UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)


☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ending ~~March~~September 3130, 2024


☐ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number: ~~000~~001-~~52390~~1342936

~~Advanced~~Rivulet ~~Voice Recognition Systems~~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

(Registrant's 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	~~AVOI~~RIVF	~~NONE~~OTC pkn

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 [X] No [_]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months.

Yes [X] 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,” non-accelerated filer “smaller reporting company” or “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [_] Accelerated filer [_] Non-accelerated filer [X] 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. ☐[ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of ~~June~~July 316, ~~2024~~2025, 80109,~~338~~695,~~287~~876 shares of common stock are issued and outstanding.

1Rivulet Entertainment, Inc.

~~Advanced~~Form ~~Voice Recognition Systems, Inc.~~10-Q

~~Table~~For ofthe ~~Contents~~Quarter ended September 30, 2024

PART I - FINANCIAL INFORMATION
		Page
				Page
PART I. FINANCIAL INFORMATION		1
Item 1.			Financial Statements	3
ITEM 1.	Condensed Consolidated Financial Statements (unaudited)	1
			Unaudited Condensed Balance Sheets as of March 31, 2024 and December 31, 2023.	3
	Condensed Consolidated Balance Sheets as of September 30, 2024 (unaudited) and June 30, 2024	1
			Unaudited Condensed Statements of Operations for the three months ended March 31, 2024 and 2023.	4
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the Three Months Ended September 30, 2024 and 2023	2
			Unaudited Condensed Statement of Stockholders’ Equity (Deficit) for the three months ended March 31, 2024 and 2023	5
	Condensed Consolidated Statements of Changes in Stockholders’ Deficit (unaudited) for the Three Months Ended September 30, 2024 and 2023	3
			Unaudited Condensed Statements of Cash Flows for the three months ended March 31, 2024 and 2023.	6
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended September 30, 2024 and 2023	4
			Notes to Unaudited Financial Statements	7
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations	12
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3			Quantitative and Qualitative Disclosures About Market Risk	13
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	19
Item 4.			Controls and Procedures	13
ITEM 4.	Controls and Procedures	19
PART II - OTHER INFORMATION
PART II. OTHER INFORMATION		20
Item 1.			Legal Proceedings	15
ITEM 1.	Legal Proceedings	20
Item 1A.			Risk Factors	15
ITEM 1A.	Risk Factors	20
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds	15
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3			Defaults Upon Senior Securities	15
ITEM 3.	Defaults Upon Senior Securities	20
Item 4.			Mine Safety Disclosures	15
ITEM 4.	Mine Safety Disclosures	21
Item 5.			Information	15
ITEM 5.	Other Information	21
Item 6.			Exhibits	15
ITEM 6.	Exhibits	22
SIGNATURES		23		16

~~Item~~PART 1I. ~~Financial~~FINANCIAL ~~Statements~~INFORMATION

~~Advanced~~Item ~~Voice~~1. ~~Recognition~~Condensed ~~Systems,~~Consolidated ~~Inc.~~Financial Statements (unaudited)

~~Condensed~~Rivulet ~~Balance~~Entertainment, ~~Sheets~~Inc.

~~(Unaudited)~~Condensed Consolidated Balance Sheets

		March 31, 2024		December 31, 2023
	2024		2024 (2)
ASSETS
	(unaudited)
Current Assets
ASSETS
Cash and cash equivalents		$ 46,368		$ 480
CURRENT ASSETS
Asset Purchase Deposit		2,800,000		-
Cash	$79,049		$101,721
Total Current Assets		2,846,368		480
Prepaid expenses	221,573		47,044
Non-Current Assets
Other current assets	125,903		-
Computer equipment, net		876		929
Total current assets	$426,525		$148,765
Total Non-Current Assets		876		929
NONCURRENT ASSETS
Total Assets		$ 2,847,244		$ 1,409
Film costs	$10,853,037		$10,024,760
LIABILITIES AND STOCKHOLDERS' (DEFICIT)
Deposits	760,166		854,390
Current Liabilities
Equity investment	2,000,000		2,000,000
Accounts payable		$ 22,000		$ -
Total noncurrent assets	$13,613,203		$12,879,150
Payroll		144,241		219,677
Total assets	$14,039,728		$13,027,915
Advance - related party		-		123,500
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accrued interest		-		7,019
CURRENT LIABILITIES
Total Current Liabilities		166,241		350,196
Accounts payable	$274,653		$205,249
Total Liabilities		$ 166,241		$ 350,196
Accrued expenses	1,408,748		712,229
Stockholders’ Equity (Deficit)
Notes payable, current	4,951,064		4,890,000
Preferred stock, $0.001 par value; 25,000,000 shares authorized; no shares issued and outstanding		-		-
Other current liabilities	3,500,000		154,689
Common stock, $0.001 par value; 547,500,000 shares authorized 12,976,685 and 5,476,685 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively.		$ 12,977		$ 5,477
Total current liabilities	$10,134,465		$5,962,167
Additional paid-in capital		11,581,126		8,588,626
NONCURRENT LIABILITIES
Accumulated Deficit		(8,913,100)		(8,942,890)
Related party loans, non-current	2,880,000		10,768,316
Total Stockholders' Equity (Deficit)		2,681,003		(348,787)
Notes payable, non-current	2,210,000		1,330,000
Liabilities and Stockholders' Equity (Deficit)		$ 2,847,244		$ 1,409
Total noncurrent liabilities	$5,090,000		$12,098,316
Total liabilities	$15,224,465		$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 ofSeptember 30, 2024 and June 30, 2024, respectively(1)	$109,696		$96,723
Additional paid-in capital	4,341,499		(96,723)
Shareholders' deficit	(5,635,932)		(5,032,568)
Total shareholders' deficit	$(1,184,737)		$(5,032,568)
Total liabilities & shareholders' deficit	$14,039,728		$13,027,915

~~The~~See accompanying notes ~~are~~to anthe ~~integral~~unaudited ~~part~~condensed ofconsolidated ~~these unaudited~~ financial statements.

3(1) 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 8)

~~Advanced~~(2) ~~Voice~~Financial ~~Recognition~~information ~~Systems~~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

~~Condensed Statements of Operations~~1

~~(Unaudited)~~Rivulet Entertainment, Inc.

	Three Months Ended	Three Months Ended
	March 31,	March 31,
	2024	2023
Sales	$ -	$ -
Cost of goods sold	-	-
Gross profit	-	-
Operating expenses:
Compensation	48,560	69
Professional fees	42,193	28,700
Office	1,318	1,291
Depreciation	53	-
Other	36	748
Total operating expenses	92,160	30,808
Loss from operations	(92,160)	(30,808)
Other income and (expense):
Gain on early ext. of debt	-	50,445
Gain on payroll forgiveness	123,827	-
Interest expense	(1,877)	(284)
Net other income	121,950	50,161
Gain before income taxes	29,790	19,353
Provision for income taxes	-	-
Net Income	$ 29,790	$ 19,353
Basic and diluted gain (loss) per common share*	$ -	$ -
Weighted average number of common shares	7,949,212	5,475,000

Condensed Consolidated Statements of Operations

*less than $0.01 per share(Unaudited)

The accompanying notes are an integral part of these unaudited financial statements

	For the Three Months Ended September 30,
	2024	2023(2)
Revenues	$-	$-
Production cost amortization	-	-
Gross margin	$-	$-

Operating Expense
General and administrative	$496,578	$102,764
Total operating expenses	$496,578	$102,764

Net loss before other income (expense)	$(496,578)	$(102,764)

Other (expense)/income
Other income	$127	$7,760
Interest expense	(106,913)	-
Other (expense)/income	$(106,786)	$7,760

Net loss before income taxes	$(603,364)	$(95,004)
Income tax expense	-	-
Net loss	$(603,364)	$(95,004)

Basic and diluted loss per share	($0.01)	$0.00

Basic and diluted weighted average shares outstanding(1)	108,719,419	96,722,950

4See accompanying notes to the unaudited condensed consolidated financial statements.

~~Advanced~~(1) ~~Voice~~Basic ~~Recognition~~and ~~Systems,~~diluted ~~Inc.~~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 8)

~~Condensed~~(2) ~~Statement~~Financial information for the comparative period reflects the combination of ~~Stockholders’~~certain ~~Equity~~former ~~(Deficit)~~Rivulet Media, inc. entities under common control that were transferred as part of the reverse merger transaction

~~(Unaudited)~~2

~~For~~Rivulet ~~the period ending March 31~~Entertainment, ~~2023~~Inc.

	Common Stock		Additional	Accumulated
	Shares	Par Value	Paid In Capital	Deficit	Total
Balance at December 31, 2022	5,475,000	5,475	8,282,945	(8,632,013)	(343,593)
Sales of Common Stock	-	-	-	-	-
Net Income	-	-	-	19,353	19,353
Balance at March 31, 2023	5,475,500	5,475	8,282,945	(8,612,660)	(324,240)

Condensed Consolidated Statements of Changes in Shareholders’ Deficit

For the ~~period~~Three ~~ending~~Months ~~March~~Ended September 30, 2024 and 2023

	Common Stock		Additional	Accumulated
	Shares	Par Value	Paid In Capital	Deficit	Total
Balance at December 31, 2023	5,476,685	5,477	8,588,626	(8,942,890)	(348,787)
Sales of Common Stock	7,500,000	7,500	2,992,500	-	3,000,000
Net Income	-	-	-	29,790	29,790
Balance at March 31, 2024	12,976,685	12,977	11,581,126	(8,913,100)	2,681,003

(Unaudited)

The accompanying notes are an integral part of these unaudited financial statements.

