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Item 1. Financial Statements

2024-11-14 compared with 2024-08-14 · 214 added, 122 removed, 504 unchanged (40% of the section changed)

1 unchanged sentence

SOUTHPORT ACQUISITION CORPORATION

CONDENSED BALANCE SHEETS

June 30, 2024

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2024

Current Assets:

20 unchanged sentences

200,000,000 shares authorized;

1,163,113 and 4,150,065 shares issued and outstanding subject to possible redemption at redemption value as of June 30, 2024 and December 31, 2023, respectively

1,163,113 and 4,150,065 shares issued and outstanding subject to possible redemption at redemption value as of September 30, 2024 and December 31, 2023, respectively

Stockholders’ Deficit

4 unchanged sentences

200,000,000 shares authorized;

4,200,000 issued and outstanding (excluding 1,163,113 shares subject to possible redemption) as of June 30, 2024 and 4,200,000 issued and outstanding (excluding 4,150,065 shares subject to possible redemption) as of December 31, 2023

4,200,000 issued and outstanding (excluding 1,163,113 shares subject to possible redemption) as of September 30, 2024 and 4,200,000 issued and outstanding (excluding 4,150,065 shares subject to possible redemption) as of December 31, 2023

Class B common stock, $ 0.0001 par value;

20,000,000 shares authorized;

1,550,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023

1,550,000 shares issued and outstanding as of September 30, 2024 and December 31, 2023

Additional paid-in capital

6 unchanged sentences

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

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

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

SOUTHPORT ACQUISITION CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months

For the Six Months

For the Nine Months

September 30,

Operating costs:

4 unchanged sentences

Franchise tax expense

Other operating costs

Total expenses

2 unchanged sentences

Change in fair value of warrant liability

( 1,392,000 )

( 1,275,500 )

Non-redemption agreement expense

1 unchanged sentence

Other (expense) income

( 1,226,500 )

(Loss) Income before provision for income taxes

( 1,471,678 )

( 1,600,931 )

Provision for income taxes

1 unchanged sentence

Net (loss) income

( 1,495,898 )

( 1,739,275 )

Weighted average shares outstanding of redeemable Class A common stock

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

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

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

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

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

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

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

SOUTHPORT ACQUISITION CORPORATION

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

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024

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

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

Class A common stock

22 unchanged sentences

( 3,580,689 )

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023

Sponsor cash capital contribution

Remeasurement of Class A common stock subject to possible redemption

( 1,495,898 )

Balance – September 30, 2024

( 5,722,812 )

( 5,022,087 )

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

Class A common stock

18 unchanged sentences

( 197,694,657 )

Trust Account withdrawal for tax payments

Remeasurement of Class A common stock subject to possible redemption

4 unchanged sentences

( 3,157,412 )

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

Excise tax liability

( 1,976,947 )

Sponsor cash capital contribution

Sponsor capital contribution for non-redemption agreements

Trust Account withdrawal for tax payments

( 1,827,729 )

Remeasurement of Class A common stock subject to possible redemption

Balance – September 30, 2023

( 4,048,919 )

( 3,712,358 )

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

SOUTHPORT ACQUISITION CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

For the Six Months

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months

September 30,

Cash Flows from Operating Activities:

Net (loss) income

( 1,739,275 )

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Accrued dividend on marketable securities held in Trust Account

( 1,005,796 )

Change in fair value of warrant liabilities

12 unchanged sentences

Proceeds from marketable securities held in Trust Account

Net cash provided by (used in) investing activities

( 3,923,712 )

Net cash provided by investing activities

Cash Flows from Financing Activities:

1 unchanged sentence

( 32,214,591 )

( 197,694,657 )

Cash capital contribution from Sponsor

1 unchanged sentence

( 31,661,363 )

( 197,494,657 )

Net Change in Cash

4 unchanged sentences

Remeasurement of Class A common stock subject to possible redemption

Share redemption payable

Trust Account withdrawal for tax payments

7 unchanged sentences

Description of Organization and Business Operations

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

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

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

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

As of June 30, 2024, the Company had not yet commenced any operations.

