UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10

Amendment No. 3

GENERAL FORM FOR REGISTRATION OF SECURITIES

Under Section 12(b) or (g) of the Securities Exchange Act of 1934

Copies of all correspondence to:

Gary L. Blum, Esq.

Law Offices of Gary L. Blum
3278 Wilshire Boulevard, Suite 603
Los Angeles, California 90010

Cell: 213-369-8112

Securities registered pursuant to Section 12(b) of the Act: None

Securities to be registered pursuant to Section 12(g) of the Act:

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Table of Contents

CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS

Some of the statements contained in this registration statement on Form 10 of American Picture House Corporation (hereinafter the “Company,” “APHP,” “we,” “us” or “our”) discuss future expectations, contain projections of our plan of operation or financial condition or state other forward-looking information. In this registration statement, forward-looking statements are generally identified by the words such as “anticipate,” “plan,” “believe,” “expect,” “estimate” and the like. Forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results or plans to differ materially from those expressed or implied. These statements are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and is derived using numerous assumptions. A reader should not place undue reliance on these forward-looking statements, which apply only as of the date of this registration statement. Important factors that may cause actual results to differ from projections include, for example:

Readers are cautioned not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this Form 10 to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except as required by law in the normal course of our public disclosure practices.

Additionally, the following discussion regarding our financial condition and results of operations should be read in conjunction with the financial statements and related notes included in this Form 10.

Item 1. Business

Business Overview

American Picture House Corporation aka American Picture House Pictures 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. To date, the Company has provided general consulting services to entertainment industry-based clients. These clients were interested in our entertainment industry expertise and general business knowledge. The services provided included the strategy, development, and procurement of materials including; business plans, financial projections, and corporate marketing materials for the entertainment industry. The Company has refocused its efforts and will no longer be providing these services to independent clients. Going forward, APHP plans to partner with filmmakers, showrunners, content developers and strategic technology partners to develop, package, finance, and produce high-quality feature films and television shows with broad-market appeal. The Company’s management, Board of Directors and advisors have had relationships with major studios due to many of them having worked within the entertainment industry on many films and shows in a variety of specialties including: writing, producing, directing, casting, sales, and licensing. Although these relationships have not yet yielded results to APHP to date, the Company anticipates it will be able to access these relationships to benefit the Company in its future endeavors.

The Company intends to specialize in mid-budgeted productions where more than 100% of the budget can be collateralized by a films’ or shows’ 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 IP (e.g., the book rights, script, screenplay, etc.) of a particular film or show usually has a quantifiable value, especially if such IP was written by a recognized author or by a WGA (“Writers Guild of America”) writer and further enhanced by the addition of competent producers, proven directors and directors of photography, and talented actors. While the IP itself has value, the previously mentioned elements plus the addition of factors like choosing favorable filming locales to film in (that provide monetary and/or tax incentives) and formulating lean budgets, enable third party financiers to quantify a films’ or shows’ value and this quantifiable-value can be utilized to secure additional equity investors and or be utilized to secure loans. Through the development of a strong package, APHP can limit its overall financial exposure, mitigate financial risk, and reduce the equity required from the Company to produce a film or show Loans and additional equity, are usually only secured for films that have a package that has strong elements and additional factors; therefore, a reduction in equity combined with third-party participation also is expected to increase profitability to the Company.

The Company will strive to become synonymous with creative ability, financial sophistication, and leading-edge technology. The Company has optioned IP with the intent to co-finance and co-produce feature films and limited series shows.

Filmmaking Stages and Our Strategy

To understand our business strategy, it is useful to think of filmmaking in five stages - often with different teams involved at different stages:

Our Strategy to Build Value

Our business strategy is to purchase and/or option “entertainment properties” (e.g., book rights, screenplays, scripts, etc.). that have had some level of financial investment in the development stage before we acquire the entertainment property where the initial owner or development team decided to stop development for financial or other reasons after making a substantial investment in development. For this investment, we may share with the original team rights to revenue from the acquired entertainment properties. This strategy will allow the Company to reduce our initial cash outlay when acquiring intellectual properties, allows us to allocate more funds in moving the entertainment property up the filmmaking chain, gives us assistance and goodwill from the original development team, and reduces our financial risks.

Our strategy requires us to make an informed assessment that our management team has the ability to move the script forward where the initial team failed while allowing APHP to capitalize on the initial investment.

We seek to build value in our entertainment properties by many means, including the following:

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, A. John Luessenhop, Jr. is the President, Donald J. Harris is the Secretary, Daniel Hirsch is the Treasurer, and James H. Hayne is the Assistant Treasurer and the Assistant Secretary, all report to a Board of Directors. At present, only Bannor Michael MacGregor is under a Consulting Agreement.

Our Offices

The Company maintains three virtual offices in New York, NY, Raleigh, NC, and Los Angeles, CA.

Intellectual Properties

The following overview concerns the intellectual property matters of our Company.

Intellectual properties and other proprietary rights are important to our business and can provide us with a competitive advantage. While the Company uses reasonable efforts to protect its trade and business secrets, the Company cannot assure that its employees, consultants, contractors, or advisors will not, unintentionally, or willfully, disclose the Company’s trade secrets to competitors or other third parties. In addition, courts outside the United States are sometimes less willing to protect trade secrets. We periodically review third-party proprietary rights, including copywriting and copywriting applications, in an effort to avoid infringement on third-party proprietary rights and protect our own, identify licensing or partnership opportunities and monitor the intellectual property claims of others. Any infringement of the Company’s proprietary rights could result in significant litigation costs, and any failure to adequately protect could result in the Company’s competitors offering similar products, potentially resulting in loss of a competitive advantage and decreased revenue.

Existing copyright, trademark, and trade secret laws afford only limited protection. In addition, the laws of some foreign countries do not protect the Company’s proprietary rights to the same extent as do the laws of the United States. Litigation may be necessary in the future to protect the Company’s trade secrets or to determine the validity and scope of the proprietary rights of others. This litigation could result in substantial costs and diversion of resources and could materially adversely affect the Company’s future operating results.

We own a portfolio of intellectual properties including the following screenplays: APHP owns 100% of the following titles and maintains copyrights at the U.S. Copyright Office:

APHP also own a portion of the beneficial ownership to the feature film BUFFALOED. The Company maintains a CAMA (Cash Asset Management Account) agreement with Fintage Collection Account Management, B.V. (a global film and television rights company that operates collection services) which collects licensing revenue streams worldwide from distributors on behalf of either a film or show which are then allocated to the respective CAMA participants, the beneficial owners of the film or show. APHP owns fifty percent (50%) of the IP of the feature film titled BUFFALOED and thirty five percent (35%) of the revenues generated from the CAMA.

Additionally, APHP solely maintains option rights to:

While we consider our intellectual properties to be assets, we do not believe that our competitive position is dependent primarily on our entertainment properties or that our operations are dependent upon any single Entertainment Property. We nevertheless face intellectual property-related risks. For more information on these risks, see “Risk Factors.”

Competition

Our business operates in highly competitive markets. We compete with companies within the film and media business, but ultimately our competition includes all businesses that complete for consumer entertainment dollars, including travel, sporting events, outdoor recreation and other cultural related activities.

Entertainment competitors include the major film and television studios, numerous independent motion picture and television production companies, television networks, pay television services and digital media platforms.

The scope of the competition extends beyond consumer dollars to competing to acquire rights to literary and film properties, the services of performing artists, directors, producers and other creative and technical personnel and production financing, all of which are essential to the success of our entertainment businesses.

In addition, our motion pictures will compete for audience acceptance and exhibition outlets with motion pictures produced and distributed by other companies. Likewise, we face significant competition from independent distributors as well as major studios. As a result, the success of any of our business is dependent not only on the quality and acceptance of a particular project, but also on the quality and acceptance of other competing content released into the marketplace at or near the same time as well as on our ability to license and produce content for the networks that is adequate in quantity and quality and will generate satisfactory subscriber levels.

Given such competition, we will attempt to operate with a different business model than others. We plan to emphasize a lower cost structure, risk mitigation, reliance on financial partnerships and innovative financial strategies. Our cost structures will be designed to utilize our flexibility and agility as well as the entrepreneurial spirit of our employees, partners and affiliates, in order to provide creative entertainment content to serve diverse audiences worldwide.

Many of our anticipated competitors, such as those listed below, have substantially greater financial, technical, and other resources and larger, more established marketing, sales and distribution systems than we have. Our success will depend, in part, on our ability to develop our intellectual properties in a timely manner, achieve market acceptance of our future products, gain name recognition and a positive reputation in the film industry, and establish successful marketing, sales and distribution efforts.

2AM is a Los Angeles & New York based production and management company that specializes in supporting work from auteur driven filmmakers and talent. The company was founded in 2020 by Christine D’souza Gelb, David Hinojosa, and Kevin Rowe, and was launched in strategic partnership with A24 Films LLC, the Oscar-winning studio behind films such as EVERYTHING EVERYWHERE ALL AT ONCE and MOONLIGHT, as well as the hit TV series EUPHORIA. Their website is: www.2am.com.

Utopi is a film distribution and sales company that specializes in independent and documentary cinema. With a “filmmaker first” approach, Utopia focuses on creating new theatrical and digital distribution opportunities, improving the direct-to-consumer experience, and helping filmmakers maintain a global presence. Co-founded by filmmaker Robert Schwartzman and Cole Harper in 2018, Utopia has since launched technology platform Altavod, which gives filmmakers more control, higher marketing ROI, and stronger data collection tools than other platforms; and Utopia Originals, a division dedicated to the development, packaging, and sales of original film and television content. Their website is: www.utopiadistribution.com.

XTR is a premium global nonfiction entertainment studio. With a focus on audience appeal and a commitment to artistry, the award-winning studio works with outstanding creators to produce, distribute, finance, and develop films, series, and podcasts. XTR has a world-class production facility, XTR Studios, on the Eastside of Los Angeles that includes production and post-production facilities, a sound stage, and recording studio. Since its inception in 2019, XTR has produced and financed over 80 documentaries, including THEY CALL ME MAGIC, on AppleTV+; MTV Documentary Films Oscar-nominated ASCENSION; and the Emmy and Peabody award-winning 76 DAYS. In 2021, XTR launched DOCUMENTARY+, an AVOD platform and FAST channel that brings the best in nonfiction film and television to over 80 million households in the U.S and nearly every country globally. Their website is: https://www.xtr.com/.

Employees

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, A. John Luessenhop, Jr. is the President, Donald J. Harris is the Secretary, Daniel Hirsch is the Treasurer, and James H. Hayne is the Assistant Treasurer and the Assistant Secretary, all report to a Board of Directors. At present, only Bannor Michael MacGregor is under a Consulting Agreement.

