Angel Studios — The Community-Funded Studio

The Business in Plain English

Before the balance sheet, the interest rates, and the §382 arithmetic, a first-time reader needs three orientation facts: what Angel Studios actually does, how it makes money, and why its most famous title — The Chosen — is no longer part of the company. This section provides that orientation. Every subsequent section assumes the reader has read it.

1.0   The Angel arc — first they laughed, then they fought, now they’re building the alternative

The old activist axiom — first they ignore you, then they laugh at you, then they fight you, then you win — describes the arc of Angel Studios almost too precisely to be useful as metaphor. It is the actual sequence. The company that trades on the NYSE today as ANGX at a $774 million market cap is the successor to a Utah family business that Hollywood thought was a gimmick, that four of the six major American film studios jointly sued out of its original business model, that went through Chapter 11 bankruptcy under a $62.4 million copyright judgment, and that emerged from bankruptcy having built the only at-scale theatrical-distribution platform in modern American cinema whose growth does not depend on the mainstream media ecosystem’s permission. Every subsequent number in this case — the debt at 30% effective rates, the negative book equity, the dilutive equity issuances, the 143% year-over-year revenue growth, the 2.22 million Guild members, the $184 million Sound of Freedom box office — is a consequence of that arc. The reader has to understand the arc first. The mechanics follow.

First they laughed — the VidAngel filtering years (2013-2016). The Harmon brothers launched VidAngel in 2013 as a family-content filtering service. Subscribers paid a monthly fee. VidAngel bought physical DVDs and Blu-rays of major-studio films, ripped the content, applied user-selected filters that removed profanity, nudity, or graphic violence, and streamed the filtered version to subscribers. The founders’ theory was that the Family Movie Act of 2005 authorized what they were doing and that a large fraction of American families would pay a small monthly fee to watch mainstream Hollywood on their own values-based terms. Hollywood dismissed it as a niche gimmick. The tech press treated it as a curiosity. Serious streaming-industry analysts did not cover the company. In 2013-2016, VidAngel operated with roughly 100,000 subscribers and no meaningful place in the streaming-industry conversation. It was, by the standards of the industry it was quietly critiquing, invisible.

Then they fought — the Disney lawsuit and Chapter 11 (2016-2020). In June 2016, Disney, Lucasfilm, 20th Century Fox, and Warner Bros. jointly sued VidAngel in the United States District Court for the Central District of California. The complaint alleged copyright infringement and circumvention of DMCA encryption under 17 U.S.C. §1201. In December 2016, the district court granted a preliminary injunction shutting down VidAngel’s filtering service for major-studio content. The Ninth Circuit affirmed on appeal in August 2017. In October 2017, VidAngel filed for Chapter 11 bankruptcy protection. In June 2019, a federal jury awarded the studios $62.4 million in statutory damages — approximately $75,000 per infringed work across 819 titles. In 2020, VidAngel emerged from bankruptcy under a court-approved plan of reorganization, settled the damages judgment on terms that let the company continue operating, discontinued filtering for major-studio content, and made a strategic choice that would define the next chapter: instead of filtering someone else’s content, the company would distribute its own. The rebranded entity became Angel Studios. Section 1.5 walks the full lawsuit record.

Now they’re building the alternative (2020-2026). The Angel Studios distribution model, born out of the bankruptcy settlement, matured through six specific inflection points across five years. First, the 2019 distribution partnership with independent filmmaker Dallas Jenkins on The Chosen — a multi-season biblical drama that became the largest equity-crowdfunded media project in history and reached an estimated 200 million viewers globally by 2023. Second, the launch of the Angel Guild subscription in 2021, which formalized the crowdfunding-plus-streaming-plus-project-voting model that funds the theatrical slate today. Third, Sound of Freedom in 2023, which reached $184 million in domestic box office with a 99% Popcornmeter audience score against a 57% Tomatometer critical score — the audience-critic gap that the memo returns to repeatedly because it IS the model. Fourth, the Chosen license termination in 2024-2025, which forced Angel to rebuild its content pipeline around Angel-controlled IP rather than the flagship title that put the company on the map. Fifth, the reverse recapitalization with Southport Acquisition Corp in September 2025 that put ANGX on the NYSE. Sixth, the first quarter of positive Adjusted EBITDA in Q1 2026, on 143% year-over-year revenue growth, 2.22 million paying Guild members, and a $25 million Solo Mio theatrical release that scored a 95% Popcornmeter.

1.1   How Angel Studios makes money

Angel Studios is not a traditional film studio. It is a distribution-and-curation platform for values-based film and television content, and its business model is closer to a subscription streaming service crossed with a crowdfunding platform than to Paramount Pictures or Warner Bros. Angel does not primarily produce content; it acquires distribution rights, funds theatrical releases through a mix of subscriber prepayments and outside capital, and monetizes each title across four coordinated revenue streams.

Table 1.1 — Angel Studios revenue streams at Q1 2026

Source: Form 10-Q for the quarter ended March 31, 2026, Item 2 MD&A revenue disaggregation.

The subscription line dominates. Seventy-two percent of Q1 2026 revenue came from the Angel Guild — 2.22 million paying members paying an average of roughly $13.69 per month for streaming access and, critically, for a role in choosing what gets funded next. Theatrical distribution is the second-largest line at 16%, driven by titles Angel took to wide release using Guild capital and outside co-financing. Content licensing generates 9%. Merchandise and sponsorship contribute the balance. This is a fundamentally different revenue mix than a legacy Hollywood studio — it looks much more like Netflix (subscription-first) with a theatrical release arm bolted on.

1.2   What the Angel Guild is

The Angel Guild is the piece of the business that requires the most explanation because it does not exist anywhere else in the media industry at scale. It is a paid membership community — not a fan club, not a Kickstarter, not a Patreon — that combines three functions in a single subscription: a streaming service, a project greenlight vote, and a source of pre-purchased tickets that funds theatrical releases. Each function feeds the other two.

Streaming access. Every paying Guild member gets full streaming access to Angel’s content library, currently including Sound of Freedom, Cabrini, Sight, Bonhoeffer, Solo Mio, Dry Bar Comedy, and the back catalog Angel has assembled since 2013. This is the reason a Guild member pays every month even if they never vote on a new project. If Angel offered nothing but this, the Guild would look like a niche faith-and-family streaming service.

Voting rights. Every paying Guild member gets a vote on which projects Angel green-lights next. Projects are pitched to the Guild; members watch teaser reels; members vote yes or no. Only projects that clear a Guild-vote threshold advance to development and production financing. This is the mechanism that gave Angel The Chosen, Sound of Freedom, and Cabrini — each was Guild-voted before Angel put outside capital behind it. This voting mechanism is where the “community-funded studio” language comes from, and it is the piece a Wall Street analyst covering Roku or Fubo has literally never seen before.

Pay It Forward tickets. When a Guild-voted project reaches theatrical release, Guild members can buy pre-purchased tickets that get gifted to non-members at the box office. This is how Sound of Freedom reached $184M in domestic box office in 2023 — Guild members prepaid tickets, and Angel distributed them through opening weekend to non-members who came for free. The mechanic acts as an alternative to conventional advertising: the marketing spend goes into distributed tickets rather than TV spots, and the ticket-count boost creates real box-office traction. It also creates deferred revenue on Angel’s balance sheet — pre-purchased ticket obligations sit as a liability until the ticket is redeemed at the theater. At March 31, 2026, deferred Guild membership revenue was $73.6M — a customer-prepaid war chest that funds each next slate.

1.3   The Chosen backstory — created by Dallas Jenkins, distributed by Angel, now separated

A common misconception is that Angel Studios created The Chosen. It did not. The Chosen was created, written, and directed by Dallas Jenkins, an independent filmmaker who developed the multi-season biblical drama as an independent production starting in 2017. Angel Studios (then operating as VidAngel and later renamed Angel Studios) entered a distribution partnership with Jenkins’s production entity in 2019, at which point The Chosen became the flagship title on Angel’s streaming platform. Angel was the distributor; Dallas Jenkins retained creative control and, critically, ownership of the underlying intellectual property.

The distribution partnership put Angel on the map. The Chosen Season 1 raised $10.2M via equity crowdfunding — the largest such raise in media-industry history at that time — and Angel’s platform hosted the streaming release. Season 2, Season 3, and Season 4 followed the same model. By 2023, The Chosen had been watched by an estimated 200 million viewers globally and was the anchor content driving Angel Guild membership growth. Angel captured distribution economics; Jenkins’s production entity captured the IP and production margin.

The partnership deteriorated in 2023-2024. Disputes surfaced over distribution accounting, revenue-share terms, marketing spend allocation, and creative control decisions. In May 2024, an arbitrator terminated the Chosen license agreement — meaning Angel lost the right to distribute new seasons and, on a defined ramp-down, lost streaming rights to the existing seasons. Angel appealed. In June 2025, the arbitration panel upheld the termination. In July 2025, the parties signed a mutual release and settlement.

The Chosen’s Season 5 and subsequent seasons are now distributed by the Come and See Foundation, a nonprofit affiliated with Dallas Jenkins’s production entity, with a strategic partnership with Amazon Prime Video for streaming distribution. Angel Studios no longer participates in the economics of The Chosen.

This is the single most important context for reading Angel’s FY2025 and Q1 2026 financials. In FY2024, revenue attributable to The Chosen was 19.7% of total. In Q1 2026, that percentage is zero. Every dollar of the 2.22 million Guild members’ membership fees, the $18.0M of Q1 2026 theatrical revenue, and the $10.2M of Q1 2026 content licensing revenue now flows from titles Angel controls itself — Sound of Freedom, Cabrini, Sight, Bonhoeffer, Solo Mio, and the pipeline anchored by Young Washington, Angel and the Badman, and Zero A.D.

At Friday’s close, ANGX traded at $4.15 per share, a market capitalization of approximately $774 million. The 52-week range is $2.05 to $20.39 — a 10x round-trip in twelve months that includes the SPAC-close run, the post-close Reg A dilution, the Chosen-arbitration overhang, and the Q1 2026 inflection. Next earnings are scheduled for August 4, 2026. Every subsequent section of this case reads against that $774M market-cap anchor.

