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Item 1. Financial Statements

2025-11-13 compared with 2025-08-14 · 765 added, 633 removed, 62 unchanged (96% of the section changed)

Financial Statements

SOUTHPORT ACQUISITION CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2025

ANGEL STUDIOS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

September 30, 2025

December 31, 2024

Current assets:

Prepaid expenses

Cash and cash equivalents

Accounts receivable, net

Current portion of licensing receivables, net

Physical media inventory

Current portion of notes receivable

Loan guarantee receivable

Royalty advance

Prepaid expenses and other

Total current assets

Non-Current Assets:

Marketable securities held in Trust Account (including $ 1,439 and $ 1,603 of accrued dividends as of June 30, 2025 and December 31, 2024, respectively)

Total Non-current Assets

LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT

Licensing receivables, net

Notes receivable, net of current portion

Property and equipment, net

Intangible assets, net

Digital assets

Investments in affiliates

Operating lease right-of-use assets

Other long-term assets

Liabilities and Stockholders’ Equity

Current liabilities:

Accrued expenses

Accounts payable

Accrued offering costs

Due to related party

Promissory note – related party

Administrative support fee – related party

Excise tax liability

Accrued expenses

Current portion of accrued licensing royalties

Current portion of notes payable

Current portion of operating lease liabilities

Deferred revenue

Loan guarantee payable

Current portion of accrued settlement costs

Total current liabilities

Non-current liabilities:

Warrant liability

Total Non-current Liabilities

Accrued settlement costs, net of current portion

Accrued licensing royalties, long-term

Notes payable, net of current portion

Operating lease liabilities, net of current portion

Total liabilities

Commitments and Contingencies (Note 8)

Class A common stock subject to possible redemption;

200,000,000 shares authorized;

37,987 shares issued and outstanding subject to possible redemption at redemption value as of June 30, 2025 and December 31, 2024

Stockholders’ Deficit

Preferred stock, $ 0.0001 par value;

1,000,000 shares authorized;

none issued and outstanding

Class A common stock, $ 0.0001 par value;

200,000,000 shares authorized;

4,200,000 issued and outstanding (excluding 37,987 shares subject to possible redemption) as of June 30, 2025 and December 31, 2024

Class B common stock, $ 0.0001 par value;

20,000,000 shares authorized;

1,550,000 shares issued and outstanding as of June 30, 2025 and December 31, 2024

Commitments and contingencies

Stockholders’ equity:

Common stock, $ 0.0001 par value, 700,000,000 shares authorized;

168,631,209 and 144,396,852 shares issued and outstanding as of September 30, 2025, and December 31, 2024, respectively

Additional paid-in capital

Noncontrolling interests

Accumulated deficit

1 unchanged sentence

( 99,870,749 )

Total Stockholders’ Deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

See accompanying notes to the condensed consolidated financial statements

ANGEL STUDIOS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

Licensed content and other revenue

Pay it Forward revenue

Total revenue

Operating expenses:

Cost of revenues

Selling and marketing

General and administrative

Research and development

Legal expense

Total operating expenses

Operating loss

( 38,090,870 )

( 15,144,331 )

TOTAL LIABILITIES, COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT

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

SOUTHPORT ACQUISITION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months

For the Six Months

Operating costs:

Insurance expense

Administrative expense

Administrative expense – related party

Legal and accounting expenses

Franchise tax expense

Formation, general and administrative expenses

Total expenses

Loss from operations

Other income (loss):

Change in fair value of warrant liability

( 93,232,702 )

( 57,959,347 )

Non-redemption agreement expense

Dividend income on marketable securities held in Trust Account

Other (expense) income

Other income (expense):

Net gain on digital assets

Interest expense

( 3,978,212 )

( 8,285,269 )

Loss before provision for income taxes

( 1,969,247 )

Interest income

Impairment of investments

Total other income (expense), net

Loss before income tax benefit

( 38,611,557 )

Provision for income taxes

( 13,979,468 )

( 91,874,332 )

Weighted average shares outstanding of redeemable Class A common stock

Basic and diluted net income per share, redeemable Class A common stock (see Note 2)

Weighted average shares outstanding of non-redeemable Class A and Class B common stock

Basic and diluted net loss per share, non-redeemable Class A and Class B common stock (see Note 2)

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

SOUTHPORT ACQUISITION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025

Class A common stock

Subject to possible

Class A common stock

Class B common stock

Stockholders’

Balance – January 1, 2025

( 55,752,643 )

Income tax benefit

( 4,483,167 )

Remeasurement of Class A common stock subject to possible redemption

Balance – March 31, 2025

( 38,611,557 )

( 13,899,369 )

Remeasurement of Class A common stock subject to possible redemption

( 91,874,332 )

( 51,269,476 )

Balance – June 30, 2025

Net loss attributable to noncontrolling interests

Net loss attributable to controlling interests

( 38,553,961 )

( 13,855,176 )

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024

Class A common stock

Subject to possible

Class A common stock

Class B common stock

Stockholders’

Balance – January 1, 2024

( 91,853,393 )

( 51,182,073 )

Sponsor capital contribution for non-redemption agreements

Sponsor cash capital contribution

Redemption of Class A common stock

Net loss per common share - basic

Net loss per common share - diluted

Weighted average common shares outstanding - basic

Weighted average common shares outstanding - diluted

See accompanying notes to the condensed consolidated financial statements

ANGEL STUDIOS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

Three Months Ended

Noncontrolling

Balance as of June 30, 2025

( 137,208,163 )

Stock options exercised

Issuance of common stock, net of fees

Transfer of common stock

( 9,798,068 )

Excise tax liability

Trust Account withdrawal for tax payments

Remeasurement of Class A common stock subject to possible redemption

Balance – March 31, 2024

Repurchase of common stock

Business combination related issuances and expenses

( 10,262,317 )

( 10,261,623 )

Sponsor cash capital contribution

Remeasurement of Class A common stock subject to possible redemption

Balance – June 30, 2024

Conversion of convertible notes upon business combination

Stock-based compensation expense

Convertible note beneficial conversion feature

Issuance of warrants

Contributions from noncontrolling interests, net of fees

Redemptions from noncontrolling interests

( 4,003,060 )

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

SOUTHPORT ACQUISITION CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months

( 38,553,961 )

( 38,611,557 )

Balance as of September 30, 2025

( 175,762,124 )

Balance as of June 30, 2024

( 47,402,151 )

Stock options exercised

Issuance of common stock, net of fees

Transfer of common stock

( 1,886,808 )

Repurchase of common stock

Stock-based compensation expense

( 13,855,176 )

( 13,899,369 )

Balance as of September 30, 2024

( 61,257,327 )

See accompanying notes to the condensed consolidated financial statements

ANGEL STUDIOS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

Nine Months Ended

Noncontrolling

Balance as of December 31, 2024

( 99,870,749 )

Stock options exercised

Issuance of common stock, net of fees

Transfer of common stock

( 9,864,890 )

Repurchase of common stock

Business combination related issuances and expenses

( 10,262,317 )

( 10,261,623 )

Conversion of convertible notes upon business combination

Stock-based compensation expense

Convertible note beneficial conversion feature

Issuance of warrants

Digital assets market value adjustment

Contributions from noncontrolling interests, net of fees

Redemptions from noncontrolling interests

( 15,753,060 )

( 91,853,393 )

( 91,874,332 )

Balance as of September 30, 2025

( 175,762,124 )

Balance as of December 31, 2023

( 10,073,191 )

Stock options exercised

Issuance of common stock, net of fees

Transfer of common stock

( 2,963,878 )

Repurchase of common stock

Stock-based compensation expense

Cumulative translation adjustment

( 51,182,073 )

( 51,269,476 )

Balance as of September 30, 2024

( 61,257,327 )

See accompanying notes to the condensed consolidated financial statements

ANGEL STUDIOS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended September 30,

Cash flows from operating activities:

( 91,874,332 )

Adjustments to reconcile net loss to net cash used in operating activities:

Accrued dividend on marketable securities held in Trust Account

Change in fair value of warrant liabilities

Non-redemption agreement expense

Changes in operating assets and liabilities:

Accounts payable and accrued expenses

( 51,269,476 )

Administrative support fee – related party

Due to related party

Prepaid expenses

Net cash used in operating activities

Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:

Depreciation and amortization

Amortization of operating lease assets

Stock-based compensation expense

Net gain on digital assets

( 6,225,200 )

Cash Flows from Investing Activities:

Purchases of marketable securities held in Trust Account

Proceeds from marketable securities held in Trust Account

Net cash provided by (used in) investing activities

Cash Flows from Financing Activities:

Drawdowns on promissory note – related party

Payment to Class A common stockholders for redemptions

( 1,594,889 )

Cash capital contribution from Sponsor

Net cash (used in) financing activities

Investments in affiliates gain

Non-cash interest expense

Paid-in-kind interest

Impairment of investments

Change in deferred income taxes

( 4,403,068 )

Net Change in Cash

Change in operating assets and liabilities:

Accounts receivable

( 8,442,549 )

Cash – Beginning of period

Cash – End of period

Supplemental Non-Cash Investing and Financing Activities:

Remeasurement of Class A common stock subject to possible redemption

Share redemption payable

Trust Account withdrawal for tax payments

Excess fair value of Class B common stock transferred by Sponsor

Excise tax liability

Supplemental Cash Flow Information:

Cash paid for taxes

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

SOUTHPORT ACQUISTION CORPORATION

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Description of Organization and Business Operations

Southport Acquisition Corporation (the “Company”, “SAC”, or “Southport”) is a blank check company formed in Delaware on April 13, 2021.

The Company was formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the “Business Combination”).

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

Sigma Merger Sub, Inc.

(“Merger Sub”), a direct wholly owned subsidiary of the Company, was formed in Delaware on September 9, 2024.

The Company’s condensed financial statements include Merger Sub and are presented on a consolidated basis.

As of June 30, 2025, the Company had not yet commenced any operations.

All activity from inception through June 30, 2025 related to the Company’s formation, initial public offering (the “IPO”), and pursuit of a target company to effect a Business Combination.

The registration statement for the Company’s IPO was declared effective on December 9, 2021.

On December 14, 2021, the Company consummated the IPO, which involved the Company’s sale of 23,000,000 units (the “Units”) at $ 10.00 per Unit, generating gross proceeds of $ 230,000,000 , which is discussed in Note 3.

The 23,000,000 Units sold by the Company include 3,000,000 Units purchased by the underwriter for the IPO pursuant to the full exercise of its option to purchase up to 3,000,000 additional Units to cover over-allotments.

Simultaneously with the closing of the IPO, the Company consummated the private sale of an aggregate of 11,700,000 warrants (the “Private Placement Warrants”) to Southport Acquisition Sponsor LLC (the “Sponsor”) at a price of $ 1.00 per Private Placement Warrant, generating proceeds to the Company of $ 11,700,000 .

Following the closing of the IPO on December 14, 2021, $ 234,600,000 ($ 10.20 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (the “Trust Account”) located in the United States, which will be invested in U.S.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of:

(i) the completion of a Business Combination, (ii) the redemption of any Public Shares (as defined in Note 3) properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (a) to modify the substance or timing of the Company’s obligation to provide its public stockholders the right to have their Public Shares redeemed in connection with an initial Business Combination or to redeem 100 % of the Public Shares if the Company does not complete the initial Business Combination within the Combination Period (as defined below) or (b) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity, and (iii) the redemption of the Company’s Public Shares if the Company is unable to complete the initial Business Combination within 18 months from December 14, 2021 or during any extended time that the Company has to consummate its initial Business Combination beyond such 18-month period (the “Combination Period”).

On June 9, 2023 (the “First Extension Special Meeting”), the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation (the “First Extension Amendment Proposal”) to extend the time that the Company has to consummate its initial Business Combination (the “First Extension”) from June 14, 2023 to September 14, 2023 and to allow the board of directors of the Company, without another stockholder vote, to elect to further extend the date to consummate an initial Business Combination after September 14, 2023 up to six times, by an additional month each time, up to March 14, 2024.

Prior to the First Extension Special Meeting, on May 25, 2023, the Company and the Sponsor entered into voting and non-redemption agreements (the “Non-Redemption Agreements”) with unaffiliated third parties in exchange for such third parties agreeing (i) not to redeem an aggregate of 4,000,000 shares of Class A common stock sold in its initial public offering (the “Non-Redeemed Shares”) in connection with the First Extension Special Meeting and (ii) to vote in favor of the First Extension Amendment Proposal and the First Extension at the First Extension Special Meeting (other than with respect to certain shares acquired or to be acquired pursuant to the Non-Redemption Agreements).

In exchange for the foregoing commitments, the Sponsor agreed to transfer to such third parties an aggregate of up to 1,499,996 shares of Class B common stock held by the Sponsor, with 500,000 of such shares to be transferred to such third parties promptly upon consummation of the First Extension, and an additional 166,666 shares to be transferred

to such third parties monthly beginning on September 14, 2023 and up to, and including, February 14, 2024, if the board of directors of the Company elects to further extend the deadline to consummate an initial Business Combination at or prior to such date, in each case, if such third parties continue to hold such Non-Redeemed Shares through the First Extension Special Meeting.

In connection with the First Extension Special Meeting and the entry into the Non-Redemption Agreements, on May 25, 2023, pursuant to the terms of the amended and restated certificate of incorporation of the Company, the Sponsor converted 4,200,000 shares of the Company’s Class B common stock held by it on a one-for-one basis into shares of the Company’s Class A common stock (the “Conversion”).

After giving effect to the Conversion, the Company had an aggregate of 27,200,000 shares of Class A common stock issued and outstanding, comprised of 4,200,000 shares held by the Sponsor and not subject to possible redemption and 23,000,000 shares of Class A common stock subject to possible redemption, and 1,550,000 shares of Class B common stock issued and outstanding.

In connection with the First Extension Special Meeting, the holders of 18,849,935 shares of Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $ 197,694,657 , resulting in 4,150,065 shares of Class A common stock issued and outstanding and subject to possible redemption.

Continental Stock Transfer & Trust Company (the “Trustee”) processed the redemptions and withdrew the $ 197,694,657 payable to the holders redeeming 18,849,935 shares of Class A common stock on July 7, 2023.

Prior to March 31, 2024, the board of directors of the Company approved six monthly extensions to extend the time the Company had to consummate an initial Business Combination from September 14, 2023 to March 14, 2024.

