What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-11-13 · 201 added, 194 removed, 154 unchanged (72% of the section changed)

2 unchanged sentences

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

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

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

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

1 unchanged sentence

Forward-Looking Statements

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

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

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected.

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

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

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

Such forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effects on us.

There can be no assurance that future developments affecting us will be those that we have anticipated.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

These risks and uncertainties, which are more fully described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K filed on March 12, 2026, include but are not limited to the following risks, uncertainties and other factors:

● the Company’s ability to achieve and maintain profitability in the future;

● the Company’s ability to successfully monetize projects;

● the Company’s success in retaining or recruiting its officers, key employees or directors;

● officers and directors allocating their time to other businesses and potentially having conflicts of interest with the Company’s business;

● the Company’s ability to attract and maintain an adequate customer base;

● the Company’s ability to create and distribute content that is popular with consumers and affiliates;

● the Company’s reliance on a number of partners to make its service available on their devices;

● the Company’s ability to continue to develop and enhance its existing technology;

● any significant disruption in or unauthorized access to the Company’s computer systems or those of third parties that the Company utilizes in its operations, including those relating to cybersecurity or arising from cyber-attacks;

● the Company’s ability to successfully, or profitably, compete with current and new competitors;

● the Company’s ability to consummate any interim financing, and the ability of the Company to raise additional capital, if necessary;

● the Company’s ability to successfully defend litigation or investigations;

● the ability to maintain the listing of the Company’s Common Stock on the NYSE;

● the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors;

● changes in applicable laws or regulations;

● geopolitical events and general economic conditions;

● other risks and uncertainties set forth in the section entitled “Risk Factors” in this Quarterly Report.

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

5 unchanged sentences

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

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

As of March 31, 2026, through the Angel Guild, approximately 2.22 million paying members help decide what film and TV projects we will market and distribute.

Pledge to Amplify Light

1 unchanged sentence

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

Components of Results of Operations

We primarily generate revenue from the following sources:

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

● Angel Guild r evenue comes from monthly or annual membership fees.

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

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

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

All memberships allow voting for every Angel Studios release, give early access for streaming, and help fund our original films, increasing new content releases.

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

9 unchanged sentences

Seeking to Empower the Angel Guild for Generations

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

As of March 31, 2026, we held an aggregate of approximately 303.1 bitcoin.

This equates to 1.7846 bitcoin per million shares of our Common Stock.

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

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

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

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

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

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

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

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

Regulation A Offerings

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

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

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

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

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

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

From time to time, we conduct offerings under Regulation A of the Securities Act, the proceeds of which we use for working capital and other general corporate purposes.

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

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

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

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

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

We used the proceeds from the Reg A Offering to manage our business and provide working capital for our operations, as well as expenses relating to salaries and other compensation to our officers and employees.

At the Market Offering

On December 5, 2025, we entered into an equity distribution agreement (the “Equity Distribution Agreement”), dated as of December 5, 2025, with Oppenheimer & Co.

Inc., TCBI Securities, Inc., doing business as Texas Capital Securities, Maxim Group LLC and Roth Capital Partners, LLC (each, a “Sales Agent,” and together, the “Sales Agents”), providing for the offer and sale to or through the Sales Agents, from time to time, shares of our Class A Common Stock, par value $0.0001 per share, having an aggregate offering price of up to $150,000,000.

During the year ended December 31, 2025, we sold an aggregate of 196,348 shares of our Class A Common Stock, generating gross proceeds of $1.0 million.

During the three months ended March 31, 2026, we sold no shares of our Class A Common Stock.

In accordance with the terms of the Equity Distribution Agreement, we may offer and sell shares of our Common Stock at any time and from time to time through the Sales Agents.

Sales of the shares, if any, will be made by means of transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act, including block trades and sales made in ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of the sale, at prices related to prevailing market prices or at negotiated prices.

The Sales Agents will receive from us a commission of up to 3.0% of the gross sales price per share for any shares sold through it under the Equity Distribution Agreement.

The net proceeds we receive from the sale of our Common Stock in this offering will be the gross proceeds received from such sales less the commissions and any other costs we may incur in issuing the shares.

Subject to the terms and conditions of the Equity Distribution Agreement, the Sales Agents are not required to sell any specific number or dollar amount of shares but will use their commercially reasonable efforts to sell on our behalf any shares to be offered under the Equity Distribution Agreement.

