ANGX

Business Context and Reporting Period

Company: Southport Acquisition Corporation (SAC), a Special Purpose Acquisition Company (SPAC) formed to merge with Angel Studios, Inc. (the "Business Combination").

Reporting Period: Quarter ended March 31, 2025 (Form 10-Q).

Status: The Company is a shell company with no operating revenues. It is currently in the process of consummating a merger with Angel Studios, Inc., with a closing deadline extended to September 30, 2025. The Company was delisted from the NYSE in April 2024 and now trades on the OTC Pink Marketplace.

Key Financial Metrics

Note: The Trust Account balance has decreased significantly due to shareholder redemptions in prior periods. The Company has no operating revenue.

Material Changes vs. Prior Period

• Net Loss vs. Net Income: The Company reported a net loss of $101,682 in Q1 2025, compared to net income of $261,607 in Q1 2024. The prior year income was driven by a $447,950 gain on the change in fair value of warrant liabilities and $559,907 in dividend income from the Trust Account.
• Operating Expenses: Total expenses decreased to $76,749 from $406,574. This reduction is primarily due to the absence of the $274,973 non-redemption agreement expense recorded in Q1 2024 and a $186,364 gain from the adjustment of franchise tax expense in Q1 2025.
• Trust Account: The Trust Account balance remains low at $433,645, reflecting the substantial redemptions that occurred in late 2024 (Third Extension Special Meeting) and prior extensions.
• Related Party Debt: The promissory note from the Sponsor increased to $643,132 from $439,004, reflecting additional draws to cover operating expenses.

Outlook, Risks, and Contingencies

• Merger with Angel Studios: The Company entered into a Merger Agreement on September 11, 2024. The transaction values Angel Studios at approximately $1.5 billion plus gross proceeds raised prior to closing. The closing deadline is September 30, 2025.
• Going Concern: The Company has a working capital deficit and substantial doubt exists regarding its ability to continue as a going concern for one year. Management relies on the Sponsor's promissory note (up to $1,000,000) and potential capital contributions to fund operations until the merger closes.
• Excise Tax Liability: A contingent liability of $2,424,524 has been recorded for the 1% excise tax on stock redemptions under the Inflation Reduction Act.
• Internal Controls: The Company disclosed material weaknesses in internal controls over financial reporting related to the presentation of cash flows, recognition of excise tax liability, and recording of accrued liabilities. Remediation plans are in progress.
• Warrant Liability: Public and Private Placement Warrants are classified as liabilities. Changes in fair value impact the income statement. The Sponsor has agreed to forfeit private placement warrants at closing.

Investor Verification Checklist

• Merger Closing Conditions: Verify the status of the S-4 registration statement and the approval of the Merger Agreement by both SAC and Angel Studios stockholders.
• Liquidity Sufficiency: Confirm the Company's ability to fund operations through September 2025 given the current cash balance of ~$354k and the reliance on the Sponsor's promissory note.
• Redemption Impact: Assess the impact of the low Trust Account balance ($433k) on the final equity structure and the ability to meet the $5,000,001 net tangible asset requirement (which was removed via Amendment No. 1 to the Merger Agreement).
• Internal Control Remediation: Monitor progress on remediation of material weaknesses in financial reporting controls.
• Warrant Conversion: Review the terms under which public warrants will convert to 0.1 shares of common stock prior to closing, and the forfeiture of private warrants by the Sponsor.