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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for separately from the host instrument. A conversion feature of a convertible debt instrument or certain convertible preferred stock would be separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a standalone instrument, meets the definition of an “embedded derivative” in ASC 815, Derivatives and Hedging. Generally, characteristics that require derivative treatment include, among others, when the conversion feature is not indexed to the Company’s equity, as defined in ASC 815-40, or when it must be settled either in cash or by issuing stock that is readily convertible to cash. When a conversion feature meets the definition of an embedded derivative, it would be separated from the host instrument and classified as a derivative liability carried on the consolidated balance sheet at fair value, with any changes in its fair value recognized currently in the consolidated statements of operations. Derivative Financial Instruments

The
Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our
financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For
derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value
and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For our derivative
financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and on subsequent
valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or
as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or
non-current based on whether or not net-cash settlement or conversion of the instrument could be required within twelve (12) months of
the balance sheet date.

Warrants

The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”)
and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial
instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements
for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether
the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control,
among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the
time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair
value of the warrants was estimated using a Black-Scholes pricing model.

Earnings
(Loss) Per Share

The
Company computes basic and diluted earnings (loss) per share in accordance with ASC 260, Earnings per Share. Basic earnings (loss)
per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting
period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to
issue common shares were exercised or equity awards vest resulting in the issuance of common shares that could share in the earnings
(loss) of the Company.

a result of the net loss in the years ended December 31, 2024, and 2023, the dilutive effect of the warrants and convertible notes were
considered anti-dilutive and, therefore, excluded from diluted net loss per share.

December 31, December 31,

(Share) (Share)

Warrant A 4,000,000 4,000,000

Warrant B 1,040,365 971,615

Warrant C 1,040,365 971,615

Convertible note 1,040,365 971,615

Advertising
Costs

The
Company follows the policy of charging the cost of advertising to expense as incurred. Advertising expense was nil for the years ended
December 31, 2024, and 2023.

Related
Parties and Transactions

The
Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related
Party Disclosures” and other relevant ASC standards.

Parties,
which can be an entity or individual, are considered to be related if they have the ability, directly or indirectly, to control the Company
or exercise significant influence over the Company in making financial and operational decisions. Entities are also considered to be
related if they are subject to common control or common significant influence.

Transactions
involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive,
free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related
party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations
can be substantiated.

Segment
Reporting

ASC
280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management
approach model is based on the way a company’s chief operating decision maker (“CODM”) organizes segments for
making operating decisions, assessing performance, and allocating resources. Reportable segments are based on products
and services, geography, legal structure, management structure, or any other manner in which management disaggregates the Company.

Management
has determined that the Company’s operations currently constitute a single reportable segment in accordance
with ASC 280. The CODM evaluates the Company’s operations on a consolidated basis and does not allocate resources or assess
performance separately by geography or product.

November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures, which expands the disclosure requirements
for reportable segments. The Company is currently evaluating the impact of ASU 2023-07 and expects to provide the enhanced segment disclosures
in its fiscal year 2025 filings, including additional information about significant expenses, reconciliations of segment profit or loss
to consolidated income, and other disclosures required by the standard.

Tax
credits and tax credit receivable

The
Company receives tax incentives from U.S. (state and local) and foreign government agencies to encourage the production of film, episodic
and streaming content. Regarding the accounting treatment for tax credits, GAAP provides limited guidance on the accounting for government
grants received by for-profit companies. In accordance with ASC Topic 832, Government Assistance, as adopted January 1, 2022, we will
disclose certain types of government assistance received in the notes to the consolidated financial statements that includes: a) the
nature of the transaction including the nature of the assistance being given, b) the accounting policies being used to account for the
transaction and c) other provisions of relevance, where required. Depending on the type of grant or contract, we understand there is
more than one acceptable alternative for the accounting treatment – a reduction of costs, a deferred credit to be amortized, revenue
or other income. The Company has concluded that reimbursements received for tax credits incurred, are more akin to a reduction of capitalized
productions costs and applies reimbursements against our content assets. For the years ended December 31, 2024, and 2023, the company
has recorded a tax credit receivable of $0, and $973,126, respectively.

Recent
Accounting Pronouncements

Segment
Reporting – Improvements to Reportable Segment Disclosures

November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07, Improvements
to Reportable Segment Disclosures, which expands the disclosure requirements for reportable segments in annual and interim
consolidated financial statements. The guidance requires additional information about significant segment expenses, reconciliations
of segment profit or loss to consolidated income, and the basis of measurement used for segment reporting.

The
standard is effective for public companies for fiscal years beginning after December 15, 2024, and interim periods within
those fiscal years, with early adoption permitted. Accordingly, the Company will adopt ASU 2023-07 beginning with its fiscal year
2025 annual report and interim periods thereafter.

Segment
Information

The
Company currently identifies reportable segments based on the operating segments that are evaluated regularly by the chief operating
decision maker (“CODM”) for purposes of allocating resources and assessing performance. For each reportable segment, the
Company will disclose the following as required under ASU 2023-07:

●	Revenues
from external customers and intersegment revenues.

●	Profit
or loss and total assets for each reportable segment.

●	Reconciliations
of segment profit or loss, assets, and other significant measures to the corresponding amounts
in the consolidated financial statements.

●	Significant
expenses within each segment, including a discussion of material items affecting segment
results.