American Picture House Corp

NOTES TO (UNAUDITED) FINANCIAL STATEMENTS

NOTE 1 –Organization And Description Of Business

American Picture House Corporation. (“the Company,” “we” “us”) was incorporated in the State of Nevada on September 21, 2005, originally under the corporate name of Servinational, Inc. The Company subsequently changed its name to Shikisai International, Inc. in November 2005 and then to Life Design Station, Intl., Inc. in August 2007. The Company changed its state of domicile from Nevada to Wyoming on October 13, 2020. On December 4, 2020, the Company changed its name to American Picture House Corporation.

The Company’s year-end is December 31.

NOTE 2 –Summary Of Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with accepted accounting principles (“GAAP”) in the United States.

Principles of Consolidation

The condensed consolidated financial statements of the Company include the accounts of American Picture House Corporation and its wholly owned subsidiaries, Devil’s Half-Acre, LLC and Ask Christine Productions, LLC.

Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these financial statements. As of March 31, 2024, the Company had a working capital deficit of ($270,351) and an accumulated deficit of $6,517,683.

Because the Company does not expect that the existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about the Company’s ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. Recently the Company has been funded by related party shareholders and officers. Historically, the Company raised capital through private placements, to finance working capital needs and may attempt to raise capital through the sale of common stock or other securities and obtaining some short-term loans. The Company will be required to continue to do so until its operations become profitable. Also, the Company has, in the past, paid for consulting services with its common stock to maximize working capital, and intends to continue this practice where feasible.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of 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. The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amount of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

Cash and cash equivalents

Cash equivalents are short-term highly liquid investments which include short term bank deposits (up to three months from date of deposit), that are not restricted as to withdrawals or use that are readily convertible to cash with maturities of three months or less as of the date acquired. The Company’s policy is to maintain its cash balances with financial institutions with high credit ratings and in accounts insured by the Federal Deposit Insurance Corporation (the “FDIC”) and/or by the Securities Investor Protection Corporation (the “SIPC”). The Company may periodically have cash balances in financial institutions in excess of the FDIC and SIPC insurance limits of $250,000 and $500,000, respectively. The Company has not experienced any losses to date resulting from this policy.

Accounts receivable

Accounts receivable primarily consist of trade receivables due from customers for consulting services and from fees derived from licensing of IP to content providers worldwide. As of March 31, 2024, $50,000 (97%) of accounts receivable were related to the grant of a producer credit in a proposed future film. As of December 31, 2023,100% of accounts receivable were due from theBUFFALOED CAMA (seeAssigned Rights to feature film, BUFFALOED below).

Allowance for doubtful accounts

The allowance for doubtful accounts is determined with respect to amounts the Company has determined to be doubtful of collection. In determining the allowance for doubtful accounts, the Company considers, among other things, its past experience with customers, the length of time that the balance is past due, the customer’s current ability to pay and available information about the credit risk on such customers. In 2023, the Company wrote off $193,932 of receivables as bad debt based on a review of the customer’s ability to pay, the customer’s Managing Director resigning, and the customer ceasing operations. There wasno bad debt expense during the quarter ended March 31, 2024 andno allowance for doubtful accounts at March 31, 2024 or December 31, 2023.

Prepaid expenses

At March 31, 2024, prepaid expenses consisted of prepaid insurance, prepaid licenses, and prepaid services. Prepaid expenses are amounts paid to secure the use of assets or the receipt of services at a future date or continuously over one or more future periods. When the prepaid expenses are eventually consumed, they are charged to expense. The Company had $13,367 and $29,185 in prepaid expenses as of March 31, 2024 and December 31, 2023, respectively.

Produced and Licensed Content Costs

Capitalized production costs, whether produced or acquired/ licensed rights, include development costs, direct costs and production overhead. These amounts and licensed content are included in “Produced and Licensed Content Costs” on the balance sheet as follows:

Impairment Assessment for Investment in Films and Licensed Program Rights

A film group or individual film is evaluated for impairment when an event or change in circumstances indicates that the fair value of an individual film or film group is less than its unamortized cost.

During the quarter ended March 31, 2024, the Company allowed options to two screenplays to expire and wrote-off $15,000 of previously capitalized option costs.

Assigned rights to the feature film, BUFFALOED.

