SEC Filing Document

Company: Ambitious Entertainment, Inc.
Ticker: 
CIK: 1900851
Filing Type: S-1
Document Type: S-1
Date Filed: 2026-05-15
Accession Number: 0001493152-26-023581
Exchange: 
SIC Code: 7812
SIC Description: Services-Motion Picture & Video Tape Production
URL: https://www.sec.gov/Archives/edgar/data/1900851/000149315226023581/forms-1.htm

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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.

The
Company has recognized a full valuation allowance of $5,118,649 against its deferred tax assets as of December 31, 2025,
and $4,647,488 as of December 31, 2024. This valuation allowance reflects management’s assessment that it is more
likely than not that the deferred tax assets, including net operating loss carryforwards of approximately $7.4 million, will not
be realized. The primary basis for this conclusion is the Company’s cumulative losses in recent periods, which represent significant
negative evidence under applicable accounting guidance.

Deferred
tax assets and liabilities arise from temporary differences between the carrying values of assets and liabilities for financial reporting
purposes and their respective tax bases. Despite the availability of significant net operating loss carryforwards that do not expire
until 2039, the lack of sufficient taxable income in the foreseeable future to offset these carryforwards necessitated the valuation
allowance.

Management
continuously evaluates both positive and negative evidence in assessing the realizability of deferred tax assets. Positive evidence includes
the potential for future profitability and the expected utilization of net operating losses, while negative evidence includes recent
operating performance and industry-specific challenges. At this time, the weight of the negative evidence, particularly the cumulative
losses incurred in recent years, supports the decision to maintain a full valuation allowance.

The
Company will reassess the valuation allowance on a quarterly basis and adjust it if sufficient positive evidence becomes available to
support the realizability of deferred tax assets.

Segment
Information

The
Company determines its operating segments in accordance with ASC 280, Segment Reporting, using the management approach. Operating
segments are identified based on how the Company’s chief operating decision maker (“CODM”) organizes the business for
purposes of making operating decisions, assessing performance, and allocating resources.

Management
has determined that the Company operates as a single operating and reportable segment. The CODM evaluates financial performance and allocates
resources on a consolidated basis and does not regularly review disaggregated financial information by individual film, service line,
or geographic region.

Although
the Company produced films in both the United States and Canada during 2025 and 2024, management concluded that these activities do not
have materially different economic characteristics. Production activities across geographies generate comparable profit margins, are
subject to similar cost structures (including production expenses and tax incentives), and serve the same customer base, primarily major
studios and streaming platforms. While the geographic mix of productions varied between periods, these differences did not result in
materially different risks or returns.

The
Company utilizes centralized corporate and administrative functions, including executive oversight, financial management, and compliance,
across all film productions. While individual productions may require localized personnel 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, management concluded that the Company’s film productions may be aggregated into a single reportable segment due
to their similar economic characteristics, production processes, and customer base. Management also evaluated the quantitative thresholds
for identifying additional reportable segments and determined that no individual film or group of films met the criteria for separate
segment reporting. The Company will continue to reassess its segment reporting as its operations evolve.

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

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 nominal
amount.

●	Risk-Free
Rate : A 50-basis point increase (decrease) in the risk-free interest rate would increase
(decrease) the fair value by approximately $2,700.

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

Years ended

December

Stock price $	0.79

Expected term 0.16

Expected average volatility 50% 66%

Expected dividend yield - -

Risk-free interest rate 3.47

The
following table summarizes the changes in the derivative liabilities during the year ended December 31, 2025, and 2024:

Fair Value
Measurements Using Significant Unobservable Inputs (Level 3)

Balance – January 1,

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

Addition of new derivatives
recognized as warrants 444,126

Addition of new derivatives
recognized as conversion feature 138,785

Gain
on change in fair value of the derivative (342,625	)

Balance - December

The
aggregate loss on derivatives during the years ended December 31, 2025, and 2024 was as follows.

Year ended Year ended

December 31, December 31,

Day 1 loss due to derivative
liabilities $	582,912 364,321

Change in fair value
of the derivative (342,626	) 201,422

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.

BUSINESS

Company
Overview

Ambitious
Entertainment, Inc., incorporated in Nevada in September 2020, was founded to capitalize on the convergence of online influencers, emerging
technologies, and global financing opportunities. Our team strategy focuses on developing film and television content designed for rapid
sales, global scalability, and early monetization. We achieve this speed-to-market by forging strategic partnerships with viral creators
(influencers) and combining them with what management considers to be established A-list talent, award-winning writers and directors,
and top digital creators. We believe this approach allows our team to move decisively, often outpacing traditional studios in bringing
compelling content to audiences worldwide. We believe we have identified significant opportunities emerging from the convergence of AI
technology and new creator-driven platforms to capitalize on prevailing trends while bringing compelling content to audiences worldwide.

2024, as the legacy production services sector continued
to contract, we identified major industry shifts driven by the rise of artificial intelligence and the increasing influence of digital
creators as mainstream celebrities. Following this shift, we pivoted away from production services to focus on building proprietary
content aligned with these trends. To strengthen market leadership and identity, we appointed veteran television executive Chris
Philip (Executive Producer of Sherlock & Daughter, currently airing on The CW and HBO Max) as Chief Operating
Officer, overseeing the Television Division.