v2.4.0.8
Segment Reporting
 6 Months Ended
Jun. 30, 2014
Segment Reporting [Abstract]  
Segment Reporting

Note 16. Segment Reporting


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


Power Tools & Cleaning


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


Housewares


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


eCommerce


The eCommerce segment operates in the direct response market. This segment markets consumer products for global distribution via Internet using its AsSeenOnTV.com URL. This segment also generates subscription based revenue from its nationwide weight-loss oriented digital subscription service through its eDiets.com URL.


Corporate


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


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


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


Summarized financial information concerning the Company's reportable segments for the three months ended June 30, 2014 and 2013 are shown in the following tables.


                                         

 

 

Three Months Ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

& Cleaning

 

 

Housewares

 

 

eCommerce

 

 

Corporate

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

1,525,104

 

 

$

1,671,145

 

 

$

189,122

 

 

$

-

 

 

$

3,385,371

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) gain

 

$

(2,178,871

)

 

$

(1,016,403

)

 

$

(734,121

)

 

$

733,749

 

 

$

(3,150,916

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

16,208

 

 

$

70,529

 

 

$

162,423

 

 

$

-

 

 

$

249,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

-

 

 

$

345,445

 

 

$

-

 

 

$

1,029,663

 

 

$

1,375,108

 

  

                                         

 

 

Three Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

& Cleaning

 

 

Housewares

 

 

eCommerce

 

 

Corporate

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

3,813,904

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

3,813,904

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(581,574

)

 

$

-

 

 

$

-

 

 

$

(71,211

)

 

$

(652,785

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

8,689

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

8,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

-

 

 

$

-

 

 

$

-

 

 

$

73,242

 

 

$

73,242

 


Summarized financial information concerning the Company's reportable segments for the six months ended June 30, 2014 and 2013 are shown in the following tables, followed by a reconciliation of assets to consolidated assets is as follows:


                                         

 

 

Six Months Ended June 30, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

& Cleaning

 

 

Housewares

 

 

eCommerce

 

 

Corporate

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

4,106,533

 

 

$

2,285,290

 

 

$

189,124

 

 

$

-

 

 

$

6,580,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) gain

 

$

(3,153,258

)

 

$

(1,141,668

)

 

$

(734,121

)

 

$

598,416

 

 

$

(4,430,629

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

28,995

 

 

$

94,038

 

 

$

162,423

 

 

$

-

 

 

$

285,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

-

 

 

$

457,956

 

 

$

-

 

 

$

1,159,878

 

 

$

1,617,834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets held at June 30, 2014

 

$

5,650,111

 

 

$

23,245,131

 

 

$

9,606,683

 

 

$

10,214,375

 

 

$

48,716,300

 



                                         

 

 

Six Months Ended June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power Tools

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

& Cleaning

 

 

Housewares

 

 

eCommerce

 

 

Corporate

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

9,190,171

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

9,190,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,061,093

)

 

$

-

 

 

$

-

 

 

$

(170,698

)

 

$

(1,231,791

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

$

19,940

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

19,940

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

$

-

 

 

$

-

 

 

$

-

 

 

$

169,269

 

 

$

169,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets held

 

$

2,295,191

 

 

$

-

 

 

$

-

 

 

$

-

 

 

$

2,295,191

 


                 

 

 

For the Six Months Ended

June 30,

 

 

 

2014

 

 

2013

 

Reconciliation of Total Assets Held

 

 

 

 

 

  

Total assets for reportable segments

 

$

48,716,300

 

 

$

2,295,191

 

Elimination of intersegment funding receivables

 

 

(7,957,276

)

 

 

-

 

Elimination of intersegment notes receivable

 

 

(851,237

)

 

 

-

 

Elimination of intersegment interest receivable

 

 

(4,373

)

 

 

-

 

Elimination of intersegment deferred financing fee

 

 

(23,750

)

 

 

-

 

Elimination of intersegment accrued fees

 

 

(45,401

)

 

 

 

 

Total consolidated assets

 

$

39,834,263

 

 

$

2,295,191

 


Intersegment Transactions


As of June 30, 2014, the Corporate segment has provided funding to the Power Tools & Cleaning, Housewares, and eCommerce segments in the amount of $7,410,176, $522,100 and $25,000, respectively.


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


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