In November 2022, the Company obtained certain limited rights to the feature filmBUFFALOEDfrom Bold Crayon, Inc. (“BC”), including a secured position of a one million three hundred eighty-thousand-dollar ($1,380,000.00 USD) receivable against the film’s revenues as per the film’s Cash Asset Management Agreement (“CAMA”) and a 35% share of the profits generated thereafter (“the BC Assets”). During the quarters ended March 31, 2024 and 2023, the Company reported revenues of $23,003 and $0, respectively, from the CAMA. Inception to date, the Company has received $304,875 under the CAMA. Due to uncertainties of any future revenue, if any, no value has been assigned to any potential future revenues.

As partial consideration for the BC Assets being acquired by APH hereunder, APHP agreed to pay BC the first one hundred thirty thousand dollars ($130,000.00 USD) that APHP collected from the BUFFALOED and to deliver one Preferred Share to BC for each ten thousand dollars ($10,000.00 USD), in value paid to the APHP from theBUFFALOEDreceivable above the one hundred thirty thousand dollars ($130,000.00 USD), not to exceed one hundred twenty-five (125) Preferred Shares. As of March 31, 2024, Bold Crayon was due to receive 17 Preferred Shares of APHP.

Intangible assets

The Company’s intangible assets include in-service and under-development websites and licensed internal use software. During the year ended December 31, 2023 the Company developed an external website that was placed in service during the third quarter of 2023. Additionally, during the fourth quarter of 2023 the Company began developing additional aspects of its website that went live in April 2024. During the fourth quarter of 2023, the Company licensed rights to new internal use software, but subsequently placed that project on hold and has not established a timeline for placing the software in service.

The capitalized costs of the Company’s websites placed into service were subject to straight-line amortization over athree-year period. Amortization expense totaled $$750 and $0 for the quarters ended March 31, 2024 and 2023, respectively.

Deferred Revenue

Deferred revenue represents the amount billed to clients that has not yet been earned, pursuant to agreements entered into in current and prior periods. As of March 31, 2024 and December 31, 2023, total net deferred revenue was $50,000 and $0, respectively. As previously noted, the $50,000 in deferred revenue at March 31, 2024, relates to the grant of a producer credit to a proposed film.

Revenues and Costs from Services and Products – Historically, Company’s revenue comes from contracts with customers for consulting services and from the licensing and distribution of film and other entertainment rights. The consulting services typically relate to development of business strategy and monetization of intellectual property rights. The Company accounts for a contract with a customer when there is an enforceable contract between the Company and the customer, the rights of the party are identified, the contract has economic substance, and collectability of the contract is considered probable. Historically, the term of these consulting agreements has been approximately three to six months in duration. The Company’s revenue is measured based on considerations specified in the contract with each customer. Accounting Standards Codification (“ASC”) 606 allows for adoption of an “as invoiced” practical expedient that allows companies to recognize revenue in the amount to which the entity has a right to invoice when they have a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date. The Company has elected to adopt this practical expedient with regards to its consulting services revenue. Revenues for the three months ended March 31, 2023 totaled $165,000. As discussed in Note 10 – Related Party Transactions, $35,000 of the revenue was from Ribo Music and the remaining $135,000 was from a second client. The Company did not have any consulting revenues in 2024.

Revenues from Films and Licensed Rights, are calculated based on expected ultimate revenues estimated over a period not to exceed ten years following the date of initial release of the motion picture. For an episodic television series, the period over which ultimate revenues are estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five years from the date of delivery of the most recent episode, if later. For titles included in acquired libraries, ultimate revenue includes estimates over a period not to exceed twenty years following the date of acquisition.

Revenue derived from theBUFFALOED CAMA totaled $23,003 and $0 for the quarters ended March 31, 2024 and 2023, respectively.

*Fair Value Measurements **–***The Company measures and discloses fair value in accordance with the ASC Topic 820, Fair Value Measurements and Disclosures which defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions there exists a three-tier fair-value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 1 - unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.

Level 2 - pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data.

Level 3 - pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Level 3 inputs are considered as the lowest priority within the fair value hierarchy. The valuation of the right to obtain control over affiliated company, right to acquire shares of other companies, contingent consideration to be paid upon achieving of performance milestone, certain convertible bridge loans (following the maturity date and thereafter) and certain freestanding stock warrants and bifurcated convertible feature of convertible bridge loans issued to the units’ owners, fall under this category.

