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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-14 · 343 added, 173 removed, 5 unchanged (99% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless otherwise stated or the context otherwise requires, references in this quarterly report to (i) the “Company,” “SAC,” “Southport,” “us,” or “we” are to Southport Acquisition Corporation, a Delaware corporation;

(ii) “founder shares” are to shares of our Class B common stock initially purchased by our Sponsor in a Private Placement (as defined herein) prior to our IPO (as defined herein), and the shares of our Class A common stock issued upon the conversion thereof;

and (iii) “Sponsor” are to Southport Acquisition Sponsor LLC, a Delaware limited liability company.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report.

Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This quarterly report, including statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” includes forward-looking statements.

These forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, beliefs, intentions or strategies regarding the future.

In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not a forward-looking statement.

The following is a discussion of the historical results of operations and liquidity and capital resources of Angel Studios, Inc.

(“Angel Studios,” “we,” “our,” “us,” or the “Company”).

You should read the following discussion and analysis in conjunction with the accompanying condensed consolidated financial statements of the Company and the notes thereto, as well as with the Angel Legacy’s Annual Report on Form 10-K, including the audited consolidated financial statements and the related notes included therein.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations may contain forward-looking statements.

The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements.

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of the federal securities laws that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected.

All statements, other than statements of historical fact included in this Quarterly Report on Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements, including with respect to our recently announced Business Combination (as defined below).

The forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.

Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available.

A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements.

For information identifying some of the important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the discussion under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Item 1A.

Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2024 and our quarterly reports on Form 10-Q filed with the U.S.

Securities and Exchange Commission (the “SEC”).

A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements, please refer to the “Risk Factors” section of this Quarterly Report on Form 10-Q and the registration statement on Form S-4 filed with the Securities and Exchange Commission (“SEC”) relating to our Business Combination.

The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov.

Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

We are a blank check company incorporated as a Delaware corporation on April 13, 2021 and formed for the purpose of effectuating a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (“Business Combination”).

We intend to effectuate our initial Business Combination using cash from the proceeds from our IPO and the Private Placement, our capital stock, debt or a combination of cash, capital stock and debt.

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.

On December 14, 2021, we consummated our initial public offering of 23,000,000 units (“SAC Units”), with each SAC Unit consisting of one share of Class A common stock (“SAC Class A Common Stock”) and one-half of one warrant (“SAC Public Warrant”), each whole SAC Public Warrant entitling the holder thereof to purchase one share of SAC Class A Common Stock for $11.50 per share (subject to adjustment) (the “IPO”).

The 23,000,000 SAC Units sold in our IPO include 3,000,000 SAC Units sold to BofA Securities, Inc., the underwriter for our IPO (the “underwriter”), pursuant to the underwriter’s full exercise of its option under the underwriting agreement for our IPO to purchase up to 3,000,000 additional SAC Units solely to cover over-allotments.

The SAC Units were sold at a price of $10.00 per SAC Unit, and our IPO generated gross proceeds of $230.0 million.

Simultaneously with the closing of our IPO, we consummated a private placement (the “Private Placement”) with our Sponsor of an aggregate of 11,700,000 warrants (“SAC Private Placement Warrants”) at a price of $1.00 per SAC Private Placement Warrant, generating gross proceeds to SAC of $11.7 million.

On December 14, 2021, a total of $234.6 million of the net proceeds from our IPO and the Private Placement were deposited in the Trust Account established for the benefit of SAC’s public stockholders at JPMorgan Chase Bank, N.A., with Continental Stock Transfer and Trust (“Continental”), acting as trustee.

Except with respect to interest earned on the funds held in the Trust Account that may be released to us to pay our tax obligations (less up to $100.0 thousand of interest to pay dissolution expenses), the proceeds deposited in the Trust Account will not be released from the Trust Account until the earliest of (a) the completion of our initial Business Combination, (b) the redemption of any SAC Public Shares properly submitted in connection with a stockholder vote to amend our amended and restated certificate of incorporation (the “SAC Charter”) (i) to modify the substance or timing of our obligation to provide our public stockholders the right to have their SAC Public Shares redeemed in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination by September 30, 2025 or during an extended time that the Company has to consummate its initial business combination as approved by the stockholders (an “Extension Period”) or (ii) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity, and (c) the redemption of all of our SAC Public Shares if we are unable to complete our initial Business Combination by September 30, 2025, or during any Extension Period, subject to applicable law.

The proceeds held in the Trust Account may only be invested 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 of 1940, as amended (the “Investment Company Act”), which invest only in direct U.S.

government treasury obligations.

On June 9, 2023 (the “First Extension Special Meeting”), SAC’s stockholders approved a proposal to amend the SAC Charter (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 SAC, 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, SAC entered into voting and non-redemption agreements (the “Non-Redemption Agreements”) with unaffiliated third parties (“the Third-Party SAC Investors”) agreeing (i) not to redeem an aggregate of 4,000,000 shares of Class A common stock sold in its IPO (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 the Third-Party SAC Investors an aggregate of up to 1,499,996 shares of Class B common stock held by the Sponsor (“SAC Class B Common Stock”), with 500,000 of such shares to be transferred to the Third-Party SAC Investors promptly upon consummation of the First Extension, and an additional 166,666 shares to be transferred to the Third-Party SAC Investors monthly beginning on September 14, 2023 and up to, and including, February 14, 2024, if the board of directors of SAC elects to further extend the deadline to consummate an initial Business Combination at or prior to such date, in each case, if the Third-Party SAC Investors 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 SAC Charter, the Sponsor converted 4,200,000 shares of SAC Class B Common Stock held by it on a one-for-one basis into shares of SAC Class A Common Stock.

After giving effect to the Conversion, SAC had an aggregate of 27,200,000 shares of SAC 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 SAC Class A Common Stock subject to possible redemption, and 1,550,000 shares of SAC Class B Common Stock issued and outstanding.

In connection with the First Extension Special Meeting, the holders of 18,849,935 shares of SAC Class A Common Stock properly exercised their right to redeem their shares for an aggregate redemption amount of $197.7 million, resulting in 4,150,065 shares of SAC Class A Common Stock issued and outstanding and subject to possible redemption.

The trustee processed the redemptions and withdrew the $197.7 million payable to the holders redeeming 18,849,935 shares of SAC Class A Common Stock on July 7, 2023.

The board of directors of SAC approved six monthly extensions to extend the time SAC 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 SAC Class B Common Stock held by the Sponsor to the Third-Party SAC Investors in accordance with the Non-Redemption Agreements.

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

In connection with the Second Extension Special Meeting, the holders of 2,986,952 shares of SAC Class A Common Stock properly exercised their right to redeem their shares for an aggregate redemption amount of $32.2 million, resulting in 1,163,113 shares of SAC Class A Common Stock issued and outstanding and subject to possible redemption.

