ICTV - Canadian Securities Exchange [PDF]

NOTE TO READER This Listing Statement contains a copy of the prospectus of International Commercial Television Inc. (“ICTV”) dated March 28, 2014 (the “Prospectus”). Section 14 Capitalization of the Canadian Securities Exchange’s (the “Exchange’s”) form of Listing Statement has been included following the Prospectus to provide additional disclosure on ICTV, as required by the Exchange.

TABLE OF CONTENTS 1.

Table of Concordance

2.

Schedule A – Prospectus dated March 28, 2014

3.

Schedule B – Listing Statement Disclosure – Capitalization

4.

Certificate of the Issuer

TABLE OF CONCORDANCE Information Required by Form 2A Listing Statement Corporate Structure General Development of the Business

Corresponding Item(s) in the Prospectus Corporate Structure Description of the Business Stated Business Objectives Three-Year History Trends Narrative Description of the Narrative Description of the Business Business Selected Consolidated Financial Summary Financial Information Information Management’s Discussion and Management’s Discussion and Analysis Analysis Market for Securities Trading Price and Volume Consolidated Capitalization Consolidated Capitalization Options to Purchase Securities Options to Purchase Securities Description of the Securities Description of the Securities Distributed Escrowed Securities Escrowed Securities Principal Shareholders Principal Shareholders Directors and Officers Directors and Officers Capitalization N/A Executive Compensation Executive Compensation Indebtedness of Directors and Indebtedness of Directors and Executive Officers Executive Officers Risk Factors Risk Factors Promoters Promoters Legal Proceedings Legal Proceedings and Regulatory Actions Interest of Management and Others Interest of Management and Others in Material Transactions in Material Transactions Auditors, Transfer Agents and Auditors, Transfer Agents and Registrars Registrars Material Contracts Material Contracts Interest of Experts Experts Other Material Facts Other Material Facts Financial Statements Interim Financial Statements Annual Financial Statements

Prospectus Page Number(s) 8 9 9 9 19 19 iii 28 40 39 39 38 40 41 41 Schedule B 46 48 55 61 61 62 62 62 63 59 63 63

SCHEDULE A Prospectus Dated March 28, 2014

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This prospectus does not constitute a public offering of securities PROSPECTUS Non-Offering Prospectus

Date: March 28, 2014

INTERNATIONAL COMMERCIAL TELEVISION INC. 489 Devon Park Dr., Suite 315 Wayne, Pennsylvania, 19087 No securities are being offered pursuant to this Prospectus This prospectus (the “Prospectus”) is being filed with the British Columbia Securities Commission and the Ontario Securities Commission to enable International Commercial Television Inc. (the “Company”) to become a reporting issuer pursuant to applicable securities legislation in British Columbia and Ontario, notwithstanding that no sale of its securities is contemplated herein. Since no securities are being offered pursuant to this Prospectus, no proceeds will be issued and all expenses in connection with the preparation and filing of this Prospectus will be paid by the Company from its general corporate funds. There is currently no market in Canada through which the common shares in the capital of the Company may be sold and shareholders may not be able to resell the shares of the Company owned by them. This may affect the pricing of the shares in the secondary market, the transparency and availability of trading prices, the liquidity of the shares and the extent of issuer regulation. See “Prospectus Summary – Risk Factors” on page ii of the Prospectus and “Risk Factors” on page 55 of the Prospectus. The Company’s common shares currently trade on the OTC market in the United States and are quoted on the OTCQB under the symbol ICTL. Accordingly, there is currently limited availability through which the Company’s securities may be sold and shareholders may not be able to resell securities of the Company. As of March 27, 2014, the closing price of the Company’s shares was US$0.95. The Canadian Securities Exchange has conditionally approved the listing of the common shares of the Company. Listing is subject to the Company fulfilling all the requirements of the Canadian Securities Exchange, including meeting all minimum listing requirements. An investment in the securities of the Company is speculative and involves a high degree of risk. There is no assurance that the Company’s strategy to leverage brand awareness created by its infomercials into the retail market will work. If the response rates to the Company’s infomercials are lower than it predicts, it may not achieve the customer base necessary to become or remain profitable. If the Company’s infomercials are not successful, it will not be able to recoup significant advance expenditures spent on production and media times, and its business plan may fail. The Company depends on key management and employees, the loss of whom may prevent it from implementing its business plan, limit its profitability and decrease the value of its stock. If the Company cannot protect its intellectual property rights, its operating results will suffer. If the Company does not continue to source new products, its ability to complete will be undermined, and it may be unable to implement its business plan. The Company and/or its directors may be subject, with or without merit, to a variety of civil or other legal proceedings. The Company intends to retain any future earnings to finance its business and operations and future growth and does not anticipate declaring any cash dividends in the foreseeable future. In reviewing this non-offering Prospectus you should carefully consider the matters

described under the heading “Prospectus Summary – Risk Factors” on page ii of this Prospectus and under the heading “RISK FACTORS” on page 55 of this Prospectus. No underwriters or selling agents have been involved in the preparation of this Prospectus or performed any review or independent due diligence of its contents. The Company is incorporated under the laws of a foreign jurisdiction and certain of its directors and officers (Kelvin Claney, Chief Executive Officer, Secretary and Director; Richard Ransom, President and former Chief Financial Officer; Ryan LeBon, Current Chief Financial Officer; Stephen Jarvis, Director) reside outside of Canada. The Company has appointed Schwarz Law LLP of 1984 Yonge Street, Toronto, Ontario, M4S 1Z7 as its agent for service of process. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction or resides outside of Canada, even if the party has appointed an agent for service of process. On March 27, 2014 the Company filed its annual financial statements for the year ended December 31, 2013 ( the "2013 Financial Statements"). As is required by section 32.6 of Form 41-101F1 of National Instrument 41101 General Prospectus Requirements,the 2013 Financial Statements are included in the Prospectus as additional financial statements or financial information filed or released prior to the date of the Prospectus. The Prospectus was not updated to reflect the financial information from the 2013 Financial Statements other than to include the 2013 Financial Statements in the Prospectus. Please see the filed 2013 annual report for further information. Unless otherwise noted, all currency amounts in this Prospectus are stated in United States dollars. In this Prospectus, “we”, “us”, “our”, “ICTV” and the “Company” refers to International Commercial Television Inc., a corporation incorporated under the laws of the state of Nevada.

TABLE OF CONTENTS PROSPECTUS SUMMARY....................................................................................................................................... I GLOSSARY OF TERMS......................................................................................................................................... VI CORPORATE STRUCTURE ....................................................................................................................................8 NAME AND INCORPORATION ......................................................................................................................................8 DESCRIPTION OF THE BUSINESS .......................................................................................................................9 DESCRIPTION OF THE BUSINESS .................................................................................................................................9 STATED BUSINESS OBJECTIVES..................................................................................................................................9 THREE-YEAR HISTORY ..............................................................................................................................................9 TRENDS .................................................................................................................................................................... 19 NARRATIVE DESCRIPTION OF THE BUSINESS ............................................................................................ 19 USE OF PROCEEDS ................................................................................................................................................ 24 FUNDS AVAILABLE .................................................................................................................................................. 27 BUSINESS OBJECTIVES ............................................................................................................................................. 28 DIVIDEND POLICY ................................................................................................................................................ 29 MANANAGEMENT DISCUSSION AND ANALYSIS ............................................................................................. DESCRIPTION OF THE SECURITIES DISTRIBUTED .................................................................................... 38 COMMON SHARES .................................................................................................................................................... 38 WARRANTS .............................................................................................................................................................. 39 OPTIONS................................................................................................................................................................... 39 CONSOLIDATED CAPITALIZATION ................................................................................................................. 39 OPTIONS TO PURCHASE SECURITIES............................................................................................................. 40 PRIOR SALES ............................................................................................................................................................ 40 ESCROWED SECURITIES ........................................................................................................................................... 41 PRINCIPAL SHAREHOLDERS ............................................................................................................................. 42 DIRECTORS AND OFFICERS ............................................................................................................................... 42 NAME, ADDRESS, OCCUPATION, AND SECURITY HOLDING ...................................................................................... 38 AGGREGATE OWNERSHIP OF SECURITIES ................................................................................................................. 41 CORPORATE CEASE TRADE ORDERS OR BANKRUPTCIES.......................................................................................... 41 PENALTIES OR SANCTIONS ....................................................................................................................................... 42 PERSONAL BANKRUPTCIES ...................................................................................................................................... 42 CONFLICTS OF INTEREST .......................................................................................................................................... 42 EXECUTIVE COMPENSATION................................................................................................................................ COMPENSATION DISCUSSION AND ANALYSIS .......................................................................................................... 46 COMPENSATION OF NAMED EXECUTIVE OFFICERS OF THE ISSUER .......................................................................... 49 INCENTIVE PLAN AWARDS ....................................................................................................................................... 50 PENSION PLANS BENEFITS ....................................................................................................................................... 52 TERMINATION AND CHANGE OF CONTROL BENEFITS .............................................................................................. 52 COMPENSATION OF DIRECTORS ............................................................................................................................... 52 INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS ................................................................ 48 AUDIT COMMITTEE AND CORPORATE GOVERNANCE ............................................................................ 48 PLAN OF DISTRIBUTION ..................................................................................................................................... 53

RISK FACTORS ....................................................................................................................................................... 55 PROMOTERS ........................................................................................................................................................... 61 LEGAL PROCEEDINGS AND REGULATORY ACTIONS ............................................................................... 61 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS.................................... 62 AUDITORS, TRANSFER AGENTS AND REGISTRARS ................................................................................... 62 MATERIAL CONTRACTS ..................................................................................................................................... 62 EXPERTS ................................................................................................................................................................... 63 OTHER MATERIAL FACTS .................................................................................................................................. 59 FINANCIAL STATEMENTS .................................................................................................................................. 60

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INTERNATIONAL COMMERCIAL TELEVISION INC. PROSPECTUS SUMMARY The following is a summary of the principal features of this Prospectus and should be read together with the more detailed information and financial data and statements contained elsewhere in this Prospectus. The Company

The Company’s predecessor, The Gun Store, Inc., was incorporated under the laws of Montana on February 11, 1993. On June 25, 1998, The Gun Store, Inc. reincorporated in Nevada pursuant to a voluntary share exchange with Moran Dome Exploration, Inc. (“Moran Dome”), a Nevada corporation. Pursuant to the share exchange, The Gun Store, Inc. exchanged its 100 issued and outstanding shares of common stock for 1,000,000 shares of Moran Dome common stock. In April 2000, Moran Dome entered into a share and option purchase agreement with Kelvin Claney, Robin Jan Claney and William Ainslie Reece, in their capacity as trustees of The Better Blocks Trust, which owned or controlled all of the equity interest in Windowshoppe.com Limited, R.J.M. Ventures Limited and Better Blocks International Limited. Pursuant to the agreement, Moran Dome acquired all of the equity interest in Windowshoppe.com Limited and R.J.M. Ventures Limited, as well as a license to all of the assets owned by Better Blocks International Limited in consideration for 8,000,000 shares of Moran Dome’s common stock and a $590,723 promissory note. In March 2001, Moran Dome amended and restated its articles of incorporation and changed its name from “Moran Dome Exploration, Inc.” to “International Commercial Television Inc.”

Business of the Company

The Company sells various consumer products via infomercials and through other channels, produces long-form infomercials and short-form advertising spots, and sells its proprietary brands of advertised products directly to its viewing audience. In addition, the Company sells products via televised shopping networks, the internet, and retail distribution channels. See “Description of the Business” on page 6 of this Prospectus.

Principal Products

The Company’s principal products include: 1) DermaWandTM, a skin care appliance that reduces fine lines and wrinkles and improves overall skin performance; 2) DermaVital®, a product line consisting of several moisturizers that allow water to penetrate the skin’s surface, thus re-hydrating the deeper layers; 3) BetterBlocks, a patented plastic toy building system; 4) Glo-B’s, a toy building block system made of glow-in-the-dark non-coloured plastic building blocks that bend, shape, and curve; 5) Strike N’ Set, a patented fishing lure system manufactured by MBCT Global Ventures, LLC; and 6) SlenderLift, a slimming garment system for women. See “Narrative Description of the Business” on page 16 of this Prospectus.

Listing

The Company has applied to have its common shares listed on the CSE. Listing is subject to the Company fulfilling all of the requirements of the CSE.

Use of Available Funds

As of September 30, 2013, the most recent quarter end prior to filing this Prospectus, the Company had net assets of $1,965,654 and a working capital surplus of $2,756,176. For a more detailed discussion on the Company’s available funds, see “Use of Available Funds” on page 23 of this Prospectus and “Description of the Business” on page 6 of this Prospectus.

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Directors, Officers and Senior Management

Kelvin Claney –Chief Executive Officer, Secretary and Director Richard Ransom – President and Former Chief Financial Officer Ryan LeBon – Chief Financial Officer Stephen Jarvis – Director William Kinnear – Director See “Directors and Officers” on page 38 of this Prospectus.

Risk Factors

Investment in the Company involves a substantial degree of risk and should be regarded as speculative. As a result, the purchase of the Company's securities should be considered only by those persons who can afford a loss of their entire investment. Prospective investors should carefully consider, in addition to matters set forth elsewhere in this Prospectus, the following factors relating to the business of the Company. There is no assurance that the Company’s strategy to leverage brand awareness created by its infomercials into the retail market will work. If the response rates to the Company’s infomercials are lower than it predicts, it may not achieve the customer base necessary to become or remain profitable. If the Company’s infomercials are not successful, it will not be able to recoup significant advance expenditures spent on production and media times, and its business plan may fail. The Company depends on key management and employees, the loss of whom may prevent it from implementing its business plan, limit its profitability and decrease the value of its stock. If the Company cannot protect its intellectual property rights, its operating results will suffer. If the Company does not continue to source new products, its ability to complete will be undermined, and it may be unable to implement its business plan. The Company and/or its directors may be subject, with or without merit, to a variety of civil or other legal proceedings. The Company intends to retain any future earnings to finance its business and operations and future growth and does not anticipate declaring any cash dividends in the foreseeable future. This information is presented as of the date of this Prospectus and is subject to change, completion, or amendment without notice. See “Risk Factors” on page 55 of this Prospectus.

Summary Financial Information

The following selected financial information has been derived from and is qualified in its entirety by the audited financial statements and notes thereto included in this Prospectus, and should be read in conjunction with such financial statements and the related notes thereto, along with the “Management Discussion and Analysis” included on page 26 of this Prospectus. All financial statements of the Company are prepared in accordance with generally accepted accounting principles of the United States of America.

- iii Fiscal Year Ended December 31, 2012 (Audited) Total Assets

$4,440,228

Total Liabilities

$4,840,597

Shareholders’ Deficit

$(400,369)

Total Liabilities and Shareholders’ Deficit

$4,440,228

Total Common Shares

20,772,756 FORWARD-LOOKING INFORMATION

This Prospectus contains forward-looking information, which includes disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases, or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Examples of such forward-

- iv looking information in this Prospectus includes disclosure relating to the following: ● ● ●

the Company's business and operations; the funds available to the Company and the principal purposes of those funds; the Company’s business objectives and discussion of trends affecting the business of the Company

Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking information contained in this Prospectus. The forward-looking information in this Prospectus is based on a number of assumptions which may prove to be incorrect, including, but not limited to the following: ● ● ● ●

general economic conditions; the ability of the Company to accurately assess and anticipate trends in its industry; the ability of the Company to realize its business objectives and manage its cash flow; and the ability of the Company to obtain any necessary financing;

Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Some of these risks, include, but are not limited to the following: ●

the Company may not be able to satisfy the minimum listing requirements of the CSE;

●

the Company’s new products will be at initial market introduction, and there is no assurance that the market will accept them;

●

the Company may need additional financing, and may not be able to secure such financing on terms acceptable to it;

●

the Company’s success depends on the successful marketing of its products;

●

the inability of the Company to protect the patents, trademarks, trade secrets and other proprietary rights to its products could adversely affect the Company’s competitive position; and

●

the Company and its customers are subject to various political, economic and regulatory changes in the healthcare industry that could force the Company to modify how it develops and prices its components, manufacturing capabilities and services.

The factors identified above are not intended to represent a complete list of the factors that could affect the Company. Additional risk factors are noted under the heading “Risk Factors” on page 55. The factors identified above are not intended to represent a complete list of the factors that could affect the Company. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievement may vary materially from those expressed or implied by the forward-looking information contained in this Prospectus. These risk factors should be carefully considered and readers are cautioned not to place undue reliance on forward-looking information, which speaks only as of the date of this Prospectus. All subsequent forward-looking information attributable to the Company herein is expressly qualified in its entirety by the

-vcautionary statements contained in or referred to herein. The Company does not undertake any obligation to release publicly any revisions to this forward-looking information to reflect events or circumstances that occur after the date of this Prospectus or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by the Company. Investors are cautioned not to place undue reliance on these forward-looking statements. No forwardlooking statement is a guarantee of future results.

- vi CURRENCY RATES, METRIC EQUIVALENTS AND ABBREVIATIONS All currency amounts in the Prospectus are stated in United States dollars unless otherwise indicated. All financial information with respect to the Company has been presented in United States dollars in accordance with generally accepted accounting principles in the United States. The following table sets forth, for each period indicated, the exchange rates of the Canadian dollar to the U.S. dollar at the end of such period and the high, low, average (based on the exchange rate on the last day of each month during such period) exchange rates for such period (such rates, which are expressed in Canadian dollars, are based on the noon buying rate for U.S. dollars as reported by the Bank of Canada).

Rate at the end of the period Average rate during the period Highest rate during the period Lowest rate during the period

2010 $1.0054 $0.9709 $1.0054 $0.9278

Year Ended December 31 2011 2012 2013 $0.9833 $0.999 $0.9349 $1.0111 $0.999 $0.9711 $1.0583 $1.028 $1.0166 $0.9430 $0.978 $0.9336

On March 27, 2014, the Bank of Canada noon spot exchange rate for the purchase of one U.S. dollar using Canadian dollars was $0.9044 (CAD$1.00 = USD$0.90). GLOSSARY OF TERMS The following is a glossary of certain defined terms used frequently throughout this Prospectus: “$”

unless otherwise noted all dollar amounts are considered to be in United States currency.

“Affiliate”

a company that is affiliated with another company as defined in the Business Corporations Act (British Columbia).

“associate”

means, if used to indicate a relationship with any Person, (a) a partner, other than a limited partner, of that Person, (b) a trust or estate in which that Person has a substantial beneficial interest or for which that Person serves as trustee or in a similar capacity, (c) an issuer in respect of which that Person beneficially owns or controls, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all outstanding voting securities of the issuer, or (d) a relative, including the spouse, of that Person or a relative of that Person's spouse, if the relative has the same home as that Person.

“common share”

a common share without par value of the Company.

“Company”

International Commercial Television Inc.

“Directors”

the directors of the Company.

“Effective Date”

the date on which the final receipt for this Prospectus is issued by the British Columbia Securities Commission.

“Exchange” or “CSE”

the Canadian Securities Exchange.

“Insider”

an insider as defined in the Securities Act (British Columbia), which includes (a) a director or an officer of an issuer,

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(b) a director or an officer of a person that is itself an insider or a subsidiary of an issuer, (c) a Person that has (i) beneficial ownership of, or control or direction over, directly or indirectly, or (ii) a combination of beneficial ownership of, and control or direction over, directly or indirectly, securities of an issuer carrying more than 10% of the voting rights attached to all the issuer's outstanding voting securities, excluding, for the purpose of the calculation of the percentage held, any securities held by the Person as underwriter in the course of a distribution, (d) an issuer that has purchased, redeemed or otherwise acquired a security of its own issue, for so long as it continues to hold that security, (e) a Person designated as an insider in an order made under section 3.2, or (f) a Person that is in a prescribed class of Persons. “Person”

means a company or an individual.

“Prospectus”

this prospectus and any appendices, schedules or attachments hereto.

“Transfer Agent”

Nevada Agency and Trust.

8 CORPORATE STRUCTURE Name and Incorporation International Commercial Television Inc., (formerly known as Moran Dome Exploration, Inc.), was organized under the laws of the state of Nevada on June 25, 1998. Prior to that, the Company was incorporated in Montana on February 11, 1993 under the name “The Gun Store, Inc.” and later reincorporated in Nevada pursuant to a voluntary share exchange with Moran Dome Exploration, Inc. From June 25, 1998 through March 31, 2000, the Company had limited operations and assets. On April 1, 2000, the Company entered into a Share and Option Purchase Agreement with the trustees of The Better Block Trust (BBT), which owned or controlled all of the equity interest in Windowshoppe.com Limited (WSL), R.J.M. Ventures Limited (RJML) and Better Blocks International Limited (BBIL). Under the agreement, the Company purchased all of the equity interest in WSL and RJML, an option to purchase all of the equity in BBIL and obtained a license to all of the assets owned by BBIL. The purchase price under the agreement was 8,000,000 shares of the Company's common stock and a $590,723 promissory note. The option exercise price is the issuance of an additional 500,000 shares of the Company's common stock. In March 2001, the Company amended and restated its articles of incorporation and changed its name from Moran Dome Exploration, Inc. to International Commercial Television Inc. Windowshoppe.com Limited was organized under the laws of New Zealand on June 25, 1999 and has a fiscal year end of March 31. R.J.M. Ventures Limited was organized under the laws of New Zealand on April 23, 1998 and has a fiscal year end of March 31. The Company's head and registered records office address is 489 Devon Park Dr., Suite 315, Wayne, Pennsylvania, 19087. The Company’s common shares currently trade on the OTC market in the United States and are quoted on the OTCQB under the symbol ICTL. The Company had one wholly owned subsidiary, Strategic Media Marketing Corp. (“SMM”), which was incorporated in the Province of British Columbia on February 11, 2003 and had a December 31 fiscal yearend. Effective February 7, 2011, the offices of SMM were closed down and the subsidiary was dissolved. Operations performed by SMM are now being managed out of the Company’s office. Effective February 17, 2011, the Company acquired 100% of the equity interest in Better Blocks International Limited in exchange for 500,000 shares of the Company’s common stock. The Company is not required by the laws of the jurisdiction of its incorporation or by its constating documents to hold shareholders’ meetings. For expediency and to save costs, any matters requiring shareholder approval have been dealt with by way of written consent of the shareholders. The Company is prepared to hold meetings in the future if needed.

9 DESCRIPTION OF THE BUSINESS Description of the Business The Company sells various consumer products via infomercials and through other channels. The Company produces long-form infomercials and short-form advertising spots and sells its proprietary brands of advertised products directly to its viewing audience. In addition, the Company sells products via televised shopping networks, the internet, and retail distribution channels. The Company’s goal is to create brand awareness through its infomercial and spot advertising, and in doing so, to create a customer base that it can cross-sell its brands to and that will buy its consumable products on a repetitive basis. In addition, the Company plans to create brand awareness so that these brands and their families of products may be sold in dedicated shelf-space areas by product category in traditional retail stores. The Company acquires rights to the products it markets via licensing agreements, acquisition, and in-house development. The Company currently sells these products domestically and internationally. A short-form spot is a 30-second, 1-minute, 2-minute, 3-minute or 5-minute commercial, while a long-form commercial is a 28 ½-minute direct response commercial. Short-form spots generally feature products that can be explained or demonstrated in two minutes or less, with a selling price of $29 or less. Short-form spots of three to five minutes are typically cut down versions of well-branded long-form infomercials. Long-form infomercials generally feature products with a selling price of $30 - $300 and are usually unique, with more benefits and features, and thus require a lengthier demonstration and explanation. For the fiscal years ended December 31, 2012 and December 31, 2011, 84% and 58%, respectively, of the Company’s product sales were generated from products sold domestically. The international division represented 16% and 42% of the Company’s sales volume for the years ended December 31, 2012 and 2011, respectively. International revenues resulted primarily from the sale of products to international distributors who in turn marketed its products to their respective markets via direct response and retail marketing channels. Stated Business Objectives Many of the Company’s competitors who produce successful infomercials fail to capitalize on their success by associating the products featured in their infomercials with a particular brand. The Company’s management believes there is a unique opportunity to do so and their goal is to create several brands of products and to introduce their brands to the market by airing infomercials featuring one or a few anchor products for each particular brand. As a number of the brands receive recognition through the infomercial of the anchor product(s), the Company plans to sell the anchor product(s) and related families of products under those brands in traditional retail stores. The Company’s objective is to have its brands of proprietary products sold in retail stores in dedicated shelf space areas by product category. The Company is currently developing the infrastructure it will need to develop its brands and to take families of products under those brands to the traditional retail environment.

Three-Year History

10

2010 In an agreement executed on May 20, 2009, ICTV granted exclusive distribution rights of the DermaWandTM to Allstar Marketing Group (“Allstar”) for all U.S. distribution channels with the exception of televised home shopping and beauty salons. Allstar’s distribution channels included DRTV, web, print, catalog, radio, and retail distribution in the U.S. In consideration of this exclusive license, ICTV was to be paid a royalty based on a percentage of Allstar’s U.S. sales of both the DermaWand TM and any associated sales of ICTV’s DermaVital skin care product line. In the year ended December 31, 2009, ICTV received a non-refundable royalty advance of $150,000 and earned approximately $56,000 in royalties from Allstar for U.S. distribution under their agreement. At December 31, 2009, approximately $94,000 of the nonrefundable royalty advance was unearned. On March 3, 2010, ICTV terminated its agreement with Allstar, with an effective date of March 13, 2010. After a “sell-off” period granted to Allstar that ended April 30, 2010, ICTV secured its rights back for complete U.S. distribution of the DermaWandTM. The $94,000 in non-refundable royalty advance was recognized as revenue upon the termination of the agreement. We acquired the rights to exclusively manufacture and market an innovative storage system known as “Smart Stacks”. In the fall of 2010, the Company did a DRTV media test of Smart Stacks. Our marketing efforts with regard to Smart Stacks have focused primarily on the international market. In November 2009, we acquired the worldwide exclusive license to manufacture and sell the Slender LiftTM, a slimming garment system for women. In the spring of 2010, the Company did a DRTV media test of Slender LiftTM. In February 2012, we tested Slender LiftTM on a televised home shopping channel. The product sold at an introductory price of $24.95. The test consisted of one airing of approximately eight minutes and generated sales of approximately 200 units. In April 2000 we acquired the exclusive, royalty-free worldwide license to manufacture, market and distribute BetterBlocksTM, a patented plastic toy building system, under the Share and Option Purchase Agreement with The Better Blocks Trust, a shareholder. BetterBlocksTM has been sold mainly through DRTV, mail order catalogues, retail and the television shopping channel QVC. The Company tested the BetterBlocksTM product line on televised shopping in the fall of 2009. Revenue for BetterBlocksTM was approximately $300 during 2010 and $38,000 during 2009. The Company tested the BetterBlocksTM product line on televised shopping in the fall of 2009, and continued to sell the product on the internet in 2011 and 2010. Revenue for BetterBlocksTM was approximately $6,000 and $300 during 2011 and 2010, respectively. In May 2008, ICTV moved its administrative offices from Bainbridge Island, Washington, to Wayne, Pennsylvania. The Company’s CFO resigned at that time rather than relocate to Pennsylvania. The new CFO hired by ICTV disagreed with the methods used by the former CFO to recognize certain revenues and to record returns, bad debt and reserves. As a result, ICTV announced in a report on Form 8-K filed on October 31, 2008, that it had discovered apparent errors in its recognition of revenues beginning with the third quarter of 2007 and that, as a result, it would be restating its financial statements for the last two quarters of 2007 and the first two quarters of 2008. During ICTV’s restatement process, that report was amended to include the second quarter of 2007. The restatement of ICTV’s financial statements has been completed and ICTV has been current in its financial reporting since June 30, 2010.

11 As a result, the Securities and Exchange Commission conducted an informal inquiry to determine if there had been violations of federal securities laws. ICTV provided its full cooperation to the SEC. The action filed by the SEC on August 9 is the culmination of the investigation as to ICTV. On August 9, 2010, the Securities and Exchange Commission charged the Company with filing inaccurate financial statements as a result of improper revenue recognition during the period from the second quarter of 2007 through the second quarter of 2008. ICTV agreed to settle all charges by consenting to an injunction against future violations of the SEC requirements to file accurate financial statements and to maintain controls necessary to ensure accuracy. As a result of the SEC charges brought against the Company in 2010, the Company implemented additional controls to prevent the circumstances that resulted in those charges from recurring, including hiring a new Chief Financial Officer and additional segregation of duties controls. In September 2010, the Company entered into a severance agreement with a former consultant. Under the severance agreement, the consultant will be paid $270,000 over a 27-month period in increments of $10,000 per month beginning in September 2010 and continuing through November 2012. The Company recorded the $270,000 as a general and administrative expense in the three months ended September 30, 2010. The severance payable balance at December 31, 2010 was $230,000, of which $120,000 was current and $110,000 was long-term. In October 2010, the Company terminated the employment of its Chief Operating Officer and committed to paying a four-month severance. The severance payable balance at December 31, 2010 was $33,333, all of which was a current liability. The major reason for the decrease in revenue in 2010 relates to selling the DermaWandTM at reduced prices on televised home shopping (HSN) as compared to 2009. During the majority of 2009, the DermaWandTM sold for $89.95 on HSN. Throughout 2010, the screen price for the DermaWandTM ranged from a high of $69.95 to a low of $49.95. These reductions in price throughout 2010 greatly affected the overall sales revenue for DermaWandTM. In addition, during 2010 the Company did not actively market the DermaWandTM via a DRTV campaign, as compared to 2009 when the Company ran the DRTV campaign through March 2009 until we entered into an agreement with Allstar Marketing Group which resulted in approximately $94,000 and $56,000 of royalty revenue during 2010 and 2009, respectively. In the agreement, Allstar received exclusive distribution rights of DermaWandTM for all U.S. distribution channels with the exception of televised home shopping and beauty salons. As a result, the Company terminated its DRTV campaign for the DermaWandTM in the U.S as of March 2009. In March of 2010, the Company terminated its agreement with Allstar and as a result, retained all U.S. distribution rights of DermaWand TM. We continue to sell the DermaWandTM on televised home shopping (HSN) and we continue to maintain our relationships with our customers in the international market. In 2010, 51.4% of our revenue came from our international sales, compared to 21.7% in 2009, and 48.6% of our revenue was generated by our domestic sales, as compared to 78.3% in 2009. The majority of our revenue in 2010 was through direct distribution of our own product, DermaWandTM. 100% of net sales was generated by the sale of our own products in 2010 and 2009. On November 5, 2010, the Company’s Board of Directors approved a resolution which modified the terms of the 1,600,000 warrants. The modified terms were (i) waiver of anti-dilution rights, (ii) modification of the exercise price of the warrants as defined in the agreement, and (iii) extension of expiration date to December 1, 2013.

2011

12

Net sales decreased $801,000 or 20.5% to approximately $3,102,000 in 2011 from approximately $3,903,000 in 2010, primarily as a result of decline in international sales. During 2011, international sales revenue for the DermaWandTM was approximately $1,299,000, as compared to approximately $2,005,000 in the prior year, a decrease of approximately $706,000. The decline in international sales can be attributed to the global recession, as well as the age of the DermaWandTM infomercial that was running internationally for the majority of 2011. In May 2011, the Company made the decision to move the televised home shopping sales of DermaWandTM from Home Shopping Network (HSN) to ShopNBC, where a higher screen price for the DermaWand TM is offered on ShopNBC as compared to HSN. On November 9, 2011, ICTV began airing a new Derma WandTM long-form infomercial. Through December 31, 2011, the new DermaWandTM infomercial aired 579 times on both national cable stations and throughout a variety of major and minor broadcast markets in the United States. The Company recognized approximately $128,000 of revenue related to the new DermaWandTM infomercial during 2011. In the fall of 2010, the Company did a DRTV media test of Smart StacksTM. There were no sales of Smart StacksTM during 2011 and the Company has no immediate plans for selling this product. In July 2010, we entered into an exclusive, royalty-free worldwide agreement to distribute Strike N SetTM, a patented fishing lure system manufactured by MBCT Global Ventures, LLC. As part of the agreement, ICTV will develop and produce, at its own expense, 60-second, 120-second, and 15 minute infomercials. In January 2011, ICTV began production of these infomercials and in July 2011 ran a U.S. media test of the product. Revenue for Strike N SetTM was approximately $4,000 during 2011. We entered into an Employment Agreement with Kelvin Claney, our President and Chief Executive Officer, effective March 1, 2011. The Agreement provides, among other things, that if Mr. Claney’s employment is terminated without cause, he will be entitled to severance pay in a lump sum payment equal to one year of his base salary, health insurance reimbursement and automobile expenses allowance as in effect on the date of termination. Under the Employment Agreement, Mr. Claney will be considered terminated without cause if his substantive responsibilities are changed without his prior approval, or if all or substantially all of the assets of the Company are sold, or a controlling interest in the Company is sold, unless in connection with such a sale Mr. Claney’s Employment Agreement is assumed by the buyer or he is offered an employment contract for substantially the same responsibilities, for a term of at least one year, and at substantially the same compensation, terms and benefits as provided in the Employment Agreement. On February 1, 2011, we entered into a six month office lease in Bainbridge Island, WA with a monthly lease payment of $650. The lease expired on August 1, 2011 and was not renewed. On March 8, 2011, we issued an 8-K detailing the issuance of a total of 2,350,000 options to purchase common stock to a total of nine directors, officers, employees and consultants in order to provide an additional incentive for their continuing services to the Company. The options were issued pursuant to our 2001 Stock Option Plan, which was approved by our shareholders on February 26, 2001. During March 2011, the Company acquired from one of its shareholders its equity interest in Better Blocks International Limited, a related party, consisting primarily of intellectual properties in exchange for 500,000 shares of the Company’s common stock.

13 During the course of 2011 we employed a total of six employees, five full-time employees and one parttime employee. We consider our labor relations to be good. None of our employees are covered by a collective bargaining agreement. In December 2011, our Board of Directors approved our 2011 Incentive Stock Option Plan (the “2011 Plan”). The 2011 Plan is designed for selected employees of the Company and its subsidiaries, and is intended to advance the best interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiaries with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiaries. The 2011 Plan is administered by the Board of Directors of the Company, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the Plan are determined by the Board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of the grant. As of December 31, 2011, zero options are outstanding under the 2011 Plan. On April 1, 2011, the Company issued 1,000,000 shares of common stock in a private placement at $0.10 for total consideration of $100,000. On May 11, 2011, the Company issued 250,000 shares of common stock in a private placement at $0.10 for total consideration of $25,000. On August 5, 2011, the Company entered into a three year corporate public relations consulting agreement. As part of the agreement, the consultants received compensation in the form of 500,000 shares of stock, 500,000 warrants with an exercise price of $0.10 that expire 14 months from the date of the agreement, and 1,000,000 warrants with an exercise price of $0.50 that expire 24 months from the date of the agreement. The 500,000 shares of common stock issued were valued at the fair market value of the stock on the date of grant. On August 15, 2012, the Company entered into a settlement agreement with the consultants to terminate the consulting agreement. As part of the agreement, the consultants maintained the 500,000 shares of common stock previously issued and all warrants previously issued were terminated. In addition, the consultants received 250,000 new warrants with an exercise price of $0.10 that expire 3 years from the date of the agreement. The 500,000 shares of common stock issued were originally valued at the fair market value of the stock on the date of grant. The total value of the stock was approximately $65,000 and the expense was being recognized over the consulting period. Upon termination, approximately $23,000 was expensed during the year ended December 31, 2012. As noted in the previous paragraph, on August 15, 2012, the Company terminated the consulting agreement through a settlement agreement with these consultants and concurrently entered into a new consultant agreement with one of these consultants. Therefore, any unrecognized expense related to common stock issued was immediately recognized upon termination of services with the one consultant and expense related to the other consultant will be recognized over the remaining consulting term. For the years ended December 31, 2012 and 2011, the Company recorded approximately $38,800 and $9,000, respectively related to the issuance of these shares, and the Company has remaining unrecognized expense of approximately $17,000, which will be recognized over the next 19 months. In December 2011, the Company entered into a note payable with a Canadian lender in the amount of approximately $98,000 (C$100,000). This loan accrues interest of prime plus 1%. Interest is paid monthly. Principal payments are to be paid in monthly instalments of approximately $6,500 (C$6,667), beginning in March 2012. The loan permits payment in advance without penalty at any time. On January 24, 2012, the

14 Company modified its loan with the Canadian lender. The note was modified and increased the outstanding balance to approximately $137,000 (C$140,000) as additional borrowings were made to the Company. In addition, the interest was modified to lender’s cost, plus two-percent interest and the note became convertible into shares of common stock at a fixed conversion rate of $0.196 (C$.20) per share. The Company considered this a modification of debt that was not substantive, thus no gain or loss was recorded upon modification. The amount of the beneficial conversion upon modification was deemed insignificant to the consolidated financial statements. Through December 31, 2011, 1,209,916 warrants have been exercised for approximately $121,000. The remaining warrants of 390,084 are exercisable at prices between $0.10 and $3.00 per share and expire through December 1, 2013. For the year ended December 31, 2011 and 2010, 168,649 and 1,041,267 warrants have been exercised for total proceeds of approximately $17,000 and $104,000, respectively. On February 17, 2011, the Company acquired from one of its shareholders 100% of its equity interest in Better Blocks International Limited, consisting primarily of intellectual properties in exchange for 500,000 shares of the Company’s common stock. This transaction is between entities under common control and accordingly the net asset acquired is recorded at zero, which is the carrying value of Better Blocks International Limited and is recorded as a capital transaction. For the year ended December 31, 2011 the Company recorded approximately $9,600 of stock-based compensation expense for the 500,000 warrants issued to the consultants. As of December 31, 2011, there was approximately $17,000 of total unrecognized compensation costs related to these warrant grants which will be recognized over the remaining 9 months. For the year ended December 31, 2011 the Company recorded approximately $12,400 of stock based compensation expense for the 1,000,000 warrants issued to the consultants. As of December 31, 2011, there was approximately $47,000 of total unrecognized compensation costs related to these warrant grants which will be recognized over the remaining 19 months. In November 2011, the Company issued a former consultant 50,000 shares of common stock for prior services rendered. The Company recognized $10,000 of share based compensation expense during 2011 in relation to this transaction based on the closing stock price on date of settlement. 2012 Net sales increased $19,818,000 or 639% to approximately $22,920,000 in 2012 from approximately $3,102,000 in 2011. There were two major reasons for the increase in revenue. The first reason relates to continued success of the new DermaWandTM infomercial. During 2012 sales relating to DermaWandTM for direct response television (DRTV) were approximately $17,021,000 as compared to approximately $128,000 in 2011. This increase in DRTV revenue was in part due to the launching of a new Spanish language version of the DermaWandTM show that was launched in August 2012. We have also been successful in building an autoship continuity program with our DermaVitalTM skincare line. Currently there are over 12,000 customers in the program, all which pay $29.95 per month to receive the three core products in the line; Pre-Face Beauty Treatment, Hydra Infusion Beauty Treatment, and Skin Mist. Customers are enrolled month to month and can cancel at any time. The Company is focused on expanding the DermaVitalTM line and building the continuity program. Sales related to the DermaVitalTM line during the years ended December 31, 2012 and 2011 were approximately $1,519,000 and $3,000, respectively.

15 The second reason for the increase in revenue was an increase in international sales. During 2012, international sales revenue for the DermaWandTM was approximately $3,768,000, as compared to approximately $1,299,000 in the prior year, an increase of approximately $2,469,000. The increase in international sales can be attributed primarily to the new DermaWandTM infomercial running in Europe, Asia, and South America. In February 2012, we tested Slender LiftTM on a televised home shopping channel. The product sold at an introductory price of $24.95. The test consisted of one airing of approximately eight minutes and generated sales of approximately 200 units. Three additional airings occurred in April 2012. Gross revenue for Slender LiftTM was approximately $16,600 and $120 during 2012 and 2011, respectively. On November 9, 2011, ICTV began airing a new DermaWandTM long-form infomercial. During 2012, the new DermaWandTM infomercial aired on both national cable stations and throughout a variety of major and minor broadcast markets in the United States. The Company recognized approximately $17,021,000 and $128,000 of revenue related to the new DermaWandTM infomercial, including DermaVital® sales, during 2012 and 2011, respectively. In 2012, the Company started selling warranties on the DermaWandTM for one-year, three-year and lifetime terms. One-year and three-year warranties are recognized rateably over the term. Lifetime warranties are recognized over the estimated term of five years. Any unearned warranty is included in deferred revenue on the accompanying consolidated balance sheet. In January 2012, ICTV entered into a Media Financing, Security and Assignment agreement with Media Acquisition, LLC. Under the agreement, Media Acquisition, LLC provided financing to the Company for the cost of purchasing advertising time. In return, Media Acquisition, LLC was paid a service fee based on revenues generated from the advertisement time purchased. To secure payment under the agreement, the Company granted Media Acquisition, LLC a security interest in essentially all of the Company’s assets. In addition, the Company’s CEO has personally guaranteed the Company’s performance. The term of the agreement is month-to-month and it can be terminated by either party with 30 days’ written notice. As part of the agreement, a portion of cash generated through direct response television (DRTV) is reserved to cover all fees, expenses, charges and expenses due to Media Acquisition, LLC. In August 2012, the Company terminated this agreement and the reserved cash was subsequently refunded in October 2012. On January 24, 2012, the Company modified its loan with the Canadian lender. The note was modified and increased the outstanding balance to approximately $137,000 (C$140,000) as additional borrowings were made to the Company. In addition, the interest was modified to lender’s cost, plus two-percent interest and the note became convertible into shares of common stock at a fixed conversion rate of $0.196 (C$.20) per share. The Company considered this a modification of debt that was not substantive, thus no gain or loss was recorded upon modification. The amount of the beneficial conversion upon modification was deemed insignificant to the consolidated financial statements. On February 17, 2012, the Board of Directors authorized the issuance of up to 2,500,000 shares of common stock to be purchased at $0.15 per share through February 29, 2012. On February 29, 2012, the Board amended the resolution to authorize the issuance of up to 3,000,000 shares of common stock to be purchased at $0.15 per share through March 23, 2012. A total of 2,695,000 shares were purchased through March 23, 2012 for proceeds of $388,250. In addition, for every three shares of common stock purchased, the purchasers will receive one warrant to purchase common stock at $0.25 per share. The warrant will expire three years after its issuance date. The warrants have a weighted average fair value of $0.32. The fair value of the warrant has been estimated on the date of grant using a Black-Scholes pricing model.

