10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q

———————

þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the quarterly period ended:  December 31, 2013
Or
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
	ACT OF 1934
For the transition period from: _____________ to _____________

Commission File Number: 000-53539

———————

As Seen On TV, Inc.

(Exact name of registrant as specified in its charter)

———————

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

14044 Icot Boulevard, Clearwater, Florida 33760

(Address of Principal Executive Office) (Zip Code)

(727) 451-9510

(Registrant’s telephone number, including area code)

———————

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.					þ	Yes	¨	No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
					þ	Yes	¨	No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
Large accelerated filer	¨			Accelerated filer			¨
Non-accelerated filer	¨	(Do not check if a smaller		Smaller reporting company			þ
		reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
					¨	Yes	þ	No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class			Shares Outstanding as of February 11, 2014
Common Stock, $0.0001 Par Value Per Share			71,741,250

As Seen On TV, Inc. and Subsidiaries

TABLE OF CONTENTS

		Page
		Number
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of December 31, 2013 (Unaudited) and March 31, 2013	1
	Condensed Consolidated Statements of Operations (Unaudited) for the three and nine month periods ending December 31, 2013 and December 31, 2012	2
	Condensed Consolidated Statement of Stockholders' Equity (Unaudited) for the period April 1, 2013 through December 31, 2013	3
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine month periods ending December 31, 2013 and December 31, 2012	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls And Procedures	36
	PART II. OTHER FINANCIAL INFORMATION
Item 1.	Legal Proceedings.	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosure	37
Item 5.	Other Information	37
Item 6.	Exhibits	37
Signatures		38

PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

AS SEEN ON TV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31, 2013			March 31, 2013
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	189,658		$	2,352,730
Accounts receivable, net		288,765			2,559,332
Advances on inventory purchases		—			67,455
Inventories		86,123			788,727
Note receivable on asset sale – current		225,000			—
Prepaid expenses and other current assets		450,477			792,450
Total current assets		1,240,023			6,560,694
Restricted cash – non current		82,811			450,000
Certificate of deposit – non current		—			50,489
Note receivable on asset sale – non current		675,000			—
Property and equipment, net		50,619			144,801
Goodwill		—			9,300,000
Intangible assets, net		4,468,622			10,567,655
Deposits		2,185			17,504
Total assets	$	6,519,260		$	27,091,143
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	421,127		$	1,366,426
Deferred revenue		77,559			173,750
Accrued registration rights penalty		156,000			156,000
Accrued expenses and other current liabilities		291,865			727,730
Note payable – related party		—			100,000
Accrued interest – related party		2,380			425
Notes payable – current portion		383,138			281,805
Warrant liability		1,864,962			11,689,306
Current liabilities of discontinued operations		918,125			1,673,368
Total current liabilities		4,115,156			16,168,810
Notes payable – non current		106,472			193,107
Commitments and contingencies
Stockholders' equity (deficiency):
Preferred stock, $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2013 and March 31, 2013, respectively.		—			—
Common stock, $.0001 par value; 750,000,000 shares authorized and 71,741,250 and 71,282,066 issued and outstanding at December 31, 2013 and March 31, 2013, respectively.		7,174			7,128
Additional paid-in capital		24,982,640			24,293,947
Accumulated deficit		(22,692,182	)		(13,571,849	)
Total shareholders' equity		2,297,632			10,729,226
Total liabilities and shareholders' equity	$	6,519,260		$	27,091,143

See accompanying notes to condensed consolidated financial statements

1

AS SEEN ON TV, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended December 31,						Nine Months Ended December 31,
	2013			2012			2013			2012
Revenues	$	502,507		$	5,834,246		$	1,889,993		$	6,872,201
Cost of revenues		457,203			2,787,711			1,215,181			3,821,018
Gross profit		45,304			3,046,535			674,812			3,051,183
Operating expenses:
Selling and marketing expenses		(57,928	)		2,334,379			65,982			2,534,239
General and administrative expenses		1,215,394			1,618,976			4,290,318			3,884,910
Loss from operations		(1,112,162	)		(906,820	)		(3,681,488	)		(3,367,966	)
Other (income) expense:
Warrant revaluation		(3,464,381	)		13,473,948			(9,824,344	)		8,790,512
Other (income) expense		(99	)		(36,450	)		(21,710	)		(40,084	)
Interest expense		5,165			799,272			11,705			1,586,499
Interest expense - related party		1,183			—			6,298			—
		(3,458,132	)		14,236,770			(9,828,051	)		10,336,927
Income (loss) from continuing operations before income taxes		2,345,970			(15,143,590	)		6,146,563			(13,704,893	)
Provision for income taxes		—			—			—			—
Income (loss) from continuing operations		2,345,970			(15,143,590	)		6,146,563			(13,704,893	)
Loss from discontinued operations, net of income taxes		(82,315	)		—			(15,266,896	)		—
Net income (loss)	$	2,263,655		$	(15,143,590	)	$	(9,120,333	)	$	(13,704,893	)
Income (loss) from per common share:
Basic
Continuing operations	$	0.03		$	(0.38	)	$	0.09		$	(0.39	)
Discontinued operations	$	0.00		$	0.00		$	(0.21	)	$	0.00
Income (loss) per share	$	0.03		$	(0.38	)	$	(0.13	)	$	(0.39	)
Diluted
Continuing operations	$	0.03		$	(0.38	)	$	0.08		$	(0.39	)
Discontinued operations	$	0.00		$	0.00		$	(0.21	)	$	0.00
Income (loss) per share	$	0.03		$	(0.38	)	$	(0.13	)	$	(0.39	)
Weighted average shares:
Basic		71,741,250			39,806,991			71,559,411			34,739,260
Diluted		72,763,977			39,806,991			72,619,496			34,739,260

See accompanying notes to condensed consolidated financial statements

2

AS SEEN ON TV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD APRIL 1, 2013 THROUGH DECEMBER 31, 2013
(UNAUDITED)

	Common Share, $.0001 Par Value Per Share				Additional
	Shares				Paid-In			Accumulated
	Issued		Amount		Capital			Deficit			Total
Balance April 1, 2013		71,282,066	$	7,128	$	24,293,947		$	(13,571,849	)	$	10,729,226
Rounding shares on eDiets transaction		416		—		—			—			—
Stock based compensation – options		—		—		802,868			—			802,868
Warrants issued for services		—		—		(114,129	)		—			(114,129	)
Shares issued under consulting agreement		142,500		14		(14	)		—			—
Shares issued under repricing agreement		316,268		32		(32	)		—			—
Net loss		—		—		—			(9,120,333	)		(9,120,333	)
Balance December 31, 2013		71,741,250	$	7,174	$	24,982,640		$	(22,692,182	)	$	2,297,632

See accompanying notes to condensed consolidated financial statements

3

AS SEEN ON TV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	Nine Months Ended December 31,
	2013			2012
Cash flows from operating activities:
Net income (loss)	$	(9,120,333	)	$	(13,704,893	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		918,147			38,190
Impairment related to divestiture of meal delivery component		14,631,439			—
Meal delivery component asset sale		(1,100,000	)		—
Amortization of discount on convertible debt		—			1,249,793
Amortization of deferred financing costs		—			305,492
Loss on disposal of property and equipment		33,060			—
Warrants issued for services		(114,129	)		134,367
Share-based compensation		802,868			309,675
Shares issued for consulting services		—			292,496
Change in fair value of warrants		(9,824,344	)		8,790,512
Accrued interest – convertible note		—			28,133
Inventory write-off		238,399			231,750
Changes in operating assets and liabilities:
Accounts receivable		2,270,567			(1,379,105	)
Advances on inventory purchases		67,455			(31,620	)
Inventories, net		464,205			(1,114,886	)
Prepaid expenses and other current assets		357,634			(441,279	)
Increase (decrease) in deposits		15,319			(2,185	)
Accounts payable, including liabilities related to discontinued operations		(1,700,542	)		638,754
Deferred revenue		(96,191	)		(27,750	)
Accrued interest expense – related party		1,955			—
Accrued expenses and other current liabilities		(435,867	)		174,093
Net cash used in operating activities		(2,590,358	)		(4,508,463	)
Cash flows from investing activities:
Decrease in restricted cash		367,189			—
Decrease in note receivable		—			(2,000,000	)
Certificate of deposit – non current		50,489			(382	)
Proceeds from collections of notes receivable		200,000			—
Purchase of intangible assets		(98,956	)		(1,565,525	)
Purchase of property, plant and equipment		(6,134	)		(3,627	)
Net cash provided by (used in) investing activities		512,588			(3,569,534	)
Cash flows from financing activities:
Proceeds from issuance of convertible debt		—			1,275,000
Costs associated with convertible debt		—			(162,060	)
Proceeds of note payable		150,000			159,812
Repayment of notes payable		(135,302	)		(117,462	)
Repayment of note payable – related party		(100,000	)		—
Proceeds from private placements of common stock		—			7,287,200
Costs associated with private placement of common stock		—			(885,611	)
Net cash provided by (used in) financing activities		(85,302	)		7,556,879
Net cash increase (decrease) in cash and cash equivalents		(2,163,072	)		(521,118	)
Cash and cash equivalents - beginning of period		2,352,730			4,683,186
Cash and cash equivalents - end of period	$	189,658		$	4,162,068

See accompanying notes to condensed consolidated financial statements

4

AS SEEN ON TV, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

	Nine Months Ended December 31,
	2013		2012
Supplemental disclosures of cash flow information:
Interest paid in cash	$	3,178	$	1,219
Taxes paid in cash	$	—	$	—
Non Cash Investment and Financing Activities
Common shares issued on acquisition deposit	$	—	$	257,500
Warrants issued with debt	$	—	$	860,112
Beneficial conversion feature on note payable	$	—	$	533,032
Warrants issued for asset acquisition	$	—	$	241,880
Liability recorded for asset acquisition	$	—	$	50,000
Insurance premiums financed through note payable	$	42,823	$	155,162
Common shares issued in conversion of notes payable	$	—	$	1,303,133
Reclassification of warrant liabilities to equity	$	—	$	6,386,307
Warrants issued in Unit Offering	$	—	$	5,170,768
Shares issued under repricing agreement	$	—	$	574
Shares issued to placement agent in Unit Offering	$	—	$	10

The statement above for the nine month period ending December 31, 2013 combines the cash flows from discontinued operations with the cash flows from continuing operations.  See Note 4 for further discussion of discontinued operations.

See accompanying notes to condensed consolidated financial statements

5

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.

Description of Our Business, Liquidity and Going Concern, and Basis of Presentation

Description of Our Business

As Seen On TV, Inc. (“ASTV”, “we”, “our” or the “Company”) is a direct response marketing company and owner of AsSeenOnTV.com and eDiets.com. We identify, develop and market consumer products for global distribution via TV, Internet and retail channels. Following our February 2013 acquisition of eDiets.com, Inc. (“eDiets”), our business is organized along two segments. The As Seen On TV (“ASTV”) segment is a direct response marketing company that identifies and advises in the development and marketing of consumer products. The eDiets segment is a subscription-based nationwide weight-loss oriented digital subscription service and, until our discontinuance of the meal delivery component in September 2013, provided dietary and wellness oriented meal delivery services. See Note 4.

On February 28, 2013, we acquired 100% of the outstanding stock of eDiets pursuant to the terms and conditions of the Agreement and Plan of Merger by and among our Company, eDiets Acquisition Company, a Delaware corporation and wholly owned subsidiary of our Company, and eDiets, dated October 31, 2012. Following the closing, eDiets became a wholly owned subsidiary of our Company (See Note 3). Accordingly, the operating results of eDiets are included in the financial statements from the acquisition date.

ASTV, a Florida corporation, was organized in November 2006. Our executive offices are located in Clearwater, Florida.

ASTV

ASTV generates revenues primarily from three channels, including direct response sales of consumer products, sale of consumer products through a “live-shop” TV venue and ownership of the url AsSeenOnTV.com which operates as a web based outlet for our Company and other direct response businesses.

Inventors and entrepreneurs submit products or business concepts for our review. Once we identify a suitable product or concept, we negotiate to obtain global marketing and distribution rights. These marketing and distribution agreements typically provide for revenue sharing in the form of a royalty to the inventor or product owner. As of the date of this report, we have marketed several products with limited success.

Under the terms of an agreement dated November 20, 2013, Tru Hair, Inc., a wholly owned subsidiary of the Company, licensed certain trademarks to a third party in exchange for a cash payment of $25,000 and an undertaking by the third party to use reasonable best efforts to market, distribute and sell certain inventory held by Tru Hair, Inc.

eDiets

eDiets develops and markets Internet-based diet and fitness programs, primarily through the url eDiets.com. eDiets also offered through September 2013, a subscription-based nationwide weight-loss oriented meal delivery service. Digital diet plans are personalized according to an individual’s weight goals, food and cooking preferences, and include the related shopping lists and recipes.

Liquidity and Going Concern

At December 31, 2013, we had a cash balance of approximately $190,000, a working capital deficit of approximately $2.9 million and an accumulated deficit of approximately $22.7 million. We have experienced losses from operations since our inception, and we have relied on a series of private placements and convertible debentures to fund our operations. The Company cannot predict how long it will continue to incur losses or whether it will ever become profitable.

See accompanying notes to condensed consolidated financial statements

6

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

·

Significantly curtailing costs and consolidating operations, where feasible.

·

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

·

Reducing operations to conserve cash.

·

Deferring certain marketing activities.

·

Investigating and pursuing transactions with third parties, including strategic transactions and relationships.

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

Basis of Presentation

The condensed consolidated financial statements as of December 31, 2013 and for the three month and nine month periods ended December 31, 2013 and 2012 are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of December 31, 2013, and the results of operations for the three month and nine month periods ended December 31, 2013 and 2012, the statement of shareholders' equity for the nine months ended December 31, 2013 and the statement of cash flows for the nine month periods ended December 31, 2013 and 2012. The results for the nine months ended December 31, 2013 are not necessarily indicative of the results to be expected for the entire year. The condensed consolidated balance sheet as of March 31, 2013 has been derived from audited financial statements for the fiscal year ended March 31, 2013. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, these condensed consolidated financial statements should be read in conjunction with audited consolidated financial statements and the footnotes thereto for the fiscal year ended March 31, 2013 as filed with the Securities and Exchange Commission with our Form 10-K on June 28, 2013 (the "Audited 2013 Financial Statements"). The audit report of EisnerAmper LLP, the Company’s independent registered public accounting firm, dated June 28, 2013, included an explanatory paragraph about the existence of substantial doubt concerning the Company’s ability to continue as a going concern.

Note 2.

Summary of Significant Accounting Policies

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reported periods. Our management believes the estimates utilized in preparing our consolidated financial statements are reasonable. Actual results could differ from these estimates.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. We believe the following critical accounting policies involve the most significant judgments and estimates used in the preparation of our consolidated financial statements.

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.

7

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Allowance for Sales Returns: In the direct response industry, purchased items are generally returnable for a certain period after purchase. We attempt to estimate returns and provide an allowance for sales returns where applicable. Our estimates are based on historical experience and knowledge of the products sold. The allowance for estimated sales returns totaled $0 and approximately $209,000 at December 31, 2013 and March 31, 2013, respectively.

Goodwill: Goodwill is not amortized but is subject to periodic testing for impairment in accordance with Accounting Standards Codification (“ASC”) Topic 350 -- Intangibles - Goodwill and Other - Testing Indefinite-Lived Intangible Assets for Impairment. The test for impairment was to be conducted annually or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. In connection with the Company’s decision to divest the dietary meal delivery component in September 2013, the Company determined that it would not be able to recover the carrying value of its investment in this component and therefore recorded a loss of $9,300,000 related to the associated goodwill, which was recorded in loss from discontinued operations.

The following provides a roll-forward of the Company’s goodwill:

Balance as of March 31, 2013	$	9,300,000	)
Impairment		(9,300,000	)
Balance as of December 31, 2013	$	—

Intangible Assets: Intangible assets include acquired customer relationships, urls and trademarks. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets of five years in accordance with ASC Topic 350 -- Intangibles - Goodwill and Other - Testing Indefinite-Lived Intangible Assets for Impairment. Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In connection with the Company’s decision to divest the dietary meal delivery component in September 2013, the Company determined that it would not be able to recover the carrying value of its finite-lived intangible assets in this component and therefore recorded a loss of $5,331,000 which represented the excess carrying value over the related fair value of these assets, which was recorded in loss from discontinued operations.

Income Taxes: We use the asset and liability method to determine our income tax expense or benefit. Deferred tax assets and liabilities are computed based on temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that are expected to be in effect when the differences are expected to be recovered or settled. Any resulting net deferred tax assets are evaluated for recoverability and, accordingly, a valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax asset will not be realized.

Restricted Cash

Restricted cash represents funds held by eDiets credit card processors.

Revenue Recognition

We recognize revenue from product sales in accordance with Financial Accounting Standards Board (“FASB”) ASC 605 — Revenue Recognition. Following agreements or orders from customers, we ship products to our customers often through a third party facilitator. Revenue from product sales is only recognized when substantially all the risks and rewards of ownership have transferred to our customers, the selling price is fixed and collection is reasonably assured. Typically, these criteria are met when our customer’s order is received and we receive acknowledgment of receipt by a third party shipper and collection is reasonably assured.

We recognized deferred revenue for our dietary meal delivery program as payment is made in advance of the actual meal delivery. We also recognize deferred revenue related to our online dietary subscription services as payments are made in advance of the full subscription period. As of December 31, 2013 and March 31, 2013, we had recognized deferred revenue of approximately $78,000 and $174,000, respectively.

8

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has a return policy on its ASTV sales whereby the customer can return any product within 60-days of receipt for a full refund, excluding shipping and handling. However, historically the Company has accepted returns past 60-days of receipt. The Company provides an allowance for returns based upon specific product warranty agreements and past experience and industry knowledge. All significant returns for the periods presented have been offset against gross sales. The Company also provides a reserve for warranties, which is not significant and is included in accrued expense.

eDiets’ meal delivery revenue, through the divestiture date, was recognized upon delivery and transfer of title to the product. This occurred upon shipment from the Company’s fulfillment center and delivery to the end-customer. eDiets’ digital revenue is generated by the Company offering membership subscriptions to the proprietary content contained in its websites. Subscriptions are paid in advance, mainly via credit/debit cards, and cash receipts are recognized as deferred revenue and are recorded as revenue on a straight-line basis over the period of the digital plan subscription.

Receivables

Accounts receivable consists of amounts due from the sale of our direct response, home shopping related products and dietary programs. Our allowance for doubtful accounts at December 31, 2013 and March 31, 2013, totaled $0 and $152,000, respectively. The allowances are estimated based on historical customer experience and industry knowledge.

Inventories and Advances on Inventory Purchases

Inventories are stated at the lower of cost or market. Cost is determined using a first-in, first-out, or FIFO, method. We review our inventory for excess or obsolete inventory and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value.

Advances on inventory purchases represent payments made to our product suppliers in advance of delivery to the Company. It is common industry practice to require a substantial deposit against products ordered before commencement of manufacturing, particularly with off-shore suppliers. Additional advance payments may also be required upon achievement of certain agreed upon manufacturing or shipment benchmarks. Upon delivery and receipt by the Company of the items ordered, and the Company taking title to the goods, the balances are transferred to inventory.

Property and Equipment, net

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

Property and equipment, net consists of the following:

Property and equipment	Estimated Useful Lives	December 31, 2013			March 31, 2013
Computers and software	3 Years	$	61,892		$	120,041
Office equipment and furniture	5-7 Years		67,693			94,248
Leasehold improvements	1-3 Years		62,610			62,610
			192,195			276,899
Less: accumulated depreciation and amortization			(141,576	)		(132,098	)
		$	50,619		$	144,801

Depreciation and amortization expense totaled approximately $9,000 and $52,000 for the three and nine month periods ended December 31, 2013, respectively, and $13,000 and $38,000 for the three and nine month periods ending December 31, 2012.

9

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Intangible Assets

Intangible assets consisted of the following at December 31, 2013 and March 31, 2013:

	March 31, 2013			Amortization Expense for the Nine Months Ended December 31, 2013			Impairment			Additions		December 31, 2013			Estimated Useful Life
Customer relationships	$	6,000,000		$			$	(5,000,000	)	$	—	$	1,000,000		5 years
URL’s		1,000,000						(660,000	)		98,956		438,956		5 years
Trademarks		859,439						(588,439	)		—		271,000		5 years
AsSeenOnTV.com		2,839,216									—		2,839,216		Indefinite
		10,698,655						(6,248,439	)		98,956		4,549,172
Accumulated amortization		(131,000	)		(866,500	)		917,000			—		(80,550	)
	$	10,567,655		$	(866,500	)	$	(5,331,439	)	$	98,956	$	4,468,622

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

The straight-line method is being used to amortize the Company’s finite lived intangible assets over their respective lives. Related amortization expense recognized was approximately $81,000 and $867,000 for the three and nine month periods ended December 31, 2013, respectively. Amortization expense for the next five succeeding fiscal years is estimated as follows:

March 31,
2014 remaining three months	$   90,000
2015	$ 342,000
2016	$ 342,000
2017	$ 342,000
2018	$ 342,000
2019	$ 171,000

Earnings (Loss) Per Share

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

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2013		2012		2013		2012
Stock options		7,992,963		1,606,359		7,992,963		1,231,136
Warrants		64,833,369		64,172,176		64,833,369		58,978,667
		72,826,332		65,778,535		72,826,332		60,209,803

10

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Concentration of Credit Risk

Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash, cash equivalents and trade accounts receivable. Cash and cash equivalents are 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. Concentration of credit risk with respect to our trade accounts receivable to our customers is limited to $288,765 at December 31, 2013. Credit is extended to our customers, based on an evaluation of a customer’s financial condition and collateral is not required.

Advertising and Promotional Costs

Advertising and promotional costs are expensed when incurred and totaled approximately $4,000 and $16,000 for the three month periods ended December 31, 2013 and 2012, respectively, and approximately $34,000 and $70,000 for the nine month periods ended December 31, 2013 and 2012, respectively.

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 March 31, 2013, respectively. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

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

The three levels of the fair value hierarchy are as follows:

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

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 — Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

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

11

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Accounting Standards Updates

There have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended December 31, 2013, as compared to the recent accounting pronouncements described in the Company's Audited 2013 Financial Statements that are of material significance, or have potential material significance to the Company.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All inter-company account balances and transactions have been eliminated in consolidation.

Note 3.

eDiets Acquisition and Sale of Meal Delivery Service

On February 28, 2013, the Company completed the purchase of 100% of the outstanding common stock of eDiets.com, Inc., a publicly held company organized under the laws of the State of Delaware (“eDiets”), offering subscription-based weight-loss oriented meal delivery service and individualized digital subscription-based weight-loss and wellness programs. Pursuant to the terms and conditions of the Agreement and Plan of Merger by and among our Company, eDiets Acquisition Company, a Delaware corporation and wholly owned subsidiary of our Company, and eDiets, dated October 31, 2012 we issued an aggregate of 19,077,686 shares of our common stock, at the ratio of 1.2667 shares of our common stock for each outstanding share of eDiets’ common stock, to the eDiets’ stockholders. Following the closing, eDiets became a wholly owned subsidiary of our Company.

At completion, we believed the acquisition of eDiets could create a more scalable business and facilitate our strategic objective of becoming one of the top providers of ecommerce products and solutions. In addition, while there were no assurances, it was anticipated that the acquisition would allow us to expand our product offerings, realize potential synergies in marketing and media purchases, realize potential cost savings in administrative expenses and the costs associated with public company compliance, and take advantage of product cross-selling opportunities.

The total purchase price for eDiets was approximately $15.1 million. The purchase price consisted of approximately (i) $2.4 million in cash, (ii) $11.1 million in the Company’s common stock, valued based on the closing price of the stock on February 28, 2013, (iii) $0.9 million representing the fair value of the Company’s options issued to eDiets’ employees and warrants issued to eDiets consultants, and (iv) assumed liability of $600,000 in principal and $92,057 of related accrued interest in eDiets notes payable to related parties, which converted into 988,654 shares of common stock at $0.70 per share and warrants to purchase 494,328 shares of common stock of the Company, all pursuant to the Agreement and Plan of Merger. In accordance with accounting standards of business combinations, we accounted for the acquisition of eDiets under the acquisition method. Under the acquisition method, the assets acquired and liabilities assumed at the date of acquisition were recorded in the consolidated financial statements at their respective fair values at the date of acquisition. The excess of the purchase price over the fair value of the acquired net assets has been recorded as goodwill. eDiets’ results of operations are included in our consolidated financial statements from the date of acquisition.

12

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The determination of the estimated fair value of the acquired assets and liabilities assumed required management to make significant estimates and assumptions. We determined the fair value by applying established valuation techniques, based on information that management believed to be relevant to this determination. The following table summarizes the purchase price allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition:

Cash and cash equivalents	$	241,344
Restricted cash		450,000
Accounts receivable		118,172
Inventory		75,522
Prepaid expenses and other assets		275,170
Property, plant and equipment		61,342
Intangibles
Customer relationships		6,000,000
URL’s		1,000,000
Trademarks		859,439
Total assets acquired		9,080,989
Accounts payable		(2,318,986	)
Accrued expenses		(443,364	)
Notes payable		(463,672	)
Total liabilities assumed		(3,226,022	)
Net assets acquired	$	5,854,967

The purchase price exceeded the fair value of the net assets acquired by $9,300,000, which was recorded as goodwill. Acquisition costs, consisting of legal, consulting and other costs related to the acquisition aggregated approximately $278,000 and included $82,650 for an acquisition consulting fee payable in 142,500 shares of common stock which were issued in July 2013.

In connection with the Company’s decision to divest the dietary meal delivery component in September 2013, the Company determined that it would not be able to recover the carrying value of its investment in this component and therefore recorded a loss which is included in discontinued operations. See Note 4.

The accompanying condensed consolidated financial statements do not include any revenues or expenses related to the eDiets business on or prior to February 28, 2013, the closing date of the acquisition. The condensed consolidated statements of operations for the three month and nine month periods ended December 31, 2013 include a loss from discontinued operations of approximately $82,000 and $15,267,000, respectively, related to eDiets.

In connection with the acquisition, the Company acquired an aggregate of $463,672 of notes payable, consisting of $100,000 due to a former director of eDiets, $100,000 due to a former director of eDiets who is currently a director of the Company and $263,672 due to a former landlord of eDiets. The annual interest rate on the director and former director notes is 5%. The landlord note is interest free, absent default.

