Company: RIVF
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001493152-25-018109
Chunk: 215

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 3
Chunk 215
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 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
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. During the twelve months ended June 30, 2025, the