	Common Stock(1)		Additional	Shareholders'
	Shares	Amount(2)	Paid-in 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	-	-	-	(95,004)	(95,004)
Balance, September 30, 2023	96,722,950	$ 96,723	$ (96,723)	$ (4,946,083)	$ (4,946,083)

Balance, June 30, 2024	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	-	-	-	(603,364)	(603,364)
Balance, September 30, 2024	109,695,876	$ 109,696	$ 4,341,499	$ (5,635,932)	$ (1,184,737)

5See accompanying notes to the unaudited condensed consolidated financial statements.

~~Advanced~~(1) ~~Voice~~Common ~~Recognition~~stock ~~Systems,~~outstanding ~~Inc.~~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 8)

~~Condensed~~(2) ~~Statements~~Financial information for the comparative period reflects the combination of ~~Cash~~certain ~~Flows~~former Rivulet Media, inc. entities under common control that were transferred as part of the reverse merger transaction

~~(Unaudited)~~3

	Three Months Ended March 31,
	2024	2023
Cash Flows from Operating Activities:
Net income	$ 29,790	$ 19,353
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on payroll forgiveness	(123,827)
Amortization and depreciation	53	-
Interest expense	1,877
Changes in operating assets:	-	-
Changes in operating liabilities:
Accounts payable and accrued liabilities	70,391	(48,137)
Net cash used in operating activities	(21,716)	(28,784)
Cash Flows from Investing Activities:
Payment for Rivulet asset purchase	(2,800,000)	-
Net cash used in investing activities	(2,800,000)	-
Cash Flows from Financing Activities:
Proceeds from sale of common stock	3,000,000	-
Payment of advance from related party	(139,396)	-
Advance from related party	7,000	40,169
Net cash provided by financing activities	2,867,604	40,169
Net change in cash	45,888	11,385
Cash at Beginning of Period	480	138
Cash at End of Period	$ 46,368	$ 11,523
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$ 8,896	$ -
Income taxes	$ -	$ -

Rivulet Entertainment, Inc.

~~The~~Condensed ~~accompanying~~Consolidated ~~notes~~Statements ~~are an integral part~~ of ~~these~~Cash ~~audited financial statements.~~Flows

6(Unaudited)

Advanced Voice Recognition Systems, Inc.

	For the Three Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(603,364)	$	(95,004)
Change in operating assets and liabilities:
Accounts receivable		-		149,997
Prepaid expenses		(174,529)		1,667
Other current assets		(125,903)		(35,440)
Film costs		(515,121)		(6,531)
Deposits		94,224		(7,500)
Accounts payable		69,404		7,033
Accrued expenses		383,363		(102)
Other current liabilities		(91,810)		(77,055)
Net cash flows used in operating activities		(963,736)		(62,935)

Cash flows from investing activities:
Net cash flows provided by (used in) investing activities:		-		-

Cash flows from financing activities:
Proceeds from notes payable		941,064		60,295
Net cash flows provided by financing activities:		941,064		60,295

Net change in cash		(22,672)		(2,640)
Cash, beginning of period		101,721		2,683
Cash, end of period	$	79,049	$	43

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-	$	-
Cash paid for income taxes	$	-	$	-

Supplemental disclosure of non-cash activity:
Debt forgiveness related to reverse merger transaction	$	8,077,965	$	-
Recapitalization	$	(3,626,770)	$	-

~~Notes~~See accompanying notes to ~~Unaudited~~the ~~Condensed~~unaudited ~~Financial~~condensed ~~Statements~~consolidated financial statements.

~~Note~~ (1) Financial information for the comparative period reflects the combination of certain former Rivulet Media, inc. ~~Nature~~ entities under common control that were transferred as part of ~~Operations~~the reverse merger transaction

~~Company Overview~~4

~~The~~Rivulet ~~operations of Advanced Voice Recognition Systems~~Entertainment, Inc. (“AVRS” or the “Company”) commenced in 1994 with a predecessor entity called NCC, Inc. NCC, Inc. was incorporated on March 15, 1994 in the State of Ohio. NCC, Inc. operated as a software and hardware development company that marketed voice recognition and transcription products for commercial applications.

InNotes ~~May 2000, WG Investments, LLC acquired the assets of NCC, Inc. and subsequently changed its name~~ to ~~NCC,~~Unaudited ~~LLC.~~Condensed ~~NCC,~~Consolidated ~~LLC~~Financial ~~(also a predecessor to AVRS) continued the operations of NCC, Inc. until approximately December 31, 2001, when shifts in the industry’s markets caused NCC, LLC to suspend its operations.~~Statements

~~AVRS~~For ~~was~~The ~~incorporated~~Three inMonths ~~the~~Ended ~~State of Colorado on July 7, 2005. In~~ September ~~2005~~30, the members of NCC, LLC transferred all of their membership interests in NCC, LLC to AVRS in exchange for 93,333,333 shares (post-recapitalization) of AVRS common stock. In December 2005, the Board of Directors approved a 1.5-to-1 stock split issuing 46,666,667 common shares (post-recapitalization), which increased the number of common shares outstanding to 140 million shares (post-capitalization). Following the incorporation of AVRS, the Company initiated a new business plan and intends to continue its operations in the voice recognition and transcription industry.2024

~~Amended~~NOTE ~~and~~1 ~~Restated~~– NATURE ~~Articles~~OF ofTHE ~~Incorporation~~ORGANIZATION AND BUSINESS

On July 37, ~~2023,~~2024 (the "Closing Date"), Rivulet Entertainment, Inc. ("The Company" ~~filed~~or ~~Amended~~"Rivulet") ~~and~~completed ~~Restated~~its ~~Articles~~acquisition of ~~Incorporation~~certain wholly owned subsidiaries of Rivulet Media, Inc. In consideration for the ~~State~~acquisition of ~~Nevada~~the ~~where~~entities, the ~~authorized~~Company ~~total~~agreed ~~number~~to oftransfer approximately $10 million and 97 million shares ~~were~~to the current owners of Rivulet Media, Inc. On May 19, 2025 the agreement was amended to ~~five~~reduce ~~hundred~~the ~~seventy-two~~cash ~~million~~portion ~~five~~of ~~hundred~~the ~~thousand~~purchase ~~shares~~price ~~(572~~from $10,~~500~~000,000) ~~consisting~~to $6,450,000. Furthermore, the conditions subject to closing and the default provisions were eliminated. As of ~~five~~the ~~hundred~~date ~~forty-seven~~of ~~million~~this ~~five~~filing, ~~hundred~~the ~~thousand~~Company ~~(547~~has transferred $2,~~500~~950,000) ~~common~~to ~~shares~~the ~~with~~former ~~par~~owners ~~value~~of Rivulet Media, Inc. and had an outstanding balance of $03,500,000, which was classified as other current liabilities on our condensed consolidated Balance Sheets as of September 30, 2024.~~001~~ ~~per~~The ~~share~~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 ~~twenty-~~Rivulet ~~five~~Entertainment, ~~million~~inc. was determined to be the accounting acquiree/legal acquirer. As such, the historical financial statements presented in the filing (25for the period ended June 30,~~000~~ 2024 and for the three months ended September 30,~~000~~ 2023) ~~preferred~~are ~~shares~~those ~~with~~of ~~par~~the ~~value~~combined entities of $0Rivulet Media, Inc.~~001~~ that were transferred as part of the merger agreement.

~~Litigation~~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.

~~From~~The ~~time~~business strategy of Rivulet Entertainment, Inc. as it relates to ~~time~~films, wetelevision ~~may~~series, ~~become~~mini-series, ~~involved~~and intelevision ~~legal~~movies ~~proceedings~~is orto ~~other~~enter ~~litigation~~into ~~that~~contracts wewith ~~consider~~well-known actors and actresses, acquire scripts able to beattract alarge ~~part~~audiences ofthat ~~the~~have ~~ordinary~~been ~~course~~overlooked ofby ~~our~~blockbuster ~~business~~producers, focus on cost control measures, obtain favorable tax credits and financing opportunities. ~~Presently~~Unlike many smaller producers, weRivulet ~~are~~is not ~~involved~~targeting in"artsy" ~~any~~niche ~~litigation~~markets but films that appeal to a wide audience. The Company's 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 ~~best~~Company ~~knowledge~~has spent less than $10 million on each of ~~management,~~its ~~there~~films ~~are~~to nodate. ~~legal~~This ~~proceedings~~strategy ~~pending~~also orpermits ~~threatened~~the ~~against~~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.

