What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-04-30 · 150 added, 90 removed, 265 unchanged (48% of the section changed)

29 unchanged sentences

● geopolitical events and general economic conditions;

● the Company’s ability to complete the mergers described herein on the terms of the respective merger agreements and the ability to realize the synergies and other perceived advantages resulting from the mergers;

● the Company’s ability to obtain required regulatory approvals;

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

6 unchanged sentences

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

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.

As of June 30, 2026, through the Angel Guild, approximately 2.61 million paying members help decide what film and TV projects we will market and distribute.

Pledge to Amplify Light

17 unchanged sentences

Seeking to Empower the Angel Guild for Generations

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

As of June 30, 2026, we held an aggregate of approximately 303.1 bitcoin.

This equates to 1.6252 bitcoin per million shares of our Common Stock.

2 unchanged sentences

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.

Financings and Recent Developments

Common Stock Offering – April 2026

I n 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 per share.

The Company received net proceeds of approximately $32.5 million, after underwriting discounts, commissions, and estimated offering expenses.

Regulation A Offerings

2 unchanged sentences

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 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.

We used the proceeds from the Regulation 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

2 unchanged sentences

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.

During the six months ended June 30, 2026, we sold no shares of our Class A Common Stock from the equity distribution agreement.

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.

8 unchanged sentences

(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.

(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.

In connection with the credit facility, we issued each lender thereunder a warrant 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.

3 unchanged sentences

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.

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 (“Black Autumn”) and the Stockholder Representative (as defined in the Homestead Merger Agreement), pursuant to which we will acquire directly or indirectly all of the equity interests of 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.

at the effective time, each holder of issued and outstanding shares of Black Autumn Stock will be entitled to receive (a) that number of shares of our Class A Common Stock equal to (i)(A) the Homestead Per Share Merger Consideration multiplied by (B) the number of shares of 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 .

1 unchanged sentence

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.

On November 14, 2025, we entered into an Agreement and Plan of Merger (as amended and restated on June 29, 2026, the “TCP Merger Agreement”), by and among Angel TCP Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of the Company, 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.

at the effective time, all of the issued and outstanding TCP Units will be cancelled and extinguished and converted automatically into the right to receive a portion of the TCP Aggregate Stock Consideration equal to the TCP Aggregate Stock Consideration multiplied by such TCP Unitholder’s TCP Adjusted Percentage Interest at the effective time of the merger .

All capitalized terms used in this paragraph are used as defined in the TCP Merger Agreement.

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 is contractually obligated to complete the TCP Merger before October 31, 2026, subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions.

As of the date of this Form 10-Q, the TCP Merger has not closed.

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.

On November 14, 2025, we entered into an agreement and plan of merger (as amended and restated on June 29, 2026, the “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.

at the effective time of the merger, all of the issued and outstanding 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 per TTS Investor Unit in cash equal to the TTS Investor Per Unit Cash Consideration and a number of shares of the Company’s Class A Common Stock per TTS Investor Unit equal to the TTS Investor Per Unit Stock Consideration and (b) for TTS Key Operators, a number of shares of Company Class A Common Stock per TTS Key Operator Unit 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.

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 is contractually obligated to complete the TTS Merger before October 31, 2026, subject to the receipt of regulatory approvals and the satisfaction of customary closing conditions.

As of the date of this Form 10-Q, the TTS Merger has not closed .

Asset Purchase Agreement

14 unchanged sentences

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.

The Dismissal Agreement resolved in full the action titled

Slingshot USA, LLC v.

Angel Studios Licensing, LLC, Case No.

23 unchanged sentences

P&A Subsidiaries are required to file current and periodic reports with the SEC pursuant to Rule 257(b) of Regulation A.

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

Recent Developments

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.

