American Picture House Corp 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements The following discussion and analysis should be read in conjunction with our condensed financial statements and related notes included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements due to various factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Recent Developments SSS Entertainment Agreement – TURN UP THE SUN Option Extension and Barron’s Cove Acquisition On August 1, 2025, the Company entered into an agreement with SSS Entertainment, LLC (“SSS”) to (i.) extend to December 31, 2025 its option to acquire a 24% ownership interest in the feature film TURN UP THE SUN! (aka POSE ) for $725,000 and (ii.) acquire all rights, title, and interest in the feature film Barron’s Cove and related secured assets, including liens, loans, UCC-1 filings, and security interests. As consideration, the Company issued 500,000 shares of its common stock to SSS’s principal, allocated equally between the option extension and the asset acquisition. The Company will pay to SSS the first 85% of revenues from exploitation of BARRON’S COVE until SSS has recouped $2 million, after which all such revenues will be retained by the Company. SSS may elect to convert future revenue entitlements into shares of the Company’s common stock at a conversion rate of 2.5 times the retained revenue, subject to a $1.00 per share floor. The Company will also assume up to $50,000 in costs to enforce and perfect the secured rights. Leadership updates. On August 30, 2025, Jonathan Sanger resigned as President. As disclosed in our Current Report on Form 8-K/A filed September 19, 2025, Mr. Sanger’s resignation followed a dispute regarding certain compensation matters under his consulting agreement and did not involve any disagreement with the Company on any other matter relating to operations, policies, or practices. Our Board has initiated a process to evaluate and implement any necessary adjustments to management responsibilities. On September 16, 2025, Donald J. Harris resigned from our Board of Directors, effective immediately. As disclosed in our Current Report on Form 8-K filed September 19, 2025, Mr. Harris’s resignation was not the result of any disagreement with the Company on any matter relating to operations, policies, or practices. The Board is evaluating its composition following his resignation. Capital markets update. On September 12, 2025, we entered into an Equity Line of Credit (“ELOC”) with RH2 Equity Partners, L.P., and a related Registration Rights Agreement. Under the ELOC, we may, at our election and subject to specified conditions, sell newly issued shares of our common stock to the investor over a 24-month period in an amount up to the lesser of $100 million or the “Maximum Common Stock Issuance” (as defined in the ELOC). Proceeds, if any, may be used for general corporate purposes. See “Liquidity and Capital Resources” for additional detail. 2 As of September 30, 2025. APHP has participated in a number of feature films at or near delivery: BARRON’S COVE, TURN UP THE SUN! (aka POSE ), PROTECTOR, THIEVES HIGHWAY , and MOTION (aka GET DA BAG ). Participation varies by title (first-priority recoupment/loan position, “in Association with” and Producer credits, options, and development/co-production roles). We have not recognized revenue from these projects as of September 30, 2025, unless otherwise disclosed. See Note 5 “Produced & Licensed Content” and Note 4 “Film Production Loans and Receivables” for rights, status, and accounting by title. As of September 30, 2025, we had not sold any shares under the ELOC and had not received proceeds. We may elect to draw in future periods subject to the conditions in the agreements. Organizational History of the Company and Overview Corporate History American Picture House Corporation was incorporated in Nevada on September 21, 2005 under the name Servinational, Inc. The Company subsequently changed its name to Shikisai International, Inc. in November 2005 and then to Life Design Station, Intl., Inc. in August 2007. The Company changed its state of domicile from Nevada to Wyoming on October 13, 2020. On December 4, 2020, the Company changed its name to American Picture House Corporation. The Board of Directors approved a 50:1 reverse stock split that became effective in the marketplace on October 11, 2021. Following the reverse stock split, on September 13, 2021, the Company also adopted an amendment, which was independent of the above-mentioned reverse stock split, to the Company’s Articles of Incorporation to reduce the number of authorized shares from 4,700,000,000 shares of Common Stock at $0.0001 par value to 1,000,000,000 shares of Common Stock at $0.0001 par value. On October 16, 2024 the shareholders approved our Second Amended and Restated Articles of Incorporation, which amends Article VI, paragraph