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

The fair value of cash and cash equivalents is based on its demand value, which is equal to its carrying value. Additionally, the carrying value of all other short-term monetary assets and liabilities are estimated to be equal to their fair value due to the short-term nature of these instruments.

Valuation of Long-Lived Assets – The Company evaluates whether events or circumstances have occurred which indicate that the carrying amounts of long-lived assets*(principally produced and licensed content costs)*may be impaired or not recoverable. The significant factors that are considered that could trigger an impairment review include: changes in business strategy, market conditions, or the manner of use of an asset; underperformance relative to historical or expected future operating results; and negative industry or economic trends. In evaluating an asset for possible impairment, management estimates that asset’s future undiscounted cash flows and appraised values to measure whether the asset is recoverable. The Company measures the impairment based on the projected discounted cash flows of the asset over its remaining life.

Stock-Based Compensation – The Company follows U.S. GAAP, which requires all stock-based compensation to employees, including the grant of employee stock options, to be recognized in the statement of operations based on its fair value. Awards outstanding are accounted for using the accounting principles originally applied to the award. The expense associated with share-based compensation is recognized on a straight-line basis over the service period of each award. Refer to Note 8 for additional information related to this stock-based compensation plan.

Income taxes

The Company accounts for income taxes under FASB ASC 740, “Accounting for Income Taxes”. Under FASB ASC 740, deferred tax assets and liabilities are recognized for the 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. Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. FASB ASC 740-10-05, “Accounting for Uncertainty in Income Taxes” 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 amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability under audit.

Net Loss per Share

Basic (loss) income per share is computed by dividing net (loss) income available to Common Stockholders by the weighted average number of common shares outstanding during the period. Diluted (loss) income per share reflects the potential dilution, using the treasury stock method that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that then shared in the (loss) income of the Company. In computing diluted (loss) income per share, the treasury stock method assumes that outstanding instruments are exercised/converted, and the proceeds are used to purchase Common Stock at the average market price during the period. Instruments may have a dilutive effect under the treasury stock method only when the average market price of the Common Stock during the period exceeds the exercise price/conversion rate of the instruments.

The following common share equivalents are excluded from the calculation of weighted average common shares outstanding because their inclusion would have been anti-dilutive:

Segment Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. For the period of these financial statements, the CEO of the Company was the CODM. The Company views its operations and manages its business as one operating and reporting segment.

New accounting standards

The Company’s management has evaluated all the recently issued, but not yet effective, accounting standards and guidance that have been issued or proposed by the FASB or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s financial position and results of operations.

Note 3 –Liquidity and Going Concern

The Company’s financial statements are prepared using account principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of March 31, 2024, the Company had a working capital deficit of ($270,351) and an accumulated deficit of $6,517,683. These factors, among others, raise doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from an inability of the Company to continue as a going concern.

The Company has a limited operating history, which makes it difficult to evaluate current business and future prospects. During 2023, the Company reported $169,111 of service revenues, down from $461,174 in 2023 andno revenues in 2021 and 2020. Management expects the Company to incur further losses in the foreseeable future due to costs associated with content acquisition and production, the cost of on-going litigation, and costs associated with being a public company. There can be no assurance that our operations will ever generate sufficient revenues to fund continuing operations, or that we will ever generate positive cash flow from our operations, or that we will attain or thereafter sustain profitability in any future period. To mitigate this situation, the Company has loan agreements with the Company’s CEO and the Noah Morgan Private Family Trust, a trust controlled by the Company’s CEO, to fund its month-to-month cash flow needs. During the first quarter of 2024, the Company borrowed $250,000 from the trust pursuant to a master loan agreement that is due and payable in 2025. During 2023, the Company borrowed $178,500 from and repaid $178,500 to Mr. MacGregor pursuant to a master loan agreement. The master note agreements accrue interest at a rate of 4.4% due and payable in a lump sum upon maturity of the obligation. These notes are not convertible.

NOTE 4. Film Production Loans

Senior Mezzanine Loan Agreement with Barron’s Cove Movie, LLC

In February 2024, the Company loaned $200,000 to Barron’s Cove Movie, LLC pursuant to a Senior Mezzanine Loan Agreement. $20,000 of the loan proceeds will be used to pay producer fees, including $10,000 to Mr. MacGregor. The $200,00 loan, plus a premium of twenty percent (20%), is due and payable on that date which is the earlier of either (a) twelve (12) months from the date of the loan, or (b) from allocable proceeds received by Barron’s Cove Movie, LLC related to the movie, whichever occurs first.