16 The Company tested the BetterBlocksTM product line on televised shopping in the fall of 2009, and has continued to sell the product on the internet in 2012 and 2011. Revenue for BetterBlocksTM was approximately $11,500 and $6,000 during 2012 and 2011, respectively. The Company plans to continue selling BetterBlocksTM through the web during 2013 and plans to sell this product in conjunction with the promotion of the new line of BetterBlocksTM, Glo-B’sTM. On March 14, 2012, the Company completed the execution of an agreement with Hutton Miller LLC for the production of one and two-minute direct response television commercials to be aired on major U.S. children’s cable channels, featuring Glo-B’sTM. On April 17, 2012, the Company entered into an employment agreement with Richard Ransom, our President and CFO. Under the terms of this agreement, the Company will pay an annual salary of $125,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. The President and CFO is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement, automobile allowance and other reimbursable expenses. The employment agreement will continue until terminated by either party in accordance with the terms of the agreement. If the employment agreement is terminated by the Company without cause, the employee will be entitled to a severance payment equal to one year’s salary and benefits. Glo-B’sTM is a toy-building block system that bends, moves, shapes and curves. Solidly made of quality glow-in-the-dark neon colored plastic, the blocks glow in their respective colors. Glo-B’sTM are designed for children 3 + years and will connect with and enhance other popular building block sets. Recent years have seen the “construction toy” segment of the toy market in the United States on a sharp increase, with actual “building and doing” once again enjoying a resurgence of popularity with both children and parents alike. In September 2012, the Glo-B’sTM spot was tested on a variety of national cable channels geared toward children’s programming. A second test was run in December 2012. Gross revenue of Glo-B’sTM during 2012 was approximately $13,900. During 2011 and 2010, our Directors received no compensation for their service as Directors, although they did receive reimbursement for expenses. In February 2012, Stephen Jarvis, one of our Directors, was paid $5,000 for consulting work above and beyond his duties as a Director. DermaVital® has been offered to DermaWandTM buyers through U.S. DRTV and internet distribution channels as a monthly continuity program, and to HSN customers as an “add on” product to their DermaWandTM purchase. As of March 2013, over 12,000 customers are currently enrolled in some form of DermaVital® continuity program. Customers are enrolled month to month and can cancel at any time. During 2013, ICTV is focused on expanding the number of customers that enroll in continuity, increasing the average order value of our continuity shipments, and increasing the average number of cycles that a customer stays in a continuity program. During the course of 2012, we employed a total of eight employees, seven full-time employees and one part-time employee. We consider our labor relations to be good. None of our employees are covered by a collective bargaining agreement. During the year ended December 31, 2012, 1,510,000 options were granted to employees; in addition, 80,000 options were forfeited due to an employee termination. For the years ended December 31, 2012 and 2011, the Company recorded approximately $250,000 and $70,000 respectively in stock compensation expense under the plan. At December 31, 2012, there was approximately $518,000 of total unrecognized compensation cost related to non-vested option grants that will be recognized over the remaining vesting period of approximately three years.

17

2013 On February 6, 2013, the Company entered into a new lease with the landlord of the Wayne office complex of its executive office. As of April 2013 the executive office moved into a larger space within the same complex. The new lease is for three years, commencing on April 1, 2013. The new office is 2,516 square feet, compared to the current office space which was approximately 1,700 square feet. The monthly lease payment for the first year of the new lease is approximately $4,036. In January 2013, the Company received a letter from a California law firm alleging certain violations of the California Consumer Legal Remedies Act in connection with the Company’s advertising and marketing of its DermaWandTM product. The law firm purported to represent a class of plaintiffs and invited us to contact them in order to amicably resolve the matter. We consulted with counsel and presented to the California law firm the substantiation for our advertising and marketing claims. While they acknowledged a good portion of our substantiation, the law firm continued to press for a settlement under threat of litigation. On May 1, 2013, the Company reached a tentative settlement agreement with the plaintiff and their law firm for less than the $325,000 the plaintiff was asking for to settle the suit. The final agreement and corresponding settlement payment was finalized in May 2013 for approximately $150,000. In January 2011, ICTV began production of Strike N’ SetTM infomercials and in July 2011 ran a U.S. media test of the product. Revenue for Strike N’ SetTM was approximately $8,300 and $4,000 during 2012 and 2011, respectively. The Company plans to continue selling Strike N’ SetTM through the internet during 2013. During March 2013, the Company rebranded its core DermaVital® continuity program as, “The DermaVital® Preferred Beauty Club”. As a member of the beauty club, a customer will receive exclusive benefits, including significant discounts of up to 70% on DermaVital® products, free monthly gifts of other products in the DermaVital® line, and a dedicated member-only phone number. Beginning July 2013, customers had the ability to purchase a one-time shipment of a 90 day supply of DermaVital®. This shipment was branded as the Dermavital® Ultimate Beauty Regimen (“UBR”). The UBR retails for $99.00 plus $14.95 shipping and handling, and can also be shipped on a 90-day auto-ship basis. On March 8, 2013, Stephen Jarvis exercised 166,666 stock options; Kelvin Claney exercised 399,999 stock options; Richard Ransom exercised 366,666 stock options previously issued for total gross proceeds of approximately $91,200. On March 11, 2013, the Board of Directors appointed a new Director of the Company. William N. Kinnear will serve as a Director until the later of the next annual meeting of the shareholders of the Company or until his successor is duly elected. Compensation for his services as a director is an annual stipend of $4,000 per year and options to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.25 per share. In 2013, the Company established a 401k retirement plan for employees to contribute. Currently, the Company is not providing for matching contributions. On April 3, 2013, the Company entered into a licensing agreement entered into with DermaNew, Inc., in which the Company will obtain the exclusive worldwide rights to manufacture and distribute their latest patented anti-aging and re-surfacing scientific skincare system. As part of the agreement, the Company paid a non-refundable advance royalty of $25,000 to DermaNew and agreed to share in the cost of a new

18 clinical trial. The Company will incur the cost of a new long form infomercial, which it hopes to test before the end of fiscal year 2014. On July 24, 2013, the Company entered into a licensing agreement with BioActive Skin Technologies LLC (BioActive), in which the Company will obtain the exclusive worldwide rights to manufacture and distribute BioActive beauty products and formulations. The agreement consists of an initial 18-month term and subsequent 12-month terms. As part of the agreement, the Company will pay a royalty calculated as a percentage of sales with a minimum annual payment of $100,000. The Company will incur infomercial costs which it plans to test in January 2014. On October 18, 2013, the Company filed a Form S-1 registration statement with the Securities and Exchange Commission to register the sale of up to 5,000,000 shares of its common stock for up to $2,050,000. On December 30, 2013, pursuant to Rule 477 promulgated under the Securities Act of 1933, as amended, the Company withdrew its Form S-1 registration statement, file number 333-191802, together with all amendments and exhibits thereto. The Company elected not to proceed with the offering contemplated by the registration statement due to adverse market reaction to a potential public offering at or near the Company’s current stock price. The Company believes the withdrawal to be consistent with the public interest and the protection of investors. The Company confirmed that no securities have been sold in the proposed offering. In accordance with Rule 477(c) under the Securities Act of 1933, the Company may undertake a subsequent private offering in reliance on Rule 155(c) under the Securities Act of 1933. 2014 Effective January 1, 2014, our Board of Directors appointed Ryan LeBon as Chief Financial Officer of the Company, to serve in that capacity at the will of our Board of Directors. Mr. LeBon, age 31, joined the Company in June of 2013 as the Company’s Director of Financial Reporting. Prior to joining the Company, Mr. LeBon had over nine years of experience with Deloitte & Touche LLP, as an Audit Manager primarily serving SEC registrants, and as a Controller with General Electric. Mr. LeBon is a graduate of Villanova University with a degree in accounting and is a Certified Public Accountant in Pennsylvania. Richard Ransom, our previous Chief Financial Officer, continues as President of the Company. The appointment of Ryan LeBon will allow Mr. Ransom to focus more exclusively on his duties as President. Significant Acquisitions and Significant Dispositions BetterBlocks™ In April 2000, we acquired the exclusive, royalty-free worldwide license to manufacture market and distribute BetterBlocks™, a patented plastic toy building system, under the Share and Option Purchase Agreement with The Better Blocks Trust, a shareholder. BetterBlocks™ has been sold mainly through DRTV, mail order catalogues, retail and the television shopping channel QVC. The Company tested the BetterBlocks™ product line on televised shopping in the fall of 2009, and has continued to sell the product on the internet in 2012 and 2011. Revenue for BetterBlocks™ was approximately $11,500 and $6,000 during 2012 and 2011, respectively. The Company plans to continue selling BetterBlocksTM through the internet during 2013 and plans to sell this product in conjunction with the promotion of the new line of BetterBlocksTM, Glo-B’s™.

19

Slender Lift™ In November 2009, we acquired worldwide exclusive license to manufacture and sell the Slender Lift™, a slimming garment system for women. In the spring of 2010, the Company did a DRTV media test of Slender Lift™. In February 2012, we tested Slender Lift™ on a televised home shopping channel. The product sold at an introductory price of $24.95. The test consisted of one airing of approximately eight minutes and generated sales of approximately 200 units. Three additional airings occurred in April 2012. Gross revenue for Slender Lift™ was approximately $16,600 and $120 during 2012 and 2011, respectively. Effective February 17, 2011, the Company acquired 100% of the equity interest in Better Blocks International Limited. On February 17, 2011, the Company acquired from one of its shareholders 100% of its equity interest in Better Blocks International Limited, consisting primarily of intellectual properties in exchange for 500,000 shares of the Company’s common stock. This transaction is between entities under common control and accordingly the net asset acquired is recorded at zero, which is the carrying value of Better Blocks International Limited and is recorded as a capital transaction. Trends We expect that we will face additional competition from new market entrants and current competitors as they expand their direct marketing business models. The barriers to entry in the infomercial industry are fairly low, but there are many difficult hurdles for young entrants to overcome if they are to be successful in the long-term. To be competitive, we believe we must respond promptly and effectively to the challenges of technological change, evolving standards and our competitors’ innovations. We must also source successful products, create brand awareness, and utilize good sales pitches for our products. We believe that although we have a limited operating history, we are strategically positioned to compete because of our management’s experience and strong relationships in the industry. In addition, we feel that associating our products with particular brands and focusing on the traditional retail environment, as we intend to do, will give us a competitive advantage over traditional infomercial companies who fail to capitalize on the consumer awareness they create via their infomercials. NARRATIVE DESCRIPTION OF THE BUSINESS The Company’s Proposed Brands and Current Products The Company continually seeks to develop, acquire or obtain the license to consumer products that management believes can be distributed and marketed profitably, especially in the retail environment. The success of the Company depends, in part, on its ability to market products that appeal to viewers and that can be easily associated with a particular brand. In order to succeed, the Company is also aware of the need to identify new products to supplement and possibly replace its existing product lines as they mature through product life cycles. The Company’s product development and marketing department is the backbone of the Company. The Company puts forth extensive effort to research and develop new products that are unique and that will be suitable both for direct response marketing in infomercials and for sale in traditional retail stores. The Company’s development of new product ideas stems from a variety of sources, including inventors, trade shows, strategic alliances with manufacturing and consumer product companies, industry conferences, and the continuous review of new developments within targeted brand and product categories. In addition, the Company receives unsolicited new product proposals from independent parties.

20 The Company also internally generates ideas for new products that it wishes to develop. If the Company has an idea for a product, it will present prototype specifications to one of its manufacturers to develop a prototype, and the Company will then evaluate the feasibility of selling the product through an infomercial. When evaluating a product for its suitability for an infomercial, the Company considers how appropriate it is for television demonstration and how consumers will perceive the value of the product. Part of the selection criteria for new products consists of the following: ●

Products must be unique, demonstrable, have mass-market appeal and generally be unavailable elsewhere in the marketplace. Benefits must be capable of being demonstrated visually, preferably with support from customer testimonials;

●

Must support a minimum five times markup from landed cost while still representing good perceived value to the consumer;

●

Must have a unique “hook” to be able to catch the attention of the viewer; informercials simply portray the consumer’s problem and the solution provided by the product and usually present a significant before and after state – the bigger the problem solved by the product, the greater the sales potential;

●

Easily and effectively promoted through sustained television branding;

●

Supports a margin sufficiently high enough to maintain profitability to the Company when sold through conventional retailers;

●

Has high-volume sales potential, to ensure retailer interest;

●

Exhibits potential for “back-end” sales either through traditional retail or by company-run “auto ship” continuity programs – the more related products that are available for upsell/back-end campaigns, the wider the advantage in the infomercial marketplace;

●

Should have the potential to be turned into a long-term retail item; a product can drive retail sales by capitalizing on awareness advertising that is created with a successful infomercial; and

●

Must be relatively easy to ship.

The primary product categories are health and beauty, diet and fitness, and leisure and toy products. These categories have performed well in direct response television (DRTV) campaigns and they move smoothly to retail sales channels. Retail buyers seek out new and better products in these categories, especially branded products that have gained a high profile through television. The following is a list of products the Company owns or has certain rights to and that it is currently marketing or planning to market over the next twelve months:

Health and Beauty Products

21 The health and beauty category is a strong and proven DRTV category as products in this category demonstrate well on television with before and after clinical trials, possess high profit margins, and are aimed at the highly motivated “fountain of youth” markets. DermaWand™ The Company has a worldwide exclusive license to sell the DermaWand™, a skin care appliance that reduces fine lines and wrinkles and improves overall skin appearance. The price consumers pay for DermaWand™ varies from country to country, however, it generally ranges from approximately $90 to $120. The DermaWand™ is sold and marketed with DermaVital® skin care products which are offered with a monthly continuity program. The Company sold approximately 318,000 and 99,000 DermaWand™ units during 2012 and 2011, respectively. On November 9, 2011, the Company began airing a new DermaWand™ long-form infomercial. During 2012, the new DermaWand™ aired on both national cable stations and throughout a variety of major and minor broadcast markets in the United States. The Company recognized approximately $17,021,000 and $128,000 of revenue related to the new DermaWand™ infomercial, including DermaVital™ sales, during 2012 and 2011, respectively. DermaVital® is a brand of cosmetics with a wide variety of products. The product line consists of several moisturizers that allow water to penetrate the skin’s surface, thus re-hydrating the deeper layers. Medical experts, including dermatologists, agree that dehydration or lack of water is a major cause of skin problems. The problem is that the skin by itself is virtually waterproof and water cannot penetrate its resilient surface. This moisturizing formula has the ability to send water into the deeper layers of the skin where it is most needed. The result is a deeper moisturization that softens, cleanses and hydrates the skin in a way that enhances and supports the skin’s own natural functions. In addition to moisturizers, the DermaVital® line has facial cleansers, microdermabrasion treatments, eye cream, lip cream, and hand cream. The Company is currently working on developing new products to market under the DermaVital® name. DermaVital® has been offered to DermaWand™ buyers through U.S. DRTV and internet distribution channels as a monthly continuity program, and to Home Shopping Network customers as an “add on” product to their DermaWand™ purchase. As of January 16, 2014, over 19,000 customers are currently enrolled in some form of DermaVital® continuity program. Customers are enrolled month to month and can cancel at any time. During 2013, the Company is focused on expanding the number of customers that enrol in continuity, increasing the average order value of its continuity shipments, and increasing the average number of cycles that a customer stays in a continuity program. In an effort to achieve these goals, during March 2013 the Company rebranded its core DermaVital® continuity program as “The DermaVital® Preferred Beauty Club”. As a member of the beauty club, a customer will receive exclusive benefits, including significant discounts of up to 70% on DermaVital™ products, free monthly gifts of other products in the DermaVital® line, and a dedicated members-only phone number. Beginning July 2013, customers had the ability to purchase a one-time shipment of a 90 day supply of DermaVital®. This shipment was branded as the Dermavital® Ultimate Beauty Regimen (“UBR”). The UBR retails for $99.00 plus $14.95 shipping and handling, and can also be shipped on a 90-day auto-ship basis.

Additional Products – Various Categories

22 BetterBlocks™ In April 2000, the Company acquired the exclusive, royalty-free worldwide license to manufacture, market and distribute BetterBlocks™, a patented plastic toy building system, under the Share and Option Purchase Agreement with The Better Blocks Trust, a shareholder. BetterBlocks™ has been sold mainly through DRTV, mail order catalogues, retail and the television shopping channel QVC. The Company tested the BetterBlocks™ product line on televised shopping in the fall of 2009 and has continued to sell the product on the internet in 2012 and 2011. Revenue for BetterBlocks™ was approximately $11,500 and $6,000 during 2012 and 2011, respectively. The Company plans to continue selling BetterBlocks™ through the internet during 2013 and plans to sell this product in conjunction with the promotion of the new line of BetterBlocks™, Glo-B’s™. Glo-B’s™ On March 14, 2012, the Company completed the execution of an agreement with Hutton Miller LLC for the production of one and two-minute direct response television commercials to be aired on major U.S. children’s cable channels, featuring Glo-B’s™. Glo-B’s™ is a toy building block system that bends, moves, shapes, and curves. Solidly made of quality glow-in-the-dark neon-coloured plastic, the blocks glow in their respective colours. Glo-B’s™ are designed for children aged three and up, and will connect with and enhance other popular building block sets. Recent years have seen the “construction toy” segment of the toy market in the United States on a sharp increase, with actual “building and doing” once again enjoying a resurgence in popularity with both children and parents alike. In September 2012, the Glo-B’s™ spot was tested on a variety of national cable channels geared toward children’s programming. A second test was run in December 2012. Gross revenue of Glo-B’s™ during 2012 was approximately $13,900. Strike N’ Set™ In July 2010, the Company entered into an exclusive, royalty-free, worldwide agreement to distribute Strike N’Set™, a patented fishing lure system manufactured by MBCT Global Ventures, LLC. As part of the agreement, the Company was required to develop and produce, at its own expense, 60-second, 120-second, and 15-minute infomercials. In January 2011, the Company began production of these infomercials and, in July 2011, ran a U.S. media test of the product. Revenue for Strike N’ Set™ was approximately $8,300 and $4,000 during 2012 and 2011, respectively. The Company plans to continue selling Strike N’ Set™ through the internet during 2013. Slender Lift™ In November 2009, the Company acquired a worldwide exclusive license to manufacture and sell the Slender Lift™, a slimming garment system for women. In the spring of 2010, the Company did a DRTV media test of Slender Lift™. In February 2012, the Company tested Slender Lift™ on a televised home shopping channel. The product sold at an introductory price of $24.95. The test consisted of one airing of approximately eight minutes and generated sales of approximately 200 units. Three additional airings occurred in April 2012. Gross revenue for Slender Lift™ was approximately $16,600 and $120 during 2012 and 2011, respectively. Marketing, Sales, Production and Distribution

23 The Company uses infomercials to build brand awareness and identity. Infomercials are designed to motivate the viewer to purchase the product immediately (or in the case of lead-generation DRTV, to inquire about the product). As a result, where brand TV spots generally focus on one key benefit, infomercials give the viewer all the information they need to make a purchasing decision, including presenting multiple features and benefits, and providing price and quality comparisons. Most infomercials also include a special time-sensitive offer designed to induce immediate response. Infomercials are characterized by benefit-driven copy, captivating demonstrations and attractive offers. A typical infomercial consists of two or three “pods” that each last from 6 -12 minutes. Each pod contains product and benefit information for consumers to make a decision on whether or not to purchase. The pod concludes with a call-to-action (CTA) during which the seller asks for the order. More importantly, we feel that infomercials build brand awareness. Viewers of a long-form infomercial are exposed to the name and features of a particular brand and product for nearly thirty minutes. We think that this brand recognition will make it easier to market the featured product in the retail environment, because consumers who have seen our infomercials will already have been exposed to the brand. We expect other products within the featured product’s family to benefit from brand association in the retail environment. We believe this introduction of product family brands through infomercials will save much time, money and effort that we would otherwise have to spend on marketing if we were to introduce our products to traditional retail without airing the infomercials first. We also think infomercials are an easy means by which to measure the success of our marketing efforts. We can measure how successful an infomercial is or will be by doing a media test. If the product performs well during test marketing, we can increase the media time for the infomercial. We can also target certain markets by buying media time in particular locations or cities. The products we sell via our infomercials may do well in some markets, but not in others. When orders are placed, we gather demographic information about the purchaser and use this information to determine our future target markets. We contract with several independent companies to manufacture our products. In general, we place an order with the manufacturer and we pay the manufacturer cash upon shipment of the goods. In some instances, we provide the manufacturer with an advance payment to cover a portion of the manufacturers’ costs, and we pay the balance after the goods are shipped. We contract with telemarketing firms to answer phones and capture orders for products sold through our infomercials. Our storage of inventory, customer service, order processing, and order shipping functions are performed by an outside third party contracted fulfillment company - a2b Fulfillment in Greensboro, GA. We generally fulfill our orders within one to five days of the date customers order our products. If for some reason we are unable to fulfill an order within five days of the date of a customer’s order, then we provide the customer with a letter explaining the reason for the delay. The letter will also provide the customer with a revised shipping date not to exceed thirty days, and will offer the customer an option to either consent to the delay in shipping or to cancel their order and receive a prompt refund.

Infomercial Production In the past, we have produced our infomercials with internal management resources, but we also have utilized independent production companies to produce our infomercials. We have relationships with several

24 independent producers, and we contract out such functions as a way to keep our overhead to a minimum. We, along with the owner or inventor of the product (as the case may be), will always have input in the production process. Even when we out-source production, we utilize a company specialist to oversee all scripting, filming and editing of the infomercial, and we take great care to ensure that the infomercial is produced in such a way that it can easily be adapted to international markets. Media Testing Once the infomercial is produced, we acquire a minimal amount of inventory and purchase $10,000 – $20,000 worth of media time through one of our preferred direct response television specialist media agencies to test the infomercial in select target markets. The agencies generally have comprehensive records of the markets and time slots in which certain product categories have historically sold well. The agencies also have comprehensive tracking and analyzing programs to test and track the sales response in the markets where we air our infomercials. The agencies will provide us with a report showing the amount of revenue generated from the infomercial as a ratio to media dollars spent. For example, a 2.5:1 ratio means that for every $1.00 spent on media, $2.50 was generated in sales. We take this information, along with other things such as cost of goods, fulfillment charges, telemarketing costs, insurance, returns, credit card commissions, and shipping costs, and generate our own reports to assess the success of the infomercial in our target markets. Product Rollout If a positive result is achieved during media testing, we will begin to build up inventory of the product and “roll out” the infomercial on a wider scale by increasing media spending on a weekly basis until a point just before returns diminish. When we roll out infomercials, we generally begin with a media spend of $75,000 – $100,000 per week for media time for a long-form infomercial and a minimum of $50,000 per week for a short-form infomercial or spot. We monitor results, payoffs and profitability of our infomercials on a daily basis and aim to be very cautious as to when and how we go about rolling out our infomercials. In our experience, a “good average” infomercial, which we define as having a media ratio of 2.5:1, will have a life span of eight to twelve months and will, at its peak, sustain $150,000 – $200,000 in media spending per week. A “hit” infomercial, which we define as having a media ratio of 4:1 or greater, will have a life span of 12 to 24 months, and at its peak, will sustain $600,000 – $700,000 in media spending per week. International Sales The goal of our international division is to establish solid distribution relationships in each country where our products are marketed. By doing so, we can tailor our products and production for each individual region, and develop relationships with local experts and established companies that are intimate with the marketplace. When a product that was domestically sold in an infomercial is prepared for international distribution, the international infomercial operator will dub the infomercial, develop product literature in the appropriate foreign language, and review the infomercial’s compliance with local laws. The international infomercial operator will then test the infomercial and roll it out on a larger scale if the test marketing is successful. We believe that many well-produced infomercials can produce profitable margins somewhere internationally, even if they have failed in the United States. We do expect to continue to devote attention to the international market and to have our infomercials aired internationally through our strategic alliances that we have and will continue to develop throughout the world. We are working to leverage our line of products that we market internationally and test which shows sell best in each country and region. Traditional Retail Sales

25

We aim to capitalize on the brand and product awareness we create through our infomercials by selling our proprietary brands of products and related families of products under those brands in dedicated shelf-space areas by product category in traditional retail stores. We believe that traditional retail sales are a logical step to take after we create brand and product awareness through our infomercials, because we will not have to incur any significant marketing costs and expenses that consumer product companies would otherwise have to incur when introducing their products to the traditional retail environment. We are currently working toward creating the infrastructure that we will need in order to take our brands and products to the traditional retail environment. The objective of the DRTV strategy is to build brands that are attractive to our main target market – national retailers. Other Direct Response Sales Methods Once we have rolled out a product in an infomercial, we prepare to distribute the product via other direct response methods, such as mail order catalogues, direct mail, credit card statement inserts and live appearances on television home shopping channels such as HSN and QVC. We believe that this is an additional means by which to use the brand awareness we create in our infomercials, and to reach consumers who might not watch television. These other direct response methods also extend the time period during which each of our products can generate revenue. Customer Service We seek to provide our customers with quality customer service. We generally offer an unconditional 30day money back return policy to purchasers of our products. Our policy is to investigate the cause of returns if returns begin to undermine our expectations for a product’s profitability. Competition We compete directly with several established companies that generate sales from infomercials and direct response television, as well as small independent direct response television producers. Products similar to ours may be sold in department stores, pharmacies, general merchandise stores, magazines, newspapers, direct mail advertising, catalogues, and over the internet. Many of our major competitors, who include Thane International Inc. and Guthy-Renker Corp., have substantially greater financial, marketing and other resources than us. We expect that we will face additional competition from new market entrants and current competitors as they expand their direct marketing business models. The barriers to entry in the infomercial industry are fairly low, but there are many difficult hurdles for young entrants to overcome if they are to be successful in the long-term. To be competitive, we believe we must respond promptly and effectively to the challenges of technological change, evolving standards and our competitors’ innovations. We must also source successful products, create brand awareness, and utilize good sales pitches for our products. We believe that although we have a limited operating history, we are strategically positioned to compete because of our management’s experience and strong relationships in the industry. In addition, we feel that associating our products with particular brands and focusing on the traditional retail environment, as we intend to do, will give us a competitive advantage over traditional infomercial companies who fail to capitalize on the consumer awareness they create via their infomercials. Intellectual Property

26 Our success is dependent, in part, upon our proprietary rights to our primary products. The following consists of a description of our intellectual property rights. ● Trademarks We have several registered trademarks for BetterBlocks™ in countries throughout the world. We have also registered trademarks in the United States for DermaWand™, DermaVital™, Smart Stacks™, Slender Lift™, BetterBlocks™, Glo-B’s™, and Strike N’ Set™. ● Patents We have patents for the toy building elements of BetterBlocks™ in several countries throughout the world. We also have the exclusive right to the use of the worldwide patent for DermaWand™, as is necessary to manufacture, market and distribute DermaWandTM. In addition, we have the exclusive right to the use of the worldwide patent for the distribution of Strike N’ Set™. ● Copyrights We have copyright registrations for all versions of our infomercials for DermaWand™ and BetterBlocks™. ● Registered Designs We have registered designs for BetterBlocks™ in several countries throughout the world.

Royalty Agreements In April 2000, we assumed from R.J.M. Ventures Limited and Better Blocks International Limited, by virtue of the Share and Option Purchase Agreement we signed with The Better Blocks Trust, the obligation to pay royalties on the sales of the DermaWand™ under the following agreements: DermaWand™ ● Under a marketing and royalty agreement with the developer of DermaWand™, we are obligated to pay them a royalty at $2.50 per unit sold. The agreement is silent as to its duration. Governmental Regulation We are subject to regulation by a variety of federal, state and local agencies, including the Federal Trade Commission, the Federal Communications Commission, the Consumer Product Safety Commission, Health Canada, the Canadian Standards Association and the Food and Drug Administration under the FDC Act. The government regulations to which we are subject vary depending on the types of products we manufacture and market. As we begin to market a broader variety of products and services, we may become subject to regulation by additional agencies. We are also subject to the Federal Mail/Telephone Order Rule. Under the Mail/Telephone Order Rule, it is an unfair or deceptive act or practice for a seller to solicit any order for the sale of merchandise to be ordered by the buyer through the mail or by telephone unless, at the time of the solicitation, the seller has a reasonable basis to expect that it will be able to ship the ordered merchandise to the buyer within 30 days after the seller’s receipt of a properly completed order from the buyer. If the buyer uses credit to pay for the merchandise, the time period within which the seller must ship the merchandise to the buyer is extended to 50 days. Under the Mail/Telephone Order Rule, the seller, among other things, must provide the buyer with any revised shipping date. If the seller is unable to fulfill an order within 30 or 50 days, as the case may be, then the seller must provide the buyer an option either to consent to a delay in shipping or to cancel their order and receive a prompt refund.

27 There can be no assurance that new laws, rules, regulations or policies that may have an adverse effect on our operations will not be enacted or promulgated at a future date. Employees During the course of 2013 we employed a total of eight employees, seven full-time employees and one parttime employee. We consider our labor relations to be good. None of our employees are covered by a collective bargaining agreement. Research and Development Our research and development costs have consisted of efforts to discover and develop new products and the testing and development of direct-response advertising related to these products. USE OF AVAILABLE FUNDS Proceeds This is a non-offering prospectus. The Company is not raising any funds in conjunction with this Prospectus and accordingly, there are no proceeds. Funds Available As at September 30, 2013, the Company had a working capital of $2,756,176, which will be expended on the principal purposes set out below. The working capital is comprised primarily of net proceeds received from sales revenues. The Company expects to cover its expenses and working capital requirements for the next twelve months from revenue derived from operations and does not anticipate undertaking any debt or equity financings in the near term. A significant amount of the Company’s general and administrative and selling and marketing expenditures is variable. As such, the Company is able to manage the majority of its costs with its revenue results. The Company’s most significant driver of its results are media expenditures (i.e. the amount of infomercials run). The Company tracks its Media Efficiency Ratio (MER) on a weekly basis. This is a measure of the amount of media run to sales generated. The Company monitors its breakeven MER which also measures other variable costs, such as bad debt expense, management consulting commissions, call center, fulfillment and customer service expenses. The Company is able to manage its cash flow by monitoring its MER. For example, if the MER is not at a level above the Company’s breakeven point, the Company will adjust its media budget to better performing agencies, or reduce its media expenditures which will lower revenues and related variable expenses. The Company monitors its working capital requirements based on its projected media spends, including analyzing future projected cash flows. Through this analysis, the Company is able to monitor its liquidity at a sufficient level on an ongoing basis and account for seasonality. The Company continues to assess the necessity for debt or equity financing as it develops new products and expands into new markets. Expenses – Next 12 months Media Expenses

$15,000,000

General and Administrative for 12 Months(1)

$8,850,000

Inventory Costs

$7,000,000

28

Customer Service

$5,000,000

Production & Fulfillment

$3,500,000

Royalties & Commissions

$1,500,000

Merchant Fees

$1,200,000

Customization & Clinical Trials

$420,000

Estimated Prospectus and CSE Listing Costs

$30,000

Total

$42,500,000

(1)

A summary of the estimated annual general and administrative costs is as follows:

Item Bad Debt Expense Consulting fees Salaries and Share Based Compensation Professional fees (legal and accounting) Liability Insurance Travel Website Development Corporate and Shareholder Communications Office and Rent Transfer agent fees SEDAR filing fees Estimated 12 month General and Administrative Expenses

Amount

$4,500,000 $1,500,000 $1,400,000 $450,000 $260,000 $255,000 $180,000 $160,000 $120,000 $15,000 $10,000 $8,850,000

The above table does not include any proceeds that may be available through the exercise of options and warrants currently outstanding as summarized in this Prospectus. Any funds realized from the exercise of options and warrants will be added to the Company’s general working capital. Subject to the Company maintaining its current expense requirements, the Company anticipates that it will have sufficient working capital to maintain its expenditures for the next twelve months. Cautionary Statements Readers are cautioned that the disclosure above constitutes forward-looking information, future oriented financial information, or financial outlooks (collectively “forward-looking information”) within the meaning of Canadian securities laws. Specifically, the statement that the Company expects to cover its expenses and working capital requirements for the next twelve months from revenue derived from operations and does not anticipate any debt or equity financings in the near term is a forward-looking statement. Such forward-looking information and statements are based on a number of material factors and assumptions, including, but not limited in any manner to, the continued success of the DermaWand product, including entering into retail markets and new markets; the success of new products the Company is working on; direct response industry conditions; sufficient working capital to develop the Company’s business plan; access to adequate services and supplies; interest rates; access to capital markets and associated cost of funds; availability of a qualified work force; ability to negotiate, finalize and execute

29 relevant agreements; the ability to meet production targets; capital and operating expenditures; economic conditions; availability of sufficient financing; and any and all other timing, operational, financial, budgetary, economic, legal, social, regulatory and political factors that may influence future events or conditions. While we consider these factors and assumptions to be reasonable based on information currently available to us, they may prove to be incorrect. The reader should not place undue reliance on forward-looking information and statements. Forwardlooking information and statements are only predictions based on our current expectations and our projections about future events. Actual results may vary from such forward-looking information for a variety of reasons, including but not limited to risks and uncertainties disclosed in the Company's filings at www.sedar.com and other unforeseen events or circumstances. Other than as required by law, the Company does not intend, and undertakes no obligation to update any forward-looking information to reflect, among other things, new information or future events. Business Objectives Although the Company currently sells its products primarily through infomercials, the goal of the Company’s business is to use the brand awareness it creates in its infomercials to sell its products (along with additional line extensions) under distinct brand names in traditional retail stores. The Company’s objective is to have these families of products sold in the traditional retail environment in shelf space dedicated to the product category. The Company is developing the infrastructure to create these brands of products so that it can implement its business plan. DIVIDEND POLICY To date the Company has not paid any dividends on its common stock, and the board does not expect to declare or pay any dividends on the common stock in the foreseeable future. Payment of any dividends will be dependent upon the Company’s future earnings, if any; its financial condition; and other factors the board determines are relevant.

INTERNATIONAL COMMERCIAL TELEVISION, INC. SELECTED FINANCIAL INFORMATION AND MANAGEMENT DISCUSSION AND ANALYSIS MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Except for the historical information presented in this document, the matters discussed in this prospectus, and specifically in the "Management's Discussion and Analysis or Plan of Operation”, or otherwise incorporated by reference into this document contain "forward looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements can be identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "intends", "should", or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. The safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, apply to forward-looking statements made by the Company. You should not place undue reliance on forward-looking statements. Forward-looking statements involve risks and uncertainties. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. These forward-looking statements are based on current expectations, and the Company assumes no obligation to update this information unless required by applicable securities legislation. Readers are urged to carefully review and consider the various disclosures made by the Company in this prospectus and in the Company's other reports filed with the Securities and Exchange Commission that attempt to advise interested parties of the risks and factors that may affect the Company's business.

30 The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the Financial Statements and accompanying notes and the other financial information appearing elsewhere in this report. Overview The goal of our business plan is to use the brand awareness we create in our infomercials so that we can sell the products featured, along with related families of products, under distinct brand names in traditional retail stores. Our goal is to have these families of products sold in the traditional retail environment in shelf-space dedicated to the product category. We are developing the infrastructure to create these brands of products so that we can implement our business plan. Fluctuations in our revenue are driven by changes in our product mix. Revenues may vary substantially from periodto-period depending on our product line-up. A product that generates revenue in one quarter may not necessarily generate revenues in each quarter of a fiscal year for a variety of reasons, including, seasonal factors, number of infomercials run, the product’s stage in its life-cycle, the public’s general acceptance of the infomercial and other outside factors, such as the general state of the economy. Just as fluctuations in our revenues are driven by changes in our product mix, our gross margins from period to period depend on our product mix. Our gross margins vary according to whether the products we sell are primarily our own products or third-party products. As a general rule, the gross margins for our own products are considerably higher based on proportionately smaller cost of sales. For third-party products, our general experience is that our gross margins are lower, because we record as cost of sales the proportionately higher cost of acquiring the product from the manufacturer. Within each category (i.e., our own products versus third-party products), gross margins still tend to vary based on factors such as market price sensitivity and cost of production. Many of our expenses for our own products are incurred up-front. Some of our up-front expenditures include infomercial production costs and purchases of media time. If our infomercials are successful, these up-front expenditures produce revenue as consumers purchase the products aired on the infomercials. We do not incur infomercial production costs and media time for our third-party products, because we merely act as the distributor for pre-produced infomercials. It is the responsibility of the international infomercial operators to whom we sell the thirdparty products to take the pre-produced infomercial, adapt it to their local standards and pay for media time.

Summary of Quarterly Results

31 A summary of the Company’s financial results for the eight most recently completed quarters is as follows (unaudited): Quarter Ended September 30, 2013 NET SALES NET INCOME (LOSS) NET INCOME (LOSS) PER SHARE BASIC DILUTED

$ 8,300,312 100,508 $ $

0.00 0.00

June 30, 2013 $ 10,455,115 648,909 $ $

0.03 0.03

March 31, 2013 $ 12,400,233 1,168,559 $ $

0.06 0.05

December 31, 2012 $ 10,138,976 (424,114) $ $

(0.03) (0.02)

Quarter Ended NET SALES NET INCOME (LOSS) NET INCOME (LOSS) PER SHARE BASIC DILUTED

September 30, 2012 $ 6,289,601 (217,200) $ $

(0.01) (0.01)

June 30, 2012 $ 3,836,498 112,474 $ $

0.01 0.00

March 31, 2012 $ 2,655,311 (21,608) $ $

(0.00) (0.00)

December 31, 2011 $ 1,138,362 (301,766) $ $

The following results of operations section contains the factors which have caused the variations in the quarters noted above. Please see such sections for further discussion on general trends and the seasonality of the business. September 30, 2013 and 2012 Results of Operations The following discussion compares operations for the three and nine months ended September 30, 2013 with the three and nine months ended September 30, 2012. Revenues Our revenues increased to approximately $8,300,000 and $31,156,000 for the three and nine months ended September 30, 2013, up from approximately $6,290,000 and $12,781,000 recorded during the three and nine months ended September 30, 2012, a 32% and 144% increase, respectively. The primary reason relates to continued success of the new DermaWandTM infomercial, which began airing in November 2011. During the three and nine months ended September 30, 2013 sales relating to DermaWandTM for direct response television (DRTV) were approximately $6,143,000 and $23,034,000 as compared to approximately $4,062,000 and $7,621,000 during the three and nine months ended September 30, 2012. This increase in DRTV revenue was in part due to the launching of a new Spanish language version of the DermaWandTM infomercial that was launched in August 2012. In addition, we had approximately 31,000 and 16,000 airings of the English and Spanish language versions of the DermaWand TM infomercial for the nine months ended September 30, 2013, respectively, compared to 20,000 and 700 airings for the nine months ended September 30, 2012, respectively. We have also been successful in building an auto-ship continuity program with our DermaVital ® skincare line. Currently there are approximately 16,500 customers in one of our DermaVital ® Preferred beauty clubs. As of July 2013, customers had the ability to purchase a one-time shipment of a 90 day supply of DermaVital®. This shipment was branded as the Dermavital® Ultimate Beauty Regimen (“UBR”). The UBR retails for $99.00 plus $14.95 shipping and handling, and can also be shipped on a 90-day auto-ship basis. In addition, customers have an option of signing up for three monthly DermaVital® Preferred beauty clubs, all of which receive the three core products in the line; Pre-Face Beauty Treatment, Hydra Infusion Beauty Treatment, and Skin Mist. The three clubs retail between $19.95 and $39.95 per month. Customers are enrolled month to month and can cancel at any time. The Company is focused on expanding the DermaVital® line and building the continuity program. Sales related to DermaVital® during the three and nine months ended September 30, 2013 were approximately $1,080,000 and $3,193,000 as compared to approximately $381,000 and $752,000 during the three and nine months ended September 30, 2012.