1.4   The Harmon brothers — who founded Angel Studios

Angel Studios was founded in Provo, Utah in 2013 by four brothers and a cousin. Neal Harmon is the CEO and public face of the company. His brothers Daniel Harmon (creative), Jeffrey Harmon (co-founder, marketing), and Jordan Harmon (co-founder), together with cousin Benton Crane, complete the founding team. Before Angel, the same team ran Harmon Brothers, a Utah-based creative advertising agency best known for the viral Squatty Potty, Poo-Pourri, and Purple Mattress campaigns of the mid-2010s. The Harmon Brothers agency’s conversion-focused, faith-and-family-values creative sensibility is the same sensibility that runs Angel Studios today — the marketing DNA of the parent company transferred wholesale into the studio.

The founders are members of The Church of Jesus Christ of Latter-day Saints (LDS/Mormon) and have spoken openly about the faith foundation of the business. That foundation is not incidental — it explains the values-based curation model, the Utah headquarters, the Guild’s community-lock-in dynamics, and the specific content categories Angel operates in (faith-forward drama, family films, biblical narrative). It also explains the Class B super-voting share structure, which was designed to preserve the founder team’s ability to keep the studio’s content mission intact against outside-shareholder pressure.

1.5   The Disney v. VidAngel copyright suit — and the pivot that produced Angel Studios

To understand Angel Studios, the reader has to understand that Angel Studios is the successor to VidAngel, an earlier company the same Harmon founders operated from 2013 through 2020 as a family-content filtering service. VidAngel’s original business model worked like this: subscribers paid a monthly fee, VidAngel bought physical DVDs and Blu-rays of major-studio films, ripped the content, applied user-selectable filters that removed profanity, nudity, violence, or other objectionable material, and streamed the filtered version to subscribers. VidAngel claimed the model was legal under the Family Movie Act of 2005, which authorizes filtering of copyrighted content for private home viewing. The studios disagreed.

In June 2016, Disney, Lucasfilm, 20th Century Fox, and Warner Bros. jointly sued VidAngel in the United States District Court for the Central District of California. The complaint alleged (i) copyright infringement, (ii) circumvention of encryption on DVDs and Blu-rays in violation of the Digital Millennium Copyright Act (17 U.S.C. §1201), and (iii) unfair competition. The studios’ theory was that VidAngel’s filtering-and-streaming service went beyond what the Family Movie Act authorized because it involved (a) making unauthorized digital copies of encrypted works, and (b) redistributing those copies via a subscription streaming service. In December 2016, the district court granted the studios a preliminary injunction shutting down VidAngel’s filtering service for major-studio content. The Ninth Circuit affirmed on appeal in August 2017.

In October 2017, VidAngel filed for Chapter 11 bankruptcy protection. The case ran through 2018 and 2019 while the district-court copyright-damages trial proceeded in parallel. In June 2019, a federal jury awarded the studios $62.4 million in statutory damages — approximately $75,000 per infringed work across 819 titles. The judgment was affirmed on appeal. In 2020, VidAngel emerged from bankruptcy under a court-approved plan of reorganization, settled the damages judgment on terms that let the company continue operating, discontinued its filtering service for major-studio content, and pivoted to a new business model: distributing content Angel controlled itself, rather than filtering content it did not. The rebranded entity became Angel Studios.

1.6   Who owns Angel today — the shareholder map

Angel Studios’ ownership is easier to understand once the reader separates voting control from economic ownership. The dual-class structure was designed to keep voting control with the founder team while economic ownership diversified through the SPAC transaction and subsequent equity issuances. Table 1.2 puts both lenses on the same page.

Table 1.2 — Ownership map at April 27, 2026 (illustrative practitioner summary)

Source: Institute summary from Form 10-K for the year ended December 31, 2025 (Item 12 Security Ownership); Form 10-Q for the quarter ended March 31, 2026, Note 6; Q1 2026 earnings press release dated April 30, 2026; Business Combination Proxy Statement dated August 2025 (SEC EDGAR). Class B and Class A splits within the founder block are aggregated for readability; the underlying Schedule 13G / Section 16 filings itemize individual founder holdings.

The voting-control picture is the practitioner takeaway. Even after the SPAC transaction, the Reg A offering, the ATM program, and the April 2026 registered offering — three separate rounds of Class A dilution that pushed public-float economic ownership above 55% — the founder team retains roughly 75-80% of the votes through Class B super-voting shares. Any material change to the company’s direction, mission, or capital structure requires either founder buy-in or a Class B amendment that Class B holders themselves would have to approve. This is why the Harmon family remains, in practice, in operating and strategic control of the company even at a $774M market cap where their economic stake is a minority.

1.7   The capital structure in one page — a reader’s simplifier

Angel Studios’ capital structure is legitimately complicated. There are two share classes, five debt facilities at rates from 10% to 30.9%, an insider-owned related-party revolver, four undrawn term-loan tranches with covenants, 35.9M anti-dilutive potentially issuable shares, warrants, options, RSUs, a 303-bitcoin treasury with unrealized-loss volatility, and a $230M NOL that may already be capped by §382. Sections 3 through 12 walk each piece in detail. This subsection is the reader’s cheat sheet — everything on one page, in the order a practitioner would build it.

Table 1.3 — Angel Studios capital structure at a glance (all figures at 3/31/2026 or 4/27/2026 reference date)

Source: Form 10-Q for the quarter ended March 31, 2026, balance sheet (page 3), Notes 4 (Debt), 5 (Equity), 6 (Common Stock), 7 (Bitcoin), 8 (Subsequent Events); Q1 2026 press release dated April 30, 2026.

Executive Summary

Section 2 established what Angel Studios does, how the Guild works, and why The Chosen is no longer part of the company. This section is the numeric read on what those facts produce on the balance sheet and income statement. The financial position looks distressed at first glance — negative stockholders’ equity, double-digit interest rates, dilutive equity issuance — because Angel is investing through the post-Chosen content-pipeline rebuild while simultaneously scaling the Guild subscription base. Q1 2026 revenue growth (143% year-over-year) and first-quarter-of-positive Adjusted EBITDA is the empirical answer to whether that investment thesis is working. The case takes no position on whether it continues.

On September 25, 2025, Angel Studios completed a reverse recapitalization with a special-purpose acquisition company called Southport Acquisition Corp. Angel Legacy was the accounting acquirer; the transaction generated zero net cash proceeds; direct transaction costs of $4.9 million ran through general and administrative expense; and the surviving public company began trading on the New York Stock Exchange under the ticker ANGX. Six months later, the company reported its first quarter of positive Adjusted EBITDA. Total revenue for the three months ended March 31, 2026, was $115.1 million, up 143% year-over-year. Paying members of the Angel Guild reached 2.22 million, up 11% quarter-over-quarter and 106% year-over-year. Selling and marketing expense, which had run at 107% of revenue in Q1 2025, dropped to 49% of revenue in Q1 2026.

Those numbers describe a business that is inflecting. The rest of the balance sheet describes a business that must earn every dollar of that inflection.

At March 31, 2026, Angel Studios carried total liabilities of $254.5 million against total assets of $213.1 million, producing total stockholders' equity of negative $41.5 million. Accumulated deficit was $255.3 million. Notes payable totaled $102.3 million at effective interest rates between 14.5% and 30.9%. A revolving production-and-advertising loan facility of $38.5 million was fully owned by directors, officers, and stockholders of the company — a related-party structure that priced insider capital at 10% to 15% and gave that capital first-priority repayment against theatrical box-office receipts of the funded titles. The company held 303.1 bitcoin marked at $20.7 million on the balance sheet, down from $26.5 million at year-end 2025, a $5.8 million unrealized loss that ran through the P&L under ASU 2023-08 fair-value accounting. And the company had accumulated a federal net operating loss carryforward of approximately $230.2 million, offset in full by a valuation allowance.

This case is a valuation-first read on that combined picture. The Institute questions are three:

1. What is the Angel Guild actually worth? The Guild is 72% of revenue at Q1 2026 and grew 140% year-over-year. Trailing-twelve-month average revenue per member is $13.69 per month. The Q1 2026 balance sheet carries $73.6 million of deferred Guild membership revenue — a customer-prepaid war chest that funds each next slate. If the Guild is treated as SaaS-grade recurring revenue and valued at streaming/subscription multiples, Angel's implied equity value is materially higher than the residual $34.5 million April 2026 registered offering at $2.10 per share suggests. If the Guild is treated as a subsidy of a still-loss-generating studio — a bulk pre-purchase of theatrical tickets and merchandise rather than a durable subscription — the multiple compresses.

2. Is the $230.2M NOL a real shield, or an accounting artifact? Section 382 of the Internal Revenue Code limits a corporation's ability to use its net operating losses following an "ownership change" — typically a greater-than-50-percentage-point shift in 5% shareholders over a rolling three-year window. The Southport reverse-recap in September 2025 is the fact pattern that Section 382 was written to catch. Angel Legacy converted 160.7 million shares into the public shell in a transaction with a SPAC shareholder base rotating through redemptions, and then followed that transaction with a $55M Regulation A offering, a $150M at-the-market equity distribution agreement, and a $34.5M April 2026 registered offering. If a Section 382 ownership change occurred at the SPAC close, the annual usable NOL is limited to the pre-change equity value multiplied by the long-term tax-exempt rate. At Angel's post-close valuation and a rate near 4.5%, the annual shield is small enough that the $230.2 million pile could take a decade or more to bleed out even if the company achieves sustained profitability. The 10-K states the limitation risk explicitly; the case walks the practitioner arithmetic.

3. Can Angel produce its own IP after losing The Chosen? Angel's original growth was built on distribution of The Chosen, the largest equity-crowdfunded media project in history. In May 2024, an arbitrator terminated the Chosen license agreement. In June 2025, the arbitration panel upheld the termination. In July 2025, the parties signed a mutual release. Every dollar of the 2.22 million Guild members' membership fees, the $18.0 million of Q1 2026 theatrical revenue, and the $10.2 million of Q1 2026 content licensing revenue now flows from titles Angel controls itself — Sound of Freedom, Cabrini, Sight, Bonhoeffer, and the Q1 2026 flagship Solo Mio (Kevin James), which crossed $25 million in domestic box office with a 95% Popcornmeter score. The 2026 slate anchored by Young Washington (Kelsey Grammer, Mary-Louise Parker, Ben Kingsley), Angel and the Badman (Tommy Lee Jones), and Zero A.D. (Sam Worthington, Jim Caviezel, Ben Mendelsohn) is the empirical test of whether the Guild flywheel works without The Chosen.