In addition, under the provisions of ASC 805—Business Combinations, the Company recognized as stock-based compensation the difference in fair value between the eDiets options outstanding at the acquisition date and the replacement ASTV options granted. The fair value of the eDiets’ options replaced was recorded as consideration in the acquisition. The excess fair value of the ASTV replacement options over the fair value of the eDiets options, totaling approximately $694,000, was recognized as compensation cost in the fiscal year ended March 31, 2013.

At the time of acquisition, eDiets had approximately $61.2 million in net operating loss carryforwards. Those net operating loss carryforwards will be subject to the Internal Revenue Code 382 ownership change rules which will limit future use by eDiets, as a subsidiary of the Company, to approximately $0.50 million per year.

13

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 4.

Discontinued Operations

On October 11, 2013, the Company completed the sale to Chefs Diet National Co., LLC (“Chef’s Diet”), a subsidiary of Chef’s Diet Corp., of certain assets (the “Meal Delivery Assets”) relating to the eDiets meal delivery business pursuant to an Asset Purchase and Revenue Sharing Agreement (the “Agreement”) dated August 23, 2013 between eDiets and Chef’s Diet. The disposed assets consist primarily of a customer database of active and inactive eDiets customers. In addition, eDiets granted Chef’s Diet a perpetual royalty-free license to content and certain other intellectual property used in connection with the eDiets meal delivery business. While the transaction was not completed until October 11, 2013, the transaction met the criteria of held-for-sale accounting as of September 30, 2013 and has been presented in accordance with the provisions of ASC 205-20 Discontinued Operations for all periods presented.

The base sales price of $1.1 million consisted of an initial cash payment of $200,000, of which $100,000 was collected prior to September 30, 2013, with the additional $100,000 collected during the three months ended December 31, 2013, plus deferred cash payments totaling $900,000 payable as follows: (i) eight quarterly payments beginning January 1, 2014 in an amount equal to the greater of $56,250 or seven percent of adjusted gross revenue for the immediately preceding period, and (ii) eight quarterly payments beginning January 1, 2016 in an amount equal to the greater of $56,250 or five percent of adjusted gross revenue for the immediately preceding period. In addition, Chef’s Diet will make up to four quarterly bonus payments of up to $50,000 each if it meets certain customer acquisition and retention targets.

The Company’s meal delivery operations were a component of our eDiets subsidiary which delivered fresh and frozen diet or wellness focused meals to our customers. Management believes this divestiture will allow the Company to streamline its operations and focus its limited recourses on ecommerce based platforms, which it believes is the future of the dietary and wellness industries.

In connection with the Agreement, the Company retained a perpetual, nonexclusive, worldwide, royalty free right and license to use the Meal Delivery Assets in its business provided that it shall not utilize such assets to promote any fresh, frozen or prepared meal program, as defined.

For the three month and nine month periods ending December 31, 2013, the Company’s meal delivery component had operational losses of $82,000 and $1,735,000, respectively. As a result of this divestiture, the Company recognized a non-cash charge of $14,631,000, including a write down of goodwill of $9,300,000 and $5,331,000 in identifiable intangible assets, resulting from the Company’s determination that it would not be able to recover the carrying value of its investment in this component and that it would not be able to recover the carrying value of its finite-lived intangible assets in this component and therefore recorded the related loss in discontinued operations. As a result of this impairment, the Company carries no remaining goodwill. No tangible assets or liabilities were transferred in the divestiture of the meal delivery component.

The results of operations for the meal delivery component has been reported as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented. The following table summarizes the results of operations for the discontinued component:

	Three Months Ended December 31, 2013			Nine Months Ended December 31, 2013
Net sales	$	23,692		$	1,975,673
Operating (loss)		(82,315	)		(1,735,457	)
Asset sale		—			1,100,000
Impairment charge related to goodwill and finite-lived intangibles		—			(14,631,439	)
Income tax benefit (expense)		—			—
Loss from discontinued operations, net of taxes	$	(82,315	)	$	(15,266,896	)

14

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 5.

Prepaid expenses and other current assets

Components of prepaid expenses and other current assets consist of the following:

	December 31, 2013		March 31, 2013
Prepaid license fees	$	27,528	$	23,550
Prepaid insurance		312,244		388,690
Prepaid investor relations fees		—		8,475
Prepaid talent fees		110,414		204,167
Prepaid professional fees		—		57,055
Prepaid medical and related insurance		—		46,011
Prepaid expenses – other		291		64,502
	$	450,477	$	792,450

Note 6.

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:

	December 31, 2013		March 31, 2013
Accrued compensation	$	132,333	$	137,505
Accrued warranty		10,836		52,000
Accrued sales returns		—		156,838
Accrued professional fees		69,500		159,000
Accrued rents		2,651		2,874
Accrued severance		59,773		179,318
Accrued other		16,772		40,195
	$	291,865	$	727,730

Note 7.

Warrant Liabilities

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

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

The assumptions used in connection with the valuation of warrants issued were as follows:

	December 31, 2013		March 31, 2013
Number of shares underlying the warrants	47,726,100		47,726,100
Exercise price	$0.595 - $0.80		$0.595 - $0.80
Volatility	150	%	133	%
Risk-free interest rate	0.38%-1.27	%	0.36%-0.77	%
Expected dividend yield	0.00	%	0.00	%
Expected warrant life (years)	1.96 - 4.00		2.50 – 4.75
Stock price	$0.08		$0.35

15

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Recurring Level 3 Activity and Reconciliation

The tables below provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3). The table reflects gains and losses for the nine month period ended December 31, 2013, for all financial liabilities categorized as Level 3 as of December 31, 2013.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

	March 31, 2013		Initial Measurements		Increase (Decrease) in Fair Value			Reclassed to Equity		December 31, 2013
2011 Unit Offering	$	8,531,735	$	—	$	(7,111,367	)	$	—	$	1,420,368
2011 Unit Offering Placement Agent		1,073,855		—		(895,079	)		—		178,776
2012 Bridge Warrant		231,691		—		(206,020	)		—		25,671
2012 Bridge Warrant Placement Agent		46,338		—		(41,204	)		—		5,134
2012 Unit Offering		1,268,686		—		(1,129,571	)		—		139,115
2012 Unit Offering Placement Agent		432,735		—		(349,568	)		—		83,167
2013 Merger related notes converted		104,266		—		(91,535	)		—		12,731
	$	11,689,306	$	—	$	(9,824,344	)	$	—	$	1,864,962

	March 31, 2012		Initial Measurements		Increase (Decrease) in Fair Value			Reclassed to Equity			December 31, 2012
2011 Bridge Warrant	$	6,604,706	$	—	$	(966,334	)	$	(5,638,372	)	$	—
2011 Bridge Warrant Placement Agent		876,119		—		(128,184	)		(747,935	)		—
2011 Unit Offering		15,816,980		—		8,819,955			—			24,636,935
2011 Unit Offering Placement Agent		2,499,810		—		601,142			—			3,100,952
2012 Bridge Warrant		—		716,760		62,430			—			779,190
2012 Bridge Warrant Placement Agent		—		143,352		12,485			—			155,837
2012 Unit Offering		—		4,075,834		296,021						4,371,855
2012 Unit Offering Placement Agent		—		1,094,936		92,997						1,187,933
	$	25,797,615	$	6,030,882	$	8,790,512		$	(6,386,307	)	$	34,232,702

Number of Warrants Subject to Remeasurement

	Number of Warrants
	March 31,		Warrant				December 31,
	2013		Additions		Reductions		2013
2011 Unit Offering		33,277,842		—		—		33,277,842
2011 Unit Offering Placement Agent		4,726,892		—		—		4,726,892
2012 Bridge Warrant		1,137,735		—		—		1,137,735
2012 Bridge Warrant Placement Agent		227,546		—		—		227,546
2012 Unit Offering		6,300,213		—		—		6,300,213
2012 Unit Offering Placement Agent		1,561,544		—		—		1,561,544
2013 Merger related notes converted		494,328		—		—		494,328
		47,726,100		—		—		47,726,100

Note 8.

Related Party Transactions

Concurrent with the Company’s acquisition of eDiets on February 28, 2013, the Company issued 988,654 shares of common stock and warrants to purchase 494,328 shares of common stock in settlement of $600,000 of related eDiets party debt and $92,057 in related interest to an eDiets director and one former director. In addition, during the second quarter, the Company repaid $50,000 in principal to our director, and the remaining $50,000 was repaid with related interest in the third quarter.

16

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the period April 1, 2013 through December, 31, 2013, the Company recognized related party interest expense of $6,298 with related accrued interest of $2,380 at December 31, 2013.

On December 23, 2013, the Company entered into a Note Purchase Agreement with Infusion Brands International, Inc. The Note Purchase Agreement was executed in connection with a possible merger between Infusion Brands and the Company. This agreement provided for a series of notes totaling up to $500,000 through April 15, 2014. As of December 31, 2013, the Company had borrowed $150,000 under this agreement. The notes bear interest at 12% per annum and, if no merger between the parties is completed, mature on June 30, 2014. At December 31, 2013, the Company had accrued $400 of related party interest under the initial note.

Note 9.

Notes Payable

In connection with the acquisition of eDiets on February 28, 2013, the Company assumed an aggregate of $463,672 of notes payable, consisting of (i) $100,000 owed to a former director of eDiets who is currently a director of the Company, which matured on June 30, 2013 (ii) $100,000 owed to a former director of eDiets, which matured on June 30, 2013, but has not been repaid and (iii) $263,672 owed to a former landlord of eDiets, which is payable in equal monthly installments, the last of which matures on October 1, 2015. All notes are unsecured and the director and former director notes carry an interest rate of 5% per annum. The landlord note is interest free, absent default.

At December 31, 2013 and March 31, 2013, the Company had notes payable – current portion of $383,138 and $281,805, respectively. At December 31, 2013 and March 31, 2013, notes payable – current portion included $102,060 due to the former landlord and $100,000 due to the former director of eDiets. In addition, the balances include amounts due under insurance related notes payable. Annual interest rates on these notes range from 5% to 8.4%.

Notes payable non-current includes $76,472 and $153,107, due to a former landlord at December 31, 2013 and March 31, 2013, respectively, and $30,000 and $40,000 due through fiscal 2016, respectively, due under our asset purchase agreement with Seen On TV.

Note 10.

Commitments and Contingencies

In connection with the eDiets acquisition, on September 10, 2012, the Company received notice of a complaint filed in Broward County, Florida by an eDiets stockholder against eDiets, members of the board of directors of eDiets and the Company, alleging that eDiets breached its fiduciary duty to its stockholders by entering into the transaction for inadequate consideration. Prior to the deadline for the defendants to answer the complaint, the plaintiff and the defendants in the case filed a stipulation with the court allowing the plaintiff to file an amended complaint. The Company’s acquisition of eDiets was consummated on February 28, 2013. On November 19, 2013, the plaintiff voluntarily dismissed the case without prejudice.

17

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On May 2, 2013, effective May 1, 2013, we entered into an employment agreement with Mr. Ronald C. Pruett Jr. to serve as our chief executive officer. The term of the agreement is for one year and will be automatically renewed for successive one-year periods unless a notice of non-renewal is given by either party or the agreement is otherwise terminated sooner in accordance with its provisions. Pursuant to the agreement, Mr. Pruett will receive an annual base salary of $275,000, together with an additional salary of $275,000 during the first year of his employment with us. Mr. Pruett’s base salary may be increased from time to time as determined by the compensation committee of the board of directors. Mr. Pruett voluntarily waived his right to receive payments on his additional salary of $275,000 beginning with the payroll period ending February 10, 2014 and continuing until Mr. Pruett otherwise notifies the Company. In addition to his base salary, Mr. Pruett will be entitled to receive an annual cash bonus calculated by reference to our actual performance during the immediately preceding fiscal year measured against a revenue and adjusted EBITDA (earnings before income taxes, depreciation and amortization) target to be established by Mr. Pruett and the compensation committee and approved by the board of directors. As of February 10, 2014, Mr. Pruett and the compensation committee had yet to establish a revenue and adjusted EBITDA target for our fiscal year ending March 31, 2014. Mr. Pruett also received an option grant to purchase 425,000 shares (the “First Option Grant”) of our common stock and a second option grant to purchase 2,625,000 shares (the “Second Option Grant”) of our common stock. The First Option Grant vested on the grant date, May 6, 2013, and has a per share exercise price equal to $0.35, the average of the high bid and low asked prices of our common stock on the OTC Bulletin Board on the trading day immediately preceding the grant date. The Second Option Grant has a per share exercise price equal to $0.70. The Second Option Grant vests in four equal tranches on May 6, 2013, May 1, 2014, November 1, 2014 and May 1, 2015. Provided that the agreement has not been terminated, on December 31, 2013, Mr. Pruett became entitled to receive subsequent grants of stock and options, at the compensation committee’s option, with an aggregate value of at least $918,750, vesting in four equal tranches on the grant date, May 1, 2014, November 1, 2014 and May 1, 2015. As of February 10, 2014, Mr. Pruett was not granted any additional stock options.

If Mr. Pruett’s employment is terminated due to death, his estate will receive (i) six months’ base salary at his then current rate in a lump sum payment and (ii) one year of continued coverage under the Company’s employee benefit plans. If Mr. Pruett’s employment is terminated due to disability, he will receive (i) six months’ base salary at his then current rate, (ii) one year of continued coverage under the Company’s employee benefit plans and (iii) any earned but unpaid bonuses, provided that the Company may credit against such amounts any proceeds paid to Mr. Pruett with respect to any disability policy maintained for his benefit. If Mr. Pruett’s employment is terminated by the Company without cause or following a change in control or by Mr. Pruett for good reason or following a change in control, Mr. Pruett will receive (i) 12 months’ base salary at his then current rate, (ii) continued provision during such 12-month period of benefits under the Company’s employee benefit plans, (iii) immediate vesting of all granted but unvested stock options and (iv) a prorated payment of any bonus or other payments earned in connection with any bonus plan in which Mr. Pruett participated at the time of termination. The amount of each payment under (i) shall be reduced by one dollar for each three dollars otherwise payable, until the aggregate amount of all such reductions, together with the aggregate amount of bonus reductions described above, equals $275,000. Mr. Pruett will not be entitled to any compensation if his employment is terminated by the Company for cause or by Mr. Pruett in the absence of good reason.

On June 13, 2013, TV Goods, Inc. (“TV Goods”), the Company’s wholly owned subsidiary, entered into a termination agreement (the “Termination Agreement”) with Presser Direct, LLC (“Presser Direct”) under which it terminated a Purchasing and Marketing Agreement (the “P & M Agreement”) between TV Goods and Presser Direct dated March 7, 2012, relating to the manufacture, marketing, sale and distribution of the SeasonAire heater and related product lines. Under the Termination Agreement, TV Goods agreed to pay approximately $309,000 related to previously purchased inventory and approximately $146,000 attributable to royalty payments under the P & M Agreement, of which $65,000 was to be held in escrow pending delivery of replacements for damaged or defective SeasonAire heaters and related products previously sold by TV Goods. TV Goods also agreed to transfer title to certain assets relating to the products, including infomercials and intellectual property, to Presser Direct. Presser Direct agreed to pay TV Goods $50,000 for existing SeasonAire inventory, to assume obligations to make all royalty payments relating to SeasonAire sales after July 31, 2013 and to assume all liabilities relating to the SeasonAire products after June 13, 2013, except for certain warranty obligations relating to SeasonAire products sold prior to that date. TV Goods and Presser Direct released each other from all obligations under the P & M Agreement, so that the only surviving obligations were those arising under the Termination Agreement.

18

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Leases

On February 1, 2012, the Company entered into a new 36-month lease agreement on our existing headquarters facility. Terms of the lease provide for a base rent payments of $7,875 per month for the first twelve months, increasing 3% per year thereafter. The lease contains no provisions for a change in the base rent based on future events or contingent occurrences. In accordance with the provisions ASC 840-Leases, the Company is recognizing lease expenses on a straight-line basis, which total $8,114 per month over the lease term. In connection with the entering into the new leases, the Company recognized income of approximately $71,000 attributable to the recovery of the deferred rent obligation under the previous lease and wrote-off to lease expense $12,420 in security deposits attributable to the prior lease.

During September 2012, eDiets entered into a one year lease for office space in Pompano Beach, Florida. The lease covered approximately 8,800 square feet at a monthly base rent of $9,800 per month. The Company did not renew this lease upon expiration and no longer occupies this facility.

The following is a schedule by year of future minimum rental payments required under our lease agreement on December 31, 2013:

	Operating Lease
Year 1	$	91,900
Year 2		—
Year 3		—
Year 4		—
Year 5		—
	$	91,900

Base rent expense recognized by the Company, attributable to its headquarters facility and eDiets facility was approximately $24,000 and $132,000 for the three month and nine month periods ending December 31, 2013, respectively, and $24,000 and $73,000 for the three month and nine month periods ending December 31, 2012.

Registration Rights

Under the terms of a 2010 private placement, the Company provided that it would use its best reasonable efforts to cause the related registration statement to become effective within 180 days of the termination date, July 26, 2010, of the offering. We have failed to comply with this registration rights provision and are obligated to make pro rata payments to the subscribers under the 2010 private placement in an amount equal to 1% per month of the aggregate amount invested by the subscribers up to a maximum of 6% of the aggregate amount invested by the subscribers. The maximum amount of penalty to which the Company may be subject is $156,000. The Company has a related accrued liability of $156,000 at both December 31, 2013 and March 31, 2013.

Note 11.

Stockholders’ Equity

Capital Stock

Preferred Stock

We are authorized to issue up to 10,000,000 shares of preferred stock, $.0001 par value per share. Our board of directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of preferred stock in series, and by filing a certificate pursuant to the applicable law of the state of Florida, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. No shares of preferred stock were issued or outstanding at December 31, 2013 and March 31, 2013, respectively.

19

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Common Stock

At December 31, 2013 and March 31, 2013, we were authorized to issue up to 750,000,000 shares of common stock, $.0001 par value per share.

At December 31, 2013 and March 31, 2013, the Company had 71,741,250 and 71,282,066 shares issued and outstanding, respectively. Holders are entitled to one vote for each share of common stock (or its equivalent).

Share Issuances

Common Stock and Warrants

On July 19, 2013, the Company issued 142,500 shares of common stock to National Securities Corporation in consideration for consulting and advisory services provided by National Securities Corporation under an advisory services agreement dated August 14, 2012 in connection with the eDiets merger. The $82,650 was recorded as an expense and additional paid-in capital during fiscal year ended March 31, 2013.

On July 19, 2013, the Company issued an aggregate of 316,268 shares of common stock to the seller of Seen On TV, LLC, in accordance with the anti-dilution protection provisions contained in the June 28, 2012 Seen On TV, LLC asset purchase agreement.

On November 19, 2012, the Company entered into a licensing and endorsement agreement with Eight Entertainment, LLC furnishing celebrity endorsement services. The agreement is for a 24-month term and provides for the celebrity eDiets endorsements, advertising and promotion programs. In consideration the Company agreed to a one-time payment of $250,000 and the issuance of warrants to purchase up to 6,500,000 shares of common stock as follows:

Issuance	Number of Shares	Exercise Price	Date of Issuance
1	1,500,000	$0.01	Within 10 days of effectiveness
2	1,250,000	$0.25	3 months from agreement
3	750,000	$0.50	12 months from agreement
4	1,000,000	$0.75	16 months from agreement
5	1,000,000	$1.00	20 months from agreement
6	1,000,000	$2.00	24 months from agreement
	6,500,000

The actual number of warrants to be granted under the agreement was subject to adjustment downward up to 50%, based upon certain performance goals being achieved relating to weight-loss. These provisions constitute a performance commitment within the meaning of ASC 505 — Equity. In accordance with ASC 505 — Equity, when equity instruments are issued to non-employees in exchange for the receipt of goods or services the equity instruments are measured at fair value at the earlier of the date at which a commitment for performance by the counterparty to earn the equity instruments is reached or the date at which the counterparty’s performance is complete. The agreement does not contain a sufficiently large disincentive for nonperformance as forfeiture of the equity instrument is the sole remedy in the event of nonperformance. Therefore, a final measurement date will not be established until performance is complete and ASC 505 — Equity requires the recognition of expense from the transaction be measured at the then-current lowest aggregate fair value at each reporting period with changes in those lowest aggregate fair values between the reporting periods recognized in earnings. The first of two performance goals was met during March 2013 reducing the potential adjustment downward to 25%. On May 15, 2013, the second performance goal was not achieved and warrants to purchase 1,625,000 shares of common stock exercisable at prices from $0.01 to $2.00 per share were forfeited.

20

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The related campaign talent costs are being recorded in selling and marketing expenses over the performance period of 24 months. The assumptions used at the initial valuation date, November 19, 2012, and December 31, 2013, were as follows:

	Lowest Aggregate Fair Value
	Initial Valuation	December 31, 2013
Number of shares underlying warrants	3,250,000	4,875,000
Exercise prices	$0.01 - $2.00	$0.01 - $2.00
Volatility	174.0%	149.7%
Risk-free interest rate	0.33%	0.38%
Expected dividend yield	0.00%	0.00%
Expected warrant life (years)	3.00	1.90

For the three month and nine month periods ending December 31, 2013, the Company recognized marketing expense or expense (reduction) of approximately $(120,000) and $(114,000), respectively, attributable to warrants issued and approximately $31,000 and $94,000, respectively, attributable to the $250,000 cash component paid.

The Company recognized marketing expense under this agreement of approximately $150,000, including approximately $136,000 attributable to the warrants issued and approximately $14,000 attributable to the cash component for the three and nine month periods ending December 31, 2012.

A summary of warrants outstanding at December 31, 2013, is as follows:

Summary of Warrants Outstanding

Warrant Description	Number of Warrants (A)		Exercise Prices	Expiration Dates
2010 Other Placements	975,000		$3.00-$10.00	January 13, 2014 - January 24, 2014
2011 Convertible Notes	431,251		$3.00-$10.00	April 11, 2014
2011 Private Placement	672,750		$3.00-$10.00	May 27, 2014 - June 15, 2014
2011 Bridge Warrant	8,789,064		$0.64	August 29, 2014
2011 Bridge Warrant Placement Agent	1,165,875		$0.64	August 29, 2014
2011 Unit Offering	33,277,837	(B)	$0.59	October 28, 2016
2011 Unit Offering Placement Agent	4,726,891	(B)	$0.59	October 28, 2016
2010 Other Placements	412,500		$0.64-$3.15	June 1, 2014 - June 22, 2015
2012 Bridge Warrant	1,137,735	(B)	$0.77	September 7, 2015 - September 20, 2015
2012 Bridge Warrant Placement Agent	227,546	(B)	$0.77	September 7, 2015
2012 Unit Offering	6,300,213	(B)	$0.80	November 14, 2015
2012 Unit Offering Placement Agent	1,561,544	(B)	$0.70-$0.80	November 14, 2017
2012 Talent Compensation	4,875,000		$0.01-$2.00	November 19, 2015
2013 Merger related notes converted	494,328	(B)	$0.80	November 14, 2015
2013 eDiets Warrants	910,835		$1.40-$4.74	February 7, 2014 - September 11, 2019
	65,958,369

———————

(A)

All warrants reflect post anti-dilution and repricing provisions applied.

(B)

Subject to potential further ant-dilution and repricing adjustment (See Note 7).

Equity Compensation Plans

In May 2010, the Company adopted its 2010 Executive Equity Incentive Plan and 2010 Non Executive Equity Incentive Plan (collectively, the “2010 Plans”) and granted 600,000 options and 450,000 options, respectively.

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

21

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On June 4, 2012, the Company issued 30,000 options to a direct response consultant. The fair value of the options granted was estimated on the date of grant using the Black Scholes options pricing model using the assumptions established at that time. The following table includes the assumptions used in valuing this grant:

Number of shares underlying the options	30,000
Exercise price	$0.87
Volatility	185	%
Risk-free interest rate	0.68	%
Expected dividend yield	0.00	%
Expected option life (years)	5

As the options vested upon grant, the entire fair value of $25,100 was charged to stock-based compensation immediately and is included in general and administrative expenses.

On September 24, 2012, the Company’s board of directors adopted the 2013 Equity Compensation Plan (the “2013 Plan” and, together with the 2010 Plans, the “Plans”) with terms similar to the previously adopted 2010 Plans. The 2013 Plan authorized the issuance of up to 3,000,000 options to purchase common stock. The 2013 Plan was modified in March 2013 authorizing the issuance of up to 6,000,000 options. On May 6, 2013, the 2013 Plan was further modified, increasing the shares of common stock reserved for issuance under such plan to 9,000,000 shares.

On December 15, 2012, the compensation committee granted 2,075,000 options from the remaining available options under the Plans. The options were granted to 17 employees and directors of the Company. The options granted vest at 20% per year over a five-year period and expire ten years from grant date. The fair value of the options granted was estimated on the grant date using the Black Scholes options pricing model using the assumptions established at that time. The following table includes the assumptions used in valuing this grant:

Number of shares underlying the options	2,075,000
Exercise price	$0.68
Volatility	177	%
Risk-free interest rate	1.18	%
Expected dividend yield	0.00	%
Expected option life (years)	7

On May 2, 2013, effective May 1, 2013, we entered into an employment agreement with Mr. Ronald C. Pruett Jr. to serve as our chief executive officer. As a component of his compensation package the board of directors approved an option grant to purchase 425,000 shares (the “First Option Grant”) of our common stock and a second option grant to purchase 2,625,000 shares (the “Second Option Grant”) of our common stock. The First Option Grant vested on the grant date, May 6, 2013, and has a per share exercise price equal to $0.35, the average of the high bid and low asked prices of our common stock on the OTC Bulletin Board on the trading day immediately preceding the grant date. The Second Option Grant has a per share exercise price equal to $0.70. The Second Option Grant vests in four equal tranches on May 6, 2013, May 1, 2014, November 1, 2014 and May 1, 2015. Provided that the agreement has not been terminated, on December 31, 2013, Mr. Pruett became entitled to receive subsequent grants of stock and options, at the compensation committee’s discretion, with an aggregate value of at least $918,750, vesting in four equal tranches on the grant date, May 1, 2014, November 1, 2014 and May 1, 2015. As of February 10, 2014, Mr. Pruett was not granted any additional stock options. If Mr. Pruett’s employment is terminated for any reason, other than by the Company for cause or by Mr. Pruett in the absence of good reason, he shall be entitled to certain compensation and benefits as provided under the agreement. The following table includes the assumptions used in valuing this grant:

Number of shares underlying the option	425,000		2,625,000
Exercise price	$0.35		$0.70
Volatility	137	%	137	%
Risk-free interest rate	1.19	%	1.19	%
Expected dividend yield	0.00	%	0.00	%
Expected option life (years)	7		7

22

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On August 1, 2013, the Company issued 500,000 stock options to Henrik Sandell to serve as the Company’s chief operating officer. The fair value of the options granted was estimated on the date of grant using the Black Scholes option pricing model using the assumptions established at that time. The following table includes the assumptions used in valuing this grant:

Number of shares underlying the options	500,000
Exercise price	$0.70
Volatility	159.03	%
Risk-free interest rate	2.15	%
Expected dividend yield	0.00	%
Expected option life (years)	7

The grant provided that 125,000 options vested upon grant according, $22,250, the fair value of the vested component, was charged to stock based compensation immediately and is included in general and administrative expense.

