Company: RIVF
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001641172-25-024216
Chunk: 21

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 21
---
 paid in capital. Upon settlement of the transaction an additional $0.2 million of liabilities were forgiven, resulting
in total liability forgiveness of $8.1 million.

NOTE
7 – RELATED PARTY TRANSACTIONS

Rivulet
Media, Inc.

As
part of the merger transaction, the transferred entities had $7,888,316 of intercompany loans with Rivulet Media, Inc. as of June 30,
2024. The intercompany loans did not include a stated interest rate or due date. Further, as a result of the transaction, the loans were
forgiven by Rivulet Media, Inc. as of the merger consummation date. Upon settlement of the transaction an additional $189,649 of liabilities
were forgiven, resulting in total liability forgiveness of $8,077,965. The debt forgiveness was recognized as an increase to additional
paid in capital.

Beneficial
Owner

During
the year ended June 30, 2024, the Company entered into a $2,880,000 note payable agreement with a certain beneficial owner of Rivulet
Media, Inc. The notes are due on February 1, 2026 and have a stated interest rate of 15%. The balance of the loan was $2,880,000 as of
December 31, 2024 and June 30, 2024.

Advances

During
the six months ended December 31, 2024, the Company advanced funds to a person of Management at Rivulet Entertainment, Inc. in the
amount of $171,376
which is included in other current assets on the condensed consolidated balance sheets. The advance bears no interest and has no stated maturity date.

NOTE
8 – REVERSE MERGER

During
July of 2024, certain combined entities of Rivulet Media, Inc. entered into a reverse merger with Rivulet Entertainment, Inc. In accordance
with ASC 805, Business Combinations, it was determined that the combined entities should be considered the accounting acquirer
and Rivulet Entertainment, Inc. should be considered the accounting acquiree.

    13

In
determining the number of shares outstanding as of the merger completion date, the Company utilized the guidance in ASC 805-40, Reverse
Acquisitions. Specifically, while the combined entities (that were transferred as part of the transaction) did not have any shares
outstanding as of the merger date, the Company established an exchange ratio based on the number of shares issued by Riv