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Item 9A. Controls and Procedures

2026-03-12 compared with 2025-04-15 · 1296 added, 1159 removed, 107 unchanged (96% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms.

Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

Our management evaluated, with the participation of our current Chief Executive Officer who also acts as our principal accounting officer, the effectiveness of our disclosure controls and procedures as of December 31, 2024, pursuant to Rule 13a-15(b) under the Exchange Act.

Based upon that evaluation, our Chief Executive Officer who also acts as our principal accounting officer concluded that, as of December 31, 2024, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below.

As of December 31, 2024, we identified a material weakness related to fact that we have not yet designed and maintained effective controls related to our process for recording accrued liabilities, specifically we did not relieve an accrual that was no longer due and payable once it became likely that it would not be due and payable.

As previously disclosed in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2022, as of December 31, 2022, we identified a material weakness related to the fact that we have not yet designed and maintained effective controls relating to the presentation of our statement of cash flows, which continues to exist as of December 31, 2024.

In addition, as previously disclosed in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2023, as of December 31, 2023, we identified a material weakness related to the fact that we had not yet designed and maintained effective controls relating to the recognition of excise tax liability within our financial statements, which continues to exist as of December 31, 2024.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud.

Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met.

Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs.

Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any.

The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated, as of December 31, 2025, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e).

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025 to provide reasonable assurance that information required to be disclosed by us in this Annual Report or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

Management’s Report on Internal Controls Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting.

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.

Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected in a timely manner.

Also, because of changes in conditions, internal control effectiveness may vary over time.

Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to financial statement preparation.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024.

In making this assessment, management used the criteria set forth in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in “Internal Control-Integrated Framework.” Based on management’s assessment using the COSO criteria, management has concluded that our internal control over financial reporting was not effective as of December 31, 2024 as a result of the material weaknesses in internal control over financial reporting described above.

This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.

Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this Annual Report.

Remediation Plan

We will implement a remediation plan to address the material weakness identified as of December 31, 2024.

Our Chief Executive Officer will perform additional post-closing review procedures including confirmation with vendors of amounts owed and outstanding at each period end.

As previously disclosed in Part II, Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2022, we implemented a remediation plan to address the material weakness identified as of December 31, 2022.

Our Chief Executive Officer will continue to perform additional post-closing review procedures including consulting with subject matter experts related to the accounting for marketable securities and stockholder redemptions.

Additionally, we implemented a remediation plan to address the material weakness identified as of December 31, 2023.

Our Chief Executive Officer will continue to perform additional post-closing review procedures including consulting with tax and legal subject matter experts related to the accounting for stockholder redemptions.

The Company’s management has expended, and will continue to expend, a substantial amount of effort and resources for the remediation and improvement of our internal control over financial reporting.

While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements, we have improved, and will continue to improve, these processes to ensure that transactions are effectively evaluated in the context of the increasingly complex accounting standards.

We plan to continue to enhance our review procedures of evaluating and implementing the accounting standards that apply to our financial statements, including additional analyses by our personnel and third-party professionals with whom we consult regarding complex accounting, tax and legal matters.

The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Our internal control system is a process designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with GAAP.

All internal control systems, no matter how well designed, have inherent limitations and can only provide reasonable assurance with respect to financial reporting.

Management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in “Internal Control-Integrated Framework,” issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Based on this assessment, management determined that we maintained effective internal control over financial reporting as of December 31, 2025.

Changes in Internal Control over Financial Reporting

Other than the matter discussed above, there were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal controls over financial reporting that occurred during the three months ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information

Not applicable.

Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.

Not applicable.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspection

Directors, Executive Officers, and Corporate Governance

Directors and Executive Officers

Our directors and executive officers are as follows:

Chief Executive Officer and Director

Sigmund Anderman

Matthew Hansen

Jennifer Nuckles

Cathleen Schreiner Gates

David Winfield

Jeb Spencer is our Chief Executive Officer and has served as a member of our board of directors since May 2021.

He is the co-founder and managing partner of TVC Capital, a software focused, growth equity fund, a position he has held since 2006.

He has been a chief executive officer, investor and board member of SaaS companies for the last 20 years.

He has served on the board of directors of 16 other software companies, including SmartAction (2018 to 2024), SimpleNexus (2018 to 2022);

Levels Beyond (2012 to 2021);

ReverseVision (2012 to 2022);

Docupace Technologies (2016 to 2020);

EdgeWave (2014 to 2019);

Accordent Technologies (2006 to 2011) and Ellie Mae, Inc.

(previously NYSE:

ELLI) (2011 to 2019).

At Ellie Mae, a leading provider of automation software for the mortgage industry which is now a subsidiary of Intercontinental Exchange, Inc (NYSE:

Spencer also served as the Chair of the board’s M&A Committee.

Spencer was formerly the chief executive officer of Del Mar Datatrac, Inc., a provider of mortgage origination software to the mid-market that was sold to Fiserv (NASDAQ:

FISV) in 2005 and to Ellie Mae in 2011.

As managing partner of TVC Capital, he was involved in a $20.0 million Series A financing and a $108.0 million Series B financing in 2018 and January 2021, respectively, in which TVC Capital invested alongside Insight Partners in SimpleNexus, a homeownership software company that was acquired by nCino, Inc.

NCNO) in January 2022 in a stock and cash transaction valued at approximately $1.2 billion.

The SimpleNexus platform serves independent mortgage banks, banks and credit unions, and loan originators in the United States.

Spencer holds a B.A.

in Political Science from Boston College and an MBA from Harvard Business School.

We believe that Mr.

Spencer’s extensive experience with software focused companies, including his experience as a board member of a number of these companies (including a former public company) and as a chief executive officer of certain of these companies, his business experience in investing in private companies, as well as experience with sales of private companies qualify him to serve on our board.

Jared Stone has served as Chairman of our board of directors since May 2021.

He is an investor in private and public companies with over 27 years of experience leading investments on behalf of institutional and family investors.

From 2001 to 2015, he was a co-founder, managing director and member of the investment committee of Northgate Capital, a global private equity investment firm, where he and his partners raised and invested approximately $4.5 billion in private equity capital.

Prior to graduate school, Mr.

Stone began his career at McKinsey & Company and then worked at Onex Corporation, Greenwich Street Capital Partners and Bain Capital.

He holds a B.A.

in Honors Economics from Brigham Young University, an MBA from Harvard Business School and a J.D.

from Yale Law School.

We believe that Mr.

Stone’s vast experience with investing in private and public companies, including a mortgage software company, as well as his experience as a board member qualify him to serve on our board.

Sigmund “Sig” Anderman has served as a member of our board of directors since May 2021.

He is an entrepreneur who has founded, run, invested in and advised many real estate and mortgage services and financial technology companies over a 50-year career.

In 1997, he founded Ellie Mae, Inc.

(previously NYSE:

At Ellie Mae, Mr.

Anderman served as chief executive officer and chairman of the board of directors from 1997 through January 2015 and as executive chairman of the board of directors from February 2015 until April 2019 when Ellie Mae was acquired by Thoma Bravo, a private equity firm that subsequently sold Ellie Mae

to Intercontinental Exchange, Inc.

Anderman co-founded American Home Shield Corporation, a home warranty company, in 1973, and served as its general counsel until 1979 and as its chief executive officer from 1979 to 1982.

Anderman founded CompuFund, Inc., a computerized mortgage banking company, in 1982 and served as its chief executive officer until 1991.

Anderman founded Inspectech Corporation, a computerized home inspection company, in 1991 and served as its chief executive officer until 1998.

Anderman was named one of the “Ten Most Influential People in the Mortgage Industry” in 2005 by Inman News and received the Distinguished Career Award from the Executive Roundtable for Mortgage Finance in 2019.

Anderman serves on the boards of several nonprofit institutions, including Natural Resources Defense Council Action Fund (since 2014), the Anderman Foundation (President since 2012) and the Springboard Initiative (Chairman and President since 2015).

Anderman holds a B.A.

in Education from City College of New York and a J.D.

from New York University Law School.

We believe that Mr.

Anderman’s broad experience as an entrepreneur and chief executive officer, his years of experience as the chairman of the board of directors of a public company, as well as his experience with mergers and acquisitions qualify him to serve on our board.

Matthew Hansen has served as a member of our board of directors since January 2022.

He is the founder and former Chief Executive Officer of SimpleNexus, a homeownership software company that offers a comprehensive digital platform connecting loan officers, borrowers, and real estate agents.

Under his leadership, SimpleNexus grew from a startup to an industry leader, ultimately leading to its acquisition by nCino, Inc.

NCNO) in January 2022.

Following the acquisition, Mr.

Hansen was the Chief Product Officer at nCino for two years, where he oversaw global product and engineering groups spanning Salt Lake City, London, Wilmington, NC, and Melbourne.

His leadership during this period was pivotal in integrating and scaling the combined product offerings, contributing to the company’s continued growth in the fintech space.

Hansen’s career spans over 20 years in software development, with a strong focus on leadership roles that drive innovation and growth.

Before founding SimpleNexus, Mr.

Hansen led core development at Simplifile (2009 to 2014), a company specializing in the electronic recording of land records.

His technical and leadership expertise were also instrumental in the development of Amirsys, Inc., building diagnostic imaging software for radiologists and pathologists (2005 to 2009).

Hansen’s early career includes developing sophisticated point-of-sale systems for Micron, motorsports, and recreational vehicle dealerships, as well as software solutions for union training management.

We believe that Mr.

Hansen’s decades of experience in developing enterprise software/SaaS, including FinTech, as well as his years of experience as the founder and chief executive officer of a mortgage software focused company qualify him to serve on our board.

Jennifer Nuckles has served as a member of our board of directors since January 2022.

She currently serves as Chief Executive Officer and member of the board of directors of R-Zero, a biosafety technology company.

Prior to joining R-Zero, Ms.

Nuckles was an Executive Vice President and the Group Business Unit Leader – Enterprise, Content, and Insights at SoFi Technologies, Inc.

SOFI)(“SoFi”), a digital personal finance company, from March 2020 to September 2022, and Business Unit Leader – Marketplace, Enterprise, Partnerships and Content at SoFi from June 2019 to March 2020.

Prior to joining SoFi, she was the Chief Marketing Officer of several consumer technology companies, including Doctor on Demand (2016 – 2019) and Zynga (NASDAQ:

ZNGA) (2014 – 2016).

Nuckles spent almost a decade in leadership positions at The Clorox Company, running well-known household-name brands.

She began her career in consulting covering consumer and media at Arthur Andersen.

Nuckles holds an MBA from Harvard Business School and a B.A.

from the University of California.

She is a Certified Public Accountant.

We believe that Ms.

Nuckles’ years of experience as a marketing executive in the consumer technology industry, her current experience as a senior executive of a digital personal finance company, as well as her experience as a board member qualify her to serve on our board.

Cathleen Schreiner Gates has served as a member of our board of directors since May 2021.

She was the chief executive officer of SimpleNexus from May 2021 to July 2022.

SimpleNexus is a homeownership software company with a digital platform for loan officers, borrowers, and real estate agents.

SimpleNexus was acquired by nCino, Inc.

NCNO) in January 2022.

Schreiner Gates was also a member of the board of directors of SimpleNexus from March 2020 until January 2022.

She served as the President of SimpleNexus from August 2020 until she became the company’s chief executive officer.

Prior to SimpleNexus, she was the executive vice president of Sales and Marketing at Ellie Mae, Inc.

(previously NYSE:

ELLI), now a subsidiary of Intercontinental Exchange, Inc (NYSE:

ICE), from March 2015 to July 2019 and was senior vice president of Sales and Client Services at Ellie Mae from February 2012 to March 2015.

Schreiner Gates is the chief executive officer of Trifecta Consulting LLC, a Go-To-Market

consulting company she founded in 2019.

She has spent the last 10 years in the mortgage FinTech sector and has over 30 years of experience in enterprise software/SaaS, spanning multiple industries and ranging from venture-backed, early-stage companies to larger public companies, all with a high-growth focus.

Schreiner Gates has been a speaker at industry events and is an active supporter of women-in-leadership organizations.

She holds a B.A.

in French Literature and an MBA from Rutgers University.

We believe that Ms.

Schreiner Gates’s decades of experience in enterprise software/SaaS, her experience in various executive officer roles at a mortgage software focused company, including her current role as the chief executive officer of a mortgage software company, as well as her experience as a board member qualify her to serve on our board.

David Winfield has served as a member of our board of directors since May 2021.

He is currently an advisor to the Executive Director of the Major League Baseball Players Association, a position he has held since 2013.

He is a former MLB player with broad experiences in professional sports, business, media and philanthropy.

In his 22 year MLB career following his collegiate baseball career at the University of Minnesota, Minneapolis, Mr.

Winfield won a World Series Championship, appeared in 12 All-Star Games and was inducted into the National Baseball Hall of Fame in his first year of eligibility.

Subsequent to his baseball career, in 1995, he established Winfield & Winfield, Ltd., a personal services corporation that provides business development, consulting and advocacy services for corporate, sports, education and government entities, where he has served as President since its inception.

In addition, Mr.

Winfield created and headed the Winfield Foundation, a foundation which provided health and education services to youth and communities nationwide from 1975 to 1997.

We believe that Mr.

Winfield’s years of business experience in providing various services to a range of entities, his experience as an officer of a private company, as well as his extensive experience in an advisory role for a major sports association qualify him to serve on our board.

Number and Terms of Office of Officers and Directors

Our board of directors consists of seven members.

Only holders of our founder shares have the right to elect and to remove our directors prior to consummation of our initial business combination, and holders of our public shares will not have the right to vote on the election or removal of directors during such time.

These provisions of our amended and restated certificate of incorporation may only be amended if approved by the holders of a majority of the outstanding shares of our Class B common stock.

Approval of our initial business combination will require the affirmative vote of a majority of our board directors.

The term of office of our initial directors will expire at our first annual meeting of stockholders.

We may not hold an annual meeting of stockholders until after we consummate our initial business combination.

Any vacancy on our board of directors, including a vacancy resulting from an enlargement of our board of directors, may be filled by vote of a majority of our directors then in office.

Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office.

Our board of directors is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate.

Our bylaws provide that our officers may consist of a Chief Executive Officer, a President, a Chief Financial Officer, Vice Presidents, a Secretary, Assistant Secretaries, a Treasurer and such other offices as may be determined by the board of directors.

Committees of the Board of Directors

Our board of directors has one standing committee:

an audit committee.

Because we are a “controlled company,” we are not required to have a compensation committee composed of independent directors, nor do we have a nominating and corporate governance committee.

Audit Committee

We have established an audit committee of our board of directors.

The members of our audit committee are Sigmund Anderman, Jennifer Nuckles and David Winfield, with Jennifer Nuckles serving as chair of the audit committee.

The audit committee held six meetings during 2024.

Each member of the audit committee is financially literate.

In addition, our board of directors has determined that each of Sigmund Anderman, Jennifer Nuckles and David Winfield qualifies as an “audit committee financial expert” as defined in applicable SEC rules and has accounting or related financial management expertise.

Our board of directors has also determined that Sigmund Anderman, Jennifer Nuckles and David Winfield are independent directors under Rule 10A-3 under the Exchange Act.

We have adopted an audit committee charter, which details the purpose and principal functions of the audit committee, including:

● assisting board oversight of (1) the integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm’s qualifications and independence, and (4) the performance of our internal audit function and independent registered public accounting firm;

● the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm and any other independent registered public accounting firm engaged by us;

● pre-approving all audit and non-audit services to be provided by the independent registered public accounting firm or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;

● reviewing and discussing with the independent registered public accounting firm all relationships the independent registered public accounting firm has with us in order to evaluate their continued independence;

● obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing (1) the independent registered public accounting firm’s internal quality-control procedures and (2) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

● meeting to review and discuss our annual audited financial statements and quarterly financial statements with management and the independent registered public accounting firm, including reviewing our specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;

● reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction;

● reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

You will be able to review the audit committee charter by accessing our public filings at the SEC’s website at www.sec.gov.

Director Nominations

We do not have a standing nominating committee, although we intend to form a corporate governance and nominating committee as and when required to do so by law.

Our board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee.

As there is no standing nominating committee, we do not have a nominating committee charter in place.

The board of directors will also consider director candidates recommended for nomination by our stockholders during such times as they are seeking proposed nominees to stand for election at the next annual meeting of stockholders (or, if applicable, a special meeting of stockholders).

Our stockholders that wish to nominate a director for election to our board of directors should follow the procedures set forth in our bylaws.

