Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our historical results of operations and liquidity and capital resources should be read in conjunction with our audited consolidated financial statements and the notes related thereto which are included in "Part II, Item 8. Financial Statements and Supplementary Data"of this Annual Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those that are set forth under "Special Note Regarding Forward-Looking Statements," "Part I, Item 1A. Risk Factors" and elsewhere in this Annual Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

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We are a values based media distribution company that uses technology to empower a vibrant and growing community to replace the Hollywood gatekeeper system and champion stories that amplify light for mainstream audiences.

Our community, known as the Angel Guild, is at the heart of this mission.

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1) The Angel Guild votes to select film and TV shows.

2) The Angel Guild rallies in theaters to support film releases.

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

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As of December 31, 2025, through the Angel Guild, approximately 2.0 million paying members help decide what film and TV projects we will market and distribute.

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Pledge to Amplify Light

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All Guild members make a written pledge stating: "When I vote, I pledge to help choose excellent entertainment that is true, honest, noble, just, authentic, lovely or admirable."

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Components of Results of Operations

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Revenue

We primarily generate revenue from the following sources:

Bitcoin Treasury Strategy

As of December 31, 2025, we held an aggregate of approximately 303.1 bitcoins. This equates to 1.7925 bitcoin per million shares of our Common Stock. 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.

Financings

Regulation A Offerings

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 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. 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 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.

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 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 (the "Common Stock"), 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.

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 of 1933, as amended (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.

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

Loan and Security Agreement with Warrant Offering

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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 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.

Other

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During the year ended December 31, 2025, we sold an aggregate of 9,266,477 shares of Class A Common Stock to various purchasers, generating gross proceeds of approximately $49.1 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.

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P&A Subsidiaries

Over the past year, we have formed several subsidiaries (each, a "P&A Subsidiary") to exploit the commercial potential of specific films. Generally, a P&A Subsidiary enters into a distribution agreement with a filmmaker/production company to license the rights to market and distribute a film. The P&A Subsidiary then executes a services agreement with us to market the film's theatrical release. The P&A Subsidiary also sublicenses the film to us for distribution via the Angel App and our website, as well as to other distribution networks. In exchange for our right to distribute the film, we retain a share of revenue generated by our distribution of the film to the Guild.

P&A Subsidiaries have dual class voting structures: preferred shares, which are offered to investors under Regulation A; and common shares, which we purchase at formation and which are the sole voting shares of a P&A Subsidiary. Typically, the preferred shares have a 'Stated Value' of 115-120% of the price at which the shares are sold. A P&A Subsidiary's board of directors may, upon determining that the company has sufficient available funds, pay the Stated Value to preferred shareholders. 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. After a P&A Subsidiary has redeemed its preferred shares, the subsidiary splits remaining revenue with the filmmaker according to the terms of the Distribution Agreement.

We are legally distinct from the P&A Subsidiaries, and investments in them are distinct from an investment in us. A P&A Subsidiary is formed solely to exploit the commercial potential of a single film, and proceeds generated from a subsidiary's offering of preferred shares are used to market and distribute that one film. A P&A Subsidiary has no other business or assets other than its exploitation of the rights to the film. The subsidiary's shareholders do not have any rights to our assets or securities if a film does not perform well financially.

Investors in our common stock are investing in us and our business, which is broader than the marketing of a single film. Investors in our Common Stock do not have any right to payment of any amounts from the receipts of a film's theatrical release prior to dividend payments made to the shareholders of the P&A Subsidiaries.

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

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, which is filed as Exhibit 10.16 to this Annual Report.

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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, which is filed as Exhibit 10.14 to this Annual Report.

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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, which is filed as Exhibit 10.15 to this Annual Report.

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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.

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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.

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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 contain 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.

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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. The foregoing summary does not purport to be a complete description and is subject to and qualified in its entirety to the full text of the Term Sheet, which is filed as Exhibit 10.8 to this Annual Report.

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Financial Operations Overview

Revenues

Historically, we have primarily generated revenue from the Angel Guild, theatrical distribution, content licensing and other. See "Revenue" for more information.

Cost of Revenues

Cost of revenues represents the direct costs incurred by us in generating our revenue. These costs include expenses directly associated with the goods or services sold during the reporting period. Components of cost of revenues include items such as licensing royalty expense, free theatrical tickets for premium Guild members, content amortization, film delivery costs, hosting, merchandise costs, credit card fees, freight and shipping costs and costs of services provided.

Operating Expenses

Selling and Marketing: Selling and marketing expenses include the promotion of the Angel Guild and increasing memberships, as well as current and future theatrical releases. As we continue to bring on additional content, drive Angel Guild memberships and promote future theatrical releases, this cost is expected to continue to rise.

