Rivulet Entertainment, Inc. (RIVF) — 10-K

Filed 2025-10-15 · Period ending 2025-06-30 · 21,183 words · SEC EDGAR

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# Rivulet Entertainment, Inc. (RIVF) — 10-K

**Filed:** 2025-10-15
**Period ending:** 2025-06-30
**Accession:** 0001493152-25-018109
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1342936/000149315225018109/)
**Origin leaf:** d9dd1f4db64b670f1dfbe4d964af6f1ba8cf181f4867050039e593b0f38e9f0f
**Words:** 21,183



---

**
UNITED
STATES**
**SECURITIES
AND EXCHANGE COMMISSION**
**Washington,
D.C. 20549**
**FORM
10-K**
(Mark
One)
| 
| 
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For
the fiscal year ended **June 30, 2025**
OR
| 
| 
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Commission
File Number: **000-52390**
**Rivulet
Entertainment, Inc.**
(Exact
name of registrant as specified in its charter)
| 
Nevada | 
| 
98-0511932 | |
| 
(State
or other jurisdiction
of
incorporation or organization) | 
| 
(I.R.S.
Employer
Identification
No.) | |
7659
E. Wood Drive, Scottsdale, AZ 85260
(Address
of principal executive offices)
(480)
704-4183
(Registrants
telephone number, including area code)
| 
Title
of each class | 
| 
Trading
Symbol(s) | 
| 
Name
of each exchange on which registered | |
| 
Common
Stock par value $0.001 per share | 
| 
RIVF | 
| 
OTC
pk | |
Securities
registered pursuant to Section 12(g) of the Act: **Common Stock, $0.001 par value**
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes 
No
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes No
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes No
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer,
smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
| 
Large
accelerated filer | 
| 
Accelerated
filer | 
| |
| 
Non-accelerated
Filer | 
| 
Smaller
reporting company | 
| |
| 
| 
| 
Emerging
growth company | 
| |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 
If securities are registered pursuant
to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect
the correction of an error to previously issued financial statements. 
Indicate by check mark whether any of those error corrections
are restatements that required a recovery analysis of incentive-based compensation received by any of the registrants executive
ocers during the relevant recovery period pursuant to 240.10D-1(b). 
Indicate
by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm
that prepared or issued its audit report.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
The
aggregate market value of the outstanding common equity held by non-affiliates of the Registrant as of the last business day of the Registrants
most recent completed second fiscal quarter was approximately [$2,838,803] based upon the last reported sales price on the OTC for such
date. For purposes of this disclosure, shares of common stock held by officers and directors of the Registrant have been excluded because
such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily conclusive.
As
of October 13, 2025, a total of 109,695,876
shares were issued and outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
List
hereunder the following documents if incorporated by reference and the Part of the Form 10-K into which the document is incorporated:
**None**
| | |
**TABLE
OF CONTENTS**
| 
PART I | 
| 
| 
|
| 
Item
1. | 
Business | 
3 | 
|
| 
Item
1A. | 
Risk Factors | 
5 | 
|
| 
Item
1B. | 
Unresolved Staff Comments | 
5 | 
|
| 
Item
1C. | 
Cybersecurity | 
5 | 
|
| 
Item
2. | 
Properties | 
6 | 
|
| 
Item
3. | 
Legal Proceedings | 
6 | 
|
| 
Item
4. | 
Mine Safety Disclosures | 
6 | 
|
| 
| 
| 
| 
|
| 
PART II | 
| 
|
| 
| 
| 
| 
|
| 
Item
5. | 
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 
7 | 
|
| 
Item
6. | 
Selected Financial Data | 
8 | 
|
| 
Item
7. | 
Managements Discussion and Analysis of Financial Condition and Results of Operations | 
8 | 
|
| 
Item
7A. | 
Quantitative and Qualitative Disclosures About Market Risk | 
12 | 
|
| 
Item
8. | 
Consolidated Financial Statements and Supplementary Data | 
13 | 
|
| 
Item
9. | 
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 
14 | 
|
| 
Item
9A. | 
Controls and Procedures | 
14 | 
|
| 
Item
9B. | 
Other Information | 
14 | 
|
| 
| 
| 
| 
|
| 
PART III | 
| 
|
| 
| 
| 
| 
|
| 
Item
10. | 
Directors, Executive Officers and Corporate Governance | 
15 | 
|
| 
Item
11. | 
Executive Compensation | 
16 | 
|
| 
Item
12. | 
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 
16 | 
|
| 
Item
13. | 
Certain Relationships and Related Transactions, and Director Independence | 
17 | 
|
| 
Item
14. | 
Principal Accounting Fees and Services | 
17 | 
|
| 
| 
| 
| 
|
| 
PART IV | 
| 
|
| 
| 
| 
| 
|
| 
Item
15. | 
Exhibits, Financial Statement Schedules | 
18 | 
|
| 
Item
16. | 
Form 10-K Summary | 
18 | 
|
| 
SIGNATURES | 
19 | 
|
| 2 | |
| Table of Contents | |
**Safe
Harbor Statement Under the Private Securities Litigation Reform Act of 1995**
Information
included in this Form 10-K contains forward-looking statements. This information may involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements of Rivulet Entertainment, Inc. (the Company),
to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking
statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable
by use of the words may, will, should, expect, anticipate, estimate,
believe, intend, or project or the negative of these words or other variations on these words
or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance
that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially
from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws,
the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available
or other events occur in the future.
**PART
I**
**Item
1. Business**
****
**General
Overview**
****
Rivulet
Entertainment, Inc. (the Company, we or us), is an independent studio engaged in the production,
distribution and marketing of star driven commercial feature-length films, television series and mini-series, and television movies,
from initial creative development through principal photography, postproduction, distribution and ancillary sales. The Company also provides
music production. Upon completion of production, the Company expects to receive initial revenues from domestic and foreign distribution
contracts headquartered in Scottsdale, Arizona.
As
disclosed in our Form 8-K filed with the SEC on May 5, 2024, the Company merged into its wholly owned subsidiary with the Company surviving
and operating under its subsidiarys name. The effective date of the name change was July 12, 2024 whereby the Companys
name was changed from Advanced Voice Recognition Systems, Inc. to Rivulet Entertainment, Inc. All references to the Company in this filing
have been updated to reflect the name change.
On
July 7, 2024 (the Closing Date), Rivulet Entertainment, Inc. (The Company or Rivulet) completed
its acquisition of certain wholly owned subsidiaries of Rivulet Media, Inc. In consideration for the acquisition of the entities, the
Company agreed to transfer approximately $10 million and 97 million shares to the current owners of Rivulet Media, Inc. On May 19, 2025
the agreement was amended to reduce the cash portion of the purchase price from $10,000,000 to $6,450,000. Furthermore, the conditions
subject to closing and the default provisions were eliminated. As of the date of this filing, the Company has transferred $2,950,000
to the former owners of Rivulet Media, Inc. and had an outstanding balance of $3,500,000, which was classified as other current liabilities
on the Companys consolidated balance sheets as of June 30, 2025. The transaction was accounted for as a reverse asset
acquisition whereby the combined entities of Rivulet Media, Inc. were determined to be the accounting acquirer/legal acquiree and Rivulet
Entertainment, Inc. was determined to be the accounting acquiree/legal acquirer. As such, the comparative financial statements presented
in the filing (for the period ended June 30, 2024) are those of the combined entities of Rivulet Media, Inc. that were transferred as
part of the merger agreement.
**Industry
Overview**
****
The
film industry, is a global business encompassing the creation, distribution, and exhibition of movies, involving various stages like
development, pre-production, production, post-production, and distribution, with major players including studios, independent producers,
and streaming platforms, all working to bring films to audiences through theatrical release and other viewing platforms like streaming
services; essentially, its a multifaceted industry focused on producing and delivering visual content for entertainment purposes,
generating significant revenue through box office sales and other distribution channels.
| 3 | |
| Table of Contents | |
**Principal
Proposed Products or Services**
****
**Rivulet
Entertainment Enterprise Solutions**
****
The
independent film industry, also known as indie cinema, is made up of films that are produced outside of the major film
studio system. Independent films are known for their unique narratives, unconventional themes, and distinct storytelling methods. The
Company will have lower budgets than mainstream films and are characterized by a focus on creative expression and artistic vision over
commercial appeal.
**Market**
****
The
film industry is expected to grow in the coming years, with the global market projected to reach $182.23 billion by 2031. Global Movies
and Entertainment Market size was valued at over $100 billion in 2023 and is poised to grow. The independent film industry is in a healthy
position, with independent box office receipts outpacing studio productions for the third year in a row.
Another
recent development in the independent film industry include a strong recovery in Box office revenue in 2023.
Independent films are finding success by targeting a diverse audience. Social media platforms like Instagram, Facebook, and TikTok
can be used to build buzz around a film and engage with audiences. The availability of streaming platforms and their superior sound
quality is contributing to the growth of the market.
**Intellectual
Property**
****
Intellectual
property (IP) refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names
and images used in commerce.
**Research
and Development**
****
We
did not incur any expense for research and development activities during the twelve months ended June 30, 2025 and 2024.
**Employees**
****
We
currently have two full-time employees, Diana Jakowchuk, our Secretary and Treasurer, and Walter Geldenhuys, our President, Chief Executive
Officer and Chief Financial Officer. To that extent, we engage consultants and other service providers in order to help us carry out
our business plan.
**Available
Information**
****
We
file the following reports with the SEC under Section 13(a) of the Securities Exchange Act of 1934 as a smaller reporting company: Annual
Reports on Form 10-K; Quarterly Reports on Form 10-Q; Current Reports on Form 8-K; and any amendments to these reports.
The
Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and all amendments to these reports
and other information that we file with or furnish to the Securities and Exchange Commission, or the SEC, are accessible free of charge
on our website. We make these documents available as soon as reasonably practicable after we file them with or furnish them to the SEC.
The SEC also maintains an Internet site at www.sec.com that contains our reports, proxy and information statements and other information
that we file electronically with the SEC.
| 4 | |
| Table of Contents | |
**Item
1A. Risk Factors**
****
Pursuant
to the instructions in Item 1A of Form 10-K, the Company, which is a smaller reporting company (SRC) is not required to
provide risk factor information.
**Item
1B. Unresolved Staff Comments**
Not
applicable
**Item
1C. Cybersecurity**
Risk
Management and Strategy
Rivulet
Entertainment, Inc. recognizes the critical importance of developing, implementing, and maintaining robust cybersecurity measures to
safeguard our information systems and protect the confidentiality, integrity, and availability of our data.
*Managing
Material Risks & Integrated Overall Risk Management*
**
Currently,
the Company does not have a formalized cybersecurity risk management process. However, the organization is working toward implementing
a framework for assessing, identifying, and managing material risks from cybersecurity threats. This includes assessing cybersecurity
risk as part of an overall risk assessment and considering the likelihood and potential consequences of each risk. Plans also include
the identification of critical cybersecurity risks (e.g., malware, phishing, ransomware, and unauthorized access) and the implementation
of formalized mitigants to address those risks such as cybersecurity policies and incident response strategy.
*Third-Party
Risk*
**
The
Company does not currently engage with third parties in connection with cybersecurity risk management. Third-party consultants including
cybersecurity auditors are being considered for future engagement, at which point any risks stemming from the use of third parties will
be incorporated into the cybersecurity risk assessment.
*Risks
from Cybersecurity Threats*
**
The
Company has not encountered any cybersecurity risks or incidents that have materially impacted our business strategy, operational results,
or financial condition. We remain dedicated to maintaining a strong cybersecurity position by continually analyzing and improving our
security procedures to reduce potential risks. This approach to cybersecurity is critical for protecting sensitive information and guaranteeing
the reliability of our business operations.
Governance
**
*Director
Oversight*
Currently,
Walter Geldenhuys, president and chief executive officer, is the Companys sole director. Mr. Geldenhuys is committed to effective
governance in managing risks associated with cybersecurity threats because he recognizes the significance of these threats to the Companys
operational integrity and stakeholder confidence.
As
Mr. Geldenhuys is the sole director and the Company has minimal employees, he is made aware of relevant cybersecurity risks and related
updates on an ongoing and real-time basis. To that extent, there have been no critical or time sensitive cybersecurity updates thus far.
| 5 | |
| Table of Contents | |
*Managements
Role Managing Risk*
Within
the management team, the responsibility for assessing and managing cybersecurity risk falls under the purview of Mr. Geldenhuys, whose
background includes running a technology Company.