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess.

In general, in identifying and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

Code of Ethics

We have adopted a Code of Ethics applicable to our directors, officers and employees.

You will be able to review this document by accessing our public filings at the SEC’s website at www.sec.gov.

In addition, a copy of our Code of Ethics will be provided without charge upon request from us.

We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Current Report on Form 8-K.

Conflicts of Interest

Each of our officers and directors presently has, and any of them in the future may have additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity.

Accordingly, if any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she will honor his or her fiduciary or contractual obligations to present such opportunity to such entity.

We do not believe, however, that the fiduciary duties or contractual obligations of our officers or directors will materially affect our ability to complete our business combination.

Our amended and restated certificate of incorporation contains a waiver of the corporate opportunity doctrine, which provides that we renounce our interest in any corporate opportunity offered to any director or officer unless (i) such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of our Company, (ii) such opportunity is one we are legally and contractually permitted to undertake and would otherwise be reasonable for us to pursue and (iii) the director or officer is permitted to refer the opportunity to us without violating another legal obligation.

The purpose for the surrender of corporate opportunities is to allow officers, directors or other representatives with multiple business affiliations to continue to serve as an officer of our Company or on our board of directors.

Our officers and directors may from time to time be presented with opportunities that could benefit both another business affiliation and us.

In the absence of the “corporate opportunity” waiver in our amended and restated certificate of incorporation, certain candidates would not be able to serve as an officer or director.

We believe we substantially benefit from having representatives, who bring significant, relevant and valuable experience to our management, and, as a result, the inclusion of the “corporate opportunity” waiver in our amended and restated certificate of incorporation provides us with greater flexibility to attract and retain the officers and directors that we feel are the best candidates.

However, the personal and financial interests of our directors and officers may influence their motivation in timely identifying and selecting a target business and completing a business combination.

The different timelines of competing business combinations could cause our directors and officers to prioritize a different business combination over finding a suitable acquisition target for our business combination.

Consequently, our directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in our stockholders’ best interest, which could negatively impact the timing for a business combination.

In addition, our sponsor, officers and directors may participate in the formation of, or become an officer or director of, any other blank check company prior to completion of our initial business combination.

As a result, our sponsor, officers or directors could have conflicts of interest in determining whether to present business combination opportunities to us or to any other blank check company with which they may become involved.

Although we have no formal policy in place for vetting potential conflicts of interest, our board of directors will review any potential conflicts of interest on a case-by-case basis.

Investors should be aware of the following potential conflicts of interest:

● None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities.

● In the course of their other business activities, our officers and directors may become aware of investment and business opportunities which may be appropriate for presentation to our Company as well as the other entities with which they are affiliated.

Our management has pre-existing fiduciary duties and contractual obligations and may have conflicts of interest in determining to which entity a particular business opportunity should be presented.

● Our sponsor, directors and officers have agreed to waive their redemption rights with respect to any founder shares and any public shares held by them in connection with the consummation of our initial business combination.

Additionally, our sponsor, directors and officers have agreed to waive their redemption rights with respect to any founder shares held by them if we fail to consummate our initial business combination by September 30, 2025, or during an Extension Period.

If we do not complete our initial business combination within such applicable time period, the proceeds of the sale of the private placement warrants held in the Trust Account will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless.

With certain limited exceptions, the founder shares will not be transferable, assignable or salable by our Initial Stockholders until one year after the completion of our initial business combination.

With certain limited exceptions, the private placement warrants and the Class A common stock underlying such warrants, will not be transferable, assignable or salable by our sponsor or its permitted transferees until 30 days after the completion of our initial business combination.

Since our sponsor, directors and officers may directly or indirectly own founder shares and private placement warrants, our sponsor, directors and officers may have a conflict of interest in determining whether a particular target business is an appropriate business with which to effectuate our initial business combination because of their financial interest in completing an initial business combination by September 30, 2025, or during an Extension Period.

● Our officers and directors may in the future become affiliated with entities, including other blank check companies, engaged in business activities similar to those intended to be conducted by our Company.

● Our sponsor, officers or directors may have a conflict of interest with respect to evaluating a business combination and financing arrangements as we may obtain loans from our sponsor or an affiliate of our sponsor or any of our officers or directors to finance transaction costs in connection with an intended initial business combination.

Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender.

Such warrants would be identical to the private placement warrants, including as to exercise price, exercisability and exercise period.

The conflicts described above may not be resolved in our favor.

Under Delaware law, officers and directors owe the following fiduciary duties:

● duty to act in good faith, with the care of a prudent person, and in the best interest of the corporation as a whole;

● duty to refrain from self-dealing, usurping corporate opportunities and receiving improper personal benefits;

● duty to make decisions on an informed basis, in good faith and in the honest belief that the action was taken in the best interest of the corporation and that these decisions will be protected by the “business judgment rule.”

In general, officers and directors of a corporation incorporated under the laws of the State of Delaware are required to present business opportunities to a corporation if:

● the corporation could financially undertake the opportunity;

● the opportunity is within the corporation’s line of business;

● it would not be fair to the corporation and its stockholders for the opportunity not to be brought to the attention of the corporation.

Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities.

Furthermore, our amended and restated certificate of incorporation provides that the doctrine of corporate opportunity will not apply with respect to any of our officers or directors in circumstances where the application of the doctrine would conflict with any fiduciary duties or contractual obligations they may have, and none of our directors or officers will be required to offer any such corporate opportunity of which he or she may become aware to us.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, officers or directors.

In the event we seek to complete our initial business combination with such a company, we, or a committee of independent directors, would obtain an opinion from an independent investment banking firm which is a member of FINRA, or from an independent accounting firm, that such an initial business combination is fair to our Company from a financial point of view.

In the event that we submit our initial business combination to our public stockholders for a vote, our sponsor, directors and officers have agreed to vote any founder shares held by them and any public shares purchased during or after the offering in favor of our initial business combination.

The information required by Item 10, other than the information regarding executive officers, which is included in Item 1 of this Annual Report, is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.

Executive Compensation

Executive Officer and Director Compensation

None of our officers or directors have received any compensation for services rendered to us.

Commencing on December 10, 2021, through the earlier of consummation of our initial business combination and our liquidation, we will pay our sponsor a total of $15,000 per month for office space, utilities, and secretarial and administrative services.

In addition, our sponsor, officers, directors and their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.

Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors or our or any of their respective affiliates.

After the completion of our initial business combination, officers and directors who remain with us may be paid consulting, management or other compensation from the post-transaction company.

All compensation will be fully disclosed to stockholders, to the extent then known, in the tender offer materials or proxy solicitation materials furnished to our stockholders in connection with a proposed business combination.

It is unlikely that the amount of such compensation will be known at the time, because the directors of the post-transaction company will be responsible for determining executive officer and director compensation.

Any compensation to be paid to our officers after the completion of our initial business combination will be determined by a compensation committee constituted solely by independent directors or by a majority of independent directors of the post-transaction company.

We are not party to any agreements with our officers and directors that provide for benefits upon termination of employment.

The existence or terms of any such employment or consulting arrangements may influence our management’s motivation in identifying or selecting a target business, and we do not believe that the ability of our management to remain with us after the consummation of our initial business combination should be a determining factor in our decision to proceed with any potential business combination.

Compensation Committee Interlocks and Insider Participation

None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.

The information required by Item 11 is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth information regarding the beneficial ownership of our common stock as of March 31, 2025, based on information obtained from the persons named below, with respect to the beneficial ownership of shares of our common stock, by:

● each person known by us to be the beneficial owner of more than 5% of the outstanding shares of any class of our common stock;

● each of our executive officers and directors;

● all our executive officers and directors as a group.

Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them.

The following table does not reflect record or beneficial ownership of the private placement warrants as these warrants are not exercisable within 60 days of the date of this report.

Class A common stock

Class B common stock

Name of Beneficial Owners (3)

5% or Greater Beneficial Owners:

Southport Acquisition Sponsor LLC (4)

RiverNorth SPAC Arbitrage Fund, LP (5)

Radcliffe SPAC Master Fund, L.P.

Kepos Special Opportunities Masters Fund L.P.

Polar Multi-Strategy Master Fund, L.P.

Sandia Investment Management L.P.

and affiliated entities and persons (9)

Directors and Executive Officers:

Jeb Spencer (10)

Jared Stone (10)

Sigmund Anderman*

Matthew Hansen*

Jennifer Nuckles*

Cathleen Schreiner Gates*

David Winfield*

All officers and directors as a group (seven individuals)

Less than one percent.

This individual does not beneficially own any shares of common stock or private placement warrants.

However, this individual has a pecuniary interest in shares of common stock and private placement warrants through his or her ownership of membership interests of our sponsor.

(1) Based on 4,237,987 shares of Class A common stock outstanding as of March 31, 2025, including those shares of Class A common stock comprising a portion of a unit.

(2) Based on 1,550,000 shares of Class B common stock outstanding as of March 31, 2025.

(3) Unless otherwise noted, the business address of each of the following entities or individuals is c/o Southport Acquisition Corporation, 268 Post Road, Suite 200, Fairfield, CT 06824.

(4) Shares of Class B common stock will automatically convert into shares of Class A common stock at the time of our initial business combination, or earlier at the option of the holders thereof, on a one-for-one basis, subject to adjustment.

Southport Acquisition Sponsor LLC, a Delaware limited liability company, is our sponsor and is controlled by Jeb

Spencer, our Chief Executive Officer, and Jared Stone, the Chairman of our board, who serve as the only members of the sponsor’s board of managers.

(5) Based on information contained in a Schedule 13G filed with respect to SAC on February 14, 2024, RiverNorth Capital Management, LLC had shared voting and dispositive power over 700,000 shares of Class A common stock.

Based on company records, in connection with the Third Extension Special Meeting, RiverNorth Capital Management, LLC and its affiliates exercised their redemption rights with respect to substantially all of such shares.

In addition, based on company records, RiverNorth SPAC Arbitrage Fund, LP owned 262,496 shares of Class B common stock received in connection with the First Extension Special Meeting.

The business address of each of RiverNorth Capital Management, LLC and RiverNorth SPAC Arbitrage Fund, LP is 360 S.

Rosemary Avenue, Ste.

1420, West Palm Beach, Florida 33401.

Based on SAC company records, Radcliffe SPAC Master Fund, L.P.

owned 187,498 shares of Class B common stock received in connection with the First Extension Special Meeting.

Pursuant to an investment management agreement, Radcliffe Capital Management, L.P.

(“RCM”) serves as the investment manager of the Radcliffe SPAC Master Fund, L.P.

RGC Management Company, LLC (“Management”) is the general partner of RCM.

Steve Katznelson and Christopher Hinkel serve as managing members of Management.

Each of the parties in this footnote disclaims any beneficial ownership of the shares held by Radcliffe SPAC Master Fund, L.P.

other than to the extent of any pecuniary interest the party may have therein.

The business address of Radcliffe SPAC Master Fund, L.P.

is c/o Radcliffe Capital Management, L.P., 50 Monument Road, Suite 300, Bala Cynwyd, PA 19004.

Based on SAC company records, Kepos Special Opportunities Master Fund L.P.

owned 262,496 shares of Class B common stock received in connection with the First Extension Special Meeting.

Kepos Capital LP is the investment manager of Kepos Special Opportunities Master Fund L.P.

and Kepos Partners LLC is the General Partner of Kepos Special Opportunities Master Fund L.P.

and each may be deemed to have voting and dispositive power with respect to the shares held by Kepos Special Opportunities Master Fund L.P.

The general partner of Kepos Capital LP is Kepos Capital GP LLC (the “Kepos GP”) and the Managing Member of Kepos Partners LLC is Kepos Partners MM LLC (“Kepos MM”).

Mark Carhart controls Kepos GP and Kepos MM and, accordingly, may be deemed to have voting and dispositive power with respect to the shares held by Kepos Special Opportunities Master Fund L.P.

Carhart disclaims beneficial ownership of the shares held by Kepos Special Opportunities Master Fund L.P.

The business address of Kepos Special Opportunities Master Fund L.P.

is c/o Kepos Capital LP, 11 Times Square, 35th Floor, New York, NY 10036.

Based on SAC company records, Polar Multi-Strategy Master Fund owned 262,502 shares of Class B common stock received in connection with the First Extension Special Meeting.

The Polar Multi-Strategy Master Fund (“Polar”) is under management by Polar Asset Management Partners Inc.

PAMPI serves as investment advisor to Polar and has control and discretion over the shares held by Polar.

As such, PAMPI may be deemed the beneficial owner of the shares held by Polar.

PAMPI disclaims any beneficial ownership of the reported shares other than to the extent of any pecuniary interest therein.

The ultimate natural person who has voting and dispositive power over the shares held by Polar is Paul Sabourin, Chief Investment Officer of PAMPI.

The business address of Polar is c/o Polar Asset Management Partners Inc., 16 York Street, Suite 2900, Toronto, Ontario M5J 0E6, Canada.

Based on information contained in a Schedule 13G/A filed with respect to SAC on November 14, 2024, each of Sandia Investment Management L.P.

and Timothy J.

Sichler had shared voting and dispositive power over 154,564 shares of Class A common stock.

Based on SAC company records, in connection with the Third Extension Special Meeting, Sandia Investment Management L.P.

and its affiliates exercised their redemption rights with respect to substantially all of such shares.

In addition, based on SAC company records, Sandia Crest LP owned 37,502 shares of Class B common stock, Walleye Investments Fund LLC owned 18,748 shares of Class B common stock, Walleye Opportunities Master Fund Ltd owned 37,502 shares of Class B common stock, WWJr.

Enterprises Inc.

owned 112,500 shares of Class B common stock, Crestline Summit Master, SPC - Peak SP owned 34,857 shares of Class B common stock and Crestline Summit Master, SPAC - Crestline Summit Apex SP owned 21,393 shares of Class B common stock, in each case, which shares were received in connection with the First Extension Special Meeting.

The business address of each of Sandia Investment Management L.P., Sandia Crest LP and Timothy J.

Sichler is 201 Washington Street, Boston, MA 02108.

The business address of each of Walleye Opportunities Master Fund Ltd and Walleye Investments Fund LLC is 2800

Niagara Lane, Plymouth, MN 55447.

The business address of WWJr.

Enterprises Inc.

Clematis, West Palm Beach, FL 33401.

The business address of each of Crestline Summit Master, SPC—Peak SP and Crestline Summit Master, SPAC—Crestline Summit Apex SP is 201 Main Street, Fort Worth, TX 76102.

These shares consist solely of shares of Class A common stock and Class B common stock held in the name of the sponsor.

The sponsor is controlled by Jeb Spencer, our Chief Executive Officer, and Jared Stone, the Chairman of our board of directors, who serve as the only members of the sponsor’s board of managers.

As of March 31, 2025, our sponsor holds 312,506 of our founder shares and 4,200,000 of our public shares issued in connection with the Conversion.

Holders of our founder shares have the right to elect and to remove all of our directors prior to the consummation of our initial business combination.

Holders of our public shares do not have the right to elect any directors to our board of directors prior to our initial business combination.

In addition, because our sponsor holds 78.0% of our outstanding common stock, our sponsor may be able to effectively influence the outcome of all matters requiring approval by our stockholders, including amendments to our amended and restated certificate of incorporation and approval of significant corporate transactions.

Our sponsor purchased an aggregate of 11,700,000 private placement warrants in the Private Placement.

Each private placement warrant entitles the holder thereof to purchase one share of our Class A common stock at $11.50 per share, subject to adjustment.

If we do not complete our initial business combination by September 30, 2025, or during any Extension Period, the funds in the Trust Account, which includes a portion of the proceeds from the Private Placement, will be used to fund the redemption of our public shares, and the private placement warrants will expire worthless.

The private placement warrants are subject to the transfer restrictions and are entitled to registration rights, in each case, described below.

The private placement warrants will not be redeemable by us except in certain redemption scenarios and will be exercisable on a cashless basis so long as they are held by our management team or our sponsor or their permitted transferees.

If the private placement warrants are held by holders other than our management team or our sponsor or their permitted transferees, the private placement warrants will be redeemable by us in all redemption scenarios and exercisable by the holders on the same basis as the warrants included in the units sold in our IPO.

Otherwise, the private placement warrants have terms and provisions that are identical to those of the warrants sold in our IPO.

Our sponsor, officers and directors are deemed to be our “promoter” as such term is defined under the federal securities laws.

Please see “Certain Relationships and Related Transactions, and Director Independence” for additional information regarding our relationships with our promoters.

