Company: RIVF
Filing Date: 2025-09-10
Form Type: 10-Q
Source: 0001493152-25-013005
Chunk: 31

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-09-10
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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120,402 consisted of participation costs of $100,000, pre-production
costs of $7,500 and other expenses of $12,902.

The
increase in general and administrative for the nine months ended March 31, 2025 as compared to the nine months ended March 31, 2024 was
primarily related to participation costs recognized in the amount of $1,995,058 in the current period, related to a film sale. The remainder
of the increases were primarily due to general organizational ramp-up to administratively support the Company’s in-production and
pre-production films.

Other
(expense) income

For
the nine months ended March 31, 2025, other income (expense) totaled $638,725 which consisted of interest expense of $640,837 and other
income of $2,112. For the nine months ended March 31, 2024, other income (expense) totaled $0. The increase in other (expense) income
was primarily related to the increase in notes payable during the nine months ended March 31, 2025 as compared to the nine months ended
March 31, 2024. Portions of our interest costs related to notes payable are capitalized in accordance with Accounting Standards Codification
(“ASC”) 926, Entertainment-Films and therefore are expensed through the amortization of capitalized film costs. For
the nine months ended March 31, 2025 and 2024, the Company capitalized $1.5 million and $0.4 million of interest expense to film costs
related to various picture film productions.

Critical
Accounting Estimates

Impairment
of Capitalized Production Costs

The
Company will test its unamortized production costs whenever events or changes in circumstances indicate that the fair value of a film
may be less than its unamortized costs. If the Company determines that the fair value of a film is less than its unamortized production
costs, then the unamortized capitalized costs for the film will be written down by the amount exceeding the film’s fair value.
The unit of account for impairment testing is the individual film being produced and the fair value is determined using a discounted
cash flow technique.

Recognition
of Revenue from Contracts with Customers

The
Company recognizes revenue from its contracts with customers in accordance with the core principle outlined in ASC 606, Revenue from
Contracts with Customers. Specifically, “to depict the transfer of promised goods or