Smaller Reporting Company

The Company is a “smaller reporting company” as defined in Rule 12b-2 under the Exchange Act. There are certain exemptions available to us as a smaller reporting company, including: (1) not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes Oxley Act; (2) scaled executive compensation disclosures; and (3) the requirement to provide only two years of audited financial statements, instead of three years. As long as we maintain our status as a “smaller reporting company”, these exemptions will continue to be available to us.

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 adopted an amendment 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.

As of October 11, 2023, the Company has 1,001,000,000 shares authorized, including 1,000,000,000 common shares and 1,000,000 preferred shares.

Common Shares - As of October 11, 2023 APHP has 1,000,000,000 common shares authorized of which 107,740,991 shares issued and outstanding. As of October 11, 2023 the total number of shareholders of record was 308. 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 October 11, 2023 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, 3,829 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 - Our Chief Executive Officer and Chairman of the board of Directors, Bannor Michael MacGregor, is the beneficial owner of 31,532,737 shares of common stock, which controls 29.27.% of the outstanding common voting shares. Mr. MacGregor is the owner of 100% of the Company’s 3,829 shares of issued and outstanding Series A preferred stock. The Company’s Series A preferred shares have voting rights equal to 1,000,000 votes per each one share. As such, Mr. MacGregor has voting rights equal to 3,860,532,737 shares of common stock, representing 98.1% of voting rights,

Item 1A. Risk Factors

An investment in our common shares involves a high degree of risk. You should carefully consider the risks described below together with all of the other information included in this prospectus before making an investment decision. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we may currently deem immaterial, may become important factors that harm our business, results of operations and financial condition. If any of the following risks actually occurs, our business, results of operations and financial condition could suffer. In that case, the trading price of our common shares could decline, and you may lose all or part of your investment.

Risks Related to Our Company

We have had losses, and we cannot assure future profitability.

We have reported operating losses for fiscal years 2021, 2022, and the first and second quarters of 2023. Our accumulated deficit was approximately $4.1 million at June 30, 2023. We cannot assure you we will continue to operate profitably, and if we cannot, we may not be able to meet our debt service, working capital requirements, capital expenditure plans, anticipated production slate or other cash needs. Our inability to meet those needs could have a material adverse effect on our business, results of operations and financial conditions.

We face substantial capital requirements and financial risks.

Our business requires a substantial investment of capital. The production, acquisition and distribution of motion pictures require a significant amount of capital. A significant amount of time may elapse between our expenditure of funds and the receipt of commercial revenues from or government contributions to our motion pictures. This time lapse requires us to fund a significant portion of our capital requirements from our revolving credit facility and from other sources. Although we intend to continue to reduce the risks of our production exposure through financial contributions from broadcasters, distributors, tax shelters, government and industry programs and studios, we cannot assure you that we will continue to implement successfully these arrangements or that we will not be subject to substantial financial risks relating to the production, acquisition, completion and release of future motion pictures and television programs. If we increase (through internal growth or acquisition) our production slate or our production budgets, we may be required to increase overhead, make larger up-front payments to talent and consequently bear greater financial risks. Any of the foregoing could have a material adverse effect on our business, results of operations or financial condition.

Budget overruns may adversely affect our business. Our business model requires that we be efficient in production of our motion pictures. Actual motion picture and television production costs often exceed their budget, sometimes significantly. The production, completion and distribution of motion pictures and television productions are subject to a number of uncertainties, including delays and increased expenditures due to creative differences among key cast members and other key creative personnel or other disruptions or events beyond our control. Risks such as death or disability of star performers, technical complications with special effects or other aspects of production, shortages of necessary equipment, damage to film negatives, master tapes and recordings or adverse weather conditions may cause cost overruns and delay or frustrate completion of a production. If a motion picture or television production incurs substantial budget overruns, we may have to seek additional financing from outside sources to complete production. We cannot make assurances regarding the availability of such financing on terms acceptable to us, and the lack of such financing could have a material adverse effect on our business, results of operations and financial condition.

In addition, if a motion picture production incurs substantial budget overruns, we cannot assure you that we will recoup these costs, which could have a material adverse effect on our business, results of operations or financial condition. Increased costs incurred with respect to a particular film may result in any such film not being ready for release at the intended time and the postponement to a potentially less favorable time, all of which could cause a decline in box office performance, and thus the overall financial success of such film. Budget overruns could also prevent a picture from being completed or released. Any of the foregoing could have a material adverse effect on our business, results of operations and financial condition.

Production costs and marketing costs are rising at a faster rate than increases in either domestic admissions to movie theatres or admission ticket prices, leaving us more dependent on other media, such as home video, television and foreign markets, and new media. If we cannot successfully exploit these other media, it could have a material adverse effect on our business, results of operations or financial condition.

Our revenues and results of operations may fluctuate significantly.

Revenues and results of operations are difficult to predict and depend on a variety of factors. Our revenues and results of operations depend significantly upon the commercial success of the motion pictures that we distribute, which cannot be predicted with certainty. Accordingly, our revenues and results of operations may fluctuate significantly from period to period, and the results of any one period may not be indicative of the results for any future periods. We cannot assure you that we will manage the production, acquisition and distribution of future motion pictures profitably.

Our revenues and results of operations are vulnerable to currency fluctuations. We report our revenues and results of operations in U.S. dollars, but a significant portion of our revenues is earned outside of the United States. currencies on revenues and operating margins, and fluctuations could have a material adverse effect on our business, results of operations or financial condition.

From time to time we may experience currency exposure on distribution and production revenues and expenses from foreign countries, which could have a material adverse effect on our business, results of operations and financial condition.

Accounting practices used in our industry may accentuate fluctuations in operating results. In addition to the cyclical nature of the entertainment industry, our accounting practices (which are standard for the industry) may accentuate fluctuations in our operating results.

Failure to manage future growth may adversely affect our business.

We may not be able to obtain additional funding to meet our requirements. Our ability to grow through acquisitions, business combinations and joint ventures, to maintain and expand our development, production and distribution of motion pictures and to fund our operating expenses depends upon our ability to obtain funds through equity financing, debt financing (including credit facilities) or the sale or syndication of some or all of our interests in certain projects or other assets. If we do not have access to such financing arrangements, and if other funding does not become available on terms acceptable to us, there could be a material adverse effect on our business, results of operations or financial condition.

We are subject to risks associated with acquisitions and joint ventures. We have made or entered into, and will continue to pursue, various acquisitions, business combinations and joint ventures intended to complement or expand our business. Given that discussions or activities relating to possible acquisitions range from private negotiations to participation in open bid processes, the timing of any such acquisition is uncertain. Although from time to time we actively engage in discussions and activities with respect to possible acquisitions and investments, we have no present agreements or understandings to enter into any such material transaction. Any indebtedness incurred or assumed in any such transaction may or may not increase our leverage relative to our earnings before interest, provisions for income taxes, amortization, minority interests, gain on dilution of investment in subsidiary and discounted operation, or EBIDTA, or relative to our equity capitalization, and any equity issued may or may not be at prices dilutive to our then existing shareholders. We may encounter difficulties in integrating acquired assets with our operations. Furthermore, we may not realize the benefits we anticipated when we entered into these transactions. In addition, the negotiation of potential acquisitions, business combinations or joint ventures as well as the integration of an acquired business could require us to incur significant costs and cause diversion of management’s time and resources. Future acquisitions by us could also result in:

Any of the foregoing could have a material adverse effect on our business, results of operations or financial condition.

Our ability to exploit our filmed content library may be limited.

A significant portion of our filmed content library revenues comes from a small number of titles. We depend on a limited number of titles for the majority of the revenues generated by our filmed and television content library. In addition, many of the titles in our library are not presently distributed and generate substantially no revenue. If we cannot acquire new product and rights to popular titles through production, distribution agreements, acquisitions, mergers, joint ventures or other strategic alliances, it could have a material adverse effect on our business, results of operations or financial condition.

We are limited in our ability to exploit a portion of our filmed content library. Our rights to the titles in our filmed content library vary; in some cases we have only the right to distribute titles in certain media and territories for a limited term. We cannot assure you that we will be able to renew expiring rights on acceptable terms, and any such failure could have a material adverse effect on business, results of operations or financial condition.

Our success depends on external factors in the motion picture industry.

Our success depends on the commercial success of motion pictures which is unpredictable. Operating in the motion picture and television industry involves a substantial degree of risk.

Each motion picture is an individual artistic work, and unpredictable audience reactions primarily determine commercial success. Generally, the popularity of our motion pictures or programs depends on many factors, including the critical acclaim they receive, the format of their initial release, for example, theatrical or direct-to-video, the actors and other key talent, their genre and their specific subject matter. The commercial success of our motion pictures also depends upon the quality and acceptance of motion pictures that our competitors release into the marketplace at or near the same time, critical reviews, the availability of alternative forms of entertainment and leisure activities, general economic conditions and other tangible and intangible factors, many of which we do not control and all of which may change. We cannot predict the future effects of these factors with certainty, any of which factors could have a material adverse effect on our business, results of operations and financial condition.

In addition, because a motion picture’s performance in ancillary markets, such as home video and pay and free television, is often directly related to its box office performance or television ratings, poor box office results or poor television ratings may negatively affect future revenue streams. Our success will depend on the experience and judgment of our management to select and develop new investment and production opportunities. We cannot make assurances that our motion pictures will obtain favorable reviews or ratings, that our motion pictures will perform well at the box office or in ancillary markets or that broadcasters will license the rights to broadcast any of our television programs in development or renew licenses to broadcast programs in our library. The failure to achieve any of the foregoing could have a material adverse effect on our business, results of operations and financial condition.

Licensed distributors’ failure to promote our programs may adversely affect our business. Licensed distributors’ decisions regarding the timing of release and promotional support of our motion pictures and related products are important in determining the success of these pictures and products. As with most companies engaging in licensed distribution, we do not control the timing and manner in which our licensed distributors distribute our motion pictures. Any decision by those distributors not to distribute or promote one of our motion pictures or related products or to promote competitors’ motion pictures, programs or related products to a greater extent than they promote ours could have a material adverse effect on our business, results of operations or financial condition.

We could be adversely affected by strikes or other union job actions. The motion picture and television programs produced by us generally employ actors, writers and directors who are members of the Screen Actors Guild, Writers Guild of America and Directors Guild of America, respectively, pursuant to industry-wide collective bargaining agreements.

We face substantial competition in all aspects of our business.