Accordingly, as of September 11, 2024, there were 5,363,113 shares of SAC Class A Common Stock issued and outstanding (including 1,163,113 shares of SAC Class A Common Stock subject to possible redemption) and approximately $12.8 million held in the Trust Account.

On March 21, 2024, SAC received correspondence from the staff of NYSE Regulation of the NYSE indicating that the staff has determined to commence proceedings to delist the SAC Class A Common Stock, SAC Public Warrants and SAC Units, because SAC had fallen below the NYSE’s continued listing standard requiring a listed acquisition company to maintain an average aggregate global market capitalization attributable to its publicly held shares over a consecutive 30 trading day period of at least $40.0 million.

On April 8, 2024, the NYSE filed a Form 25 to delist the SAC Class A Common Stock, SAC Public Warrants and SAC Units, and to remove such securities from registration under Section 12(b) of the Exchange Act.

The delisting became effective ten days after the filing of the Form 25, and the deregistration became effective 90 days after the Form 25 filing.

The SAC Class A Common Stock, SAC Public Warrants and SAC Units remain registered under Section 12(g) of the Exchange Act, and began trading on the OTC Pink Marketplace on or about March 22, 2024 under the ticker 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”) (refer to Proposed Business Combination section below).

On October 2, 2024, SAC filed a definitive proxy statement (the “Third Extension Proxy Statement”) with respect to a third meeting of the stockholders (the “Third Extension Special Meeting”) to obtain stockholder approval to further amend the SAC Charter to extend the time by which SAC 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, SAC received a redemption report from Continental indicating that, as of October 11, 2024, the holders of 985,170 shares of SAC 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, SAC determined to postpone the Third Extension Special Meeting originally scheduled for October 15, 2024, to October 22, 2024, to allow additional time for SAC to engage with its stockholders and solicit redemption reversals.

On October 21, 2024, SAC 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 the a new proposal to amend the SAC Charter to eliminate the limitation that the SAC may not redeem its outstanding shares of SAC Class A Common Stock to the extent that such redemption would result in SAC 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 SAC 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 Continental in connection with the Third Extension Special Meeting were not processed.

On October 29, 2024, SAC filed an amendment to the Third Extension Proxy Statement that amended and restated the Third Extension Proxy Statement to:

(1) reschedule the Third Extension Special Meeting originally scheduled for October 15, 2024, and postponed to October 22, 2024, to November 13, 2024 and (2) reflect the addition of the Redemption Limitation Amendment Proposal.

On November 13, 2024, SAC held the Third Extension Special Meeting, at which SAC’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 shares of SAC Class A Common Stock properly exercised their right to redeem their shares for an aggregate redemption amount of $12.5 million, resulting in 37,987 shares of SAC Class A Common Stock issued and outstanding and subject to possible redemption.

Accordingly, following such redemptions, there were 4,237,987 shares of SAC Class A Common Stock issued and outstanding (including 37,987 shares of SAC Class A Common Stock subject to possible redemption) and approximately $423.5 thousand held in the Trust Account.

On January 15, 2025, certain of the Third-Party SAC Investors transferred an aggregate of 262,502 shares of SAC Class B Common Stock back to the Sponsor for no additional consideration in connection with the liquidation of certain of such investors’ investment vehicles.

Accordingly, as of June 30, 2025, the Sponsor holds 4,200,000 shares of SAC Class A Common Stock, 312,506 shares of SAC Class B Common Stock and 11,700,000 SAC Private Placement Warrants.

On February 14, 2025, SAC, Angel Studios and Merger Sub entered into the Merger Agreement Amendment (refer to Proposed Business Combination section below).

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

All activity from inception through June 30, 2025 relates to our formation, our IPO and our pursuit of a target company with which to effect our initial Business Combination.

The Company has selected December 31 as its fiscal year end.

Proposed Business Combination

Merger Agreement

On September 11, 2024, the Company entered into the Merger Agreement, by and among the Company, Merger Sub, and Angel Studios.

The Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, (i) at 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 SAC;

(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 our 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 our common stock (subject to appropriate adjustments to the number of shares of our common stock underlying such options and the exercise price of such options);

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

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

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, (i) the absence of any law or injunction prohibiting the consummation of the Business Combination, (ii) the effectiveness of the registration statement on Form S-4 filed by SAC in connection with the transaction, (iii) the approval of the Merger Agreement and the transactions contemplated thereby by the respective stockholders of SAC and Angel Studios, and (iv) the receipt of approval for listing on the New York Stock Exchange or the Nasdaq Stock Market (or any other nationally recognized stock exchange in the United States as may be agreed by Angel Studios and SAC) of our Class A common stock (including shares issued in the transaction).

Each party’s obligations to consummate the Business Combination are also conditioned upon the accuracy of the other party’s representations and warranties, subject to customary materiality and material adverse effect qualifiers, and the performance in all material respects by the other party of its covenants in the Merger Agreement to be performed as of or prior to the Closing.

The Merger Agreement contains additional covenants, including, among others, providing for (i) the parties to conduct their respective businesses in the ordinary course through the Closing, (ii) the parties to not initiate any negotiations or enter into any agreements for certain alternative transactions, (iii) SAC to prepare and file a registration statement on Form S-4, including a joint proxy statement/prospectus, and take certain other actions to obtain the requisite approval of SAC stockholders of certain proposals regarding the Business Combination and SAC warrant holders regarding the warrant conversion, and (iv) the parties to use reasonable best efforts to obtain necessary approvals from governmental agencies.

The Merger Agreement contains customary representations and warranties by SAC, Merger Sub and Angel Studios.

The representations and warranties of the respective parties to the Merger Agreement generally will not survive the Closing.

The Merger Agreement may be terminated at any time prior to the Closing (i) by written consent of SAC and Angel Studios, (ii) by either Angel Studios or SAC, if certain approvals of the stockholders of SAC or Angel Studios, to the extent required under the Merger Agreement, are not obtained as set forth therein, (iii) by Angel Studios, if there is a Modification in Recommendation (as defined in the Merger Agreement), or by SAC, if there is a Company Modification in Recommendation (as defined in the Merger Agreement), and (iv) by either SAC or Angel Studios in certain other circumstances set forth in the Merger Agreement, including (a) if any governmental authority shall have issued or otherwise entered a final, non-appealable order making consummation of the Merger illegal or otherwise preventing or prohibiting consummation of the Merger, (b) in the event of certain uncured material breaches by the other party or (c) if the Closing has not occurred on or before September 30, 2025.

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.

In connection with the Merger Agreement and 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 Public Warrants automatically will convert into 0.1 newly issued share of Southport Class A common stock and such warrants will cease to be outstanding.