Senior Loan Agreement with PNP Movie, LLC

In February 2024, the Company agreed to loan PNP Movie, LLC $97,475 to be used solely in connection with a named feature length motion picture. As of March 31, 2024, $20,000 had been advanced against this funding commitment. In April 2024, the loan agreement was amended whereby the Company agreed to lend an additional $42,525 and to use best efforts to increase the aggregate financing to $597,475. As of the date of this filing, a total of $195,000 had been advanced to PNP Movie, LLC. These loans, plus a premium of twenty percent (20%), is due and payable on that date which is the earlier of either (a) twelve (12) months from the date of the loan, or (b) from allocable proceeds received by PNP Movie, LLC related to the movie, whichever occurs first.

Additionally, the agreement states that Mr. MacGregor shall be entitled to a producer fee based on work to be performed and that Mr. MacGregor will receive a “Producer” credit and his son a “Co-Producer” credit on the film.

NOTE 5. Intangible Assets

The identifiable intangible assets consist of the following assets:

There wereno impairment charges associated with the Company’s identifiable intangible assets during the quarters ended March 31, 2024 and 2023.

Amortization expense recorded in the accompanying consolidated statements of operations was $750 for the quarter year ended March 31, 2024. The Company did not own any intangible assets during the quarter-ended March 31, 2023.

Note 6 –Notes Payable

Note Payable – Mr. MacGregor

During the first quarter of 2023, the Company borrowed $125,500 from Mr. MacGregor pursuant to a master loan agreement dated March 1, 2023. The master note agreement accrues interest at a rate of 4.4% due and payable in a lump sum upon maturity of the obligation. This note is not convertible.

During the first quarter of 2024, the Company borrowed $250,000 from a trust managed by Mr. MacGregor pursuant to a master loan agreement dated February 6, 2024. The master note agreement accrues interest at a rate of 4.68% due and payable in a lump sum upon maturity of the obligation. This note is not convertible.

Noah Morgan Private Family Trust Loan Agreement (“NMPFT”)

On February 6, 2024, the Company entered into a master loan agreement with the NMPFT. The master note agreement accrues interest at a rate of 4.68%. Also during February 2024, the Company borrowed $250,000 pursuant to this loan agreement with this amount due and payable in a lump sum on February 6, 2025. This note is not convertible. $200,000 of these loan proceeds were used to fund the senior mezzanine loan to Barron’s Cove Movie, LLC as more fully described in Note 4 above.

Economic Injury Disaster Loan

In March 2021, the Company executed anEconomic Injury Disaster Loan (“EIDL”) secured loan with the U.S. Small Business Administration under the EIDL program in the amount of $149,900. The loan is secured by all tangible and intangible assets of the Company and payable over 30 years at an interest rate of 3.75% per annum. Interest only installment payments commenced in September 2023.

Note 7 –Equity

Common Stock

The Company has 1,000,000,000 common shares authorized. As of May 2, 2024, the Company has 111,399,325 shares issued and outstanding. As of May 2, 2024, the total number of shareholders of record was 331.

The Common Stock has a one share one voting right with no other rights. There are no provisions in the Company’s Articles of Incorporation, Articles of Amendment, or By-laws that would delay or prevent a change of control. The Board may from time to time declare, and the Company may pay, dividends on its shares in cash, property, or its own shares, except when the Corporation is insolvent, when the payment thereof would render the Company insolvent, subject to any preferential dividend rights of outstanding shares of preferred shares or when the declaration or payment thereof would be contrary to any other state law restrictions.

Preferred Stock

The Preferred Stock consists of 1,000,000 preferred shares authorized, of which 100,000 preferred shares have been designated as Series A Convertible Preferred Stock (“Series A preferred shares” herein). At present,3,829 Series A preferred shares are issued and outstanding. The Series A preferred shares have the following rights: (i.) a first position lien against all of the Company’s assets including but not limited to the Company’s IP (“Intellectual Property”), (ii.) is convertible at a ratio of 1 to 100,000 so that each one share of Series A preferred stock may be exchanged for 100,000 Common Stock shares, (iii.) and that each share of Series A preferred stock shall carry superior voting rights to the Company’s Common Stock and that each share of Series A preferred stock shall be counted as 1,000,000 votes in any Company vote and (iv.) and any other benefits as deemed necessary and appropriate at the time of such issuance. The Preferred shares do not have any specific redemption rights or sinking fund provisions.

The “Liquidation Preference” with respect to a share of Series A preferred stock means an amount equal to the ratio of (i.) the total amount of the Company’s assets and funds available for distribution to the Series A preferred shares to (ii.) the number of shares of Series A preferred stock outstanding. The Series A preferred stock has a liquidation preference equal to $12.02 per preferred share.

Dividend Provisions

Subject to preferential dividend rights, if any, of the holders of Preferred Stock, dividends on the Common Stock may be declared by the Board of Directors and paid out of any funds legally available therefor at such times and in such amounts as the Board of Directors shall determine.

Note 8–Equity Based Compensation

The American Picture House Corporation 2023 Directors, Employees and Advisors Stock Incentive and Compensation Plan (the “Plan”) was established in January 2023 to create an additional incentive to promote the financial success and progress of the Company. The Plan shall be administered by the Board of Directors and may grant options to purchase shares of the authorized but unissued Common Stock of the Company. The options may be either incentive stock options or nonqualified stock options.

The options granted under the Plan expire on the date determined by the Board of Directors and may not extend more than 10 years.

Under the Plan, unless the board specifies otherwise, stock options must be granted at an exercise price not less than the fair value of the Company’s Common Stock on the grant date. The aggregate fair value of incentive stock options held by any optionee shall not exceed $100,000.

The Board of Directors shall determine the terms and conditions of the options. The vesting requirements of all awards under the Plan may be time or event based and vary by individual grant. The incentive stock options and nonqualified stock options generally become exercisable over a two-year period. Vested and unexercised options may be available to be exercised no later than three months after termination of employment (or such longer period as determined by the Board of Directors).

Stock Option Grants

On February 8, 2024, the Company’s Board of Directors authorized the issuance of 250,000 options to each of its nine board members,1,673,250 options to advisors,662,983 options to Mr. Macgregor, and 497,238 options to Mr. Blanchard for an aggregate of 5,083,471 options with the rights to purchase common shares of the Company at an exercise price of $0.0125 per share. As all of the options vested 100% upon grant, the Company recorded $1,258,160 of stock option compensation expense in the quarter ended March 31, 2024. Share-based compensation expense is reported within General and Administrative expenses.

Note 9 –Contingencies and Uncertainties

Risks and Uncertainties – The Company’s operations are subject to significant risks and uncertainties including financial, operational, and regulatory risks, including the potential risk of business failure. The Company does not have employment contracts with its key employees, including the controlling shareholders who are officers of the Company.

NOTE 10 –Related Party Transactions

The Company has agreed to indemnify Mr. MacGregor for all legal and professional costs originating from the lawsuit*Randall S. Sprung v. Bannor Michael MacGregor, Jeffery Katz, and Life Design Station International, Inc. –*Supreme Court of New York, County of Kings, Index No.: 504677/2019.

During the three months ended March 31, 2024 and 2023, the Company incurred approximately $45,000 and $30,000, respectively, of professional fees to a legal firm affiliated with a member of the Board of Directors.

The Company has consulting services relationships with members of the Board whereby they were compensated a total of $15,000 and $26,000 during the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, $0 and $20,000, respectively, were accrued and unpaid. The consulting services are provided as requested by management and may be terminated at any time with no penalty. On January 1, 2023, the $105,000 of the 2022 accrued consulting fees were exchanged for options to purchase 1,160,221 shares of Common Stock at $0.125 per share.

During 2022, the Company entered into consulting agreements with Ribo Music LLCaka Ribo Media (“Ribo Media”) whereby the Company assisted Ribo Media in developing an online media platform to deliver music and eventually movies directly to consumers via their smart devices. Revenues from the Ribo Media consulting services totaled $0 and $35,000, for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, accounts receivable from Ribo Media totaled $1,775 and $0, respectively. Michael Blanchard, a director and shareholder of the Company and Timothy Battles, a director and shareholder of the Company, are both Managing Members and controlling shareholders in Ribo Media.

In August 2022, the Company funded Devil’s Half-Acre Productions, LLC owned by John Luessenhop to produce the feature film Devil’s Half-Acre written and directed by Dashiell Luessenhop, a son of A. John Luessenhop, a former Board member. In July 2023 APH obtained 100% ownership of Devil’s Half-Acre Productions, LLC and executed a new option agreement with the writer. In September 2023, APH paid a Five Thousand-Dollar (5,000) option fee to the writer. This option entitles APH to produce the film by July 2024, with the ability to extend the option for an additional two (2) years. As of March 31, 2024, the Company has capitalized $148,824 of production costs associated with this film.