In connection with each of the six monthly extensions, the Sponsor transferred 166,666 shares of the Company’s Class B common stock held by the Sponsor to unaffiliated third parties in accordance with the Non-Redemption Agreements.

In addition, on March 14, 2024 (the “Second Extension Special Meeting”), the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation to further extend the time that the Company has to consummate its initial Business Combination from March 14, 2024 to December 14, 2024 (the “Second Extension”).

In connection with the Second Extension Special Meeting, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $ 32,214,591 , resulting in 1,163,113 shares of Class A common stock issued and outstanding and subject to possible redemption.

On April 8, 2024, the New York Stock Exchange (the “NYSE”) filed a Form 25 to delist the Company’s Class A common stock, warrants, with each whole warrant exercisable for one share of Class A common stock at an exercise price of $ 11.50 , subject to adjustment (“Warrants”) and Units, each consisting of one share of Class A common stock and one -half of one Warrant and remove such securities from registration under Section 12(b) of the Exchange Act.

The delisting became effective 10 days after the filing of the Form 25.

The deregistration of the Company’s Class A common stock, Warrants and Units under Section 12(b) of the Exchange Act became effective 90 days after the Form 25 filing.

Upon deregistration of the Company’s securities under Section 12(b) of the Exchange Act, the Company’s securities will remain registered under Section 12(g) of the Exchange Act.

The Company’s Class A common stock, Warrants and Units began trading on the OTC Pink Marketplace on or about March 22, 2024 under the symbols “PORT”, “PORTW” and “PORTU”, respectively.

On September 11, 2024, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, Merger Sub and Angel Studios, Inc., a Delaware Corporation (“Angel Studios”).

The Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, (i) at the closing of the transactions contemplated by the Merger Agreement (the “Closing”), upon the terms and subject to the conditions thereof, and in accordance with the Delaware General Corporation Law, as amended, Merger Sub will merge with and into Angel Studios, with Angel Studios continuing as the surviving corporation and a wholly owned subsidiary of Southport (the “Merger”);

(ii) at the Closing, all of the outstanding capital stock of Angel Studios (other than shares subject to Angel Studios options, shares held in treasury and any dissenting shares) will be converted into the right to receive shares of common stock, par value $ 0.0001 per share, of Southport (“Southport Common Stock”), in an aggregate amount equal to (x) $ 1,500,000,000 plus the aggregate gross proceeds of any capital raised by Angel Studios prior to the Closing, divided by (y) $ 10.00 ;

(iii) at the Closing, all of the outstanding options to acquire capital stock of Angel Studios will be converted into comparable options to acquire shares of Southport Common Stock (subject to appropriate adjustments to the number of shares of Southport Common Stock underlying such options and the exercise price of such options);

(iv) subject to the approval of the holders of Southport’s public warrants, Southport will amend its public warrants so that, immediately prior to the Closing, each of the issued and outstanding Southport public warrants automatically will convert into 0.1 newly issued share of the Company’s Class A common stock and such warrants will cease to be outstanding;

and (v) at the Closing, Southport will be renamed “Angel Studios, Inc.”

On September 11, 2024, Southport also entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”), by and among Southport, the Sponsor, and Angel Studios, pursuant to which the Sponsor has agreed to, among other things, (i) vote in favor of the Merger Agreement and the transactions contemplated thereby and (ii) not redeem its shares of Southport Common Stock in connection therewith.

In addition, the Sponsor has agreed to forfeit all of the Southport private placement warrants held by it at the Closing for no additional consideration.

The Sponsor has also agreed to cover certain expenses incurred by Southport that are unpaid and payable at the Closing in excess of a specified cap.

The Sponsor Support Agreement will terminate upon the earlier of the termination of the Merger Agreement or written agreement by the parties.

On September 11, 2024, Southport also entered into a Stockholder Support Agreement (the “Angel Studios Stockholder Support Agreement”) by and among Southport, Angel Studios and certain stockholders of Angel Studios (the “Key Stockholders”).

Under the Angel Studios Stockholder Support Agreement, the Key Stockholders agreed, with respect to the outstanding shares of Angel Studios common stock held by such Key Stockholders, to vote their shares or execute and deliver a written consent adopting the Merger Agreement and related transactions and approving the Merger Agreement and transactions contemplated thereby.

On October 2, 2024, the Company filed a definitive proxy statement (the “Original Third Extension Proxy Statement”) with respect to a third special meeting of stockholders (the “Third Extension Special Meeting”) to obtain stockholder approval to further amend the Company’s amended and restated certificate of incorporation to extend the time by which the Company must consummate its initial Business Combination from December 14, 2024 to September 30, 2025, as contemplated by the Merger Agreement (the “Third Extension Amendment Proposal”).

On October 11, 2024, the Company received a redemption report from the Trustee indicating that, as of October 11, 2024, the holders of 985,170 shares of the Company’s Class A common stock had properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 11.08 per share.

On October 14, 2024, the Company determined to postpone the Third Extension Special Meeting originally scheduled for October 15, 2024, to October 22, 2024, to allow additional time for the Company to engage with its stockholders and solicit redemption reversals.

On October 21, 2024, the Company cancelled the Third Extension Special Meeting and announced that it intended to file an amendment to the definitive proxy statement to reflect the addition of a new proposal to amend the Company’s amended and restated certificate of incorporation to eliminate the limitation that the Company may not redeem its outstanding shares of Class A common stock to the extent that such redemption would result in the Company having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act), of less than $ 5,000,001 , in order to allow the Company to redeem such shares irrespective of whether such redemption would exceed this limitation (the “Redemption Limitation Amendment Proposal”).

Accordingly, the redemptions indicated on the October 11, 2024 redemption report from the Trustee in connection with the Third Extension Special Meeting were not processed.

On October 29, 2024, the Company filed an amendment to the Original Third Extension Proxy Statement that amends and restates the Original Third Extension Proxy Statement to:

(1) reschedule the Third Extension Special Meeting originally scheduled for October 15, 2024 and postponed to October 22, 2024 (as previously disclosed in the Current Report on Form 8-K filed with the SEC on October 15, 2024) to November 13, 2024 and (2) reflect the addition of the Redemption Limitation Amendment Proposal.

On November 13, 2024, the Company held the Third Extension Special Meeting, at which the Company’s stockholders approved the Third Extension Amendment Proposal and the Redemption Limitation Amendment Proposal.

In connection with the vote to approve the Third Extension Amendment Proposal and the Redemption Limitation Amendment Proposal, the holders of 1,125,126 Public Shares properly exercised their right to redeem their shares (and did not withdraw their redemption) for cash at a redemption price of approximately $ 11.15 per Public Share, for an aggregate redemption amount of $ 12,543,118 .

Accordingly, as of June 30, 2025, there were 4,237,987 shares of Class A common stock issued and outstanding (including 37,987 shares of Class A common stock subject to possible redemption) and $ 438,166 held in the Trust Account.

On January 15, 2025, certain third-party investors in the Company transferred an aggregate of 262,502 shares of Class B common stock, par value $ 0.0001 per share, of the Company, which had previously been transferred by the Sponsor to such investors, back to the Sponsor for no additional consideration in connection with the liquidation of certain of such investors’ investment vehicles.

On February 14, 2025, SAC, Angel Studios and Merger Sub entered into Amendment No.

1 to the Merger Agreement (the “Merger Agreement Amendment”), which amended the Merger Agreement to (i) remove the closing condition that SAC have at least $ 5,000,001 of net tangible assets upon the Closing, (ii) amend the definitions of “Acquiror Expense Cap” (as defined in the Merger Agreement Amendment) and “Transaction Expenses” (as defined in the Merger Agreement Amendment) and (iii) amend the provision regarding expense statements.

Risks and Uncertainties

Management is currently evaluating the impact of the Russia-Ukraine war, the conflicts in the Middle East, tariff and trade restrictions, interest rate fluctuations, and the recently adopted Securities and Exchange Commission (the “SEC”) rules and amendments affecting special purpose acquisition corporations like the Company, and has concluded that while it is reasonably possible that such matters could have a negative effect on the Company’s financial position, cash flows, results of its operations and/or search for a target company, the specific impacts are not readily determinable as of June 30, 2025.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law.

The IR Act provides for, among other things, a new U.S.

federal 1% excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations.

The excise tax is imposed on the repurchasing corporation itself, not its stockholders from whom shares are repurchased.

The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase.

However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.

In addition, certain exceptions apply to the excise tax.

Department of the Treasury has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

The IR Act applies only to repurchases that occur after December 31, 2022.

On July 7, 2023, 18,849,935 shares of Class A common stock were redeemed by the Company’s stockholders for a total of $ 197,694,657 in connection with the stockholder vote to approve the Company’s Extension Amendment Proposal.

On March 14, 2024, 2,986,952 shares of Class A common stock were redeemed by the Company’s stockholders for a total of $ 32,214,591 in connection with the stockholder vote to further extend the time that the Company has to consummate its initial Business Combination from March 14, 2024 to December 14, 2024.

On November 13, 2024, 1,125,126 shares of Class A common stock were redeemed by the Company’s stockholders for a total of $ 12,543,118 in connection with the vote to approve the Third Extension Amendment Proposal and the Redemption Limitation Amendment Proposal.

The Company evaluated the classification and accounting of the stock redemption under ASC 450, “Contingencies”.

ASC 450 states that when a loss contingency exists, the likelihood that the future events will confirm the loss or impairment of an asset or the incurrence of a liability can range from probable to remote.

A contingent liability must be reviewed at each reporting period to determine appropriate treatment.

The Company evaluated the current status and probability of completing an initial Business Combination as of June 30, 2025 and determined that a contingent liability should be calculated and recorded.

As of June 30, 2025, the Company recorded $ 2,424,524 of excise tax liability calculated as 1% of shares redeemed.

Going Concern

As of June 30, 2025 and December 31, 2024, the Company had cash of $ 328,610 and $ 494,974 , respectively, and working capital deficit of $ 4,370,038 and $ 3,862,447 , respectively.

The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of time within one year after the date that these financial statements are issued.

Management plans to address this uncertainty through capital contributions or working capital loans whereby, the Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors can, but are not obligated to, loan the Company funds as may be required (see Note 5).

However, there is no assurance that the Company’s plans to raise capital or to consummate a Business Combination will be successful within the Combination Period.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC.

Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.

Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows.

In the opinion of management, the accompanying unaudited condensed financial

statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the SEC on April 15, 2025, which contains the audited financial statements and notes thereto.

The financial information as of December 31, 2024 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The interim results for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any future interim periods.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company had $ 328,610 and $ 494,974 of cash and no cash equivalents as of June 30, 2025 and December 31, 2024, respectively.

Marketable Securities Held in Trust Account

Following the closing of the IPO on December 14, 2021, an amount of $ 234,600,000 from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in the Trust Account and may be invested only in U.S.

government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under

the Investment Company Act which invest only in direct U.S.

government treasury obligations.

The Trust Account is intended as a holding place for funds pending the earliest to occur of:

(i) the completion of the initial Business Combination;

(ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to provide its public stockholders the right to have their Public Shares redeemed in connection with an initial Business Combination or to redeem 100 % of the Public Shares if the Company does not complete the initial Business Combination within the Combination Period or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity;

and (iii) the redemption of the Company’s Public Shares if the Company is unable to complete the initial Business Combination within the Combination Period.

In connection with the First Extension Special Meeting, the holders of 18,849,935 shares of Class A common stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 10.49 per share of Class A common stock, for an aggregate redemption amount of $ 197,694,657 .

The Trustee redeemed $ 197,694,657 of marketable securities held in the Trust Account to pay the holders redeeming 18,849,935 shares of Class A common stock on July 7, 2023.

In connection with the Second Extension Special Meeting, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 10.79 per share of Class A common stock, for an aggregate redemption amount of $ 32,214,591 .

The Trustee redeemed the $ 32,214,591 of marketable securities held in the Trust Account to pay the holders redeeming 2,986,952 shares of Class A common stock on March 27, 2024.

In connection with the Third Extension Special Meeting, the holders of 1,125,126 shares of Class A common stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 11.15 per share of Class A common stock, for an aggregate redemption amount of $ 12,543,118 .

The Trustee redeemed the $ 12,543,118 of marketable securities held in the Trust Account to pay the holders redeeming 1,125,126 shares of Class A common stock on November 15, 2024.

Accordingly, as of June 30, 2025 and December 31, 2024, there was $ 438,166 and $ 429,151 , respectively, of marketable securities held in the Trust Account.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement” (“ASC 820”), approximates the carrying amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.

Fair Value Measurements

Fair value is defined as the price that would be received for sale of an asset or paid to transfer of a liability, in an orderly transaction between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

These tiers include:

● Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;

● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;

● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”.

For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

The classification of derivative instruments,

including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.

Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

As of June 30, 2025 and December 31, 2024, derivative liabilities are comprised of the warrant liability of $ 5,797,850 and $ 4,639,000 , respectively.

Warrant Liability

The Company accounts for warrants for the Company’s common stock that are not indexed to its own shares as liabilities at fair value on the balance sheet.

The warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of other income (expense), net on the statement of operations.

The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the common stock warrants.

At that time, the portion of the warrant liability related to the common stock warrants will be reclassified to additional paid-in capital.

Common Stock Subject to Possible Redemption

The Company accounts for its common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.” Common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value.

Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity.

At all other times, common stock is classified as stockholders’ equity.

The Company’s common stock features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.

Accordingly, at June 30, 2025 and December 31, 2024, 37,987 shares of Class A common stock subject to possible redemption is presented, at redemption value, as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet, respectively.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period.

Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit.

For the three and six months ended June 30, 2025, the Company has recorded accretion of $ 4,521 and $ 9,015 , respectively, to remeasure the value of Class A common stock subject to possible redemption value of $ 438,166 .

For the three and six months ended June 30, 2024, the Company has recorded accretion of $ 163,615 and $ 723,522 , respectively, to remeasure the value of Class A common stock subject to possible redemption value of $ 12,729,617 .

As of June 30, 2025 and December 31, 2024, the Class A common stock, classified as temporary equity in the condensed balance sheets, are reconciled in the following tables:

Class A common stock subject to possible redemption, December 31, 2023

Redemption of Class A common stock

Physical media inventory

Royalty advance

( 1,268,738 )

Trust Account withdrawal for tax payments

Remeasurement of Class A common stock subject to possible redemption

Class A common stock subject to possible redemption, December 31, 2024

Remeasurement of Class A common stock subject to possible redemption

Class A common stock subject to possible redemption, June 30, 2025

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes.

