Angel Studios, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk We are subject to market risks in the ordinary course of our business, including changes in interest rates. Historically, fluctuations in interest rates have not had a significant impact on our operating results. As of September 30, 2025, we had no outstanding variable rate indebtedness, and we have not utilized any derivative financial instruments such as futures contracts, options and swaps, forward foreign exchange contracts or interest rate swaps and futures. In addition, any sales we make that are denominated in a foreign currency will be subject to risks associated with changes in currency exchange rates. These risks include the possibility of significant fluctuations in the foreign currency markets, the imposition or modification of foreign exchange controls and potential illiquidity in the secondary market. 38 Table of Contents These risks will vary depending upon the currency or currencies involved. Our exposure to interest rate risk and foreign currency exchange rate changes is increasing but we do not believe it to be material under current accounting guidance. We also hold digital assets, and as such, we are exposed to the following risks: Market Price Risk of Digital Assets We hold digital assets that are exposed to the impact of market price changes. Declines in the fair market value of these assets will impact the cash value that would be realized if we were to sell our digital assets for cash, therefore having a negative impact on our liquidity. With the adoption of ASU 2023-08 on January 1, 2025, which requires digital assets to be measured at fair value with changes recognized in net income, our exposure to this volatility could be material to our financial condition and results of operations. Custodian Risk Our digital assets are held with a third-party custodian, BitGo, which we selected based on various factors, including their financial strength and industry reputation. Custodian risk refers to the potential loss, theft, or misappropriation of our digital assets due to operational failures, cybersecurity breaches, or financial difficulties experienced by these third parties. Although we periodically monitor the financial health, insurance coverage, and security measures of our custodian, reliance on such third parties inherently exposes us to risks that we cannot fully mitigate.