~~Reverse~~We ~~Split~~intend to grow and ~~Increase~~diversify our portfolio of content to capitalize on demand from emerging and traditional platforms throughout the world. We will attempt to maintain a disciplined approach to acquisition, production, and distribution of product by balancing our financial risks against the probability of commercial success for each project. We pursue the same disciplined approach to investments in, ~~Authorized~~and ~~Shares~~acquisition of, libraries and other assets complementary to our business. We believe that our strategic focus on content and creation of innovative content distribution strategies will enhance our competitive position in the industry, ensure optimal use of our capital, build diversified foundation for future growth, and generate significant long-term value for our stockholders.

OnNOTE ~~July~~2 5,– SUMMARY ~~2023,~~OF ~~the~~SIGNIFICANT ~~Shareholders~~ACCOUNTING approved to authorize a reverse split of 1 new share for one hundred old shares basis as of September 30, 2023 where fractional shares will be rounded up to the next whole share. In addition, the Shareholders approved to authorize twenty-five million (25,000,000) preferred shares for a total of 572,500,000 consisting of 547,500,000 common shares and 25,000,000 preferred shares of the company. The Articles of Information with the state of Nevada were amended to reflect the approved actions of the Shareholders.POLICIES

~~The~~Basis ~~reverse stock split did not change the number~~ of authorized shares five hundred and forty seven million five hundred thousand (547,500,000) shares of common stock or par value. All references in these condensed financial statements to share, share prices, and other per share information in all periods presented have been adjusted, on a retrospective basis, to reflect the reverse stock split.Presentation

~~Asset~~These ~~Purchase~~accompanying ~~Agreement~~condensed consolidated unaudited 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 interim 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

On March 1, 2024, the Company and Rivulet Media, Inc., a Delaware corporation (Rivulet), collectively the Parties, entered into an Asset Purchase Agreement (the “Purchase Agreement”), pursuant to which, subject to the terms and conditions therein, the Company shall purchase, with stock and cash, certain assets of Rivulet. The Acquisition is anticipated to close on April 10, 2024, subject to review by FINRA, there is no assurance this will occur. Upon its terms and subject to the conditions set forth in the Purchase Agreement, at the effective time of the Acquisition the identified assets of Rivulet shall be converted into the right of the Rivulet Shareholders to receive 90,784,800 shares of common stock of the Company, $0.001 par value per share (“Shares”), and $10,069,000 to be distributed, after the payment of Rivulets payables, pro rata to the shareholders of Rivulet. Holders of Rivulet fractional shares shall be rounded up if applicable. On March 7, 2024, the Company ordered the common shares to be issued to Rivulet in accordance with the Asset Purchase Agreement. On March 1, 2024, the Company disbursed $2,600,000 to Rivulet as a partial payment.5

7(“ASC”) 926, Entertainment-Films. All comparative period financial information reflects the results of the former Rivulet Media, inc. entities under common control that were transferred as part of the transaction.

~~Unregistered~~In ~~Sales~~the opinion of ~~Equity~~management, ~~Securities~~the interim financial statements reflect all normal recurring adjustments necessary for a fair statement of the Company's financial condition and operating results as of and for the periods presented. Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the interim results and trends in the interim financial statements may not be representative of those for the full year or any future period.

OnPrinciples March 1, 2024 Advanced Voice Recognition Systems, Inc. (the “Company”) entered into a Subscription Agreement with one private investor. Pursuant to the Subscription Agreement, the Company sold 7,500,000 shares of ~~common~~Consolidation stock at a purchase price of $0.40 per share for a total of $3,000,000. The funds will be used to pay the Company’s debts and contribute to the Acquisition costs. The Company has distributed to Rivulet $2,800,000 as a portion of the acquisition cost. The Company paid no underwriting discounts or commissions. A copy of the form of subscription agreement is filed as Exhibit 10.5 to this Current Report and is incorporated herein by reference. These issuances are granted based on exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”), and applicable state laws pursuant to Section 4(2) of the Securities Act and Rule 506 of Regulation D. These issuances qualified for this exemption from registration because (i) the Investor is an “accredited investors” as that term is defined in Regulation D promulgated under the Securities Act; (ii) the Company did not engage in any general solicitation or advertising to market the securities; (iii) the Investor was provided the opportunity to ask questions and receive answers from the Company regarding the issuance; (iv) the securities will be issued to a person with knowledge and experience in financial and business matters so that the investor is capable of evaluating the merits and risks of an investment in the Company; and (v) the Investor received restricted securities.

~~Note~~The 2Company evaluates the need to consolidate other entities based on the guidance set forth in ASC 810, Consolidation (“ASC 810”). ~~Significant~~ ~~Accounting~~To ~~Policies~~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 September 30, 2024, Rivulet Entertainment, Inc. consolidated included the following wholly owned subsidiaries:

Unaudited Financial Information

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%

~~The~~Going accompanying financial information at March 31, 2024 and for the three months ended March 31, 2024 and 2023 are unaudited. In the opinion of management, all normal and recurring adjustments which are necessary to provide a fair presentation of the Company’s financial position at March 31, 2024 and its operating results for the three months ended March 31, 2024 and 2023 have been made. Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2023. The results of operations for the three months ended March 31, 2024 are not necessarily an indication of operating results to be expected for the year ending December 31, 2024.Concern

~~Going~~The ~~Concern~~Company had cash of $79,049 as of September 30, 2024. Further, the Company incurred a net loss of $603,364, negative working capital of $9.7 million, stockholders’ deficit of $1.2 million and cash flow used in operations of $1.0 million for the interim period ended September 30, 2024. 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.

~~The~~Use ~~accompanying financial statements have been prepared on a going concern basis, which contemplates the realization~~ of assets and the satisfaction of liabilities in the normal course of business. At March 31, 2024 Current Assets were $2,846,368 and Current Liabilities were $166,241. Current assets exceed current liabilities which resulted in working capital of $2,680,127 and no significant revenues. The Company may be unable to continue as a going concern because of these factors there is substantial doubt about the Company being able to continue for a reasonable time.Estimates

The preparation of financial statements doin ~~not~~conformity ~~include~~with ~~any~~U.S. ~~adjustments~~GAAP ~~relating~~requires to the ~~recoverability~~Company's ~~and~~management ~~classification~~to ofmake ~~assets~~estimates and ~~liabilities~~assumptions that ~~might~~affect ~~be necessary should~~ the ~~Company~~reported beamounts ~~unable~~of toassets ~~continue~~and asliabilities aand ~~going~~disclosure ~~concern. The~~of ~~Company’s~~contingent ~~continuation~~assets asand aliabilities ~~going~~at ~~concern~~the isdate ~~dependent~~of ~~upon~~the ~~its~~financial ~~ability~~statements toand ~~generate~~the ~~sufficient~~reported ~~cash~~amounts ~~flow~~of torevenues ~~meet~~and ~~its~~expenses ~~obligations~~during onthe areporting ~~timely~~period. ~~basis~~Making ~~and~~estimates ~~ultimately~~requires management to ~~attain~~exercise ~~profitability~~significant judgment. ~~During~~ ~~the~~It ~~twelve~~is ~~months~~at ~~ended~~least ~~December~~reasonably ~~31,~~possible ~~2023~~that the ~~Company~~estimate ~~received~~of anthe ~~aggregate~~effect of ~~$305~~a condition,~~683~~ ~~from~~situation ~~the~~or ~~release~~set of ~~escrow~~circumstances ~~related~~that toexisted at the ~~sale~~date of ~~shares~~the incondensed ~~private~~consolidated ~~offerings~~financial ofstatements, ~~its~~which ~~common~~management ~~stock~~considered ~~and~~in ~~$123,500~~formulating ~~from~~its ~~advances~~estimate, ~~from~~could ~~related~~change ~~parties. During~~in the ~~three~~near ~~months~~term ~~ended~~due ~~March~~to ~~31,~~one ~~2024,~~or ~~the~~more ~~Company~~future ~~received~~confirming anevents. ~~aggregate~~The ofCompany ~~$3,000,000~~bases ~~from~~its ~~the~~estimates ~~sale~~on ofhistorical ~~shares~~experience inand ~~private~~on ~~offerings~~various ofassumptions ~~its~~that ~~common~~are ~~stock. There~~believed isto nobe ~~guarantee~~reasonable, ~~that~~the ~~AVRS~~results ~~will~~of bewhich ~~able~~form ~~to provide~~ the ~~capital~~basis ~~required~~ for the ~~Company~~amounts torecorded ~~continue~~in asthe acondensed ~~going~~consolidated ~~concern~~financial statements.

~~Use of Estimates~~6

~~The~~Cash ~~preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates~~ and ~~assumptions~~Cash that affect the reported amounts of assets and liabilities and the 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. Actual results could differ from those estimates.Equivalents

~~Cash~~The ~~and~~Company ~~Cash~~considers ~~Equivalents~~all short-term investments with an original maturity of three months or less when purchased to be cash or cash equivalents.