*Monitoring
Cybersecurity Incidents*
As
noted above, Mr. Geldenhuys is the sole Director of Rivulet Entertainment and the Company currently has a limited number of employees.
As such, Mr. Geldenhuys personally monitors cybersecurity events and logs for unusual activity or potential security breaches within
the network. E-mail alerts are sent in real time as notification for any suspicious activity including phishing attempts, suspicious
attachments, and other e-mail-related security concerns.
**
*Reporting
to Board of Directors*
As
discussed above, Mr. Geldenhuys is currently the Companys sole director. Thus, he is either aware or made aware of the Companys
material risks from cybersecurity threats. To that extent, the Company is not aware of any material risks from cybersecurity events at
this time.
**Item
2. Properties**
Our
principal executive offices are located at 7659 E. Wood Drive, Scottsdale, Arizona and are provided to us free of charge by Diana Jakowchuk,
our Secretary and Treasurer.
**Item
3. Legal Proceedings**
None.
**Item
4. Mine Safety Disclosures**
Not
Applicable.
| 6 | |
| Table of Contents | |
**PART
II**
**Item
5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.**
**Market
Information**
Commencing
on June 19, 2008, our common stock has been quoted on the OTC under the symbol AVOI (currently RIVF). The
following table sets forth the high and low bid prices per share of our common stock for the first two quarterly periods in our fiscal
year 2025 and in all quarterly periods for fiscal year 2024. These prices represent inter-dealer quotation without retail markup, markdown
or commission and may not necessarily represent actual transactions. Currently, there is not established public trading market for our
common shares and, as such, no information has been provided for the last two quarterly periods in fiscal year 2025.
| 
| | 
High | | | 
Low | | |
| 
Three Months Ended December 31, 2024 | | 
| 0.80 | | | 
| 0.35 | | |
| 
Three Months Ended September 30, 2024 | | 
| 0.85 | | | 
| 0.35 | | |
| 
Three Months Ended June 30, 2024 | | 
| 2.99 | | | 
| 0.47 | | |
| 
Three Months Ended March 31, 2024 | | 
| 0.90 | | | 
| 0.32 | | |
| 
Three Months Ended December 31, 2023 | | 
| 0.99 | | | 
| 0.40 | | |
| 
Three Months Ended September 30, 2023 | | 
| 1.89 | | | 
| 0.30 | | |
**Holders**
As
of October 13, 2025, we have approximately 635 holders of record of our common stock and 109,695,876 shares issued and outstanding.
The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock,
whose shares is held in the names of various securities brokers, dealers and registered clearing agencies.
**Dividends**
We
have not declared any cash dividends, nor do we have any current plans to do so. We are not subject to any legal restrictions respecting
the payment of dividends, except that they may not be paid to render us insolvent. We currently anticipate that we will retain all of
our future earnings for use in the expansion and operation of our business and do not anticipate paying any cash dividends in the foreseeable
future.
**Securities
Authorized for Issuance Under Equity Compensation Plans**
****
Not
applicable
****
**Transfer
Agent and Registrar**
Our
transfer agent and registrar is Pacific Stock Transfer Company 6725 Via Austi Pkwy Ste 300, Las Vegas, NV 89119.
**Unregistered
Sales of Equity Securities**
****
During
March of 2024, the Company sold 7.5 million shares for gross proceeds of approximately $3 million. The shares were issued under Rule
506(c) of the Securities Act of 1933 and were sold to certain accredited investors. The proceeds from the sale were used to purchase
certain entities from Rivulet Media as part of the merger transaction.
| 7 | |
| Table of Contents | |
**Purchases
of equity securities by the issuer and affiliated purchasers**
Not
applicable
**Item
6. Selected Financial Data**
Not
applicable.
**Item
7. Managements Discussion and Analysis of Financial Condition and Results of Operations**
****
*The
following discussion and analysis should be read in conjunction with the financial statements and related notes included elsewhere in
this Form 10-K. To that extent, the information discussed below solely reflects the results of the combined entities that were transferred
as part of the agreement with Rivulet Entertainment, Inc. This document contains certain forward-looking statements that involve risks
and uncertainties, such as statements of the Companys plans, objectives, expectations and intentions. When used in this document,
the words expects, anticipates, intends and plans and similar expressions are
intended to identify certain of these forward-looking statements. The cautionary statements made in this document should be read as being
applicable to all related forward-looking statements wherever they appear in this document. Our actual results could differ materially
from those discussed in this document.*
**RESULTS
OF OPERATIONS**
**For
the Twelve Months Ended June 30, 2025 and June 30, 2024**
Our
financial results for the twelve months ended June 30, 2025 and 2024 are summarized as follows:
| 
| | 
For the Twelve Months Ended June 30, | | |
| 
| | 
2025 | | | 
2024 | | |
| 
Revenues | | 
$ | 10,000,000 | | | 
$ | 60,000 | | |
| 
Production cost amortization | | 
| 10,468,345 | | | 
| - | | |
| 
Gross margin | | 
$ | (468,345 | ) | | 
$ | 60,000 | | |
| 
| | 
| | | | 
| | | |
| 
Operating Expense | | 
| | | | 
| | | |
| 
General and administrative | | 
$ | 3,562,474 | | | 
$ | 241,489 | | |
| 
Total operating expenses | | 
$ | 3,562,474 | | | 
$ | 241,489 | | |
| 
| | 
| | | | 
| | | |
| 
Net loss before other income (expense) | | 
| (4,030,819 | ) | | 
| (181,489 | ) | |
| 
| | 
| | | | 
| | | |
| 
Other income (expense) | | 
$ | (1,889,081 | ) | | 
$ | - | | |
| 
| | 
| | | | 
| | | |
| 
Net (loss) income before income taxes | | 
| (5,919,900 | ) | | 
| (181,489 | ) | |
| 
Income tax expense | | 
| - | | | 
| - | | |
| 
Net (loss) income | | 
$ | (5,919,900 | ) | | 
$ | (181,489 | ) | |
*Revenues*
**
The
Company recognized $10.0 million and $60,000 in revenues during the twelve months ended June 30, 2025 and 2024, respectively. The increase
in revenues recognized during the twelve months ended June 30, 2025 as compared to the twelve months ended June 30, 2024 was due to the
sale of a film during the current year for $10.0 million.
| 8 | |
| Table of Contents | |
*Film
Cost Amortization*
**
Film
cost amortization was approximately $10.5 million for the twelve months ended June 30, 2025. Film cost amortization relates solely to
the amortization of capitalized film costs. As the Company does not expect to generate additional revenues from the film the entire capitalized
film cost balance was amortized, in accordance with ASC 926 - *Individual Film Forecast Computation*. The Company did not incur
any film cost amortization during the twelve months ended June 30, 2024.
*General
and Administrative*
**
General
and administrative expense for the twelve months ended June 30, 2025 and 2024 totaled $3,562,474 and $241,489, respectively. General
and administrative costs for the twelve months ended June 30, 2025 of $3,562,474 consisted of participation costs of $1,995,058, professional
fees of $899,599, music and musician expenses $87,275, travel & meals and entertainment of $100,824, payroll costs of $277,967, external
communication of $61,760 and other expenses of $131,991.
General
and administrative costs for the twelve months ended June 30, 2024 of $241,189 consisted of participation costs of $100,000, professional
fees of $121,347, pre-production costs of $7,500 and other expenses of $12,642.
The
increase in general and administrative for the twelve months ended June 30, 2025 as compared to the twelve months ended June 30, 2024
was primarily related to participation costs recognized in the amount of $1,995,058 in the current period, related to a film sale. The
remainder of the increases were primarily due to general organizational ramp-up to administratively support the Companys in-production
and pre-production films.
**Other
(expense) income**
**
For
the twelve months ended June 30, 2025, other expense totaled $1,889,081 which consisted of interest expense of $891,330, impairment
of an investment made in a private company of $1,000,000 and other income of $2,249. For the twelve months ended June 30, 2024,
other income (expense) totaled $0. The increase in other (expense) income was primarily related to the increase in notes payable
during the twelve months ended June 30, 2025 as compared to the twelve months ended June 30, 2024 and the $1.0 million impairment
recognized during the twelve months ended June 30, 2025. Portions of our interest costs related to notes payable are capitalized in
accordance with Accounting Standards Codification (ASC) 926, *Entertainment-Films* and therefore are expensed
through the amortization of capitalized film costs. For the twelve months ended June 30, 2025 and 2024, the Company capitalized $1.8
million and $0.7 million of interest expense to film costs related to various picture film productions.
**LIQUIDITY
AND CAPITAL RESOURCES**
The
Company will incur significant capital costs as it continues to produce feature length films, such as The Dink. In
order to continue to produce films, the Company will need to raise funds through additional borrowings and equity until such time as
our operating revenues from the sale of films are sufficient to meet our cost structure, and ultimately provide profitable
operations. There is no assurance we will be successful in raising additional capital or achieving profitable operations.
The
Company had notes payable, which were used to fund our film production, totaling $20,169,282 as of June 30, 2025. Further, the Company
still has a $3,500,000 outstanding balance to Rivulet Media, inc. stemming from the merger transaction.
**Going
Concern**
The
Company had cash of $128,089 as of June 30, 2025, negative working capital of approximately $23.4 million and accumulated deficit
of approximately $11.0 million. Further, during the twelve months ended June 30, 2025, the Company incurred a net loss of approximately
$5.9 million and cash flow used in operations of approximately $11.0 million for the twelve months ended June 30, 2025. As such, the
Company concluded that there is substantial about its ability to continue as a going concern. The Company hopes to mitigate the conditions
or events that raise substantial doubt about its ability to continue as a going concern through its future sales of movie rights and
future capital raises.
| 9 | |
| Table of Contents | |
**Cash
Flows**
The
following tables summarize the results of our cash flows for the below respective periods:
| 
| | 
For the Twelve Months Ended June 30, | | |
| 
| | 
2025 | | | 
2024 | | |
| 
Net loss | | 
$ | (5,919,900 | ) | | 
$ | (181,489 | ) | |
| 
Net cash flows used in operating activities | | 
| (10,976,200 | ) | | 
| (9,456,373 | ) | |
| 
Net cash flows provided by financing activities | | 
| 11,002,568 | | | 
| 9,555,411 | | |
| 
Net change in cash | | 
| 26,368 | | | 
| 99,038 | | |
| 
Cash, beginning of period | | 
| 101,721 | | | 
| 2,683 | | |
| 
Cash, end of period | | 
$ | 128,089 | | | 
$ | 101,721 | | |
**Operating
Activities**
Net
cash used in operating activities was approximately $11.0 million for the twelve months ended June 30, 2025. Cash used in operating
activities resulted from a net loss for the twelve months ended June 30, 2025 of approximately $5.9 million, a decrease in cash from
changes in operating assets and liabilities of approximately $16.5 million offset by amortization of film costs of approximately
$10.5 million and impairment of investment in a private company of $1.0 million. Film cost amortization is a non-cash expense and is a reconciling item between net loss and cash flow used in
operations.
Net
cash used in operating activities was approximately $9.5 million for the twelve months ended June 30, 2024. Cash used in operating activities
resulted from net loss for the twelve months ended June 30, 2024 of approximately $0.2 million and a decrease in cash from changes in
operating assets and liabilities of approximately $9.3 million.
**Investing
Activities**
There
were no investing activities during either the twelve months ended June 30, 2025 or 2024.
**Financing
Activities**
Net
cash provided by financing activities was approximately $11.0 million for the twelve months ended June 30, 2025 and consisted of proceeds
from notes payable in the amount of approximately $21.7 million and payments on notes payable in the amount of approximately $10.7 million.
Net
cash provided by financing activities was approximately $9.6 million for the twelve months ended June 30, 2024 and consisted of proceeds
from notes payable in the amount of approximately $9.6 million.
