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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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

Derivative Liability - Warrants $	- $	- $	6,602,804 $	6,602,804

Derivative Liability – conversion feature - - 1,305,626 1,305,626

Total Liabilities $	- $	- $	7,908,430 $	7,908,430

Stock-based
Compensation

The
Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award.

Content
Assets

The
Company sources intellectual property (“IP”) to create and develop new films for sale to third parties. Content assets related
to original productions include the unamortized costs of both completed and in-process video content produced by the Company. Capitalized
costs include all direct production and financing costs, capitalized interest when applicable, and production overhead. Content assets
are monetized individually and therefore are reviewed at the individual level when an event or change in circumstance indicates a change
in the expected usefulness of the content or the fair value may be less than the unamortized cost.

Impairment
of Long-lived Assets

The
Company reviews its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset might
not be recoverable. An impairment loss would be recognized when projected undiscounted future cash flows are less than its carrying amount.
The expected cash flows are based on assumptions regarding the Company’s future business outlook. Actual results could differ from
these assumptions. The Company did not record any impairment losses during the year ended December 31, 2024, and 2023.

Revenue
recognition

The
Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration
which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that are
within the scope of Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (Topic 606), the Company
performs the following five steps:

identify the contract(s) with a customer;

identify the performance obligations in the contract;

(iii)
determine the transaction price;

allocate the transaction price to the performance obligations in the contract; and

recognize revenue when (or as) the entity satisfies a performance obligation.

The
Company applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to
in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within
the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance
obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of 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