~~The~~Film Company considers all highly liquid debt instruments with original maturities of three months or less when acquired to be cash equivalents. The Company had cash at March 31, 2024 of $46,368, and $480 at December 31, 2023. No amounts resulted from cash equivalents.Costs

8In accordance with ASC 926, Entertainment-Films, the Company reports production costs incurred as a separate asset on its condensed consolidated balance sheets ("Film costs"). Production 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 production costs and subsequently charged to expense when the Company recognizes the related revenue.

~~Note~~Amortization ~~3. Fixed~~of ~~Assets~~Production Costs

~~Computer~~As ~~equipment~~the Company's films are monetized on their own, ~~net~~the ~~consisted~~Company amortizes production costs using the individual-film-forecast-computation method. Pursuant to that method, unamortized production costs as of the ~~following~~beginning atof ~~March~~the 31current fiscal year are multiplied by the individual-film-forecast-computation method fraction. To that extent, ~~2024~~the Company will begin amortization of capitalized production costs when a film is released, and ~~December~~it 31begins 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, ~~2023:~~if any, are accounted for prospectively. Amortization of production costs is presented as production cost amortization on the face of our condensed consolidated statements of operations.

~~PLANT,~~Impairment ~~PROPERTY,~~of ~~EQUIPMENT~~Capitalized Production Costs

Ended March 31, 2024
	Carrying Value	Depreciation	Balance
Computer	$ 1,051	$ 175	$ 876
	$ 1,051	$ 175	$ 876

The Company will test its unamortized production 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 production costs, then the unamortized capitalized costs for the film will be written down by the amount exceeding the film’s 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.

Ended December 31, 2023
	Carrying Value	Depreciation	Balance
Computer	$ 1,052	$ 123	$ 929
	$ 1,052	$ 123	$ 929

Recognition of Revenue from Contracts with Customers

AsThe ofCompany ~~March~~recognizes ~~31,~~revenue ~~2024~~from its contracts with customers in accordance with the core principle outlined in ASC 606, Revenue ~~depreciation~~from ~~expense~~Contracts ~~totaled~~with ~~$53~~Customers. ~~and~~Specifically, as“to depict the transfer of ~~March~~promised ~~31,~~goods ~~2023~~or ~~depreciation~~services ~~expense~~to ~~was~~customers $0in 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:

~~Note~~·Step ~~4. Related~~1-Identify ~~Party~~the ~~Transactions~~contract(s) with a customer

~~Related~~·Step ~~Parties~~2-Identify ~~Transactions,~~the ~~Indebtedness~~performance ~~and~~obligations ~~Gain~~in onthe ~~Forgiveness~~contract

~~The~~·Step ~~Company~~3-Determing ~~owed~~ the ~~officers~~transaction aggregate of $144,241 at March 31, 2024 and $219,677 at December 31, 2023 for accrued payroll. During the period of three months ending March 31, 2024 and 2023 the Company accrued payroll expenses of $48,560 and $69, respectively. During the period of three months ending March 31, 2024, proceeds from CEO advances of $2,000 and a related party of $5,000 were received and payments were made towards CEO and related party advances of $139,396 for operating expenses comprised of $14,500 advance and $116,000 in promissory notes and 8,896 of accrued interest.price

On·Step ~~February~~4-Allocate ~~2, 2023,~~ the ~~Company~~transaction ~~issued~~price ~~a promissory note~~ to athe ~~related~~performance ~~party~~obligations ~~for~~in ~~$10,000~~the ~~with interest of 10% per annum with a scheduled maturity of February 1, 2024.~~contract

On·Step ~~February~~5-Recognize ~~28,~~revenue ~~2023,~~when (or as) the Company ~~issued~~satisfies a ~~promissory~~performance ~~note to a related party for $15,000 with interest of 10% per annum with a scheduled maturity of February 27, 2024.~~obligation

OnThe ~~March~~Company’s ~~31,~~contracts ~~2023~~with its customers currently contain a single performance obligation comprised of a license to motion picture rights. In accordance with ASC 606, the Company ~~issued~~( ai.e. ~~promissory~~the ~~note~~“licensor”) tohas concluded that the license transfer should i) be considered functional intellectual property and ii) that customers (the “licensees” or “distributors”) are therefore granted a ~~related~~right ~~party~~to ~~for~~access ~~$15~~of the Company’s intellectual property throughout the license period. As such,~~000~~ ~~with~~revenue ~~interest~~is recognized at a point in time upon the Company’s delivery of ~~10%~~the ~~per~~license ~~annum~~to ~~with~~the alicensee. ~~scheduled~~The ~~maturity~~Company does not currently provide any form of ~~March~~extended 30payment terms to its customers and, ~~2024~~as such, a fixed payment is typically received from the customer within 90 days after the license is transferred.

~~On May 12, 2023, the Company issued a promissory note to a related party for $12,000 with interest of 10% per annum with a scheduled maturity of May 11, 2024.~~7

OnIn ~~September~~determining 1,the ~~2023~~transaction price, the Company’s ~~issued~~contracts awith ~~promissory~~its ~~note~~customers todo not include a ~~related~~significant ~~party~~financing ~~for~~component, ~~$50~~non-cash consideration or consideration payable to the customer. However,~~000~~ ~~with~~the ~~interest~~Company’s contracts typically will include sales-based or usage-based royalties that are triggered by the attainment of ~~10%~~certain ~~per~~levels ~~annum~~of box office receipts or video on demand (“VOD”) purchases. To that extent, in accordance with aASC ~~scheduled~~606-10-55, ~~maturity~~the Company will recognize the sales-based or usage-based royalties only when the later of ~~May~~the ~~31,~~following ~~2024~~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.

OnAs ~~June~~it 1,pertains ~~2023,~~to ~~the~~incremental ~~Company~~costs ~~issued~~of aobtaining ~~promissory note to~~ a ~~related party for $50~~contract,~~000~~ ~~with~~the ~~interest~~Company ofdoes ~~10%~~not ~~per~~incur ~~annum~~any ~~with~~type ~~a scheduled maturity~~ of ~~May~~sales ~~31, 2024~~commissions.

OnExploitation ~~November~~and ~~28,~~Participation ~~2023, the Company issued a promissory note to a related party for $9,000 with interest of 10% per annum with a scheduled maturity of May 31, 2024.~~Costs

OnThe ~~February~~Company 9accounts for advertising costs in accordance with ASC 720-35, ~~2024~~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 ~~related~~film ~~party~~is ~~advanced~~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 $50 and $100,000 for the three months ended September 30, 2024 and 2023, respectively, which is included in general and administrative expense on the condensed consolidated statements of operations.

OnInvestments ~~March 4, 2024, the advances and notes issued by related parties during the year ended December 31, 2023 were paid~~ in ~~full.~~Equity The payments consisted of payment to our CEO for advances in the amount $14,500.00 and payment to a related party in the amount of $124,896.63 of which $111,000.00 was principal, $5,000 was advanced and $8,896.63 was interest on the promissory notes.Securities

9The 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.

OnIn ~~March~~addition ~~11,~~to ~~2024,~~assessing ~~Chung~~whether ~~Cam,~~the ~~our~~investments ~~CFO~~still qualify to be recognized at cost minus impairment, ~~waived~~the ~~his~~Company ~~accrued~~will ~~salary. The~~also ~~amount~~make a qualitative assessment at the end of ~~forgiveness~~each reporting period considering impairment indicators to evaluate whether the investment is impaired. If the qualitative assessment indicates that the investment is impaired and ~~related~~the ~~payroll~~fair ~~taxes~~value of ~~$123~~the investment is less than its carrying value,~~827~~ ~~was~~then ~~recognized~~the asinvestment awill ~~gain~~be ~~during~~written down to fair value. The Company did not recognize any impairments for the ~~quarter~~three ~~ending~~months ~~March~~ended 31September 30, 2024 and 2023.

~~The~~General ~~above transactions~~ and ~~amounts~~Administrative ~~are not necessarily indicative of what third parties would agree to.~~Expenses

~~Note~~Our ~~5.Stockholder~~general ~~Equity~~and /administrative ~~(Deficit)~~ expenses primarily consist of personnel and related costs, including employee salaries, legal fees relating to corporate matters, accounting and audit related costs, insurance, corporate communications, information technology, participation costs and related expenses.

~~Common~~Income ~~Stock~~Taxes

AsThe Company follows the asset and liability method of ~~March~~accounting ~~31,~~for ~~2024,~~income wetaxes ~~had 12~~under ASC 740,~~976,685 shares~~ “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 ~~common~~existing ~~stock~~assets ~~outstanding~~and liabilities and ~~were~~their ~~authorized~~respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to ~~issue 547~~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,~~500~~ when necessary,~~000 shares~~ ofto ~~common~~reduce ~~stock~~deferred attax aassets ~~par~~to ~~value~~the ofamount $0expected to be realized.~~001.~~

WeASC ~~had 5,476,685 shares~~740 ofprescribes ~~common~~a ~~stock~~recognition ~~outstanding~~threshold asand a measurement attribute for the financial statement recognition and measurement of ~~December~~tax 31positions taken or expected to be taken in a tax return. For those benefits to be recognized, ~~2023~~a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company is

~~Common Stock Issued for Cash~~8

Oncurrently ~~March~~not 1,aware ~~2024~~of ~~the~~any ~~Company~~issues ~~entered~~under ~~into~~review athat ~~Subscription~~could ~~Agreement~~result ~~with~~in ~~one~~significant ~~private investor. Pursuant to the Subscription Agreement~~payments, ~~the~~accruals ~~Company~~or ~~issued~~material ~~7,500,000~~deviation ~~shares~~from ofits ~~common~~position. ~~stock~~The atCompany ais ~~purchase~~subject ~~price~~to ofincome ~~$0.40~~tax ~~per~~examinations ~~share~~by ~~for~~major ataxing ~~total~~authorities ofsince ~~$3,000,000~~inception.