**CRITICAL
ACCOUNTING ESTIMATES**
**Impairment
of Capitalized Film Costs**
The
Company will test its unamortized film costs whenever events or changes in circumstances indicate that the fair value of a film may be
less than its unamortized costs. If the Company determines that the fair value of a film is less than its unamortized film costs, then
the unamortized capitalized costs for the film will be written down by the amount exceeding the films fair value. The unit of
account for impairment testing is the individual film being produced and the fair value is determined using a discounted cash flow technique.
| 10 | |
| Table of Contents | |
**Recognition
of Revenue from Contracts with Customers**
The
Company recognizes revenue from its contracts with customers in accordance with the core principle outlined in ASC 606, *Revenue from
Contracts with Customers*. Specifically, to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which we expect to be entitled in exchange for those goods or services. To that extent, the Company
recognizes revenue in accordance with the ASC Topic by applying the following five steps:
| 
| 
| 
Step
1-Identify the contract(s) with a customer | |
| 
| 
| 
Step
2-Identify the performance obligations in the contract | |
| 
| 
| 
Step
3-Determing the transaction price | |
| 
| 
| 
Step
4-Allocate the transaction price to the performance obligations in the contract | |
| 
| 
| 
Step
5-Recognize revenue when (or as) the Company satisfies a performance obligation | |
The
Companys contracts with its customers currently contain a single performance obligation comprised of a license to motion picture
rights. In accordance with ASC 606, the Company ( i.e. the licensor) has concluded that the license transfer should i)
be considered functional intellectual property and ii) that customers (the licensees or distributors) are
therefore granted a right to access of the Companys intellectual property throughout the license period. As such, revenue is recognized
at a point in time upon the Companys delivery of the license to the licensee. The Company does not currently provide any form
of extended payment terms to its customers and, as such, a fixed payment is typically received from the customer within 90 days after
the license is transferred.
In
determining the transaction price, the Companys contracts with its customers do not include a significant financing component,
non-cash consideration or consideration payable to the customer. However, the Companys contracts typically will include sales-based
or usage-based royalties that are triggered by the attainment of certain levels of box office receipts or video on demand (VOD)
purchases. To that extent, in accordance with ASC 606-10-55, the Company will recognize the sales-based or usage-based royalties only
when the later of the following events occur-a) the subsequent sale or usage occurs or b) the performance obligation to which the sales-based
or usage-based royalty has been satisfied.
As
it pertains to incremental costs of obtaining a contract, the Company does not incur any type of sales commissions.
**Investments
in Equity Securities**
The
Company accounts for its investments in equity securities without a readily determinable fair value at cost minus impairment in accordance
with ASC 321, *Investments-Equity Securities*. Further, the Company will continue to recognize its investments without a readily
determinable fair value at cost minus impairment until the investment does not qualify to be measured as such. To that extent, the Company
will re-assess at the end of each reporting period whether the investment still qualifies to be recognized at cost minus impairment.
In
addition to assessing whether the investments still qualify to be recognized at cost minus impairment, the Company will also make a
qualitative assessment at the end of each reporting period considering impairment indicators to evaluate whether the investment is
impaired. If the qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than
its carrying value, then the investment will be written down to fair value. During the twelve months ended June 30, 2025, the
Company recognized a $1.0 million impairment on its original $2.0 million investment, resulting in a carrying value of $1.0 million
as of June 30, 2025. The Company did not recognize any impairment for the twelve months ended June 30, 2024.
| 11 | |
| Table of Contents | |
**Recent
Accounting Pronouncements**
In
November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07,
*Segment Reporting*- *Improvements to Reportable Segment Disclosures* (ASU 2023-07), which requires incremental
disclosures related to a public entitys reportable segments. Required disclosures include, on an annual and interim basis, significant
segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount
for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a
description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of
segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure
of more than one measure of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim
periods within fiscal years beginning after December 15, 2024. The Company adopted the new standard as of July 1, 2024. The adoption
of ASU 2023-07 did not materially impact the Companys financial statements.
In
December 2023, the FASB issued ASU 2023-09-*Income Taxes* (Topic 740)-Improvements to Income Tax Disclosures, which requires entities
to provide additional information in the rate reconciliation and additional disclosures about income taxes paid. The guidance should
be applied prospectively and is effective for annual periods beginning after December 15, 2024. The Company does not expect the issued
standard will have a material impact on its combined financial statements.
In
November 2024, the FASB issued ASU 2024-03, *Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures*
(Subtopic 220-40). The amendments in this update require disclosure, in the notes to combined financial statements, of specified information
about certain costs and expenses at each interim and annual reporting period. The amendments are effective for annual periods beginning
after December 15, 2026, and reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently
evaluating the impact that the new ASU will have on its combined financial statements.
**Item
7A. Quantitative and Qualitative Disclosures About Market Risk**
As
a smaller reporting company, we are not required to provide this information.
| 12 | |
| Table of Contents | |
**Item
8. Financial Statements and Supplementary Data3**
**Table
of contents**
| 
| 
| 
Index | 
| |
| 
Report of Independent Registered Public Accounting Firm (PCAOB ID: [6920]) | 
| 
F1 | 
| |
| 
| 
| 
| 
| |
| 
Consolidated Balance Sheets as of June 30, 2025 and 2024 | 
| 
F3 | 
| |
| 
| 
| 
| 
| |
| 
Consolidated Statements of Operations for the Twelve Months Ended June 30, 2025 and 2024 | 
| 
F4 | 
| |
| 
| 
| 
| 
| |
| 
Consolidated Statements of Shareholders Deficit for the Twelve Months Ended June 30, 2025 and 2024 | 
| 
F5 | 
| |
| 
| 
| 
| 
| |
| 
Consolidated Statements of Cash Flows for the Twelve Months Ended June 30, 2025 and 2024 | 
| 
F6 | 
| |
| 
| 
| 
| 
| |
| 
Notes to the Consolidated Financial Statements | 
| 
F7 | 
| |
| 13 | |
| Table of Contents | |
*
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of Rivulet Entertainment, Inc.
**Opinion
on the Financial Statements**
****
We
have audited the accompanying consolidated balance sheets of Rivulet Entertainment, Inc. (the Company) as of June 30,
2025 and 2024, and the related consolidated statements of operations, shareholders deficit, and cash flows for each of the
years in the two-year period ended June 30 2025, and the related notes (collectively referred to as the financial statements). In
our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30,
2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30
2025, in conformity with accounting principles generally accepted in the United States of America.
**Substantial
Doubt about the Companys Ability to Continue as a Going Concern**
****
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note
2, the Company has incurred net losses and negative cash flow from operations. These factors raise substantial doubt about the Companys
ability to continue as a going concern. Our opinion is not modified with respect to that matter.
**Basis
for Opinion**
****
These
financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on the Companys
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities
laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, audits of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion
on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.
**Critical
Audit Matters**
The
critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial
statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit
matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
**3702
W Spruce St #1430 Tampa, Florida 33607 +1.813.441.9707**
| F-1 | |
| Table of Contents | |
Accounting
for Reverse Merger Transaction*
As
described in Note 9 to the Companys financial statements, during the year ended June 30, 2025, the Company completed a reverse
merger transaction in which Rivulet Entertainment Inc. issued shares of its common stock to acquire certain subsidiaries which consolidated
formed Rivulet Media, Inc. In accordance with ASC 805-40, *Business Combinations Reverse Acquisitions,* management determined
that Rivulet Media, Inc. is the accounting acquirer and Rivulet Entertainment, Inc. is the legal acquirer, resulting in the transaction
being accounting for as a reverse recapitalization rather than a business combination. Accordingly, the assets and liabilities of Rivulet
Entertainment, Inc. were recorded at their historical carrying values, and the equity structure was retroactively restated to reflect
that of Rivulet Entertainment, Inc.
We
identified the Companys accounting for the reverse merger transaction as a critical audit matter. The principal considerations
for our determination of this critical audit matter were managements judgements in determining the accounting acquirer in accordance
with the criteria in ASC 805-10-55, assessing whether the transaction met the definition of a business combination or a reverse recapitalization,
and determining the appropriate presentation and disclosure of the recapitalized equity structure, including additional-paid-in-capital
adjustments. Auditing these judgments and assumptions by the Company involves auditor judgment due to the nature and extent of audit
evidence and effort required to address these matters.
The
primary procedures we performed to address these critical audit matters included the following:
| 
| We
obtained the asset purchase agreement and all related stock issuance, and merger documents
and performed the following procedures. | |
| 
- | Reviewed
APA agreement for all relevant terms. | |
| 
- | Obtained
managements memo on the accounting treatment for the transaction, read and evaluated whether managements conclusions and accounting treatment were appropriate | |
| 
- | Evaluated
managements analysis on determining the accounting acquirer, and whether the legal
acquirer met the definition of a business | |
| 
- | Obtained
managements memo on the equity recapitalization, read and evaluated whether managements conclusions and accounting treatment were appropriate | |
| 
- | Tested
managements computation of the recapitalization adjustments to common stock and additional-paid-in-capital. | |
| 
- | Evaluated
the adequacy of the Companys disclosures in the financial statements regarding the
nature, accounting treatment, and impact of the reverse merger. | |
| 
| |
| 
| |
| 
We have served as the Companys
auditor since 2024. | |
| 
ASTRA
Audit & Advisory LLC | |
| 
PCAOB Firm ID #6920 | |
| 
Tampa, Florida | |
| 
October 15, 2025 | |
| F-2 | |
| Table of Contents | |
**Rivulet
Entertainment, Inc.**
**Consolidated
Balance Sheets**
| 
| | 
2025 | | | 
2024(2) | | |
| 
| | 
As of June 30, | | |
| 
| | 
2025 | | | 
2024(2) | | |
| 
| | 
| | | 
| | |
| 
ASSETS | | 
| | | | 
| | | |
| 
CURRENT ASSETS | | 
| | | | 
| | | |
| 
Cash | | 
$ | 128,089 | | | 
$ | 101,721 | | |
| 
Accounts receivable, net | | 
| 1,999,979 | | | 
| - | | |
| 
Prepaid expenses | | 
| 24,983 | | | 
| 47,044 | | |
| 
Other current assets | | 
| 778,530 | | | 
| - | | |
| 
Total current assets | | 
$ | 2,931,581 | | | 
$ | 148,765 | | |
| 
| | 
| | | | 
| | | |
| 
NONCURRENT ASSETS | | 
| | | | 
| | | |
| 
Film costs | | 
$ | 15,013,594 | | | 
$ | 10,024,760 | | |
| 
Deposits | | 
| 866,440 | | | 