Research and Development: Research and development expenses consist of personnel necessary to continue our focus on improving existing products, optimizing existing services and developing new technology to better meet the needs of our customers and partners. These expenses also include the amortization of capitalized software. See Note 8, Capitalized Software, Netfor more information.

General and Administrative: 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: Legal expenses include costs incurred in connection with legal proceedings, regulatory matters, compliance obligation, 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.

Results of Operations

The following represents our performance highlights for the year ended December 31, 2025, as compared to the year ended December 31, 2024:

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Revenues

The following represents our revenue by type for the year ended December 31, 2025, as compared to the year ended December 31, 2024:

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During the year ended December 31, 2025 compared to the year ended December 31, 2024, the increase in revenues was largely due to: 1) an increase in Angel Guild revenue by $174.1 million as a result of increased Angel Guild members from approximately 0.6 million to approximately 2.0 million from December 31, 2024 to December 31, 2025, 2) an increase in Theatrical revenue by $47.6 million as a result of more successful theatrical box office releases in 2025, including the King of Kings and David, 3) an increase in content licensing revenue of $7.9 million as a result of larger licensing deals being entered into from our 2025 theatrical releases,compared to 2024 which had smaller theatrical box office releases and in turn smaller licensing deals and 4) an increase in Merchandise revenue of $1.6 million as our films brand recognition become stronger. This increase was offset by a decrease in Pay it Forward and Theatrical Pay it Forward revenue of $6.0 million, due to our focus transitioning away from Pay it Forward and focusing more on the Angel Guild.

Cost of Revenues

The following represents our costs of revenue by type for the year ended December 31, 2025, as compared to the year ended December 31, 2024:

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During the year ended December 31, 2025 compared to the year ended December 31, 2024, the increase in cost of revenues was largely due to: 1) an increase in Angel Guild cost of revenues by $29.3 million was a result of increased memberships and the associated transaction fees of $19.2 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 $7.9 million. The increase in theatrical cost of revenues of $4.2 million was a result of 8 films being released during the year ended December 31, 2025 with only 5 films being released during the year ended December 31, 2024. The increase in royalties of $41.3 million was a result of higher royalties earned by filmmakers, with most of the increase directly related to the profit sharing of the Angel Guild revenues during the year.

Selling and Marketing

The following represents our selling and marketing expenses by type for the year ended December 31, 2025, as compared to the year ended December 31, 2024:

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During the year ended December 31, 2025, compared to the year ended December 31, 2024, the increase in selling and marketing expenses was largely due to: 1) an increase in Angel Guild sales and marketing expenses of $129.1 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 $68.0 million as a result of 8 box theatrical box office releases in 2025 compared to 5 box office releases in 2024. 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 year ended December 31, 2025, compared to the year ended December 31, 2024, the increase in general and administrative costs of $15.6 million were primarily related to: 1) additional employee costs of $3.5 million during 2025 related to the support staff necessary to manage the continued and expected growth of the business, 2) additional equity issuance costs of $5.3 million during 2025 due to an increase in the cost of equity granted to employees, 3) additional 3rd party accounting and auditing services of $3.9 million as a result of the costs incurred from the Business Combination, 4) additional foreign withholding tax of $0.7 million as a result of increase licensing

deals in international territories, 5) amortization of $1.0 million of the prepaid content rights related to a First Look Agreement the Company entered into with an artist granting the Company the right of first refusal on the artist's future projects, and 6) additional software costs of $0.7 million.

For the year ended December 31, 2025, compared to the year ended December 31, 2024, the increase in research and development costs of $2.7 million were primarily related to: 1) additional employee costs of $0.6 million related to additional staff necessary to manage the continued and expected growth of the business, 2) additional software costs of $0.9 million, and 3) additional amortization of capitalized software of $1.3 million. The increase in research and development expenses also reflects our expanded investment in artificial intelligence capabilities and AI-assisted development practices. During 2025, we integrated AI development tools across our engineering organization and invested in an AI-enhanced discovery and recommendation system, which helped lead to increased member engagement with our film and TV show library. We believe our adoption of AI-accelerated development practices improves our engineering productivity and enables us to allocate a greater proportion of our technical resources to architecture, product design, and quality assurance rather than manual code generation. We expect to continue increasing our investment in AI tools and capabilities in future periods.

For the year ended December 31, 2025, compared to the year ended December 31, 2024, the decrease in legal expense of $0.7 million was largely a result of a decrease in legal costs associated with 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 I, Item 3. Legal Proceedings."

Other Income and Expense

The decrease in the gain/loss on digital assets of $3.5 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 decreasing during the year ended December 31, 2025. During the year ended December 31, 2024, we sold a portion of our digital assets and as such recognized a realized gain of $1.7 million.