All activity from inception through June 30, 2024 related to the Company’s formation, initial public offering (the “IPO”), and pursuit of a target company to effect a Business Combination.

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 unaudited condensed financial statements include Merger Sub and are presented on a consolidated basis.

As of September 30, 2024, the Company had not yet commenced any operations.

All activity from inception through September 30, 2024 related to the Company’s formation, initial public offering (the “IPO”), and pursuit of a Business Combination.

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

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

On June 9, 2023 (the “Special Meeting”), the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation (the “Extension Amendment Proposal”) to extend the time that the Company has to consummate its initial Business Combination (the “Extension”) from June 14, 2023 to September 14, 2023 and to allow the board of directors of the Company, without another stockholder vote, to elect to further extend the date to consummate an initial Business Combination after September 14, 2023 up to six times, by an additional month each time, up to March 14, 2024, providing the Company a 21-month period (or up to 27-month period) from the closing of the IPO to consummate its initial Business Combination.

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

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

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

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

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

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

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

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

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

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

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

1 unchanged sentence

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

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

In connection with the vote to extend the time that the Company has to consummate its initial Business Combination from March 14, 2024 to December 14, 2024, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for an aggregate redemption amount of $ 32,214,591 , resulting in 1,163,113 shares of Class A common stock issued and outstanding and subject to possible redemption.

Accordingly, as of June 30, 2024, there were 5,363,113 shares of Class A common stock issued and outstanding (including 1,163,113 shares of Class A common stock subject to possible redemption) and $ 12,729,617 held in the Trust Account.

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

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

Accordingly, as of September 30, 2024, there were 5,363,113 shares of Class A common stock issued and outstanding (including 1,163,113 shares of Class A common stock subject to possible redemption) and $ 12,895,117 held in the Trust Account.

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

3 unchanged sentences

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

Agreement and Plan of Merger

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

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

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

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

Southport Common Stock underlying such options and the exercise price of such options);

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

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

The Merger Agreement is subject to the satisfaction or waiver of certain customary closing conditions, including, among others, the approval of the Merger Agreement and the transactions contemplated thereby by the respective stockholders of Southport and Angel Studios, and the approval by Southport’s stockholders of an extension to Southport’s deadline to consummate a business combination to September 30, 2025 (see Note 11).

Sponsor Support Agreement

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

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

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

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

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

Risks and Uncertainties

the Company’s financial position, cash flows, results of its operations and/or search for a target company, the specific impacts are not readily determinable as of June 30, 2024.

Management is currently evaluating the impact of the Russia-Ukraine war, the war in Israel, interest rate fluctuations, and the recently adopted Securities and Exchange Commission (the “SEC”) rules and amendments affecting special purpose acquisition corporations like the Company, and has concluded that while it is reasonably possible that such matters could have a negative effect on the Company’s financial position, cash flows, results of its operations and/or search for a target company, the specific impacts are not readily determinable as of September 30, 2024.

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

8 unchanged sentences

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

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

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

On July 7, 2023, 18,849,935 shares of Class A common stock were redeemed by the Company’s stockholders for a total of $ 197,694,657 in connection with the First Special Meeting.

On March 14, 2024, 2,986,952 shares of Class A common stock were redeemed by the Company’s stockholders for a total of $ 32,214,591 in connection with the Second Special Meeting.

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

1 unchanged sentence

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

The Company evaluated the current status and probability of completing an initial Business Combination as of June 30, 2024 and determined that a contingent liability should be calculated and recorded.

As of June 30, 2024, the Company recorded $ 2,299,092 of excise tax liability calculated as 1% of shares redeemed.

The Company evaluated the current status and probability of completing an initial Business Combination as of September 30, 2024 and

determined that a contingent liability should be calculated and recorded.

As of September 30, 2024, the Company recorded $ 2,299,092 of excise tax liability calculated as 1% of shares redeemed.

Going Concern

As of June 30, 2024 and December 31, 2023, the Company had cash of $ 490,693 and $ 2,171,553 , respectively, and working capital deficit of $ 3,116,689 and $ 2,808,465 , respectively.

