $35,000,000 during each of the first five annual periods commencing after January 14, 2011, which aggregate payments for all such periods shall not exceed $3,000,000; and

	·	10% of the Company's gross operating income in excess of $50,000,000 during each of the first six annual periods commencing after January 14, 2011, which aggregate payments for all such periods shall not exceed $5,000,000.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 7 – Notes Payable (Continued)

For purposes of calculating the contingent payments, Gross Operating Income means the actual cash received by the Company from the sale of "Ronco-branded products" reduced by the amount of any obligations accrued by the Company with respect to returned products, co-op or marketing allowances, warranty and product discounts or markdowns imposed by the customers, minus the cost directly or indirectly accrued by the Company with respect to such products including but not limited to costs related to (i) the production and/or acquisition of the products, (ii) shipping and freight costs (whether to or from warehouses, fulfillment centers, or to customers), (iii) all fulfillment costs relating to such products including the assembly, packaging, rework and handling thereof (whether by the Company or third party fulfillment centers), (iv) storage, (v) credit card fees and other charges, and (vi) design and creative expenses including that related to packaging or to logos or other designs affixed or incorporated into products or related to packaging materials.

Other Promissory Notes

On March 15, 2013, the Company entered into a promissory note for $200,000. The promissory note's interest rate is 18% per annum and is payable monthly in arrears. The note matures on March 14, 2014. 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.

On June 30, 2013, the Company 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 matures on June 30, 2014.

The aggregate accrued interest on the promissory notes that were entered into during 2013 was $21,835.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 8 – Fair Value

The following table presents the assets carried on the balance sheet by level within the fair value- hierarchy, as defined in Note 3 – Summary of Significant Accounting Policies, as of December 31, 2013 and 2012 for which nonrecurring changes in fair value have been recorded during the years ended December 31, 2013 and 2012.


			Quoted Prices
			In Active		Significant
			Markets		Other		Significant
	Year Ended		for Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2013		(Level 1)		(Level 2)		(Level 3)		Total Losses
Patents	$	1,326,054	$	-	$	-	$	1,326,054	$	-
Trademarks and Tradenames		1,409,800		-		-		1,409,800		-
Goodwill		983,304		-		-		983,304		1,844,894
	$	3,719,158	$	-	$	-	$	3,719,158	$	1,844,894


			Quoted Prices
			In Active		Significant
			Markets		Other		Significant
	Year Ended		for Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2012		(Level 1)		(Level 2)		(Level 3)		Total Losses
Patents	$	1,476,664	$	-	$	-	$	1,476,664	$	-
Trademarks and Tradenames		1,409,800		-		-		1,409,800		2,462,200
Goodwill		983,304		-		-		983,304		3,435,603
	$	3,869,768	$	-	$	-	$	3,869,768	$	5,897,803

During the year ended December 31, 2013, the Company recognized additional goodwill in the amount of $1,844,894 as a result of contingent purchase price consideration becoming probable and estimable (See Contingent Promissory Note section of Note 7 for further information). At December 31, 2013, goodwill with a carrying amount of $2,828,198 was written down to its fair value of $983,304 resulting in an impairment of $1,844,894 for the year ended December 31, 2013.

Goodwill and other intangible assets, consisting of trademarks and trade names, with prior carrying amounts of $4,418,907 and $3,872,000, respectively, were written down to their fair values of $983,304 and $1,409,800, respectively, resulting in impairment charges of $3,435,603 and $2,462,200, respectively, for a total impairment of $5,897,803 for the year ended December 31, 2012.

The Company's intangible assets were valued using a market approach to estimate fair value of goodwill and other intangible assets. This valuation technique utilized a significant number of unobservable inputs.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 9 – Redeemable Preferred Stock

The Company has 200 authorized shares of Preferred Stock, $0.0001 par value. The Company has designated 100 of such shares as Series A Preferred Stock with a stated value of $27,000 per share. On January 14, 2011, the Company 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

The Company has 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 the Company does 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 the Company to redeem all or part of the Series A Preferred Stock then outstanding. The redemption price is payable by the Company 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 13^th 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 the Company 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 up through the issuance of these financial statements these shares do not reach the level of being considered mandatorily redeemable and are classified as mezzanine.