Transfers of Founder Shares and Private Placement Warrants

The founder shares, private placement warrants and any warrants issued upon conversion of working capital loans and any shares of Class A common stock issued upon conversion or exercise thereof are each subject to transfer restrictions pursuant to lock-up provisions in letter agreements between us and our sponsor, officers and directors.

Those lock-up provisions provide that such securities are not transferable or salable (1) in the case of the founder shares, until the earlier of (A) one year after the completion of our initial business combination and (B) subsequent to our initial business combination, (x) if the closing price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after our initial business combination, or (y) the date following the completion of our initial business combination on which we complete a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of our stockholders having the right to exchange their shares of common stock for cash, securities or other property, and (2) in the case of the private placement warrants, any warrants issued upon conversion of working capital loans and the respective Class A common stock underlying such warrants, until 30 days after the completion of our initial business combination, except in each case (a) to our officers or directors, any affiliates or family members of any of our officers or directors, our sponsor or any members of our sponsor, or any of its affiliates;

(b) in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of the individual’s immediate family or an affiliate of such person, or to a charitable organization;

(d) in the case of an individual, pursuant to a qualified domestic relations order;

(e) transfers by private sales or transfers made in connection with consummation of our initial business combination at prices no greater than the price at which the securities were originally purchased;

(f) in the event of our liquidation prior to our completion of our initial business combination;

(g) by virtue of the laws of Delaware or our sponsor’s limited liability company agreement, as amended, upon dissolution of our sponsor;

or (h) in the event of our completion of a liquidation, merger, stock exchange, reorganization or other similar transaction which results in all of our stockholders having the right to exchange their shares of common stock for cash,

securities or other property subsequent to our completion of our initial business combination;

or (i) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (a) through (h) above, provided, however, that in the case of clauses (a) through (e) and (i), these permitted transferees must enter into a written agreement agreeing to be bound by these transfer restrictions and the other restrictions contained in the letter agreement.

Registration Rights

The holders of the founder shares (including public shares issued upon conversion thereof), private placement warrants and warrants that may be issued upon conversion of working capital loans (and any shares of common stock issuable upon the exercise of the private placement warrants or warrants issued upon conversion of the working capital loans and upon conversion of the founder shares) are entitled to registration rights pursuant to a registration rights agreement requiring us to register such securities for resale (in the case of the founder shares, only after conversion to shares of Class A common stock).

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

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our initial business combination and rights to require us to register for resale such securities pursuant to Rule 415 under the Securities Act.

However, the registration rights agreement provides that we are not required to effect or permit any registration or cause any registration statement to become effective until termination of the applicable lock-up period as described above under “—Transfers of Founder Shares and Private Placement Warrants.” We will bear the expenses incurred in connection with the filing of any such registration statements.

The information required by Item 12 is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.

Certain Relationships and Related Transactions, and Director Independence

On May 27, 2021, our sponsor purchased an aggregate of 7,187,500 founder shares for an aggregate purchase price of $25,000.

On November 24, 2021, our sponsor surrendered 1,437,500 founder shares for no consideration, thereby reducing the aggregate number of founder shares outstanding to 5,750,000, resulting in an effective purchase price paid for the founder shares of approximately $0.004 per share, and reducing the aggregate number of founder shares owned by our sponsor to 5,750,000.

Our sponsor has purchased an aggregate of 11,700,000 private placement warrants for a purchase price of $1.00 per warrant in the Private Placement.

As such, our sponsor’s at-risk capital in this transaction is valued at $11,700,000.

Each private placement warrant entitles the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as provided herein.

The private placement warrants (including the Class A common stock issuable upon exercise of the private placement warrants) may not, subject to certain limited exceptions, be transferred, assigned or sold by our sponsor or its permitted transferees until 30 days after the completion of our initial business combination.

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

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.

Additionally, in connection with the Non-Redemption Agreements entered into with unaffiliated third parties on May 25, 2023, the sponsor agreed to transfer an aggregate of up to 1,499,996 shares of Class B common stock held by the sponsor with 500,000 of such shares to be transferred to such third parties promptly upon consummation of the First Extension, and an additional 166,666 shares to be transferred to such third parties monthly beginning on September 14, 2023 and up to, and including, February 14, 2024, if the board of directors of the Company elects to further extend the deadline to consummate an initial business combination at or prior to such date, in each case, if such third parties continue to hold such Non-Redeemed Shares through the First Extension Special Meeting.

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 from the sponsor.

If any of our officers or directors becomes aware of a business combination opportunity which is suitable for an entity to which he or she has then-current fiduciary or contractual duties or obligations to present the opportunity to such entity, he or she will honor these duties or obligations to present such business combination opportunity to such entity prior to presenting such opportunity to us.

Our officers and directors currently have other relevant fiduciary or contractual duties or obligations that may take priority over their duties or obligations to us, and even when they do not have such fiduciary or contractual duties or obligations, may choose to present business combination opportunities to other entities before presenting them to us if they are not prohibited by our amended and restated certificate of incorporation from doing so.

Our sponsor, officers and directors or any of their respective affiliates will be reimbursed for any out-of-pocket expenses incurred in connection with activities on our behalf such as identifying potential target businesses and performing due diligence on suitable business combinations.

Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers, directors or our or any of their respective affiliates and will determine which expenses and the amount of expenses that will be reimbursed.

There is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred by such persons in connection with activities on our behalf.

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.

Upon the earlier of consummation of our initial business combination and our liquidation, we will cease paying these monthly fees.

Accordingly, assuming the consummation of our initial business combination takes until September 30, 2025, our sponsor will be paid a total of $546,500 for these services.

Our sponsor loaned us $350,000 under an unsecured promissory note to be used for a portion of the expenses of our IPO.

These loans were non-interest bearing, unsecured and were due at the earlier of May 31, 2022 and the closing of the IPO.

These loans were repaid upon completion of the IPO out of the $2,500,000 of offering proceeds that was allocated for the payment of offering expenses (other than underwriting fees) and amounts not to be held in the Trust Account.

On October 3, 2024, our 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 is non-interest bearing and payable on the earlier of September 30, 2025 or the date on which we consummate a Business Combination.

If we do 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 we have funds available to outside of the trust account.

As of December 31, 2024, $439,004 was outstanding under the Sponsor Promissory Note.

On January 15, 2025, certain of the Company’s unaffiliated third-party investors transferred an aggregate of 262,502 shares of our 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, the sponsor holds 4,200,000 shares of our Class A common stock, 312,506 shares of our Class B common stock and 11,700,000 private placement warrants.

In order to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, our management team and our sponsor and any of their respective affiliates may, but none of them is obligated to, loan us funds as may be required.

If we complete our initial business combination, we would repay such loaned amounts out of the proceeds of the Trust Account released to us.

In the event that our initial business combination is not completed by September 30, 2025 or during any Extension Period, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from the Trust Account would be used for such repayment.

Up to $1,500,000 of such loans may be convertible into warrants at a price of $1.00 per warrant at the option of the lender.

The warrants would be identical to the private placement warrants.

The terms of such loans, if any, have not been determined and no written agreements exist with respect to such loans.

Prior to our initial business combination, we do not expect to seek loans from parties other than our management team or our sponsor or any of their respective affiliates, if any, as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the Trust Account.

After our initial business combination, members of our management team who remain with us, if any, may be paid consulting, management or other fees from the post-transaction company with any and all amounts being fully disclosed to our stockholders, to the extent then known, in the tender offer or proxy solicitation materials, as applicable, furnished to our stockholders.

It is unlikely the amount of such compensation will be known at the time of distribution of such tender offer materials or at the time of a stockholder meeting held to consider our initial business combination, as applicable, as it will be up to the directors of the post-transaction company to determine executive officer and director compensation.

We have entered into a registration rights agreement with respect to the founder shares, private placement warrants and warrants issued upon conversion of working capital loans (if any) and shares of our Class A common stock issuable for conversion or exercise thereof, which is described under the heading “Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters — Registration Rights.”

Refer to Note 5 of our financial statements for more information regarding our related party transactions.

Related Party Policy

We have not yet adopted a formal policy for the review, approval or ratification of related party transactions.

Accordingly, the transactions discussed above were not reviewed, approved or ratified in accordance with any such policy.

We have adopted a Code of Ethics requiring us to avoid, wherever possible, all conflicts of interests, except under guidelines or resolutions approved by our board of directors (or the appropriate committee of our board) or as disclosed in our public filings with the SEC.

Under our Code of Ethics, conflict of interest situations include any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) involving our Company.

In addition, our audit committee, pursuant to its written charter, is responsible for reviewing and approving related party transactions to the extent that we enter into such transactions.

An affirmative vote of a majority of the members of the audit committee present at a meeting at which a quorum is present will be required in order to approve a related party transaction.

A majority of the members of the entire audit committee will constitute a quorum.

Without a meeting, the unanimous written consent of all of the members of the audit committee will be required to approve a related party transaction.

Our audit committee will review on a quarterly basis all payments that were made by us to our sponsor, officers or directors, or our or any of their respective affiliates.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, officer or employee.

To further minimize conflicts of interest, we have agreed not to consummate an initial business combination with an entity that is affiliated with our sponsor, directors or officers unless we, or a committee of independent directors, have obtained an opinion from an independent investment banking firm which is a member of FINRA or an independent accounting firm that our initial business combination is fair to our Company from a financial point of view.

There will be no finder’s fees, reimbursement, consulting fee, monies in respect of any payment of a loan or other compensation paid by us to our sponsor, officers or directors or our or any of their respective affiliates, for services rendered to us prior to or in connection with the completion of our initial business combination (regardless of the type of transaction that it is).

However, the following payments may be made to our sponsor, officers or directors, or our or their affiliates, and, if made prior to our initial business combination will be made from funds held outside the Trust Account:

● payment to our sponsor of a total of $15,000 per month for office space, utilities, and secretarial and administrative services;

● reimbursement for any out-of-pocket expenses related to identifying, investigating and completing an initial business combination;

● repayment of loans which may be made by our sponsor, officers or directors or their respective affiliates to fund working capital deficiencies or finance transaction costs in connection with an intended initial business combination, the terms of which have not been determined nor have any written agreements been executed with respect thereto.

Up to $1,500,000 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 payments may be funded using, if any, the net proceeds from our IPO and the Private Placement not held in the Trust Account or, upon completion of the initial business combination, from any amounts remaining from the proceeds of the Trust Account, if any, released to us in connection therewith.

Director Independence

An “independent director” is defined generally as a person that, in the opinion of the Company’s board of directors, has no material relationship with the listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company).

Our board has determined that each of Sigmund Anderman, Matthew Hansen, Jennifer Nuckles, Cathleen Schreiner Gates and David Winfield is an independent director under Rule 10A-3 under the Exchange Act.

Our independent directors will have regularly scheduled meetings at which only independent directors are present.

The information required by Item 13 is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.

Principal Accountant Fees and Services

The following is a summary of fees paid or to be paid to BDO USA, P.C., for services rendered in 2024 and 2023:

Audit-Related Fees

All Other Fees

Pre-Approval Policy

The audit committee is responsible for pre-approving all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).

Exhibit and Financial Statement Schedules.

(a) The following documents are filed as part of this report:

(1) Financial Statements

(2) Financial Statements Schedules

All financial statement schedules are omitted because they are not applicable or the amounts are immaterial and not required, or the required information is presented in the financial statements and notes thereto in Item 15 of Part IV below.

We hereby file as part of this report the exhibits listed in the attached Exhibit Index.

Copies of such material can be obtained on the SEC website at www.sec.gov.

Form 10-K Summary.

Not applicable.

EXHIBIT INDEX

Underwriting Agreement, dated December 9, 2021, by and between the Company and BofA Securities, Inc., as underwriter (2)

Agreement and Plan of Merger, dated as of September 11, 2024 (7)

The information required by Item 14 is incorporated by reference to the relevant information included in our proxy statement for our 2026 Annual Meeting of Stockholders.

Exhibits And Financial Statement Schedules

(a) List of documents filed as a part of this Form 10-K:

(1) Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB Firm ID:270)

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Operations as of December 31, 2025, 2024 and 2023

Consolidated Statements of Stockholders’ Equity as of December 31, 2025, 2024, and 2023

Consolidated Statements of Cash Flows as of December 31, 2025, 2024 and 202 3

Notes to Consolidated Financial Statements

(2) Consolidated Financial Statement Schedules:

The financial statements are listed in the Index to Consolidated Financial Statements, Notes and Schedules on page F-1

The following exhibits are filed with this report.

Exhibits which are incorporated herein by reference can be obtained from the SEC’s website at sec.gov.

(b) Exhibits:

Exhibit Description

Agreement and Plan of Merger, dated September 11, 2024, by and among Southport Acquisition Corporation, Sigma Merger Sub, Inc.

and Angel Studios, Inc., incorporated by reference to Exhibit 2.1 on the Company’s Form 8-K/A on September 11, 2024

Amendment No.

1 to Agreement and Plan of Merger, dated as of February 14, 2025 (10)

Amended and Restated Certificate of Incorporation of the Company (2)

Amended and Restated Bylaws of the Company (2)

Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated June 9, 2023 (4)

Second Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated March 14, 2024 (5)

Third Amendment to the Amended and Restated Certificate of Incorporation of the Company, dated November 13, 2024 (9)

Specimen Unit Certificate (1)

Specimen Class A Common Stock Certificate (1)

Specimen Warrant Certificate (included in Exhibit 4.4) (2)

Warrant Agreement, dated December 9, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent (2)

Description of Securities (3)

Promissory Note, dated May 27, 2021 issued to Southport Acquisition Sponsor LLC (1)

Letter Agreement, dated December 9, 2021, by and among the Company, its initial officers and directors, and Southport Acquisition Sponsor LLC (2)

Letter Agreement, dated January 6, 2022, by and among the Company, Matthew Hansen and Jennifer Nuckles (3)

Investment Management Trust Agreement, dated December 9, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as trustee (2)

Registration Rights Agreement, dated December 9, 2021, by and between the Company and Southport Acquisition Sponsor LLC (2)

Securities Subscription Agreement, dated May 27, 2021 between the Company and Southport Acquisition Sponsor LLC (1)

Private Placement Warrants Subscription Agreement, dated December 9, 2021, by and between the Company and Southport Acquisition Sponsor LLC (2)

Form of Indemnity Agreement (1)

Sponsor Support Agreement, dated as of September 11, 2024 (7)

Angel Studios Stockholder Support Agreement, dated as of September 11, 2024 (7)

Promissory Note, dated October 3, 2024, issued to Southport Acquisition Sponsor LLC (8)

Certification of the Chief Executive Officer (and Principal Financial Officer) required by Rule 13a-14(a) or Rule 15d-14(a)

Certification of the Chief Executive Officer (and Principal Financial Officer) required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C.

Clawback Policy, dated January 23, 2024, by and among the Company and its Executive Officers (6)

XBRL Instance Document

XBRL Taxonomy Extension Schema

XBRL Taxonomy Calculation Linkbase

XBRL Taxonomy Label Linkbase

XBRL Definition Linkbase Document

Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101)

1 to Agreement and Plan of Merger, dated February 14, 2025, by and among the Company, Sigma Merger Sub, Inc.

and Angel Legacy, incorporated by reference to Exhibit 2.1 of the Company’s Current Report on Form 8-K, filed on February 14, 2025

Agreement and Plan of Merger between the Company, Angel Black Autumn Merger Sub, Inc., Black Autumn Show, Inc.

and the Stockholder Representative, dated November 14, 2025

Agreement and Plan of Merger by and among by and among the Company, Angel TCP Merger Sub, LLC, Toothy Cow Productions, LLC and the unitholder representative, dated November 14, 2025

Agreement and Plan of Merger between the Company and Angel Tuttle Merger Sub, LLC, Tuttle Twins Show, LLC and the unitholder representative, dated November 14, 2025

Second Amended and Restated Certificate of Incorporation of Angel Studios, Inc., incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form S-1 filed on September 16, 2025

Amended and Restated Bylaws of Angel Studios, Inc., incorporated by reference to Exhibit 3.2 of the Company’s Registration Statement on Form S-1 filed on September 16, 2025

Form of Subordinated Convertible Promissory Note, incorporated by reference to Exhibit 4.1 of Angel Legacy’s Current Report on Form 8-K, filed on August 15, 2025

Warrant to Purchase Stock, incorporated by reference to Exhibit 4.1 of Angel Legacy’s Current Report on Form 8-K, filed on September 10, 2025

Warrant to Purchase Stock, incorporated by reference to Exhibit 4.2 of Angel Legacy’s Current Report on Form 8-K, filed on September 10, 2025

Angel Studios, Inc.

