What changed in this filing

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Item 1. Financial Statements

2026-08-14 compared with 2026-05-14 · 405 added, 310 removed, 227 unchanged (76% of the section changed)

1 unchanged sentence

PICTURE HOUSE CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS AS OF MARCH 31, 2026

CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2026

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets, March 31, 2026 (unaudited) and December 31, 2025

Condensed Consolidated Statements of Operations, for the three months ended March 31, 2026 and 2025

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit), for the three months ended March 31, 2026 and 2025

Condensed Consolidated Statements of Cash Flows, for the three months ended March 31, 2026 and 2025

Notes to Condensed Consolidated Financial Statements

Consolidated Balance Sheets, June 30, 2026 and December 31, 2025

Consolidated Statements of Operations, for the three and six months ended June 30, 2026 and 2025

Consolidated Statements of Changes in Stockholders’ Equity (Deficit), for the three and six months ended June 30, 2026 and

Consolidated Statements of Cash Flows, for the six months ended June 30, 2026 and 2025

to Condensed Consolidated Financial Statements

PICTURE HOUSE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2026

CONSOLIDATED BALANCE SHEETS

June 30, 2026

December 31, 2025

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Loans receivable, film financing arrangements

Intangible assets, net of accumulated amortization of $ 48,417 and $ 42,583 as of March 31, 2026 and

Intangible assets, net of accumulated amortization of $ 54,250 and $ 42,583 as of June 30, 2026 and

December 31, 2025, respectively.

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1,000,000,000 authorized.

113,761,925 and 113,399,325 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively.

113,761,925 and 113,399,325 issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

Preferred Stock $ 0.0001 par value.

1,000,000 authorized.

3,839 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively.

3,839 issued and outstanding as of June 30, 2026 and December 31, 2025, respectively.

Additional paid in capital

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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

* Derived from

audited information.

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

Derived from audited information.

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

PICTURE HOUSE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended March 31,

CONSOLIDATED STATEMENTS OF OPERATIONS

months ended June 30,

Cost of revenues

2 unchanged sentences

Research and development

Sales and marketing

Total Operating Expenses

and marketing

Operating Expenses

Net Operating Loss

( 1,227,693 )

Other Income (Expenses):

Interest income

Interest expense

Net Other Income (Expenses)

Other Income (Expenses)

Loss before income taxes

1 unchanged sentence

$ ( 760,628 )

$ ( 242,697 )

$ ( 1,249,465 )

Net loss per common share - Basic and Diluted

2 unchanged sentences

PICTURE HOUSE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

the six months ended June 30, 2026 and 2025

Preferred Stock

Total Stockholders’

Stockholders’

Balance, December 31, 2024

5 unchanged sentences

$ ( 528,514 )

Preferred Stock

Additional Paid In

Stock Subscription

Stockholders’ Equity

Balance, December 31, 2025

Common Stock issued for services

Stock option compensation

Balance, June 30, 2025

$ ( 8,541,419 )

$ ( 1,106,107 )

Stockholders’ Equity

Balance, December 31, 2025

$ ( 7,826,394 )

1 unchanged sentence

Financing costs settled in shares of stock

Note payable ($ 5,754 ) and financing costs ($ 1,750 ) settled in shares of stock

Note payable ($ 5,754 )

and financing costs ($ 1,750 )

settled in shares of stock

Balance, March 31,

1 unchanged sentence

$ ( 405,282 )

Balance, June 30, 2026

$ ( 8,069,091 )

2 unchanged sentences

PICTURE HOUSE CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended March 31,

CONSOLIDATED STATEMENTS OF CASH FLOWS

ended June 30,

Cash Flows from Operating Activities:

2 unchanged sentences

$ ( 1,249,465 )

Adjustments to Reconcile Net Income (Loss) to Net Cash Flows from Operating Activities:

Reserve for uncollectible receivable

Expiration of produced and licensed costs

Adjustments to Reconcile

Net Income (Loss) to Net Cash Flows from Operating Activities:

Reserve for uncollectible

Expiration of produced

and licensed costs

Stock option expense

Commons stock issued for services

Preferred stock redeemed in exchange for assets

Note payable converted to equity

Financing costs paid in shares of common stock

Commons stock issued for

Preferred stock redeemed

in exchange for assets

Note payable converted

Financing costs paid in

shares of common stock

Amortization expense

Change in operating assets and liabilities:

Change in operating assets

and liabilities:

Accounts receivable

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Receivables - related party

Loans receivable, film financing arrangements

Loans receivable, film

financing arrangements

Produced and licensed costs

Cash overdraft

Accounts payable and accrued expenses

Interest payable - related parties

Interest payable - EIDL loan

Deferred revenue

Net Cash Flows from Operating Activities

Accounts payable and accrued

Interest payable - related

Interest payable - EIDL

Net Cash Flows from Operating

Cash Flows from Investing Activities:

Intangible assets

Net Cash Flows from Investing Activities

Net Cash Flows from Investing

Cash Flows from Financing Activities:

Proceeds from issuance of note payable

Proceeds from debt borrowings - related parties

Repayment of debt borrowings - related parties

Proceeds from commercial line of credit

Repayments on commercial line of credit

Proceeds from issuance

of note payable

Proceeds from debt borrowings

- related parties

Repayment of debt borrowings

- related parties

Proceeds from commercial

line of credit

Repayments on commercial

line of credit

Proceeds from note payable

Repayment of note payable

Proceeds from sale of Common Stock

Net Cash Flows from Financing Activities

from sale of Common Stock

Net Cash Flows from Financing

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Period

Cash and Cash Equivalents, End of Period

Cash and Cash Equivalents,

Beginning of Period

Cash and Cash Equivalents,

End of Period

Non-cash Financing and Investing Activities:

Notes payable converted to Common Stock

Financing costs paid in Common Stock

Notes payable converted

to Common Stock

Financing costs paid in

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

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2025, the Company pivoted away from third-party consulting to concentrate on internally developed projects and selective strategic partnerships.