A. (1.) of our current Amended and Restated Articles of Incorporation to grant authorization to our Board of Directors to determine, without shareholder approval, the designations, preferences, limitations, restrictions, and relative rights of any additional classes of Preferred Stock, and variations in the relative rights and preferences as between different series. The Company filed the Second Amended and Restated Articles of Incorporation with the State of Wyoming in April 2025. As of October 27, 2025, the Company has 1,001,000,000 shares authorized, including 1,000,000,000 common shares and 1,000,000 Preferred shares. Common Shares - As of October 27, 2025, APHP has 1,000,000,000 common shares authorized of which 112,899,325 shares issued and outstanding. As of October 27, 2025, the total number of shareholders of record was 332. All common shares are entitled to participate in any distributions or dividends that may be declared by the Board of Directors, subject to any preferential dividend rights of outstanding shares of Preferred shares. 3 Preferred Shares - As of October 27, 2025, the Company had 1,000,000 Preferred shares authorized, of which 100,000 Preferred shares have been designated as Series A Convertible Preferred Stock (“Series A Preferred shares” herein). At present, 3,839 Series A Preferred shares are issued and outstanding. The Series A Preferred shares do not have any rights to dividends; voting - each share of Series A Preferred shares carries a superior voting right to the Company’s common shares, each Series A Preferred share shall be counted as 1,000,000 votes in any Company vote. Each Series A Preferred share is convertible at a ratio of 1 to 100,000 so that each one share of Series A Preferred shares may be exchanged for 100,000 common shares. Series A Preferred shares hold a first position lien against all of the Company’s assets including but not limited to the Company’s IP (“Intellectual Property”). The Preferred shares do not have any specific redemption rights or sinking fund provisions. Voting Control – October 27, 2025, Mr. Bannor Michael MacGregor, the Company’s Chief Executive Officer and Chairperson, beneficially owned 24,413,041 shares of the Company’s common stock (including options exercisable within 60 days), representing approximately 21.62% of the outstanding common shares. In addition, Mr. MacGregor directly and indirectly beneficially owns and controls all 3,839 issued and outstanding shares of the Company’s Series A Preferred Stock, representing 100% of that class. Each Series A Preferred Share has voting rights equal to 1,000,000 votes per share, for an aggregate of 3,839,000,000 votes. When combined with the voting rights associated with his common stock ownership, Mr. MacGregor controls voting rights equivalent to 3,863,163,041 shares of common stock, or approximately 97.75% of the Company’s total voting power. Business Overview American Picture House Corporation (“APHP”), also known as American Picture House Pictures, is an entertainment company focused on the development, packaging, financing and production of feature films and limited series. During 2025, APHP pivoted away from third-party consulting to concentrate on internally developed projects and selective strategic partnerships. Our objective over time is to build a disciplined slate and the organizational capabilities of a scaled independent (“mini-major”); however, there can be no assurance that we will achieve this objective. APHP’s strategy emphasizes mid-budget projects where a substantial portion of production costs may be supported by project-level structures (e.g., pre-sales, distribution advances, production incentives/tax credits, and, where available, completion guarantees). We aim to mitigate equity exposure by assembling packages that combine bankable creative elements (script/IP, producers, directors, cast) with cost-efficient production plans (including incentive-eligible jurisdictions). We may co-produce and/or co-finance with third parties when appropriate. As part of this approach, we acquire or option IP at a stage where prior owners/creators have already invested meaningful development effort, enabling APHP to advance the material with targeted spend (e.g., WGA rewrites/polish, packaging, schedules and budgets) while maintaining financial discipline. Where appropriate, original developers may retain a contingent participation in future project revenues. We also intend to leverage industry-standard financing tools and to engage reputable third-party advisors (agencies, legal, sales agents, banks) on a project-by-project basis. 