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 the Company may declare, order, pay or make a dividend or other distribution on shares of the Common Stock, or other capital stock of the Company, 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.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 9 – Preferred Stock (Continued)

Liquidation Preference

In the event of a liquidation or dissolution and winding up of the Company, whether voluntary or involuntary, the assets of the Company 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 the Company, 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 the Company, except the affirmative vote of the holders of a majority of the Series A Preferred Stock shall be necessary for the Company to authorize or effect any of the following:


	·	Any amendment or repeal of any provision of the Corporation'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 Stock (other than the Series A Preferred Stock 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 the Company at the Company's sole discretion.

As of December 31, 2013 the Series A Preferred Stock remains outstanding.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 10 – Related Parties

Intercompany Receivable and Payable

CD3 Holdings, Inc., the parent company of Ronco Holdings, Inc., owes $278,574 to the Company. This is recorded as a related party receivable.

Executive Employment Agreements

On June 15, 2013, the Company entered into 5-year employment agreements with its President and Executive Vice President at an annual salary of $180,000. The agreements contain customary confidentiality, non-disclosure, intellectual property and change of control provisions.

Note 11 – Income Taxes

At December 31, 2013 and 2012, the Company had gross deferred tax assets in excess of deferred tax liabilities of $5,123,687 and $3,860,000, respectively. The Company determined that it is "more likely than not" that such assets will not be realized, and as such have applied a valuation allowance of $5,123,687 and $3,860,000 as of December 31, 2013 and 2012, respectively. The Company evaluates its ability to realize our deferred tax assets each period and adjust the amount of our valuation allowance, if necessary. We operate within multiple taxing jurisdictions and are subject to audit in those jurisdictions. Because of the complex issues involved, any claims can require an extended period to resolve.

ASC 740 Income Taxes requires that a valuation allowance be established when it is more likely than not all or a portion of a deferred tax asset will not be realized. A review of all available positive and negative evidence needs to be considered, including the Company's current and past performance, the market environment in which we operate, the utilization of past tax credits and length of carry-back and carry-forward periods. Forming a conclusion that a valuation allowance is not needed is difficult when there is negative objective evidence such as cumulative losses in recent years. Cumulative losses weigh heavily in the overall assessment. We have applied 100% valuation allowance against the Company's net deferred tax assets as of December 31, 2013 and 2012.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 11 – Income Taxes (Continued)

A reconciliation between the amount of income tax benefit determined by applying the applicable U.S. statutory income tax rate to pre-tax loss is as follows:


	Year Ended December 31,
	2013			2012
Federal statutory	$	(1,269,000	)	$	(3,126,000	)
State tax, net of federal		-			-
Meals and entertainment and other		5,000			17,000
Change in valuation allowance on deferred tax assets		1,264,000			3,109,000
	$	-		$	-

The valuation allowance increased by $1,264,000 and $3,109,000 for the years ended December 31, 2013 and 2012, respectively.

The primary components of net deferred tax assets are as follows:


	At December 31,
	2013			2012
Net operating losses	$	3,561,687		$	2,109,000
Identifiable intangibles		1,476,000			1,650,000
Allowances		74,000			98,000
Accrued vacation		10,000			-
Charitable contributions		3,000			1,000
Inventory costs		5,000			5,000
Depreciation		(6,000	)		(3,000	)
Valuation allowance		(5,123,687	)		(3,860,000	)
Net deferred tax assets	$	-		$	-

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 11 – Income Taxes (Continued)

At December 31, 2013, we had net operating loss carry forwards of $10,475,549 for U.S. federal income tax purposes. The U.S. operating losses expire as follows:


Year of	Year	U.S.
Expiration	Generated	Losses
December 31, 2033	December 31, 2013	$	4,272,549
December 31, 2032	December 31, 2012		3,459,000
December 31, 2031	December 31, 2011		2,744,000
		$	10,475,549

Uncertain Tax Positions

We have no unrecognized income tax benefits as of December 31, 2013 and 2012. There have been no material changes in unrecognized tax benefits through December 31, 2013. The calendar years 2013, 2012 and 2011 are considered open tax years in U.S. federal and state tax jurisdictions. We currently do not have any audit investigations in any jurisdiction.