As of March 31, 2026, APHP’s project participation includes BARRON’S COVE, POSE, THIEVES HIGHWAY, PROTECTOR and MOTION.

As of June 30, 2026, APHP’s project participation includes BARRON’S COVE, POSE, THIEVES HIGHWAY, PROTECTOR and MOTION .

BARRON’S COVE, POSE and THIEVES HIGHWAY were released in 2025;

PROTECTOR was released in U.S.

theaters on March

and MOTION remained in post-production during the quarter.

Company had no employees as of March 31, 2026 and continued to rely on consultants and other independent contractors for corporate operations

March 6, 2026;

THE LAST TEMPTATION OF BECKY (“ BECKY III ”) and MOTION both were in post-production.

Company had no employees as of June 30, 2026 and continued to rely on consultants and other independent contractors for corporate operations

and project-level activities.

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equivalents are short-term highly liquid investments with original maturities of three months or less when acquired.

Checks issued in

excess of available bank balances are classified as a book overdraft within accounts payable and accrued expenses.

receivable primarily consist of trade receivables due from customers for consulting services and from fees derived from licensing of

IP to content providers worldwide.

As of March 31, 2026, accounts receivable was related to the BUFFALOED CAMA (see Assigned Rights

As of June 30, 2026, accounts receivable was related to the BUFFALOED CAMA (see Assigned Rights

to feature film, BUFFALOED below) and collection service fees related to the Company’s contractual revenue collection rights

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an aggregate of $ 1,150,000 (the “APHP Priority Amount”).

Accordingly, the $ 1,150,000 accounts receivable balance reflects

the Company’s contractual priority receivable / collection right at year-end.

There was no bad debt expense for the quarters ended

March 31, 2026 and 2025 and no additional allowance for doubtful accounts for the periods ended March 31, 2026 and December 31, 2025.

There was no bad debt expense for the three and six months ended

June 30, 2026 and 2025 and no additional allowance for doubtful accounts for the periods ended June 30, 2026 and December 31, 2025.

Schedule of Accounts Receivable

March 31, 2026

December 31, 2025

Accounts receivable, CAMA

Accounts receivable, Collection Service Fees

Accounts receivable,

Collection Service Fees

Accounts receivable

and Licensed Content Costs

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Schedule of Produced and Licensed Content Costs

March 31, 2026

December 31, 2025

Films in development and pre-production stage

Films in development

and pre-production stage

Produced and licensed

Completed Released In November 2022, the Company obtained certain limited rights to the feature film BUFFALOED from Bold Crayon,

(“BC”), including a secured position of a one million three hundred eighty-thousand-dollar ($ 1,380,000.00 USD) receivable

against the film’s revenues as per the film’s Cash Asset Management Agreement (“CAMA”) and a 35 % share of the

profits generated thereafter (“the BC Assets”).

During the quarters ended March 31, 2026 and 2025, the Company reported revenues

of $ 1,220 and $ 0 , respectively, from the CAMA.

partial consideration for the BC Assets being acquired by APHP hereunder, APHP agreed to pay BC the first one hundred thirty thousand

dollars ($ 130,000.00 USD) that APHP collected from the BUFFALOED and to deliver one Preferred Share to BC for each ten thousand

dollars ($ 10,000.00 USD), in value paid to APHP from the BUFFALOED receivable above the one hundred thirty thousand dollars ($ 130,000.00

USD), not to exceed one hundred twenty- five ( 125 ) Preferred Shares.

As of March 31, 2025, BC was due to receive 20 Preferred Shares

These Preferred Shares were issued to BC at the end of April 2025.

HALF-ACRE / ASK CHRISTINE, disposition of project rights.

On March 11, 2025, the Company entered into an agreement pursuant to

which it assigned to the Company’s past president, Alfred John Luessenhop, Jr.

(“Luessenhop”) all of the Company’s

and certain affiliated entities’ rights, title, and interest in the motion picture project DEVIL’S HALF-ACRE , and

assigned the screenplay and option agreement for ASK CHRISTINE , in each case effective upon completion of Luessenhop’s transfer

to the Company of 1,000,000 shares of the Company’s common stock (valued at $ 256,000 ).

The Company also agreed to assign to Luessenhop

the Company’s rights under certain software license and cloud services agreements, subject to the terms of the agreement.

In November 2022, the Company obtained certain limited rights to the feature film BUFFALOED from Bold Crayon,

(“BC”), including a secured position of a one million three hundred eighty-thousand-dollar ($ 1,380,000.00

USD) receivable against the film’s revenues as per the

film’s Cash Asset Management Agreement (“CAMA”) and a 35 %

share of the profits generated thereafter (“the BC Assets”).

During the three months ended June 30, 2026 and 2025, the Company

reported revenues of $ 0

respectively, from the CAMA.

During the six months ended June 30, 2026 and 2025, the Company reported revenues of $ 1,220

respectively, from the CAMA.

APHP acquired a first-priority recoupment/loan position related to this title in August 2025.

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actually received by the Company from exploitation of BARRON’S COVE .

Under the amendment, the Company is entitled to receive

100% of Net Revenues until it has received an aggregate $ 1,150,000 , after which Net Revenues are allocated 85% to SSS and 15% to the

Company until SSS has received the specified recoupment amount, and thereafter 100% of subsequent Net Revenues are retained by the Company.