Additionally, in connection with the Sponsor Support Agreement (defined below), the Sponsor has agreed to forfeit all of the Private Placement Warrants held by it at the Closing for no additional consideration.

Support Agreement

On September 11, 2024, SAC entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”), by and among SAC, our sponsor and Angel Studios, pursuant to which our 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 our common stock in connection therewith.

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

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

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

Angel Studios Stockholder Support Agreement

On September 11, 2024, SAC entered into a Stockholder Support Agreement (the “Angel Studios Stockholder Support Agreement”) by and among SAC, 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.

Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, SAC, our sponsor, certain equity holders of Angel Studios, Jared Stone and the other parties thereto, will enter into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which SAC will grant customary registration rights to the other parties thereto, including to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of SAC common stock that are held by the other parties thereto.

Lock-Up Agreement

The Merger Agreement contemplates that, at the Closing, SAC and the Key Holders (as defined in the Merger Agreement) will enter into a Lock-Up Agreement (the “Lock-Up Agreement”).

The Lock-Up Agreement contains certain restrictions on transfer with respect to shares of SAC common stock held by the Key Holders immediately following the Closing (other than shares purchased in the public market after the Closing) and the shares of SAC common stock issued to directors and executive officers of the combined company upon settlement or exercise of stock options or other equity awards outstanding as of immediately following the Closing in respect of awards of Angel Studios outstanding immediately prior to the Closing (the “Lock-Up Shares”).

Such restrictions begin at the Closing and end on the earlier of (i) one year after the Closing and (ii) (a) for 33% of the Lock-Up Shares, the date on which the last reported sale price of SAC common stock equals or exceeds $12.50 per share for any 20 trading days within any 30-trading day period commencing at least 30 days after the Closing and (b) for an additional 50% of the Lock-Up Shares, the date on which the last reported sale price of SAC common stock equals or exceeds $15.00 per share for any 20 trading days within any 30-trading day period commencing at least 30 days after the Closing.

Results of Operations and Known Trends or Future Events

Our entire activity from inception through June 30, 2025 relates solely to our formation, our IPO and our pursuit of an initial Business Combination.

We have not generated any operating revenues to date, and we will not generate any operating revenues until after completion of our initial Business Combination.

We will generate non-operating income in the form of interest income on cash and cash equivalents.

There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements.

We have incurred and expect to continue to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended June 30, 2025, we had net loss of $1.6 million, which consisted of $4.5 thousand dividend income on marketable securities held in the Trust Account, offset by a $1.2 million loss on the change in fair value of warrant liability, provision for income tax of $277, $170.7 thousand in legal and accounting expenses, $3.6 thousand of franchise tax expense, $142.2 thousand of administrative expenses (of which $45.0 thousand are due to related party), and $25.7 thousand of insurance expense.

For the six months ended June 30, 2025, we had net loss of $1.7 million, which consisted of $9.0 thousand dividend income on marketable securities held in the Trust Account and a $182.8 thousand adjustment to franchise tax expense, offset by a $1.2 million loss on the change in fair value of warrant liability, provision for income tax of $88.6 thousand, $345.0 thousand in legal and accounting expenses, $206.0 thousand of administrative expenses (of which $90.0 thousand are due to related party), $50.6 thousand of insurance expense, and $163 of bank fees.

For the three months ended June 30, 2024, we had net loss of $505.0 thousand, which consisted of $163.6 thousand dividend income on marketable securities held in the Trust Account, offset by a $331.5 thousand loss on the change in fair value of warrant liability, provision for income tax of $49.4 thousand, $82.8 thousand in legal and accounting expenses, $50.0 thousand of franchise tax expense, $57.1 thousand of administrative expenses (of which $45.0 thousand are due to related party), $80.1 thousand of insurance expense, $21.3 thousand of listing fees, and $1.5 thousand of bank fees.

For the six months ended June 30, 2024, we had net loss of $243.4 thousand, which consisted of $723.5 thousand dividend income on marketable securities held in the Trust Account and a $116.5 thousand gain on the change in fair value of warrant liability, offset by a non-redemption agreement expense of $275.0 thousand related to the excess fair value of Class B common stock transferred by the Sponsor, provision for income tax of $114.1 thousand, $143.3 thousand in legal and accounting expenses, $125.9 thousand of franchise tax expense, $203.8 thousand of administrative expenses (of which $90.0 thousand are due to related party), $175.3 thousand of insurance expense, $42.5 thousand of listing fees, and $3.5 thousand of bank fees.

Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

We are a values based media distribution company that uses technology to empower a vibrant and growing community to replace the Hollywood gatekeeper system and champion stories that amplify light for mainstream audiences.

Our community, known as the Angel Guild, is at the heart of this mission.

1) The Angel Guild votes to select film and TV shows.

2) The Angel Guild rallies in theaters to support film releases.

3) The Angel Guild funds future films and TV shows with their membership.

As of September 30, 2025, through the Angel Guild, approximately 1.6 million paying members from more than 160 different countries help decide what film and TV projects we will market and distribute.

Pledge to Amplify Light

All Guild members make a written pledge stating:

“When I vote, I pledge to help choose excellent entertainment that is true, honest, noble, just, authentic, lovely or admirable.”

We primarily generate revenue from the following sources:

● Angel Guild revenue comes from monthly or annual membership fees.

Currently there are three possible tiers for membership, Basic with Ads, Basic, and Premium.

All memberships allow voting for every Angel Studios release, give early access for streaming,

and help fund our original films, increasing new content releases.

The Basic and Premium tiers have no ads during shows and the Premium tier includes two complimentary tickets to every Angel Studios theatrical release and a discount for all merchandise.

● Theatrical Distribution revenue comes from releasing our original films with our exhibitor partners.

Every time a moviegoer purchases a ticket from the partner theaters, we receive a percentage of the box office revenue.

For most international theaters, the percentage of box office revenue is first paid to a distributor who then pays us.

● Content Licensing revenue comes from licensing our films and TV shows to other distributors such as Amazon, Apple and Netflix.

Our future plans include licensing the rights to our films and TV shows for other experiences such as derivative shows, video games, theme parks and Broadway-style plays.

● Other revenue is generated from sales of merchandise related to our films and series, as well as physical DVD sales.

We also offer a direct online store for Angel Studios themed products and wholesale products to retail partners.

We were founded in 2013 by our Chief Executive Officer, Neal Harmon, along with his brothers Daniel, Jeffrey and Jordan, and their cousin, Benton Crane.

Bitcoin Treasury Strategy:

Seeking to Empower the Angel Guild for Generations

As of September 30, 2025, we beneficially owned approximately 303.1 bitcoin.

This equates to 1.7974 bitcoin per million shares of our Common Stock.

