Company: RIVF
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001493152-25-018109
Chunk: 121

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 1B
Chunk 121
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 customers and, as such, a fixed payment is typically received from
the customer within 90 days after the license is transferred.

    F-9

In
determining the transaction price, the Company’s contracts with its customers do not include a significant financing component,
non-cash consideration or consideration payable to the customer. However, the Company’s contracts typically will include sales-based
or usage-based royalties that are triggered by the attainment of certain levels of box office receipts or video on demand (“VOD”)
purchases. To that extent, in accordance with ASC 606-10-55, the Company will recognize the sales-based or usage-based royalties only
when the later of the following events occur-a) the subsequent sale or usage occurs or b) the performance obligation to which the sales-based
or usage-based royalty has been satisfied.

As
it pertains to incremental costs of obtaining a contract, the Company does not incur any type of sales commissions.

During
the year ended June 30, 2025 the Company sold film rights to a customer for $10.0 million. The Company concluded that the sale represented
the transfer of a functional license to the customer and that it had satisfied all of its performance obligations stemming from the agreement
during the period. As such, the entire $10.0 million fixed sale price was recognized as revenue during the period. The Company does not
expect to generate additional revenues from the film.

Exploitation
and Participation Costs

The
Company accounts for advertising costs in accordance with ASC 720-35, Other Expenses-Advertising Costs. All other direct costs
incurred in connection with the distribution of a film are expensed as incurred. In addition, the Company will begin to accrue (expense)
participation costs when i) a film is released and ii) it begins to recognize revenue from the film. Participation costs are accrued
(expensed) using the individual-film-forecast-computation method. The Company incurred participation costs of $1,995,058 and $100,000
for the twelve months ended June 30, 2025 and 2024, respectively, which is included in general and administrative expense on the consolidated
statements of operations. Further, the Company had accrued participation cost expenses of $311,469 and $0 as of June 30, 2025 and 2024,
which are presented in accrued expenses in the consolidated balance sheets. The accrued participation costs are expected to
be paid during the upcoming operating cycle.

Investments