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

The Company recognizes accrued interest and penalties

related to unrecognized tax benefits, if any, as income tax expense.

The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position, other than a change in accounting estimate related to the Company’s 2024 Delaware franchise tax accrual.

The Company has adjusted the 2024 Delaware franchise tax accrual from $ 219,400 , comprised of $ 200,000 of franchise tax and $ 19,400 of related interest and penalties as of December 31, 2024, to $ 18,746 , comprised of $ 16,400 of franchise tax and $ 2,346 of related interest and penalties as of March 31, 2025, to agree to the 2024 Delaware franchise tax filing submission.

The 2024 Delaware franchise tax of $ 18,746 was paid on March 20, 2025.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2025, other than those previously mentioned.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the U.S.

As the legislation was signed into law after June 30, 2025, its impacts are not reflected in the Company’s results for the three and six months ended June 30, 2025.

The Company is in the process of evaluating the OBBBA and has not estimated its financial impact at this time.

Net Income (Loss) Per Common Stock

The Company complies with accounting and disclosure requirements of ASC Topic 260, “Earnings Per Share”.

The condensed statements of operations include a presentation of income per Class A redeemable common stock and income (loss) per non-redeemable common stock following the two-class method of income (loss) per common stock.

In order to determine the net income (loss) attributable to both the Class A redeemable common stock and non-redeemable common stock, the Company first considered the total income allocable to both sets of stock.

This is calculated using the total net income (loss) less any dividends paid.

For purposes of calculating net income (loss) per share, any remeasurement of the Class A common stock subject to possible redemption was treated as dividends paid to the public stockholders.

Subsequent to calculating the total income (loss) allocable to both sets of stock, the Company split the amount to be allocated using the weighted average shares outstanding ratio for the Class A redeemable common stock and for the non-redeemable Class A and Class B common stock for the three and six months ended June 30, 2025 and 2024, as a result of shareholder redemptions.

The following table reflects the calculation of basic and diluted net income (loss) per common stock (in dollars, except per share amounts):

For the Three Months Ended

June 30, 2025

Prepaid expenses and other current assets

( 2,514,521 )

Remeasurement of Class A redeemable shares to redemption value

Net loss including accretion of Class A redeemable shares to redemption value

( 2,336,927 )

For the Three Months Ended

June 30, 2025

Class A and Class B

Redeemable Shares

Non-redeemable shares

Total number of shares

Ownership percentage

Net loss allocated based on ownership percentage

Licensing receivables

( 4,032,744 )

Other long-term assets

Accounts payable and accrued expenses

( 8,763,371 )

Remeasurement of Class A redeemable shares to redemption value based on ownership percentage

Accretion applicable to remeasurement of Class A redeemable shares to redemption value

Total loss based on ownership percentage

Accrued licensing royalties

( 6,788,204 )

Operating lease liabilities

Deferred revenue

Net cash and cash equivalents used in operating activities

( 58,654,497 )

Weighted average shares outstanding

Basic and diluted net income (loss) per share

For the Six Months Ended

June 30, 2025

( 39,578,731 )

Remeasurement of Class A redeemable shares to redemption value

Net loss including accretion of Class A redeemable shares to redemption value

Cash flows from investing activities:

Purchases of property and equipment

Issuance of notes receivable

( 1,455,279 )

For the Six Months Ended

June 30, 2025

Class A and Class B

Redeemable Shares

Non-redeemable shares

Total number of shares

Ownership percentage

Net loss allocated based on ownership percentage

Collections of notes receivable

Purchase of digital assets

Sale of digital assets

Purchase of intangible assets

( 3,006,012 )

Purchase of content

( 6,320,963 )

Remeasurement of Class A redeemable shares to redemption value based on ownership percentage

Accretion applicable to remeasurement of Class A redeemable shares to redemption value

Total loss based on ownership percentage

Investments in affiliates

( 5,511,002 )

( 1,033,516 )

Weighted average shares outstanding

Basic and diluted net income (loss) per share

For the Three Months Ended

June 30, 2024

Remeasurement of Class A redeemable shares to redemption value

Net loss including accretion of Class A redeemable shares to redemption value

For the Three Months Ended

June 30, 2024

Class A and Class B

Redeemable Shares

Non-redeemable shares

Total number of shares

Weighted average shares ratio

Net loss allocated based on weighted average shares ratio

Remeasurement of Class A redeemable shares to redemption value based on weighted average shares ratio

Accretion applicable to remeasurement of Class A redeemable shares to redemption value

Total income (loss) based on weighted average shares ratio

Weighted average shares outstanding

Basic and diluted net income (loss) per share

For the Six Months Ended

June 30, 2024

Trust Account withdrawals for tax payments

Remeasurement of Class A redeemable shares to redemption value

Net loss including accretion of Class A redeemable shares to redemption value

For the Six Months Ended

June 30, 2024

Class A and Class B

Redeemable Shares

Non-redeemable shares

Total number of shares

Weighted average shares ratio

Net loss allocated based on weighted average shares ratio

Trust Account withdrawals for tax payments based on weighted average shares ratio

Remeasurement of Class A redeemable shares to redemption value based on weighted average shares ratio

Accretion applicable to Trust Account withdrawals for tax payments

Accretion applicable to remeasurement of Class A redeemable shares to redemption value

Total income (loss) based on weighted average shares ratio

Weighted average shares outstanding

Basic and diluted net income (loss) per share

Related Parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions.

Companies are also considered to be related if they are subject to common control or common significant influence.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $ 250,000 .

As of June 30, 2025, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Net cash and cash equivalents provided by (used in) investing activities

( 15,580,726 )

Cash flows from financing activities:

Repayment of notes payable

( 63,450,746 )

( 18,374,314 )

Repayment of loan guarantee

( 10,175,490 )

Receipt of notes payable

Repayment of accrued settlement costs

Exercise of stock options

Issuance of common stock

Contribution of equity in noncontrolling interests

Redemption of equity in noncontrolling interests

( 15,753,060 )

Fees related to issuance of common stock and minority interest

Repurchase of common stock

Equity financing fees

Debt financing fees

( 1,842,746 )

Net cash and cash equivalents provided by financing activities

Effect of changes in foreign currency exchange rates on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

( 13,857,823 )

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of cash flow information:

Cash paid for interest

Supplemental schedule of noncash financing activities:

Adoption of ASU No.

Conversion of debt

Issuance of warrants

Debt conversion feature

Investment capital receivable

Operating lease right-of-use assets and liabilities

See accompanying notes to the condensed consolidated financial statements

Angel Studios, Inc.

Notes to the Condensed Consolidated Financial Statements

The financial information presented in these unaudited financial statements is condensed and should be read in conjunction with the entity’s latest annual audited financial statements.

Interim disclosures generally do not repeat those in the annual statements.

Description of Organization and Summary of Significant Accounting Policies

The company comprises Angel Studios, Inc., a Delaware corporation, and its subsidiaries and affiliates (collectively, the “Company”) (f/k/a Southport Acquisition Corporation or “Southport”).

The Company’s mission is to share stories with the world that amplify light.

This is done by aligning the Company’s interests with those of the creators and the audience and utilizing the wisdom of crowds to help guide decisions on the content that gets created.

Business Combination

On September 10, 2025, the Company consummated the previously announced Business Combination (as defined below) pursuant to that certain Agreement and Plan of Merger, dated as of September 11, 2024 (as amended, the “Merger Agreement”), by and among the Company, Sigma Merger Sub, Inc., a Delaware corporation and direct wholly owned subsidiary of the Company (“Merger Sub”), and Angel Studios Legacy, Inc.

(f/k/a Angel Studios, Inc.), a Delaware corporation (“Angel Legacy”).

Pursuant to the terms of the Merger Agreement, a merger was effected in which Merger Sub merged with and into Angel Legacy, the separate corporate existence of Merger Sub ceased and Angel Legacy survived as the surviving company and direct wholly-owned subsidiary of the Company (the “Merger” and, collectively with the other transactions described in the Merger Agreement, the “Business Combination”).

On the Closing Date (as defined in the Merger Agreement), and prior to the Effective Time (as defined in the Merger Agreement), the Company changed its name from “Southport Acquisition Corporation” to “Angel Studios, Inc.” Angel Legacy subsequently merged up and into Angel Studios, Inc., with Angel Studios, Inc.

as the surviving entity.

Notwithstanding the legal form of the Business Combination pursuant to the Merger Agreement, the Business Combination has been accounted for as a reverse recapitalization in accordance with United States generally accepted accounting principals (“GAAP”) because Angel Legacy is the operating company and has been determined to be the accounting acquirer, while Southport is a blank check company.

Under the reverse recapitalization model, the Business Combination was treated as Angel Legacy issuing equity for the net assets of Southport, with no goodwill or intangible assets recorded.

While Southport was the legal acquirer in the Business Combination, because Angel Legacy was deemed the accounting acquirer, the historical financial statements of Angel Legacy became the historical financial statements of the combined company upon the consummation of the Business Combination.

As a result, the condensed combined financial statements reflect (i) the historical operating results of Angel Legacy prior to the Business Combination;

(ii) the combined results of Southport and Angel Legacy following the closing of the Business Combination;

(iii) the assets and liabilities of Angel Legacy at their historical cost;

and (iv) the Company’s equity structure for all periods presented.

In accordance with the applicable guidance, the equity structure within these quarterly financial statements have been retroactively restated in all comparative periods up to the closing date, to reflect the number of shares of the Company’s Common Stock (as defined below) issued to Angel Legacy common shareholders.

As such, the shares and corresponding capital amounts and earnings per share related to Angel Legacy common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Business Combination, which is 5.3504621 , with all Angel Legacy Class A common stock and Class C common stock being converted to Class A common stock, par value $ 0.0001 per share (the “Class A Common Stock”) and all Angel Legacy Class B common stock and Class F common stock being converted to Class B common stock, par value $ 0.0001 per share (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”).

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company.

All significant intercompany balances and transactions have been eliminated in consolidation.

The unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information.

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of the Company’s management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these unaudited condensed consolidated financial statements.

Operating results for three and nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025.

The balance sheet at December 31, 2024 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements.

The accompanying unaudited condensed consolidated financial statements should be read together with the annual audited consolidated financial statements and related notes for the fiscal year ended December 31, 2024 included in the Angel Legacy’s Annual Report on Form 10-K filed with the SEC on March 28, 2025.

As comprehensive income equals net income, separate statements of comprehensive income were not included in the accompanying condensed consolidated financial statements.

Reclassifications

Certain prior period balances have been reclassified to conform to the current period presentation in the condensed consolidated financial statements and the accompanying notes.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts and disclosures.

Accordingly, actual results could differ from those estimates.

Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances.

Regularly, the Company evaluates the assumptions, judgments, and estimates.

Actual results may differ from these estimates.

Fair Value Measurements

The Company applies the accounting provisions related to fair value measurements given in ASC 820, Fair Value Measurements.

These provisions define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

They also establish a hierarchy that prioritizes the information used in developing fair value estimates and require disclosure of fair value measurements by level within the fair value hierarchy.

The hierarchy gives the highest priority to quoted prices in active markets (Level 1 measurements) and the lowest priority to unobservable data (Level 3 measurements), such as the reporting entity’s own data.

These provisions also provide valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flows), and the cost approach (cost to replace the service capacity of an asset or replacement cost).

An asset or liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The three levels of the valuation hierarchy are defined as follows:

Observable inputs such as quoted prices (unadjusted) for identical assets or liabilities in active markets.

Inputs other than quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Unobservable inputs that reflect the Company’s own assumptions

Digital Assets

In 2021, the Company saw a need to further diversify and maximize returns on cash balances that are not required to maintain adequate operating liquidity.

As such, the Company implemented a policy that would allow for the investment in bitcoin (digital assets) under this policy.

The Company believes their bitcoin holdings are highly liquid.

However, digital assets may be subject to volatile market prices, which may be unfavorable at the time when the Company wants or needs to liquidate them.

The Company has ownership of and control over their digital assets and may use third-party custodial services to secure it.

The digital assets are initially recorded at cost

and are subsequently remeasured on the condensed consolidated balance sheet at fair value.

Periods prior to January 1, 2025 include digital assets at cost, net of impairment losses incurred since their acquisition.

The Company determines and records the fair value of their digital assets in accordance with ASC Topic 820, Fair Value Measurement , based on quoted prices on the active exchange(s) that they have determined is the principal market for such assets (Level I inputs).

The Company determines the cost basis of their digital assets using the cost at the time of acquisition of each unit received.

Realized and unrealized gains and losses are now recorded to net loss (gain) on digital assets in the Company’s condensed consolidated statement of operations.

For periods prior to January 1, 2025, prior to the adoption of ASU 2023-08, the Company’s digital assets were initially recorded at cost, and subsequently measured at cost, net of any impairment losses incurred since acquisition.

Impairment losses were recognized as “Write-down of digital assets” in the Company’s Consolidated Statement of Operations in the period in which the impairment occurred.

Also for periods prior to January 1, 2025, gains were not recorded until realized upon sale(s), at which point they were presented net of any impairment losses for the same digital assets held.

In determining the gain to be recognized upon sale, the Company would calculate the difference between the sales price and carrying value of the digital assets sold immediately prior to sale.

The Company accounts for its digital assets, which are comprised solely of bitcoin, as indefinite-lived intangible assets.

The Company’s digital assets are initially recorded at cost.

Subsequent to the Company’s adoption of ASU 2023-08 on January 1, 2025, bitcoin assets are measured at fair value as of each reporting period.

The Company determines the fair value of its bitcoin based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for bitcoin (Level 1 inputs).

Changes in fair value are recognized as incurred in the Company's condensed consolidated statements of operations, within “Net gain on digital assets”, within operating expenses in the Company’s condensed consolidated statements of operations.

See Note 3, Digital Assets , for further information regarding digital assets.

The condensed consolidated financial statements have been prepared assuming the Company will continue to operate as a going concern within one year from the date of issuance of these condensed consolidated financial statements.

For the nine months ended September 30, 2025, the Company incurred a net loss of approximately $ 91.9 million and used cash in operating activities of approximately $ 58.7 million.

The Company had an accumulated deficit of approximately $ 175.8 million as September 30, 2025.