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

Financial Operations Overview

27 unchanged sentences

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,

A reconciliation between net income/(loss) and Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025 is presented below:

For the three months ended June 30,

Reconciliation of net loss to non-GAAP Adjusted EBITDA

2 unchanged sentences

Stock-based compensation

Net loss on digital assets

Net loss (gain) on digital assets

Adjusted EBITDA

For the six months ended June 30,

Reconciliation of net loss to non-GAAP Adjusted EBITDA

Interest expense, net

Depreciation and amortization

Stock-based compensation

Net loss (gain) on digital assets

Adjusted EBITDA

Results of Operations

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,

The following represents our performance highlights for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025:

For the three months ended June 30,

Cost of revenues

4 unchanged sentences

Operating loss

Net loss on digital assets

Net gain (loss) on digital assets

Interest expense

Interest income

Other income (expense)

Loss before income tax benefit

Income tax benefit

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,

The following represents our revenue by type for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025:

For the three months ended June 30,

Content licensing

Pay it Forward

Theatrical Pay it Forward

Total Revenue

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 .

During the three months ended June 30, 2026, compared to the three months ended June 30, 2025, the increase in revenues was largely due to:

1) an increase in Angel Guild revenue by $43.9 million as a result of increased Angel Guild members from 1.31 million to 2.61 million from June 30, 2025 to June 30, 2026, 2) an increase in content licensing revenue, which increased by $8.5 million as a result of larger licensing deals being entered into from our 2026 theatrical releases, compared to smaller deals in the prior year period, and 3) an increase in merchandise revenue of $1.3 million largely due to DVD sales in Q2 2026.

This increase was partially offset by a decrease in theatrical revenue of $29.8 million largely due to the release of two larger releases in Q2 2025, as compared to a single smaller release in Q2 2026.

Cost of Revenues

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,

The following represents our cost of revenues by type for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025:

For the three months ended June 30,

Total Cost of Revenues

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.

During the three months ended June 30, 2026, cost of revenues was $51.7 million compared to $27.3 million in the same quarter in the prior year.

The increase in Angel Guild cost of revenues by $1.8 million was largely a result of increased memberships and the transaction fees of $3.5 million related to that growth, partially offset by a decrease in the amount of free movie tickets for premium Angel Guild members for Angel theatrical releases of $2.7 million.

The increase in royalties of $24.0 million was a result of royalties earned by filmmakers from higher net revenue earned from the Angel Guild.

These increases were partially offset by a decrease in theatrical cost of revenues of $1.2 million as a result of reduced spending on distributing theatrical releases in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.

Selling and Marketing

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,

The following represents our selling and marketing expenses by type for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025:

For the three months ended June 30,

Total Selling and Marketing

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.

During the three months ended June 30, 2026, compared to the three months ended June 30, 2025, selling and marketing expenses remained relatively consistent.

The increase in Angel Guild sales and marketing expenses of $14.4 million was a result of the promotion of the Angel Guild in an effort to increase memberships.

This was partially offset by a decrease in Theatrical sales and marketing expenses of $14.2 million as a result of reduced spending on promoting theatrical releases in the three-months ended June 30, 2026 as compared to June 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 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.

For the three months ended June 30, 2026, higher general and administrative costs of $2.6 million were primarily related to:

1) additional employee costs of $1.2 million during 2026 related to the support staff necessary to manage the continued and expected growth of the

business, and 2) additional equity issuance costs of $1.4 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.

For the three months ended June 30, 2026, research and development costs remained relatively consistent, with no large increases or decreases in personnel or software costs associated with research and development.

For the three months ended June 30, 2026, compared to the three months ended June 30, 2025, the decrease in legal expense of $5.8 million was largely a result of legal costs in the prior year from the anticipated Merger with Merger Sub with no comparable transactions in the three months ended June 30, 2026.

Other Income and Expense

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.

The increase in the loss on digital assets of $10.4 million during the three months ended June 30, 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 June 30, 2026 by a greater amount as compared to the three months ended June 30, 2025.

Results of Operations

The following represents our performance highlights for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025:

For the six months ended June 30,

Cost of revenues

Selling and marketing

General and administrative

Research and development

Legal expense

Operating loss

Net gain (loss) on digital assets

Interest expense

Interest income

Other income (expense)

Loss before income tax benefit

Income tax benefit

The following represents our revenue by type for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025:

For the six months ended June 30,

Content licensing

Total Revenue

During the six months ended June 30, 2026, compared to the six months ended June 30, 2025, the increase in revenues was largely due to:

1) an increase in Angel Guild revenue by $92.6 million as a result of increased Angel Guild members from 1.31 million to 2.61

million from June 30, 2025 to June 30, 2026, 2) an increase in content licensing revenue, which increased by $16.1 million as a result of larger licensing deals being entered into from our Q4 2025 and Q1 2026 theatrical releases, compared to smaller deals in the prior year period, and 3) an increase in merchandise revenue of $3.5 million largely due to increased DVD sales in 2026 as compared to the prior year period.