We are smaller and less diversified than many of our competitors. Although we are an independent distributor and producer, we constantly compete with major U.S. and international studios. Most of the major U.S. studios are part of large diversified corporate groups with a variety of other operations, including television networks and cable channels, that can provide both means of distributing their products and stable sources of earnings that may allow them better to offset fluctuations in the financial performance of their motion picture and television operations. In addition, the major studios have more resources with which to compete for ideas, storylines and scripts created by third parties as well as for actors, directors and other personnel required for production. The resources of the major studios may also give them an advantage in acquiring other businesses or assets, including film libraries, that we might also be interested in acquiring. The foregoing could have a material adverse effect on our business, results of operations and financial condition.

The motion picture industry is highly competitive and at times may create an oversupply of motion pictures in the market. The number of motion pictures released by our competitors, particularly the major U.S. studios, may create an oversupply of product in the market, reduce our share of box office receipts and make it more difficult for our films to succeed commercially. Oversupply may become most pronounced during peak release times, such as school holidays and national holidays, when theatre attendance is expected to be highest. For this reason, and because of our more limited production and advertising budgets, we typically do not release our films during peak release times, which may also reduce our potential revenues for a particular release. Moreover, we cannot guarantee that we can release all of our films when they are otherwise scheduled. In addition to production or other delays that might cause us to alter our release schedule, a change in the schedule of a major studio may force us to alter the release date of a film because we cannot always compete with a major studio’s larger promotion campaign. Any such change could adversely impact a film’s financial performance. In addition, if we cannot change our schedule after such a change by a major studio because we are too close to the release date, the major studio’s release and its typically larger promotion budget may adversely impact the financial performance of our film. The foregoing could have a material adverse effect on our business, results of operations and financial condition.

Technological advances may reduce our ability to exploit our motion pictures. The entertainment industry in general and the motion picture industry in particular continue to undergo significant technological developments, including video-on-demand. This rapid growth of technology combined with shifting consumer tastes could change how consumers view our motion pictures and television programs. For example, an increase in video-on-demand could decrease home video rentals. Other larger entertainment distribution companies will have larger budgets to exploit these growing trends. We cannot predict how we will financially participate in the exploitation of our motion pictures and television programs through these emerging technologies or whether we have the right to do so for certain of our library titles. If we cannot successfully exploit these and other emerging technologies, it could have a material adverse effect on our business, results of operations or financial condition.

The loss of key personnel could adversely affect our business.

Our success depends to a significant degree upon the efforts, contributions and abilities of our senior management. We cannot assure you that the services of our key personnel will continue to be available to us or that we will be able to successfully renegotiate such employment agreements. The loss of services of any key employees could have a material adverse effect on our business, results of operations or financial condition.

We face risks from doing business internationally.

We distribute motion picture outside the United States through third party licensees and derive revenues from these sources. As a result, our business is subject to certain risks inherent in international business, many of which are beyond our control. These risks include:

Any of these factors could have a material adverse effect on our business, results of operations or financial condition.

Protecting and defending against intellectual property claims including those against copyright infringement may have a material adverse effect on our business.

Our ability to compete depends, in part, upon successful protection of our intellectual property. We do not have the financial resources to protect our rights to the same extent as major studios. We attempt to protect proprietary and intellectual property rights to our productions through available copyright and trademark laws and licensing and distribution arrangements with reputable international companies in specific territories and media for limited durations. Despite these precautions, existing copyright and trademark laws afford only limited practical protection in certain countries. We also distribute our products in other countries in which there is no copyright and trademark protection. As a result, it may be possible for unauthorized third parties to copy and distribute our productions or certain portions or applications of our intended productions, which could have a material adverse effect on our business, results of operations or financial condition.

Litigation may also be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity. Any such litigation could result in substantial costs and the diversion of resources and could have a material adverse effect on our business, results of operations or financial condition. We cannot assure you that infringement or invalidity claims will not materially adversely affect our business, results of operations or financial condition. Regardless of the validity or the success of the assertion of these claims, we could incur significant costs and diversion of resources in enforcing our intellectual property rights or in defending against such claims, which could have a material adverse effect on our business, results of operations or financial condition.

Piracy of motion pictures, including digital and internet piracy, may reduce the gross receipts from the exploitation of our films.

Motion picture piracy is extensive in many parts of the world, including South America, Asia, the countries of the former Soviet Union and other former Eastern bloc countries. Additionally, as motion pictures begin to be digitally distributed using emerging technologies such as the internet and online services, piracy could become more prevalent, including in the U.S., because digital formats are easier to copy. As a result, users can download and distribute unauthorized copies of copyrighted motion pictures over the internet. In addition, there could be increased use of devices capable of making unauthorized copies of motion pictures. As long as pirated content is available to download digitally, many consumers may choose to download such pirated motion pictures rather than pay for motion pictures. Piracy of our films may adversely impact the gross receipts received from the exploitation of these films, which could have a material adverse effect on our business, results of operations or financial condition.

We face other risks in obtaining production financing from private and other international sources. For some productions, we finance a portion of our production budgets from incentive programs as well as international sources in the case of our international treaty co-productions. The foregoing could have a material adverse effect on our business, results of operations or financial condition.

Risks Related to the Company’s Common Shares

An active, liquid and orderly market for the Company’s Common Shares may not develop, and you may not be able to resell your Common Shares at or above the purchase price.

APHP’s common shares are quoted on the OTC Pink. An active trading market for the Company’s Common Shares has not developed and may never develop or be sustained. The lack of an active market may impair an investor’s ability to sell its shares at the time it wishes to sell them or at a price that it considers reasonable. An inactive market may also impair the Company’s ability to raise capital by selling shares and may impair the Company’s ability to acquire other businesses or technologies using the Company’s shares as consideration, which, in turn, could materially adversely affect the Company’s business.

Our common shareholders face the risk of substantial potential dilution of their equity and voting rights from holders of our Series A preferred shares.

All common shares are entitled to one vote per share, and participate in any distributions or dividends that may be declared by the Board of Directors. As of October 11, 2023, the Company has 1,000,000,000 common shares authorized of which 107,740,991 shares are issued and outstanding. As of October 11, 2023 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, 3,829 Series A preferred shares are issued and outstanding, and no other preferred shares have been designated or issued. The Series A preferred shares do not have any rights to dividends; however, 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. Further, 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 also hold a first position lien against all of the Company’s assets including but not limited to the Company’s intellectual property. The Preferred shares do not have any specific redemption rights or sinking fund provisions. Hence, the current holder (our Chief Executive Officer and Chairman of the Board of Directors, Bannor Michael MacGregor) of the 3,829 Series A preferred shares that are currently issued and outstanding, has the ability to control the election of Board members and other Company matters that require shareholder votes. Further, Mr. MacGregor has the ability to convert his 3,829 Series A preferred shares into 382,900,000 common shares, thereby retaining control of the Company for the foreseeable future even without owning the Series A preferred shares.

Our Chief Executive Officer and Chairman of the Board of Directors holds a significant percentage of our outstanding voting securities, which could reduce the ability of minority shareholders to effect certain corporate actions.

Our Chief Executive Officer and Chairman of the board of Directors, Bannor Michael MacGregor, is the beneficial owner of 31,532,737 shares of common stock, which controls 29.27% of the outstanding common voting shares. Mr. MacGregor is the owner of 100% of the Company’s 3,829 shares of issued and outstanding Series A preferred stock. The Company’s Series A preferred shares have voting rights equal to 1,000,000 votes per each one share. As such, Mr. MacGregor has voting rights equal to 3,860,532,737 shares of common stock, representing 98.1 % of voting rights, and thus control of any item brought before shareholders requiring a vote. As a result of this ownership, Mr. MacGregor possesses and can continue to possess significant influence and can elect and can continue to elect a majority of our Board of Directors and authorize or prevent proposed significant corporate transactions. Mr. MacGregor’s ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer.

There exists the potential risk and conflict of interest presented by the ability of Mr. MacGregor to retain majority control of the Company’s voting power while reducing, potentially significantly, his economic interest in the Company’s shares. Although Mr. MacGregor may be able to sell his entire economic interest in the Company’s common stock, Mr. MacGregor would retain control over the company by maintaining his Series A preferred shares.

The trading price of the shares of the Company’s Common Shares could be highly volatile, and purchasers of the Company’s Common Shares could incur substantial losses.

The Company’s shares price is likely to be volatile. The shares market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, investors may not be able to sell their Common Shares at or above their purchase price. The market price for the Company’s Common Shares may be influenced by those factors discussed in this “Risk Factors” section and many others, including:

APHP does not currently intend to pay dividends on its Common Shares, and, consequently, investors’ ability to achieve a return on their investment will depend on appreciation, if any, in the price of the Company’s Common Shares.

American Picture House has never declared or paid any cash dividend on its Common Shares. APHP currently anticipates that it will retain future earnings for the development, operation and expansion of the Company’s business and does not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to shareholders will therefore be limited to the appreciation of their shares. There is no guarantee that the Company’s Common Shares will appreciate in value or even maintain the price at which shareholders have purchased their shares.

Sales of a substantial number of shares of the Company’s Common Shares by the Company’s shareholders in the public market could cause the Company’s shares price to fall.

Sales of a substantial number of the Company’s Common Shares in the public market or the perception that these sales might occur could significantly reduce the market price of the Company’s Common Shares and impair the Company’s ability to raise adequate capital through the sale of additional equity securities.

If the Company fails to maintain proper and effective internal control over financial reporting, the Company’s ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in the Company’s financial reporting and the trading price of the Company’s Common Shares may decline.

Pursuant to Section 404 of Sarbanes-Oxley, the Company’s management is required to report upon the effectiveness of the Company’s internal control over financial reporting. Additionally, if the Company reaches an accelerated filer threshold, the Company’s independent registered public accounting firm will be required to attest to the effectiveness of the Company’s internal control over financial reporting. The rules governing the standards that must be met for management to assess the Company’s internal control over financial reporting are complex and require significant documentation, testing and possible remediation. To comply with the requirements of being a reporting company under the Exchange Act, the Company will need to upgrade its information technology systems; implement additional financial and management controls, reporting systems and procedures; and hire additional accounting and finance staff. If the Company or, if required, its auditors are unable to conclude that the Company’s internal control over financial reporting is effective, investors may lose confidence in the Company’s financial reporting and the trading price of the Company’s Common Shares may decline.