| 854,390 | | |
| 
Equity investment | | 
| 1,000,000 | | | 
| 2,000,000 | | |
| 
Total noncurrent assets | | 
$ | 16,880,034 | | | 
$ | 12,879,150 | | |
| 
| | 
| | | | 
| | | |
| 
Total assets | | 
$ | 19,811,615 | | | 
$ | 13,027,915 | | |
| 
| | 
| | | | 
| | | |
| 
LIABILITIES AND SHAREHOLDERS DEFICIT | | 
| | | | 
| | | |
| 
CURRENT LIABILITIES | | 
| | | | 
| | | |
| 
Accounts payable | | 
$ | 738,222 | | | 
$ | 205,249 | | |
| 
Accrued expenses | | 
| 1,979,924 | | | 
| 712,229 | | |
| 
Related party loans, current | | 
| 2,880,000 | | | 
| - | | |
| 
Notes payable, current | | 
| 17,214,742 | | | 
| 4,890,000 | | |
| 
Other current liabilities | | 
| 3,500,000 | | | 
| 154,689 | | |
| 
Total current liabilities | | 
$ | 26,312,888 | | | 
$ | 5,962,167 | | |
| 
| | 
| | | | 
| | | |
| 
NONCURRENT LIABILITIES | | 
| | | | 
| | | |
| 
Related party loans, non-current | | 
| - | | | 
| 10,768,316 | | |
| 
Notes payable, non-current | | 
| - | | 
| 1,330,000 | | |
| 
Total noncurrent liabilities | | 
$ | - | | 
$ | 12,098,316 | | |
| 
| | 
| | | | 
| | | |
| 
Total liabilities | | 
$ | 26,312,888 | | | 
$ | 18,060,483 | | |
| 
| | 
| | | | 
| | | |
| 
Commitments and contingencies (Note 2) | | 
| - | | | 
| - | | |
| 
| | 
| | | | 
| | | |
| 
SHAREHOLDERS DEFICIT | | 
| | | | 
| | | |
| 
| | 
| | | | 
| | | |
| 
Common stock, par value of $0.001; 547,500,000 shares authorized; 109,695,876 and 96,722,950 issued and outstanding as of June 30, 2025 and June 30, 2024, respectively(1) | | 
$ | 109,696 | | | 
$ | 96,723 | | |
| 
Additional paid-in capital | | 
| 4,341,499 | | | 
| (96,723 | ) | |
| 
Accumulated deficit | | 
| (10,952,468 | ) | | 
| (5,032,568 | ) | |
| 
Total shareholders deficit | | 
$ | (6,501,273 | ) | | 
$ | (5,032,568 | ) | |
| 
| | 
| | | | 
| | | |
| 
Total liabilities & shareholders deficit | | 
$ | 19,811,615 | | | 
$ | 13,027,915 | | |
(The
accompanying notes are an integral part of these consolidated financial statements)
| 
(1) | 
As
of June 30, 2024, Common stock outstanding has been determined in accordance with the exchange ratio established as part of the reverse
merger that was completed during July of 2024 (refer to Note 9) | |
| 
| 
| |
| 
(2) | 
Financial
information for the comparative period reflects the combination of certain former Rivulet Media, Inc. entities under common control
that were transferred as part of the reverse merger transaction. | |
| F-3 | |
| Table of Contents | |
**Rivulet
Entertainment, Inc.**
**Consolidated
Statements of Operations**
| 
| | 
2025 | | | 
2024(2) | | |
| 
| | 
For the Twelve Months Ended June 30, | | |
| 
| | 
2025 | | | 
2024(2) | | |
| 
Revenues | | 
$ | 10,000,000 | | | 
$ | 60,000 | | |
| 
Production cost amortization | | 
| 10,468,345 | | | 
| - | | |
| 
Gross margin | | 
$ | (468,345 | ) | | 
$ | 60,000 | | |
| 
| | 
| | | | 
| . | | |
| 
Operating Expense | | 
| | | | 
| | | |
| 
General and administrative | | 
$ | 3,562,474 | | | 
$ | 241,489 | | |
| 
Total operating expenses | | 
$ | 3,562,474 | | | 
$ | 241,489 | | |
| 
| | 
| | | | 
| | | |
| 
Net loss before other income (expense) | | 
$ | (4,030,819 | ) | | 
$ | (181,489 | ) | |
| 
| | 
| | | | 
| | | |
| 
Other (expense) income | | 
| | | | 
| | | |
| 
Other (expense) income | | 
$ | 2,249 | | | 
$ | - | | |
| 
Investment impairment | | 
| (1,000,000 | ) | | 
| - | | |
| 
Interest expense | | 
| (891,330 | ) | | 
| - | | |
| 
Other (expense) income | | 
$ | (1,889,081 | ) | | 
$ | - | | |
| 
| | 
| | | | 
| | | |
| 
Net loss before income taxes | | 
$ | (5,919,900 | ) | | 
$ | (181,489 | ) | |
| 
Income tax expense | | 
| - | | | 
| - | | |
| 
Net loss | | 
$ | (5,919,900 | ) | | 
$ | (181,489 | ) | |
| 
| | 
| | | | 
| | | |
| 
Basic and diluted loss per share | | 
$ | (0.05 | ) | | 
$ | (0.00 | ) | |
| 
| | 
| | | | 
| | | |
| 
Basic and diluted weighted average shares outstanding(1) | | 
| 109,447,760 | | | 
| 96,722,950 | | |
(The
accompanying notes are an integral part of these consolidated financial statements)
| 
(1) | 
For
the twelve months ended June 30, 2024, basic and diluted share information has been determined using the exchange ratio established
as part of the reverse merger that was completed during July of 2024 (refer to Note 9) | |
| 
| 
| |
| 
(2) | 
Financial
information for the comparative period reflects the combination of certain former Rivulet Media, inc. entities under common control
that were transferred as part of the reverse merger transaction. | |
| F-4 | |
| Table of Contents | |
**Rivulet
Entertainment, Inc.**
**Consolidated
Statements of Changes in Shareholders Deficit**
**For
the Twelve Months Ended June 30, 2025 and 2024**
| 
| | 
Shares | | | 
Amount(1)(2) | | | 
Capital(2) | | | 
Deficit(2) | | | 
Total(2) | | |
| 
| | 
Common Stock(1) | | | 
Additional Paid-in | | | 
Accumulated | | | 
| | |
| 
| | 
Shares | | | 
Amount(2) | | | 
Capital(2) | | | 
Deficit(2) | | | 
Total(2) | | |
| 
Balance, June 30, 2023 | | 
| 96,722,950 | | | 
$ | 96,723 | | | 
$ | (96,723 | ) | | 
$ | (4,851,079 | ) | | 
$ | (4,851,079 | ) | |
| 
Net loss | | 
| - | | | 
| - | | | 
| - | | | 
| (181,489 | ) | | 
| (181,489 | ) | |
| 
Balance, June 30, 2024 | | 
| 96,722,950 | | | 
$ | 96,723 | | | 
$ | (96,723 | ) | | 
$ | (5,032,568 | ) | | 
$ | (5,032,568 | ) | |
| 
Balance | | 
| 96,722,950 | | | 
$ | 96,723 | | | 
$ | (96,723 | ) | | 
$ | (5,032,568 | ) | | 
$ | (5,032,568 | ) | |
| 
Recapitalization | | 
| 12,972,926 | | | 
| 12,973 | | | 
| (3,639,743 | ) | | 
| - | | | 
| (3,626,770 | ) | |
| 
Related Party Debt Forgiveness | | 
| - | | | 
| - | | | 
| 8,077,965 | | | 
| - | | | 
| 8,077,965 | | |
| 
Net loss | | 
| - | | | 
| - | | | 
| - | | | 
| (5,919,900 | ) | | 
| (5,919,900 | ) | |
| 
Balance, June 30, 2025 | | 
| 109,695,876 | | | 
$ | 109,696 | | | 
$ | 4,341,499 | | | 
$ | (10,952,468 | ) | | 
$ | (6,501,273 | ) | |
| 
Balance | | 
| 109,695,876 | | | 
$ | 109,696 | | | 
$ | 4,341,499 | | | 
$ | (10,952,468 | ) | | 
$ | (6,501,273 | ) | |
(The
accompanying notes are an integral part of these consolidated financial statements)
| 
(1) | 
For
the twelve months ended June 30, 2024, common stock outstanding has been determined in accordance with the exchange ratio established
as part of the reverse merger that was completed during July of 2024 (refer to Note 9) | |
| 
| 
| |
| 
(2) | 
Financial
information for the comparative period reflects the combination of certain former Rivulet Media, inc. entities under common control
that were transferred as part of the reverse merger transaction. | |
| F-5 | |
| Table of Contents | |
**Rivulet
Entertainment, Inc.**
**Consolidated
Statements of Cash Flows**
| 
| | 
2025 | | | 
2024(1) | | |
| 
| | 
For the Twelve Months Ended June 30, | | |
| 
| | 
2025 | | | 
2024(1) | | |
| 
Cash flows from operating activities: | | 
| | | | 
| | | |
| 
Net loss | | 
$ | (5,919,900 | ) | | 
$ | (181,489 | ) | |
| 
Adjustments to reconcile net loss to net cash used in operating activities: | | 
| | | | 
| | | |
| 
Amortization of film costs | | 
| 10,468,345 | | | 
| - | | |
| 
Investment impairment | | 
| 1,000,000 | | | 
| - | | |
| 
Bad debt expense | | 
| - | | | 
| 120,000 | | |
| 
Change in operating assets and liabilities: | | 
| | | | 
| | | |
| 
Accounts receivable | | 
| (1,999,979 | ) | | 
| 29,997 | | |
| 
Prepaid expenses | | 
| 22,061 | | | 
| (45,377 | ) | |
| 
Other current assets | | 
| (778,530 | ) | | 
| - | | |
| 
Film costs | | 
| (15,457,179 | ) | | 
| (9,594,246 | ) | |
| 
Deposits | | 
| (12,050 | ) | | 
| (758,274 | ) | |
| 
Accounts payable | | 
| 532,973 | | | 
| 205,249 | | |
| 
Accrued expenses | | 
| 1,259,869 | | | 
| 690,133 | | |
| 
Other current liabilities | | 
| (91,810 | ) | | 
| 77,634 | | |
| 
Net cash flows used in operating activities | | 
| (10,976,200 | ) | | 
| (9,456,373 | ) | |
| 
| | 
| | | | 
| | | |
| 
Cash flows from investing activities: | | 
| | | | 
| | | |
| 
Net cash flows provided by (used in) investing activities: | | 
| - | | | 
| - | | |
| 
| | 
| | | | 
| | | |
| 
Cash flows from financing activities: | | 
| | | | 
| | | |
| 
Proceeds from notes payable | | 
| 21,660,506 | | | 
| 6,185,000 | | |
| 
Payments on note payable | | 
| (10,657,938 | ) | | 
| - | | |
| 
Proceeds from notes payable - related party | | 
| - | | | 
| 3,370,411 | | |
| 
Net cash flows provided by financing activities: | | 
| 11,002,568 | | | 
| 9,555,411 | | |
| 
| | 
| | | | 
| | | |
| 
Net change in cash | | 
| 26,368 | | | 
| 99,038 | | |
| 
Cash, beginning of period | | 
| 101,721 | | | 
| 2,683 | | |
| 
Cash, end of period | | 
$ | 128,089 | | | 
$ | 101,721 | | |
| 
| | 
| | | | 
| | | |
| 
Supplemental disclosure of cash flow information: | | 
| | | | 
| | | |
| 
Cash paid for interest | | 
$ | 799,475 | | | 
$ | - | | |
| 
Income taxes paid | | 
$ | - | | | 
$ | - | | |
| 
| | 
| | | | 
| | | |
| 
Supplemental disclosure of non-cash activity: | | 
| | | | 
| | | |
| 
Debt forgiveness related to reverse merger transaction (Note 8) | | 
$ | 8,077,965 | | | 
$ | - | | |
| 
Recapitalization | | 
$ | (3,626,770 | ) | | 
$ | - | | |
(The
accompanying notes are an integral part of these consolidated financial statements)
| 
(1) | 
Financial
information for the comparative period reflects the combination of certain former Rivulet Media, inc. entities under common control
that were transferred as part of the reverse merger transaction. | |
| F-6 | |
| Table of Contents | |
**Rivulet
Entertainment, Inc.**
**Notes
to Consolidated Financial Statements**
**For
The Twelve Months Ended June 30, 2025 and 2024**
**NOTE
1 NATURE OF THE ORGANIZATION AND BUSINESS**
****
On
July 7, 2024 (the Closing Date), Rivulet Entertainment, Inc. (The Company or Rivulet) completed
its acquisition of certain wholly owned subsidiaries of Rivulet Media, Inc. In consideration for the acquisition of the entities, the
Company agreed to transfer approximately $10 million and 97 million shares to the current owners of Rivulet Media, Inc. On May 19, 2025
the agreement was amended to reduce the cash portion of the purchase price from $10,000,000 to $6,450,000. Furthermore, the conditions
subject to closing and the default provisions were eliminated. As of the date of this filing, the Company has transferred $2,950,000
to the former owners of Rivulet Media, Inc. and had an outstanding balance of $3,500,000, which was classified as other current liabilities
on the Companys consolidated balance sheets as of June 30, 2025. The transaction was accounted for as a reverse merger
whereby the combined entities of Rivulet Media, Inc. were determined to be the accounting acquirer/legal acquiree and Rivulet Entertainment,
Inc. was determined to be the accounting acquiree/legal acquirer. As such, the comparative financial statements presented in the filing
(for the twelve months ended June 30, 2024) are those of the combined entities of Rivulet Media, Inc. that were transferred as part of
the merger agreement.
The
Company produces, distributes and markets feature-length films, television series and mini-series, and television movies, from initial
creative development through principal photography, postproduction, distribution and ancillary sales.
The
business strategy of Rivulet Entertainment, Inc. as it relates to films, television series, mini-series, and television movies is to
enter into contracts with well-known actors and actresses, acquire scripts able to attract large audiences that have been overlooked
by blockbuster producers, focus on cost control measures, obtain favorable tax credits and financing opportunities. Unlike many smaller
producers, Rivulet is not targeting artsy niche markets but films that appeal to a wide audience. The Companys business
plan as an independent film producer is to fully leverage all of its guaranteed contracts that it negotiates upfront for a film to be
produced. This strategy permits the Company to raise less equity capital and obtain short-term bridge loans thereby permitting much larger
budgets than historically could be obtained by independent film producers. Management believes this strategy enables the Company to produce
films with budgets of up to $50 million although historically the Company has spent less than $15 million on each of its films to date.
This strategy also permits the Company to forego the risks associated with a speculative movie venture which may or may not repay its
funding sources by pre-selling contracts to distributors such as Netflix who are looking for content to reach its viewers. The Company
can also determine whether to sell its domestic or international rights to another production company if unanticipated cash needs develop
while in production.