The amendment also provides for quarterly statements and inspection rights and requires remittance timing for amounts payable to SSS.

The amendment further acknowledges uncertainty relating to bankruptcy proceedings involving Yale Entertainment LLC and the potential

impact on enforcement, priority, or timing of collections.

Completed Released .

APHP earned an “in Association with” credit and holds an option to purchase a 24 % ownership position

through December 31, 2025, which would require an additional investment of $ 725,000 to exercise.

As of September 30, 2025, the option

had not been exercised.

The Company carried this asset at $ 300,000 as of September 30, 2025.

Completed Released .

APHP earned an “In Association With” credits.

The Company issued 250,000 shares to Mr.

Sanghani as consideration attributed to this title in Q4 2025.

Completed Released.

APHP earned an “In Association With” credits.

The Company issued 250,000 shares to Mr.

consideration attributed to this title in Q4 2025.

the amendment, the Company is entitled to receive 100% of Net Revenues until it has received an aggregate $ 1,150,000 ,

after which Net Revenues are allocated 85% to SSS and 15% to the Company until SSS has received the specified recoupment amount, and

thereafter 100% of subsequent Net Revenues are retained by the Company.

amendment further acknowledges uncertainty relating to bankruptcy proceedings involving Yale Entertainment LLC and the potential impact

on enforcement, priority, or timing of collections.

The Company’s POSE arrangement was restructured pursuant to the Multi-Film Investment and Compensation Agreement with

SSS effective January 27, 2026.

APHP earned an “In Association With” credit.

APHP earned an “In Association With” credit;

PROTECTOR was released in U.S.

theaters on March

TEMPTATION OF BECKY.

not yet released.

On May 26, 2026, the Company entered into a Master Investment and Co-Production

Agreement with Becky III The Movie LLC and Russell Posternak (executed June 3, 2026) relating to the motion picture The Last Temptation

of Becky (referred to in the agreement as “BECKY 3”).

Under the agreement, the Company is entitled to a $360,000 senior equity

recoupment preference, a participation in distribution fees, and related co-production and credit rights, in consideration of 250,000

shares of common stock and options to purchase 300,000 shares of common stock at an exercise price of $0.20 per share.

The shares and

options were issued on August 6, 2026;

accordingly, no amount attributable to this title is included in produced and licensed content

costs at June 30, 2026.

See Note 9 – Subsequent Events.

The picture had its world premiere at the Fantasia International Film Festival

in Montreal on July 25, 2026 and is to be distributed by Quiver Distribution.

As of the date of this report, no theatrical release date

had been announced and the Company had collected no amounts in respect of its senior equity recoupment preference.

In post-production.

APHP anticipates co-producing and co-financing the film with SSS Entertainment.

Management reviews produced and licensed content costs for impairment when events indicate that the carrying amount may not

be recoverable.

Pursuant to the Multi-Film Investment and Compensation Agreement with SSS Entertainment, LLC effective January

27, 2026, the Company agreed to provide a $500,000 funding amount relating to MOTION in exchange for an assigned economic interest attributable

to such funding.

The Company satisfied this funding obligation during the six months ended June 30, 2026 on a non-cash basis, and the

related content interest is included in produced and licensed content costs at June 30, 2026.

The Company is entitled to a production

company credit pursuant to applicable agreements.

As of the date of this report, no release date had been announced.

Company’s intangible assets include in-service and under-development websites and licensed internal use software.

1 unchanged sentence

costs of the Company’s websites placed into service were subject to straight-line amortization over a three-year period.

expense totaled $ 5,834 and $ 5,833 for the quarters ended March 31, 2026 and 2025, respectively.

expense totaled $ 5,833 and $ 5,833 for the three months ended June 30, 2026 and 2025, respectively.

Amortization expense totaled $ 11,667

and $ 11,667 for the six months ended June 30, 2026 and 2025, respectively.

revenue represents the amount billed to clients that has not yet been earned, pursuant to agreements entered into in current and prior

As of March 31, 2026 and December 31, 2025, total net deferred revenue was $ 50,000 and $ 50,000 , respectively.

As of June 30, 2026 and December 31, 2025, total net deferred revenue was $ 50,000 and $ 50,000 , respectively.

The $ 50,000 in

deferred revenue relates to the grant of a producer credit to a proposed film.

and Costs from Services and Products – Historically, Company’s revenue comes from contracts with customers for

consulting services and from the licensing and distribution of film and other entertainment rights.

The consulting services typically

relate to development of business strategy and monetization of intellectual property rights.

The Company accounts for a contract with

a customer when there is an enforceable contract between the Company and the customer, the rights of the party are identified, the contract

has economic substance, and collectability of the contract is considered probable.

Historically, the term of these consulting agreements

has been approximately three to six months in duration.

The Company’s revenue is measured based on considerations specified in

the contract with each customer.

Accounting Standards Codification (“ASC”) 606 allows for adoption of an “as invoiced”

practical expedient that allows companies to recognize revenue in the amount to which the entity has a right to invoice when they have

a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s

performance completed to date.

The Company has elected to adopt this practical expedient with regards to its consulting services revenue.

Revenues for the three months ended March 31, 2026 and 2025 totaled $ 1,220 and $ 0 , respectively.

from Films and Licensed Rights , are calculated based on expected ultimate revenues estimated over a period not to exceed ten

years following the date of initial release of the motion picture.

For an episodic television series, the period over which ultimate

revenues are estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five

years from the date of delivery of the most recent episode, if later.

For titles included in acquired libraries, ultimate revenue includes

estimates over a period not to exceed twenty years following the date of acquisition.

derived from the BUFFALOED CAMA totaled $ 1,220 and $ 0 for the quarters ended March 31, 2026 and 2025, respectively.