The Company cannot assure its investors that there will not be material weaknesses or significant deficiencies in the Company’s internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit the Company’s ability that its internal control over financial reporting is effective, or if the Company’s independent registered public accounting firm determines the Company has a material weakness or significant deficiency in the Company’s internal control over financial reporting once that firm begin its Section 404 reviews, investors may lose confidence in the accuracy and completeness of the Company’s financial reports, the market price of the Company’s Common Shares could decline, and the Company could be subject to sanctions or investigations by the SEC or other regulatory authorities. Failure to remedy any material weakness in the Company’s internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict the Company’s future access to the capital markets to accurately report its financial condition, results of operations or cash flows. The Company intends to hire additional personnel to improve internal controls.

Our Chief Executive Officer and Chairman of the Board of Directors holds a significant percentage of our outstanding voting securities, which could reduce the ability of minority shareholders to effect certain corporate actions.

Our Chief Executive Officer and Chairman of the board of Directors, Bannor Michael MacGregor, is the beneficial owner of 31,532,737 shares of common stock, which controls 29.27% of the outstanding common voting shares. Mr. MacGregor is the owner of 100% of the Company’s 3,829 shares of issued and outstanding Series A preferred stock. The Company’s Series A preferred shares have voting rights equal to 1,000,000 votes per each one share. As such, Mr. MacGregor has voting rights equal to 3,860,532,737 shares of common stock and thus control of any item brought before shareholders requiring a vote. As a result of this ownership, Mr. MacGregor possesses and can continue to possess significant influence and can elect and can continue to elect a majority of our Board of Directors and authorize or prevent proposed significant corporate transactions. Mr. MacGregor’s ownership and control may also have the effect of delaying or preventing a future change in control, impeding a merger, consolidation, takeover or other business combination or discourage a potential acquirer from making a tender offer.

There exists the potential risk and conflict of interest presented by the ability of Mr. MacGregor to retain majority control of the Company’s voting power while reducing, potentially significantly, his economic interest in the Company’s shares. Although Mr. MacGregor may be able to sell his entire economic interest in the Company’s common stock, Mr. MacGregor would retain control over the company by maintaining his Series A preferred shares.

Risks Related to our Management and Control Persons

Our largest shareholder, officer, and director, Bannor Michael MacGregor, holds substantial control over the Company and is able to influence all corporate matters, which could be deemed by shareholders as not always being in their best interests.

Bannor Michael MacGregor, Chairman and CEO, holds substantial control over the Company. As a result, Mr. MacGregor, could have significant influence over most matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions, even if other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders may view as beneficial. Mr. MacGregor controls 29.27% of the Company’s common shares. Additionally, Mr. MacGregor owns 3,829 Series A Preferred Shares that have voting rights equivalent to 3,829,000,000 common shares.

We are dependent on the continued services of our Chairman and CEO, and our President, and if we fail to keep them or fail to attract and retain qualified senior executives and key technical personnel, our business may not be able to expand.

We are dependent on the continued services of Chairman/CEO, Bannor Michael MacGregor and President, A. John Luessenhop, Jr., and the availability of new executives to implement our business plans. The market for skilled employees is highly competitive, especially for employees in our industry. Although we expect that our planned compensation programs will be intended to attract and retain the employees required for us to be successful, there can be no assurance that we will be able to retain all our key employees or a sufficient number to execute our plans, nor can there be any assurance we will be able to continue to attract new employees as required.

Our lack of adequate D&O insurance may also make it difficult for us to retain and attract talented and skilled directors and officers.

In the future we may be subject to litigation, including potential class action and shareholder derivative actions. Risks associated with legal liability are difficult to assess and quantify, and their existence and magnitude can remain unknown for significant periods of time. While we do have D&O insurance it may not be sufficient in the case of litigation.

Our Officers and Key Personnel may voluntarily terminate their relationship with us at any time, and competition for qualified personnel is lengthy, costly, and disruptive.

If we lose the services of our officers and key personnel and fail to replace them if they depart, we could experience a negative effect on our financial results and shares price. The loss and our failure to attract, integrate, motivate, and retain additional key employees could have a material adverse effect on our business, operating and financial results and shares price.

Risks Relating to Our Company and Industry

The success of our business depends on our ability to maintain and enhance our reputation and brand.

We believe that our reputation in our industry is of significant importance to the success of our business. A well-recognized brand is critical to increasing our customer base and, in turn, increasing our revenue. Since the industry is highly competitive, our ability to remain competitive depends to a large extent on our ability to maintain and enhance our reputation and brand, which could be difficult and expensive. To maintain and enhance our reputation and brand, we need to successfully manage many aspects of our business, such as cost-effective marketing campaigns to increase brand recognition and awareness in a highly competitive market. We cannot assure you, however, that these activities will be successful and achieve the brand promotion goals we expect. If we fail to maintain and enhance our reputation and brand, or if we incur excessive expenses in our efforts to do so, our business, financial conditions and results of operations could be adversely affected.

In the event that we are unable to successfully compete in our industry, we may not see lower profit margins

We face substantial competition in our industry. Due to our smaller size, it can be assumed that some of our competitors have greater financial and other competitive resources. We will attempt to compete against these competitors by developing film content that exceed what is offered by our competitors. However, we cannot assure you that our intellectual properties will outperform competing films. Increased competition could result in:

Any one of these results could adversely affect our business, financial condition, and results of operations. In addition, our competitors may develop competing products that achieve greater market acceptance. It is also possible that new competitors may emerge and acquire significant market share. Our inability to achieve sales and revenue due to competition will have an adverse effect on our business, financial condition, and results of operations.

If we are unable to successfully manage growth, our operations could be adversely affected.

Our progress is expected to require the full utilization of our management, financial and other resources. Our ability to manage growth effectively will depend on our ability to improve and expand operations, including our financial and management information systems, and to recruit, train and manage personnel. There can be no absolute assurance that management will be able to manage growth effectively.

If we do not properly manage the growth of our business, we may experience significant strains on our management and operations and disruptions in our business. Various risks arise when companies and industries grow quickly. If our business or industry grows too quickly, our ability to meet customer demand in a timely and efficient manner could be challenged. We may also experience development delays as we seek to meet increased demand for our services and platform. Our failure to properly manage the growth that we or our industry might experience could negatively impact our ability to execute on our operating plan and, accordingly, could have an adverse impact on our business, our cash flow and results of operations, and our reputation with our current or potential customers.

We may fail to successfully integrate acquisitions or otherwise be unable to benefit from pursuing acquisitions.

We believe there are meaningful opportunities to grow through acquisitions and joint ventures across all service categories and we expect to continue a strategy of selectively identifying and acquiring intellectual properties. We may be unable to identify, negotiate, and complete suitable acquisition opportunities on reasonable terms. There can be no assurance that any business acquired by us will be successfully integrated with our operations or prove to be profitable to us. We may incur future liabilities related to acquisitions. Should any of the following problems, or others, occur as a result of our acquisition strategy, the impact could be material:

The elimination of monetary liability against our directors, officers and employees under our Articles of Incorporation and the existence of indemnification rights to our directors, officers and employees may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers, and employees.

Our Articles of Incorporation contain provisions that mitigate the liability of our directors for monetary damages to our Company and shareholders. Our Bylaws also require us to indemnify our officers and directors. We may also have contractual indemnification obligations under our agreements with our directors, officers, and employees. The foregoing indemnification obligations could result in our Company incurring substantial expenditures to cover the cost of settlement or damage awards against directors, officers, and employees that we may be unable to recoup. These provisions and resulting costs may also discourage our Company from bringing a lawsuit against directors, officers, and employees for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against our directors, officers, and employees even though such actions, if successful, might otherwise benefit our Company and shareholders.

Item 2. Financial Information

Management’s discussion and analysis of financial condition and results of operations

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our financial statements and the notes to those financial statements that are included elsewhere in this Form 10. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. See “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Form 10.

General

American 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. The Company 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. The Company 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.

Our ability to generate any revenue sufficient to achieve profitability will depend on the successful development, production, and distribution of motion pictures. We reported a net loss of approximately $448,000 for the six months ended June 30, 2023 and net losses of $86,000 and $506,000 for the years ended December 31, 2022 and 2021, respectively. As of June 30, 2023, we had an accumulated deficit of approximately $4.1 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. We expect that our expenses and capital expenditures will increase substantially in connection with our ongoing activities including, but not limited to the following:

Over 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 terms.

Components of Our Results of Operations

Revenue

The Company’s revenue comes from contracts with customers for consulting services and from the licensing and distribution of film and other entertainment 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.

Cost of Revenues

Cost of revenues includes only 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 with no separate compensation due or payable to these individuals.

Operating Expenses

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and personnel-related costs, including stock-based compensation, for our executives and other administrative functions. General and administrative expenses include legal fees, accounting, auditing, consulting, and tax services; insurance costs; investor relations and transfer agent fees; travel expenses; and facility costs.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and development of our product candidates. 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.

Other Income (Expense)

Interest Income. Interest income consists of interest earned on our cash balances.

Interest Expense. Interest expenses consist of interest on the Company’s Economic Injury Disaster Loan (“EIDL”); credit cards, and related party debt.

Bad Debt Expense. Bad debt expense reflects amounts recorded as a reserve for accounts receivable where management had subsequently determined collectability is uncertain or improbable.

Income Taxes

Since our inception, we have not recorded any income tax benefits for the net losses we have incurred or for the research and development tax credits earned in each year and interim period, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carry forwards and tax credit carryforwards will not be realized.

Revenues and Cost of Revenues

During the three months ended June 30, 2023 and 2022, the Company did not report any revenues or cost of revenues. The Company’s revenue comes from contracts with customers for consulting services and from the licensing and distribution of film and other entertainment rights.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2023 were approximately $395,000 compared to approximately $140,000 for the three months ended June 30, 2022. The increase of approximately $256,000 in general and administrative expenses relates to accounting, auditing, and legal professional fees decrease in salaries and personnel-related costs and increased travel expenses and approximately $194,000 of bad debt expense. The customer that owes APH approximately $194,000 advised the Company in June 2023 that their Managing Director resigned and that the customer ceased operations. Consequently, in the second quarter of 2023 management established an allowance for this receivable and subsequently determined that the monies due were uncollectable and therefore was written off. As we transition to a public company, we expect general and administrative costs to increase in future periods.

Other Income (Expense)

Interest Income. Interest income for the three months ended June 30, 2023 and 2022 was minimal and consisted of interest earned on invested cash balances.

Interest Expense. Interest expense for the three months ended June 30, 2023 and 2022 was approximately $2,000 and $2,000, respectively, and was primarily related to our Economic Injury Disaster Loan (“EIDL”) and working capital loan.

Liquidity and Capital Resources

During the second quarter of 2023, the Company sold 3,333,328 shares of Common Stock at $0.15 per share to new investors resulting in total proceeds of $500,000. $40,166 of the $500,000 is reported as a subscription receivable as of June 30, 2023 and was subsequently collected in July 2023.

