Current Report Filing (8-k)
October 18 2018 - 5:04PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported):
October 12, 2018
AfterMaster,
Inc.
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(Exact
name of registrant as specified in its charter)
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Delaware
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001-10196
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23-2517953
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(State
or other jurisdictionof incorporation)
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(Commission
FileNumber)
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(IRS
Employer IdentificationNumber)
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6671 Sunset Blvd., Suite 1520
Hollywood, California
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90028
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(Address
of principal executive offices)
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(zip
code)
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(310)
657-4886
(Registrant’s
telephone number, including area code)
(former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2.
below):
☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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☐
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933
(§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this
chapter).
Emerging growth
company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.
☐
Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report
or Completed Interim Review
On October 12, 2018, the Board of Directors of AfterMaster, Inc.
(the “
Company
”) determined that
the Company’s financial statements in each of the Quarterly
Reports on Form 10-Q for the quarterly periods ended September 30,
2017, December 31, 2017, and March 31, 2018 (such Quarterly Reports
collectively the “
Quarterly Reports
”),
should not be relied upon because of the following issues
discovered in the course of the Company’s preparation and
audit of its financial statements for the year ended June 30,
2018.
During the September 30, 2017 quarter, the Company sold $400,000 of
its product to its manufacturer for $400,000 and recorded it as
gross revenue. The transaction eliminated $400,000 in short term
debt. During the course of the audit it was determined that the
transaction
should have been classified as net
sales. Accordingly, the Company should not have (i) recognized
gross revenue of $400,000 for the sale related to 4,000 units to
the Company’s manufacturer, (ii) recognized the cost of sales
related to 4,000 units of Company products sold
to that manufacturer in the amount of
$400,000.
The Company also determined that it erroneously
overstated the derivative liability as of
September 30, 2017 and it should be reduced by
$485,031.
During the December 31, 2017 quarter, the Company sold $90,000 of
its product to its manufacturer for $120,000 and recorded it as
gross revenue. The transaction eliminated $90,000 in short term
debt. During the course of the audit it was determined that the
transaction should have been classified as net sales. Accordingly,
the Company should not have (i) recognized gross revenue of
$120,000 for the sale related to the 1,000 units to the
Company’s manufacturer and should have only recognized
$30,000 in net revenue, (ii) recognized the cost of sales of
$90,000 related to 1,000 units of Company product sold to that
manufacturer, or (iii) decreased derivative liabilities by $356,396
by including in the derivative liability calculation convertible
debt that did not include elements that would trigger derivative
treatment.
During the March 31, 2018 quarter, the Company is (i) recording
changes made in the September 30, 2017 and the December 31, 2017
quarters, and (ii) increasing derivative liabilities by
$365,803 due to the Company using the
incorrect discounted conversion rate to arrive at
the conversion price and number of shares that could be issued and
using
an incorrect maturity
date to estimate the useful life on several notes used in the
derivative liability calculation.
The
Company has contemporaneously filed with this 8-K the amended
Quarterly Reports on Form 10-Q/A (the “
Amended Quarterly
Reports
”). The differences between the Quarterly
Reports and the Amended Quarterly Reports are identified in the
Amended Quarterly Reports.
The
Company’s 10-K filed October 15, 2018 reflects the net result
of the changes from the restatements.
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.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated:
October 18, 2018
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AFTERMASTER, INC.
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By:
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/s/
Larry Ryckman
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Name:
Larry Ryckman
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Title:
President and Chief Executive Officer
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