Under the terms of the Equity Distribution Agreement, we also may sell shares to the Sales Agents as principals for their own account to the extent permitted under the Securities Act and the Exchange Act.

Loan and Security Agreement with Warrant Offering

On September 8, 2025, we entered into a Loan and Security Agreement with certain lenders, which provides us with an up to $100.0 million term loan with a delayed draw feature, which is composed of four committed tranches:

(i) the first tranche in an aggregate principal amount of $40.0 million, which was funded on the closing date;

(ii) the second tranche in an aggregate principal amount equal to $20.0 million, which was drawn in February 2026;

(iii) the third tranche in an aggregate principal amount equal to $20.0 million,

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

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

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

In connection with the credit facility, we issued each lender thereunder a warrant to purchase stock to purchase an aggregate amount of 1,462,682 shares of our 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.

As part of the initial draw, the lenders received warrants to purchase 585,072 shares of the Company’s Class A Common Stock.

As part of the second tranche draw, the lenders received warrants to purchase 292,537 shares of the Company’s Class A Common Stock.

Homestead Merger

On November 14, 2025, we entered into an Agreement and Plan of Merger (“Homestead Merger Agreement”), by and among the Company, Angel Black Autumn Merger Sub, Inc., a Delaware Corporation and wholly-owned subsidiary of the Company, Black Autumn Show, Inc., a Delaware Corporation (“Homestead”) and the Stockholder Representative (as defined in the Black Autumn 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 Homestead Stock 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 .

See further discussion of related party in Note 7 to the condensed consolidated financial statements.

Toothy Cow Productions Merger

On November 14, 2025, we entered into an Agreement and Plan of Merger (“TCP Merger Agreement”), by and among Angel TCP Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Angel, Toothy Cow Productions, LLC, a Tennessee limited liability company (“TCP”), and the unitholder representative, pursuant to which we will acquire directly or indirectly all of the equity interests of 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 .

Tuttle Twins Show Merger

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.

See further discussion of related party in Note 7 to the condensed consolidated financial statements.

Asset Purchase 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 contributed $31,366,686 and 2521 contributed $46,550,473 in cash to the JV.

Moreover, the Company was credited, as a capital contribution, an amount equal to $2,342,277 on account of a previous investment with Slingshot, which resulted 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 became 42% to the Company and 58% to 2521.

Separately, under the Term Sheet, the JV Partners agreed to 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.

The LLCA became effective on October 2, 2025, and the Distribution Agreement became effective on November 19, 2025.

Under the Term Sheet, and by means of the Asset Purchase Agreement, Giant Slayer Media acquired substantially all of the assets of Slingshot related to the animated feature film, DAVID, the associated works and certain other ancillary rights and obligations, for an aggregate purchase price of $77,917,159 in cash.

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

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

(b) each of the JV Partners agreed to assign, and caused 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 is acting as the distributor of the Purchased Assets under the Distribution Agreement, which contains specific payment terms, events of default and guaranty terms.

The relationship of the JV Partners in the JV is governed by the LLCA, which 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 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, and any and all claims arising from or relating to the parties’ prior content distribution agreement concerning DAVID and Young David.

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

P&A Subsidiaries

10 unchanged sentences

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

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

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

8 unchanged sentences

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

Off the Chain

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

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

The sale closed on October 10, 2024.

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

Recent Developments

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

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

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

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

as the surviving entity.

Loan and Security Agreement with Warrant Offering

(i) the first tranche in an aggregate principal amount of $40.0 million, which was funded on the closing date;

(ii) the second tranche in an aggregate principal amount equal to $20.0 million, which may be drawn on or prior to June 30, 2026;

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

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

In connection with the credit facility, the Company issued each lender thereunder a warrant to purchase stock to purchase an aggregate amount of 1,462,682 shares of the Company’s Class A common stock with an exercise price per share of $7.29.

The Warrants vest and become exercisable in proportion to and in conjunction with the advancement of each tranche under the Credit Facility.

The warrants will expire on September 11, 2030.

Asset Purchase Agreement

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

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

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

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

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

Angel Studios Licensing, LLC, Case No.

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

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

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

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

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

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

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.