Note 12 – Commitments and Contingencies

At December 31, 2013, there was a lawsuit pending against the Company relating to a claim for breach of contract arising from the failure of the Company to pay for goods tendered. The amount sought in the lawsuit is $257,832. However, the Company has asserted a counterclaim for fraud and a claim under the Texas Deceptive Trade Practices Act, alleging, in part, that the goods provided were not in good or sellable condition and, as such, no money is owed to plaintiff for the alleged damages sought for breach of contract.

The Company settled the lawsuit for $70,000 on July 17, 2014.

Note 13 – Major customers and suppliers

Major customers are those customers that account for more than 10% of product sales. For the year ended December 31, 2013, approximately 17% of product sales were derived from a customer and the accounts receivable from this customer represented approximately 6% of total accounts receivable at December 31, 2013. For the year ended December 31, 2012, approximately 10% of product sales were derived from a customer and the accounts receivable from this customer represented approximately 10% of total accounts receivable at December 31, 2012.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 13 – Major customers and suppliers (continued)

Major suppliers are those suppliers that account for more than 10% of cost of product sales. For the year ended December 31, 2013, approximately 35% of cost of product sales was derived from three suppliers and the accounts payable for these suppliers represented approximately 5% of total accounts payable at December 31, 2013. For the year ended December 31, 2012, approximately 30% of cost of product sales was derived from two suppliers and the accounts payable for these suppliers represented 18% of total accounts payable at December 31, 2012.

The loss of any one of these customers or suppliers would have a material adverse effect on the Company's financial results and operations.

Note 14– Subsequent Events

The Company evaluated subsequent events through August 12, 2014, the date this financial statement was available to be issued. The following material subsequent events required disclosure in the accompanying financial statements:

Forbearance Agreement

On March 7, 2014, the Company and certain creditors entered into a Forbearance Agreement whereby each creditor will forbear from exercising its rights and remedies under the Secured Note and Performance Note for up to 1 year provided the Company does not default on the forbearance agreement.

Loan and Security Agreement

On April 11, 2014, the Company and Infusion Brands, Inc. entered into a Loan and Security Agreement ("Loan Agreement"). The Company may borrow up to $3,000,000 for working capital subject to an Accounts Receivable and Inventory Borrowing Base calculation that is subject to Infusion Brands, Inc's sole approval. Borrowings made are subject to an interest rate of Prime plus 4% per annum that shall accrue daily and be payable monthly. The Loan Agreement's maturity date is April 11, 2015. As part of the Agreement, the Company has secured the payment of all borrowings by granting Infusion Brands, Inc. a security interest in the assets of the Company.

Promissory Note

On May 5, 2014, the Company entered into a promissory note for $200,000 from As Seen On TV, Inc., a related party. 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.

Ronco Holdings, Inc.

Notes to Financial Statements

For the Years Ended December 31, 2013 and 2012

Note 14– Subsequent Events (continued)

Intercompany Funding

The Company has borrowed for working capital needs $522,000 from Infusion Brands, Inc. through a series of payments to the Company and to vendors on behalf of the Company. Terms of the funding have yet to be determined.

Default

The Company's promissory notes issued on March 15, 2013 in the amount of $450,000 and June 30, 2013 in the amount of $1,100,000 that matured on March 14, 2014 and June 30, 2014, respectively, are currently outstanding and in default due to nonpayment.

Exhibit 99.3

Unaudited Pro Forma Condensed Consolidated Financial Statements

The following unaudited pro forma condensed consolidated financial statements give effect to the merger of As Seen On TV, Inc. ("ASTV" or the "Company") and Infusion Brands, Inc. ("Infusion") completed on April 2, 2014. Under the terms of the definitive merger agreement, the Company issued 452,960,490 shares of its common stock to Infusion Brands International, Inc., parent of Infusion, in exchange for all of the shares of Infusion. Following the transaction, Infusion Brands International, Inc. ("IBI") became an 85.2% owner of the Company's outstanding common shares and 75% owner of the Company's common shares on a fully diluted basis. The merger agreement further provided IBI with the right to appoint a majority of the Company's Board of Directors. Accordingly, the transaction was accounted for as a reverse acquisition under the provisions of ASC 805-40 Business Combinations – Reverse Acquisitions with Infusion becoming the acquirer for accounting purposes and the Company becoming the accounting acquiree.

