2. CORRECTION OF INTERM CONDENSED FINANCIAL STATEMENTS

6 Months Ended

Dec. 31, 2014

Correction Of Interm Condensed Financial Statements

2. CORRECTION OF INTERM CONDENSED FINANCIAL STATEMENTS

This Amendment No. 1 corrects our previously issued interim consolidated financial statements for the six months ended December 31, 2014, to add derivative liabilities due to an error in sequencing which begun on August 15, 2014 when the company became contingently obligated to issue shares of common stock in excess of the 100 million authorized under the Company's certificate of incorporation and to recognize deferred revenue related to licensing revenue. Consequently, the ability to settle these obligations with common shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability.  The correcting adjustments increased the derivative liability by $2,078,509, increase in derivative expense by $126,126, increase in loss on derivative instruments by $753,138, and an increase in additional paid in capital by $1,199,245. We have restated the three and six months ended December 31, 2014, because we concluded the corrections were material to the interim condensed financial statements.

The effects of these corrections on the interim consolidated financial statements were:

STUDIO ONE MEDIA, INC.
Consolidated Balance Sheets
	December 31,
	2014
As Reported
Derivative liability		-
Deferred revenue		206,000
Total Current Liabilities		6,596,562
Total Liabilities		6,638,261
Additional paid in capital		46,049,020
Accumulated Deficit		(51,760,774	)
Total Stockholders' Deficit		(5,625,012	)
Total Liabilities and Stockholders' Deficit	$	1,013,249
Correction
Derivative liability		2,078,509
Deferred revenue		(200,000	)
Total Current Liabilities		1,878,509
Total Liabilities		1,878,509
Additional paid in capital		(1,199,245	)
Accumulated Deficit		(679,264	)
Total Stockholders' Deficit		(1,878,509	)
Total Liabilities and Stockholders' Deficit	$	-
As Corrected
Derivative liability		2,078,509
Deferred revenue		6,000
Total Current Liabilities		8,475,071
Total Liabilities		8,516,770
Additional paid in capital		44,849,775
Accumulated Deficit		(52,440,038	)
Total Stockholders' Deficit		(7,503,521	)
Total Liabilities and Stockholders' Deficit	$	1,013,249

STUDIO ONE MEDIA, INC.
Consolidated Statements of Operations (Unaudited)
	For the Three			For the Six
	Months Ended			Months Ended
	December 31,			December 31,
	2014			2014
As Reported
Licensing Revenues		-			-
Other Expense
Derivative Expense		-			-
Change in Fair Value of Derivative		-			-
Total Other Expense		(1,561,649	)		(2,118,514	)
Loss Before Income Taxes		(3,229,482	)		(4,775,645	)
NET LOSS	$	(3,229,482	)	$	(4,775,645	)
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(3,245,363	)	$	(4,808,542	)
Basic and Diluted Loss Per Share of Common Stock	$	(0.04	)	$	(0.06	)
Correction
Licensing Revenues		-			200,000
Other Expense
Derivative Expense		(66,381	)		(126,126	)
Change in Fair Value of Derivative		(725,593	)		(753,138	)
Total Other Expense		(791,974	)		(879,264	)
Loss Before Income Taxes		(791,974	)		(879,264	)
NET LOSS	$	(791,974	)	$	(879,264	)
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(791,974	)	$	(879,264	)
Basic and Diluted Loss Per Share of Common Stock	$	(0.01	)	$	(0.01	)
As Corrected
Licensing Revenues		-			200,000
Other Expense
Derivative Expense		(66,381	)		(126,126	)
Change in Fair Value of Derivative		(725,593	)		(753,138	)
Total Other Expense		(2,353,623	)		(2,997,778	)
Loss Before Income Taxes		(4,021,456	)		(5,454,909	)
NET LOSS	$	(4,021,456	)	$	(5,454,909	)
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(4,037,337	)	$	(5,487,806	)
Basic and Diluted Loss Per Share of Common Stock	$	(0.05	)	$	(0.07	)

STUDIO ONE MEDIA, INC.
Consolidated Statements of Cash Flows (Unaudited)
	December 31,
	2014
As Reported
OPERATING ACTIVITIES
Net Loss		$	(4,775,645	)
Derivative expense			-
(Gain) loss on derivative			-
Accounts payable and accrued expenses and deferred revenue			1,201,680
NON CASH FINANCING ACTIVITIES:
Derivative liability		$	-

Correction
OPERATING ACTIVITIES
Net Loss	$	(679,264	)
Derivative expense		126,126
(Gain) loss on derivative		753,138
Accounts payable and accrued expenses and deferred revenue		(200,000	)
NON CASH FINANCING ACTIVITIES:
Derivative liability	$	1,199,245
As Corrected
OPERATING ACTIVITIES
Net Loss	$	(5,454,909	)
Derivative expense		126,126
(Gain) loss on derivative		753,138
Accounts payable and accrued expenses and deferred revenue		1,001,680
NON CASH FINANCING ACTIVITIES:
Derivative liability	$	1,199,245