2025 Long-Term Incentive Plan, incorporated by reference to Exhibit 4.7 of the Company’s Registration Statement on Form S-8, filed on November 18, 2025

Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

Settlement Agreement, dated August 26, 2020, incorporated by reference to Exhibit 1.3 of Angel Legacy’s Form 1-U filed on September 15, 2020

Promissory Note and Security Agreement between Angel Studios, Inc.

and VidAngel Entertainment, LLC, dated March 1, 2021, incorporated by reference to Exhibit 6.6 of Angel Legacy’s Form 1-K filed on April 28, 2023

Form of Escrow Agreement by and between North Capital Private Securities Corporation and Angel Studios, Inc., incorporated by reference to Exhibit 1.2 of Angel Legacy’s Form 1-A filed on June 20, 2024

P&A Loan Agreement between Angel P&A, LLC and Angel Studios, Inc., dated February 23, 2024, incorporated by reference to Exhibit 10.11 of Angel Legacy’s Annual Report on Form 10-K filed on March 28, 2025

Amendment to P&A Loan Agreement between Angel P&A, LLC and Angel Studios, Inc., dated December 1, 2024, incorporated by reference to Exhibit 10.12 of Angel Legacy’s Annual Report on form 10-K filed on March 28, 2025

Subscription Agreement, incorporated by reference to Exhibit 4.1 of Angel Legacy’s amended Form 1-A filed on July 24, 2025

Broker-Dealer - Onboarding Agent Agreement – Reg A+ Tier 2, by and between Rialto Markets LLC and Angel Studios, Inc., effective June 16, 2025, incorporated by reference to Exhibit 1.1 of Angel Legacy’s Form 1-A filed on July 24, 2025

Term Sheet by and between Angel Studios, Inc.

and 2521 Entertainment, LLC, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, filed on October 8, 2025

Note and Warrant Purchase Agreement, incorporated by reference to Exhibit 10.1 of Angel Legacy’s Current Report on Form 8-K, filed on May 9, 2025

Form of Subordinated Convertible Promissory Note, incorporated by reference to Exhibit 10.2 of Angel Legacy’s Current Report on Form 8-K, filed on May 9, 2025

Form of Subordinated Convertible Promissory Note, incorporated by reference to Exhibit 4.1 to Angel Legacy’s Current Report on Form 8-K filed on August 15, 2025

Loan and Security Agreement, incorporated by reference to Exhibit 10.1 of Angel Legacy’s Current Report on Form 8-K, filed on September 10, 2025

Participation Rights Agreement, incorporated by reference to Exhibit 10.2 of Angel Legacy’s Current Report on Form 8-K, filed on September 10, 2025

Equity Distribution Agreement, dated December 5, 2025, between the Company and Oppenheimer & Co.

Inc., TCBI Securities, Inc., doing business as Texas Capital Securities, Maxim Group LLC and Roth Capital Partners, LLC, incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K, filed on December 5, 2025

Form of Support Agreement, by and among the Company and certain key equity holders of Black Autumn (included as Exhibit A to Exhibit 2.3 filed above)

Form of Support Agreement, by and among the Company and certain key equity holders of TCP

Form of Support Agreement, by and among the Company and certain key equity holders of TTS

Form of Black Autumn Key Operator Stock Restriction Agreement (included as Exhibit B to Exhibit 2.3 filed above)

Form of TTS Key Operator Stock Restriction Agreement

Ratification and First Amendment to Loan and Security Agreement, effective as of September 9, 2025

Angel Studios, Inc.

Securities Trading Policy

List of Significant Subsidiaries

Consent of Tanner LLP

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.

1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002

Angel Studios, Inc.

Executive Officer Incentive Compensation Recovery Policy

Inline XBRL Instance Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Labels Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Filed herewith.

Furnished herewith

Filed as an exhibit to the Registration Statement on Form S-1 filed with the SEC on November 24, 2021 (File No.

Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on December 14, 2021 (File No.

Filed as an exhibit to the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2022 (File No.

Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on June 9, 2023 (File No.

Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on March 14, 2024 (File No.

Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on January 24, 2024 (File No.

Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on September 11, 2024 (File No.

Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on October 3, 2024 (File No.

Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on November 13, 2024 (File No.

Filed as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on February 14, 2025 (File No.

SOUTHPORT ACQUISITION CORP.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (BDO USA, P.C.;

New York, New York;

PCAOB ID# 243 )

Financial Statements:

+ Certain exhibits and schedules to this Exhibit have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ANGEL STUDIOS, INC.

March 12, 2026

/s/ Neal Harmon

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Neal Harmon

Chief Executive Officer and Director

March 12, 2026

(Principal Executive Officer)

/s/ Scott Klossner

Chief Financial Officer

March 12, 2026

Scott Klossner

(Principal Financial and Accounting Officer)

/s/ Paul Ahlstrom

March 12, 2026

Paul Ahlstrom

/s/ Katie Liljenquist

March 12, 2026

Katie Liljenquist

/s/ Mina Nguyen

March 12, 2026

/s/ Steve Sarowitz

March 12, 2026

Steve Sarowitz

/s/ Robert C.

March 12, 2026

/s/ Benton Crane

March 12, 2026

ANGEL STUDIOS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB Firm ID:

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Operations for the years ended December 31, 2024 and 2023

Consolidated Statements of Changes in Common Stock Subject to Possible Redemption and Stockholders’ Deficit for the years ended December 31, 2024 and 2023

Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023

Consolidated Statements of Operations as of December 31, 2025, 2024 and 2023

Consolidated Statements of Stockholders’ Equity as of December 31, 2025, 2024, and 2023

Consolidated Statements of Cash Flows as of December 31, 2025, 2024 and 2023

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Southport Acquisition Corporation

Fairfield, Connecticut

To the Board of Directors and Stockholders of

Angel Studios, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Southport Acquisition Corporation (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in common stock subject to possible redemption and stockholders’ deficit, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company does not have sufficient cash and working capital to sustain its operations and the Company’s ability to execute its business plan is dependent upon its successful completion of the proposed business combination described in Note 1 to the consolidated financial statements.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

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

We have audited the accompanying consolidated balance sheets of Angel Studios, Inc.

and subsidiaries (collectively, the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

1 unchanged sentence

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

1 unchanged sentence

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

/s/ BDO USA, P.C.

Critical Audit Matter

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there were no critical audit matters.

/s/ TANNER LLP

We have served as the Company’s auditor since 2016

April 15, 2025

SOUTHPORT ACQUISITION CORPORATION

March 12, 2026

ANGEL STUDIOS, INC.

Consolidated Balance Sheets

December 31, 2025

December 31, 2024

Current assets:

Prepaid expenses

Cash and cash equivalents

Accounts receivable, net

Current portion of licensing receivables, net

Physical inventory

Current portion of notes receivable

Loan guarantee receivable

Royalty advance

Prepaid expenses and other

Total current assets

Non-current assets:

Marketable securities held in Trust Account (including $ 1,603 and $ 198,419 of accrued dividends as of December 31, 2024 and 2023, respectively)

Total Non-current Assets

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

Licensing receivables, net

Notes receivable, net of current portion

Property and equipment, net

Intangible assets, net

Capitalized software, net

Digital assets

Investments in affiliates

Operating lease right-of-use assets

Other long-term assets

Liabilities and Stockholders’ Equity

Current liabilities:

Accrued expenses

Accounts payable

Accrued offering costs

Due to related party

Promissory note – related party

Administrative support fee – related party

Excise tax liability

Accrued expenses

Current portion of accrued licensing royalties

Current portion of notes payable

Current portion of operating lease liabilities

Deferred revenue

Loan guarantee payable

Current portion of accrued settlement costs

Total current liabilities

Non-Current liabilities:

Warrant Liability

Total Non-current Liabilities

Accrued settlement costs, net of current portion

Accrued licensing royalties, long-term

Notes payable, net of current portion

Operating lease liabilities, net of current portion

Total liabilities

Commitments and contingencies (Note 13)

Class A common stock subject to possible redemption;

200,000,000 shares authorized;

37,987 and 4,150,065 shares issued and outstanding subject to possible redemption at redemption value as of December 31, 2024 and 2023, respectively

Stockholders’ Deficit

Preferred stock, $ 0.0001 par value;

1,000,000 shares authorized;

none issued and outstanding

Class A common stock, $ 0.0001 par value;

200,000,000 shares authorized;

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

Stockholders’ equity:

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

169,095,572 and 144,396,852 shares issued and outstanding as of December 31, 2025, and December 31, 2024, respectively

Additional paid-in capital

Noncontrolling interests

Accumulated deficit

1 unchanged sentence

( 87,014,444 )

Total Stockholders’ Deficit

( 8,501,447 )

Total stockholders’ equity

( 25,780,324 )

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

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

SOUTHPORT ACQUISITION CORPORATION

Total liabilities and stockholders’ equity

See accompanying notes to the consolidated financial statements

ANGEL STUDIOS, INC.

Consolidated Statements of Operations

Operating costs:

Administrative expenses

Administrative expenses – related party

Legal and accounting expenses

Insurance expense

Franchise tax expense

Other operating costs

Loss from operations

Year Ended December 31,

Licensed content and other revenue

Pay it Forward revenue

Total revenue

Operating expenses:

Cost of revenues

Selling and marketing

General and administrative

Research and development

Legal expense

Total operating expenses

Operating income (loss)

( 164,108,478 )

( 86,719,551 )

Other (expense) income, net:

Change in fair value of warrant liability

Other income (expense):

Net gain (loss) on digital assets

( 1,792,728 )

Dividend income on marketable securities held in Trust Account

Financing expense

Other (expense) income

Interest expense

( 11,834,846 )

(Loss) income before provision for income taxes

( 2,366,014 )

Provision for income taxes

( 3,657,958 )

Net (loss) income

Interest income

Other income (expense)

( 1,000,000 )

Basic and diluted weighted average shares outstanding, redeemable Class A common stock

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

Basic and diluted weighted average shares outstanding, 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 consolidated financial statements.

SOUTHPORT ACQUISITION CORPORATION

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

For the Year Ended December 31, 2024

Class A common stock

Subject to possible

Class A common stock

Class B common stock

Stockholders’

Balance – January 1, 2024

Total other income (expense), net

( 6,382,843 )

( 1,842,837 )

Excise tax liability

Sponsor cash capital contributions

Sponsor capital contributions for non-redemption agreements

Redemption of Class A common stock

Income (loss) before income tax expense (benefit)

( 170,491,321 )

( 84,910,876 )

Trust Account withdrawal for tax payments

Remeasurement of Class A common stock subject to possible redemption

Income tax expense (benefit)

( 2,697,435 )

Net income (loss)

( 170,491,321 )

Balance – December 31, 2024

( 88,445,478 )

Net loss attributable to noncontrolling interests

Net income (loss) attributable to controlling interests

( 170,478,642 )

For the Year Ended December 31, 2023

Class A common stock

Subject to possible

Class A common stock

Class B common stock

( 88,273,377 )

Net income (loss) per common share - basic

Net income (loss) per common share - diluted

Weighted average common shares outstanding - basic

Weighted average common shares outstanding - diluted

See accompanying notes to the consolidated financial statements

ANGEL STUDIOS, INC.

Consolidated Statements of Stockholders’ Equity

Deficit) / Retained

Noncontrolling

Stockholders'

Balance – January 1, 2023

Balance as of January 1, 2023

( 12,105,814 )

Stock options exercised

Issuance of Common Stock, net of fees

Transfer of Common Stock

( 1,590,938 )

Excise tax liability

Repurchase of Common Stock

Stock-based compensation expense

Cumulative translation adjustment

Net income (loss)

Balance as of December 31, 2023

Stock options exercised

Issuance of Common Stock, net of fees

Transfer of Common Stock

( 3,013,626 )

Repurchase of Common Stock

Stock-based compensation expense

Consolidation of noncontrolling interests

Cumulative translation adjustment

( 88,273,377 )

Sponsor conversion of Class B common stock

( 88,445,478 )

Sponsor cash capital contributions

Sponsor capital contributions for non-redemption agreements

Redemption of Class A common stock

Balance as of December 31, 2024

( 87,014,444 )

Stock options exercised

Issuance of common stock, net of fees

Transfer of common stock

( 11,973,805 )

Trust Account withdrawal for tax payments

Repurchase of common stock

Business combination related issuances and expenses

( 10,262,317 )

Remeasurement of Class A common stock subject to possible redemption

( 10,261,623 )

Conversion of convertible notes upon business combination

Stock-based compensation expense

Convertible note beneficial conversion feature

Issuance of warrants

Digital assets market value adjustment (adoption of ASU 2023-08)

Contributions from noncontrolling interests, net of fees

Redemptions from noncontrolling interests

( 15,753,060 )

Balance – December 31, 2023

( 15,753,060 )

( 170,478,642 )

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

SOUTHPORT ACQUISITION CORPORATION

( 170,491,321 )

Balance as of December 31, 2025

( 241,531,068 )

( 25,780,324 )

See accompanying notes to the consolidated financial statements

ANGEL STUDIOS, INC.

Consolidated Statements of Cash Flows

Year Ended December 31,

Cash flows from operating activities:

Net (loss) income

Net income (loss)

( 170,491,321 )

Adjustments to reconcile net income to net cash provided by operating activities:

Accrued dividend on marketable securities held in Trust Account

Change in fair value of warrant liability

Sponsor capital contribution for non-redemption agreements

Changes in operating assets and liabilities:

( 88,445,478 )

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

Depreciation and amortization

Amortization of operating lease assets

Stock-based compensation expense

Net loss (gain) on digital assets

( 1,683,946 )

Miscellaneous (gain)/loss

( 1,799,524 )

Investments in affiliates gain

Non-cash interest expense

Paid-in-kind interest

Bad debt expense

Change in deferred income taxes

Change in operating assets and liabilities:

Accounts receivable

( 35,122,339 )

( 19,343,719 )

Physical inventory

( 2,343,001 )

Royalty advance

( 1,309,274 )

Prepaid expenses and other current assets

( 6,712,831 )

( 4,829,440 )

( 2,696,030 )

Certificate of deposit

Licensing receivables

( 1,729,500 )

( 19,130,765 )

Other long-term assets

( 4,000,319 )

Accounts payable and accrued expenses

Accrued licensing royalties

( 11,353,995 )

Administrative support fee – related party

Due to related party

Prepaid expenses

Net cash (used in) provided by operating activities

Operating lease liabilities

Deferred revenue

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

( 83,331,965 )

( 51,296,510 )

Cash flows from investing activities:

Purchases of marketable securities held in Trust Account

Purchases of property and equipment

Issuance of notes receivable

( 1,865,603 )

Proceeds from marketable securities held in Trust Account

Net cash provided by investing activities

( 3,366,462 )

Collections of notes receivable

Purchase of digital assets

Sale of digital assets

Purchase of intangible assets

( 3,006,012 )

Additions to internal-use software

( 8,693,434 )

( 8,415,649 )

( 8,962,728 )

Purchase of content

( 6,346,681 )

Investments in affiliates

( 36,967,815 )

( 5,495,376 )

( 1,720,390 )

Return on investments in affiliates

Net cash and cash equivalents used in investing activities

( 55,585,348 )

( 12,843,666 )

( 9,964,697 )

Cash flows from financing activities:

Payment to Class A common stockholders for redemptions

Repayment of notes payable

( 67,053,622 )

( 18,438,039 )

Cash capital contribution from Sponsor

Payments made by Sponsor under promissory note – related party, net

Net cash used in financing activities

( 26,751,117 )

Repayment of loan guarantee

( 10,175,490 )

Net Change in Cash

Receipt of notes payable

Repayment of accrued settlement costs

( 4,371,972 )

Cash – Beginning

Cash – Ending

Supplemental disclosure of non-cash financing activities:

Remeasurement of Class A common stock subject to possible redemption

Excess fair value of Class B common stock transferred by Sponsor

Excise tax liability

Supplemental Cash Flow Information:

Cash paid for taxes

Trust Account withdrawal for tax payments

Exercise of stock options

Issuance of common stock

Investments in minority owned entities

Contribution of equity in noncontrolling interests

Redemption of equity in noncontrolling interests

( 15,753,060 )

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

SOUTHPORT ACQUISITION CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Description of Organization and Business Operations

Southport Acquisition Corporation.

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

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

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

Sigma Merger Sub, Inc.

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

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

As of December 31, 2024, the Company had not yet commenced any operations.