As of September 30, 2024 and December 31, 2023, the Company had cash of $ 517,975 and $ 2,171,553 , respectively, and working capital deficit of $ 3,166,087 and $ 2,808,465 , respectively.

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

4 unchanged sentences

Basis of Presentation

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

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

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

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

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

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on April 1, 2024, which contains the audited financial statements and notes thereto.

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

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on April 1, 2024, which contains the audited financial statements and notes thereto.

The financial information as of December 31, 2023 is derived from the audited financial statements presented in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The interim results for the three and

six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future interim periods.

The interim results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any future interim periods.

Emerging Growth Company

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

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

This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an

emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

5 unchanged sentences

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

The Company had $ 490,693 and $ 2,171,553 of cash and no cash equivalents as of June 30, 2024 and December 31, 2023, respectively.

The Company had $ 517,975 and $ 2,171,553 of cash and no cash equivalents as of September 30, 2024 and December 31, 2023, respectively.

Marketable Securities Held in Trust Account

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(i) the completion of the initial Business Combination;

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

to stockholders’ rights or pre-initial Business Combination activity;

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

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

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

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

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

In connection with the stockholder vote to further extend the time that the Company has to consummate its initial Business Combination from March 14, 2024 to December 14, 2024, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 10.79 per share of Class A common stock, for an aggregate redemption amount of $ 32,214,591 .

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

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

Accordingly, as of September 30, 2024 and December 31, 2023, there was $ 12,895,117 and $ 44,709,805 of marketable securities held in the Trust Account.

Fair Value of Financial Instruments

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

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

Fair Value Measurements

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

As of June 30, 2024 and December 31, 2023, derivative liabilities are comprised of the warrant liability of $ 464,000 and $ 580,500 , respectively.

As of September 30, 2024 and December 31, 2023, derivative liabilities are comprised of the warrant liability of $ 1,856,000 and $ 580,500 , respectively.

Warrant Liability

8 unchanged sentences

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

Accordingly, at June 30, 2024 and December 31, 2023, 1,163,113 and 4,150,065 shares of Class A common stock subject to possible redemption is presented, at redemption value, as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet, respectively.

Accordingly, at September 30, 2024 and December 31, 2023, 1,163,113 and 4,150,065 shares of Class A common stock subject to possible redemption is presented, at redemption value, as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet, respectively.

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

2 unchanged sentences

On March 14, 2024, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $ 10.79 per share of Class A common stock, for an aggregate redemption amount of $ 32,214,591 .

For the six months ended June 30, 2024, the Company has recorded accretion of $ 723,522 .

As of June 30, 2024 and December 31, 2023, the Class A common stock, classified as temporary equity in the condensed balance sheets, are reconciled in the following tables:

For the three and nine months ended September 30, 2024, the Company has recorded accretion of $ 165,500 and $ 889,022 , respectively.

As of September 30, 2024 and December 31, 2023, the Class A common stock, classified as temporary equity in the condensed consolidated balance sheets, are reconciled in the following tables:

Class A common stock subject to possible redemption, December 31, 2022

9 unchanged sentences

Remeasurement of Class A common stock subject to possible redemption

Class A common stock subject to possible redemption, June 30, 2024

Class A common stock subject to possible redemption, September 30, 2024

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

4 unchanged sentences

The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of June 30, 2024.

There were no unrecognized tax benefits and $ 468 accrued for interest and penalties related to 2021 California franchise taxes as of September 30, 2024.

Net Income (Loss) Per Common Stock

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

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

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

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

1 unchanged sentence

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

Subsequent to calculating the total income (loss) allocable to both sets of stock, the Company split the amount to be allocated using the weighted average shares outstanding ratio for the Class A redeemable common stock and for the non-redeemable Class A and Class B common stock for the three and six months ended June 30, 2024 and 2023, as a result of shareholder redemptions.

Subsequent to calculating the total income (loss) allocable to both sets of stock, the Company split the amount to be allocated using the weighted average shares outstanding ratio for the Class A redeemable common stock and for the non-redeemable Class A and Class B common stock for the three and nine months ended September 30, 2024 and 2023, as a result of shareholder redemptions.

