What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-04-14 · 144 added, 72 removed, 102 unchanged (68% of the section changed)

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See “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Form 10-K.

Picture House Corporation plans to be a premiere entertainment company with a focus on feature films, limited series, and content-enhancing

technologies.

APHP is managed by astute financiers and supported by seasoned creatives.

The Company plans to partner with top filmmakers,

showrunners, content developers, and strategic technology partners to develop, package, finance, and produce high-quality feature films

and shows with broad-market appeal.

The Company’s management and advisors have relationships with major studios, Streamers, leading

talent agencies, and proven foreign sales companies, which will empower the Company to offer A-list creatives (and convincing up-and-comers)

the opportunity to partner with a financier/producer that values passion and imagination and understands profitability.

plans to specialize in mid-budgeted productions where more than 100% of the budget can be collateralized by a film’s or show’s

intellectual property (‘IP”), unsold licensing sales projections, pre-sold licensing contracts, incentive agreements, tax

rebates, and grants.

The Company’s management and advisors will use these assets to limit risk and guarantee greater profitability.

The Company will strive to become synonymous with creative ability, financial sophistication, and leading-edge technology.

has optioned IP with the intent to co-finance and co-produce feature films and limited series shows.

The Company intends to embrace the

ever-evolving technologies that service the industry including innovative artificial intelligence (“AI”) tools and models.

Picture House Corporation (“APHP”) is an entertainment company focused on the development, packaging, financing and production

of feature films and limited series.

During 2025, we pivoted away from third-party consulting to concentrate on internally developed

projects and selective strategic partnerships.

We generally pursue two complementary approaches to participating in projects:

(i) structured

film finance and senior or priority recoupment positions, including senior secured production lending and first-priority receipt or recoupment

structures designed to prioritize return of capital;

and (ii) building an owned or controlled content library over time by acquiring

or optioning intellectual properties and, where appropriate, obtaining negative ownership or other control rights in projects.

structures and strategies are intended to reduce exposure relative to subordinated equity participation but do not eliminate risk, and

our financial results will depend on project performance, distribution outcomes, and the timing and amount of receipts.

seek to apply disciplined underwriting and structured deal terms to the independent film market, including through defined revenue waterfalls

and priority receipt positions where available.

Our portfolio includes projects in various stages of release and post-production, and

our ability to generate revenues sufficient to achieve profitability depends on the successful commercial exploitation of our projects,

including the timing and amount of receipts under applicable distribution and revenue-sharing arrangements.

From time to time, we may

issue equity or equity-linked instruments in connection with financings or as compensation for services, which may be dilutive to existing

stockholders.

ability to generate any revenue sufficient to achieve profitability will depend on the successful development, production, and distribution

of motion pictures.

We reported net losses of $2.3 million and $1.4 million for the years ended December 31, 2024 and 2023, respectively.

We reported net losses of $534,440 and $2.3 million for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, we had an accumulated deficit of approximately $7.8 million.

We expect to continue to incur significant expenses

and increasing operating losses until we begin receiving revenue from the distribution of our film properties.

and may continue to incur operating losses until we generate sufficient revenues to support our operations.

We expect that our expenses

and capital expenditures will increase substantially in connection with our ongoing activities including, but not limited to the following:

● Development

and production of current and future film properties;

acquisition of additional intellectual property rights and/or acquisition of intellectual property and production companies in the

entertainment industry;

acquisition of additional intellectual property rights and/or acquisition of intellectual

property and production companies in the entertainment industry;

development and production personnel to support our film production activities;

operational, legal, compliance, financial, investor relations, and management information systems personnel to support our development

and production and operations as a new public company.

operational, legal, compliance, financial, investor relations, and management information

systems personnel to support our development and production and operations as a new public

and Capital Resources

the next twelve months management plans to use borrowings and the sale of Common Stock to mitigate the effects of cash flow deficits;

however, no assurance can be given that debt or equity financing, if and when required, will be available on commercially reasonable

addition, certain financings may include convertible or equity-linked features (including variable conversion pricing and share reservation

mechanics) that could result in significant dilution to existing stockholders and downward pressure on our stock price.

to year end, on January 20, 2026, the Company completed a convertible note financing with Labrys Fund II, L.P.

for a cash purchase price

of $150,000, of which $114,000 was disbursed to the Company (net of placement agent fees, legal fees, and a repayment to the investor).

Developments (2025 and early 2026)

Entertainment Agreement / POSE option extension and BARRON’S COVE acquisition.

On August 1, 2025, the Company

entered into an agreement with SSS Entertainment, LLC to extend to December 31, 2025 its option to acquire a 24% ownership interest in

POSE for $725,000 and to acquire all rights, title and interest in the feature film BARRON’S COVE and related secured assets.

As consideration, the Company issued 500,000 shares of its common stock, allocated equally between the option extension and asset acquisition.

The agreement also set forth an inter-party revenue collection and allocation structure for BARRON’S COVE and included a

potential revenue-to-equity conversion feature, in each case subject to the terms of the agreement.

As described below, the parties amended

the revenue collection and allocation structure on December 29, 2025.

Entertainment amendment (Dec.

On December 29, 2025, the Company entered into Amendment No.

1 to its August 1, 2025 agreement

with SSS Entertainment, LLC, which (i) extended the Company’s option relating to POSE through March 31, 2026, and (ii) revised

the inter-party revenue collection and allocation structure for BARRON’S COVE by providing the Company a first-priority

right to receive Net Revenues until the Company has received $1,150,000, followed by an 85%/15% Net Revenue split to SSS and the Company,

respectively, until SSS has received the agreed recoupment amount, with all subsequent Net Revenues retained by the Company.

The amendment

also acknowledges uncertainties associated with the bankruptcy proceedings involving Yale Entertainment LLC and the potential impact

on enforcement, priority, and timing of collections.

Entertainment multi-film arrangement / Board approval (Jan.

Effective as of January 27, 2026, the Company and

SSS Entertainment, LLC entered into a Multi-Film Investment and Compensation Agreement that revised the parties’ commercial arrangement

with respect to POSE , contemplated Company funding relating to MOTION , and contemplated a potential additional investment

in an untitled SSS-produced motion picture, in each case subject to the terms of the agreement and applicable approvals.

Under that agreement,

the parties converted the prior POSE option-based payment structure into a fixed payment structure consisting of a $175,000 partial

payment and a $575,000 remaining payable due on or before January 31, 2027;

contemplated a $500,000 funding amount relating to MOTION

in exchange for an assigned economic interest;

and contemplated a $200,000 investment in an untitled SSS-produced picture, subject to

mutually agreed definitive documentation.

The agreement also contemplated certain equity-based consideration and incentive arrangements,

including credit-based share incentives and an option grant under the Company’s equity incentive plan, each subject to applicable

approvals and the terms of the agreement.

On March 12, 2026, the Board of Directors approved the Company’s entry into the Multi-Film

Investment and Compensation Agreement and ratified Amendment No.

1 effective December 29, 2025.

See Note 13 - Subsequent Events.

On August 30, 2025, Jonathan Sanger resigned as President.

On September 16, 2025, Donald J.

Harris resigned from the Board

of Directors.

Line of Credit.

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).

As of December 31, 2025, we had not sold any shares under the ELOC and had not

received proceeds.

Fund II promissory note.

On September 22, 2025, the Company issued an unsecured promissory note to Labrys Fund II, L.P.

with an original

principal amount of $115,000 and a twelve-month maturity.

The note includes customary covenants and events of default and provides for

amortization beginning March 23, 2026, subject to the note’s terms.

Subsequent to year end, the Company completed an additional financing with Labrys Fund II, L.P.

on January 20, 2026;

see Note 13 - Subsequent Events.

A related Current Report on Form 8-K had not been filed as of the date of this Annual Report and is being

filed separately.

of Our Results of Operations

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research activities and development of our projects.