In addition, this Current Report on Form 8-K/A reflects the accounting recognition of the Amended and Restated RFL Enterprises and Infusion Agreement ("Participation Agreement") dated March 6, 2014. Under the provisions of the Participation Agreement, RFL Enterprises LLC, Ronco Funding, LLC and IBI agreed the acquisition of all rights with respect to secured debts held by creditors of Ronco Holdings, Inc. ("Ronco Holdings") 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, 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 does not hold an equity position, Ronco Holdings was deemed a Variable Interest Entity under the provisions of ASC 810 – Consolidation with Infusion being the primary beneficiary.

There are two sets of pro forma financial statements included to reflect multiple transactions. Pro forma 1 reflects the reverse acquisition of Infusion by the Company. Pro forma 2 reflects the contribution and assumption of certain assets and liabilities of IBI by Infusion and the initial consolidation of Ronco by Infusion. The pro forma balances from Pro Form 2 are carried forward to Pro Forma 1 to the Infusion Historical column.

Pro forma 1 includes the unaudited pro forma condensed consolidated balance sheet which presents our financial position as of March 31, 2014, assuming that the reverse acquisition of Infusion by the Company had occurred on March 31, 2014. The pro forma includes the balance sheet of the Company as of March 31, 2014 and the balance sheet of Infusion as of December 31, 2013. Also included is the unaudited pro forma condensed consolidated statement of operations which includes the results of operations for the year ended March 31, 2014 of the Company and for the year ended December 31, 2013 of Infusion as if the acquisition had occurred on April 1, 2013.

Pro forma 2 includes the balance sheets of Infusion and Ronco as of December 31, 2013 as if the contribution and assumption and the initial consolidation had occurred on December 31, 2013. It also includes the unaudited pro forma consolidated statements of operations of Infusion and Ronco for the year ended December 31, 2013 as if the contribution and assumption and the initial consolidation had occurred on January 1, 2013.

The unaudited pro forma condensed financial statements should be read in conjunction with the historical consolidated financial statements and accompanying notes of the Company, which are included in the Annual Report on Form 10-K for the year ended March 31, 2014. The unaudited pro forma condensed financial statements for Infusion and Ronco Holdings should be read in conjunction with the historical financial statements and accompanying notes which are included in Exhibits 99.1 and 99.2 of the Current Report on Form 8-K/A.

Both unaudited pro forma condensed financial statements are presented for informational purposes only and are not necessarily indicative of the results of operations that would have resulted had the acquisitions described above been consummated at the pro forma dates described. These results are not necessarily indicative of the results of operations which may be realized in the future. The effective consideration paid in both acquisitions was based on the best estimates of estimated fair values available at the time. The allocations made and fair values assigned are subject to additional studies not yet completed and may be subject to significant change.

Pro Forma 1

As Seen On TV, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
March 31, 2014


	ASTV Historical		Infusion Pro Forma			Pro Forma Adjustments			Ref.	Pro Forma
Assets
Cash and cash equivalents	$	5,400	$	324,987		$	(304,943	)	(3)	$	25,444
Accounts receivable, net		93,801		2,771,546							2,865,347
Inventories				1,888,843							1,888,843
Note receivable				711,220							711,220
Interest receivable				259,584							259,584
Note receivable on asset sale - current		225,000									225,000
Due from related party				278,574							278,574
Prepaid expenses and other current assets		271,804		460,595							732,399
Total current assets		596,005		6,695,349			(304,943	)			6,986,411

Restricted cash - non current		83,267									83,267
Note receivable on asset sale - non current		675,000									675,000
Property and equipment, net		43,798		254,764							298,562
Goodwill				15,160,902			234,300		(1)		15,395,202
Intangible assets, net		4,388,072		3,700,000			3,561,828		(1)		11,649,900
Deposits		2,185		5,392							7,577
Total assets	$	5,788,327	$	25,816,407		$	3,491,185			$	35,095,919