We had an accumulated deficit of approximately $4.1 million, incurred a net loss of approximately $395,000, and had cash outflows from operations of approximately $188,000 as of and for the three months ended June 30, 2023. 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, 2023, we had cash and cash equivalents of approximately $266,000.

Operating Activities

During the three months ended June 30, 2023, operating activities used approximately $188,000 of cash, primarily resulting from our net loss of approximately $395,000, partially offset by non-cash charges and changes in our operating assets and liabilities of $207,000.

During the three months ended June 30, 2022, operating activities used approximately $20,000 of cash, primarily resulting from our net loss of approximately $141,000, partially offset by non-cash charges and changes in our operating assets and liabilities of approximately $121,000.

Investing Activities

During the three months ended June 30, 2023 and 2022, investing activities were not significant.

Financing Activities

During the three months ended June 30, 2023, net cash provided by financing activities was approximately $437,000 including approximately $460,000 of proceeds from the sale of Common Stock partially offset by net repayments of $23,000 on related party borrowings.

During the three months ended June 30, 2022, net cash provided by financing activities was $0.

Revenues and Cost of Revenues

During the six months ended June 30, 2023 and 2022, the Company had revenues of approximately $169,000 and $0, respectively. The Company’s revenue comes from contracts with customers for consulting services and from the licensing and distribution of film and other entertainment rights.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2023 were approximately $579,000 compared to approximately $207,000 for the six months ended June 30, 2022. The increase of approximately $372,000 in general and administrative expenses relates to accounting, auditing, and legal professional fees, decrease in salaries and personnel-related costs and increased travel expenses and approximately $194,000 of bad debt expense. The customer that owes APH approximately $194,000 advised the Company in June, 2023 that their Managing Director resigned and that the customer ceased operations. Consequently, in the second quarter of 2023 management established an allowance for this receivable and subsequently determined that the monies due were uncollectable and therefore was written off. As we transition to a public company, we expect general and administrative costs to increase in future periods.

Other Income (Expense)

Interest Income. Interest income for the six months ended June 30, 2023 and 2022 was approximately $2,000 and $0, respectively, and consisted of interest earned on invested cash balances.

Interest Expense. Interest expense for the six months ended June 30, 2023 and 2022 was approximately $4,000 and $4,000, respectively, and was primarily related to our Economic Injury Disaster Loan (“EIDL”) and working capital loan.

Liquidity and Capital Resources

During the first half of 2023, the Company sold 3,333,328 shares of Common Stock at $0.15 per share to new investors resulting in total proceeds of $500,000. $40,166 of the $500,000 is reported as a subscription receivable as of June 30, 2023 and was subsequently collected in July 2023.

We had an accumulated deficit of approximately $4.1 million, incurred a net loss of approximately $448,000, and had cash outflows from operations of approximately $318,000 as of and for the six months ended June 30, 2023. 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, 2023, we had cash and cash equivalents of approximately $266,000.

Operating Activities

During the six months ended June 30, 2023, operating activities used approximately $318,000 of cash, primarily resulting from our net loss of approximately $448,000, partially offset by non-cash charges and changes in our operating assets and liabilities of $318,000.

During the six months ended June 30, 2022, operating activities used approximately $62,000 of cash, primarily resulting from our net loss of approximately $210,000, partially offset by non-cash charges and changes in our operating assets and liabilities of approximately $149,000.

Investing Activities

During the six months ended June 30, 2023 and 2022, investing activities were not significant.

Financing Activities

During the six months ended June 30, 2023, net cash provided by financing activities was approximately $562,000 including approximately $460,000 of proceeds from the sale of Common Stock and net related party borrowings of $103,000.

During the six months ended June 30, 2022, net cash provided by financing activities was approximately $47,000 resulting from net related party borrowings.

Revenues

During the years ended December 31, 2022 and 2021, the Company reported consulting revenues of approximately $461,000 and $0, respectively. The Company’s revenue comes from contracts with customers for consulting services and from the licensing and distribution of film and other entertainment rights.

Cost of Revenues

Cost of revenues for the years ended December 31, 2022 and 2021, were approximately $132,000 and $0, respectively, and 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.

General and Administrative Expenses

General and administrative expenses for the year ended December 31, 2022, were approximately $409,000, compared to approximately $492,000 for the year ended December 31, 2021. The net decrease of approximately $82,000 in general and administrative expenses primarily relates to the 2021 period including approximately $366,000 of bad debt expense while the 2022 period included approximately $284,000 of increased accounting, auditing, and legal professional fees and increased travel expenses. We expect to see further increases as we grow our operations in future periods.

Other Income (Expense)

Interest Income. Interest income for the years ended December 31, 2022 and 2021 was approximately $2,000 and $0, respectively, and consisted of interest earned on invested cash balances.

Interest Expense. Interest expense for the years ended December 31, 2022 and 2021 was approximately $8,000 and $14,000, respectively, and was primarily related to our Economic Injury Disaster Loan (“EIDL”) and working capital loan.

Liquidity and Capital Resources

As indicated in the accompanying financial statements, we had an accumulated deficit of approximately $3.7 million, incurred a net loss of approximately $86,000 and cash inflows from operations of approximately $5,000 as of and for the year ended December 31, 2022. 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 and commercially release our products 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 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, 2022, we had cash and cash equivalents of $32,000.

Operating Activities

During the year ended December 31, 2022, operating activities provided approximately $5,000 of cash, primarily resulting from our net loss of approximately $86,000, partially offset by non-cash charges of approximately $25,000 and net cash provided by changes in our operating assets and liabilities of $66,000.

During the year ended December 31, 2021, operating activities used approximately $179,000 of cash, primarily resulting from our net loss of approximately $506,000, partially offset by non-cash charges of approximately $370,000 and net cash provided by changes in our operating assets and liabilities of $43,000.

Investing Activities

During the year ended December 31, 2022, net cash used by financing activities was approximately $121,000, related to film production.

During the year ended December 31, 2021, net cash used by financing activities was $0.

Financing Activities

During the year ended December 31, 2022, net cash provided by financing activities was approximately $46,500, consisting primarily of related party working capital borrowings under a promissory note.

During the year ended December 31, 2021, net cash provided by financing activities was approximately $278,000, consisting primarily of $128,000 related party working capital borrowings under a promissory note and proceeds of $149,900 from an Economic Injury Disaster Loan (“EIDL”) secured loan with the U.S. Small Business Administration.

Funding Requirements

We expect our expenses to increase substantially in connection with our ongoing film development and production activities. In addition, transition from the OTC markets to an SEC registrant will increase our reporting and compliance cost.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of such stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures, or declaring dividends.

Critical Accounting Policies and Significant Judgments and Estimates

Our financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. 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 awards.

Off-Balance Sheet Arrangements

During the periods presented, we did not have and we do not currently have any significant off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Working Capital Loan

During the three months ended June 30, 2023 and the years ended December 31, 2022 and 2021, the Company borrowed approximately $125,000, $115,000, and $259,000, respectively, from Michael MacGregor, the Company’s CEO & President and Board member to meet working capital requirements. During 2022, the Company agreed to exchange $299,401 in debt obligations to Mr. MacGregor and relief from two of the Company’s legal services providers in exchange for equity in the form of 3,000,000 common shares valued at $0.10 per share for an equivalent aggregate value of $300,000. The transaction enabled the Company to retire $231,901 of debt due and owing to Mr. MacGregor and $67,500 of accrued legal fees.

Thu Company also repaid approximately $69,000 of this related party debt in 2022. During 2021, the Company issued 3,829 shares of Series A Preferred Stock to Mr. MacGregor as payment in full for: (a) repayment of loans from an affiliate comprised of principal of $539,084 and accrued interest of $30,197 (combined $569,281) and (b) a shareholder assuming the loan payable to a note payable to an affiliate comprised of principal of $186,637 and accrued interest of $9,871 (combined $196,508). In aggregate, $765,789 of loans and accrued interest were converted to 3,829 shares of Series A Preferred Stock.

[The above summary of our Working Capital Loan is qualified in its entirety by reference to the full text of the Business Loan Agreements and the related Promissory Notes with respect to the Working Capital Loan which are filed as exhibits to the registration statement of which this filing].

Accounts Receivable – Accounts receivable primarily consist of trade receivables due from customers for consulting services and from fees derived from licensing of IP to content providers worldwide.

Going Concern

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

Management evaluated all relevant conditions and events that are reasonably known or reasonably knowable, in the aggregate, as of the date the consolidated financial statements are issued and determined. The Company’s ability to continue as a going concern is dependent on the Company’s ability to generate increased revenues and raise capital within one year from the date of filing.

Over the next twelve months management plans to use borrowings and security sales 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.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to shareholders.

Item 3. Properties

The Company maintains three virtual offices in New York, NY, Raleigh, NC, and Los Angeles, CA.

Item 5. Directors and Executive Officers.

Bannor Michael MacGregor, CEO/Chairperson – Age 58

Mr. MacGregor has served as the Company’s Chief Executive Officer since September of 2017. Mr. MacGregor has been the Managing Member of Duncan Morgan, LLC since June of 2008. Prior to that, Mr. MacGregor served as the CEO and President of Bold Crayon Corporation from 2018 to 2022. Mr. MacGregor was a producer on the feature film, BUFFALOED (2020). Mr. MacGregor also served as an Executive Director at the Organization for the Advocacy of Multi Cultural Unity, Inc., a non-profit, that promotes cultural awareness, from 2016 to 2022.

A. John Luessenhop, Jr., esq., President/Director – Age 64

Mr. Luessenhop has served as the Company’s President since July of 2023. Prior to that Mr. Luessenhop has served as the CFO at Catalyst Cannabis Co. from 2020 to 2023. Mr. Luessenhop is a writer/director/producer and former Wall Street attorney. Mr. Luessenhop co-wrote and directed SPEED KILLS, starring John Travolta and Kathryn Winnick. The film premiered as an original on the leading streaming services with high success. Mr. Luessenhop directed two movies, TAKERS and TEXAS CHAINSAW 3D (the reboot of the iconic horror franchise), that both opened #1 at the U.S. Box Office. TAKERS also followed its box office success by topping U.S. charts for sales, rentals, and video-on-demand purchases. Mr. Luessenhop earned degrees as the University of Virginia and Georgetown Law School.

Donald J. Harris, esq., Secretary/Director – Age 61

Mr. Harris has served as the Company’s Secretary since July of 2023. Mr. Harris serves as a partner at Harris Sarratt & Hodges, LLP since 1999. Mr. Harris is a corporate attorney and trial attorney specializing in complex business disputes involving issues related to corporate governance, and ownership, contracting, technology, intellectual property, and licensing.

