Company: RIVF
Filing Date: 2025-10-15
Form Type: 10-K
Source: 0001493152-25-018109
Chunk: 434

Company: Rivulet Entertainment, Inc.
Filing Date: 2025-10-15
Form: 10-K
Item: Item 7A
Chunk 434
---
locate the transaction price to the performance obligations in the contract

    ●
    Step
    5-Recognize revenue when (or as) the Company satisfies a performance obligation

The
Company’s contracts with its customers currently contain a single performance obligation comprised of a license to motion picture
rights. In accordance with ASC 606, the Company ( i.e. the “licensor”) has concluded that the license transfer should i)
be considered functional intellectual property and ii) that customers (the “licensees” or “distributors”) are
therefore granted a right to use the Company’s intellectual property as it exists at the point in time at which the license is
granted. As such, revenue is recognized at a point in time upon the Company’s delivery of the license to the licensee. The Company
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.

    F-9

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 year ended June 30, 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