Liabilities and Stockholders' Equity
Accounts payable	$	566,769	$	4,566,472		$				$	5,133,241
Deferred revenue		38,769									38,769
Accrued registration rights penalty		156,000									156,000
Accrued expenses and other current liabilities		204,797		3,102,270							3,307,067
Accounts receivable financing arrangement				473,960							473,960
Deferred revenue				37,030							37,030
Notes payable - related party		450,000					(450,000	)	(2)		—
Accrued interest - related party		9,237					(9,237	)	(2)		—
Notes payable - current portion		246,001		12,165,040							21,411,041
Other current liabilities				2,000							2,000
Warrant liability		929,761									929,761
Current liabilities of discontinued operations		904,788									904,788
Total current liabilities		3,506,122		29,286,772			(459,237	)			32,393,657

Notes payable - non current		80,957									80,957
Long-term notes payable - related party				4,884,776							4,884,776
Redeemable preferred stock				2,700,000							2,700,000

Stockholders' equity (deficit)		2,201,248		(11,090,141	)		3,950,422		(3)		(4,938,471	)
Noncontrolling interest		—		(25,000	)		—				(25,000	)
Total stockholders' equity		2,201,248		(11,115,141	)		3,950,422				(4,963,471	)
Total liabilities and stockholders' equity	$	5,788,327	$	25,816,407		$	3,491,185			$	35,095,919

Pro Forma 1

As Seen On TV, Inc.
Unaudited Pro Forma Condensed Statement of Operations
For the Year Ended March 31, 2014


	ASTV Historical			Infusion Pro forma			Pro Forma Adjustments			Ref.	Pro Forma

Total revenues	$	1,985,595		$	23,583,154						$	25,568,749
Cost of revenues		1,341,529			18,701,219							20,042,748
Gross profit		644,066			4,881,935							5,526,001

Operating expenses:
Selling and marketing expenses		68,801			2,692,923							2,761,724
General and administrative expenses		5,335,091			6,815,780			(317,100	)	(4)		11,833,771
Impairment of intangible assets including goodwill					1,844,894							1,844,894
		5,403,892			11,353,597			(317,100	)			16,440,389
Loss from operations		(4,759,826	)		(6,471,662	)		317,100				(10,914,388	)

Other (income) expenses:
Warrant revaluation		(10,759,545	)									(10,759,545	)
Other income		(23,530	)		(14,642	)						(38,172	)
Interest expense		13,819			1,308,897							1,322,716
Interest expense - related party		13,155						(9,237	)	(4)		3,918
		(10,756,101	)		1,294,255			(9,237	)			(9,471,083	)

Income from (loss) from continuing operations before income taxes		5,996,275			(7,765,917	)		326,337				(1,443,305	)
Provision for income taxes		—			—			—				—
Net income (loss)		5,996,275			(7,765,917	)		326,337				(1,443,305	)
Net loss attributable to noncontrolling interest					(3,769,864	)						(3,769,864	)
Net loss attributable to As Seen On TV, Inc.	$	5,996,275		$	(3,996,053	)	$	326,337			$	2,326,559


Earnings per share basic and diluted:
Basic
Income to ASTV stockholders	$	0.08									$	0.00


Diluted
Income to ASTV stockholders	$	0.08									$	0.00

Weighted-average number of common shares outstanding - basic and diluted
Basic		71,604,248								(A)		524,564,738
Diluted		72,699,243								(A)		525,659,733

Pro Forma 1

Overview

Effective April 2, 2014, As Seen On TV, Inc. (the "Company" or "ASTV") completed an Agreement and Plan of Merger with Infusion Brands International, Inc., a Nevada corporation ("IBI"), Infusion Brands, Inc. ("Infusion"), a Nevada corporation and a wholly owned subsidiary of IBI, and ASTV Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of the Company.