~~Common~~Concentration ~~Stock~~of ~~Issued~~Credit ~~for Business Combinations~~Risk

WeFinancial ~~did~~instruments ~~not~~that ~~issue~~potentially ~~shares~~subject ~~for~~the ~~mergers~~Company orto ~~acquisitions~~concentrations ~~related~~of ~~activity~~credit ~~during~~risk consist of a cash account in a financial institution, which, at times, may exceed the ~~three~~Federal ~~months~~Depository ~~ended~~Insurance ~~March~~Coverage 31of $250,000. As of September 30, 2024, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

~~Common~~Fair ~~Stock~~Value ~~Issued for Services~~Measurements

WeFair ~~did~~value ~~not~~is ~~issue~~defined ~~shares~~as the price that would be received for ~~Services~~sale ~~during~~of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the ~~three~~measurement ~~months~~date. ~~ended~~U.S. ~~March~~GAAP 31establishes a three-tier fair value hierarchy, ~~2024~~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:

~~Common~~·Level ~~Stock~~1, ~~Issued~~defined ~~Under~~as ~~Equity~~observable ~~Incentive~~inputs ~~Plan~~such as quoted prices (unadjusted) for identical instruments in active markets;

We·Level ~~did~~2, ~~not~~defined ~~issue~~as ~~shares~~inputs ~~under~~other anthan ~~equity~~quoted ~~incentive~~prices ~~plan~~in ~~during~~active ~~the~~markets ~~three~~that ~~months~~are ~~ended~~either ~~March~~directly ~~31,~~or ~~2024.~~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

~~Preferred~~·Level ~~Stock~~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 ~~Company~~reporting ~~authorized~~amount 25of our cash represents fair value due to its liquid nature. Further,~~000,000~~ ~~shares~~the stated amounts of ~~Preferred~~related ~~stock,~~and ~~$.001~~non-related ~~par~~notes payable also represent fair value; noas ~~shares~~the borrowings are issued at prevailing market rates. As of September 30, 2024 and ~~outstanding~~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.

~~Series~~Related AParty Preferred Stock. The Company designated 10,000,000 shares of the non-convertible Preferred stock as Series A . The Series A has a One Dollar ($1.00) per share face value, has one (1) vote per share and pays a ten percent annual dividend. None of the Series A shares have been issued.Disclosures

~~Note~~The 6Company discloses all related party transactions in accordance with the guidance in ASC 850, Related Party Disclosures. ~~Provision~~To ~~for~~that ~~Corporate~~extent, ~~Income~~amounts ~~Taxes~~of related party transactions are stated on the face of our condensed consolidated balance sheets, condensed consolidated statements of operations and condensed consolidated statements of cash flows (as applicable).

~~The~~Segment Company provides for income taxes by the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. This also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.Reporting

~~FASB~~The ~~Interpretation~~Company Nocurrently operates in a single operating segment. 48Operating segments are reported in a manner consistent with the internal reporting provided to the Company’s chief operating decision maker (~~Fin~~“the 48CODM”). -The ~~Accounting~~Company’s ~~for~~CODM, ~~Uncertain~~which ~~Tax~~is ~~Positions~~its Chief Executive Officer, views the Company’s operations and manages its business as a single operating segment, which is currently movie film production.

The Company files income tax returns in the U.S. federal jurisdiction and various state, and local jurisdictions. The Company is no longer subject to U.S. federal income tax examination by tax authorities, with limited exception, for the quarters prior to December 31, 2014. With respect to state and local jurisdictions, with limited exception, the Company is no longer subject to income tax audits prior to December 31, 2014. In the normal course of business, the Company is subject to examination by various taxing authorities. Although the outcome of tax audits is always uncertain, the Company believes that adequate amounts of tax, interest and penalties have been provided for any adjustments that may result from these open tax years.9

~~Note~~Commitments 7.and ~~Subsequent Events~~Contingencies

OnThe ~~May~~Company 2,accounts ~~2024~~for ~~the~~contingencies ~~Company~~in ~~filed~~accordance anwith 8ASC 450-K20, Contingencies. Certain ~~disclosing~~conditions ~~that~~may onexist ~~March~~as ~~28,~~of ~~2024,~~the date the ~~Company~~condensed ~~filed~~consolidated afinancial ~~DEF~~statements ~~14C~~are ~~disclosing~~issued, ~~that~~which ~~the~~may ~~Board~~result ofin ~~Directors~~a ofloss ~~both~~to the Company, ~~and~~but ~~its~~which ~~wholly~~will ~~owned~~only ~~Subsidiary~~be ~~and~~resolved ~~its~~when ~~majority~~one ~~shareholder~~or ~~agreed~~more future events occur or fail to ~~merge~~occur. ~~the~~The Company ~~into~~assesses ~~the~~such ~~Subsidiary~~contingent ~~with~~liabilities, ~~the~~and ~~Subsidiary~~such ~~surviving~~assessment inherently involves an exercise of judgment. ~~The~~ ~~actual~~In ~~merger~~assessing isloss ~~the~~contingencies ~~Subsidiary~~related ~~merging~~to ~~into~~legal ~~the~~proceedings ~~Company~~that ~~with~~are pending against the Company ~~surviving~~or ~~and~~un-asserted ~~operating~~claims ~~under~~that may result in such proceedings, the ~~Subsidiary’s~~Company ~~name. This~~evaluates ~~type~~the perceived merits of ~~merger~~any ~~does~~legal ~~not~~proceedings ~~require~~or ~~shareholder~~un-asserted ~~approval~~claims ~~pursuant~~as towell as the ~~applicable~~perceived ~~Nevada~~merits of the amount of relief sought or expected to be sought therein.

10If 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 Company’s condensed 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.

~~statutes.~~In Onaddition ~~May~~to ~~1, 2024~~ the ~~correction~~stated ~~has~~interest ~~been~~rates ~~made~~on ~~with~~ the ~~state~~loans, certain of ~~Nevada~~our ~~and~~notes anpayable ~~Amended~~include ~~Agreement~~a ~~and~~net ~~Plan~~profit ofparticipation ~~Merger~~feature ~~has~~whereby ~~been~~the ~~executed~~lender bymay ~~the~~receive ~~parties.~~an ~~The~~additional ~~Amended~~return ~~Plan~~based on the performance of ~~Merger~~the asfilm ~~filed~~underwritten ~~with~~by the ~~8-K~~loan. onCertain ~~May~~of 3,these ~~2024~~loans isare ~~incorporated~~collateralized ~~herein~~ by ~~reference~~interests in film rights the Company owns.

OnRecent ~~May~~Accounting 7, 2024 the Company filed an 8-K disclosing that it had dismissed BF Borgers CPA PC (“BF Borgers”) as its independent registered public accounting firm. On May 3, 2024, the U.S. Securities and Exchange Commission (the “SEC”) through its Staff Report has advised that, in lieu of obtaining a letter from BF Borgers stating whether or not it agrees with the statements herein, the Issuer may indicate that BF Borgers is not currently permitted to appear or practice before the SEC for reasons described in the SEC’s Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Sections 4C and 21C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order.Pronouncements