Financial Operations Overview

13 unchanged sentences

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

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

Legal expenses 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 us.

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

Non-GAAP Financial Measures

Adjusted earnings before interest, income taxes, depreciation and amortization (“Adjusted EBITDA”), a non-GAAP measure used by management to assess operating performance, is defined as net income/(loss), excluding interest expense, net, income tax expense, depreciation and amortization, stock-based compensation, and the (gain)/loss on digital assets, as well as exceptional items.

Management uses Adjusted EBITDA as a supplemental measure of operating performance to evaluate the performance of the Company’s business operations, to facilitate comparisons of operating results across reporting periods, and to assist in planning and forecasting future periods.

Adjusted EBITDA is presented as a supplemental measure of the Company’s operating performance and should not be considered in isolation or as a substitute for net income/(loss) or any other measure of financial performance calculated in accordance with GAAP.

We present Adjusted EBITDA in this filing because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our ongoing operating performance.

Period-to-period comparison of Adjusted EBITDA helps our management identify additional trends in our company’s financial results that may not be shown solely by period-to-period comparison of net income/(loss).

In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to net income/(loss), helps investors make comparisons between our company and other companies that may have different capital structures, different capitalized asset values, different forms of employee compensation and different strategic nonrecurring projects.

Adjusted EBITDA has its limitations as an analytical tool because of the excluded items, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

Some of these limitations include:

● Adjusted EBITDA does not reflect interest expense and interest income because these items are not directly attributable to the performance of our business operations and may vary over time due to a variety of financing transactions that we have entered into or may enter into in the future.

● Adjusted EBITDA does not reflect certain non-cash items, including depreciation and amortization, stock-based compensation expense, and the (gain)/loss on digital assets.

We believe that excluding the effect of these expenses from Adjusted EBITDA assists management and investors in making period-to-period comparisons in our company’s operating performance because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.

A reconciliation between net income/(loss) and adjusted EBITDA is presented below:

For the three months ended March 31,

Reconciliation of net loss to non-GAAP Adjusted EBITDA

Interest expense, net

Depreciation and amortization

Stock-based compensation

Net loss on digital assets

Adjusted EBITDA

Results of Operations

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

For the three months ended September 30,

Cost of revenues

Selling and marketing

General and administrative

Research and development

Legal expense

Operating loss

Net gain on digital assets

Interest expense

Interest income

Impairment of investments

Loss before income tax benefit

Income tax benefit

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

For the three months ended September 30,

Content licensing

Pay it Forward

Theatrical Pay it Forward

Total Revenue

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

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

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

Cost of Revenues

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

For the three months ended September 30,

Total Cost of Revenues

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

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

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

Selling and Marketing

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

For the three months ended September 30,

Total Selling and Marketing

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

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

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

Other Operating Expenses

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

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

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

Other Income and Expense

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

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

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

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

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

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

For the nine months ended September 30,

The following represents our performance highlights for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025:

For the three months ended March 31,

Cost of revenues

4 unchanged sentences

Operating loss

Net gain on digital assets

Net loss on digital assets

Interest expense

Interest income

Impairment of investments

Loss before income tax benefit

Income tax benefit

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

For the nine months ended September 30,

The following represents our revenue by type for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025:

For the three months ended March 31,

Content licensing

2 unchanged sentences

Total revenue

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

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

This increase was offset by a decrease in:

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

During the three months ended March 31, 2026, compared to the three months ended March 31, 2025, the increase in revenues was largely due to:

1) an increase in Angel Guild revenue by $48.6 million as a result of increased Angel Guild members from 1.08 million to 2.22 million from March 31, 2025 to March 31, 2026, 2) an increase in theatrical revenue of $10.2 million due to films with larger box offices in Q1 2026 as compared to Q1 2025, 3) an increase in content licensing revenue, which increased by $7.6 million as a result of larger licensing deals being entered into from our Q4 2025 and Q1 2026 theatrical releases, compared to smaller deals as a result of

smaller theatrical box office releases in Q4 2024 and Q1 2025, and 4) an increase in merchandise revenue of $2.2 million largely due to DVD sales of David in Q1 2026.

This increase was offset by a decrease in total Pay it Forward revenue by $1.1 million, largely due to our focus on transitioning away from Pay it Forward and focusing more on the Angel Guild .