Management is working to increase revenues through the growth of Angel Guild memberships, the Company’s pipeline of theatrical releases through 2026 and additional streaming agreements.

The Company finances marketing activities for theatrical releases through two primary methods:

1) Regulation A offerings that are tailored to raise money for the print and advertising costs (“P&A”) for specific theatrical releases and 2) P&A loan agreements with individual and institutional investors.

During the nine months ended September 30, 2025, the Company raised $ 13.2 million from Regulation A offerings and received $ 32.0 million from P&A loans, both of which were used for P&A in various theatrical releases during the year.

During the year ended December 31, 2024, the Company raised $ 0.0 million from Regulation A offerings and received $ 23.3 million from P&A loans.

During the nine months ended September 30, 2025, the Company paid $ 36.5 million for the repayments of P&A loans, including interest and paid $ 15.8 million as a redemption of shares for Regulation A investors, from the proceeds collected from the theatrical releases and other revenues earned.

During the year ended December 31, 2024, the Company paid $ 17.9 million for the repayments of P&A loans, including interest and paid $ 0.0 million as a redemption of shares for Regulation A investors, from the proceeds collected from the theatrical releases and other revenues earned.

Additionally, the Company has raised capital through the sale of its Common Stock, generating approximately $ 102.8 million of cash during the nine months ended September 30, 2025, and $ 32.8 million of cash and $ 9.5 million in bitcoin during the year ended December 31, 2024.

During the nine months ended September 30, 2025, the Company has grown from approximately 0.6 million to approximately 1.6 million Angel Guild paying members, generating approximately $ 170.6 million in cash from Angel Guild paid memberships.

Management believes the Company will be able to continue to fund operating capital shortfalls through November 2026 through the issuance of debt and Common Stock.

While there is no assurance of success, management remains committed to its plans to grow revenues and manage expenses.

If these efforts are not successful, or if securing debt and selling Common Stock on acceptable terms proves challenging, the Company can reduce its spend on marketing of the Angel Guild, which could materially affect its growth, its financial condition and/or its ability to continue as a going concern.

Accounts Receivable

The Company records its accounts receivable at sales value less an allowance for doubtful accounts receivable.

Management determines the allowance for doubtful accounts receivable in accordance with ASC 326 by segmenting the receivables portfolio and using historical experience, market conditions and account aging to determine an allowance for each segment.

Account balances are written off against the allowance when the potential for recovery is remote.

Recoveries of receivables previously written off are recorded when payment is received.

As of September 30, 2025, the allowance for doubtful accounts receivable was $ 0.4 million.

As of December 31, 2024, the Company’s allowance for doubtful accounts receivable was $ 0.4 million.

Licensing Receivables

Licensing receivables consist of amounts due from customers under the Company’s multi-year content licensing arrangements.

These receivables arise from the licensing of content to third parties, typically over terms ranging from several months to up to ten years , with an average duration of around three years .

For licensing arrangements where payments are due over a longer period, the Company assesses the need to recognize a significant financing component when the expected time between the satisfaction of the Company’s performance obligations and the receipt of payment exceeds one year.

In such cases, the licensing receivable is recorded at the present value of the future payments, discounted at a rate reflective of a separate financing transaction between the Company and the customer at contract inception.

When no significant financing component is deemed to be present (e.g., when payments are expected within one year), the receivable is recorded at the transaction price, without adjustment for the time value of money.

The Company monitors licensing receivables for collectability and assesses for credit risk at each reporting period.

Any expected credit losses are recognized in accordance with the Company's allowance for doubtful accounts policy.

Physical Inventory

Physical inventory consists of apparel, DVDs, Blu-rays, books, and other merchandise purchased for resale, related to content the Company is distributing.

Physical inventory is recorded at average cost.

The Company periodically reviews the physical media inventory for excess supply, obsolescence, and valuations above estimated realization amounts, and provides a reserve to cover these items.

Management determined that no reserve for physical media inventory was necessary as of September 30, 2025, and December 31, 2024.

Prepaid Expenses and Other

Prepaid expenses primarily represent payments made in advance for services and goods to be received in future periods.

These include, but are not limited to, prepayments for insurance, software, rent, fees and future advertising.

As the benefits are consumed or utilized, the prepaid assets are recognized as expenses on the condensed consolidated statements of operations.

Prepaid Content Rights

In July 2025, the Company entered into a First Look Agreement with an artist granting the Company the right of first refusal on the artist’s future projects.

As part of the arrangement, the Company paid a $ 3.0 million cash bonus upon execution of the agreement and granted non-qualified stock options to the artist.

The cash payment is being amortized to expense on a straight-line basis over the first guaranteed year of the agreement, which represents the period of expected benefit.

The agreement includes optional renewal years that are subject to annual performance conditions and may be terminated by either party.

The stock option grant includes both immediately vested and performance-based components;

the immediate portion was expensed at grant, and the performance-based portion will be recognized as compensation expense when achievement of the related performance conditions becomes probable.

Royalty Advances

From time to time, the Company advances cash to its partners as prepayments of future royalty earnings.

These advances are recoupable from future royalties otherwise payable to the partner and are collected by the Company prior to the distribution of other earnings or settlement of other obligations.

Investments in Affiliates

Investments in affiliates represent the Company’s investments in noncontrolling interests.

The Company’s investments where the Company has significant influence, but does not control, and joint ventures which are variable interest entities (“VIE”) in which the Company is not the primary beneficiary, are recorded under the equity method of accounting in the accompanying condensed consolidated financial statements.

The Company’s investments where the Company has little or no influence and which the Company

is not the primary beneficiary, are recorded under the cost method of accounting in the accompanying condensed consolidated financial statements.

Under the equity method, the Company’s investment is stated at cost and adjusted for the Company’s share of net earnings or losses and reduced by distributions.

Equity in earnings is recognized based on the Company’s ownership interest in the earnings of the VIE.

Under the cost method, the Company’s investment is stated at cost and will be reduced by any distributions received.

Notes Receivable

The Company enters into various notes receivable with filmmakers for marketing and other purposes.

The Company records its notes receivable based on actual amounts loaned or paid for on behalf of the filmmaker.

The Company also has a note receivable from the disposition of a business in 2021.

The Company establishes specific reserves for those customer accounts identified with collection problems due to insolvency or other issues.

The Company’s notes receivable are considered past due when payment has not been received within thirty days of the due date.

The amounts of the specific reserves are estimated by management based on various assumptions, including the customer’s financial position, age of the receivables and changes in payment schedules and histories.

Notes receivable balances are charged off against the allowance for doubtful notes when the potential for recovery is remote.

Recoveries of notes receivable previously charged off are recorded when payment is received.

The allowance for doubtful notes receivable was $ 0.0 million as of September 30, 2025 and December 31, 2024.

Accrued Licensing Royalties

Accrued licensing royalties represent amounts owed by the Company to filmmakers based on the contractual terms agreed upon with the filmmaker.

Estimates are made based on available information and historical experience, taking into consideration any known uncertainties.

Where necessary, accruals are adjusted in subsequent periods to reflect changes in circumstances or estimates.

Deferred Revenue

Deferred revenue represents payments received in advance of the Company fulfilling its performance obligations under various arrangements, including Angel Guild memberships, content licensing, Pay it Forward payments for theatrical releases, theatrical ticket presales and other deferred revenue.

The Company recognizes deferred revenue when cash is received before the related revenue recognition criteria are met, and such amounts are recognized as revenue when the related performance obligations are satisfied.

Angel Guild Memberships

Angel Guild membership fees, which include multiple membership options, are recorded as deferred revenue when received.

As of September 30, 2025 and December 31, 2024, the Company had $ 49.7 million and $ 19.8 million, respectively, of deferred revenue related to Angel Guild memberships.

These amounts are expected to be recognized as revenue over the membership period and within the next twelve months.

Content Licensing

For certain content licensing arrangements, the Company recognizes deferred revenue when payment is received in advance of delivering the content or when performance obligations related to the licensing arrangement have not yet been satisfied.

Revenue is recognized as content is delivered and the customer can begin exploiting the content, or, in the case of usage-based royalties, when the sale or usage occurs.

As of September 30, 2025 and December 31, 2024, the Company had $ 0.0 million of deferred revenue related to content licensing arrangements.

Pay it Forward

The Company receives Pay it Forward payments, which are used to offset the costs of free or discounted theatrical tickets provided to others.

Pay it Forward payments in excess of Ticket Redemption Expenses (as defined below) are initially recorded as deferred revenue.

Revenue is recognized as Pay it Forward payments are redeemed for tickets or when it is determined that future ticket redemptions will be less than the deferred revenue balance.

As of September 30, 2025 and December 31, 2024, the Company had $ 0.0 million and $ 0.4 million, respectively, of deferred revenue related to Pay it Forward payments, which is expected to be redeemed or recognized as revenue within the next twelve months.

Theatrical Ticket Presales

The Company records deferred revenue related to theatrical ticket presales, which represent payments received in advance of scheduled theatrical releases.

Revenue is recognized when the related theatrical releases occur.

As of September 30, 2025 and December 31, 2024, the Company had $ 0.4 million and $ 1.0 million, respectively, of deferred revenue related to these presales.

Other Deferred Revenue

As of September 30, 2025 and December 31, 2024, the Company had $ 0.6 million and $ 1.0 million, respectively, in deferred revenue from various other types of contractual arrangements.

These amounts will be recognized as revenue when the performance obligations are satisfied, primarily within the next twelve months.

Revenue Recognition

The Company recognizes revenue when a customer obtains control of promised products or services.

The amount of revenue recognized reflects the consideration that the Company expects to be entitled to receive in exchange for these products or services.

The Company applies the following five steps:

1) Identify the contract with the customer;

2) Identify the performance obligations in the contract;

3) Determine the transaction price;

4) Allocate the transaction price to performance obligations in the contract;

and 5) Recognize revenue when or as the Company satisfies a performance obligation.

The following components represent the most significant portions of revenue being recognized:

For the three months ended September 30,

For the nine months ended September 30,

Content licensing

Pay it Forward

Theatrical Pay it Forward

Total Revenue

Angel Guild Revenue

The Angel Guild is a paid membership that gives certain benefits, such as early access to certain content and the ability to vote on future content.

Premium memberships receive additional benefits, such as complimentary theatrical tickets and merchandise discounts.

Members have the option to pay either on a monthly or annual basis.

The payments for memberships are initially recorded as deferred revenue and allocated to three different performance obligations:

1) memberships – recognized on a straight-line basis over the membership period, 2) complimentary theatrical tickets – allocated only in periods of theatrical releases by the Company and recognized as tickets are redeemed during the month of membership and 3) merchandise – recognized as the benefit is used.

Theatrical Release Revenue

Prior to the digital release of licensed content, the Company might provide the option to release content as part of a theatrical release.

Revenue from these events is recognized at a point in time – when the theatrical showing takes place.

The Company will negotiate the terms of the theatrical distribution window (ranging from a few weeks to a few months), profit sharing percentage, and collection terms with the theater owners prior to the release.

Theatrical release revenue fluctuates depending on the timing and scale of theatrical showings.

Content Licensing Revenue

The Company’s content licensing arrangements include fixed fee and minimum guarantee arrangements, and sales or usage based royalties.

The Company’s fixed fee or minimum guarantee licensing arrangements may, in some cases, include multiple titles, multiple license periods (windows), rights to exploitation in different media, or rights to exploitation in multiple territories, which may be considered distinct performance obligations.

When these performance obligations are considered distinct, the fixed fee or minimum guarantee in the arrangement is allocated to the title, window, media right or territory as applicable, based on estimates of relative standalone selling prices.

The amounts related to each performance obligation (i.e., title, window, media or territory) are recognized when the content has been delivered, and the window for the exploitation right in that territory has begun, which is the point in time at which the customer is able to begin to use and benefit from the content.

Sales or usage based royalties represent amounts due to the Company based on the “sale” or “usage” of its content by the customer, and revenues are recognized at the later of when the subsequent sale or usage occurs, or the performance obligation

to which some or all the sales or usage-based royalty has been allocated has been satisfied (or partially satisfied).

Generally, when the Company licenses completed content (with standalone functionality, such as a movie, or television show), its performance obligation will be satisfied prior to the sale or usage.

The actual amounts due to the Company under these arrangements are typically not reported to the Company until several months after the close of the reporting period.

The Company records revenue under these arrangements for the amounts due and not yet reported to the Company based on estimates of the sales or usage of these customers and pursuant to the terms of the contracts.

Such estimates are based on information from the Company’s customers, historical experience with similar titles in that market or territory, the performance of the title in other markets and/or available data in the industry.

While the Company believes these estimates are reasonable estimates of the amounts due under these arrangements, such estimated amounts could differ from the actual amounts to be subsequently reported by the customer, which could be higher or lower than the Company’s estimates, and could result in an adjustment to revenues in future periods.

Any adjustments booked during the September 30, 2025 and 2024 periods have been immaterial.

For certain multi-year licensing arrangements, payments may be due over a longer period.

When the Company expects the period between fulfillment of its performance obligation and the receipt of payment to be greater than a year, a significant financing component is present.

In these cases, such payments are discounted to present value based on a discount rate reflective of a separate financing transaction between the customer and the Company, at contract inception.

The Company does not assess contracts with deferred payments for significant financing components if, at contract inception, the Company expects the period between fulfillment of the performance obligation and subsequent payment to be one year or less.

Content licensing arrangements can last between several months to up to ten years .

The typical period ranges around three years .

Merchandise Revenue

The Company has partnered with creators to distribute the creators’ licensed original content and related merchandise.

Merchandise revenue represents apparel, DVDs, Blu-rays, books and other intellectual property.

Revenue is recognized upon shipment of the merchandise and is recognized at a point in time, when physically shipped.

Pay it Forward Revenue

Pay it Forward revenue consists of payments made from customers who want to keep the Company’s content free to general users and help create future episodes and seasons of their favorite shows.

Pay it Forward revenues are reported as Pay it Forward revenue in the condensed consolidated statements of operations in accordance with ASC Topic 958, Not-for-Profit Entities.

Theatrical Pay it Forward Revenue

The Company also collects Pay it Forward payments for the Company’s upcoming or current theatrical releases.

These collections are used to offset the cost the Company incurs to purchase free or discounted tickets (“Ticket Redemption Expenses”) for people who may not have otherwise been able to watch the film.

