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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for segment reporting. The standard is effective for public companies for fiscal years beginning after December 15, 2024, and interim periods within those fiscal years, with early adoption permitted. Accordingly, the Company will adopt ASU 2023-07 beginning with its fiscal year 2025 annual report and interim periods thereafter. Segment Information The Company currently identifies reportable segments based on the operating segments that are evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and assessing performance. For each reportable segment, the Company will disclose the following as required under ASU 2023-07: ● Revenues from external customers and intersegment revenues. ● Profit or loss and total assets for each reportable segment. ● Reconciliations of segment profit or loss, assets, and other significant measures to the corresponding amounts in the consolidated financial statements. ● Significant expenses within each segment, including a discussion of material items affecting segment results.

The
Company is currently evaluating the impact of ASU
2023-07 on its segment disclosures and expects to provide enhanced segment reporting in the fiscal year 2025 filings.

Management
determined the Company’s operations constitute a single reportable segment in accordance with ASC 280.

Income
Taxes – Improvements to Income Tax Disclosures

December 2023, the FASB issued a new standard to improve income tax disclosures. The guidance requires disclosure of disaggregated income
taxes paid, prescribes standardized categories for the components of the effective tax rate reconciliation, and modifies other income
tax-related disclosures. The standard will be effective for us beginning with our annual reporting for fiscal year 2026, with early adoption
permitted. We are currently evaluating the impact of this standard on our income tax disclosures.

Recently
Adopted Accounting Pronouncements

The
Company on January 1, 2022, adopted the provisions of ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and
Derivatives and Hedging – Contracts in Entity’s’ Own Equity (Subtopic 815-40): Accounting for Convertible Instruments
and Contracts in an Entity’s Own Equity). The modified retrospective adoption of the new accounting principle did not have
a material effect on the Company’s financial statements. As a result of the adoption of this new accounting principle, the Company
did not have to separate any embedded conversion feature in the Company’s newly issued convertible debt.

The
Company on January 1, 2022, early adopted ASU 2021-04: Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments
(Subtopic 470-50), Compensation – Stock Compensation (Topic 718) and Derivatives and Hedging – Contracts in
Entity’s Own Equity (Subtopic 815-40) on a prospective basis. The new standard was issued in April 2021 with one aspect being
the intent of standardizing the application of accounting for modification of warrants. The adoption of this ASU did not have material
impact on the Company’s financial statements.

The
Company on January 1, 2022, adopted the provisions of ASU 2021-07,
Determining the Current Price of an Underlying Share for Equity-Classified Share-Based Awards, which provides private companies
the option to elect a practical expedient to determine the current price input of equity-classified share-based awards issued as compensation
using the reasonable application of a reasonable valuation method. The characteristics of this method are the same as the characteristics
used in the regulations of the U.S. Department of the Treasury related to Section 409A of the U.S. Internal Revenue Code (the Treasury
Regulations) to describe the reasonable application of a reasonable valuation method for income tax purposes. The adoption of this ASU
did not have material impact on the Company’s financial statements.

June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic
326), Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 was further amended in November 2020 by ASU No. 2020-10,
Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). As a result, ASC
Topic 326, Financial Instruments – Credit Losses is effective for public companies for annual reporting periods, and interim periods
within those years beginning after December 15, 2020. For all other entities, it is effective for fiscal years beginning after December
15, 2022, including interim periods within those fiscal years. As the Company is an “emerging growth company” and elects
to apply for the new and revised accounting standards at the effective date for a private company, the Company adopted ASU No. 2016-13.
on January 1, 2023, and the adoption did not have a material impact on the Company’s consolidated financial statements.

NOTE
3 - ACCOUNTS RECEIVABLE

of December 31, 2024, and 2023, accounts receivable totaled $290,597 and $5,528,441, respectively. The amounts as of December 31, 2024,
and 2023 represents funds due to the Company under the terms of the film production service agreements. In addition, as of December 31,
2023, the balance includes $750,000 related to a production finance agreement. This amount represents funds due to the Company under
the terms of the agreement, which provides financing for production-related activities.

NOTE
4 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid
expenses and other current assets are assets and payments previously made, that benefit future periods. The balance as of December 31,
2024, and 2023, respectively includes prepaid operating expenses and production related deposits.

Prepaid
and other current assets comprised of the following:

December 31, December 31,

Prepaid expenses $	7,083 $	5,000

Deposits 109,659 352,301

NOTE
5 - INVESTMENTS

of December 31, 2024, the Company’s only investment in third-party film projects consisted of a participation
right in the development of The Chuck Berry Story. This investment represents financial contributions made under a shopping agreement
originally executed on November 14, 2022, and subsequently amended on July 24, 2024, to extend the term through May 14, 2025. Under the
agreement, the Producer has the right to solicit funding partners and development opportunities for the project. If a funding partner
is not secured by the contractual maturity date, all rights under the agreement revert to the Licensor.

The
Company accounts for the investment at cost, representing the cash payments made, unless there is evidence of impairment. The carrying
value of the investment was $128,650 as of December 31, 2024, compared to $292,720 as of December 31, 2023. The decrease in investment
balance reflects impairment charges of approximately $86,000 and the transfer of membership
interests to a third party of approximately $99,000, partially offset by new investments of $21,000.

The
Company holds a 0% equity ownership interest in the underlying project rights; rather, the investment entitles the Company to participate
in revenue generated if the project successfully proceeds to production and distribution.

Revenue
Participation

These
investments provide the Company with participation rights in revenue streams generated from the exploitation of the films, including
theatrical releases, streaming, and other distribution channels. The timing and amount of returns from these investments depend on the
performance of the respective film projects and market conditions.

Impairment
Testing

The
Company evaluates its film investments for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable.
Impairment testing is conducted using a discounted cash flow (DCF) model, which incorporates significant assumptions about future revenue
streams, market demand, and other economic factors. If the recoverable amount, calculated as the present value of expected future cash
flows, is less than the carrying value, an impairment loss is recognized in the period of determination.

During
the year ended December 31, 2024, an impairment loss of $85,837 was recognized related to the Company’s investments in third-party
films.

Fair
Value Hierarchy Classification

Although
the investments are carried at cost, the Company estimates their fair value for impairment testing purposes using unobservable inputs,
including projections of future cash flows and discount rates reflective of project-specific risks. As such, these investments fall within
Level 3 of the fair value hierarchy under Accounting Standards Codification (ASC) 820.

Credit
Risk

The
Company’s investments in third-party film projects are subject to credit risk, as returns depend on the financial and operational
performance of external producers and distributors. The Company actively monitors the creditworthiness of its partners and evaluates
the recoverability of its investments based on current and anticipated market conditions. Management believes that any credit risks associated
with these investments are appropriately reflected in their carrying amounts.

NOTE
6 - ACCRUED EXPENSES

Accrued
expenses were as follows:

December 31, December 31,

Legal and other service $	137,128 $	200,696

Accrued interest 519,290 586,748

NOTE
7 - PRODUCTION FINANCING

Film
related obligations were as follows as of December 31, 2024:

December 31,

Production financing Maturity Default Interest Collateral 2024