Mr. Sandell’s options vest under the following schedule:

Percent of Grant	Vesting Date
25%	August 1, 2013
25%	May 1, 2014
25%	November 1, 2014
25%	May 1, 2015

Stock based compensation for the three month and nine month periods ending December 31, 2013 was approximately $186,000 and $803,000, respectively. Stock based compensation for the three month and nine month periods ending December 31, 2012 was approximately $175,000 and $310,000, respectively. Stock based compensation for all periods presented are included in general and administration expenses, in the accompanying condensed consolidated statements of operations.

Information related to options granted under our option plans at December 31, 2013 and, 2012 and activity for each of the nine months then ended is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at April 1, 2013		5,933,708	(A)	$	2.32		6.55	$	44,475
Granted		3,550,000			0.66		—		—
Exercised		—			—		—		—
Forfeited		(1,461,357	)		5.97		—		—
Expired		(29,388	)		0.83		—		—
Outstanding at December 31, 2013		7,992,963		$	1.39		7.35	$	—
Exercisable at December 31, 2013		4,756,713		$	2.52		6.03	$	—

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at April 1, 2012		1,025,000		$	1.31		—	$	—
Granted		2,105,000			0.68		—		—
Exercised		—			—		—		—
Forfeited		(12,500	)		0.96		—		—
Expired		—			—		—		—
Outstanding at December 31, 2012		3,117,500		$	0.89		7.67	$	—
Exercisable at December 31, 2012		880,000		$	1.37		3.02	$	—

———————

(A)

Includes 2,816,208 eDiets acquisition adjusted replacement options.

23

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The weighted average grant date fair value of unvested options at December 31, 2013, was approximately $1,256,000 and will be expensed over a weighted average period of 6.33 years.

As of December 31, 2013, there were 4,822,500 options available for further issuance under the Plans.

In addition, under the provisions of ASC 805—Business Combinations, the Company recognized as stock-based compensation the difference in fair value between the eDiets options outstanding at the acquisition date and the replacement ASTV options granted. The fair value of the eDiets’ options replaced of $604,218 was recorded as consideration transferred in the acquisition. The excess fair value of the ASTV replacement options over the fair value of the eDiets options was recognized as compensation cost in the year ended March 31, 2013 since substantially all of the options were fully vested. Accordingly, the Company recorded $694,000 in stock-based compensation in March 2013.

No tax benefits are attributable to our share based compensation expense recorded in the accompanying financial statements because we are in a net operating loss position and a full valuation allowance is maintained for all net deferred tax assets. For stock options, the amount of the tax deductions is generally the excess of the fair market value of our shares of common stock over the exercise price of the stock options at the date of exercise.

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

At the effective time of the merger with eDiets, each eDiets option that remained outstanding and unexercised following the effective time was deemed amended and is now exercisable for shares of our common stock. The terms and conditions of the options remained the same, except that the number of shares covered by the option, and the exercise price was adjusted to reflect the exchange ratio of 1.2667. The exercise price per share is now equal to the exercise price prior to the effective time, divided by the exchange ratio. The above discussion reflects options and shares adjusted for the exchange ratio.

Note 12.

Segment Reporting

Commencing February 28, 2013, effective with the Company’s acquisition of eDiets, the Company organized its business into two operating segments to better align its organization based upon the Company’s management structure, products and services offered, markets served and types of customers. The ASTV segment derives its revenues from the marketing and sale of consumer direct response products, including Internet and TV “live shop” venues. The eDiets segment is a subscription-based nationwide weight-loss oriented digital subscription service and, until our discontinuance of the meal delivery component in September 2013, provided dietary and wellness oriented meal delivery services. See Note 4. Management reviews financial information presented on an operating segment basis for the purpose of making certain operating decisions and assessing financial performance.

Corporate and other expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Corporate and other assets include cash and cash equivalents, prepaid expenses and deposits.

24

AS SEEN ON TV, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables reflect results of operations from our business segments for the three month and six month periods ending December 31, 2013:

	Three Months Ended December 31, 2013
	ASTV			eDiets			Corporate and other		Total
Revenues	$	373,901		$	128,606		$	—	$	502,507
Costs of revenues		414,739			42,464			—		457,203
Gross profit (loss)		(40,838	)		86,142			—		45,304
Gross profit (loss) %		(11%	)		67%			0%		9%
Allocated operating expenses:
Selling and marketing expense		43,981			(101,909	)		—		(57,928	)
General and administrative expenses		559,726			95,299			560,369		1,215,394
Income (loss) from operations		(644,545	)		92,752			(560,369)		(1,112,162	)
Revaluation of warrants and interest		(815	)		(4,534	)		3,463,483		3,458,132
Loss from discontinued operations		—			(82,315	)		—		(82,315	)
Net income (loss) before taxes	$	(645,360	)	$	5,903		$	2,903,112	$	2,263,655

	Nine Months Ended December 31, 2013
	ASTV			eDiets			Corporate and other			Total
Revenues	$	1,233,092		$	656,901		$	—		$	1,889,993
Costs of revenues		1,141,667			73,514			—			1,215,181
Gross profit		91,425			583,387			—			674,812
Gross profit %		7%			89%			—			36%
Allocated operating expenses:
Selling and marketing expense		126,915			(60,933	)		—			65,982
General and administrative expenses		2,324,192			196,119			1,770,007			4,290,318
Loss from operations		(2,359,682	)		448,201			(1,770,007	)		(3,681,488	)
Revaluation of warrants and interest		1,186			1,558			9,824,307			9,828,051
Loss from discontinued operations		—			(15,266,896	)		—			(15,266,896	)
Net income (loss) before taxes	$	(2,358,496	)	$	(14,817,137	)	$	8,055,300		$	(9,120,333	)

Note 13.

Subsequent Events

Ronald C. Pruett, Jr., the Company’s chief executive officer, voluntarily waived his right to receive Additional Compensation, as defined in Section 3(a) of his employment agreement with the Company, beginning with the payroll period ending February 10, 2014 and continuing until Mr. Pruett otherwise notifies the Company. See Note 10.

25

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on our management’s beliefs, assumptions and expectations and on information currently available to our management. Generally, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements, which generally are not historical in nature. All statements that address operating or financial performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements, including, without limitation, our expectations with respect to product sales, future financings, or the commercial success of our products or services. We may not actually achieve the plans, projections or expectations disclosed in our forward-looking statements, and actual results, developments or events could differ materially from those disclosed in the forward-looking statements. Our management believes that these forward-looking statements are reasonable as and when made. However, you should not place undue reliance on forward-looking statements because they speak only as of the date when made. We do not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by federal securities laws and the rules of the Securities and Exchange Commission (the “SEC”). Forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, those described from time to time in our future reports filed with the SEC.

The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited interim consolidated condensed financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.

Overview

As Seen On TV, Inc. (“ASTV”, “we”, “our” or the “Company”) is a direct response marketing company and owner of AsSeenOnTV.com and eDiets.com. We identify, develop and market consumer products for global distribution via TV, Internet and retail channels. In February 2013 we acquired eDiets.com, Inc. (“eDiets”) and following this transaction our business is organized along two segments. The ASTV segment is a direct response marketing company that identifies and advises in the development and marketing of consumer products. The eDiets segment is a subscription-based nationwide weight-loss oriented digital subscription service.

Although the Company made the decision to divest its dietary meal component in September 2013, when considering the acquisition of eDiets, we believed that the combination could create a stronger, more scalable business and facilitate our strategic objective of becoming one of the top providers of ecommerce products and solutions.

To more effectively facilitate the integration of the two companies, and in an effort to enhance our abilities to achieve the expected benefits of the acquisition of eDiets, in May 2013, Ronald C. Pruett Jr. joined our Company as chief executive officer.

26

Since the hiring of Mr. Pruett and the closing of the acquisition of eDiets, we have undertaken extensive internal changes which we believe, when completed, will enable us to operate as a combined organization, utilizing common information and communication systems, operating procedures, financial controls and human resources practices. Those changes include a significant reduction in personnel and an enhanced emphasis brought about in part through the divestiture of our meal delivery service in our second fiscal quarter allowing the Company to better focus our limited resources on the eDiets digital subscription-based plans. In addition, we have directed significant Company resources to develop and deploy our ecommerce platforms on behalf of third parties, which we believe may prove more profitable for the Company. Under this structure, we would not recognize total revenue with sales transactions but rather a negotiated percentage of each transaction. This approach, if successful, would eliminate many costs and the administrative burden of purchasing and carrying inventories, while capitalizing on our ecommerce platforms and distribution potential already owned by the Company.

We believe this shift in focus to-ecommerce based revenues could be accomplished principally through maximizing resources and assets already held by the Company. While we currently receive a royalty through our ownership of the url AsSeenOnTV.com, this outlet presents the opportunity to generate revenues from both referrals or the placement and distribution of our own products or products for which we will receive a licensing fee. Distribution of third party products through this channel provides us with the opportunity to expand revenues without a costly proportionate expansion of infrastructure, including support personal and inventory purchase and management costs.

We also intend to continue to expand our management fee program for products featured in live televised shopping venues. As with an enhanced ecommerce program, partnering with successful product owners provides us with the opportunity to increase revenues across many product sectors, lending our expertise and access without a costly investment in infrastructure or inventory.

Within our eDiets subsidiary we intend to significantly expand our existing digital subscription program, coupled with strong celebrity endorsements. We have already commenced executing under this program with our relationships with well-known celebrities. In furtherance of our shift to focus to ecommerce platforms and to reduce operating expenses, on October 11, 2013, the Company completed the sale to Chefs Diet National Co., LLC (“Chef’s Diet”), a subsidiary of Chef’s Diet Corp., of certain assets (the “Meal Delivery Assets”) relating to the eDiets meal delivery business pursuant to an Asset Purchase and Revenue Sharing Agreement (the “Agreement”) dated August 23, 1013 between eDiets and Chef’s Diet. The disposed assets consist primarily of a customer database of active and inactive eDiets customers. In addition, eDiets granted Chef’s Diet a perpetual royalty-free license to content and certain other intellectual property used in connection with the eDiets meal delivery business. While the transaction was not completed until October 11, 2013, the transaction met the criteria of held-for-sale accounting as of September 30, 2013 and has been presented in accordance with the provisions of ASC 205-20 Discontinued Operations for all periods presented.

The base sales price of $1.1 million consisted of an initial cash payment of $200,000, which was collected prior to December 31, 2013, plus deferred cash payments totaling $900,000 payable as follows: (i) eight quarterly payments beginning January 1, 2014 in an amount equal to the greater of $56,250 or seven percent of adjusted gross revenue for the immediately preceding period, and (ii) eight quarterly payments beginning January 1, 2016 in an amount equal to the greater of $56,250 or five percent of adjusted gross revenue for the immediately preceding period. In addition, Chef’s Diet will make up to four quarterly bonus payments of up to $50,000 each if it meets certain customer acquisition and retention targets. The elimination of our meal delivery program, while having a negative effect on revenues in the near term, has had, and is expected to have, a significant reduction in operating expenses. As a result of this divestiture, the meal delivery component of our dietary programs has been recorded as a discontinued operation in our condensed consolidated financial statements.

In connection with the Agreement, the Company retained a perpetual, nonexclusive, worldwide, royalty free right and license to use the Meal Delivery Assets in its business provided that it shall not utilize such assets to promote any fresh, frozen or prepared meal program, as defined.

27

On December 18, 2013, the Company entered into a memorandum of understanding with Infusion Brands for the acquisition of Infusion Brands in a stock-for-stock transaction. The terms of the memorandum of understanding provide that, in exchange for 100% of the outstanding shares of Infusion Brands, the Company will issue a number of shares of its common stock to the shareholders of Infusion Brands to enable them to own in the aggregate 75% of the outstanding shares of the Company. The closing of the transaction is subject to a number of conditions precedent, including, but not limited to:

·

the satisfactory completion of due diligence on each company by the other company

·

the execution of a binding agreement and plan of merger by the parties; and

·

satisfaction or waiver of customary conditions precedent.

The Company has begun the due diligence process, and while there can be no assurances, has a target closing date for the transaction, assuming the satisfaction of the conditions precedent to closing, of March 31, 2014. However, as a result of the number of conditions precedent to close, investors should not place undue reliance on the execution of the memorandum of understanding, and there are no assurances that this transaction will ultimately be consummated.

The memorandum of understanding also provides that Infusion Brands will furnish up to $500,000 of interim financing to the Company during the period following execution of the memorandum of understanding and the closing of the transaction. As of December 31, 2013, the Company has received $150,000 under the financing agreement

Management believes that the acquisition of Infusion Brands, with their international distribution channels and expanding product lines, could significantly improve the Company’s operational results. Further, Infusion Brands will be able to capitalize on the Company’s eCommerce platforms already in place which we believe have been significantly enhanced by our recent restructuring program.

We continue to face a number of challenges during fiscal 2014, including operating within the highly competitive online diet industry, effectively responding to ever changing consumer preferences and completing our eDiets integration. We must also raise additional funds to provide the resources necessary to continue in business and to realize the expected benefits of our initiatives. The continuation of the Company’s business is dependent upon raising additional financial support. In light of the Company’s results from operations, the Company intends to continue to evaluate various possibilities, including: (i) raising additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt, (ii) selling one or more lines of business, or all or a portion of the Company’s assets, (iii) entering into a business combination, and (iv) aggressively restructuring existing operations, including reducing or eliminating less promising operations, liquidating assets, or significantly reducing or suspending our operations. These possibilities, to the extent available, may be on terms that result in significant dilution to the Company’s shareholders or that result in the Company’s shareholders losing all of their investment in the Company. There can be no assurance that the Company will be successful in effecting any of the above possibilities. If the Company’s efforts in this regard are unsuccessful, the Company will be required to further reduce or suspend operations and/or seek relief through a filing under the U.S. Bankruptcy Code. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

28

Going concern

We reported a net loss of approximately $9,120,000 for the nine month period ended December 31, 2013. At December 31, 2013, we had a working capital deficit of approximately $2.9 million, an accumulated deficit of approximately $22.7 million and cash used in operations for the nine months ended December 31, 2013 of approximately $2,590,000. Based on our recurring losses from operations and negative cash flows from operations, the report of our independent registered public accounting firm on our financial statements for the fiscal year ended March 31, 2013, contains an explanatory paragraph regarding our ability to continue as a going concern. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful in our efforts to increase our revenues and report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our Company.

Results of operations

The Company’s meal delivery operations were a component for our eDiets subsidiary which delivered fresh and frozen diet or wellness focused meals to our customers. Management believes the divestiture of this component, as described above, will allow the Company to streamline its operations and focus its limited resources on ecommerce based platforms, which it believes is the future of the dietary and wellness industries.

For the three month and nine month periods ending December 31, 2013, the Company’s discontinued meal delivery component had operational losses of $83,000 and $1,735,000, respectively. As a result of this divestiture, the Company recognized a non-cash charge of $14,631,000, including a write down of goodwill of $9,300,000 and $5,331,000 in identifiable intangible assets, resulting from the Company’s determination that it would not be able to recover the carrying value of its investment in this component and that it would not be able to recover the carrying value of its finite-lived intangible assets in this component and therefore recorded the related loss in discontinued operations. As a result of this impairment, the Company carries no remaining goodwill. No tangible assets or liabilities were transferred in the divestiture of the meal delivery component.

The results of operations for the meal delivery component has been reported as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented. The following table summarizes the results of operations for the discontinued component:

	Three Months Ended December 31, 2013			Nine Months Ended December 31, 2013
Net sales	$	23,692		$	1,975,963
Operating (loss)		(82,315	)		(1,735,458	)
Asset sale		—			1,100,000
Impairment charge related to goodwill and finite-lived intangibles		—			(14,631,439	)
Income tax benefit (expense)		—			—
Loss from discontinued operations, net of taxes	$	(82,315	)	$	(15,266,897	)

During the three and nine month period ended December 31, 2012, we had only one reporting segment, ASTV. Following our acquisition of eDiets.com completed February 28, 2013 we began reporting our operations in two segments. The ASTV segment is a direct response marketing company that identifies and advises in the development and marketing of consumer products. The eDiets segment is a subscription-based nationwide weight-loss oriented digital subscription service and, until our discontinuance of the meal delivery component in September 2013, provided dietary and wellness oriented meal delivery services. See Note 4.

29

The following tables provide a summary of our segment information for the three and nine month period ended December 31, 2013:

	Three Months Ended December 31, 2013
	ASTV			eDiets			Corporate and other			Total
Revenues	$	373,901		$	128,606		$	—		$	502,507
Costs of revenues		414,739			42,464			—			457,203
Gross profit (loss)		(40,838	)		86,142			—			45,304
Gross profit (loss) %		(11%	)		67%			0%			9%
Allocated operating expenses:
Selling and marketing expense		43,981			(101,909	)		—			(57,928	)
General and administrative expenses		559,726			95,299			560,359			1,215,394
Income (loss) from operations		(644,545	)		92,752			(560,359	)		(1,112,162	)
Revaluation of warrants and interest		(815	)		(4,534	)		3,463,483			3,458,132
Loss from discontinued operations		—			(82,315	)		—			(82,315	)
Net income (loss) before taxes	$	(645,360	)	$	5,903		$	2,903,112		$	2,263,655

	Nine Months Ended December 31, 2013
	ASTV			eDiets			Corporate and other			Total
Revenues	$	1,233,092		$	656,901		$	—		$	1,889,993
Costs of revenues		1,141,667			73,514			—			1,215,181
Gross profit		91,425			583,387			—			674,812
Gross profit %		7%			89%			—			36%
Allocated operating expenses:
Selling and marketing expense		126,915			(60,933	)		—			65,982
General and administrative expenses		2,324,192			196,119			1,770,007			4,290,318
Loss from operations		(2,359,682	)		448,201			(1,770,007	)		(3,681,488	)
Revaluation of warrants and interest		1,186			1,558			9,824,307			9,828,051
Loss from discontinued operations		—			(15,266,896	)		—			(15,266,896	)
Net income (loss) before taxes	$	(2,358,496	)	$	(14,817,137	)	$	8,055,300		$	(9,120,333	)

We measure the profit or loss of our segments or “segment operating income (loss).” We define segment operating income (loss) as income from operations before warrant revaluation income or loss, net interest expenses and income taxes and excludes unallocated corporate overhead. We have no intersegment revenues, profits or losses. The amounts under the caption, “Corporate and Other” in this table are unallocated corporate overhead items. Loss from discontinued operations reflects the losses from our meal delivery component and impairment of diet related intangibles including $5,331,000 in identifiable intangibles and $9,300,000 in related goodwill.

Revenues

ASTV segment

We generate revenues in our ASTV segment from a number of sources. In the fiscal 2013 and fiscal 2012 periods, these sources included:

·

heater sales,

·

other product sales,

·

speaking engagement fees,

·

infomercial production income, and

·

royalty fees.

30

While there can be no assurance, management believes that continuing to develop a marketing strategy based upon distributing developed products through our asseenontv.com url, will ultimately prove a successful strategy.

ASTV segment revenues for both the three month period and nine month period ended December 31, 2013 declined 94% and 82%, respectively, from the comparable periods of the preceding year. This very sharp decline was due to the absence of sales of our heater unit during the current year. Revenues related to the Company’s heater products totaled approximately $4.5 million for the three and nine month periods ending December 31, 2012. The suspension of these revenues represents the Company’s intentional shift in focus from traditional direct response, inventory intensive model, to an eCommerce based model which we believe requires less capital per revenue dollar and improvement of the Company’s long-term prospects.

Product sales represent limited ASTV sales of various consumer direct response products. These sales declined during the quarter ended December 31, 2013 and nine months ended December 31, 2013, compared to the prior year periods as the Company reduced expenditures on media spending to conserve cash during its restructuring resulting in reduced product sales revenue.

Commission and royalty fees income, totaling $264,000 and $92,000 in the three month periods ended December 31, 2013 and 2012, respectively, primarily represent fees received by the Company under an agreement associated with our AsSeenOnTV.com url and partnership fees associated with products appearing on home shopping networks. Commission and royalty fees income, totaling $439,000 and $180,000 in the nine month periods ended December 31, 2013 and 2012, respectively, also primarily represent fees received by the Company under an agreement associated with our AsSeenOnTV.com url and partnership fees associated with products appearing on home shopping networks. The royalty fees includes minimum fees due the Company resulting from its acquisition of the AsSeenOnTV.com url, completed in June 2012. While there can be no assurance, it is hoped that these royalty fees will increase in the future as web-related revenues for those utilizing our website increase.

Infomercial production ceased during the current fiscal year. This reflected the Company’s decision to shift away from infomercial production to ecommerce driven sales of consumer products, including ecommerce dietary products which the Company believes has a higher earnings potential. The Company has no plans to develop infomercial production operations in the future.

Under the terms of an agreement dated November 20, 2013, Tru Hair, Inc., a wholly owned subsidiary of the Company, licensed certain trademarks to a third party in exchange for a cash payment of $25,000 and an undertaking by the third party to use reasonable best efforts to market, distribute and sell certain inventory held by Tru Hair, Inc.

eDiets segment

The Company intends to continue to focus its efforts on diet related programs with an emphasis on ecommerce platforms. As discussed above, on October 11, 2013, the Company completed the sale to Chef’s Diet of certain assets relating to the eDiets meal delivery component. The elimination of our meal delivery program, while having a negative effect on revenues for the current periods, has, and will continue to, significantly reduce operating expenses. It will also enable us to dedicate our limited resources to developing our ecommerce platforms.

31

Cost of revenues

Overall, cost of revenues for the quarter ended December 31, 2013 represented 91% of revenues compared to 48% of revenues for the three month period ended December 31, 2012. This sharp increase between the periods is due primarily to a write-down of inventory during the quarter believed to be obsolete or otherwise slow moving totaling $230,000 as well as a change in the overall product mix and strategy from tangible products inventoried, held and sold by the Company to an ecommerce based approach. Management of the Company plans to continue to expand this model in the future. Cost of revenues for the nine month period ended December 31, 2013 was 64% of revenues compared to 56% of revenues for the nine month period ended December 31, 2012. As with the quarterly figures, this increase was attributable in larger part to the write-down of inventories. The Company believes that, while there can be no assurance, the shift in emphasis away from a traditional distribution of purchased inventory items to a more ecommerce based subscription or royalty based model will better utilize the Company’s limited resources, providing a higher return.

Costs associated with the ASTV segment product sales include the direct costs of purchasing the products marketed as well as fulfillment costs associated with the taking and shipment of orders, merchant discount fees, royalties, commissions and shipping and freight costs. The Company does not manufacture any products in-house and relies on third-party suppliers, located primarily outside of the United States, for its inventory. Accordingly, our cost of products acquired for sale could vary significantly if fuel and transportation costs were to increase in the future. Costs associated with the eDiets segment sales, following our divestiture of the meal delivery component, include credit card fees, product costs, fulfillment and shipping costs, as well as costs associated with revenue sharing or royalty costs related to license agreements with third party nutrition and fitness companies, Internet access fees and compensation for nutritional professionals.

Operating expenses

Operating expenses, consisting of selling and marketing expenses and general and administrative expenses, declined sharply for the three month and nine month periods ending December 31, 2013, compared to the comparable periods of the preceding year. The bulk of this decrease is reflected in selling and marketing expenses attributable to the absence of selling and marketing expenses related to the Company’s heater sales campaign in the prior year which accounted for 77% and 66%, respectively, of total revenues for the three and nine month periods ending December 31, 2012. There were no comparable heater sales or related costs for the three and nine month periods ending December 31, 2013. In addition, the Company recorded a credit or reduction in expense during the third quarter of approximately $121,000 related to the revaluation of warrants issued under a talent agreement resulting from a decline in the trading value of our stock.

General and administrative expenses declined approximately 25% for the quarter ended December 31, 2013, compared to the comparable period of the preceding year. This decrease was due primarily to our shift in sales focus away from inventory intensive direct response products with related support, towards a more eCommerce focused approach. General office expenses declined approximately $142,000, administrative salaries declined $72,000 as well as a decrease in administrative related travel.

General and administrative expenses for the nine months ended December 31, 2013, increased approximately 11% over the prior year. A significant component of this increase, approximately $493,000 over the nine month period, represents stock-based compensation resulting primarily from a company-wide grant of 2,075,000 options in December 2012 and the May 2013 grant of 3,050,000 options to our new chief executive officer, Mr. Ronald C. Pruett, Jr., a portion of which vested upon grant. Administrative salaries also increased by approximately $246,000 coupled with an increase in insurance related costs of approximately $300,000, due in part to our acquisition of eDiets in February 2013, and amortization expense related to acquisition related intangibles. These increases were offset by other cost reduction measures mentioned above. While there can be no assurance, we anticipate general and administrative expenses to decline in future periods as a percentage of sales as the Company implements its cost reduction program, which includes among other components, the reduction in administrative staff and related expenses.

32

Other (income) expenses

Other (income) expense primarily consists of the non-cash income or expense recognized on the periodic revaluation of the fair value of financing related warrants outstanding at the end of each period that, based on their provisions, are carried as liabilities on the Company’s records. For the three month period ended December 31, 2013, we reported warrant revaluation income of approximately $3,464,000 and expense of approximately $13,474,000 in the three month period ended December 31, 2012. For the nine month periods ended December 31, 2013 and 2012, we reported warrant revaluation income of approximately $9,824,000 and expense of approximately $8,791,000, respectively. These periodic revaluations have, and most likely will continue to, result in significant, non-cash income or expense being recognized at the end of any given period depending on fluctuations in the market value of our stock on each remeasurement date. Investors should not place undue emphasis on our other income resulting from our revaluation of warrants outstanding when evaluating our actual operating performance.

Liquidity and capital resources

Liquidity is the ability of a company to generate adequate amounts of cash to meet the company’s needs for cash to operate the business. At December 31, 2013, we had a working capital deficit of approximately $2.9 million as compared to a working capital deficit of approximately $9.6 million at March 31, 2013. At December 31, 2013, our current assets decreased 81% and our current liabilities decreased 75%, respectively, from March 31, 2013. The sharp decrease in current liabilities was primarily due to a sharp decline in the Company’s warrant liabilities, decreasing from $11,689,306 to $1,864,962 between the periods. This decline was attributable to a significant drop in the market price of our common stock, used in determining the fair value of the liability at the respective balance sheet dates. Principal changes in current assets at December 31, 2013 compared to March 31, 2013 include a decline in cash from approximately $2,353,000 to $190,000 attributable primarily to operational losses during the period and sharp decline in accounts receivable reflecting our sharp decline in sales revenue and our operational restructuring toward eCommerce based operations.

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States, which contemplate continuation as a going concern. As of December 31, 2013, we had approximately $190,000 in cash and cash equivalents. We have sustained substantial operational losses since our inception, and such operational losses have continued through December 31, 2013. We have financed our operations primarily through the issuance of shares of our common stock and the issuance of convertible notes. The Company cannot predict how long it will continue to incur losses or whether it will ever become profitable. These factors raise substantial doubt as to our ability to continue as a going concern. We have undertaken, and will continue to implement, various measures to address our financial condition, including:

·

Significantly curtailing costs and consolidated operations, where feasible.

·

Continuing to seek debt, equity and other forms of financing, including funding through strategic partnerships.

·

Reducing operations to conserve cash.

·

Deferring certain marketing activities.

·

Investigating and pursuing transactions with third parties, including strategic transaction and relationships.

If the company’s efforts in this regard are unsuccessful, the Company will be required to further reduce or suspend operations and/or seek relief through a filing under the U.S. Bankruptcy Code. The Company’s condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

Net cash used in operating activities for the nine month period ended December 31, 2013, was approximately $2,590,000. This use of cash was due in large part to our operational losses and decreases in the balance in accounts payable offset by a decrease in trade accounts receivable and inventory levels. The decline in accounts receivable and inventory levels primarily resulted from the wind-down of the Company’s heater sales program which is a seasonal product.

33

Commitments

In connection with the eDiets acquisition, on September 10, 2012, the Company received notice of a complaint filed in Broward County, Florida by an eDiets stockholder against eDiets, members of the board of directors of eDiets and the Company, alleging that eDiets breached its fiduciary duty to its stockholders by entering into the transaction for inadequate consideration. Prior to the deadline for the defendants to answer the complaint, the plaintiff and the defendants in the case filed a stipulation with the court allowing the plaintiff to file an amended complaint. The Company’s acquisition of eDiets was consummated on February 28, 2013. On November 19, 2013, the plaintiff voluntarily dismissed the case without prejudice.

On May 2, 2013, effective May 1, 2013, we entered into an employment agreement with Mr. Ronald C. Pruett Jr. to serve as our chief executive officer. The term of the agreement is for one year and will be automatically renewed for successive one-year periods unless a notice of non-renewal is given by either party or the agreement is otherwise terminated sooner in accordance with its provisions. Pursuant to the agreement, Mr. Pruett will receive an annual base salary of $275,000, together with an additional salary of $275,000 during the first year of his employment with us. Mr. Pruett’s base salary may be increased from time to time as determined by the compensation committee of the board of directors. In addition to his base salary, Mr. Pruett will be entitled to receive an annual cash bonus calculated by reference to our actual performance during the immediately preceding fiscal year measured against a revenue and adjusted EBITDA (earnings before income taxes, depreciation and amortization) target to be established by Mr. Pruett and the compensation committee and approved by the board of directors. As of November 18, 2013, Mr. Pruett and the compensation committee had yet to establish a revenue and adjusted EBITDA target for our fiscal year ending March 31, 2014. Mr. Pruett also received an option grant to purchase 425,000 shares (the “First Option Grant”) of our common stock and a second option grant to purchase 2,625,000 shares (the “Second Option Grant”) of our common stock. The First Option Grant vested on the grant date, May 6, 2013, and has a per share exercise price equal to $0.35, the average of the high bid and low asked prices of our common stock on the OTC Bulletin Board on the trading day immediately preceding the grant date. The Second Option Grant has a per share exercise price equal to $0.70. The Second Option Grant vests in four equal tranches on May 6, 2013, May 1, 2014, November 1, 2014 and May 1, 2015. Provided that the agreement has not been terminated, on December 31, 2013, Mr. Pruett will become entitled to receive subsequent grants of stock and options, at the compensation committee’s option, with an aggregate value of at least $918,750, vesting in four equal tranches on the grant date, May 1, 2014, November 1, 2014 and May 1, 2015.

If Mr. Pruett’s employment is terminated due to death, his estate will receive (i) six months’ base salary at his then current rate in a lump sum payment and (ii) one year of continued coverage under the Company’s employee benefit plans. If Mr. Pruett’s employment is terminated due to disability, he will receive (i) six months’ base salary at his then current rate, (ii) one year of continued coverage under the Company’s employee benefit plans and (iii) any earned but unpaid bonuses, provided that the Company may credit against such amounts any proceeds paid to Mr. Pruett with respect to any disability policy maintained for his benefit. If Mr. Pruett’s employment is terminated by the Company without cause or following a change in control or by Mr. Pruett for good reason or following a change in control, Mr. Pruett will receive (i) 12 months’ base salary at his then current rate, (ii) continued provision during such 12-month period of benefits under the Company’s employee benefit plans, (iii) immediate vesting of all granted but unvested stock options and (iv) a prorated payment of any bonus or other payments earned in connection with any bonus plan in which Mr. Pruett participated at the time of termination. The amount of each payment under (i) shall be reduced by one dollar for each three dollars otherwise payable, until the aggregate amount of all such reductions, together with the aggregate amount of bonus reductions described above, equals $275,000. Mr. Pruett will not be entitled to any compensation if his employment is terminated by the Company for cause or by Mr. Pruett in the absence of good reason.

34

On June 13, 2013, TV Goods, Inc. (“TV Goods”), the Company’s wholly owned subsidiary, entered into a termination agreement (the “Termination Agreement”) with Presser Direct, LLC (“Presser Direct”) under which it terminated a Purchasing and Marketing Agreement (the “P & M Agreement”) between TV Goods and Presser Direct dated March 7, 2012, relating to the manufacture, marketing, sale and distribution of the SeasonAire heater and related product lines. Under the Termination Agreement, TV Goods agreed to pay approximately $309,000 related to previously purchased inventory and approximately $146,000 attributable to royalty payments under the P & M Agreement, of which $65,000 was to be held in escrow pending delivery of replacements for damaged or defective SeasonAire heaters and related products previously sold by TV Goods. TV Goods also agreed to transfer title to certain assets relating to the products, including infomercials and intellectual property, to Presser Direct. Presser Direct agreed to pay TV Goods $50,000 for existing SeasonAire inventory, to assume obligations to make all royalty payments relating to SeasonAire sales after July 31, 2013 and to assume all liabilities relating to the SeasonAire products after June 13, 2013, except for certain warranty obligations relating to SeasonAire products sold prior to that date. TV Goods and Presser Direct released each other from all obligations under the P & M Agreement, so that the only surviving obligations were those arising under the Termination Agreement.

Leases

On February 1, 2012, the Company entered into a new 36-month lease agreement on our existing headquarters facility. Terms of the lease provide for base rent payments of $7,875 per month for the first twelve months, increasing 3% per year thereafter. The lease contains no provisions for a change in the base rent based on future events or contingent occurrences. In accordance with the provisions ASC 840-Leases, the Company is recognizing lease expenses on a straight-line basis, which total $8,114 per month over the lease term. In connection with the entering into the new leases, the Company recognized income of approximately $71,000 attributable to the recovery of the deferred rent obligation under the previous lease and wrote-off to lease expense $12,420 in security deposits attributable to the prior lease.

In September 2012 eDiets entered into a one year lease for office space in Pompano Beach, Florida. The lease covers approximately 8,800 square feet at a monthly base rent of $9,800 per month. The Company did not renew this lease upon expiration and no longer occupies this facility.

The following is a schedule by year of future minimum rental payments required under our lease agreement on December 31, 2013:

	Operating Lease
Year 1	$	91,900
Year 2		—
Year 3		—
Year 4		—
Year 5		—
	$	91,900

Base rent expense recognized by the Company, attributable to its headquarters facility and eDiets facility, was approximately $24,000 and $132,000 for the three month and nine month periods ended December 31, 2013, respectively, and $24,000 and $73,000 for the three month and nine month periods ending December 31, 2012.

Other Commitments

Under the terms of a 2010 private placement, the Company provided that it would use its best reasonable efforts to cause the related registration statement to become effective within 180 days of the termination date, July 26, 2010, of the offering. We have failed to comply with this registration rights provision and are obligated to make pro rata payments to the subscribers under the 2010 private placement in an amount equal to 1% per month of the aggregate amount invested by the subscribers up to a maximum of 6% of the aggregate amount invested by the subscribers. The maximum amount of penalty to which the Company may be subject is $156,000. The Company had recognized an accrued penalty of $156,000 at both December 31, 2013 and March 31, 2013, respectively.

35

Critical accounting policies

There have been no changes to our critical accounting policies in the nine months ended December 31, 2013. Critical accounting policies and the significant estimates made in accordance with them are regularly discussed with our audit committee. Those policies are discussed under “Critical accounting policies and estimates” in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as in our consolidated financial statements and the footnotes thereto for the fiscal year ended March 31, 2013, as filed with the SEC with our Annual Report on Form 10-K filed with the SEC on June 28, 2013.

Accounting Standards Updates

There have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended December 31, 2013, as compared to the recent accounting pronouncements described in the Company's Audited 2013 Financial Statements that are of material significance, or have potential material significance to the Company.

Off Balance Sheet Arrangements

As of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Quantitative and Qualitative Disclosures about Market Risk

Not applicable to smaller reporting companies.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management carried out an evaluation with the participation of our chief executive officer and chief financial officer who serve as our principal executive officer and principal financial and accounting officer, required by Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934 (the “Exchange Act”) of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our chief executive officer and chief financial officer concluded that as of December 31, 2013, our disclosure controls and procedures were effective such that the information relating to our Company required to be disclosed in our SEC reports (i) is recorded processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosures.

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

36

PART II.–OTHER FINANCIAL INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

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

ITEM 1A.

RISK FACTORS

Not applicable to smaller reporting companies.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the period covered by this report, except as previously disclosed, we have not sold shares of our common stock without registration under the Securities Act of 1933, as amended.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.

MINE SAFETY DISCLOSURE

Not applicable to our Company.

ITEM 5.

OTHER INFORMATION

(a)

None.

(b)

There have been no material changes to the procedures by which security holders may recommend nominees to the Company’s board of directors.

ITEM 6.

EXHIBITS

Exhibit Number		Description
10.1		Note Purchase Agreement dated as of December 23, 2013 (previously filed under Exhibit 10.7 to Form 8-K Current Report filed on December 23, 2013)
31.1		Certification Pursuant to Rule 13a-14(a) (Provided herewith)
31.2		Certification Pursuant to Rule 13a-14(a)/15d-14(a) (Provided herewith)
32.1		Certification Pursuant to Section 1350 (Provided herewith)
32.2		Certification Pursuant to Section 1350 (Provided herewith)
101.INS	*	XBRL Instance Document
101.SCH	*	XBRL Taxonomy Extension Schema Document
101.CAL	*	XBRL Taxonomy Calculation Linkbase Document
101.DEF	*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	*	XBRL Taxonomy Extension Presentation Linkbase Document

———————

* These exhibits are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such exhibits will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we incorporate them by reference.

37

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.

Date: February 12, 2014

As Seen On TV, Inc.

/s/ RONALD C. PRUETT, JR.

Ronald C. Pruett, Jr.

Chief Executive Officer

(Principal Executive Officer)

/s/ DENNIS W. HEALEY

Dennis W. Healey 

Chief Financial Officer

(Principal Financial Officer)

38

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
RULE 13a-14(a) OR RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, Ronald C. Pruett, Jr., certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2013 of As Seen On TV, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 12, 2014

/s/ RONALD C. PRUETT, JR.

Ronald C. Pruett, Jr.

Chief Executive Officer 

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OR
RULE 15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

I, Dennis W. Healey, certify that:

1.

I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2013 of As Seen On TV, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 12, 2014

/s/ DENNIS W. HEALEY

Dennis W. Healey 

Chief Financial Officer

(Principal Financial Officer)

EX-32.2

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C.
SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of As Seen On TV, Inc. (the “Company”) for the quarterly period ended December 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Executive Officer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on his knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 12, 2014

/s/ RONALD C. PRUETT, JR.

Ronald C. Pruett, Jr. 

Chief Executive Officer

(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of As Seen On TV, Inc. (the “Company”) for the quarterly period ended December 31, 3013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chief Financial Officer of the Company hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on his knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 12, 2014

/s/ DENNIS W. HEALEY

Dennis W. Healey 

Chief Financial Officer

(Principal Financial Officer)

XML

Discontinued Operations (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2013
Discontinued Operations [Abstract]
Initial cash payment	$ 200,000	$ 200,000
Proceeds from collections on notes receivable	100,000	200,000
Deferred cash payments	900,000	900,000
Quarterly payments beginning January 1, 2014, value	56,250	56,250
Quarterly payments beginning January 1, 2014, percent	7.00%	7.00%
Quarterly payments beginning January 1, 2016, value	56,250	56,250
Quarterly payments beginning January 1, 2016, percent	5.00%	5.00%
Quarterly bonus payment	50,000	50,000
Goodwill Impairment		9,300,000
Impairment of intangible assets		$ 6,248,439

XML

Stockholders' Equity (Schedule of Vesting Period) (Details)	9 Months Ended
	Dec. 31, 2013
Vesting Period One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of Grant	25.00%
Vesting Date	Aug. 01, 2013
Vesting Period Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of Grant	25.00%
Vesting Date	May 01, 2014
Vesting Period Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of Grant	25.00%
Vesting Date	Nov. 01, 2014
Vesting Period Four [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of Grant	25.00%
Vesting Date	May 01, 2015

XML

Commitments and Contingencies (Operating Leases) (Details) (USD $)	1 Months Ended		3 Months Ended		9 Months Ended
	May 31, 2013	Feb. 28, 2013	Dec. 31, 2013 sqft	Dec. 31, 2012	Dec. 31, 2013 sqft	Dec. 31, 2012	Feb. 02, 2012
Operating Leased Assets [Line Items]
Base salary	$ 275,000
Options granted, exercise price					$ 0.66	$ 0.68
Value of options granted	918,750
Minimum termination payment after reductions			275,000		275,000
Escrow deposit			65,000		65,000
Receivable from contract termination					50,000
Term of lease agreement (in months)			36 months		36 months
Area of real estate property			8,800		8,800
The annual percentage increase in rent payments							3.00%
Monthly base rent payment			9,800		9,800		7,875
Total monthly lease expense recognized over the lease term, using the straight-line method							8,114
Income recognized from recovery of deferred rent obligation		71,000
Expense recognized for write-off of security deposits		12,420
Rent expense			24,000	24,000	132,000	73,000
Future minimum rental payments required under lease agreement
Year 1			91,900		91,900
Year 2
Year 3
Year 4
Year 5
Total			91,900		91,900
First Option Grant [Member]
Operating Leased Assets [Line Items]
Stock options issued for compensation	425,000
Options granted, exercise price	$ 0.35
Second Option Grant [Member]
Operating Leased Assets [Line Items]
Stock options issued for compensation	2,625,000
Options granted, exercise price	$ 0.70
Inventories [Member]
Operating Leased Assets [Line Items]
Payment for contract termination					309,000
Royalties [Member]
Operating Leased Assets [Line Items]
Payment for contract termination					$ 146,000

XML

Stockholders' Equity (Common Stock Issued for Service) (Details) (USD $)	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Stockholders Equity Note [Line Items]
Options granted, exercise price	$ 0.66	$ 0.68
First Issuance [Member]
Stockholders Equity Note [Line Items]
Shares issued under consulting agreement, shares	1,500,000
Options granted, exercise price	$ 0.01
Date of Issuance	Within 10 days of effectiveness
Second Issuance [Member]
Stockholders Equity Note [Line Items]
Shares issued under consulting agreement, shares	1,250,000
Options granted, exercise price	$ 0.25
Date of Issuance	3 months from agreement
Third Issuance [Member]
Stockholders Equity Note [Line Items]
Shares issued under consulting agreement, shares	750,000
Options granted, exercise price	$ 0.50
Date of Issuance	12 months from agreement
Fourth Issuance [Member]
Stockholders Equity Note [Line Items]
Shares issued under consulting agreement, shares	1,000,000
Options granted, exercise price	$ 0.75
Date of Issuance	16 months from agreement
Fifth Issuance [Member]
Stockholders Equity Note [Line Items]
Shares issued under consulting agreement, shares	1,000,000
Options granted, exercise price	$ 1.00
Date of Issuance	20 months from agreement
Sixth Issuance [Member]
Stockholders Equity Note [Line Items]
Shares issued under consulting agreement, shares	1,000,000
Options granted, exercise price	$ 2.00
Date of Issuance	24 months from agreement
Total Issuance [Member]
Stockholders Equity Note [Line Items]
Shares issued under consulting agreement, shares	6,500,000

XML

Related Party Transactions (Details) (USD $)	3 Months Ended		9 Months Ended		1 Months Ended	9 Months Ended	1 Months Ended		9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Feb. 28, 2013 eDiets .Com [Member]	Dec. 31, 2013 eDiets .Com [Member]	Feb. 28, 2013 eDiets .Com [Member] Warrant [Member]	Feb. 28, 2013 eDiets .Com [Member] Common Stock [Member]	Dec. 31, 2013 Infusion Brands International Inc [Member]
Related Party Transaction [Line Items]
Stock issued for acquisition							494,328	988,654
Related party debt					$ 600,000				$ 150,000
Interest expense - related party	1,183		6,298		92,057	6,298			400
Notes payable officer						50,000
Interest rate									12.00%
Maturity date						Jun. 30, 2013
Interest accrued in the period				(28,133)		2,380
Repayment of related party debt						$ 50,000

XML

Summary of Significant Accounting Policies (Schedule of Property and Equipment) (Details) (USD $)	9 Months Ended
	Dec. 31, 2013	Mar. 31, 2013
Property and equipment [Line Items]
Property and equipment, gross	$ 192,195	$ 276,899
Less: accumulated depreciation and amortization	(141,576)	(132,098)
Property and equipment, net	50,619	144,801
Computers and software [Member]
Property and equipment [Line Items]
Property and equipment, gross	61,892	120,041
Property and equipment, estimated useful lives	3 years
Office equipment and furniture [Member]
Property and equipment [Line Items]
Property and equipment, gross	67,693	94,248
Office equipment and furniture [Member] | Minimum [Member]
Property and equipment [Line Items]
Property and equipment, estimated useful lives	5 years
Office equipment and furniture [Member] | Maximum [Member]
Property and equipment [Line Items]
Property and equipment, estimated useful lives	7 years
Leasehold improvements [Member]
Property and equipment [Line Items]
Property and equipment, gross	$ 62,610	$ 62,610
Leasehold improvements [Member] | Minimum [Member]
Property and equipment [Line Items]
Property and equipment, estimated useful lives	1 year
Leasehold improvements [Member] | Maximum [Member]
Property and equipment [Line Items]
Property and equipment, estimated useful lives	3 years

XML

Stockholders' Equity (Equity Compensation Plan) (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended		9 Months Ended			1 Months Ended	9 Months Ended	12 Months Ended	1 Months Ended								3 Months Ended	12 Months Ended	1 Months Ended						1 Months Ended
	May 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013 Maximum [Member]	Feb. 28, 2013 eDiets .Com [Member]	Dec. 31, 2013 eDiets .Com [Member]	Mar. 31, 2013 eDiets .Com [Member]	May 31, 2013 First Option Grant [Member]	May 31, 2010 First Option Grant [Member]	May 31, 2013 Second Option Grant [Member]	May 31, 2010 Second Option Grant [Member]	Aug. 31, 2013 Third Option Grant [Member]	May 31, 2010 2010 Executive Equity Incentive Plan [Member]	Sep. 30, 2011 2010 Non Executive Equity Incentive Plan [Member]	May 31, 2010 2010 Non Executive Equity Incentive Plan [Member]	Dec. 31, 2010 2010 Non Executive Equity Incentive Plan [Member]	Mar. 31, 2012 2010 Non Executive Equity Incentive Plan [Member]	Jun. 30, 2012 Direct Response Consultant [Member]	Jun. 04, 2012 Direct Response Consultant [Member]	Dec. 31, 2012 2013 Equity Compensation Plan [Member]	Sep. 30, 2012 2013 Equity Compensation Plan [Member]	May 06, 2013 2013 Equity Compensation Plan [Member]	Sep. 24, 2012 2013 Equity Compensation Plan [Member]	Dec. 31, 2012 The Plans [Member]	May 31, 2010 2 Officers And Directors [Member]	May 31, 2010 Officers And 2 Directors [Member]
Stockholders Equity Note [Line Items]
Granted				3,550,000	2,105,000					425,000	50,000	2,625,000	150,000	500,000	600,000		450,000				30,000					2,075,000	600,000
Share-based compensation		$ 186,000	$ 175,000	$ 803,000	$ 309,675			$ 694,000	$ 694,000					$ 22,250						$ 25,100
Equity Incentive Plan, shares authorized																									3,000,000
Stock option plan, additional shares authorized																3,000,000	50,000	100,000	75,000				6,000,000
Shares reserved for issuance		4,822,500		4,822,500																				9,000,000
Vesting percentage																										20.00%
Granted				$ 0.66	$ 0.68					$ 0.35		$ 0.70			$ 1.50		$ 1.50
Fair value of options granted	918,750			256,000		100,000		604,218
Vesting period for plan				6 years 3 months 29 days															18 months			5 years				5 years
Common stock, conversion ratio				1.2667			1.2667
Vested														125,000
Exercise period											5 years		2 years		5 years	5 years	5 years		5 years			10 years				10 years	5 years	2 years
Forfeited				(1,461,357)	(12,500)
Minimum percentage of fair market price for an exercise price				100.00%
Percentage of ownership of common stock, benchmark				10.00%
Minimum percentage of fair market price for an exercise price, exceeding benchmark ownership percentage				110.00%
Aggregate fair market value of underlying shares can not exceed				$ 100,000
Maximum exercise period for ownership exceeding benchmark				10 years

XML

Accrued expenses and other current liabilities (Tables)

9 Months Ended

Dec. 31, 2013

Accrued expenses and other current liabilities [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

	December 31, 2013		March 31, 2013
Accrued compensation	$	132,333	$	137,505
Accrued warranty		10,836		52,000
Accrued sales returns		-		156,838
Accrued professional fees		69,500		159,000
Accrued rents		2,651		2,874
Accrued severance		59,773		179,318
Accrued other		16,772		40,195
	$	291,865	$	727,730

XML

Stockholders' Equity (Preferred Stock) (Details) (USD $)	Dec. 31, 2013	Mar. 31, 2013
Stockholders' Equity [Abstract]
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, par value per share	$ 0.0001	$ 0.0001

XML

Accrued expenses and other current liabilities (Details) (USD $)	Dec. 31, 2013	Mar. 31, 2013
Accrued expenses and other current liabilities [Abstract]
Accrued compensation	$ 132,333	$ 137,505
Accrued warranty	10,836	52,000
Accrued sales returns		156,838
Accrued professional fees	69,500	159,000
Accrued rents	2,651	2,874
Accrued severance	59,773	179,318
Accrued other	16,772	40,195
Accrued expenses and other current liabilities	$ 291,865	$ 727,730

XML

eDiets Acquisition and Sale of Meal Delivery Service (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended				1 Months Ended		3 Months Ended	9 Months Ended	12 Months Ended				1 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2013	Feb. 28, 2013	Jul. 31, 2013 National Securities Corporation [Member]	Feb. 28, 2013 eDiets .Com [Member]	Dec. 31, 2013 eDiets .Com [Member]	Dec. 31, 2013 eDiets .Com [Member]	Mar. 31, 2013 eDiets .Com [Member]	Feb. 28, 2013 Director [Member]	Feb. 28, 2013 Former Director [Member]	Feb. 28, 2013 Former Landlord [Member]	Feb. 28, 2013 Warrant [Member] eDiets .Com [Member]
Business Acquisition [Line Items]
Number of shares issued for business acquisition								19,077,686
Common stock, conversion ratio			1.2667					1.2667
Total purchase consideration								$ 15,100,000
Cash consideration								2,400,000
Options issued in acquisition to eDiets employees								11,100,000
Fair value of consideration								900,000
Business acquisition, liabilities assumed						3,226,022		600,000
Interest accrued in the period				(28,133)				92,057
Number of shares converted								988,654							494,328
Conversion price								$ 0.70
Consulting fee							82,650
Common shares issued for services, shares							142,500
Goodwill					9,300,000
Transaction and transition related costs incurred											278,000
Net loss	2,263,655	(15,143,590)	(9,120,333)	(13,704,893)					82,000	15,267,000
Notes payable						463,672						100,000	100,000	263,672
Interest rate												5.00%	5.00%
Share-based compensation	186,000	175,000	803,000	309,675						694,000	694,000
Prior year net operating loss limitations										61,200,000
Prior year net operating loss limitations, maximum value per year	$ 500,000		$ 500,000						$ 500,000	$ 500,000

XML

Stockholders' Equity (Common Stock and Warrants) (Narrative) (Details) (USD $)	1 Months Ended	3 Months Ended	9 Months Ended		12 Months Ended					0 Months Ended	3 Months Ended	9 Months Ended					3 Months Ended	9 Months Ended	1 Months Ended					1 Months Ended
	May 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2013	Dec. 31, 2013 Minimum [Member]	Mar. 31, 2013 Minimum [Member]	Dec. 31, 2013 Maximum [Member]	Mar. 31, 2013 Maximum [Member]	Jun. 02, 2011 Warrant [Member]	Dec. 31, 2012 Warrant [Member]	Dec. 31, 2012 Warrant [Member]	Dec. 31, 2013 Warrant [Member] Minimum [Member]	Mar. 31, 2013 Warrant [Member] Minimum [Member]	Dec. 31, 2013 Warrant [Member] Maximum [Member]	Mar. 31, 2013 Warrant [Member] Maximum [Member]	Dec. 31, 2012 Cash [Member]	Dec. 31, 2012 Cash [Member]	Nov. 30, 2012 Eight Entertainment LLC [Member]	Jul. 31, 2013 National Securities Corporation [Member]	Jul. 31, 2013 Seen On TV LLC [Member]	Jun. 30, 2012 Seen On TV LLC [Member]	Jun. 28, 2012 Seen On TV LLC [Member]	Jun. 30, 2012 Mediterranean Securities Group LLC [Member]	Dec. 31, 2011 Mediterranean Securities Group LLC [Member]
Stockholders Equity Note [Line Items]
Payment amount																			$ 250,000
Stock forfieted	1,625,000
Marketing expense		150,000		150,000							136,000	136,000					14,000	14,000
Shares issued under consulting agreement, shares																				142,500
Shares issued under repricing agreement, shares																					316,268
Consulting fee																				82,650
Shares issued for services, shares			4,875,000		3,250,000														650,000					25,000	25,000
Stock compensation expense		0
Exercise price of warrants						0.01	0.01	2.00	2.00				0.595	0.595	0.80	0.80
Fair value of warrants issued										205,962															25,000
Accrued expense reclassified to equity																								25,000
Number of shares issued for business acquisition																						250,000
Value of shares issued in acquisition																							$ 257,500

XML

Notes Payable (Details) (USD $)	9 Months Ended						1 Months Ended				1 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2013	Feb. 28, 2013	Dec. 31, 2013 Maximum [Member]	Dec. 31, 2013 Minimum [Member]	Feb. 28, 2013 Director [Member]	Feb. 28, 2013 Former Landlord [Member]	Dec. 31, 2013 Former Landlord [Member]	Mar. 31, 2013 Former Landlord [Member]	Feb. 28, 2013 Former Director [Member]	Dec. 31, 2013 Former Director [Member]	Mar. 31, 2013 Former Director [Member]	Dec. 31, 2013 Seen On TV LLC [Member]	Mar. 31, 2013 Seen On TV LLC [Member]
Debt Instrument [Line Items]
Notes payable				$ 463,672			$ 100,000	$ 263,672			$ 100,000
Notes payable - current portion	383,138		281,805						102,060	102,060		100,000	100,000
Notes payable - non current	106,472		193,107	263,672					76,472	153,107				30,000	40,000
Interest rate					5.00%	8.40%	5.00%				5.00%
Maturity date							Jun. 30, 2013	Oct. 01, 2015			Jun. 30, 2013
Interest accrued in the period		$ (28,133)

XML

eDiets Acquisition and Sale of Meal Delivery Service

9 Months Ended

Dec. 31, 2013

eDiets Acquisition and Sale of Meal Delivery Service [Abstract]

eDiets Acquisition and Sale of Meal Delivery Service

Note 3.

eDiets Acquisition and Sale of Meal Delivery Service

On February 28, 2013, the Company completed the purchase of 100% of the outstanding common stock of eDiets.com, Inc., a publicly held company organized under the laws of the State of Delaware ("eDiets"), offering subscription-based weight-loss oriented meal delivery service and individualized digital subscription-based weight-loss and wellness programs. Pursuant to the terms and conditions of the Agreement and Plan of Merger by and among our Company, eDiets Acquisition Company, a Delaware corporation and wholly owned subsidiary of our Company, and eDiets, dated October 31, 2012 we issued an aggregate of 19,077,686 shares of our common stock, at the ratio of 1.2667 shares of our common stock for each outstanding share of eDiets' common stock, to the eDiets' stockholders. Following the closing, eDiets became a wholly owned subsidiary of our Company.

At completion, we believed the acquisition of eDiets could create a more scalable business and facilitate our strategic objective of becoming one of the top providers of ecommerce products and solutions. In addition, while there were no assurances, it was anticipated that the acquisition would allow us to expand our product offerings, realize potential synergies in marketing and media purchases, realize potential cost savings in administrative expenses and the costs associated with public company compliance, and take advantage of product cross-selling opportunities.

The total purchase price for eDiets was approximately $15.1 million. The purchase price consisted of approximately (i) $2.4 million in cash, (ii) $11.1 million in the Company's common stock, valued based on the closing price of the stock on February 28, 2013, (iii) $0.9 million representing the fair value of the Company's options issued to eDiets' employees and warrants issued to eDiets consultants, and (iv) assumed liability of $600,000 in principal and $92,057 of related accrued interest in eDiets notes payable to related parties, which converted into 988,654 shares of common stock at $0.70 per share and warrants to purchase 494,328 shares of common stock of the Company, all pursuant to the Agreement and Plan of Merger. In accordance with accounting standards of business combinations, we accounted for the acquisition of eDiets under the acquisition method. Under the acquisition method, the assets acquired and liabilities assumed at the date of acquisition were recorded in the consolidated financial statements at their respective fair values at the date of acquisition. The excess of the purchase price over the fair value of the acquired net assets has been recorded as goodwill. eDiets' results of operations are included in our consolidated financial statements from the date of acquisition.

The determination of the estimated fair value of the acquired assets and liabilities assumed required management to make significant estimates and assumptions. We determined the fair value by applying established valuation techniques, based on information that management believed to be relevant to this determination. The following table summarizes the purchase price allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition:

Cash and cash equivalents	$	241,344
Restricted cash		450,000
Accounts receivable		118,172
Inventory		75,522
Prepaid expenses and other assets		275,170
Property, plant and equipment		61,342
Intangibles
Customer relationships		6,000,000
URL's		1,000,000
Trademarks		859,439
Total assets acquired		9,080,989
Accounts payable		(2,318,986	)
Accrued expenses		(443,364	)
Notes payable		(463,672	)
Total liabilities assumed		(3,226,022	)
Net assets acquired	$	5,854,967

The purchase price exceeded the fair value of the net assets acquired by $9,300,000, which was recorded as goodwill. Acquisition costs, consisting of legal, consulting and other costs related to the acquisition aggregated approximately $278,000 and included $82,650 for an acquisition consulting fee payable in 142,500 shares of common stock which were issued in July 2013.

In connection with the Company's decision to divest the dietary meal delivery component in September 2013, the Company determined that it would not be able to recover the carrying value of its investment in this component and therefore recorded a loss which is included in discontinued operations. See Note 4.

The accompanying condensed consolidated financial statements do not include any revenues or expenses related to the eDiets business on or prior to February 28, 2013, the closing date of the acquisition. The condensed consolidated statements of operations for the three month and nine month periods ended December 31, 2013 include a loss from discontinued operations of approximately $82,000 and $15,267,000, respectively, related to eDiets.

In connection with the acquisition, the Company acquired an aggregate of $463,672 of notes payable, consisting of $100,000 due to a former director of eDiets, $100,000 due to a former director of eDiets who is currently a director of the Company and $263,672 due to a former landlord of eDiets. The annual interest rate on the director and former director notes is 5%. The landlord note is interest free, absent default.

In addition, under the provisions of ASC 805-Business Combinations, the Company recognized as stock-based compensation the difference in fair value between the eDiets options outstanding at the acquisition date and the replacement ASTV options granted. The fair value of the eDiets' options replaced was recorded as consideration in the acquisition. The excess fair value of the ASTV replacement options over the fair value of the eDiets options, totaling approximately $694,000, was recognized as compensation cost in the fiscal year ended March 31, 2013.

At the time of acquisition, eDiets had approximately $61.2 million in net operating loss carryforwards. Those net operating loss carryforwards will be subject to the Internal Revenue Code 382 ownership change rules which will limit future use by eDiets, as a subsidiary of the Company, to approximately $0.50 million per year.

XML

Warrant Liabilities (Schedule of Warrants Issued) (Details) (USD $)	9 Months Ended	12 Months Ended
	Dec. 31, 2013	Mar. 31, 2013
Class of Warrant or Right [Line Items]
Number of shares underlying the warrants	47,726,100	47,726,100
Minimum [Member]
Class of Warrant or Right [Line Items]
Exercise price	0.01	0.01
Maximum [Member]
Class of Warrant or Right [Line Items]
Exercise price	2.00	2.00
Warrant [Member]
Class of Warrant or Right [Line Items]
Number of shares underlying the warrants	47,726,100	47,726,100
Volatility	150.00%	133.00%
Risk-free interest rate, minimum	0.38%	0.36%
Risk-free interest rate, maximum	1.27%	0.77%
Expected dividend yield	0.00%	0.00%
Stock price	$ 0.08	$ 0.35
Warrant [Member] | Minimum [Member]
Class of Warrant or Right [Line Items]
Exercise price	0.595	0.595
Expected life in years	1 year 11 months 16 days	2 years 6 months
Warrant [Member] | Maximum [Member]
Class of Warrant or Right [Line Items]
Exercise price	0.80	0.80
Expected life in years	4 years	4 years 9 months

XML

Segment Reporting (Tables)

9 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Schedule of Business Segments

The following tables reflect results of operations from our business segments for the three month and six month periods ending December 31, 2013:

	Three Months Ended December 31, 2013
	ASTV			eDiets			Corporate and other		Total
Revenues	$	373,901		$	128,606		$	-	$	502,507
Costs of revenues		414,739			42,464			-		457,203
Gross profit (loss)		(40,838	)		86,142			-		45,304
Gross profit (loss) %		(11%	)		67%			0%		9%
Allocated operating expenses:
Selling and marketing expense		43,981			(101,909	)		-		(57,928	)
General and administrative expenses		559,726			95,299			560,369		1,215,394
Income (loss) from operations		(644,545	)		92,752			(560,369)		(1,112,162	)
Revaluation of warrants and interest		(815	)		(4,534	)		3,463,483		3,458,132
Loss from discontinued operations		-			(82,315	)		-		(82,315	)
Net income (loss) before taxes	$	(645,360	)	$	5,903		$	2,903,112	$	2,263,655

	Nine Months Ended December 31, 2013
	ASTV			eDiets			Corporate and other			Total
Revenues	$	1,233,092		$	656,901		$	-		$	1,889,993
Costs of revenues		1,141,667			73,514			-			1,215,181
Gross profit		91,425			583,387			-			674,812
Gross profit %		7%			89%			-			36%
Allocated operating expenses:
Selling and marketing expense		126,915			(60,933	)		-			65,982
General and administrative expenses		2,324,192			196,119			1,770,007			4,290,318
Loss from operations		(2,359,682	)		448,201			(1,770,007	)		(3,681,488	)
Revaluation of warrants and interest		1,186			1,558			9,824,307			9,828,051
Loss from discontinued operations		-			(15,266,896	)		-			(15,266,896	)
Net income (loss) before taxes	$	(2,358,496	)	$	(14,817,137	)	$	8,055,300		$	(9,120,333	)

XML

Stockholders' Equity (Tables)

9 Months Ended

Dec. 31, 2013

Stockholders Equity Note [Line Items]

Schedule of Options Issued for Service

In consideration the Company agreed to a one-time payment of $250,000 and the issuance of warrants to purchase up to 6,500,000 shares of common stock as follows:

Issuance	Number of Shares	Exercise Price	Date of Issuance
1	1,500,000	$0.01	Within 10 days of effectiveness
2	1,250,000	$0.25	3 months from agreement
3	750,000	$0.50	12 months from agreement
4	1,000,000	$0.75	16 months from agreement
5	1,000,000	$1.00	20 months from agreement
6	1,000,000	$2.00	24 months from agreement
	6,500,000

Schedule of Common Stock Purchase Warrants Valuation Assumptions

The assumptions used at the initial valuation date, November 19, 2012, and December 31, 2013, were as follows:

	Lowest Aggregate Fair Value
	Initial Valuation	December 31, 2013
Number of shares underlying warrants	3,250,000	4,875,000
Exercise prices	$0.01 - $2.00	$0.01 - $2.00
Volatility	174.0%	149.7%
Risk-free interest rate	0.33%	0.38%
Expected dividend yield	0.00%	0.00%
Expected warrant life (years)	3.00	1.90

Schedule of Warrants Outstanding

A summary of warrants outstanding at December 31, 2013, is as follows:

Summary of Warrants Outstanding

Warrant Description	Number of Warrants (A)		Exercise Prices	Expiration Dates
2010 Other Placements	975,000		$3.00-$10.00	January 13, 2014 - January 24, 2014
2011 Convertible Notes	431,251		$3.00-$10.00	April 11, 2014
2011 Private Placement	672,750		$3.00-$10.00	May 27, 2014 - June 15, 2014
2011 Bridge Warrant	8,789,064		$0.64	August 29, 2014
2011 Bridge Warrant Placement Agent	1,165,875		$0.64	August 29, 2014
2011 Unit Offering	33,277,837	(B)	$0.59	October 28, 2016
2011 Unit Offering Placement Agent	4,726,891	(B)	$0.59	October 28, 2016
2010 Other Placements	412,500		$0.64-$3.15	June 1, 2014 - June 22, 2015
2012 Bridge Warrant	1,137,735	(B)	$0.77	September 7, 2015 - September 20, 2015
2012 Bridge Warrant Placement Agent	227,546	(B)	$0.77	September 7, 2015
2012 Unit Offering	6,300,213	(B)	$0.80	November 14, 2015
2012 Unit Offering Placement Agent	1,561,544	(B)	$0.70-$0.80	November 14, 2017
2012 Talent Compensation	4,875,000		$0.01-$2.00	November 19, 2015
2013 Merger related notes converted	494,328	(B)	$0.80	November 14, 2015
2013 eDiets Warrants	910,835		$1.40-$4.74	February 7, 2014 - September 11, 2019
	65,958,369

-------

(A)

All warrants reflect post anti-dilution and repricing provisions applied.

(B)

Subject to potential further ant-dilution and repricing adjustment (See Note 7).

Schedule of Vesting Stock Options

Mr. Sandell's options vest under the following schedule:

Percent of Grant	Vesting Date
25%	August 1, 2013
25%	May 1, 2014
25%	November 1, 2014
25%	May 1, 2015

Schedule of Stock Options Activity

Information related to options granted under our option plans at December 31, 2013 and, 2012 and activity for each of the nine months then ended is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at April 1, 2013		5,933,708	(A)	$	2.32		6.55	$	44,475
Granted		3,550,000			0.66		-		-
Exercised		-			-		-		-
Forfeited		(1,461,357	)		5.97		-		-
Expired		(29,388	)		0.83		-		-
Outstanding at December 31, 2013		7,992,963		$	1.39		7.35	$	-
Exercisable at December 31, 2013		4,756,713		$	2.52		6.03	$	-

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at April 1, 2012		1,025,000		$	1.31		-	$	-
Granted		2,105,000			0.68		-		-
Exercised		-			-		-		-
Forfeited		(12,500	)		0.96		-		-
Expired		-			-		-		-
Outstanding at December 31, 2012		3,117,500		$	0.89		7.67	$	-
Exercisable at December 31, 2012		880,000		$	1.37		3.02	$	-

-------

(A)

Includes 2,816,208 eDiets acquisition adjusted replacement options.

Direct Response Consultant [Member]

Stockholders Equity Note [Line Items]

Schedule of Valuation Assumptions

The following table includes the assumptions used in valuing this grant:

Number of shares underlying the options	30,000
Exercise price	$0.87
Volatility	185	%
Risk-free interest rate	0.68	%
Expected dividend yield	0.00	%
Expected option life (years)	5

2010 Executive Equity Incentive Plan, 2010 Non Executive Equity Incentive Plan, and 2013 Equity Compensation Plan [Member]

Stockholders Equity Note [Line Items]

Schedule of Valuation Assumptions

The following table includes the assumptions used in valuing this grant:

Number of shares underlying the options	2,075,000
Exercise price	$0.68
Volatility	177	%
Risk-free interest rate	1.18	%
Expected dividend yield	0.00	%
Expected option life (years)	7

Chief Executive Officer [Member]

Stockholders Equity Note [Line Items]

Schedule of Valuation Assumptions

The following table includes the assumptions used in valuing this grant:

Number of shares underlying the option	425,000		2,625,000
Exercise price	$0.35		$0.70
Volatility	137	%	137	%
Risk-free interest rate	1.19	%	1.19	%
Expected dividend yield	0.00	%	0.00	%
Expected option life (years)	7		7

Chief Operating Officer [Member]

Stockholders Equity Note [Line Items]

Schedule of Valuation Assumptions

The following table includes the assumptions used in valuing this grant:

Number of shares underlying the options	500,000
Exercise price	$0.70
Volatility	159.03	%
Risk-free interest rate	2.15	%
Expected dividend yield	0.00	%
Expected option life (years)	7

XML

Stockholders' Equity (Schedule of Warrants Outstanding) (Details)	9 Months Ended
	Dec. 31, 2013		Mar. 31, 2013
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	47,726,100		47,726,100
Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	0.01		0.01
Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	2.00		2.00
Warrant [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	47,726,100		47,726,100
Warrant [Member] | Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	0.595		0.595
Warrant [Member] | Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	0.80		0.80
Warrant One [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	65,958,369
2010 Other Placements [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	975,000	[1]
Expiration Date, Start Date	Jan. 13, 2013
Expiration Date, End Date	Jan. 24, 2014
2010 Other Placements [Member] | Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	3.00
2010 Other Placements [Member] | Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	10.00
2011 Convertible Notes [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	431,251	[1]
Expiration Date, End Date	Apr. 11, 2014
2011 Convertible Notes [Member] | Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	3.00
2011 Convertible Notes [Member] | Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	10.00
2011 Private Placement [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	672,750	[1]
Expiration Date, Start Date	May 27, 2014
Expiration Date, End Date	Jun. 15, 2014
Exercise price	0.64
2011 Private Placement [Member] | Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	3.00
2011 Private Placement [Member] | Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	10.00
2011 Bridge Warrant [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	8,789,064	[1]
Expiration Date, End Date	Aug. 29, 2014
2011 Bridge Warrant Placement Agent [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	1,165,875	[1]
Expiration Date, End Date	Aug. 29, 2014
Exercise price	0.64
2011 Unit Offering [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	33,277,837	[1],[2]	33,277,842
Expiration Date, End Date	Oct. 28, 2016
Exercise price	0.59
2011 Unit Offering Placement Agent [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	4,726,891	[1],[2]	4,726,892
Expiration Date, End Date	Oct. 28, 2016
Exercise price	0.59
2010 Other Placements One [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	412,500	[1]
Expiration Date, Start Date	Jun. 01, 2014
Expiration Date, End Date	Jun. 22, 2015
2010 Other Placements One [Member] | Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	0.64
2010 Other Placements One [Member] | Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	3.15
2012 Bridge Warrant [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	1,137,735	[1],[2]	1,137,735
Expiration Date, Start Date	Sep. 07, 2015
Expiration Date, End Date	Sep. 20, 2015
Exercise price	0.77
2012 Bridge Placement Agent Warrant [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	227,546	[1],[2]	227,546
Expiration Date, End Date	Sep. 07, 2015
Exercise price	0.77
2012 Unit Offering [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	6,300,213	[1],[2]	6,300,213
Expiration Date, End Date	Nov. 14, 2015
Exercise price	0.80
2012 Unit Offering Placement Agent [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	1,561,544	[1],[2]	1,561,544
Expiration Date, End Date	Nov. 14, 2017
2012 Unit Offering Placement Agent [Member] | Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	0.70
2012 Unit Offering Placement Agent [Member] | Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	0.80
2012 Talent Compensation [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	4,875,000	[1]
Expiration Date, End Date	Nov. 19, 2015
2012 Talent Compensation [Member] | Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	0.01
2012 Talent Compensation [Member] | Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	2.00
2013 Merger related notes converted [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	494,328	[1],[2]	494,328
Expiration Date, End Date	Nov. 14, 2015
Exercise price	0.80
2013 eDiets Warrants [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Warrants outstanding	910,835	[1]
Expiration Date, Start Date	Feb. 07, 2014
Expiration Date, End Date	Sep. 11, 2015
2013 eDiets Warrants [Member] | Minimum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	1.40
2013 eDiets Warrants [Member] | Maximum [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Exercise price	4.74

[1] All warrants reflect post anti-dilution and repricing provisions applied.

[2] Subject to potential further ant-dilution and repricing adjustment (See Note 7).

XML

Warrant Liabilities (Schedule of Warrant Liabilities at Fair Value) (Details) (USD $)	9 Months Ended			12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012	Mar. 31, 2013
Number of Warrants [Abstract]
Number of Warrants Outstanding, beginning balance	47,726,100
Number of Warrants Outstanding, ending balance	47,726,100			47,726,100
Fair Value, beginning balance	$ 11,689,306		$ 25,797,615	$ 25,797,615
Initial Measurements			6,030,882
Increase (Decrease) in Fair Value	(9,824,344)		8,790,512	(6,359,963)
Reclassed to Equity			(6,386,307)
Fair Value, ending balance	1,864,962		34,232,702	11,689,306
Warrant [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, ending balance	47,726,100			47,726,100
Bridge Warrant [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, ending balance	8,789,064	[1]
Fair Value, beginning balance			6,604,706	6,604,706
Initial Measurements
Increase (Decrease) in Fair Value			(966,334)
Reclassed to Equity			(5,638,372)
Fair Value, ending balance
Bridge Warrant Placement Agent [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, ending balance	1,165,875	[1]
Fair Value, beginning balance			876,119	876,119
Initial Measurements
Increase (Decrease) in Fair Value			(128,184)
Reclassed to Equity			(747,935)
Fair Value, ending balance
Unit Offerings [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, beginning balance	33,277,842
Number of Warrants Outstanding, ending balance	33,277,837	[1],[2]
Fair Value, beginning balance	8,531,735		15,816,980	15,816,980
Initial Measurements
Increase (Decrease) in Fair Value	(7,111,367)		8,819,955
Reclassed to Equity
Fair Value, ending balance	1,420,368		24,636,935
Unit Offerings Placement Agent [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, beginning balance	4,726,892
Number of Warrants Outstanding, ending balance	4,726,891	[1],[2]
Fair Value, beginning balance	1,073,855		2,499,810	2,499,810
Initial Measurements
Increase (Decrease) in Fair Value	(895,079)		601,142
Reclassed to Equity
Fair Value, ending balance	178,776		3,100,952
2012 Bridge Warrant [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, beginning balance	1,137,735
Number of Warrants Outstanding, ending balance	1,137,735	[1],[2]
Fair Value, beginning balance	231,691
Initial Measurements			716,760
Increase (Decrease) in Fair Value	(206,020)		62,430
Reclassed to Equity
Fair Value, ending balance	25,671		779,190
2012 Bridge Placement Agent Warrant [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, beginning balance	227,546
Number of Warrants Outstanding, ending balance	227,546	[1],[2]
Fair Value, beginning balance	46,338
Initial Measurements			143,352
Increase (Decrease) in Fair Value	(41,204)		12,485
Reclassed to Equity
Fair Value, ending balance	5,134		155,837
2012 Unit Offering [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, beginning balance	6,300,213
Number of Warrants Outstanding, ending balance	6,300,213	[1],[2]
Fair Value, beginning balance	1,268,686
Initial Measurements			4,075,834
Increase (Decrease) in Fair Value	(1,129,571)		296,021
Reclassed to Equity
Fair Value, ending balance	139,115		4,371,855
2012 Unit Offering Placement Agent [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, beginning balance	1,561,544
Number of Warrants Outstanding, ending balance	1,561,544	[1],[2]
Fair Value, beginning balance	432,735
Initial Measurements			1,094,936
Increase (Decrease) in Fair Value	(349,568)		92,997
Reclassed to Equity
Fair Value, ending balance	83,167		1,187,933
2013 Merger related notes converted [Member]
Number of Warrants [Abstract]
Number of Warrants Outstanding, beginning balance	494,328
Number of Warrants Outstanding, ending balance	494,328	[1],[2]
Fair Value, beginning balance	104,266
Initial Measurements
Increase (Decrease) in Fair Value	(91,535)
Reclassed to Equity
Fair Value, ending balance	$ 12,731

[1] All warrants reflect post anti-dilution and repricing provisions applied.

[2] Subject to potential further ant-dilution and repricing adjustment (See Note 7).

XML

Description of Our Business, Liquidity and Going Concern, and Basis of Presentation (Details) (USD $)						1 Months Ended
	Dec. 31, 2013	Nov. 20, 2013	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Feb. 28, 2013 eDiets.com [Member]
Business Acquisition [Line Items]
Percentage of acquired outstanding stock						100.00%
Cash and cash equivalents	$ 189,658		$ 2,352,730	$ 4,162,068	$ 4,683,186
Working capital	(2,900,000)
Accumulated deficit	(22,692,182)		(13,571,849)
Cash payment for licensed trademarks		$ 25,000

XML

Summary of Significant Accounting Policies (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2013
Summary of Significant Accounting Policies [Abstract]
Allowance for estimated sales returns					$ 209,000
Deferred revenue	77,559		77,559		173,750
Allowance for doubtful accounts					152,000
Depreciation and amortization expense	9,000	13,000	52,000	38,000
Concentration Risk [Line Items]
Advertising and promotional costs	4,000	16,000	34,000	70,000
Accounts Receivable [Member]
Concentration Risk [Line Items]
Concentration of credit risk	$ 288,765		$ 288,765

XML

Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2.

Summary of Significant Accounting Policies

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reported periods. Our management believes the estimates utilized in preparing our consolidated financial statements are reasonable. Actual results could differ from these estimates.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. We believe the following critical accounting policies involve the most significant judgments and estimates used in the preparation of our consolidated financial statements.

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.

Allowance for Sales Returns: In the direct response industry, purchased items are generally returnable for a certain period after purchase. We attempt to estimate returns and provide an allowance for sales returns where applicable. Our estimates are based on historical experience and knowledge of the products sold. The allowance for estimated sales returns totaled $0 and approximately $209,000 at December 31, 2013 and March 31, 2013, respectively.

Goodwill: Goodwill is not amortized but is subject to periodic testing for impairment in accordance with Accounting Standards Codification ("ASC") Topic 350 -- Intangibles - Goodwill and Other - Testing Indefinite-Lived Intangible Assets for Impairment. The test for impairment was to be conducted annually or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. In connection with the Company's decision to divest the dietary meal delivery component in September 2013, the Company determined that it would not be able to recover the carrying value of its investment in this component and therefore recorded a loss of $9,300,000 related to the associated goodwill, which was recorded in loss from discontinued operations.

The following provides a roll-forward of the Company's goodwill:

Balance as of March 31, 2013	$	9,300,000	)
Impairment		(9,300,000	)
Balance as of December 31, 2013	$	-

Intangible Assets: Intangible assets include acquired customer relationships, urls and trademarks. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets of five years in accordance with ASC Topic 350 -- Intangibles - Goodwill and Other - Testing Indefinite-Lived Intangible Assets for Impairment. Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In connection with the Company's decision to divest the dietary meal delivery component in September 2013, the Company determined that it would not be able to recover the carrying value of its finite-lived intangible assets in this component and therefore recorded a loss of $5,331,000 which represented the excess carrying value over the related fair value of these assets, which was recorded in loss from discontinued operations.

Income Taxes: We use the asset and liability method to determine our income tax expense or benefit. Deferred tax assets and liabilities are computed based on temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that are expected to be in effect when the differences are expected to be recovered or settled. Any resulting net deferred tax assets are evaluated for recoverability and, accordingly, a valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax asset will not be realized.