We plan to hold bitcoin as a strategic treasury asset as an adjunct to our core film and TV distribution business.

We do not have policies governing the amount of bitcoin we intend to hold now or in the future and the overall amount of bitcoin we intend to hold is uncertain.

Additionally, we have not currently set any official policies governing how or when we will exchange cash for bitcoin, or sell bitcoin for cash, with the exception that bitcoin may be sold, if necessary, to meet the day-to-day financial obligations of the Company.

The continued implementation of our bitcoin treasury strategy aims to support its mission-driven approach of funding the world’s best filmmakers in producing stories that amplify light for generations to come.

The overall strategy contemplates that we may (i) enter into capital raising transactions that are collateralized by its bitcoin holdings, (ii) consider pursuing strategies to create income streams or otherwise generate funds using its bitcoin holdings and (iii) periodically sell bitcoin for general corporate purposes, including to generate cash to meet its operating requirements.

Regulation A Offerings

In September 2024, we sold an aggregate of 3,538,661 shares of our Class A Common Stock, pursuant to an offering under Regulation A of the Securities Act of 1933, as amended (the “Securities Act”).

The price of the Class A Common Stock was $5.66 per share, and the Regulation A Offering generated gross proceeds of approximately $20.0 million.

We determined the Regulation A Price after considering several key factors at that time, including (i) the information set forth in the Angel Legacy offering statement on Form 1-A, originally filed with the SEC on June 20, 2024, as subsequently amended and filed with the SEC on each of August 9, 2024 and August 27, 2024, and as qualified by the SEC on August 29, 2024, (ii) our history and future growth expectations, as well as the history and future growth expectations of the industry in which we compete, (iii) our past and present financial performance, (iv) our prospects for future earnings and the present state of our business, (v) the general condition of the securities markets at the time of the Regulation A Offering, (vi) the recent market prices of, and demand for, publicly traded common stock of generally comparable companies and (vii) other relevant factors.

Our Chief Executive Officer, Neal Harmon, purchased 42 shares of Class A Common Stock, our President, Jordan Harmon, purchased 3,536 shares of Class A Common Stock, our Chief Content Officer, Jeffrey Harmon purchased 42 shares of Class A Common Stock and one of our directors, Paul Ahlstrom, purchased 85 shares of Class A Common Stock, in each case as part of the Reg A Offering.

We intend to use the proceeds from the Reg A Offering to manage our business and provide working capital for our operations.

The proceeds may also be used to pay expenses relating to salaries and other compensation to our officers and employees.

In September 2025, we sold an aggregate of 6,688,077 shares of our Class A Common Stock, pursuant to an offering under Regulation A.

The price of the Class A Common Stock was $8.23 per share, and the Regulation A Offering generated gross proceeds of approximately $55.0 million.

We determined the Regulation A Price after considering several key factors at that time, including (i) the information set forth in the Angel Legacy offering statement on Form 1-A, originally filed with the SEC on June 26, 2025, as subsequently amended and filed with the SEC on July 24, 2025, and as qualified by the SEC on August 6, 2025, (ii) our history and future growth expectations, as well as the history and future growth expectations of the industry in which we compete, (iii) our past and present financial performance, (iv) our prospects for future earnings and the present state of our business, (v) the general condition of the securities markets at the time of the Reg A Offering, (vi) the recent market prices of, and demand for, publicly traded common stock of generally comparable companies and (vii) other relevant factors.

We intend to use the proceeds from the Reg A Offering to manage our business and provide working capital for our operations.

The proceeds may also be used to pay expenses relating to salaries and other compensation to our officers and employees.

P&A Subsidiaries

Over the past year, we have formed several subsidiaries (each, a “P&A Subsidiary”) to exploit the commercial potential of specific films.

Generally, a P&A Subsidiary enters into a distribution agreement with a filmmaker/production company to license the rights to market and distribute a film.

The P&A Subsidiary then executes a services agreement with us to market the film’s theatrical release.

The P&A Subsidiary also sublicenses the film to us for distribution via the Angel App and our website, as well as to other distribution networks.

In exchange for our right to distribute the film, we retain a share of revenue generated by our distribution of the film to the Guild.

P&A Subsidiaries have dual class voting structures:

preferred shares, which are offered to investors under Regulation A;

and common shares, which we purchase at formation and which are the sole voting shares of a P&A Subsidiary.

Typically, the preferred shares have a ‘Stated Value’ of 115-120% of the price at which the shares are sold.

A P&A Subsidiary’s board of directors may, upon determining that the company has sufficient available funds, pay the Stated Value to preferred shareholders.

Payments are made from receipts generated by the film’s theatrical release, after movie theaters have taken their negotiated share.

If revenue generated from a film’s theatrical release is insufficient to pay the Stated Value, P&A Subsidiaries may pay the Stated Value from revenue generated by the film’s distribution, merchandizing sales, and other commercial exploitation.

Upon full payment of the Stated Value, a P&A Subsidiary’s preferred shares are automatically redeemed, and we become the entity’s sole owner.

After a P&A Subsidiary has redeemed its preferred shares, the subsidiary splits remaining revenue with the filmmaker according to the terms of the Distribution Agreement.

We are legally distinct from the P&A Subsidiaries, and investments in them are distinct from an investment in us.

A P&A Subsidiary is formed solely to exploit the commercial potential of a single film, and proceeds generated from a subsidiary’s offering of preferred shares are used to market and distribute that one film.

A P&A Subsidiary has no other business or assets other than its exploitation of the rights to the film.

The subsidiary’s shareholders do not have any rights to our assets or securities if a film does not perform well financially.

Investors in our common stock are investing in us and our business, which is broader than the marketing of a single film.

Investors in our Common Stock do not have any right to payment of any amounts from the receipts of a film’s theatrical release prior to dividend payments made to the shareholders of the P&A Subsidiaries.

P&A Subsidiaries are required to file current and periodic reports with the SEC pursuant to Rule 257(b) of Regulation A.

Unlike us, P&A Subsidiaries do not have reporting obligations under Section 15 of the Exchange Act.

Off the Chain

On September 11, 2024, we and Off the Chain, LP (“Off the Chain”), a leading bitcoin asset management firm, entered into an agreement in principle for an investment by Off the Chain of approximately $10.0 million to help support our bitcoin treasury strategy.

On September 30, 2024, we entered into a stock purchase agreement with Off the Chain, pursuant to which Off the Chain agreed to purchase an aggregate of 1,769,328 shares of Class A Common Stock, at a price of $5.66 per share, for an aggregate purchase price of $10.0 million, payable in bitcoin.

The sale closed on October 10, 2024.

We intend to use the proceeds from our sale of Class A Common Stock to Off the Chain to support our bitcoin treasury strategy.