BFIn ~~Borgers’~~November ~~audit~~2023, ~~reports~~the onFinancial ~~the~~Accounting ~~Company’s~~Standards ~~consolidated~~Board ~~financial~~(“FASB”) ~~statements~~issued asAccounting ofStandards ~~and~~Update ~~for~~(“ASU”) ~~the~~2023-07, Segment ~~fiscal~~Reporting - Improvements ~~years~~to ~~ended~~Reportable ~~December~~Segment ~~31,~~Disclosures (“ASU 2023-07”), ~~and~~which ~~December~~requires ~~31,~~incremental ~~2022~~disclosures ~~did~~related ~~not~~to ~~contain~~a anpublic ~~adverse~~entity’s ~~opinion~~reportable orsegments. aRequired ~~disclaimer~~disclosures ofinclude, ~~opinion~~on an annual and ~~were~~interim ~~not~~basis, ~~qualified~~significant orsegment ~~modified~~expenses asthat are regularly provided to ~~audit~~the ~~scope~~CODM orand ~~accounting~~included ~~principles.~~within ~~nor~~each ~~were~~reported ~~there~~measure ~~disagreements~~of segment profit or loss, asan ~~that~~amount ~~term~~for other segment items (which is ~~defined~~the indifference ~~Item~~between ~~304(a~~segment revenue less segment expenses and less segment profit or loss)~~(1)(iv)~~ and a description of ~~Regulation~~its ~~S-K~~composition, ~~between~~ the ~~Company~~title and BFposition ~~Borgers~~of onthe ~~any~~CODM, ~~matter~~and an explanation of ~~accounting~~how ~~principles~~the orCODM ~~practices,~~uses ~~financial~~the ~~statement~~reported ~~disclosure,~~measure(s) orof ~~auditing~~segment ~~scope~~profit or ~~procedure,~~loss ~~which~~in ~~disagreements,~~assessing ifsegment ~~not~~performance ~~resolved~~and deciding how to BFallocate ~~Borgers’~~resources. ~~satisfaction,~~The ~~would~~standard ~~have~~also ~~caused~~permits BFdisclosure ~~Borgers~~of tomore ~~make~~than ~~reference~~one tomeasure ~~such~~of ~~disagreements~~segment inprofit. ~~its~~ASU ~~audit~~2023-07 ~~reports.~~is ~~During~~effective ~~the~~for fiscal years ~~ended~~beginning after December 3115, 2023, and ~~2022,~~interim ~~and~~periods ~~through~~within ~~the~~fiscal ~~date~~years ofbeginning ~~this~~after ~~report~~December 15, ~~there~~2024. ~~were~~The noadoption ~~reportable~~of ~~events~~ASU ~~within~~2023-07 ~~the~~did ~~meaning~~not ofhave ~~Item 304(~~a~~)(1)(v)~~ ofmaterial ~~Regulation~~impact ~~S-K~~on the Company’s condensed consolidated financial statements.

OnIn ~~May~~December 42023, ~~2024,~~the ~~Chung~~FASB ~~Cam~~issued ~~resigned~~ASU as2023-09-Income ~~the~~Taxes (Topic ~~Issuer’s~~740)-Improvements ~~Chief~~to ~~Financial~~Income ~~Officer~~Tax asDisclosures, ~~disclosed~~which requires entities to provide additional information in the ~~8-K~~rate ~~filed~~reconciliation onand ~~May~~additional 7disclosures 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 condensed consolidated financial statements.

OnIn ~~May~~November 172024, the FASB issued ASU 2024-03, Income ~~the~~Statement-Reporting ~~Company~~Comprehensive ~~disclosed~~Income-Expense ~~through~~Disaggregation ~~its~~Disclosures (Subtopic 8220-K40). ~~filed~~The ~~that~~amendments ~~date~~in this update require disclosure, ~~that~~in itthe ~~has~~notes ~~engaged~~to ~~Astra~~combined ~~Audit~~financial statements, of specified information about certain costs and ~~Advisory~~expenses at each interim and annual reporting period. The amendments are effective for annual periods beginning after December 15, ~~LLC~~2026, asand ~~the~~reporting ~~independent~~periods ~~registered~~beginning ~~public~~after ~~accounting~~December ~~firms~~15, 2027, with early adoption permitted. ~~Said~~The ~~decision~~Company ~~was~~is ~~made~~currently ~~with~~evaluating the ~~recommendation~~impact ~~and~~that ~~approval~~the ofnew ~~the~~ASU ~~sole~~will ~~Board~~have ofon ~~Director~~its ofcombined ~~the~~financial ~~Company~~statements.

1110

~~Item~~NOTE 2.3 ~~Management's~~– FILM ~~Discussion~~COSTS ~~and Analysis of Financial Condition and Results of Operations~~COMPONENTS

~~The~~Components ~~statements~~of ~~contained~~production incosts ~~this~~for ~~Quarterly~~films ~~Report~~predominantly ~~that~~monetized ~~are~~on ~~not~~their ~~historical~~own ~~are~~were ~~“forward-looking statements”, which can be identified by use of terms such~~ as “may”, “could”, “should”, “expect”, “plan”, “project”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “pursue”, “target”, “probable”, “possible”, or “continue”, the negative of such terms or other comparable terminology, although some forward-looking statements may be expressed differently.follows:

Forward-Looking Statements

	As of
	September 30, 2024	June 30, 2024
Released	$-	$-
Completed and not released	9,886,289	-
In production	966,748	9,356,746
Preproduction	-	668,014
Total	$10,853,037	$10,024,760

~~The~~NOTE ~~forward-looking~~4 statements contained in this 10-Q are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this 10-Q are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to various factors listed in this Quarterly Report. All forward-looking statements speak only as of the date of this 10-Q. We do not intend to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.– DEPOSITS

~~Our~~As ~~Business~~of September 30, 2024 and June 30, 2024, the Company held deposits of $760,166 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 condensed consolidated balance sheets. The deposits are intended to secure the Company's obligations for union-related benefits, including health and retirement contributions for eligible union members.The deposits are refundable upon fulfillment of the Company's obligations under the terms of the agreements or upon termination of the agreements. As of September 30, 2024 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.

~~Advanced~~NOTE ~~Voice~~5 ~~Recognition~~– INVESTMENT ~~Systems,~~IN ~~Inc~~EQUITY ~~new direction is to the Media Industry, producing movies, advertising and other media and entertainment related products.~~ SECURITIES

OnDuring ~~March~~June 1,of ~~2024,~~2023 the Company ~~and~~made ~~Rivulet~~a ~~Media~~$2, ~~Inc.~~000,000 aequity ~~Delaware~~investment ~~corporation~~in ~~(Rivulet),~~Casa ~~collectively~~Azul ~~the~~Spirits, ~~Parties~~LLC, ~~entered~~a ~~into~~tequila anCompany ~~Asset~~incorporated ~~Purchase~~in ~~Agreement (the “Purchase Agreement”)~~Delaware, ~~pursuant to~~ which, ~~subject~~gave to the ~~terms and conditions therein, the~~ Company ~~shall~~a ~~purchase,~~5% ~~with~~ownership ~~stock~~stake. ~~and~~As ~~cash,~~the ~~certain~~Company ~~assets~~neither ofcontrols ~~Rivulet.~~nor ~~The~~has ~~Acquisition~~significant isinfluence ~~anticipated~~over tothe ~~close~~investee, onwe ~~April~~recognize ~~10,~~our ~~2024,~~investment ~~subject~~in toaccordance ~~review~~with byASC ~~FINRA~~321, Equity ~~there is no assurance this will occur~~Securities. ~~Upon its terms and subject to the conditions set forth in the Purchase Agreement~~Further, atas the ~~effective~~equity ~~time~~investment ofdoes ~~the~~not ~~Acquisition~~have ~~the~~a ~~identified~~readily ~~assets~~determinable offair ~~Rivulet~~value ~~shall~~and bedoes ~~converted~~not ~~into~~qualify ~~the~~for ~~right of~~ the ~~Rivulet~~practical ~~Shareholders~~expedient to ~~receive~~estimate ~~90,784,800~~fair ~~shares of common stock of the Company, $0.001 par~~ value ~~per share~~ (~~“Shares”),~~outlined ~~and~~in $ASC 820-10),~~069,000~~ ~~to be distributed, after~~ the ~~payment of Rivulets payables, pro rata to the shareholders of Rivulet. Holders of Rivulet fractional shares shall be rounded up if applicable. On March 7, 2024, the~~ Company ~~ordered~~recognizes ~~the~~its ~~common~~investments ~~shares to be issued to Rivulet~~ in ~~accordance~~Casa ~~with~~Azul ~~the~~at ~~Asset~~cost ~~Purchase~~minus ~~Agreement~~impairment. ~~On March 1, 2024, the Company disbursed $2,800,000 to Rivulet as a partial payment.~~

~~Results~~The carrying amount of ~~Operations~~our investment in Casa Azul was $2,000,000 as of both September 30, 2024 and June 30, 2024. Further, the Company has not adjusted the cost of the investment, either upwards or downwards, since we made the initial investment. 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 September 30, 2024.

At March 31, 2024, we had current assets of $2,846,368 and current liabilities of $166,241, as compared to $480 current assets and $350,196 in current liabilities at December 31, 2023. Our increase in current assets is attributed proceeds received from sale of common shares in a private placement. Our decrease in current liabilities is attributed to payroll forgiveness by our CFO and payments made towards related party debts.11

WeNOTE ~~had~~6 a– NOTES ~~net~~PAYABLE ~~income~~AND ofRELATED ~~$29,790~~PARTY ~~and $19,353 for the three months ended March 31, 2024 and 2023, respectively. The increase in net income is attributable to the gain realized from payroll forgiveness from our CFO.~~LOANS

~~Liquidity~~The Company enters into loan agreements with both related and ~~Capital~~non-related ~~Resources~~parties in order to fund their ongoing film production activities. To that extent, the Company had the following outstanding debt as of September 30, 2024 and June 30, 2024:

For the three months ended March 31, 2024, we used $21,716 of cash in operating activities and $2,800,000 in investing activities, and we received $2,867,604 from financing activities. As a result, for the three months ended March 31, 2024 we recognized a $45,888 increase in cash on hand. For the three months ended March 31, 2023, $28,784 cash was used in operating activities, $-0- cash in investing activities, and we received $40,169 cash from the advance from related party resulting in a $11,385 increase in cash on hand for the period.