Cost of Revenues

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

For the nine months ended September 30,

The following represents our cost of revenues by type for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025:

For the three months ended March 31,

Total cost of revenues

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

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

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

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

During the three months ended March 31, 2026, cost of revenues was $44.0 million compared to $19.5 million in the same quarter in the prior year.

The increase in Angel Guild cost of revenues by $7.0 million was largely a result of increased memberships and the transaction fees of $4.8 million related to that growth, as well as an increased number of free movie tickets for premium Angel Guild members for Angel theatrical releases of $2.6 million.

The increase in royalties of $15.6 million was a result of higher royalties earned by filmmakers from the Angel Guild.

Selling and Marketing

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

For the nine months ended September 30,

The following represents our selling and marketing expenses by type for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025:

For the three months ended March 31,

Total selling and marketing

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

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

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

During the three months ended March 31, 2026, compared to the three months ended March 31, 2025, the increase in selling and marketing expenses was largely due to:

1) An increase in Angel Guild sales and marketing expenses of $2.5 million as a result of the promotion of the Angel Guild in an effort to increase memberships and 2) An increase in Theatrical sales and marketing expenses of $3.3 million as a result of stronger theatrical releases in Q1 2026 as compared to Q1 2025.

Other Operating Expenses

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

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

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

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

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

Legal Proceedings.”

For the three months ended March 31, 2026, higher general and administrative costs of $3.9 million were primarily related to:

1) additional employee costs of $1.0 million during 2026 related to the support staff necessary to manage the continued and expected growth of the business, 2) additional equity issuance costs of $0.8 million during 2026 due to an increase in options and RSUs granted to employees in the last 12 months and their related fair value on the grant date, 3) amortization expense of $0.8 million related to a new three-year first-look agreement with a filmmaker, which provides the Company with priority rights to review and bid on the filmmaker's future projects, 4) additional third party accounting and auditing services of $0.4 million due to the added complexity of being a public company, and 5) additional software costs of $0.3 million with the increased growth of the business.

For the three months ended March 31, 2026, the increase in research and development costs of $0.8 million primarily related to additional employee costs during 2026 related to the support staff necessary to manage the continued and expected growth of the business.

For the three months ended March 31, 2026, compared to the three months ended March 31, 2025, the increase in legal expense of $1.4 million was largely a result of the legal fees associated with the Homestead, Toothy Cow Productions, and Tuttle Twins Show pending acquisitions.

Other Income and Expense

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

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

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

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

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

The increase in the loss on digital assets of $2.5 million during the three months ended March 31, 2026 was a result of measuring our digital assets at fair value at the end of each reporting period per Accounting Standards Update (“ASU”) No.

2023-08 and the value of bitcoin decreasing during the three months ended March 31, 2026 by a greater amount as compared to the three months ended March 31, 2025.

The increase in interest expense of $4.5 million is related to a higher dollar amount of P&A and other notes entered into and outstanding during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, as can be seen on our condensed consolidated statements of cash flows and condensed consolidated balance sheets.

Liquidity and Capital Resources

Operating and Capital Expenditure Requirements

September 30, 2025

March 31, 2026

December 31, 2025

Cash and cash equivalents

Accrued settlement costs

Loan guarantee payable

Notes payable

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

Cash and cash equivalents decreased by $5.2 million in the three months ended March 31, 2026, primarily due to cash used in investing activities of $2.5 million, cash used in financing activities of $4.6 million, offset by cash provided by operating activities of $1.9 million.

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

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

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

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

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

As of March 31, 2026, we had cash on hand of approximately $38.9 million.

Notes payable currently consists of 1) P&A notes in the amount of $40.5 million with amounts due based on timing of certain cash proceeds, but which amounts are expected to be paid within the next twelve months, 2) financing of a convertible note in the amount of $5.7 million, which will become due, if not converted into equity beforehand, by May 1, 2027, and 3) a financing facility in the amount of $100.0 million, of which $60.0 million is currently drawn as of the date of this report, with interest payable monthly and principal installments starting in November 2027 and a final maturity of October 1, 2030.

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

Evaluation of Going Concern

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

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

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

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

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

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

We have an accumulated deficit of approximately $255.3 million as of March 31, 2026.