Recent Developments

On September 10, 2025, the we 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.

Loan and Security Agreement with Warrant Offering

On September 8, 2025, we entered into a Loan and Security Agreement with certain lenders, which provides us with an 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 by December 31, 2026 and (iv) the fourth tranche in an aggregate principal amount equal to $20.0 million, which may be drawn by June 30, 2027.

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

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

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.

Asset Purchase Agreement

The Company entered into a Term Sheet with 2521 that sets forth the principal terms and conditions governing the joint venture between the JV Partners, through Giant Slayer Media.

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 and Giant Slayer Media, also dated as of October 7, 2025.

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.

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 us and Slingshot and the dismissal of the current lawsuit, brought by Slingshot against Angel Studios Licensing, LLC, our 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 (“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.

During the nine months ended September 30, 2025, we sold an aggregate of 9,071,042 shares of Class A Common Stock to various purchasers, generating gross proceeds of approximately $47.5 million.

The issuances of the Class A Common Stock were made in reliance upon exemptions from registration provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder.

We intend to use the proceeds from the sales of Class A common stock to manage our business and provide working capital for our operations.

The proceeds may also be used to pay expenses relating to salaries and other compensation to our officers and employees.

Financial Operations Overview

Historically, we have primarily generated revenue from the Angel Guild, theatrical distribution, content licensing and other.

See “Revenue” for more information.

Cost of Revenues

Cost of revenues represents the direct costs incurred by us in generating our revenue.

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

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

Operating Expenses

Selling and Marketing :

Selling and marketing expenses include the promotion of the Angel Guild and increasing memberships, as well as current and future theatrical releases.

As we continue to bring on additional content, drive Angel Guild memberships and promote future theatrical releases, this cost is expected to continue to rise.

Research and Development :

Research and development expenses consist of the addition of personnel necessary to continue our focus on improving existing products, optimizing existing services and developing new technology to better meet the needs of our customers and partners.

General and Administrative :

General and administrative expenses consist of the increased support staff necessary to manage the continued and expected growth of the business, including payroll and related expenses for executive, finance, content acquisition and administrative personnel, as well as recruiting, professional fees and other general corporate expenses.

Legal expenses include costs incurred in connection with legal proceedings, regulatory matters, compliance obligation, and corporate governance.

Legal expenses may fluctuate based on the nature, timing, and complexity of matters encountered by us.

While we strive to manage these costs effectively, they may have a material impact on our financial condition depending on the scope of ongoing or anticipated legal matters.

Results of Operations

The following represents our performance highlights for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024:

For the three months ended September 30,

Cost of revenues

Selling and marketing

General and administrative

Research and development

Legal expense

Operating loss

Net gain on digital assets

Interest expense

Interest income

Impairment of investments

Loss before income tax benefit

Income tax benefit

The following represents our revenue by type for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024:

For the three months ended September 30,

Content licensing

Pay it Forward

Theatrical Pay it Forward

Total Revenue

During the three months ended September 30, 2025, compared to the three months ended September 30, 2024, the increase in revenues was largely due to:

1) an increase in Angel Guild revenue by $50.2 million as a result of increased Angel Guild members from 0.3 million to 1.6 million from September 30, 2024 to September 30, 2025, and 2) content licensing revenue, which increased by $7.1 million as a result of larger licensing deals being entered into from our 2025 theatrical releases, compared to smaller deals as a result of smaller theatrical box office releases in 2024.

This increase was offset by a decrease in Theatrical Pay it Forward revenue by $1.3 million, as theatrical Pay it Forward receipts were offset by the cost of purchasing and giving away free tickets and no revenue was recognized during the three months ended September 30, 2025.

Cost of Revenues

The following represents our cost of revenues by type for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024:

For the three months ended September 30,

Total Cost of Revenues

During the three months ended September 30, 2025, cost of revenues was $34.3 million compared to $8.1 million in the same quarter in the prior year.

The increase in Angel Guild cost of revenues by $7.3 million was a result of increased memberships and the transaction fees of $5.4 million related to that growth, as well as an increased number of free movie tickets for premium Angel Guild members for Angel theatrical releases of $1.6 million.

The increase in royalties of $17.0 million was a result of higher royalties earned by filmmakers.

Selling and Marketing

The following represents our selling and marketing expenses by type for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024:

For the three months ended September 30,

Total Selling and Marketing

During the three months ended September 30, 2025, compared to the three months ended September 30, 2024, the increase in selling and marketing expenses was largely due to:

1) An increase in Angel Guild sales and marketing expenses of $36.6 million as a result of the promotion of the Angel Guild in an effort to increase memberships and 2) An increase in Theatrical sales and marketing expenses of $11.8 million as a result of two theatrical box office releases and related spend during the three months ended September 30, 2025.

As we continue to bring on additional content, drive Angel Guild memberships and promote future theatrical releases, this cost is expected to fluctuate, but overall remain high and be a significant component of our operating expenses.

Other Operating Expenses

For the three months ended September 30, 2025, higher general and administrative costs of $4.1 million were primarily related to:

1) additional employee costs of $1.2 million during 2025 related to the support staff necessary to manage the continued and expected growth of the business, 2) additional option issuance costs of $1.6 million during 2025 due to an increase in options granted to employees and their related Black-Scholes value on the grant date and 3) additional 3 rd party accounting and auditing services of $0.9 million as a result of the costs incurred from the anticipated Merger with Merger Sub.

For the three months ended September 30, 2025, the increase in research and development costs of $1.0 million primarily related to additional employee costs during 2025 related to the support staff necessary to manage the continued and expected growth of the business.

Other Income and Expense

The increase of gain on digital assets of $1.2 million in 2025 is a result of measuring our digital assets at fair value at the end of each reporting period per Accounting Standards Update (“ASU”) No.

2023-08 and the value of bitcoin increasing during the three months ended September 30, 2025.

During the three months ended September 30, 2024, we sold a portion of our digital assets and as such recognized a realized gain of $0.9 million.

The increase in interest expense of $3.5 million is related to a higher dollar amount of P&A and other notes entered into and outstanding during the three months ended September 30, 2025, compared to the three months ended September 30, 2024, as can be seen on our condensed consolidated statements of cash flows.