	September 30, 2024	June 30, 2024

Current notes payable; Issued December 2023-January 2024; 15% stated interest rate; Due April 1, 2024 - in default	$4,140,000	$4,140,000
Current notes payable; Issued July 2024-September 2024; 10% stated interest rate; Due March 28, 2025	61,064	-
Non-current notes payable; Issued June 2023-May 2024; 15% stated interest rate; Due February 1, 2026	1,330,000	1,330,000
Non-current notes payable; Issued July 2024-September 2024; 15%-20% stated interest rates; Due upon the earlier of a sale of a film or closing of a senior debt facility.	755,000	-
Non-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	10,041,064	16,988,316
Less current maturities	(4,951,064)	(4,890,000)
Total notes payable, non-current portion	$5,090,000	$12,098,316

~~Historically,~~As ~~our~~of ~~President~~September ~~has~~30, ~~loaned~~2024, orcertain ~~advanced~~notes tototaling us$4,140,000, ~~funds~~were ~~for~~in ~~working~~technical ~~capital~~default onas ana ~~“as~~result ~~needed”~~of ~~basis~~non-payment. ~~There~~However, isper nothe ~~assurance~~terms ~~that~~of ~~these~~the ~~loans~~notes, orthe ~~advances~~default ~~will~~interest ~~continue~~rate inof 25% cannot be triggered unless a default notice is received from the ~~future~~lender(s). AtNotes ~~March~~totaling 31$2,450,000 ~~2024~~were ~~and~~paid-down ~~December~~during ~~31,~~October ~~2023~~2024. Subsequently, wea ~~owed~~default ~~our~~notice ~~officers~~was anreceived ~~aggregate~~for of $~~144~~1,~~241~~500,000 ~~and~~in ~~$219,677,~~notes ~~respectively,~~during ~~for~~November ~~accrued~~of ~~payroll. On~~2024 ~~January~~at 5,which ~~2024~~time ~~Mr.~~the ~~Geldenhuys~~interest ~~advanced~~rate on the ~~Company~~notes increased from 15% to 25%. These notes totaling $21,500,000~~. The~~ ~~accrued~~of ~~advances~~the notes were paid inoff ~~full~~during onthe three months ended March 131, ~~2024~~2025. ~~(Note4)~~The remaining $190,000 were still in default as of the time of this filing and bore an interest rate of 25%.

12During the three months ended September 30, 2024, the Company entered into certain note agreements totaling $61,064. These notes bear interest at a rate of 10%, and mature at dates through March 28, 2025.

ToAdditionally, ~~obtain~~during ~~sufficient~~the ~~funds~~three tomonths ~~meet~~ended ~~our~~September ~~future needs for capital~~30, ~~we will from time to time~~2024, ~~evaluate~~the ~~opportunities~~Company toentered ~~raise~~into ~~financing~~certain ~~through~~note ~~sales~~agreements oftotaling ~~our securities~~$880,000. ~~However,~~These ~~future~~notes ~~equity~~bear orinterest ~~debt~~at ~~financing~~rates ~~may~~of ~~not~~15% ~~be available~~ to ~~us at all~~20%, orand ifmature ~~available,~~dependent ~~may~~upon ~~not~~factors berelated ~~on terms acceptable~~ to ~~us.~~future Wefilm dosales ~~not~~or ~~intend~~the toclosing ~~pay~~of ~~dividends~~a tosenior ~~shareholders~~debt ~~in the foreseeable future~~facility.

In ~~order~~addition ~~for~~to ~~our~~the ~~operations~~stated tointerest ~~continue~~rates on the loans, wecertain ~~will~~loans ~~need~~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 September 30, 2024. In addition, certain tax credit assignment loans totaling $750,000 were entered into during fiscal year 2024 whereby the lenders agreed to ~~generate~~be ~~revenues~~paid (on a dollar per dollar basis) from ~~our~~the ~~intended~~proceeds ~~operations~~of ~~sufficient~~a refundable tax credit related to ~~meet~~the ~~our~~production ~~anticipated~~of ~~cost~~the ~~structure~~Nutcracker film. While the tax credit was not received as of September 30, 2024, 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.

~~Going~~The ~~Concern~~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 accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. At March 31, 2024 Current Assets were $2,846,368 and Current Liabilities were $166,241. Current assets exceed current liabilities which resulted in working capital of $2,680,127 and no significant revenues. The Company may be unable to continue as a going concern because of these factors there is substantial doubt about the Company being able to continue for a reasonable time.12

The ~~financial~~debt ~~statements~~forgiveness dowas ~~not~~recognized ~~include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue~~ as aan ~~going~~increase ~~concern. The Company’s continuation as a going concern is dependent upon its ability~~ to ~~generate~~additional ~~sufficient~~paid ~~cash~~in ~~flow to meet its obligations on a timely basis and ultimately to attain profitability~~capital. ~~During~~ ~~the~~Upon ~~twelve~~settlement ~~months~~of ~~ended December 31, 2023~~ the ~~Company~~transaction ~~received~~ an ~~aggregate~~additional of $~~305,683~~0.2 ~~from~~million ~~the release~~ of ~~escrow~~liabilities ~~related~~were toforgiven, ~~the~~resulting ~~sale of shares~~ in ~~private~~total ~~offerings~~liability offorgiveness ~~its common stock and $123,500 from advances from related parties. During the three months ended March 31, 2024, the Company received an aggregate~~ of $~~3,000,000 from the sale of shares in private offerings of its common stock~~8. ~~There~~1 ~~is no guarantee that AVRS will be able to provide the capital required for the Company to continue as a going concern~~million.

~~Off-Balance~~Maturities ~~Sheet~~on ~~Arrangements~~debt are as follows:

None noted.

October 1, 2024 - June 30, 2025	$	4,201,064
July 1, 2025 - June 30, 2026		5,840,000
Total payments	$	10,041,064

~~Item~~NOTE 3.7 ~~Quantitative~~– RELATED ~~and~~PARTY ~~Qualitative Disclosure About Market Risk~~TRANSACTIONS

~~Pursuant~~Rivulet ~~to Item 305(e) of Regulation S-K (229.305(e)~~Media, ~~the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229~~Inc.~~10(f)(1) of the SEC.~~

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 September 30, 2024 and June 30, 2024.

Advances

During the three months ended September 30, 2024, the Company advanced funds to a person of Management at Rivulet Entertainment, Inc. in the amount of $127,776. The advance bears no interest and has no stated maturity date.

NOTE 8 – 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:

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

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 9 – SHAREHOLDERS’ EQUITY

As of September 30, 2024 the Company was authorized to issue multiple series of preferred stock, as outlined below. There were no preferred shares issued or outstanding as of September 30, 2024.

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;

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;

NOTE 10 – SUBSEQUENT EVENTS

In accordance with ASC 855, Subsequent Events, the Company has evaluated events and transactions subsequent to September 30, 2024 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 condensed consolidated financial statements.

License of Nutcracker

During October of 2024, the Company signed a license and distribution agreement with Disney DTC LLC (“DDTC”) for access rights to the feature film “Nutcrackers” and all associated short from content (i.e. trailers, deleted scenes, etc.) The license term lasts 15 years following the initial exploitation of the project by DDTC. In consideration of the license agreement, the Company is to receive a fixed payment of $10 million of which approximately $8 million had been received as of the date the condensed consolidated financial statements were issued.

Debt Payments

Various notes payable totaling approximately $12.0 million were repaid subsequent to September 30, 2024.

Debt Issuance

Debt Facility

On October 16, 2024 the Company entered into a one-year credit facility with total availability of $3,500,000. The full amount of $3,500,000 has been drawn as of the date of these condensed consolidated financial statements with an approximate interest rate of 6.5%.

Note Issuances

Subsequent to September 30, 2024, the Company issued notes payable totaling $375,000 with interest rates ranging from 15% to 20% and maturities dependent upon aspects related to sale of particular films or closing of a senior debt facility.

Subsequent to September 30, 2024, the Company issued notes payable in the amount of $525,000 with various maturity dates which have had negotiated term extensions and bear interest at rates ranging from 10% to 16%.

Subsequent to September 30, 2024, the Company issued notes payable of approximately $17.6 million. The notes bear interest at 10% and mature January 25, 2026.

Litigation

During June of 2025, the Company received an OSHA complaint which was made against one of our wholly owned subsidiaries (i.e. "The Nutcracker"). The Company does not believe that there is any merit to the claim. Further, an estimate of the possible loss cannot be made at this time.

Item 2. Management’s 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-Q. 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 Company's 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.

Liquidity and Capital Resources

The Company had notes payable, which were used to fund our film production, totaling $10,041,064 as of September 30, 2024. Further, the Company still has a $3,500,000 outstanding balance to Rivulet Media, inc. stemming from the merger transaction.

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 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.

Going Concern

The Company had cash of $79,049 as of September 30, 2024. Further, the Company incurred a net loss of $603,364, negative working capital of $9.7 million, stockholders' deficit of $1.2 million and cash flow used in operations of $1.0 million for the interim period ended September 30, 2024. 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.

