13. CORRECTION OF INTERIM CONDENSED FINANCIAL STATEMENTS

6 Months Ended

Dec. 31, 2015

Correction Of Interim Condensed Financial Statements

13. CORRECTION OF INTERIM CONDENSED FINANCIAL STATEMENTS

This Amendment No. 1 corrects our previously issued interim consolidated financial statements for the six months ended December 31, 2015, to recognize losses on available for sale securities due to the investment’s stock price dropping from $3.00 per share to $0.05 per share as of December 31, 2015. Because of the decline in the investment’s stock price, the investment is being impaired as of December 31, 2015, as the decline was other than temporary. The correcting adjustments increased the loss on available for sale securities by $1,770,000 and decreased accumulated other comprehensive income by $1,770,000. We restated the three and six months ended December 31, 2015, because we concluded the corrections were material to the interim condensed financial statements.

The effects of these corrections on the interim consolidated financial statements are as follows:

AFTERMASTER, INC.
Consolidated Balance Sheets
	December 31,
	2015
As Reported
Accumulated other comprehensive income			(1,770,000	)
Accumulated Deficit		$	(57,230,155	)
Correction
Accumulated other comprehensive income			1,770,000
Accumulated Deficit		$	(1,770,000	)
As Corrected
Accumulated other comprehensive income			-
Accumulated Deficit		$	(59,000,155	)

AFTERMASTER, INC.
Consolidated Statements of Operations (Unaudited)
	For the Three			For the Six
	Months Ended			Months Ended
	December 31,			December 31,
	2015			2015
As Reported
Loss on Available for Sale Securities		-			-
Total Other Income (Expense)		(202,448	)		4,087,204
Income (Loss) Before Income Taxes		(2,897,424	)		935,292
NET LOSS	$	(2,897,424	)	$	935,292
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(2,914,213	)	$	915,865
Basic and Diluted Loss Per Share of Common Stock	$	(0.03	)	$	0.01
Diluted Income Per Share of Common Stock	$	(0.03	)	$	0.01
Unrealized loss on AFS Securities		(1,170,000	)		(1,170,000	)
Correction
Loss on Available for Sale Securities		(1,770,000	)		(1,770,000	)
Total Other Income (Expense)		(1,770,000	)		(1,770,000	)
Income (Loss) Before Income Taxes		(1,770,000	)		(1,770,000	)
NET LOSS	$	(1,770,000	)	$	(1,770,000	)
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(1,770,000	)	$	(1,770,000	)
Basic and Diluted Loss Per Share of Common Stock	$	(0.02	)	$	(0.02	)
Diluted Income Per Share of Common Stock	$	0.03		$	(0.01	)
Unrealized loss on AFS Securities		1,170,000			1,170,000

As Corrected
Loss on Available for Sale Securities		(1,770,000	)		(1,770,000	)
Total Other Income (Expense)		(1,972,448	)		2,317,204
Income (Loss) Before Income Taxes		(4,667,424	)		(834,708	)
NET LOSS	$	(4,667,424	)	$	(834,708	)
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(4,684,213	)	$	(854,135	)
Basic and Diluted Loss Per Share of Common Stock	$	(0.05	)	$	(0.01	)
Diluted Income Per Share of Common Stock	$	-		$	-
Unrealized loss on AFS Securities		-			-

AFTERMASTER, INC.
Consolidated Statements of Cash Flows (Unaudited)
	December 31,
	2015
As Reported
OPERATING ACTIVITIES
Net Loss		$	935,292
Loss on Available for Sale Securities			-
Correction
OPERATING ACTIVITIES
Net Loss		$	(1,770,000	)
Derivative expense			1,770,000
As Corrected
OPERATING ACTIVITIES
Net Loss		$	(834,708	)
Loss on Available for Sale Securities			1,770,000