Company Snapshot & Capital Structure

2.1   Corporate profile

Table 2.1 — Corporate profile at March 31, 2026

Source: Form 10-K for the year ended December 31, 2025, page 1 and Item 5; Form 10-Q for the quarter ended March 31, 2026, pages 1 and 17.

2.2   Authorized capital — the dual-class stack

Angel Studios has authorized a total of 701 million shares of capital stock: 500 million shares of Class A Common Stock at one vote per share, 200 million shares of Class B Common Stock at ten votes per share, and 1 million shares of preferred stock. Class B super-voting shares concentrate voting control with the Harmon family and legacy pre-SPAC holders. The dual-class structure was carried through the September 2025 Business Combination and is a permanent feature of the capital structure absent an amendment approved by the Class B holders themselves.

Table 2.2 — Authorized capital stock and voting mechanics

Source: Form 10-Q for the quarter ended March 31, 2026, Note 6 (Common Stock), page 22.

2.3   Shares outstanding walk — Q1 2026 and post-quarter

The shares-outstanding walk from the Business Combination close through the April 2026 registered offering is the diligence starting point for any dilution or per-share valuation calculation. The Business Combination itself contributed 168.6 million shares. Reg A, at-the-market, option exercises, and repurchases brought the balance to 169.85 million at 3/31/2026. The April 2026 registered offering added 16.4 million shares in a single transaction — a 9.7% increase in outstanding shares at a public offering price of $2.10.

Table 2.3 — Shares outstanding walk, Business Combination close through April 2026

Source: Form 10-Q for the quarter ended March 31, 2026, Notes 2 and 8; Item 2 MD&A; Q1 2026 earnings press release dated April 30, 2026, footnote 4.

2.4   Debt facilities and effective interest rates

Angel Studios carries $102.3 million of net notes payable at March 31, 2026, spread across five distinct facilities and, in one case, an insider-owned production-and-advertising vehicle. Coupon rates run from 10% to 15%. Because each facility other than the May 2024 P&A loans and Angel P&A revolver was issued with warrant or convertible features, the effective interest rate — the imputed borrowing cost after allocating the warrant or conversion value to additional paid-in capital — is materially higher than the coupon in every case. The May 2025 convertible note has an effective rate of 30.9%.

Table 2.4 — Debt facilities at March 31, 2026 ($ in millions)

Source: Form 10-Q for the quarter ended March 31, 2026, Note 4 (Debt), pages 18-20. Effective rates reflect allocation of warrant fair value to additional paid-in capital in accordance with ASC 470.

2.5   Undrawn capacity and covenant architecture

The September 2025 term loan is structured as a $100 million delayed-draw facility across four committed tranches. Tranche 1 ($40M) funded at close. Tranche 2 ($20M) drew in February 2026. Tranche 3 ($20M) is available through December 31, 2026. Tranche 4 ($20M) is available through June 30, 2027. Availability of tranches 3 and 4 is conditioned on achievement of a specified minimum annualized recurring revenue and receipt of a specified minimum of net cash proceeds from equity issuance — a covenant structure that hard-wires the Guild ARR growth trajectory into the debt-facility architecture. Interest-only payments apply for the first 26 months; principal amortization begins in month 27, with a balloon maturity on October 1, 2030. The credit facility is secured by substantially all of the company's assets and includes a minimum-liquidity covenant.

Table 2.5 — Undrawn term-loan capacity at March 31, 2026

Source: Form 10-Q for the quarter ended March 31, 2026, Note 4 (Debt), page 19; Item 2 MD&A, pages 27-28.

2.6   Anti-dilutive potentially issuable shares — the overhang

In addition to the 186.4 million shares outstanding at April 27, 2026, Angel Studios has 35.9 million potentially issuable shares outstanding as of Q1 2026 — anti-dilutive under GAAP loss-per-share arithmetic because the company posted a net loss, but real for any per-share valuation exercise a practitioner would run. This overhang represents an additional 21% of shares outstanding at the reference date.

Table 2.6 — Potentially issuable common shares (anti-dilutive) at March 31, 2026

Source: Form 10-Q for the quarter ended March 31, 2026, Note 6 (Common Stock — Loss per Share), page 23.

Trading Levels Since NYSE Listing

Angel Studios has been publicly traded on the NYSE for approximately seven months at the date of this memo. The Institute approach in this section is to anchor the price discussion to the filed-document reference prices that Angel and its counterparties negotiated at each capital-markets event — not as a substitute for live-tape data, but as a superior valuation signal. Each reference price below carries the signature of a party with money at risk who negotiated the price at that moment: a Regulation A investor, a convertible lender, a warrant recipient, a merger counterparty, an ATM buyer, or an underwriter placing a registered offering. Market close prices reflect the marginal-share opinion of anonymous liquidity. Filed-document reference prices reflect the considered opinion of a specific counterparty who wrote a check or issued a security. For a company that has traded publicly for only seven months and whose float is thin relative to peer streaming or subscription-community names, the contract-set prices are the higher-signal data. Read as a ladder, they describe an equity that priced at $8.23 in September 2025 and cleared at $2.10 seven months later.

3.1   Filed-document reference-price ladder

Table 3.1 — Reference prices from filed documents, September 2025 through April 2026

Source: Form 10-Q for the quarter ended March 31, 2026, Notes 2, 4, 5, and 8; Item 2 MD&A. All prices are contract-set reference points from filed documents; live NYSE tape data is not shown in this table.

3.2   Implied fully-diluted equity value at each reference print

Applying each reference price to the shares outstanding on the corresponding date gives the equity value implied by a rational counterparty at each moment in the seven-month arc. The descent from a $1.44 billion implied equity value in September 2025 to $391 million after the April 2026 offering is the price story in one number, before layering in net debt.

Table 3.2 — Implied equity value at each reference-price event

Source: Institute calculation. Implied equity value = reference price × shares outstanding at that reference date. Shares outstanding sourced from Form 10-Q, Notes 2 and 8, and Q1 2026 press release footnote 4.

3.3   Implied enterprise value at the April 2026 print

Enterprise value bridges equity value to the operating-asset value that the memo's Section 8 valuation triangulates against. Applying standard EV arithmetic to the April 2026 registered-offering print gives an implied enterprise value of $425 million — a number that is close to a 1.0× multiple of Angel's forward Guild ARR run-rate and materially below any commonly-cited SaaS or subscription-streaming multiple.

Table 3.3 — Enterprise value bridge at the April 2026 offering price

Source: Institute calculation from filed balance sheet at March 31, 2026 and post-quarter events disclosed in Form 10-Q Note 8. Excludes 35.9M anti-dilutive potentially issuable shares (see Table 2.6); a fully-diluted stress-case EV is developed in Section 8.

Precedent Transactions

Angel Studios is not directly comparable to any single transaction in the public precedent set. It is a hybrid of three distinct M&A archetypes: the SVOD library acquisition (Amazon-MGM, Sony-Crunchyroll), the subscription-community platform (the Chosen crowdfunding rounds, Rumble, Truth Social/DWAC), and the SPAC-emerged media roll-up (fuboTV, Chicken Soup for the Soul Entertainment, Buzzfeed, Vice). The precedent set below is organized by archetype so a reader can triangulate what a rational strategic or financial acquirer would pay for each Angel asset separately — the Guild subscription stream, the owned-IP film library, and the technology platform.

4.1   SVOD library and studio acquisitions

Amazon-MGM is the reference transaction: $8.5 billion all-cash for approximately 4,000 films and 17,000 TV episodes, with the MGM+ streaming service embedded. Sony-Crunchyroll established the pure-play values-adjacent SVOD subscription multiple (Crunchyroll had 5 million paying subscribers at deal announcement). The Netflix acquisition of Roald Dahl Story Company established that IP-with-content-rights carries a premium to library-only SVOD.

Table 4.1 — SVOD library and studio precedents

Source: Company press releases; SEC filings; FactSet transaction database. Multiples calculated from disclosed enterprise value against the trailing-twelve-month revenue at deal announcement.

4.2   Subscription-community platform precedents

The most instructive comps for the Angel Guild are not the streaming megadeals but the smaller subscription-community rounds and the values-adjacent crowdfunding valuations. The Chosen, whose distribution license Angel lost in 2024, raised private capital at valuations that priced its 100 million-plus audience at a per-viewer multiple that Angel materially undercuts at the current market price. Rumble, a values-adjacent user-generated-content platform, went public via a 2022 SPAC at a $2.1 billion valuation with 44 million monthly active users.

Table 4.2 — Subscription-community platform precedents and reference valuations

Source: Chosen crowdfunding disclosures (Regulation CF filings on SEC EDGAR); Rumble CFVI merger 8-K, September 2022; DWAC/Truth Social S-4 filings; Substack, Patreon, MasterClass private-round announcements. Per-member figures are the Institute’s divisor calculation and not disclosed values.

Applied to Angel's 2.22 million paying Guild members, the private-market per-member multiples span from Patreon's roughly $571 per patron on the low end to Substack's roughly $1,300 per paying subscriber on the high end. Even at the Patreon low, that arithmetic implies an equity value of $1.27 billion — more than three times the April 2026 offering print. The critical caveat: private-round valuations from 2021 are the top of a technology-cycle peak and do not price the compressed-multiple regime of 2024-2026.

4.3   SPAC-emerged media — the failure set

The reverse-recap path that took Angel public in September 2025 has a distinct precedent set of its own, and the results have been sobering. Chicken Soup for the Soul Entertainment, once one of the largest values-adjacent SPAC-emerged media companies, filed for Chapter 11 in June 2024. Buzzfeed, which went public via a SPAC in December 2021 at a $1.5 billion valuation, has traded at approximately 5% of that valuation for most of 2025. Vice Media, which never made it public, sold in bankruptcy for approximately $350 million in mid-2023.

Table 4.3 — SPAC-emerged media companies — outcomes

Source: SEC filings, S-1s, bankruptcy dockets, public trading histories. Value retention = current market cap divided by de-SPAC deal valuation, both undiscounted for time value.

Trading Comparables

There is no public company that maps cleanly onto Angel Studios. The direct analog would be a mid-cap subscription streaming operator with a values-based content thesis, a customer-funded slate, a dual-class founder structure, a bitcoin treasury, and a $200M+ net operating loss carryforward. That company does not exist. What does exist is a peer set that isolates each of Angel's economic dimensions separately: subscription streaming multiples (NFLX, WBD, PSKY, CURI), values-based platform multiples (RUM, TSLA-adjacent), mid-cap studio multiples (LGF.A/B), and small-cap SVOD survivors (FUBO, RLGT). The Institute view is that a practitioner should read Angel against each peer group on the metric where the comparison holds and ignore each peer group's other multiples.

