AfterMaster (AFTM) Risk Analysis

As of June 30, 2019, we had an accumulated deficit of $85,859,489 and negative working capital of $12,891,404. In addition, for the year ended June 30, 2019, we had a loss of approximately $9,302,739 and negative cash flow from operating activities of approximately $2,417,256. The Company has not declared dividends on its common stock, but the Company does have cumulative dividends in arrears through June 30, 2019, of approximately $1,361,102 for its outstanding Series A Convertible Preferred Stock. Revenues generated from our current operations are not sufficient to pay our ongoing operating expenses. Therefore, we will have to obtain additional funding from the sale of our securities or from strategic transactions in order to fund our current level of operations. In order to fund our working capital needs and our operational costs during 2019, we entered into twenty-two (22) Share Purchase Agreements with individual accredited investors resulting in net proceeds of $281,500, seven (7) notes payable resulting in net proceeds of $375,000, thirteen (13) related notes payable resulting in net proceeds of $154,000, and thirteen (13) convertible notes payable resulting in net proceeds of $1,867,350 to the Company. The funds currently available to us are inadequate to fully implement our business plan. Until we have achieved revenues sufficient for us to break-even, we will not be a self-sustaining entity, which could adversely impact our ability to be competitive in the areas in which we do and intend to operate. We require additional funding for continued operations and will therefore be dependent upon our ability to raise additional funds through bank borrowing, equity or debt financing or asset sales. We expect to access the public and private equity and/or debt markets periodically to obtain the funds we need to support our operations and continued growth. There is no assurance that we will be able to obtain additional funding when needed, or that such funding, if available, can be obtained on terms acceptable to us. If we require, but are unable to obtain, additional financing in the future on acceptable terms, or at all, we will not be able to continue our business strategy, respond to changing business or economic conditions, withstand adverse operating results or compete effectively. If we cannot obtain needed funds, we may be forced to curtail, in whole or in part, or cease its activities altogether. When additional shares are issued to obtain financing, current shareholders will suffer a dilutive effect on their percentage of stock ownership. We require substantial capital to continue Aftermaster operations. Although we intend to engage in subsequent debt and equity offerings of our securities to raise additional working capital for Aftermaster operations, we have no firm commitments for any additional funding, either debt or equity, at the present time. Insufficient financial resources may require us to delay or eliminate all or some of our sales and marketing efforts to generate revenues for AfterMaster, which could have a material adverse effect on our business, financial condition and results of operations. There is no certainty that our expenditures will result in a profitable business as proposed.