What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-04-30 compared with 2025-11-13 · 271 added, 282 removed, 545 unchanged (50% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

September 30, 2025

March 31, 2026

December 31, 2025

3 unchanged sentences

Current portion of licensing receivables, net

Physical media inventory

Physical inventory

Current portion of notes receivable

Loan guarantee receivable

Royalty advance

5 unchanged sentences

Intangible assets, net

Capitalized software, net

Digital assets

10 unchanged sentences

Deferred revenue

Loan guarantee payable

Current portion of accrued settlement costs

Total current liabilities

Accrued settlement costs, net of current portion

Accrued licensing royalties, long-term

2 unchanged sentences

Total liabilities

Commitments and contingencies

Commitments and contingencies (Note 5)

Stockholders’ equity:

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

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

169,850,328 and 169,095,572 shares issued and outstanding as of March 31, 2026, and December 31, 2025, respectively

Additional paid-in capital

4 unchanged sentences

Total stockholders’ equity

( 41,459,771 )

( 25,780,324 )

Total liabilities and stockholders’ equity

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Licensed content and other revenue

11 unchanged sentences

( 33,591,563 )

Other income (expense):

Net loss on digital assets

( 5,845,056 )

( 3,299,105 )

Other income (expense):

Net gain on digital assets

Interest expense

1 unchanged sentence

( 1,564,155 )

( 1,969,247 )

Interest income

Impairment of investments

Total other income (expense), net

Loss before income tax benefit

Total other expense

( 11,089,885 )

( 3,738,569 )

Loss before income tax benefit

( 13,756,056 )

3 unchanged sentences

( 37,330,132 )

( 13,899,369 )

( 91,874,332 )

( 51,269,476 )

Net loss attributable to noncontrolling interests

Net income (loss) attributable to noncontrolling interests

Net loss attributable to controlling interests

1 unchanged sentence

( 37,303,924 )

( 91,853,393 )

( 51,182,073 )

Net loss per common share - basic

7 unchanged sentences

Noncontrolling

Balance as of June 30, 2025

Balance as of December 31, 2025

( 241,531,068 )

( 25,780,324 )

Stock options exercised

Issuance of common stock, net of fees

Vesting of restricted stock units

Transfer of common stock

( 9,798,068 )

Repurchase of common stock

Business combination related issuances and expenses

( 10,262,317 )

( 10,261,623 )

Conversion of convertible notes upon business combination

Stock-based compensation expense

Convertible note beneficial conversion feature

Issuance of warrants

Contributions from noncontrolling interests, net of fees

Redemptions from noncontrolling interests

1 unchanged sentence

( 5,870,796 )

( 38,553,961 )

( 38,611,557 )

Balance as of September 30, 2025

( 175,762,124 )

Balance as of June 30, 2024

( 47,402,151 )

Stock options exercised

Issuance of common stock, net of fees

Transfer of common stock

Net income (loss)

( 13,804,520 )

Repurchase of common stock

Stock-based compensation expense

( 13,756,056 )

Balance as of March 31, 2026

( 255,335,588 )

Balance as of September 30, 2024

( 41,459,771 )

See accompanying notes to the condensed consolidated financial statements

ANGEL STUDIOS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

Nine Months Ended

Noncontrolling

Balance as of December 31, 2024

2 unchanged sentences

Issuance of common stock, net of fees

Transfer of common stock

( 9,864,890 )

Repurchase of common stock

Business combination related issuances and expenses

( 10,262,317 )

( 10,261,623 )

Conversion of convertible notes upon business combination

Stock-based compensation expense

Convertible note beneficial conversion feature

Issuance of warrants

Digital assets market value adjustment

5 unchanged sentences

( 37,330,132 )

Balance as of September 30, 2025

( 175,762,124 )

Balance as of December 31, 2023

( 10,073,191 )

Stock options exercised

Issuance of common stock, net of fees

Transfer of common stock

( 2,963,878 )

Repurchase of common stock

Stock-based compensation expense

Cumulative translation adjustment

( 51,182,073 )

( 51,269,476 )

Balance as of September 30, 2024

Balance as of March 31, 2025

( 108,356,350 )

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

1 unchanged sentence

( 37,330,132 )

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

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

Depreciation and amortization

Amortization of operating lease assets

Amortization of content assets

Amortization of right-of-use assets

Stock-based compensation expense

Net gain on digital assets

( 6,225,200 )

( 1,594,889 )

Net loss on digital assets

Investments in affiliates gain

1 unchanged sentence

Paid-in-kind interest

Impairment of investments

Change in deferred income taxes

( 4,403,068 )

Bad debt expense (recovery)

Change in operating assets and liabilities:

Accounts receivable

( 8,442,549 )

Physical media inventory

Physical inventory

Royalty advance

2 unchanged sentences

( 4,230,773 )

( 2,336,927 )

Licensing receivables

( 4,032,744 )

Other long-term assets

( 4,625,675 )

Accounts payable and accrued expenses

1 unchanged sentence

Accrued licensing royalties

( 6,788,204 )

Operating lease liabilities

Deferred revenue

Net cash and cash equivalents used in operating activities

( 58,654,497 )

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

( 9,760,444 )

2 unchanged sentences

Issuance of notes receivable

( 1,455,279 )

Collections of notes receivable

Purchase of digital assets

Sale of digital assets

Purchase of intangible assets

Additions to internal-use software

( 2,576,062 )

Purchase of content

( 2,173,360 )

Purchase of content

Investments in affiliates

( 5,511,002 )

Return on investments in affiliates

Net cash and cash equivalents used in investing activities

( 2,528,070 )

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

( 3,245,898 )

9 unchanged sentences

Issuance of common stock

Contribution of equity in noncontrolling interests

Investments in minority owned entities

Redemption of equity in noncontrolling interests

( 5,870,796 )

Fees related to issuance of common stock and minority interest

( 6,000,000 )

Repurchase of common stock

Equity financing fees

Debt financing fees

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

( 4,567,262 )

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

6 unchanged sentences

Adoption of ASU No.

Conversion of debt

Change from digital assets to digital assets receivable

Issuance of warrants

Debt conversion feature

Investment capital receivable

Operating lease right-of-use assets and liabilities

See accompanying notes to the condensed consolidated financial statements

10 unchanged sentences

(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”).

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 to exist and Angel Legacy survived as the surviving company and direct wholly-owned subsidiary of the Company (the “Merger” and, collectively with the other transactions described in the Merger Agreement, the “Business Combination”).

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

as the surviving entity.

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

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

As a result, the condensed consolidated 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;

1 unchanged sentence

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.

In accordance with the applicable guidance, the equity structure within these quarterly financial statements has 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”).

5 unchanged sentences

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

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

Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2026.

The balance sheet at December 31, 2025 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP for complete financial statements.

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

The accompanying unaudited condensed consolidated financial statements should be read together with the annual audited consolidated financial statements and related notes for the fiscal year ended December 31, 2025 included in the Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 12, 2026.

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

21 unchanged sentences

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.

The Company believes its bitcoin holdings are highly liquid.

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

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

The digital assets are initially recorded at cost

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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, within “Net gain (loss) on digital assets”, in the Company’s condensed consolidated statements of operations.

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

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

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

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

For the three months ended March 31, 2026, the Company incurred a net loss of approximately $ 13.8 million and had cash provided by operating activities of approximately $ 1.9 million.

The Company had an accumulated deficit of approximately $ 255.3 million as of March 31, 2026.

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

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

The Company has historically financed marketing activities for theatrical releases through two primary methods:

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

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

During the three months ended March 31, 2026, the Company did not raise any money from Regulation A offerings or P&A loans.

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.

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

During the three months ended March 31, 2026, the Company paid $ 18.7 million for the repayments of P&A loans, including interest and paid $ 5.9 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, 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.

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

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

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

Additionally, the Company has raised capital through the sale of its Common Stock, generating $ 104.1 million of cash during the year ended December 31, 2025.

The Company did no t generate any cash through the sale of its Common Stock during the three months ended March 31, 2026.

During the three months ended March 31, 2026, the Company generated approximately $ 92.2 million in cash from Angel Guild paid memberships.

In addition, in April 2026, the Company issued Common Stock through a public offering for aggregate proceeds of $ 34.5 million.

As the Company continues to grow, management expects that the existing capital resources, including cash, accounts receivables, licensing receivables, recurring revenues from its membership base, the ability to draw on its existing debt facility, and the ability to sell its digital assets if necessary, will be sufficient to meet the Company’s operating requirements for at least the next twelve months.