During 2022, the Company entered into definitive agreements to secure Bold Crayon Corporation (“Bold Crayon” or “BC”) as a development partner and purchased certain assets from Bold Crayon, including a portion of the rights to a feature film, and copyrights on six film titles. The Parties agree that APHP will designate BC as a “Content Partner”, wherein BC will develop content and present APHP with a first opportunity to co-finance and/or coproduce content developed by BC subject to a mutually agreed upon Content Partner Agreement and BC will accept such designation. The Company anticipates any rights and obligations between APH and BC to be effective upon the greenlighting of a specific film or show Mr. MacGregor, CEO and a director of the Company, Mr. MacGregor is also the CEO and a director of Bold Crayon and effectively controls Bold Crayon as a managing manager of the trustee of the trust that owns the majority ownership interest in Bold Crayon. Mr. Michael Blanchard was a past Director and Secretary/Treasurer of Bold Crayon and is a director of APHP. The transaction between the parties has been consummated and all IP and copyrights have been transferred. During the quarters ended March 31, 2024 and 2023, the Company reported revenues of $23,003 and $0, respectively, from the CAMA. Inception to date, the Company has received $304,875 under the CAMA. As partial consideration for the BC Assets being acquired by APH hereunder, APHP agreed to pay BC the first one hundred thirty thousand dollars ($130,000.00 USD) that APHP collected from the BUFFALOED and to deliver one Preferred Share to BC for each ten thousand dollars ($10,000.00 USD), in value paid to the APHP from theBUFFALOEDreceivable above the one hundred thirty thousand dollars ($130,000.00 USD), not to exceed one hundred twenty-five (125) Preferred Shares. As of March 31, 2024, Bold Crayon was due to receive 17 Preferred Shares of APHP.

On November 10, 2022, the Company approved the optioning ofMIDNIGHT’S DOOR written by Kirsten Elms from Mr. Luessenhop for $12,700 *(provided the Company produces MIDNIGHT’S DOOR as a feature film and further subject to producer agreements with Luessenhop and MacGregor).*Mr. Luessenhop was a director of the Company and owned 2.005% of the Company at the time of this transaction. The Company elected to allow this option to expire during the first quarter of 2024 resulting in the expensing of $7,500 of previously capitalized costs.

On November 10, 2022 the Company entered into an additional agreement regardingTHE DEVIL’S HALF-ACRE to extend additional financing in an undetermined amount to the film in exchange among other things for increased equity in the film. At the time,DEVIL’S HALF-ACRE was controlled by Mr. Luessenhop.

During the first quarter of 2023, the Company borrowed $125,500 from Mr. MacGregor pursuant to a master loan agreement dated March 1, 2023. The master note agreement accrues interest at a rate of 4.4% due and payable in a lump sum upon maturity of the obligation. This note is not convertible.

During the first quarter of 2024, the Company borrowed $250,000 from a trust managed by Mr. MacGregor pursuant to a master loan agreement dated February 6, 2024. The master note agreement accrues interest at a rate of 4.68% due and payable in a lump sum upon maturity of the obligation. This note is not convertible.

NOTE 11 –SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10,Subsequent Events, the Company has analyzed its operations subsequent to March 31, 2024, to the date these consolidated financial statements were issued. Except as noted below, management has determined that it does not have any material subsequent events to disclose in these consolidated financial statements.

Sales of Common Stock

During the period April 1, 2024 to present, the Company sold 616,000 shares of Common Stock at $0.25 per share to new investors resulting in total proceeds of $154,000.

Borrowing under Line of Credit

On April 1 and April 10, the Company borrowed $70,000 and $44,300 under its American Express Business Line of Credit. The April 1 stadvance had an annual percentage rate of 16.09% and is payable in twelve monthly installments. The April 10 th advance had an annual percentage rate of 32.67% and is payable in six monthly installments. Repayment of these borrowings commenced in May 2024. Mr. MacGregor has personally guaranteed these loans.

On April 1, 2024 Bannor Michael MacGregor loaned the Company $25,000. On April 15 th, the Company paid back $12,500 to Mr. MacGregor.