The increase in interest income of $0.8 million is the result of higher cash balances during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

The following represents our performance highlights for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024:

For the nine months ended September 30,

Cost of revenues

Selling and marketing

General and administrative

Research and development

Legal expense

Operating loss

Net gain on digital assets

Interest expense

Interest income

Impairment of investments

Loss before income tax benefit

Income tax benefit

The following represents our revenue by type for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024:

For the nine months ended September 30,

Content licensing

Pay it Forward

Theatrical Pay it Forward

Total Revenue

During the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, the increase in revenues was largely due to:

1) An increase in Angel Guild revenue by $119.5 million as a result of increased Angel Guild members from 0.3 million to 1.6 million paying Angel Guild members from September 30, 2024 to September 30, 2025, 2) An increase in Theatrical revenue by $27.9 million as a result of more theatrical box office releases in 2025, and 3) An increase in content licensing revenue of $5.3 million as a result of larger licensing deals being entered into from our 2025 theatrical releases, compared to smaller deals as a result of smaller theatrical box office releases in 2024.

This increase was offset by a decrease in:

1) Merchandise revenue of $1.5 as a result of focusing less on Merchandise during 2025, and 2) Pay it Forward and Theatrical Pay it Forward revenue of $4.9 million, due to our focus transitioning away from Pay it Forward and focusing more on the Angel Guild.

Cost of Revenues

The following represents our cost of revenues by type for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024:

For the nine months ended September 30,

Total Cost of Revenues

During the nine months ended September 30, 2025, cost of revenues was $81.1 million compared to $31.3 million for the nine months ended September 30, 2024.

The increase in Angel Guild cost of revenues by $21.8 million was a result of increased memberships and the associated transaction fees of $13.1 million related to that growth, as well as an increased number of free movie tickets for premium Angel Guild members for Angel theatrical releases of $6.5 million.

The increase in theatrical cost of revenues of $2.2 million was a result of six films being released during the nine months ended September 30, 2025 with only three films being released during the same period 2024.

The increase in royalties of $23.6 million was a result of higher royalties earned by filmmakers.

Selling and Marketing

The following represents our selling and marketing expenses by type for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024:

For the nine months ended September 30,

Total Selling and Marketing

During the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, the increase in selling and marketing expenses was largely due to:

1) an increase in Angel Guild sales and marketing expenses of $93.9 million as a result of the promotion of the Angel Guild in an effort to increase memberships and 2) an increase in theatrical sales and marketing expenses of $26.4 million as a result of six box theatrical box office releases in 2025 compared to only three during this same period in 2024.

The main driver for the increase in other marketing was additional marketing staff needed to manage the continued and expected growth of the business.

Other Operating Expenses

For the nine months ended September 30, 2025, higher general and administrative costs of $11.4 million were primarily related to:

1) additional employee costs of $2.4 million during 2025 related to the support staff necessary to manage the continued and expected growth of the business, 2) additional option issuance costs of $4.8 million during 2025 due to an increase in options granted to employees and their related Black-Scholes value on the grant date, 3) additional 3 rd party accounting and auditing services of $2.2 million as a result of the costs incurred from the Business Combination, and 4) additional foreign withholding tax of $0.7 million as a result of increase licensing deals in international territories.

For the nine months ended September 30, 2025, the decrease in legal expense of $1.7 million was largely a result of a decrease in legal costs associated with The Chosen, Inc.

(f/k/a The Chosen, LLC) (“The Chosen”) arbitration and estimated liabilities as a result of the arbitration during 2024, which was offset by additional legal costs from the Business Combination.

For more information, see “Part II—Other Information, Item 1.

Legal Proceedings.”

Other Income and Expense

The increase in the gain on digital assets of $4.6 million in 2025 is a result of measuring our digital assets at fair value at the end of each reporting period per Accounting Standards Update (“ASU”) No.

2023-08 and the value of bitcoin increasing during the nine months ended September 30, 2025.

During the nine months ended September 30, 2024, we sold a portion of our digital assets and as such recognized a realized gain of $1.6 million.

The increase in interest expense of $6.3 million is related to a higher dollar amount of P&A and other notes entered into and outstanding during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, as can be seen on our condensed consolidated statements of cash flows.

The increase in interest income of $1.5 million is the result of higher cash balances during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Liquidity and Capital Resources

As of June 30, 2025 and December 31, 2024, we had cash of $328.6 thousand and $495.0 thousand, respectively, and working capital deficit of $4.4 million and $3.9 million, respectively.

For the six months ended June 30, 2025, net cash used in by operating activities was $534.0 thousand.

Net loss of $1.7 million was increased by $1.5 thousand of accrued dividends on marketable securities held in the Trust Account and a $33.9 thousand decrease in changes in operating assets and liabilities, offset by a $1.2 million loss on the change in fair value of the warrant liability.

For the six months ended June 30, 2024, net cash used in by operating activities was $1.8 million.

Net loss of $243.4 thousand was increased by a non-redemption agreement expense of $275.0 thousand related to the transfer of Class B shares by the Sponsor, and decreased by a $116.5 thousand gain on the change in fair value of warrant liability, $54.2 thousand of accrued dividends on marketable securities held in the Trust Account, and $1.7 million decrease in changes in operating assets and liabilities.

As of June 30, 2025 and December 31, 2024, we had marketable securities held in the Trust Account of $438.2 thousand and $429.2 thousand, respectively, consisting of securities held in a money market fund that invests in U.S.

Treasury securities with a maturity of 185 days or less.

As of June 30, 2025 and December 31, 2024, we had cash of $328.6 thousand and $495.0 thousand, respectively, held outside the Trust Account.

We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.

The Sponsor has committed to making capital contributions to SAC in order to fund its search for and consummation of an initial Business Combination.

The Sponsor has not provided cash contributions for the three and six months ended June 30, 2025, respectively, and has provided cash contributions of $97.6 thousand and $372.6 thousand for the three and six months ended June 30, 2024.

On October 3, 2024, the Sponsor agreed to loan SAC an aggregate of up to $1.0 million to cover expenses related to the Business Combination pursuant to 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 SAC consummates an initial Business Combination.

If SAC 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 SAC has funds available to it outside of the Trust Account.

As of June 30, 2025 and December 31, 2024, SAC drew $814.1 thousand and $439.0 thousand, respectively, under the Sponsor Promissory Note.

We do not believe we will have sufficient funds in order to meet the expenditures required for operating our business prior to our initial Business Combination.

We expect to incur significant costs in connection with an initial Business Combination.

These conditions raise substantial doubt about our ability to continue as a going concern for a period of time through September 30, 2025 which is the termination of the current Extension Period.

In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial Business Combination, our Sponsor or an affiliate of our Sponsor or certain of our officers and directors may, but are not obligated to, loan us funds as may be required.

If we complete our initial Business Combination, we would repay such loaned amounts.

In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment.

Up to $1.5 million of such loans may be convertible into warrants of the post-business combination entity at a price of $1.00 per warrant at the option of the lender.

These warrants would be identical to the SAC Private Placement Warrants.

However, the Sponsor Support Agreement provides that if there are any amounts outstanding under any working capital loan extended to SAC by the Sponsor as of the Closing, then notwithstanding the terms of any such working capital loan, SAC will repay such outstanding amounts to the Sponsor at the Closing solely in cash, and not in the form of SAC Common Shares or any other form.

