SEC Filing Document

Company: Ambitious Entertainment, Inc.
Ticker: 
CIK: 1900851
Filing Type: DRS/A
Document Type: DRS/A
Date Filed: 2025-10-08
Accession Number: 0001493152-25-017387
Exchange: 
SIC Code: 7812
SIC Description: Services-Motion Picture & Video Tape Production
URL: https://www.sec.gov/Archives/edgar/data/1900851/000149315225017387/filename1.htm

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in the consolidated financial statements for the year ended December 31, 2024. Five of the subsidiaries were transferred out of the Company during the year ended December Going Concern The Company’s consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States including the assumption of a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as shown in the accompanying consolidated financial statements, the Company had a net loss of $2.2 million, an accumulated deficit of $13.8 million, and cash used in operations of $5.5 million for the year ended December 31, 2024. The Company expects to continue to incur significant expenditures to develop its technology and is currently not reserving cash to repay convertible notes. As such, there is substantial doubt about the Company’s ability to continue as a going concern.

The
Company has incurred recurring losses and negative cash flows from operations, which raise substantial doubt about its ability to continue
as a going concern. As of December 31, 2024, the Company has $2,021,771 in net convertible debt with a weighted average interest rate
of 7% per annum. Of this amount, $1,893,229 matures on June 1, 2025, and $128,542 matures between May and December 2026. The Company’s
monthly cash burn is approximately $87,500, comprised of $65,000 in labor, $7,000 in travel, $7,500 in legal expenses, $5,000 in audit
fees, and $3,000 in development expenses.

Management
recognizes the need to obtain additional resources to support operations in 2025 and beyond. To address these liquidity challenges, management
has developed the following plans:

1.	Near-Term
Capital Raise :

○	Management
plans to raise $1,000,000 within one month of filing its Form S-1. The funding is expected to be secured through convertible debt
with terms of 1-3 years and an interest rate of 7%. The Company is actively negotiating with 2-3 merchant banks to finalize this
raise.

○	The
$1,000,000 funding is projected to cover operating expenses until the Company lists its shares on the New York Stock Exchange.

2.	Post-Listing
Capital Raise :

○	Following
the listing on the New York Stock Exchange, the Company plans to raise $10,000,000. Management is in discussions with two brokerage
firms regarding this raise, which will provide additional capital to fund the Company’s operations and strategic initiatives.

the absence of the successful execution of these plans, the Company does not have contingency plans other than the possibility of personal
funding by the CEO.

These
consolidated financial statements do not include any adjustments related to the recoverability or classification of recorded asset amounts
and the classification of liabilities that may be necessary if the Company is unable to continue as a going concern.

Management
believes the planned $1,000,000 funding and subsequent $10,000,000 raise, if successfully executed, will mitigate the substantial doubt
about the Company’s ability to continue as a going concern through the end of 2025.

NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis
of Presentation and Principles of Consolidation

The
accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States of America and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The
consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.

Use
of Estimates

The
preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and
assumptions. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that
it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values
of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results
experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences
between the estimates and the actual results, future results of operations will be affected. Significant estimates are contained in the
accompanying consolidated financial statements for the valuation of derivatives, warrants, and other financial instruments.

Cash
and Cash Equivalents

The
Company considers all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents.
Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The
Company’s cash is primarily maintained in checking accounts. These balances may, at times, exceed the U.S. Federal Deposit Insurance
Corporation insurance limits. As of December 31, 2024, the Company had cash and cash equivalents of $12,156, including cash reserves
of $8,735. The Company has not experienced any losses on deposits of cash and cash equivalents.

Accounts
Receivable

Accounts
receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original
amount less an allowance for doubtful accounts. The Company reviews the accounts receivable on a periodic basis and makes general and
specific allowances when there is doubt as to the collectability of individual balances. The Company usually determines the adequacy
of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision
for doubtful accounts when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based
on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections.
The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements
of operations and comprehensive income (loss). Delinquent account balances are written off against the allowance for doubtful accounts
after management has determined that the likelihood of collection is remote. In circumstances in which the Company receives payment for
accounts receivable that have previously been written off, the Company reverses the allowance and bad debt.

Prepaid
Expenses and Other Current Assets

Prepaid
expenses and other current assets consist of various payments that the Company has made in advance for deposits, and goods or services
to be received in the future. Prepaid expenses include consulting, advertising, insurance, and service or other contracts requiring up-front
payments.

Fair
Value Measurements

The
Company follows accounting guidelines on fair value measurements for financial instruments measured on a recurring basis, as well as
for certain assets and liabilities that are initially recorded at their estimated fair values. Fair value is defined as the exit price,
or the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants
as of the measurement date. The Company uses the following three-level hierarchy that maximizes the use of observable inputs and minimizes
the use of unobservable inputs to value its financial instruments:

●	Level
1: Observable inputs such as unadjusted quoted prices in active markets for identical instruments.

●	Level
2: Quoted prices for similar instruments that are directly or indirectly observable in the marketplace.

●	Level
3: Significant unobservable inputs which are supported by little or no market activity and that are financial instruments whose values
are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which
the determination of fair value requires a significant judgment or estimation.

Financial
instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair
value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety
requires the Company to make judgments and consider factors specific to the asset or liability. The use of different assumptions and/or
estimation methodologies may have a material effect on estimated fair values. Accordingly, the fair value estimates disclosed, or initial
amounts recorded, may not be indicative of the amount that the Company or holders of the instruments could realize in a current market
exchange.

The
carrying amounts of the Company’s financial instruments including cash and cash equivalents, prepaid expenses, accounts payable
and accrued liabilities approximate fair value due to the short-term maturities of these instruments.

Set
out below are the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis and their
fair value hierarchy as of December 31, 2024, and 2023:

December 31, 2024 Level 1 Level 2 Level 3 Carrying Value

Liabilities

Derivative Liability - Warrants $	- $	- $	6,921,846 $	6,921,846

Derivative Liability – conversion feature - - 1,552,327 1,552,327

Total Liabilities $	- $	- $	8,474,173 $	8,474,173

December 31, 2023 Level 1 Level 2 Level 3 Carrying Value

Liabilities