5.1   Subscription streaming peer set — NFLX, WBD, PSKY, CURI

The subscription streaming peer set is a bad EV/EBITDA fit for Angel (Netflix's economics don't inform Angel's) but a defensible EV/subscriber and EV/revenue reference for the highest-multiple bookend.

Table 5.1 — Subscription streaming peer set, mid-2026 reference multiples

Source: Institute reference values compiled from public trading data and most recent 10-Q/10-K filings. Values are approximate mid-2026 references intended for triangulation; not intended as precise trading levels.

5.2   Values-based and community-platform peer set

The values-adjacent public peer set is thin. Rumble Inc. is the closest fit — a publicly traded platform with a values-based user community, a founder-controlled dual-class structure, a SPAC-emerged capital-markets history, and a burn-rate profile that mirrors Angel's pre-inflection.

Table 5.2 — Values-based and community-platform peer set, mid-2026 reference multiples

Source: Institute reference values compiled from public trading data and most recent 10-Q/10-K filings.

5.3   Mid-cap studio and small-cap SVOD peer set

The mid-cap studio comps (Lionsgate Studios, AMC Networks) price the pure-play studio economics without a subscription flywheel. The small-cap SVOD comps (fuboTV, Reelgood) price the subscription business at scale below Angel's Guild.

Table 5.3 — Mid-cap studio and small-cap SVOD peers, mid-2026 reference multiples

Source: Institute reference values compiled from public trading data and most recent 10-Q/10-K filings.

5.4   Angel Studios — multiple positioning across the three peer sets

Applying each peer-group multiple to Angel Studios at its Q1 2026 metrics gives a valuation range that spans an order of magnitude — the correct read is that different peer groups will always produce different valuations for a hybrid business, and the practitioner's job is to weight each multiple by how well the peer group's economics inform Angel's economics.

Table 5.4 — Angel Studios implied equity value by peer-group multiple

Source: Institute calculation. Implied EV = multiple × Angel metric. Implied equity value = implied EV less $34M net debt/short position. Guild ARR run-rate = Q1 2026 Guild revenue of $83.3M × 4 = $333M; total Q1 2026 revenue annualized = $460M.

Historical Financial Build

The four-period picture that anchors the memo is: FY2023 was a profitable year (net income of $13.4 million), FY2024 turned to a large loss ($88.3 million), FY2025 doubled the loss ($170.5 million), and Q1 2026 posted the company's first quarter of positive Adjusted EBITDA (+$4.0 million against a Q1 2025 loss of $28.7 million). Reading those four data points as a straight-line collapse-and-recovery misses the point. The FY24 and FY25 losses were driven by the Chosen litigation termination and a self-financed marketing scale-up to establish the Guild flywheel with owned IP. Q1 2026 is the first quarter where the Guild flywheel produced enough recurring revenue to leverage the marketing base — and where the marketing cost per Guild member dropped materially.

6.1   Revenue mix compositional shift — Guild share expansion

The compositional shift in the revenue mix is the leading indicator of the business-model inflection. The Angel Guild grew from a $34.7 million contribution in Q1 2025 (73% of that quarter's total revenue) to an $83.3 million contribution in Q1 2026 (72% of that quarter's total revenue). Content licensing (Amazon, Apple, Netflix), which had been trivial at $2.6 million in Q1 2025, grew to $10.2 million in Q1 2026 (+291%). Theatrical revenue grew from $7.7 million to $18.0 million (+133%) as Solo Mio and other titles delivered.

Table 6.1 — Revenue mix, Q1 2025 vs. Q1 2026 ($ in millions)

Source: Form 10-Q for the quarter ended March 31, 2026, Note 3 (Revenue Recognition), page 12.

6.2   Guild economics — membership growth and ARPM curve

The Guild subscriber count grew from 1.08 million paying members in Q1 2025 to 2.22 million in Q1 2026 — a doubling of the paying base while the trailing-twelve-month average revenue per member held at $13.69 per month.

Table 6.2 — Angel Guild membership and unit economics

Source: Q1 2026 press release dated April 30, 2026; Form 10-Q Note 3 (Revenue Recognition — Angel Guild), page 12; Form 10-K for the year ended December 31, 2025.

6.3   Selling and marketing leverage — from 107% to 49% of revenue

The single most important operating-leverage lever in the Angel P&L is the drop in selling and marketing expense as a percentage of revenue. In Q1 2025, the company spent $50.5 million on S&M against $47.4 million of revenue — a 107% ratio. In Q1 2026, the company spent $56.6 million on S&M against $115.1 million of revenue — a 49% ratio. S&M spend grew 12% year over year while revenue grew 143%. This is the arithmetic that produces the Adjusted EBITDA turn.

Table 6.3 — Operating expense build, Q1 2025 vs. Q1 2026 ($ in millions)

Source: Form 10-Q for the quarter ended March 31, 2026, Condensed Consolidated Statements of Operations, page 4.

6.4   Adjusted EBITDA reconciliation

Angel Studios reports Adjusted EBITDA excluding stock-based compensation and the mark-to-market movement of the bitcoin treasury — both of which are material P&L items under GAAP.

Table 6.4 — Adjusted EBITDA reconciliation, Q1 2025 vs. Q1 2026 ($ in millions)

Source: Q1 2026 press release dated April 30, 2026, "Reconciliation of net loss to non-GAAP Adjusted EBITDA," page 4.

6.5   Deferred revenue build — the leading indicator of Guild ARR

The single balance-sheet line that best predicts future Guild revenue is deferred Guild membership revenue. From December 31, 2025 to March 31, 2026, deferred Guild revenue grew by $8.8 million, or 14%, in a single quarter — a sharper growth rate than the 11% quarter-over-quarter Guild member growth, suggesting that the mix is shifting toward annual (rather than monthly) memberships, or that ARPM is inflecting up.

Table 6.5 — Deferred revenue balances at March 31, 2026 and December 31, 2025 ($ in millions)

Source: Form 10-Q for the quarter ended March 31, 2026, Notes 3 (Revenue Recognition — Deferred Revenue), page 12, and Condensed Consolidated Balance Sheets, page 3.

Consolidated Cash Flow Statement — SEC-Filed Data

The cash flow statement below reproduces the audited consolidated statements of cash flows from the Angel Studios FY2025 Annual Report on Form 10-K, filed with the SEC on March 12, 2026. The 10-K presents a three-year comparative (FY2023, FY2024, FY2025) as required for a first-time reporting company under Regulation S-X. The Q1 2025 and Q1 2026 columns are added from the unaudited condensed consolidated statements of cash flows in the Form 10-Q for the quarter ended March 31, 2026. Every line ties to a specific SEC filing; no Institute estimates are used in this table.

Table 6.6 — Consolidated Statements of Cash Flows (SEC-filed, $ in millions)

Source: Form 10-K for the year ended December 31, 2025, Consolidated Statements of Cash Flows, page F-6 (all three annual columns). Form 10-Q for the quarter ended March 31, 2026, Condensed Consolidated Statements of Cash Flows, pages 6-7 (both quarterly columns). Every line item in the table above is directly disclosed in one of these two SEC filings. "n.d." indicates the line item is not separately presented in that filing at that level of detail. "n.a." indicates the line was not applicable to that period.

Valuation Framework

The Institute valuation framework treats Angel Studios as a sum-of-the-parts: (a) the Guild subscription business valued on an ARR-multiple basis; (b) the theatrical distribution and content licensing business valued on a normalized EBITDA multiple; (c) the bitcoin treasury valued at pure net asset value; and (d) the §382-limited NOL deferred tax asset valued at a discounted present-value shield. Debt and off-balance-sheet obligations bridge SOTP enterprise value to equity value. The framework is run in three scenarios — Low (SPAC-comp reversion), Base (Institute view), High (subscription-community reversion) — and the boardroom commit is stated at the end.

7.1   SOTP component 1 — Angel Guild subscription business

The Guild is valued as an annualized recurring revenue (ARR) stream. Q1 2026 Guild revenue of $83.3M annualizes to a $333M run-rate. Applying the range of subscription-community multiples developed in Sections 4 and 5, the Guild business alone supports a valuation of $500M in the Institute Base case, $250M in the Low case (streaming-reversion), and $1.0B in the High case (private-round subscription-community reversion).

Derivation of the 1.5× Base case multiple. The multiple is not a blended midpoint. It is derived from three anchors, each weighted by the reader-relevance of the peer group to Angel's actual economics. Anchor 1: Paramount Skydance (PSKY) trades at approximately 1.1× NTM revenue on a subscription base that grew ~5% in FY26E — the "streaming with cable drag" comparable. Anchor 2: Rumble (RUM), the closest values-based subscription peer, trades at approximately 5.5× NTM revenue on a values-based user community growing ~15% annually — the "values-adjacent public peer" comparable. Anchor 3: Substack and Patreon 2021 private rounds implied 3-4× ARR — the "subscription-community private-round" comparable. Weighting: 40% to PSKY (Angel is a smaller streaming/media company), 30% to RUM (values-adjacent capital markets fit), and 30% to Substack/Patreon (subscription-community architecture match) gives (0.40 × 1.1) + (0.30 × 5.5) + (0.30 × 3.5) = 0.44 + 1.65 + 1.05 = 3.14×. Then applied against Angel's 140% Guild-revenue-growth premium versus PSKY's ~5%, the Institute weights the RUM and Substack/Patreon multiples down by 50% to reflect that Angel's growth is un-tested against the private-round peer group's later-stage compression. That produces (0.40 × 1.1) + (0.30 × 2.75) + (0.30 × 1.75) = 0.44 + 0.83 + 0.53 = 1.80×. Rounded down to 1.50× to reflect execution risk on the FY26E guided EBITDA loss and to align with the mid-point of the Section 5.4 streaming EV/NTM revenue band. This is the derivation. A reader who prefers the un-discounted 1.8× or the streaming-only 0.75× can substitute either in the Section 7.5 bridge and rerun the arithmetic.

Table 7.1 — Angel Guild subscription valuation, three scenarios

Source: Institute calculation. Guild ARR = Q1 2026 Angel Guild revenue of $83.3M annualized (× 4). Multiple range triangulated from Section 4.2 subscription-community precedents and Section 5.1-5.3 trading peers.