If total theatrical Pay it Forward payments are in excess of total Ticket Redemption Expenses, the excess amount will initially be included on the Company’s condensed consolidated financial statements as deferred revenue.

Deferred revenue will be recognized as Pay it Forward revenue during a reporting period if future Ticket Redemption Expenses are expected to be less than the deferred revenue balance.

Other Revenue

Other revenue consists of tickets to Dry Bar Comedy shows and other events, concession sales, general and administrative management fees and in-app advertising.

Other revenue is recognized when the services are performed or when the event takes place.

The Company does not disclose revenue by geography as it is impracticable to do so.

The Company’s business operations involve complex, interconnected revenue streams that are not easily attributable to specific geographic regions.

Revenue is often generated through multi-region engagements, global contracts and shared operational resources, making geographic segmentation inaccurate or misleading.

As a result, providing such information would not reflect the true nature of the Company’s business and could lead to misinterpretation.

Cost of Revenues

Cost of revenues represents the direct costs incurred by the Company in generating its revenue.

These costs include expenses directly associated with the goods or services sold during the reporting period.

Cost of revenues is recognized in the condensed consolidated statements of operations in the period in which the related revenue is recognized, following the matching principle.

Components of cost of revenues include licensing royalty expense, content amortization, film delivery costs, hosting, merchandise costs, credit card fees, freight and shipping costs, and costs of services provided.

Selling and Marketing Expenses

Selling and marketing expenses represent costs incurred by the Company in promoting and selling its products or services.

These expenses are recognized in the condensed consolidated statements of operations in the period in which they are incurred.

Components of selling and marketing expenses include advertising and promotional activities, salaries and benefits for sales and marketing personnel, travel and entertainment expenses related to sales and marketing activities, and costs of marketing materials.

It also includes costs incurred by the Company to purchase movie tickets for giving away, which costs are offset by the Pay it Forward receipts the Company receives from customers who Pay it Forward for others to see the show.

The total amount of Pay it Forward receipts that were offset against selling and marketing costs for the three months ended September 30, 2025, and 2024, were $ 0.1 million and $ 0.6 million, respectively, and for the nine months ended September 30, 2025, and 2024, were $ 2.6 million and $ 3.5 million, respectively.

General and Administrative Expenses

General and administrative expenses represent costs incurred by the Company that are not directly attributable to the production of goods or services.

These expenses include, but are not limited to, salaries and benefits of administrative staff, office rent, utilities, office supplies, insurance, legal fees and other overhead costs necessary to support the operations of the business.

General and administrative expenses are recognized in the condensed consolidated statements of operations in the period in which they are incurred.

Expenses are measured at the fair value of the consideration given in exchange for goods or services received.

Research and Development Expenses

Research and development expenses consist primarily of payroll, software and other related expenses for research and development personnel responsible for making improvements to the Company’s service offerings, including testing and maintaining and modifying the user interface and infrastructure.

These expenses are recognized in the condensed consolidated statements of operations in the period in which they are incurred.

Stock-Based Compensation

Stock-based payments made to employees, including grants of employee stock options, are measured using a fair value-based method.

The related expense is recorded in the condensed consolidated statements of operations over the period of service.

Income taxes are provided for the tax effects of transactions reported in the condensed consolidated financial statements and consist of taxes currently due plus deferred taxes related primarily to differences between the tax bases of assets and liabilities.

The deferred taxes represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled.

Deferred income tax assets are reviewed periodically for recoverability, and valuation allowances are provided when it is more likely than not that some or all of the deferred income tax assets may not be realized.

The Company believes that it has appropriate support for the income tax positions taken and to be taken on its tax returns and that its accruals for tax liabilities are adequate for all open tax years based on an assessment of many factors including experience and interpretations of tax laws applied to the facts of each matter.

The Company files income tax returns in the U.S.

federal jurisdiction and certain state jurisdictions.

As of September 30, 2025 and December 31, 2024, the Company had $ 0.0 million of deferred tax assets.

Basic and Diluted Earnings (Loss) Per Share

Basic earnings (loss) per share attributable to the Company is computed by dividing income (loss) attributable to the Company by the weighted-average number of shares outstanding during the period.

Diluted earnings (loss) per share attributable to the Company gives effect to all dilutive potential shares that are outstanding during the period (if any) and excludes stock options that are anti-dilutive as a result of any net losses during the period.

Segment Reporting

The Company operates as a single reportable segment.

The Chief Operating Decision Maker (“CODM”), Neal Harmon, our Chief Executive Officer, evaluates the Company’s financial performance and allocates resources based on consolidated financial results.

The Company does not manage its operations or prepare financial information on a disaggregated basis beyond the consolidated level for internal reporting purposes.

The CODM reviews consolidated operating results, primarily focusing on revenue, operating income (loss), and key expense categories to assess performance and make strategic decisions.

The single reportable segment derives its revenue as described above, primarily from Angel Guild revenue, theatrical release revenue, content licensing, merchandise revenue, Pay it Forward revenue and other revenue.

Segment profit or loss is measured consistently with the condensed consolidated operating income (loss) presented in the condensed consolidated statements of income.

The significant expense categories regularly provided to the CODM as part of the consolidated financial review include cost of revenue, selling and marketing, research and development and general and administrative expenses.

The amounts for these categories are included in the condensed consolidated statements of operations.

These expenses represent the primary financial measures used by the CODM to evaluate operational efficiency and resource needs.

No other significant expense categories or performance metrics are regularly provided to the CODM on a disaggregated basis.

The Company’s accounting policies for segment reporting are consistent with the significant accounting policies described in Note 1.

Convertible Notes and Warrants

The Company accounts for warrants and convertible features of debt as either equity-classified or liability-classified instruments based on an assessment of the financial instrument’s specific terms.

The assessment for the convertible features of debt considers whether the convertible debt instrument is issued at a substantial premium.

The Company has determined that a premium of 10 percent or more is considered substantial.

The assessment for the warrants considers whether the warrants are freestanding financial instruments, meet the definition of a liability, and whether the warrants meet all the requirements for equity classification, including whether the warrants are indexed to the Company’s own stock and whether the warrant holders could potentially require “net cash settlement”, among other conditions for equity classification.

The Company has determined that all outstanding warrants and convertible features of debt meet the criteria for equity classification.

The warrants and the convertible features of the debt are recorded as a component of additional paid-in capital on the condensed consolidated statements of stockholders’ equity at the time of issuance.

The fair value of the warrants and the convertible features of the debt are estimated using the Black Scholes option pricing model at the time of issuance.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No.

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require the Company to disclose specified additional information in its income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

ASU 2023-09 will also require the Company to disaggregate its income taxes paid disclosure by federal, state and foreign taxes, with further disaggregation required for significant individual jurisdictions.

ASU 2023-09 will become effective for Annual periods beginning after December 15, 2024.

The Company is still reviewing the impact of ASU 2023-09.

Initial Public Offering

At the closing of the IPO on December 14, 2021, the Company sold 23,000,000 Units at a price of $ 10.00 per Unit.

Each Unit consists of one share of the Company’s Class A common stock, $ 0.0001 par value (each a “Public Share”), and one -half of one warrant of the Company (each a “Public Warrant”).

Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $ 11.50 per share, subject to adjustment (see Note 7).

Upon the closing of the IPO on December 14, 2021, $ 234,600,000 ($ 10.20 per Unit sold in the IPO) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in the Trust Account.

The amounts held in the Trust Account will be invested in U.S.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment

Company Act, with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company.

As of June 30, 2025 and December 31, 2024, $ 438,166 and $ 429,151 was held in the Trust Account, respectively.

In addition, as of June 30, 2025 and December 31, 2024, $ 328,610 and $ 494,974 of cash was not held in the Trust Account and is available for working capital purposes, respectively.

Transaction costs of the IPO amounted to $ 13,935,218 consisting of $ 4,600,000 of underwriting discount, $ 8,050,000 of deferred underwriting discount and $ 1,285,218 of actual offering costs.

On August 22, 2022, the underwriter delivered a letter to the Company pursuant to which the underwriter waived its entitlement to the payment of the deferred underwriting discount (see Note 8).

Private Placement

The Sponsor purchased an aggregate of 11,700,000 Private Placement Warrants at a price of $ 1.00 per warrant ($ 11,700,000 in the aggregate) in a private placement that closed simultaneously with the closing of the IPO.

Each Private Placement Warrant is exercisable for one whole Class A common stock at a price of $ 11.50 per share, subject to adjustment.

$ 9,200,000 of the proceeds from the sale of the Private Placement Warrants was added to the proceeds from the IPO placed in the Trust Account.

If the Company does not complete a Business Combination within the Combination Period, the Private Placement Warrants and the underlying securities will expire worthless.

The Private Placement Warrants are non-redeemable (except as described in Note 7 below under “—Redemption of warrants for Class A common stock when the price per Class A common stock equals or exceeds $ 10.00 ”) and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.

Related Party Transactions

Founder Shares

On May 27, 2021, the Company issued an aggregate of 7,187,500 shares of Class B common stock to the Sponsor for a purchase price of $ 25,000 .

On November 25, 2021, the Sponsor surrendered 1,437,500 shares of the Company’s Class B common stock for no consideration, resulting in there being an aggregate of 5,750,000 shares of the Company’s Class B common stock outstanding (the “Founder Shares”), up to 750,000 of which were then subject to forfeiture to the extent that the over-allotment option is not exercised in full by the underwriter for the IPO.

On December 13, 2021, the underwriter for the IPO exercised its over-allotment option in full, with the related closing of the additional 3,000,000 covered by the option occurring on December 14, 2021.

Accordingly, no Founder Shares remain subject to forfeiture.

On May 25, 2023, pursuant to the terms of the amended and restated certificate of incorporation of the Company, the Sponsor converted 4,200,000 Founder Shares held by it on a one -for-one basis into shares of the Company’s Class A common stock.

After giving effect to such conversion, the Company had 1,550,000 shares of Class B common stock issued and outstanding.

The Sponsor agreed, subject to certain limited exceptions, not to transfer, assign or sell any of its Founder Shares until the earlier to occur of:

(A) one year after the completion of a Business Combination or (B) the date on which the Company completes a liquidation, merger, capital stock exchange or similar transaction that results in the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property.

Notwithstanding the foregoing, if the closing price of the Company’s Class A common stock equals or exceeds $ 12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock-up.

Related Party Loans

The Sponsor agreed to loan the Company an aggregate of up to $ 350,000 to cover expenses related to the IPO pursuant to a promissory note (the “Note”).

The Note was non-interest bearing and was payable on the completion of the IPO.

The Company fully repaid the outstanding balance on the Note on December 14, 2021.

In addition, in order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the Company’s Sponsor, an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (the “Working Capital Loans”).

The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $ 1,500,000 of such Working Capital

Loans may be convertible into warrants, at a price of $ 1.00 per warrant.

If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.

In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

As of June 30, 2025 and December 31, 2024, no Working Capital Loans were outstanding.

Sponsor Promissory Note

On October 3, 2024, the Sponsor agreed to loan the Company an aggregate of up to $ 1,000,000 to cover expenses related to the Business Combination (the “Sponsor Promissory Note”).

The Sponsor Promissory Note is non-interest bearing and payable on the earlier of September 30, 2025 or the date on which the Company consummates a Business Combination.

If the Company does not consummate a Business Combination, the Sponsor Promissory Note will not be repaid and all amounts owed under the Sponsor Promissory Note will be forgiven except to the extent that the Company has funds available to it outside of the Trust Account.

As of June 30, 2025 and December 31, 2024, the Company had $ 814,146 and $ 439,004 , respectively, outstanding under the Sponsor Promissory Note.

Due to Related Party

The Sponsor has made tax payments, payments to various vendors on behalf of the Company, and transferred funds to the Company.

As of June 30, 2025 and December 31, 2024, the Company owed $ 270,590 .

Administrative Support Agreement

Commencing on December 10, 2021 and until completion of the Company’s initial Business Combination or liquidation, the Company is required to pay the Sponsor $ 15,000 per month for administrative support and services.

The Company pays the Sponsor for rent and costs incurred under the administrative support and services agreement.

For the three and six months ended June 30, 2025, the Company has paid $ 0 under the agreement.

For the three and six months ended June 30, 2024, the Company has paid $ 0 under the agreement.

The Company has accrued $ 501,500 and $ 411,500 related to the unpaid amounts under the administrative support agreement as of June 30, 2025 and December 31, 2024, respectively, which is recorded to administrative support fee – related party liability on the balance sheets.

The Sponsor will not be paid for any unpaid amounts in the event an initial business combination is not consummated.

Sponsor Cash Capital Contribution

As of June 30, 2025, the Sponsor made capital contributions of $ 1,444,227 to the Company to fund outstanding payments to the Company’s vendors.

The Sponsor made no contributions for the three and six months ended June 30, 2025.

The Sponsor made $ 97,581 and $ 333,228 of contributions for the three and six months ended June 30, 2024, respectively.

The Sponsor intends to continue providing cash to satisfy working capital obligations as needed through capital contributions.

The Company has recorded the cash received from the Sponsor as a capital contribution in additional paid-in capital.

Stockholders’ Equity

Preferred stock — The Company is authorized to issue up to 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share.

At June 30, 2025 and December 31, 2024, there were no shares of preferred stock issued or outstanding.

Class A common stock — The Company is authorized to issue up to 200,000,000 shares of Class A common stock with a par value of $ 0.0001 per share.

Holders of Class A common stock are entitled to one vote for each share.

On May 25, 2023, pursuant to the terms of the amended and restated certificate of incorporation of the Company, the Sponsor converted 4,200,000 shares of the Company’s Class B common stock held by it on a one-for-one basis into shares of the Company’s Class A common stock, resulting in an aggregate of 27,200,000 shares of Class A common stock issued and outstanding , of which 4,200,000 shares were held by the Sponsor and not subject to possible redemption and 23,000,000 shares were subject to possible redemption.

On June 9, 2023, the holders of 18,849,935 shares of Class A common stock properly exercised their right to redeem their shares for cash in connection with the vote on the First Extension Special Meeting, resulting in 4,150,065 shares of Class A common stock issued and outstanding and subject to possible redemption.

On March 14, 2024, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for cash in connection with the Second Extension Special Meeting, resulting in 1,163,113 shares of Class A common

stock issued and outstanding and subject to possible redemption.

On November 13, 2024, the holders of 1,125,126 shares of Class A common stock properly exercised their right to redeem their shares for cash in connection with the Third Extension Special Meeting, resulting in 37,987 shares of Class A common stock issued and outstanding and subject to possible redemption.

Accordingly, at June 30, 2025 and December 31, 2024, there were 4,237,987 shares of Class A common stock issued and outstanding, including 37,987 shares of Class A common stock subject to possible redemption.

Class B common stock — The Company is authorized to issue up to 20,000,000 shares of Class B, $ 0.0001 par value, common stock.

Holders of the Company’s common stock are entitled to one vote for each share.

On May 27, 2021, the Company issued an aggregate of 7,187,500 shares of Class B common stock to the Sponsor for a purchase price of $ 25,000 .

On November 25, 2021, the Sponsor surrendered 1,437,500 shares of Class B common stock for no consideration, resulting in there being an aggregate of 5,750,000 shares of Class B common stock outstanding.

On May 25, 2023, pursuant to the terms of the amended and restated certificate of incorporation of the Company, the Sponsor converted 4,200,000 shares of the Company’s Class B common stock held by it on a one-for-one basis into shares of the Company’s Class A common stock, resulting in an aggregate of 1,550,000 shares of Class B common stock issued and outstanding.

Accordingly, as of June 30, 2025 and December 31, 2024, there were 1,550,000 shares of Class B common stock issued and outstanding, of which 312,506 are held by the Sponsor and 1,237,494 were transferred to third-party investors pursuant to the Non-Redemption Agreements.

The shares of Class B common stock will automatically convert into shares of the Company’s Class A common stock at the time of the Business Combination on a one -for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations and the like.

In the case that additional shares of the Company’s Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts sold in the IPO and related to the closing of an initial Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as converted basis, 20 % of the sum of the total number of all shares of the Company’s common stock outstanding upon the completion of the IPO plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with an initial Business Combination (net of the number of shares of Class A common stock redeemed in connection with an initial Business Combination), excluding any shares or equity-linked securities issued, or to be issued, to any seller in the Business Combination and any warrants issued upon the conversion of Working Capital Loans.

Holders of shares of Class B common stock may also elect to convert their shares of Class B common stock into an equal number of shares of Class A common stock, subject to adjustment as provided above, at any time prior to a Business Combination.

The Company may issue additional common stock or preferred stock to complete its Business Combination or under an employee incentive plan after completion of its Business Combination.

The Company accounts for 23,200,000 warrants issued in connection with the IPO ( 11,500,000 Public Warrants and the 11,700,000 Private Placement Warrants) in accordance with the guidance contained in ASC 815-40.

Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

Accordingly, the Company classifies each warrant as a liability at its fair value.

Offering costs were allocated to the Class A common stock and Public Warrants, and the amounts allocated to the Public Warrants was expensed immediately.

This liability is subject to re-measurement at each balance sheet date.

With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

Warrants – Public Warrants may only be exercised for a whole number of shares.

No fractional shares will be issued upon exercise of the Public Warrants.

The Public Warrants will become exercisable 30 days after the consummation of a Business Combination.

The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or the Company’s liquidation.

The Company is not obligated to deliver any Class A common stock pursuant to the exercise of a Public Warrant and will have no obligation to settle such Public Warrant exercise unless a registration statement under the Securities Act covering the issuance of the Class A common stock issuable upon exercise of the Public Warrants is then effective and a prospectus relating thereto is current, subject

to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available.

No Public Warrants are exercisable for cash or on a cashless basis, and the Company is not obligated to issue any shares of Class A common stock to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available.

The registration statement for the IPO (the “IPO Registration Statement”) registered the sale for the shares of Class A common stock issuable upon exercise of the Public Warrants.

The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its commercially reasonable efforts to file a post-effective amendment to the IPO Registration Statement or a new registration statement, in the Company’s discretion, with the SEC, under the Securities Act covering the sale of the Class A common stock issuable upon exercise of the Public Warrants.

The Company will use its commercially reasonable efforts to cause such post-effective amendment or new registration statement, as the case may be, to become effective and to maintain a current prospectus relating to those shares of Class A common stock until the warrants expire or are redeemed, as specified in the warrant agreement.

If a registration statement covering the shares of Class A common stock issuable upon exercise of the Public Warrants is not effective by the 60 th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption.

Redemption of warrants when the price per share of Class A common stock equals or exceeds $ 18.00 .

Once the Public Warrants become exercisable, the Company may redeem the outstanding Public Warrants for redemption:

● in whole and not in part;

● at a price of $ 0.01 per Public Warrant;

● upon a minimum of 30 days ’ prior written notice of redemption to each warrant holder;

● if, and only if, the last reported sale price of the Class A common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 - trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.

Redemption of warrants when the price per Class A common stock equals or exceeds $ 10.00 .

Once the warrants become exercisable, the Company may redeem the outstanding warrants:

● in whole and not in part;

● at a price of $ 0.10 per warrant;

● upon a minimum of 30 days ’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares of Class A common stock determined by reference to an agreed table based on the redemption date and the “fair market value” of Class A common stock;

● if, and only if, the last reported sale price of the Class A common stock equals or exceeds $ 10.00 per Public Share (as adjusted) for any 20 trading days within the 30 - trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders;

● if the last reported sale price of the Class A common stock for any 20 trading days within a 30 - trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $ 18.00 per share (as adjusted), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.

The Company will not redeem the warrants as described above unless a registration statement under the Securities Act covering the sale of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available throughout the 30 -day redemption period (or, in the case of a redemption described above under “Redemption of warrants when the price per share of Class A common stock equals or exceeds $ 18.00 ,” the Company requires or permits the Public Warrants to be exercised on a cashless basis as described below), except, in the case of a redemption described above under “Redemption of warrants when the price per Class A common stock equals or exceeds $ 10.00 ,” if the sale of those shares of Class A common stock pursuant to the cashless exercise of the warrants is exempt from registration under the Securities Act.

If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the sale of

the shares of Class A common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state securities laws or the Company is unable to effect such registration or qualification.

If the Company calls the Public Warrants for redemption, the Company’s management will have the option to require or permit all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number of shares of common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation.

If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants.

Accordingly, the warrants may expire worthless.

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its initial Business Combination at an issue price or effective issue price of less than $ 9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, (i) in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such affiliates, as applicable, prior to such issuance, and (ii) without taking into account the transfer of Founder Shares or Private Placement Warrants (including if such transfer is effectuated as a surrender to the Company and subsequent reissuance by the Company) by the Sponsor in connection with such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the Company’s initial Business Combination on the date of the consummation of such initial Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial Business Combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the Market Value and the Newly Issued Price, the $ 18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180 % of the greater of the Market Value and the Newly Issued Price and the $ 10.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to the greater of the Market Value and the Newly Issued Price.

The Private Placement Warrants are identical to the Public Warrants included in the Units sold in the IPO, except that the Private Placement Warrants and the shares of common stock issuable upon the exercise of the Private Placement Warrants will not be transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions.

Additionally, the Private Placement Warrants will be non-redeemable in certain redemption scenarios and exercisable on a cashless basis so long as they are held by the initial purchasers thereof or their permitted transferees.

If the Private Placement Warrants are held by someone other than the initial purchasers thereof or their permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by such holders on the same basis as the Public Warrants.

If a tender offer, exchange or redemption offer shall have been made to and accepted by the holders of the Class A common stock and upon completion of such offer, the offeror owns beneficially more than 50% of the outstanding Class A common stock, the holder of the warrant shall be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant had been exercised, accepted such offer and all of the Class A common stock held by such holder had been purchased pursuant to the offer.

If less than 70% of the consideration receivable by the holders of the Class A common stock in the applicable event is payable in the form of common equity in the successor entity that is listed on a national securities exchange or is quoted in an established over-the-counter market, and if the holder of the warrant properly exercises the warrant within thirty days following the public disclosure of the consummation of the applicable event by the Company, the warrant exercise price shall be reduced by an amount equal to the difference (but in no event less than zero) of (i) the warrant price in effect prior to such reduction minus (ii) (A) the Per Share Consideration (as defined in the warrant agreement) minus (B) the value of the warrant based on the Black-Scholes Warrant Value for a Capped American Call on Bloomberg Financial Markets.

The Company expects to account for the Public Warrants and Private Placement Warrants as liabilities in accordance with the guidance contained in ASC 815-40, “Derivatives and Hedging—Contracts in Entity’s Own Equity”.

Because the Company does not control the occurrence of events, such as a tender offer or exchange, that may trigger cash settlement of the warrants where not all of the stockholders also receive cash, the warrants do not meet the criteria for equity treatment thereunder, as such, the warrants must be recorded as derivative liability.

Additionally, certain adjustments to the settlement amount of the Private Placement Warrants are based on a variable that is not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40, and thus the Private Placement Warrants are not considered indexed to the Company’s own stock and not eligible for an exception from derivative accounting.

The accounting treatment of derivative financial instruments requires that the Company record a derivative liability upon the issuance of the warrants at the closing of this offering.

Accordingly, the Company classifies each warrant as a liability at its fair value.

The Public Warrants will be allocated a portion of the proceeds from the issuance of the Units equal to its fair value determined with the assistance of a professional independent valuation firm.

The warrant liability is subject to re-measurement at each balance sheet date.

With each such re-measurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

The Company reassess the classification of the warrants at each balance sheet date.

If the classification changes as a result of events during the period, the warrants will be reclassified as of the date of the event that causes the reclassification.

There has been no change in the classification of the warrants as of June 30, 2025.

Commitments and Contingencies

Registration Rights

The holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of the Working Capital Loans (and in each case holders of the underlying securities thereof, as applicable) are entitled to registration rights pursuant to a registration rights agreement signed on December 9, 2021, requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to our Class A common stock).

The holders of these securities are entitled to make up to three demands, excluding short form registration demands, that the Company register such securities.

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the Company’s consummation of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.

However, the registration rights agreement provides that the Company is not required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period with respect to such securities.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The Company granted the underwriter a 45 -day option from the date of the IPO to purchase up to 3,000,000 additional Units to cover over-allotments, if any, at the IPO price less the underwriting discount.

On December 13, 2021, the underwriter exercised the option in full, closing the sale of the 3,000,000 additional Units on December 14, 2021.

The underwriter was paid an underwriting commission of $ 4,600,000 upon the closing of the IPO.

In addition, the underwriter was entitled to a deferred fee of $ 0.35 per Unit, or $ 8,050,000 in the aggregate, payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

On August 22, 2022, the underwriter delivered a letter to the Company pursuant to which the underwriter waived its entitlement to the payment of the deferred underwriting fee.

The $ 8,050,000 waived fee was recorded to accumulated deficit.

Non-redemption Agreements

On May 25, 2023, the Company and the Sponsor entered into Non-Redemption Agreements with unaffiliated third parties in exchange for such third parties agreeing (i) not to redeem an aggregate of 4,000,000 shares of Class A common stock sold in its initial public offering (the “Non-Redeemed Shares”) in connection with the Special Meeting and (ii) to vote in favor of the Extension Amendment Proposal and the Extension at the Special Meeting (other than with respect to certain shares acquired or to be acquired pursuant to the Non-Redemption Agreements).

In exchange for the foregoing commitments, the Sponsor has agreed to transfer to such third parties an aggregate of up to 1,499,996 shares of Class B common stock held by the Sponsor, with 500,000 of such shares to be transferred to such third parties promptly upon consummation of the Extension, and an additional 166,666 shares to be transferred to such third parties monthly beginning on September 14, 2023 and up to, and including, February 14, 2024, if the board of directors of the Company elects to further extend the deadline to consummate an initial Business Combination at or prior to such date, in each case, if such third parties continue to hold such Non-Redeemed Shares through the Special Meeting.

The Company previously had extended the deadline six times, to March 14, 2024, resulting in a total of 1,499,996 shares of Class B common stock being transferred to such third parties.

The Company accounted for the Non-Redemption Agreements in accordance with Staff Accounting Bulletin Topic 5T (“SAB Topic 5T”).

The Company considered the Sponsor’s transfer of Class B common stock to the unaffiliated third parties in exchange for the Non-Redemption Agreements as a capital contribution by the Sponsor, and recognized the excess fair value of the transferred Class B common stock as a non-redemption agreement expense on the condensed statements of operations.

The Company determined the excess fair value of the 1,499,996 shares of Class B common stock transferred to such third parties upon the consummation of the First Extension to be $ 1,209,879 .

Fair Value Measurements

Recurring Fair Value Measurements

The following table presents information about the Company’s assets and liabilities that are measured at fair value at June 30, 2025, and December 31, 2024, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

June 30, 2025

Marketable securities held in trust account

Public Warrants

Private Placement Warrants

Improvements to Income Tax Disclosures .

This ASU enhances the transparency and decision-usefulness of income tax disclosures by requiring, among other items, greater disaggregation in the rate reconciliation and income taxes paid by jurisdiction.

The guidance is effective for public business entities for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The ASU does not affect interim period disclosures (e.g., Form 10-Q), and as such, no changes have been made to the Company’s interim reporting.

The Company is currently evaluating the impact of this ASU on its annual income tax disclosures and does not expect it to have a material impact on its consolidated financial statements.

Recapitalization

As discussed in Note 1, following the closing of the Business Combination, Angel Legacy was deemed the accounting acquirer and the transaction was accounted for as a reverse recapitalization.

Transaction Proceeds

Upon the closing, the Company received no gross proceeds.

The following table reconciles the elements of the Business Combination to the condensed consolidated statements of cash flows and the condensed consolidated statement of changes in stockholders’ equity for the period ended September 30, 2025:

Cash-trust and cash, net of redemptions

accounts payable and accrued expenses

( 10,261,623 )

Reverse recapitalization, net

( 10,261,623 )

In connection with the Business Combination, the Company incurred $ 4.9 million in one-time direct and incremental transaction costs, consisting of legal and other professional fees, recorded in general and administration expenses.

The number of shares of common stock immediately following the consummation of the Business Combination were:

Southport common stock, outstanding prior to Business Combination

Angel Legacy Shares, converted

Shares issued to Angel Legacy convertible noteholders

Common stock immediately after the Business Combination

Digital Assets

The table below summarizes the digital assets shown on the Company’s condensed consolidated balance sheets as of:

September 30, 2025

December 31, 2024

Marketable securities held in trust account

Public Warrants

Private Placement Warrants

The following table presents the changes in the fair value of the Company’s liabilities classified as Level 2 as of June 30, 2025 and December 31, 2024:

Warrant Liabilities

Level 2 Derivative warrant liabilities as of December 31, 2023

Change in fair value of Private Placement Warrant liability

Transfer of Public Warrant liability to Level 2

Level 2 Derivative warrant liabilities as of December 31, 2024

Change in fair value of warrant liabilities

Level 2 Derivative warrant liabilities as of June 30, 2025

The Public Warrants were reclassified from Level 1 to Level 2 as a result of the delisting of the Company’s Class A common stock and Public Warrants from the NYSE on March 21, 2024.

At June 30, 2025, and December 31, 2024, the Company’s warrant liability was valued at $ 5,797,850 and $ 4,639,000 .

Under the guidance in ASC 815-40, the Public Warrants and the Private Placement Warrants do not meet the criteria for equity treatment.

As such, the Public Warrants and the Private Placement Warrants must be recorded on the balance sheet at fair value.

This valuation is subject to re-measurement at each balance sheet date.

With each re-measurement, the valuations will be adjusted to fair value, with the change in fair value recognized in the Company’s statement of operations.

The following table presents fair value information for the three and six months ended June 30, 2025, and 2024, of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

The Company’s Private Placement Warrant liability is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets.

Significant deviations from these estimates and inputs could result in a material change in fair value.

For the Three and Six Months Ended June 30, 2025

Derivative warrant liabilities as of December 31, 2024

Change in fair value

Derivative warrant liabilities as of March 31, 2025

Change in fair value

Derivative warrant liabilities as of June 30, 2025

For the Three and Six Months Ended June 30, 2024

Derivative warrant liabilities as of December 31, 2023

Change in fair value

Derivative warrant liabilities as of March 31, 2024

Change in fair value

Derivative warrant liabilities as of June 30, 2024

The Company established the initial fair value for the warrants on December 14, 2021, the date of the consummation of the Company’s IPO.

The Company allocated the proceeds received from (i) the sale of Units (which is inclusive of one share of Class A common stock and one -half of one Public Warrant), (ii) the sale of Private Placement Warrants, and (iii) the issuance of Class B common stock, first to the warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Class A common stock subject to possible redemption (temporary equity), Class A common stock (permanent equity) and Class B common stock (permanent equity) based on their relative fair values at the initial measurement date.

As of June 30, 2025, the Public Warrants have detached from the Units and are separately tradable on the over-the-counter markets.

The closing price of the Public Warrants was utilized in determining the fair value of the Public Warrants as of June 30, 2025.

The key inputs into the Monte Carlo simulation formula used to value the Private Placement Warrants were as follows at June 30, 2025 and 2024:

Common stock price

Exercise price

Risk-free rate of interest

Warrant to buy one share

Dividend yield

Non-recurring Fair Value Measurements

On May 25, 2023, the Company and the Sponsor entered into Non-Redemption Agreements with unaffiliated third parties (see Note 8).

The Company accounts for the excess fair value of the Class B shares transferred from the Sponsor to the unaffiliated third parties as a capital contribution by the Sponsor and recorded a non-redemption agreement expense in accordance with SAB Topic 5T.

The Company estimated the fair value of the 500,000 Class B shares transferred upon the consummation of the Extension at $ 387,000 , or $ 0.77 per share.

In connection with the subsequent extensions to March 14, 2024, the Sponsor transferred an additional 999,996 Class B shares to the unaffiliated third parties under the terms of the Non-Redemption Agreements.

The Company estimated the fair value of the 999,996 Class B shares transferred at $ 0.82 to $ 0.83 per share.

The fair value of the Class B shares was determined by multiplying the underlying stock price of the Company’s Class A common stock by the estimated probability of an Initial Business Combination and applying a discount for lack of marketability (“DLOM”).

The Company utilized June 9, 2023, the date of the consummation of the Extension, as the measurement date for the transfer of the 500,000 Class B shares and September 30, 2023, October 11, 2023, November 14, 2023, December 13, 2023, January 12, 2024 and February 14, 2024 as the measurement dates for the transfer of the 166,666 Class B shares ( 999,996 Class B shares in the aggregate) transferred in connection with the subsequent extensions, respectively.

The following are the key inputs into the calculations at the measurement dates:

Digital assets held:

Approximate number of bitcoin held

Digital asset cost basis

Digital asset carrying value

The carrying value on the Company’s condensed consolidated balance sheets at each period-end prior to the adoption of ASC 2023-08 represented the lowest fair value (based on Level 1 inputs in the fair value hierarchy) of the bitcoin at any time since their acquisition.

Therefore, these fair value measurements were made during the period of their acquisition through December 31, 2024.

The following table summarizes the Company’s digital asset purchases, gains (losses) on digital assets as calculated after the adoption of ASU 2023-08 on January 1, 2025, and write-down of digital assets as calculated prior to the adoption of ASU 2023-08 for the periods indicated.

For the three months ended September 30,

For the nine months ended September 30,

Approximate number of bitcoin acquired

Approximate number of bitcoin dispensed

Digital asset additions

Digital asset dispositions

Unrealized gains, net

Realized gains (losses), net

Notes Payable

The following table summarizes the Company’s debt facilities as of September 30, 2025 and December 31, 2024 (in millions):

Type of Facility

or Arrangement

Balance as of September 30, 2025

Balance as of December 31, 2024

Original Principal Amount

Interest Rate

Repayment Terms

May 2024 P&A loans

For detailed terms, see (1)

May 2025 convertible note

See Convertible Notes and Warrants section below

September 2025 notes

See Convertible Notes and Warrants section below

Revolving P&A loans (See Note 6, Related-Party Transactions )

10.0 - 15.0 *

The current notes mature between October and December 2025

discounts and issuance costs, net of amortization

Total notes payable balance

* The interest rates for these loans are calculated as simple interest, where the amount of interest is a fixed amount of the principal.

(1) The maturity date is dependent on the timing of cash collections from theatrical sales, licensing revenue, merchandise sales and other revenue.

The balance is expected to be fully paid within the next twelve months.

Notes with convertible features and/or warrants

May 2025 convertible note with warrants

In May 2025, the Company entered into a note and warrant purchase agreement with an unaffiliated third party, providing for the private placement of a subordinated convertible promissory note and warrant to purchase 163,322 shares of the Company’s Class A Common Stock with an exercise price of $ 6.13 per share.

At the investor’s option and prior to the maturity date, the convertible note and any accrued interest may be converted into shares of the Company’s Class A Common Stock at a fixed price of $ 6.13 per share.

The Company does not have the right to prepay the convertible note.

Interest is compounded monthly and payable on the maturity date.

A discount of $ 1.3 million was recorded for the convertible feature of the note and the warrant, as allocated based on the relative fair values of the elements of the convertible note and warrant.

This discount was recorded as paid-in capital.

Due to the total fair value of the note, including the warrant and convertible feature, being greater than the principal amount of the note, the effective interest rate is greater than the coupon rate and is approximately 30.9 %.

In September 2025, Steve Sarowitz, who is the controlling person of this unaffiliated third party, became a member of the Company’s board of directors.

August 2025 convertible notes

In August 2025, the Company entered into two notes with unaffiliated third parties, providing for the private placement of subordinated convertible promissory notes of the Company’s Class A Common Stock.

A discount of $ 0.8 million was recorded for the convertible feature of the note, as allocated based on the relative fair values of the elements of the convertible note.

This discount was recorded as paid-in capital.

Due to the total fair value of the note, including the convertible feature, being greater than the principal amount of the note, the effective interest rate is greater than the coupon rate and is approximately 45.2 %.

These notes included automatic conversion features where if the Company’s Common Stock becomes listed on a national securities exchange, the notes would automatically convert into a number of shares of the Company’s Class A Common Stock equal to the total outstanding principal amount, together with all accrued interest, divided by the conversion price of $ 7.29 .

In September 2025, as a result of the Business Combination, the Company became publicly listed, and therefore these notes were automatically converted per the terms of the notes.

The total number of shares issued upon conversion was 973,002 shares of Class A Common Stock.

September 2025 note with warrants

In September 2025, The Company entered into a loan and security agreement with certain lenders, which provides up to $ 100.0 million term loan with a delayed draw feature, which is composed of four committed tranches:

(i) the first tranche in an aggregate principal amount of $ 40.0 million, which was funded on the closing date;

(ii) the second tranche in an aggregate principal amount equal to $ 20.0 million, which may be drawn on or prior to June 30, 2026;

(iii) the third tranche in an aggregate principal amount equal to $ 20.0 million, which may be drawn on or prior to December 31, 2026 and (iv) the fourth tranche in an aggregate principal amount equal to $ 20.0 million, which may be drawn on or prior to June 30, 2027.

The availability of each tranche will be subject to achievement by the Company of certain conditions, including, without limitation, achievement of a specified minimum annualized recurring revenue and receipt of a minimum of net cash proceeds from the sale or issuance of equity.

Borrowings under the credit facility was used to pay off certain of the Company’s existing indebtedness, as well as for general working capital purposes and business operations.

The Company's obligations under the credit facility will be secured by substantially all of the Company's assets, but shall exclude the equity held by the Company in, and the assets of, the subsidiaries of the Company that are formed from time to time for the primary purpose of raising capital under Regulation A of the Securities Act of 1933.

Borrowings under the credit facility will bear interest at a variable rate equal to the greater of (x) the Prime Rate (as defined under the credit facility) plus 6.0 % and (y) 13.5 %.

The Company will be required to make monthly payments of principal and accrued interest (the first 26 months being interest only payments), with the remaining balance being repaid upon maturity on October 1, 2030.

The credit facility contain representations, warranties and covenants that are typical for these types of facilities.

These covenants include restrictions on mergers or sales of assets and secured debt borrowings, subject to exceptions and limitations.

The credit facility also requires the Company to maintain a minimum liquidity level and contains events of default applicable to the Company that are customary for agreements of this type.

In connection with the credit facility, the Company issued each lender thereunder a warrant to purchase stock to purchase an aggregate amount of 1,462,682 shares of the Company’s Class A common stock with an exercise price per share of $ 7.29 .

The Warrants vest and become exercisable in proportion to and in conjunction with the advancement of each tranche under the Credit Facility.

The warrants will expire on September 11, 2030.

The Company also granted the lenders rights to participate in future issuances of the Company’s capital stock.

As part of the initial draw, the lenders received warrants to purchase 585,073 shares of the Company’s Class A common stock with an exercise price of $ 7.29 per share.

A discount of $ 2.3 million was recorded for the warrant, as allocated based on the relative fair values of the elements of the note and warrant.

This portion of the debt discount was recorded as paid-in capital.

An additional $ 0.4 million was booked as a debt discount for commitment fees paid to the Lender, and $ 0.3 million was

booked as debt issuance costs for legal and other fees paid to third parties.

Due to the total fair value of the note, including the warrant, being greater than the principal amount of the note, the effective interest rate is greater than the coupon rate and is approximately 16.3 %.

The following table summarizes further details of the outstanding notes with convertible features and/or warrants:

Issuance Date

Maturity Date

Principal Amount

Coupon Interest Rate

May 2025 convertible note

September 2025 note with warrants

September 8, 2025

Common stock price

Estimated probability of an Initial Business Combination

Estimated volatility

Risk-free rate

Time to expiration

The Company utilized the discrete method for estimating its interim income tax provision.

During the three and six months ended June 30, 2025, the Company recorded an income tax provision of $ 277 and $ 88,604 , respectively, and our effective tax rate was ( 0.02 )% and ( 5.65 )%, respectively.

During the three and six months ended June 30, 2024, the Company recorded an income tax provision of $ 49,421 and $ 114,124 , respectively, and our effective tax rate was ( 9.79 )% and ( 88.30 )%, respectively.

The effective tax rate differs from the Federal statutory tax rate of 21 % due to changes in the fair value of warrant liabilities and valuation allowance on the deferred tax assets.

The Company has evaluated the positive and negative evidence bearing upon its ability to realize its deferred tax assets, which primarily consist of capitalized startup costs.

The Company considered the history of cumulative net losses, estimated future taxable income and prudent and feasible tax planning strategies, and has concluded that it is more likely than not that the Company will not realize the benefits of its deferred tax assets.

As such, the Company recorded a full valuation allowance against net deferred tax assets as of June 30, 2025.

Segment Information

ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers.

Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.

The Company’s CODM has been identified as the Chief Executive Officer, who reviews the assets, operating results, and financial metrics for the Company as a whole to make decisions about allocating resources and assessing financial performance.

Accordingly, management has determined that there is only one reportable segment.

The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statements of operations as net income or loss.

The CODM uses net income or loss to manage the business and forecasts to ensure enough capital is available to complete a business combination or similar transaction within the business combination period.

The CODM also reviews significant expenses, which are consistent with those reported on the statements of operations, to manage, maintain, and enforce contractual agreements to ensure costs are aligned with agreements and the budget.

The measure of segment assets is reported on the balance sheets as total assets.

All segment items included in net income or loss are reported on the statements of operations and described within their respective disclosures.

October 1, 2030

Components and Fair Value of the Convertible Notes

The convertible note consisted of the following components as of September 30, 2025.

The principal shown in the table below consists of the principal amount of the note as well as the interest (which is paid-in-kind each month).

September 30, 2025

Outstanding Principal Amount

Discounts, Net of Amortization

Net Carrying Amount

Fair Value (1)

May 2025 convertible note

(1) The fair value includes the note, the conversion feature on the note, and the warrant.

The conversion feature and warrant were determined based on the Black Scholes option pricing model on the date of issuance of the note and has been classified as level 3 in the fair value hierarchy.

Interest Expense of the Convertible Notes

The following table summarizes interest expenses related to the convertible notes:

Three Months Ended September 30, 2025

Contractual Interest Expense

Amortization of Debt Discount

May 2025 convertible note

Nine Months Ended September 30, 2025

Contractual Interest Expense

Amortization of Debt Discount

May 2025 convertible note

Commitments and Contingencies

Legal Proceedings

The Company currently is, and from time to time might again become, involved in litigation arising in the normal course of business.

Litigation is necessary to defend the Company.

The results of any current or future complex litigation matters cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact because of defense and settlement costs, distraction of management and resources, and other factors.

Additionally, these matters may change in the future as the litigation and factual discovery unfolds.

Legal fees are expensed as incurred.

Insurance recoveries associated with legal costs incurred are recorded when they are received.