Value Measurements – The Company measures and discloses fair value in accordance with the ASC Topic 820, Fair Value

Measurements and Disclosures which defines fair value, establishes a framework and gives guidance regarding the methods used for measuring

fair value, and expands disclosures about fair value measurements.

Fair value is an exit price, representing the amount that would be

received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in

pricing an asset or liability.

As a basis for considering such assumptions there exists a three-tier fair-value hierarchy, which prioritizes

the input used in measuring fair value as follows:

1 - unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to

access as of the measurement date.

2 - pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly

observable through corroboration with observable market data.

3 - pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity

for the non-financial asset or liability at the measurement date.

The inputs into the determination of fair value require significant

management judgment or estimation.

Level 3 inputs are considered as the lowest priority within the fair value hierarchy.

The valuation

of the right to obtain control over affiliated company, right to acquire shares of other companies, contingent consideration to be paid

upon achieving of performance milestone, certain convertible bridge loans (following the maturity date and thereafter) and certain freestanding

stock warrants and bifurcated convertible feature of convertible bridge loans issued to the units’ owners, fall under this category.

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

fair value of cash and cash equivalents is based on its demand value, which is equal to its carrying value.

Additionally, the carrying

value of all other short- term monetary assets and liabilities are estimated to be equal to their fair value due to the short-term nature

of these instruments.

of Long-Lived Assets – The Company evaluates whether events or circumstances have occurred which indicate that the carrying

amounts of long-lived assets (principally produced and licensed content costs) may be impaired or not recoverable.

The significant

factors that are considered that could trigger an impairment review include:

changes in business strategy, market conditions, or the

manner of use of an asset;

underperformance relative to historical or expected future operating results;

and negative industry or economic

In evaluating an asset for possible impairment, management estimates that asset’s future undiscounted cash flows and appraised

values to measure whether the asset is recoverable.

The Company measures the impairment based on the projected discounted cash flows

of the asset over its remaining life.

Compensation – The Company follows U.S.

GAAP, which requires all stock-based compensation to employees, including the grant

of employee stock options, to be recognized in the statement of operations based on its fair value.

Awards outstanding are accounted

for using the accounting principles originally applied to the award.

The expense associated with share-based compensation is recognized

on a straight-line basis over the service period of each award.

Refer to Note 6 for additional information related to this stock-based

compensation plan.

Company accounts for income taxes under FASB ASC 740, “ Accounting for Income Taxes” .

Under FASB ASC 740, deferred

tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement

carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured

using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered

Under FASB ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in

the period that includes the enactment date.

FASB ASC 740-10-05, “ Accounting for Uncertainty in Income Taxes” prescribes

a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or

expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained

upon examination by taxing authorities.

amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate

The Company assesses the validity of its conclusions regarding uncertain tax positions quarterly to determine if facts or

circumstances have arisen that might cause it to change its judgment regarding the likelihood of a tax position’s sustainability

and Costs from Services and Products

Company’s revenue is derived from contracts with customers for consulting services and from the licensing and distribution of film

and other entertainment rights.

The Company has elected the ASC 606 “as invoiced” practical expedient with respect to its

consulting services revenue.

Revenue from films and licensed rights, including amounts received under cash asset management arrangements,

is recognized when collection is deemed probable;

ultimate revenues are estimated over a period not to exceed ten years following the

date of initial release of the motion picture.

Cost of revenues includes only those costs directly related to the services rendered.

Revenues totaled $ 0 and $ 0 for the three months ended June 30, 2026 and 2025, respectively, and $ 1,220 and $ 0 for the six months ended

June 30, 2026 and 2025, respectively.

All revenue recognized during the three and six months ended June 30, 2026 and 2025 was derived

from film and licensed rights arrangements;

the Company had no consulting services revenue in either period.

Contract liabilities consist

solely of deferred revenue as disclosed above;

the Company had no contract assets at June 30, 2026 or December 31, 2025.

Value Measurements

Company measures and discloses fair value in accordance with ASC Topic 820, Fair Value Measurements and Disclosures.

Fair value is an

exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date.

The three-tier fair-value hierarchy prioritizes the inputs used in measuring fair

Level 1 – unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – observable inputs

other than quoted prices;

and Level 3 – unobservable inputs.

The carrying value of cash and cash equivalents and all other short-term

monetary assets and liabilities are estimated to approximate their fair value due to the short-term nature of these instruments.

of Long-Lived Assets

Company evaluates whether events or circumstances have occurred which indicate that the carrying amounts of long-lived assets (principally

produced and licensed content costs) may be impaired or not recoverable, and measures impairment based on the projected discounted cash

flows of the asset over its remaining life.

Company follows U.S.

GAAP, which requires all stock-based compensation, including the grant of employee stock options, to be recognized

in the statement of operations based on its fair value, recognized on a straight-line basis over the service period of each award.

to Note 6 for additional information.

Company accounts for income taxes under FASB ASC 740.

Deferred tax assets and liabilities are recognized for the future tax consequences

attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective

tax bases, measured using enacted tax rates.

A tax position must be more-likely-than-not to be sustained upon examination for the related

benefit to be recognized.

The Company assesses its uncertain tax positions quarterly.

Loss Per Share

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only to the extent they are not anti-dilutive.

For the quarter ended March 31, 2026, potentially dilutive securities included Series

A preferred shares and outstanding stock options.

For the three and six months ended June 30, 2026, potentially dilutive securities included

Series A preferred shares and outstanding stock options.