Daniel Hirsch, Treasurer – Age 55

Mr. Hirsch has served as the Company’s Treasurer since July of 2023. Prior to that Mr. Hirsch served as Chief Financial Officer and director of Todos Medical Ltd since January 5, 2020. Mr. Hirsch has been Managing Partner of First Line Capital, LLC since 2002. Mr. Hirsch holds a Bachelor’s Degree in Economics from Yeshiva University and a Master’s Degree in Public Health from the New School of Social Research.

James H. Hayne, CPA, Assistant Secretary and Assistant Treasurer – Age 57

Mr. Hayne has served as the Company’s Assistant Secretary and Assistant Treasurer since July of 2023. Mr. Hayne is a finance executive with over 30 years’ corporate and public accounting experience. Mr. Hayne has been a shareholder at Hayne Financial Consulting, LLC, a consulting firm that principally provides contract accounting and chief financial officer services, since January 1, 2023. Mr. Hayne was a shareholder at Hayne, CPA, PLLC from November 1, 2017 through December 31, 2019 and from January 1, 2020 through December 31, 2022, Mr. Hayne was a shareholder with Dodson, Shelton & Nelson, P.A. Mr. Hayne holds a Bachelor’s Degree in Accounting from North Carolina State University and is a licensed Certified Public Accountant.

Philip Quartararo, Independent Director – Age 67

Mr. Quartararo has served the Chairman and President of the Hello Group, a prominent Music Publishing company that is administered through SONY, since June 2019. Mr. Quartararo serves as the President of VirtualSonics, a tech company specializing in building virtual instruments and is SONY’s global brand partner on 360RA, the newest spatial audio delivery system since 2018. Prior to that Mr. Quartararo served as the President of Rhythm Nation Records, from September 2016 to November of 2019. Mr. Quartararo is considered an artist branding expert and is widely regarded as one of the industry’s staunchest advocates to defend and protect artists rights. Prior to that Mr. Quartararo served as the CEO at Virgin Records, Warner Bros. Records and EMI, and has been involved in the careers of recording artists ranging from U2 to Linkin Park to Josh Groban to the Spice Girls.

Michael Wilson, Independent Director – Age 57

Mr. Wilson serves as the EVP of Operations and Finance at Astro Digital since January of 2017. Mr. Wilson serves as the Co-Founder of The Panama Media Center since January of 2013. Mr. Wilson serves as an Executive Director of The Delahunt Group since March of 2011. Mr. Wilson is an executive and corporate advisor specializing in business strategy, investment banking, portfolio management, and valuation. Mr. Wilson earned an MBA from NYU Stern School of Business and is a graduate of Northeastern University.

Michael Blanchard, Director – Age 63

Mr. Blanchard had served the Company’s as its Secretary/Treasurer from September 2020 to July 2023. Mr. Blanchard serves as the CEO of Ribo Music, LLC since April pf 2020. Prior to that Mr. Blanchard served as an Investor Liaison to Bold Crayon Corporation from 2018 to December of 2020. Mr. Blanchard is a graduate of Boston College.

Tim Battles, Director – Age 59

Mr. Battles serves as the CFO of Ribo Music, LLC since April pf 2020. Prior to that served as the SVP/Chief Integration Officer of TPx Communications from 2016 to 2018. Mr. Battles earned a Bachelor’s Degree from Bowdin College.

Peter Conway, Independent Director – Age 65

Mr. Conway serves as the CEO of PC2 Consulting since January 2015. Prior to that, Mr. Conway served as COO, CTO and various executive roles in product line development, marketing and sales spanning servers, storage and networking technologies for companies like EMC, Dell, and Microsoft. Earned an Masters at Computer Science from Rensselaer Polytechnic Institute (RPI) and a B.S. at Computer Science from Union College.

William J. MacDonald, Independent Director– Age 67

Mr. MacDonald serves as the Chief Creative Officer of Asteri Networks since December of 2017. Mr. MacDonald is an American film and television producer and writer. Mr. MacDonald was a co-creator of the HBO original series ROME (in association of the BBC) along with John Milius and Bruno Heller and served as an executive producer and writer on the series. Mr. MacDonald has a producer, co-producer or executive producer credit on SLIVER, JADE, AN OCCASIONAL HELL, ROUGH RIDERS, MOLLY AND ONE MAN’S HERO. Mr. MacDonald earned an undergraduate degree from Georgetown University and a Juris Doctor degree from the Fordham University School of Law in New York.

Thomas Rauker, Independent Director – Age 59

Mr Rauker currently serves as the President and COO of Aidentified, LLC, an AI driven data and intelligence business, since June of 2022, and was also recently added to the Board of Directors. Prior to this Mr. Rauker served as the Global COO of Dun & Bradstreet (D&B) since May of 2019 and served in various executive leadership roles at the company since January of 2015 following the acquisition of NetProspex, Inc. During his tenure at D&B he played key roles in both the privatization of the company, completed in February of 2019, and the following IPO in July 2020 to bring the company back to the NYSE. Prior D&B, Mr. Rauker served as the COO and CFO of NetProspex starting in 2010, leading the company through a Series C of Venture Capital Funding leading to a successful sale of the company in January 2015 to D&B. Mr. Rauker also has continued to serve as an advisor to multiple Private Equity and Venture Capital firms since June of 2021.

Term of Office

Our directors are appointed to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our Bylaws. Our officers are appointed by our Board of Directors and hold office until removed by the board, subject to their respective employment agreements.

Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

Involvement in Certain Legal Proceedings

No persons or entities listed above have, in the past 10 years, been the subject of:

Board of Directors

General Practices

According to our Amended and Restated Articles of Incorporation, our Board of Directors must consist of at least seven and not more than sixteen directors. Currently, our Board of Directors consists of ten directors. Pursuant to our Amended Articles, our directors are elected at an annual or special general meeting of our shareholders and serve on our Board of Directors until the next annual general meeting at which one or more directors are elected or until they are removed by the majority of our shareholders at an annual or special general meeting of our shareholders or upon the occurrence of certain events, in accordance with our Amended Articles. In addition, our Amended Articles allow our Board of Directors to appoint directors to fill vacancies on our Board of Directors to serve until the next annual meeting or special general meeting, or earlier if required by our Amended Articles or applicable law.

Our Board of Directors consists of 10 members with 5 members being independent under Nasdaq rules. The independent directors are: Michael Wilson, Peter Conway, Philip Quartararo, William MacDonald and Thomas Rauker.

Audit Committee

Our Board of Directors has adopted an audit committee charter that sets forth the responsibilities of the audit committee consistent with the regulations of the SEC including the following:

Our audit committee, which consists of two directors and one officer, provides assistance to our Board of Directors in fulfilling its legal and fiduciary obligations in matters involving our accounting, auditing, financial reporting, internal control and legal compliance functions by pre-approving the services performed by our independent accountants and reviewing their reports regarding our accounting practices and systems of internal control over financial reporting. Our audit committee also oversees the audit efforts of our independent accountants and takes those actions that it deems necessary to satisfy itself that the accountants are independent of management.

Our audit committee consists of Michael Wilson, a director, who serves as the chairperson and Thomas Rauker, a director, and James Hayne, an officer, serve as the other committee members. All members of our audit committee meet the requirements for financial literacy under the applicable rules and regulations of the SEC and the Nasdaq corporate governance rules. Our Board of Directors has determined that Mr. Wilson, Mr. Rauker, and Mr. Hayne are “audit committee financial experts” as defined by the SEC rules and has the requisite financial experience as defined by the Nasdaq Rules. Our Board of Directors has determined that two members, Mr. Wilson and Mr. Rauker, of our compensation committee are independent under the Nasdaq Rules, including the additional independence requirements applicable to the members of a compensation committee.

Compensation Committee

Under Wyoming law, the Board of Directors of any corporation may appoint a compensation committee. Our compensation committee is comprised of at least three directors, including two outside directors, who must constitute a majority of the members of the compensation committee.

The roles of the compensation committee are, among others, as follows:

Our compensation committee consists of three directors, Philip Quartararo who serves as the chairperson, and A. John Luessenhop, Jr., and William J. MacDonald who serve as the other members. Our Board of Directors has determined that two members, Mr. Quartararo and Mr. MacDonald, of our compensation committee are independent under the Nasdaq Rules, including the additional independence requirements applicable to the members of a compensation committee.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee, which is comprised of three directors, is responsible for reviewing proposed new members of the Board and establishing full criteria for board membership. The nominating and corporate governance committee is also responsible for evaluating the performance of the Board as a whole, as well as that of the individual members of the Board.

Our nominating and corporate governance committee consists of A. John Luessenhop. Jr., who serves as the chairperson, Timothy Battles and Donald Harris who serve as the other members. Our Board of Directors has determined that one member, Mr. Battles, of our nominating and corporate governance committee is independent under the Nasdaq Rules, including the additional independence requirements applicable to the members of a nominating and corporate governance committee.

For the fiscal years ending December 31, 2021, and 2022, the Board of Directors:

Reviewed and discussed the audited financial statements with management and reviewed and discussed the written disclosures and the letter from our independent auditors on the matters relating to the auditor’s independence.

Based upon the Board of Directors’ review and discussion of the matters above, the Board of Directors authorized inclusion of the audited financial statements for the year ended December 31, 2022, and 2021, to be included in this Registration Statement on Form 10 filed with the Securities and Exchange Commission.

Code of Ethics & Insider Trading Policy

We have adopted a Code of Ethics and Insider Trading Policy which applies to our executive officers, directors and employees. A copy of our code of ethics is filed as Exhibit 14 to this Form 10.

Item 6. Executive Compensation

On January 1, 2023, the Board of Directors of the Company authorized the grant of options to purchase 3,810,221 common shares of the Company at an exercise price of $0.0125 per share. This grant included 250,000 options to each of its nine Board members, 100,000 options to each of its four advisors, and 1,160,221 options granted to two officers/Board members for the conversion of $105,000 of accrued consulting fees into options to purchase shares of Common Stock. The consulting agreements are at-will consulting agreements which may be terminated at any time with no penalty.

We have entered into a consulting agreement with our CEO, Michael MacGregor, for a fee of Five Thousand dollars ($5,000) per month. The agreement calls for the promotion of the quality of the Company’s products and services with attention to the maintenance of the standards and procedures of the Company. Additionally, the CEO is seeking to enhance and develop the Company’s relationships with the entertainment industry and technology developers. As of June 30, 2023, the Company had not executed the stock option grant and related agreements. No stock option expense will be reported until such time as the stock option grant and related agreements are fully executed.