This increase was partially offset by a decrease in Theatrical revenue by $19.5 million, largely due to the release of King of Kings in Q2 2025, as compared to smaller releases in the current period .

Cost of Revenues

The following represents our cost of revenues by type for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025:

For the six months ended June 30,

Total cost of revenues

During the six months ended June 30, 2026, cost of revenues was $95.8 million compared to $46.8 million for the six months ended June 30, 2025.

The increase in Angel Guild cost of revenues by $8.8 million was largely a result of increased memberships and the transaction fees of $8.3 million related to that growth.

The increase in royalties of $39.6 million was a result of royalties earned by filmmakers from higher net revenue earned from the Angel Guild.

These increases were partially offset by a decrease in Theatrical cost of revenues of $0.9 million as a result of reduced spending on distributing theatrical releases in the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.

Selling and Marketing

The following represents our selling and marketing expenses by type for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025:

For the six months ended June 30,

Total selling and marketing

During the six months ended June 30, 2026, compared to the six months ended June 30, 2025, the increase in selling and marketing expenses was largely due to an increase in Angel Guild sales and marketing expenses of $17.0 million as a result of the promotion of the Angel Guild in an effort to increase memberships.

This was partially offset by a decrease in theatrical sales and marketing expenses of $10.8 million as a result of reduced spending on promoting theatrical releases in the six-months ended June 30, 2026 as compared to the six months ended June 30, 2025.

Other Operating Expenses

For the six months ended June 30, 2026, higher general and administrative costs of $6.4 million were primarily related to:

1) additional employee costs of $2.2 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 $2.3 million during 2026 due to an increase in options and RSUs granted to employees in the six months ended June 30, 2026 and their related fair value on the grant date, and 3) amortization expense of $1.5 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.

For the six months ended June 30, 2026, the increase in research and development costs of $1.2 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 six months ended June 30, 2026, compared to the six months ended June 30, 2025, the decrease in legal expense of $4.3 million was largely a result of legal costs in the prior year from the anticipated Merger with Merger Sub, partially offset by the legal fees associated with the Homestead, Toothy Cow Productions, and Tuttle Twins Show pending acquisitions.

Other Income and Expense

The increase in the loss on digital assets of $12.9 million during the six months ended June 30, 2026 was a result of measuring our digital assets at fair value at the end of each reporting period per ASU No.

2023-08 and the value of bitcoin decreasing during the six months ended June 30, 2026 by a greater amount as compared to the six months ended June 30, 2025.

The increase in interest expense of $4.8 million is related to a higher dollar amount of P&A and other notes entered into and outstanding during the six months ended June 30, 2026, compared to the six months ended June 30, 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

March 31, 2026

June 30, 2026

December 31, 2025

1 unchanged sentence

Notes payable

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.

Cash and cash equivalents increased by $4.0 million in the six months ended June 30, 2026, primarily due to cash provided by operating activities of $18.8 million, partially offset by cash used in investing activities of $13.8 million and cash used in financing activities of $1.1 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 March 31, 2026, we had cash on hand of approximately $38.9 million.

As of June 30, 2026, we had cash on hand of approximately $48.0 million.

Notes payable currently consists of 1) P&A notes in the amount of $12.0 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 $6.0 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 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.

For the six months ended June 30, 2026, we incurred a net loss of approximately $37.6 million and had cash provided by operating activities of approximately $18.8 million.

We have an accumulated deficit of approximately $279.1 million as of June 30, 2026.

Marketing expense was our largest expense for the period ended June 30, 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 are working to increase revenues through the growth of Angel Guild memberships, our pipeline of theatrical releases during the second half of 2026 and additional streaming agreements.

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

During the three months ended June 30, 2026, the Company did not raise any money from Regulation A offerings and received $10.0 million from 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.

During the six months ended June 30, 2026, the Company paid $57.6 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.

