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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on a percentage-of-completion basis, as described below. The Company did not generate revenue from feature films or other licensing activities during these periods. For the six months ended June 30, 2025, and 2024, 100% of the Company’s revenue was derived from production services. Revenue related to production service agreements is recognized on a percentage-of-completion basis, as described below. The Company did not generate revenue from feature films or other licensing activities during these periods. Production Services Revenue For production service agreements, revenue is recognized over time on a percentage-of-completion basis as the Company satisfies its performance obligations. The percentage of completion is determined based on actual costs incurred relative to total estimated costs, and related costs are expensed as incurred in proportion to the percentage of completion. Contract Balances The Company’s contract balances include the following: ● Deferred Revenue: Represents payments received in advance of the performance obligations being satisfied.

●	Content
Assets: Capitalized costs related to feature film programming rights, which are deferred and recognized as revenue when the rights
are transferred to the customer.

June 30. December 31.

Deferred Revenue 2025 2024

Beginning Balance $	0 $	0

Additions $	0 $	0

Revenue Recognized $	0 $	0

Ending Balance $	0 $	0

Deferred Revenue 2024 2023

Beginning Balance $	0 $	0

Additions $	0 $	0

Revenue Recognized $	0 $	0

Ending Balance $	0 $	0

Performance
Obligations

The
Company satisfies its performance obligations for production services over time, accounting for 100% of the Company’s total revenue
for the six months ended June 30, 2025, and 2024. The satisfaction of performance obligations is measured using the percentage-of-completion
method, as described above. For the years presented, there were no material unsatisfied performance obligations as of the balance sheet
date.

The
Company satisfies its performance obligations for production services over time, accounting for 100% of the Company’s total revenue
for the years ended December 31, 2024, and December 31, 2023. The satisfaction of performance obligations is measured using the percentage-of-completion
method, as described above. For the years presented, there were no material unsatisfied performance obligations as of the balance sheet
date.

Cost
of Revenue

Costs
incurred to produce feature films are capitalized when incurred and expensed when the movie rights are transferred. The costs incurred
to acquire feature film programming rights, including advances, are capitalized.

Income
Taxes

Income
taxes are accounted for using an asset and liability approach for financial accounting and reporting for income taxes, and recognition
and measurement of deferred assets are based upon the likelihood of realization of tax benefits in future years. Under this method, deferred
taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Valuation allowances are established when management determines that
it is more likely than not that some portion or all of the net deferred tax asset, on a jurisdiction-by-jurisdiction basis, will not
be realized. The financial effect of changes in tax laws or rates is accounted for in the period of enactment.

From
time to time, the Company engages in transactions in which the tax consequences may be subject to uncertainty. Significant judgment is
required in assessing and estimating the tax consequences of these transactions. In determining the Company’s tax provision for
financial reporting purposes, the Company establishes a reserve for uncertain tax positions unless such positions are determined to be
more likely than not of being sustained upon examination, based on their technical merits. The Company’s policy is to recognize
interest and/or penalties related to income tax matters in income tax expense.

The
Company has recognized a full valuation allowance of $4,848,574 against its deferred tax assets as of December 31, 2024, and $4,374,363
as of December 31, 2023. This valuation allowance reflects management’s assessment that it is more likely than not that the deferred
tax assets, including net operating loss carryforwards of approximately $6.6 million, will not be realized. The primary basis for this
conclusion is the Company’s cumulative losses in recent periods, which represent significant negative evidence under applicable
accounting guidance.

Deferred
tax assets and liabilities arise from temporary differences between the carrying values of assets and liabilities for financial reporting
purposes and their respective tax bases. Despite the availability of significant net operating loss carryforwards that do not expire
until 2038, the lack of sufficient taxable income in the foreseeable future to offset these carryforwards necessitated the valuation
allowance.

Management
continuously evaluates both positive and negative evidence in assessing the realizability of deferred tax assets. Positive evidence includes
the potential for future profitability and the expected utilization of net operating losses, while negative evidence includes recent
operating performance and industry-specific challenges. At this time, the weight of the negative evidence, particularly the cumulative
losses incurred in recent years, supports the decision to maintain a full valuation allowance.

The
Company will reassess the valuation allowance on a quarterly basis and adjust it if sufficient positive evidence becomes available to
support the realizability of deferred tax assets.

Segment
Reporting

Under
ASC 280, “Segment Reporting,” the Company applies the management approach model to define its operating segments. This model
evaluates the manner in which the Company’s chief operating decision maker (“CODM”) organizes the business for decision-making
purposes, assessing performance, and allocating resources. Segments are identified based on factors such as products and services, geography,
legal structure, or management organization.

The
Company has determined that its operations constitute a single reportable segment. While the Company produced films in both the United
States and Canada during 2023 and 2024, management concluded that geographic differences do not result in materially dissimilar economic
characteristics. Specifically:

1.	Similar
Economic Characteristics: The production activities in the United States and Canada generate comparable profit margins, face similar
cost structures (e.g., production expenses and tax incentives), and serve the same class of customers, primarily major studios and
streaming platforms.

2.	Geographic
Operations: While the geographic split has varied (e.g., one film in the U.S. and others in Canada during 2024, and three films in
Canada with one in the U.S. during 2023), the geographic differences have not created materially different risks or opportunities
for the Company.

The
Company has determined that its operations constitute a single reportable segment. The Company did not produce any films
in the six months ended June 30, 2025. During the six months ended June 30, 2024, the Company produced films
in both the United States and Canada; however, management concluded that geographic differences did not result in materially dissimilar
economic characteristics. Specifically:

1.	Similar
Economic Characteristics: The production activities in the United States and Canada generate comparable profit margins, face similar
cost structures (e.g., production expenses and tax incentives), and serve the same class of customers, primarily major studios and
streaming platforms.

2.	Geographic
Operations: While the geographic split has varied (e.g., one film in the U.S. and others in Canada during 2024), the geographic differences
have not created materially different risks or opportunities for the Company.

Regarding
shared resources, the Company utilizes centralized corporate overhead and administrative services, including executive oversight, financial
management, and compliance monitoring, for all films. Surveillance systems and related infrastructure are also shared across all operations.
However, some differences exist in personnel and equipment usage, as each film may require specific local hires or project-specific equipment.
These differences are operational in nature and do not materially affect the economic characteristics of the Company’s activities.

Based
on these factors, the Company concluded that its films can be aggregated into a single reportable segment. This decision aligns with
the guidance under ASC 280-10-50-11, as the films share similar economic and operational characteristics, consistent production processes,
and a common customer base.

Quantitative
thresholds for identifying additional segments were evaluated, and the Company determined that no individual film or group of films met
the criteria for separate segment reporting. Management will continue to assess its segment reporting annually to ensure compliance with
ASC 280 as the business evolves.

Derivative
Financial Instruments