Under the terms of the Merger Agreement, the Company issued to IBI 452,960,490 shares of its common stock in exchange for all of the outstanding shares of Infusion Brands, Inc. common stock. As a result, IBI became an 85.2% owner of the Company's outstanding common shares and 75% owner of the Company's common shares on a fully diluted basis. The Merger Agreement further provided that IBI had the right to appoint a majority of the Board of Directors. Accordingly, the transaction was accounted for as a reverse acquisition with Infusion Brands, Inc. ("Infusion") becoming the acquirer for accounting purposes and the Company becoming the accounting acquiree.

The 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 disclosed. 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, which is the closing stock price on the day of the effective date of the Merger Agreement. The Company expects that the allocation will be finalized within twelve months after the merger.

The Merger Agreement provided for merger consideration of the 452,960,490 shares of common stock as well as the Company 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)	$	6,456,713
Less:
Reduction in note payable to IBI	(B)		(450,000	)
Interest accrued on IBI note payable	(C)		(9,237	)
Consideration effectively transferred		$	5,997,476

(A)

Based on 71,741,250 common shares with a fair value of $0.09 per share, the closing price of As Seen On TV, Inc. common shares on April 2, 2014, the transaction closing date.

(B)

Represents a series of notes issued by the Company 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.

Goodwill (ASC805-40-55-13)


Consideration effectively transferred	$	5,997,476
Net recognized values of ASTV's tangible assets and liabilities assumed:
Current assets		596,005
Non current assets (exclusive of goodwill and intangibles)		804,250
Total assets		1,400,255
Current liabilities		(3,506,122	)
Non current liabilities		(80,957	)
Total net liabilities assumed	$	(2,186,824	)

Consideration effectively transferred	$	5,997,476
Adjusted net liabilities assumed		2,186,824
Excess	$	8,184,300

Estimated fair value of identifiable intangibles	$	7,950,000
Estimated fair value of goodwill		234,300
	$	8,184,300

Pro Forma 1

As the merger transaction is being accorded reverse acquisition accounting, the purchase price will be allocated to the tangible and intangible assets and liabilities of the Company based on the estimated fair value of assets acquired and liabilities assumed. The significant intangible assets likely to be recognized include the Company's URL's, customer relationships and trademarks. The estimated fair value of these assets will be amortized over their useful lives, utilizing the straight-line method. The following allocation of the aggregate fair value is preliminary and subject to adjustment.

(1) Pro forma adjustments to assets (unaudited):


	Goodwill		Intangibles
Estimated fair value of goodwill	$	234,300	$	—
Eliminate historical intangibles, other than goodwill				(4,549,172	)
Eliminate historical accumulated amortization of intangibles				161,000
Estimated fair value of intangibles, other than goodwill				7,950,000
	$	234,300	$	3,561,828

(2) Pro forma adjustments to liabilities (unaudited):


	Note Payable - Interest Payable
	Related Party			Related Party			Total
Eliminated note payable due to IBI	$	(450,000	)	$	—		$	(450,000	)
Eliminated interest payable on IBI note payable					(9,237	)		(9,237	)
	$	(450,000	)	$	(9,237	)	$	(459,237	)

(3) Pro forma adjustments to equity:


	Common Stock		Additional Paid in Capital			Accumulated Deficit			Stockholders' Equity
Eliminated Company's stockholders’ equity	$	7,274	$	(25,095,345	)	$	22,901,271		$	(2,201,348	)
Fair value of consideration shares issued		38,122		6,418,591			—			6,456,713
Merger related professional fees		—		—			(304,943	)		(304,943	)
	$	30,848	$	(18,676,754	)	$	22,596,328		$	3,950,422

(4) Pro forma adjustments to statement of operations:


	General and Administrative			Interest Related Party
Eliminate historical amortization of intangibles	$	(947,100	)	$	—
Amortization on fair valued intangibles		630,000			—
Eliminate historical interest on IBI note payable		—			(9,237	)
	$	(317,100	)	$	(9,237	)

Pro Forma 2

As Seen On TV, Inc.
Unaudited Pro Forma Condensed Consolidated Balance Sheet
December 31, 2013