The Company
intends to grow and diversify our portfolio of content to capitalize on demand from emerging and traditional platforms throughout the
world. The Company will attempt to maintain a disciplined approach to acquisition, production, and distribution of product by balancing its financial
risks against the probability of commercial success for each project. The Company pursues the same disciplined approach to investments in, and
acquisition of, libraries and other assets complementary to the business. The Company believes that its strategic focus on content
and creation of innovative content distribution strategies will enhance its competitive position in the industry, ensure optimal use
of the Companys capital, build diversified foundation for future growth, and generate significant long-term value for the Companys
shareholders.
| F-7 | |
| Table of Contents | |
**NOTE
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
****
**Basis
of Presentation**
These
accompanying consolidated financial statements have been presented in United States dollars ($ or USD) and
are prepared in accordance with United States generally accepted accounting principles (US GAAP) for financial information
and with Article 8 of Regulation S-X. In addition, as a film production company, the Company also complies with the incremental guidance
in Accounting Standards Codification (ASC) 926, *Entertainment-Films*. All comparative period financial information
reflects the combined results of the former Rivulet Media, Inc. entities under common control that were transferred as part of the transaction.
**Principles
of Consolidation**
****
The
Company evaluates the need to consolidate other entities based on the guidance set forth in ASC 810*, Consolidation* (ASC
810). To that extent, the Company will consolidate entities in which it has a controlling financial interest based on the guidance
in the ASC topic. As of June 30, 2025, Rivulet Entertainment, Inc. consolidated included the following wholly owned subsidiaries:
SCHEDULE OF WHOLLY OWNED SUBSIDIARIES
| 
Entity
Name | 
| 
Year
of Incorporation | 
| 
Percentage
Ownership | |
| 
Nutcracker,
LLC | 
| 
2023 | 
| 
100% | |
| 
Kicklight,
LLC | 
| 
2023 | 
| 
100% | |
| 
Good
News, LLC | 
| 
2021 | 
| 
100% | |
| 
Please
Baby Please LLC | 
| 
2020 | 
| 
100% | |
| 
Mistress
Movie, LLC | 
| 
2020 | 
| 
100% | |
| 
LAC2
Productions, LLC | 
| 
2022 | 
| 
100% | |
| 
Acolyte
Productions, LLC | 
| 
2022 | 
| 
100% | |
| 
Storyland
Productions, LLC | 
| 
2021 | 
| 
100% | |
| 
Da
Vinci, LLC | 
| 
2023 | 
| 
100% | |
| 
Garden,
LLC | 
| 
2023 | 
| 
100% | |
| 
Storyland
Animation, LLC | 
| 
2021 | 
| 
100% | |
| 
Rivulet
Media Ventures, LLC | 
| 
2023 | 
| 
100% | |
| 
The
Dink Productions, LLC | 
| 
2024 | 
| 
100% | |
****
**Going
Concern**
****
The
Company had cash of $128,089as
of June 30, 2025, negative working capital of $23.4 million and accumulated deficit of $11.0
million. Further, during the twelve months ended
June 30, 2025, the Company incurred a net loss of $5.9
million and cash flow used in operations of $11.0
million for the twelve months ended June 30, 2025. As such,
the Company concluded that there is substantial about its ability to continue as a going concern. The Company hopes to mitigate the conditions
or events that raise substantial doubt about its ability to continue as a going concern through its future sales of movie rights and
future capital raises.
**Use
of Estimates**
****
The
preparation of financial statements in conformity with U.S. GAAP requires the Companys management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise
significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances
that existed at the date of the consolidated financial statements, which management considered in formulating its estimate,
could change in the near term due to one or more future confirming events. The Company bases its estimates on historical experience and
on various assumptions that are believed to be reasonable, the results of which form the basis for the amounts recorded in the consolidated financial statements.
**Cash
and Cash Equivalents**
****
The
Company considers all short-term investments with an original maturity of three months or less when purchased to be cash or cash equivalents.
| F-8 | |
| Table of Contents | |
**Film
Costs**
****
In
accordance with ASC 926, *Entertainment-Films*, the Company reports film costs incurred as a separate asset on its consolidated
balance sheets (Film costs). Film costs include all direct negative costs incurred in the physical production of a film,
such as compensation of cast and rental facilities on location, as well as allocations of production overhead and capitalized interest
(if any). Further, costs incurred related to significant changes to a film are added to film costs and subsequently charged to expense
when the Company recognizes the related revenue.
**Amortization
of Film Costs**
****
As
the Companys films are monetized on their own, the Company amortizes film costs using the individual-film-forecast-computation
method. Pursuant to that method, unamortized film costs as of the beginning of the current fiscal year are multiplied by the individual-film-forecast-computation
method fraction. To that extent, the Company will begin amortization of capitalized film costs when a film is released, and it begins
to recognize revenue from that film. The Company will review and revise its estimate of ultimate revenue as of each reporting date to
reflect the most currently available information. Changes to the estimate of ultimate revenue, if any, are accounted for prospectively.
Amortization of film costs is presented as film cost amortization on the face of the Companys consolidated statements
of operations.
During
the twelve months ended June 30, 2025 and 2024, the Company recognized approximately $10.5 million and $0 of film cost amortization which
is presented as film cost amortization in the Companys consolidated statements of operations.
**Impairment
of Capitalized Film Costs**
****
The
Company will test its unamortized film costs whenever events or changes in circumstances indicate that the fair value of a film may be
less than its unamortized costs. If the Company determines that the fair value of a film is less than its unamortized film costs, then
the unamortized capitalized costs for the film will be written down by the amount exceeding the films fair value. The unit of
account for impairment testing is the individual film being produced and the fair value is determined using a discounted cash flow technique.
**Recognition
of Revenue from Contracts with Customers**
****
The
Company recognizes revenue from its contracts with customers in accordance with the core principle outlined in ASC 606, *Revenue from
Contracts with Customers*. Specifically, to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which we expect to be entitled in exchange for those goods or services. To that extent, the Company
recognizes revenue in accordance with the ASC Topic by applying the following five steps:
| 
| 
| 
Step
1-Identify the contract(s) with a customer | |
| 
| 
| 
Step
2-Identify the performance obligations in the contract | |
| 
| 
| 
Step
3-Determing the transaction price | |
| 
| 
| 
Step
4-Allocate the transaction price to the performance obligations in the contract | |
| 
| 
| 
Step
5-Recognize revenue when (or as) the Company satisfies a performance obligation | |
The
Companys contracts with its customers currently contain a single performance obligation comprised of a license to motion picture
rights. In accordance with ASC 606, the Company ( i.e. the licensor) has concluded that the license transfer should i)
be considered functional intellectual property and ii) that customers (the licensees or distributors) are
therefore granted a right to use the Companys intellectual property as it exists at the point in time at which the license is
granted. As such, revenue is recognized at a point in time upon the Companys delivery of the license to the licensee. The Company
does not currently provide any form of extended payment terms to its customers and, as such, a fixed payment is typically received from
the customer within 90 days after the license is transferred.
| F-9 | |
| Table of Contents | |
In
determining the transaction price, the Companys contracts with its customers do not include a significant financing component,
non-cash consideration or consideration payable to the customer. However, the Companys contracts typically will include sales-based
or usage-based royalties that are triggered by the attainment of certain levels of box office receipts or video on demand (VOD)
purchases. To that extent, in accordance with ASC 606-10-55, the Company will recognize the sales-based or usage-based royalties only
when the later of the following events occur-a) the subsequent sale or usage occurs or b) the performance obligation to which the sales-based
or usage-based royalty has been satisfied.
As
it pertains to incremental costs of obtaining a contract, the Company does not incur any type of sales commissions.
During
the year ended June 30, 2025 the Company sold film rights to a customer for $10.0 million. The Company concluded that the sale represented
the transfer of a functional license to the customer and that it had satisfied all of its performance obligations stemming from the agreement
during the period. As such, the entire $10.0 million fixed sale price was recognized as revenue during the period. The Company does not
expect to generate additional revenues from the film.
**Exploitation
and Participation Costs**
****
The
Company accounts for advertising costs in accordance with ASC 720-35, *Other Expenses-Advertising Costs*. All other direct costs
incurred in connection with the distribution of a film are expensed as incurred. In addition, the Company will begin to accrue (expense)
participation costs when i) a film is released and ii) it begins to recognize revenue from the film. Participation costs are accrued
(expensed) using the individual-film-forecast-computation method. The Company incurred participation costs of $1,995,058 and $100,000
for the twelve months ended June 30, 2025 and 2024, respectively, which is included in general and administrative expense on the consolidated
statements of operations. Further, the Company had accrued participation cost expenses of $311,469 and $0 as of June 30, 2025 and 2024,
which are presented in accrued expenses in the consolidated balance sheets. The accrued participation costs are expected to
be paid during the upcoming operating cycle.
**Investments
in Equity Securities**
****
The
Company accounts for its investments in equity securities without a readily determinable fair value at cost minus impairment in accordance
with ASC 321, *Investments-Equity Securities*. Further, the Company will continue to recognize its investments without a readily
determinable fair value at cost minus impairment until the investment does not qualify to be measured as such. To that extent, the Company
will re-assess at the end of each reporting period whether the investment still qualifies to be recognized at cost minus impairment.
In
addition to assessing whether the investments still qualify to be recognized at cost minus impairment, the Company will also make a qualitative
assessment at the end of each reporting period considering impairment indicators to evaluate whether the investment is impaired. If the
qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than its carrying value,
then the investment will be written down to fair value. During the twelve months ended June 30, 2025, the Company recognized a
$1.0 million impairment on its original $2.0 million investment, resulting in a carrying value of $1.0 million as of June 30, 2025. The
Company did not recognize any impairment for the twelve months ended June 30, 2024.
**General
and Administrative Expenses**
****
The
Companys general and administrative expenses primarily consist of participation costs, personnel and related costs, including
employee salaries, legal fees relating to corporate matters, accounting and audit related costs, insurance, corporate communications,
information technology and related expenses.
**
**Income
Taxes**
****
The
Company follows the asset and liability method of accounting for income taxes under ASC 740, *Income Taxes*. Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period
that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected
to be realized.
| F-10 | |
| Table of Contents | |
ASC
740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions
taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be
sustained upon examination by taxing authorities. The Company is currently not aware of any issues under review that could result in
significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing
authorities since inception.
**Net Loss Per Share**
Net loss per share is computed by dividing net loss by the weighted
average number of common shares outstanding during the reporting period. Diluted earnings per share is computed similarly to the basic
earnings per share, except the weighted average number of common shares outstanding are increased to include additional shares from the
assumed exercise of share options, if dilutive.The Company had no outstanding shares issuable to be excluded from the computation
of diluted net loss per share for the periods presented.
**Concentration
of Credit Risk**
****
Financial
instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution,
which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. As of June 30, 2025, the Company has not experienced
losses on this account and management believes the Company is not exposed to significant risks on such account.
In
addition, virtually the Companys entire accounts receivable balance as of June 30, 2025 is with a single customer. However, the
Company believes that the customer is in good credit standing and does not have reason to believe that there any collectability issues
with the outstanding balance.
**Accounts
Receivable**
****
Accounts
receivable, net of allowance for credit losses, represent their estimated net realizable value, which approximates fair value.
Provisions for expected credit losses are recorded based on historical collection experience, current conditions and reasonable and
supportable forecasts. Receivables are written off when they are deemed uncollectible. As of June 30, 2025 and 2024, the Company had
an accounts receivable balance of approximately $2.0
million and $0
million, respectively. All amounts were deemed collectable as of June 30, 2025.
**Fair
Value Measurements**
****
Fair
value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction
between market participants at the measurement date. U.S. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:
| 
| 
| 
Level
1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; | |
| 
| 
| 
Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted
prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;
and | |
| 
| 
| 
Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. | |
The
reporting amount of cash represents fair value due to its liquid nature. Further, the stated amounts of related and non-related notes
payable also represent fair value as the borrowings are issued at prevailing market rates. As of June 30, 2025 and June 30, 2024, the
Company did not have any assets measured at fair value on a recurring basis that would require disclosure based on the fair value hierarchy
outlined in ASC 820.
| F-11 | |
| Table of Contents | |
**Related
Party Disclosures**
****
The
Company discloses all related party transactions in accordance with the guidance in ASC 850, *Related Party Disclosures*. To that
extent, amounts of related party transactions are stated on the face of the consolidated balance sheets, consolidated
statements of operations and consolidated statements of cash flows (as applicable).
**Segment
Reporting**
****
The
Company currently operates in a single operating segment. Operating segments are reported in a manner consistent with the internal reporting
provided to the Companys chief operating decision maker (the CODM). The Companys CODM, which is its Chief
Executive Officer, views the Companys operations and manages its business as a single operating segment, which is currently movie
film production. The CODM primarily evaluates cash flow from operations and overall liquidity to determine its ability to deliver its
picture films.