Schedule of Anti-dilutive Securities Excluded from Computation of Weighted Average Common Shares Outstanding

March 31, 2026

December 31, 2025

Convertible Preferred Stock

Stock options

In addition to the securities presented above, at

June 30, 2026 the Company had outstanding convertible notes payable under which shares of common stock may be issued upon conversion.

Because the conversion price is variable and is determined by reference to the market price of the Company’s common stock at the time

of conversion, the number of shares issuable upon conversion is not determinable as of the reporting date and has therefore not been

included in the table.

The Company has reserved an initial 12,000,000 shares of common stock for potential issuance upon conversion of

the notes, subject to adjustment in accordance with their terms.

Company operates as one reportable segment.

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accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern.

As of March 31, 2026, the Company had a working capital deficit of approximately $ 1,452,000 ,

an accumulated deficit of $ 7,997,633 ,

and cash and cash equivalents of approximately $ 22,000 .

These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the

date the financial statements are issued.

of June 30, 2026, the Company had a working capital deficit of approximately $ 1.5 million, an accumulated deficit of $ 8.1 million, and

had no cash on hand and a book overdraft of $ 767 .

These conditions raise substantial doubt about the Company’s ability to continue

as a going concern within one year after the date the financial statements are issued.

current plan to address these conditions includes continued project monetization efforts, borrowings from related parties or third parties,

equity issuances or equity-linked financings, and disciplined management of operating expenditures.

During the first quarter of 2026,

the Company entered into a convertible note financing with Labrys Fund II, L.P.

and also continued to implement project-level arrangements

with SSS Entertainment, LLC.

There can be no assurance that these efforts will be successful.

related transfer agent instructions, the Company authorized its transfer agent to reserve an initial 12,000,000 shares of common stock

for potential issuance upon conversion and to adjust the reserve from time to time consistent with the note’s terms and limitations.

The note’s conversion price is based on a discount to market prices over a specified trading-day lookback period, and conversions

are subject to beneficial ownership limitations.

During the quarter ended March 31, 2026, Labrys converted $ 5,754 of principal together

with $ 1,750 for fees, $ 7,504 in total, into 162,600 shares of Common Stock at a conversion price of $ 0.04615 per share of Common Stock.

There can be no assurance that these

efforts will be successful.

4 – Notes Payable

Injury Disaster Loan

Company’s EIDL obligation had a carrying value of $ 149,900 at December 31, 2025, with accrued interest of $ 6,086 .

The loan bears

interest at 3.75 % per annum and is secured by substantially all of the Company’s tangible and intangible assets.

Insert the March

31, 2026 accrued interest and current/non-current presentation analysis.

Company’s EIDL obligation had a carrying value of $ 149,900 at June 30, 2026, with accrued interest of $ 5,220 .

The Company’s

EIDL obligation had a carrying value of $ 149,900 at December 31, 2025, with accrued interest of $ 6,086 .

The loan bears interest at 3.75 %

per annum and is secured by substantially all of the Company’s tangible and intangible assets.

Line of Credit

American Express line of credit balance was $ 97,905 at March 31, 2026 and December 31, 2025.

Borrowings bear interest at rates ranging

from approximately 16.09 % to 34.3 % and are personally guaranteed by Mr.

American Express line of credit balance was $ 97,905 at June 30, 2026 and $ 97,905 at December 31, 2025.

Borrowings bear interest at rates

ranging from approximately 16.09 % to 34.3 % and are personally guaranteed by Mr.

note financing (Labrys Fund II)

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The purchase price was disbursed such that $ 114,000 was wired to the Company, $ 7,500 was

paid to the placement agent (Enclave Capital LLC) for the Company’s benefit, $ 25,000 was directed to the investor for repayment

of a portion of a prior promissory note, and $ 3,500 was withheld for the investor’s legal fees.

the quarter ended March 31, 2026, Labrys converted $ 5,754 of principal together with $ 1,750 for fees, $ 7,504 in total, into 162,600 shares

of Common Stock at a conversion price of $ 0.04615 per share of Common Stock.

paid to the placement agent (Enclave Capital LLC), $ 25,000 was directed to the investor for repayment of a portion of a prior promissory

note, and $ 3,500 was withheld for the investor’s legal fees.

There were no additional borrowings under this note during the quarter

ended June 30, 2026.

the six months ended June 30, 2026, Labrys converted $ 7,504

of principal (and fees) into 162,000

shares of Common Stock at a conversion price of $ 0.04615

per share of Common Stock.

There were no principal conversions

during the quarter ended June 30, 2026.

Subsequent to June 30, 2026, the 200,000 commitment

shares issued in connection with the January 20, 2026 financing ceased to be held in restricted book-entry form with the Company’s transfer

agent and became available for resale.

note financing (Quick Capital, LLC)

April 17, 2026, the Company entered into a securities purchase agreement with Quick Capital, LLC (“Quick”) pursuant to which

the Company issued a 12 % promissory note in the aggregate principal amount of $ 31,250 (which includes an original issue discount of $ 22,500 )

in exchange for a cash purchase price of $ 23,000 .

The note has a twelve-month maturity from the issue date and contains conversion features

subject to the note’s terms and limitations.

The purchase price was disbursed such that $ 23,000 was wired to the Company, $ 2,000 was paid to the placement

agent (Enclave Capital LLC), and $ 2,500 was withheld for the investor’s legal fees.

the six months ended June 30, 2026, Labrys converted $ 7,504 of principal (and fees) into 162,000 shares of Common Stock at a conversion

price of $ 0.04615 per share of Common Stock.

There was no principal conversions during the quarter ended June 30, 2026.

5 – Related Party Debt and Interest

Payable – Mr.

the quarter ended March 31, 2026, the Company borrowed $ 0

from and repaid $ 112,337

of principal and $ 18,300 of accrued interest to Mr.

the three months ended June 30, 2026, the Company borrowed $ 2,626 from and repaid $ 17,973 of principal to Mr.

MacGregor pursuant to a

master loan agreement.

During the six months ended June 30, 2026, the Company borrowed $ 2,626 from and repaid $ 130,310 of principal to

MacGregor pursuant to a master loan agreement.

The master note agreement accrues

interest at a rate of 4.4 %

due and payable in a lump sum upon maturity of the obligation.

The master note agreement accrues interest at a rate of 4.4 % due and payable in a

lump sum upon maturity.

This note is not convertible.

As of June 30, 2026, the Company owed $ 210,525 of principal and $ 2,788 of accrued

interest on this note.

As of December 31, 2025, the Company owed $ 338,209 of principal and $ 16,676 of accrued interest on this note.

Morgan Private Family Trust Loan Agreement (“NMPFT”)

the quarter ended March 31, 2026, Company did no t borrow or repay any loan principal from a family trust related to Mr.

MacGregor pursuant

to a master loan agreement.

The master note agreement accrues interest at a rate of 4.4 % due and payable in a lump sum upon maturity

of the obligation.

the six months ended June 30, 2026, the Company did not borrow or repay any principal from the family trust.

The master note agreement

accrues interest at a rate of 4.4 % due and payable in a lump sum upon maturity.

This note is not convertible.

$ 200,000 of these loan proceeds were used to fund the senior mezzanine loan to Barron’s

Cove Movie, LLC.

$ 200,000 of these loan

proceeds were used to fund the senior mezzanine loan to Barron’s Cove Movie, LLC.

As of June 30, 2026, the Company owed $ 309,000

of principal and $ 32,758 of accrued interest on this note.

As of December 31, 2025, the Company owed $ 309,000 of principal and $ 25,524

of accrued interest on this note.

6 – Equity and Stock-Based Compensation

2 unchanged sentences

and Preferred Shares.

As of March 31, 2026 and December 31, 2025, the Company had 113,761,925 and 113,399,325 common shares and 3,839

As of June 30, 2026 and December 31, 2025, the Company had 113,761,925

and 113,399,325

common shares and 3,839

Series A preferred shares issued and outstanding.

As of May 13, 2026, the Company disclosed 113,761,925 common shares and 3,839 Series

A preferred shares issued and outstanding.

Commitment Shares.

In connection with the January 20, 2026 Labrys financing, the Company agreed to issue 200,000 shares of common stock

as commitment shares.

March 2026, Labrys converted $ 5,754 of principal together with $ 1,750 for fees, $ 7,504 in total, into 162,600 shares of Common Stock

at a conversion price of $ 0.04615 per share of Common Stock.

As of March 25, 2026, 3,833,471 stock options remained outstanding and exercisable.

As of August 13, 2026, the Company had 114,691,925 common shares and 3,839 Series A

preferred shares issued and outstanding.

Share Issuances Subsequent to June 30,

On August 6, 2026, the Company issued an aggregate of 930,000

shares of common stock, consisting of 250,000

shares issued in connection with the BECKY 3 Master Investment and Co-Production Agreement described in Note 9.

Additionally, 680,000

shares were issued to three holders as described in Note 9.

All such shares were issued as restricted securities bearing customary

restrictive legends.

As of August 13, 2026, the Company had 114,691,925

shares of common stock issued and outstanding.

Option grants to SSS Entertainment.

The Multi-Film

Investment and Compensation Agreement with SSS Entertainment, LLC contemplates the grant of nonqualified stock options to purchase an

aggregate of 2,500,000 shares of common stock at an exercise price of $ 0.20 per share to Shaun Sanghani or his designees, assigns or nominees,

subject to Board and/or committee approval, availability under the Company’s equity incentive plan, and execution of applicable award

documentation.

As of June 30, 2026, no such options had been granted, no grant date had been established for accounting purposes, and

no compensation cost had been recognized.

Effective July 1, 2026, the Board of Directors approved the grant of options to purchase an

aggregate of 700,000 shares to four designees.

The remaining 1,800,000 options contemplated by the agreement have not been approved or

As of June 30, 2026 and December 31, 2025, 3,583,471

and 3,833,471 stock options,

respectively, remained outstanding and exercisable.

On August 6, 2026, the Company granted options to purchase 300,000 shares of common stock at an exercise price of

$ 0.20 per share, with a term expiring May 26, 2028, in connection with the BECKY 3 Master Investment and Co-Production Agreement

described in Note 9.

Those options become exercisable only in proportion to the Company’s actual collection of its $ 360,000 senior equity

recoupment entitlement, at a ratio of one option share for each $ 1.20 collected.

No amounts had been collected as of the date of this

report, and accordingly none of those options were exercisable.

The Company also granted options to purchase an aggregate of 700,000 shares

of common stock effective July 1, 2026 to designees of SSS Entertainment, LLC.

7 – Commitments and Contingencies

2 unchanged sentences

5220010741) and Michael Jones v.

American Picture House Corporation (JAMS

American Picture House Corporation

(JAMS Case No.

5220010727), with JAMS advising that the Jones matter had been consolidated with the Sanger-caption matter.

The Company disputes

the claims asserted and reserves all rights, objections and defenses, including with respect to commencement, service and arbitrability.

Based on information currently available, management could not conclude that a loss was probable or reasonably estimable.

disputes the claims asserted and reserves all rights, objections and defenses, including with respect to commencement, service and arbitrability.

BECKY 3 Master Investment and Co-Production

Effective May 26, 2026, and executed on June 3, 2026, the Company entered into a Master Investment and Co-Production Agreement

and related ancillary agreements with Russ Posternak and Becky III The Movie LLC with respect to the motion picture BECKY 3 .