During the six months ended June 30, 2026 , the Company issued Common Stock through a public offering for aggregate proceeds of $34.5 million and generated approximately $190.5 million in cash from Angel Guild paid memberships.

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.

2 unchanged sentences

Operating Activities.

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,

Cash flows provided by (used in) operating activities for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were as follows:

For the six months ended June 30,

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.

Cash flows provided by operating activities for the six months ended June 30, 2026 was $18.8 million compared to cash flows used in operating activities of $20.4 million for the six months ended June 30, 2025, an increase of $39.2 million.

This increase was primarily attributable to 1) growth in net Angel Guild cash received, which is due to increased Guild membership, and 2) lower marketing spend as a percentage of revenue.

The increase in cash is also a result of the collection of theatrical receipts related to David in the first quarter of 2026.

Investing Activities.

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,

Cash flows used in investing activities for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were as follows:

For the six months ended June 30,

Purchases of property and equipment

1 unchanged sentence

Collections of notes receivable

Advances to acquisition target

Sale of digital assets

4 unchanged sentences

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.

Cash flows used in investing activities for the six months ended June 30, 2026 was $13.8 million compared to cash flows used in investing activities of $12.2 million for the six months ended June 30, 2025.

The increase of cash flows used was largely due to the advances to certain acquisition targets for $8.2 million, partially offset by the decrease of the purchase of content of $4.1 million and the decrease of investment in affiliates of $3.0 million.

Financing Activities.

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,

Cash flows provided by (used in) financing activities for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, were as follows:

For the six months ended June 30,

Repayment of notes payable

4 unchanged sentences

Issuance of common stock

Investments in minority owned entities

Contribution of equity in noncontrolling interests

Redemption of equity in noncontrolling interests

Fees related to issuance of common stock and minority interest

Repurchase of common stock

1 unchanged sentence

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 .

Cash flows used in financing activities for the six months ended June 30, 2026 were $1.1 million compared to cash flows provided by financing activities of $53.3 million for the six months ended June 30, 2025.

During the six months ended June 30, 2026, we raised $30.0 million in notes payable and $34.5 million through issuance of Common Stock in a public offering.

This was partially offset by the repayment of $57.6 million for P&A related notes and a $5.9 million redemption paid for equity in noncontrolling interests.

During the six months ended June 30, 2025, we raised $38.5 million with issuance of our common stock, $8.7 million in equity from noncontrolling interests, and $48.9 million in notes payable.

These were partially offset by the repayment of $25.5 million for P&A related notes, a $11.8 million redemption paid for equity in noncontrolling interests and a $6.0 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 2.22 million Angel Guild members as of March 31, 2026, accounting for 72.4% of our total revenue in 2026.

The Angel Guild grew to approximately 2.61 million Angel Guild members as of June 30, 2026, accounting for 76.7% of our total revenue in 2026.

As of June 30, 2026, filmmakers have earned $289.6 million in cumulative royalties.

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.

For the six months ended June 30, 2026, the trailing twelve months average revenue per member was $13.63 per month.

Critical Accounting Estimates

26 unchanged sentences

Management’s estimate of forfeitures is based on historical experience but actual forfeitures could differ materially as a result of voluntary employee actions and involuntary actions which would result in significant change in our stock-based compensation expense amounts in the future.

The fair value of the Common Stock underlying the employee stock options is estimated using third party valuations, including market, income, and cost valuation approaches.

The fair value of the Common Stock underlying the employee stock options is estimated using closing market price.

Other Estimates

1 unchanged sentence

Off-Balance Sheet Arrangements

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.

As of June 30, 2026, our off-balance sheet arrangements consisted of guarantees of repayment of third-party loans made to independent film production companies that are unconsolidated variable interest entities in which we hold a variable interest but are not the primary beneficiary.

Our maximum potential undiscounted future payments under these guarantees were $6.5 million, against which we have recorded a guarantee liability of $0.3 million, and we have assessed the payment risk as low.

We had no other off-balance sheet arrangements as of June 30, 2026 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.

See Note 1, Description of Organization and Summary of Significant Accounting Policies , and Note 5, Commitments and Contingencies , to the condensed consolidated financial statements.

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