**Commitments
and Contingencies**
****
The
Company accounts for contingencies in accordance with ASC 450-20, *Contingencies.*Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when
one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves
an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted
claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims
as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If
the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability
can be estimated, then the estimated liability would be accrued in the Companys consolidated financial statements. If
the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but
cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and
material, would be disclosed. The Company is not currently involved in any legal proceedings that could require either accrual or disclosure.
In
addition to the stated interest rates on the loans, certain of our notes payable include a net profit participation feature whereby the
lender may receive an additional return based on the performance of the film underwritten by the loan. Certain of these loans are collateralized
by interests in film rights the Company owns.
**Recent
Accounting Pronouncements**
****
In
November 2023, the FASB issued ASU 2023-07,
*Segment Reporting*- *Improvements to Reportable Segment Disclosures* (ASU 2023-07), which requires incremental
disclosures related to a public entitys reportable segments. Required disclosures include, on an annual and interim basis, significant
segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, an amount
for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a
description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of
segment profit or loss in assessing segment performance and deciding how to allocate resources. The standard also permits disclosure
of more than one measure of segment profit. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim
periods within fiscal years beginning after December 15, 2024. The Company adopted the new standard as of July 1, 2024, The adoption of
ASU 2023-07 did not have a material impact on the Companys consolidated financial statements.
| F-12 | |
| Table of Contents | |
In
December 2023, the FASB issued ASU 2023-09-*Income Taxes* (Topic 740)-*Improvements to Income Tax Disclosures*, which requires
entities to provide additional information in the rate reconciliation and additional disclosures about income taxes paid. The guidance
should be applied prospectively and is effective for annual periods beginning after December 15, 2024. The Company does not expect the
issued standard will have a material impact on its consolidated financial statements.
In
November 2024, the FASB issued ASU 2024-03, *Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures*
(Subtopic 220-40). The amendments in this update require disclosure, in the notes to combined financial statements, of specified information
about certain costs and expenses at each interim and annual reporting period. The amendments are effective for annual periods beginning
after December 15, 2026, and reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently
evaluating the impact that the new ASU will have on its combined financial statements.
**NOTE
3 FILM COSTS COMPONENTS**
Components
of film costs for films predominantly monetized on their own were as follows:
SCHEDULE OF COMPONENTS OF PRODUCTION COSTS FOR FILMS
| 
| | 
2025 | | | 
2024 | | |
| 
| | 
As
of June 30, | | |
| 
| | 
2025 | | | 
2024 | | |
| 
Released | | 
$ | - | | | 
$ | - | | |
| 
Completed
and not released | | 
| - | | | 
| - | | |
| 
In
production | | 
| 14,215,580 | | | 
| 9,356,746 | | |
| 
Preproduction | | 
| 798,014 | | | 
| 668,014 | | |
| 
Total | | 
$ | 15,013,594 | | | 
$ | 10,024,760 | | |
****
**NOTE
4 DEPOSITS**
As
of June 30, 2025 and June 30, 2024, the Company held deposits of $866,440 and $854,390, respectively, with various film unions, in accordance
with the requirements of collective bargaining agreements. These deposits are classified as non-current assets on the consolidated
balance sheets. The deposits are intended to secure the Companys obligations for union-related benefits, including health and
retirement contributions for eligible union members.
The
deposits are refundable upon fulfilment of the Companys obligations under the terms of the agreements or upon termination of
the agreements. As of June 30, 2025 and June 30, 2024, the Company is in compliance with all applicable union requirements, and no deposits
are subject to forfeiture. The Company monitors its compliance with these agreements on an ongoing basis to ensure all obligations are
met.
**NOTE
5 INVESTMENT IN EQUITY SECURITIES**
During
June of 2023 the Company made a $2,000,000
equity investment in Casa Azul Spirits, LLC, a tequila Company incorporated in Delaware, which gave the Company a 5%
ownership stake. As the Company neither controls nor has significant influence over the investee, the investment is recognized in
accordance with ASC 321, *Equity Securities*. Further, as the equity investment does not have a readily determinable fair value
and does not qualify for the practical expedient to estimate fair value (outlined in ASC 820-10), the Company recognizes its
investments in Casa Azul at cost minus impairment.
The
carrying amount of the investment in Casa Azul was $1,000,000 and $2,000,000
as of June 30, 2025 and June 30, 2024, respectively. During the twelve months ended June 30, 2025, the Company recognized a
$1.0 million impairment on its original $2.0 million investment, resulting in a carrying value of $1.0 million as of June 30, 2025. The
Company did not recognize any impairment for the twelve months ended June 30, 2024. The Company considered the price per share disclosed in recent subscription
agreements issued by Casa Azul in determining the carrying amount of the investment as of June 30, 2025.
| F-13 | |
| Table of Contents | |
**NOTE
6 INCOME TAXES**
Income
taxes for our fiscal years ended June 30, 2025 and June 30, 2024 were as follows:
SCHEDULE OF SCHEDULE OF INCOME TAXES
| 
| | 
| June
30, 2025 | | | 
| June
30, 2024 | | |
| 
Current: | | 
| | | | 
| | | |
| 
Federal | | 
$ | - | | | 
$ | - | | |
| 
State | | 
| - | | | 
| - | | |
| 
Total
Current | | 
| - | | | 
| - | | |
| 
Deferred: | | 
| | | | 
| | | |
| 
Federal | | 
$ | - | | | 
$ | - | | |
| 
State | | 
| - | | | 
| - | | |
| 
Total
Deferred | | 
| - | | | 
| - | | |
| 
Total
Tax Provision | | 
$ | - | | | 
$ | - | | |
The
Company accounts for income taxes under ASC 740, *Income Taxes* (ASC 740), which provides for an asset and liability
approach of accounting for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated
future tax consequences, using currently enacted tax laws, attributed to temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts calculated for income tax purposes.
The
Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making
such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable
temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations.
A
reconciliation of the federal income tax rate to the Companys effective tax rate for the periods ended June 30, 2025 and June
30, 2024 were as follows:
SCHEDULE OF RECONCILIATION OF THE FEDERAL INCOME TAX RATE
| 
| | 
June
30, 2025 | | | 
June
30, 2024 | | |
| 
| | 
For
the years ended | | |
| 
| | 
June
30, 2025 | | | 
June
30, 2024 | | |
| 
Federal
Statutory Rate | | 
| 21 | % | | 
| 21 | % | |
| 
State tax,
net on income tax benefit | | 
| 3.87 | % | | 
| 3.87 | % | |
| 
Change
in Valuation Allowance | | 
| -24.87 | % | | 
| -24.87 | % | |
| 
Effective
Tax Rate | | 
| - | | | 
| - | | |
We
account for income taxes using the asset and liability method. Deferred taxes are recorded based on differences between the financial
statement basis and tax basis of assets and liabilities and available tax loss and credit carryforwards.
| F-14 | |
| Table of Contents | |
The
significant components of our deferred taxes consisted of the following:
SCHEDULE OF SIGNIFICANT COMPONENTS OF OUR DEFERRED TAXES
| 
| | 
June
30, 2025 | | | 
June
30, 2024 | | |
| 
Deferred
Tax Assets: | | 
| | | | 
| | | |
| 
Bad
Debt | | 
$ | - | | | 
$ | 29,845 | | |
| 
Net
Operating Losses | | 
| 1,472,279 | | | 
| 1,494,451 | | |
| 
Gross
Deferred Tax Assets | | 
| 1,472,279 | | | 
| 1,524,296 | | |
| 
Valuation
Allowance | | 
| (1,472,279 | ) | | 
| (1,451,822 | ) | |
| 
Net
Deferred Tax Assets | | 
$ | - | | | 
$ | 72,474 | | |
| 
Deferred
Tax Liabilities: | | 
| - | | | 
| - | | |
| 
Partnership
Income / (Loss) | | 
| - | | | 
| (72,474 | ) | |
| 
Gross
deferred tax liabilities | | 
| - | | | 
| (72,474 | ) | |
| 
Net
deferred tax asset (liability) | | 
$ | - | | | 
$ | - | | |
For
our fiscal year ended June 30, 2024, the Companys items of income, deductions, assets, and liabilities were included within the
consolidated tax return of its ultimate U.S. parent, Rivulet Media. The provision for income taxes were calculated by applying a separate
return method. Under this method, the current provision was the amount of tax payable or refundable on the basis of a hypothetical,
current-year separate return. Any deferred taxes on temporary differences, including any carryforwards, that could be claimed on a hypothetical
return were assessed on the basis of the projected separate return results for purposes of determining the need for a valuation allowance.
Consistent
with the application of this guidance, the Company recognized current and deferred income tax consequences as if it were a separate taxpayer
rather than a member of its consolidated tax group. As such, the deferred tax assets and liabilities reflect certain tax attributes resulting
from its separate return accounting (for fiscal year 2024). For the current year, all items of income, deductions, assets, and liabilities
were included within the consolidated tax return of Rivulet Entertainment, inc. (i.e. and not calculated based on a hypothetical separate
return method).
As
of June 30, 2025 and 2024, the Company recorded a gross deferred tax asset, for federal net operating loss carryforwards (NOLs)
of $10.5 million and $5.7 million, respectively. As noted above, the prior year NOLs were generated while part of a combined tax return
and may not legally exist or may offset income in the consolidated return of the parent which is not included in the consolidated financial
statements.
Our
ability to use our net operating losses to offset future taxable income may be subject to certain limitations. In general, under Section
382 of the Code, a corporation that undergoes an ownership change, generally defined as a greater than 50% change by value
in its equity ownership over a three-year period, is subject to limitations on its ability to utilize its pre change net operating losses,
or NOLs, to offset future taxable income. Our existing NOLs may be subject to limitations arising from ownership changes that we might
have undergone in the past and a detailed study has not been performed to date. Future changes in our stock ownership, some of which
might be beyond our control, could result in an ownership change under Section 382 of the Code, further limiting our ability to utilize
a material portion of the NOLs even if we attain profitability. During the years ended June 30, 2025 and 2024, the Companys valuation
allowance increased by approximately $20,000 and approximately $5,000, respectively.
The
Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions. The Company will
recognize interest and penalties related to any uncertain tax positions through its income tax expense.
| F-15 | |
| Table of Contents | |
**NOTE
7 NOTES PAYABLE AND RELATED PARTY LOANS**
The
Company enters into loan agreements with both related and non-related parties in order to fund their ongoing film production activities.
To that extent, the Company had the following outstanding debt as of June 30, 2025 and June 30, 2024:
SCHEDULE OF NOTES PAYABLE AND RELATED PARTY LOAN
| 
| | 
2025 | | | 
2024 | | |
| 
| | 
As
of June 30, | | |
| 
| | 
2025 | | | 
2024 | | |
| 
Current
notes payable; Issued December 2023-January 2024; 15% stated interest rate; Due April 1, 2024 - in default | | 
$ | 190,000 | | | 
$ | 4,140,000 | | |
| 
Current
notes payable; Issued July 2024-September 2024; 10% stated interest rate; Due March 28, 2025 - in default | | 
| 13,493 | | | 
| - | | |
| 
Current
loan payable; Issued October 2024; 6.5% average interest rate; Due October 2025; net of deferred financing costs | | 
| 3,417,593 | | | 
| - | | |
| 
Current
notes payable; Issued September 2024; 20% stated interest rates; Due upon the earlier of a sale of a film or closing of a senior
debt facility - in default | | 
| 150,000 | | | 
| - | | |
| 
Current
notes payable; Issued June 2023-May 2024; 15% stated interest rate; Due February 1, 2026 | | 
| 1,255,000 | | | 
| 1,330,000 | | |
| 
Current
notes payable; Issued October 2024-December 2024; 10% stated interest rate; Due January 25, 2026 | | 
| 9,708,656 | | | 
| - | | |
| 
Any and
all sums due shall be due on or before August 24, 2025 or extended as stated | | 
| 300,000 | | | 
| - | | |
| 
Any and
all sums due shall be due on July 4, 2025 or extended as stated | | 
| 225,000 | | | 
| - | | |
| 
Current
notes payable; Issued July 2024-June 2025; 10%-20% stated interest rates; Due upon the earlier of a sale of a film or closing of
a senior debt facility | | 
| 1,080,000 | | | 
| - | | |
| 
Current
notes payable; Issued July 2024-September 2024; 15% stated interest rate; Due upon sale of film | | 
| 125,000 | | | 
| - | | |
| 
Tax credit
assignment loans; Issued January of 2024; Participation in future tax receivable; No stated interest rate or due date | | 
| 750,000 | | | 
| 750,000 | | |
| 
Related
party notes payable to a beneficial owner; Issued October-November of 2023; 15% stated interest rate; Due February 1, 2026 (refer
to Note 8) | | 
| 2,880,000 | | | 
| 2,880,000 | | |
| 
Related
party notes payable to parent company; Issued at various dates; no stated interest rate or due date (refer to Note 8) | | 
| - | | | 
| 7,888,316 | | |
| 
Total notes
payable | | 
| 20,094,742 | | | 
| 16,988,316 | | |
| 
Less
current maturities | | 
| (20,094,742 | ) | | 
| (4,890,000 | ) | |
| 
Total
notes payable, non-current portion | | 
$ | - | | | 
$ | 12,098,316 | | |
As
of June 30, 2025, $353,000 of notes were in default as a result of provisions in the respective note agreements requiring payment upon
sale of a film, which has yet to be fulfilled by the Company. As of the date of the filing, $353,000 were still in default and bore an
interest rate of 20% to 25%.