Company is not obligated to fund any cash under the agreement.

The Company is treated for economic purposes as having made a $ 300,000

senior equity investment in the picture, entitling it to recoup $ 360,000 out of the picture waterfall on a senior equity basis, pari passu

with up to $ 300,000 of other senior equity, together with a distribution fee corridor participation, a participation in the producer’s

future BECKY -related producer fees and backend, and an assignment of certain collateral recovery rights.

As consideration, the

Company agreed to issue 250,000 shares of common stock and to grant two-year options to purchase 300,000 shares of common stock at an

exercise price of $ 0.20 per share, which options become exercisable proportionally as the Company collects its $ 360,000 recoupment entitlement.

At June 30, 2026, the Company’s obligation to issue those securities remained subject to approval by the Company’s Board of Directors

and other conditions precedent, and accordingly no shares had been issued, no options had been granted, and no amounts had been recorded

in the accompanying condensed consolidated financial statements.

The conditions were satisfied on August 6, 2026.

8 – Related Party Transactions

The following is a summary of related party transactions for the three months ended March 31, 2026 and 2025:

following is a summary of related party transactions for the three and six months ended June 30, 2026 and 2025:

salary waiver;

1 unchanged sentence

On December 31, 2025, Mr.

MacGregor, the Company’s Chief Executive

Officer and controlling stockholder, delivered a letter to the Company’s Board confirming that he is waiving any cash salary effective

January 1, 2025 through March 31, 2026, unless the Board expressly approves otherwise in a written resolution executed after the date

of the letter.

The letter also confirms that, during the same period, Mr.

MacGregor will not sell, transfer, pledge, or otherwise dispose

of any of his preferred shares and will not convert any preferred shares into common stock, except as required by operation of law or

pursuant to a written Board-approved exception documented in advance.

MacGregor, the Company’s Chief

Executive Officer and controlling stockholder, delivered a letter to the Company’s Board confirming that he is waiving any

cash salary effective January 1, 2025 through March 31, 2026, unless the Board expressly approves otherwise in a written resolution

executed after the date of the letter, and confirming a standstill on the sale, transfer, pledge, or conversion of his preferred

shares during the same period.

MacGregor has extended the salary waiver and preferred standstill until at least June 30,

fees / related party.

During the quarters ended March 31, 2026 and March 31, 2025, the Company incurred approximately $ 0 and $ 45,000 ,

During the three and six months ended June 30, 2025, the Company incurred approximately $ 45,000 and $ 90,000 ,

respectively, of professional fees to a legal firm affiliated with a former member of the Company’s Board of Directors.

31, 2026 and December 31, 2025, the Company had approximately $ 136,000 and $ 146,000 , respectively, included in accounts payable and accrued

expenses owed to the legal firm.

were rendered by the legal firm during the first six months of 2026.

At June 30, 2026 and December 31, 2025, the Company had approximately

$ 136,000 and $ 146,000 , respectively, included in accounts payable and accrued expenses owed to the legal firm.

consulting arrangements.

During the quarters ended March 31, 2026 and March 31, 2025, the Company had consulting services relationships

During the three months ended June 30, 2026 and 2025, the Company had consulting services relationships

with members of the Board of Directors whereby they were compensated a total of $ 0 and $ 15,000 , respectively.

As of December 31, 2025

and 2024, $ 0 and $ 0 , respectively, were accrued and unpaid with respect to such consulting arrangements.

The consulting services were

provided as requested by management and could be terminated at any time without penalty.

During the first quarter of 2025, amounts totaling

$ 15,000 were paid to Mr.

however, at Mr.

MacGregor’s direction, such amounts were applied as partial repayment of indebtedness

owed by the Company to him and were not treated as compensation.

During the quarter ended March 31, 2026, the Company borrowed $ 0 from and repaid $ 112,337 to Mr.

MacGregor pursuant to

a master loan agreement.

The master loan agreement accrues interest at a rate of 4.4 % and is payable in a lump sum upon maturity.

note is not convertible.

As of March 31, 2026, the Company owed $ 225,872 of principal and $ 727 of accrued interest on this note.

December 31, 2025, the Company owed $ 338,209 of principal and $ 16,676 of accrued interest on this note.

trust related to Mr.

During the quarter ended March 31, 2026, the Company borrowed $ 0 from and repaid $ 0 to a family trust

related to Mr.

MacGregor pursuant to a master loan agreement.

The master loan agreement accrues interest at a rate of 4.4 % and is payable

in a lump sum upon maturity.

The note is not convertible.

$ 200,000 of these loan proceeds were used to fund the senior mezzanine loan

to Barron’s Cove Movie, LLC.

As of March 31, 2026, the Company owed $ 309,000 of principal and $ 29,141 of accrued interest on this

As of December 31, 2025, the Company owed $ 309,000 of principal and $ 25,524 of accrued interest on this note.

During the six months ended

June 30, 2026 and 2025, the Company had consulting services relationships with members of the Board of Directors whereby they were compensated

a total of $ 0 and $ 30,000 , respectively.

The consulting services were provided as requested by management and could be terminated at

any time without penalty.

MacGregor and family trust.

See Note 5 for related-party note balances and activity.

Director share purchase.

Subsequent to June

30, 2026, a member of the Board of Directors purchased shares of the Company’s common stock from the Company for cash.

9 – Subsequent Events

has evaluated subsequent events through the date these condensed consolidated financial statements are issued.

fee discussions.

During the quarter ended March 31, 2026, the Company and Aldous PLLC engaged in discussions regarding outstanding

professional fees and entered into a tolling and standstill agreement effective March 1, 2026 to facilitate those discussions.

settlement documentation, including a proposed settlement amount of $ 103,598.52 , was circulated, but no final settlement agreement was

executed during the quarter.

fee discussions (Aldous PLLC).

During the quarter ended June 30, 2026, the Company and Aldous PLLC engaged in discussions regarding

outstanding professional fees and entered into a tolling and standstill agreement effective March 1, 2026.

Draft settlement documentation,

including a proposed settlement amount of $ 103,598.52 , was circulated, but no final settlement agreement was executed during the quarter.

BECKY 3, Board approval, share issuance

and option grant.

On August 6, 2026, the Company’s Board of Directors approved the Master Investment and Co-Production Agreement described

in Note 7 and the issuance of securities thereunder.

On the same date, the Company issued 250,000 shares of common stock to the producer

as consideration for the credits and branding rights granted to the Company, and granted options to purchase 300,000 shares of common

stock at an exercise price of $ 0.20 per share, with a two-year term expiring May 26, 2028.

The options become exercisable in proportion

to the Company’s actual collection of its $ 360,000 senior equity recoupment entitlement, at a ratio of one option share for each $ 1.20

collected, and are subject to a cashless exercise feature.

The shares and options were issued and granted in reliance on the exemption

from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506(b) of Regulation D promulgated

The Company received no cash consideration and paid no cash in connection with the transaction.

The 250,000 shares issued were measured at the closing

price of the Company’s common stock on the OTCQB Marketplace on August 6, 2026 of $ 0.12 per share, resulting in aggregate consideration

of $ 30,000 .

That amount will be recognized as promotional expense in the third quarter of 2026.

The Company’s determination of fair value

for financial reporting purposes is made by the Company in accordance with U.S.

The 300,000 options were valued using the Black-Scholes

option pricing model, resulting in an aggregate grant date fair value of approximately $ 14,000 .

The valuation used the following assumptions:

a stock price of $ 0.12 per share, an exercise price of $ 0.20 per share, an expected term of 1.8 years, representing the remaining contractual

term of the award, which the Company has elected to use as the expected term for nonemployee awards, expected volatility of 100 %, a risk-free

interest rate of 4.2 %, and no expected dividends.

Because the options become exercisable only upon the Company’s collection of the senior

equity recoupment entitlement, which management has assessed as a performance condition that is not currently probable of achievement,

no expense has been recognized with respect to the options.

Premiere of THE LAST TEMPTATION OF BECKY .

On July 25, 2026, the motion picture referred to in the Master Investment and Co-Production Agreement as BECKY 3 had its world

premiere at the Fantasia International Film Festival in Montreal.

The picture is to be distributed by Quiver Distribution.

As of the date

of this report, no theatrical release date had been announced and the Company had collected no amounts in respect of its senior equity

recoupment entitlement.

Option grants to SSS Entertainment designees.

Effective July 1, 2026, the Company granted nonqualified stock options to purchase an aggregate of 700,000 shares of common stock, consisting

of 175,000 options to each of four designees of SSS Entertainment, LLC, at an exercise price of $ 0.20 per share, pursuant to the Multi-Film

Investment and Compensation Agreement described in Note 2.

The options expire January 27, 2028.

The aggregate grant date fair value, determined

using the Black-Scholes option pricing model, was approximately $ 29,000 , which will be recognized in the third quarter of 2026.

The valuation

used the following assumptions:

a stock price of $ 0.12 per share, an exercise price of $ 0.20 per share, an expected term of 1.6 years,

representing the remaining contractual term of the award, expected volatility of 100 %, a risk-free interest rate of 4.2 %, and no expected

The remaining 1,800,000 options contemplated by that agreement have not been approved by the Board of Directors and have not

been granted;

accordingly, no grant date has been established and no cost has been recognized with respect to them.

Other share issuances.

On August 6, 2026, in

addition to the shares described above, the Company issued an aggregate of 680,000 shares of common stock.

Of that amount, 600,000 shares

were sold to two purchasers for cash at a price of $ 0.10 per share, for aggregate gross proceeds to the Company of $ 60,000 , and 80,000

shares were issued to a third holder as compensation for services rendered to the Company.

Of the shares sold for cash, 500,000 shares,

for aggregate proceeds of $ 50,000 , were purchased by Timothy Battles, a member of the Company’s Board of Directors.

The purchase price

was approved by the Board of Directors with Mr.

Battles abstaining and reflects a discount from the quoted closing price of the Company’s

common stock on August 6, 2026 of $ 0.12 per share, determined by the Board to reflect the restricted nature of the shares, which are subject

to a holding period under Rule 144 and bear customary restrictive legends.

The shares issued for services were measured at the closing

price of the Company’s common stock on the OTCQB Marketplace on August 6, 2026 of $ 0.12 per share, resulting in a charge of $ 9,600 that

will be recognized in the third quarter of 2026.

All of the shares were issued in reliance on the exemption from registration provided

by Section 4(a)(2) of the Securities Act of 1933, as amended, and/or Rule 506(b) of Regulation D promulgated thereunder, to purchasers

who represented investment intent, in transactions not involving any general solicitation, and bear customary restrictive legends.

Transfers by principal stockholder.

6, 2026, The Noah Morgan Private Family Trust, a principal stockholder of the Company affiliated with the Company’s Chief Executive Officer,

transferred an aggregate of 1,100,000 shares of common stock to unaffiliated transferees in privately negotiated transactions.

neither issued nor received any consideration in connection with these transfers, and they had no effect on the number of shares of common

stock outstanding.

Following the transfers, the trust held 20,036,048 shares of common stock.

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-Q

Item 1. Financial Statements