7.2   SOTP component 2 — Theatrical, licensing, and other revenue

The non-Guild revenue lines (theatrical distribution $18.0M, content licensing $10.2M, merchandise $3.1M, other $0.5M in Q1 2026) annualize to a $127M run-rate. This is the operating business excluding the Guild — the "studio" business in the sum-of-the-parts. Because Angel has not yet demonstrated sustained profitability on this segment, the Institute values it on an EV/Revenue basis at multiples benchmarked to Lionsgate Studios and AMC Networks (Section 5.3).

Table 7.2 — Non-Guild theatrical/licensing/merchandise valuation, three scenarios

Source: Institute calculation. Non-Guild run-rate = Q1 2026 (Theatrical $18.0M + Content licensing $10.2M + Merchandise $3.1M + Pay it Forward + Other $0.5M) × 4.

7.3   SOTP component 3 — Bitcoin treasury

The bitcoin treasury is a discrete asset valued at its balance-sheet carrying value. 303.1 BTC at Q1 2026 carrying of $20.7M. The Institute takes this at pure NAV and does not apply a corporate-holding discount (Angel has explicit optionality to sell, collateralize, or hold under its bitcoin treasury strategy per 10-Q p 27).

Table 7.3 — Bitcoin treasury valuation (all scenarios)

Source: Form 10-Q for the quarter ended March 31, 2026, Note 3 (Digital Assets), page 17.

7.4   SOTP component 4 — §382-limited NOL deferred tax asset

The $230.2M gross NOL carryforward has a face-value tax-effected DTA of $56.2M at a 24.4% blended federal-plus-state rate (see Section 10 for the full §382 walk). The Institute applies a haircut in three tiers reflecting the range of possible §382 outcomes: Low case assumes a full §382 ownership change occurred at the Southport reverse-recap, capping the annual usable NOL at pre-change equity times the long-term tax-exempt rate; Base case assumes the ownership change is more likely than not but the pre-change equity value produces a meaningful annual limit; High case assumes the §382 test was not tripped by the SPAC transaction (a defensible but low-probability read that would require the Southport shareholders to be treated as continuity owners, which is inconsistent with typical SPAC-emergence practitioner guidance).

Table 7.4 — §382-limited NOL DTA valuation, three scenarios

Source: Institute calculation. Section 10 develops the §382 mechanics; face DTA sourced from 10-K Income Tax footnote at page F-36. Long-term tax-exempt rate ("LTTER") reference approximates July 2026 IRS Rev. Rul. rate.

7.4a   SOTP component 5 — Dry Bar Comedy and owned digital-content assets

The Dry Bar Comedy franchise is disclosed in the FY2025 10-K at page 8 as generating over five billion cumulative views across YouTube and social media. Angel describes it as "one of the largest collections of clean stand-up comedy in the world." This is a discrete owned digital-content asset that is not captured in the Guild ARR (Section 7.1) or in the theatrical/licensing/merchandise component (Section 7.2) — Dry Bar revenue flows through the "Other" line of the P&L which totaled $0.5M in Q1 2026, materially understating the asset's economic value.

The Institute values Dry Bar Comedy as a standalone digital-content library and creator-economy asset using three anchor multiples: (a) YouTube-CPM library-monetization value on the cumulative view base; (b) per-viewer valuation applied against the estimated active viewer cohort using Rumble-style creator platform multiples; and (c) comparable creator-economy asset transaction multiples. The three approaches triangulate to a Low case of ~$10M (pure passive library asset), a Base case of ~$50M (~15% of current implied enterprise value; treats Dry Bar as a discrete platform-integrated asset), and a High case of ~$200M (applies creator-economy multiples on the active-view cohort).

Table 7.4a — Dry Bar Comedy standalone valuation, three scenarios

Source: Institute calculation. Cumulative view base of 5B+ per 10-K page 8. Active-viewer estimate is Institute reconstruction; Angel does not disclose Dry Bar Comedy operating metrics separately. This is the first Institute valuation of the Dry Bar asset in a Baratelli case study and is subject to refinement.

7.5   Bridge from SOTP enterprise value to equity value per share

Combining the four SOTP components and applying the standard bridge (add cash, subtract net debt and other obligations, then divide by fully-diluted shares) yields the implied intrinsic equity value per share under each scenario.

Table 7.5 — SOTP bridge to equity value per share ($ in millions except per-share)

Source: Institute calculation. Fully-diluted share count = 186.4M April 27, 2026 outstanding + 35.9M anti-dilutive potentially issuable (Table 2.6) = 222.3M. Contingent Disney note = probability-weighted haircut against the $62.5M Reorganization Plan promissory note (see Section 13).

7.6   The Institute view — the boardroom commit

The Institute view is that Angel Studios' intrinsic equity value at March 31, 2026 sits in the Base case range: approximately $2.90 per fully-diluted share, or a 38% premium to the April 2026 registered offering price of $2.10. The base case now incorporates the Dry Bar Comedy standalone valuation ($50M Base case per Table 7.4a) that the earlier SOTP bridge omitted. The commit rests on three positions.

First, the Guild is a subscription business, not a subsidy. The 106% year-over-year growth in paying members, the 14% quarter-over-quarter growth in deferred revenue (a leading indicator that outpaced member growth), the stable $13.69/month ARPM, and the $73.6M customer-prepaid working-capital float justify a 1.5× ARR multiple — below the private subscription-community range of 3×+ but above the pure-streaming range of 0.75×. A 1.5× multiple values the Guild at $500M — more than the entire current implied enterprise value of the company.

Second, the §382 NOL is likely already limited, but the shield is not zero. A defensible base-case §382 limit of approximately $45M per year of usable NOL, at a 24.4% blended rate, present-valued at 10% over a 15-20 year horizon, produces a real DTA of approximately $15M. This is a marginal contributor to the valuation but not the value driver Angel's tax footnote implies at face value.

Third, the debt overhang and legacy obligations compress the enterprise value into equity value less than the SOTP implies. $102M of notes payable at effective rates of 14-31%, plus $37M of accrued licensing royalties, plus a $20M base-case haircut for the Disney Reorganization Plan contingent note (fully $62.5M face but cancellable on compliance), plus the ongoing dilution risk from unexercised warrants and undrawn term-loan tranches, together produce a $200M bridge from SOTP EV to equity value.

7.7   What’s left for common shareholders — the fully-diluted per-share walk

Angel Studios is unlike most companies covered in the Institute’s case library. LVMH, Danaher, Copart, Belron, Samsung, Comcast, Berkshire — each is a cash-flow business where the valuation debate is about the multiple. Angel is different. It reads as a private company with a public-company capital structure and a devoted fan base willing to lose money to support it. The founder team retains 75-80% of voting control through Class B super-voting shares even after three rounds of Class A dilution. The Guild’s 2.22 million paying members overlap materially with the shareholder base — many Reg A investors are also Guild members, and many Guild members were customers before they were investors. The stock trades every day on NYSE and dilutes through registered offerings and ATM programs like a public company, but the customer-shareholder overlap and the mission-driven governance make it operate like a family-controlled media enterprise where economic maximization is not the primary objective. Every subsequent piece of the valuation analysis has to be read against that fact. The practitioner question that follows — the one Sections 3 through 7.6 have implicitly ducked — is what is left for the common shareholder after every layer of the capital structure has taken its cut.

This subsection answers that question directly. It walks four dilution layers, three enterprise-value scenarios, and three per-share outcomes. The math is honest to the downside because the case’s credibility depends on the memo being honest to the downside.

Layer 1 — Basic outstanding today

At the April 27, 2026 reference date in the Q1 2026 press release, Angel Studios had 186.4 million common shares outstanding — approximately 101.4 million Class A shares in the public float and approximately 85.0 million Class B super-voting shares held by the founder team and pre-SPAC insiders. At the July 16, 2026 close of $4.15, that produced a market capitalization of $773.7 million. This is the starting point for every per-share calculation that follows.

Layer 2 — In-the-money treasury-method dilution today

Table 2.6 in Section 3 disclosed 35.9 million anti-dilutive potentially issuable shares (warrants, options, RSUs, convertible-note shares). Under GAAP loss-per-share arithmetic those shares are excluded because Angel posted a net loss. Under a per-share valuation exercise they cannot be. The treasury-method calculation — standard practice in equity research — assumes each in-the-money option or warrant is exercised, the exercise proceeds are used to repurchase shares at the current market price, and only the net new shares dilute the outstanding count. Warrants that are out of the money at $4.15 (the SPAC public warrants, exercise price approximately $11.50) do not exercise and do not dilute. Options and RSUs granted below $4.15 do exercise and dilute net of proceeds. The May 2025 Sarowitz convertible note converts to Class A at a defined trigger. Treasury-method net dilution today is approximately 20-22 million shares, producing a fully-diluted count of approximately 206-208 million shares.

Layer 3 — All potentially-issuable shares at full trigger

If the stock ever reprices above $11.50 (a 2.8x from current), the SPAC public warrants exercise, the remaining out-of-the-money options exercise, and every RSU eventually vests. Maximum dilution from currently-outstanding instruments is the full 35.9 million potentially-issuable shares, producing a fully-diluted count of 222.3 million shares. This is the correct denominator for a bull-case per-share calculation, because a bull case implies the stock traded up enough to bring all instruments into the money.

Layer 4 — Forward capital plan (the layer most memos miss)

The dilution walk cannot stop at Layer 3 because Angel’s business model requires forward capital. Three forward-dilution sources are already visible in the 10-Q disclosures:

Table 7.7a — Forward dilution sources visible in Q1 2026 disclosures

Source: Institute analysis of Form 10-Q for the quarter ended March 31, 2026, Note 4 (Debt) covenant summaries, Note 6 (Common Stock) ATM disclosure, and Item 2 MD&A liquidity discussion.

Fully-loaded diluted share count after realistic forward capital plan: approximately 265-280 million shares. This is the correct denominator for a bear-case or realistic-base-case per-share calculation, because it reflects what the share count actually looks like if Angel executes the growth story the current price implies.

The enterprise-value-to-equity-value walk

Section 7 built a sum-of-the-parts enterprise value range. To get from that enterprise value to a per-share value to the common holder, three adjustments are required: back out the debt, add cash and bitcoin, and subtract contingent obligations that will be settled ahead of common. Table 7.7b walks all three scenarios.