During
the twelve months ended June 30, 2025, the Company entered into certain note agreements totaling $18.2 million. These notes bear interest
at rates of approximately 10% to 20%, and mature dependent upon factors related to future film sales, the closing of a senior debt facility
or certain stated maturity dates, as detailed in the table above.
Additionally,
on October 16, 2024 the Company entered into a one1-year credit facility with total availability of $3.5 million. The full amount of $3.5
million has been drawn as of the date of these consolidated financial statements with an approximate interest rate of 6.5%.
During
the twelve months ended June 30, 2025, the Company paid notes payable of approximately $10.6 million.
| F-16 | |
| Table of Contents | |
In
addition to the stated interest rates on the loans, certain loans include a net profit participation feature whereby the lender may receive
an additional return based on the performance of the film underwritten by the loan. Certain of these loans are collateralized by interests
in film rights the Company owns. Additionally, certain of these notes are guaranteed by an individual who is a related party. To that
extent, none of the participation features were triggered as of June 30, 2025. In addition, certain tax credit assignment loans totaling
$750,000 were entered into during fiscal year 2024 whereby the lenders agreed to be paid (on a dollar per dollar basis) from the proceeds
of a refundable tax credit related to the production of the Nutcracker film. While the tax credit was not received as of June 30, 2025,
the Company expects to receive the credit in the near future and has therefore classified the tax assignment loans as current. In order
to receive this tax credit, the Company must have an audit performed on the required financial information, which is currently in-process.
The
Company had approximately $7.9 million in related party debt to its former parent company as of June 30, 2024. However, in accordance
with the merger agreement all of the debt was forgiven as of the merger consummation date. The debt forgiveness was recognized as an
increase to additional paid in capital. Upon settlement of the transaction an additional $0.2 million of liabilities were forgiven, resulting
in total liability forgiveness of $8.1 million.
**NOTE
8 RELATED PARTY TRANSACTIONS**
*Rivulet
Media, Inc.*
As
part of the merger transaction, the transferred entities had $7,888,316 of intercompany loans with Rivulet Media, Inc. as of June 30,
2024. The intercompany loans did not include a stated interest rate or due date. Further, as a result of the transaction, the loans were
forgiven by Rivulet Media, Inc. as of the merger consummation date. Upon settlement of the transaction an additional $189,649 of liabilities
were forgiven, resulting in total liability forgiveness of $8,077,965. The debt forgiveness was recognized as an increase to additional
paid in capital.
*Beneficial
Owner*
During
the year ended June 30, 2024, the Company entered into a $2,880,000 note payable agreement with a certain beneficial owner of Rivulet
Media, Inc. The notes are due on February 1, 2026 and have a stated interest rate of 15%. The balance of the loan was $2,880,000 as of
June 30, 2025 and June 30, 2024.
*Advances*
During
the twelve months ended June 30, 2025, the Company advanced funds to a person of Management at Rivulet Entertainment, Inc. in the amount
of $307,000 which is included in other current assets on the consolidated balance sheets. The advance bears no interest and
has no stated maturity date, which is not necessarily indicative of terms a third-party would contractually enter into.
**NOTE
9 REVERSE MERGER**
During
July of 2024, certain combined entities of Rivulet Media, Inc. entered into a reverse merger with Rivulet Entertainment, Inc. In accordance
with ASC 805, *Business Combinations*, it was determined that the combined entities should be considered the accounting acquirer
and Rivulet Entertainment, Inc. should be considered the accounting acquiree.
In
determining the number of shares outstanding as of the merger completion date, the Company utilized the guidance in ASC 805-40, *Reverse
Acquisitions*. Specifically, while the combined entities (that were transferred as part of the transaction) did not have any shares
outstanding as of the merger date, the Company established an exchange ratio based on the number of shares issued by Rivulet Entertainment,
Inc. to effectuate the merger divided by the number of shares outstanding of Rivulet Media, Inc. consolidated immediately prior to the
merger as follows:
SCHEDULE OF MERGER
| 
| | 
| | 
| | | |
| 
Number
of shares issued to effectuate the merger | | 
A | | 
| 96,722,950 | | |
| 
Rivulet
Media inc. consolidated shares outstanding-pre merger | | 
B | | 
| 144,045,171 | | |
| 
Exchange
ratio | | 
A/B | | 
| 0.67 | | |
| F-17 | |
| Table of Contents | |
Further,
for the recapitalization shares issued amount, the Company determined the implicit number of shares that Rivulet Media, Inc. would have
had to issue in order to provide Rivulet Entertainment, Inc. with an approximate 12% interest in the combined company and multiplied
that amount times the established exchange ratio as follows:
| 
| | 
| | 
| | | |
| 
Gross
implicit shares issued by Rivulet Media, inc. | | 
A | | 
| 19,320,000 | | |
| 
Exchange
ratio | | 
B | | 
| 0.67 | | |
| 
Net
implicit shares issued | | 
A*B | | 
| 12,972,926 | | |
****
**NOTE
10 SHAREHOLDERS DEFICIT**
As
of June 30, 2025, the Company was authorized to issue multiple series of preferred stock, as outlined below. There were no preferred shares
issued or outstanding as of June 30, 2025.
Series
A Preferred Stock: (10,000,000 shares authorized; $0.001 par value):
The
Series A Preferred stock had the following rights and privileges:
| 
| 
| 
Are
without voting powers on any matter presented to the common stockholders of the Company for their action or consideration. Series
A stockholders are entitled to vote on matters relating to modifications, adjustments, waivers, or other changes or matters relating
to Series A stock. Each Series A stock share shall have one (1) vote on matters relating to Series A stock. | |
| 
| 
| 
May
be subject to redemption at such time or times and at such prices determined by the Board of Directors; | |
| 
| 
| 
Are
entitled to receive dividends (which may be cumulative or non-cumulative) at 10% per annum payable in preference to, or in such relation
to, the dividends payable on any other class or classes or series of stock; | |
| 
| 
| 
May
have rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; | |
| 
| 
| 
Are
not convertible; | |
| 
| 
| 
May
be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary,
upon the issue of any additional shares (including additional shares of such series or of any other series) and upon the payment
of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any
subsidiary of, any outstanding shares of the Corporation; and | |
| 
| 
| 
May
have such other relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, in
each case as shall be stated in said resolution or resolutions providing for the issue of such shares of Preferred Stock. | |
Series
B Preferred Stock: (10,000,000 shares authorized; $0.001 par value):
The
Series B Preferred stock had the following rights and privileges:
| 
| 
| 
Are
entitled to vote on any matter presented to the common stockholders of the Company for their action or consideration. Each share
of Series B Preferred shall have twenty-five (25) votes. Series B stockholders are also entitled to vote on matters relating to modifications,
adjustments, waivers, or other changes or matters relating to Series B stock. Each Series B stock share shall have one (1) vote on
matters relating to Series B stock. | |
| 
| 
| 
May
be subject to redemption at such time or times and at such prices as determined by the Board of Directors; | |
| 
| 
| 
Are
not entitled to receive dividends; | |
| 
| 
| 
May
have such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; | |
| 
| 
| 
Shall
have the right to convert any or all of the Holders Series B stock into 25 fully paid and non-assessable shares of common
stock for each share of Series B Preferred stock | |
| 
| 
| 
May
be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of such series in such amount
or amounts; | |
| 
| 
| 
May
be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary,
upon the issue of any additional shares (including additional shares of such series or of any other series) and upon the payment
of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any
subsidiary of, any outstanding shares of the Corporation; and | |
| 
| 
| 
May
have such other relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, in
each case as shall be stated in said resolution or resolutions providing for the issue of such shares of Preferred Stock. | |
| F-18 | |
| Table of Contents | |
Series
C Preferred Stock: (2,500,000 shares authorized; $0.001 par value; face value of $0.60 per share):
The
Series C Preferred stock had the following rights and privileges:
| 
| 
| 
Shall
be entitled to vote on any matter presented to the common stockholders of the Company for their action or consideration. Each share
of Series C Preferred shall have one (1) vote. Series C stockholders are also entitled to vote on matters relating to modifications,
adjustments, waivers, or other changes or matters relating to Series C stock. Each Series B stock share shall have one (1) vote on
matters related to Series C stock. | |
| 
| 
| 
May
be subject to redemption at such time or times and at such prices as determined by the Board of Directors; | |
| 
| 
| 
Are
entitled to receive dividends of 10% per annum; | |
| 
| 
| 
May
have such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; | |
| 
| 
| 
Shall
have the right to convert any or all of the holders Series C stock into one (1) fully paid and non-assessable share of common
stock for each share of Series C Preferred stock and Series C Preferred shares shall automatically convert on the one for one basis
after five (5) years from the date of purchase. | |
| 
| 
| 
May
be entitled to the benefit of a sinking fund to be applied to the purchase or redemption of shares of such series in such amount
or amounts; | |
| 
| 
| 
May
be entitled to the benefit of conditions and restrictions upon the creation of indebtedness of the Corporation or any subsidiary,
upon the issue of any additional shares (including additional shares of such series or of any other series) and upon the payment
of dividends or the making of other distributions on, and the purchase, redemption or other acquisition by the Corporation or any
subsidiary of, any outstanding shares of the Corporation; and | |
| 
| 
| 
May
have such other relative, participating, optional or other special rights, qualifications, limitations or restrictions thereof, in
each case as shall be stated in said resolution or resolutions providing for the issue of such shares of Preferred Stock. | |
****
**NOTE
11 SUBSEQUENT EVENTS**
In
accordance with ASC 855, *Subsequent Events,*the Company has evaluated events and transactions subsequent to June 30, 2025 through
the date these consolidated financial statements were issued. Other than the below, there are no subsequent events identified
that would require disclosure in these consolidated financial statements.
**Film
Rights Sale**
Subsequent
to June 30, 2025, the Company collected the remaining $2.0 million of accounts receivable related to film sale that occurred during the
twelve months ended June 30, 2025.
**Debt
Payments**
Payments
on various notes payable of approximately $2.0 million were repaid subsequent to June 30, 2025.
**Debt
Issuance**
Subsequent
to June 30, 2025, the Company issued approximately $0.7 million of notes payable bearing interest at rates of 10% to 15%.
| F-19 | |
| Table of Contents | |
**ITEM
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**
Not
applicable.
**ITEM
9A. CONTROLS AND PROCEDURES.**
**Evaluation
of Disclosure Controls and Procedures**
Our
management, with the participation of our chief executive officer evaluated the effectiveness of our disclosure controls and procedures
as defined in Rules 13a-15(e) and 15d-15(e) and pursuant to Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934,
as amended (the Exchange Act) as of June 30, 2025. Disclosure controls and procedures are controls and procedures that
are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this
Form 10-K, is recorded, processed, summarized and reported, within the time period specified in the SECs rules and forms, and
that such information is accumulated and is communicated to our management, including our principal executive and principal financial
officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. In designing
and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure
controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment
in evaluating the benefits of possible controls and procedures relative to their costs.
Based
on our review and evaluation, our chief executive officer concluded that our disclosure controls and procedures were not effective. The
evaluation of our disclosure controls and procedures and the conclusion as to their adequacy and effectiveness, included consideration
of the deficiency noted below.
We
have identified, as of June 30, 2025, a lack of segregation of duties in accounting and financial reporting activities, which we believe
is a material weakness. The size of our business necessarily imposes practical limitations on the effectiveness of those internal control
practices and procedures that rely on the segregation of duties.