The increase in interest expense of $9.5 million is related to a higher dollar amount of P&A and other notes entered into and outstanding during the year ended December 31, 2025, compared to the year ended December 31, 2024, as can be seen on our consolidated statements of cash flows.

The increase in interest income of $2.0 million is the result of higher cash balances during the year ended December 31, 2025, compared to the year ended December 31, 2024.

For the year ended December 31, 2025, the $1.8 million in other income is the result of a $2.4 million gain related to an IRS regulation released in Q4 2025, which, as a result, allowed the Company to remove a previously booked excise tax accrual in relation to the Business Combination, offset by $0.6 million in expenses related to the impairment of investments. For the year ended December 31, 2024, the $1.0 million other expense was related to an impairment loss on an equity investment.

Liquidity and Capital Resources

Operating and Capital Expenditure Requirements

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Cash and cash equivalents increased by $36.9 million in the year ended December 31, 2025, due to cash flow provided by financing activities of $175.8 million, offset by cash used in operating activities of $83.3 million and cash used in investing activities of $55.6 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 December 31, 2025, we had cash on hand of approximately $44.1 million. Notes payable currently

consists of 1) P&A notes in the amount of $55.5 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 $5.5 million, which will be 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 payable monthly and principal installments starting in November 2027 and a final maturity of October 1, 2030. These amounts were offset by $3.8 million in debt issuance costs and debt discounts. 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.

Evaluation of Going Concern

The 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 consolidated financial statements. For the year ended December 31, 2025, we incurred a net loss of approximately $170.5 million and used cash in operating activities of approximately $83.3 million. We have an accumulated deficit of approximately $241.5 million as of December 31, 2025. A significant portion of the net loss for the period ended December 31, 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 2026.

We have seen tremendous growth in our revenue as a result of 1) increasing Angel Guild memberships, 2) having a strong pipeline of theatrical releases through 2026 and 3) finding success in post-theatrical window licensing agreements. Theatrical releases typically require a large upfront capital commitment for marketing the film. We finance 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 year ended December 31, 2025, we raised $13.2 million from Regulation A offerings and received $84.0 million from P&A loans, both of which were used for P&A in various theatrical releases during the year. During the year ended December 31, 2024, we raised $5.0 million from Regulation A offerings and received $23.3 million from P&A loans. During the year ended December 31, 2025, we 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 year ended December 31, 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 $104.1 million of cash during the year ended December 31, 2025 and we have grown from approximately 0.6 million Angel Guild members, as of December 31, 2024, to approximately 2.0 million Angel Guild members, as of December 31, 2025, generating approximately $254.8 million in cash from Angel Guild paid memberships during the year ended December 31, 2025. In addition, in February 2026, the second tranche of the Company's Loan and Security Agreement was drawn, for an aggregate principal amount equal to $20.0 million. 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. 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 year ended December 31, 2025, as compared to the year ended December 31, 2024, were as follows:

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Cash flows used in operating activities for the year ended December 31, 2025 was $83.3 million compared to cash flows used in operating activities of $51.3 million for the year ended December 31, 2024. The increase in cash used in operating activities during 2025, compared to 2024, is due largely to the larger net loss generated during the current year of $82.0 million, an increase in accounts receivable of $42.8 million resulting in less proceeds received, partially offset by an increase in accounts payable and accrued expenses of $19.4 million, a higher deferred revenue balance of $26.1 million, a decrease in licensing receivables of $10.3 million, an increase in

accrued licensing royalties of $23.3 million, and an increase in both depreciation and amortization expense of $6.5 million and stock-based compensation expense of $6.0 million.

Investing Activities. Cash flows used in investing activities for the year ended December 31, 2025, as compared to the year ended December 31, 2024, were as follows:

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Cash flows used in investing activities for the year ended December 31, 2025 was $55.6 million compared to cash flows used in investing activities of $12.8 million for the year ended December 31, 2024. The increase of cash flows used was largely due to the increased cash spend for investments in affiliates of $31.5 million largely due to the investment in Giant Slayer Media, an increase of our purchase of content of $5.8 million largely due to the purchase of the IP for Sketch, the purchase of prepaid content rights of $3.0 million related to a First Look Agreement the Company entered into with an artist granting the Company the right of first refusal on the artist's future projects, as well as a decrease in the disposition of digital assets of $2.2 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.