Table 7.7b — Enterprise value to equity value walk, three scenarios ($M)

Source: Institute analysis. Enterprise value range derived from Section 7 SOTP. Cash and BTC per Q1 2026 balance sheet. Debt, royalties, and Disney contingent per Form 10-Q Note 4 and Section 13. Per-share arithmetic in Table 7.7c below uses these equity-value figures.

The per-share answer — bear, base, bull

Table 7.7c divides the equity value in each scenario by the appropriate fully-diluted share count. The bear and base cases use the forward-capital-plan share count (Layer 4, approximately 275 million shares) because a bear or base scenario implies Angel executing at roughly current trajectory, which requires the forward capital raise. The bull case uses the Layer 3 count (222 million shares) because a bull scenario — the stock trading above $11.50 — means Angel accessed growth capital through instrument exercise rather than fresh equity issuance.

Table 7.7c — Fully-diluted per-share value to the common holder, three scenarios

Source: Institute analysis. Bear/base fully-diluted count uses Layer 4 forward capital plan (~275M shares). Bull case uses Layer 3 warrant-exercise trigger (~222M shares) because $11.50+ share price is implicit in the bull enterprise value range.

This is why the framing matters. Angel Studios is not a case where the reader debates whether the multiple should be 8× EBITDA or 10× EBITDA. It is a case where the reader has to decide whether a subscription-community company with 143% year-over-year growth, a $774M market cap, negative book equity, high-cost debt, a founder-controlled voting structure, and 60-75 million shares of forward dilution baked into its funding plan is worth $4.15 to them. The Guild members who bought Reg A shares at $8.23 in September 2025 have already lost 50% and a substantial fraction of them are, empirically, still customers. That fact is instructive about who is really holding the stock at $4.15 and why they are holding it. The practitioner reader should form an independent view.

The Institute takes no position on whether the $4.15 close is the right price. The Institute takes a specific position on what the fully-diluted math means: the base-case fully-diluted equity value at the Institute’s modeled valuation range is $2.38 per share, the current price is 74% above that, and a common shareholder who buys at $4.15 is implicitly betting on either better-than-base-case Guild economics or lower-than-modeled forward dilution. Both are defensible bets. Neither is the low-risk bet the current stock price implies.

7.8   The $200M hole — obligations to fill, and whether operations can fill them

The subsection 7.7 walk answered “what’s left for common after full dilution.” This subsection asks the reciprocal question: what do Angel Studios’ existing obligations actually total, and can the operating business fill that hole from free cash flow before dilution has to do the work? The answer determines whether the $2.38 base-case per-share figure holds or whether it drifts toward the $1.05 bear.

Sizing the hole

Table 7.8a totals the balance-sheet and contingent obligations Angel Studios must clear at some point in the future. It is the closest approximation to what a distress-scenario liquidation-preference reader would see if the going-concern assumption were relaxed. It also is the cash-out that has to occur, one way or another, over the FY2026-2030 window.

Table 7.8a — Sizing the hole ($M, at 3/31/2026 balance sheet)

Source: Form 10-Q for the quarter ended March 31, 2026, balance sheet (page 3); Note 4 (Debt); Note 6 (Common Stock and Deferred Revenue); Section 13 Legacy Overhangs for Disney Reorganization Plan expected outcome.

The number that matches Phil’s intuition — the $200M hole — is the cash-required obligations line: $102M of high-cost debt, $37M of legacy licensing royalties, and an expected $20M cash settlement of the Disney contingent note, for a rounded $160-200M range depending on the Disney outcome. Deferred Guild membership revenue is a real obligation but it is customer-funded — the customers have already paid, and Angel’s obligation is to deliver content, not to write a check. Accumulated deficit is a book number, not a cash number.

Can operations fill the hole?

Q1 2026 produced $115.1M of revenue, positive Adjusted EBITDA for the first time, and free cash flow to the firm approximately break-even. To fill a $200M cash hole over five years without additional equity issuance would require Angel to generate approximately $40M per year of free cash flow available for debt reduction. Table 7.8b models what that requires under three growth scenarios.

Table 7.8b — FCF required to fill the $200M hole in 5 years, under three growth scenarios

Source: Institute analysis. 2028E revenue derived by compounding Q1 2026 annualized revenue ($460M) at the disclosed growth rate. FCF margin requirement is $40M ÷ 2028E revenue. FCF margin at scale is unknown — Angel has not disclosed steady-state economics.

Two structural constraints prevent Angel from filling the hole from operations alone at moderate growth. The first is the interest burden: at $102M of debt at 14.5-30.9% effective rates, Angel is paying approximately $15-20M per year in cash interest. That interest is a fixed drag on FCF that has to be cleared before any dollar can go to debt paydown. The second is the content-slate investment: growing the Guild requires new content, and new content requires either equity or Guild-prepayment funding, both of which reduce the pool of cash available for debt reduction.

Table 7.8c shows the alternative: filling the hole through equity issuance instead of operating cash flow. This is what the Layer 4 forward capital plan in subsection 7.7 was already modeling.

Table 7.8c — The equity alternative to filling the hole

Source: Institute analysis. Fully-diluted share count basis is 208M (Layer 2 today) for the dilution percentage calculation.

The Guild Flywheel — Mechanics

The Angel Guild is described in every Angel Studios filing as a three-step system: members vote to select film and TV shows, members rally in theaters to support film releases, members fund future films and TV shows with their membership. That is the disclosure language. The economic mechanic is different, and more interesting. The Guild is a customer-prepaid working-capital float: members pay membership dues into deferred revenue on the balance sheet; that deferred revenue funds the next slate; the slate produces theatrical, licensing, and merchandise revenue; the resulting content library retains and expands the Guild base. The mechanic works if and only if the ratio of member-lifetime-value to slate-cost stays above one.

8.1   The three-tier membership pricing architecture

Angel Studios offers Guild membership at three tiers: Basic with Ads, Basic, and Premium. All three tiers include voting rights on every future Angel release, early streaming access, and slate funding. The Basic (no ads) and Premium tiers also strip advertising from the streaming experience; Premium adds two complimentary theatrical tickets per release plus a merchandise discount.

Table 8.1 — Angel Guild three-tier membership architecture

Source: Form 10-Q for the quarter ended March 31, 2026, Item 2 MD&A, page 26 ("Components of Results of Operations — Angel Guild revenue"). Monthly price ranges reflect Institute estimates triangulated to the disclosed TTM ARPM of $13.69/month; Angel does not disclose tier-by-tier pricing in its SEC filings.

8.2   The deferred-revenue mechanic — how customer cash funds the slate

Angel Guild membership fees are recorded as deferred revenue on the balance sheet when received and recognized as revenue over the membership period. This is standard SaaS accounting. What is not standard is what Angel does with that cash. Rather than earning interest on the float, Angel deploys the cash directly into slate production and prints-and-advertising for upcoming theatrical releases. The customer, through the Guild membership fee, is pre-funding the slate that the same customer will vote to select and then watch.

Table 8.2 — Deferred Guild revenue at balance-sheet dates and implied member-payment velocity

Source: Form 10-Q for the quarter ended March 31, 2026, Note 3 (Revenue Recognition — Deferred Revenue), page 12, and Q1 2026 press release. Implied deferred rev per member = deferred Guild rev ÷ paying members. Months prepaid = implied per-member deferred ÷ TTM ARPM of $13.69.

8.3   The Solo Mio case study — single-title flywheel proof

Solo Mio (Kevin James, released 2025-2026) is the clearest single-title demonstration of the flywheel operating as designed. The film crossed $25 million in domestic box office with a 95% Popcornmeter score, and Angel Studios described it in the Q1 2026 press release as "driving new Guild membership growth to the platform." The film is Guild-selected content (members voted to approve it), Guild-funded (member dues paid the production capital), and Guild-marketed (Premium members received complimentary tickets which converted a member benefit into a marketing expense).

The Solo Mio arithmetic in one sentence: theatrical revenue of approximately $12-15M attributable to Angel (a share of the $25M+ domestic box), plus Guild membership growth of 220,000 net new members in the quarter of release, plus content-licensing optionality for post-theatrical windows. Solo Mio was one Q1 2026 release; the 2026 slate has six more comparable titles including Young Washington, Angel and the Badman, Runner, The Brink of War, Drummer Boy, Hershey, and Zero A.D.

8.4   The unit economics — two approaches, both instructive

Angel Studios does not disclose per-member customer acquisition cost, lifetime value, churn rate, or a functional breakdown of selling and marketing spend. Because these are the four inputs required to construct LTV/CAC arithmetic, any presented ratio necessarily embeds Institute assumptions that must be defended. Rather than present a single ratio that appears authoritative, the Institute presents two approaches: an observed S&M leverage approach that uses only disclosed data (no attribution assumption), and a reconstructed LTV/CAC approach that shows the arithmetic transparently. A reader who prefers to weight one over the other can do so.

Approach 1 — observed S&M leverage. This is the strict-disclosed-data approach. It uses only revenue, S&M spend, and paying-member count. It does not require any attribution assumption.

Table 8.3a — Observed S&M leverage (strict-disclosed approach)

Source: Form 10-Q Q1 2026, Condensed Consolidated Statements of Operations, page 4; Q1 2026 press release Guild subscriber disclosure. Implied blended cost-per-acquisition uses total S&M as numerator and does not assume any allocation between Guild acquisition and theatrical / merchandise marketing.

Approach 2 — reconstructed LTV/CAC. This approach requires four Institute assumptions: (a) an attribution rate of S&M to Guild acquisition (assumed 60%, reasoning below), (b) an annual churn rate (assumed 30%), (c) a Guild gross margin (assumed 20%), and (d) a per-member contribution period. Each assumption is defended in the notes column.

Table 8.3b — Reconstructed LTV/CAC (with all assumptions defended)

Source: Institute reconstruction from Form 10-Q Q1 2026, Condensed Consolidated Statements of Operations page 4, and Q1 2026 press release membership disclosures. Every assumption above is explicit; the reader can substitute alternate values in the companion Excel model.

The critical takeaway: under strict-disclosed data alone (Approach 1), S&M as a percentage of revenue has compressed from 107% to 49% in one year — a signal that the Guild flywheel is inflecting toward positive unit economics regardless of the attribution assumption. Under the reconstructed LTV/CAC (Approach 2), the ratio at as-modeled assumptions is 0.70, but reasonable variation in the four Institute assumptions moves the ratio into the 0.55—1.10 range. What is not defensible is presenting a single LTV/CAC number as authoritative; what is defensible is showing the arithmetic transparently and letting the reader run the sensitivity.