All activity from inception through December 31, 2024 relates to the Company’s formation, initial public offering (the “IPO”), and pursuit of a target company to effect a Business Combination.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

(iv) subject to the approval of the holders of Southport’s public warrants, Southport will amend its public warrants so that,

immediately prior to the Closing, each of the issued and outstanding Southport public warrants automatically will convert into 0.1 newly issued share of 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.”.

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.

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

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

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

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

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

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

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

On October 29, 2024, the Company filed an amendment to the Original Filing that amends and restates the Original Filing to:

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

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

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

Risks and Uncertainties

Management is currently evaluating the impact of the Russia-Ukraine war, the war in the Middle East, interest rate fluctuations and increased inflation, and the recently adopted 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 December 31, 2024.

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

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

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

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

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

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

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

In addition, certain exceptions apply to the excise tax.

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

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

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

On November 13, 2024, 1,125,126 shares of Class A common stock were redeemed by the Company’s stockholders for a total of $ 12,543,118 in connection with the Third Extension Special Meeting.

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

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

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

The Company evaluated the current status and probability of completing an initial Business Combination as of December 31, 2024 and determined that a contingent liability should be calculated and recorded.

As of December 31, 2024, the Company recorded $ 2,424,524 of excise tax liability calculated as 1% of shares redeemed.

Going Concern

As of December 31, 2024 and 2023, the Company had cash of $ 494,974 and $ 2,171,553 , respectively, and a working capital deficit of $ 3,862,447 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.

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

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

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

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

Summary of Significant Accounting Policies

Repurchase of common stock

Equity issuance costs

Equity issuance costs related to minority interests

Debt financing fees

( 1,035,448 )

Net cash and cash equivalents provided by financing activities

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

Net increase (decrease) in cash and cash equivalents

( 17,989,599 )

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Supplemental disclosure of cash flow information:

Cash paid for interest

Supplemental schedule of noncash financing activities:

Adoption of ASU No.

Conversion of debt

Issuance of warrants

Debt conversion feature

Investment capital receivable

Investment of bitcoin for issuance of common stock

Operating lease right-of-use assets and liabilities

( 1,421,166 )

See accompanying notes to the consolidated financial statements

Angel Studios, Inc.

Notes to Consolidated Financial Statements

Description of Organization and Summary of Significant Accounting Policies

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

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

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

Business Combination

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

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

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

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

as the surviving entity.

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

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

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

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

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

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

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

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

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

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC.

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and Merger Sub.

All intercompany transactions and balances have been eliminated upon consolidation.

Emerging Growth Company

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

statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

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

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

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

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

These consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”).

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

Principles of Consolidation

The accompanying consolidated financial statements of the Company include the accounts of Angel Studios, Inc.

and its majority-owned and controlled subsidiaries and affiliates.

The Company reviews its relationships with other entities to identify whether it is the primary beneficiary of a variable interest entity (“VIE”).

If the determination is made that the Company is the primary beneficiary, then the entity is consolidated.

All significant intercompany balances have been eliminated in consolidation.

Reclassifications

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

Use of Estimates

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

Making estimates requires management to exercise significant judgment.

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

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

Cash and Cash Equivalents

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

The Company had $ 494,974 and $ 2,171,553 of cash and no cash equivalents as of December 31, 2024 and 2023, respectively.

Marketable Securities Held in Trust Account

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

government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S.

government treasury obligations.

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

(i) the completion of the initial Business Combination;

(ii) the redemption of any public shares properly tendered in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to provide its public stockholders the right to have their Public Shares redeemed in connection with an initial Business Combination or to redeem 100 % of the Public Shares if the Company does not complete the initial Business Combination by September 30, 2025 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 by September 30, 2025.

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

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

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

common stock, for an aggregate redemption amount of $ 32,214,591 .

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

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

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

Accordingly, as of December 31, 2024 and 2023, there was $ 429,151 and $ 44,709,805 , respectively, of marketable securities held in the Trust Account.

Fair Value of Financial Instruments

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

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

Accordingly, actual results could differ from those estimates.

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

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

Actual results may differ from these estimates.

Fair Value Measurements

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

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

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

These tiers include:

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

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

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

Derivative Financial Instruments

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

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

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

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

As of December 31, 2024 and 2023, derivative liabilities are comprised of the warrant liability of $ 4,639,000 and $ 580,500 , respectively.

Warrant Liability

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

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

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

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

Common Stock Subject to Possible Redemption

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

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

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

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

Accordingly, at December 31, 2024 and 2023, 37,987 and 4,150,065 shares of Class A common stock subject to possible redemption, respectively, is presented, at redemption value, as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheet.

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

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

For the year ended December 31, 2024, the Company has recorded accretion of $ 966,174 to remeasure the value of Class A common stock subject to possible redemption value of $ 429,151 , which is offset by $ 44,757,709 of Class A stockholder redemptions and $ 489,119 of withdrawals from the Trust Account for income taxes.

As of December 31, 2024 and 2023, the Class A common stock, classified as temporary equity in the balance sheets reconciled in the following table:

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

Remeasurement of Class A common stock subject to possible redemption

Redemption of Class A common stock

( 197,694,657 )

Trust Account withdrawal for tax payments

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

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

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

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

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

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

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

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

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

Unobservable inputs that reflect the Company’s own assumptions

Concentrations of Credit Risk

The Company’s cash is held in non-interest-bearing and interest-bearing accounts that may exceed the Federal Deposit Insurance Corporation (the “FDIC”) insurance limits.

If such banking institutions were to fail, the Company could lose all or a portion of those amounts held in excess of such insurance limitations.

For example, the FDIC took control of Silicon Valley Bank (SVB), where the Company held a portion of its cash and cash equivalents.

The Federal Reserve subsequently announced that account holders would be made whole, and the Company once again received access to all of its cash and cash equivalents.

However, the FDIC may not make all account holders whole in the event of future bank failures.

In addition, even if account holders are ultimately made whole with respect to a future bank failure, account holders’ access to their accounts and assets held in their accounts may be substantially delayed.

Any material loss that the Company may experience in the future or inability for a material time period to access its cash and cash equivalents could have an adverse effect on the Company’s ability to pay its operational expenses or make other payments, which could adversely

affect the business.

Major vendors are defined as those vendors having expenditures made by the Company which exceed 10.0% of the Company’s total cost of revenues.

Concentrations of vendors were as follows for the years ended December 31:

Major customers are defined as those customers generating revenues for the Company which exceed 10.0% of the Company’s total recognized revenues.

Concentrations of customers were as follows for the years ended December 31:

Major concentrations of customers with licensing receivables are defined as those customers with a licensing receivables balances for the Company which exceed 10.0% of the Company’s outstanding licensing receivables.

Concentrations of customers with licensing receivables balance were as follows for the years ended December 31:

*Vendors and customers that did not exceed the 10.0% concentration threshold.

Digital Assets

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

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

The Company believes their bitcoin holdings are highly liquid.

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

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

The digital assets are initially recorded at cost and are subsequently remeasured on the consolidated balance sheets at fair value.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For the year ended December 31, 2025, the Company incurred a net loss of approximately $ 170.5 million and used cash in operating activities of approximately $ 83.3 million.

The Company had an accumulated deficit of approximately $ 241.5 million as of December 31, 2025.

The Company has seen tremendous growth in its revenue as a result of 1) increasing Angel Guild memberships, 2) having a strong pipeline of theatrical releases through 2026 and 3) finding success in post-theatrical window licensing agreements.

Theatrical releases typically require a large upfront capital commitment for marketing the film.

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

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

During the year ended December 31, 2025, the Company raised $ 13.2 million from Regulation A offerings and received $ 84.0 million from P&A loans, both of which were used for P&A in various theatrical releases during the year.

During the year ended December 31, 2024, the Company raised $ 5.0 million from Regulation A offerings and received $ 23.3 million from P&A loans.

During the year ended December 31, 2025, the Company paid $ 43.5 million for the repayments of P&A loans, including interest, and paid $ 15.8 million as a redemption of shares for Regulation A investors, from the proceeds collected from the theatrical releases and other revenues earned.

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

Additionally, the Company has raised capital through the sale of its Common Stock, generating approximately $ 104.1 million of cash during the year ended December 31, 2025, and $ 32.8 million of cash and $ 9.5 million in bitcoin during the year ended December 31, 2024.

During the year ended December 31, 2025, the Company has grown from approximately 0.6 million to approximately 2.0 million Angel Guild paying members, generating approximately $ 254.8 million in cash from Angel Guild paid memberships.

In addition, in February 2026, the second tranche of the Company’s Loan and Security Agreement was drawn, for an aggregate principal amount equal to $ 20.0 million.

Management believes the Company will be able to continue to fund operating capital shortfalls through March 2027 through the issuance of debt and Common Stock.

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

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

Accounts Receivable

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

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

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

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

As of December 31, 2025, the allowance for doubtful accounts receivable was $ 0.6 million.

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

Licensing Receivables

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

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

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

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

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

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

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

Physical Inventory

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

Physical inventory is recorded at average cost.

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

Management determined that no reserve for physical inventory was necessary as of December 31, 2025, 2024, and 2023.

Prepaid Expenses and Other

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

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

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

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization.

Depreciation and amortization are calculated using the straight-line method over the estimated economic useful lives of the assets or over the related lease terms (if shorter) as follows:

Office and computer equipment

Production equipment

Leasehold improvements

Furniture and fixtures

Warehouse equipment

Internal-use software

Computer software

Expenditures that materially increase values or capacities or extend useful lives of property and equipment are capitalized.

Routine maintenance, repairs, and renewal costs are expensed as incurred.

Upon sale or other retirement of depreciable property, the cost and accumulated depreciation and amortization are removed from the related accounts and any gain or loss is reflected in the consolidated statements of operations.

The Company produces content for Dry Bar Comedy shows that are recorded and streamed through various channels.

The Company capitalizes costs associated with the production, including development costs, direct costs, and production overhead.

The Company amortizes the content assets in cost of revenues on the consolidated statements of operations over the period of use, which is estimated to be ten years , beginning with the month of first availability.

The amortization is calculated using the straight-line method.

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

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

The Company amortizes this content asset in cost of revenues on the consolidated statements of operations over the period of use, which is estimated to be ten years , beginning with the month of first availability.

The amortization is calculated using the individual-film-forecast method in order to properly recognize expenses in the same accounting period as the revenues they help generate.

Royalty Advances

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

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

Intangible Assets

Intangible assets consist of domain names the Company has acquired and prepaid content rights and are stated at cost less accumulated amortization.

Amortization for the domain names is calculated using the straight-line method over the estimated economic useful lives of the domain names of approximately thirty years .

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

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

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

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

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

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

Internal-Use Software

The Company follows Accounting Standards Codification (“ASC”) 350-40, as amended by ASU 2025-06, to account for development costs incurred for the costs of computer software developed or obtained for internal use.

ASC 350-40 requires such costs to be capitalized once certain criteria are met.

Capitalized internal-use software costs are primarily comprised of direct labor and technology related expenses.

ASC 350-40 includes specific guidance on costs not to be capitalized, such as overhead, general and administrative, and training costs.

Internal-use software includes software utilized for cloud-based solutions as well as software for internal systems and tools.

Costs are capitalized once the project is defined, funding is committed, and it is confirmed the software will be used for its intended use.

Capitalization of these costs concludes once the project is complete and the software is ready for its intended purpose.

Post-configuration training and maintenance costs are expensed as incurred.

Impairment of Long-Lived Assets

No significant write-downs of long-lived assets occurred during the years ended December 31, 2025 and 2024.

Investments in Affiliates

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

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

The Company’s investments where the Company has little or no influence and which the Company is not the primary beneficiary, are accounted for using the measurement alternative, which is cost, less any impairment, in the accompanying consolidated financial statements.

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

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

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

Notes Receivable

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

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

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

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

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

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

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

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

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

Other Long-term Assets

Other long-term assets mainly consist of security deposits that will be held for longer than one year and are recorded at fair value when paid and deferred tax assets.

Any impairment in the other long-term assets will be recognized on the consolidated statements of operations.

Accrued Expenses

Accrued expenses represent liabilities for goods or services received by the Company as of the reporting date but for which invoices have not been received or processed.

These expenses are recognized when all of the following conditions are met:

there is a present obligation resulting from a past event (i.e., goods or services have been received), it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and the amount of the obligation can be reliably measured.

Accrued expenses are recognized and measured based on the best estimate of the amount owed at the reporting date.

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

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

Accrued Licensing Royalties

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

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

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

Deferred Revenue

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

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

Angel Guild Memberships

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

As of December 31, 2025 and December 31, 2024, the Company had $ 64.8 million and $ 19.8 million, respectively, of deferred revenue related to Angel Guild memberships.

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

Pay it Forward

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

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

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

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

Theatrical Ticket Presales

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

Revenue is recognized when the related theatrical releases occur.

As of December 31, 2025 and December 31, 2024, the Company had $ 0.6 million and $ 1.0 million, respectively, of deferred revenue related to these presales.

Other Deferred Revenue

As of December 31, 2025 and December 31, 2024, the Company had $ 1.1 million and $ 1.0 million, respectively, in deferred revenue from various other types of contractual arrangements.

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

Revenue Recognition

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

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

The Company applies the following five steps:

1) Identify the contract with the customer;

2) Identify the performance obligations in the contract;

3) Determine the transaction price;

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

and 5) Recognize revenue

when or as the Company satisfies a performance obligation.

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

For the year ended December 31,

Content licensing

Pay it Forward

Theatrical Pay it Forward

Total Revenue

Angel Guild Revenue

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

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

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

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

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

Theatrical Release Revenue

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

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

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

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

Content Licensing

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

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

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

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

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

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

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

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

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

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

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

adjustment to revenues in future periods.

Any adjustments booked during the years ended December 31, 2025 and 2024 have been immaterial.

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

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

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

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

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

The typical period ranges around three years .

Merchandise Revenue

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

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

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

Pay it Forward Revenue

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

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

Theatrical Pay it Forward Revenue

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

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

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

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

Other Revenue

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

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

The following table presents the Company’s revenue recognized over time or at a point in time (as previously described) for the years ended December 31:

Over time revenue

Point in time revenue

Total revenue

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

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

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

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

Cost of Revenues

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

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

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

Components of cost of revenues include licensing royalty expense, free theatrical tickets for premium Guild members, content amortization, film delivery costs, hosting, merchandise costs, credit card fees, freight and shipping costs, and costs of services provided.

Selling and Marketing Expenses

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

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

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

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

The total amount of Pay it Forward receipts that were offset against selling and marketing costs during the years ended December 31, 2025, 2024 and 2023 were $ 6.8 million, $ 4.2 million and $ 23.8 million, respectively.

General and Administrative Expenses

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

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

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

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

Research and Development Expenses

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

Under ASC 350-40, as amended by ASU 2025-06 and as discussed in the Internal-Use Software section above, certain of these expenses are capitalized and amortized over the useful life.

The amortization of these expenses are included in research and development expenses.

For expenses that do not qualify for capitalization, the expenses are recognized in the consolidated statements of operations in the period in which they are incurred.

Legal 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.

Stock-Based Compensation

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

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

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

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

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

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

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

federal jurisdiction and certain state jurisdictions.

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

Basic and Diluted Earnings (Loss) Per Share

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

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

Operating Leases

The Company leases several office spaces, warehouses, and servers, which are accounted for as operating leases.

Lease payments are due monthly and are based on the fixed terms of the leases.

The lease terms expire at various dates through 2029 and provide for renewal options ranging from one year to five years .

In the normal course of business, it is expected that these leases will be renewed or replaced by leases on other properties.

The Company determines if an arrangement is a lease at its inception.

A rate implicit in the lease when readily determinable is used in arriving at the present value of lease payments.

As the Company’s leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on information available at lease commencement date for all of its leases.

Lease expense for operating leases is recognized on a straight-line basis.

Segment Reporting

The Company operates as a single reportable segment.

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

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

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

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

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

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

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

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

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

Convertible Notes and Warrants

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

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

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

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

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

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

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

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements Not Yet Adopted

In December 2025, the FASB issued ASU 2025-12, Codification Improvments., which addresses stakeholder suggestions through technical corrections, clarifications, and minor improvements across various Codification Topics, applying to all entities within affected guidance.

ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-12.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements , which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-11.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses.

The Board is issuing the amendments in this Update to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development).

Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.

The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments in this Update should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of this Update or (2) retrospectively to any or all prior periods presented in the financial statements.