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Financing Activities. Cash flows provided by financing activities for the year ended December 31, 2025, as compared to the year ended December 31, 2024, were as follows:

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Cash flows provided by financing activities for the year ended December 31, 2025 were $175.8 million compared to cash flows provided by financing activities of $46.2 million for the year ended December 31, 2024. During the year ended December 31, 2025, we raised $55.0 million from a Regulation A offering, $49.1 million with issuance of our common stock, $13.7 million in equity from noncontrolling interests, and $157.3 million in notes payable. These were offset by the repayment of $43.5 million for P&A related notes, the repayment of $27.9 million of notes payable and accrued settlement costs, a $15.8 million redemption paid for equity in noncontrolling interests and a $10.2 million payment related to a loan guarantee. A portion of the additions in notes payable in 2025 was due to a refinancing strategy to consolidate debt, simplify the capital structure and lower interest costs. During the year ended

December 31, 2024, we raised $32.8 million with issuance of Common Stock and $23.8 million for P&A related activities, and repaid $18.4 million for P&A related activities during the same year.

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Trends and Key Factors Affecting Our Performance

Angel Guild

We launched the Angel Guild in the second quarter of 2023. Since that time the Angel Guild grew to approximately 0.6 million paying members as of December 31, 2024 and approximately 2.0 million paying members as of December 31, 2025, accounting for 36.9% and 65.2% of our total revenue, respectively. 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 year ended December 31, 2025, the trailing twelve months average revenue per member is $13.67 per month.

Distribution and License Agreements

Our business does not currently generate revenue from distribution activities related to the Chosen Agreement. Revenue from distribution activities related to the Chosen Agreement has accounted for 0.0%, 6.40% and 19.70% of our total revenue for the years ended December 31, 2025, 2024 and 2023, respectively.

On April 4, 2023, The Chosen initiated a private binding arbitration against us alleging certain material breaches of contract under the Chosen Agreement and seeking to terminate the Chosen Agreement pursuant to which we were granted a limited license to distribute, solely on the Angel App, all previous and future episodes and seasons of the TV series "The Chosen" and any future audiovisual productions derivatives thereof. On September 25, 2024, the arbitrator proceeding issued the Award granting The Chosen's breach of contract claims and terminating the Chosen Agreement effective as of May 28, 2024. The Award granted The Chosen monetary damages in the amount of $30.0 thousand, plus costs and an allocable portion of its attorney fees. The Award denied in full The Chosen's claims for the remedies of disgorgement of profits and corrective advertising.

On October 25, 2024, we filed an appeal of the Award with an appellate panel of arbitrators (the "Panel"), as permitted under the arbitration provision of the Chosen Agreement. On June 13, 2025, the Panel upheld the Award and we intend to comply with its terms, including with respect to the termination of the Chosen Agreement effective as of May 28, 2024.

On July 11, 2025, we entered into a settlement and release agreement with The Chosen for dismissal and mutual release of all pending matters. We settled all pending claims and liabilities as part of the Award in July 2025.

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. The Angel App is available across iOS, Android, Roku, Fire TV, Samsung Smart TV, Apple TV, and Apple Vision Pro. 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.

Critical Accounting Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reported periods. The SEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. 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. Actual results may differ from these estimates under different assumptions or conditions.

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Long-lived Assets

Intangible assets with finite lives and property, plant and equipment are amortized or depreciated over their estimated useful life on a straight-line basis. We monitor conditions related to these assets to determine whether events and circumstances warrant a revision to the remaining amortization or depreciation period. We test these assets for potential impairment whenever our management concludes events or changes in circumstances indicate that the carrying amount may not be recoverable. 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.

Income Taxes

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. Valuation allowances are established, when necessary, to reduce deferred tax assets when we expect the amount of tax benefit to be realized is less than the carrying value of the deferred tax asset.

Accounting for income taxes involves uncertainty and judgment on how to interpret and apply tax laws and regulations within our annual tax filings. Such uncertainties from time to time may result in a tax position that may be challenged and overturned by a tax authority in the future which could result in additional tax liability, interest charges and possibly penalties.

Stock-Based Compensation

All share-based payments, including grants of stock options and restricted stock units, are required to be recognized in the Company's financial statements based upon their respective grant date fair values. We use the Black-Scholes option pricing model or the Monte Carlo pricing model to estimate the value of employee stock options, which require a number of assumptions to determine the model inputs. These include the expected volatility of our stock and employee exercise behavior, which are based on historical data as well as expectations of future developments over the term of the option. The fair value of the Company's restricted stock units is based on the closing market price of its stock on the date of grant. The Company recognizes stock-based compensation net of actual forfeitures over the requisite service period of the award.

Other Estimates

See "Part II, Item 8. Financial Statements and Supplementary Data-Note 1" to the accompanying consolidated financial statements included herein for further discussion.

Off-Balance Sheet Arrangements

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As of December 31, 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.

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