	Infusion			Pro Forma
	Brands			Capitalization				Ronco			Pro Forma
	Historical			Adjustments			Ref.	Historical			Adjustments			Ref.	Pro Forma
Assets
Cash	$	91,397		$	31,161		(1)	$	202,429		$	—			$	324,987
Accounts receivable, net		1,127,058			—				1,644,488			—				2,771,546
Note receivable		—			711,220		(1)		—			—				711,220
Interest receivable		—			259,584		(1)		—			—				259,584
Inventories		879,178			—				1,009,665			—				1,888,843
Due from related party					—				278,574			—				278,574
Prepaid expenses and other current		96,826			—				363,769			—				460,595
Total current assets		2,194,459			1,001,965				3,498,925			—				6,695,349

Property and equipment, net		100,732			6,660		(1)		147,372			—				254,764
Goodwill		—			—				983,304			14,177,598		(2)		15,160,902
Intangible assets, net		—			—				2,735,854			964,146		(2)		3,700,000
Deposits		—			5,392				—			—				5,392
Total assets	$	2,295,191		$	1,014,017			$	7,365,455		$	15,141,744			$	25,816,407

Liabilities and Stockholders' Deficit
Accounts payable	$	2,193,664			—			$	2,372,808			—			$	4,566,472
Accrued expenses		657,695			—				2,384,575			60,000		(5)		3,102,270
Accounts receivable financing arrangement		473,960			—				—			—				473,960
Deferred revenue		37,030			—				—			—				37,030
Notes payable		—			11,000,000		(1)		10,165,040			—				21,165,040
Other current liabilities		2,000			—				—			—				2,000
Due to Parent		20,138,733			(20,138,733	)	(1)		—			—				—
Total current liabilities		23,503,082			(9,138,733	)			14,922,423			60,000				29,346,772

Long-term debt - related party		—			—				4,884,776			—				4,884,776

Redeemable preferred stock		—			—				2,700,000			—				2,700,000

Stockholders' Deficit
Common stock		—			—				2,000			(2,000	)	(3)		—
Additional paid in capital		6,483,739			10,152,750		(1)		—			—				16,636,489
Accumulated deficit		(27,691,630	)		—				—			(35,000	)	(5)		(27,726,630	)
Total Infusion stockholders' deficit		(21,207,891	)		10,152,750				2,000			(37,000	)			(11,090,141	)
Noncontrolling interest									(15,143,744	)		15,118,744		(2)(3)		(25,000	)
Total stockholders' deficit		(21,207,891	)		10,152,750				(15,141,744	)		15,081,744		(5)		(11,115,141	)

Total liabilities and stockholders' deficit	$	2,295,191		$	1,014,017			$	7,365,455		$	15,141,744			$	25,816,407

Pro Forma 2

As Seen On TV, Inc.
Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2013


	Infusion Brands Historical			Pro Forma Capitalization Adjustments	Ref.	Ronco Historical			Pro Forma Adjustments			Ref.	Pro Forma

Total revenues	$	14,731,837				$	8,851,317						$	23,583,154
Cost of revenues		11,257,676					7,443,543							18,701,219
Gross profit		3,474,161					1,407,774							4,881,935

Operating expenses:
Selling and marketing expenses		2,174,375					518,548							2,692,923
General and administrative expenses		4,979,688					1,796,437			39,655		(4)		6,815,780
Impairment of intangible assets, including goodwill							1,844,894							1,844,894
		7,154,063					4,159,879			39,655				11,353,597
Loss from operations		(3,679,902	)				(2,752,105	)		(39,655	)			(6,471,662	)

Other (income) expenses:
Other income		(14,642	)											(14,642	)
Interest expense		330,793					978,104							1,308,897
		316,151					978,104							1,294,255
Loss before income taxes		(3,996,053	)				(3,730,209	)		(39,655	)			(7,765,917	)
Provision for income taxes		—					—			—				—
Net loss		(3,996,053	)				(3,730,209	)		(39,655	)			(7,765,917	)
Net loss attributable to noncontrolling interest							(3,730,209	)		(39,655	)	(4)		(3,769,864	)
Net loss attributable to Infusion Brands, Inc.	$	(3,996,053	)			$	—		$	—			$	(3,996,053	)

Pro Forma 2

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

(A) Contribution and Assumption Agreement

On March 31, 2014, Infusion Brands International, Inc. ("IBI") and Infusion Brands, Inc. ("Infusion") entered into a contribution and assumption agreement whereby IBI transferred to Infusion, as a contribution to capital, all right, title and interest in certain properties, assets and other rights. As part of this agreement, Infusion assumed all the liabilities and obligations relating to the assets transferred and the parties further agreed that all amounts owed to IBI by Infusion were extinguished as a capital contribution.