8.5   The values-alignment moat — why Guild retention may not track SaaS peers

Every valuation multiple applied to the Guild in the SOTP framework rests on an assumption about retention. Streaming peers churn 30-50% annually. Private subscription communities churn 15-25%. SaaS-grade recurring revenue churns under 10%. Which bucket does the Angel Guild belong in?

The Institute view is that Angel Guild retention should not be modeled against the streaming peer set, because the Guild is not primarily selling entertainment. It is selling participation in a distribution model that produces content its members want to exist. The distinction matters because it changes what the churn driver is. A Netflix subscriber churns when specific titles disappoint. A Guild member churns when the Guild’s mission disappoints. Those are different failure modes with different rates.

The empirical evidence is limited but consistent. The Reg A investors who paid $8.23 per share in September 2025 have watched the stock trade down approximately 50% and, based on public disclosure of member retention, appear to have remained Guild members at rates well above what a comparable financial loss would produce in a conventional subscription cohort. Sound of Freedom’s $184M domestic box office was funded substantially through Pay-It-Forward tickets — Guild members prepaying tickets to be gifted to non-members — which is functionally a donation model layered onto a subscription. The Chosen’s original equity-crowdfunding raise, the Guild’s vote-to-greenlight mechanism, and the Harmon founder team’s public framing of the business all suggest a customer base for whom the subscription is partly-a-purchase and partly-a-declaration.

A second structural moat is press independence. Mainstream press coverage of Angel Studios’ content is structurally unfriendly. Rotten Tomatoes critic scores for values-based and faith-forward theatrical releases run 40-60 points below their Popcornmeter audience scores. Awards ecosystems (Academy Awards, Emmys, Golden Globes) do not routinely recognize titles Angel distributes. Mainstream entertainment press covers Angel titles skeptically or not at all. In a conventional distribution business this would be lethal — theatrical release economics for most non-tentpole films depend on the critic-and-press ecosystem to convert opening-weekend interest into second-and-third-weekend legs. Angel’s distribution model does not depend on that ecosystem. The Guild is the marketing channel. Pay-It-Forward tickets are the audience-acquisition channel. Values-aligned community members share content with each other through word-of-mouth networks the press does not reach and does not influence. Sound of Freedom reached $184M in domestic box office in 2023 while mainstream critical reception was tepid to hostile — a 57% Tomatometer against a 99% Popcornmeter. That gap is not a bug in the model. The gap is the model. Angel has built the only major theatrical-distribution business in modern American cinema whose growth is functionally decoupled from the mainstream media ecosystem, and that decoupling is a structural competitive advantage that scales with the size of the underserved audience segment. If mainstream press hostility persists at current intensity through the FY2026-2028 slate, Angel’s economics are unaffected. If it moderates — which it may not — that is upside optionality, not the base case.

A necessary caveat — the film-industry capital barrier is nothing like the steel-plant capital barrier. Unlike Cleveland-Cliffs’ Great Lakes iron ore infrastructure, film-industry entry barriers are structurally modest. As one Netflix co-founder observed at length in his account of that company’s founding, the physical infrastructure required to launch in the entertainment business is trivial compared to industrial businesses — a director is a hire, a script is an edit, financing is a phone call, and a first film can be produced for $5-30 million. Amazon proved the point empirically. When Amazon Studios launched in 2010, the company simply hired the writers, directors, and producers it needed, licensed the distribution rights where useful, and had a slate of original films within five years. There were no environmental impact studies. There were no zoning-board hearings. There were no multi-year permit gauntlets. There was no multi-generational workforce expertise that couldn’t be assembled through targeted hires. Compare that to the $1-5 billion, decade-long timeline, environmental-permit gauntlet, and multi-generational workforce expertise required to build a functioning American steel plant. If Mel Gibson decided today to build a competing values-aligned distribution platform, he would face capital and time barriers measured in tens of millions of dollars and 24-36 months, not billions of dollars and decades. The Cleveland-Cliffs analogy captures the community-trust dimension of Angel’s moat directionally. It does not capture the capital dimension at all. Film has some of the lowest asset-barrier entry costs of any American industry, and the only durable moat a values-aligned distributor can build is the trust head-start — which the callout below walks explicitly as a competitive-threat risk.

And a fourth structural characteristic — operational infrastructure survives paradigm shifts. The Institute’s case study on Lyft made a related point about the autonomous-vehicle transition. Even in the most disruptive scenario — Waymo, Tesla, or a third-party AV network displacing human-driver ride-share entirely — the fleet-operations layer does not disappear. It contracts a little on rental duration but expands enormously on rental velocity, and the operational infrastructure (fleets, garages, insurance, cleaning, maintenance, dispatch, remote monitoring) is the same operational infrastructure Hertz and Avis have run for eighty years, just applied at higher rental velocity. Someone still has to handle the operations. The same logic applies to values-aligned content distribution. Even in the most disruptive scenario in which mainstream Hollywood retrenches, streaming consolidates, and values-content moves from the periphery to the center of American entertainment, the distribution-and-community operations do not run themselves. The Guild’s back-office subscription management, the Pay-It-Forward ticket reconciliation, the theatrical distribution deals with AMC and Regal and Cinemark, the licensor royalty accounting, the SVOD partnership economics — that operational layer is what Angel Studios is, and it is the layer that survives whatever comes next. Angel does not need mainstream Hollywood to collapse for the model to work. Angel needs to keep operating the distribution rails for the audience it already serves. The model wins by doing the work every day, not by waiting for the incumbents to disappear.

The valuation implication is straightforward. If Guild retention follows a values-alignment curve rather than a streaming-entertainment curve, the base-case 1.5× ARR multiple applied in subsection 7.6 is too conservative. Values-alignment subscription businesses at scale — SiriusXM in its early years, MasterClass in its subscription phase, membership organizations more broadly — support multiples in the 2.5-4.0× forward revenue range. Applying that range to Angel’s $332M annualized Guild revenue produces a Guild-alone valuation of $830M-$1.3B, above the entire current market cap. This is not the Institute’s base case, because the values-alignment thesis is still empirically unproven at the 5-10 year horizon Angel’s Guild has not yet reached. But it is the reason the bull case in Table 7.7c produces a $6.93 fully-diluted per-share figure. The bull case assumes the values-alignment thesis holds. The bear case assumes it does not. The current stock price implies the market has priced somewhere in between, closer to the base case than to either tail.

The $230M NOL — And Why It May Already Be Capped

At December 31, 2025, Angel Studios disclosed federal net operating loss carryforwards of approximately $230.2 million, giving rise to a tax-effected deferred tax asset of $56.2 million inside a total gross DTA of $62.3 million. Every dollar of that gross DTA was offset by a valuation allowance. The 10-K income tax footnote states explicitly that the utilization of the NOL is subject to annual limitation under Section 382 of the Internal Revenue Code. This section walks the §382 mechanics, the specific Angel Studios fact pattern, and the arithmetic that determines whether the $230.2 million pile is a real shield or an accounting artifact.

9.1   The NOL build — how the pile got to $230M

Angel Studios generated its $230M+ NOL pile in a compressed two-year period. FY2023 was profitable ($13.4M in net income attributable to controlling interests). FY2024 lost $88.3M. FY2025 lost $170.5M. The FY24 loss was driven by the Chosen litigation and the accelerated marketing scale-up to establish the Guild flywheel with owned IP. The FY25 loss was driven by the Southport Business Combination costs, continued Guild-acquisition S&M investment, and the mark-to-market accounting for the bitcoin treasury under newly-adopted ASU 2023-08.

Table 9.1 — NOL build by fiscal year ($ in millions)

Source: Form 10-K for the year ended December 31, 2025, Consolidated Statements of Operations and Note 16 (Income Taxes). Q1 2026 estimate = Q1 2026 net loss added to disclosed 12/31/2025 NOL of $230.2M.

9.2   The full deferred tax asset build — and the valuation allowance

The DTA table in the 10-K income tax footnote shows the gross DTA and the offsetting valuation allowance in detail. Understanding this table is the diligence starting point for any subsequent conversation about NOL usability.

Table 9.2 — Angel Studios deferred tax asset build ($ in millions), FY2025

Source: Form 10-K for the year ended December 31, 2025, Note 16 (Income Taxes), page F-36. MLTN = "more likely than not" recovery test under ASC 740.

9.3   The §382 mechanics — primer

Section 382 of the Internal Revenue Code limits a corporation's ability to use its pre-change net operating loss carryforwards following an "ownership change." The mechanics matter because they determine whether the shield the P&L already generated ever produces cash tax savings.

An ownership change is defined technically, and every practitioner working on any post-SPAC or post-secondary-offering situation needs to know the definition: an ownership change occurs when the percentage of stock owned by "5-percent shareholders" (any shareholder or public shareholder group holding 5% or more) increases by more than 50 percentage points over a rolling three-year testing period. SPAC mergers, private placements, follow-on offerings, and even large secondary sales can trip the test either individually or in cumulative combination.

Once an ownership change occurs, the "§382 limitation" caps the annual amount of pre-change NOL that can offset post-change taxable income. The cap is calculated as: pre-change equity value × long-term tax-exempt rate. The long-term tax-exempt rate is published monthly by the IRS in the Revenue Rulings and typically approximates 3.5% to 5.0%. Any pre-change NOL not used in a given year carries over subject to the same annual cap, until the NOL either expires or is used.

9.4   The Angel Studios fact pattern — the Southport reverse-recap trigger

The Southport Acquisition Corp / Angel Studios reverse recapitalization closed September 25, 2025. The transaction converted Angel Legacy shareholders into the surviving public company shell in a share-for-share exchange, with Angel Legacy contributing 160.7 million shares against Southport's pre-close 6.9 million public shares plus 1.0 million shares issued to Angel Legacy convertible noteholders. Every SPAC-emergence practitioner playbook treats this fact pattern as strongly suggestive of a §382 ownership change: the pre-existing SPAC public shareholders (subject to redemptions, and typically a rotating institutional base) constitute an aggregated "public group" whose ownership percentage shifted materially at the transaction close.