Restricted Cash

Restricted cash represents funds held by eDiets credit card processors.

Revenue Recognition

We recognize revenue from product sales in accordance with Financial Accounting Standards Board ("FASB") ASC 605 - Revenue Recognition. Following agreements or orders from customers, we ship products to our customers often through a third party facilitator. Revenue from product sales is only recognized when substantially all the risks and rewards of ownership have transferred to our customers, the selling price is fixed and collection is reasonably assured. Typically, these criteria are met when our customer's order is received and we receive acknowledgment of receipt by a third party shipper and collection is reasonably assured.

We recognized deferred revenue for our dietary meal delivery program as payment is made in advance of the actual meal delivery. We also recognize deferred revenue related to our online dietary subscription services as payments are made in advance of the full subscription period. As of December 31, 2013 and March 31, 2013, we had recognized deferred revenue of approximately $78,000 and $174,000, respectively.

The Company has a return policy on its ASTV sales whereby the customer can return any product within 60-days of receipt for a full refund, excluding shipping and handling. However, historically the Company has accepted returns past 60-days of receipt. The Company provides an allowance for returns based upon specific product warranty agreements and past experience and industry knowledge. All significant returns for the periods presented have been offset against gross sales. The Company also provides a reserve for warranties, which is not significant and is included in accrued expense.

eDiets' meal delivery revenue, through the divestiture date, was recognized upon delivery and transfer of title to the product. This occurred upon shipment from the Company's fulfillment center and delivery to the end-customer. eDiets' digital revenue is generated by the Company offering membership subscriptions to the proprietary content contained in its websites. Subscriptions are paid in advance, mainly via credit/debit cards, and cash receipts are recognized as deferred revenue and are recorded as revenue on a straight-line basis over the period of the digital plan subscription.

Receivables

Accounts receivable consists of amounts due from the sale of our direct response, home shopping related products and dietary programs. Our allowance for doubtful accounts at December 31, 2013 and March 31, 2013, totaled $0 and $152,000, respectively. The allowances are estimated based on historical customer experience and industry knowledge.

Inventories and Advances on Inventory Purchases

Inventories are stated at the lower of cost or market. Cost is determined using a first-in, first-out, or FIFO, method. We review our inventory for excess or obsolete inventory and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value.

Advances on inventory purchases represent payments made to our product suppliers in advance of delivery to the Company. It is common industry practice to require a substantial deposit against products ordered before commencement of manufacturing, particularly with off-shore suppliers. Additional advance payments may also be required upon achievement of certain agreed upon manufacturing or shipment benchmarks. Upon delivery and receipt by the Company of the items ordered, and the Company taking title to the goods, the balances are transferred to inventory.

Property and Equipment, net

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

Property and equipment, net consists of the following:

Property and equipment	Estimated Useful Lives	December 31, 2013			March 31, 2013
Computers and software	3 Years	$	61,892		$	120,041
Office equipment and furniture	5-7 Years		67,693			94,248
Leasehold improvements	1-3 Years		62,610			62,610
			192,195			276,899
Less: accumulated depreciation and amortization			(141,576	)		(132,098	)
		$	50,619		$	144,801

Depreciation and amortization expense totaled approximately $9,000 and $52,000 for the three and nine month periods ended December 31, 2013, respectively, and $13,000 and $38,000 for the three and nine month periods ending December 31, 2012.

Intangible Assets

Intangible assets consisted of the following at December 31, 2013 and March 31, 2013:

	March 31, 2013			Amortization Expense for the Nine Months Ended December 31, 2013			Impairment			Additions		December 31, 2013			Estimated Useful Life
Customer relationships	$	6,000,000		$			$	(5,000,000	)	$	-	$	1,000,000		5 years
URL's		1,000,000						(660,000	)		98,956		438,956		5 years
Trademarks		859,439						(588,439	)		-		271,000		5 years
AsSeenOnTV.com		2,839,216									-		2,839,216		Indefinite
		10,698,655						(6,248,439	)		98,956		4,549,172
Accumulated amortization		(131,000	)		(866,500	)		917,000			-		(80,550	)
	$	10,567,655		$	(866,500	)	$	(5,331,439	)	$	98,956	$	4,468,622

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

The straight-line method is being used to amortize the Company's finite lived intangible assets over their respective lives. Related amortization expense recognized was approximately $81,000 and $867,000 for the three and nine month periods ended December 31, 2013, respectively. Amortization expense for the next five succeeding fiscal years is estimated as follows:

March 31,
2014 remaining three months	$   90,000
2015	$ 342,000
2016	$ 342,000
2017	$ 342,000
2018	$ 342,000
2019	$ 171,000

Earnings (Loss) Per Share

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

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2013		2012		2013		2012
Stock options		7,992,963		1,606,359		7,992,963		1,231,136
Warrants		64,833,369		64,172,176		64,833,369		58,978,667
		72,826,332		65,778,535		72,826,332		60,209,803

Concentration of Credit Risk

Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash, cash equivalents and trade accounts receivable. Cash and cash equivalents are 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. Concentration of credit risk with respect to our trade accounts receivable to our customers is limited to $288,765 at December 31, 2013. Credit is extended to our customers, based on an evaluation of a customer's financial condition and collateral is not required.

Advertising and Promotional Costs

Advertising and promotional costs are expensed when incurred and totaled approximately $4,000 and $16,000 for the three month periods ended December 31, 2013 and 2012, respectively, and approximately $34,000 and $70,000 for the nine month periods ended December 31, 2013 and 2012, respectively.

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 March 31, 2013, respectively. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

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

The three levels of the fair value hierarchy are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

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

Accounting Standards Updates

There have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended December 31, 2013, as compared to the recent accounting pronouncements described in the Company's Audited 2013 Financial Statements that are of material significance, or have potential material significance to the Company.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All inter-company account balances and transactions have been eliminated in consolidation.

XML

Summary of Significant Accounting Policies (Schedule of Goodwill) (Details) (USD $)	9 Months Ended
	Dec. 31, 2013
Summary of Significant Accounting Policies [Abstract]
Goodwill balance, beginning	$ 9,300,000
Goodwill Impairment	(9,300,000)
Goodwill balance, ending

XML

Discontinued Operations (Schedule of Results of Operations) (Details) (USD $)	3 Months Ended	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2013
Discontinued Operations [Abstract]
Net sales	$ 23,692	$ 1,975,673
Operating (loss)	(82,315)	(1,735,457)
Asset sale		1,100,000
Impairment charge related to goodwill and finite-lived intangibles		(14,631,439)
Income tax benefit (expense)
Loss from discontinued operations, net of taxes	$ (82,315)	$ (15,266,896)

XML

Stockholders' Equity (Schedule of Valuation Assumptions) (Details)	9 Months Ended	12 Months Ended									1 Months Ended		9 Months Ended
	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2013 Minimum [Member]	Mar. 31, 2013 Minimum [Member]	Dec. 31, 2013 Maximum [Member]	Mar. 31, 2013 Maximum [Member]	Dec. 31, 2013 Warrant [Member] Minimum [Member]	Mar. 31, 2013 Warrant [Member] Minimum [Member]	Dec. 31, 2013 Warrant [Member] Maximum [Member]	Mar. 31, 2013 Warrant [Member] Maximum [Member]	Jun. 30, 2012 Direct Response Consultant [Member]	Dec. 31, 2012 2010 Executive Equity Incentive Plan, 2010 Non Executive Equity Incentive Plan, and 2013 Equity Compensation Plan [Member]	Dec. 31, 2013 First Option Grant [Member]	Dec. 31, 2013 Second Option Grant [Member]	Dec. 31, 2013 Third Option Grant [Member]
Stockholders Equity Note [Line Items]
Shares issued for services, shares	4,875,000	3,250,000									30,000	2,075,000	425,000	2,625,000	500,000
Exercise price			0.01	0.01	2.00	2.00	0.595	0.595	0.80	0.80	0.87	0.68	0.35	0.70	0.70
Volatility	149.70%	174.00%									185.00%	177.00%	137.00%	137.00%	159.03%
Risk-free interest rate	0.38%	0.33%									0.68%	1.18%	1.19%	1.19%	2.15%
Expected dividend yield	0.00%	0.00%									0.00%	0.00%	0.00%	0.00%	0.00%
Expected life	1 year 10 months 24 days	3 years									5 years	7 years	7 years	7 years	7 years

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2013	Mar. 31, 2013
Current assets:
Cash and cash equivalents	$ 189,658	$ 2,352,730
Accounts receivable, net	288,765	2,559,332
Advances on inventory purchases		67,455
Inventories	86,123	788,727
Note receivable on asset sale - current	225,000
Prepaid expenses and other current assets	450,477	792,450
Total current assets	1,240,023	6,560,694
Restricted cash - non current	82,811	450,000
Certificate of deposit - non current		50,489
Note receivable on asset sale - non current	675,000
Property and equipment, net	50,619	144,801
Goodwill		9,300,000
Intangible assets, net	4,468,622	10,567,655
Deposits	2,185	17,504
Total assets	6,519,260	27,091,143
Current liabilities:
Accounts payable	421,127	1,366,426
Deferred revenue	77,559	173,750
Accrued registration rights penalty	156,000	156,000
Accrued expenses and other current liabilities	291,865	727,730
Note payable - related party		100,000
Accrued interest - related party	2,380	425
Notes payable - current portion	383,138	281,805
Warrant liability	1,864,962	11,689,306
Current liabilities of discontinued operations	918,125	1,673,368
Total current liabilities	4,115,156	16,168,810
Notes payable - non current	106,472	193,107
Commitments and contingencies
Stockholders' equity (deficiency):
Preferred stock, $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding at December 31, 2013 and March 31, 2013, respectively.
Common stock, $.0001 par value; 750,000,000 shares authorized and 71,741,250 and 71,282,066 issued and outstanding at December 31, 2013 and March 31, 2013, respectively.	7,174	7,128
Additional paid-in capital	24,982,640	24,293,947
Accumulated deficit	(22,692,182)	(13,571,849)
Total shareholders' equity	2,297,632	10,729,226
Total liabilities and shareholders' equity	$ 6,519,260	$ 27,091,143

XML

Warrant Liabilities (Schedule of Warrants Subject to Remeasurement) (Details)	9 Months Ended			9 Months Ended
	Dec. 31, 2013	Dec. 31, 2013 Warrant [Member]	Mar. 31, 2013 Warrant [Member]	Dec. 31, 2013 2011 Unit Offering [Member]		Dec. 31, 2013 2011 Unit Offering Placement Agent [Member]		Dec. 31, 2013 2012 Bridge Warrant [Member]		Dec. 31, 2013 2012 Bridge Placement Agent Warrant [Member]		Dec. 31, 2013 2012 Unit Offering [Member]		Dec. 31, 2013 2012 Unit Offering Placement Agent [Member]		Dec. 31, 2013 2013 Merger related notes converted [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Number of Warrants Outstanding, beginning balance	47,726,100	47,726,100	47,726,100	33,277,842		4,726,892		1,137,735		227,546		6,300,213		1,561,544		494,328
Warrant Additions
Warrant Reductions
Number of Warrants Outstanding, ending balance	47,726,100	47,726,100	47,726,100	33,277,837	[1],[2]	4,726,891	[1],[2]	1,137,735	[1],[2]	227,546	[1],[2]	6,300,213	[1],[2]	1,561,544	[1],[2]	494,328	[1],[2]

[1] All warrants reflect post anti-dilution and repricing provisions applied.

[2] Subject to potential further ant-dilution and repricing adjustment (See Note 7).

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net income (loss)	$ (9,120,333)	$ (13,704,893)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	918,147	38,190
Impairment related to divestiture of meal delivery component	14,631,439
Meal delivery component asset sale	(1,100,000)
Amortization of discount on convertible debt		1,249,793
Amortization of deferred financing costs		305,492
Loss on disposal of property and equipment	33,060
Warrants issued for services	(114,129)	134,367
Share-based compensation	802,868	309,675
Shares issued for consulting services		292,496
Change in fair value of warrants	(9,824,344)	8,790,512
Accrued interest - convertible note		28,133
Inventory write-off	238,399	231,750
Changes in operating assets and liabilities:
Accounts receivable	2,270,567	(1,379,105)
Advances on inventory purchases	67,455	(31,620)
Inventories, net	464,205	(1,114,886)
Prepaid expenses and other current assets	357,634	(441,279)
Increase (decrease) in deposits	15,319	(2,185)
Accounts payable, including liabilities related to discontinued operations	(1,700,542)	638,754
Deferred revenue	(96,191)	(27,750)
Accrued interest expense - related party	1,955
Accrued expenses and other current liabilities	(435,867)	174,093
Net cash used in operating activities	(2,590,358)	(4,508,463)
Cash flows from investing activities:
Decrease in restricted cash	367,189
Decrease in note receivable		(2,000,000)
Certificate of deposit - non current	50,489	(382)
Proceeds from collections on notes receivable	200,000
Purchase of intangible assets	(98,956)	(1,565,525)
Purchases of property, plant and equipment	(6,134)	(3,627)
Net cash provided by (used in) investing activities	512,588	(3,569,534)
Cash flows from financing activities:
Proceeds from issuance of convertible debt		1,275,000
Costs associated with convertible debt		(162,060)
Proceeds of notes payable	150,000	159,812
Repayment of notes payable	(135,302)	(117,462)
Repayment of note payable - related party	(100,000)
Proceeds from private placements of common stock		7,287,200
Costs associated with private placement of common stock		(885,611)
Net cash provided by (used in) financing activities	(85,302)	7,556,879
Net cash increase (decrease) in cash and cash equivalents	(2,163,072)	(521,118)
Cash and cash equivalents - beginning of period	2,352,730	4,683,186
Cash and cash equivalents - end of period	189,658	4,162,068
Supplemental disclosures of cash flow information:
Interest paid in cash	3,178	1,219
Taxes paid in cash
Non Cash Investment and Financing Activities
Common shares issued on acquisition deposit		257,500
Warrants issued with debt		860,112
Beneficial conversion feature on note payable		533,032
Warrant issued for asset acquisition		241,880
Liability recorded for asset acquisition		50,000
Insurance premiums financed through notes payable	42,823	155,162
Common shares issued in conversion of notes payable		1,303,133
Reclassification of warrant liabilities to equity		6,386,307
Warrants issued in Unit Offering		5,170,768
Shares issued under repricing agreement		574
Shares issued to placement agent in Unit Offering		$ 10

XML

Segment Reporting (Schedule of Results of Operations) (Details) (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Segment Reporting Information [Line Items]
Revenues	$ 502,507	$ 5,834,246	$ 1,889,993	$ 6,872,201
Costs of revenues	457,203	2,787,711	1,215,181	3,821,018
Gross profit (loss)	45,304	3,046,535	674,812	3,051,183
Gross profit (loss) %	9.00%		36.00%
Selling and marketing expenses	(57,928)	2,334,379	65,982	2,534,239
General and administrative expenses	1,215,394	1,618,976	4,290,318	3,884,910
Income (loss) from operations	(1,112,162)	(906,820)	(3,681,488)	(3,367,966)
Revaluation of warrants and interest	3,458,132	(14,236,770)	9,828,051	(10,336,927)
Loss from discontinued operations	(82,315)		(15,266,896)
Net income (loss) before taxes	2,263,655		(9,120,333)
ASTV [Member]
Segment Reporting Information [Line Items]
Revenues	373,901		1,233,092
Costs of revenues	414,739		1,141,667
Gross profit (loss)	(40,838)		91,425
Gross profit (loss) %	(11.00%)		7.00%
Selling and marketing expenses	43,981		126,915
General and administrative expenses	559,726		2,324,192
Income (loss) from operations	(644,545)		(2,359,682)
Revaluation of warrants and interest	(815)		1,186
Loss from discontinued operations
Net income (loss) before taxes	(645,360)		(2,358,496)
eDiets.com [Member]
Segment Reporting Information [Line Items]
Revenues	128,606		656,901
Costs of revenues	42,464		73,514
Gross profit (loss)	86,142		583,387
Gross profit (loss) %	67.00%		89.00%
Selling and marketing expenses	(101,909)		(60,933)
General and administrative expenses	95,299		196,119
Income (loss) from operations	92,752		448,201
Revaluation of warrants and interest	(4,534)		1,558
Loss from discontinued operations	(82,315)		(15,266,896)
Net income (loss) before taxes	5,903		(14,817,137)
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Revenues
Costs of revenues
Gross profit (loss)
Gross profit (loss) %
Selling and marketing expenses
General and administrative expenses	560,369		1,770,007
Income (loss) from operations	(560,369)		(1,770,007)
Revaluation of warrants and interest	3,463,483		9,824,307
Loss from discontinued operations
Net income (loss) before taxes	$ 2,903,112		$ 8,055,300

XML

Summary of Significant Accounting Policies (Schedule of Related Amortization Expense) (Details) (USD $)	Dec. 31, 2013
Summary of Significant Accounting Policies [Abstract]
2014 remaining three months	$ 90,000
2015	342,000
2016	342,000
2017	342,000
2018	342,000
2019	$ 171,000

XML

eDiets Acquisition and Sale of Meal Delivery Service (Tables)

9 Months Ended

Dec. 31, 2013

eDiets Acquisition and Sale of Meal Delivery Service [Abstract]

Schedule of Assets Acquired and Liabilities Assumed

The following table summarizes the purchase price allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition:

Cash and cash equivalents	$	241,344
Restricted cash		450,000
Accounts receivable		118,172
Inventory		75,522
Prepaid expenses and other assets		275,170
Property, plant and equipment		61,342
Intangibles
Customer relationships		6,000,000
URL's		1,000,000
Trademarks		859,439
Total assets acquired		9,080,989
Accounts payable		(2,318,986	)
Accrued expenses		(443,364	)
Notes payable		(463,672	)
Total liabilities assumed		(3,226,022	)
Net assets acquired	$	5,854,967

XML

Summary of Significant Accounting Policies (Schedule of Antidilutive Securities Excluded From the Computation of Earnings Per Share) (Details)	3 Months Ended		9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	72,826,332	65,778,535	72,826,332	60,209,803
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	7,992,963	1,606,359	7,992,963	1,231,136
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities	64,833,369	64,172,176	64,833,369	58,978,667

XML

Prepaid expenses and other current assets (Tables)

9 Months Ended

Dec. 31, 2013

Prepaid expenses and other current assets [Abstract]

Schedule of Prepaid Expenses and Other Assets

Components of prepaid expenses and other current assets consist of the following:

	December 31, 2013		March 31, 2013
Prepaid license fees	$	27,528	$	23,550
Prepaid insurance		312,244		388,690
Prepaid investor relations fees		-		8,475
Prepaid talent fees		110,414		204,167
Prepaid professional fees		-		57,055
Prepaid medical and related insurance		-		46,011
Prepaid expenses - other		291		64,502
	$	450,477	$	792,450

XML

Description of Our Business, Liquidity and Going Concern, and Basis of Presentation

9 Months Ended

Dec. 31, 2013

Description of Our Business, Liquidity and Going Concern, and Basis of Presentation [Abstract]

Description of Our Business, Liquidity and Going Concern, and Basis of Presentation

Note 1.

Description of Our Business, Liquidity and Going Concern, and Basis of Presentation

Description of Our Business

As Seen On TV, Inc. ("ASTV", "we", "our" or the "Company") is a direct response marketing company and owner of AsSeenOnTV.com and eDiets.com. We identify, develop and market consumer products for global distribution via TV, Internet and retail channels. Following our February 2013 acquisition of eDiets.com, Inc. ("eDiets"), our business is organized along two segments. The As Seen On TV ("ASTV") segment is a direct response marketing company that identifies and advises in the development and marketing of consumer products. The eDiets segment is a subscription-based nationwide weight-loss oriented digital subscription service and, until our discontinuance of the meal delivery component in September 2013, provided dietary and wellness oriented meal delivery services. See Note 4.

On February 28, 2013, we acquired 100% of the outstanding stock of eDiets pursuant to the terms and conditions of the Agreement and Plan of Merger by and among our Company, eDiets Acquisition Company, a Delaware corporation and wholly owned subsidiary of our Company, and eDiets, dated October 31, 2012. Following the closing, eDiets became a wholly owned subsidiary of our Company (See Note 3). Accordingly, the operating results of eDiets are included in the financial statements from the acquisition date.

ASTV, a Florida corporation, was organized in November 2006. Our executive offices are located in Clearwater, Florida.

ASTV

ASTV generates revenues primarily from three channels, including direct response sales of consumer products, sale of consumer products through a "live-shop" TV venue and ownership of the url AsSeenOnTV.com which operates as a web based outlet for our Company and other direct response businesses.

Inventors and entrepreneurs submit products or business concepts for our review. Once we identify a suitable product or concept, we negotiate to obtain global marketing and distribution rights. These marketing and distribution agreements typically provide for revenue sharing in the form of a royalty to the inventor or product owner. As of the date of this report, we have marketed several products with limited success.

Under the terms of an agreement dated November 20, 2013, Tru Hair, Inc., a wholly owned subsidiary of the Company, licensed certain trademarks to a third party in exchange for a cash payment of $25,000 and an undertaking by the third party to use reasonable best efforts to market, distribute and sell certain inventory held by Tru Hair, Inc.

eDiets

eDiets develops and markets Internet-based diet and fitness programs, primarily through the url eDiets.com. eDiets also offered through September 2013, a subscription-based nationwide weight-loss oriented meal delivery service. Digital diet plans are personalized according to an individual's weight goals, food and cooking preferences, and include the related shopping lists and recipes.

Liquidity and Going Concern

At December 31, 2013, we had a cash balance of approximately $190,000, a working capital deficit of approximately $2.9 million and an accumulated deficit of approximately $22.7 million. We have experienced losses from operations since our inception, and we have relied on a series of private placements and convertible debentures to fund our operations. The Company cannot predict how long it will continue to incur losses or whether it will ever become profitable.

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

·

Significantly curtailing costs and consolidating operations, where feasible.

·

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

·

Reducing operations to conserve cash.

·

Deferring certain marketing activities.

·

Investigating and pursuing transactions with third parties, including strategic transactions and relationships.

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

Basis of Presentation

The condensed consolidated financial statements as of December 31, 2013 and for the three month and nine month periods ended December 31, 2013 and 2012 are unaudited and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the financial position as of December 31, 2013, and the results of operations for the three month and nine month periods ended December 31, 2013 and 2012, the statement of shareholders' equity for the nine months ended December 31, 2013 and the statement of cash flows for the nine month periods ended December 31, 2013 and 2012. The results for the nine months ended December 31, 2013 are not necessarily indicative of the results to be expected for the entire year. The condensed consolidated balance sheet as of March 31, 2013 has been derived from audited financial statements for the fiscal year ended March 31, 2013. While management of the Company believes that the disclosures presented are adequate to make the information not misleading, these condensed consolidated financial statements should be read in conjunction with audited consolidated financial statements and the footnotes thereto for the fiscal year ended March 31, 2013 as filed with the Securities and Exchange Commission with our Form 10-K on June 28, 2013 (the "Audited 2013 Financial Statements"). The audit report of EisnerAmper LLP, the Company's independent registered public accounting firm, dated June 28, 2013, included an explanatory paragraph about the existence of substantial doubt concerning the Company's ability to continue as a going concern.

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2013	Mar. 31, 2013
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract]
Preferred stock, par value per share	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.0001	$ 0.0001
Common stock, shares authorized	750,000,000	750,000,000
Common stock, shares issued	71,741,250	71,282,066
Common stock, shares outstanding	71,741,250	71,282,066

XML

Stockholders' Equity

9 Months Ended

Dec. 31, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 11.

Stockholders' Equity

Capital Stock

Preferred Stock

We are authorized to issue up to 10,000,000 shares of preferred stock, $.0001 par value per share. Our board of directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of preferred stock in series, and by filing a certificate pursuant to the applicable law of the state of Florida, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. No shares of preferred stock were issued or outstanding at December 31, 2013 and March 31, 2013, respectively.

Common Stock

At December 31, 2013 and March 31, 2013, we were authorized to issue up to 750,000,000 shares of common stock, $.0001 par value per share.

At December 31, 2013 and March 31, 2013, the Company had 71,741,250 and 71,282,066 shares issued and outstanding, respectively. Holders are entitled to one vote for each share of common stock (or its equivalent).

Share Issuances

Common Stock and Warrants

On July 19, 2013, the Company issued 142,500 shares of common stock to National Securities Corporation in consideration for consulting and advisory services provided by National Securities Corporation under an advisory services agreement dated August 14, 2012 in connection with the eDiets merger. The $82,650 was recorded as an expense and additional paid-in capital during fiscal year ended March 31, 2013.

On July 19, 2013, the Company issued an aggregate of 316,268 shares of common stock to the seller of Seen On TV, LLC, in accordance with the anti-dilution protection provisions contained in the June 28, 2012 Seen On TV, LLC asset purchase agreement.

On November 19, 2012, the Company entered into a licensing and endorsement agreement with Eight Entertainment, LLC furnishing celebrity endorsement services. The agreement is for a 24-month term and provides for the celebrity eDiets endorsements, advertising and promotion programs. In consideration the Company agreed to a one-time payment of $250,000 and the issuance of warrants to purchase up to 6,500,000 shares of common stock as follows:

Issuance	Number of Shares	Exercise Price	Date of Issuance
1	1,500,000	$0.01	Within 10 days of effectiveness
2	1,250,000	$0.25	3 months from agreement
3	750,000	$0.50	12 months from agreement
4	1,000,000	$0.75	16 months from agreement
5	1,000,000	$1.00	20 months from agreement
6	1,000,000	$2.00	24 months from agreement
	6,500,000

The actual number of warrants to be granted under the agreement was subject to adjustment downward up to 50%, based upon certain performance goals being achieved relating to weight-loss. These provisions constitute a performance commitment within the meaning of ASC 505 - Equity. In accordance with ASC 505 - Equity, when equity instruments are issued to non-employees in exchange for the receipt of goods or services the equity instruments are measured at fair value at the earlier of the date at which a commitment for performance by the counterparty to earn the equity instruments is reached or the date at which the counterparty's performance is complete. The agreement does not contain a sufficiently large disincentive for nonperformance as forfeiture of the equity instrument is the sole remedy in the event of nonperformance. Therefore, a final measurement date will not be established until performance is complete and ASC 505 - Equity requires the recognition of expense from the transaction be measured at the then-current lowest aggregate fair value at each reporting period with changes in those lowest aggregate fair values between the reporting periods recognized in earnings. The first of two performance goals was met during March 2013 reducing the potential adjustment downward to 25%. On May 15, 2013, the second performance goal was not achieved and warrants to purchase 1,625,000 shares of common stock exercisable at prices from $0.01 to $2.00 per share were forfeited.