As the contribution and assignment agreement was implemented as a part of a reorganization directly associated with the As Seen on TV, Inc. and Infusion merger transaction, the transaction was reflected on a pro forma basis at December 31, 2013.

(1) A pro forma (unaudited) summary of the contribution and assumption agreement transaction as if it had occurred on December 31, 2013, is as 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

Notes payable		(11,000,000	)
Total liabilities assumed		(11,000,000	)
Net liabilities assumed by Infusion		(9,985,983	)
Forgiveness of debt		20,138,733
Contribution to capital	$	10,152,750

Of liabilities assumed, $11,000,000 represents Senior Secured Debenture dated March 6, 2014 issued to Vicis Capital Master Fund, majority shareholder of IBI.

(B) Debt participation agreement

On March 6, 2014, Ronco Holdings, Inc.'s ("Ronco") secured debt lender entered into an agreement with various affiliated entities whereby Ronco's secured debt may be purchased by Infusion for $4,350,000 through a series of participations to occur prior to March 6, 2015. The transfer of these rights is subject to an initial payment of $2,000,000 with a final payment of $2,350,000 due within one year of the initial payment. The initial payment was made on April 2, 2014, concurrent with the execution of the merger agreement between Infusion and As Seen on TV, Inc.

Infusion also holds the rights to designate the majority of the board of directors of Ronco. Due to the ownership and rights to the Ronco secured debt and control over the Ronco's board of directors, Ronco was deemed to be a Variable Interest Entity under the provisions of ASC - 810, Consolidations, with Infusion being the primary beneficiary. Infusion's initial consolidation of Ronco is accounted for as a Business Combination under ASC 805, which requires that the assets and liabilities be recorded at fair value.

The following pro forma adjustments reflect Ronco's status as a Variable Interest Entity at December 31, 2013

Pro Forma 2

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements

(Continued)

Consideration effectively Transferred:

Ronco's assets and liabilities at December 31, 2013 at fair value (preliminary)


	Amount
Current assets	$	3,498,925
Non current assets (not including goodwill)		3,847,372
Total assets		7,346,297
Liabilities assumed (including redeemable preferred stock)		(22,507,199	)
Total net liabilities assumed	$	(15,160,902	)

Goodwill:
Consideration transferred	$	—
Adjusted net liabilities assumed		15,160,902
Goodwill	$	15,160,902

(2) Pro forma adjustments to record the initial consolidation of Ronco at fair value including recording of goodwill (unaudited):


							Non-Controlling
	Goodwill			Intangibles			Interest
Eliminate historical intangibles, other than goodwill	$	—		$	(3,189,818	)	$	3,189,818
Eliminate historical accumulated amortization of intangibles					453,964			(453,964	)
Eliminated historical goodwill balance		(983,304	)					983,304
Estimated fair value of intangibles, other than goodwill					3,700,000			(3,700,000	)
Estimated fair value of goodwill		15,160,902						(15,160,902	)
	$	14,177,598		$	964,146		$	(15,141,744	)

(3) Pro forma adjustments to liabilities and stockholders’ deficit:


	Common Stock			Non-Controlling Interest
Eliminated Ronco's stockholders' equity	$	(2,000	)	$	2,000

(4) Pro forma adjustments to statement of operations:


	Infusion Brands		Ronco			Total
Eliminate historical amortization of intangibles	$	—	$	(160,345	)	$	(160,345	)
Amortization on fair valued intangibles				200,000			200,000

Adjustment to general and administrative expenses	$	—	$	39,655		$	39,655

(5) Pro forma adjustments to liabilities and stockholders’ deficit


	Infusion Brands		Ronco		Total

Merger related fees	$	35,000	$	25,000	$	60,000

Boards:

Quotes:

Boards

News

Market Data

Markets

Discover

Your Recent History