(0.02) (0.02)

32 Gross Margin For the three and nine months ended September 30, 2013 we generated approximately $6,154,000 and $22,559,000 in gross margin, compared to approximately $4,384,000 and $8,431,000 for the three and nine months ended September 30, 2012. Gross margin percentage was approximately 74% and 72% for the three and nine months ended September 30, 2013, up from approximately 70% and 66% during the three and nine months ended September 30, 2012. The main reason for the increase in gross margin was that the sales generated from the new DermaWandTM infomercial have an average selling price of $145, including shipping and handling, which represented the majority of sales for the three and nine months ended September 30, 2013. In comparison, for the three and nine months ended September 30, 2012, there was a more significant portion of our sales generated from televised home shopping, which had a selling price of approximately $60 to $100. For the nine months ended September 30, 2013 and 2012, gross margin percentage for DRTV Revenue was 88% and 89%, compared to 66% and 75% for televised home shopping. Operating Expenses Total operating expenses increased to approximately $6,044,000 and $20,550,000 during the three and nine months ended September 30, 2013, from approximately $4,593,000 and $8,540,000 during the three and nine months ended September 30, 2012, an increase of approximately $1,451,000, or 32% and $12,010,000 or 141%. This increase in operating expenses in primarily due to the expenses associated with running the new DermaWandTM infomercial. The largest of these expenses are media expenditures. Total media and production expenses increased to approximately $2,770,000 and $9,518,000 for the three and nine months ended September 30, 2013, from approximately $2,374,000 and $4,348,000 for the three and nine months ended September 30, 2012. Media and production expenses increased due to additional airings and the costs of running the Spanish infomercial, which began to run in August 2012. Other expenses that increased in association with DRTV Revenue, including the DermaWand TM and DermaVital® line are as follows:

Answering Service Customer Service Customization & Duplication Merchant Fees Total

For the three months ended September 30 Increase 2013 2012 (Decrease) $571,000 $444,000 $127,000 361,000 168,000 193,000 51,000 72,000 (21,000) 219,000 171,000 48,000 $1,202,000 $855,000 $347,000

Percentage of DRTV Revenue Increase 2013 2012 (Decrease) 8% 10% (2%) 5% 4% 1% 1% 2% (1%) 3% 4% (1%) 17% 19% (2%)

Answering Service Customer Service Customization & Duplication Merchant Fees Total

For the nine months ended September 30 Increase 2013 2012 (Decrease) $2,154,000 $740,000 $1,414,000 1,313,000 264,000 1,049,000 169,000 153,000 16,000 819,000 271,000 548,000 $ 4,455,000 $1,428,000 $3,027,000

Percentage of DRTV Revenue Increase 2013 2012 (Decrease) 8% 9% (1%) 5% 3% 2% 1% 2% (1%) 3% 3% 0% 17% 17% 0%

As seen above, other expenses as a percentage of DRTV Revenue stayed consistent on a year to date basis. As a percentage of DRTV revenue, increased expenses to improve overall customer service were offset by decreases in answering service expense. In addition to the increased costs associated with the infomercial; there was also an increase in bad debt expenses. Total bad debt expenses increased to approximately $627,000 and $2,382,000 during the three and nine months ended

33 September 30, 2013, from approximately $104,000 and $311,000 during the three and nine months ended September 30, 2012. Bad debt as a percentage of DRTV and continuity sales increased to 9% during the nine months ended September 30, 2013 from 4% during the nine months ended September 30, 2012. The main reason for this was the increase in sales related primarily to the infomercial, in which we offer customers the option to try the Dermawand TM on a free trial basis. Approximately 50% of our customers elect to take the free trial followed by three monthly installments of $39.95. The majority of our bad debt expense is associated with these customers. Income Tax Expense The provision for income tax increased to approximately $4,000 and $72,000, from $0 and $0 during the three and nine month periods ended September 30, 2013 and 2012, respectively. For the nine months ended September 30, 2013 and 2012, the provision represented an effective tax rate of 4% and 0%, respectively, of pre-tax income. Net Income The Company generated net income of approximately $101,000 and $1,918,000 for the three and nine months ended September 30, 2013, compared with a net loss of approximately $217,000 and $126,000 for the three and nine months ended September 30, 2012. Contributing to the increase was the increases in gross margin for both periods. Further, there was an increase in continuity sales generated from the monthly shipments of the Company’s DermaVital® skincare products. Sales from DermaVital® for the three and nine months ended September 30, 2013 were approximately $1,080,000 and $3,193,000 as compared to approximately $381,000 and $752,000 during the three and nine months ended September 30, 2012. Since the majority of these sales occur after the expense of acquiring the customer has already occurred (i.e. media expenses, telemarketing expenses, etc.) as well as with lower materials costs, the profit margin on these particular sales is high, compared to the initial DRTV sale that results directly from the running of an infomercial. December 31, 2012 and 2011 Results of Operations The following discussion compares operations for the fiscal year ended December 31, 2012, with the fiscal year ended December 31, 2011. Revenues Net sales increased $19,818,000 or 639% to approximately $22,920,000 in 2012 from approximately $3,102,000 in 2011. There were two major reasons for the increase in revenue. The first reason relates to continued success of the new DermaWandTM infomercial. During 2012 sales relating to DermaWandTM for direct response television (DRTV) were approximately $17,021,000 as compared to approximately $128,000 in 2011. This increase in DRTV revenue was in part due to the launching of a new Spanish language version of the DermaWand show that was launched in August 2012. We have also been successful in building an auto-ship continuity program with our DermaVitalTM skincare line. Currently there are over 12,000 customers in the program, all which pay $29.95 per month to receive the three core products in the line; Pre-Face Beauty Treatment, Hydra Infusion Beauty Treatment, and Skin Mist. Customers are enrolled month to month and can cancel at any time. The Company is focused on expanding the DermaVitalTM line and building the continuity program. Sales related to the DermaVitalTM line during the years ended December 31, 2012 and 2011 were approximately $1,519,000 and $3,000, respectively. The second reason for the increase in revenue was an increase in international sales. During 2012, international sales revenue for the DermaWandTM was approximately $3,768,000, as compared to approximately $1,299,000 in the prior year, an increase of approximately $2,469,000. The increase in international sales can be attributed primarily to the new DermaWandTM infomercial running in Europe, Asia, and South America. Gross Margin Gross margin percentage increased to approximately 67.4% in 2012 from approximately 49.5% in 2011. The main reason for the increase in gross margin was that the sales generated from the new DermaWandTM infomercial have an

34 average selling price of $145, including shipping and handling, which represented the majority of sales for the 2012. In comparison, for 2011, the majority of sales were generated from televised home shopping, which had a selling price of approximately $60 to $100. Infomercial sales of DermaWand TM only occurred during the last quarter of 2011, whereas it ran for all of 2012. In 2012, we generated approximately $15,440,000 in gross margin, compared to approximately $1,534,000 in 2011. Operating Expenses Total operating expenses increased to approximately $15,915,000 in 2012, from approximately $2,020,000 in 2011, an increase of $13,895,000, or 688%. This increase in operating expenses in primarily due to the expenses associated with running the new DermaWandTM infomercial. The largest of these expenses are media expenditures. Total media and production expenses increased to approximately $7,626,000 in 2012, from approximately $337,000 in 2011. Other expenses that increased in association with the DermaWand TM infomercial were answering services of approximately $1,587,000 in 2012, from approximately $33,000 in 2011; customization and duplication of approximately $218,000 in 2012, from approximately $52,000 in 2011; and merchant fees of approximately $521,000 in 2012, from approximately $19,000 in 2011. In addition to the increased costs associated with the infomercial, there was also a significant increase in stock based compensation and bad debt expense. Total stock based compensation expenses increased to approximately $838,000 during 2012, from approximately $111,000 in 2011. Total bad debt expenses increased to approximately $1,436,000 during 2012, from approximately $44,000 in 2011, which is consistent with the increase in sales and related primarily to infomercial sales. Net Loss The Company generated net loss of approximately $550,000 for the year ended December 31, 2012, compared to a 2011 net loss of approximately $486,000. The major reason for the increased 2012 net loss was the increased operating expenses, offset by increased profit margins the Company achieved with the higher selling price for DermaWand TM through DRTV infomercial sales. December 31, 2011 and 2010 Results of Operations The following discussion compares operations for the fiscal year ended December 31, 2011, with the fiscal year ended December 31, 2010. Revenues Net sales decreased $801,000 or 20.5% to approximately $3,102,000 in 2011 from approximately $3,903,000 in 2010, primarily as a result of decline in international sales. During 2011, international sales revenue for the DermaWand TM was approximately $1,299,000, as compared to approximately $2,005,000 in the prior year, a decrease of approximately $706,000. The decline in international sales can be attributed to the global recession, as well as the age of the DermaWandTM infomercial that was running internationally for the majority of 2011. With the production of the new infomercial, the Company is anticipating an increase in sales through international distributors during 2012. In addition, during March 2010, the Company recognized approximately $94,000 of royalty income relating to the non-refundable royalty advance paid under the Allstar agreement. No revenue was recognized under the Allstar agreement in 2011. One hundred percent of net sales were generated by the sale of our own products in 2011 and 2010. Gross Margin Gross margin percentage increased to approximately 49.5% in 2011 from approximately 46.1% in 2010. There are three factors that affect the increase in gross margin. The first factor is the decrease in International sales during 2011

35 of approximately $706,000 compared to 2010. DermaWandTM is sold wholesale internationally with an average price of approximately $21. A second reason gross margin increased in 2011 was the transition of televised home shopping networks. In May 2011 the Company made the decision to move the televised home shopping sales of Derma Wand from Home Shopping Network (HSN) to ShopNBC, upon where a higher screen price for the DermaWandTM is offered on ShopNBC as compared to HSN. Finally, the sales generated from the new DermaWandTM infomercial have an average selling price of approximately $145, including shipping and handling. There were no infomercial sales of DermaWandTM during 2010. In 2011, we generated approximately $1,534,000 in gross margin, compared to approximately $1,801,000 in 2010. Operating Expenses Total operating expenses decreased to approximately $2,020,000 in 2011, down from approximately $2,597,000 in 2010, a decrease of $577,000, or 22.2%. Management’s efforts to reduce the level of expenses over the past twelve months are one of the reasons for the decrease in operating expenses. A significant amount of the decrease in operating expenses, approximately $576,000, can be attributed to a decrease in payroll and severance expenses. In addition, the Company has decreased accounting expenses by approximately $198,000 and consulting expenses by approximately $139,000. In addition to the decrease, certain expenses increased due to the re-launching of the DermaWandTM infomercial in November of 2011. Offsetting these decreases were increases in operating costs of approximately $161,000 in media expense, $136,000 in production expenses, and $32,000 in answering service expenses. Net Loss Our net loss for the year ended December 31, 2011 was approximately $485,900, compared to a 2010 net loss of approximately $796,000. The major reason for the decreased 2011 net loss was the increased profit margins the Company achieved with the higher selling price for DermaWandTM on ShopNBC, combined with management’s efforts to reduce operating expenditures.

Liquidity and Capital Resources At September 30, 2013, we had approximately $903,000 in cash (including cash held in escrow), compared to approximately $908,000 at December 31, 2012. We generated positive cash flows from operations of approximately $76,000 in the nine months ended September 30, 2013 compared to positive cash flow from operations of approximately $457,000 for the same period in 2012. The positive cash flow from operations during the current period was primarily a result of a net income of approximately $1,918,000, a decrease in accounts receivable, net of bad debt expense, of approximately $15,000, an increase in deferred revenue of approximately $203,000, and share based compensation expense of approximately $379,000, partially offset by an increase in inventory of approximately $160,000, an increase in prepaid expense and other current assets of approximately $211,000, a decrease in accounts payable and accrued liabilities of approximately $1,846,000, a decrease in severance payable of approximately $31,000. The most significant driver in cash flow from operations was the increase in sales and net income discussed above, offset by payment of accounts payable and accrued liabilities. The Company has a note payable to The Better Blocks Trust (“BB Trust”), a shareholder, originally in the amount of $590,723. On April 1, 2012, the shareholder note payable was modified. The new terms include interest at the rate of four and three quarters percent (4.75%) per annum. Interest on the unpaid balance of this note shall be paid in arrears as of the end of each calendar quarter, with payment due on the first day of the month following the quarter as to which interest is being paid. The first payment of interest was due on January 1, 2013, for the three quarters beginning April 1, 2012 and ending on December 31, 2012. The principal balance of this note shall be due and payable in three equal payments on each of April 1, 2015, April 1, 2016, and April 1 2017. Interest on the loan for the three and nine months ended September 30, 2013 and 2012, was approximately $5,200 and $7,000 and $17,800 and $14,000, respectively

36 This note may be prepaid in whole or in part at any time without penalty, and any prepayment shall be applied against the next principal payment due. For the three and nine months ended September 30, 2013 and 2012, $52,000 and $0 and $137,000 and $0, respectively, in principal prepayments were made on the note. At September 30, 2013 and December 31, 2012, the balance outstanding was approximately $453,723 and $590,723, respectively. All or any part of this note may be converted into shares of common stock of the Company at any time, and from time to time, prior to payment, at a conversion price of $0.50 per share. Conversion is at the option of lender. Any amount not converted will continue to be payable in accordance with the terms of the note. In December 2011, the Company entered into a note payable with a Canadian lender in the amount of approximately $98,000 (C$100,000). This loan accrues interest of prime plus 1%. Interest is paid monthly. Principal payments are to be paid in monthly installments of approximately $6,500 (C$6,667), beginning in March 2012 and ending May 2013. On January 24, 2012, the Company entered into a note modification with the Canadian lender, increasing the outstanding balance to approximately $137,000 (C$140,000) as additional borrowings were made by the Company. The principal payments on the additional borrowings of approximately $39,500 (C$40,000) are in two installments of $20,000 (approximates C$) payable on April 15, 2012 and July 15, 2012, respectively. In addition, the interest rate on the note was modified to lender’s cost, plus two-percent and the note became convertible into shares of the Company’s common stock at a fixed conversion rate of $0.196 (C$0.20) per share. As of September 30, 2013, there was no outstanding balance on this note. As of September 30, 2013, the Company had a working capital of approximately $2,756,000, compared to approximately $336,000 at December 31, 2012, and an accumulated deficit of approximately $5,336,000 as of September 30, 2013. Although we currently sell our products primarily though infomercials, the goal of our business is to use the brand awareness we create in our infomercials to sell our products (along with additional line extensions) under distinct brand names in traditional retail stores. Our objective is to have these families of products sold in the traditional retail environment in shelf-space dedicated to the product category. We are developing the infrastructure to create these brands of products so that we can implement our business plan. There is no guarantee that the Company will be successful in bringing our products into the traditional retail environment. If the Company is unsuccessful in achieving this goal, the Company will be required to raise additional capital to meet its working capital needs. If the Company is unsuccessful in completing additional financings, it will not be able to meet its working capital needs or execute its business plan. In such case the Company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. CRITICAL ACCOUNTING POLICIES AND ESTIMATES The Securities and Exchange Commission (“SEC”) defines “critical accounting policies” as those that require application of management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our significant accounting policies are described in Note 2 in the Notes to the Consolidated Financial Statements. Not all of these significant accounting policies require management to make difficult, subjective or complex judgments or estimates. However, the following policies could be deemed to be critical within the SEC definition. Improvement in working capital is mainly due to the modification of debt terms reclassifying the $590,723 shareholders note payable to long-term as of December 31, 2012. Accounts receivable Accounts receivable are recorded net of allowances for returns and doubtful accounts of approximately $623,000, $13,000, and $7,000 for the years ended December 31, 2012, 2011, and 2010, respectively. The allowances are calculated based on historical customer returns and bad debts. In addition to reserves for returns on accounts receivable, an accrual is made against returns for product that have been sold to customer and had cash collections, while the customer still has the right to return the product. The amounts of these accruals included in accounts payable and accrued liabilities in our Consolidated Balance Sheets were

37 approximately $248,000, $42,000 and 9,000 at December 31, 2012, 2011, and 2010, respectively. Inventories Inventories consist primarily of products held for resale, and are valued at the lower of cost (first-in, first-out method) or market. The Company adjusts inventory for estimated obsolescence when necessary based upon demand and market conditions. The Company has recorded approximately $251,000, $12,000, and $0 of inventory of consigned product as of December 31, 2012, 2011, and 2010, respectively, that has been shipped to customers under the 30-day free trial period for which the trial period has not expired and as such the customer has not accepted the product. Revenue recognition For our domestic direct response television sales generated by our infomercials, product sales revenue is recognized when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured. The Company’s revenues in the Consolidated Statement of Operations are net of sales taxes. The Company offers a 30-day risk-free trial as one of its payment options. Revenue on the 30-day risk-free trial sales is not recognized until customer acceptance and collectability are assured which we determine to be when the trial period ends. If the risk-free trial expires without action by the customer, product is determined to be accepted by the customer and revenue is recorded. Revenue for items purchased without the 30-day free trial is recognized upon shipment of the product to the customer and collectability is assured. Revenue related to our DermaVitalTM continuity program is recognized monthly upon shipment to customers. Revenue related to international wholesale customers is recorded at gross amounts with a corresponding charge to cost of sales. The Company has a return policy whereby the customer can return any product received within 30 days of receipt for a full refund excluding shipping and handling. However, historically the Company has accepted returns past 30 days of receipt. The Company provides an allowance for returns based upon past experience. All significant returns for the years presented have been offset against gross sales. Income taxes In preparing our consolidated financial statements, we make estimates of our current tax exposure and temporary differences resulting from timing differences for reporting items for book and tax purposes. We recognize deferred taxes by the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In consideration of our accumulated losses and lack of historical ability to generate taxable income to utilize our deferred tax assets, we have estimated that we will not be able to realize any benefit from our temporary differences and have recorded a full valuation allowance. If we become profitable in the future at levels which cause management to conclude that it is more likely than not that we will realize all or a portion of the net operating loss carry-forward, we would immediately record the estimated net realized value of the deferred tax asset at that time and would then provide for income taxes at a rate equal to our combined federal and state effective rates, which would be approximately 40% under current tax laws. Subsequent revisions to the estimated net realizable value of the deferred tax asset could cause our provision for income taxes to vary significantly from period to period. The Company’s policy is to recognize interest and penalties related to tax matters in general and administrative expenses in the Consolidated Statements of Operations. Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements.

38

Transactions with Related Parties The Company has received short-term advances from a shareholder, Mr. Tim Crosby. These advances amounted to approximately $50,000, $40,000 and $2,500 during the years ended December 31, 2012, 2011, and 2010, respectively. The $50,000 loan accrued interest of 6% annually. Principal payments were made in six monthly installments of approximately $8,333, beginning in May 2012 and ending in October 2012. Interest was paid along with the final payment in October 2012. The total advances are offset by repayments which amounted to approximately $57,500, $32,500 and $3,200 during the years ended December 31, 2012, 2011, and 2010, respectively. At December 31, 2012, 2011, and 2010, the balance outstanding was approximately $0, $7,500, and $2,000 respectively. These advances were included in Short Term Advances Payable – Related Parties on the accompanying consolidated balance sheets. The Company also received short-term advances from another shareholder, Ms. Christina Boves. There were no advances during the years ended December 31, 2012, 2011 and 2010. Repayments amounted to approximately $30,900, $0 and $0 during the years ended December 31, 2012, 2011, and 2010 respectively. These advances are noninterest bearing and without specific terms of repayment. At December 31, 2012, 2011, 2010 the balance outstanding was approximately $0, $30,900, and $0 respectively. These advances were included in Short Term Advances Payable – Related Parties on the accompanying consolidated balance sheets. The Company has a note payable to a shareholder, The Better Blocks Trust, with an original balance of $590,723. Prior to April 1, 2012, this loan was interest-free and had no specific terms of repayment. On April 1, 2012, the note payable was modified. The new terms include interest at the rate of four and three quarters percent (4.75%) per annum. Interest on the unpaid balance of the note is to be paid in arrears as of the end of each calendar quarter, with payment due on the first day of the month following the quarter as to which interest is being paid. The first payment of interest was due on January 1, 2013, for the three quarters beginning April 1, 2012 and ending on December 31, 2012. Interest on the loan for the three and nine months ended September 30, 2013 and 2012, was approximately $5,200 and $7,000 and $17,800 and $14,000, respectively. Interest charged through September 30, 2013 was fully paid at September 30, 2013. The principal balance of this note shall be due and payable in three equal payments on each of April 1, 2015, April 1, 2016, and April 1 2017. This note may be prepaid in whole or in part at any time without penalty, and any prepayment shall be applied against the next principal payment due. For the three and nine months ended September 30, 2013 and 2012, $52,000 and $0, and $137,000 and $0, respectively, in principal prepayments were made on the note. At September 30, 2013 and December 31, 2012, the balance outstanding was $453,723 and $590,723, respectively. Additional principal payments of $60,000 were made through December 31, 2013. At April 1, 2012, when this note was modified, a conversion option was added that stated that all or any part of this note may be converted into shares of common stock of the Company at any time, and from time to time, prior to payment, at a conversion price of $0.50 per share. Conversion is at the option of lender. Any amount not converted will continue to be payable in accordance with the terms of the note. The Company considered this a modification of debt that was not substantive, thus no gain or loss was recorded upon modification. All related party transactions were disclosed in the financial statements and were measured based on the consideration exchanged. The business purpose of the transactions was to continue to fund the growth of the Company. We have three directors. Under the definition of director independence found in NASD Rule 4200, Stephen Jarvis was our sole independent director in 2012, 2011 and 2010. William Kinnear became a second independent director in 2013.

DESCRIPTION OF THE SECURITIES DISTRIBUTED Common shares

39 The authorized capital of the Company consists of 100,000,000 common shares with par value of $0.001 and 20,000,000 preferred shares. Preferred shares may be issued in series from time to time with such designation, rights, preferences and limitations as the Company’s board of directors determines by resolution and without shareholder approval. The board of directors has exclusive discretion to issue preferred stock with rights that may trump those of common stock. Currently no preferred shares are issued and outstanding. As of the date of this Prospectus, 23,013,316 common shares were issued and outstanding as fully paid and non-assessable. Holders of common shares are entitled to one vote per share upon all matters on which they have the right to vote. The common shares do not have pre-emptive rights and are not subject to redemption or retraction provisions. The Company may, if authorized by the directors, purchase or otherwise acquire any of its common shares at a price and upon the terms determined by the directors. Holders of the common shares are entitled to receive such dividends as may be declared by the board of Directors out of funds legally available therefore. In the event of dissolution or winding up of the affairs of the Company, holders of the common shares are entitled to share rateably in all assets of the Company remaining after payment of all amounts due to creditors. Warrants As of December 31, 2013, there are 6,470,000 stock options and share purchase warrants issued and outstanding, as well as approximately 787,446 common shares that could be issued upon conversion of outstanding debt. The board of Directors has the power to issue such shares without shareholder approval. Options In June 2001, the Company’s shareholders approved the 2001 Stock Option Plan, designed for selected employees, officers and directors to the Company and its subsidiaries, and intended to advance the interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiary with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiary. The stock option plan is administered by the board of Directors, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the plan are determined by the board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of the grant. The plan expired in February 2011. As of December 31, 2013, 933,334 options are outstanding under the plan. See “Options to Purchase Securities”. In December 2011, the board of Directors approved the 2011 Incentive Stock Option Plan. The 2011 option plan is designed for selected employees, officers and Directors of the Company and its subsidiary, and is intended to advance the best interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiaries with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiary. The 2011 plan is administered by the board of Directors, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the 2011 plan are determined by the board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of grant. As of December 31, 2013, 2,541,666 options are outstanding under the 2011 plan. CONSOLIDATED CAPITALIZATION The following table sets forth the share and loan capital of the Company as at the dates below. The table should be read in conjunction with and is qualified in its entirety by the Company’s audited financial

40 statements for the fiscal year ended December 31, 2012 and unaudited financial statements for the nine months ended September 30, 2013. Authorized Capital Common Shares Preferred Shares Warrants

100,000,000

Stock Options

N/A

Long-term Debt

N/A

Outstanding as of December 31, 2012 $12,463,654 (20,772,756 common shares) Nil

20,000,000 N/A

$304,841 (1,503,417 warrants with exercise prices ranging from $0.10 to $3.00) $927,200 (4,880,000 stock options with a weighted average exercise price of $0.19) $590,723

Outstanding as of September 30, 2013 $9,349,742 (21,743,587 common shares) Nil $304,841 (1,503,417 warrants with exercise prices ranging from $0.10 to $3.00) $1,203,284 (5,231,669 stock options with a weighted average exercise price of $0.23) $453,723

OPTIONS TO PURCHASE SECURITIES The following table presents information as to the number of shares of the Company’s common stock which are authorized for issuance under the Plan as of December 31, 2013. Plan Category

(a) Number of securities (b) Weighted-average to be issued upon exercise price of exercise of outstanding outstanding options options

Equity compensation 3,475,000 plans approved by security holders Equity compensation 1,881,667 plans not approved by security holders Total 5,356,667

$0.24

(c) Number of securities remaining available for future issuance under the Plan (excluding securities reflected in column (a) 458,334

$0.23

N/A

$0.123

458,334

The following table summarizes, as at the date of this Prospectus, the options granted to directors, executive officers, employees and consultants of the Company.

41

Category Current and past executive officers (3)

Number of Options Granted Expiration Date February 2021 – December 2023 2,800,000 525,000

February 2021 – December 2023

Current and past employees

1,025,000

February 2021 – December 2023

Current and past consultants

1,940,000

February 2015 – July 2023

Current and past directors (3)

Prior Sales There were no sales of common shares within 12 months of the date of this Prospectus. Trading Price and Volume The Company’s common shares currently trade on the OTC market in the United States and are quoted on the OTCQB under the symbol ICTL. The following table sets forth the reported high and low prices and the trading volume as reported by stockhouse.com for the shares for each month for the twelve (12) month period prior to the date of this prospectus: Date Price (US $) Trading Volume High Low February 2014 1.08 0.75 1,756,544 January 2014 0.94 0.67 1,508,918 December 2013 0.90 0.29 4,150,000 November 2013 0.37 0.22 1,651,500 October 2013 0.46 0.33 314,682 September 2013 0.534 0.39 322,950 August 2013 0.535 0.45 660,903 July 2013 0.58 0.46 496,920 June 2013 0.73 0.53 861,510 May 2013 0.78 0.16 1,594,545 April 2013 0.34 0.15 78,967 March 2013 0.38 0.20 134,668 Escrowed Securities None of the Company’s issued shares are held in escrow.

42 PRINCIPAL SHAREHOLDERS To the knowledge of the Company's directors and senior officers, the following persons beneficially own, directly or indirectly, or exercise control or direction over, common shares carrying more than 10% of all voting rights:

Name The Better Blocks Trust, declared January 1, 1994(2)

Type of Ownership

Shares (and % of Outstanding Shares)(1) Owned, Controlled or Directed

Registered

6,668,660 (29.0%)

Total:

6,668,660 (29.0%)

Note: (1) (2)

On the basis of 23,013,316 issued and outstanding common shares as at the date hereof; Kelvin Claney, the Chairman and Chief Executive Officer of the Company, is a joint trustee of The Better Blocks Trust. Mr. Claney disclaims any beneficial ownership of the shares and options owned or controlled by The Better Blocks Trust beyond the extent of his pecuniary interest. The address for The Better Blocks Trust is 1 Kimberly Road, Epson, Auckland City, Auckland, New Zealand, c/o Barry Stafford, Stafford Klaassen.

DIRECTORS AND OFFICERS Name, Address, Occupation, and Security Holding The following table sets forth particulars regarding the current Directors and officers of the Company:

43 Name, Position with the Company and State and Country of Residence Kelvin Claney (1)(2) CEO, Secretary and Director Pennsylvania United States Richard Ransom (2)(3) President, Pennsylvania United States

Ryan LeBon Chief Financial Officer, Pennsylvania United States

Stephen Jarvis (1)(2) Director, Pennsylvania United States William Kinnear (1)(2)

Director Toronto, Ontario, Canada

Principal Occupation For Past Five Years President of RJM Ventures Inc., a television direct response marketing company, since 1992.

Controller at Hildebrandt International from 2002 to 2006; Chief Financial Officer of the Company from December 2008 to December 2013; President of the Company since August 2011 Audit Manager at Deloitte & Touche LLP from January 2005 to May 2012; Controller at General Electric from May 2012 to June 2013; Director of Financial Reporting of the Company from June 2013 to December 2013; Appointed Chief Financial Officer effective January 1, 2014 Co-founder and President of Positive Response Vision, Inc., an infomercial-based direct response company, since 1996 Corporate Secretary of Fairwater Capital Corporation since 2002; Chartered Professional Accountant

Number of Securities Beneficially Owned or controlled directly or indirectly, as of the date of this Prospectus 590,443 (2.5%)

504,166 (2.2%)

Term of Office January 2001 to present

Controller from July 2008 to December 2008 Chief Financial Officer from December 2008 to December 2013. President from August 2011 to present

Nil

Appointed Chief Financial Officer effective January 1, 2014 to present

671,666 (2.9%)

Director since December 2009

Nil

Director since March 2013

Notes: (1) Member of the Audit Committee. There is currently no Chair of the Audit Committee. (2) Percentage is based on 23,013,316 common shares issued as of the date of this Prospectus. (3) Mr. Ransom resigned his position as Chief Financial Officer effective January 1, 2014. Mr. Ryan LeBon was appointed Chief Financial Officer effective January 1, 2014.

The terms of the foregoing director and officer appointments shall expire at the next annual shareholders meeting.

44 A description of the principal occupation for the past five years and summary of the experience of the directors and officers of the Company is as follows: Kelvin Claney –Chief Executive Officer, Chairman Kelvin Claney, age 62, has served as a director of the Company since January 2001. Mr. Claney began working in the United States direct response business in 1989 as an independent contractor to National Media Corp., where he produced, sourced, and executive produced various infomercial projects, including Euro Painter, HP9000, Auri polymer sealant and Color Cote 2000™, Dustmaster 2000, LeSnack, Iron Quick and Fatfree Express. Since 1992, Mr. Claney has served as President of R.J.M. Ventures, Inc., a television direct response marketing company, where he was responsible for such things as identifying projects the Company wants to become involved in, selecting production companies to produce infomercials and selecting media times to promote the infomercials. The creation of the Smart StacksTM infomercial, which is now owned by ICTV, was one of the projects Mr. Claney was responsible for as President of R.J.M. Ventures, Inc. He also created the infomercial for the children’s toy product known as BetterBlocksTM, which was then owned by The Better Blocks Trust. Mr. Claney works full-time for the Company and devotes approximately 100% of his working time to the Company. The Company entered into an Employment Agreement with Kelvin Claney effective March 1, 2011. The Agreement provides, among other things, that if Mr. Claney’s employment is terminated without cause, he will be entitled to severance pay in a lump sum payment equal to one year of his base salary, health insurance reimbursement and automobile expenses allowance as in effect on the date of termination. Under the terms of this agreement, the Company pays an annual salary of $180,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. Effective January 1, 2013, this salary was increased to $240,000 and approved by the Board of Directors. Under the Employment Agreement, Mr. Claney will be considered terminated without cause if his substantive responsibilities are changed without his prior approval, or if all or substantially all of the assets of the Company are sold, or a controlling interest in the Company is sold, unless in connection with such a sale Mr. Claney’s Employment Agreement is assumed by the buyer or he is offered an employment contract for substantially the same responsibilities, for a term of at least one year, and at substantially the same compensation, terms and benefits as provided in the Employment Agreement. Richard Ransom, age 35, is the President of the Company. Richard Ransom joined the Company in July of 2008 as the Director of Finance, and was appointed as Chief Financial Officer on December 8, 2008. Mr. Ransom joined the Company with eight years of experience in financial management roles at Traffic.com, Hildebrandt International, and Grant Thornton. He is a graduate of Pennsylvania State University with a degree in Accounting, and received his MBA from Delaware Valley College in December, 2009. In August 2011, Mr. Ransom was promoted to President of the Company. Mr. Ransom resigned his position as Chief Financial Officer effective January 1, 2014. He continues in his role as President. Mr. Ransom works full-time for the Company and devotes approximately 100% of his working time to the Company. On April 17, 2012, the Company entered into an employment agreement with Richard Ransom. Under the terms of this agreement, the Company will pay an annual salary of $125,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s board of Directors. Effective January 1, 2013, this annual salary was increased to $160,000 and approved by the Board of Directors. The President is also entitled to annual performance bonuses as determined appropriate by the board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement, automobile allowance and other reimbursable expenses. The employment agreement will continue until terminated by either party in accordance with the terms of the agreement. If the employment agreement is

45 terminated by the Company without cause, the employee will be entitled to a severance payment equal to one year’s salary and benefits. Ryan LeBon, age 31, is Chief Financial Officer of the Company. Mr. LeBon joined the Company in June of 2013 as the Company’s Director of Financial Reporting and was appointed as Chief Financial Officer effective January 1, 2014. Prior to joining the Company, Mr. LeBon had over nine years of experience with Deloitte & Touche LLP, as an Audit Manager primarily serving SEC registrants, and as a Controller with General Electric. Mr. LeBon is a graduate of Villanova University with a degree in accounting and is a Certified Public Accountant in Pennsylvania. Mr. LeBon works full-time for the Company and devotes approximately 100% of his working time to the Company. Stephen Jarvis, age 58, is a Director of the Company. Stephen Jarvis has served as a Director of the Company since December 17, 2009. Mr. Jarvis is the co-founder and President of Positive Response Vision, Inc., located in Manila, Philippines. Formed in 1996, Positive Response Vision is one of the largest infomercial-based direct response companies in Southeast Asia, and has approximately 400 employees. The company markets and distributes a vast range of products throughout the Philippines. As President, Mr. Jarvis is responsible for product sourcing and acquisition, inventory, finance control and design issues. Mr. Jarvis also produces infomercials in a private capacity, licensing them to Positive Response Vision and other international infomercial companies. Mr. Jarvis has been engaged in direct response marketing since 1983. Mr. Jarvis is an independent contractor and has not entered into a non-competition or non-disclosure agreement with the Company. Mr. Francis intends to devote that percentage of his working time to the affairs of the Company as is required to fulfill his responsibilities as a director. William Kinnear, age 69, is a Director of the Company. William Kinnear became a Director of the Company in March 2013. Mr. Kinnear is a Chartered Professional Accountant in Canada, and has over 40 years of experience as a senior officer with a variety of companies, both public and private, in the accounting and financial disciplines. His experience includes the areas of mortgage underwriting and finance, point of sale, steel fabrication, secretarial services, and investments. Mr. Kinnear is currently Corporate Secretary for a private investment company, and provides corporate secretarial services to a variety of companies, working closely with stock exchanges and security commissions within Canada. Mr. Kinnear is an independent contractor and has not entered into a non-competition or non-disclosure agreement with the Company. Mr. Kinnear intends to devote that percentage of his working time to the affairs of the Company as is required to fulfill his responsibilities as a Director. Aggregate Ownership of Securities As of the date of this prospectus, the directors, officers, and promoters of the Company, as a group, directly or indirectly beneficially own 8,434,935 common shares, representing approximately 37.0% of the issued and outstanding common shares on an undiluted basis. Corporate Cease Trade Orders or Bankruptcies No director, officer, promoter or other member of management of the Company has, within the past ten years, been a director, officer or promoter of any other issuer that, while that person was acting in that capacity: (a)

was the subject of a cease trade or similar order or an order that denied the issuer access to any statutory exemptions for a period of more than 30 consecutive days; or

46 (b)

was declared bankrupt or made a voluntary assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or insolvency or been subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold the assets of that person.

Penalties or Sanctions No director or executive officer of the Company has, within the past ten years, been subject to any penalties or sanctions imposed by a court or by a securities regulatory authority relating to securities legislation or has entered into a settlement agreement with a securities regulatory authority or has been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision. Personal Bankruptcies No current or proposed director, officer, or promoter of the Company has, within the past ten years, been declared bankrupt or made a voluntary assignment in bankruptcy, made a proposal under any legislation relating to bankruptcy or insolvency or been subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver manager, or trustee appointed to hold the assets of that individual. Conflicts of Interest Conflicts of interest may arise as a result of the Directors and officers of the Company holding positions as directors or officers of other companies. Some of the Directors and officers have been and will continue to be engaged in the identification and evaluation of assets and businesses, with a view to potential acquisition of interests in businesses and companies on their own behalf and on behalf of other companies, and situations may arise where the Directors and officers will be in direct competition with the Company. Conflicts, if any, will be subject to the procedures and remedies under the Nevada Revised Statutes. EXECUTIVE COMPENSATION Compensation Discussion and Analysis The Company does not have a compensation program other than entering into employment contracts with its Chief Executive Officer and President, and paying consulting fees and incentive bonuses. The compensation of the executive officers is determined by the Board, based in part on recommendations from the Chief Executive Officer. The Board recognizes the need to provide a compensation package that will attract and retain qualified and experienced executives, as well as align the compensation level of each executive to that executive’s level of responsibility. The objectives of the Company’s compensation policies and practices are: • to reward individual contributions in light of the Company’s performance; • to be competitive with the companies with whom the Company competes for talent; • to align the interests of the executives with the interests of the shareholders; and • to attract and retain executives who could help the Company achieve its objectives. Effective March 1, 2011, the Company entered into an employment agreement with Kelvin Claney, Chief Executive Officer of the Company. Under the terms of this agreement, the Company pays an annual salary of $180,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. Effective January 1, 2013, this salary was increased to $240,000 and was approved by the

47 Board of Directors. Effective January 1, 2014, this salary was increased to $275,000 and was approved by the Board of Directors. Mr. Claney is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement; automobile allowance and other reimbursable expenses. The initial term of this employment agreement is five years. The agreement automatically renews for successive one year periods unless either party provides not less than 60 days prior written notice of their intent not to renew the agreement. If the employment agreement is terminated by the Company without cause, Mr. Claney will be entitled to a severance payment equal to one year’s salary and benefits. On April 17, 2012, the Company entered into an employment agreement with Richard Ransom, President and Chief Financial Officer of the Company. Under the terms of this agreement, the Company pays an annual salary of $125,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. Effective January 1, 2013, this annual salary was increased to $160,000 and approved by the Board of Directors. Mr. Ransom is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement; automobile allowance and other reimbursable expenses. The employment agreement will continue until terminated by either party in accordance with the terms of the agreement. If the employment agreement is terminated by the Company without cause, Mr. Ransom will be entitled to a severance payment equal to one year’s salary and benefits. Effective January 1, 2014, Ryan LeBon was appointed as Chief Financial Officer of the Company. The Company pays an annual salary of $125,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. Mr. LeBon is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement. During the most recent financial year ended December 31, 2013, the Chief Executive Officer was paid a salary of $240,000 and a bonus of $25,000, while the President was paid a salary of $160,000 and a bonus of $25,000. The Company accrued approximately $25,000 in bonuses to the CEO and the President for the year ended December 31, 2013, included in accounts payable and accrued expenses in the accompanying consolidated financial statements. These bonuses were paid in January 2014. Currently the Board believes that the Company is competitive with the companies whom the Company competes for talent. The basic component of executive compensation has consisted of a salary component and performancebased variable incentive compensation, which may be comprised of cash bonuses or stock option grants. The allocation of value to these different compensation elements are not based on a formula, but rather are intended to reflect market practices as well as the Board’s discretionary assessment of an executive officer’s past contribution and the ability to contribute to future short and long-term business results. Specifically, the objectives of executive compensation are to recognize market pay, and acknowledge the competencies and skills of individuals. The rate established for each executive officer is intended to reflect each individual’s responsibilities, experience, prior performance and other discretionary factors deemed relevant by any compensation committee that may be formed in future. The objectives of incentive bonuses in the form of cash payments are designed to add a variable component of compensation, based on corporate and individual performances for executive officers and employees. The objectives of the stock option plan are to reward achievement of long-term financial and operating performance and focus on key activities and achievements critical to the ongoing success of the Company. At this stage in the Company’s development, greater emphasis may be put on incentive stock option compensation. The Company has no other forms of compensation, other than payments made from time to time to individuals or companies they control for the provision of consulting services. Such consulting services

48 are paid for by the Company, to the best of its ability, at competitive industry rates for work of a similar nature by reputable arm’s length service providers. Actual compensation will vary based on the performance of the executives relative to the achievement of goals and the price of the Company’s securities, as well as the financial condition of the Company. The Board evaluates individual executive performance with the goal of setting compensation at levels that it believes is comparable with executives in other companies of similar size and stage of development operating in the same industry. In connection with setting appropriate levels of compensation, members of the Board base their decisions on their general business and industry knowledge and experience and publicly available information of comparable companies while also taking into account the Company’s relative performance and strategic goals. In determining the level of compensation payable to the Company’s Chief Executive Officer, the Board considered the following benchmark companies: Thane International Inc. and Guthy-Renker Corp. In the course of its deliberations, the Board considered the implications of the risks associated with adopting the compensation practices currently in place. The Board does not believe that its current compensation practices create a material risk that the NEOs or any employee would be encouraged to take inappropriate or excessive risks, and no such risks have been detected to date. The Board will continue to include this consideration in its deliberations, and believes that it would detect actions of management and employees of the Company that constitute or would lead to inappropriate or excessive risks. The Company does not have a policy that would prohibit the NEOs or directors from purchasing financial instruments that are designed or would have the effect of hedging the value of equity securities granted to, or held by, these individuals. Option-Based Awards Once implemented, the incentive stock option portion of the compensation will be intended to provide the executive officers of the Company with a long-term incentive in developing the Company's business. Options to be granted under the stock option plan will be approved by the Board, and if applicable, its subcommittees, after consideration of the Company's overall performance and whether the Company has met targets set out by the executive officers in their strategic plan. All previous grants of option-based awards will be taken into account when considering new grants. Compensation Governance For the 2012 fiscal year, management had direct involvement in and knowledge of the business goals, strategies, experiences and performance of the Company. As a result, management played an important role in the compensation decision-making process. The CEO may also provide a self-assessment of his own individual performance objectives and/or results achieved, if requested by the Board. No such requests were made by the Board during 2012. Performance Assessment Rather than strictly applying formulas and weightings to forward-looking performance objectives, which may lead to unintended consequences for compensation purposes, the Board exercises its discretion and uses sound judgment in making compensation determinations. For this reason, the Board does not measure performance using any pre-set formulas in determining compensation awards for NEOs. The Board’s assessment of the overall business performance of the Company, including corporate performance against both quantitative and qualitative objectives and, where appropriate, relative performance against peers, provides the context for individual executive officer evaluations for all direct compensation awards.