The Company will review the guidance in ASU 2024-03 and will adopt disclosures as applicable in the fiscal year ended December 31, 2027.

Recently Adopted Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-06, which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40.

The ASU makes targeted improvements to ASC 350-40 but does not fully align the framework for accounting for internally developed software costs that are subject to ASC 350-40 with the framework applied to software to be sold or marketed

externally that is subject to ASC 985-20.

The ASU also does not amend the guidance on costs of software licenses that are within the scope of ASC 985-20.

The amendments supersede the guidance on Web site development costs in ASC 350-50 and relocate that guidance, along with the recognition requirements for development costs specific to Web sites, to ASC 350-40.

This ASU becomes effective for annual periods beginning in 2028, including interim periods, with early adoption permitted.

The Company has adopted this standard with its annual period beginning on January 1, 2025 and applied it retrospectively.

The adoption of this standard will require the capitalization of software costs not previously capitalized under the old standard;

therefore, it required an adjustment to the Company’s opening Accumulated Deficit balance as of January 1, 2025 and 2024 to recognize the cumulative effect of initially applying the change in accounting principle to previous periods.

The adjustment subsequently made was a decrease in the accumulated deficit for the years ended December 31, 2022, December 31, 2023 and December 31, 2024 of $ 7.1 million, $ 11.3 million and $ 12.9 million, respectively.

An adjustment to increase the Company’s Net Income was required for the year ended December 31, 2023 of $ 4.2 million and an adjustment to decrease the Company’s Net Loss was required for the year ended December 31, 2024 of $ 1.5 million.

The per-share impact for the year ended December 31, 2024 was $ 0.01 for both basic and diluted Net Loss per common share.

The per-share impact for the year ended December 31, 2023 was $ 0.03 and $ 0.03 for basic and diluted Net Loss per common share, respectively.

In addition, an adjustment to decrease the Company’s Net Loss was required for the quarters ended March 31, 2025, June 30, 2025 and September 30, 2025 of $ 0.1 million, $ 0.1 million and $ 0.1 million, respectively.

The adjustment created an insignificant impact to the Company’s income tax expense (benefit) for the years ended December 31, 2023 and December 31, 2024.

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

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

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

In December 2023, the FASB issued ASU No.

2023 08, “Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350 60):

Accounting for and Disclosure of Crypto Assets.” This standard provides accounting and disclosure guidance for crypto assets that meet the definition of an intangible asset and certain other criteria.

In-scope assets are subsequently measured at fair value with changes recorded in the consolidated statements of operations.

The standard requires separate presentation of (1) in-scope crypto assets from other intangible assets and (2) changes in the fair value of those crypto assets.

Disclosure of significant crypto asset holdings and an annual reconciliation of the beginning and ending balances of crypto assets are also required.

This ASU is effective for annual periods beginning in 2025, including interim periods, with early adoption permitted.

The Company adopted this standard with its annual period beginning on January 1, 2025.

The adoption of this standard required an adjustment to the Company’s opening Retained Earnings balance as of January 1, 2025, to recognize the cumulative effect of initially applying the change in accounting principle to previous periods.

The adjustment subsequently made was an increase in the Company’s digital assets of $ 16.0 million, with a corresponding decrease to the Company’s opening Retained Earnings balance, which accounts for the difference between the December 31, 2024 ending book value of digital assets and their respective fair market value on January 1, 2025.

Recapitalization

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

Transaction Proceeds

Upon the closing, the Company received no gross proceeds.

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

Cash-trust and cash, net of redemptions

accounts payable and accrued expenses

( 10,261,623 )

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

Remeasurement of Class A common stock subject to possible redemption

Redemption of Class A common stock

Reverse recapitalization, net

( 10,261,623 )

Trust Account withdrawal for tax payments

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

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

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

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

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

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

The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position, other than interest of $ 11,400 related to late payments of the Company’s 2024 Delaware franchise tax, penalties and interest of $ 19,203 related to late and overdue payments of the Company’s 2023 Delaware franchise tax, and penalties and interest of $ 22,062 related to late filing of the Company’s 2022 federal and state tax returns.

Net Income (Loss) Per Common Stock

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

The 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 per common stock.

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

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

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

Subsequent to calculating the total income (loss) allocable to both sets of stock, the Company split the amount to be allocated using the weighted average shares outstanding ratio for the Class A redeemable common stock and for the non-redeemable Class A and Class B common stock for the year ended December 31, 2024 and 2023 as a result of shareholder redemptions.

The following table reflects the calculation of basic and diluted net loss per common stock for the year ended December 31, 2024 (in dollars, except per share amounts):

For the Year Ended

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

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

Southport common stock, outstanding prior to Business Combination

Angel Legacy Shares, converted

Shares issued to Angel Legacy convertible noteholders

Common stock immediately after the Business Combination

Digital Assets

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

December 31, 2025

December 31, 2024

Digital assets held:

Approximate number of bitcoin held

Digital asset cost basis

Digital asset carrying value

The cost basis is determined using the first-in, first-out methodology.

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

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

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

For the year ended December 31,

Approximate number of bitcoin acquired

Approximate number of bitcoin dispensed

Digital asset additions

Digital asset dispositions

Unrealized loss, net

( 1,789,357 )

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

Realized gain (loss), net

Property and Equipment

Property and equipment consisted of the following as of December 31:

Computer equipment

Leasehold improvements

Computer software

Furniture and fixtures

Production equipment

Warehouse equipment

Less accumulated depreciation and amortization

( 3,227,303 )

For the Year Ended

December 31, 2024

Class A and Class B

Redeemable Shares

Non-redeemable Shares

Total number of shares

Weighted average shares ratio

Net loss allocated based on ownership percentage

( 2,648,796 )

Property and equipment are stated at cost, less accumulated depreciation.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 1 to 5 years .

Depreciation and amortization expense on property and equipment for the years ended December 31, 2025, 2024 and 2023 was $ 0.6 million, $ 0.7 million, and $ 0.7 million, respectively.

Content Assets, Net

Content consisted of the following as of December 31:

Less accumulated amortization

( 4,973,476 )

The Company produces content for Dry Bar Comedy shows that are recorded and streamed through various channels.

The Company capitalizes costs associated with the production, including development costs, direct costs, and production overhead.

The amortization for this content is calculated using the straight-line method.

The Company also capitalizes the content licensing rights for certain shows.

The amortization for these content licensing rights is accrued and expensed according to the terms of the individuals licensing agreements.

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

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

The amortization is calculated using the individual-film-forecast method in order to properly recognize expenses in the same accounting period as the revenues they help generate.

Amortization expense on content for the years ended December 31, 2025, 2024 and 2023 was $ 4.5 million, $ 0.2 million and $ 0.2 million, respectively.

Notes Receivable

On March 1, 2021, the Company entered into an agreement to sell substantially all the assets and liabilities of the Company’s content filtering service.

As part of this transaction, the Company paid cash to the buyer to provide liquidity to the business and the buyer entered into a note with the Company and is required to pay $ 9.9 million over fourteen years .

If the buyer defaults under any of its obligations under the agreement, they will be required to transfer and assign all assets and liabilities back to the Company for no consideration.

As of December 31, 2025, and 2024, the outstanding balance on the consolidated balance sheets is $ 4.2 million and $ 4.5 million, respectively.

In addition to the notes receivable from the sale of the filtering business, the Company enters into various notes receivables with filmmakers and international distributors for marketing and other purposes.

The terms of these agreements are generally less than one year and non-interest bearing.

The total amount of notes receivable due from filmmakers and international distributors as of December 31, 2025 and 2024 was $ 1.1 million and $ 0.5 million, respectively, which is included in current portion of notes receivable on the consolidated balance sheets.

Intangible Assets

Intangible assets consisted of the following as of December 31:

Prepaid content rights

Less accumulated amortization

( 1,347,430 )

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

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

Accretion applicable to Trust Account withdrawals for tax payments

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

Total income (loss) based on ownership percentage

Amortization for the domain names is calculated using the straight-line method over the estimated economic useful lives of the domain names of approximately thirty years .

The prepaid content rights are being amortized on a straight-line basis over the first guaranteed year of the agreement, which represents the period of expected benefit.

Amortization expense on intangible assets for the years ended December 31, 2025, 2024 and 2023 was $ 1.1 million, $ 73.0 thousand and $ 73.0 thousand, respectively.

Capitalized Software, Net

A summary of the Company's capitalized software as of December 31, 2025 and 2024 is as follows:

Estimated Useful Life

Software development costs

Development in progress

Accumulated amortization

( 27,268,934 )

( 19,027,444 )

Weighted average shares outstanding

Basic and diluted net loss per share

The following table reflects the calculation of basic and diluted net income (loss) per common stock for the year ended December 31, 2023 (in dollars, except per share amounts):

For the Year Ended

Capitalized software, net

The Company capitalized software development costs for continuing operations totaling $ 8.7 million and $ 8.4 million during the years ended December 31, 2025 and 2024, respectively.

Amortization expense for continuing operations for capitalized software development costs amounted to $ 8.2 million, $ 6.9 million and $ 4.8 million during the years ended December 31, 2025, 2024 and 2023, respectively.

The capitalized software costs are being amortized on a straight-line basis over a three-year period, which represents the period of expected benefit.

There were no amounts written down to net realizable value for continuing operations during the years ended December 31, 2025, 2024 and 2023, respectively.

Notes Payable

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

December 31, 2025

Trust Account withdrawals for tax payments

Remeasurement of Class A redeemable shares to redemption value

( 6,707,678 )

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

December 31, 2024

Type of Facility

or Arrangement

Carrying Value

Fair Value (1)

Carrying Value

Fair Value (1)

Original Principal Amount

Interest Rate

Repayment Terms

May 2024 P&A loans

For detailed terms, see (2)

May 2025 convertible note

For detailed terms, see (3)

September 2025 note with warrants

For detailed terms, see (3)

Revolving P&A loans (See Note 17, Related-Party Transactions )

10.0 - 15.0 *

For the Year Ended

For detailed terms, see (4)

discounts and issuance costs, net of amortization

Total notes payable balance

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

(1) For debt without convertible features and/or warrants, the Company measures the fair value of its outstanding debt and interest rate swaps using discounted cash flow techniques that use observable market inputs (Level 2 measurements).

For debt with conversion features and/or warrants, the conversion features and warrants were determined based on the Black Scholes option pricing model and have been classified as level 3 in the fair value hierarchy.

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

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

(3) See the convertible features and/or warrants section below.

(4) The current notes mature between January and April 2026.

Maturities for all long-term debt at December 31, 2025, are as follows (in millions):

Year Ending December 31,

(1) The carrying value of the debt in the above table excludes discounts and issuance costs, net of amortization, of $ 3.8 million

Notes with convertible features and/or warrants

May 2025 convertible note with warrants

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

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

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

Interest is compounded monthly and payable on the maturity date.

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

This discount was recorded as paid-in capital.

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

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

August 2025 convertible notes

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

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

This discount was recorded as paid-in capital.

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

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

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

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

September 2025 note with warrants

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

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

(ii) the second tranche in an aggregate principal amount equal to $ 20.0 million, which was drawn in February 2026;

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

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

Borrowings under the credit facility were 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 Company’s loan and security agreement, certain bitcoin holdings are maintained in a controlled securities account subject to an account control agreement in favor of the administrative agent and are pledged as collateral to secure the Company’s obligations under the facility.

The Company retains ownership of the bitcoin and continues to recognize such holdings as digital assets on its consolidated balance sheets.

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

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

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

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

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

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

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

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

The warrants will expire on September 11, 2030.

The Company also granted the lenders rights to participate in future

issuances of the Company’s capital stock.

As part of the initial draw, the lenders received warrants to purchase 585,072 shares of the Company’s Class A common stock with an exercise price of $ 7.29 per share.

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

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

An additional $ 0.4 million was booked as a debt discount for commitment fees paid to the Lender, and $ 0.3 million was booked as debt issuance costs for legal and other fees paid to third parties.

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

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

Issuance Date

Maturity Date

Principal Amount

Coupon Interest Rate

May 2025 convertible note

September 2025 note with warrants

September 8, 2025

October 1, 2030

Components and Fair Value of the Convertible Notes

The convertible note consisted of the following components as of December 31, 2025.

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

December 31, 2025

Class A and Class B

Redeemable Shares

Non-redeemable Shares

Total number of shares

Weighted average shares ratio

Net income allocated based on ownership percentage

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

Outstanding Principal Amount

Discounts, Net of Amortization

Net Carrying Amount

Fair Value (1)

May 2025 convertible note

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

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

Interest Expense of the Convertible Notes

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

Year Ended December 31, 2025

Contractual Interest Expense

Amortization of Debt Discount

May 2025 convertible note

Investments in Affiliates

Consolidated Entities

The Company consolidates entities in which it has a controlling financial interest, either through a majority voting interest or as the primary beneficiary of a VIE, in accordance with ASC 810, Consolidation.

As of December 31, 2025, the Company consolidates several subsidiaries and VIEs where the Company is the primary beneficiary.

Consolidated Subsidiaries (Voting Interest):

The Company holds majority ownership in several subsidiaries which are consolidated based on voting interest control.

These subsidiaries are integral to the Company’s operations.

There are no significant restrictions on the ability of these subsidiaries to transfer funds to the parent in the form of dividends, loans, or advances, except for standard regulatory requirements in certain jurisdictions.

Consolidated VIEs:

The Company is the primary beneficiary of various VIEs, special-purpose entities established to raise capital for upcoming content and invest in new and related content.

The Company consolidates these VIEs because it has the power to direct the activities that most significantly impact the VIEs’ economic performance and has the obligation to absorb losses or the right to receive benefits that could be significant to the VIEs.

The carrying amounts of the VIEs’ assets and liabilities included in the consolidated balance sheets as of December 31, 2025, are $ 4.8 million.

Creditors of these VIEs have no recourse to the general credit of the Company.

Certain restrictions have existed for certain of the Company’s VIE’s that require revenue generated by the exploitation of certain films to be used to redeem the preferred shares of that VIE.

As of the date of this filing, all of these preferred shares have been redeemed and no such restrictions exist for any of the Company’s VIE’s.

Investment in Unconsolidated Entities

The Company holds investments in several unconsolidated entities, some of which are accounted for under the equity method and others under the measurement alternative.

Equity Method Investments

In October 2025, the Company entered into a term sheet (the “Term Sheet”) with 2521 Entertainment, LLC (“2521”, together with the Company, the “JV Partners”) that sets forth the principal terms and conditions governing the joint venture between the JV Partners, through Giant Slayer Media LLC (“Giant Slayer Media” or the “JV”).

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

Under the Term Sheet, and by means of the Asset Purchase Agreement, Giant Slayer Media will acquire substantially all of the assets of Slingshot related to the animated feature film, DAVID, the associated works and certain other ancillary rights and obligations (the “Purchased Assets”).

The Company does not have a majority of voting interest or a controlling financial interest in Giant Slayer.

The Company does, however, have significant influence over the decisions made by Giant Slayer.

As such, the Company will not consolidate Giant Slayer and will treat its investment as an equity method investment.

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

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

Following the cash contributions by the JV Partners, the equity split in the JV is 42 % to the Company and 58 % to 2521.

In October 2023, the Company entered into an equity purchase agreement with a third-party entity, acquiring preferred units for an aggregate purchase price of $ 1.0 million.

Based on the Company’s assessment of the investee’s financial outlook, the Company determined that it is unlikely the investment will be recovered in the foreseeable future.

Accordingly, a full impairment of the $ 1.0 million investment was recorded as of December 31, 2024.

This impairment is reflected as a loss under the line item ‘Impairment of investment in affiliates’ in the other income (expense) section of the consolidated statements of operations for the year ended December 31, 2024.

No similar impairments occurred during 2025.

Additionally, the Company holds equity investments in other unconsolidated entities.

These entities are accounted for under the equity method, as the Company holds significant influence over their operations.

The Company’s share of the investees’ net income was $ 0.3 million and $ 0.1 million for the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, and 2024, the carrying value of these investments totaled approximately $ 36.5 million and $ 2.6 million, respectively.

No impairments or significant valuation adjustments were required for these equity method investments.

Measurement Alternative Investments

The Company also holds investments in entities where it does not have significant influence, which are accounted for under the measurement alternative.

Under the measurement alternative method, investments are carried at cost, adjusted for observable price changes in orderly transactions for identical or similar investments and for impairments.

As of December 31, 2025 and 2024, the carrying value of these investments totaled approximately $ 9.6 million and $ 5.6 million, respectively, with no impairment recorded during the periods.

