Company: RIVF
Filing Date: 2025-09-10
Form Type: 10-Q
Source: 0001493152-25-013005
Chunk: 12

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-09-10
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 does not currently provide any form of extended payment terms to its customers and, as such, a fixed payment is typically
received from the customer within 90 days after the license is transferred.

     7

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 three and  nine months ended March 31, 2025 the Company sold film rights to a customer in the amount of $0 and $10.0
million, respectively. 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 nine months ended March 31, 2025 and 2024, respectively, which is included in General and administrative expense on the condensed
consolidated statements of operations. The Company incurred no participation costs for the three months ended March 31, 2025 and 2024,
respectively. Further, the Company had accrued participation cost