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

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

Accounts Receivable

3 unchanged sentences

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

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

As of March 31, 2026, the allowance for doubtful accounts receivable was $ 0.5 million.

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

4 unchanged sentences

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.

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 credit risk at each reporting period.

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

2 unchanged sentences

Physical inventory is recorded at average cost.

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

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

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 March 31, 2026, and December 31, 2025.

Prepaid Expenses and Other

2 unchanged sentences

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

Prepaid Content Rights

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 condensed 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 condensed 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 $ 3.0 million cash bonus upon execution of the agreement and granted non-qualified stock options to the artist.

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

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.

1 unchanged sentence

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

Royalty Advances

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

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

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

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 three months ended March 31, 2026 and 2025.

Investments in Affiliates

1 unchanged sentence

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

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

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

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 condensed consolidated financial statements.

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

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

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

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

Notes Receivable

7 unchanged sentences

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

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

The allowance for doubtful notes receivable was $ 0.0 million as of March 31, 2026 and December 31, 2025.

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 condensed 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

3 unchanged sentences

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.

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.

1 unchanged sentence

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

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

As of March 31, 2026 and December 31, 2025, the Company had $ 73.6 million and $ 64.8 million, respectively, of deferred revenue related to Angel Guild memberships.

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

Content Licensing

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

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

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

Pay it Forward

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

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

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

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

Theatrical Ticket Presales

1 unchanged sentence

Revenue is recognized when the related theatrical releases occur.

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

As of March 31, 2026 and December 31, 2025, the Company had $ 0.5 million and $ 0.6 million, respectively, of deferred revenue related to these presales.

Other Deferred Revenue

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

As of March 31, 2026 and December 31, 2025, the Company had $ 0.6 million and $ 1.1 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.

9 unchanged sentences

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

For the three months ended September 30,

For the nine months ended September 30,

For the three months ended March 31,

Content licensing

25 unchanged sentences

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

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

Any adjustments booked during the three months ended March 31, 2026 and 2025 have been immaterial.

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

27 unchanged sentences

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

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

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

3 unchanged sentences

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

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

The total amount of Pay it Forward receipts that were offset against selling and marketing costs for the three months ended March 31, 2026, and 2025, were $ 1.5 million and $ 0.3 million, respectively.

General and Administrative Expenses

5 unchanged sentences

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

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

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 is included in research and development expenses.

For expenses that do not qualify for capitalization, the expenses are recognized in the condensed 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 obligations, and corporate governance.

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

Stock-Based Compensation

7 unchanged sentences

federal jurisdiction and certain state jurisdictions.

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

As of March 31, 2026 and December 31, 2025, the Company had $ 0.0 million of deferred tax assets.

Basic and Diluted Earnings (Loss) Per Share

1 unchanged sentence

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, our Chief Executive Officer, evaluates the Company’s financial performance and allocates resources based on consolidated financial results.

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.

1 unchanged sentence

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

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

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

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

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

1 unchanged sentence

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

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

Convertible Notes and Warrants

8 unchanged sentences

Recently Issued Accounting Pronouncements Not Yet Adopted

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

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

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

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

In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-12, Codification Improvements, 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 , which improves 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 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 ASU does not affect interim period disclosures (e.g., Form 10-Q), and as such, no changes have been made to the Company’s interim reporting.

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

The amendments should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date 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.

R ecently 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 required 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 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 year ended December 31, 2024 of $ 12.9 million.

An adjustment to decrease the Company’s Net Loss was required for the three months ended March 31, 2025 of $ 0.1 million.

The per-share impact for the three months ended March 31, 2025 was $ 0.00 for both basic and diluted Net Loss per common share.

Recapitalization

2 unchanged sentences

Upon the closing, the Company received no gross proceeds.

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

Cash-trust and cash, net of redemptions

11 unchanged sentences

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

September 30, 2025

March 31, 2026

December 31, 2025

3 unchanged sentences

Digital asset carrying value

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

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

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

For the three months ended September 30,

For the nine months ended September 30,

The cost basis is determined using the first-in, first-out methodology.

The following table summarizes the Company’s digital asset purchases, dispositions, and gains (losses) on digital assets as calculated for the periods indicated:

For the three months ended March 31,

Approximate number of bitcoin acquired

2 unchanged sentences

Digital asset dispositions

Unrealized gains, net

Realized gains (losses), net

Unrealized loss, net

( 5,845,056 )

( 3,299,105 )

Notes Payable

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

The following table summarizes the Company’s debt facilities as of March 31, 2026 and December 31, 2025 (in millions):

March 31, 2026

December 31, 2025

Type of Facility

or Arrangement

Balance as of September 30, 2025

Balance as of December 31, 2024

Carrying Value

Original Principal Amount

4 unchanged sentences

May 2025 convertible note

See Convertible Notes and Warrants section below

September 2025 notes

See Convertible Notes and Warrants section below

For detailed terms, see (2)

September 2025 note with warrants

For detailed terms, see (2)

February 2026 note with warrants

For detailed terms, see (2)

Revolving P&A loans (See Note 7, Related-Party Transactions )

10.0 - 15.0 *

The current notes mature between October and December 2025

For detailed terms, see (3)

discounts and issuance costs, net of amortization

3 unchanged sentences

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

(2) See the Notes with convertible features and/or warrants section below.

(3) The March 31, 2026 balance was paid in full by April 2026.

Notes with convertible features and/or warrants

8 unchanged sentences

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

1 unchanged sentence

(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;

(ii) the second tranche in an aggregate principal amount equal to $ 20.0 million, which was drawn in February 2026, and is discussed below in the February 2026 note with warrants section;

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

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

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

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.

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.

1 unchanged sentence

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.

The credit facility contains 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.

7 unchanged sentences

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.

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:

February 2026 note with warrants

In February 2026, the Company drew the second tranche from the term loan discussed in the September 2025 note with warrants section above.

The terms are identical to the September 2025 note.

This tranche was for aggregate principal amount equal to $ 20.0 million.

As part of the 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.

A discount of $ 0.2 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 $ 0.2 million was booked as a debt discount for commitment fees paid to the lender.

The following table summarizes further details of the outstanding notes with convertible features and/or warrants as of March 31, 2026:

Issuance Date

6 unchanged sentences

October 1, 2030

February 2026 note with warrants

February 17, 2026

October 1, 2030

Components and Fair Value of the Convertible Notes

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

The convertible note consisted of the following components as of March 31, 2026 and 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):

September 30, 2025

March 31, 2026

Outstanding Principal Amount

3 unchanged sentences

May 2025 convertible note

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

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

December 31, 2025

Outstanding Principal Amount

Discounts, Net of Amortization

Net Carrying Amount

Fair Value (1)

May 2025 convertible note

(1) The estimated fair value of the convertible note is determined using a market-based discount rate reflective of the Company’s credit risk and current market conditions for similar instruments (Level 3 input within the fair value hierarchy established under ASC 820).

Interest Expense of the Convertible Notes

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

Three Months Ended September 30, 2025

Contractual Interest Expense

Amortization of Debt Discount

May 2025 convertible note

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Contractual Interest Expense

11 unchanged sentences

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

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

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 condensed consolidated financial position, results from operations or liquidity.

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

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 Millenium Copyright Act (“DMCA”) violations involving works from Disney Enterprises, Inc., Lucasfilm Ltd., Twentieth Century Fox Corporation, Warner Bros.

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 Film Corporation, Warner Bros.

Entertainment, Inc., and their subsidiaries.

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

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

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 ( $ 1.3 thousand per title).

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

5 unchanged sentences

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

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

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

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

The total purchase price was $ 30.0 million.

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

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

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

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

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

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

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

3 unchanged sentences

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 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.

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

Under the Term Sheet, and by means of the Asset Purchase Agreement, Giant Slayer Media will acquire substantially all of the assets of Slingshot related to the animated feature film, DAVID, the associated works and certain other ancillary rights and obligations.

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.

On November 14, 2025, the Company entered into an agreement and plan of merger (“Homestead Merger Agreement”) pursuant to which the Company 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 the Company’s 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.

On November 14, 2025, the Company entered into an agreement and plan of merger (“TCP Merger Agreement”) pursuant to which the Company 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 referenced as an exhibit to this Form 10-Q.

In connection with the pending Acquisition and pursuant to rights established under the existing distribution agreement, the Company has committed to fund the production of additional seasons of The Wingfeather Saga (the "Wingfeather Production Funding").

The Company has determined that the Wingfeather Production Funding constitutes a transaction separate from the Acquisition and is accounted for independently under applicable GAAP.

Accordingly, production costs funded by the Company are capitalized as content costs.

As of March 31, 2026, the Company has capitalized approximately $ 1.9 million of production costs related to The Wingfeather Saga, which are presented as Long-Term Assets on the condensed consolidated balance sheets.

On November 14, 2025, the Company entered into an agreement and plan of merger (“TTS Merger Agreement”) pursuant to which the Company 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 referenced as an exhibit to this Form 10-Q.

In connection with the pending Acquisition and pursuant to rights established under the existing distribution agreement, the Company has committed to fund the production of additional seasons of The Tuttle Twins Show (the "Tuttle Twins Production Funding").

The Company has determined that the Tuttle Twins Production Funding constitutes a transaction separate from the Acquisition and is accounted for independently under applicable GAAP.

Accordingly, production costs funded by the Company are capitalized as content costs.

As of March 31, 2026, the Company has capitalized approximately $ 1.2 million of production costs related to The Tuttle Twins show, which are present ed as Long-Term Assets on the condensed consolidated balance sheet.

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.

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

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

1 unchanged sentence

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

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

See Note 4 for additional details.

In September 2025, Steve Sarowitz, who is the

controlling person of this unaffiliated third party, became a member of the Company’s board of directors.

See Note 4, Debt for additional details.

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 4 for additional details.

The 2 nd draw was taken by the Company in February 2026, from which the lenders received warrants to purchase 292,537 shares of the Company’s Class A Common Stock.

See Note 4, 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 condensed consolidated statements of stockholders’ equity at the time of issuance.

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

The fair value of the warrants was 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 4, Debt.

Loss per Share

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

Three Months Ended

Nine Months Ended

The following table represents the Company’s loss per share for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

Net loss attributable to controlling interests

1 unchanged sentence

( 37,303,924 )

( 91,853,393 )

( 51,182,073 )

Weighted average basic shares outstanding

5 unchanged sentences

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

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

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

Three Months Ended

Nine Months Ended

All potential common shares were anti-dilutive as a result of the Company’s net losses during the three months ended March 31, 2026 and 2025.

Three Months Ended March 31,

Stock options to purchase common stock

Unvested restricted stock awards

Convertible securities to acquire common stock

3 unchanged sentences

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

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

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

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

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

During the three months ended March 31, 2026 and 2025, the Company incurred expenses of $ 0.1 million and $ 0.1 million, respectively, to the related party for marketing services.

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.

The revenue participation rights allow Angel P&A the right to receive an amount not to exceed 115.0 % (initial investment plus a 10.0 % to 15.0 % 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.

2 unchanged sentences

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

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

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

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

As of March 31, 2026 and December 31, 2025, the total outstanding balance of revolving P&A loans was $ 38.5 million and $ 53.5 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 .

1 unchanged sentence

See Note 4, Debt for additional details.

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

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

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

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

On October 22, 2025, Benton Crane joined the Company’s Board of Directors.

Crane is an executive producer and board member at Black Autumn Show, Inc., the creator of the Homestead film and television series, and Tuttle Twins Show LLC.

The Company has a distribution agreement with the Homestead film and series resulting in payments of $ 6.5 million during the year ended December 31, 2025, and payments of $ 4.0 million during the three months ended March 31, 2026.

Total payments, including royalties paid, to the Tuttle Twins Show LLC, during the year ended December 31, 2025 and the three months ended March 31, 2026, were $ 3.9 million and $ 1.2 million, respectively.

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

Subsequent Events

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

Entry Into A Material Definitive Agreement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Angel Studios Licensing, LLC, Case No.

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

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

Subsequent events have been evaluated through April 30, 2026, which is the date the condensed consolidated financial statements were available to be issued.

In April 2026, the Company entered into an underwriting agreement with an unaffiliated third party for the issuance and sale of 16,445,000 shares of its Class A Common Stock at a price to the public of $ 2.10 , for aggregate proceeds of $ 34.5 million.

In April 2026, the Company repaid in full the outstanding balance of $ 38.5 million under its revolving P&A loan facility.

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

What changed 10-Q

Item 1. Financial Statements