Moreover, we may need to obtain additional financing either to complete our initial Business Combination or because we become obligated to redeem a significant number of SAC Public Shares upon completion of our initial Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination.

If we are unable to complete our initial cusiness combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account.

On May 25, 2023, pursuant to the SAC Charter, the Sponsor converted 4,200,000 shares of SAC Class B Common Stock held by it on a one-for-one basis into shares of SAC Class A Common Stock, resulting in an aggregate of 27,200,000 shares of SAC Class A Common Stock issued and outstanding, comprised of 4,200,000 shares of SAC Class A Common Stock held by the Sponsor and not subject to possible redemption and 23,000,000 shares of SAC Class A Common Stock subject to possible redemption.

On June 9, 2023, the holders of 18,849,935 shares of SAC Class A Common Stock properly exercised their right to redeem their shares in connection with the First Extension Special Meeting for $197.7 million in cash, resulting in 4,150,065 shares of SAC Class A Common Stock issued and outstanding that are subject to possible redemption.

On March 14, 2024, the holders of 2,986,952 shares of SAC Class A Common Stock properly exercised their right to redeem their shares in connection with the Second Extension Special Meeting for $32.2 million in cash, resulting in 1,163,113 shares of Class A common stock issued and outstanding that are subject to possible redemption.

On November 13, 2024, the holders of 1,125,126 shares of SAC Class A Common Stock properly exercised their right to redeem their shares in connection with the Third Extension Special Meeting for $12.5 million in cash, resulting in 37,987 shares of SAC Class A Common Stock issued and outstanding that are subject to possible redemption.

Off-Balance Sheet Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of June 30, 2025 or December 31, 2024.

We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities as of June 30, 2025 or December 31, 2024.

Pursuant to the underwriting agreement for our IPO, the underwriter of our IPO 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 we complete a Business Combination, subject to the terms of the underwriting agreement.

However, 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.

On October 3, 2024, the Sponsor agreed to lend SAC an aggregate of up to $1.0 million to cover expenses related to the Business Combination.

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

If SAC 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 SAC has funds available to it outside of the Trust Account.

We have entered into a letter agreement with our Sponsor pursuant to which we are required to pay our Sponsor a total of $15,000 per month for office space, utilities, and secretarial and administrative services, commencing on December 10, 2021, the date that our securities were first listed on the NYSE, through the earlier of our initial Business Combination and our liquidation.

Commitments and Contingencies

Registration rights

The holders of the SAC Class B Common Stock, SAC Private Placement Warrants and any warrants that may be issued upon conversion of 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 SAC Class B Common Stock, only after conversion to our SAC 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 of 1933, as amended (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

We granted the underwriter a 45-day option from the date of our 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 our 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 we complete 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

Prior to the First Extension Special Meeting, on May 25, 2023, SAC and the Sponsor entered into Non-Redemption Agreements with Third-Party SAC Investors in exchange for the Third-Party SAC Investors agreeing (i) not to redeem 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 has agreed to transfer to the Third-Party SAC Investors an aggregate of up to 1,499,996 shares of SAC Class B common stock held by the Sponsor, with 500,000 of such shares to be transferred to the Third-Party SAC Investors promptly upon consummation of the First Extension, and an additional 166,666 shares to be transferred to the Third-Party SAC Investors monthly beginning on September 14, 2023 and up to, and including, February 14, 2024, if the board of directors of SAC elects to further extend the deadline to consummate an initial Business Combination at or prior to such date, in each case, if the Third-Party SAC Investors continue to hold such Non-Redeemed Shares through the Fist Extension Special Meeting.

Prior to March 31, 2024, the Company had extended the deadline to complete the Business Combination six times, to March 14, 2024, resulting in a total of 1,499,996 shares of SAC Class B Common Stock being transferred to the Third-Party SAC Investors.

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

SAC considered the Sponsor’s transfer of SAC Class B Common Stock to the Third-Party SAC Investors in exchange for the Non-Redemption Agreements as a capital contribution by the Sponsor, and recognized the excess fair value of the transferred SAC Class B Common Stock as a non-redemption agreement expense on the condensed statements of operations for the three and six months ended June 30, 2024.

The Company determined the excess fair value of the 1,499,996 SAC Class B Common Stock transferred to the Third-Party SAC Investors to be $1.2 million as of June 30, 2025.

Operating and Capital Expenditure Requirements

September 30, 2025

December 31, 2024

Cash and cash equivalents

Accrued settlement costs

Loan guarantee payable

Notes payable

Cash and cash equivalents increased by $56.1 million in the nine months ended September 30, 2025, primarily due to cash used in operating activities of $58.7 million and cash used in investing activities of $15.6 million, offset by cash provided by financing activities of $130.4 million.

To date, we have funded a significant portion of our operations through private and public offerings of our common stock and raise of money through notes payable.

As of September 30, 2025, we had cash on hand of approximately $63.3 million.

Notes payable currently consists of 1) P&A notes in the amount of $9.5 million with amounts due based on timing of certain cash proceeds, but which amounts are expected to be paid within the next twelve months, 2) financing of a convertible note in the amount of $5.3, which will be come due, if not converted into equity beforehand, by May 1, 2027, and 3) a financing facility in the amount of $100.0 million, of which $40.0 million is currently drawn, with interest is payable monthly and principal installments starting in November 2027 and a final maturity of October 1, 2030.

As we continue to grow, we expect to raise additional funds to cover any shortfall in operating needs.

We project that our existing capital resources, including cash, accounts receivables, licensing receivables, recurring revenues from our membership base, and the ability to sell our digital assets if necessary, will be sufficient to meet our operating requirements for at least the next twelve months.

Evaluation of Going Concern

The condensed consolidated financial statements have been prepared assuming we 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, we incurred a net loss of approximately $91.9 million and used cash in operating activities of approximately $58.7 million.

We have an accumulated deficit of approximately $175.8 million as of September 30, 2025.

A significant portion of the net loss for the period ended September 30, 2025 was due to the continued marketing expenses to increase Angel Guild memberships and support our theatrical releases.

We anticipate that as we continue to grow the business, we will incur operating losses and use cash in operating activities during 2025 and into 2026.

We are working to increase revenues through the growth of Angel Guild memberships, our pipeline of theatrical releases through 2026 and additional streaming agreements.

We finance 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, we 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 2024, we 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, we 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 2024, we 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, we have raised capital through the sale of our common stock, generating approximately $102.8 million of cash during the nine months ended September 30, 2025 and we have grown from 0.6 million Angel Guild members, as of December 31, 2024, to 1.6 million Angel Guild members, as of September 30, 2025, generating approximately $170.6 million in cash from Angel Guild paid memberships during the nine months ended September 30, 2025.