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

For the Three Months Ended

June 30, 2024

September 30, 2024

( 1,495,898 )

Remeasurement of Class A redeemable shares to redemption value

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

( 1,661,398 )

For the Three Months Ended

June 30, 2024

September 30, 2024

Class A and Class B

4 unchanged sentences

Net loss allocated based on weighted average shares ratio

( 1,244,217 )

( 1,495,898 )

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

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

Total income (loss) based on weighted average shares ratio

Total loss based on weighted average shares ratio

( 1,381,872 )

( 1,495,898 )

Weighted average shares outstanding

Basic and diluted net income (loss) per share

For the Six Months Ended

June 30, 2024

Basic and diluted net loss per share

For the Nine Months Ended

September 30, 2024

( 1,739,275 )

Trust Account withdrawals for tax payments

Remeasurement of Class A redeemable shares to redemption value

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

For the Six Months Ended

June 30, 2024

Net loss including accretion of Class A redeemable shares to redemption value and Trust Account withdrawals for tax payments

( 2,139,178 )

For the Nine Months Ended

September 30, 2024

Class A and Class B

4 unchanged sentences

Net loss allocated based on weighted average shares ratio

( 1,295,477 )

( 1,739,275 )

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

3 unchanged sentences

Total income (loss) based on weighted average shares ratio

( 1,593,340 )

( 1,739,275 )

Weighted average shares outstanding

1 unchanged sentence

For the Three Months Ended

June 30, 2023

September 30, 2023

Trust Account withdrawals for tax payments

Remeasurement of Class A redeemable shares to redemption value

( 2,404,208 )

Net income excluding accretion of Class A redeemable shares to redemption value

Net income including accretion of Class A redeemable shares to redemption value and Trust Account withdrawals for tax payments

For the Three Months Ended

June 30, 2023

September 30, 2023

Class A and Class B

4 unchanged sentences

Net income allocated based on weighted average shares ratio

Accretion allocation based on weighted average shares ratio

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

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

Accretion applicable to Trust Account withdrawals for tax payments

( 1,827,729 )

Accretion applicable to Class A redeemable shares

Total income (loss) based on weighted average shares ratio

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

Total (loss) income based on weighted average shares ratio

Weighted average shares outstanding

Basic and diluted net income (loss) per share

For the Six Months Ended

June 30, 2023

Basic and diluted net (loss) income per share

For the Nine Months Ended

September 30, 2023

Trust Account withdrawals for tax payments

Remeasurement of Class A redeemable shares to redemption value

( 6,120,704 )

Net income excluding accretion of Class A redeemable shares to redemption value

Net loss including accretion of Class A redeemable shares to redemption value and Trust Account withdrawals for tax payments

( 1,001,781 )

For the Six Months Ended

June 30, 2023

For the Nine Months Ended

September 30, 2023

Class A and Class B

4 unchanged sentences

Net income allocated based on weighted average shares ratio

Accretion allocation based on weighted average shares ratio

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

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

( 4,440,608 )

1 unchanged sentence

( 6,120,704 )

Accretion applicable to Class A redeemable shares

Accretion applicable to Trust Account withdrawals for tax payments

( 2,287,729 )

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

Total income (loss) based on weighted average shares ratio

3 unchanged sentences

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

As of June 30, 2024, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

As of September 30, 2024, the Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Recent Accounting Pronouncements

12 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, $ 12,729,617 and $ 44,709,805 was held in the Trust Account, respectively.

In addition, as of June 30, 2024 and December 31, 2023, $ 490,693 and $ 2,171,553 of cash was not held in the Trust Account and is available for working capital purposes, respectively.

As of September 30, 2024 and December 31, 2023, $ 12,895,117 and $ 44,709,805 was held in the Trust Account, respectively.

In addition, as of September 30, 2024 and December 31, 2023, $ 517,975 and $ 2,171,553 of cash was not held in the Trust Account and is available for working capital purposes, respectively.

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

25 unchanged sentences

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

As of June 30, 2024 and December 31, 2023, no Working Capital Loans were outstanding.