Management
believes this lack of segregation of duties in accounting and financial reporting did not result in material inaccuracies or omissions
of material fact and, to the best of its knowledge, believes that the financial statements for the transition period ended June 30, 2025
and 2024 fairly present in all material respects the financial condition and results of operations for the Company in conformity with
US GAAP. There is, however, a reasonable possibility that a material misstatement of our annual or financial statements would not have
been prevented or detected as a result of this material weakness.
**Managements
Report on Internal Control over Financial Reporting**
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f)and
15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
| 
(1) | 
pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our
assets; | |
| 
| 
| |
| 
(2) | 
provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of its management and
directors; and | |
| 
| 
| |
| 
(3) | 
provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that
could have a material effect on the financial statements. | |
Our
management assessed the effectiveness of its internal control over financial reporting as of June 30, 2025. We have identified, as of
June 30, 2025, a lack of segregation of duties in accounting and financial reporting activities, which we believe is a material weakness.
The size of our business necessarily imposes practical limitations on the effectiveness of those internal control practices and procedures
that rely on the segregation of duties.
The
Company has already undertaken certain plans in order to remediate the material weakness. Specifically, the Company has brought in an
outside consulting firm to assist with i) SEC reporting requirements and ii) segregation of duties. However, as a result of the material
weakness and restatement of our financial statements included in our previously filed Form 10-KT, the Company has concluded that our
internal controls over financial reporting were not effective as of June 30, 2025.
This
Form 10-K does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.
Managements report was not subject to attestation by our registered public accounting firm as we are a non-accelerated filer.
**Changes
in Internal Control Over Financial Reporting**
There
were no changes in the Companys internal controls over financial reporting that occurred during our last fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
**ITEM
9B. OTHER INFORMATION**
****
**Not
Applicable**
| 14 | |
| Table of Contents | |
**PART
III**
**ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.**
**Directors
and Executive Officers**
The
Companys directors and executive officers, and their ages as of the date of this report, are listed below. Our sole director,
Walter Geldenhuys, is not currently serving a fixed term.
| 
Name | 
| 
Age | 
| 
Positions(s) | |
| 
Walter
Geldenhuys | 
| 
68 | 
| 
President,
CEO, Interim CFO and Director | |
| 
Diana
Jakowchuk | 
| 
71 | 
| 
Secretary
and Treasurer | |
**Family
Relationships**
Not
applicable
**Business
Experience**
****
Walter
Geldenhuys Mr. Geldenhuys has served as a member of the Companys Board of Directors
since May 2008. Mr. Geldenhuys also served as the President of Advanced Voice Recognition Systems, Inc., a Colorado corporation, also
known as AVRS, from 2005 until June 2008. From 2000 to 2005, Mr. Geldenhuys was a member of NCC, LLC, which became AVRSs wholly-owned
subsidiary in 2005. In addition, Mr. Geldenhuys has owned Progressive Technologies LLC, a design and manufacturing concern, since 2002.
Diana
Jakowchuk Ms.
Jakowchuk has served as our Secretary and Treasurer since May 2008. Ms. Jakowchuk served as Secretary to AVRS, Inc. (a Colorado company)
from 2006-2008. Between December 2004 and July 2006, Ms. Jakowchuk served as office manager for a retail hardware company. From December
2001 to December 2004, Ms. Jakowchuk served as the State Victim Assistance Coordinator for MADD Victim Services. Prior to December 2001,
Ms. Jakowchuk served as Records Manager for NCC, LLC a predecessor to AVRS. Ms. Jakowchuk received an Associates of Arts degree from
Scottsdale Community College in 1979.
**Compliance
with Section 16(a) of the Exchange Act**
The
Company is not aware of any person who, at any time during the fiscal year ended June 30, 2025, was a director, officer, beneficial owner
of more than ten percent of the Companys common stock, that failed to file on a timely basis reports required by Section 16(a)
of the Exchange Act during the most recent fiscal year.
**Code
of Ethics**
****
The
Company has adopted a code of ethics that applies to its principal executive officer (who also service as its interim principal financial
officer). The Company does not currently employ a principal financial officer or controller. Refer to exhibit 14.1 for additional information.
**Audit
Committee Financial Expert**
The
Company does not have an audit committee at this time.
**Insider
Trading Arrangements and Policies**
****
The
Company has adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of the registrants
securities by directors, officers and employees, or the registrant itself, that are reasonably designed to promote compliance with insider
trading laws, rules and regulations, and any listing standards applicable to the registrant. Refer to exhibit 19.1 for additional information
regarding our policy.
****
| 15 | |
| Table of Contents | |
**ITEM
11. EXECUTIVE COMPENSATION.**
**Summary
Compensation Table**
**SUMMARY
COMPENSATION TABLE**
****
| 
Name and principal position | | 
Year | | 
Salary 
($)(1),(2) | | | 
Bonus ($) | | | 
Stock Awards ($) | | | 
Option Awards ($) | | | 
Nonequity incentive plan compensation ($) | | | 
Nonqualified deferred compensation earnings ($) | | | 
All Other Compensation ($) | | | 
Total ($) | | |
| 
Walter Geldenhuys-President, CEO, | | 
2025 | | 
$ | 120,000 | | | 
| | | | 
| | | | 
| | | | 
| | | | 
| | | | 
| | | | 
$ | 120,000 | | |
| 
Interim CFO and Director(3) | | 
2024 | | 
$ | 120,000 | | | 
| | | 
| - | | | 
| - | | | 
| - | | | 
| - | | | 
| - | | | 
$ | 120,000 | | |
| 
Diana Jakowchuk-Secretary and Treasurer | | 
2024 | | 
$
$ | 60,000 60,000 | | | 
| | | | 
| - | | | 
| - | | | 
| - | | | 
| - | | | 
| - | | | 
$ $ | 60,000
60,000 | | |
(1)
The individuals listed in the summary compensation table were only granted a base salary during each of the two years ended June 30,
2025 and 2024.
(2)
The following compensation amounts were accrued as of June 30, 2025: i) Walter Geldenhuys-$130,000 ii) Diana Jakowchuk-$20,000
(3)
Mr. Geldenhuys does not receive any compensation for his role as Director.
**Narrative
Disclosure to Summary Compensation Table**
****
Both
Mr. Geldenhuys and Ms. Jakowchuk only receive base salaries at this time.
****
**Outstanding
Equity Awards at Fiscal Year-End Table**
****
The
Company did not have any outstanding equity awards as of year-end for any of its named executive officers.
**ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.**
****
**Security
Authorized for Issuance Under Equity Compensation Plans**
****
The
Company does not currently have any securities that are authorized for issuance under and equity compensation plan
**Security
ownership of Certain Beneficial Owners**
| 
(1) Title of class | | 
(2) Name and address of
beneficial owner | | 
(3) Amount
and nature of beneficial ownership | | | 
(4) Percent of Class | | |
| 
Common Stock | | 
Klusman Family Holdings LLC 5105 E Exeter Blvd Phoenix AZ 85018-3008 | | 
| 14,069,692 | | | 
| 13 | % | |
| 
Common Stock | | 
Lawrence M. Silver 200 E Palmetto Park Rd Suite 600 Boca Raton FL 33432-5627 | | 
| 12,651,390 | | | 
| 12 | % | |
| 
Common Stock | | 
Dan Crosser 225 12TH St Manhattan Beach CA 90266-5304 | | 
| 12,375,000 | | | 
| 11 | % | |
| 
Common Stock | | 
Genius Equity LLC 2319 E Escondido PL Gilbert AZ 85234-5065 | | 
| 7,500,000 | | | 
| 7 | % | |
| 
Common Stock | | 
Brooks Koepka Trust 5345 Pennock Point Rd Jupiter, FL 33458-3493 | | 
| 5,817,000 | | | 
| 5 | % | |
(1)
Based on 109,695,765 shares outstanding as of September 29, 2025. The shares outstanding amount was obtained from the transfer agents
shareholder listing report.
(2)
Of the number of shares shown in column (3), there was no amount known to be shares to which such listed beneficial owner has the right
to acquire beneficial ownership as specified in Rule 13d-3(d)(1) under the Exchange Act
| 16 | |
| Table of Contents | |
****
**Security
Ownership of Management**
| 
(1) Title of class | | 
(2) Name of beneficial
owner | | 
(3) Amount
and nature of beneficial ownership | | | 
Percent of Class | | |
| 
Common Stock | | 
Walter Geldenhuys | | 
| 320,365 | | | 
| * | |
| 
Common Stock | | 
Diana Jakowchuk | | 
| 36,122 | | | 
| * | | |
| 
| | 
| | 
| | | | 
| | |
| 
Common Stock | | 
Directors and Executive Officers as a group | | 
| 356,487 | | | 
| * | | |
(1)
There were no directors or officers that held more than one percent of the common shares outstanding as of October 13, 2025. Further,
the directors and officers as a group also held <1% of the common shares outstanding as of October 13, 2025.
*Change
in control*
**
Not
applicable
**ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.**
**Transactions
with related persons, promoters and certain control persons**
****
Not
applicable
**Corporate
Governance**
****
The
Companys sole director, Walter Geldenhuys, is not independent.
**ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES.**
The
following table shows the fees paid or accrued for the audit and other services provided by our principal accountant.
| 
| | 
For
the Twelve Months Ended June 30, | |
| 
| | 
2025 | | | 
2024 | |
| 
Audit
fees | | 
$ | 186,000 | | | 
$ | 67,500 | |
| 
Audit related
fees | | 
$ | - | | | 
$ | - | |
| 
Tax fees | | 
$ | - | | | 
$ | 10,000 | |
| 
All other
fees | | 
$ | - | | | 
$ | - | |
**Audit
Fees**
Audit
fees represent the professional services rendered for the audit of our annual financial statements and the review of our consolidated
financial statements included in quarterly reports, along with services normally provided by the accountant in connection with statutory
and regulatory filings or engagements.
**Audit
Related Fees**
Audit-related
fees represent professional services rendered for assurance and related services by the principal accountant that are reasonably related
to the performance of the audit or review of our consolidated financial statements that are not reported under audit fees.
**Tax
Fees**
Tax
fees represent professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. During the
year ended June 30, 2024, services were rendered by the principal accountant to obtain a tax credit provided by the state of Ohio related
to film production that occurred in the state.
**All
Other Fees**
All
other fees represent fees billed for products and services provided by the principal accountant, other than the services reported for
the other categories.
| 17 | |
| Table of Contents | |
**PART
IV**
**ITEM
15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.**
The
following exhibits are filed as part of this Form 10-K:
| 
Exhibit
Number | 
| 
Description | |
| 
| 
| 
| |
| 
14.1 | 
| 
Code of Ethics | |
| 
| 
| 
| |
| 
19.1 | 
| 
Insider trading policies and procedures | |
| 
| 
| 
| |
| 
21.1 | 
| 
Subsidiaries of the registrant | |
| 
| 
| 
| |
| 
31.1 | 
| 
Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to 302 of the Sarbanes-Oxley Act of 2002. | |
| 
| 
| 
| |
| 
32.1 | 
| 
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002. | |
| 
| 
| 
| |
| 
101.INS** | 
| 
Inline
XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within
the Inline XBRL document) | |
| 
| 
| 
| |
| 
101.SCH** | 
| 
Inline
XBRL Taxonomy Extension Schema Document | |
| 
| 
| 
| |
| 
101.CAL** | 
| 
Inline
XBRL Taxonomy Extension Calculation Linkbase Document | |
| 
| 
| 
| |
| 
101.DEF** | 
| 
Inline
XBRL Taxonomy Extension Definition Linkbase Document | |
| 
| 
| 
| |
| 
101.LAB** | 
| 
Inline
XBRL Taxonomy Extension Labels Linkbase Document | |
| 
| 
| 
| |
| 
101.PRE** | 
| 
Inline
XBRL Taxonomy Extension Presentation Linkbase Document | |
| 
| 
| 
| |
| 
104** | 
| 
Cover
Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
____________
| 
** | 
XBRL
(Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus
for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. | |
| 
* | 
Included
as an Exhibit to this filing | |
**ITEM
16. FORM 10-K SUMMARY.**
None.
| 18 | |
| Table of Contents | |
**SIGNATURES**
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
| 
| 
Rivulet
Entertainment, Inc. | 
|
| 
| 
| 
| 
|
| 
October
15, 2025 | 
By: | 
/s/
Walter Geldenhuys | 
|
| 
| 
| 
Walter
Geldenhuys | 
|
| 
| 
| 
President,
Chief Executive Officer and Interim Chief Financial Officer | |
| 19 | |