4 Execution focus across the filmmaking lifecycle. APHP participates principally in: ● Development & packaging: rights acquisition/optioning, story development, and attaching key creative elements; ● Financing: structuring pre-sales and other project-level funding sources; and ● Production planning: detailed budgets, schedules, incentive analysis, and risk mitigation (including completion bond evaluation where applicable). As of the date of this report, APHP continues to develop and evaluate projects in various stages of the pipeline. Initiatives described above are subject to market conditions, third-party approvals, availability of financing, and execution risks, and there can be no assurance that any specific project will be packaged, financed, produced, or commercially successful. Organizational Structure At present, the Company has no employees. We do, however, utilize the services of consultants. The Company is managed by its officers. Bannor Michael MacGregor is the CEO/President, Michael Blanchard is the Secretary, and Daniel Hirsch is the Treasurer, all report to a Board of Directors. At present, only Bannor Michael MacGregor is under a Consulting Agreement. Our Offices The Company maintains three virtual offices in New York, NY, Raleigh, NC, and Los Angeles, CA. Critical Accounting Policies and Estimates Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or “GAAP.” The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reported period. In accordance with GAAP, we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies are fully described in Note 2 to our financial statements appearing elsewhere in this Quarterly Report, and we believe those accounting policies are critical to the process of making significant judgments and estimates in the preparation of our financial statements. Cybersecurity Update APHP’s risk management program remains unchanged; see “Item 8. Cybersecurity” in our Annual Report on Form 10-K for a full discussion of our risk management and governance framework. COVID-19 Update To date, the COVID-19 pandemic has not had a material impact on the Company, particularly due to our current lack of operations. The pandemic may, however, have an impact on our ability to evaluate and acquire an operating entity through a reverse merger or otherwise. Off-Balance Sheet Arrangements None. 5 Results of Operations — Three Months Ended September 30, 2025 vs. 2024 Three months ended September 30, 2025 2024 Change $ Revenues $ - $ - $ - Cost of revenues - - - - - - Operating Expenses: General and administrative 67,743 315,570 (247,827 ) Research and development - - - Sales and marketing 7,027 - 7,027 Total Operating Expenses 74,770 315,570 (240,800 ) Net Operating Loss (74,770 ) (315,570 ) 240,800 Other Income (Expenses): Interest income - 1,332 (1,332 ) Interest expense (30,787 ) (12,276 ) (18,511 ) Net Other Income (Expenses) (30,787 ) (10,944 ) (19,843 ) Loss before income taxes (105,557 ) (326,514 ) 220,957 Income taxes - - - Net loss $ (105,557 ) $ (326,514 ) $ 220,957 Revenues and Cost of Revenues The Company had no revenue during the three months ended September 30, 2025 and September 30, 2024. General and Administrative Expenses General and administrative expenses for the three months ended September 30, 2025 were approximately $67,000 compared to approximately $316,000 for the three months ended September 30, 2024, a decrease of approximately $248,000 as management sought to significantly reduce operational spend to conserve cash resources. Sales and Marketing Expenses Sales and marketing expenses for the three months ended September 30, 2025 were approximately $7,000 compared to approximately $0 for the three months ended September 30, 2024, an increase of approximately $7,000. Other Income (Expense) Interest Income. Interest income for the three months ended September 30, 2025 and 2024 was minimal and consisted of interest earned on invested cash balances. 6 Interest Expense. Interest expense for the three months ended September 30, 2025 and 2024 was $30,787 and $12,276, respectively, and was primarily related to our Economic Injury Disaster Loan (“EIDL ”), commercial line of credit, related party working capital loans, and a loan a new promissory note entered into during the quarter. Liquidity and Capital Resources We had an accumulated deficit of approximately $8.7 million, incurred a net loss of approximately $106,000, and had cash outflows from operations of approximately $81,000 as of and for the three months ended September 30, 2025. Further, we expect to continue to incur significant costs in the pursuit of our business plans. We cannot assure you that our plans to raise capital or to complete our film development and production activities will be successful. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Since our inception, we have incurred significant operating losses. We expect to incur significant expenses and operating losses for the foreseeable future as we develop and produce feature films. To date, we have funded our operations with proceeds from sales of Common Stock and borrowings from related parties under promissory notes. As of September 30, 2025, our cash and cash equivalents were approximately $102,00 and we were not able to meet our current obligations as they became due and payable. Potential project distributions. Certain titles, including BARRON’S COVE, may generate future cash inflows to APHP under applicable distribution waterfalls. The timing and amount of any such inflows are uncertain and have not been assumed in our near-term liquidity plan. See Note 5 “Produced & Licensed Content” and Note 4 “Film Production Loans and Receivables”. Operating Activities During the three months ended September 30, 2025 and 2024, operating activities consumed approximately $81,000 and $34,000 of cash, respectively. Investing Activities During the three months ended September 30, 2025 and 2024, investing activities were $0. Financing Activities During the three months ended September 30, 2025, net cash provided by financing activities was $182,000 which was comprised of $115,000 of new debt financing and $312,000 of net new related party borrowings. During the three months ended September 30, 2024, net cash provided by financing activities was approximately $25,000 which and was comprised primarily of related party borrowings. 7 Results of Operations — Nine Months Ended September 30, 2025 vs. 2024 Nine months ended September 30, 2025 2024 Change $ Revenues $ - $ 23,003 $ (23,003 ) Cost of revenues - - - - 23,003 (23,003 ) Operating Expenses: General and administrative 1,293,606 2,197,584 (903,978 ) Research and development - 703 (703 ) Sales and marketing 8,857 25,325 (16,468 ) Total Operating Expenses 1,302,463 2,223,612 (921,149 ) Net Operating Loss (1,302,463 ) (2,200,609 ) 898,146 Other Income (Expenses): Interest income 44 1,818 (1,774 ) Interest expense (52,603 ) (28,281 ) (24,322 ) Net Other Income (Expenses) (52,559 ) (26,463 ) (26,096 ) Loss before income taxes (1,355,022 ) (2,227,072 ) 872,050 Income taxes - - - Net loss $ (1,355,022 ) $ (2,227,072 ) $ 872,050 Revenues and Cost of Revenues The Company had no revenue during the three months ended September 30, 2025 and September 30, 2024. The Company had no revenue during the nine months ended September 30, 2025. During the nine months ended September 30, 2024, the Company had revenues totaling $23,000 all of which were from the BUFFALOED CAMA. General and Administrative Expenses General and administrative expenses for the nine months ended September 30, 2025 were approximately $1,294,000 compared to approximately $2,198,000 for the nine months ended September 30, 2024, a decrease of approximately $904,000. The 2025 period included $379,000 of stock-based compensation expense compared to $1,258,000 in the 2024 period. The 2025 period also included the write-off of $196,200 of loans receivable that management determined were uncollectible, and the expiration of rights to a screenplay carried on the books at $150,834. Sales and Marketing Expenses Sales and marketing expenses for the nine months ended September 30, 2025 were approximately $9,000 compared to approximately $25,000 for the nine months ended September 30, 2024, a decrease of approximately $16,000. 8 Other Income (Expense) Interest Income. Interest income for the nine months ended September 30, 2025 and 2024 was minimal and consisted of interest earned on invested cash balances. Interest Expense. Interest expense for the nine months ended September 30, 2025 and 2024 was $21,816 and $16,005, respectively, and was primarily related to our Economic Injury Disaster Loan (“EIDL ”), commercial line of credit and related party working capital loans. Liquidity and Capital Resources Going concern, liquidity and plan. As of and for the nine months ended September 30, 2025, we had an accumulated deficit of approximately $8.6 million, incurred a net loss of approximately $1.4 million, and used approximately $325,000 of net cash in operating activities. Since inception, we have incurred significant operating losses and expect to continue to incur substantial expenses and operating losses as we develop and produce feature films. To date, we have funded operations primarily through sales of common stock and related-party borrowings under promissory notes. As of September 30, 2025, our cash and cash equivalents were approximately $102,000, we had current liabilities of approximately $1.7 million, and we have experienced a build in payables as certain expenditures have been deferred pending project financing and capital raises. We expect near-term cash requirements over the next 12 months to increase significantly, primarily for production development, G&A, and working capital. To address these requirements, we intend to utilize a combination of (i.) our Equity Line of Credit (“ELOC”) with RH2 Equity Partners, L.P., which permits, at our election and subject to conditions, sales of common stock over a 24-month period up to the lesser of $100.0 million or the “Maximum Common Stock Issuance”; (ii.) potential bridge financing and/or commercial credit lines; and (iii.) equity issuances or project-level financing. Availability under the ELOC is not assured and is subject to specified conditions and limitations; any issuances would be dilutive and could place downward pressure on our stock price. As of September 30, 2025, we had not sold any shares under the ELOC. We cannot assure you that our plans to raise capital or to complete our film development and production activities will be successful. These factors raise substantial doubt about our ability to continue as a going concern. Management believes that, if executed as planned, the actions described above would provide sufficient liquidity to fund operations; however, if we are unable to access the ELOC or other financing on acceptable terms, we may be unable to continue as a going concern. (See Note 7 “Notes Payable and Lines of Credit” for additional information regarding the ELOC). Operating Activities During the nine months ended September 30, 2025, operating activities consumed approximately $326,000 of cash. During the nine months ended September 30, 2024, operating activities used approximately $783,000 of cash, including providing a $396,000 of financing to film production companies. Investing Activities During the nine months ended September 30, 2025 and 2024, investing activities included approximately $0 and $22,000 of costs related to development of the Company’s website. Financing Activities During the nine months ended September 30, 2025, net cash provided by financing activities was $428,000 which was comprised of $312,000 of related party borrowings and $115,000 of new debt financing. 9 During the nine months ended September 30, 2024, net cash provided by financing activities was approximately $601,000 including $169,000 of proceeds from the sale of Common Stock and $454,000 of net working capital financing under a master loan agreement from a related party and a commercial line of credit. Impairment loss. Results for the nine months ended September 30, 2025 include a $196,200 non-cash impairment charge recorded in the second quarter of 2025 to write off the PNP Movie, LLC loan following extended default and uncertainty regarding the film’s completion. (See Note 4 “Film Production Loans and Receivables” Other Material Developments and Trends Ongoing Concerns. We continue to face significant liquidity challenges and have concluded that substantial doubt exists about our ability to continue as a going concern through the next 12 months. We plan to address this by seeking additional funding sources like a short-term bridge loan, a medium-term credit-line, and a significant longer-term financial raise and the Company has reduced operating costs, but there is no assurance we will succeed. We are aware of potential claims by two former consultants; see Note 10 and Item 1 — Legal Proceedings. At this time we cannot estimate a possible loss or range of loss. Liquidity and Capital Resources Equity Line of Credit. On September 12, 2025, we entered into an Equity Line of Credit Agreement with RH2 Equity Partners, L.P. providing us the right, but not the obligation, to direct the investor to purchase newly issued shares of our common stock over a 24-month term in an aggregate amount up to the lesser of $100.0 million or the Maximum Common Stock Issuance, subject to customary conditions and a related Registration Rights Agreement. The shares issuable under the facility, if and when issued, are to be offered and sold in reliance on Section 4(a)(2) and/or Rule 506 of Regulation D. As of September 30, 2025, we [had/had not] sold any shares pursuant to the ELOC and [had/had not] received proceeds. We filed the Agreements as exhibits to our Form 8-K on September 19, 2025. We believe the ELOC, together with other financing options, enhances our liquidity and financial flexibility; however, any issuances under the facility would dilute existing stockholders and could exert downward pressure on our stock price. Availability is also subject to specified conditions and limitations described in the Agreements. Loans and recoverability. Following the Q2 2025 write-off of the PNP Movie, LLC loan, we do not expect near-term cash inflows from this source. Our liquidity plan continues to rely on project-level receipts and financing, as discussed elsewhere in this report. See Note 4 “Film Production Loans and Receivables”. Critical Accounting Policies and Estimates Reference to the significant policies in the Notes and any material updates specific to Q3 2025 (e.g., impairment judgments, fair-value measurements). Off-Balance Sheet Arrangements None Cybersecurity Update Refer to 10-K Item 8 disclosures and note any changes during Q3 2025. 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk Not required for a smaller reporting company.