Variable Interest Entities (Unconsolidated)

The Company has identified certain unconsolidated entities as VIEs under ASC 810, Consolidation.

These VIEs are primarily fundraising and content related ventures.

The Company does not consolidate these VIEs because it is not the primary beneficiary, meaning it does not have the power to direct the activities that most significantly impact the economic performance of the entities, nor does it have an obligation to absorb significant losses or the right to receive significant benefits from these VIEs.

The Company’s maximum exposure to loss as a result of its involvement with these unconsolidated VIEs is limited to the Company’s equity investment, totaling approximately $ 0.0 million as of December 31, 2025 and 2024.

This amount represents the carrying value of the Company’s equity investments in these VIEs, recorded under investments in affiliates on its consolidated balance sheets.

The Company’s involvement in these VIEs is primarily through its operational relationships, and the Company does not have any future funding commitments or guarantees to these entities.

Accrued Expenses

Accrued expenses as of December 31, 2025 and 2024, consist of the following:

Accrued marketing expenses

Other accrued expenses

Accrued legal expenses

Accrued sales tax

Accrued payroll expenses

Accrued marketing expenses consist of amounts for advertising, promotional activities and other marketing-related costs that were incurred but unpaid at year-end for both periods.

Accrued legal expenses represent amounts related to ongoing litigation and legal services incurred but not yet paid as of the respective balance sheet dates.

Accrued payroll expenses represent compensation earned by employees, including wages, bonuses and other benefits, that are unpaid as of the balance sheet date.

Accrued sales taxes include amounts for sales taxes collected from customers but not yet remitted to tax authorities at the end of the reporting period.

Other accrued expenses include various operational expenses such as professional fees and other miscellaneous items that are individually immaterial to the financial statements.

These amounts are expected to be settled in the normal course of business within the next fiscal year.

Accrued Settlement Costs

In September 2020, the Company recorded an expense on the consolidated statements of operations and an accrued settlement cost on the consolidated balance sheets of $ 5.3 million due to a settlement from the chapter 11 bankruptcy case that was filed on October 18, 2017.

The total amount due from litigation and the resulting bankruptcy case was $ 62.5 million;

however, as part of the settlement agreement, it was agreed that the $ 62.5 million would be lowered to $ 9.9 million, payable over fourteen years without interest, or a discounted $ 7.8 million payable within five years , as long as the Company makes timely payments and there is no breach or violation of the settlement agreement that remains uncured.

As a result of this settlement, and the Company’s plans to not break or violate the settlement agreement, the Company recorded an expense of $ 5.3 million during the year ended December 31, 2020.

The Company recorded the present value of $ 9.9 million with an imputed interest rate of 10.0 %.

Payments of $ 0.2 million were due quarterly.

The Company elected the five-year option and fully repaid the $ 7.8 million as of December 31, 2025.

Therefore, as of December 31, 2025 and 2024, the outstanding balance on the consolidated balance sheets was $ 0.0 million and $ 4.4 million, respectively.

Commitments and Contingencies

Legal Proceedings

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

Litigation is necessary to defend the Company.

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

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

Legal fees are expensed as incurred.

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

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

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

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

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

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

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

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

Disney Litigation and the Preliminary Injunction

On December 12, 2016, the U.S.

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

Entertainment, Inc., and their subsidiaries.

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

In 2019, the court granted the Plaintiff’s motion for partial summary judgment on liability, and a jury trial resulted in a $ 62.4 million award, including $ 61.4 million for willful copyright infringement ( $ 75,000 per title) and $ 1.0 million for DMCA violations ( $ 1,000 per title).

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

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

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

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

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

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

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

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

Mergers and Acquisitions

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

This entity produces content for the Company’s platforms.

The total purchase price was $ 1.7 million.

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

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

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

During the year ended December 31, 2025 the Company funded an additional $ 3.9 million related to supporting operations of the entity which was expensed by the Company.

In May 2025, the Company agreed to purchase the IP for Sketch for $ 6.0 million from Wonder Project Inc.

for $ 6.0 million in cash;

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

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

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

In October 2025, 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.

The Company does not have a majority of voting interest or a controlling financial interest in Giant Slayer.

The Company does, however, have significant influence over the decisions made by Giant Slayer.

As such, the Company will not consolidate Giant Slayer and will treat its investment as an equity method investment.

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

Following the cash contributions by the JV Partners, the equity split in the JV is 42 % to the Company and 58 % to 2521.

On November 14, 2025, we entered into an agreement and plan of merger (“Homestead Merger Agreement”) pursuant to which we will acquire directly or indirectly all of the equity interests of Black Autumn Show, Inc.

(“Black Autumn”), which owns the rights to the

Homestead movie and series.

Under the terms of the Homestead Merger Agreement, if the merger is completed, at the effective time of the merger, the following consideration will be payable:

at the effective time, each holder of issued and outstanding shares of Black Autumn Stock will be entitled to receive (a) that number of shares of our Class A Common Stock equal to (i)(A) the Homestead Per Share Merger Consideration multiplied by (B) the number of shares of Black Autumn Common Stock, par value $ 0.00001 per share, Black Autumn Series A-1 Preferred Stock, par value $ 0.00001 per share, Black Autumn Series A-CF Preferred Stock, par value $ 0.00001 per share and Black Autumn Series Seed Preferred Stock, par value $ 0.00001 per share, held by such holder as of immediately prior to the effective time, divided by (ii) $ 6.13 , plus (b) such holder’s Homestead Pro Rata Share of the Homestead Royalty Shares.

All capitalized terms used in this paragraph are used as defined in the Homestead Merger Agreement, which is attached as an exhibit to this Form 10-K.

On November 14, 2025, we entered into an agreement and plan of merger (“TCP Merger Agreement”) pursuant to which we will acquire directly or indirectly all of the equity interests of Toothy Cow Productions, LLC.

(“TCP”), which owns the rights to the Wingfeather Saga series.

Under the terms of the TCP Merger Agreement, if the merger is completed, at the effective time of the merger, the following consideration will be payable:

at the effective time, all of the issued and outstanding common units of membership interests of TCP (the “TCP Common Units”), preferred unit of membership interests of TCP designated as Class A Preferred Units (the “TCP Class A Preferred Units”), and preferred unit of membership interests of TCP designated as Class B Preferred Units (the “TCP Class B Preferred Units,” and, collectively with the TCP Common Units and the TCP Class B Preferred Units, the “TCP Units”) will be cancelled and extinguished and converted automatically into the right to receive a portion of the TCP Aggregate Stock Consideration.

With respect to holders of TCP Units, the TCP Aggregate Stock Consideration is equal to (a) the TCP Stock Consideration Per Common Unit, multiplied by (b) the number of shares of TCP Units held by such holder as of immediately prior to the TCP Closing;

with respect to holders of TCP Class A Preferred Units, the TCP Aggregate Stock Consideration is equal to (a) the TCP Stock Consideration Per Class A Preferred Unit, multiplied by (b) the number of shares of TCP Class A Preferred Units held by such holder as of immediately prior to the TCP Closing;

and with respect to holders of TCP Class B Preferred Units, the TCP Aggregate Stock Consideration is equal to (a) the TCP Stock Consideration Per Class B Preferred Unit, multiplied by (b) the number of shares of TCP Class B Preferred Units held by such holder as of immediately prior to the TCP Closing.

All capitalized terms used in this paragraph are used as defined in the TCP Merger Agreement, which is attached as an exhibit to this Form 10-K.

On November 14, 2025, we entered into an agreement and plan of merger (“TTS Merger Agreement”) pursuant to which we will acquire directly or indirectly all of the equity interests of Tuttle Twins Show, LLC.

(“TTS”), which owns the rights to the Tuttle Twins series.

Under the terms of the TTS Merger Agreement, if the merger is completed, at the effective time of the merger, the following consideration will be payable:

at the Effective Time, all of the issued and outstanding common units of membership interests of TTS (the “TTS Common Units”) and preferred units of membership interests of TTS (the “TTS Preferred Units,” and, together with the TTS Common Units, the “TTS Units”) will be cancelled and extinguished and converted automatically into the right to receive the TTS Merger Consideration, consisting of, as applicable, (a) for TTS Investors, an amount in cash equal to the TTS Investor Per Unit Cash Consideration and a number of shares of the Company’s Class A Common Stock equal to the TTS Investor Per Unit Stock Consideration, (b) for TTS Key Operators, a number of shares of Company Class A Common Stock equal to the TTS Key Operator Per Unit Stock Consideration.

All capitalized terms used in this paragraph are used as defined in the TTS Merger Agreement, which is attached as an exhibit to this Form 10-K.

Operating Leases

The Company has several non-cancelable office, warehouse, and server leases that mature between May 31, 2027, and March 31, 2029, with monthly payments that escalate between 3.0 %- 5.0 % each year.

The following represents maturities of operating lease liabilities as of December 31, 2025:

Year Ending December 31:

Total Lease Payments

Present value of lease liabilities

The weighted average remaining lease terms and interest rates were as follows as of December 31, 2025:

Lease Term and Discount Rate

Weighted Average Remaining Lease Term (years)

Operating leases

Weighted Average Discount Rate

Operating leases

Lease expense for operating lease liabilities was $ 1.1 million, $ 0.9 million and $ 0.7 million for the years ended December 31, 2025, 2024 and 2023, respectively, and included in general and administrative expenses on the consolidated statements of operations.

Cash payments included in the measurement of operating lease liabilities for the years ended December 31, 2025, 2024 and 2023 were $ 1.1 million, $ 0.8 million and $ 0.7 million, respectively.

ASC 460 Loan Guarantees

The Company has agreed to various loan guarantees as of December 31, 2025.

These guarantees could result in obligations if the related parties default on their loans.

In accordance with ASC 460, Guarantees, the Company evaluated whether a liability needed to be recognized for each guarantee at the time the guarantees were issued.

Based on the Company’s assessment under ASC 460, no liability or corresponding receivable was recorded.

The Company concluded that the likelihood of making payments under these guarantees is remote, and as such, no recognition was necessary.

These guarantees remain disclosed as potential obligations, but no liability has been recognized as of December 31, 2025.

The Company’s maximum exposure under all ASC 460 guarantees, if all related parties were to default and no recovery could be made, is $ 4.8 million, plus related interest, which include loans with a 20 % fixed rate or a 20 % variable APR.

The obligations behind these guarantees are all expected to be paid during 2026.

Health Plan Obligations

The Company maintains a partially self-funded, level-funded health plan for employees.

Monthly charges consist of fixed Claims Funding and Premium/Admin/Stop-Loss fees, which are recorded as expense when billed.

Claims are paid by the plan administrator from the funded account, and the Company is not responsible for claims exceeding stop-loss coverage.

Due to the plan’s design, no additional liability for unpaid or incurred-but-not-reported claims has been recorded.

Class C Common Stock Contractual Adjustment

During 2023, one of the Company’s investors purchased 2,829,934 shares of its Class A Common Stock.

As part of the agreement, the total shares purchased would be adjusted to 4,508,813 shares of Class A Common Stock if each of the below events occurred:

If gross revenues of the Company in 2023, 2024 or 2025 was less than $ 100.0 million;

If a material and adverse change occurs to one of the Company’s distribution agreements that results in a reduction in revenue of at least 20.0 % relative to the revenue that would have otherwise been entitled if not for the material change.

During 2025, the Company determined that both of these triggering events had occurred, and the additional shares have been issued and recorded.

Stock-Based Compensation

At December 31, 2025, the Company had the following stock-based employee compensation plans:

Equity Incentive Plans

The Company’s 2014 Stock Incentive Plan, originally approved in 2014, was amended and restated in each of August 2016, July 2020, and February 2021 (the “2014 Stock Incentive Plan”), The 2014 Stock Incentive Plan provided for the grant of incentive stock options, nonqualified stock options, stock appreciation rights and shares of restricted stock.

In October 2023, the Company adopted the 2023

Stock Incentive Plan (the “2023 Stock Incentive Plan”) and no further awards were granted under the 2014 Stock Incentive Plan.

The 2023 Stock Incentive Plan reserved a total of 30,898,918 shares of the Company’s Class B Common Stock for issuance thereunder and subject to the condition that the total number of shares issued thereunder, and along with the 2014 Stock Incentive Plan, shall not exceed 16.5 % of the fully diluted outstanding shares of the Company’s Common Stock.

The Company adopted a Performance Equity Plan (the “ 2023 Performance Equity Plan”) in October 2023.

This plan provided for the grant of incentive stock options, nonqualified stock options, stock appreciation rights and shares of restricted stock to certain of its employees, directors and consultants.

Awards made under the 2023 Performance Equity Plan are subject to certain performance vesting criteria based on either (i) the Company’s stock price, as quoted on a publicly traded market or stock exchange, being equal to or greater than certain prices or (ii) the Company having at least two consecutive independent stock price valuations completed on its Common Stock (and approved by the Board) that value the Company’s Common Stock at a price equal to or higher than the vesting stock price applicable to the award.

In September 2025, the Company adopted the 2025 Long-Term Incentive Plan, which serves as the successor to the 2023 Stock Incentive Plan and the 2023 Performance Equity Plan (the “Prior Plans”).

Upon the effectiveness of the 2025 Long-Term Incentive plan, no further awards will be granted under the Prior Plans, and all future equity incentive awards, including any issuances of shares, will be made exclusively under the 2025 Long-Term Incentive Plan.

Outstanding awards previously granted under the Prior Plans will continue to vest and be settled in accordance with their original terms, but no new shares will be issued pursuant to new grants under the Prior Plans.

The 2025 Long-Term Incentive Plan provides for the grant of options and full value awards such as service condition restricted stock units (“Restricted Stock Units”) and performance stock units (“Performance Stock Units” and together, “Restricted Stock Awards”).

All new share-based awards, including performance-based awards, will be issued under this plan.

The 2025 Long-Term Incentive Plan authorizes the issuance of up to 17,318,618 shares of common stock, plus the rollover shares from the Prior Plans.

This limit will automatically increase on January 1 of each year, commencing on January 1 of the year following the year in which the Effective Date occurs and ending on (and including) January 1, 2034, in an amount equal to 3 % of the total number of shares of Stock outstanding on the date that the 2025 Long-Term Incentive Plan is adopted.

As of December 31, 2025, options granted for 64,286 shares of Class A Common Stock, Restricted Stock Units for 1,294,678 shares of Class A Common Stock, and Performance Stock Units for 458,225 shares of Class A Common Stock, had been issued as part of the 2025 Long-Term Incentive Plan, with 15,501,429 shares of Class A Common Stock remaining available for issuance.

As of December 31, 2025, options granted for 14,460,257 shares of Class A Common Stock had been issued as part of the 2023 Performance Equity Plan, with no shares remaining available for issuance.

As of December 31, 2024, options granted for 11,903,954 shares of Class A Common Stock had been issued as part of the 2023 Performance Equity Plan, with 3,063,781 shares of Class A Common Stock remaining available for issuance.

These options typically have a contractual life of ten years.

As of December 31, 2025, options granted for 17,433,248 shares of Class B Common Stock had been issued as part of the 2023 Stock Incentive Plan and the 2014 Stock Incentive Plan, with no shares remaining available for issuance.

As of December 31, 2024, options granted for 14,800,928 shares of Class B Common Stock had been issued as part of the 2023 Stock Incentive Plan and the 2014 Stock Incentive Plan.

Generally, 25.0 % of these options vest on the one-year anniversary of the vesting commencement date, and 1/36 of the remaining options vest each month thereafter.

The options typically have a contractual life of ten years.

Stock Options

The following sets forth the outstanding stock options and related activity for the years ended December 31, 2025, 2024 and 2023:

Average Exercise

Price Per Share

Outstanding as of January 1, 2023

( 1,059,092 )

( 1,019,843 )

Outstanding as of December 31, 2023

( 1,057,562 )

Accretion applicable to Trust Account withdrawals for tax payments

( 2,878,374 )

Outstanding as of December 31, 2024

Outstanding as of December 31, 2025

The following summarizes information about stock options outstanding as of December 31, 2025:

Weighted Average

Number of Options

Weighted Average

Number of Options

Weighted Average

Exercise Price

The fair value of each service condition stock option was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions as of December 31:

Risk-free interest rate

Expected stock price volatility

Expected dividend yield

Expected life of options

The fair value of each performance-based stock award, both options and Performance Stock Units, granted was estimated on the date of grant using the Monte-Carlo option-pricing model with the following assumptions as of December 31:

Risk-free interest rate

Expected stock price volatility

Expected dividend yield

Expected life of options

As of December 31, 2025, 2024 and 2023, the aggregate intrinsic value of options outstanding was $ 52.1 million, $ 77.7 million and $ 17.7 million, respectively.