Management believes it will be able to continue to fund operating capital shortfalls for the next year through the issuance of debt and our 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 our common stock on acceptable terms proves challenging, we can reduce our spend on marketing of the Angel Guild, which could materially affect our growth, our financial condition and/or our ability to continue as a going concern.

Discussion of Operating, Investing, Financing Cash Flows

Operating Activities.

Cash flows used in operating activities for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were as follows:

For the nine months ended September 30,

Net cash and cash equivalents used in operating activities

Cash flows used in operating activities for the nine months ended September 30, 2025 was $58.7 million compared to cash flows used in operating activities of $39.6 million for the nine months ended September 30, 2024.

The difference of $19.1 million is largely due to the increase in net loss for the period of $40.6 million, an increase in accounts receivable resulting in less proceeds received, a decrease in accounts payable and accrued liabilities resulting in greater distributions, partially offset by increases in deferred revenue and accrued licensing royalties.

Investing Activities.

Cash flows provided by investing activities for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were as follows:

For the nine months ended September 30,

Purchases of property and equipment

Issuance of notes receivable

Collections of notes receivable

Purchase of digital assets

Sale of digital assets

Purchase of intangible assets

Purchase of content

Investments in affiliates

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

Cash flows used in investing activities for the nine months ended September 30, 2025 was $15.6 million compared to cash flows provided by investing activities of $0.7 million for the nine months ended September 30, 2024.

The increase of cash flows used was largely due to the increase of our purchase of content of $5.8 million, the purchase of prepaid content rights of $3.0 million, increased cash spend for investments in affiliates of $4.5 million, as well as a decrease in the sale of digital assets of $2.1 million.

Both periods saw moderate activity in issuing and collecting repayments on notes receivable, with more collections during 2024 being the result of several of our filmmakers paying us back these notes receivables during this period (see “ Notes to the Condensed Consolidated Financial Statements—Notes Receivable ).

Financing Activities.

Cash flows provided by financing activities for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, were as follows:

For the nine months ended September 30,

Repayment of notes payable

Repayment of loan guarantee

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

Fees related to issuance of common stock and minority interest

Repurchase of common stock

Equity financing fees

Debt financing fees

Net cash and cash equivalents provided by financing activities

Cash flows provided by financing activities for the nine months ended September 30, 2025 were $130.4 million compared to cash flows provided by financing activities of $25.0 million for the nine months ended September 30, 2024.

During the nine months ended September 30, 2025, we raised $55.0 million from a Regulation A offering, $47.5 million with issuance of our common stock, $13.7 million in equity from noncontrolling interests, and $106.2 million in notes payable.

These were offset by the repayment of $36.5 million for P&A related notes, the repayment of $27.0 million of notes payable, a $15.8 million redemption paid for equity in noncontrolling interests and a $10.2 million payment related to a loan guarantee.

During the nine months ended September 30, 2024, we received $17.0 million for P&A related notes, $26.9 million with the issuance of common stock, and repaid $18.6 million for P&A related notes.

Trends and Key Factors Affecting Our Performance

We launched the Angel Guild in the second quarter of 2023.

Since that time the Angel Guild grew to approximately 0.6 million Angel Guild members as of December 31, 2024, accounting for 32.5% of our total revenue in 2024.

The Angel Guild grew to approximately 1.6 million Angel Guild members as of September 30, 2025, accounting for 66.5% of our total revenue in 2025.

We attribute the Angel Guild growth to many factors including, but not limited to, new and exclusive content being added regularly to the Angel Guild, marketing optimization and upselling to the Angel App user base.

For the nine months ended September 30, 2025, the trailing twelve months average revenue per member is $13.70 per month.

Angel Mobile and TV App Installs

We launched the Angel Mobile App in the fourth quarter of 2021 and the Angel TV App in the first quarter of 2022 (both, individually and collectively, an “Angel App”).

Since that time, Angel App installs across all platforms grew to 59,877,979 installs as of December 31, 2024.

As of September 30, 2025, the Angel app has a total of 100,245,157 installs.

We attribute the Angel App growth to many factors including, but not limited to, new and exclusive content being added regularly to the Angel App and marketing optimization.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported.

Actual results could materially differ from those estimates.

We have not identified any critical accounting estimates as of June 30, 2025.

Recent Accounting Pronouncements

Refer to Note 2.

Summary of Significant Accounting Policies of the Notes to the Financial Statements.

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reported periods.

The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments.

Based on this definition, we have identified the critical accounting policies and judgments addressed below.

Estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the

basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

Long-lived Assets

Intangible assets with finite lives and property, plant and equipment are amortized or depreciated over their estimated useful life on a straight-line basis.

We monitor conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization or depreciation period.

We test these assets for potential impairment whenever our management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable.

The original estimate of an asset’s useful life and the impact of an event or circumstance on either an asset’s useful life or carrying value involve significant judgment regarding estimates of the future cash flows associated with each asset.

We account for income taxes under the liability method, whereby deferred tax asset or liability account balances are determined based on the difference between the financial statement and the tax bases of assets and liabilities using current tax laws and rates in effect for the year in which the differences are expected to affect taxable income.

Valuation allowances are established, when necessary, to reduce deferred tax assets when we expect the amount of tax benefit to be realized is less than the carrying value of the deferred tax asset.

Accounting for income taxes involves uncertainty and judgment on how to interpret and apply tax laws and regulations within our annual tax filings.

Such uncertainties from time to time may result in a tax position that may be challenged and overturned by a tax authority in the future which could result in additional tax liability, interest charges and possibly penalties.

Stock-Based Compensation

We account for stock-based compensation by measuring and recognizing as compensation expense the fair value of all share-based payment awards made to employees based on estimated grant date fair values.

The determination of fair value involves a number of significant estimates.

We use the Black-Scholes option pricing model or the Monte Carlo pricing model to estimate the value of employee stock options which require a number of assumptions to determine the model inputs.

These include the expected volatility of our stock and employee exercise behavior, which are based on historical data as well as expectations of future developments over the term of the option.

As stock-based compensation expense is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures.

Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Management’s estimate of forfeitures is based on historical experience but actual forfeitures could differ materially as a result of voluntary employee actions and involuntary actions which would result in significant change in our stock-based compensation expense amounts in the future.

The fair value of the Common Stock underlying the employee stock options is estimated using third party valuations, including market, income, and cost valuation approaches.

Other Estimates

See “Note 1” to the accompanying condensed consolidated financial statements included herein for further discussion.

Off-Balance Sheet Arrangements

As of September 30, 2025, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

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 2. Management’s Discussion and Analysis