Marketing expense was our largest expense for the period ended March 31, 2026 as our intent is to increase Angel Guild memberships and support our theatrical releases.

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

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

We finance marketing activities for theatrical releases through two primary methods:

We have 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, we raised $13.2 million from Regulation A offerings and received $32.0 million from P&A loans, both of which were used for P&A in various theatrical releases

during the year.

During the year ended 2024, we raised $0.0 million from Regulation A offerings and received $23.3 million from P&A loans.

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

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

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

Management believes it will be able to continue to fund operating capital shortfalls for the next year through the issuance of debt and our common stock.

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 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 $104.1 million of cash during the year ended December 31, 2025.

The Company did not generate cash through capital stock raises 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 we continue to grow, we expect that our existing capital resources, including cash, accounts receivables, licensing receivables, recurring revenues from our membership base, the ability to draw on our existing debt facility, and the ability to sell our digital assets if necessary, will be sufficient to meet our operating requirements for at least the next twelve months.

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

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

Discussion of Operating, Investing, Financing Cash Flows

Operating Activities.

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

For the nine months ended September 30,

Net cash and cash equivalents used in operating activities

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

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

Cash flows provided by (used in) operating activities for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were as follows:

For the three months ended March 31,

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

Cash flows provided by operating activities for the three months ended March 31, 2026 was $1.9 million compared to cash flows used in operating activities of $9.8 million for the three months ended March 31, 2025.

The difference of $11.6 million is largely due to the decrease in loss for the period of $23.6 million, a decrease in the change in accounts receivable, resulting in more proceeds being received, offset by a decrease in the change in accounts payable and accrued liabilities, resulting in greater distributions.

Investing Activities.

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

For the nine months ended September 30,

Cash flows used in investing activities for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were as follows:

For the three months ended March 31,

Purchases of property and equipment

1 unchanged sentence

Collections of notes receivable

Purchase of digital assets

Sale of digital assets

Purchase of intangible assets

Additions to internal-use software

Purchase of content

Investments in affiliates

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

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

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

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

Return on investments in affiliates

Net cash and cash equivalents used in investing activities

Cash flows used in investing activities for the three months ended March 31, 2026 was $2.5 million compared to cash flows used in investing activities of $3.2 million for the three months ended March 31, 2025.

The decrease of cash flows used was largely due to the decrease of the issuance of notes receivable of $0.8 million.

Financing Activities.

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

For the nine months ended September 30,

Cash flows provided by (used in) financing activities for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, were as follows:

For the three months ended March 31,

Repayment of notes payable

4 unchanged sentences

Issuance of common stock

Contribution of equity in noncontrolling interests

Investments in minority owned entities

Redemption of equity in noncontrolling interests

Fees related to issuance of common stock and minority interest

Repurchase of common stock

Equity financing fees

Debt financing fees

Net cash and cash equivalents provided by financing activities

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

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

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

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

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

Cash flows used in financing activities for the three months ended March 31, 2026 were $4.6 million compared to cash flows provided by financing activities of $20.0 million for the three months ended March 31, 2025.

During the three months ended March 31, 2026, we raised $20.0 million in notes payable.

This was offset by the repayment of $18.7 million for P&A related notes and a $5.9 million redemption paid for equity in noncontrolling interests.

During the three months ended March 31, 2025, we raised $14.8 million with issuance of our common stock and $22.9 million in notes payable.

These were offset by the repayment of $9.7 million for P&A related notes, a $6.0 million redemption paid for equity in noncontrolling interests and a $2.0 million payment related to a loan guarantee .

Trends and Key Factors Affecting Our Performance

1 unchanged sentence

Since that time the Angel Guild grew to approximately 2.00 million Angel Guild members as of December 31, 2025, accounting for 65.2% of our total revenue in 2025.

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

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

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

Angel Mobile and TV App Installs

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

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

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

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

The Angel Guild grew to approximately 2.22 million Angel Guild members as of March 31, 2026, accounting for 72.4% of our total revenue in 2026.

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

For the three months ended March 31, 2026, the trailing twelve months average revenue per member is $13.69 per month.

Critical Accounting Estimates

2 unchanged sentences

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

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

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

Estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

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

4 unchanged sentences

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

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

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.

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

14 unchanged sentences

Off-Balance Sheet Arrangements

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

As of March 31, 2026, we had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis