American Picture House Corp 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with 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 On August 1, 2025, subsequent to the end of the second quarter, the Company entered into an agreement with SSS Entertainment, LLC (“SSS”) to 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 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 the asset acquisition. The agreement also provides for the Company to pay 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. Management believes this transaction expands the Company’s film portfolio and may provide additional revenue opportunities in future periods. 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 August 14, 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 August 14, 2025, APHP has 1,000,000,000 common shares authorized of which 112,899,3325 shares issued and outstanding. As of August 14, 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. Preferred Shares - As of August 14, 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 – As of August 14, 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. 2 Business Overview American Picture House Corporation (“APHP”) , also known as American Picture House Pictures, aims to become a premier entertainment company focused on the development, financing, and production of feature films, limited series, and content-driven technologies. Led by astute financiers and supported by accomplished creatives, the Company is committed to delivering high-quality content with broad market appeal. Historically, APHP has offered strategic consulting services to clients within the entertainment sector, providing guidance in areas such as business planning, financial projections, and corporate marketing. While these engagements showcased the Company’s expertise in both entertainment and general business strategy, APHP has since pivoted away from providing independent consulting services. Moving forward, the Company will concentrate exclusively on internal content development and strategic partnerships. APHP is now focused on partnering with filmmakers, showrunners, content creators, and innovative technology partners to develop, package, finance, and produce compelling film and television projects. The Company’s leadership, Board of Directors, and advisory team bring decades of experience across key entertainment functions, including writing, producing, directing, casting, sales, and licensing, with long-standing relationships at major studios and production companies. Although these relationships have yet to translate into direct business for APHP, the Company anticipates leveraging these connections in its upcoming projects. Strategic Focus: Mid-Budget Productions APHP specializes in mid-budgeted productions where the majority, if not all, of the production budget can be secured against the project’s intellectual property (“IP”), projected and pre-sold licensing agreements, incentive programs, tax credits, and grants. The value of the IP, such as book rights, screenplays, or scripts, can be significantly enhanced by the attachment of award-winning talent, seasoned producers, and skilled directors, making it a critical asset for financial structuring. By assembling robust production packages that include proven creative elements and cost-efficient strategies, such as filming in incentive-friendly locations and building lean budgets, APHP can mitigate financial risk, reduce its equity exposure, and attract third-party investment. These efforts are designed to improve profitability and maximize investor confidence through the development of bankable content. APHP’s strategic approach emphasizes financial sophistication, creative excellence, and the use of forward-thinking technology. To date, APHP owns and has optioned several IPs with the goal of co-producing and co-financing both feature films and limited series. Understanding APHP’s Strategy Through the Filmmaking Lifecycle To better explain APHP’s business model, the filmmaking process can be broken down into five key stages, each with distinct responsibilities and goals: ● Development – Acquiring rights (e.g., books, plays), developing story ideas, and writing the screenplay. This stage includes securing financing. ● Pre-Production – Finalizing the script, hiring cast and crew, scouting and securing locations, and designing sets. ● Production – The actual filming process where raw footage is captured. ● Post-Production – Editing the footage, adding visual effects, sound design, and finalizing the film. ● Distribution – Marketing and distributing the finished project to theaters, streaming platforms, and other outlets. APHP’s strategy is to participate meaningfully at each of these stages, especially in development, financing, and packaging, to ensure that every project is positioned for both creative and commercial success. 3 Our Strategy to Build Value APHP’s business strategy centers on acquiring or optioning intellectual properties, such as book rights, screenplays, and scripts, that have already undergone a meaningful level of development investment. In many cases, these properties were advanced by their original creators or teams who, after making substantial financial or creative commitments, chose to pause or abandon further development due to budgetary or strategic reasons. By targeting projects at this stage, APHP aims to acquire valuable entertainment assets at a reduced upfront cost. In exchange, we may offer the original team a share in future revenues generated by the property. This approach enables us to: ● Minimize initial capital expenditures; ● Allocate more resources toward advancing the project through the filmmaking pipeline; ● Benefit from the insights, creative contributions, and goodwill of the original development team; and ● Significantly reduce financial and creative risk. Our strategy is predicated on our management team’s ability to identify projects with unrealized potential and execute on the next stages of development where previous efforts may have stalled. This includes leveraging our experience, industry relationships, and financial acumen to transform dormant or undervalued IP into market-ready content. Value Creation Initiatives Once acquired, we enhance the value of these properties through a multi-pronged strategy that includes: ● Engaging experienced Writers Guild of America (WGA) writers to further develop, polish, or rewrite the material; ● Attaching high-quality talent—such as reputable producers, directors, and actors; ● Assessing and securing international pre-sales and understanding global market value; ● Establishing relationships with key financial institutions and banking partners; ● Partnering with talent agencies and retaining top legal counsel; ● Identifying strategic filming locations that offer robust tax incentives, rebates, or grants; ● Creating comprehensive production budgets and tailored financing strategies; ● Securing completion bonds to mitigate production risk; and ● Developing professional production and marketing materials, such as look books, preliminary artwork, and scouting reports. This methodical, value-driven approach allows APHP to position each project for optimal creative execution, financial performance, and market success, ultimately maximizing returns for the Company and its partners. 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, Jonathan Sanger is the 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. 4 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 June 30, 2025 Compared to Three Months Ended June 30, 2024 The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024: Three months ended June 30, 2025 2024 Change $ Revenues $ - $ - $ - Cost of revenues - - - - - - Operating Expenses: General and administrative 750,406 380,082 370,324 Research and development - 703 (703 ) Sales and marketing 1,369 11,350 (9,981 ) Total Operating Expenses 751,775 392,135 359,640 Net Operating Loss (751,775 ) (392,135 ) (359,640 ) Other Income (Expenses): Interest income 44 384 (340 ) Interest expense (8,897 ) (12,820 ) 3,923 Net Other Income (Expenses) (8,853 ) (12,436 ) 3,583 Loss before income taxes (760,628 ) (404,571 ) (356,057 ) Income taxes - - - Net loss $ (760,628 ) $ (404,571 ) $ (356,057 ) Revenues and Cost of Revenues The Company had no revenues during the quarters ended June 30, 2025 and 2024, General and Administrative Expenses General and administrative expenses for the three months ended June 30, 2025 were approximately $750,000 compared to approximately $380,000 for the three months ended June 30, 2024, an increase of approximately $370,000. The 2025 period included $110,000 of stock-based compensation expense to a consultant, 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. The 2025 period also included $73,000 of stock option expense compared to $0 in the 2024 period. These one-time expenses were offset by lower operational expenses. Sales and Marketing Expenses Sales and marketing expenses for the three months ended June 30, 2025 were approximately $1,000 compared to approximately $11,000 for the three months ended June 30, 2024, a decrease of approximately $10,000. Other Income (Expense) Interest Income. Interest income for the three months ended June 30, 2025 and 2024 was minimal and consisted of interest earned on invested cash balances. Interest Expense. Interest expense for the three months ended June 30, 2025 and 2024 was $8,897 and $12,820, respectively, and was primarily related to our Economic Injury Disaster Loan (“EIDL ”), commercial line of credit and related party working capital loans. 6 Liquidity and Capital Resources We had an accumulated deficit of approximately $8.5 million, incurred a net loss of approximately $761,000, and had cash outflows from operations of approximately $90,000 as of and for the three months ended June 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 June 30, 2025, our cash and cash equivalents were negligible and we were not able to meet our current obligations as they became due and payable. Operating Activities During the three months ended June 30, 2025, operating activities consumed approximately $90,000 of cash. Accounts payable and accrued expenses increased by approximately $161,000 during the quarter due to a lack of liquidity to meet current obligations as they became due and payable. During the three months ended June 30, 2024, operating activities used approximately $441,000 of cash, including providing a $220,000 of financing to a film production company and payments resulting in a $42,000 reduction in accounts payable and accrued expenses. Investing Activities During the three months ended June 30, 2025 and 2024, investing activities included approximately $0 and $19,000 of costs related to development of the Company’s website. Financing Activities During the three months ended June 30, 2025, net cash provided by financing activities was $86,000 which was comprised of $86,000 of related party borrowings. During the three months ended June 30, 2024, net cash provided by financing activities was approximately $311,000 which included approximately $211,000 of related party borrowings and approximately $154,000 of proceeds from the sale of Common Stock. Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024 The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024: Six months ended June 30, 2025 2024 Change $ Revenues $ - $ 23,003 $ (23,003 ) Cost of revenues - - - - 23,003 (23,003 ) Operating Expenses: General and administrative 1,225,863 1,882,014 (656,151 ) Research and development - 703 (703 ) Sales and marketing 1,830 25,325 (23,495 ) Total Operating Expenses 1,227,693 1,908,042 (680,349 ) Net Operating Loss (1,227,693 ) (1,885,039 ) 657,346 Other Income (Expenses): Interest income 44 486 (442 ) Interest expense (21,816 ) (16,005 ) (5,811 ) Net Other Income (Expenses) (21,772 ) (15,519 ) (6,253 ) Loss before income taxes (1,249,465 ) (1,900,558 ) 651,093 Income taxes - - - Net loss $ (1,249,465 ) $ (1,900,558 ) $ 651,093 Revenues and Cost of Revenues The Company had no revenue during the six months ended June 30, 2025. During the six months ended June 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 six months ended June 30, 2025 were approximately $1,226,000 compared to approximately $1,882,000 for the six months ended June 30, 2024, a decrease of approximately $656,000. The 2025 period included $306,000 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 six months ended June 30, 2025 were approximately $2,000 compared to approximately $25,000 for the six months ended June 30, 2024, a decrease of approximately $23,000. Other Income (Expense) Interest Income. Interest income for the six months ended June 30, 2025 and 2024 was minimal and consisted of interest earned on invested cash balances. Interest Expense. Interest expense for the six months ended June 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. 7 Liquidity and Capital Resources We had an accumulated deficit of approximately $8.5 million, incurred a net loss of approximately $1,249,000, and had cash outflows from operations of approximately $245,000 as of and for the six months ended June 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 June 30, 2025, our cash and cash equivalents were negligible and we were not able to meet our current obligations as they became due and payable. Operating Activities During the six months ended June 30, 2025, operating activities consumed approximately $245,000 of cash. Accounts payable and accrued expenses increased by approximately $248,000 during the quarter due to a lack of liquidity to meet current obligations as they became due and payable. During the six months ended June 30, 2024, operating activities used approximately $749,000 of cash, including providing a $396,000 of financing to film production companies. Investing Activities During the six months ended June 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 six months ended June 30, 2025, net cash provided by financing activities was $86,000 which was comprised of $86,000 of related party borrowings. During the six months ended June 30, 2024, net cash provided by financing activities was approximately $576,000 including $415,000 of proceeds from the sale of Common Stock and $407,000 of net working capital financing under a master loan agreement from a related party and a commercial line of credit. 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. 8 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes to our market risk during the first six months of 2025. For a discussion of our exposure to market risk, please see Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our 2024 Form 10-K.