NOTE 6 – COMMITMENTS AND CONTINGENCIES

Legal

The Company is not a party to or otherwise involved in any legal proceedings.

In the ordinary course of business, from time to time the Company may be involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon the Company’s financial condition and/or results of operations. However, in the opinion of management, other than as set forth herein, matters currently pending or threatened against the Company are not expected to have a material adverse effect on its financial position or results of operations.

Motion Picture Residual Payments

The Company is obligated to pay motion picture residual payments of approximately 3.6% of gross licensing revenues collected by Mar Vista for residual earnings payable to the SAG-AFTRA pension and health benefit plans on behalf of the actors that performed in the motion pictures. On February 12, 2025, the Company entered into a settlement agreement with SAG-AFTRA to pay $10,943 of motion picture residual payments related to the motion picture “Terror Birds” and will be withheld from future distribution fees paid to us by Mar Vista related to the motion picture “Terror Birds”. In the fiscal years ended April 30, 2025 and 2024, the Company made payments totaling $0 and $0, respectively, and has a balance owed of $10,943 under Accounts payable and accrued expenses in the accompanying consolidated Balance Sheets at April 30, 2025.

Film Representation Agreement

On September 30, 2024, the Company entered into a Film Representation Agreement (“Agreement”) with the producers of the film. The Agreement provides for the Company to have an exclusive right for six months to represent the film to distributors and shall receive a distribution fee of 10% of the Producers’ Net proceeds, as defined. This Agreement expired on March 31, 2025.