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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conveyed, and transferred 100% of its ownership interest in FATE USA, LLC, to a third-party transferee for a total consideration of $10. In Instrument of Transfer of Limited Liability Company Interest agreement, the transferee accepted all Company contractual obligations, and the Company has no further responsibility or obligations related to FATE. The transferred subsidiary owned the film rights to FATE. During the three months ended March 31, 2024, the Company transferred its 100% interest in AMFAD and CD, to Press Play Productions, LLC, a related party for a total consideration of $20. The transferred subsidiaries owned the film rights to All My Friends are Dead and Cold Deck (See Note 13). Additionally, during the three months ended March 31, 2024, the Company transferred its 100% interest in Viper to an unrelated third party for total consideration of $10. The transferred subsidiary owned the film rights to Viper (See Note 13).

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

December 31, 2024, we had negative working capital of $12,682,410, which included cash of $12,156, inclusive of reserved cash of $8,735.
We reported a net loss of $2,247,849 and our net cash used in operating expenses totaled $5,488,917 our cash used in investing totaled
$523,969, and out cash provided by financing activities totalled $5,941,065.

Our
sources and uses of cash were as follows:

Cash
Flows from Operating Activities

experienced negative cash flows from operating activities for the year ended December 31, 2024, in the amount of $5,488,917. The net
cash used in operating activities for the year ended December 31, 2024, primarily reflected a net loss of $2,258,151 adjusted for the
add-back of non-cash items consisting of amortization of debt discount and debt issuance cost of $204,116, an initial recognition of
derivative liability of $364,321, a change in fair value derivative of $201,422, decrease in investments (non-cash) of $99,070, impairment
loss of $85,837, offset with a change operating assets and liabilities consisting of an increase in accounts payable of $219,850, a decrease
in accrued expenses of $952,191, a decrease in accounts receivable of $2.866,973, a decrease of tax credit receivable of $681,727, an
increase in other receivable of $28,101, and a decrease of prepaid expenses of $123,610.

experienced negative cash flows from operating activities for the year ended December 31, 2023, in the amount of $4,653,728. The net
cash used in operating activities for the year ended December 31, 2023, primarily reflected a net loss of $3,162,100 adjusted for the
add-back of non-cash items consisting of amortization of debt discount and debt issuance cost of $547,687, a change in fair value derivative
of $3,066,579, decrease in investments (non-cash) of $103,500 offset with a change operating assets and liabilities consisting of an
increase in accounts payable of $525,931, an increase in accrued expenses of $574,547, an increase in accounts receivable of $5,507,441,
an increase of tax credit receivable of $358,126, an increase in other receivable of $27,024, an increase of prepaid expenses of $357,301,
a decrease in content assets of $190,020, and an increase in deferred offering costs of $250,000.

Cash
Flows from Investing Activities

experienced negative cash flows from investing activities of $523,969. The net cash used in investing activities included investments
of $20,837, coupled with non-cash net working capital changes from the transfer of interest in subsidiaries of $503,132 for the year
ended December 31, 2024, compared to negative cash flows from investing activities of $396,220 for the year ended December 31, 2023,
relating to non-cash net working capital changes from the transfer of interest in subsidiaries.

Cash
Flows from Financing Activities

experienced positive cash flows from financing activities for the year ended December 31, 2024, in the amount of $5,941,065. We received
proceeds from production financing, advances from related parties, proceeds from issuance of common stock, and capital contributions
of $3,151,977, 217,005, $1,216,001, and $2,055,275, respectively. We remitted payments for production financing, advances from related
parties, and repayments of convertible notes of $358,300, $101,572, and $239,321, respectively.

experienced positive cash flows from financing activities for the year ended December 31, 2023, in the amount of $5,097,121. We received
proceeds from production financing, short term production loans, advances from related parties, and issuance of convertible notes payable
of $76,074, $4,146,503, 774,152, and 450,000, respectively. We remitted payments for production financing and advances from related parties
of $178,079 and $171,529, respectively.

Non-Cash
Transfers of Interest

March 31, 2024, the Company transferred its 100% interest in AMFAD and CD, to Press Play Productions, LLC, a related party for a total
consideration of $20. The transferred subsidiaries owned the film rights to All My Friends are Dead and Cold Deck (See
Note 13).

Additionally,
on March 31, 2024, the Company transferred its 100% interest in Viper to an unrelated third party for total consideration of $10. The
transferred subsidiary owned the film rights to Viper (See Note 13).

August 14, 2024, the Company transferred 80% of its ownership interest in DMH Production LLC equally to two unrelated third parties for
total consideration of $10. The Company retained a 20% ownership interest in DMH post-transaction. The transferred subsidiary owned the
film rights to Dead Man’s Hand (See Note 13).

Finally,
on December 1, 2024, the Company transferred its 100% interest in GOR to an unrelated third party for total consideration of $10. The
transferred subsidiary owned the film rights to Guns of Redemption (See Note 13).

Recent Financing

During the year ended December 31, 2023, the
Company issued convertible debt with principal balances ranging from approximately $25,000 to $111,000. Each debt instrument had the
following terms (i) a one-year, 7% senior secured convertible promissory note in the aggregate amount of $25,000 per Unit purchased
(the “Convertible Notes”) subject to an original issue discount of 10% (the “OID”), (ii) a five-year Series
B warrant at an aggregate exercise price of $25,000 per Unit purchased, and (iii) a five-year Series C warrant at an aggregate
exercise price of $25,000 per Unit purchased. Each Unit was immediately separable upon issuance. The Company received gross proceeds
in the amount of $442,461 from the issuance of the convertible notes.

During
the year ended December 31, 2024, the Company issued five convertible debt instruments with principal balances of $25,000. Each debt
instrument had the following terms (i) a two-year, 7% senior secured convertible promissory note in the aggregate amount of $25,000 per
Unit purchased (the “Convertible Notes”) subject to an original issue discount of 10% (the “OID”), (ii) a five-year
Series B warrant at an aggregate exercise price of $25,000 per Unit purchased, and (iii) a five-year Series C warrant at an aggregate
exercise price of $25,000 per Unit purchased. Each Unit was immediately separable upon issuance. The Company received gross proceeds
in the amount of $125,000 from the issuance of the convertible notes.

Related
Party Disclosure

Press
Play Productions, LLC, is a related party. The president of Press Play Productions is the son of the Company’s CEO. The transfer
of AMFAD and CD included provisions stipulating that the transferee assumes all contractual obligations and liabilities of the transferred
subsidiaries, and the transferor retains no further responsibility for these obligations (See Note 13).

Reason
for the Transfer

The
transfers were part of the Company’s strategy to divest film projects once all anticipated revenue had been realized and the Company
determined that there would be no further significant benefit derived from retaining the films. This strategy aligns with the Company’s
focus on producing new film projects rather than managing completed ones (See Note 13).

Accounting
Treatment

For
the three months ended March 31, 2025 and March 31, 2024

The
transfers of interest were accounted for as deconsolidation of a subsidiaries. As a result:

pre-tax gain of $1,008,080 was recognized in the unaudited consolidated statement of operations
under “Other Income (Expenses)” as a Gain (loss) on Transfer of Corporate and
Member Interest for the three months ended March 31, 2025,

pre-tax loss of $891,140 was recognized in the unaudited consolidated statement of operations
under “Other Income (Expenses)” as a Gain (loss) on Transfer of Corporate and
Member Interest for the three months ended March 31, 2024,

The
results of operations of FATE was included in the unaudited consolidated financial statements through March 31, 2025 (See Note 13).

The
results of operations of AMFAD, CD, and Viper were included in the unaudited consolidated financial statements through March 31, 2024
(See Note 13).

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

The
transfers of interest were accounted for as deconsolidation of a subsidiaries. As a result:

pre-tax gain of $1,933,261 was recognized in the consolidated statement of operations under
“Other Income (Expenses)” as a Gain on Transfer of Corporate and Member Interest.

The
results of operations of AMFAD, CD, and Viper were included in the consolidated financial statements through March 31, 2024.

The
results of operations of DMH were included in the consolidated financial statements through August 14, 2024.