We also anticipate that we will incur increased accounting, audit, legal,

regulatory, compliance, director and officer insurance, and investor and public relations expenses associated with operating as a public

We also anticipate that we will incur increased accounting, audit, legal, regulatory,

compliance, director and officer insurance, and investor and public relations expenses associated with operating as a public company.

Income (Expense)

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Total Operating Expenses

Net operating income (loss)

Net Operating Loss

Other Income (Expenses):

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Net Other Income (Expenses)

Income (loss) before income taxes

Net income (loss)

$ (2,270,258 )

Loss before income taxes

$ (2,270,258 )

the years ended December 31, 2024 and 2023, the Company reported revenues of approximately $53,000 and $201,000, respectively.

Approximately

$53,000 and $32,000 of the 2024 and 2023, respectively, of revenue relates to revenues generated from the licensed film Buffaloed .

The remainder of the 2023 revenues comes from contracts with customers for consulting services and from the licensing and distribution

of film and other entertainment rights.

of revenues for the years ended December 31, 2024 and 2023, were approximately $0 and $37,000 respectively.

The 2023 expense consist

of those costs directly related to the services being rendered.

A majority of the consulting services were performed by management and

members of the Board of Directors.

year-over-year change in results also reflects the Company’s 2025 full write-off of its PNP Movie, LLC loan receivable as an impairment

During 2025, the Company’s revenues were derived from amounts collected on receivables related to loans and

other project-level financing provided in connection with the production of the feature film BARRON’S COVE .

See Note 2, “Accounts receivable,” for discussion of the year-end $1,150,000 BARRON’S COVE -related priority receivable

arising from the Company’s contractual revenue collection rights under Amendment No.

1 dated December 29, 2025.

During the year

ended December 31, 2024, the Company reported revenues of approximately $53,000 from the licensed film BUFFALOED .

and Administrative Expenses

and administrative expenses for the year ended December 31, 2024, were approximately $2.3 million compared to approximately $1.5 million

for the year ended December 31, 2023, an increase of approximately $741,000.

The increase was primarily attributable to the Company recording

approximately $1,258,000 of stock option expense offset by a $322,000 reduction in legal and professional fees.

Additionally, the 2023

period included approximately $194,000 of bad debt expense.

We expect to see further increases as we grow our operations in future periods.

and administrative expenses for the year ended December 31, 2025, were approximately $1,403,000 compared to approximately $2,252,000

for the year ended December 31, 2024, a decrease of approximately $849,000.

The decrease was primarily attributable to the Company recording

approximately $379,000 of stock option expense in 2025 as compared to $1,258,000 in 2024.

We expect to see general and administrative

expenses to increase as we grow our operations in future periods.

Income (Expense)

Interest income for the years ended December 31, 2024 and 2023 was approximately $2,000 and $5,000, respectively, and consisted

of interest earned on invested cash balances.

Interest income for the years ended December 31, 2025 and 2024 was approximately $97,000 and $2,000, respectively.

period is primarily due to interest earned on the loan agreement with Barron’s Cove Movie, LLC.

Interest expense for the years ended December 31, 2025 and 2024 was approximately $71,000 and $46,000, respectively.

2024 expense included $24,000 of interest on working capital loans, $22,000 of related party interest, and $10,000 of EIDL interest.

The 2023 interest was primarily related to our Economic Injury Disaster Loan (“EIDL ”) and working capital loans.

and Capital Resources

indicated in the accompanying financial statements, we had an accumulated deficit of approximately $7.8 million, incurred a net loss

of approximately $2.2 million and cash outflow from operations of approximately $805,000 as of and for the year ended December 31, 2024.

of approximately $534,000 and cash outflow from operations of approximately $406,000 as of and for the year ended December 31, 2025.

Further, we expect to continue to incur significant costs in the pursuit of our business plans.

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These factors, among others, raise substantial doubt about our ability to continue as a going concern.

our inception, we have incurred significant operating losses.

We expect to incur significant expenses and operating losses for the foreseeable

future as we advance the preclinical and, if successful, the clinical development of our programs.

To date, we have funded our operations

with proceeds from sales of Common Stock and borrowings under convertible promissory notes.

As of December 31, 2024, we had negative

cash and cash equivalents of $21.

addition, on December 31, 2025, the Company’s Chief Executive Officer delivered a letter confirming a cash salary waiver (effective

January 1, 2025 through March 31, 2026) and a temporary standstill on transfers or conversions of his preferred shares during the same

inception, we have incurred operating losses and expect to continue to incur expenses as we pursue our business plan, including development,

packaging, financing, production, distribution, and commercialization of our film and content portfolio, and as we operate as a public

reporting company.

To date, we have funded operations primarily through equity issuances and debt financings (including related party

Our ability to improve operating results depends on the successful commercial exploitation of our projects, including the

timing and amount of receipts under applicable distribution and revenue-sharing arrangements, and there can be no assurance that additional

capital will be available on acceptable terms, or at all.

As of December 31, 2025, we had cash and cash equivalents of $124.

the year ended December 31, 2025, operating activities used approximately $405,000 of cash, primarily resulting from our net loss of

approximately $534,000, partially offset by non-cash.

the year ended December 31, 2024, operating activities used approximately $805,000 of cash, primarily resulting from our net loss of

approximately $2.3 million, partially offset by non-cash charges of approximately $1.4 million.

the year ended December 31, 2023, operating activities used approximately $1.1 million of cash, primarily resulting from our net loss

of approximately $1.4 million, partially offset by non-cash charges of approximately $353,000.

the year ended December 31, 2024, net cash used by financing activities was approximately $22,000 comprised of investment in intangible

the year ended December 31, 2023, net cash used by financing activities was approximately $73,000 comprised of investment in intangible

the year ended December 31, 2024, net cash provided by financing activities was approximately $623,000, derived primarily from related

party borrowings of $358,000, $357,000 of net borrowings on a commercial line of credit, and $169,000 from the sale of common stock.

the year ended December 31, 2023, net cash provided by financing activities was approximately $1.467 million, derived primarily from

Additionally, during 2024 the Company borrowed and repaid $178,500 from Mr.

MacGregor under a working capital borrowings

expect our expenses to increase substantially in connection with our ongoing film development and production activities.

transition from the OTC markets to an SEC registrant will increase our reporting and compliance cost.

the years ended December 31, 2025 and 2024, net cash used by financing activities was approximately $0 and $22,000, respectively comprised

of investment in intangible assets.

the year ended December 31, 2025, net cash provided by financing activities was approximately $406,000, consisting primarily of $115,000

of proceeds from issuance of note payable, $381,822 of proceeds from debt borrowings - related parties, $(92,234) of repayments of debt

borrowings - related parties, and $1,050 of proceeds from a commercial line of credit.

the year ended December 31, 2024, net cash provided by financing activities was approximately $623,000, consisting primarily of $387,931

of proceeds from debt borrowings - related parties, $(30,310) of repayments of debt borrowings - related parties, $142,600 of proceeds

from a commercial line of credit, $(45,745) of repayments on the commercial line of credit, and $169,000 of proceeds from the sale of

common stock.

We expect our expenses to increase substantially in connection with our ongoing film development and production activities.

In addition, as a public reporting company, we expect to continue to incur increased reporting, compliance, legal, accounting and other

administrative costs.

such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity

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As applicable

to these financial statements, the most significant estimates and assumptions include (i.) determining the need for an allowance for

doubtful accounts (ii.) impairment of long-lived assets;

(iii.) deferred income taxes and (iv.) measurement of the fair value of equity

to these financial statements, the most significant estimates and assumptions include (i) determining the need for an allowance for doubtful

accounts (ii) impairment of long-lived assets;

(iii) deferred income taxes and (iv) measurement of the fair value of equity awards.

Sheet Arrangements

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rules and regulations of the SEC.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis