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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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

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.

Sensitivity
Analysis

For
the six months ended June 30, 2024 and June 30, 2025

The
fair value of derivative liabilities is sensitive to changes in key inputs:

●	Volatility :
A 5% increase (decrease) in volatility would increase (decrease) the fair value by approximately $2,400 and $30,000 as of
June 30, 2025, and December 31, 2024, respectively.

●	Risk-Free
Rate : A 50-basis point increase (decrease) in the risk-free interest rate would increase (decrease) the fair value by approximately
$7,200 and $8,400 as of June 30, 2025, and December 31, 2024, respectively.

The
inputs used to calculate the derivative values are as follows:

Six Months ended Year ended

June 30, December 31,

Stock price $	0.79 - 2.50 $	0.79 - 2.50

Expected term 0.16 -2.93 0.26 - 3.17

Expected average volatility 50	% 66	%

Expected dividend yield - -

Risk-free interest rate 3.83

The
following table summarizes the changes in the derivative liabilities during the period of December 31, 2024, through June 30,

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

Balance - December 31, 2024 $	8,474,173

Addition of new derivatives recognized as warrants 222,064

Addition of new derivatives recognized as conversion feature 69,394

Loss on change in fair value of the derivative (1,885,521	)

Balance – June 30, 2025 $	6,880,110

Six Months ended Year ended

June 30, December 31,

Change in fair value of the derivative $	(1,885,521	) $	211,422

Day 1 loss due to derivative liabilities 291,458 354,321

For
the fiscal year ended December 31, 2023 and December 31, 2024

The
fair value of derivative liabilities is sensitive to changes in key inputs:

●	Volatility :
A 5% increase (decrease) in volatility would increase (decrease) the fair value by approximately $30,000.

●	Risk-Free
Rate : A 50-basis point increase (decrease) in the risk-free interest rate would increase (decrease) the fair value by approximately

The
inputs used to calculate the derivative values are as follows:

Years ended

December 31,

Stock price $ 0.79 - 2.50 $ 0.61 - 2.50

Expected term 0.26 - 3.17 0.26 - 3.17

Expected average volatility 66	% 64	%

Expected dividend yield - -

Risk-free interest rate 3.88 - 5.25% 0.7 1 - 3.00%

The
following table summarizes the changes in the derivative liabilities during the year ended December 31, 2024, and 2023:

Fair
Value Measurements Using Significant Unobservable Inputs (Level 3)

Balance – January 1, 2023 $	4,349,390

Addition of new derivatives recognized as warrants 1,101,262

Addition of new derivatives recognized as conversion feature 344,145

Loss on change in fair value of the derivative 2,113,633

Balance - December 31, 2023 $	7,908,430

Addition of new derivatives recognized as warrants 277,578

Addition of new derivatives recognized as conversion feature 86,743

Loss on change in fair value of the derivative 201,422

Balance - December 31, 2024 $	8,474,173

December 31,

Change in fair value of the derivative $	211,422 $	2,606,094

Day 1 loss due to derivative liabilities 354,321 952,946

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.

Off-Balance
Sheet Arrangements

did not have, during the periods presented, and we do not currently have, any relationships with any organizations or financial partnerships,
such as structured finance or special purpose entities, that would have been established for the purpose of facilitating off-balance
sheet arrangements or other contractually narrow or limited purposes.

Critical
Accounting Policies and Significant Accounting Estimates

Our
management’s discussion and analysis of our financial condition and results of operations are based on our financial statements,
which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation of
these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities as of the date of the financial statements as well as the reported expenses during
the reporting periods. The accounting estimates that require our most significant, difficult, and subjective judgments have an impact
on revenue recognition, the determination of share-based compensation, and financial instruments. We evaluate our estimates and judgments
on an ongoing basis. Actual results may differ materially from these estimates under different assumptions or conditions.

Our
significant accounting policies are more fully described in our financial statements (Note 3 in our audited consolidated financial statements
as of and for the years ended December 31, 2024 and 2023), included elsewhere in this prospectus.

Recently
Issued Accounting Standards

Our
analysis of recently issued accounting standards are more fully described in our financial statements (Note 3 in our audited consolidated
financial statements as of and for the years ended December 31, 2024 and 2023 included elsewhere in this prospectus.

Non-GAAP
Financial Measure

addition to our financial results prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP
financial measures, including earnings before interest, taxes, depreciation, and amortization (“EBITDA”), to evaluate our
operational performance and enhance comparability across periods. EBITDA, defined as net income (loss) adjusted to exclude the impact
of depreciation, amortization, and stock-based compensation, provides useful insight into the company’s underlying business performance
by excluding non-cash expenses and other items that management considers not indicative of our core operating results. This measure should
be viewed as a supplement to, not a substitute for, our GAAP results. The above discussion contains a reconciliation of Net Loss, the
most directly comparable GAAP measure, to EBITDA for the periods presented.

BUSINESS

Company
Overview

Ambitious
Entertainment, Inc., a Nevada corporation, was incorporated in September 2020. The company was founded to harness the power
of online influencers, emerging technologies, and global financing through strategic partnerships with viral creators. Ambitious creates
film and television content that is intended to sell quickly, scale globally and monetize early, often before traditional
studios react, by combining what management considers to be A-list talent (such as Charlize Theron, John Travolta and Nicolas Cage),
top-tier writers and directors (including Bob Yari and Academy Award winner Kathryn Bigelow) and leading digital creators (such as Adam
Rose and JoJo Siwa).