SEC Filing Document

Company: Ambitious Entertainment, Inc.
Ticker: 
CIK: 1900851
Filing Type: DRS
Document Type: DRS
Date Filed: 2025-07-17
Accession Number: 0001493152-25-011282
Exchange: 
SIC Code: 7812
SIC Description: Services-Motion Picture & Video Tape Production
URL: https://www.sec.gov/Archives/edgar/data/1900851/000149315225011282/filename1.htm

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the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Disaggregation of Revenue For the years ended December 31, 2024, and December 31, 2023, 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.

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 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. For production service
agreements, costs are recognized in proportion to the percentage of completion, consistent with the revenue recognition method.

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.

Foreign
Currency Translation

Monetary
assets and liabilities denominated in currencies other than the functional currency are translated at exchange rates in effect at the
balance sheet date. Resulting unrealized and realized gains and losses are included in the consolidated statements of operations.

Foreign
company assets and liabilities in foreign currencies are translated into U.S. dollars at the exchange rate in effect at the balance sheet
date. Foreign company revenue and expense items are translated at the average rate of exchange for the fiscal year. Gains or losses arising
on the translation of the accounts of foreign companies are included in accumulated other comprehensive income or loss, a separate component
of shareholders’ equity.

Convertible
Debt and Convertible Preferred Stock

The
Company has adopted Accounting Standards Update (“ASU”) 2020-06, simplifying the accounting for convertible instruments.
ASU 2020-06 (i) reduced the number of accounting models for convertible instruments, by eliminating the models that require separation
of cash conversion or beneficial conversion features from the host and (ii) revised derivative scope exception and (iii) provided targeted
improvements for EPS. The adoption of ASU 2020-06 did not have a material impact on the Company’s outstanding convertible debt
instruments.

When
the Company issues convertible debt or convertible preferred stock, it evaluates the balance sheet classification to determine whether
the instrument should be classified either as debt or equity, and whether the conversion feature should be accounted 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 76 71

Warrant C 76 68

Convertible note 623,065 583,780

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