As of September 30, 2024 and December 31, 2023, no Working Capital Loans were outstanding.

Due to Related Party

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

As of June 30, 2024 and December 31, 2023, the Company owed $ 270,590 and $ 236,233 , respectively.

As of September 30, 2024 and December 31, 2023, the Company owed $ 270,590 and $ 236,233 , respectively.

Administrative Support Agreement

1 unchanged sentence

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

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

For the three and six months ended June 30, 2023, the Company has paid $ 10,500 under the agreement.

The Company has accrued $ 321,500 and $ 231,500 related to the unpaid amounts under the administrative support agreement as of June 30, 2024 and December 31, 2023, respectively, which is recorded to administrative support fee – related party liability on the balance sheets.

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

For the three and nine months ended September 30, 2023, the Company has paid $ 10,500 under the agreement.

The Company has accrued $ 366,500 and $ 231,500 related to the unpaid amounts under the administrative support agreement as of September 30, 2024 and December 31, 2023, respectively, which is recorded to administrative support fee – related party liability on the balance sheets.

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

Sponsor Cash Capital Contribution

As of June 30, 2024, the Sponsor made capital contributions of $ 1,133,228 to the Company to fund outstanding payments to the Company’s vendors.

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

The Sponsor made $ 0 of contributions for the three and six months ended June 30, 2023.

As of September 30, 2024, the Sponsor made capital contributions of $ 1,353,228 to the Company to fund outstanding payments to the Company’s vendors.

The Sponsor made $ 220,000 and $ 553,228 of contributions for the three and nine months ended September 30, 2024, respectively.

The Sponsor made $ 0 of contributions for the three and nine months ended September 30, 2023.

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

2 unchanged sentences

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

At June 30, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding.

At September 30, 2024 and December 31, 2023, there were no shares of preferred stock issued or outstanding.

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

1 unchanged sentence

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

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

On March 14, 2024, the holders of 2,986,952 shares of Class A common stock properly exercised their right to redeem their shares for cash in connection with the vote to extend the time that the Company has to complete an initial Business Combination from March 14, 2024 to December 14, 2024, resulting in 1,163,113 shares of Class A common stock issued and outstanding and subject to possible redemption.

Accordingly, at June 30, 2024 and December 31, 2023, there were 5,363,113 and 8,350,065 shares of Class A common stock issued and outstanding , including 1,163,113 and 4,150,065 shares of Class A common stock subject to possible redemption, respectively.

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

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

Accordingly, at September 30, 2024 and December 31, 2023, there were 5,363,113 and 8,350,065 shares of Class A common stock issued and outstanding , including 1,163,113 and 4,150,065 shares of Class A common stock subject to possible redemption, respectively.

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

3 unchanged sentences

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

Accordingly, as of June 30, 2024 and December 31, 2023, there were 1,550,000 shares of Class B common stock issued and outstanding.

Accordingly, as of September 30, 2024 and December 31, 2023, there were 1,550,000 shares of Class B common stock issued and outstanding, of which 50,004 shares are held by the Sponsor and 1,499,996 were transferred to third party investors pursuant to the Non-Redemption Agreements.

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

53 unchanged sentences

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

There has been no change in the classification of the warrants as of June 30, 2024.

There has been no change in the classification of the warrants as of September 30, 2024.

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, the Sponsor has agreed to forfeit all of the Private Placement Warrants held by it at the Closing for no additional consideration.

Commitments and Contingencies

13 unchanged sentences

Non-Redemption Agreements

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

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

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

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

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

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

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

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

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

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

In addition, on March 14, 2024, the Company’s stockholders approved a proposal to amend the Company’s amended and restated certificate of incorporation to further extend the time that the Company has to consummate its initial business combination from March 14, 2024 to December 14, 2024.

1 unchanged sentence

Recurring Fair Value Measurements

The following table presents information about the Company’s assets and liabilities that are measured at fair value at June 30, 2024, and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

June 30, 2024

The following table presents information about the Company’s assets and liabilities that are measured at fair value at September 30, 2024, and December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

September 30, 2024

Marketable securities held in trust account

5 unchanged sentences

Private Placement Warrants

At June 30, 2024, and December 31, 2023, the Company’s warrant liability was valued at $ 464,000 and $ 580,500 .