The Company assesses whether there is a reasonable possibility that a loss, or additional losses beyond those already accrued, may be incurred (“Material Loss”).

If there is a reasonable possibility that a Material Loss may be incurred, the Company discloses an estimate or range of the amount of loss, either individually or in the aggregate, or discloses that an estimate of loss cannot be made.

If a Material Loss occurs due to an unfavorable outcome in any legal matter, this may have an adverse effect on the condensed consolidated financial position, results of operations, and liquidity of the Company.

The Company records a provision for each liability when determined to be probable, and the amount of the loss may be reasonably estimated.

These provisions are reviewed annually and adjusted as additional information becomes available.

Management, after consultation with legal counsel, believes that the outcome of these proceedings will not have a material impact on the Company’s condensed consolidated financial position, results from operations or liquidity.

The actual amounts from the resolution of these matters could vary from management’s estimate.

Disney Litigation

On December 12, 2016, the U.S.

District Court for the Central District of California granted a preliminary injunction against the Company (formerly VidAngel) for copyright infringement and Digital Millenium Copyright Act (“DMCA”) violations involving works from Disney Enterprises, Inc., Lucasfilm Ltd., Twentieth Century Fox Corporation, Warner Bros.

Entertainment, Inc., and their subsidiaries.

The plaintiffs alleged that the Company unlawfully decrypted and infringed 819 titles.

In 2019, the court granted the Plaintiff’s motion for partial summary judgment on liability, and a jury trial resulted in a $ 62.4 million award, including $ 61.4 million for willful copyright infringement ($ 75,000 per title) and $ 1 million for DMCA violations ($ 1,000 per title).

A judgment was entered in September 2019, with plaintiffs also seeking costs and attorneys' fees.

In August 2020, the Company entered into a settlement agreement with the plaintiffs as part of its reorganization plan (“Reorganization Plan”), effectively resolving the litigation.

Among other things, the plan allowed the Company to continue as a going concern, ensuring full payment to creditors while equity holders retained their interests.

The Company committed to not infringing the studios' copyrights, including prohibitions on decrypting, reproducing, streaming, or distributing their works.

Additionally, the Company agreed not to sue the studios or lobby to amend the Family Movie Act for 14 years and dismissed its appeal.

Under the settlement, the Company was to pay $ 9.9 million over 14 years or a discounted $ 7.8 million within five years , with a $ 62.5 million promissory note remaining outstanding but cancellable upon full compliance and no breaches (limited to fewer than four unauthorized uses in any consecutive five-year period).

The Company elected the five-year option and fully repaid the $ 7.8 million by September 30, 2025.

The foregoing summary of certain provisions of the Reorganization Plan and related settlement agreement are not complete and are subject to and qualified in their entirety by reference to the Reorganization Plan and Disney Settlement Agreement, copies of which can be found in the Angel Legacy Current Report on Form 1-U filed on September 15, 2020, under “Item 2.1, Exhibits,” and the terms of which are incorporated by reference herein.

Mergers and Acquisitions

In July 2022, the Company purchased an 8.0 % interest in an entity that is partially owned by one or more of the Company’s directors, officers, and stockholders.

This entity produces content for the Company’s platforms.

The total purchase price was $ 1.7 million.

In August 2023, the Company entered into negotiations to acquire this entity in full.

While negotiations are ongoing, the Company agreed to fund the operations of the entity.

The Company funded a total of $ 4.4 million during the year ended December 31, 2024.

During the nine months ended September 30, 2025 the Company funded an additional $ 2.8 million related to supporting operations of the entity which was expensed by the Company.

In August 2024, the Company agreed to a non-binding term sheet to acquire the rights related to a project currently under a content licensing agreement.

The total purchase price was $ 30.0 million.

The Company agreed to fund the operations of the entity until and following the completion of the acquisition.

During the year ended December 31, 2024, the Company funded $ 2.2 million.

During the nine months ended September 30, 2025, the Company funded an additional $ 4.4 million related to supporting operations of the entity which was expensed by the Company.

In April 2025, the Company entered into a non-binding term sheet to acquire Black Autumn Show, Inc., including its Homestead film, television series and related assets, for stock consideration based on a valuation of up to $ 28.2 million.

The Company agreed to fund feature seasons of the television series through either 1) royalties earned from the film and television show or 2) additional funding to cover the remaining production costs.

Currently, the Company has not had to pay any additional funding outside of the royalties earned.

In May 2025, the Company agreed to purchase the IP for Sketch from Wonder Project Inc.

for $ 6.0 million in cash;

$ 2.0 million each is to be paid on or before May 31, 2025, June 30, 2025, and July 31, 2025.

The purchase is now complete and the final payment has been completed.

With this purchase, Angel Studios now controls the rights, title, and interest in the film, including any subsequent productions.

The Company has authorized Common Stock consisting of 700,000,000 shares, of which 500,000,000 shares have been designated as Class A Common Stock and 200,000,000 have been designated as Class B Common Stock.

The Company has also authorized preferred stock consisting of 1,000,000 , par value $ 0.0001 per share.

Each outstanding share of Class A Common Stock is entitled to one vote and each outstanding share of Class B Common Stock is entitled to ten votes.

Warrant Offerings

In May 2025, the Company entered into a note and warrant purchase agreement with an unaffiliated third party, providing for the private placement of a subordinated convertible promissory note with a principal balance of $ 5.0 million and warrant to purchase 163,322 shares of the Company’s Class A Common Stock with an exercise price of $ 6.13 per share.

In September 2025, Steve Sarowitz, who is the controlling person of this unaffiliated third party, became a member of the Company’s board of directors.

See Note 4 for additional details.

In September 2025, the Company entered into two notes and warrant purchase agreements with unaffiliated third parties, providing for the private placement of notes with a total principal balance of $ 40.0 million and warrants to purchase 1,462,682 shares of the Company’s Class A common stock with an exercise price per share of $ 7.29 .

As part of the initial draw, the lenders received warrants to purchase 585,073 shares of the Company’s Class A common stock.

See Note 4 for additional details.

The Company determined that the outstanding warrants meet the criteria for equity classification.

Therefore, the warrants are recorded as a component of additional paid-in capital on the condensed consolidated statements of stockholders’ equity at the time of issuance.

The fair value of the warrants were estimated using the Black-Scholes option pricing model at the time of issuance and will not be remeasured throughout their life, pursuant to ASC 470.

For more information regarding the note and warrant purchase agreements, refer to Note 3, Debt.

Loss per Share

The following table represents the Company’s loss per share for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended

Nine Months Ended

Net loss attributable to controlling interests

( 38,553,961 )

( 13,855,176 )

( 91,853,393 )

( 51,182,073 )

Weighted average basic shares outstanding

Effect of dilutive shares

Weighted average diluted shares

Basic loss per share

Diluted loss per share

Basic loss per share includes no dilution and is computed by dividing net income available to common stockholders by the weighted average common shares outstanding for the period.

Diluted loss per share is calculated similarly to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the common shares were dilutive.

All potential common shares were anti-dilutive as a result of the Company’s net losses during the three and nine months ended September 30, 2025 and 2024.

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted loss per share as their inclusion would be anti-dilutive, for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended

Nine Months Ended

Stock options to purchase common stock

Convertible securities to acquire common stock

Warrants to purchase common stock

Total outstanding potentially dilutive securities

Related-Party Transactions

The Company has a marketing services contract with an entity owned by one or more of the Company’s directors, officers, and stockholders.

During the three months ended September 30, 2025 and 2024, the Company incurred expenses of $ 0.2 million and $ 0.1 million, respectively, to the related party for marketing services.

During the nine months ended September 30, 2025 and 2024, the Company incurred expenses of $ 0.5 million and $ 0.4 million, respectively, to the related party for marketing services.

In July 2021, the Company purchased a 50.0 % interest in the entity that owns the building in which the Company leases its office space from.

Lease payments made during the period of related party ownership were $ 0.1 million and $ 0.1 million for the three months ended September 30, 2025 and 2024, respectively and $ 0.3 million and $ 0.4 million for the nine months ended September 30, 2025 and 2024, respectively.

In February 2024, the Company entered into a revolving P&A loan agreement with Angel P&A, LLC, a Delaware limited liability company (“Angel P&A”) that is 100.0 % owned by one or more of the Company’s directors, officers, and stockholders.

Angel P&A was set up for the specific purpose of raising P&A funds for the Company to use for upcoming theatrical releases, in exchange for revenue participation rights of the films.

The revenue participation rights allow Angel P&A the right to receive an amount not to exceed 110.0 % (initial investment plus a 10.0 % return) of their invested amount.

Angel P&A has priority on the cash receipts to the Company of the particular film they invested in and shall be paid in full before any other claims, with the exception of money raised under Regulation A of Section 3(6) of the Securities Act, for P&A (if any) which would take first priority, from the film are paid.

When Angel P&A receives the repayment on these notes, the interest portion is distributed to the institutional investors and the original investment can either remain at Angel P&A for additional P&A loans needed by the Company or be returned to the institutional investors until the Company has further need of the funds.

The commitment period between Angel P&A and the Company, and between Angel P&A and the investors, lasts through February 2027.

Angel P&A has no employees and is not anticipated to incur any operating expenses.

The maturity on the loans are typically due between 80 – 120 days from the individual draw.

As of September 30, 2025 and December 31, 2024, the total outstanding balance of revolving P&A loans is $ 7.7 million and $ 8.2 million, respectively.

In May 2025, the Company entered into a note and warrant purchase agreement with an unaffiliated third party, providing for the private placement of a subordinated convertible promissory note .

In September 2025, Steve Sarowitz, who is the controlling person of this unaffiliated third party, became a member of the Company’s board of directors.

See Note 4, Debt for additional details.

On October 22, 2025, the Company’s Board of Directors voted to increase the size of the Board from five to seven directors.

One of the new members of the Board is Benton Crane, who is an executive producer and board member at Black Autumn Snow LLC, the creator of the Homestead film and television series, and Tuttle Twins Show LLC.

The Company has a distribution agreement with the Homestead film and series resulting in payments of $ 0.2 million during the year ended December 31, 2024, and payments of $ 4.9 million during the nine months ended September 30, 2025.

Total payments, including royalties paid to the Tuttle Twins Show LLC, during the year ended December 31, 2024 and the nine months ended September 30, 2025, were $ 4.4 million and $ 2.8 million, respectively.

See Note 5, Commitments and Contingencies , for more information.

Subsequent Events

On July 22, 2025, the Company received a notice of effectiveness from the SEC with respect to the Form S-4 registration statement of the Company and Angel Studios.

Subsequent events have been evaluated through November 14, 2025, which is the date the condensed consolidated financial statements were available to be issued.

Entry Into A Material Definitive Agreement

The Company entered into a term sheet (the “Term Sheet”) with 2521 Entertainment, LLC (“2521”, together with the Company, the “JV Partners”) that sets forth the principal terms and conditions governing the joint venture between the JV Partners, through Giant Slayer Media LLC (“Giant Slayer Media” or the “JV”).

The Term Sheet, pursuant to its terms, became binding on October 7, 2025, upon the execution of that certain Asset Purchase Agreement by and between Slingshot USA LLC (“Slingshot”) and Giant Slayer Media, also dated as of October 7, 2025 (the “Asset Purchase Agreement”).

The Term Sheet will remain in effect until the earlier of (a) the execution of the definitive Limited Liability Company Agreement for the JV (the “LLCA”) and a distribution agreement between the Company (or one of its affiliates) and Giant Slayer Media (the “Distribution Agreement”) or (b) the mutual agreement of the JV Partners to terminate the Term Sheet.

Pursuant to the Term Sheet, the Company will contribute $ 31,366,686 and 2521 will contribute $ 46,550,473 in cash to the JV.

Moreover, the Company will also be credited, as a capital contribution, an amount equal to $ 2,342,277 on account of a previous investment with Slingshot, which will result in the Company’s total initial capital contribution of $ 33,708,963 .

Following the cash contribution by the JV Partners, the equity split in the JV will be 42 % to the Company and 58 % to 2521.

Separately, under the Term Sheet, the JV Partners will negotiate in good faith and execute definitive agreements to implement the terms of the Term Sheet, including the Asset Purchase Agreement, the LLCA and the Distribution Agreement, each in form and substance reasonably acceptable to the JV Partners.

Under the Term Sheet, and by means of the Asset Purchase Agreement, Giant Slayer Media will acquire substantially all of the assets of Slingshot related to the animated feature film, DAVID, the associated works and certain other ancillary rights and obligations (the “Purchased Assets”), for an aggregate purchase price of $ 77,917,159 in cash.

Further, except as may be otherwise provided in the Distribution Agreement:

(a) Giant Slayer Media will acquire ownership of the Purchased Assets under the Asset Purchase Agreement;

(b) each of the JV Partners will agree to assign, and will cause its affiliates and personnel to assign, to Giant Slayer Media all rights, title and interest in and to any derivative works, sequels, prequels, spinoffs or other works based on or derived from the Purchased Assets and (c) all such rights will automatically vest in Giant Slayer Media without further action.

The Company or its relevant affiliate will act as the distributor of the Purchased Assets under the Distribution Agreement, which will contain specific payment terms, events of default and guaranty terms.

The relationship of the JV Partners in the JV will be governed by the LLCA, which will contain specific terms regarding the distribution of proceeds received from the Company under the Distribution Agreement and other terms relating to the management of the JV.

In addition to the consummation of the transactions contemplated in the Term Sheet, the Asset Purchase Agreement also provided for, upon the closing of the transactions contemplated therein, the revocation by Slingshot of its deemed termination of the distribution agreement between the Company and Slingshot and the dismissal of the current lawsuit, brought by Slingshot against Angel Studios Licensing, LLC, the Company’s affiliate, pursuant to a Confidential Dismissal Agreement and Mutual Release (the “Dismissal Agreement”) effective as of October 7, 2025, by and between Angel Studios Licensing, LLC and Slingshot.

The Dismissal Agreement resolved in full the action titled Slingshot USA, LLC v.

Angel Studios Licensing, LLC, Case No.

250401064, in the Fourth Judicial District Court, Utah County, State of Utah (the “Lawsuit”), and any and all claims arising from or relating to the parties’ prior content distribution agreements concerning DAVID and Young David.

Slingshot dismissed the Lawsuit with prejudice on October 8, 2025.

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

What changed 10-Q

Item 1. Financial Statements