AfterMaster, Inc. (OTCMKTS:AFTM) Files An 8-K Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim ReviewItem 4.02
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
On May 10, 2018, the Board of Directors of AfterMaster, Inc. (the “Company”) determined that the Company’s financial statements in (i) the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2017, and (ii) the Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2017 (such Quarterly Reports collectively the “Quarterly Reports”), should not be relied upon because of the following issue discovered in the course of the Company’s preparation of its financial statements for the quarterly period ended March 31, 2018:
During the September 30, 2017 quarter, the Company should have (i) recognized the cost of sales related to 4,000 units of Company products soldto the Company’s manufacturer, instead of recording such costs of sales in the quarter ending December 31, 2017, (ii) not includedaccounts receivableof $400,000related to the sale of the 4,000 units, (iii) recognized an accounts payable extinguishment of $125,000 with its manufacturer related to the purchase of the 4,000 units, and (iv) offset the payables and receivables related to the 4,000 units totaling $400,000.
During the December 31, 2017 quarter, the Company should have (i) offset accounts receivable and accounts payable related to a sale totaling $90,000 to the Company’s manufacturer, (ii)reported a decrease in cost of goods sold of $142,389 and (iii)recorded additional inventory of $340,389.
The Company intends to file amended Quarterly Reports on Form 10-Q/A as soon as possible (the “Amended Quarterly Reports”). The differences between the Quarterly Reports and the Amended Quarterly Reports will be identified in the Amended Quarterly Reports.
The Company’s authorized officer discussed with the Company’s independent certifying accountant, Sadler Gibb & Associates, LLC (“Sadler Gibb”) the matters discussed in this report.
About AfterMaster, Inc. (OTCMKTS:AFTM)
Aftermaster, Inc. is an audio technology company. The Company and its subsidiaries are engaged in the development and commercialization of audio and video technologies for professional and consumer use, including AfterMaster audio, ProMaster, Aftermaster Pro and MyStudio. As of June 30, 2016, the Company operated six recording and mastering studios at its Hollywood California facility. AfterMaster Audio Technology is an internally-developed mastering, remastering and audio processing technology. AfterMaster Pro is a personal audio re-mastering device. Aftermaster Pro transforms the audio of television, smartphone, headphones, laptop, tablet, gaming unit, or virtually any audio-enabled device. ProMaster is an online music mastering, streaming and storage service designed for independent artists, which utilizes audio technologies developed by it. ProMaster will master a user’s uploaded music and allows them to compare up to 90 seconds of their original to the newly mastered songs.
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