Except as disclosed above, no Directors were paid in excess of $100,000 in the year 2022.

Item 7. Certain Relationships and Related Transactions, and Director Independence

Other than described below or the transactions described under the heading “Executive Compensation,” there have not been, and there is not currently proposed, any transaction or series of similar transactions to which we were a participant and in which any director, executive officer, holder of 5% or more of any class of our capital shares or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest.

Related Party Transactions in 2022 and 2021

The Company has agreed to indemnify Mr. MacGregor for all legal and professional costs originating from the lawsuit Randall S. Sprung v. Bannor Michael MacGregor, Jeffery Katz, and Life Design Station International, Inc. – Supreme Court of New York, County of Kings, Index No.: 504677/2019.

During 2022 and 2021, the Company incurred approximately $120,000 and $30,000, respectively, of professional fees to a legal firm affiliated with a member of the Board of Directors, Mr. Harris. At December 31, 2022 and 2021, the Company had $55,000 and $30,000, respectively, in accounts payable and accrued expenses owed to the legal firm.

During 2022, the Company entered into consulting services relationships with four other members of the Board whereby they were compensated a total of $149,000. As of December 31, 2022, $105,000 of the total amount of $149,000 was accrued and unpaid. The consulting services are provided as requested by management and may be terminated at any time with no penalty. There is currently one consulting agreement with Bannor Michael MacGregor for a fee of Five Thousand dollars ($5,000) per month. This agreement has no convertible features.

During 2022, the Company entered into a services agreement with Ribo Music LLC aka Ribo Media (“Ribo Media”) whereby the Company will assist Ribo Media in developing an online media platform which will deliver music and eventually movies directly to consumers via their smart devices for a fee of $151,250. In October 2022, this agreement was amended to increase the scope of the services to be rendered by the Company by $35,000 for a total of $186,250. As of December 31, 2022, the Company had received $186,250. Michael Blanchard, a director, Secretary/Treasurer and shareholder of the Company, and Timothy Battles, a director and shareholder of the Company, are both Managing Members and controlling shareholders in Ribo Media.

In August 2022, the Company began production of the feature film, THE DEVIL’S HALF-ACRE, written and directed by Dashiell Luessenhop, a son of A. John Luessenhop, a director of the Company. During the year ended December 31, 2022, the Company capitalized $106,355 of production costs associated with this film.

On November 10, 2022 the Company acquired an option/purchase agreement on the screenplay MIDNIGHT’S DOOR from Mr. Luessenhop, the owner/controller of the associated IP (“intellectual property”), wherein Mr. Luessenhop and Mr. MacGregor were entitled to reimbursement of an aggregate of $12,700 provided the Company produced a feature film. The option was due to expire on February 14, 2023, but was subsequently re-issued for another year directly to the Company (See Note 9).

During 2022, the Company entered into definitive agreements to secure Bold Crayon Corporation (“Bold Crayon”) as a development partner and purchased certain assets from Bold Crayon, including a portion of the rights to a feature film, and copyrights on six film titles. Mr. MacGregor, CEO/President and a director of the Company, Mr. MacGregor is also the CEO/President and a director of Bold Crayon and effectively controls Bold Crayon as a managing manager of the trustee of the trust that owns the majority ownership interest in Bold Crayon. Mr. Michael Blanchard was a past Director and Secretary/Treasurer of Bold Crayon and is the Secretary/Treasurer and a director of APHP and Mr. Blanchard owns 3.643% of the common shares of APHP.

On November 10, 2022, the Company approved the optioning of MIDNIGHT’S DOOR written by Kirsten Elms from Mr. Luessenhop for $12,700 (provided the Company produces MIDNIGHT’S DOOR as a feature film and further subject to producer agreements with Luessenhop and MacGregor). Mr. Luessenhop is a director of the Company and owns 2.005% of the Company.

On November 10, 2022 the Company entered into an additional agreement regarding THE DEVIL’S HALF-ACRE to extend additional financing in an undetermined amount to the film in exchange among other things for increased equity in the film. DEVIL’S HALF-ACRE is currently controlled by Mr. Luessenhop. On August 18, 2023, the Company completed an addendum to the Devil’s Half-Acre agreement that was originally signed between the Company and A. John Luessenhop assigning the rights to Devil’s Half-Acre to APHP in exchange for the Company agreeing to fund up to Three Million dollars ($3,000,000) for the production of the film.

On November 10, 2022 and as a result of previous agreement between two of Company’s Shareholders the Company ratified Bold Crayon as a “Designated APHP Content Developer” and approved the purchase of certain assets from Bold Crayon. The Board has authorized management to enter into definitive agreements to consummate the transaction as soon as is practical. As noted above, Mr. MacGregor controls Bold Crayon.

On November 10, 2022 the Company granted Mr. Luessenhop, a director of the Company, the right to purchase 2,000,000 common shares in the Company for $0.0125 per share for an aggregate purchase price $25,000 to be paid to the Company in the form of two components: (i.) relief of an outstanding account payable of $12,417 due to Mr. Luessenhop from the Company and (ii.) cash of $12,583.

Regarding the IMM Technology License more fully described in Note 2, Mr. MacGregor was a member of the Board of Directors of VASTECH from March 8, 2017 until July 7, 2021. Mr. MacGregor also owns approximately 2.5% of VASTECH. Mr. MacGregor owns approximately 4.9% of Intellitech Pty Ltd, the now current owner of the VASTECH IMM Technology.

In November 2020, the Company agreed to pay Bold Crayon Corporation (“Bold Crayon”) $80,000 in exchange for an option to finance and co-produce two feature films subject to Bold Crayon procuring a portion of the equity required to fund the production of the films. Bold Crayon failed to secure the funding and the option expired on December 31, 2020. In March 2021, the Company paid the $80,000 owed to Bold Crayon pursuant to the option agreement. The Company’s President is also the President and Director of Bold Crayon but does not hold any equity in Bold Crayon.

On September 13, 2021, the Company issued 3,829 shares of Preferred Stock to Mr. MacGregor as payment in full for: (a) repayment of loans from Mr. MacGregor comprised of principal of $539,084 and accrued interest of $30,197 (combined $569,281) and (b) Mr. MacGregor assuming the loan payable to a note payable to an affiliate comprised of principal of $186,637 and accrued interest of $9,871 (combined $196,508). In aggregate, $765,789 of loans and accrued interest were converted to 3,829 shares of Preferred Stock.

During November 2021, the Company issued 1,735,000 shares of Common Stock to persons or entities as payment in full for services rendered or to be rendered to the Company, including 100,000 issued to a member of the Board of Directors. The Company recorded $3,470 of consulting expense related to the issuance of these 1,735,000 shares.

Mr. MacGregor, the Company’s President, is also the Managing Manager of the of the trustee of The Noah Morgan Private Family Trust and the Managing Member of the trustee of the Bold Crayon Private Family Trust. In November 2021, the two trusts entered into a private stock exchange agreement whereby The Noah Morgan Private Family Trust transferred 44,000,000 shares of Common Stock in the Company to the Bold Crayon Private Family Trust. The Bold Crayon Private Family Trust currently maintains ownership of 2,933,215 of the aforementioned shares. As part of this private stock exchange agreement, the Bold Crayon Private Family Trust, as the controlling shareholder of Bold Crayon Corporation, agreed in principal to: (i) act as a designated American Picture House developer of IP and pledged to become a WGA signatory, (ii) grant the Company the right of first refusal to produce six titles owned by Bold Crayon, and (iii) Bold Crayon may further at its sole discretion grant certain beneficial ownership to a Bold Crayon produced feature film at Bold Crayon’s sole discretion at such time as the Company and Bold Crayon mutually agree to the Company. The Company was not a party to the aforementioned private stock exchange agreement and no incremental shares of Common Stock were issued as a result of this transaction.

Related Party Transactions during the six months ended June 30, 2023

During the six months ended June 20, 2023, the Company incurred approximately $60,000 of professional fees to a legal firm affiliated with a member of the Board of Directors, Mr. Harris. At December 31, 2022 and June 30, 2023, $55,000 and $10,000, respectively, in accounts payable and accrued expenses were owed to the legal firm.

January 1, 2023, $105,000 of accrued consulting fees, including $60,000 for Mr. MacGregor and $45,000 for Mr. Blanchard, were exchanged for options to purchase 1,160,221 shares of Common Stock at $0.125 per share.

During the six months ended June 30, 2023, the Company incurred approximately $47,000 of consulting fees to three members of the Board of Directors or their affiliates.

During the six months ended June 30, 2023, the Company borrowed $178,500 from Mr. MacGregor pursuant to a master loan agreement that is due and payable in 2024. The master note agreement accrues interest at a rate of 4.4% due and payable in a lump sum upon maturity of the obligation. During the six months ended June 30, 2023, the Company also repaid $75,981 of these related party borrowings. This note is not convertible.

On September 14, 2023, the Board of Directors of the Company approved to enter into Officer’s agreements with Mr. Daniel Hirsch, Mr. James Hayne and Mr. Don Harris. These agreements will be for a duration of twelve months with compensation to be determined by the Compensation Committee.

Item 8. Legal Proceeding

We may from time to time be involved in various claims and legal proceedings of a nature we believe are normal and incidental to our business. These matters may include product liability, intellectual property, employment, personal injury cause by our employees, and other general claims. Aside from the following, we are not presently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Pending Legal Proceeding(s).

Randall S. Sprung v. Bannor Michael MacGregor, Jeffery Katz, and Life Design Station International, Inc. – Supreme Court of New York, County of Kings, Index No.: 504677/2019

This action instituted by Randall Sprung against the Defendants on March 4, 2019, to recover monies he alleges are owed by Defendants (Counter-Plaintiffs) pursuant to written agreements to purchase shares and to provide consulting services between the parties. Defendants Bannor Michael MacGregor and Life Design Station International, Inc. (“LDSI”) (Counter-Plaintiffs) have filed counterclaims to recover damages they have incurred as a direct result of Sprung’s failure to properly perform his obligations and duties under the written agreement between the parties.

In February 2022, Plaintiff Sprung passed away. On May 25, 2023, the Court entered an Order substituting David Sprung, as Administrator of the Estate of Randall S. Sprung, for Randall S. Sprung as Defendant in the action.

While the case was filed in March 2019, due to the COVID-19 pandemic and the death of the Plaintiff, it is still in the preliminary stages. The Defendants will continue to pursue their counterclaims and to defend against Plaintiff’s claims vigorously.

Holders

As of October 11, 2023 we had 313 shareholders of record of common shares per our transfer agent’s shareholder list with others in street name.