As of December 31, 2025, 2024, and 2023, the aggregate intrinsic value of options exercisable was $ 32.8 million, $ 44.4 million and $ 15.5 million, respectively.

Expected option lives and volatilities were based on historical data of the Company and comparable companies in the industry.

The risk-free interest rate was calculated using similar rates published by the Federal Reserve.

The Company has no plans to declare any future dividends.

Restricted Stock Awards

Nonvested Restricted Stock Units as of December 31, 2025 and changes during the year ended December 31, 2025 were as follows:

Number of Shares

Weighted-average Grant Date Fair Value

Nonvested at December 31, 2024

Nonvested at December 31, 2025

The Company estimates the grant-date fair value of Restricted Stock Units based on the closing price of the Company’s common stock on the date of grant.

Nonvested Performance Stock Units as of December 31, 2025 and changes during the year ended December 31, 2025 were as follows:

Number of Shares

Weighted-average Grant Date Fair Value

Nonvested at December 31, 2024

Nonvested at December 31, 2025

Stock-Based Compensation

Stock-based compensation expense is recognized on a straight-line basis, except for performance-based awards for which expense is recorded each period for the estimated expense associated with the projected achievement of the performance-based targets.

The following table shows share-based compensation expense and the related income tax impact included in the Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023:

Stock-based compensation expense

Total income tax impact on provision

As of December 31, 2025, there was $ 36.8 million of unrecognized stock-based compensation expense related to nonvested stock option awards.

That cost is expected to be recognized over a weighted-average period of 4.8 years.

As of December 31, 2025, there was $ 8.6 million of unrecognized stock-based compensation expense related to nonvested Restricted Stock Awards.

That cost is expected to be recognized over a weighted-average period of 3.3 years.

The Company recognizes forfeitures as they occur.

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

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

Voting Rights

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

Liquidation Rights

The holders of shares of Common Stock outstanding shall be entitled to receive all of the assets and funds of the Company remaining and available for distribution.

Such assets and funds shall be divided among and paid to the holders of shares of Common Stock, on a pro-rata basis, according to the number of shares of Common Stock held by them.

Dividends may be paid on the outstanding shares of Common Stock as and when declared by the Board, out of funds legally available.

Identical Rights

Holders of shares of Common Stock shall have the same rights and privileges and rank equally with, and have identical rights and privileges as, holders of all other shares of Common Stock, except with regard to voting rights as provided above.

Voluntary Conversion into Class A Common Stock

Each one share of Class B Common Stock shall be convertible into one share of Class A Common Stock at the option of the holder at any time.

Warrant Offerings

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

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

See Note 9, Debt for additional details.

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

As part of the initial draw, the lenders received warrants to purchase 585,072 shares of the Company’s Class A common stock.

See Note 9, Debt for additional details.

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

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

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

For more information regarding the note and warrant purchase agreements, refer to Note 9, Debt.

Loss per Share

The following table represents the Company’s loss per share for the year ended December 31:

Net income (loss) attributable to controlling interests

( 170,478,642 )

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

Total income (loss) based on ownership percentage

Weighted average shares outstanding

Basic and diluted net income (loss) per share

Related Parties

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

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

Concentration of Credit Risk

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

At December 31, 2024 and 2023, 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

In November 2023, the FASB issued Accounting Standard Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses.

The standard was effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

We adopted this ASU for the annual period ended December 31, 2024 and applied the provisions retrospectively to each period presented in the financial statements.

Adoption of the new standard did not have a material impact on our financial statements.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

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

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

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

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

Initial Public Offering

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

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

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

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

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

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

As of December 31, 2024 and 2023, $ 429,151 and $ 44,709,805 was held in the Trust Account, respectively.

In addition, as of December 31, 2024 and 2023, $ 494,974 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.

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 (see Note 8).

Private Placement

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

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

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

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

The Private Placement Warrants are non-redeemable (except as described in Note 8 below under “—Redemption of warrants for Class A common stock when the price per Class A common stock equals or exceeds $ 10.00 ”) and exercisable on a cashless basis so long as they are held by the Sponsor or its permitted transferees.

Related Party Transactions

Founder Shares

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

On November 24, 2021, the Sponsor surrendered 1,437,500 shares of the Company’s Class B common stock for no consideration, resulting in there being an aggregate of 5,750,000 shares of the Company’s Class B common stock outstanding (the “Founder Shares”), up to 750,000 of which were then subject to forfeiture to the extent that the over-allotment option is not exercised in full by the underwriter for the IPO.

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

Accordingly, no Founder Shares remain subject to forfeiture.

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

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

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

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

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

Related Party Loans

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

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

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

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

The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $ 1,500,000 of such Working Capital Loans may be convertible into warrants, at a price of $ 1.00 per warrant.

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

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

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

Sponsor Promissory Note

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

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

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

As of December 31, 2024 and 2023, the Company had $ 439,004 and $ 0 , respectively, outstanding under the Sponsor Promissory Note

Due to and due from 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 December 31, 2024 and 2023, the Company owed $ 270,590 and $ 236,233 , respectively.

Administrative Support Agreement

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

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

For the year ended December 31, 2024 and 2023, the Company has paid $ 0 and $ 10,500 under the agreement, respectively.

The Company has accrued $ 411,500 and $ 231,500 related to the unpaid amounts under the administrative support agreement which is recorded to the administrative support fee liability – related party account on the balance sheets for the year ended December 31, 2024 and 2023, respectively.

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

Sponsor Cash Capital Contribution

For the years ended December 31, 2024 and 2023, the Sponsor made capital contributions of $ 644,227 and $ 800,000 , respectively, to the Company to fund outstanding payments to vendors.

The Sponsor can, but is not obligated to, continue providing cash to satisfy working capital obligations as needed through capital contributions.

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

Sponsor Support Agreement

On September 11, 2024, the Company also entered into a Sponsor Support Agreement (the “Sponsor Support Agreement”), by and among the Company, 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 the Company’s common stock in connection therewith.

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

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

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

Stockholders’ Deficit

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 December 31, 2024 and 2023, there were no preferred stock issued or outstanding.

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

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

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

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

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

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

Accordingly, at December 31, 2024 and 2023, there were 4,237,987 and 8,350,065 shares of Class A common stock issued and outstanding , including 37,987 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 common stock with a par value of $ 0.0001 per share.

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

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

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

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

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

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

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

Holders of shares

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

● in whole and not in part;

● at a price of $ 0.01 per Public Warrant;

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

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

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

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

● in whole and not in part;

● at a price of $ 0.10 per warrant;

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

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

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

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

If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if the sale of the shares of Class A common stock upon exercise of the warrants is not exempt from registration or qualification under applicable state securities laws or the Company is unable to effect such registration or qualification.

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

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

If the Company is unable to complete a Business Combination by September 30, 2025 and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants.

Accordingly, the warrants may expire worthless.

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

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

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

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

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

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

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

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

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

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

Accordingly, the Company expects to classify each warrant as a liability at its fair value.

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

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

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

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

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

Commitments and Contingencies

Registration rights

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

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

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

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

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

Underwriting Agreement

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

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

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

In addition, the underwriter is entitled to a deferred fee of $ 0.35 per Unit, or $ 8,050,000 in the aggregate.

The deferred fee is payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

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

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

Non-redemption Agreements

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

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

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 consolidated statements of operations.

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

Fair Value Measurements

Recurring Fair Value Measurements

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

December 31, 2024

Marketable securities held in trust account

Public Warrants

Private Placement Warrants

December 31, 2023

Marketable securities held in trust account

Public Warrants

Private Placement Warrants

The following table presents the changes in the fair value of the Company’s liabilities classified as Level 2 as of December 31, 2024 and 2023.

Warrant Liabilities

Level 2 Derivative warrant liabilities as of December 31, 2023

Change in fair value of Private Placement Warrant liability

Transfer of Public Warrant liability to Level 2

Level 2 Derivative warrant liabilities as of December 31, 2024

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

At December 31, 2024 and 2023, the Company’s warrant liability was valued at $ 4,639,000 and $ 580,500 , respectively.

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

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

The fair value of the Public Warrants and Private Placement Warrants are subject to re-measurement at each balance sheet date.

With each re-measurement, the Public Warrants and Private Placement Warrants are 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 Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2024 and 2023, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

The Company’s 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.

Derivative warrant liabilities as of December 31, 2022

Establishment of share repurchase liability

Share repurchase payment

( 88,273,377 )

Change in fair value

Derivative warrant liabilities as of December 31, 2023

Change in fair value

Derivative warrant liabilities as of December 31, 2024

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

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

As of December 31, 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 December 31, 2024.

The key inputs into the Monte Carlo simulation formula used to value the Private Placement Warrants were as follows at December 31, 2024 and 2023:

Common stock price

Exercise price

Risk-free rate of interest

Warrant to buy one share (adjusted for the probability of dissolution)

Dividend yield

Non-recurring Fair Value Measurements

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

The Company accounts for the excess fair value of the Class B shares transferred from the Sponsor to the unaffiliated

third parties as a capital contribution by the Sponsor and recorded a financing 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 First Extension of the deadline to complete a business combination from June 14, 2023 to September 14, 2023 at $ 387,000 , or $ 0.77 per share.

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

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

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

The Company utilized June 9, 2023, the date of the consummation of the 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:

September 30,

Common stock price

Estimated probability of an Initial Business Combination

Estimated volatility

Risk-free rate

Time to expiration

The Company’s net deferred tax assets at December 31, 2024 and 2023 is as follows:

Deferred tax assets:

Capitalized start-up costs

Net operating loss carryforward

Total deferred tax assets

Valuation allowance

Weighted average basic shares outstanding

Effect of dilutive shares

Weighted average diluted shares

Basic loss per share

Diluted loss per share

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

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

Common shares were anti-dilutive in periods where the Company’s performance resulted in a net loss.

The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted loss per share as their inclusion would be anti-dilutive, for the years ended December 31:

Stock options to purchase common stock

Unvested restricted stock awards

Convertible securities to acquire common stock

Warrants to purchase common stock

Total outstanding potentially dilutive securities

The components of the provision (benefit) for income taxes, net are as follows for the years ended December 31:

( 3,219,201 )

Net deferred tax assets

Deferred tax liabilities:

Accrued dividends on marketable securities held in Trust Account

Total deferred tax liabilities

Net deferred tax assets (liabilities)

The income tax provision for the years ended December 31, 2024 and 2023 consists of the following:

Current expense (benefit)

Deferred expense (benefit)

Change in Valuation Allowance

Income tax provision

As of December 31, 2024 and 2023, the Company has federal net operating loss carryforwards of $ 0 and $ 0 , respectively, that may be carried forward indefinitely.

As of December 31, 2024 and 2023, the Company has gross state net operating loss carryforwards of $ 809,078 and $ 570,536 , respectively, which begin to expire in 2041.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible.

Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment.

After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance.

For the years ended December 31, 2024 and 2023, the change in the valuation allowance was $ 470,585 and $ 649,873 , respectively.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2024 and 2023 is as follows:

Statutory federal income tax rate

State taxes, net of federal tax benefit

Change in fair value of warrant liabilities

( 2,120,852 )

Provision (benefit) for income taxes, net

( 2,697,435 )

The following table presents the differences between the Company's income tax provision and the amounts computed at the federal statutory income tax rate, on both a dollar and percentage basis, for the years ended December 31:

Federal income tax at statutory rates

( 35,778,212 )

( 17,831,284 )

State and local income taxes (1)

( 5,438,581 )

( 2,952,104 )

Foreign tax effects

Effect of changes in tax laws or rates enacted in the current period

Effect of cross-border tax laws

Research and development tax credits

other credits

Change in valuation allowance

Income tax provision

The Company’s effective tax rates for the periods presented differ from the expected (statutory) rates due to changes in fair value in warrants and the recording of full valuation allowances on deferred tax assets.

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

federal jurisdiction and is subject to examination by the various taxing authorities.

The Company’s tax returns for the years ended December 31, 2024 and 2023 remain open and subject to examination.

The Company considers Delaware to be a significant state tax jurisdiction.

Segment Information

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

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

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

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

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

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

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

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

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

( 2,348,227 )

Nontaxable or nondeductible items

Share-based payment awards

Transaction Costs

Changes in unrecognized tax benefits

Adoption of ASU 2025-06

( 1,033,267 )

Other adjustments

( 2,697,435 )

(1) The State of Utah contributes to the majority (greater than 50%) of the tax effect in this category.

Significant components of the Company’s net deferred income tax assets, which are included in other long-term assets on the consolidated balance sheets, are as follows as of December 31:

Net operating loss carryforwards

Research and development

Digital asset impairment

Research and development credits

Depreciation and amortization

Impairment of equity investment

Accruals and reserves

Deferred gain on sale

( 1,052,533 )

Valuation allowance

( 62,270,172 )

( 25,861,296 )

As of December 31, 2025, the Company had net operating loss (“NOL”) carryforwards available to offset future taxable income, of approximately $ 230.2 million.

The utilization of the NOL carryforwards is subject to annual limitations under Section 382 of the Internal Revenue Code of 1986, as amended.

Section 382 imposes limitations on a corporation’s ability to utilize its NOL carryforwards if it experiences an “ownership change.” In general terms, an ownership change results from transactions increasing the ownership of certain stockholders in the stock of a corporation by more than 50.0% over a three-year period.

The total cash paid for income taxes (net of refunds) is composed of the following, for the years ended December 31:

Total cash paid for income taxes (net of refunds)

*Some jurisdictions met the 5% disaggregation threshold;

however, the related amounts were immaterial.

The Company has concluded that there are no significant uncertain tax positions requiring disclosure.

Related-Party Transactions

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

During the years ended December 31, 2025, 2024 and 2023, the Company incurred expenses of $ 0.6 million, $ 0.5 million and $ 1.0 million, respectively, to the related party for marketing services.

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

Lease payments made to the related party were $ 0.5 million for the years ended December 31, 2025, 2024 and 2023.

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

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

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

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

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

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

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

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

As of December 31, 2025 and December 31, 2024, the total outstanding balance of revolving P&A loans is $ 53.5 million and $ 8.2 million, respectively.

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

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

See Note 9, Debt for additional details.

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

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

The Company has a distribution agreement with the Homestead film and series resulting in payments for the years ended December 31, 2025, 2024 and 2023 of $ 6.5 million, $ 0.2 million, and $ 0.0 million.

Total payments, including royalties, paid to the Tuttle Twins Show LLC, for the years ended December 31, 2025, 2024 and 2023, were $ 3.9 million, $ 4.4 million, and $ 1.0 million, respectively.

See Note 13, Commitments and Contingencies , for more information.

Subsequent Events

On January 14, 2025, the Company made a $ 140,000 payment to the Internal Revenue Service for 2024 estimated federal taxes.

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

Accordingly, as of January 15, 2025, the Sponsor holds 4,200,000 shares of Class A common stock, par value $ 0.0001 per share, of the Company, 312,506 shares of Class B Common Stock and 11,700,000 private placement warrants of the Company.

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

1 to Agreement and Plan of Merger (the “Merger Agreement Amendment”), which amends the Merger Agreement to (i) remove the closing condition requiring the Company to 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.

Other than as expressly modified by the Merger Agreement Amendment, the Merger Agreement remains in full force and effect.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

April 15, 2025

Southport Acquisition Corporation

/s/ Jeb Spencer

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ Jeb Spencer

Chief Executive Officer and Director

(Principal Executive Officer and Principal Financial and Accounting Officer)

April 15, 2025

/s/ Jared Stone

Chairman of the Board of Directors

April 15, 2025

/s/ Sigmund Anderman

April 15, 2025

Sigmund Anderman

/s/ Matthew Hansen

April 15, 2025

Matthew Hansen

/s/ Jennifer Nuckles

April 15, 2025

Jennifer Nuckles

/s/ Cathleen Schreiner Gates

April 15, 2025

Cathleen Schreiner Gates

/s/ David Winfield

April 15, 2025

David Winfield

Loan and Security Agreement with Warrant Offering

(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;

In February 2026, the second tranche, for an aggregate principal amount equal to $ 20.0 million.

As part of the second tranche draw, the lenders received warrants to purchase 292,537 shares of the Company’s Class A common stock with an exercise price of $ 7.29 per share.

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-K

Item 9A. Controls and Procedures