The related campaign talent costs are being recorded in selling and marketing expenses over the performance period of 24 months. The assumptions used at the initial valuation date, November 19, 2012, and December 31, 2013, were as follows:

	Lowest Aggregate Fair Value
	Initial Valuation	December 31, 2013
Number of shares underlying warrants	3,250,000	4,875,000
Exercise prices	$0.01 - $2.00	$0.01 - $2.00
Volatility	174.0%	149.7%
Risk-free interest rate	0.33%	0.38%
Expected dividend yield	0.00%	0.00%
Expected warrant life (years)	3.00	1.90

For the three month and nine month periods ending December 31, 2013, the Company recognized marketing expense or expense (reduction) of approximately $(120,000) and $(114,000), respectively, attributable to warrants issued and approximately $31,000 and $94,000, respectively, attributable to the $250,000 cash component paid.

The Company recognized marketing expense under this agreement of approximately $150,000, including approximately $136,000 attributable to the warrants issued and approximately $14,000 attributable to the cash component for the three and nine month periods ending December 31, 2012.

A summary of warrants outstanding at December 31, 2013, is as follows:

Summary of Warrants Outstanding

Warrant Description	Number of Warrants (A)		Exercise Prices	Expiration Dates
2010 Other Placements	975,000		$3.00-$10.00	January 13, 2014 - January 24, 2014
2011 Convertible Notes	431,251		$3.00-$10.00	April 11, 2014
2011 Private Placement	672,750		$3.00-$10.00	May 27, 2014 - June 15, 2014
2011 Bridge Warrant	8,789,064		$0.64	August 29, 2014
2011 Bridge Warrant Placement Agent	1,165,875		$0.64	August 29, 2014
2011 Unit Offering	33,277,837	(B)	$0.59	October 28, 2016
2011 Unit Offering Placement Agent	4,726,891	(B)	$0.59	October 28, 2016
2010 Other Placements	412,500		$0.64-$3.15	June 1, 2014 - June 22, 2015
2012 Bridge Warrant	1,137,735	(B)	$0.77	September 7, 2015 - September 20, 2015
2012 Bridge Warrant Placement Agent	227,546	(B)	$0.77	September 7, 2015
2012 Unit Offering	6,300,213	(B)	$0.80	November 14, 2015
2012 Unit Offering Placement Agent	1,561,544	(B)	$0.70-$0.80	November 14, 2017
2012 Talent Compensation	4,875,000		$0.01-$2.00	November 19, 2015
2013 Merger related notes converted	494,328	(B)	$0.80	November 14, 2015
2013 eDiets Warrants	910,835		$1.40-$4.74	February 7, 2014 - September 11, 2019
	65,958,369

-------

(A)

All warrants reflect post anti-dilution and repricing provisions applied.

(B)

Subject to potential further ant-dilution and repricing adjustment (See Note 7).

Equity Compensation Plans

In May 2010, the Company adopted its 2010 Executive Equity Incentive Plan and 2010 Non Executive Equity Incentive Plan (collectively, the "2010 Plans") and granted 600,000 options and 450,000 options, respectively.

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

On June 4, 2012, the Company issued 30,000 options to a direct response consultant. The fair value of the options granted was estimated on the date of grant using the Black Scholes options pricing model using the assumptions established at that time. The following table includes the assumptions used in valuing this grant:

Number of shares underlying the options	30,000
Exercise price	$0.87
Volatility	185	%
Risk-free interest rate	0.68	%
Expected dividend yield	0.00	%
Expected option life (years)	5

As the options vested upon grant, the entire fair value of $25,100 was charged to stock-based compensation immediately and is included in general and administrative expenses.

On September 24, 2012, the Company's board of directors adopted the 2013 Equity Compensation Plan (the "2013 Plan" and, together with the 2010 Plans, the "Plans") with terms similar to the previously adopted 2010 Plans. The 2013 Plan authorized the issuance of up to 3,000,000 options to purchase common stock. The 2013 Plan was modified in March 2013 authorizing the issuance of up to 6,000,000 options. On May 6, 2013, the 2013 Plan was further modified, increasing the shares of common stock reserved for issuance under such plan to 9,000,000 shares.

On December 15, 2012, the compensation committee granted 2,075,000 options from the remaining available options under the Plans. The options were granted to 17 employees and directors of the Company. The options granted vest at 20% per year over a five-year period and expire ten years from grant date. The fair value of the options granted was estimated on the grant date using the Black Scholes options pricing model using the assumptions established at that time. The following table includes the assumptions used in valuing this grant:

Number of shares underlying the options	2,075,000
Exercise price	$0.68
Volatility	177	%
Risk-free interest rate	1.18	%
Expected dividend yield	0.00	%
Expected option life (years)	7

On May 2, 2013, effective May 1, 2013, we entered into an employment agreement with Mr. Ronald C. Pruett Jr. to serve as our chief executive officer. As a component of his compensation package the board of directors approved an option grant to purchase 425,000 shares (the "First Option Grant") of our common stock and a second option grant to purchase 2,625,000 shares (the "Second Option Grant") of our common stock. The First Option Grant vested on the grant date, May 6, 2013, and has a per share exercise price equal to $0.35, the average of the high bid and low asked prices of our common stock on the OTC Bulletin Board on the trading day immediately preceding the grant date. The Second Option Grant has a per share exercise price equal to $0.70. The Second Option Grant vests in four equal tranches on May 6, 2013, May 1, 2014, November 1, 2014 and May 1, 2015. Provided that the agreement has not been terminated, on December 31, 2013, Mr. Pruett became entitled to receive subsequent grants of stock and options, at the compensation committee's discretion, with an aggregate value of at least $918,750, vesting in four equal tranches on the grant date, May 1, 2014, November 1, 2014 and May 1, 2015. As of February 10, 2014, Mr. Pruett was not granted any additional stock options. If Mr. Pruett's employment is terminated for any reason, other than by the Company for cause or by Mr. Pruett in the absence of good reason, he shall be entitled to certain compensation and benefits as provided under the agreement. The following table includes the assumptions used in valuing this grant:

Number of shares underlying the option	425,000		2,625,000
Exercise price	$0.35		$0.70
Volatility	137	%	137	%
Risk-free interest rate	1.19	%	1.19	%
Expected dividend yield	0.00	%	0.00	%
Expected option life (years)	7		7

On August 1, 2013, the Company issued 500,000 stock options to Henrik Sandell to serve as the Company's chief operating officer. The fair value of the options granted was estimated on the date of grant using the Black Scholes option pricing model using the assumptions established at that time. The following table includes the assumptions used in valuing this grant:

Number of shares underlying the options	500,000
Exercise price	$0.70
Volatility	159.03	%
Risk-free interest rate	2.15	%
Expected dividend yield	0.00	%
Expected option life (years)	7

The grant provided that 125,000 options vested upon grant according, $22,250, the fair value of the vested component, was charged to stock based compensation immediately and is included in general and administrative expense.

Mr. Sandell's options vest under the following schedule:

Percent of Grant	Vesting Date
25%	August 1, 2013
25%	May 1, 2014
25%	November 1, 2014
25%	May 1, 2015

Stock based compensation for the three month and nine month periods ending December 31, 2013 was approximately $186,000 and $803,000, respectively. Stock based compensation for the three month and nine month periods ending December 31, 2012 was approximately $175,000 and $310,000, respectively. Stock based compensation for all periods presented are included in general and administration expenses, in the accompanying condensed consolidated statements of operations.

Information related to options granted under our option plans at December 31, 2013 and, 2012 and activity for each of the nine months then ended is as follows:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at April 1, 2013		5,933,708	(A)	$	2.32		6.55	$	44,475
Granted		3,550,000			0.66		-		-
Exercised		-			-		-		-
Forfeited		(1,461,357	)		5.97		-		-
Expired		(29,388	)		0.83		-		-
Outstanding at December 31, 2013		7,992,963		$	1.39		7.35	$	-
Exercisable at December 31, 2013		4,756,713		$	2.52		6.03	$	-

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at April 1, 2012		1,025,000		$	1.31		-	$	-
Granted		2,105,000			0.68		-		-
Exercised		-			-		-		-
Forfeited		(12,500	)		0.96		-		-
Expired		-			-		-		-
Outstanding at December 31, 2012		3,117,500		$	0.89		7.67	$	-
Exercisable at December 31, 2012		880,000		$	1.37		3.02	$	-

-------

(A)

Includes 2,816,208 eDiets acquisition adjusted replacement options.

The weighted average grant date fair value of unvested options at December 31, 2013, was approximately $1,256,000 and will be expensed over a weighted average period of 6.33 years.

As of December 31, 2013, there were 4,822,500 options available for further issuance under the Plans.

In addition, under the provisions of ASC 805-Business Combinations, the Company recognized as stock-based compensation the difference in fair value between the eDiets options outstanding at the acquisition date and the replacement ASTV options granted. The fair value of the eDiets' options replaced of $604,218 was recorded as consideration transferred in the acquisition. The excess fair value of the ASTV replacement options over the fair value of the eDiets options was recognized as compensation cost in the year ended March 31, 2013 since substantially all of the options were fully vested. Accordingly, the Company recorded $694,000 in stock-based compensation in March 2013.

No tax benefits are attributable to our share based compensation expense recorded in the accompanying financial statements because we are in a net operating loss position and a full valuation allowance is maintained for all net deferred tax assets. For stock options, the amount of the tax deductions is generally the excess of the fair market value of our shares of common stock over the exercise price of the stock options at the date of exercise.

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

At the effective time of the merger with eDiets, each eDiets option that remained outstanding and unexercised following the effective time was deemed amended and is now exercisable for shares of our common stock. The terms and conditions of the options remained the same, except that the number of shares covered by the option, and the exercise price was adjusted to reflect the exchange ratio of 1.2667. The exercise price per share is now equal to the exercise price prior to the effective time, divided by the exchange ratio. The above discussion reflects options and shares adjusted for the exchange ratio.

XML

Document and Entity Information	9 Months Ended
	Dec. 31, 2013	Feb. 11, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Entity Registrant Name	As Seen On TV, Inc.
Entity Central Index Key	0001432967
Current Fiscal Year End Date	--03-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2014
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		71,741,250

XML

Segment Reporting

9 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Reporting

Note 12.

Segment Reporting

Commencing February 28, 2013, effective with the Company's acquisition of eDiets, the Company organized its business into two operating segments to better align its organization based upon the Company's management structure, products and services offered, markets served and types of customers. The ASTV segment derives its revenues from the marketing and sale of consumer direct response products, including Internet and TV "live shop" venues. The eDiets segment is a subscription-based nationwide weight-loss oriented digital subscription service and, until our discontinuance of the meal delivery component in September 2013, provided dietary and wellness oriented meal delivery services. See Note 4. Management reviews financial information presented on an operating segment basis for the purpose of making certain operating decisions and assessing financial performance.

Corporate and other expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Corporate and other assets include cash and cash equivalents, prepaid expenses and deposits.

The following tables reflect results of operations from our business segments for the three month and six month periods ending December 31, 2013:

	Three Months Ended December 31, 2013
	ASTV			eDiets			Corporate and other		Total
Revenues	$	373,901		$	128,606		$	-	$	502,507
Costs of revenues		414,739			42,464			-		457,203
Gross profit (loss)		(40,838	)		86,142			-		45,304
Gross profit (loss) %		(11%	)		67%			0%		9%
Allocated operating expenses:
Selling and marketing expense		43,981			(101,909	)		-		(57,928	)
General and administrative expenses		559,726			95,299			560,369		1,215,394
Income (loss) from operations		(644,545	)		92,752			(560,369)		(1,112,162	)
Revaluation of warrants and interest		(815	)		(4,534	)		3,463,483		3,458,132
Loss from discontinued operations		-			(82,315	)		-		(82,315	)
Net income (loss) before taxes	$	(645,360	)	$	5,903		$	2,903,112	$	2,263,655

	Nine Months Ended December 31, 2013
	ASTV			eDiets			Corporate and other			Total
Revenues	$	1,233,092		$	656,901		$	-		$	1,889,993
Costs of revenues		1,141,667			73,514			-			1,215,181
Gross profit		91,425			583,387			-			674,812
Gross profit %		7%			89%			-			36%
Allocated operating expenses:
Selling and marketing expense		126,915			(60,933	)		-			65,982
General and administrative expenses		2,324,192			196,119			1,770,007			4,290,318
Loss from operations		(2,359,682	)		448,201			(1,770,007	)		(3,681,488	)
Revaluation of warrants and interest		1,186			1,558			9,824,307			9,828,051
Loss from discontinued operations		-			(15,266,896	)		-			(15,266,896	)
Net income (loss) before taxes	$	(2,358,496	)	$	(14,817,137	)	$	8,055,300		$	(9,120,333	)

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Revenues	$ 502,507	$ 5,834,246	$ 1,889,993	$ 6,872,201
Costs of revenues	457,203	2,787,711	1,215,181	3,821,018
Gross profit	45,304	3,046,535	674,812	3,051,183
Operating expenses:
Selling and marketing expenses	(57,928)	2,334,379	65,982	2,534,239
General and administrative expenses	1,215,394	1,618,976	4,290,318	3,884,910
Loss from operations	(1,112,162)	(906,820)	(3,681,488)	(3,367,966)
Other (income) expense:
Warrant revaluation	(3,464,381)	13,473,948	(9,824,344)	8,790,512
Other (income) expense	(99)	(36,450)	(21,710)	(40,084)
Interest expense	5,165	799,272	11,705	1,586,499
Interest expense - related party	1,183		6,298
Total other (income) expense	(3,458,132)	14,236,770	(9,828,051)	10,336,927
Income (loss) from continuing operations before income taxes	2,345,970	(15,143,590)	6,146,563	(13,704,893)
Provision for income taxes
Income (loss) from continuing operations	2,345,970	(15,143,590)	6,146,563	(13,704,893)
Loss from discontinued operations, net of income taxes	(82,315)		(15,266,896)
Net income (loss)	$ 2,263,655	$ (15,143,590)	$ (9,120,333)	$ (13,704,893)
Basic
Continuing operations	$ 0.03	$ (0.38)	$ 0.09	$ (0.39)
Discontinued operations	$ 0.00	$ 0.00	$ (0.21)	$ 0.00
Basic	$ 0.03	$ (0.38)	$ (0.13)	$ (0.39)
Diluted
Continuing operations	$ 0.03	$ (0.38)	$ 0.08	$ (0.39)
Discontinued operations	$ 0.00	$ 0.00	$ (0.21)	$ 0.00
Diluted	$ 0.03	$ (0.38)	$ (0.13)	$ (0.39)
Weighted average shares:
Basic	71,741,250	39,806,991	71,559,411	34,739,260
Diluted	72,763,977	39,806,991	72,619,496	34,739,260

XML

Accrued expenses and other current liabilities

9 Months Ended

Dec. 31, 2013

Accrued expenses and other current liabilities [Abstract]

Accrued expenses and other current liabilities

Note 6.

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consist of the following:

	December 31, 2013		March 31, 2013
Accrued compensation	$	132,333	$	137,505
Accrued warranty		10,836		52,000
Accrued sales returns		-		156,838
Accrued professional fees		69,500		159,000
Accrued rents		2,651		2,874
Accrued severance		59,773		179,318
Accrued other		16,772		40,195
	$	291,865	$	727,730

XML

Prepaid expenses and other current assets

9 Months Ended

Dec. 31, 2013

Prepaid expenses and other current assets [Abstract]

Prepaid expenses and other current assets

Note 5.

Prepaid expenses and other current assets

Components of prepaid expenses and other current assets consist of the following:

	December 31, 2013		March 31, 2013
Prepaid license fees	$	27,528	$	23,550
Prepaid insurance		312,244		388,690
Prepaid investor relations fees		-		8,475
Prepaid talent fees		110,414		204,167
Prepaid professional fees		-		57,055
Prepaid medical and related insurance		-		46,011
Prepaid expenses - other		291		64,502
	$	450,477	$	792,450

XML

Discontinued Operations (Tables)

9 Months Ended

Dec. 31, 2013

Discontinued Operations [Abstract]

Schedule of Discontinued Operations

The following table summarizes the results of operations for the discontinued component:

	Three Months Ended December 31, 2013			Nine Months Ended December 31, 2013
Net sales	$	23,692		$	1,975,673
Operating (loss)		(82,315	)		(1,735,457	)
Asset sale		-			1,100,000
Impairment charge related to goodwill and finite-lived intangibles		-			(14,631,439	)
Income tax benefit (expense)		-			-
Loss from discontinued operations, net of taxes	$	(82,315	)	$	(15,266,896	)

XML

Subsequent Events

9 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

Note 13.

Subsequent Events

Ronald C. Pruett, Jr., the Company's chief executive officer, voluntarily waived his right to receive Additional Compensation, as defined in Section 3(a) of his employment agreement with the Company, beginning with the payroll period ending February 10, 2014 and continuing until Mr. Pruett otherwise notifies the Company. See Note 10.

XML

Notes Payable

9 Months Ended

Dec. 31, 2013

Notes Payable [Abstract]

Notes Payable

Note 9.

Notes Payable

In connection with the acquisition of eDiets on February 28, 2013, the Company assumed an aggregate of $463,672 of notes payable, consisting of (i) $100,000 owed to a former director of eDiets who is currently a director of the Company, which matured on June 30, 2013 (ii) $100,000 owed to a former director of eDiets, which matured on June 30, 2013, but has not been repaid and (iii) $263,672 owed to a former landlord of eDiets, which is payable in equal monthly installments, the last of which matures on October 1, 2015. All notes are unsecured and the director and former director notes carry an interest rate of 5% per annum. The landlord note is interest free, absent default.

At December 31, 2013 and March 31, 2013, the Company had notes payable - current portion of $383,138 and $281,805, respectively. At December 31, 2013 and March 31, 2013, notes payable - current portion included $102,060 due to the former landlord and $100,000 due to the former director of eDiets. In addition, the balances include amounts due under insurance related notes payable. Annual interest rates on these notes range from 5% to 8.4%.

Notes payable non-current includes $76,472 and $153,107, due to a former landlord at December 31, 2013 and March 31, 2013, respectively, and $30,000 and $40,000 due through fiscal 2016, respectively, due under our asset purchase agreement with Seen On TV.

XML

Warrant Liabilities

9 Months Ended

Dec. 31, 2013

Warrant Liabilities [Abstract]

Warrant Liabilities

Note 7.

Warrant Liabilities

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

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

The assumptions used in connection with the valuation of warrants issued were as follows:

	December 31, 2013		March 31, 2013
Number of shares underlying the warrants	47,726,100		47,726,100
Exercise price	$0.595 - $0.80		$0.595 - $0.80
Volatility	150	%	133	%
Risk-free interest rate	0.38%-1.27	%	0.36%-0.77	%
Expected dividend yield	0.00	%	0.00	%
Expected warrant life (years)	1.96 - 4.00		2.50 - 4.75
Stock price	$0.08		$0.35

Recurring Level 3 Activity and Reconciliation

The tables below provides a reconciliation of the beginning and ending balances for the liabilities measured at fair value using significant unobservable inputs (Level 3). The table reflects gains and losses for the nine month period ended December 31, 2013, for all financial liabilities categorized as Level 3 as of December 31, 2013.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

	March 31, 2013		Initial Measurements		Increase (Decrease) in Fair Value			Reclassed to Equity		December 31, 2013
2011 Unit Offering	$	8,531,735	$	-	$	(7,111,367	)	$	-	$	1,420,368
2011 Unit Offering Placement Agent		1,073,855		-		(895,079	)		-		178,776
2012 Bridge Warrant		231,691		-		(206,020	)		-		25,671
2012 Bridge Warrant Placement Agent		46,338		-		(41,204	)		-		5,134
2012 Unit Offering		1,268,686		-		(1,129,571	)		-		139,115
2012 Unit Offering Placement Agent		432,735		-		(349,568	)		-		83,167
2013 Merger related notes converted		104,266		-		(91,535	)		-		12,731
	$	11,689,306	$	-	$	(9,824,344	)	$	-	$	1,864,962

	March 31, 2012		Initial Measurements		Increase (Decrease) in Fair Value			Reclassed to Equity			December 31, 2012
2011 Bridge Warrant	$	6,604,706	$	-	$	(966,334	)	$	(5,638,372	)	$	-
2011 Bridge Warrant Placement Agent		876,119		-		(128,184	)		(747,935	)		-
2011 Unit Offering		15,816,980		-		8,819,955			-			24,636,935
2011 Unit Offering Placement Agent		2,499,810		-		601,142			-			3,100,952
2012 Bridge Warrant		-		716,760		62,430			-			779,190
2012 Bridge Warrant Placement Agent		-		143,352		12,485			-			155,837
2012 Unit Offering		-		4,075,834		296,021						4,371,855
2012 Unit Offering Placement Agent		-		1,094,936		92,997						1,187,933
	$	25,797,615	$	6,030,882	$	8,790,512		$	(6,386,307	)	$	34,232,702

Number of Warrants Subject to Remeasurement

	Number of Warrants
	March 31,		Warrant				December 31,
	2013		Additions		Reductions		2013
2011 Unit Offering		33,277,842		-		-		33,277,842
2011 Unit Offering Placement Agent		4,726,892		-		-		4,726,892
2012 Bridge Warrant		1,137,735		-		-		1,137,735
2012 Bridge Warrant Placement Agent		227,546		-		-		227,546
2012 Unit Offering		6,300,213		-		-		6,300,213
2012 Unit Offering Placement Agent		1,561,544		-		-		1,561,544
2013 Merger related notes converted		494,328		-		-		494,328
		47,726,100		-		-		47,726,100

XML

Related Party Transactions

9 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions

Note 8.

Related Party Transactions

Concurrent with the Company's acquisition of eDiets on February 28, 2013, the Company issued 988,654 shares of common stock and warrants to purchase 494,328 shares of common stock in settlement of $600,000 of related eDiets party debt and $92,057 in related interest to an eDiets director and one former director. In addition, during the second quarter, the Company repaid $50,000 in principal to our director, and the remaining $50,000 was repaid with related interest in the third quarter.

For the period April 1, 2013 through December, 31, 2013, the Company recognized related party interest expense of $6,298 with related accrued interest of $2,380 at December 31, 2013.

On December 23, 2013, the Company entered into a Note Purchase Agreement with Infusion Brands International, Inc. The Note Purchase Agreement was executed in connection with a possible merger between Infusion Brands and the Company. This agreement provided for a series of notes totaling up to $500,000 through April 15, 2014. As of December 31, 2013, the Company had borrowed $150,000 under this agreement. The notes bear interest at 12% per annum and, if no merger between the parties is completed, mature on June 30, 2014. At December 31, 2013, the Company had accrued $400 of related party interest under the initial note.

XML

Commitments and Contingencies

9 Months Ended

Dec. 31, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 10.

Commitments and Contingencies

In connection with the eDiets acquisition, on September 10, 2012, the Company received notice of a complaint filed in Broward County, Florida by an eDiets stockholder against eDiets, members of the board of directors of eDiets and the Company, alleging that eDiets breached its fiduciary duty to its stockholders by entering into the transaction for inadequate consideration. Prior to the deadline for the defendants to answer the complaint, the plaintiff and the defendants in the case filed a stipulation with the court allowing the plaintiff to file an amended complaint. The Company's acquisition of eDiets was consummated on February 28, 2013. On November 19, 2013, the plaintiff voluntarily dismissed the case without prejudice.

On May 2, 2013, effective May 1, 2013, we entered into an employment agreement with Mr. Ronald C. Pruett Jr. to serve as our chief executive officer. The term of the agreement is for one year and will be automatically renewed for successive one-year periods unless a notice of non-renewal is given by either party or the agreement is otherwise terminated sooner in accordance with its provisions. Pursuant to the agreement, Mr. Pruett will receive an annual base salary of $275,000, together with an additional salary of $275,000 during the first year of his employment with us. Mr. Pruett's base salary may be increased from time to time as determined by the compensation committee of the board of directors. Mr. Pruett voluntarily waived his right to receive payments on his additional salary of $275,000 beginning with the payroll period ending February 10, 2014 and continuing until Mr. Pruett otherwise notifies the Company. In addition to his base salary, Mr. Pruett will be entitled to receive an annual cash bonus calculated by reference to our actual performance during the immediately preceding fiscal year measured against a revenue and adjusted EBITDA (earnings before income taxes, depreciation and amortization) target to be established by Mr. Pruett and the compensation committee and approved by the board of directors. As of February 10, 2014, Mr. Pruett and the compensation committee had yet to establish a revenue and adjusted EBITDA target for our fiscal year ending March 31, 2014. Mr. Pruett also received an option grant to purchase 425,000 shares (the "First Option Grant") of our common stock and a second option grant to purchase 2,625,000 shares (the "Second Option Grant") of our common stock. The First Option Grant vested on the grant date, May 6, 2013, and has a per share exercise price equal to $0.35, the average of the high bid and low asked prices of our common stock on the OTC Bulletin Board on the trading day immediately preceding the grant date. The Second Option Grant has a per share exercise price equal to $0.70. The Second Option Grant vests in four equal tranches on May 6, 2013, May 1, 2014, November 1, 2014 and May 1, 2015. Provided that the agreement has not been terminated, on December 31, 2013, Mr. Pruett became entitled to receive subsequent grants of stock and options, at the compensation committee's option, with an aggregate value of at least $918,750, vesting in four equal tranches on the grant date, May 1, 2014, November 1, 2014 and May 1, 2015. As of February 10, 2014, Mr. Pruett was not granted any additional stock options.

If Mr. Pruett's employment is terminated due to death, his estate will receive (i) six months' base salary at his then current rate in a lump sum payment and (ii) one year of continued coverage under the Company's employee benefit plans. If Mr. Pruett's employment is terminated due to disability, he will receive (i) six months' base salary at his then current rate, (ii) one year of continued coverage under the Company's employee benefit plans and (iii) any earned but unpaid bonuses, provided that the Company may credit against such amounts any proceeds paid to Mr. Pruett with respect to any disability policy maintained for his benefit. If Mr. Pruett's employment is terminated by the Company without cause or following a change in control or by Mr. Pruett for good reason or following a change in control, Mr. Pruett will receive (i) 12 months' base salary at his then current rate, (ii) continued provision during such 12-month period of benefits under the Company's employee benefit plans, (iii) immediate vesting of all granted but unvested stock options and (iv) a prorated payment of any bonus or other payments earned in connection with any bonus plan in which Mr. Pruett participated at the time of termination. The amount of each payment under (i) shall be reduced by one dollar for each three dollars otherwise payable, until the aggregate amount of all such reductions, together with the aggregate amount of bonus reductions described above, equals $275,000. Mr. Pruett will not be entitled to any compensation if his employment is terminated by the Company for cause or by Mr. Pruett in the absence of good reason.

On June 13, 2013, TV Goods, Inc. ("TV Goods"), the Company's wholly owned subsidiary, entered into a termination agreement (the "Termination Agreement") with Presser Direct, LLC ("Presser Direct") under which it terminated a Purchasing and Marketing Agreement (the "P & M Agreement") between TV Goods and Presser Direct dated March 7, 2012, relating to the manufacture, marketing, sale and distribution of the SeasonAire heater and related product lines. Under the Termination Agreement, TV Goods agreed to pay approximately $309,000 related to previously purchased inventory and approximately $146,000 attributable to royalty payments under the P & M Agreement, of which $65,000 was to be held in escrow pending delivery of replacements for damaged or defective SeasonAire heaters and related products previously sold by TV Goods. TV Goods also agreed to transfer title to certain assets relating to the products, including infomercials and intellectual property, to Presser Direct. Presser Direct agreed to pay TV Goods $50,000 for existing SeasonAire inventory, to assume obligations to make all royalty payments relating to SeasonAire sales after July 31, 2013 and to assume all liabilities relating to the SeasonAire products after June 13, 2013, except for certain warranty obligations relating to SeasonAire products sold prior to that date. TV Goods and Presser Direct released each other from all obligations under the P & M Agreement, so that the only surviving obligations were those arising under the Termination Agreement.

Leases

On February 1, 2012, the Company entered into a new 36-month lease agreement on our existing headquarters facility. Terms of the lease provide for a base rent payments of $7,875 per month for the first twelve months, increasing 3% per year thereafter. The lease contains no provisions for a change in the base rent based on future events or contingent occurrences. In accordance with the provisions ASC 840-Leases, the Company is recognizing lease expenses on a straight-line basis, which total $8,114 per month over the lease term. In connection with the entering into the new leases, the Company recognized income of approximately $71,000 attributable to the recovery of the deferred rent obligation under the previous lease and wrote-off to lease expense $12,420 in security deposits attributable to the prior lease.

During September 2012, eDiets entered into a one year lease for office space in Pompano Beach, Florida. The lease covered approximately 8,800 square feet at a monthly base rent of $9,800 per month. The Company did not renew this lease upon expiration and no longer occupies this facility.

The following is a schedule by year of future minimum rental payments required under our lease agreement on December 31, 2013:

	Operating Lease
Year 1	$	91,900
Year 2		-
Year 3		-
Year 4		-
Year 5		-
	$	91,900

Base rent expense recognized by the Company, attributable to its headquarters facility and eDiets facility was approximately $24,000 and $132,000 for the three month and nine month periods ending December 31, 2013, respectively, and $24,000 and $73,000 for the three month and nine month periods ending December 31, 2012.

Registration Rights

Under the terms of a 2010 private placement, the Company provided that it would use its best reasonable efforts to cause the related registration statement to become effective within 180 days of the termination date, July 26, 2010, of the offering. We have failed to comply with this registration rights provision and are obligated to make pro rata payments to the subscribers under the 2010 private placement in an amount equal to 1% per month of the aggregate amount invested by the subscribers up to a maximum of 6% of the aggregate amount invested by the subscribers. The maximum amount of penalty to which the Company may be subject is $156,000. The Company has a related accrued liability of $156,000 at both December 31, 2013 and March 31, 2013.

XML

Summary of Significant Accounting Policies (Schedule of Intangible Assets) (Details) (USD $)	3 Months Ended	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2013	Dec. 31, 2012	Mar. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 4,549,172	$ 4,549,172		$ 10,698,655
Accumulated amortization	(80,550)	(80,550)		(131,000)
Intangible assets, net	4,468,622	4,468,622		10,567,655
Amortization Expense	(81,000)	(866,500)
Impairment		(6,248,439)
Accumulated amortization of impairment		917,000
Intangible assets net of reversal of impairment charges		(5,331,439)
Additions		98,956	1,565,525
AsSeenOnTV.com [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	2,839,216	2,839,216		2,839,216
Additions
Estimated Useful Life		Indefinite
Customer relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	1,000,000	1,000,000		6,000,000
Impairment		(5,000,000)
Additions
Estimated Useful Life		5 years
URL's [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	438,956	438,956		1,000,000
Impairment		(660,000)
Additions		98,956
Estimated Useful Life		5 years
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible assets, gross	271,000	271,000		859,439
Impairment		(588,439)
Additions
Estimated Useful Life		5 years

XML

Stockholders' Equity (Common Stock) (Details) (USD $)	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Stockholders' Equity [Abstract]
Common stock, shares authorized	750,000,000	750,000,000
Common stock, par value per share	$ 0.0001	$ 0.0001	$ 0.0001
Common stock, shares outstanding	71,741,250	71,282,066	50,806,385

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

Schedule of Goodwill

The following provides a roll-forward of the Company's goodwill:

Balance as of March 31, 2013	$	9,300,000	)
Impairment		(9,300,000	)
Balance as of December 31, 2013	$	-

Schedule of Property and Equipment

Property and equipment, net consists of the following:

Property and equipment	Estimated Useful Lives	December 31, 2013			March 31, 2013
Computers and software	3 Years	$	61,892		$	120,041
Office equipment and furniture	5-7 Years		67,693			94,248
Leasehold improvements	1-3 Years		62,610			62,610
			192,195			276,899
Less: accumulated depreciation and amortization			(141,576	)		(132,098	)
		$	50,619		$	144,801

Schedule of Intangible Assets

Intangible assets consisted of the following at December 31, 2013 and March 31, 2013:

	March 31, 2013			Amortization Expense for the Nine Months Ended December 31, 2013			Impairment			Additions		December 31, 2013			Estimated Useful Life
Customer relationships	$	6,000,000		$			$	(5,000,000	)	$	-	$	1,000,000		5 years
URL's		1,000,000						(660,000	)		98,956		438,956		5 years
Trademarks		859,439						(588,439	)		-		271,000		5 years
AsSeenOnTV.com		2,839,216									-		2,839,216		Indefinite
		10,698,655						(6,248,439	)		98,956		4,549,172
Accumulated amortization		(131,000	)		(866,500	)		917,000			-		(80,550	)
	$	10,567,655		$	(866,500	)	$	(5,331,439	)	$	98,956	$	4,468,622

Schedule of Amortization Expense

Amortization expense for the next five succeeding fiscal years is estimated as follows:

March 31,
2014 remaining three months	$   90,000
2015	$ 342,000
2016	$ 342,000
2017	$ 342,000
2018	$ 342,000
2019	$ 171,000

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2013		2012		2013		2012
Stock options		7,992,963		1,606,359		7,992,963		1,231,136
Warrants		64,833,369		64,172,176		64,833,369		58,978,667
		72,826,332		65,778,535		72,826,332		60,209,803

XML

Warrant Liabilities (Tables)

9 Months Ended

Dec. 31, 2013

Warrant Liabilities [Abstract]

Schedule of Warrants Issued

The assumptions used in connection with the valuation of warrants issued were as follows:

	December 31, 2013		March 31, 2013
Number of shares underlying the warrants	47,726,100		47,726,100
Exercise price	$0.595 - $0.80		$0.595 - $0.80
Volatility	150	%	133	%
Risk-free interest rate	0.38%-1.27	%	0.36%-0.77	%
Expected dividend yield	0.00	%	0.00	%
Expected warrant life (years)	1.96 - 4.00		2.50 - 4.75
Stock price	$0.08		$0.35

Schedule of Warrant Liabilities at Fair Value

The table reflects gains and losses for the nine month period ended December 31, 2013, for all financial liabilities categorized as Level 3 as of December 31, 2013.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

	March 31, 2013		Initial Measurements		Increase (Decrease) in Fair Value			Reclassed to Equity		December 31, 2013
2011 Unit Offering	$	8,531,735	$	-	$	(7,111,367	)	$	-	$	1,420,368
2011 Unit Offering Placement Agent		1,073,855		-		(895,079	)		-		178,776
2012 Bridge Warrant		231,691		-		(206,020	)		-		25,671
2012 Bridge Warrant Placement Agent		46,338		-		(41,204	)		-		5,134
2012 Unit Offering		1,268,686		-		(1,129,571	)		-		139,115
2012 Unit Offering Placement Agent		432,735		-		(349,568	)		-		83,167
2013 Merger related notes converted		104,266		-		(91,535	)		-		12,731
	$	11,689,306	$	-	$	(9,824,344	)	$	-	$	1,864,962

	March 31, 2012		Initial Measurements		Increase (Decrease) in Fair Value			Reclassed to Equity			December 31, 2012
2011 Bridge Warrant	$	6,604,706	$	-	$	(966,334	)	$	(5,638,372	)	$	-
2011 Bridge Warrant Placement Agent		876,119		-		(128,184	)		(747,935	)		-
2011 Unit Offering		15,816,980		-		8,819,955			-			24,636,935
2011 Unit Offering Placement Agent		2,499,810		-		601,142			-			3,100,952
2012 Bridge Warrant		-		716,760		62,430			-			779,190
2012 Bridge Warrant Placement Agent		-		143,352		12,485			-			155,837
2012 Unit Offering		-		4,075,834		296,021						4,371,855
2012 Unit Offering Placement Agent		-		1,094,936		92,997						1,187,933
	$	25,797,615	$	6,030,882	$	8,790,512		$	(6,386,307	)	$	34,232,702

Schedule of Warrant Remeasurement

Number of Warrants Subject to Remeasurement

	Number of Warrants
	March 31,		Warrant				December 31,
	2013		Additions		Reductions		2013
2011 Unit Offering		33,277,842		-		-		33,277,842
2011 Unit Offering Placement Agent		4,726,892		-		-		4,726,892
2012 Bridge Warrant		1,137,735		-		-		1,137,735
2012 Bridge Warrant Placement Agent		227,546		-		-		227,546
2012 Unit Offering		6,300,213		-		-		6,300,213
2012 Unit Offering Placement Agent		1,561,544		-		-		1,561,544
2013 Merger related notes converted		494,328		-		-		494,328
		47,726,100		-		-		47,726,100

XML

Commitments and Contingencies (Registration Rights) (Details) (USD $)	9 Months Ended
	Dec. 31, 2013	Mar. 31, 2013
Commitments and Contingencies [Abstract]
The maximum number of days within the termination date, the company was allowed for registration date to become effective for the 2010 Private Placement	180
Termination date for the 2010 Private Placement	Jul. 26, 2010
The minimum percentage rate owed to investors for failing to file the registration statement within the 180 day window	1.00%
The maximum percentage rate owed to investors for failing to file the registration statement within the 180 day window	6.00%
The maximum penalty that can be incurred by the company for failing to file the registration statement within the 180 day window	$ 156,000
Amount of accrued penalty for failing to file registration statement within 180 day window	$ 156,000	$ 156,000

XML

Prepaid expenses and other current assets (Details) (USD $)	Dec. 31, 2013	Mar. 31, 2013
Prepaid expenses and other current assets [Abstract]
Prepaid license fees	$ 27,528	$ 23,550
Prepaid insurance	312,244	388,690
Prepaid investor relations fees		8,475
Prepaid talent fees	110,414	204,167
Prepaid professional fees		57,055
Prepaid medical and related insurance		46,011
Prepaid expenses - other	291	64,502
Prepaid expenses and other current assets	$ 450,477	$ 792,450

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]
Balance at Mar. 31, 2013	$ 10,729,226	$ 7,128	$ 24,293,947	$ (13,571,849)
Balance, shares at Mar. 31, 2013	71,282,066	71,282,066
Rounding shares on eDiets transaction		416
Share based compensation - options	802,868		802,868
Warrants issued for services	(114,129)		(114,129)
Shares issued under consulting agreement		14	(14)
Shares issued under consulting agreement, shares		142,500
Shares issued under repricing agreement		32	(32)
Shares issued under repricing agreement, shares		316,268
Net loss	(9,120,333)			(9,120,333)
Balance at Dec. 31, 2013	$ 2,297,632	$ 7,174	$ 24,982,640	$ (22,692,182)
Balance, shares at Dec. 31, 2013	71,741,250	71,741,250

XML

Discontinued Operations

9 Months Ended

Dec. 31, 2013

Discontinued Operations [Abstract]

Discontinued Operations

Note 4.

Discontinued Operations

On October 11, 2013, the Company completed the sale to Chefs Diet National Co., LLC ("Chef's Diet"), a subsidiary of Chef's Diet Corp., of certain assets (the "Meal Delivery Assets") relating to the eDiets meal delivery business pursuant to an Asset Purchase and Revenue Sharing Agreement (the "Agreement") dated August 23, 2013 between eDiets and Chef's Diet. The disposed assets consist primarily of a customer database of active and inactive eDiets customers. In addition, eDiets granted Chef's Diet a perpetual royalty-free license to content and certain other intellectual property used in connection with the eDiets meal delivery business. While the transaction was not completed until October 11, 2013, the transaction met the criteria of held-for-sale accounting as of September 30, 2013 and has been presented in accordance with the provisions of ASC 205-20 Discontinued Operations for all periods presented.

The base sales price of $1.1 million consisted of an initial cash payment of $200,000, of which $100,000 was collected prior to September 30, 2013, with the additional $100,000 collected during the three months ended December 31, 2013, plus deferred cash payments totaling $900,000 payable as follows: (i) eight quarterly payments beginning January 1, 2014 in an amount equal to the greater of $56,250 or seven percent of adjusted gross revenue for the immediately preceding period, and (ii) eight quarterly payments beginning January 1, 2016 in an amount equal to the greater of $56,250 or five percent of adjusted gross revenue for the immediately preceding period. In addition, Chef's Diet will make up to four quarterly bonus payments of up to $50,000 each if it meets certain customer acquisition and retention targets.

The Company's meal delivery operations were a component of our eDiets subsidiary which delivered fresh and frozen diet or wellness focused meals to our customers. Management believes this divestiture will allow the Company to streamline its operations and focus its limited recourses on ecommerce based platforms, which it believes is the future of the dietary and wellness industries.

In connection with the Agreement, the Company retained a perpetual, nonexclusive, worldwide, royalty free right and license to use the Meal Delivery Assets in its business provided that it shall not utilize such assets to promote any fresh, frozen or prepared meal program, as defined.

For the three month and nine month periods ending December 31, 2013, the Company's meal delivery component had operational losses of $82,000 and $1,735,000, respectively. As a result of this divestiture, the Company recognized a non-cash charge of $14,631,000, including a write down of goodwill of $9,300,000 and $5,331,000 in identifiable intangible assets, resulting from the Company's determination that it would not be able to recover the carrying value of its investment in this component and that it would not be able to recover the carrying value of its finite-lived intangible assets in this component and therefore recorded the related loss in discontinued operations. As a result of this impairment, the Company carries no remaining goodwill. No tangible assets or liabilities were transferred in the divestiture of the meal delivery component.

The results of operations for the meal delivery component has been reported as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented. The following table summarizes the results of operations for the discontinued component:

	Three Months Ended December 31, 2013			Nine Months Ended December 31, 2013
Net sales	$	23,692		$	1,975,673
Operating (loss)		(82,315	)		(1,735,457	)
Asset sale		-			1,100,000
Impairment charge related to goodwill and finite-lived intangibles		-			(14,631,439	)
Income tax benefit (expense)		-			-
Loss from discontinued operations, net of taxes	$	(82,315	)	$	(15,266,896	)

XML

Stockholders' Equity (Schedule of Stock Options Activity) (Details) (USD $)	9 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Shares
Options, beginning balance	5,933,708	1,025,000
Granted	3,550,000	2,105,000
Exercised
Forfeited	(1,461,357)	(12,500)
Expired	(29,388)
Options, ending balance	7,992,963	3,117,500
Options exercisable	4,756,713	880,000
Weighted average exercise price
Options, beginning balance	$ 2.32	$ 1.31
Granted	$ 0.66	$ 0.68
Exercised
Forfeited	$ 5.97	$ 0.96
Expired	$ 0.83
Options, ending balance	$ 1.39	$ 0.89
Options exercisable	$ 2.52	$ 1.37
Aggregate intrinsic value
Options, beginning balance	$ 44,775
Options, ending balance
Options exercisable
Weighted average remaining contractual life (years)
Options, weighted average contractual life	7 years 4 months 6 days	7 years 8 months 1 day
Options exercisable, period end	6 years 11 days	3 years 7 days
Options granted, adjusted replacement options	2,816,208

XML

Commitments and Contingencies (Tables)

9 Months Ended

Dec. 31, 2013

Commitments and Contingencies [Abstract]

Schedule Of Future Minimum Rental Payments

The following is a schedule by year of future minimum rental payments required under our lease agreement on December 31, 2013:

	Operating Lease
Year 1	$	91,900
Year 2		-
Year 3		-
Year 4		-
Year 5		-
	$	91,900

XML

eDiets Acquisition and Sale of Meal Delivery Service (Schedule of the Fair Value of Assets Acquired and Liabilities Assumed) (Details) (USD $)	Feb. 28, 2013
Business Acquisition [Line Items]
Cash and cash equivalents	$ 241,344
Restricted cash	450,000
Accounts receivable	118,172
Inventory	75,522
Prepaid expenses and other assets	275,170
Property, plant and equipment	61,342
Total assets acquired	9,080,989
Accounts payable	(2,318,986)
Accrued expenses	(443,364)
Notes payable	(463,672)
Total liabilities assumed	(3,226,022)
Total assets acquired	5,854,967
URL's [Member]
Business Acquisition [Line Items]
Intangible assets	1,000,000
Customer relationships [Member]
Business Acquisition [Line Items]
Intangible assets	6,000,000
Trademarks [Member]
Business Acquisition [Line Items]
Intangible assets	$ 859,439

XML

Summary of Significant Accounting Policies (Policy)

9 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies [Abstract]

Accounting Estimates

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenue and expenses during the reported periods. Our management believes the estimates utilized in preparing our consolidated financial statements are reasonable. Actual results could differ from these estimates.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. We believe the following critical accounting policies involve the most significant judgments and estimates used in the preparation of our consolidated financial statements.

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.

Allowance for Sales Returns: In the direct response industry, purchased items are generally returnable for a certain period after purchase. We attempt to estimate returns and provide an allowance for sales returns where applicable. Our estimates are based on historical experience and knowledge of the products sold. The allowance for estimated sales returns totaled $0 and approximately $209,000 at December 31, 2013 and March 31, 2013, respectively.

Goodwill: Goodwill is not amortized but is subject to periodic testing for impairment in accordance with Accounting Standards Codification ("ASC") Topic 350 -- Intangibles - Goodwill and Other - Testing Indefinite-Lived Intangible Assets for Impairment. The test for impairment was to be conducted annually or more frequently if events occur or circumstances change indicating that the fair value of the goodwill may be below its carrying amount. In connection with the Company's decision to divest the dietary meal delivery component in September 2013, the Company determined that it would not be able to recover the carrying value of its investment in this component and therefore recorded a loss of $9,300,000 related to the associated goodwill, which was recorded in loss from discontinued operations.

The following provides a roll-forward of the Company's goodwill:

Balance as of March 31, 2013	$	9,300,000	)
Impairment		(9,300,000	)
Balance as of December 31, 2013	$	-

Intangible Assets: Intangible assets include acquired customer relationships, urls and trademarks. Intangible assets with finite lives are amortized using the straight-line method over the estimated economic lives of the assets of five years in accordance with ASC Topic 350 -- Intangibles - Goodwill and Other - Testing Indefinite-Lived Intangible Assets for Impairment. Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In connection with the Company's decision to divest the dietary meal delivery component in September 2013, the Company determined that it would not be able to recover the carrying value of its finite-lived intangible assets in this component and therefore recorded a loss of $5,331,000 which represented the excess carrying value over the related fair value of these assets, which was recorded in loss from discontinued operations.

Income Taxes: We use the asset and liability method to determine our income tax expense or benefit. Deferred tax assets and liabilities are computed based on temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates that are expected to be in effect when the differences are expected to be recovered or settled. Any resulting net deferred tax assets are evaluated for recoverability and, accordingly, a valuation allowance is provided when it is more likely than not that all or some portion of the deferred tax asset will not be realized.

Restricted Cash

Restricted Cash

Restricted cash represents funds held by eDiets credit card processors.

Revenue Recognition

Revenue Recognition

We recognize revenue from product sales in accordance with Financial Accounting Standards Board ("FASB") ASC 605 - Revenue Recognition. Following agreements or orders from customers, we ship products to our customers often through a third party facilitator. Revenue from product sales is only recognized when substantially all the risks and rewards of ownership have transferred to our customers, the selling price is fixed and collection is reasonably assured. Typically, these criteria are met when our customer's order is received and we receive acknowledgment of receipt by a third party shipper and collection is reasonably assured.

We recognized deferred revenue for our dietary meal delivery program as payment is made in advance of the actual meal delivery. We also recognize deferred revenue related to our online dietary subscription services as payments are made in advance of the full subscription period. As of December 31, 2013 and March 31, 2013, we had recognized deferred revenue of approximately $78,000 and $174,000, respectively.

The Company has a return policy on its ASTV sales whereby the customer can return any product within 60-days of receipt for a full refund, excluding shipping and handling. However, historically the Company has accepted returns past 60-days of receipt. The Company provides an allowance for returns based upon specific product warranty agreements and past experience and industry knowledge. All significant returns for the periods presented have been offset against gross sales. The Company also provides a reserve for warranties, which is not significant and is included in accrued expense.

eDiets' meal delivery revenue, through the divestiture date, was recognized upon delivery and transfer of title to the product. This occurred upon shipment from the Company's fulfillment center and delivery to the end-customer. eDiets' digital revenue is generated by the Company offering membership subscriptions to the proprietary content contained in its websites. Subscriptions are paid in advance, mainly via credit/debit cards, and cash receipts are recognized as deferred revenue and are recorded as revenue on a straight-line basis over the period of the digital plan subscription.

Receivables

Receivables

Accounts receivable consists of amounts due from the sale of our direct response, home shopping related products and dietary programs. Our allowance for doubtful accounts at December 31, 2013 and March 31, 2013, totaled $0 and $152,000, respectively. The allowances are estimated based on historical customer experience and industry knowledge.

Inventories and Advances on Inventory Purchases

Inventories and Advances on Inventory Purchases

Inventories are stated at the lower of cost or market. Cost is determined using a first-in, first-out, or FIFO, method. We review our inventory for excess or obsolete inventory and write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value.

Advances on inventory purchases represent payments made to our product suppliers in advance of delivery to the Company. It is common industry practice to require a substantial deposit against products ordered before commencement of manufacturing, particularly with off-shore suppliers. Additional advance payments may also be required upon achievement of certain agreed upon manufacturing or shipment benchmarks. Upon delivery and receipt by the Company of the items ordered, and the Company taking title to the goods, the balances are transferred to inventory.

Property and Equipment, net

Property and Equipment, net

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

Property and equipment, net consists of the following:

Property and equipment	Estimated Useful Lives	December 31, 2013			March 31, 2013
Computers and software	3 Years	$	61,892		$	120,041
Office equipment and furniture	5-7 Years		67,693			94,248
Leasehold improvements	1-3 Years		62,610			62,610
			192,195			276,899
Less: accumulated depreciation and amortization			(141,576	)		(132,098	)
		$	50,619		$	144,801

Depreciation and amortization expense totaled approximately $9,000 and $52,000 for the three and nine month periods ended December 31, 2013, respectively, and $13,000 and $38,000 for the three and nine month periods ending December 31, 2012.

Intangible Assets

Intangible Assets

Intangible assets consisted of the following at December 31, 2013 and March 31, 2013:

	March 31, 2013			Amortization Expense for the Nine Months Ended December 31, 2013			Impairment			Additions		December 31, 2013			Estimated Useful Life
Customer relationships	$	6,000,000		$			$	(5,000,000	)	$	-	$	1,000,000		5 years
URL's		1,000,000						(660,000	)		98,956		438,956		5 years
Trademarks		859,439						(588,439	)		-		271,000		5 years
AsSeenOnTV.com		2,839,216									-		2,839,216		Indefinite
		10,698,655						(6,248,439	)		98,956		4,549,172
Accumulated amortization		(131,000	)		(866,500	)		917,000			-		(80,550	)
	$	10,567,655		$	(866,500	)	$	(5,331,439	)	$	98,956	$	4,468,622

Long-lived assets, including intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

The straight-line method is being used to amortize the Company's finite lived intangible assets over their respective lives. Related amortization expense recognized was approximately $81,000 and $867,000 for the three and nine month periods ended December 31, 2013, respectively. Amortization expense for the next five succeeding fiscal years is estimated as follows:

March 31,
2014 remaining three months	$   90,000
2015	$ 342,000
2016	$ 342,000
2017	$ 342,000
2018	$ 342,000
2019	$ 171,000

Earnings (Loss) Per Share

Earnings (Loss) Per Share

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

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

	Three Months Ended December 31,				Nine Months Ended December 31,
	2013		2012		2013		2012
Stock options		7,992,963		1,606,359		7,992,963		1,231,136
Warrants		64,833,369		64,172,176		64,833,369		58,978,667
		72,826,332		65,778,535		72,826,332		60,209,803

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially expose us to concentrations of credit risk consist primarily of cash, cash equivalents and trade accounts receivable. Cash and cash equivalents are 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. Concentration of credit risk with respect to our trade accounts receivable to our customers is limited to $288,765 at December 31, 2013. Credit is extended to our customers, based on an evaluation of a customer's financial condition and collateral is not required.

Advertising and Promotional Costs

Advertising and Promotional Costs

Advertising and promotional costs are expensed when incurred and totaled approximately $4,000 and $16,000 for the three month periods ended December 31, 2013 and 2012, respectively, and approximately $34,000 and $70,000 for the nine month periods ended December 31, 2013 and 2012, respectively.

Fair Value Measurements

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 March 31, 2013, respectively. Accordingly, the estimates presented in these financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments.

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

The three levels of the fair value hierarchy are as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments and listed equities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 includes financial instruments that are valued using models or other valuation methodologies. These models consider various assumptions, including volatility factors, current market prices and contractual prices for the underlying financial instruments. Substantially all of these assumptions are observable in the marketplace, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

Level 3 - Unobservable inputs for the asset or liability. Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

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

Accounting Standards Updates

Accounting Standards Updates

There have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended December 31, 2013, as compared to the recent accounting pronouncements described in the Company's Audited 2013 Financial Statements that are of material significance, or have potential material significance to the Company.

Principles of Consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its consolidated subsidiaries. All inter-company account balances and transactions have been eliminated in consolidation.