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: Quarterly period ended June 30, 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., having entered into a Merger Agreement on September 11, 2024, and an amendment on February 14, 2025. The Company was delisted from the NYSE in April 2024 and trades on the OTC Pink Marketplace under the symbols PORT, PORTW, and PORTU.
Key Financial Metrics
| Metric | Q2 2025 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) |
|---|---|---|---|
| Net Loss | $(1,555,744) | $(1,657,426) | $(243,377) |
| Operating Expenses | $342,238 | $418,987 | $694,302 |
| Change in Fair Value of Warrant Liability | $(1,217,750) | $(1,158,850) | $116,500 (Gain) |
| Cash and Cash Equivalents | $328,610 | $328,610 | $490,693 |
| Trust Account Balance | $438,166 | $438,166 | $12,729,617 |
| Total Liabilities | $10,580,022 | $10,580,022 | $9,127,425 |
| Working Capital Deficit | $(4,370,038) | $(4,370,038) | $(3,862,447) |
Material Changes vs. Prior Period
- Net Loss Increase: Net loss for the six months ended June 30, 2025, increased significantly to $1.66 million compared to $243,000 in the prior year period. This is primarily driven by a $1.16 million loss on the change in fair value of warrant liabilities, whereas the prior year included a $116,500 gain.
- Trust Account Depletion: The Trust Account balance has decreased drastically from approximately $12.7 million in June 2024 to $438,166 in June 2025. This reduction is due to significant shareholder redemptions totaling $12.5 million in November 2024 (Third Extension Special Meeting), following earlier redemptions in 2023 and 2024.
- Share Count Reduction: Shares of Class A common stock subject to possible redemption dropped from 1,163,113 in June 2024 to 37,987 in June 2025 due to the aforementioned redemptions.
- Excise Tax Liability: The Company recorded a $2,424,524 excise tax liability as of June 30, 2025, calculated as 1% of shares redeemed under the Inflation Reduction Act. This liability was not present in the same form in the prior period.
Outlook, Risks, and Contingencies
- Merger Progress: The Company received a notice of effectiveness from the SEC for its Form S-4 registration statement on July 22, 2025. The merger with Angel Studios is subject to stockholder approval and other customary closing conditions.
- Going Concern: The Company has a working capital deficit of $4.37 million and substantial doubt exists regarding its ability to continue as a going concern for one year from the filing date. Management relies on capital contributions or loans from the Sponsor to fund operations until the Business Combination is consummated.
- Warrant Liability Volatility: The warrant liability is classified as a derivative liability and re-measured at fair value each period. The increase in liability from $4.64 million (Dec 2024) to $5.80 million (June 2025) contributed significantly to the net loss.
- Internal Controls: The Company disclosed material weaknesses in internal controls over financial reporting related to the presentation of the statement of cash flows, recognition of excise tax liability, and recording of accrued liabilities. Remediation plans are in progress.
- Extension Deadline: The Company has extended its deadline to consummate a Business Combination to September 30, 2025.
Investor Verification Checklist
- Merger Closing Conditions: Verify the status of stockholder approvals for both Southport and Angel Studios required to close the transaction.
- Liquidity Sufficiency: Confirm the Sponsor's ability and commitment to provide the necessary working capital loans to bridge the $4.37 million deficit until the merger closes.
- Warrant Conversion Terms: Review the specific terms under which public warrants will convert into 0.1 shares of common stock and the impact on dilution.
- Excise Tax Impact: Assess the final calculation of the excise tax liability and whether it will be paid from the Trust Account or require additional funding.
- Internal Control Remediation: Monitor the progress of remediation for the identified material weaknesses in financial reporting controls.