49 Corporate Performance In the future, it is the intention that the Board will approve annual corporate objectives in line with the Company’s key longer-term strategies for growth and value creation. These quantitative and qualitative objectives will then be used by the Board as a reference when making compensation decisions. It is the intention of the Board to review the results achieved by the Company and discuss them with management on an annual basis. For the purposes of determining total compensation, the Board will then determine an overall rating for actual corporate performance relative to an expected level of performance. This overall corporate performance rating will provide general context for the Board’s review of individual performance by the NEOs. Individual Performance As with the corporate objectives, individual executive officer’s performance objectives may include a combination of quantitative and qualitative measures with no pre-determined weightings. During the most recent financial year ended December 31, 2013, the Kelvin Claney, Chief Executive Officer was paid a salary of $240,000 and a bonus of $25,000, while Richard Ransom, the President and Chief Financial Officer was paid a salary of $160,000 and a bonus of $25,000. Compensation Committee The Company currently does not have a compensation committee in place and the Board intends to approve all compensation decisions in the near future, provided that directors who are also officers are exempt from participating in such compensation discussions. The Company may establish a compensation committee in the future to assist the Board in fulfilling its responsibility to shareholders, potential shareholders and the investment community by reviewing and providing recommendations to the Board regarding executive compensation, succession plans for executive officers, and the Company’s overall compensation and benefits policies, plans and programs. Compensation Consultant At no time since the Company’s most recently completed financial year has the Company retained a compensation consultant or advisor to assist the Board in determining compensation for any of the Company’s directors or executive officers. Compensation of Named Executive Officers of the Company Summary Compensation Table During the financial year ended December 31, 2013 and 2012, the Company had two Named Executive Officers (as described in National Instrument 51-102, Continuous Disclosure Obligations), namely Kelvin Claney and Rich Ransom, the Chief Executive Officer and President of the Company, respectively.

50 The following table sets forth the compensation of the Named Executive Officers for the period indicated: Name and Principal position

Kelvin Claney, Chief Executive Officer(1)

Rich Ransom, President and Chief Financial Officer(2)

Year

Salary ($)

Sharebased awards ($)

Optionbased awards ($)

Non-equity Incentive plan compensation ($) Annual incentive plans

Longterm incentive plans

Pension value ($)

All other compensation ($)

Total compensation ($)

December 31, 2012

$180,000

Nil

$208,313

Nil

Nil

Nil

$65,600 (bonus)

$453,913

December 31, 2013

$240,000

Nil

$25,100

Nil

Nil

Nil

$25,000 (bonus)

$290,100

December 31, 2012

$125,000

Nil

$128,125

Nil

Nil

Nil

$70,832 (bonus)

$323,957

December 31, 2013

$160,000

Nil

$136,800

Nil

Nil

Nil

$25,000 (bonus)

$321,800

Notes: (1)

Mr. Claney provides his services to the Company pursuant to an employment agreement effective March 1, 2011. (2)

Mr. Ransom provides his services to the Company pursuant to an employment agreement dated April 17, 2012. Mr. Ransom resigned his position as Chief Financial Officer effective January 1, 2014. Mr. Ryan LeBon was appointed Chief Financial Officer effective January 1, 2014.

Incentive Plan Awards In December 2011, the Company’s board of Directors approved the 2011 Incentive Stock Option Plan. The 2011 Plan is designed for selected employees, officers, and directors of the Company and its subsidiary, and is intended to advance the best interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiaries with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiary. The 2011 Plan is administered by the Board of Directors of the Company, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the Plan are determined by the board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of the grant. As of December 31, 2012, 1,480,000 options are outstanding under the 2011 Plan. The following table sets forth information concerning all awards outstanding under incentive plans of the Company at the end of the most recently completed financial year, including awards granted before the most recently completed financial year, to each of the Named Executive Officers:

51 Outstanding Share-Based Awards and Option-Based Awards Option-based Awards Number of securities underlying unexercised options (#)

Name

Option exercise price ($)

Share-based Awards Option expiration date

Value of unexercise d in-themoney options ($) (1)

Kelvin Claney, CEO

Rich Ransom, President

Ryan LeBon, CFO

(1)

Number of shares or Common Shares of shares that have not vested (#)

Market or payout value of sharebased awards that have not vested ($)

166,667

.0828

February 7, 2021

$111,200

-

-

133,334

.165

January 10, 2022

$78,000

-

-

300,000

.584375

September 18, 2022

$33,125

-

-

100,000

0.251

April 23, 2023

$49,900

100,000

.0828

February 7, 2021

$66,720

-

-

333,334

.15

January 10, 2022

$200,000

-

-

200,000

.53125

September 18, 2022

$43,750

-

-

600,000

0.228

April 23, 2023

$313,200

100,000

0.555

July 11, 2023

$19,500

-

-

100,000

0.295

December 3, 2023

$45,500

-

-

Calculated using closing price of $0.75 as of January 16, 2014

The following table sets forth details of the value vested during the financial year ended December 31, 2013 for each of the Named Executive Officers for option-based awards, share based awards and non equity incentive plan compensation:

Incentive Plan Awards – Value Vested or Earned

52 Name

Kelvin Claney CEO Rich Ransom President Ryan LeBon CFO

Option-based awards Value vested during the year ($)(1)

Share-based awards Value vested during the year ($)

Non-equity incentive plan compensation Value earned during the year ($)

$166,763

-

-

$174,012

-

-

Nil

-

-

(1)Calculated using closing price of $0.75 as of January 16, 2014

Pension Plans Benefits In 2013, the Company established a 401k retirement plan for employees to contribute. Currently, the Company is not providing for matching contributions. Termination and Change of Control Benefits Under the terms of the Employment Agreement with Kelvin Claney, the Chief Executive Officer, effective March 1, 2011, if Mr. Claney’s employment is terminated without cause, he will be entitled to severance pay in a lump sum payment equal to one year of his base salary, health insurance reimbursement and automobile expenses allowance as in effect on the date of termination. Under the Employment Agreement, Mr. Claney will be considered terminated without cause if his substantive responsibilities are changed without his prior approval, or if all or substantially all of the assets of the Company are sold, or a controlling interest in the Company is sold, unless in connection with such a sale Mr. Claney’s Employment Agreement is assumed by the buyer or he is offered an employment contract for substantially the same responsibilities, for a term of at least one year, and at substantially the same compensation, terms and benefits as provided in the Employment Agreement. Under the terms of an employment agreement with Richard Ransom, the President of the Company, the employment agreement will continue until terminated by either party in accordance with the terms of the agreement. If the employment agreement is terminated by the Company without cause, the employee will be entitled to a severance payment equal to one year’s salary and benefits. Compensation of Directors During 2012 and 2011, the Company’s Directors received no compensation for their service as Directors, although they did receive reimbursement for expenses. In 2012, Stephen Jarvis, one of the Company’s Directors, was paid $10,600 for commissions above and beyond his duties as a Director; he also received a bonus for worked performed above and beyond his duties as a Director of $16,040 paid in February 2013, and accrued for as of December 31, 2012. Commissions and bonuses paid to Mr. Jarvis were a result of international sales consulting work performed. Such work was not deemed to be at a level which would impact independence as a director under NASD Rule 4200. In 2013, Stephen Jarvis and William Kinnear were paid an annual stipend of $4,000. Mr. Kinnear was issued options to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.25 per share. INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS As at the date of this Prospectus, no Director, executive officer or employee of the Company or their respective associates or affiliates is or has been indebted to the Company at any time.

53 AUDIT COMMITTEE AND CORPORATE GOVERNANCE Corporate governance relates to the activities of the Board, the members of which are elected by and are accountable to the shareholders, and takes into account the role of the individual members of management who are appointed by the Board and who are charged with the day-to-day management of the Company. The Board is committed to sound corporate governance practices, which are in the interest of its shareholders and contribute to effective and efficient decision making. National Policy 58-201 Corporate Governance Guidelines establishes corporate governance guidelines which apply to all public companies. The Company has reviewed its own corporate governance practices in light of these guidelines. In certain cases, the Company's practices comply with the guidelines, however, the Board considers that some of the guidelines are not suitable for the Company at its current stage of development and therefore these guidelines have not been adopted. For example, the Company considers the following guidelines to be more appropriate when the Company has more resources at its disposal, considering that the guidelines are not intended to be prescriptive and issuers are only encouraged to consider the guidelines in developing their own corporate governance practices: 1) Pursuant to Section 3.4 of National Policy 58-201, the Board of Directors should adopt a written mandate explicitly acknowledging responsibility for the stewardship of the Company, including responsibility for succession planning, developing the Company’s approach to corporate governance, including developing a set of corporate governance principles and guidelines that are specifically applicable to the Company, and measures for receiving feedback from stakeholders; 2) Pursuant to Section 3.7 of National Policy 58-201, the Board of Directors should provide continuing education opportunities for all directors, so that individuals may maintain or enhance their skills and abilities as directors, as well as to ensure their knowledge and understanding of the Company’s business remains current; 3) Pursuant to Section 3.10 of National Policy 58-201, the Board of Directors should appoint a nominating committee composed entirely of independent directors; 4) Pursuant to Section 3.18 of National Policy 58-201, the Board of Directors, its committees and each individual director should be regularly assessed regarding his, her or its effectiveness and contribution. The Company will continue to review and implement corporate governance guidelines as the business of the Company progresses and becomes more active in operations. National Instrument 58-101 Disclosure of Corporate Governance Practices mandates disclosure of corporate governance practices in Form 58101F2, which disclosure is set out below. 1.

Board of Directors

The mandate of the Board is to supervise the management of the Company and to act in the best interests of the Company. The Board acts in accordance with: (a)

the Nevada Revised Statutes and its rules and regulations;

(b)

the Company's constating documents; and

(d)

other applicable laws and company policies.

54 The Board approves all significant decisions that affect the Company before they are implemented. The Board supervises their implementation and reviews the results. The Board is actively involved in the Company's strategic planning process. The Board discusses and reviews all materials relating to the strategic plan with management. The Board is responsible for reviewing and approving the strategic plan. At least one Board meeting each year is devoted to discussing and considering the strategic plan, which takes into account the risks and opportunities of the business. Management must seek the Board's approval for any transaction that would have a significant impact on the strategic plan. The Board periodically reviews the Company's business and implementation of appropriate systems to manage any associated risks, communications with investors and the financial community and the integrity of the Company's internal control and management information systems. The Board also monitors the Company's compliance with its timely disclosure obligations and reviews material disclosure documents prior to distribution. The Board is responsible for choosing the Chief Executive Officer and President, in addition to appointing senior management and for monitoring their performance and developing descriptions of the positions for the Board, including the limits on management's responsibilities and the corporate objectives to be met by the management. The Board approves all the Company's major communications, including annual and quarterly reports, financing documents and press releases. The Board approves the Company's communication policy that covers the accurate and timely communication of all important information. It is reviewed annually. This policy includes procedures for communicating with analysts by conference calls. Because of the small number of persons involved in management of the Company, it has not formally appointed an audit committee, and the entire board of directors currently serves the function of an audit committee. The Company intends to form an audit committee with two independent members of the Board. The company is actively seeking a third independent director to serve as a member of the audit committee and plans to appoint an audit committee financial expert in the coming year. The Board has not yet adopted a code of ethics applicable to its chief executive officer and chief financial officer, or persons performing those functions, because of the small number of persons involved in management of the Company. The Board, in its role as the Audit Committee, examines the effectiveness of the Company's internal control processes and management information systems. The Board is responsible for determining whether or not each Director is an independent Director. Directors who also act as officers of the Company are not considered independent. Directors who do not also act as officers of the Company, do not work in the day-to-day operations of the Company, are not party to any material contracts with the Company, or receive any fees from the Company except as disclosed in this Prospectus, are considered independent. Under the definition of Director independence found in NASD Rule 4200, Stephen Jarvis was the sole independent Director of the Company in 2012 and 2011. William Kinnear became a second independent Director in 2013. 2.

Directorships

None of the Company’s Directors are also currently Directors of other reporting issuers (or equivalent) in a jurisdiction or a foreign jurisdiction. 3.

Orientation and Continuing Education

55 The Board of Directors of the Company briefs all new Directors with the policies of the Board of Directors, and other relevant corporate and business information. 4.

Ethical Business Conduct

The Company has not yet adopted a complete code of ethics policy. The Company believes that attention to both disclosure and financial reporting controls helps foster ethical business conduct, and towards that goal carries out a quarterly evaluation of the status and effectiveness of both the Company’s disclosure controls and procedures, and the Company’s internal controls over financial reporting. As of December 31, 2013 the conclusions of the Company’s principal executives was that: Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures. We carried out an evaluation as of December 31, 2013, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15(b) and 15d-15(b). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective. During the year ended December 31, 2013, the Company hired additional accounting personnel which helped strengthen its control environment. The Company has implemented controls such as a monthly budget to actual review process, utilizing a formal closing review procedure, performing a balance sheet review meeting, and formalizing account reconciliation procedures. In addition, the Company has drafted an audit committee charter and is actively seeking a third independent member. We are continuing to actively assess and evaluate our most critical business and accounting processes to identify further enhancements and improvement opportunities. Lastly the Board believes that the fiduciary duties placed on individual Directors by the Company’s governing corporate legislation, the common law, and the restrictions placed by applicable corporate legislation on an individual Director’s participation in decisions by the Board in which the Director has an interest, are sufficient to ensure that the Board operates in the best interest of the Company. 5.

Nomination of Directors

The Board is responsible for identifying individuals qualified to become new Board members and recommending to the Board new Director nominees for the next annual meeting of shareholders. New nominees must have a track record in general business management, special expertise in an area of strategic interest to the Company, the ability to devote the time required, shown support for the Company's mission and strategic objectives, and a willingness to serve. 6.

Compensation

The Board conducts reviews with regard to Directors' compensation once a year. To make its recommendation on Directors' compensation, the Board takes into account the types of compensation and

56 the amounts paid to Directors of comparable publicly traded Canadian companies and aligns the interests of Directors with the return to shareholders. The Board decides the compensation of the Company's officers, based on industry standards and the Company's financial situation. 7.

Other Board Committees

The Board currently has no committees and believes that given the current size of the Company, the functions of all common committees can be responsibly performed by the Directors. All proceedings of the Board are conducted by way of formal meetings or through resolutions consented to in writing by all of the Directors of the Company. The Board does not have a formal process for reviewing the contributions of individual Directors, however, informal evaluations of members’ contributions are usually performed during regular board meetings. 8.

Assessments

The Board monitors the adequacy of information given to Directors, communication between the board and management and the strategic direction and processes of the board and committees. Audit Committees Audit Committee and Financial Expert The Company does not have an audit committee. The Company is still small and the functions of an audit committee are done by the board of Directors as a whole. As such the Company has no audit committee charter, and no audit committee financial expert serving on an audit committee. The board of Directors, however, is confident in its ability as a whole to perform the functions required of an audit committee. Audit Committee’s Pre-Approval Policies and Procedures The Company does not at this time have an audit committee and no formal pre-approval policies or procedures have yet been implemented. The board of Directors, acting in lieu of an audit committee, is required to pre-approve the engagement of the Company’s principal accountant for non-auditing services. External Auditor Service Fees The aggregate fees billed to the Company for professional services rendered from EisnerAmper, LLP for the audit of the Company's annual financial statements, review of the Company's quarterly financial statements, and other services normally provided in connection with statutory and regulatory filings or engagements was approximately $97,650 in 2012 and approximately $97,500 in 2011. Audit-Related Fees There were no fees billed in each of the last two fiscal years for assurance and related services by our independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements, and are not reported above. Tax Fees

57 On February 21, 2012 the Company’s Board of Directors engaged EisnerAmper LLP, our independent registered public accounting firm, for tax compliance, tax advice, and tax planning. The aggregate fees billed to the Company for professional services rendered for taxes were approximately $73,750 in 2012. There were no tax fees in 2011. All Other Fees There were no other fees billed in each of the last two fiscal years for professional services rendered by our independent registered public accounting firm. All fees for audit and non-audit services, and any material fees for other services, are approved in advance by the Chief Executive Officer and the Chief Financial Officer. Exemption The Company is relying upon the exemption in section 6.1 of NI 52-110 in respect of the composition of its Audit Committee and in respect of its reporting obligations under NI 52-110. PLAN OF DISTRIBUTION This is a non-offering prospectus. No securities are offered pursuant to this Prospectus. The Company is not a reporting issuer in any province or territory of Canada. RISK FACTORS The common shares should be considered highly speculative due to the nature of the Company’s business and the present stage of its development. In evaluating the Company and its business, investors should carefully consider, in addition to the other information contained in this Prospectus, the following risk factors. These risk factors are not a definitive list of all risk factors associated with an investment in the Company or in connection with the Company’s operations. There may be other risks and uncertainties that are not known to the Company or that the Company currently believes are not material, but which also may have a material adverse effect on its business, financial condition, operating results or prospects. In that case, the trading price of the common shares could decline substantially, and investors may lose all or part of the value of the common shares held by them. An investment in securities of the Company should only be made by persons who can afford a significant or total loss of their investment. There is no market through which these securities may be sold and purchasers may not be able to resell securities purchased under this Prospectus. There is no assurance that the Company’s strategy to leverage brand awareness created by its infomercials into the retail market will work, and the value of any investment may decline if the Company does not attain retail sales. The goal of the Company’s business plan is to create brand awareness through infomercials so that it can use this brand awareness to sell its products under its brands in traditional retail stores in dedicated shelfspace areas. The Company’s success will depend on its ability to associate its products with particular brands to create consumer awareness and to enter the traditional retail market. If the Company’s strategy to leverage brand awareness created by its infomercials into the retail market does not work and it does not attain retail sales, the value of any investment may decline.

58 If the response rates to the Company’s infomercials are lower than the Company predicts, it may not achieve the customer base necessary to become or remain profitable, and the value of any investment may decrease. The Company’s revenue projections assume that a certain percentage of viewers who see its infomercials will purchase its products. If a lower percentage of these viewers purchase the products than the Company projects, it will not achieve the customer base necessary to become or remain profitable, and the value of any investment may decrease.

If the Company’s infomercials are not successful, it will not be able to recoup significant advance expenditures spent on production and media times, and its business plan may fail. The Company’s business involves a number of risks inherent in operating a direct response television business. The production of infomercials and purchase of media time for television involves significant advance expenditures. A short-form infomercial generally costs around $15,000-$40,000 to produce, while production costs for a long-form infomercial are generally around $120,000-$180,000. The Company is dependent on the success of the infomercials it produces and the public’s continued acceptance of infomercials in general. If the Company’s infomercials do not generate consumer support and create brand awareness and the Company cannot recover the initial money it spends on production and media time, it will not be able to recoup the advance expenditures and may go out of business if new products and additional capital are not available. The Company depends on key management and employees, the loss of whom may prevent it from implementing its business plan, limit its profitability and decrease the value of its stock. The Company is dependent on the talent and resources of its key executives and employees. In particular, the success of the Company’s business depends to a great extent on Kelvin Claney, its Chief Executive Officer and a member of the Board of Directors. Mr. Claney has extensive experience in the infomercial industry, and his services are critical to the Company’s success. The market for persons with experience in the direct response television industry is very competitive, and there can be no guarantee that the Company will be able to retain the services of Mr. Claney. The Company has not obtained key man insurance with respect to Mr. Claney or any of its executive officers. The loss of Mr. Claney may prevent the Company from implementing its business plan, which may limit its profitability and decrease the value of its stock. If the Company cannot protect its intellectual property rights, its operating results will suffer, and investors could ultimately lose their entire investment. The Company seeks to protect its proprietary rights to its products through a combination of patents, trademarks, copyrights and design registrations. Despite the Company’s efforts to protect its proprietary rights, unauthorized parties may attempt to copy aspects of the Company’s products or obtain and use information that it considers proprietary. Litigation may be necessary to enforce the Company’s intellectual property rights and to determine the validity and scope of the proprietary rights of others. Any litigation could result in substantial costs and diversion of management and other resources with no assurance of success and could seriously harm the Company’s business and operating results. Investors could lose their entire investment. If the Company does not continue to source new products, its ability to compete will be undermined, and it may be unable to implement its business plan.

59 The Company’s ability to compete in the direct marketing industry and to expand into the traditional retail environment depends to a great extent on its ability to develop or acquire new innovative products under particular brands and to complement these products with related families of products under those brands. If the Company does not source new products as its existing products mature through their product life cycles, or if it does not develop related families of products under its brands, it will not be able to implement its business plan, and the value of any investment may decrease. The Company is not required by the laws of its jurisdiction of incorporation to hold shareholders’ meetings. The Company is not required by the laws of the jurisdiction of its incorporation or by its constating documents to hold shareholders’ meetings. For expediency and to save costs, any matters requiring shareholder approval have been dealt with by way of written consent of the shareholders. The Company is prepared to hold meetings in the future if needed. The Company’s shares are classified as “penny stock,” which will make it more difficult to sell than exchange-traded stock. The Company’s securities are subject to the Securities and Exchange Commission rule that imposes special sales practice requirements upon broker-dealers that sell such securities to other than established customers or accredited investors. For purposes of the rule, the phrase “accredited investors” means, in general terms, institutions with assets exceeding $5,000,000 or individuals having a net worth in excess of $1,000,000 or having an annual income that exceeds $200,000 (or that, combined with a spouse’s income, exceeds $300,000). For transactions covered by the rule, the broker-dealer must make a special suitability determination for the purchaser and receive the purchaser’s written agreement to the transaction prior to the sale. Consequently, the rule may affect the ability of purchasers of the Company’s securities to buy or sell in any market that may develop. In addition, the Securities and Exchange Commission has adopted a number of rules to regulate “penny stocks”. A “penny stock” is any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. Such rules include Rules 3a511, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6 and 15g-7 under the Securities and Exchange Act of 1934, as amended. The rules may further affect the ability of owners of the Company’s shares to sell their securities in any market that may develop for them. Shareholders should be aware that, according to the Securities and Exchange Commission Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include: ● ● ● ● ●

control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; “boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons; excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the inevitable collapse of those prices with consequent investor losses.

The issuance of additional shares may have the effect of diluting the interest of shareholders.

60 Any additional issuances of common stock by the Company from its authorized but unissued shares may have the effect of diluting the percentage interest of existing shareholders. Out of the Company’s 100,000,000 authorized common shares, 79,227,244 shares, or approximately 79%, remain unissued at December 31, 2012. The Company has approximately 6,383,000 stock options and warrants to purchase common stock outstanding, as well as approximately 1,332,000 in potential common shares that could be issued upon conversion of outstanding debt as of December 31, 2012. The board of Directors has the power to issue such shares without shareholder approval. None of the Company’s 20,000,000 authorized preferred shares are issued. The Company fully intends to issue additional common shares or preferred shares in order to raise capital to fund its business operations and growth objectives. The board of Directors’ authority to set rights and preferences of preferred stock may prevent a change in control by shareholders of common stock. Preferred shares may be issued in series from time to time with such designation, rights, preferences and limitations as the Company’s board of Directors determines by resolution and without shareholder approval. This is an anti-takeover measure. The board of Directors has exclusive discretion to issue preferred stock with rights that may trump those of common stock. The board of directors could use an issuance of preferred stock with dilutive or voting preferences to delay, defer or prevent common stockholders from initiating a change in control of the Company or reduce the rights of common stockholders to the net assets upon dissolution. Preferred stock issuances may also discourage takeover attempts that may offer premiums to holders of the Company’s common stock. Concentration of ownership of management and directors may reduce the control by other shareholders over ICTV. The executive officers and directors own or exercise full or partial control over approximately 37.0% of the Company’s outstanding common stock. As a result, other investors in the Company’s common stock may not have much influence on corporate decision-making. In addition, the concentration of control over the Company’s common stock in the executive officers and directors could prevent a change in control of ICTV. The Company’s board of directors is staggered, which makes it more difficult for a stockholder to acquire control of the Company. The Company’s articles of incorporation and bylaws provide that its board of directors be divided into three classes, with one class being elected each year by the stockholders. This generally makes it more difficult for stockholders to replace a majority of directors and obtain control of the board. Stockholders do not have the authority to call a special meeting, which discourages takeover attempts. The Company’s articles of incorporation permit only the board of directors to call a special meeting of the stockholders, thereby limiting the ability of stockholders to effect a change in control of the Company. The Company does not anticipate paying dividends to common stockholders in the foreseeable future, which makes investment in the Company’s stock speculative or risky. The Company has not paid dividends on its common stock and does not anticipate paying dividends on its common stock in the foreseeable future. The board of directors has sole authority to declare dividends payable to the Company’s stockholders. The fact that the Company has not and does not plan to pay dividends indicates that it must use all of the funds generated by operations for reinvestment in its operating activities. Investors also must evaluate an investment in the Company solely on the basis of anticipated capital gains.

61

Limited liability of the Company’s executive officers and directors may discourage stockholders from bringing a lawsuit against them. The Company’s articles of incorporation and bylaws contain provisions that limit the liability of directors for monetary damages and provide for indemnification of officers and directors. These provisions may discourage stockholders from bringing a lawsuit against officers and directors for breaches of fiduciary duty and may also reduce the likelihood of derivative litigation against officers and directors even though such action, if successful, might otherwise have benefited the stockholders. In addition, a stockholder’s investment in the Company may be adversely affected to the extent that costs of settlement and damage awards against officers or directors are paid by the Company under the indemnification provisions of the articles of incorporation and bylaws. The impact on a stockholder’s investment in terms of the cost of defending a lawsuit may deter the stockholder from bringing suit against one of the Company’s officers or Directors. The Company has been advised that the SEC takes the position that this provision does not affect the liability of any director under applicable federal and state securities laws. The Company faces risk related to late tax filings. The Company had not previously filed its mandatory tax filings since inception. During 2012, the Company filed all of the mandatory filings dating back to the inception of the Company. Management believes that the potential income tax liability to the Company is not significant since the Company reported significant losses for most years since inception. Moreover, to the best of management’s knowledge, the Company does not believe that not filing tax returns is a violation of any of its contractual covenants. The Company completed its Section 382 Net Operating Loss study in 2013 and concluded that no limitations on the utilization of Net Operating Loss carryforward deductions exist. In addition, we have estimated and accrued approximately $190,000 related to these late filings. PROMOTERS Kelvin Claney, the Chairman and Chief Executive Officer of the Company, is a joint trustee of The Better Blocks Trust and through his pecuniary interest in the Better Blocks Trust, may be considered to be the Promoter of the Company in that he took the initiative in founding and organizing the Company. As of the date of this prospectus, including shares owned by The Better Blocks Trust, Mr. Claney holds 7,259,103 shares of the Company, representing approximately 32% of the issued and outstanding Shares of the Company. See “Directors and Officers” and “Principal Shareholders”. LEGAL PROCEEDINGS AND REGULATORY ACTIONS In January 2013, the Company received a letter from a California law firm alleging certain violations of the California Consumer Legal Remedies Act in connection with the Company’s advertising and marketing of its DermaWandTM product. The law firm purported to represent a class of plaintiffs and invited us to contact them in order to amicably resolve the matter. We consulted with counsel and presented to the California law firm the substantiation for our advertising and marketing claims. While they acknowledged a good portion of our substantiation, the law firm continued to press for a settlement under threat of litigation. On May 1, 2013, the Company reached a tentative settlement agreement with the plaintiff and their law firm for less than the $325,000 the plaintiff was asking for to settle the suit. The final agreement and corresponding settlement payment was finalized in May 2013 for approximately $150,000.

62 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS No Insider, director or executive officer of the Company and no associate or affiliate of any director, executive officer or Insider has any material interest, direct or indirect, in any transaction within the three years before the date of the Prospectus that has materially affected or is reasonably expected to materially affect the Company. See "Executive Compensation". AUDITORS, TRANSFER AGENTS AND REGISTRARS Auditors The Company's auditor is EisnerAmper LLP, of 101 West Avenue, Jenkintown, PA 19046. Transfer Agent and Registrar The Registrar and Transfer Agent for the Company is Nevada Agency and Trust Company of 50 West Liberty Street, Reno, Nevada, 89501. The Company is in the process of identifying an additional transfer agent located in Canada. MATERIAL CONTRACTS Except for contracts entered into in the ordinary course of business, the only material contracts which the Company has entered into in the two years prior to the date of the Prospectus are the following: 1.

Severance agreement with a former consultant dated as of September 2010. Under the severance agreement the consultant will be paid $270,000 over a 27-month period in increments of $10,000 per month beginning in September 2010 and continuing through November 2012. In April 2011, the Company amended the agreement to allow for monthly payments of $3,400 per month for a period of one year from April 2011 through March 2012. In March 2012, the Company amended the agreement for a second time to continue the monthly payment of $3,400 through March 2016.

2.

Three-year corporate public relations consulting agreement where the consultants received compensation in the form of 500,000 shares of stock, 500,000 warrants with an exercise price of $0.10 that expire 14 months from the date of the agreement, and 1,000,000 warrants with an exercise price of $0.50 that expire 24 months from the date of the agreement. On August 15, 2012, the Company entered into a settlement agreement with the consultants to terminate the consulting agreement. As part of the agreement, the consultants maintained the 500,000 shares of Common stock previously issued and all warrants previously issued were terminated. In addition, the consultants received 250,000 new warrants with an exercise price of $0.10 that expire 3 years from the date of the agreement.

3.

Licensing agreement with BioActive Skin Technologies LLC (BioActive) dated July 24, 2013, in which the Company will obtain the exclusive worldwide rights to manufacture and distribute BioActive beauty products and formulations. The agreement consists of an initial 18-month term and subsequent 12-month terms.

4.

Licensing agreement with DermaNew, Inc., dated April 3, 2013, in which the Company will obtain the exclusive worldwide rights to manufacture and distribute their latest patented anti-aging and resurfacing scientific skincare system.

5.

Canadian Securities Exchange Listing Agreement executed by the Company.

63

Inspection of Material Contracts and Reports Copies of all the material contracts and reports referred to in this Prospectus may be inspected at the registered office of the Company at 489 Devon Park Drive, Suite 315, Wayne, Pennsylvania, during normal business hours during the distribution of the securities offered hereunder, and for a period of 30 days thereafter, as well as on the SEDAR website at www.sedar.com upon the Effective Date of this Prospectus. EXPERTS The consolidated balance sheets of International Commercial Television, Inc. as of December 31, 2013 2012, 2011 and 2010, and the related consolidated statements of operations, shareholders’ deficit, and cash flows for each of the years in the four-year period ended December 31, 2013, have been audited by EisnerAmper LLP, independent registered public accounting firm, as stated in their reports which are incorporated herein. The reports for the years ended December 31, 2012, 2011, and 2010 included an explanatory paragraph about the existence of substantial doubt concerning the Company’s ability to continue as a going concern, in reliance on the reports of such firm given upon their authority as experts in accounting and auditing. EisnerAmper LLP have advised that they have complied with the United States Securities and Exchange Commission's rules on auditor independence. No person or company whose profession or business gives authority to a statement made by such person or company and who is named as having prepared or certified a part of this Prospectus, or prepared or certified a report or valuation described or included in this Prospectus, has received or shall receive or holds a direct or indirect interest in any securities or property of the Company or any associates or affiliates of the Company. OTHER MATERIAL FACTS There are no other material facts about the Company which are not otherwise disclosed in this Prospectus. EXEMPTIONS Pursuant to Part 19 of National Instrument 41-101 General Prospectus Requirements (NI 41-101), the Company applied for exemptive relief from section 2.3 of NI 41-101 in order to allow the Company to file an amended and restated preliminary prospectus and a final prospectus more than 90 days after the receipt for the preliminary prospectus. The relief will be evidenced by the receipt for the final prospectus. The relief was conditional on the Company filing an amended and restated preliminary prospectus by March 4, 2014 and the final prospectus by March 28, 2014.

64 FINANCIAL STATEMENTS The following financial statements are attached to this Prospectus:

Interim Financial Statements Condensed Consolidated Balance Sheets as of September 30, 2013 (unaudited) and December 31, 2012 Condensed Consolidated Statements of Operations for the nine months ended September 30, 2013 and 2012 (unaudited) Condensed Consolidated Statement of Shareholders’ Equity (Deficit) for the nine months ended September 30, 2013 (unaudited) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2013 and 2012 (unaudited) Notes to the Condensed Consolidated Financial Statements Audited Financial Statements Report of Independent Registered Public Accounting Firm for the years ended December 31, 2012 and 2011 Consolidated Balance Sheets as of December 31, 2012 and 2011 Consolidated Statements of Operations for the years ended December 31, 2012 and 2011 Consolidated Statements of Shareholders’ Deficit for the years ended December 31, 2012 and 2011 Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2011 Notes to the Consolidated Financial Statements Report of Independent Registered Public Accounting Firm for the years ended December 31, 2010 Consolidated Balance Sheet as of December 31, 2010 Consolidated Statement of Operations for the year ended December 31, 2010 Consolidated Statement of Shareholders’ Deficit for the year ended December 31, 2010 Consolidated Statement of Cash Flows for the year ended December 31, 2010 Notes to the Consolidated Financial Statements Report of Independent Registered Public Accounting Firm for the years ended December 31, 2013 and 2012

65 Consolidated Balance Sheets as of December 31, 2013 and 2012 Consolidated Statements of Operations for the years ended December 31, 2013 and 2012 Consolidated Statements of Shareholders’ Deficit for the years ended December 31, 2013 and 2012 Consolidated Statements of Cash Flows for the years ended December 31, 2013 and 2012 Notes to the Consolidated Financial Statements

66

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS AS OF September 30, 2013 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents Cash held in escrow Accounts receivable, net of allowance for returns and doubtful accounts of $334,157 and $623,061, respectively Inventories, net Prepaid expenses and other current assets Total current assets

$

Furniture and equipment Less accumulated depreciation Furniture and equipment, net Other assets Total assets LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable and accrued liabilities Convertible note payable Severance payable Deferred revenue Income tax payable Tax penalties payable Total current liabilities

December 31, 2012

752,743 150,021

$

758,358 150,008

1,139,332 2,140,186 608,576 4,790,858

1,154,855 1,979,757 324,991 4,367,969

81,507 (65,644) 15,863

71,258 (56,949) 14,309

30,461

57,950

$

4,837,182

$

4,440,228

$

1,514,687 40,800 289,195 190,000 2,034,682

$

3,360,745 30,169 40,800 281,774 48,600 270,000 4,032,088

Severance payable – long-term Deferred revenue – long-term Convertible note payable to shareholder Total long-term liabilities

57,200 325,923 453,723 836,846

87,800 129,986 590,723 808,509

-

-

11,533 7,290,344 (5,336,223)

10,562 6,843,267 (7,254,198)

1,965,654

(400,369)

COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY (DEFICIT): Preferred stock 20,000,000 shares authorized, no shares issued and outstanding Common stock, $0.001 par value, 100,000,000 shares authorized, 21,743,587 and 20,772,756 shares issued and outstanding as of September 30, 2013 and December 31, 2012, respectively Additional paid-in-capital Accumulated deficit Total shareholders’ equity (deficit) Total liabilities and shareholders’ equity (deficit)

$

4,837,182

See accompanying notes to condensed consolidated financial statements.

$

4,440,228

67 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(Unaudited)

For the three months ended

September 30, 2013 NET SALES

$

8,300,312

For the nine months ended

September 30, 2012 $

6,289,601

September 30, 2013 $

31,155,661

September 30, 2012 $

12,781,410

COST OF SALES

2,146,270

1,905,767

8,597,106

4,350,680

GROSS PROFIT

6,154,042

4,383,834

22,558,555

8,430,730

OPERATING EXPENSES: General and administrative Selling and marketing Total operating expenses

1,785,146 4,258,875 6,044,021

1,066,533 3,526,341 4,592,874

5,740,604 14,809,742 20,550,346

2,237,558 6,302,193 8,539,751

110,021

(209,040)

2,008,208

(109,021)

(5,025)

(8,160)

(17,700)

(17,313)

104,996

(217,200)

1,990,508

(126,334)

4,488

-

72,533

-

OPERATING INCOME (LOSS)

INTEREST EXPENSE, NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX PROVISION FOR INCOME TAXES NET INCOME (LOSS)

$

100,508

$

(217,200)

$

1,917,975

$

(126,334)

NET INCOME (LOSS) PER SHARE BASIC DILUTED

$ $

0.00 0.00

$ $

(0.01) (0.01)

$ $

0.09 0.08

$ $

(0.01) (0.01)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES BASIC DILUTED

21,718,315 24,252,780

20,647,756 20,647,756

21,481,149 24,660,092

See accompanying notes to condensed consolidated financial statements.

19,898,741 19,898,741

68 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 (Unaudited) Common Stock $0.001 par value Shares Amount Balance at January 1, 2013

20,772,756

$

10,562

Additional Paid-In Capital $

6,843,267

Accumulated Deficit $

(7,254,198)

Totals $

(400,369)

Share based compensation expenses

-

-

335,576

-

335,576

Expense for previously issued common stock for consulting services

-

-

10,834

-

10,834

37,500

38

5,400

-

5,438

933,331

933

95,267

-

96,200

-

-

-

1,917,975

1,917,975

Issuance of restricted stock for consulting services Exercise of options Net income Balance at September 30, 2013

21,743,587

$

11,533

$

7,290,344

$

(5,336,223)

See accompanying notes to condensed consolidated financial statements.

$

1,965,654

69 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012 (Unaudited) 2013 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by (used in) operating activities: Depreciation Bad debt expense Share based compensation Tax penalties payable Change in assets and liabilities Accounts receivable Inventories Prepaid expenses, other current assets and other assets Accounts payable and accrued liabilities Severance payable Income tax payable Accrued interest to shareholder Deferred revenue Net cash provided by operating activities

$

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of furniture and equipment Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock Proceeds from exercise of options Proceeds from note payable Payments on convertible note payable Payments on convertible note payable to shareholder Advances from related parties Payments to related parties Net cash (used in) provided by financing activities NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, beginning of the period

1,917,975

2012

$

(126,334)

8,695 2,381,968 379,339 (80,000)

10,586 311,499 674,834 -

(2,366,445) (160,429) (210,804) (1,846,058) (30,600) (121,381) 203,358 75,616

(968,140) (323,590) (167,820) 978,538 (30,600) 14,030 84,240 457,243

(10,250) (10,250)

(2,471) (2,471)

96,200 (30,169) (137,000) (70,969)

388,500 40,000 (86,113) 50,000 (77,581) 314,806

(5,603)

769,578

908,366

58,804

CASH AND CASH EQUIVALENTS, end of the period

$

902,764

$

828,382

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Taxes paid Fair value of warrants in connection with sale of common stock Interest paid Write off of fully depreciated assets

$ $ $ $

145,530 17,700 -

$ $ $ $

273,831 3,432 108,183

See accompanying notes to condensed consolidated financial statements.

70 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 1 - Organization, Business of the Company and Liquidity Organization and Nature of Operations International Commercial Television Inc., (the “Company” or “ICTV”) was organized under the laws of the State of Nevada on June 25, 1998. Effective February 17, 2011, the Company acquired 100% of the equity interest in Better Blocks International Limited (“BBI”). The Company sells various consumer products. The products are primarily marketed and sold throughout the United States and internationally via infomercials. Although our companies are incorporated in Nevada and New Zealand, a substantial portion of our operations are currently run from the Wayne, Pennsylvania office. Liquidity and Going Concern The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company generated positive cash flows from operating activities in the nine month period ended September 30, 2013 of approximately $76,000. The Company had working capital of approximately $2,756,000 and an accumulated deficit of approximately $5,336,000 as of September 30, 2013. The goal of our strategy is to use the brand awareness we create in our infomercials so that we can sell the products featured in our infomercials, along with related families of products, under distinct brand names in traditional retail stores. Our goal is to have these families of products sold in the traditional retail environment in shelf-space dedicated to the product category. We are developing the infrastructure to create these brands of products so that we can implement our business plan. Currently, this plan is being executed with the DermaWandTM and the DermaVital® skincare line. The Company does not require any additional capital to grow the DermaWand TM and the DermaVital® businesses. The Company is currently exploring other devices and consumable product lines. There is no guarantee that the Company will be successful in bringing our products into the traditional retail environment. If the Company is unsuccessful in achieving this goal, the Company will be required to raise additional capital to meet its working capital needs. If the Company is unsuccessful in completing additional financings, it will not be able to meet its working capital needs or execute its business plan. In such case the Company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. These conditions in conjunction with the Company’s historical net operating losses and accumulated deficit, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability of the carrying amount of recorded assets or the amount of liabilities that might result should the Company be unable to continue as a going concern.

71 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 2 - Summary of significant accounting policies Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and within the rules of the Securities and Exchange Commission applicable to interim financial statements and therefore do not include all disclosures that might normally be required for financial statements prepared in accordance with generally accepted accounting principles. The accompanying unaudited condensed consolidated financial statements have been prepared by management without audit and should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing in our Annual Report on Form 10-K for the year ended December 31, 2012. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position, consolidated results of operations and consolidated cash flows, for the periods indicated, have been made. The results of operations for the three and nine months ended September 30, 2013 are not necessarily indicative of operating results that may be achieved over the course of the full year. Principles of consolidation The accompanying condensed consolidated financial statements include the accounts of the Company and its whollyowned subsidiary BBI for the nine months ended September 30, 2013 and 2012. All significant inter-company transactions and balances have been eliminated. Use of 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 amounts reported in the condensed consolidated financial statements and accompanying notes. Management believes that the estimates utilized in preparing its condensed consolidated financial statements are reasonable and prudent. The most significant estimates used in these condensed consolidated financial statements include the allowance for doubtful accounts, reserves for returns, inventory reserves, valuation allowance on deferred tax assets and share based compensation. Actual results could differ from these estimates. Recently Issued Accounting Pronouncements In July 2013, the FASB issued ASU 2013-11,”Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. This update to the income tax guidance clarifies the diversity in practice in the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This update requires the unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred tax asset or as a liability to the extent the entity cannot or does not intend to use the deferred tax asset for such purpose. The new accounting guidance is effective beginning January 1, 2014 and should be applied prospectively to all unrecognized tax benefits that exist at the effective date and retrospective application is permitted. The Company does not expect the adoption of ASU 2013-11 to have a material impact on its consolidated financial statements.

72 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 2 - Summary of significant accounting policies (continued) Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, include cash and trade receivables. The Company maintains cash in bank accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses and believes it is not exposed to any significant risks on its cash in bank accounts. As of September 30, 2013 and December 31, 2012, approximately 95% and 90% of the Company’s accounts receivable were due from various individual customers to whom our products had been sold directly via Direct Response Television. Major customers are considered to be those who accounted for more than 10% of net sales. There were no major customers for the three and nine months ended September 30, 2013. For the three and nine months ended September 30, 2012, approximately 13% and 6%, respectively, of net sales were made to one televised shopping network major customer. Fair value of financial instruments Fair value estimates, assumptions and methods used to estimate fair value of the Company’s financial instruments are made in accordance with the requirements of Accounting Standards Codification (“ASC”) 825-10, “Disclosures about Fair Value of Financial Instruments.” The Company has used available information to derive its estimates. However, because these estimates are made as of a specific point in time, they are not necessarily indicative of amounts the Company could realize currently. The use of different assumptions or estimating methods may have a material effect on the estimated fair value amounts. The carrying values of financial instruments such as cash, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to the short settlement period for these instruments. It is not practicable to estimate the fair value of the Convertible Note Payable to Shareholder due to its related party nature. Cash and cash equivalents The Company considers all unrestricted highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash held in escrow Transfirst ePayment Services (“Transfirst”), ICTV’s credit card processing vendor for VISA, MasterCard, Discover and American Express transactions in the United States, maintains a reserve fund within our processing account to cover all fees, charges, and expenses due to them, including those estimated for possible customer charge backs. These reserves are updated periodically by Transfirst and maintained for a rolling 180 days of activity. Based upon established levels of risk, this normally represents approximately 2% of transaction volume for the period, with a maximum of $150,000 and is considered “Cash held in escrow.” At September 30, 2013 and December 31, 2012 the amount of Transfirst reserves were approximately $150,000. Foreign currency transactions Transactions are entered into by the Company in currencies other than its local currency (U.S. Dollar). Currency gains or losses are recorded in general and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.

73 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 2 - Summary of significant accounting policies (continued) Accounts receivable Accounts receivable are recorded net of allowances for returns and doubtful accounts of approximately $334,000 at September 30, 2013 and $623,000 at December 31, 2012. The allowances are calculated based on historical customer returns and bad debts. In addition to reserves for returns on accounts receivable, an accrual is made for returns of product that has been sold to customers and had cash collections, while the customer still has the right to return the product. The amounts of these accruals included in accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheets were approximately $167,000 at September 30, 2013, and $248,000 at December 31, 2012. Inventories Inventories consist primarily of products held for resale, and are valued at the lower of cost (first-in, first-out method) or market. The Company adjusts inventory for estimated obsolescence when necessary based upon demand and market conditions. Included in inventory at September 30, 2013 and December 31, 2012 is approximately $133,000 and $251,000, respectively of consigned product that has been shipped to customers under the 30-day free trial period for which the trial period has not expired and as such the customer has not accepted the product. Furniture and equipment Furniture and equipment are carried at cost and depreciation is computed over the estimated useful lives of the individual assets ranging from 3 to 7 years. Depreciation is computed using the straight-line method. The related cost and accumulated depreciation of assets retired or otherwise disposed of are removed from the accounts and the resultant gain or loss is reflected in earnings. Maintenance and repairs are expensed currently while major renewals and betterments are capitalized. Depreciation expense amounted to approximately $1,100 and $3,600 and $8,700 and $10,600 for the three and nine months ended September 30, 2013 and 2012, respectively. Impairment of long-lived assets In accordance with ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”, long-lived assets are reviewed for impairment when circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future net cash flows estimated by the Company to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are recorded as held for sale at the lower of carrying value or estimated net realizable value. No impairment losses were identified or recorded for the nine months ended September 30, 2013 and 2012.

74 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 2 - Summary of significant accounting policies (continued) Revenue recognition For our domestic direct response television sales generated by our infomercials, product sales revenue is recognized when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured. The Company’s revenues in the Condensed Consolidated Statement of Operations are net of sales taxes. The Company offers a 30-day risk-free trial as one of its payment options. Revenue on the 30-day risk-free trial sales is not recognized until customer acceptance and collectability are assured which we determine to be when the trial period ends. If the risk-free trial expires without action by the customer, product is determined to be accepted by the customer and revenue is recorded. Revenue for items purchased without the 30-day free trial is recognized upon shipment of the product to the customer and collectability is assured. Revenue related to our DermaVital® continuity program is recognized monthly upon shipment to customers. Revenue related to international wholesale customers is recorded at gross amounts with a corresponding charge to cost of sales upon shipment. Deferred revenue for payment received prior to shipment on international sales approximated $188,000 and $240,000 as of September 30, 2013 and December 31, 2012, respectively. The Company has a return policy whereby the customer can return any product received within 30 days of receipt for a full refund excluding shipping and handling. However, historically the Company has accepted returns past 30 days of receipt. The Company provides an allowance for returns based upon past experience. All significant returns for the periods presented have been offset against gross sales. In 2012, the Company started selling warranties on the DermaWandTM for one-year, three-year and lifetime terms. In 2013, the Company started selling five-year warranties and discontinued lifetime warranties. Revenues under oneyear, three-year and five-year warranties are recognized ratably over the term. Lifetime warranties are recognized over the estimated term of 5 years. Any unearned warranty is included in deferred revenue on the accompanying condensed consolidated balance sheet. Changes in the Company’s deferred service revenue related to the warranties, included in deferred revenue in the Condensed Consolidated Balance Sheet is presented in the following table for the nine months ended September 30, 2013: September 30, 2013 Deferred extended warranty revenue: Balance at January 1, 2013 Revenue deferred for new warranties Revenue recognized Balance at September 30, 2013 Current portion Non-current portion

$

$ $ $

171,319 321,915 (66,403) 426,831 100,908 325,923 426,831

75 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 2 - Summary of significant accounting policies (continued) Shipping and handling Amounts billed to a customer for shipping and handling are included in net sales; shipping and handling revenue approximated $872,000 and $947,000 and $3,020,000 and $1,690,000 for the three and nine months ended September 30, 2013 and 2012, respectively. Shipping and handling costs are included in cost of sales. Shipping and handling costs approximated $700,000 and $497,000 and $2,639,000 and $961,000 for the three and nine months ended September 30, 2013 and 2012, respectively. Research and development Research and development costs are expensed as incurred and are included in selling and marketing expense in the accompanying condensed consolidated financial statements. Research and development costs primarily consist of efforts to discover and develop new products and the testing and development of direct-response advertising related to these products. Research and development costs approximated $32,000 and $39,000 and $85,000 and $53,000 for the three and nine months ended September 30, 2013 and 2012, respectively. Media and production costs Media and production costs are expensed as incurred and are included in selling and marketing expense in the accompanying condensed consolidated financial statements. The Company incurred approximately $2,770,000 and $2,374,000 and $9,518,000 and $4,348,000 in such costs for the three and nine months ended September 30, 2013 and 2012, respectively. Income taxes In preparing our condensed consolidated financial statements, we make estimates of our current tax exposure and temporary differences resulting from timing differences for reporting items for book and tax purposes. We recognize deferred taxes by the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In consideration of our accumulated losses and lack of historical ability to generate taxable income to utilize our deferred tax assets, we have estimated that we will not be able to realize any benefit from our temporary differences and have recorded a full valuation allowance. If we become profitable in the future at levels which cause management to conclude that it is more likely than not that we will realize all or a portion of the net operating loss carry-forward, we would immediately record the estimated net realized value of the deferred tax asset at that time and would then provide for income taxes at a rate equal to our combined federal and state effective rates, which would be approximately 40% under current tax laws. Subsequent revisions to the estimated net realizable value of the deferred tax asset could cause our provision for income taxes to vary significantly from period to period. The Company’s policy is to recognize interest and penalties related to tax matters in general and administrative expenses in the Condensed Consolidated Statements of Operations.

76 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 2 - Summary of significant accounting policies (continued) Stock options In June 2001, our shareholders approved our 2001 Stock Option Plan (the “Plan”). The Plan is designed for selected employees, officers and directors to the Company and its subsidiary, and is intended to advance the best interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiary with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiary. The Plan is administered by the Board of Directors of the Company, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the Plan are determined by the Board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of the grant. The Plan expired in February 2011. As of September 30, 2013, 933,334 options are outstanding under the 2001 Plan. In December 2011, our shareholders approved our 2011 Stock Option Plan (the “2011 Plan”). The 2011 Plan is designed for selected employees, officers, and directors to the Company and its subsidiary, and is intended to advance the best interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiary with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiary. The 2011 Plan is administered by the Board of Directors of the Company, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the Plan are determined by the Board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of the grant. As of September 30, 2013, 2,191,668 options are outstanding under the 2011 Plan. The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC Topic 505, subtopic 50, Equity-Based Payments to Non-Employees based upon the fair-value of the underlying instrument. The equity instruments, consisting of stock options granted to consultants, are valued using the BlackScholes valuation model. The measurement of stock-based compensation is subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense over the period which services are received. The Company uses ASC Topic 718, “Share-Based Payments” to account for stock-based compensation. The Company recognizes compensation expense in an amount equal to the fair value of share-based payments such as stock options granted to employees over the requisite vesting period of the awards. Stock options granted to non-employees are remeasured at each reporting period.

77 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited)

Note 2 - Summary of significant accounting policies (continued) Stock options (continued) The following is a summary of stock options outstanding under the Plan and 2011 Plan (collectively “Stock Option Plans”) for the nine months ended September 30, 2013 and 2012:

Employee

Number of Shares NonEmployee

Balance, January 1, 2013 Granted during the year Exercised during the year

2,730,000 945,000 (899,998)

350,000 -

Balance, September 30, 2013

2,775,002

350,000

Employee

-

Number of Shares NonEmployee

Balance, January 1, 2012 Granted during the year Exercised during the year Expired during the year

1,300,000 1,510,000 -

350,000 -

Balance, September 30, 2012

2,810,000

350,000

Weighted Average Exercise Price

Totals 3,080,000 $ 945,000 (899,998)

0.18 0.27 0.10

3,125,002

0.23

$

Weighted Average Exercise Price

Totals 1,650,000 1,510,000 -

-

$

0.08 0.29 -

$

0.18

3,160,000

Of the stock options outstanding as of September 30, 2013 under the Stock Option Plans, 660,002 options are currently vested and exercisable. The weighted average exercise price of these options was $0.21. These options expire through September 2022. The aggregate intrinsic value for options outstanding and exercisable at September 30, 2013 was approximately $142,000. The aggregate intrinsic value for options outstanding and exercisable at September 30, 2012 was approximately $162,000. The aggregate intrinsic value for options exercised during the nine months ended September 30, 2013 was approximately $180,000. For the three and nine months ended September 30, 2013 and 2012, the Company recorded approximately $57,000 and $93,300 and $200,000 and $183,900, respectively, in share compensation expense related to vesting of options previously granted under the Stock Option Plans. At September 30, 2013, there was approximately $531,000 of total unrecognized compensation cost related to non-vested option grants that will be recognized over the remaining vesting period of approximately 3 years.

78 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited)

Note 2 - Summary of significant accounting policies (continued) Stock options (continued) The following assumptions are used in the Black-Scholes option pricing model for the nine months ended September 30, 2013 and 2012 to value the stock options granted during the period: 2013 Risk-free interest rate Expected dividend yield Expected life Expected volatility Weighted average grant date fair value

2012 Risk-free interest rate Expected dividend yield Expected life Expected volatility Weighted average grant date fair value

1.14 – 1.99% 0.00 6.00 years 318% – 352% $0.29

1.19% – 1.62% 0.00 6.00 years 305% – 316% $0.31

The following is a summary of stock options outstanding outside of the Stock Option Plans for the nine months ended September 30, 2013 and 2012:

Employee

Number of Shares NonEmployee

Balance, January 1, 2013 Granted during the year Exercised during the year

150,000 150,000 (33,333)

1,650,000 190,000

Balance, September 30, 2013

266,667

1,840,000

Employee

-

Number of Shares NonEmployee

Balance, January 1, 2012 Granted during the year Exercised during the year

150,000 -

250,000 1,400,000

Balance, September 30, 2012

150,000

1,650,000

Weighted Average Exercise Price

Totals 1,800,000 $ 340,000 (33,333)

0.20 0.35 0.15

2,106,667

0.23

$

Weighted Average Exercise Price

Totals 250,000 1,550,000

-

$

0.18 0.20 -

$

0.20

1,800,000

Of the stock options outstanding outside of the plan at September 30, 2013, 1,073,333 options are currently vested and exercisable. The weighted average exercise price of these options was $0.19. These options expire between December 2013 and March 2023. The aggregate intrinsic value for options outstanding and exercisable at September 30, 2013 was approximately $264,000. The aggregate intrinsic value for options outstanding and exercisable at September 30, 2012 was approximately $178,000. The aggregate intrinsic value for options exercised during the nine months ended September 30, 2013 was approximately $5,000.

79 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 2 - Summary of significant accounting policies (continued) Stock options (continued) For the three and nine months ended September 30, 2013 and 2012, the Company recorded approximately $1,600 and $89,000 and $136,000 and $187,000, respectively, in share based compensation expense related to vesting of options previously granted outside of the Stock Option Plans. At September 30, 2013, there was approximately $331,000 of total unrecognized compensation cost related to non-vested option grants outside the plan that will be recognized over the remaining vesting period of approximately 3 years. The following assumptions are used in the Black-Scholes option pricing model for the nine months ended September 30, 2013 to value the stock options outstanding outside the plan: 2013 Risk-free interest rate 1.14 – 2.64% Expected dividend yield 0.00 Expected life 5.00 – 10.00 years Expected volatility 262% – 320% Weighted average grant date $0.31 fair value

2012 Risk-free interest rate Expected dividend yield Expected life Expected volatility Weighted average grant date fair value

0.31 – 1.67% 0.00 3.00 – 10.00 years 265% – 418% $0.31

The following is a summary of all stock options outstanding and nonvested for the nine months ended September 30, 2013:

Number of Shares NonEmployee Employee Balance, January 1, 2013 – nonvested Granted Vested Balance September 30, 2013 - nonvested

2,463,333 1,095,000 (1,009,999) 2,548,334

1,383,333 190,000 (623,333) 950,000

Totals 3,846,666 $ 1,285,000 (1,633,332) 3,498,334 $

Weighted Average Exercise Price 0.21 0.29 0.21 0.24

For the nine months ended September, 2013 and 2012, the Company recognized approximately $224,000 and $95,000, respectively, in share based compensation expense related to employee stock options and approximately $111,000 and $275,000, respectively related to share based compensation expense related to non-employee stock based awards.

80 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited)

Note 3 - Commitments and contingencies Leases As of September 30, 2013, the Company has an active lease related to the office space in Wayne, Pennsylvania through April 2016. Total rent expense incurred during the three and nine months ended September 30, 2013 and 2012 totaled approximately $13,000 and $7,000 and $33,000 and $25,000, respectively. The schedule below details the future financial obligations under the remaining lease as of September 30, 2013. Remaining three months 2013

2014

2015

2016

TOTAL OBLIGATION

Wayne - Corporate HQ

$ 13,000

$ 52,500

$ 53,100

$ 13,300

$ 131,900

Total Lease Obligations

$ 13,000

$ 52,500

$ 53,100

$ 13,300

$ 131,900

DermaWandTM During 2007, the Company entered into an exclusive license agreement with Omega 5 wherein ICTV was assigned all of the trademarks and all of the patents and pending patents relating to the DermaWandTM and was granted exclusive license with respect to the commercial rights to the DermaWandTM. This agreement was amended and superseded on July 28, 2010. The geographical scope of the license granted is the entire world. Royalty payments are made on a monthly basis and are calculated by multiplying the number of units of product sold, domestically and internationally, by $2.50. The license remains exclusive to ICTV provided ICTV pays to Omega 5 a minimum annual payment of $250,000 in the initial 18 month term of the agreement and in each succeeding one-year period. If in any calendar year the payments made by the Company to Omega exceed the annual minimum of $250,000, then the amount in excess of the annual minimum or “rollover amount” will be credited towards the Company’s annual minimum for the immediately following calendar year only. If the Company fails to meet the minimum requirements as outlined in the agreement, it may be forced to assign the trademarks and patents back to Omega 5. After the initial term, the exclusive license granted shall renew automatically for a three year period, and thereafter automatically at three-year intervals. The amount of expenses incurred for sales of the DermaWand TM related to these agreements were approximately $177,000 and $210,000 and $729,000 and $521,000 for the three and nine months ended September 30, 2013 and 2012, respectively.

81 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 3- Commitments and contingencies (continued) Employment Agreement Effective March 1, 2011, the Company entered into an employment agreement with the CEO of the Company. Under the terms of this agreement, the Company will pay an annual salary of $180,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. Effective January 1, 2013, this annual salary was increased to $240,000 and approved by the Board of Directors. The CEO is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement; automobile allowance and other reimbursable expenses. The initial term of this employment agreement is five years and automatically renews for successive one year periods unless either party provides not less than 60 days prior written notice of their intent not to renew the agreement. If the employment agreement is terminated by the Company without cause, the employee will be entitled to a severance payment equal to one year’s salary and benefits. On April 17, 2012, the Company entered into an employment agreement with the President and CFO of the Company. Under the terms of this agreement, the Company will pay an annual salary of $125,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. Effective January 1, 2013, this annual salary was increased to $160,000 and approved by the Board of Directors. The President and CFO is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement; automobile allowance and other reimbursable expenses. The employment agreement will continue until terminated by either party in accordance with the terms of the agreement. If the employment agreement is terminated by the Company without cause, the employee will be entitled to a severance payment equal to one year’s salary and benefits. The Company accrued approximately $106,000 in bonuses to the CEO and the President and CFO for the year ended December 31, 2012, included in accounts payable and accrued expenses in the accompanying consolidated financial statements. These bonuses were paid in February 2013. A bonus accrual of approximately $75,000 has been made for the nine months ended September 30, 2013. Legal In January 2013, the Company received a letter from a California law firm alleging certain violations of the California Consumer Legal Remedies Act in connection with the Company’s advertising and marketing of its DermaWand TM product. The law firm purported to represent a class of plaintiffs and invited us to contact them in order to amicably resolve the matter. We consulted with counsel and presented to the California law firm the substantiation for our advertising and marketing claims. While they acknowledged a good portion of our substantiation, the law firm continued to press for a settlement under threat of litigation. On May 1, 2013, the Company reached a tentative settlement agreement with the plaintiff and their law firm for less than the $325,000 the plaintiff was asking for to settle the suit. The final agreement and corresponding settlement payment was finalized in May 2013. Other matters Product Liability Insurance For certain products, the Company was (and is) listed as an additional insured party under the product manufacturers’ insurance policy. The current policy has a scheduled expiration of April 20, 2014.

82 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 4 – Severance payable In September 2010 the Company entered into a severance agreement with a former consultant. Under the severance agreement, the consultant will be paid $270,000 over a 27 month period in increments of $10,000 per month beginning in September 2010 and continuing through November 2012. The Company recorded the $270,000 as a General and Administrative expense in the three months ended September 30, 2010. In April 2011, the Company amended the aforementioned severance agreement. The amendment allowed the Company to make monthly payments of $3,400 per month for a period of one year from April 2011 through March 2012. In March 2012, the Company amended the aforementioned severance agreement for a second time to continue the monthly payment amount of $3,400 through March 2016. The severance payable balance was approximately $98,000 at September 30, 2013 and $128,600 at December 31, 2012, of which $40,800 is current and $57,200 is long-term as of September 30, 2013. Note 5 - Related party transactions The Company has a note payable to a shareholder with an original balance of $590,723. Prior to April 1, 2012, this loan was interest-free and had no specific terms of repayment. On April 1, 2012, the note payable was modified. The new terms include interest at the rate of four and three quarters percent (4.75%) per annum. Interest on the unpaid balance of the note is to be paid in arrears as of the end of each calendar quarter, with payment due on the first day of the month following the quarter as to which interest is being paid. The first payment of interest was due on January 1, 2013, for the three quarters beginning April 1, 2012 and ending on December 31, 2012. Interest on the loan for the three and nine months ended September 30, 2013 and 2012, was approximately $5,200 and $7,000 and $17,800 and $14,000, respectively. Interest charged through September 30, 2013 was fully paid at September 30, 2013. The principal balance of this note shall be due and payable in three equal payments on each of April 1, 2015, April 1, 2016, and April 1 2017. This note may be prepaid in whole or in part at any time without penalty, and any prepayment shall be applied against the next principal payment due. For the three and nine months ended September 30, 2013 and 2012, $52,000 and $0, and $137,000 and $0, respectively, in principal prepayments were made on the note. At September 30, 2013 and December 31, 2012, the balance outstanding was $453,723 and $590,723, respectively. An additional principal payment of $20,000 was made in October 2013. At April 1, 2012, when this note was modified, a conversion option was added that stated that all or any part of this note may be converted into shares of common stock of the Company at any time, and from time to time, prior to payment, at a conversion price of $0.50 per share. Conversion is at the option of lender. Any amount not converted will continue to be payable in accordance with the terms of the note. The Company considered this a modification of debt that was not substantive, thus no gain or loss was recorded upon modification. Note 6 – Notes payable In December 2011, the Company entered into an unsecured note payable with a Canadian lender in the amount of approximately $98,000 (C$100,000). This loan accrues interest of prime (3.25% at September 30, 2013 and December 31, 2012) plus 1%. Interest is paid monthly. Principal payments are to be paid in fifteen monthly installments of approximately $6,500 (C$6,667), beginning in March 2012 and ending May 2013. The loan permits payment in advance without penalty at any time.

83 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 6 – Notes payable (continued) On January 24, 2012, the Company entered into a note modification with the Canadian lender increasing the outstanding balance to approximately $137,000 (C$140,000) as additional borrowings were made by the Company. The principal payments on the additional borrowings of approximately $39,500 (C$40,000) are in two installments of $20,000 (approximates C$) payable on April 15, 2012 and July 15, 2012, respectively. In addition, the interest rate on the note was modified to lender’s cost (prime), plus two-percent and the note became convertible into shares of the Company’s common stock at a fixed conversion rate of $0.196 (C$.20) per share. The Company considered this a modification of debt that was not substantive, thus no gain or loss was recorded upon modification. The amount of the beneficial conversion upon modification was deemed insignificant to the consolidated financial statements. The amount outstanding under the note at September 30, 2013 and December 31, 2012 was approximately $0 and $30,200 (C$30,000), respectively. Interest on the loan is paid monthly and was approximately $0 and $900, and $300 and $3,100, for the three and nine months ended September 30, 2013 and 2012, respectively. The lender of this note is also one of the two persons that receive royalty payments on the DermaWand TM sales as noted in Note 3. Note 7 - Capital transactions On February 17, 2012, the Board authorized the issuance of up to 2,500,000 shares of common stocks to be purchased at $0.15 per share through February 29, 2012. On February 29, 2012, the Board amended the resolution to authorize the issuance of up to 3,000,000 shares of common stock to be purchased at $0.15 per share through March 23, 2012. A total of 2,590,000 shares were purchased through March 23, 2012 for gross proceeds of $388,500. In addition, for every three shares of common stock purchased, the purchasers received one warrant to purchase common stock at $0.25 per share. A total of 863,333 warrants were issued. The warrants expire three years after their issuance date. The warrants have a weighted average fair value of $0.32. The fair value of the warrant has been estimated on the date of grant using a Black-Scholes Pricing Model with the following assumptions: Risk-free interest rate Expected dividend yield Expected life Expected volatility Exercise price

0.36 – 0.58% 0.00 3.00 years 410% – 418% $0.25

The fair value of the warrants was approximately $274,000, recorded as an increase and corresponding decrease to additional paid-in capital during the three months ended March 31, 2012. During the year ended December 31, 2011, the Company entered into a three year corporate public relations consulting agreement where the consultants received compensation in the form of 500,000 shares of stock, 500,000 warrants with an exercise price of $0.10 that expire 14 months from the date of the agreement, and 1,000,000 warrants with an exercise price of $0.50 that expire 24 months from the date of the agreement. On August 15, 2012, the Company entered into a settlement agreement with the consultants to terminate the consulting agreement. As part of the agreement, the consultants maintained the 500,000 shares of common stock previously issued and all warrants previously issued were terminated. In addition, the consultants received 250,000 new warrants with an exercise price of $0.10 that expire 3 years from the date of the agreement.

84 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 7 - Capital transactions (continued) The 500,000 shares of common stock issued were originally valued at the fair market value of the stock on the date of grant. The total value of the stock was approximately $65,000 and the expense was being recognized over the consulting period. As noted in the previous paragraph, on August 15, 2012, the Company terminated the consulting agreement through a settlement agreement with these consultants and concurrently entered into a new consultant agreement with one of these consultants. Therefore, any unrecognized expense related to common stock and warrants issued was immediately recognized upon termination of services with the one consultant and expense related to the other consultant will be recognized over the remaining consulting term. The Company recognized approximately $0 and $25,000, and $11,000 and $36,000 of share based compensation expense for the three and nine months ended September 30, 2013 and 2012, respectively related to the issuance of these shares, and the Company has remaining unrecognized expense of approximately $6,000, which will be recognized over the next 10 months. For the three and nine months ended September 30, 2013 and 2012, the Company recorded approximately $0 and $149,000 and $0 and $160,000, respectively, of share based compensation expense for the 500,000 warrants issued to the consultants. The warrants were fully expensed at settlement. As of September 30, 2013, there was no unrecognized compensation costs related to these warrant grants. For the three and nine months ended September 30, 2013 and 2012, the Company recorded approximately $0 and $32,000 and $0 and $47,000, respectively, of share based compensation expense for the 1,000,000 warrants issued to the consultants. The warrants were fully expensed at settlement. As of September 30, 2013, there was no unrecognized compensation costs related to these warrant grants. For the three and nine months ended September 30, 2013 and 2012, the Company recorded approximately $5,000 and $58,000, and $14,000 and $58,000, respectively of share based compensation expense for the 250,000 warrants issued to the consultants under the settlement agreement. The expense related to the consultant no longer performing services was recognized immediately during the year ended December 31, 2012. As of September 30, 2013, there was approximately $34,000 of total unrecognized compensation costs related to these warrant grants which will be recognized over the remaining 22.5 months. On October 24, 2012, 125,000 warrants issued to one of the consultants were exercised for total consideration of $13,000. As previously stated, on August 15, 2012, the Company entered into a three year corporate public relations consulting agreement with one of the previous consultants. As part of the agreement, the consultant will receive a monthly consulting fee of $4,000, a commission of $7.50 for each DermaWand TM sold plus 5% of the net revenue from other products sold on a third party website, and 125,000 additional warrants with an exercise price of $0.30 that expires 36 months from the date of the agreement. For the three and nine months ended September 30, 2013 and 2012, the Company recorded approximately $5,000 and $3,000, and $14,000 and $3,000 of share based compensation, respectively. As of September 30, 2013, there was approximately $34,000 of total unrecognized compensation costs related to these warrant grants which will be recognized over the remaining 22.5 months. Due to the fact that any warrants issued to the consultant under the new consulting agreement are nonforfeitable, the 125,000 warrants with an exercise price of $0.10 and a fair value of $55,000, and the 125,000 warrants with an exercise price of $0.30 and a fair value of $55,000, which aggregated $110,000, were recorded in equity and were capitalized on the balance sheet in prepaid expenses and other current assets during 2012 and will be expensed over the consultant term. For the three and nine months ended September 30, 2013, approximately $9,000 and $28,000, respectively was expensed and included in share based compensation expense in our accompanying consolidated financial statements. Approximately $67,000 is capitalized at September 30, 2013 and approximately $37,000 and $30,000 is reflected as current and non-current assets, respectively, in our accompanying condensed consolidated balance sheet.

85 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 7 - Capital transactions (continued)

As of September 30, 2013, the following warrants were outstanding and exercisable:

Holder Shareholders in 2007 placement (modified 2010) Shareholders in February 2012 private placement Consultant Consultant Balance at September 30, 2013

Warrants Outstanding

Exercise Price

390,084

$0.10 - $3.00

863,333

$0.25

125,000 125,000

$0.10 $0.30

1,503,417

Expiration Date December 2013 February – March 2015 August 2015 August 2015

$0.10 - $3.00

On September 1, 2013, the Company entered into a one year investor relations consulting agreement, in which 150,000 shares of restricted stock were agreed to be issued to a consultant. Restricted stock awards provide that, during the applicable vesting periods, the shares awarded may not be sold or transferred by the participant. The fair market value was $0.45. 37,500 shares vested as of the date of executed agreement. An additional 37,500 shares vest on December 31, 2013, with the remaining 75,000 shares vesting on February 28, 2014. The award contains service conditions based on the consultant’s continued service for the Company. For the three and nine months ended September 30, 2013, the Company recorded approximately $5,000 of share based compensation, respectively. As of September 30, 2013, there was approximately $60,000 of total unrecognized compensation costs related to this restricted stock grant which will be recognized over the remaining eleven months. Note 8 - Basic and diluted earnings per share ASC 260, “Earnings Per Share” requires presentation of basic earnings per share and dilutive earnings per share. The computation of basic earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share gives the effect to all dilutive potential common shares outstanding during the period. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect. For the purposes of obtaining future capital to finance the Companies’ operations and to fund future expansion of the Companies’ Direct Response Television campaign certain shareholders are able to purchase additional stock with stock warrants attached to common stock issued. At September 30, 2013, there were 1,503,417 warrants outstanding and exercisable. The warrants are exercisable between $0.10 and $3.00 per share expiring through August 2015. At September 30, 2013 there were 5,231,669 stock options outstanding and 1,733,335 were vested and exercisable at an average exercise price of $0.23. The following securities were not involved in the computation of diluted net income per share as their effect would have been anti-dilutive:

Options to purchase common stock Warrants to purchase common stock Convertible note payable from shareholder

September 30, 2013 1,165,000 125,000 1,011,446

2012 4,960,000 1,628,417 1,671,666

86 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 8 - Basic and diluted earnings per share (continued) As the Company was in a loss position for the three end nine months ended September 30, 2012, all shares were antidilutive. The number of shares of common stock used to calculate basic and diluted earnings per share for the nine months ended September 30, 2013 and 2012 was determined as follows: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2013 2012 2013 2012 Basic weighted average shares outstanding Dilutive effect of outstanding stock options Dilutive effect of outstanding warrants Dilutive effect of restricted stock awards Dilutive effect of convertible note payable

21,718,315 1,912,328 590,896 31,241 -

20,647,756 -

21,481,149 1,603,888 383,194 10,414 1,181,447

19,898,741 -

Weighted average dilutive shares outstanding

24,252,780

20,647,756

24,660,092

19,898,741

87 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 8 - Basic and diluted earnings per share (continued) The computations for basic and fully diluted earnings per share are as follows: Weighted Average Shares (Denominator)

For the 3-months ended September 30, 2013:

Income (Numerator)

Basic earnings per share Income to common shareholders

$

100,508

21,718,315

$

0.00

Diluted earnings per share Income to common shareholders

$

100,508

24,252,780

$

0.00

For the 3-months ended September, 2012:

Loss (Numerator)

Basic and diluted loss per share Income to common shareholders

$

(217,200)

Weighted Average Shares (Denominator)

20,647,756

Weighted Average Shares (Denominator)

Per Share Amount

Per Share Amount

$

(0.01)

For the 9-months ended September 30, 2013:

Income (Numerator)

Basic income per share Income to common shareholders

$

1,917,975

21,481,149

$

0.09

$

1,935,770

24,660,092

$

0.08

Diluted earnings per share Income to common shareholders, including interest expense on convertible note payable of $17,795

For the 9-months ended September 30, 2012:

Loss (Numerator)

Basic and diluted loss per share Income to common shareholders

$

(126,334)

Weighted Average Shares (Denominator)

19,898,741

Per Share Amount

Per Share Amount

$

(0.01)

88 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 9 - Income taxes The provision for income tax for the three and nine months ended September 30, 2013 and 2012 consists of the following:

Current Federal State Total

Three Months Ended September 30, September 30, 2013 2012 $ 3,000 $ 1,000 $ 4,000 $ -

Nine Months Ended September 30, September 30, 2013 2012 $ 40,000 $ 32,000 $ $ 72,000 $ -

The provision for income tax related to federal and state income taxes is approximately $4,000 and $72,000 for the three and nine months ended September 30, 2013, respectively, or 4% of pre-tax income, compared to $0 and $0 for the three and nine months ended September 30, 2012, respectively, or 0% of pre-tax income. The effective tax rates for 2013 and 2012 reflect provisions for current federal alternative minimum taxes and state income taxes. The effective rate differs from the statutory rate primarily due to the anticipated utilization of net operating losses for which no tax benefit has previously been provided. As of December 31, 2012, the Company had approximately $2,783,000 of gross federal net operating losses and approximately $406,000 of gross state net operating losses available, of which approximately $2,600,000 and $220,000, respectively, are anticipated to be utilized in 2013. Although, the Company anticipates to utilize these net operating losses it should be noted that, as of September 30, 2013, there is not sufficient positive evidence to support that it is more likely than not that the Company will be able to utilize its deferred tax assets. The Company has generated one year of taxable income thus far and the Company is currently undergoing an IRC Section 382 study which could potentially reduce the amount of deferred tax assets that may be utilized in the future. Due to the change in ownership provisions of the Internal Revenue Code, the availability of the Company’s net operating loss carry forwards may be subject to annual limitations against taxable income in future periods, which could substantially limit the eventual utilization of such carry forwards. The Company is currently analyzing the historical or potential impact of its equity financings on beneficial ownership; however, no determination has been made whether the net operating loss carry forward is subject to any Internal Revenue Code Section 382 limitation. To the extent there is a limitation, there would be a reduction in the amount of net operating losses permitted to be used to offset taxable income in 2013 causing the effective tax rate to increase. Since it is not more likely than not that the assets will be realized, a full valuation allowance is provided against the deferred tax assets. During 2012, the Company filed income tax returns from inception, 1998, through 2011; therefore, the statute for all years remains open and any of these years could potentially be audited. The Company’s policy is to recognize interest and penalties related to tax matters in general and administrative expenses in the Consolidated Statements of Operations. The Company recorded zero interest and penalties for the quarters ended September 30, 2013 and 2012. At September 30, 2013 and December 31, 2012 the Company has approximately $190,000 and $270,000 accrued for various tax penalties. The following is a summary of the activity in the penalties payable for the nine months ended September 30, 2013. The accrual has been reduced because a closing agreement was issued by the Wisconsin Department of Revenue resolving an outstanding tax issue, no tax or penalties were due upon resolution. Balance, January 1, 2013 Reductions in reserve Balance, September 30, 2013

$ 270,000 (80,000) $ 190,000

89 INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS September 30, 2013 and September 30, 2012 (Unaudited) Note 10 - Segment reporting The Company operates in one industry segment and is engaged in the selling of various consumer products primarily through direct marketing infomercials and televised home shopping. The Company evaluates performance and allocates resources based on several factors, of which the primary financial measure is operating income (loss) by geographic area. Operating expenses are primarily prorated based on the relationship between domestic and international sales. Information with respect to the Company’s operating income (loss) by geographic area is as follows: For the three months ended September 30, 2013 Domestic International Totals

NET SALES

$

7,644,618

$

For the three months ended September 30, 2012 Domestic International Totals

655,694

$ 8,300,312

$ 5,434,533

$

855,068

$ 6,289,601

COST OF SALES Gross profit

1,876,955 5,767,663

269,315 386,379

2,146,270 6,154,042

1,517,031 3,917,502

388,736 466,332

1,905,767 4,383,834

Operating expenses: General and administrative Selling and marketing Total operating expense

1,716,278 4,245,856 5,962,134

68,868 13,019 81,887

1,785,146 4,258,875 6,044,021

1,022,613 3,514,120 4,536,733

43,920 12,221 56,141

1,066,533 3,526,341 4,592,874

$ (619,231) $

410,191

Operating income (loss)

$

(194,471) $

304,492 $

110,021

For the nine months ended September 30, 2013 Domestic International Totals

NET SALES

$

(209,040)

For the nine months ended September 30, 2012 Domestic International Totals

$ 28,259,735

$ 2,895,926

$ 31,155,661

$ 9,979,513

$ 2,801,897

$12,781,410

COST OF SALES Gross profit

7,329,174 20,930,561

1,267,932 1,627,994

8,597,106 22,558,555

3,045,986 6,933,527

1,304,694 1,497,203

4,350,680 8,430,730

Operating expenses: General and administrative Selling and marketing Total operating expense

5,562,581 14,775,365 20,337,946

178,023 34,377 212,400

5,740,604 14,809,742 20,550,346

2,110,964 6,271,168 8,382,132

126,594 31,025 157,619

2,237,558 6,302,193 8,539,751

2,008,209 $(1,448,605)

$ 1,339,584

$ (109,021)

Operating income (loss)

$

592,615 $ 1,415,594

$

Selected balance sheet information by segment is presented in the following table as of: September 30, Total Assets 2013 Domestic $ 4,827,715 International 9,467

December 31, 2012 $ 4,414,775 25,453

Total Assets

$

$

4,837,182

4,440,228

Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of International Commercial Television, Inc. We have audited the accompanying consolidated balance sheets of International Commercial Television, Inc. and Subsidiary (collectively, the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of operations, shareholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2012. The financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of International Commercial Television, Inc. and Subsidiary as of December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s recurring losses from operations raise substantial doubt about its ability to continue as a going concern. Management’s plans considering these matters are also described in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/EisnerAmper, LLP Edison, New Jersey March 28, 2013

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2012 AND 2011 2012

2011

ASSETS CURRENT ASSETS: Cash and cash equivalents Cash held in escrow Accounts receivable, net of doubtful account reserves of $623,061 and $13,317, respectively Inventories, net Prepaid expenses and other current assets

$

758,358 $ 150,008 1,154,855 1,979,757 324,991

53,337 5,467 46,220 718,450 20,559

4,367,969

844,033

Furniture and equipment Less accumulated depreciation Furniture and equipment, net

71,258 56,949 14,309

183,117 162,868 20,249

Other assets

57,950

-

Total current assets

Total assets

$ 4,440,228 $

LIABILITIES AND SHAREHOLDERS’ DEFICIT CURRENT LIABILITIES: Convertible note payable – short-term Accounts payable and accrued liabilities Short term advances payable – related parties Severance payable – short-term Deferred revenue – short-term Tax provision payable Tax penalties payable Convertible note payable to shareholder – short-term Total current liabilities

$

30,169 3,360,745 40,800 281,774 48,600 270,000 4,032,088

Severance payable – long-term Deferred revenue – long-term Convertible note payable to shareholder– long-term Convertible note payable – long-term Total long-term liabilities

$

864,282

65,363 856,542 38,359 40,800 25,128 270,000 590,723 1,886,915

87,800 129,986 590,723 808,509

128,600 32,681 161,281

-

-

COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ DEFICIT: Preferred stock 20,000,000 shares authorized, no shares issued and outstanding Common stock, $0.001 par value, 100,000,000 shares authorized, 20,722,756 and 18,057,756 shares issued and outstanding as of December 31, 2012 and December 31, 2011, respectively Additional paid-in-capital Accumulated deficit Total shareholders’ deficit Total liabilities and shareholders’ deficit

10,562 6,843,267 (7,254,198)

7,959 5,511,877 (6,703,750)

(400,369)

(1,183,914)

$ 4,440,228

See accompanying notes to consolidated financial statements.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY

$

864,282

CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 2012

2011

$ 22,920,386

$ 3,102,041

COST OF SALES

7,480,788

1,567,876

GROSS PROFIT

15,439,598

1,534,165

General and administrative Selling and marketing

4,347,052 11,568,271

1,332,008 687,809

Total operating expenses

15,915,323

2,019,817

NET SALES

OPERATING EXPENSES:

OPERATING LOSS INTEREST EXPENSE, NET LOSS BEFORE PROVISION FOR INCOME TAX PROVISION FOR INCOME TAX

(475,725)

(485,652)

(26,123)

(240)

(501,848)

(485,892)

(48,600)

NET LOSS

$

(550,448) $

BASIC AND DILUTED NET LOSS PER SHARE

$

(0.03) $

WEIGHTED AVERAGE NUMBER OF COMMON SHARES BASIC DILUTED

See accompanying notes to consolidated financial statements.

20,110,242 20,110,242

(485,892)

(0.03)

16,844,086 16,844,086

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Common Stock $0.001 par value Shares Amount

Balance at January 1, 2011

15,547,179

$

Additional Paid-In Capital

5,448

Accumulated Deficit

$ 5,257,293 $ (6,217,858)

Totals

$

(955,117)

Net loss

-

-

-

(485,892)

Share based compensation

-

-

70,163

-

70,163

Shares issued as part of BBI acquisition

500,000

500

(500)

-

-

Exercise of warrants

168,649

169

16,696

-

16,865

1,291,928

1,292

127,712

-

129,004

550,000

550

18,478

-

19,028

-

-

22,035

-

22,035

Issuance of common stock Issuance of common stock for consulting services Issuance of warrants for consulting services Balance at December 31, 2011

18,057,756

Net loss

-

Share based compensation

-

Exercise of warrants

$

7,959

$ 5,511,877 $

-

-

(485,892)

(6,703,750)

$ (1,183,914)

(550,448)

(550,448)

522,164

-

522,164

125,000

12

12,488

-

12,500

2,590,000

2,591

385,909

-

388,500

Issuance of common stock for consulting services

-

-

38,820

-

38,820

Issuance of warrants for consulting services

-

-

262,045

-

262,045

Issuance of nonforfeitable warrants for consulting services

-

-

109,964

-

109,964

10,562

$ 6,843,267

Issuance of common stock

Balance at December 31, 2012

20,722,756

$

$ (7,254,198)

See accompanying notes to consolidated financial statements.

$

(400,369)

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 2012 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ Adjustments to reconcile net loss to net cash and cash equivalents provided by (used in) operating activities: Depreciation Bad debt expense Stock based compensation Change in assets and liabilities Accounts receivable Inventories Prepaid expenses and other assets Accounts payable and accrued liabilities Severance payable Tax provision Tax penalties Deferred revenue Net cash provided by (used in) operating activities

(550,448) $

2011

(485,892)

14,250 1,435,920 838,388

14,092 43,594 111,226

(2,544,555) (1,261,307) (267,777) 2,504,203 (40,800) 48,600 386,632 563,106

(14,009) (191,629) 26,115 234,855 (93,933) 10,000 (7,570) (353,151)

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of fixed assets Net cash used in investing activities

(8,310) (8,310)

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock Proceeds from exercise of warrants Proceeds from note payable Payments on note payable Advances from related parties Payments to related parties Net cash provided by financing activities

388,500 12,500 40,000 (107,875) 50,000 (88,359) 294,766

16,865 129,004 98,044 40,000 (32,500) 251,413

849,562

(101,738)

58,804

160,542

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, beginning of the year CASH AND CASH EQUIVALENTS, end of the year SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Capitalization of stock based compensation expense related to nonforfeitable warrants Fair value of warrants in connection with sale of common stock Interest paid Write off of fully depreciated assets

See accompanying notes to consolidated financial statements.

-

$

908,366 $

58,804

$

109,964 $ 273,831 26,490 120,169

249 -

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 1 - Organization, Business of the Company and Liquidity Organization and Nature of Operations International Commercial Television Inc., (the “Company” or “ICTV”) was organized under the laws of the State of Nevada on June 25, 1998. Strategic Media Marketing Corp. (“SMM”), a wholly owned subsidiary, was incorporated in the Province of British Columbia on February 11, 2003 and has a December 31 fiscal year-end. Effective February 7, 2011, SMM offices were closed down and the subsidiary was dissolved. Operations performed by SMM are now being managed out of our office. Effective February 17, 2011, the Company acquired 100% of the equity interest in Better Blocks International Limited (“BBI”), see Note 7. The Company sells various consumer products. The products are primarily marketed and sold throughout the United States and internationally via infomercials. Although our companies are incorporated in Nevada and New Zealand, a substantial portion of operations are currently run from the Wayne, Pennsylvania office. Liquidity and Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company generated positive cash flows from operating activities in the past fiscal year of approximately $563,000, but, for the most part, has experienced recurring losses from operations. The Company had positive working capital of approximately $336,000 and an accumulated deficit of approximately $7,254,000 as of December 31, 2012. The goal of our strategy is to use the brand awareness we create in our infomercials so that we can sell the products featured in our infomercials, along with related families of products, under distinct brand names in traditional retail stores. Our goal is to have these families of products sold in the traditional retail environment in shelf-space dedicated to the product category. We are developing the infrastructure to create these brands of products so that we can implement our business plan. Currently, this plan is being executed with the DermaWand TM and the DermaVital® skincare line. The Company does not require any additional capital to grow the DermaWandTM and the DermaVital® businesses. The Company is currently exploring other devices and consumable product lines. There is no guarantee that the Company will be successful in bringing our products into the traditional retail environment. If the Company is unsuccessful in achieving this goal, the Company will be required to raise additional capital to meet its working capital needs. If the Company is unsuccessful in completing additional financings, it will not be able to meet its working capital needs or execute its strategy. In such case the Company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability of the carrying amount of recorded assets or the amount of liabilities that might result should the Company be unable to continue as a going concern. Note 2 - Summary of significant accounting policies Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary BBI for the period February 17, 2011 through December 31, 2012 and SMM for the period January 1, 2011 through February 7, 2011 and for the year ended December 31, 2011. All significant inter-company transactions and balances have been eliminated.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 2 - Summary of significant accounting policies (continued) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles of the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates. Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, include cash and trade receivables. The Company maintains cash in bank accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses and believes it is not exposed to any significant risks on its cash in bank accounts. As of December 31, 2012 and December 31, 2011, 90% and 39% of the Company’s accounts receivable were due from various individual customers to whom our products had been sold directly via Direct Response Television; 5% and 0%, respectively were due from a third party; 4% and 0% was cash due from the Company’s credit card processors; the remaining 1% and 61% of the Company’s accounts receivable were due from one and three wholesale infomercial operators, respectively. Major customers are considered to be those who accounted for more than 10% of net sales. For the fiscal years ended December 31, 2012 and 2011, approximately 5% and 43%, respectively, of the Company’s net sales were made to two televised shopping network major customers. Fair value of financial instruments Fair value estimates, assumptions and methods used to estimate fair value of the Company’s financial instruments are made in accordance with the requirements of ASC 825-10, “Disclosures about Fair Value of Financial Instruments.” The Company has used available information to derive its estimates. However, because these estimates are made as of a specific point in time, they are not necessarily indicative of amounts the Company could realize currently. The use of different assumptions or estimating methods may have a material effect on the estimated fair value amounts. The carrying values of financial instruments such as cash, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to the short settlement period for these instruments. It is not practicable to estimate the fair value of the Note Payable to Shareholder due to its related party nature. Cash and cash equivalents The Company considers all unrestricted highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash held in escrow Transfirst ePayment Services (“Transfirst”), ICTV’s credit card processing vendor for VISA, Mastercard, Discover and American Express transactions in the United States, maintains a reserve fund within our processing account to cover all fees, charges, and expenses due them, including those estimated for possible customer charge backs. These reserves are updated periodically by Transfirst and maintained for a rolling 180 days of activity. Based upon established levels of risk, this normally represents approximately 2% of transaction volume for the period, with a maximum of $150,000 and is considered as “Cash held in escrow”. At December 31, 2012 and 2011 the amount of Transfirst reserves was approximately $150,000 and $5,000, respectively. In January 2012, ICTV entered into a Media Financing, Security and Assignment agreement with Media Acquisition, LLC (“Media Acquisition”). Under the agreement, Media Acquisition, LLC provided financing to the Company for the cost of purchasing advertising time. In return, Media Acquisition was paid a service fee based on revenues generated from the advertisement time purchased. To secure payment under the agreement, the Company granted Media Acquisition a security interest in essentially all of the Company’s assets. In addition, the Company’s CEO has personally guaranteed the Company’s performance. The term of the agreement is month-to-month and it can be terminated by either party with 30 days written notice. As part of the agreement, a portion of cash generated through direct response television (DRTV) is reserved to cover all fees, expenses, charges and expenses due Media Acquisition. In August 2012, the Company terminated this agreement and the reserved cash was subsequently refunded in October 2012.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 2 - Summary of significant accounting policies (continued) Foreign currency transactions Transactions entered into by the Company in currencies other than its local currency, are recorded in its local currency and any changes in currency exchange rates that occur from the initiation of a transaction until settled are recorded as foreign currency gains or losses in the Consolidated Statements of Operations. Accounts receivable Accounts receivable are recorded net of allowances for returns and doubtful accounts of approximately $623,000 and $13,000 for the years ended December 31, 2012 and 2011, respectively. The allowances are calculated based on historical customer returns and bad debts. In addition to reserves for returns on accounts receivable, an accrual is made against returns for product that have been sold to customer and had cash collections, while the customer still has the right to return the product. The amounts of these accruals included in accounts payable and accrued liabilities in our Consolidated Balance Sheets were approximately $248,000 and $42,000 at December 31, 2012 and 2011, respectively. Inventories Inventories consist primarily of products held for resale, and are valued at the lower of cost (first-in, first-out method) or market. The Company adjusts inventory for estimated obsolescence when necessary based upon demand and market conditions. The Company has recorded approximately $251,000 and $12,000 in inventory of consigned product as of December 31, 2012 and 2011, respectively, that has been shipped to customers under the 30-day free trial period for which the trial period has not expired and as such the customer has not accepted the product. Furniture and equipment Furniture and equipment are carried at cost and depreciation is computed over the estimated useful lives of the individual assets ranging from 3 to 7 years. Depreciation is computed using the straight-line method. The related cost and accumulated depreciation of assets retired or otherwise disposed of are removed from the accounts and the resultant gain or loss is reflected in earnings. Maintenance and repairs are expensed currently while major renewals and betterments are capitalized. Depreciation expense amounted to approximately $14,000 and $14,000, respectively, for the years ended December 31, 2012 and 2011. Impairment of Long-Lived Assets In accordance with ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”, long-lived assets are reviewed for impairment when circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future net cash flows estimated by the Company to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are recorded as held for sale at the lower of carrying value or estimated net realizable value. No impairment losses were identified or recorded in the fiscal years ended December 31, 2012 and 2011.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 2 - Summary of significant accounting policies (continued) Revenue recognition For our domestic direct response television sales generated by our infomercials, product sales revenue is recognized when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured. The Company’s revenues in the Statement of Operations are net of sales taxes. The Company offers a 30-day risk-free trial as one of its payment options. Revenue on the 30-day risk-free trial sales is not recognized until customer acceptance and collectability are assured which we determine to be when the trial period ends. If the riskfree trial expires without action by the customer, product is determined to be accepted by the customer and revenue is recorded. Revenue for items purchased without the 30-day free trial is recognized upon shipment of the product to the customer and collectability is assured. Revenue related to our DermaVital® continuity program is recognized monthly upon shipment to customers. Revenue related to international wholesale customers is recorded at gross amounts with a corresponding charge to cost of sales upon shipment. The Company has a return policy whereby the customer can return any product received within 30 days of receipt for a full refund excluding shipping and handling. However, historically the Company has accepted returns past 30 days of receipt. The Company provides an allowance for returns based upon past experience. All significant returns for the years presented have been offset against gross sales. In 2012, the Company started selling warranties on the DermaWandTM for one-year, three-year and lifetime terms. One-year and three-year warranties are recognized ratably over the term. Lifetime warranties are recognized over the estimated term of 5 years. Any unearned warranty is included in deferred revenue on the accompanying consolidated balance sheet. Changes in the Company’s deferred service revenue related to the warranties is presented in the following table: 2012 Deferred extended warranty revenue: At beginning of period Revenue deferred for new warranties Revenue recognized At end of period Current portion Non-current portion

$

$ $ $

186,535 (15,216) 171,319 41,333 129,986 171,319

Shipping and handling The amount billed to a customer for shipping and handling is included in revenue: shipping and handling revenue approximated $3,546,000 and $61,000 for the years ended December 31, 2012 and 2011, respectively. Shipping and handling costs are included in cost of sales. Shipping and handling costs approximated $2,082,000 and $233,000 for the years ended December 31, 2012 and 2011, respectively. Research and development Research and development costs are expensed as incurred and are included in selling and marketing expense in the accompanying consolidated financial statements. Research and development costs primarily consist of efforts to discover and develop new products and the testing and development of direct-response advertising related to these products.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 2 - Summary of significant accounting policies (continued) Media and production costs Media and production costs are expensed as incurred and are included in selling and marketing expense in the accompanying consolidated financial statements. The Company incurred approximately $7,626,000 and $337,000 in such costs for the years ended December 31, 2012 and 2011, respectively. Income taxes In preparing our consolidated financial statements, we make estimates of our current tax exposure and temporary differences resulting from timing differences for reporting items for book and tax purposes. We recognize deferred taxes by the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In consideration of our accumulated losses and lack of historical ability to generate taxable income to utilize our deferred tax assets, we have estimated that we will not be able to realize any benefit from our temporary differences and have recorded a full valuation allowance. If we become profitable in the future at levels which cause management to conclude that it is more likely than not that we will realize all or a portion of the net operating loss carry-forward, we would immediately record the estimated net realized value of the deferred tax asset at that time and would then provide for income taxes at a rate equal to our combined federal and state effective rates, which would be approximately 40% under current tax laws. Subsequent revisions to the estimated net realizable value of the deferred tax asset could cause our provision for income taxes to vary significantly from period to period. The Company’s policy is to recognize interest and penalties related to tax matters in general and administrative expenses in the Consolidated Statements of Operations. Stock options In June 2001, our shareholders approved our 2001 Stock Option Plan (the “Plan”). The Plan is designed for selected employees, officers and directors of the Company and its subsidiaries, and is intended to advance the best interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiaries with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiaries. The Plan is administered by the Board of Directors of the Company, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the Plan are determined by the Board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of the grant. The Plan expired in February 2011. As of December 31, 2012, 1,600,000 options are outstanding under the Plan. In December 2011, our shareholders approved our 2011 Stock Option Plan (the “2011 Plan”). The 2011 Plan is designed for selected employees, officers, and directors of the Company and its subsidiaries, and is intended to advance the best interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiaries with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiaries. The 2011 Plan is administered by the Board of Directors of the Company, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the Plan are determined by the Board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of the grant. Generally, the options granted vest over three years with one-third vesting on each anniversary date of the grant. As of December 31, 2012, 1,480,000 options are outstanding under the 2011 Plan. The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC Topic 505, subtopic 50, Equity-Based Payments to Non-Employees based upon the fair-value of the underlying instrument. The equity instruments, consisting of stock options granted to consultants, are valued using the Black-Scholes valuation model. The measurement of stock-based compensation is subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense over the period which services are received.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 2 - Summary of significant accounting policies (continued) Stock options (continued) The Company uses ASC (“Accounting Standards Codification”) Topic 718, “Share-Based Payments”, to account for stock-based compensation issued to employees and directors. The Company recognizes compensation expense in an amount equal to the fair value of share-based payments such as stock options granted to employees over the requisite vesting period of the awards. Stock options granted to non-employees are remeasured at each reporting period until a measurement date has been reached. The following is a summary of stock options outstanding under the existing stock option plan for the years ended December 31, 2012 and 2011:

Number of Shares NonEmployee Employee

Weighted Average Exercise Price

Totals

Balance, January 1, 2012 Granted during the year Exercised during the year Forfeited during the year

1,300,000 1,510,000 (80,000)

350,000 -

1,650,000 1,510,000 (80,000)

$

0.08 0.29 (0.11)

Balance, December 31, 2012

2,730,000

350,000

3,080,000

$

0.18

Number of Shares NonEmployee Employee

Weighted Average Exercise Price

Totals

Balance, January 1, 2011 Granted during the year Exercised during the year Expired during the year

1,300,000 -

657,000 350,000 (657,000)

657,000 1,650,000 (657,000)

$

2.00 0.08 (2.00)

Balance, December 31, 2011

1,300,000

350,000

1,650,000

$

0.08

Of the stock options currently outstanding, 533,333 options are currently vested and exercisable; 16,667 previously vested and exercisable options were forfeited during the year ended December 31, 2012. The weighted average exercise price of these options was $0.08. These options expire in February 2021. The aggregate intrinsic value for options outstanding and exercisable at December 31, 2012 was approximately $276,000. The aggregate intrinsic value for options outstanding and exercisable at December 31, 2011 was immaterial. During the year ended December 31, 2012, 1,510,000 options were granted to employees; in addition, 80,000 options were forfeited due to employee termination. For the years ended December 31, 2012 and 2011, the Company recorded approximately $250,000 and $70,000 respectively in stock compensation expense under the plan. At December 31, 2012, there was approximately $518,000 of total unrecognized compensation cost related to non-vested option grants that will be recognized over the remaining vesting period of approximately 3 years.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 2 - Summary of significant accounting policies (continued) Stock options (continued) The following assumptions are used in the Black-Scholes option pricing model for the year ended December 31, 2012 and 2011 to value the stock options granted during the period: 2012 Risk-free interest rate Expected dividend yield Expected life Expected volatility Weighted average grant date fair value

1.19% - 1.62%

2011 Risk-free interest rate

0

Expected dividend yield

6.00 years 305% - 316% $0.30

Expected life

1.92% - 3.03% 0 6.00 -10.00 years

Expected volatility Weighted average grant date fair value

313% - 340% $0.14

The following is a summary of stock options outstanding outside of the existing stock option plan for the years ended December 31, 2012 and 2011:

Number of Shares NonEmployee Employee

Weighted Average Exercise Price

Totals

Balance, January 1, 2012 Granted during the year Exercised during the year Expired during the year

150,000 -

250,000 1,400,000 -

250,000 1,550,000 -

$

0.18 0.20 -

Balance, December 31, 2012

150,000

1,650,000

1,800,000

$

0.20

Number of Shares NonEmployee Employee

Weighted Average Exercise Price

Totals

Balance, January 1, 2011 Granted during the year Exercised during the year Expired during the year

-

250,000 -

250,000 -

$

0.18 -

Balance, December 31, 2011

-

250,000

250,000

$

0.18

Of the stock options currently outstanding outside of the plan at December 31, 2012, 500,000 options are currently vested and exercisable. The weighted average exercise price of these options was $0.11. These options expire between December 2013 and February 2015. The aggregate intrinsic value for options outstanding and exercisable at December 31, 2012 was approximately $243,000. The aggregate intrinsic value for options outstanding and exercisable at December 31, 2011 was immaterial. During the year ended December 31, 2012, 1,550,000 options were granted to employees and consultants. For the years ended December 31, 2012 and 2011, the Company recorded approximately $272,000 and $0 respectively in stock compensation expense under the plan. At December 31, 2012, there was approximately $547,000 of total unrecognized compensation cost related to nonvested option grants that will be recognized over the remaining vesting period of approximately 3 years.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 2 - Summary of significant accounting policies (continued) Stock options (continued) The following assumptions are used in the Black-Scholes option pricing model for the year ended December 31, 2012 to value the stock options outstanding outside the plan: 2012 Risk-free interest rate Expected dividend yield Expected life Expected volatility Weighted average grant date fair value

0.72% – 1.78% 0.00 3.00 – 10.00 years 263% – 394% $0.31

The following is a summary of all stock options outstanding, and nonvested for the year ended December 31, 2012:

Number of Shares NonEmployee Employee

Balance, January 1, 2012 – nonvested Granted Vested Forfeited Balance, December 31, 2012 - nonvested

1,300,000 1,660,000 (433,334) (63,333) 2,463,333

Totals

516,667 1,400,000 (533,334 ) 1,383,333

1,816,667 $ 3,060,000 (966,668) (63,333) 3,846,666 $

Weighted Average Exercise Price 0.09 0.25 0.10 0.11 0.21

Note 3 - Commitments and contingencies Leases As of December 31, 2012, the Company had an active lease related to the office space rented in Wayne, Pennsylvania. Total rent expense incurred during 2012 and 2011 totaled approximately $34,000 and $38,000, respectively. During the year ended December 31, 2012, the Company renewed its lease at the Wayne, Pennsylvania location with lower monthly rent payments, which extends through March, 2013. On April 1, 2013, the Company will be moving to a different building within the same facility and has amended the lease through March 2016. The schedule below details the future financial obligations under the remaining two leases.

Wayne - Corporate HQ

$

2013 46,400

Total Lease Obligations

$

46,400

$

2014 50,900

$

50,900

$

2015 51,500

$

51,500

$

2016 14,400

$

TOTAL OBLIGATION -$ 163,200

$

14,400

$

-$

2017

163,200

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 3 - Commitments and contingencies (continued) DermaWandTM On October 15, 1999, Windowshoppe.com Limited (“WSL”) entered into an endorsement agreement with an individual for her appearance in a DermaWandTM infomercial. On July 11, 2001, the agreement was amended to include a royalty payment for each unit sold internationally, up to a maximum royalty payment for any one calendar quarter. Further, if the infomercial is aired in the United States, then the airing fee will revert back to the same flat rate per calendar quarter. The initial term of the agreement was five years starting October 15, 1999. The agreement automatically and continually renews for successive additional five-year terms unless R.J.M.Ventures (“RJML”) is in material default and is notified in writing at least thirty days prior to the end of the then current term that the individual intends to terminate the agreement. The Company assumed any and all responsibilities associated with the license and reconveyance agreements dated April 1, 2000 entered into by the Company and WSL and RJML. On January 5, 2001, WSL entered into an agreement with Omega 5. WSL shall have worldwide nonexclusive rights to manufacture, market and distribute DermaWandTM. In consideration of these rights, WSL shall pay a monthly payment for each unit sold of DermaWand depending on various scenarios as defined in the agreement. The agreement is silent as to its duration. During 2007, the Company entered into an exclusive license agreement with Omega 5 wherein ICTV was assigned all of the trademarks and all of the patents and pending patents relating to the DermaWand TM and was granted exclusive license with respect to the commercial rights to the DermaWandTM. This agreement was amended and superseded on July 28, 2010. The geographical scope of the license granted is the entire world consisting of the United States of America and all of the rest of the world. The license remains exclusive to ICTV provided ICTV pays to Omega 5 a minimum annual payment of $250,000 in the initial 18 month term of the agreement and in each succeeding one-year period. If in any calendar year the payments made by the Company to Omega exceed the annual minimum of $250,000, then the amount in excess of the annual minimum or “rollover amount” will be credited towards the Company’s annual minimum for the immediately following calendar year only. If the Company fails to meet the minimum requirements as outlined in the agreement, it may be forced to assign the trademarks and patents back to Omega 5. After the initial term, the exclusive license granted shall renew automatically for a three year period, and thereafter automatically at three-year intervals. The amount of royalty expense incurred for sales of the DermaWand TM were approximately $795,000 and $248,000 for the years ended December 31, 2012 and 2011, respectively. Employment Agreement Effective March 1, 2011, the Company entered into an employment agreement with the CEO of the Company. Under the terms of this agreement, the Company agrees that in consideration of services performed, the Company will pay an annual salary of $180,000, subject as appropriate to an adjustment to be approved by the Company’s Board of Directors on an annual basis. The CEO is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, as well as employee is entitled to receive issuance of stock options and other employee benefits such as health insurance reimbursement; automobile allowance and other reimbursable expenses. The initial term of this employment agreement is five years and shall automatically renew for successive one year periods unless either party provides no less than 60 days prior written notice of their intent not to renew the agreement. If the employment agreement is terminated by the Company without cause, the employee will be entitled to a severance payment equal to one year’s salary and benefits. On April 17, 2012, the Company entered into an employment agreement with the President and CFO of the Company. Under the terms of this agreement, the Company will pay an annual salary of $125,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. The President and CFO is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement; automobile allowance and other reimbursable expenses. The employment agreement will continue until terminated by either party in accordance with the terms of the agreement. If the employment agreement is terminated by the Company without cause, the employee will be entitled to a severance payment equal to one year’s salary and benefits. The Company has accrued approximately $106,000 in bonuses to the CEO and the President and CFO for the year ended December 31, 2012, included in accounts payable and accrued expenses in the accompanying consolidated financial statements. These bonuses were paid in February 2013.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 3 - Commitments and contingencies (continued) Other matters Product Liability Insurance For certain products, the Company was (and is) listed as an additional insured party under the product manufacturers’ insurance policy. On February 20, 2007, the Company purchased its own liability insurance to cover all direct to consumer product sales in the US and worldwide, which expires on April 20, 2013. At present, management is not aware of any claims against the Company for any products sold. Note 4 – Severance payable In September 2010 the Company entered into a severance agreement with a former consultant. Under the severance agreement, the consultant will be paid $270,000 over a 27 month period in increments of $10,000 per month beginning in September 2010 and continuing through November 2012. The Company recorded the $270,000 as a General and Administrative expense in the three months ended September 30, 2010. In April 2011, the Company amended the aforementioned severance agreement. The amendment allows the Company to make monthly payments of $3,400 per month for a period of one year from April 2011 through March 2012. In March 2012, the Company amended the aforementioned severance agreement for a second time to continue the monthly payment amount of $3,400 through March 2016. The severance payable balance at December 31, 2012 and 2011 is $128,600 and $169,400, respectively of which $40,800 is current and $87,800 is long-term as of December 31, 2012. Note 5 - Related party transactions The Company has received short-term advances from a shareholder. These advances amounted to approximately $50,000 and $40,000 during the years ended December 31, 2012 and 2011, respectively. The $50,000 loan accrued interest of 6% annually. Principal payments were made in six monthly installments of approximately $8,333, beginning in May 2012 and ending in October 2012. Interest was paid along with the final payment in October 2012. The advances are offset by repayments which amounted to approximately $57,500 and $32,500 during the years ended December 31, 2012 and 2011, respectively. These advances were included in Short Term Advances Payable – Related Parties on the accompanying consolidated balance sheets. At December 31, 2012 and 2011, the balance outstanding was approximately $0 and $7,500, respectively. The Company also received short-term advances from another shareholder. There were no advances during the years ended December 31, 2012 and 2011. Repayments amounted to approximately $30,900 and $0 during the years ended December 31, 2012 and 2011, respectively. These advances are non-interest bearing and without specific terms of repayment. These advances were included in Short Term Advances Payable – Related Parties on the accompanying consolidated balance sheets. At December 31, 2012 and 201, the balance outstanding was approximately $0 and $30,900, respectively. The Company has a note payable to a shareholder in the amount of $590,723. Prior to April 1, 2012, this loan was interest-free and had no specific terms of repayment. On April 1, 2012, the note payable was modified. The new terms include interest at the rate of four and three quarters percent (4.75%) per annum. Interest on the unpaid balance of the note is to be paid in arrears as of the end of each calendar quarter, with payment due on the first day of the month following the quarter as to which interest is being paid. The first payment of interest was due on January 1, 2013, for the three quarters beginning April 1, 2012 and ending on December 31, 2012. Interest of approximately $21,000 was paid on December 28, 2012. The principal balance of this note shall be due and payable in three equal payments on each of April 1, 2015, April 1, 2016, and April 1, 2017. This note may be prepaid in whole or in part at any time without penalty, and any prepayment shall be applied against the next principal payment due. Subsequent to December 31, 2012, $55,000 in principal payments were made on the note. All or any part of this note may be converted into shares of common stock of the Company at any time, and from time to time, prior to payment, at a conversion price of $0.50 per share. Conversion is at the option of lender. Any amount not converted will continue to be payable in accordance with the terms of the note. The Company considered this a modification of debt that was not substantive, thus no gain or loss was recorded upon modification.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 6 – Notes payable In December 2011, the Company entered into an unsecured note payable with a Canadian lender in the amount of approximately $98,000 (C$100,000). This loan accrues interest at prime (3.25% at December 31, 2012) plus 1%. Interest is paid monthly. Principal payments are to be paid in fifteen monthly installments of approximately $6,500 (C$6,667), beginning in March 2012 and ending May 2013. The loan permits payment in advance without penalty at any time. On January 24, 2012, the Company entered into a note modification with the Canadian lender increasing the outstanding balance to approximately $137,000 (C$140,000) as additional borrowings were made by the Company. The principal payments on the additional borrowings of approximately $39,500 (C$40,000) were due in two installments of $20,000 (approximates C$) payable on April 15, 2012 and July 15, 2012. In addition, the interest rate on the note was modified to lender’s cost (prime), plus twopercent and the note became convertible into shares of the Company’s common stock at a fixed conversion rate of $0.196 (C$.20) per share. The Company considered this a modification of debt that was not substantive, thus no gain or loss was recorded upon modification. The amount of the beneficial conversion upon modification was deemed insignificant to the consolidated financial statements. The amount outstanding under the note at December 31, 2012 was approximately $30,200 (C$30,000). The balance was paid in full by March 2013. Interest paid on the loan for the years ended December 31, 2012 and 2011, was approximately $3,600 and $250, respectively. The lender of this note is also one of the two persons that receive royalty payments on the DermaWand TM sales as noted in Note 3 Note 7 - Capital transactions On February 17, 2011, the Company acquired from one of its shareholders 100% of its equity interest in Better Blocks International Limited (“BBI”), consisting primarily of intellectual properties in exchange for 500,000 shares of the Company’s common stock. This transaction is between entities under common control and accordingly the net asset acquired is recorded at zero, which is the carrying value of BBI and is recorded as a capital transaction. On April 1, 2011, the Company issued 1,000,000 shares of common stock in a private placement at $0.10 for total consideration of $100,000. On May 11, 2011, the Company issued 250,000 shares of common stock in a private placement at $0.10 for total consideration of $25,000. In November 2011, the Company issued a former consultant 50,000 shares of common stock for prior services rendered. The Company recognized $10,000 of share based compensation expense during 2011 in relation to this transaction based on the closing stock price on date of settlement. In addition, during 2011, the Company issued 41,928 shares of commons stock for total consideration of approximately $4,000. On February 17, 2012, the Board authorized the issuance of up to 2,500,000 shares of common stocks to be purchased at $0.15 per share through February 29, 2012. On February 29, 2012, the Board amended the resolution to authorize the issuance of up to 3,000,000 shares of common stock to be purchased at $0.15 per share through March 23, 2012. A total of 2,590,000 shares were purchased through March 23, 2012 for gross proceeds of $388,500. In addition, for every three shares of common stock purchased, the purchasers received one warrant to purchase common stock at $0.25 per share. A total of 863,333 warrants were issued. The warrants expire three years after their issuance date. The warrants have a weighted average fair value of $0.32. The fair value of the warrant has been estimated on the date of grant using a Black-Scholes Pricing Model with the following assumptions: Risk-free interest rate Expected dividend yield Expected life Expected volatility Exercise price

0.36% – 0.58% 0.00 3.00 years 410% – 418% $0.25

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 7 - Capital transactions (continued) The fair value of the warrants was approximately $274,000, and was recorded as an increase and corresponding decrease to additional paid-in capital for the year ended December 31, 2012. During the year ended December 31, 2011, the Company entered into a three year corporate public relations consulting agreement where the consultants received compensation in the form of 500,000 shares of stock, 500,000 warrants with an exercise price of $0.10 that expire 14 months from the date of the agreement, and 1,000,000 warrants with an exercise price of $0.50 that expire 24 months from the date of the agreement. On August 15, 2012, the Company entered into a settlement agreement with the consultants to terminate the consulting agreement. As part of the agreement, the consultants maintained the 500,000 shares of common stock previously issued and all warrants previously issued were terminated. In addition, the consultants received 250,000 new warrants with an exercise price of $0.10 that expire 3 years from the date of the agreement. The 500,000 shares of common stock issued were originally valued at the fair market value of the stock on the date of grant. The total value of the stock was approximately $65,000 and the expense was being recognized over the consulting period. Upon termination, approximately $23,000 was expensed during the year ended December 31, 2012. As noted in the previous paragraph, on August 15, 2012, the Company terminated the consulting agreement through a settlement agreement with these consultants and concurrently entered into a new consultant agreement with one of these consultants. Therefore, any unrecognized expense related to common stock issued was immediately recognized upon termination of services with the one consultant and expense related to the other consultant will be recognized over the remaining consulting term. For the years ended December 31, 2012 and 2011, the Company recorded approximately $38,800 and $9,000, respectively related to the issuance of these shares, and the Company has remaining unrecognized expense of approximately $17,000, which will be recognized over the next 19 months. The Company used the Black Scholes model to value the 1,500,000 warrants granted using under the consulting agreement. The weighted average grant date fair value of these warrants was $0.06. For the years ended December 31, 2012 and 2011, the Company recorded approximately $160,000 and $9,600, respectively, of stock based compensation expense to fully expense the 500,000 warrants issued to the consultants under the consulting agreement. As of December 31, 2012, there was no unrecognized compensation costs related to these warrant grants. For years ended December 31, 2012 and 2011, the Company recorded approximately $47,000 and $12,400, respectively, of stock based compensation expense to fully expense the 1,000,000 warrants issued to the consultants under the consulting agreement. As of December 31, 2012, there was no unrecognized compensation costs related to these warrant grants. For the year ended December 31, 2012 the Company recorded approximately $62,700 of stock based compensation expense for the 250,000 warrants issued to the consultants under the settlement agreement. The expense related to the consultant no longer performing services was recognized immediately. As of December 31, 2012, there was approximately $47,300 of total unrecognized compensation costs related to these warrant grants which will be recognized over the remaining 31.5 months. On October 24, 2012, 125,000 warrants issued to one of the consultants were exercised for total consideration of $12,500. On August 15, 2012, the Company entered into a three year corporate public relations consulting agreement with 1 of the previous consultants. As part of the agreement, the consultant will receive a monthly consulting fee of $4,000, a commission of $7.50 for each DermaWandTM sold plus 5% of the net revenue from other products sold on a third party website, and 125,000 additional warrants with an exercise price of $0.30 that expires 36 months from the date of the agreement. For years ended December 31, 2012, the Company recorded approximately $7,700 of stock based compensation expense for the 125,000 warrants issued to the consultant under the new consulting agreement. As of December 31, 2012, there was approximately $47,300 of total unrecognized compensation costs related to these warrant grants which will be recognized over the remaining 31.5 months.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 7 - Capital transactions (continued) Due to the fact that any warrants issued to the consultant under the new consulting agreement are nonforfeitable, the 125,000 warrants with an exercise price of $0.10 and a fair value of $55,000, and the 125,000 warrants with an exercise price of $0.30 and a fair value of $55,000, which aggregated $110,000, were recorded in equity and were capitalized on the balance sheet in prepaid expenses and other current assets and will be expensed over the consultant term. For the year ended December 31, 2012, approximately $15,000 was expensed and included in stock based compensation expense in our accompanying consolidated financial statements. Approximately $94,000 is capitalized and approximately $36,000 and $58,000 is reflected as current and noncurrent assets, respectively, in our accompanying consolidated balance sheet. At December 31, 2012, the following warrants were outstanding:

Holder

Warrants Outstanding

Exercise Price

Expiration Date

Shareholders in 2007 placement (modified 2010)

390,084

$0.10 - $3.00

December 2013

Shareholders in February 2012 private placement

863,333

$0.25

February – March 2015

Consultant

125,000

$0.10

August 2015

Consultant

125,000

$0.30

August 2015

Balance at December 31, 2012

1,503,417

The warrants have a weighted average fair value of $0.44. The fair value of the new warrants has been estimated on the date of grant using a Black-Scholes Pricing Model with the following assumptions: Risk-free interest rate Expected dividend yield Expected life Expected volatility Exercise price

0.31 – 0.42% 0 3.00 years 401% $0.10 – $0.30

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 8 - Basic and diluted earnings (loss) per share ASC 260, “Earnings Per Share” requires presentation of basic earnings per share and dilutive earnings per share. The computation of basic earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share gives the effect to all dilutive potential common shares outstanding during the period. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect. For the purposes of obtaining future capital to finance the Companies’ operations and to fund future expansion of the Companies’ Direct Response Television campaign certain shareholders are able to purchase additional stock with stock warrants attached to common stock issued. At December 31, 2012, there were 1,503,417 warrants outstanding and exercisable. The warrants are exercisable between $0.10 and $3.00 per share expiring through August 2015. At December 31, 2012 there were 4,880,000 stock options outstanding and 1,033,334 were vested and exercisable at an exercise price of $0.09. The following securities were not involved in the computation of diluted net loss per share as their effect would have been antidilutive: December 31 2012 2011 Options to purchase common stock 4,880,000 1,900,000 Warrants to purchase common stock 1,503,417 1,890,084 Convertible note payable from shareholder 1,332,291 -

The computations for basic and fully diluted earnings per share are as follows:

For the year ended December 31, 2012:

Loss (Numerator)

Weighted Average Shares (Denominator)

Per Share Amount

Basic and diluted loss per share Loss to common shareholders

For the year ended December 31, 2011:

$ (550,448)

Loss (Numerator)

20,110,242

Weighted Average Shares (Denominator)

$

(0.03)

Per Share Amount

Basic and diluted loss per share Loss to common shareholders

$

(485,892)

17,145,925 $

(0.03)

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 9 - Income taxes The income tax expense for the years ended December 31, 2012 and 2011 consist of the following: Current Federal State Total

$

2012 40,000 8,600

2011 $

-

$

48,600

$

-

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company has provided a full valuation allowance on the net deferred tax asset because of uncertainty regarding its realization. This asset primarily consists of net operating losses. For the most part, the Company has experienced operating losses since inception. Therefore the Company has accumulated approximately $2,527,000 and $420,000 of net operating loss carryforwards for federal and state purposes, respectively, which expire twenty years from the time of incurrence for federal purposes. Expiration for the state net operating carryforwards may vary based on different state rules. Significant components of the Company’s deferred tax assets (liabilities) are approximately as follows as of December 31, 2012 and 2011:

Net operating loss Accrued returns and allowances Accumulated depreciation Stock options Deferred income Other Total deferred tax assets Valuation allowance Net deferred tax assets

$

$ $

2012 901,000 334,000 (5,000) 390,000 158,000 207,000 1,985,000 (1,985,000) -

2011 1,948,000 21,000 (3,000) 70,000 10,000 107,000 $ 2,153,000 (2,153,000) $ $

A valuation allowance for all of our net deferred tax assets has been provided as we are unable to determine, at this time, that the generation of future taxable income against which the net operating loss (“NOL”) and carryforwards could be used can be predicted to be more likely than not. Net change to our valuation allowance for the year ended December 31, 2012 was a decrease of $168,000. Due to the change in ownership provisions of the Internal Revenue Code, the availability of the Company’s net operating loss carry forwards may be subject to annual limitations against taxable income in future periods, which could substantially limit the eventual utilization of such carry forwards. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership and therefore no determination has been made whether the net operating loss carry forward is subject to any Internal Revenue Code Section 382 limitation. To the extent there is a limitation, there would be a reduction in the deferred tax asset with an offsetting reduction in the valuation allowance. During 2012, the Company filed income tax returns from inception, 1998, through 2011; therefore, the statute for all years remains open and any of these years could potentially be audited. The Company’s policy is to recognize interest and penalties related to tax matters in general and administrative expenses in the Consolidated Statements of Operations. At December 31, 2012 and 2011, the Company had approximately $270,000, respectively accrued for various tax penalties.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 9 - Income taxes (continued) A reconciliation between the Company’s effective tax rate and the federal statutory rate for the years ended December 31, 2012 and 2011, is as follows: 2012 Federal rate State tax rate Effect of permanent differences Change in valuation allowance Effective tax rate

2011

34.00% 5.95% 5.03% (32.18)% 12.80%

34.00% 5.95% 3.30% (43.25)% 0.00%

Note 10 - Segment reporting The Company operates in one industry segment and is engaged in the selling of various consumer products primarily through direct marketing infomercials. The Company evaluates performance and allocates resources based on several factors, of which the primary financial measure is operating income by geographic area. Operating expenses are primarily prorated based on the relationship between domestic and international sales. Information with respect to the Company’s operating income (loss) by geographic area is as follows: For the year ended December 31, 2012 Domestic International Totals

NET SALES

$ 19,152,585 $

COST OF SALES

3,767,801 $ 22,920,386

For the year ended December 31, 2011 Domestic International Totals

$

1,802,921 $

1,299,120 $ 3,102,041

5,642,849

1,837,939

7,480,788

966,811

601,065

1,567,876

Gross profit

13,509,736

1,929,862

15,439,598

836,110

698,055

1,534,165

Operating expenses: General and administrative Selling and marketing Total operating expenses

4,160,082 11,521,033 15,681,115

186,970 47,238 234,208

4,347,052 11,568,271 15,915,323

1,207,424 634,586 1,842,010

124,584 53,223 177,807

1,332,008 687,809 2,019,817

Operating income (loss)

$

(2,171,379) $

1,695,654 $

(475,725) $ (1,005,900) $

520,248 $

(485,652)

Selected balance sheet information by segment is presented in the following table as of December 31:

Total Assets Domestic International

$

2012 4,414,775 25,453

$

2011 834,965 29,317

Total Assets

$

4,440,228

$

864,282

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2012 and 2011 Note 11 – Subsequent events In January 2013, the Company received a letter from a California law firm alleging certain violations of the California Consumer Legal Remedies Act in connection with the Company’s advertising and marketing of its DermaWandTM product. The law firm purported to represent a class of plaintiffs and invited us to contact them in order to amicably resolve the matter. We have consulted with counsel and have presented to the California law firm the substantiation for our advertising and marketing claims. While they have acknowledged a good portion of our substantiation, the law firm continues to press for a settlement under threat of litigation. The plaintiff is currently asking for approximately $325,000 to settle the suit. We believe we would prevail if the California law firm were to bring suit. However, while the cost of settling the matter would likely be material, we also believe that the cost of litigation may exceed the amount for which the matter can be settled. Therefore, while it may take substantial time, we are continuing settlement negotiations. On February 6, 2013, the Company entered into a new lease with the landlord of the Wayne office complex of its executive office. As of April 2013 the executive office will move into a larger space within the same complex. The new lease is for three years, commencing on April 1, 2013. The new office will be 2,516 square feet, compared to the current office space which is approximately 1,700 square feet. The monthly lease payment for the first year of the new lease will be approximately $4,036. On March 8, 2013, Stephen Jarvis exercised 166,666 stock options; Kelvin Claney exercised 399,999 stock options; Richard Ransom exercised 366,666 stock options previously issued for total gross proceeds of approximately $91,200. On March 11, 2013, the Board of Directors appointed a new director of the Company. William N. Kinnear will serve as a director until the later of the next annual meeting of the shareholders of the Company or until his successor is duly elected. Compensation for his services as a director is an annual stipend of $4,000 per year and options to purchase 50,000 shares of the Company’s common stock at an exercise price of $.025 per share. In 2013, the Company established a 401k retirement plan for employees to contribute. Currently, the Company is not providing for matching contributions.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of International Commercial Television, Inc. We have audited the accompanying consolidated balance sheet of International Commercial Television, Inc. and Subsidiary (collectively, the “Company”) as of December 31, 2010, and the related consolidated statements of operations, shareholders’ deficit, and cash flows for the year ended December 31, 2010. The financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of International Commercial Television, Inc. and Subsidiary as of December 31, 2010, and the consolidated results of their operations and their cash flows for the year ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company’s recurring losses from operations and negative cash flows from operations raise substantial doubt about its ability to continue as a going concern. Management’s plans considering these matters are also described in Note 1 to the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/EisnerAmper, LLP Edison, New Jersey March 30, 2012

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2010 2010 ASSETS CURRENT ASSETS: Cash and cash equivalents Restricted cash Accounts receivable, net of doubtful account reserves of $7,000 Inventories, net Prepaid expenses and other current assets

$

158,482 2,060 75,805 526,821 46,674

Total current assets

809,842

Furniture and equipment Less accumulated depreciation Furniture and equipment, net

183,117 148,776 34,341

Total assets

$

844,183

LIABILITIES AND SHAREHOLDERS’ DEFICIT CURRENT LIABILITIES: Note payable – short term Accounts payable and accrued liabilities Accounts payable - related parties Severance payable - short term Deferred revenue Tax penalties payable Note payable to shareholder

$

Total current liabilities

621,687 30,859 153,333 32,698 260,000 590,723 1,689,300

Long-term severance payable Long-term note payable Total long-term liabilities

110,000 110,000

COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ DEFICIT: Preferred stock 20,000,000 shares authorized, no shares issued and outstanding

-

Common stock, $0.001 par value, 100,000,000 shares authorized, 15,547,179 shares issued and outstanding as of December 31, 2010 Additional paid-in-capital Accumulated deficit

5,448 5,257,293 (6,217,858)

Total shareholders’ deficit

(955,117)

Total liabilities and shareholders’ deficit See accompanying notes to consolidated financial statements.

$

844,183

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31 2010 2010 NET SALES

$ 3,903,219

COST OF SALES

2,102,448

GROSS PROFIT

1,800,771

OPERATING EXPENSES: General and administrative Selling and marketing

2,197,927 399,175

Total operating expenses

2,597,102

OPERATING LOSS

(796,331)

OTHER (EXPENSES) INCOME, NET: Interest (expense) income, net Total other (expenses) income, net

418 418

NET LOSS

$ (795,913)

BASIC AND DILUTED NET LOSS PER SHARE

$

See accompanying notes to consolidated financial statements.

(0.05)

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF SHAREHOLDERS’ DEFICIT FOR THE YEAR ENDED DECEMBER 31, 2010 Common Stock $0.001 par value Shares Amount

Balance at January 1, 2010

14,505,912

$

Additional Paid-In Capital

4,407

Accumulated Deficit

$ 5,126,763 $ (5,421,945)

Totals

$ (290,775)

Net loss

-

-

-

(795,913)

Share based compensation

-

-

27,444

-

27,444

1,041,267

1,041

103,086

-

104,127

Exercise of warrants Balance at December 31, 2010

15,547,179

$

5,448

$ 5,257,293 $ (6,217,858)

See accompanying notes to consolidated financial statements.

(795,913)

$

(955,117)

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2010 2010 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: Depreciation Bad debt expense Stock based compensation Change in assets and liabilities Accounts receivable Inventories Prepaid expenses and other current assets Accounts payable and accrued liabilities Severance payable Tax penalties

$ (795,913) 14,339 27,444 16,743 488,088 2,902 (243,606) 263,333 10,000

Deferred revenue Net cash and cash equivalents used in operating activities

(102,702) (319,372)

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of warrants Proceeds from issuance of common stock Proceeds from note payable Advances from related parties Payments to related parties

104,127 2,524 (3,232)

Net cash and cash equivalents provided by financing activities

103,419

NET DECREASE IN CASH AND CASH EQUIVALENTS

(215,953)

CASH AND CASH EQUIVALENTS, beginning of the year

376,495

CASH AND CASH EQUIVALENTS, end of the year

See accompanying notes to consolidated financial statements.

$

160,542

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 1 - Organization, Business of the Company and Liquidity Organization and Nature of Operations International Commercial Television Inc., (the “Company” or “ICTV”) was organized under the laws of the State of Nevada on June 25, 1998. Strategic Media Marketing Corp. (“SMM”), a wholly owned subsidiary, was incorporated in the Province of British Columbia on February 11, 2003 and has a December 31 fiscal year-end. Effective February 7, 2011, SMM offices were closed down and the subsidiary was dissolved. Operations performed by SMM are now being managed out of our office. The Company sells various consumer products. The products are primarily marketed and sold throughout the United States and internationally via infomercials. Although our companies are incorporated in Nevada and New Zealand, a substantial portion of operations are currently run from the Wayne, Pennsylvania office. Liquidity and Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company generated negative cash flows from operating activities in the past fiscal year of approximately $319,000, and the Company, for the most part, has experienced recurring losses from operations. The Company had negative working capital of approximately $879,000 and an accumulated deficit of approximately $6,218,000 as of December 31, 2010. Although we currently sell products through infomercials, the goal of our business plan is to use the brand awareness we create in our infomercials so that we can sell the products featured in our infomercials, along with related families of products, under distinct brand names in traditional retail stores. Our goal is to have these families of products sold in the traditional retail environment in shelf-space dedicated to the product category. We are developing the infrastructure to create these brands of products so that we can implement our business plan. There is no guarantee that the Company will be successful in bringing our products into the traditional retail environment. If the Company is unsuccessful in achieving this goal, the Company will be required to raise additional capital to meet its working capital needs. If the Company is unsuccessful in completing additional financings, it will not be able to meet its working capital needs or execute its business plan. In such case the Company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability of the carrying amount of recorded assets or the amount of liabilities that might result should the Company be unable to continue as a going concern. Note 2 - Summary of significant accounting policies Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary SMM. All significant inter-company transactions and balances have been eliminated.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 2 - Summary of significant accounting policies (continued) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles of the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates. Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, include cash and trade receivables. The Company maintains cash in bank accounts that, at times, may exceed federally insured limits. As of December 31, 2010, the Company did not exceed the federally insured limit in its investment savings. The Company has not experienced any losses and believes it is not exposed to any significant risks on its cash in bank accounts. As of December 31, 2010, 4% of the Company’s accounts receivable were due from various individual customers to whom our products had been sold directly via Direct Response Television; the remaining 96% of the Company’s accounts receivable were due from two and three wholesale infomercial operators, respectively. Major customers are considered to be those who accounted for more than 10% of net sales. Fair value of financial instruments Fair value estimates, assumptions and methods used to estimate fair value of the Company’s financial instruments are made in accordance with the requirements of ASC 825-10, “Disclosures about Fair Value of Financial Instruments.” The Company has used available information to derive its estimates. However, because these estimates are made as of a specific point in time, they are not necessarily indicative of amounts the Company could realize currently. The use of different assumptions or estimating methods may have a material effect on the estimated fair value amounts. The carrying values of financial instruments such as cash, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to the short settlement period for these instruments. It is not practicable to estimate the fair value of the Note Payable to Shareholder due to its related party nature. Cash and cash equivalents The Company considers all unrestricted highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted Cash Transfirst ePayment Services (“Transfirst”), ICTV’s credit card processing vendor for VISA and Mastercard transactions in the United States, maintains a reserve fund within our processing account to cover all fees, charges, and expenses due them, including those estimated for possible customer charge backs. These reserves are updated periodically by Transfirst and maintained for a rolling 180 days of activity. Based upon established levels of risk, this normally represents approximately 2% of transaction volume for the period, and is considered as “Restricted Cash”. At December 31, 2010 the amount of Transfirst reserves were approximately $2,000. Foreign currency transactions Transactions entered into by the Company in currencies other than its local currency, are recorded in its local currency and any changes in currency exchange rates that occur from the initiation of a transaction until settled are recorded as foreign currency gains or losses in the Consolidated Statements of Operations.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 2 - Summary of significant accounting policies (continued) Accounts receivable Accounts receivable are recorded net of allowances for returns and doubtful accounts of approximately $7,000 for the year ended December 31, 2010. The allowances are calculated based on historical customer returns and bad debts. In addition to reserves for returns on accounts receivable, an accrual is made against returns for product that have been sold to customer and had cash collections, while the customer still has the right to return the product. The amounts of these accruals included in accounts payable and accrued liabilities in our Consolidated Balance Sheets were approximately $9,000 at December 31, 2010. Inventories Inventories consist primarily of products held for resale, and are valued at the lower of cost (first-in, first-out method) or market. The Company adjusts inventory for estimated obsolescence when necessary based upon demand and market conditions. The Company has not recorded any inventory of consigned product as of December 31, 2010 that has been shipped to customers under the 30-day free trial period for which the trial period has not expired and as such the customer has not accepted the product. Furniture and equipment Furniture and equipment are carried at cost and depreciation is computed over the estimated useful lives of the individual assets ranging from 3 to 7 years. Depreciation is computed using the straight-line method. The related cost and accumulated depreciation of assets retired or otherwise disposed of are removed from the accounts and the resultant gain or loss is reflected in earnings. Maintenance and repairs are expensed currently while major renewals and betterments are capitalized. Depreciation expense amounted to approximately $14,000 for the year ended December 31, 2010. Impairment of Long-Lived Assets In accordance with ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”, long-lived assets are reviewed for impairment when circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future net cash flows estimated by the Company to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are recorded as held for sale at the lower of carrying value or estimated net realizable value. No impairment losses were identified or recorded in the fiscal year ended December 31, 2010.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 2 - Summary of significant accounting policies (continued) Revenue recognition For our domestic direct response television sales generated by our infomercials, product sales revenue is recognized when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured. The Company’s revenues in the Statement of Operations are net of sales taxes. The Company offers a 30-day risk-free trial as one of its payment options. Revenue on the 30-day risk-free trial sales is not recognized until customer acceptance and collectability are assured which we determine to be when the trial period ends. If the riskfree trial expires without action by the customer, product is determined to be accepted by the customer and revenue is recorded. Revenue for items purchased without the 30-day free trial is recognized upon shipment of the product to the customer and collectability is assured. The Company entered into an exclusive distribution agreement with Allstar Marketing (“Allstar”) in May 2009. As part of the agreement with Allstar, the Company received non-refundable royalty advances which were booked as deferred revenue until Allstar sold DermaWands. Allstar was required to provide ICTV with monthly royalty statements per the contract within 30 days of the end of each month. The Company recorded revenue in the month goods were sold per the Allstar royalty statements. In March 2010, the Allstar agreement was terminated and the Company retained the exclusive distribution rights for the Derma Wand. Upon termination of the contract, the Company recognized the remaining non-refundable royalty advances that were previously booked in deferred revenue. The Company recognized $94,000 in revenue related to the Allstar agreement in the year ended December 31, 2010. Revenue related to international wholesale customers is recorded at gross amounts with a corresponding charge to cost of sales upon shipment. The Company has a return policy whereby the customer can return any product received within 30 days of receipt for a full refund excluding shipping and handling. However, historically the Company has accepted returns past 30 days of receipt. The Company provides an allowance for returns based upon past experience. All significant returns for the years presented have been offset against gross sales. Shipping and handling Amounts billed to customers for shipping and handling are included in revenue: shipping and handling revenue approximated $13,000 for the year ended December 31, 2010. Shipping and handling costs are included in cost of sales. Shipping and handling costs approximated $227,000 for the year ended December 31, 2010. Research and development Research and development costs are expensed as incurred and are included in selling and marketing expense in the accompanying consolidated financial statements. Research and development costs primarily consist of efforts to discover and develop new products and the testing and development of direct-response advertising related to these products. Media and production costs Media and production costs are expensed as incurred and are included in selling and marketing expense in the accompanying consolidated financial statements. The Company incurred approximately $11,000 in such costs for the year ended December 31, 2010.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 2 - Summary of significant accounting policies (continued) Income taxes In preparing our consolidated financial statements, we make estimates of our current tax exposure and temporary differences resulting from timing differences for reporting items for book and tax purposes. We recognize deferred taxes by the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In consideration of our accumulated losses and lack of historical ability to generate taxable income to utilize our deferred tax assets, we have estimated that we will not be able to realize any benefit from our temporary differences and have recorded a full valuation allowance. If we become profitable in the future at levels which cause management to conclude that it is more likely than not that we will realize all or a portion of the net operating loss carry-forward, we would immediately record the estimated net realized value of the deferred tax asset at that time and would then provide for income taxes at a rate equal to our combined federal and state effective rates, which would be approximately 40% under current tax laws. Subsequent revisions to the estimated net realizable value of the deferred tax asset could cause our provision for income taxes to vary significantly from period to period. The Company’s policy is to recognize interest and penalties related to tax matters in general and administrative expenses in the Consolidated Statements of Operations. Stock options The Company has a 2001 Stock Option Plan (“Plan”). The purpose of this Plan is to provide additional incentives to key employees, officers, directors and consultants of the Company and its subsidiaries in order to help attract and retain the best available personnel for positions of responsibility and otherwise promoting the success of the business activities. It is intended that options issued under this Plan constitute nonqualified stock options. The general terms of awards under the option plan are that 10% will vest every 6 months. The maximum term of options granted is 10 years and the number of shares authorized for grants of options is 3,000,000. The Company uses ASC 718, Share-Based Payments, to account for stock-based compensation. The Company recognizes compensation expense in an amount equal to the fair value of share-based payments such as stock options granted to employees over the requisite vesting period of the awards. Stock options granted to non-employees are remeasured at each reporting period. For the year ended December 31, 2010, the Company recorded approximately $7,000 in stock compensation expense related to vesting of options previously granted.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 2 - Summary of significant accounting policies (continued) Stock options (continued) The following is a summary of stock options outstanding under the existing stock option plan for the year ended December 31, 2010:

Number of Shares NonEmployee Employee

Weighted Average Exercise Price

Totals

Balance, January 1, 2010 Granted Exercised Expired

-

817,000 (160,000)

817,000 (160,000)

$

1.68 0.36

Balance, December 31, 2010

-

657,000

657,000

$

2.00

Of the stock options currently outstanding, 657,000 options are currently vested and exercisable. The weighted average exercise price of these options was $2.00. These options expire in September 2011. The aggregate intrinsic value for options outstanding and exercisable at December 31, 2010 was immaterial. The following assumptions are used in the Black-Scholes option pricing model for the year ended December 31, 2010 to value the stock options outstanding: 2010 Risk-free interest rate Expected dividend yield Expected life Expected volatility Weighted average grant date fair value

0.04% 0.00 0.85 years 411.21% $0.23

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 2 - Summary of significant accounting policies (continued) Stock options (continued) During 2010, 250,000 options were granted to a consultant for services rendered. For the year ended December 31, 2010, the Company recorded approximately $20,000 in stock compensation expense. The exercise price for the 150,000 and 100,000 options granted was $0.25 and $0.075 per share respectively and the options will be fully vested in approximately 2.3 years. 2010 Risk-free interest rate Expected dividend yield Expected life Expected volatility Weighted average grant date fair value

0.98% 0.00 3.00 years 442.25% $0.08

Note 3 - Commitments and contingencies Leases As of December 31, 2010, the Company had active leases related to the office space rented in Wayne, Pennsylvania and Bainbridge Island, Washington. Total rent expense incurred during 2010 totaled approximately $57,000. The schedule below details the future financial obligations under the remaining two leases. TOTAL 2011 2012 2013 2014 2015 OBLIGATION Bainbridge Island $ 5,535 $ - $ - $ - $ - $ 5,535 Wayne - Corporate HQ

$

33,150 $

8,075 $

-

$

-

$

-

$

41,225

Total Lease Obligations

$

38,685 $

8,075 $

-

$

-

$

-

$

46,760

DermaWandTM On October 15, 1999, Windowshoppe.com Limited (“WSL”) entered into an endorsement agreement with an individual for her appearance in a DermaWand infomercial. On July 11, 2001, the agreement was amended to include a royalty payment for each unit sold internationally, up to a maximum royalty payment for any one calendar quarter. Further, if the infomercial is aired in the United States, then the airing fee will revert back to the same flat rate per calendar quarter. The initial term of the agreement was five years starting October 15, 1999. The agreement automatically and continually renews for successive additional five-year terms unless R.J.M.Ventures (“RJML”) is in material default and is notified in writing at least thirty days prior to the end of the then current term that the individual intends to terminate the agreement. The Company assumed any and all responsibilities associated with the license and reconveyance agreements dated April 1, 2000 entered into by the Company and WSL and RJML. On January 5, 2001, WSL entered into an agreement with Omega 5. WSL shall have worldwide nonexclusive rights to manufacture, market and distribute DermaWandTM. In consideration of these rights, WSL shall pay a monthly payment for each unit sold of DermaWand depending on various scenarios as defined in the agreement. The agreement is silent as to its duration.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 3 - Commitments and contingencies (Continued) During 2007, the Company entered into an exclusive license agreement with Omega 5 wherein ICTV was assigned all of the trademarks and all of the patents and pending patents relating to the DermaWand TM and was granted exclusive license with respect to the commercial rights to the DermaWandTM. This agreement was amended and superseded on July 28, 2010. The geographical scope of the license granted is the entire world consisting of the United States of America and all of the rest of the world. The license remains exclusive to ICTV provided ICTV pays to Omega 5 a minimum annual payment of $250,000 in the initial 18 month term of the agreement and in each succeeding one-year period. If in any calendar year the payments made by the Company to Omega exceed the annual minimum of $250,000, then the amount in excess of the annual minimum or “rollover amount” will be credited towards the Company’s annual minimum for the immediately following calendar year only. If the Company fails to meet the minimum requirements as outlined in the agreement, it may be forced to assign the trademarks and patents back to Omega 5. After the initial term, the exclusive license granted shall renew automatically for a three year period, and thereafter automatically at three-year intervals. The amount of expenses incurred for sales of the DermaWand TM were approximately $403,000 for the year ended December 31, 2010. Product Liability Insurance For certain products, the Company was (and is) listed as an additional insured party under the product manufacturers’ insurance policy. On February 20, 2007, the Company purchased its own liability insurance to cover all direct to consumer product sales in the US and worldwide, which expires on April 20, 2012. At present, management is not aware of any claims against the Company for any products sold. Note 4 – Severance payable In September 2010 the Company entered into a severance agreement with a former consultant. Under the severance agreement, the consultant will be paid $270,000 over a 27 month period in increments of $10,000 per month beginning in September 2010 and continuing through November 2012. The Company recorded the $270,000 as a General and Administrative expense in the three months ended September 30, 2010. The severance payable balance at December 31, 2010 is $230,000 of which $120,000 is current and $110,000 is long-term. In October 2010, the Company terminated the employment of its Chief Operating Officer and committed to paying a four month severance. The severance payable balance at December 31, 2010 is $33,333, all of which is a current liability. Note 5 - Related party transactions The Company has received short-term advances from a shareholder. These advances amounted to approximately $2,500 during the year ended December 31, 2010. The advances are offset by payments which amounted to approximately $3,200 during the year ended December 31, 2010. These advances are non-interest bearing and without specific terms of repayment. These advances are included in accounts payable – related parties, on the accompanying Consolidated Balance Sheets. The Company has a note payable to a shareholder in the amount of $590,723. This loan is interest-free and has no specific terms of repayment.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 6 - Capital transactions In December 2007 we issued a total of 1,600,000 shares of our common stock and an equal number of warrants in a private placement of common stock and warrants. In the purchase agreement, the investors bought their stock at $2.20 per share, received warrants to purchase an equal number of shares at $3.00 per share, and were granted certain anti-dilution rights, which would essentially re-price their purchase if we later sold shares at a lower price. At our current stock price, the anti-dilution provisions essentially precluded our raising capital through sales of our stock. As a result, the Company requested that the investors waive their anti-dilution rights. One of the requirements for us to obtain the requested waivers was to reduce the warrant exercise price to more closely reflect our current stock price. The result of our negotiations with the investors was a reduction in the warrant exercise price to $.10 per share for those warrants exercised promptly, and a reduction in the warrant exercise price to $.40 per share for most of the remaining warrants. On November 5, 2010, the Company’s Board of Directors approved a resolution which modified the terms of the 1,600,000 warrants. The modified terms were (i) waiver of anti-dilution rights, (ii) modification of the exercise price of the warrants as defined in the agreement, and (iii) extension of expiration date to December 1, 2013. The Company accounted for this change of warrants as a modification of the warrants during the year ended December 31, 2010. The modification of warrants, an equity instrument, resulted in a transfer of value to the holders of the instrument, thus as such this transfer of value has been characterized as a deemed dividend to shareholders. The Company valued the deemed dividend as the incremental fair value of modified warrants compared to the fair value of the old warrants immediately prior to modification. The weighted average grant date fair value of the warrants after modification was $0.05 per share. The fair value of the warrants prior to modification was insignificant, therefore a deemed dividend to the shareholder was recorded for approximately $77,000 to account for the incremental fair value of the warrant modification, which is reflected as an increase and corresponding decrease in additional paid in capital during the year ended December 31, 2010.

The following assumptions were used in determining the grant date fair value of the warrants: 2010 Risk-free interest rate Expected dividend yield Expected life Expected volatility

0.60% 0.00 3.00 years 365.00%

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010

Note 8 - Basic and diluted earnings per share ASC 260, “Earnings Per Share” requires presentation of basic earnings per share and dilutive earnings per share. The computation of basic earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share gives the effect to all dilutive potential common shares outstanding during the period. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect. For the purposes of obtaining future capital to finance the Companies’ operations and to fund future expansion of the Companies’ Direct Response Television campaign certain shareholders are able to purchase additional stock with stock warrants attached to common stock issued. At December 31, 2010, there were 558,733 warrants outstanding and exercisable. The warrants are exercisable between $0.10 and $3.00 per share expiring December 3, 2013. At December 31, 2010 there were 907,000 stock options outstanding and 657,000 were vested and exercisable at an exercise price of $2.00. The following securities were not involved in the computation of diluted net loss per share as their effect would have been antidilutive: December 31, 2010 Options to purchase common stock 907,000 Warrants to purchase common stock 558,733 The computations for basic and fully diluted earnings per share are as follows: Weighted Average Shares

For the year ended December 31, 2010:

Income/(Loss) (Numerator) (Denominator)

Per Share Amount

Basic and diluted loss per share Loss to common shareholders

$

(795,913)

14,508,765 $

(0.05)

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 9 - Income taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company has provided a full valuation allowance on the net deferred tax asset because of uncertainty regarding its realization. This asset primarily consists of net operating losses. For the most part, the Company has experienced operating losses since inception. Therefore the Company has accumulated approximately $4,900,000 and $4,300,000 of net operating loss carryforwards for federal and state purposes, respectively, which expire twenty years from the time of incurrence for federal purposes. Expiration for the state net operating carryforwards may vary based on different state rules. Significant components of the Company’s deferred tax assets (liabilities) are approximately as follows as of December 31, 2010:

Net operating loss Accrued returns and allowances Accumulated depreciation Other Total deferred tax assets Valuation allowance Net deferred tax assets

2010 1,802,000 4,000 (5,000) 165,000 $ 1,966,000 (1,966,000) $ $

A valuation allowance for all of our net deferred tax assets has been provided as we are unable to determine, at this time, that the generation of future taxable income against which the net operating loss (“NOL”) and carryforwards could be used can be predicted to be more likely than not. Net change to our valuation allowance for the year ended December 31, 2010 was an increase of $235,000. Due to the change in ownership provisions of the Internal Revenue Code, the availability of the Company’s net operating loss carry forwards may be subject to annual limitations against taxable income in future periods, which could substantially limit the eventual utilization of such carry forwards. The Company has not analyzed the historical or potential impact of its equity financings on beneficial ownership and therefore no determination has been made whether the net operating loss carry forward is subject to any Internal Revenue Code Section 382 limitation. To the extent there is a limitation, there would be a reduction in the deferred tax asset with an offsetting reduction in the valuation allowance. Current United States Federal tax law limits the use of net operating loss carry forwards after there has been a substantial change in ownership, as defined in Internal Revenue code Section 382, during a three year period. The Company has not evaluated whether a change in ownership has occurred over the last three years. The Company’s use of net operating losses for United States and state tax purposes may be limited under the Internal Revenue Code if it is determined that a change in ownership has occurred. The Company has not filed income tax returns since inception; therefore, the statute for all years remains open and any of these years could potentially be audited. The Company’s policy is to recognize interest and penalties related to tax matters in general and administrative expenses in the Consolidated Statements of Operations. At December 31, 2010, the Company had approximately $260,000 accrued for various tax penalties.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 10 - Segment reporting The Company operates in one industry segment and is engaged in the selling of various consumer products primarily through direct marketing infomercials. The Company evaluates performance and allocates resources based on several factors, of which the primary financial measure is operating income by geographic area. Operating expenses are primarily prorated based on the relationship between domestic and international sales. Information with respect to the Company’s operating income by geographic area is as follows: For the year ended December 31, 2010 Domestic International Totals

NET SALES

COST OF SALES Gross profit Operating expenses: General and administrative Selling and marketing Total operating expenses Operating income (loss)

$

1,898,174 $

2,005,045 $ 3,903,219

1,290,420

812,028

2,102,448

607,754

1,193,017

1,800,771

1,979,754 339,496 2,319,250

218,173 59,679 277,852

2,197,927 399,175 2,597,102

$ (1,711,496) $

915,165 $ (796,331)

Selected balance sheet information by segment is presented in the following table as of December 31:

Total Assets Domestic International

$

2010 810,252 33,931

Total Assets

$

844,183

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2010 Note 11 – Subsequent events On March 8, 2011, we issued an 8-K detailing the issuance of a total of 2,350,000 options to purchase common stock (the “Options”) to a total of nine directors, officers, employees and consultants in order to provide an additional incentive for their continuing services to the Company. The options were issued pursuant to our 2001 Stock Option Plan, which was approved by our shareholders on February 26, 2001. During March 2011, the Company acquired from one of its shareholders its equity interest in Better Blocks International Limited (“BBI”), a related party, consisting primarily of intellectual properties in exchange for 500,000 shares of the Company’s common stock.

Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of International Commercial Television, Inc. We have audited the accompanying consolidated balance sheets of International Commercial Television, Inc. and Subsidiary (collectively, the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, shareholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2013. The financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of International Commercial Television, Inc. and Subsidiary as of December 31, 2013 and 2012, and the consolidated results of their operations and their cash flows for each of the years in the two-year period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America. /s/EisnerAmper, LLP Jenkintown, Pennsylvania March 27, 2014

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2013 and 2012 2013

2012

ASSETS CURRENT ASSETS: Cash and cash equivalents Cash held in escrow Accounts receivable, net of doubtful account reserves of $446,307 and $623,061, respectively Inventories, net Prepaid expenses and other current assets Total current assets

$

Furniture and equipment Less accumulated depreciation Furniture and equipment, net Other assets Total assets

$

1,370,178 62,924

758,358 150,008

791,292

1,154,855

1,778,073 733,427 4,735,894

1,979,757 324,991 4,367,969

81,507 (66,712) 14,795

71,258 (56,949) 14,309

21,297 4,771,986

57,950 4,440,228

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) CURRENT LIABILITIES: Accounts payable and accrued liabilities $ 1,391,342 Convertible note payable – short-term Severance payable – short-term 40,800 Deferred revenue – short-term 242,827 Tax provision payable Tax penalties payable 190,000 Total current liabilities 1,864,969 Severance payable – long-term Deferred revenue – long-term Convertible note payable to shareholder– long-term Total long-term liabilities

$

$

3,360,745 30,169 40,800 281,774 48,600 270,000 4,032,088

47,000 386,821 393,723 827,544

87,800 129,986 590,723 808,509

-

-

11,616

10,562

7,676,177 (5,608,320) 2,079,473

6,843,267 (7,254,198) (400,369)

COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY (DEFICIT): Preferred stock 20,000,000 shares authorized, no shares issued and outstanding Common stock, $0.001 par value, 100,000,000 shares authorized, 21,826,650 and 20,722,756 shares issued and outstanding as of December 31, 2013 and 2012, respectively Additional paid-in-capital Accumulated deficit Total shareholders’ equity (deficit) Total liabilities and shareholders’ equity (deficit)

$

4,771,986

See accompanying notes to consolidated financial statements.

$

4,440,228

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2013 and 2012 2013

2012

$ 40,964,127

$ 22,920,386

COST OF SALES

11,508,854

7,480,788

GROSS PROFIT

29,455,273

15,439,598

General and administrative Selling and marketing

7,867,497 19,864,436

4,347,052 11,568,271

Total operating expenses

27,731,933

15,915,323

OPERATING INCOME (LOSS)

1,723,340

NET SALES

OPERATING EXPENSES:

INTEREST EXPENSE, NET

(475,725)

(22,494)

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAX

(26,123)

1,700,846

PROVISION FOR INCOME TAX

(501,848)

(54,968)

(48,600)

NET INCOME (LOSS)

$ 1,645,878

$

BASIC NET INCOME (LOSS) PER SHARE DILUTED NET INCOME (LOSS) PER SHARE

$ $

$ $

WEIGHTED AVERAGE NUMBER OF COMMON SHARES BASIC DILUTED

See accompanying notes to consolidated financial statements.

0.08 0.07

21,547,775 24,726,718

(550,448)

(0.03) (0.03)

20,110,242 20,110,242

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2013 and 2012 Common Stock $0.001 par value Shares Amount

Balance at January 1, 2012

18,057,756

$

Additional Paid-In Capital

7,959

Accumulated Deficit

$ 5,511,877 $ (6,703,750)

Totals

$ (1,183,914)

Net loss

-

-

-

(550,448)

Share based compensation

-

-

522,164

-

522,164

125,000

12

12,488

-

12,500

2,590,000

2,591

385,909

-

388,500

Issuance of common stock for consulting services

-

-

38,820

-

38,820

Issuance of warrants for consulting services

-

-

262,045

-

262,045

Issuance of nonforfeitable warrants for consulting services

-

-

109,964

-

109,964

Exercise of warrants Issuance of common stock

Balance at December 31, 2012

20,722,756

Net income

-

Share based compensation

-

Exercise of warrants

$

10,562

$ 6,843,267 $

-

(7,254,198)

(550,448)

$

(400,369)

-

1,645,878

1,645,878

638,910

-

638,910

45,563

46

18,179

-

18,225

Expense for previously issued common stock for consulting services

-

-

10,834

-

10,834

Issuance of restricted stock for consulting services

75,000

75

69,720

-

69,795

933,331

933

95,267

-

96,200

11,616

$ 7,676,177

Exercise of options Balance at December 31, 2013

21,826,650

$

$ (5,608,320)

See accompanying notes to consolidated financial statements.

$ 2,079,473

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2013 and 2012

CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ Adjustments to reconcile net income (loss) to net cash and cash equivalents provided by operating activities: Depreciation Bad debt expense Stock based compensation Change in assets and liabilities Accounts receivable Inventories Prepaid expenses and other assets Accounts payable and accrued liabilities Severance payable Tax provision payable Tax penalties payable Deferred revenue Net cash provided by operating activities

2013

2012

1,645,878 $

(550,448)

9,763 3,195,211 723,694

14,250 1,435,920 838,388

(2,831,648) 201,684 (286,414) (1,969,403) (40,800) (138,124) (80,000) 217,888 647,729

(2,544,555) (1,261,307) (267,777) 2,504,203 (40,800) 48,600 386,632 563,106

(10,249) (10,249)

(8,310) (8,310)

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock Proceeds from exercise of options Proceeds from exercise of warrants Proceeds from note payable Payments on note payable Advances from related parties Payments to related parties Payments on convertible note payable to shareholder Net cash (used in) provided by financing activities

96,200 18,225 (30,169) (197,000) (112,744)

388,500 12,500 40,000 (107,875) 50,000 (88,359) 294,766

NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, beginning of the year

524,736 908,366

849,562 58,804

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of fixed assets Net cash used in investing activities

CASH AND CASH EQUIVALENTS, end of the year SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Capitalization of stock based compensation expense related to nonforfeitable warrants Fair value of warrants in connection with sale of common stock Interest paid Income taxes paid Write off of fully depreciated assets

See accompanying notes to consolidated financial statements.

$

1,433,102 $

$

- $ 23,048 145,530 23,048 -

908,366

109,964 273,831 26,490 26,490 120,169

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 1 - Organization, Business of the Company and Liquidity Organization and Nature of Operations International Commercial Television Inc., (the “Company” or “ICTV”) was organized under the laws of the State of Nevada on June 25, 1998. The Company sells various health, wellness and beauty products through infomercials and other channels. The products are primarily marketed and sold throughout the United States and internationally via infomercials. Although our companies are incorporated in Nevada and New Zealand, a substantial portion of operations are currently run from our Wayne, Pennsylvania office. On February 17, 2011, the Company acquired from one of its shareholders 100% of its equity interest in Better Blocks International Limited (“BBI”), consisting primarily of intellectual properties in exchange for 500,000 shares of the Company’s common stock. This transaction is between entities under common control and accordingly the net asset acquired is recorded at zero, which was the carrying value of BBI and was recorded as a capital transaction. ICTV utilizes a distinctive marketing strategy and multi-channel distribution model to develop, market and sell products through infomercials, live home shopping television, specialty outlets and online shopping. It offers health and beauty products, including DermaWandTM, a skin care device that reduces the appearance of fine lines and wrinkles, and helps improve skin tone and texture; and DermaVitalTM, a professional quality skin care line that effects superior hydration. The goal of our strategy is to use the brand awareness we create in our infomercials so that we can sell the products featured in our infomercials, along with related families of products, under distinct brand names on both a continuity program model basis and in traditional retail stores. Our goal is to have these families of products sold in the traditional retail environment in shelf-space dedicated to the product category. We are developing the infrastructure to create these brands of products so that we can implement our business plan. Currently, this plan is being executed with the DermaWand TM and the DermaVitalTM skincare line. The Company is presently exploring other devices and consumable product lines. Note 2 - Summary of significant accounting policies Principles of consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary BBI. All significant inter-company transactions and balances have been eliminated. Use of 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 amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results could differ from these estimates.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 2 - Summary of significant accounting policies (continued) Recently Issued Accounting Pronouncements In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2013-11,”Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists”. This update to the income tax guidance clarifies the diversity in practice in the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. This update requires the unrecognized tax benefit to be presented in the financial statements as a reduction to a deferred tax asset or as a liability to the extent the entity cannot or does not intend to use the deferred tax asset for such purpose. The new accounting guidance is effective beginning January 1, 2014 and should be applied prospectively to all unrecognized tax benefits that exist at the effective date and retrospective application is permitted. The adoption of ASU 2013-11 did not have a material impact on its consolidated financial statements. Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, include cash and trade receivables. The Company maintains cash in bank accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses and believes it is not exposed to any significant risks on its cash in bank accounts. As of December 31, 2013 and 2012, 90% and 90% of the Company’s accounts receivable were due from various individual customers to whom our products had been sold directly via Direct Response Television; 7% and 5%, respectively were due from a third party; 1.5% and 4% was cash due from the Company’s credit card processors; the remaining 1.5% and 1% of the Company’s accounts receivable were due from two and one wholesale infomercial operators, respectively. Major customers are considered to be those who accounted for more than 10% of net sales. For the fiscal years ended December 31, 2013 and 2012, there were no major customers. Fair value of financial instruments Fair value estimates, assumptions and methods used to estimate fair value of the Company’s financial instruments are made in accordance with the requirements of Accounting Standards Codification (“ASC”) 825-10, “Disclosures about Fair Value of Financial Instruments.” The Company has used available information to derive its estimates. However, because these estimates are made as of a specific point in time, they are not necessarily indicative of amounts the Company could realize currently. The use of different assumptions or estimating methods may have a material effect on the estimated fair value amounts. The carrying values of financial instruments such as cash, accounts receivable, accounts payable, and accrued liabilities approximate their fair values due to the short settlement period for these instruments. It is not practicable to estimate the fair value of the Note Payable to Shareholder due to its related party nature. Cash and cash equivalents The Company considers all unrestricted highly liquid investments with an original maturity of three months or less to be cash equivalents.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 2 - Summary of significant accounting policies (continued) Cash held in escrow Transfirst ePayment Services (“Transfirst”), ICTV’s credit card processing vendor for VISA, Mastercard, Discover and American Express transactions in the United States, maintains a reserve fund within our processing account to cover all fees, charges, and expenses due them, including those estimated for possible customer charge backs. These reserves are updated periodically by Transfirst and maintained for a rolling 180 days of activity. Based upon established levels of risk, this normally represents approximately 2% of transaction volume for the period, with a maximum of $150,000 and is considered as “Cash held in escrow”. Effective August 1, 2013, the Company switched its credit card processing from Transfirst to Litle & Co., LLC (“Litle”). Litle does not require a reserve to be held for its processing. The Company still utilizes Transfirst for electronic check processing. As a result of the change in credit card processors, Transfirst released approximately $87,000 of the reserve through December 31, 2013, with a portion remaining for electronic check processing. The Company expects the remainder of the reserve to be released in 2014. At December 31, 2013 and 2012 the amount of Transfirst reserves was approximately $63,000 and $150,000, respectively. Foreign currency transactions Transactions entered into by the Company in currencies other than its local currency, are recorded in its local currency and any changes in currency exchange rates that occur from the initiation of a transaction until settled are recorded as foreign currency gains or losses in the Consolidated Statements of Operations. Accounts receivable Accounts receivable are recorded net of allowances for returns and doubtful accounts of approximately $446,000 and $623,000 as of December 31, 2013 and 2012, respectively. The allowances are calculated based on historical customer returns and bad debts. In addition to reserves for returns on accounts receivable, an accrual is made against returns for product that have been sold to customer and had cash collections, while the customer still has the right to return the product. The amounts of these accruals included in accounts payable and accrued liabilities in our Consolidated Balance Sheets were approximately $239,000 and $248,000 as of December 31, 2013 and 2012, respectively. Inventories Inventories consist primarily of products held for resale, and are valued at the lower of cost (first-in, first-out method) or market. The Company adjusts inventory for estimated obsolescence when necessary based upon demand and market conditions. The Company has recorded approximately $139,000 and $251,000 in inventory of consigned product as of December 31, 2013 and 2012, respectively, that has been shipped to customers under the 30-day free trial period for which the trial period has not expired and as such the customer has not accepted the product. Furniture and equipment Furniture and equipment are carried at cost and depreciation is computed over the estimated useful lives of the individual assets ranging from 3 to 7 years. Depreciation is computed using the straight-line method. The related cost and accumulated depreciation of assets retired or otherwise disposed of are removed from the accounts and the resultant gain or loss is reflected in earnings. Maintenance and repairs are expensed currently while major renewals and betterments are capitalized. Depreciation expense amounted to approximately $10,000 and $14,000, respectively, for the years ended December 31, 2013 and 2012.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 2 - Summary of significant accounting policies (continued) Impairment of Long-Lived Assets In accordance with ASC 360-10, “Accounting for the Impairment or Disposal of Long-Lived Assets”, long-lived assets are reviewed for impairment when circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future net cash flows estimated by the Company to be generated by such assets. If such assets are considered to be impaired, the impairment to be recognized is the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of by sale are recorded as held for sale at the lower of carrying value or estimated net realizable value. No impairment losses were identified or recorded in the fiscal years ended December 31, 2013 and 2012. Revenue recognition For our domestic direct response television sales generated by our infomercials, product sales revenue is recognized when the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred, the selling price is fixed or determinable, and collectability is reasonably assured. The Company’s revenues in the Statement of Operations are net of sales taxes. The Company offers a 30-day risk-free trial as one of its payment options. Revenue on the 30-day risk-free trial sales is not recognized until customer acceptance and collectability are assured which we determine to be when the trial period ends. If the risk-free trial expires without action by the customer, product is determined to be accepted by the customer and revenue is recorded. Revenue for items purchased without the 30-day free trial is recognized upon shipment of the product to the customer and collectability is assured. Revenue related to our DermaVitalTM continuity program is recognized monthly upon shipment to customers. Revenue related to international wholesale customers is recorded at gross amounts with a corresponding charge to cost of sales upon shipment. Deferred revenue – short-term for payment received prior to shipment on international sales approximated $119,000 and $240,000 as of December 31, 2013 and 2012, respectively. The Company has a return policy whereby the customer can return any product received within 30 days of receipt for a full refund excluding shipping and handling. However, historically the Company has accepted returns past 30 days of receipt. The Company provides an allowance for returns based upon past experience. Returns for the years presented have been offset against gross sales. In 2012, the Company started selling warranties on the DermaWand TM for one-year, three-year and lifetime terms. One-year and threeyear warranties are recognized ratably over the term. Lifetime warranties are recognized over the estimated term of 5 years. Any unearned warranty is included in deferred revenue on the accompanying consolidated balance sheets. Changes in the Company’s deferred service revenue related to the warranties is presented in the following table: 2013 Deferred extended warranty revenue: At beginning of period Revenue deferred for new warranties Revenue recognized At end of period Current portion Non-current portion