At September 30, 2024, and December 31, 2023, the Company’s warrant liability was valued at $ 1,856,000 and $ 580,500 .

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

2 unchanged sentences

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

The following table presents fair value information for the three and six months ended June 30, 2024, and 2023, of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

The following table presents fair value information for the three and nine months ended September 30, 2024, and 2023, of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

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

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

For the Three and Six Months Ended June 30, 2024

For the Three and Nine Months Ended September 30, 2024

Derivative warrant liabilities as of December 31, 2023

3 unchanged sentences

Derivative warrant liabilities as of June 30, 2024

For the Three and Six Months Ended June 30, 2023

Change in fair value

Derivative warrant liabilities as of September 30, 2024

For the Three and Nine Months Ended September 30, 2023

Derivative warrant liabilities as of December 31, 2022

4 unchanged sentences

Derivative warrant liabilities as of June 30, 2023

Share repurchase payment

( 197,694,657 )

Change in fair value

Derivative warrant liabilities as of September 30, 2023

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

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

As of June 30, 2024, the Public Warrants have detached from the Units and are separately tradable on the over-the-counter markets.

The closing price of the Public Warrants was utilized in determining the fair value of the Public Warrants as of June 30, 2024.

The key inputs into the Monte Carlo simulation formula used to value the Private Placement Warrants were as follows at June 30, 2024 and 2023:

As of September 30, 2024, the Public Warrants have detached from the Units and are separately tradable on the over-the-counter markets.

The closing price of the Public Warrants was utilized in determining the fair value of the Public Warrants as of September 30, 2024.

The key inputs into the Monte Carlo simulation formula used to value the Private Placement Warrants were as follows at September 30, 2024 and 2023:

September 30,

Common stock price

6 unchanged sentences

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

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

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

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

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

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

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

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

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

6 unchanged sentences

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

During the three and six months ended June 30, 2024, the Company recorded an income tax provision of $ 49,421 and $ 114,124 , respectively, and our effective tax rate was ( 7.0 )% and ( 30.03 )%, respectively.

During the three and six months ended June 30, 2023, the Company recorded an income tax provision of $ 591,012 and $ 1,110,969 , respectively, and our effective tax rate was 26.3 % and 28.1 %, respectively.

During the three and nine months ended September 30, 2024, the Company recorded an income tax provision of $ 24,220 and $ 138,344 , respectively, and our effective tax rate was 1.65 % and 8.64 % respectively.

During the three and nine months ended September 30, 2023, the Company recorded an income tax provision of $ 142,965 and $ 1,253,934 , respectively, and our effective tax rate was 107.94 % and 30.70 %, respectively.

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

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

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

As such, the Company recorded a full valuation allowance against net deferred tax assets as of June 30, 2024.

realize the benefits of its deferred tax assets.

As such, the Company recorded a full valuation allowance against net deferred tax assets as of September 30, 2024.

Subsequent Events

The deregistration of the Company’s Class A common stock, Warrants and Units under Section 12(b) of the Exchange Act became effective July 7, 2024, 90 days after the April 8, 2024 filing by the NYSE of a Form 25 to delist the Company’s Class A common stock, Warrants and Units.

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

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

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

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

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

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

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

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

On October 29, 2024, the Company filed an amendment to the definitive proxy statement that was filed with the SEC on October 2, 2024 (the “Original Filing”) that amends and restates the Original Filing to:

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

On November 12, 2024, the Company filed a Registration Statement on Form S-4 with the SEC in connection with the Business Combination with Angel Studios.

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

In connection with the vote to approve the Third Extension Amendment Proposal and the Redemption Limitation Amendment Proposal, the holders of 1,125,126 Public Shares properly exercised their right to redeem their shares (and did not withdraw their redemption) for cash at a redemption price of approximately $ 11.08 per Public Share, for an aggregate redemption amount of approximately $ 12 million.

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

What changed 10-Q

Item 1. Financial Statements