Company: RIVF
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024216
Chunk: 43

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 43
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 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 six months ended December 31, 2024 and 2023, respectively, which is included in General and administrative expense on the
condensed consolidated statements of operations. The Company incurred participation costs of $1,995,058
and $0
for the three months ended December 31, 2024 and 2023, respectively. Further, the Company had accrued participation cost expenses of $1,995,058
as of December 31, 2024, which are presented in accrued expenses in the condensed consolidated balance sheet. The 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 six months ended December 31, 2024 and 2023.

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