$

2012 171,319 436,816 (97,505) 510,630

$

$

123,809 386,821

$

41,333 129,986

$

510,630

$

171,319

$

$

186,535 (15,216) 171,319

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 2 - Summary of significant accounting policies (continued) Shipping and handling The amount billed to a customer for shipping and handling is included in revenue: shipping and handling revenue approximated $5,990,000 and $3,546,000 for the years ended December 31, 2013 and 2012, respectively. Shipping and handling costs are included in cost of sales. Shipping and handling costs approximated $3,443,000 and $2,082,000 for the years ended December 31, 2013 and 2012, respectively. Research and development Research and development costs are expensed as incurred and are included in selling and marketing expense in the accompanying consolidated financial statements. Research and development costs primarily consist of efforts to discover and develop new products and the testing and development of direct-response advertising related to these products. Product testing and development costs approximated $168,000 and $70,000 for the years ended December 31, 2013 and 2012, respectively. Media and production costs Media and production costs are expensed as incurred and are included in selling and marketing expense in the accompanying consolidated financial statements. The Company incurred approximately $12,950,000 and $7,626,000 in such costs for the years ended December 31, 2013 and 2012, respectively. Income taxes In preparing our consolidated financial statements, we make estimates of our current tax exposure and temporary differences resulting from timing differences for reporting items for book and tax purposes. We recognize deferred taxes by the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for differences between the financial statement and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In consideration of our accumulated losses and limited historical ability to generate taxable income to utilize our deferred tax assets, we have estimated that we will not be able to realize any benefit from our temporary differences and have recorded a full valuation allowance. If we sustain profitability in the future at levels which cause management to conclude that it is more likely than not that we will realize all or a portion of the net operating loss carry-forward, we would record the estimated net realized value of the deferred tax asset at that time and would then provide for income taxes at a rate equal to our combined federal and state effective rates. Subsequent revisions to the estimated net realizable value of the deferred tax asset could cause our provision for income taxes to vary significantly from period to period. The Company’s policy is to recognize interest and penalties related to tax matters in general and administrative expenses in the Consolidated Statements of Operations. Stock options In June 2001, our shareholders approved our 2001 Stock Option Plan (the “Plan”). The Plan is designed for selected employees, officers and directors of the Company and its subsidiary, and is intended to advance the best interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiaries with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiaries. The Plan is administered by the Board of Directors of the Company, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the Plan are determined by the Board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of the grant. The Plan expired in February 2011.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 2 - Summary of significant accounting policies (continued) Stock options (continued) As of December 31, 2013, 933,334 options are outstanding under the Plan. In December 2011, our shareholders approved our 2011 Stock Option Plan (the “2011 Plan”). The 2011 Plan is designed for selected employees, officers, and directors of the Company and its subsidiary, and is intended to advance the best interests of the Company by providing personnel who have substantial responsibility for the management and growth of the Company and its subsidiary with additional incentive by increasing their proprietary interest in the success of the Company, thereby encouraging them to remain in the employ of the Company or its subsidiary. The 2011 Plan is administered by the Board of Directors of the Company, and authorizes the issuance of stock options not to exceed a total of 3,000,000 shares. The terms of any awards under the Plan are determined by the Board of Directors, provided that no options may be granted at less than the fair market value of the stock as of the date of the grant. Generally, the options granted vest over three years with one-third vesting on each anniversary date of the grant. As of December 31, 2013, 2,541,668 options are outstanding under the 2011 Plan. The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC Topic 505, subtopic 50, Equity-Based Payments to Non-Employees based upon the fair-value of the underlying instrument. The equity instruments, consisting of stock options granted to consultants, are valued using the Black-Scholes valuation model. The measurement of stockbased compensation is subject to periodic adjustments as the underlying equity instruments vest and is recognized as an expense over the period which services are received. Stock options (continued) The Company uses ASC Topic 718, “Share-Based Payments”, to account for stock-based compensation issued to employees and directors. The Company recognizes compensation expense in an amount equal to the fair value of share-based payments such as stock options granted to employees over the requisite vesting period of the awards. Stock options granted to non-employees are remeasured at each reporting period.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 2 - Summary of significant accounting policies (continued) Stock options (continued) The following is a summary of stock options outstanding under the Plan and 2011 Plan (collectively “Stock Option Plans”) for the years ended December 31, 2013 and 2012:

Number of Shares NonEmployee Employee

Weighted Average Exercise Price

Totals

Balance, January 1, 2013 Granted during the year Exercised during the year Forfeited during the year

2,730,000 1,295,000 (899,998) -

350,000 -

3,080,000 1,295,000 (899,998) -

$

0.18 0.27 0.10 -

Balance, December 31, 2013

3,125,002

350,000

3,475,002

$

0.24

Number of Shares NonEmployee Employee

Weighted Average Exercise Price

Totals

Balance, January 1, 2012 Granted during the year Exercised during the year Forfeited during the year

1,300,000 1,510,000 (80,000)

350,000 -

1,650,000 1,510,000 (80,000)

$

0.08 0.29 (0.11)

Balance, December 31, 2012

2,730,000

350,000

3,080,000

$

0.18

Of the stock options outstanding as of December 31, 2013 under the Stock Option Plans, 747,502 options are currently vested and exercisable. The weighted average exercise price of these options was $0.20. These options expire through September 2022. The aggregate intrinsic value for options outstanding and exercisable at December 31, 2013 was approximately $486,000. The aggregate intrinsic value for options outstanding and exercisable at December 31, 2012 was approximately $276,000. The aggregate intrinsic value for stock options exercised during the year ended December 31, 2013 was approximately $184,000. For the years ended December 31, 2013 and 2012, the Company recorded approximately $262,000 and $250,000 respectively in stock compensation expense under the plan. At December 31, 2013, there was approximately $551,000 of total unrecognized compensation cost related to non-vested option grants that will be recognized over the remaining vesting period of approximately 3 years.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 2 - Summary of significant accounting policies (continued) Stock options (continued) The following assumptions are used in the Black-Scholes option pricing model for the years ended December 31, 2013 and 2012 to value the stock options granted during the period: 2013 Risk-free interest rate Expected dividend yield Expected life Expected volatility Weighted average grant date fair value

1.14% - 2.13%

2012 Risk-free interest rate

1.19% - 1.62%

0.00

Expected dividend yield

0.00

6.00 years 318% - 352% $0.30

Expected life Expected volatility Weighted average grant date fair value

6.00 years 305% - 316% $0.30

The following is a summary of stock options outstanding outside of the Stock Option Plans for the years ended December 31, 2013 and 2012:

Number of Shares NonEmployee Employee

Weighted Average Exercise Price

Totals

Balance, January 1, 2013 Granted during the year Exercised during the year Expired during the year

150,000 175,000 (33,333) -

1,650,000 190,000 (250,000)

1,800,000 365,000 (33,333) (250,000)

$

0.20 0.34 0.15 0.18

Balance, December 31, 2013

291,667

1,590,000

1,881,667

$

0.23

Number of Shares NonEmployee Employee

Weighted Average Exercise Price

Totals

Balance, January 1, 2012 Granted during the year Exercised during the year Expired during the year

150,000 -

250,000 1,400,000 -

250,000 1,550,000 -

$

0.18 0.20 -

Balance, December 31, 2012

150,000

1,650,000

1,800,000

$

0.20

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 2 - Summary of significant accounting policies (continued) Stock options (continued) Of the stock options currently outstanding outside of the Stock Option Plans at December 31, 2013, 823,333 options are currently vested and exercisable. The weighted average exercise price of these options was $0.20. These options expire through April 2023. The aggregate intrinsic value for options outstanding and exercisable at December 31, 2013 was approximately $537,000. The aggregate intrinsic value for options outstanding and exercisable at December 31, 2012 was $243,000. For the years ended December 31, 2013 and 2012, the Company recorded approximately $377,000 and $272,000, respectively in stock compensation expense under the plan. At December 31, 2013, there was approximately $473,000 of total unrecognized compensation cost related to non-vested option grants that will be recognized over the remaining vesting period of approximately 3 years. The following assumptions are used in the Black-Scholes option pricing model for the years ended December 31, 2013 and 2012 to value the stock options outstanding outside the plan: 2013 Risk-free interest rate Expected dividend yield Expected life Expected volatility Weighted average grant date fair value

1.14% – 3.04%

2012 Risk-free interest rate

0.72% – 1.78%

0.00

Expected dividend yield

0.00

5.00 – 10.00 years 262% – 322% $0.43

Expected life Expected volatility

3.00 – 10.00 years 263% - 394%

Weighted average grant date fair value

$0.31

The following is a summary of all stock options outstanding, and nonvested for the year ended December 31, 2013:

Number of Shares NonEmployee Employee Balance, January 1, 2013 – nonvested Granted Vested Balance, December 31, 2013 – nonvested

2,463,333 1,470,000 (1,009,999) 2,923,334

1,383,333 190,000 (710,833) 862,500

Totals 3,846,666 $ 1,660,000 (1,720,832) 3,785,834 $

Weighted Average Exercise Price 0.21 0.29 0.20 0.25

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 3 - Commitments and contingencies Leases As of December 31, 2013, the Company had an active lease related to the office space rented in Wayne, Pennsylvania. Total rent expense incurred during 2013 and 2012 totaled approximately $49,000 and $34,000, respectively. During the year ended December 31, 2013, the Company moved to a different building within the same facility and has amended the lease through March 2016. The schedule below details the future financial obligations under the lease.

Wayne - Corporate HQ

$

2014 52,500

Total Lease Obligations

$

52,500

$

2015 53,100

$

53,100

2017

2018

TOTAL OBLIGATION

$

2016 13,300

$

-

$

- $

118,900

$

13,300

$

-

$

- $

118,900

DermaWandTM On October 15, 1999, Windowshoppe.com Limited (“WSL”) entered into an endorsement agreement with an individual for her appearance in a DermaWand infomercial. On July 11, 2001, the agreement was amended to include a royalty payment for each unit sold internationally, up to a maximum royalty payment for any one calendar quarter. Further, if the infomercial is aired in the United States, then the airing fee will revert back to the same flat rate per calendar quarter. The initial term of the agreement was five years starting October 15, 1999. The agreement automatically and continually renews for successive additional five-year terms unless R.J.M.Ventures (“RJML”) is in material default and is notified in writing at least thirty days prior to the end of the then current term that the individual intends to terminate the agreement. The Company assumed any and all responsibilities associated with the license and reconveyance agreements dated April 1, 2000 entered into by the Company and WSL and RJML. On January 5, 2001, WSL entered into an agreement with Omega 5. WSL shall have worldwide nonexclusive rights to manufacture, market and distribute DermaWand TM. In consideration of these rights, WSL shall pay a monthly payment for each unit sold of DermaWand depending on various scenarios as defined in the agreement. The agreement is silent as to its duration. During 2007, the Company entered into an exclusive license agreement with Omega 5 wherein ICTV was assigned all of the trademarks and all of the patents and pending patents relating to the DermaWandTM and was granted exclusive license with respect to the commercial rights to the DermaWandTM. This agreement was amended and superseded on July 28, 2010. The geographical scope of the license granted is the entire world consisting of the United States of America and all of the rest of the world. The license remains exclusive to ICTV provided ICTV pays to Omega 5 a minimum annual payment of $250,000 in the initial 18 month term of the agreement and in each succeeding one-year period. If in any calendar year the payments made by the Company to Omega exceed the annual minimum of $250,000, then the amount in excess of the annual minimum or “rollover amount” will be credited towards the Company’s annual minimum for the immediately following calendar year only. If the Company fails to meet the minimum requirements as outlined in the agreement, it may be forced to assign the trademarks and patents back to Omega 5. After the initial term, the exclusive license granted shall renew automatically for a three year period, and thereafter automatically at three-year intervals. The Company met the minimum requirements in each of the years ended December 31, 2013 and 2012. The amount of royalty expense incurred for sales of the DermaWandTM included in selling and marketing in the accompanying Consolidated Statements of Operations were approximately $1,018,000 and $795,000 for the years ended December 31, 2013 and 2012, respectively.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 3 - Commitments and contingencies (continued) Employment Agreement Effective March 1, 2011, the Company entered into an employment agreement with the CEO of the Company. Under the terms of this agreement, the Company will pay an annual salary of $180,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. Effective January 1, 2013, this annual salary was increased to $240,000 and approved by the Board of Directors. The CEO is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement; automobile allowance and other reimbursable expenses. The initial term of this employment agreement is five years and automatically renews for successive one year periods unless either party provides not less than 60 days prior written notice of their intent not to renew the agreement. If the employment agreement is terminated by the Company without cause, the employee will be entitled to a severance pay in a lump sum payment equal to one year of his base salary, health insurance reimbursement and automobile expenses allowance as in effect on the date of termination. Under the Employment Agreement, Mr. Claney will be considered terminated without cause if his substantive responsibilities are changed without his prior approval, or if all or substantially all of the assets of the Company are sold, or a controlling interest in the Company is sold, unless in connection with such a sale Mr. Claney’s Employment Agreement is assumed by the buyer or he is offered an employment contract for substantially the same responsibilities, for a term of at least one year, and at substantially the same compensation, terms and benefits as provided in the Employment Agreement. On April 17, 2012, the Company entered into an employment agreement with Richard Ransom, our President. Under the terms of this agreement, the Company will pay an annual salary of $125,000, subject to review and, if appropriate, adjustment on an annual basis by the Company’s Board of Directors. Effective January 1, 2013, this annual salary was increased to $160,000 and approved by the Board of Directors. The President is also entitled to annual performance bonuses as determined appropriate by the Board of Directors, and is entitled to receive stock options and other employee benefits such as health insurance reimbursement, automobile allowance and other reimbursable expenses. The employment agreement will continue until terminated by either party in accordance with the terms of the agreement. If the employment agreement is terminated by the Company without cause, the employee will be entitled to a severance payment equal to one year’s salary and benefits. Other matters Product Liability Insurance For certain products, the Company was (and is) listed as an additional insured party under the product manufacturers’ insurance policy. On February 20, 2007, the Company purchased its own liability insurance, which expires on April 20, 2014. The Company intends to renew this policy. At present, management is not aware of any claims against the Company for any products sold. Note 4 – Severance payable In September 2010 the Company entered into a severance agreement with a former consultant. Under the severance agreement, the consultant will be paid $270,000 over a 27 month period in increments of $10,000 per month beginning in September 2010 and continuing through November 2012. The Company recorded the $270,000 as a General and Administrative expense in the three months ended September 30, 2010. In April 2011, the Company amended the aforementioned severance agreement. The amendment allows the Company to make monthly payments of $3,400 per month for a period of one year from April 2011 through March 2012. In March 2012, the Company amended the aforementioned severance agreement for a second time to continue the monthly payment amount of $3,400 through March 2016. The severance payable balance at December 31, 2013 and 2012 is $87,800 and $128,600, respectively of which $40,800 is current and $47,000 is long-term as of December 31, 2013.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 5 - Related party transactions The Company had received short-term advances from a shareholder totaling $50,000 during the year ended December 31, 2012. The $50,000 loan accrued interest of 6% annually and was repaid in October 2012. The Company also received short-term advances from another shareholder with repayments of $30,900 during the year ended December 31, 2012. These advances were non-interest bearing and without specific terms of repayment. The Company has a note payable to the Better Blocks Trust, a major shareholder, in the amount of $590,723. Prior to April 1, 2012, this loan was interest-free and had no specific terms of repayment. On April 1, 2012, the note payable was modified with new terms to include interest at the rate of four and three quarters percent (4.75%) per annum. Interest on the unpaid balance of the note is to be paid in arrears at the end of each calendar quarter, with payment due on the first day of the month following the quarter as to which interest is being accrued. The first payment of interest was due on January 1, 2013, for the three quarters beginning April 1, 2012 and ending on December 31, 2012. Interest payments of approximately $23,000 and $21,000 were paid during 2013 and 2012, respectively. As of December 31, 2013 and 2012, the balance outstanding was approximately $394,000 and $591,000, respectively. On April 1, 2012, when the note was modified, a conversion option was added that stated that all or any part of this note may be converted into shares of common stock of the Company at any time, and from time to time, prior to payment, at a conversion price of $0.50 per share. Conversion is at the option of lender. Any amount not converted will continue to be payable in accordance with the terms of the note. The Company considered this a modification of debt that was not substantive, thus no gain or loss was recorded upon modification. The principal balance of this note shall be due and payable in three equal payments on each of April 1, 2015, April 1, 2016, and April 1, 2017. This note may be prepaid in whole or in part at any time without penalty, and any prepayment shall be applied against the next principal payment due. Principal payments of $197,000 and $0 were made during the years ended December 31, 2013 and 2012, respectively. On February 5, 2014, the Better Blocks Trust sold $50,000 of its note to the Company to an accredited investor, who then converted the $50,000 note into 100,000 shares of the Company’s stock at the contractual conversion price of $.50 per share. Additionally, on March 18, 2014, The Better Blocks Trust sold $75,000 of its note to the Company to an accredited investor, who then converted the $75,000 note into 150,000 shares of the Company’s stock at the contractual conversion price of $.50 per share. The Shares were issued as restricted stock, with a restrictive legend placed on the share certificate. The issuance of the shares was exempt from registration under Regulation D and Section 4(2) of the Securities Act of 1933. Furthermore, an additional $75,000 in principal payments were made on this note through March 27, 2014.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 6 – Notes payable In December 2011, the Company entered into an unsecured note payable with a Canadian lender in the amount of approximately $98,000 (C$100,000). This loan accrued interest at prime (3.25% at December 31, 2012) plus 1%. Interest was paid monthly. Principal payments were to be paid in fifteen monthly installments of approximately $6,500 (C$6,667), beginning in March 2012 and ending May 2013. The loan permitted payment in advance without penalty at any time. On January 24, 2012, the Company entered into a note modification with the Canadian lender increasing the outstanding balance to approximately $137,000 (C$140,000) as additional borrowings were made by the Company. The principal payments on the additional borrowings of approximately $39,500 (C$40,000) were due in two installments of $20,000 (approximates C$) payable on April 15, 2012 and July 15, 2012. In addition, the interest rate on the note was modified to lender’s cost (prime), plus two-percent and the note became convertible into shares of the Company’s common stock at a fixed conversion rate of $0.196 (C$.20) per share. The Company considered this a modification of debt that was not substantive, thus no gain or loss was recorded upon modification. The amount of the beneficial conversion upon modification was deemed insignificant to the consolidated financial statements. The amount outstanding under the note at December 31, 2013 and 2012 was approximately $0 and $30,200 (C$30,000), respectively. The balance was paid in full b y March 2013. Interest paid on the loan for the years ended December 31, 2013 and 2012, was approximately $200 and $3,600, respectively. The lender of this note is also one of the two persons that receive royalty payments on the DermaWand sales as noted in Note 3 Note 7 - Capital transactions On February 17, 2012, the Board authorized the issuance of up to 2,500,000 shares of common stocks to be purchased at $0.15 per share through February 29, 2012. On February 29, 2012, the Board amended the resolution to authorize the issuance of up to 3,000,000 shares of common stock to be purchased at $0.15 per share through March 23, 2012. A total of 2,590,000 shares were purchased through March 23, 2012 for gross proceeds of $388,500. In addition, for every three shares of common stock purchased, the purchasers received one warrant to purchase common stock at $0.25 per share. A total of 863,333 warrants were issued. The warrants expire three years after their issuance date. The warrants have a weighted average fair value of $0.32. The fair value of the warrant has been estimated on the date of grant using a Black-Scholes Pricing Model with the following assumptions:

Risk-free interest rate Expected dividend yield Expected life Expected volatility Exercise price

0.36% – 0.58% 0.00 3.00 years 410% – 418% $0.25

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 7 - Capital transactions (continued) The fair value of the warrants was approximately $274,000, and was recorded as an increase and corresponding decrease to additional paid-in capital for the year ended December 31, 2012. During the year ended December 31, 2011, the Company entered into a three year corporate public relations consulting agreement where the consultants received compensation in the form of 500,000 shares of stock, 500,000 warrants with an exercise price of $0.10 that expire 14 months from the date of the agreement, and 1,000,000 warrants with an exercise price of $0.50 that expire 24 months from the date of the agreement. On August 15, 2012, the Company entered into a settlement agreement with the consultants to terminate the consulting agreement. As part of the agreement, the consultants maintained the 500,000 shares of common stock previously issued and all warrants previously issued were terminated. In addition, the consultants received 250,000 new warrants with an exercise price of $0.10 that expire 3 years from the date of the agreement. The 500,000 shares of common stock issued were originally valued at the fair market value of the stock on the date of grant. The total value of the stock was approximately $65,000 and the expense was being recognized over the consulting period. Upon termination, approximately $23,000 was expensed during the year ended December 31, 2012. As noted in the previous paragraph, on August 15, 2012, the Company terminated the consulting agreement through a settlement agreement with these consultants and concurrently entered into a new consultant agreement with one of these consultants. Therefore, any unrecognized expense related to common stock issued was immediately recognized upon termination of services with the one consultant and expense related to the other consultant will be recognized over the remaining consulting term. For the years ended December 31, 2013 and 2012, the Company recorded approximately $10,800 and $38,800, respectively related to the issuance of these shares, and the Company has remaining unrecognized expense of approximately $6,000, which will be recognized over the next 7 months. The Company used the Black Scholes model to value the 1,500,000 warrants granted using under the consulting agreement. The weighted average grant date fair value of these warrants was $0.06. For the years ended December 31, 2013 and 2012, the Company recorded approximately $0 and $160,000, respectively, of stock based compensation expense to fully expense the 500,000 warrants issued to the consultants under the consulting agreement. As of December 31, 2013, there was no unrecognized compensation costs related to these warrant grants. For the years ended December 31, 2013 and 2012, the Company recorded approximately $0 and $47,000, respectively, of stock based compensation expense to fully expense the 1,000,000 warrants issued to the consultants under the consulting agreement. As of December 31, 2013, there was no unrecognized compensation costs related to these warrant grants. For the years ended December 31, 2013 and 2012, the Company recorded approximately $18,300 and $62,700, respectively, of stock based compensation expense for the 250,000 new warrants issued to the consultants under the settlement agreement. The expense related to the consultant no longer performing services was recognized immediately. As of December 31, 2013, there was approximately $29,000 of total unrecognized compensation costs related to these warrant grants which will be recognized over the remaining 19.5 months. On October 24, 2012, 125,000 warrants issued to one of the consultants were exercised for total consideration of $12,500. On August 15, 2012, the Company entered into a three year corporate public relations consulting agreement with one of the previous consultants. As part of the agreement, the consultant will receive a monthly consulting fee of $4,000, a commission of $7.50 for each DermaWandTM sold plus 5% of the net revenue from other products sold on a third party website, and 125,000 additional warrants with an exercise price of $0.30 that expires 36 months from the date of the agreement. For the years ended December 31, 2013 and 2012, the Company recorded approximately $18,300 and $7,700, respectively, of stock based compensation expense for the 125,000 warrants issued to the consultant under the new consulting agreement. As of December 31, 2013, there was approximately $29,000 of total unrecognized compensation costs related to these warrant grants which will be recognized over the remaining 19.5 months.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 7 - Capital transactions (continued) Due to the fact that any warrants issued to the consultant under the new consulting agreement are nonforfeitable, the 125,000 warrants with an exercise price of $0.10 and a fair value of $55,000, and the 125,000 warrants with an exercise price of $0.30 and a fair value of $55,000, which aggregated $110,000, were recorded in equity and were capitalized on the balance sheet in prepaid expenses and other current assets and will be expensed over the consultant term. For the years ended December 31, 2013 and 2012, approximately $37,000 and $15,000, respectively, was expensed and included in stock based compensation expense in our accompanying consolidated financial statements. Approximately $58,000 is capitalized and approximately $37,000 and $21,000 is reflected as current and non-current assets, respectively, in our accompanying consolidated balance sheet. The warrants have a weighted average fair value of $0.44. The fair value of the new warrants has been estimated on the date of grant using a Black-Scholes Pricing Model with the following assumptions: 0.31 – 0.42%

Risk-free interest rate Expected dividend yield

-

Expected life

3.00 years

Expected volatility

401% $0.10 – $0.30

Exercise price At December 31, 2013, the following warrants were outstanding and exercisable:

Holder

Warrants Outstanding

Exercise Price

Expiration Date

Shareholders in February 2012 private placement

863,333

$0.25

February – March 2015

Consultant

125,000

$0.10

August 2015

Consultant

125,000

$0.30

August 2015

Balance at December 31, 2013

1,113,333

$0.10 - $0.30

On September 1, 2013, the Company entered into a one year investor relations consulting agreement, in which 150,000 shares of restricted stock were agreed to be issued to a consultant. Restricted stock awards provide that, during the applicable vesting periods, the shares awarded may not be sold or transferred by the participant. The fair market value was $0.45 and 37,500 shares vested as of the date of executed agreement. An additional 37,500 shares vested on December 31, 2013, with the remaining 75,000 shares vesting on February 28, 2014. The award contains service conditions based on the consultant’s continued service for the Company. For the year ended December 31, 2013, the Company recorded approximately $37,300 of share based compensation. As of December 31, 2013, there was approximately $75,200 of total unrecognized compensation costs related to this restricted stock grant which will be recognized over the remaining eight months. As of December 31, 2013, $32,500 of expense related to shares that have vested was included in prepaid expenses.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 8 - Basic and diluted earnings (loss) per share ASC 260, “Earnings Per Share” requires presentation of basic earnings per share and dilutive earnings per share. The computation of basic earnings per share is computed by dividing earnings available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted earnings per share gives the effect to all dilutive potential common shares outstanding during the period. The computation of diluted earnings per share does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect. For the purposes of obtaining future capital to finance the Companies’ operations and to fund future expansion of the Companies’ Direct Response Television campaign, certain shareholders are able to purchase additional stock with stock warrants attached to common stock issued. At December 31, 2013, there were 1,113,333 warrants outstanding and exercisable. The warrants are exercisable between $0.10 and $0.30 per share expiring through August 2015. At December 31, 2013 there were 5,356,669 stock options outstanding with 1,570,835 options vested and exercisable at a weighted average exercise price of $0.22. The following securities were not involved in the computation of diluted net loss per share as their effect would have been anti-dilutive: December 31 2013 2012 Options to purchase common stock 1,940,000 4,880,000 Warrants to purchase common stock 125,000 1,503,417 Convertible note payable from shareholder 1,332,291 As the Company was in a loss position for the year ended December 31, 2012, all shares were anti-dilutive. The number of shares of common stock used to calculate basic and diluted earnings per share for years ended December 31, 2013 and 2012 was determined as follows:

Basic weighted average shares outstanding Dilutive effect of outstanding stock options Dilutive effect of outstanding warrants Dilutive effect of restricted stock awards Dilutive effect of convertible note payable Weighted average dilutive shares outstanding

2013 21,547,775 1,603,888 383,195 10,413 1,181,447

2012 20,110,242 -

24,726,718

20,110,242

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 8 - Basic and diluted earnings (loss) per share (continued) The computations for basic and fully diluted earnings (loss) per share are as follows:

For the year ended December 31, 2013:

Loss (Numerator)

Weighted Average Shares (Denominator)

Per Share Amount

Basic earnings per share Income to common shareholders

$ 1,645,878

21,547,775

$

0.08

Diluted earnings per share Income to common shareholders, including interest expense on convertible note payable of $22,769

$ 1,668,647

24,726,718

$

0.07

Weighted Average Shares

For the year ended December 31, 2012:

Loss (Numerator) (Denominator)

Per Share Amount

Basic and diluted loss per share Loss to common shareholders

$

(550,448)

20,110,242 $

(0.03)

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 9 - Income taxes The income tax expense for the years ended December 31, 2013 and 2012 consist of the following: Current Federal State

$

2013 31,000 24,000

$

2012 40,000 8,600

Total

$

55,000

$

48,600

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets (liabilities) are approximately as follows as of December 31, 2013 and 2012:

Net operating loss Accrued returns and allowances Accumulated depreciation Stock options Deferred income Other Total deferred tax assets Valuation allowance Net deferred tax assets

$

$ $

2013 121,000 263,000 (5,000) 262,000 242,000 242,000 1,125,000 (1,125,000) -

2012 $ 901,000 334,000 (5,000) 390,000 158,000 207,000 $ 1,985,000 (1,985,000) $ -

As of December 31, 2012, the Company had approximately $2,800,000 of gross federal net operating losses and approximately $800,000 of gross state net operating losses available, of which approximately $2,400,000 and $400,000, respectively, are expected to be utilized in 2013. As of December 31, 2013, the Company completed its IRC Section 382 study and concluded that the availability of the Company’s net operating loss carry forwards will not be subject to annual limitations against taxable income in future periods due to change in ownership rules. The Company has provided a full valuation allowance on the remaining net deferred asset as the Company does not have sufficient history of taxable income. During 2012, the Company filed income tax returns from inception, 1998 through 2011; therefore, the statute for all years remains open and all years from 1998 through 2012 could potentially be audited. The Company is now current in all tax filings. The Company’s policy is to recognize interest and penalties related to tax matters in general and administrative expenses in the Consolidated Statements of Operations. At December 31, 2013 and 2012, the Company had approximately $190,000 and $270,000, respectively accrued for various tax penalties. The following is a summary of the activity in the penalties payable for the year ended December 31, 2013. The accrual has been reduced because a closing agreement was issued by the Wisconsin Department of Revenue resolving an outstanding tax issue, no tax or penalties were due upon resolution. Balance, January 1, 2013 Reductions in reserve Balance, December 31, 2013

$ 270,000 (80,000) $ 190,000

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 9 - Income taxes (continued) A reconciliation between the Company’s effective tax rate and the federal statutory rate for the years ended December 31, 2013 and 2012, is as follows: 2013 Federal rate State tax rate Effect of permanent differences Change in valuation allowance Other Effective tax rate

34.00% 0.95% 5.10% (39.7)% 2.9% 3.25%

2012 34.00% 5.95% 5.03% (32.18)% 12.80%

Note 10 - Segment reporting The Company operates in one industry segment and is engaged in the selling of various consumer products primarily through direct marketing infomercials. The Company evaluates performance and allocates resources based on several factors, of which the primary financial measure is operating income by geographic area. Operating expenses are primarily prorated based on the relationship between domestic and international sales. International sales are classified as when a product is sold through a third party international distributor. Domestic sales are DRTV sales sold directly to the consumer by the Company. Included in domestic sales is approximately $150,000 in DRTV sales in Canada. Information with respect to the Company’s operating income (loss) by geographic area is as follows: For the year ended December 31, 2013 Domestic International Totals

NET SALES

$ 36,261,537 $

COST OF SALES

4,702,590 $ 40,964,127

For the year ended December 31, 2012 Domestic International Totals

$ 19,152,585 $

3,767,801 $ 22,920,386

9,525,450

1,983,404

11,508,854

5,642,849

1,837,939

7,480,788

Gross profit

26,736,087

2,719,186

29,455,273

13,509,736

1,929,862

15,439,598

Operating expenses: General and administrative Selling and marketing Total operating expenses

7,631,281 19,807,598 27,438,879

236,216 56,838 293,054

7,867,497 19,864,436 27,731,933

4,160,082 11,521,033 15,681,115

186,970 47,238 234,208

4,347,052 11,568,271 15,915,323

1,723,340

$ (2,171,379) $

1,695,654 $

Operating income (loss)

$

(702,792) $

2,426,132 $

(475,725)

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 10 - Segment reporting (continued) Selected balance sheet information by segment is presented in the following table as of December 31:

Domestic International

$

2013 4,765,746 6,240

Total Assets

$

4,771,986

$

2012 4,414,775 25,453

$

4,440,228

Note 11 – Subsequent events On January 3, 2014, a shareholder exercised 35,000 warrants previously issued in connection with a private offering, at an exercise price of $.25 per share. The Shares were issued as restricted stock, with a restrictive legend placed on the share certificate. The issuance of the shares was exempt from registration under Regulation D and Section 4(2) of the Securities Act of 1933. On January 9, 2014, a shareholder exercised 100,000 warrants previously issued in connection with a private offering, at an exercise price of $.25 per share. The Shares were issued as restricted stock, with a restrictive legend placed on the share certificate. The issuance of the shares was exempt from registration under Regulation D and Section 4(2) of the Securities Act of 1933. On January 15, 2014, one of our key employees exercised 8,333 options previously issued to him, at an exercise price of $.228 per share. The Shares were issued as restricted stock, with a restrictive legend placed on the share certificate. The issuance of the shares was exempt from registration under Regulation D and Section 4(2) of the Securities Act of 1933. On January 24, 2014, a shareholder exercised 333,333 warrants previously issued in connection with a private offering, at an exercise price of $.25 per share, and 133,333 options previously issued to him at an exercise price of $.15 per share. The Shares were issued as restricted stock, with restrictive legends placed on the share certificates. The issuance of the shares was exempt from registration under Regulation D and Section 4(2) of the Securities Act of 1933. On January 29, 2014, one of our key employees exercised 166,667 options previously issued to him, at an exercise price of $.0828 per share. The Shares were issued as restricted stock, with a restrictive legend placed on the share certificate. The issuance of the shares was exempt from registration under Regulation D and Section 4(2) of the Securities Act of 1933. On February 18, 2014, an option holder exercised 125,000 options previously issued, at an exercise price of $.10 per share. The Shares were issued as restricted stock, with a restrictive legend placed on the share certificate. The issuance of the shares was exempt from registration under Regulation D and Section 4(2) of the Securities Act of 1933. On February 21 2014, two of our key employees exercised 100,000 options at an exercise price of $.0828 per share, and 10,000 options at an exercise price of $.23 per share. The Shares were issued as restricted stock, with restrictive legends placed on the share certificates. The issuance of the shares was exempt from registration under Regulation D and Section 4(2) of the Securities Act of 1933. On March 4, 2014, the Company entered into a licensing agreement with Ermis Labs, LLC, in which ICTV has obtained the exclusive worldwide rights to manufacture and distribute their line of Coral Actives acne treatment and skin cleansing products. As part of the agreement, the Company agreed to purchase approximately $150,000 in inventory and entered into a four month transition services agreement at $5,500 per month. This agreement extends ICTV’s presence in the health, wellness and beauty industry and gives it the ability to offer its customers and audience a differentiated solution in the acne treatment and skin cleansing area. The Coral Actives product line consists of a cleanser & serum 2-step acne treatment, retinol exfoliating cleanser, penetrating acne serum gel, moisturizer and cleansing bar. ICTV plans include further development and build-out of a continuity program, production of a new direct response television marketing infomercial and expansion of distribution channels, including retail.

INTERNATIONAL COMMERCIAL TELEVISION INC. AND SUBSIDIARY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2013 and 2012 Note 11 – Subsequent events (continued) On March 18, 2014, The Better Blocks Trust sold $75,000 of its note to the Company to an accredited investor, who then converted the $75,000 note into 150,000 shares of the Company’s stock at the contractual conversion price of $.50 per share. The Shares were issued as restricted stock, with a restrictive legend placed on the share certificate. The issuance of the shares was exempt from registration under Regulation D and Section 4(2) of the Securities Act of 1933.

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the inclusion in this Prospectus of International Commercial Television, Inc. to be filed with the British Columbia Securities Commission and the Ontario Securities Commission on or about March 28, 2014 of our report dated March 27, 2014, on our audits of the consolidated financial statements as of December 31, 2013 and 2012 and for each of the years in the two-year period ended December 31, 2013, our report dated March 28, 2013, on our audits of the consolidated financial statements as of December 31, 2012 and 2011 and for each of the years in the two-year period ended December 31, 2012 and our report dated March 30, 2012 on our audit of the consolidated financial statements as of December 31, 2010 and for the year then ended. Our reports on the December 31, 2012, 2011 and 2010 consolidated financial statements include an explanatory paragraph about the existence of substantial doubt concerning the Company's ability to continue as a going concern. We also consent to the reference to our firm under the caption “Experts” in the Prospectus.

/s/ EisnerAmper LLP March 28, 2014 Jenkintown, Pennsylvania

CERTIFICATE OF THE COMPANY Dated: March 28, 2014 This prospectus constitutes full, true and plain disclosure of all material facts relating to the securities previously issued by the Company as required by the securities legislation of British Columbia and Ontario.

“Kelvin Claney” Kelvin Claney Chief Executive Officer and Chairman

“Richard Ransom” Richard Ransom President & Former Chief Financial Officer

“Ryan LeBon” Ryan LeBon Chief Financial Officer

On behalf of the Board of Directors “Stephen Jarvis” Stephen Jarvis Director

“William Kinnear” William Kinnear Director

CERTIFICATE OF THE PROMOTER Dated: March 28, 2014 This prospectus constitutes full, true and plain disclosure of all material facts relating to the securities previously issued by the Company as required by the securities legislation of British Columbia and Ontario.

“Kelvin Claney” Kelvin Claney Chief Executive Officer and Chairman

SCHEDULE B Additional Disclosure Information 14.

Capitalization

14.1

Prepare and file the following chart for each class of securities to be listed:

Issued Capital Number of Securities (non-diluted)

Number of Securities (fullydiluted)

%of Issued (nondiluted)

% of Issued (fully diluted)

Total outstanding (A)

23,163,316

29,375,762

100

100

Held by Related Persons or employees of the Issuer or Related Person of the Issuer, or by persons or companies who beneficially own or control, directly or indirectly, more than a 5% voting position in the Issuer (or who would beneficially own or control, directly or indirectly, more than a 5% voting position in the Issuer upon exercise or conversion of other securities held) (B)

9,234,936

10,726,604

39.9

36.5

Total Public Float (A-B)

13,928,380

18,649,158

60.1

63.5

Number of outstanding securities subject to resale restrictions, including restrictions imposed by pooling or other arrangements or in a shareholder agreement and securities held by control block holders (C)

11,754,371

17,966,817

50.7

61.2

Total Tradeable Float (A-C)

11,408,945

11,408,945

49.3

38.8

Public Float

Freely-Tradeable Float

Public Securityholders (Registered) Instruction: For the purposes of this report, "public securityholders" are persons other than persons enumerated in section (B) of the previous chart. List registered holders only. Class of Security

Size of Holding

Number of holders

Total number of securities

100 – 499 securities

213

23,256

500 – 999 securities

4

2,634

1,000 – 1,999 securities

9

9,951

2,000 – 2,999 securities

8

18,148

3,000 – 3,999 securities

1

3,997

41

4,468,219

1 – 99 securities

4,000 – 4,999 securities 5,000 or more securities

Public Securityholders (Beneficial) Instruction: Include (i) beneficial holders holding securities in their own name as registered shareholders; and (ii) beneficial holders holding securities through an intermediary where the Issuer has been given written confirmation of shareholdings. For the purposes of this section, it is sufficient if the intermediary provides a breakdown by number of beneficial holders for each line item below; names and holdings of specific beneficial holders do not have to be disclosed. If an intermediary or intermediaries will not provide details of beneficial holders, give the aggregate position of all such intermediaries in the last line. Class of Security

Size of Holding

Number of holders

Total number of securities

1 – 99 securities

14

712

100 – 499 securities

41

9,841

500 – 999 securities

37

23,092

1,000 – 1,999 securities

43

51,578

2,000 – 2,999 securities

27

60,365

3,000 – 3,999 securities

21

67,007

4,000 – 4,999 securities

14

60,412

5,000 or more securities

124

4,610,323

Unable to confirm

Non-Public Securityholders (Registered) Instruction: For the purposes of this report, "non-public securityholders" are persons enumerated in section (B) of the issued capital chart. Class of Security

Size of Holding

Number of holders

Total number of securities

5

9,234,936

1 – 99 securities 100 – 499 securities 500 – 999 securities 1,000 – 1,999 securities 2,000 – 2,999 securities 3,000 – 3,999 securities 4,000 – 4,999 securities 5,000 or more securities

14.2

Provide the following details for any securities convertible or exchangeable into any class of listed securities

Description of Security Number of convertible / Number of listed securities (include conversion / exercise exchangeable securities issuable upon conversion / terms, including conversion / outstanding exercise exercise price) Warrants

520,000

Exercise Prices of $0.25 to $0.30 with expiration dates ranging from February to August 2015

Stock Options

5,305,000

Exercisable at a weighted average price of $0.23 with expiration dates ranging from February 2015 to March 2024

Convertible Debt

387,446

Debt balance of $193,723 convertible to common stock at $0.50 per share

14.3

Provide details of any listed securities reserved for issuance that are not included in section 14.2. N/A

SCHEDULE C

The first certificate below must be signed by the CEO, CFO, any person or company who is a promoter of the Issuer and two directors of the Issuer. In the case of an Issuer re-qualifying following a fundamental change, the second certificate must also be signed by the CEO, CFO, any person or company who is a promoter of the target and two directors of the target. CERTIFICATE OF THE ISSUER

Pursuant to a resolution duly passed by its Board of Directors, (full legal name of the Issuer), hereby applies for the listing of the above mentioned securities on CNSX. The foregoing contains full, true and plain disclosure of all material information relating to (full legal name of the Issuer). It contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is necessary to prevent a statement that is made from being false or misleading in light of the circumstances in which it was made. Dated at Wayne, PA this Eighth

day of April

, 2014

/s/ Kelvin Claney

/s/ Ryan LeBon

Chief Executive Officer Kelvin Claney

Chief Financial Officer Ryan LeBon

/s/ Kelvin Claney

/s/ Stephen Jarvis

Promoter (if applicable) Kelvin Claney

Director Stephen Jarvis

/s/ William Kinnear Director William Kinnear

/s/ Rich Ransom President Rich Ransom

.