Cash Flows

The following tables summarize the results of our cash flows for the below respective periods:

	For the Three Months Ended September 30,
	2024		2023
Net loss	$	(603,364)	$	(95,004)
Net cash flows used in operating activities:		(963,736)		(62,935)
Net cash flows provided by (used in) investing activities:		-		-
Net cash flows provided by financing activities:		941,064		60,295
Net change in cash		(22,672)		(2,640)
Cash, beginning of period		101,721		2,683
Cash, end of period	$	79,049	$	43

Operating Activities

Net cash used in operating activities was ($963,736) for the three months ended September 30, 2024. Cash used in operating activities resulted from a net loss for the three months ended September 30, 2024 of ($603,364) and changes in operating assets and liabilities of ($360,372).

Net cash used in operating activities was ($62,935) for the three months ended September 30, 2023. Cash used in operating activities resulted from net loss for the three months ended September 30, 2023 of ($95,004) and changes in operating assets and liabilities of $32,069.

Investing Activities

There were no investing activities for the three months ended September 30, 2024 and 2023.

Financing Activities

Net cash provided by financing activities was $941,064 for the three months ended September 30, 2024 and consisted of proceeds from notes payable.

Net cash provided by financing activities was $60,295 for the three months ended September 30, 2023 and consisted of proceeds from notes payable.

Results of Operations

Our financial results for the three months ended September 30, 2024 and 2023 are summarized as follows:

	For the Three Months Ended September 30,
	2024	2023
Revenues	$ -	$ -
Production cost amortization	-	-
Gross margin	$ -	$ -

Operating Expense
General and administrative	$ 496,578	$ 102,764
Total operating expenses	$ 496,578	$ 102,764

Net loss before other income (expense)	496,578	102,764

Other income (expense)	$ (106,786)	$ 7,760

Net loss before income taxes	(603,364)	(95,004)
Income tax expense	-	-
Net loss before income taxes	$ (603,364)	$ (95,004)

Revenues

There were no recognized revenues during the three months ended September 30, 2024 and 2023.

General and Administrative

General and administrative expense for the three months ended September 30, 2024 and 2023 totaled $496,578 and $102,764, respectively. General and administrative costs for the three months ended September 30, 2024 of $496,578 consisted of professional fees of $187,972, music and musician expenses $87,275, travel & meals and entertainment of $91,598, payroll costs of $53,106, external communication of $34,346 and other expenses of $42,281. General and administrative costs for the three months ended September 30, 2023 of $102,764 consisted of participation costs of $100,000 and other expense of $2,764.

Other (expense) income

For the three months ended September 30, 2024, other income (expense) totaled ($106,786) which consisted of interest expense of ($106,913) and other income of $127.

For the three months ended September 30, 2023, other income (expense) consisted of other income of $7,760.

Critical Accounting Policies

Impairment of Capitalized Production Costs

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 Company’s 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 Company’s intellectual property throughout the license period. As such, revenue is recognized at a point in time upon the Company’s 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 Company’s contracts with its customers do not include a significant financing component, non-cash consideration or consideration payable to the customer. However, the Company’s 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. The Company did not recognize any impairments for the three months ended September 30, 2024 and 2023.

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 entity’s 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 adoption of ASU 2023-07 did not have a material impact on its combined 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 3. Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and our chief financial 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 ~~March~~September 3130, 2024. 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-Q, is recorded, processed, summarized and reported, within the time period specified in the SEC’s 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.

WeOur ~~have~~disclosure ~~identified,~~controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of ~~March~~1934, 31as amended, ~~2024~~is recorded, aprocessed, ~~lack~~summarized ofand ~~segregation~~reported ofwithin ~~duties~~the inappropriate ~~accounting~~time periods, and ~~financial~~that ~~reporting~~such ~~activities~~information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, ~~which~~as weappropriate, doto ~~believe~~allow istimely adiscussions ~~material~~regarding ~~weakness~~required disclosure. ~~The~~ ~~size~~We, under the supervisions of ~~our~~and ~~business~~with ~~necessarily~~the ~~imposes~~participation ~~practical~~of ~~limitations~~our onmanagement, ~~the~~including ~~effectiveness~~our ofChief ~~those~~Executive ~~internal~~Officer, ~~control~~who ~~practices~~is our principal executive officer, and ~~procedures~~Chief ~~that~~Financial ~~rely~~Officer, onwho is our principal financial officer, have evaluated the ~~segregation~~effectiveness of ~~duties~~our disclosure controls and procedures. ~~Our~~ Based upon such evaluation, our chief executive officer and our chief financial officer ~~work~~have ~~closely~~concluded ~~and~~that, ~~review~~as ~~all~~of ~~day-to-day~~September ~~transactional~~30, ~~activities~~2024, ~~with~~our ~~the~~disclosure ~~secretary~~controls ~~Treasurer. The~~and ~~volume~~procedures were ineffective because of the ~~transactions~~material weaknesses in our internal control over financial reporting due to a lack of segregation of duties and the ~~Company~~lack isof ~~limited~~formal documentation of our control environment.

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 quarter ending March 31, 2024 fairly present in all material respects the financial condition and results of operations for the Company in conformity with GAAP. There is, however, a reasonable possibility that a material misstatement of the annual or interim financial statements would not have been prevented or detected as a result of this weakness.

Our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) are designed to ensure that information required to be disclosed by us in reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the appropriate time periods, and that such information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure. We, under the supervisions of and with the participation of our management, including our Chief Executive Officer, who is our principal executive officer, and Chief Financial Officer, who is our principal financial officer, have evaluated the effectiveness of our disclosure controls and procedures. Based upon such evaluation, our chief executive officer and our chief financial officer have concluded that, as of March 31, 2024, our disclosure controls and procedures were ineffective because of the material weaknesses in our internal control over financial reporting due to a lack of segregation of duties and the lack of formal documentation of our control environment.

Changes in internal control over financial reporting.

We regularly review our system of internal control over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that we maintain an effective internal control environment. Changes may include such activities as implementing new, more efficient systems, consolidating activities, and migrating processes.

There were no changes in our internal controls over financial reporting that occurred during the period covered by this Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

~~From~~During ~~time~~June toof ~~time~~2025, wethe ~~may~~Company ~~become~~received ~~involved~~an inOSHA ~~legal~~complaint ~~proceedings~~which orwas ~~other~~made ~~litigation~~against ~~that~~one ~~we consider to be a part~~ of ~~the~~our ~~ordinary~~wholly ~~course~~owned ofsubsidiaries ~~our~~(i.e. ~~business~~"The Nutcracker"). ~~Presently,~~The weCompany ~~are~~does not ~~involved~~believe inthat ~~any~~there ~~litigation~~is ~~and~~any merit to the ~~best~~claim. ~~knowledge of management~~Further, ~~there~~an ~~are~~estimate noof ~~legal~~the ~~proceedings~~possible ~~pending~~loss orcannot ~~threatened~~be ~~against~~made ~~the~~at ~~Company~~this time.

Item 1A. Risk Factors

As a smaller reporting Company, ~~the~~we ~~issuer~~are is not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On March 1, 2024 the Company entered into a Subscription Agreement with one private investor. Pursuant to the Agreement, the Company sold 7,500,000 shares of common stock at a purchase price of $0.40 per share for a total of $3,000,000. The funds will be used to pay the Company’s debts and contribute to a portion of the Acquisition costs. The Company paid no underwriting discounts or commissions. N/A ~~copy of the form of subscription agreement is attached as Exhibit 10.5 to an 8-K filed on March 7, 2024 which is incorporated herein by reference.~~

Item 3. Defaults Upon Senior Securities

~~None~~20

As of the date of this filing, the Company had defaulted on approximately $203,000 of principal amount of outstanding debt. The total arrearage as of the date of this filing was approximately $238,000, which includes both principal and interest.

Item 4. Mine Safety Disclosures

~~Not Applicable~~N/A

Item 5. Other Information

~~(a)None~~ N/A

(b)During the quarter ended March 31, 2024, no director or officer of the Company adopted or terminated a contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or a non-rule 10b5-1 trading arrangement. 21

Item 6. Exhibits

31.1	Section 302 Certification – Principal Executive Officer
Exhibit No.		Description
31.2	Section 302 Certification – Principal Financial Officer
10.1		Nutcracker License Agreement
32.1	Section 906 Certification
10.2		Notes Payable Agreement (if relevant)
10.3		Casa Azul Investment Agreement
31.1*		Certification of the Chief Executive Officer/Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*		Certification of the Chief Executive Officer/Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

15* Filed herewith.

Furnished, not filed.

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.

		ADVANCED VOICE RECOGNITION SYSTEMS, INC.
	Rivulet Entertainment, Inc.
Dated June 3, 2024	By:	/s/ Walter Geldenhuys
Date: July 24, 2025	By:	/s/ Walter Geldenhuys
		Walter Geldenhuys
		President, Chief Executive Officer (Principal Executive Officer)
		President, Chief Executive Officer and Interim Chief Financial Officer
Dated June 3, 2024	By:	/s/ Walter Geldenhuys
		Walter Geldenhuys
		Chief Financial Officer (Principal Financial Officer)

1623

Filing Compare · Rivulet Entertainment, Inc.