Dividends

The Company has not declared any cash dividends since inception and does not anticipate paying any cash dividends in the foreseeable future. The payment of cash dividends is within the discretion of the Board of Directors and will depend on the Company’s earnings, capital requirements, financial condition, and other relevant factors. There are no restrictions that currently limit the Company’s ability to pay cash, or other, dividends on its Common Shares other than those generally imposed by applicable state law. It is the present intention of management to utilize all available funds for the growth of the Company’s business.

Equity Compensation Plan Information

In January 2023, the Company adopted the American Picture House Corporation 2023 Directors, Employees and Advisors Stock Incentive and Compensation Plan (“the Plan”). The Plan shall be administered by the Board of Directors and may grant options to purchase shares of the authorized but unissued Common Stock of the Company, which options may be either incentive stock options or nonqualified stock options. The maximum number of shares of stock which may be issued for stock awards or stock options granted under the Plan is 10,000,000 shares of Common Stock. If any outstanding options expire for any reason, terminate, or forfeit, the shares or share not exercised may again be granted. During the first quarter of 2023, the Board of Directors approved the grant of 3,810,221 options to advisors and members of the Board of Directors, but as of June 30, 2023 the Company had not executed the stock option award and related agreements.

Common and Preferred Shares

Our authorized capital shares consist of 1,000,000,000 common shares and 1,000,000 preferred shares, par value $0.0001 per share, of which 100,000 preferred shares have been designated as Series A Convertible Preferred Stock (“Series A preferred shares” herein). As of October 11, 2023, there were 107,740,991 common shares issued and outstanding and 3,829 Series A preferred shares issued and outstanding, of which 100,000 preferred shares have been designated as Series A Convertible Preferred Stock (“Series A preferred shares” herein). At present, 3,829 Series A preferred shares are issued and outstanding.

Transfer Agent and Registrar

The transfer agent and registrar for our Common Shares is Madison Stock Transfer, 2500 Coney Island Avenue, Brooklyn, New York 11223, Phone: 718-627-4453.

Listing

Our Common Shares are quoted on the OTC Pink under the symbol APHP. On October 11, 2023, the last reported sale price per share for our Common Shares on the OTC Pink market as reported was $0.26.

The Board of Directors approved a 50:1 reverse common share split that became effective in the marketplace on October 11, 2021.

Following the reverse share split, on September 13, 2021, the Company adopted an amendment to the Company’s Articles of Incorporation to reduce the number of authorized shares from 4,700,000,000 common shares at $0.0001 par value to 1,000,000,000 common shares at $0.0001 par value.

Also, on September 13, 2021, the Company issued 3,829 shares of Series A preferred shares to an affiliate as payment in full for: (a.) repayment of loans from an affiliate comprised of principal of $539,084 and accrued interest of $30,197 (combined $569,281) and (b.) a shareholder assuming the loan payable to a note payable to an affiliate comprised of principal of $186,637 and accrued interest of $9,871 (combined $196,508). In aggregate, $765,789 of loans and accrued interest were converted to 3,829 Series A preferred shares.

During November 2021, the Company issued 1,735,000 common shares to persons or entities as payment in full for services rendered or to be rendered to the Company.

On March 31, 2022, the Company agreed to exchange $299,401 in debt obligations to one of the Company’s officers and relief from two of the Company’s legal services providers in exchange for equity in the form of 3,000,000 common shares valued at $0.10 per share for an equivalent aggregate value of $300,000 to be delivered in the second quarter of this year subject only to administrative approval of the price per share by the Company’s Valuation Committee (with $0.10 per share being the value). The transaction enabled the Company to retire $231,901 of debt due and owing to Bannor Michael MacGregor (producer of BUFFALOED) and $67,500 of accrued legal fees. The 3,000,000 common shares were granted to Mr. MacGregor on May 6, 2022.

On November 10, 2022, the Company granted one of the Company’s directors the right to purchase 2,000,000 shares of common shares in the Company for an aggregate purchase price $25,000 ($0.0125 per share) paid to the Company in the form of two components: (i.) a relief of an outstanding account payable of $12,417 for reimbursement of expenses related to the production of a feature film under development by the Company and (ii.) $12,583 in cash. Subsequently, on December 28, 2022, Mr. Luessenhop executed his option.

During the fourth quarter of 2022, the Board of Directors granted options to purchase up to 3,810,221 common shares, at an exercise price of $0.0125 per share, to members of the Board of Directors and advisors, subject to the formal creation and implementation of the Company’s shares option plan. In January 2023, the Board of Directors and Shareholders approved the American Picture House Corporation 2023 Directors, Employees and Advisors Shares Incentive and Compensation Plan and delivered the option agreements to the recipients.

Item 11. Description of Registrant’s Securities to be Registered

General

We are authorized by our articles of incorporation to issue an aggregate of 1,000,000,000 common shares, par value $0.0001 per share, of which 107,740,991 were outstanding as of October 11, 2023; and 1,000,000 preferred shares, par value $0.0001 per share, of which 100,000 preferred shares have been designated as Series A Convertible Preferred Stock (“Series A preferred shares” herein), and of which 3,829 were outstanding as of that date.

The following summary of the terms of our Common Shares and preferred shares, respectively, may not be complete and is subject to, and qualified in its entirety by reference to, the terms and provisions of our Amended and Restated Articles of Incorporation (the “Articles of Incorporation”) and our Bylaws, as amended (the “Bylaws”). You should refer to, and read this summary together with, our Amended and Restated Articles of Incorporation and amended and restated Bylaws to review all of the terms of our Common Shares and preferred shares, respectively, that may be important to you.

Common Shares

Holders of our Common Shares are entitled to one vote for each share held of record on each matter submitted to a vote of shareholders. Except as otherwise expressly provided by the laws of the State of Wyoming, or by the Articles of Incorporation, at any and all meetings of the shareholders of the Corporation there must be present (a quorum), either in person or by proxy, shareholders owning a one third of the issued and outstanding shares of the capital shares of the Corporation entitled to vote at said meeting. At any meeting of shareholders at which a quorum is not present, the holders of, or proxies for, a majority of the shares represented at such meeting, may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented.

To the extent permitted by law, the Board shall have full power and discretion, subject to the provisions of the Articles of Incorporation, to determine what, if any, dividends or distributions shall be declared and paid or made. Dividends may be paid in cash, in property, or in shares of capital shares, subject to the provisions of the Articles of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Company available for dividends such sums as the Directors think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Company, or for such other purpose as the Directors think conducive to the interests of the Company. The Directors may modify or abolish any such reserve in the manner in which it was created.

Series A Preferred Shares

Dividends – the Series A preferred shares do not have any rights to dividends.

Voting – each Series A preferred share 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.

Conversion – each Series A preferred share is convertible at a ratio of 1 to 100,000 so that each one Series A preferred share may be exchanged for 100,000 common shares.

Liquidation – The “Liquidation Preference” with respect to a share of Series A Preferred Stock means an amount equal to the ratio of (a) the total amount of the Corporation’s assets and funds available for distribution to the Series A Preferred Stock to (b) the number of shares of Series A Preferred Stock outstanding.

Redemption – the Series A preferred shares do not have any specific redemption rights.

Sinking Fund Provisions – the Series A preferred shares do not have any sinking fund provisions.

Articles of Incorporation and Bylaws

Our articles of incorporation do not allow cumulative voting rights in the election of our directors. Wyoming law requires the existence of cumulative voting rights to be provided for by a corporation’s articles of incorporation. In the event that a few shareholders end up owning a significant portion of our issued and outstanding common shares, the lack of cumulative voting would make it more difficult for other shareholders to replace our Board of Directors or for a third party to obtain control of us by replacing our Board of Directors. Our articles of incorporation and Bylaws do not contain any explicit provisions that would have an effect of delaying, deferring or preventing a change in control of us.

Certain Anti-Takeover Provisions

Wyoming Statutes sections 17-18-105 through 17-18-111 provide state regulation over the acquisition of a controlling interest in certain Wyoming corporations unless the articles of incorporation or bylaws of the corporation provide that the provisions of these sections do not apply, or the corporation files an election with the Wyoming secretary of state that these sections do not apply. Our Amended and Restated Articles of Incorporation and Bylaws do not state that these provisions do not apply, nor have we made an election with the secretary of state. The statute creates a number of restrictions on the ability of a person or entity to acquire control of a Wyoming company by setting down certain rules of conduct and other disclosures and restrictions in any acquisition attempt, among other things.

Item 12. Indemnification of Directors and Officers

Under our Amended and Restated Articles of Incorporation and Bylaws, the Company shall indemnify, to the fullest extent permitted by applicable law, any person, and the estate and personal representative of any such person, against all liability and expense (including attorneys’ fees) incurred by reason of the fact that he is or was a director or officer of the Corporation or, while serving at the request of the Company as a director, officer, partner, trustee, employee, fiduciary, or agent of, or in any similar managerial or fiduciary position of, another domestic or foreign corporation or other individual or entity or of an employee benefit plan. The Company also shall indemnify any person who is serving or has served the Company as director, officer, employee, fiduciary, or agent, and that person’s estate and personal representative, to the extent and in the manner provided in any bylaw, resolution of the shareholders or directors, contract, or otherwise, so long as such provision is legally permissible.

The Company may, at its discretion, advance expenses in advance of the final disposition of the case to or for the benefit of a director, officer, employee, fiduciary, or agent, who is party to a proceeding such as described in the preceding paragraph A to the maximum extent permitted by applicable law. Such right of indemnification shall not be exclusive of any other right which such directors, officers, or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of shareholders, provision of law, or otherwise.

Without limiting the application of the foregoing, our Board of Directors may adopt Bylaws from time to time with respect to indemnification, to provide at all times the fullest indemnification permitted by the laws of the State of Wyoming and may cause us to purchase and maintain insurance on behalf of any person who is or was our director or officer, or is or was serving at our request as a director or officer of another corporation, or as its representative in a partnership, joint venture, trust, or other enterprise against any liability asserted against such person and incurred in any such capacity or arising out of such status, whether or not we would have the power to indemnify such person. The indemnification provided shall continue as to a person who has ceased to be a director, officer, employee, or agent, and shall inure to the benefit of the heirs, executors, and administrators of such person.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 13. Financial Statements and Supplementary Data

The Company’s audited financial statements for the fiscal years ended December 31, 2022, and December 31, 2021, and Q1 and Q2 of 2023 are included here on pages F-1 through F6 and were audited by BF Borges CPA PC.

Item 14. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 15. Financial Statements and Exhibits

Index To Financial Statements.