Company: RIVF
Filing Date: 2025-09-10
Form Type: 10-Q
Source: 0001493152-25-013005
Chunk: 13

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-09-10
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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 expenses of $1,595,058 as of March 31, 2025, which are presented in
accrued expenses in the condensed consolidated balance sheets. During the three months ended March 31, 2025, the Company paid $400,000
of participation costs. The remaining accrued participation costs are expected to be paid during the upcoming operating cycle.

Investments
in Equity Securities

The
Company accounts for its investments in equity securities without a readily determinable fair value at cost minus impairment in accordance
with ASC 321, Investments-Equity Securities. Further, the Company will continue to recognize its investments without a readily
determinable fair value at cost minus impairment until the investment does not qualify to be measured as such. To that extent, the Company
will re-assess at the end of each reporting period whether the investment still qualifies to be recognized at cost minus impairment.

In
addition to assessing whether the investments still qualify to be recognized at cost minus impairment, the Company will also make a qualitative
assessment at the end of each reporting period considering impairment indicators to evaluate whether the investment is impaired. If the
qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than its carrying value,
then the investment will be written down to fair value. The Company did not recognize any impairments for the three and nine months ended
March 31, 2025 and 2024.

General
and Administrative Expenses

The
Company’s general and administrative expenses primarily consist of participation costs, personnel and related costs, including
employee salaries, legal fees relating to corporate matters, accounting and audit related costs, insurance, corporate communications,
information technology and related expenses.

     8

Income
Taxes

The
Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.

ASC
740 prescribes a recognition threshold and a