Angel Studios' own 10-K income tax footnote states the risk in one sentence: "The utilization of the NOL carryforwards is subject to annual limitations under Section 382 of the Internal Revenue Code of 1986, as amended. Section 382 imposes limitations on a corporation's ability to utilize its NOL carryforwards if it experiences an 'ownership change.'" The 10-K does not disclose whether Angel's own analysis concluded that a §382 ownership change did occur at the SPAC close — that determination is a subsequent-year workpaper question tied to a formal §382 study. What the disclosure signals is that Angel's tax counsel considers the analysis material to the reader.

Compounding the SPAC-close question, the three subsequent Angel capital-markets events each layered additional shift on top of the initial ownership move:

Table 9.3 — Capital-markets events layering onto the §382 rolling-3-year cumulative shift

Source: Form 10-Q for the quarter ended March 31, 2026, Notes 2 and 8; Item 2 MD&A pages 26-27; Q1 2026 press release.

9.5   The arithmetic if an ownership change occurred at close

Assume a §382 ownership change did occur at the Southport close on September 25, 2025. What is the resulting annual usable NOL cap? The formula is pre-change equity value × long-term tax-exempt rate. The pre-change equity value for Angel at the SPAC close is not a directly-published number, but it can be triangulated from the September 2025 Reg A offering price of $8.23 per share applied to the post-close shares outstanding of 168.6 million, giving a reference equity value of approximately $1.39 billion. The long-term tax-exempt rate ("LTTER") applicable to an ownership change occurring in a given month is published monthly by the IRS in a Revenue Ruling; the highest of the three preceding months' adjusted federal long-term rates is used. For an ownership change in September 2025, the applicable LTTER is 4.55% (per IRS Rev. Rul. 2025-18, Table 3, published in September 2025 IRB); for illustrative sensitivity, the Institute uses 4.5% rounded. Practitioners running Angel's actual §382 study would use the September 2025 published rate.

Table 9.4 — Annual usable NOL under a §382 limitation, illustrative scenarios

Source: Institute calculation. Formula: annual usable NOL = pre-change equity value × LTTER. LTTER = 4.55% (September 2025 applicable rate, per IRS Rev. Rul. 2025-18, Table 3); rounded to 4.5% for illustrative sensitivity. Years to full usage assumes annual NOL usage <= annual limit AND sufficient annual taxable income exists to absorb it — a strong assumption for a company that has not yet been profitable at scale.

9.6   The double-limitation problem — even at the base case, use is uncertain

Even at the Institute base-case §382 limit of $45M per year, the practitioner cannot assume the shield fully flows through to cash tax savings. The annual usable NOL is a ceiling; the actual amount used is the lesser of that ceiling and taxable income in the same year. Angel is not yet profitable on a full-year basis. The FY2026 Adjusted EBITDA guidance is a loss of less than $25 million. Working backward to GAAP taxable income, the company would likely not generate meaningful positive taxable income in 2026 at all. In that year, the §382-limited $45M usable NOL simply carries forward — no cash tax benefit is realized.

The compounding effect: if the company takes another two to three years to generate sustained taxable income, and the §382 limit is capped at $45M per year against approximately $244M of NOL, and the annual limit does not roll unused capacity forward beyond a limited period, some portion of the pile expires unused. This is why the Institute Section 7.4 valuation applies a PV haircut to the face DTA of $56.2M and arrives at a Base case usable DTA of approximately $15M.

Bitcoin Treasury Strategy

Angel Studios holds 303.1 bitcoin on its balance sheet at March 31, 2026, marked at a fair value of $20.7 million. The bitcoin position is neither an accident nor a side experiment. The 10-Q Item 2 MD&A explicitly frames the holding as a strategic corporate treasury asset: "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." Angel additionally discloses the ratio of bitcoin held per outstanding share: 1.7846 BTC per million shares of common stock outstanding.

10.1   Position size and cost basis

The 303.1-BTC position was unchanged in unit count from December 31, 2025 to March 31, 2026 — no bitcoin was purchased or sold in Q1 2026. The mark-to-market movement on the balance sheet is entirely attributable to the bitcoin price change over the quarter.

Table 10.1 — Bitcoin position and fair-value movement

Source: Form 10-Q for the quarter ended March 31, 2026, Note 3 (Digital Assets), page 17; Item 2 MD&A page 27. Implied BTC prices are Institute calculations: carrying value / units held.

10.2   The ASU 2023-08 accounting mechanic

Angel Studios adopted ASU 2023-08 — Intangibles — Goodwill and Other — Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets — on January 1, 2025. The adoption changed the accounting from the prior cost-less-impairment model (which was asymmetric: recognize losses immediately, defer gains until sale) to a fair-value-through-net-income model. Under the new standard, Angel remeasures its bitcoin holdings to fair value at each reporting date, with the change flowing through net loss on digital assets on the income statement each quarter.

The FY2025 adoption produced a one-time transition adjustment: a $12.9 million decrease in accumulated deficit at January 1, 2025 to recognize the cumulative-effect adjustment of applying the new standard retrospectively. This adjustment is a book-only, non-cash entry, but it materially reshaped the FY24 balance sheet the reader of a 2025 filing sees.

10.3   The Adjusted EBITDA carve-out

Because the fair-value P&L swings are non-cash and driven by the bitcoin market rather than by Angel's operating performance, the company's non-GAAP Adjusted EBITDA reconciliation explicitly backs out the net loss on digital assets line each quarter. In Q1 2026, the reconciliation added back $5.8M of bitcoin mark-to-market losses. Without that add-back, Adjusted EBITDA would have been approximately $(1.8)M rather than +$4.0M — still an improvement over the prior year but not the first-positive-quarter narrative Angel used in the earnings release.

10.4   The three-lever bitcoin treasury framework

Angel discloses that its bitcoin treasury strategy contemplates three levers: (i) collateralization of bitcoin holdings to enable additional capital raising; (ii) generating income streams from the bitcoin holdings; and (iii) periodic sales of bitcoin for general corporate purposes including operating requirements. The framework matters for valuation because it converts what would otherwise be a passive holding into a working treasury asset.

Table 10.2 — Three-lever bitcoin treasury framework and implications

Source: Form 10-Q for the quarter ended March 31, 2026, Item 2 MD&A, page 27 (Bitcoin Treasury Strategy narrative).

Governance & Related-Party Structure

Angel Studios is a founder-controlled, related-party-dense company. The dual-class capital structure concentrates voting power with the Harmon family; every material capital-markets or corporate-development transaction disclosed since the SPAC close has involved a related party either as counterparty, lender, or director; and the pending Homestead, Tuttle Twins, and Wingfeather Saga mergers each tie back to a single director (Benton Crane) who is the Harmon brothers' cousin. This section walks the governance and related-party architecture in the sequence a diligence reader would need it.

11.1   The dual-class founder stack

The Class B super-voting shares held by the Harmon family carry ten votes per share against the Class A public shares' one vote per share. This is a common founder-controlled structure (Meta, Snap, Alphabet, etc.) but concentrated voting power has three implications for public shareholders that are worth naming explicitly. First, no takeover of Angel Studios can occur without Harmon family consent. Second, no material change to the Class B voting differential can be made without Class B holder approval — the family effectively holds a veto on its own diminution. Third, the Class B shares are not listed and are not traded, so public shareholders have no market signal from insider voting activity.

11.2   Board expansion — October 2025

On October 22, 2025, less than one month after the Southport Business Combination close, the Board voted to expand from five to seven directors. Both new directors are related to material transactions disclosed elsewhere in the filings.

Table 11.1 — October 2025 board expansion and related-party links

Source: Form 10-K for the year ended December 31, 2025, Note 17 (Related-Party Transactions), page F-37; Form 10-Q for the quarter ended March 31, 2026, Note 7 (Related-Party Transactions), page 24.

11.3   Angel P&A, LLC — the insider-funded prints-and-advertising vehicle

The single largest related-party structure at Angel Studios is Angel P&A, LLC, a Delaware limited liability company entered into a revolving prints-and-advertising loan agreement with Angel in February 2024. Angel P&A is 100% owned by Angel's own directors, officers, and stockholders. It was set up for a specific purpose: to raise P&A funds that Angel uses for upcoming theatrical releases, in exchange for revenue-participation rights on the funded films.

The economics: Angel P&A investors receive up to 115% of their invested amount (initial investment plus a 10% to 15% return) with priority payback against theatrical box-office receipts of the funded film — ahead of every other claimant except Regulation A P&A raises. The commitment period between Angel P&A and Angel Studios (and between Angel P&A and its own investors) runs through February 2027. Individual loan maturities are 80 to 120 days from each draw.

Table 11.2 — Angel P&A, LLC facility economics

Source: Form 10-Q for the quarter ended March 31, 2026, Note 7 (Related-Party Transactions), page 24; Form 10-K for the year ended December 31, 2025, Note 17, page F-37.

The April 2026 payoff arithmetic is worth stating explicitly: the $34.5M April 2026 registered offering, plus a portion of existing cash, was used to repay the $38.5M insider-vehicle balance in full. Public common equity was issued at $2.10 per share (a low print) to retire debt held by the insider group. That is a legal, disclosed transaction. It is also the exact fact pattern that governance committees and future-plaintiff bar attorneys focus on when they consider whether affiliated-party transactions unfairly transferred economics from public shareholders to insiders.

11.4   The November 2025 all-related-party merger announcements

On November 14, 2025, Angel Studios announced three simultaneous acquisition agreements, all with counterparties tied to director Benton Crane (added to the Board October 22, 2025). All three mergers are being paid for primarily in Angel Class A common stock.

Table 11.3 — November 14, 2025 related-party acquisition announcements

Source: Form 10-Q for the quarter ended March 31, 2026, Note 5 (Commitments and Contingencies — Mergers and Acquisitions), pages 21-22; Item 2 MD&A pages 28-29.

In connection with the pending TCP and TTS acquisitions, Angel has committed to fund additional seasons of Wingfeather Saga and Tuttle Twins. As of March 31, 2026, Angel had already capitalized $1.9 million of Wingfeather production costs and $1.2 million of Tuttle Twins production costs to long-term assets. These production-funding transactions are treated separately from the acquisitions themselves under GAAP.

Legacy Overhangs & Editorial Conclusion

Every Institute case study is expected to leave the reader with two things: a complete inventory of what could go wrong that a diligence practitioner should be pricing into a multiple, and a boardroom commit on how the Institute reads the trade-off. For Angel Studios, that inventory includes three distinct legacy overhangs from pre-SPAC operating history, and the editorial conclusion is the recognition that this case is worth writing because it is the exact template of what a good practitioner is asked to price week after week: an inflecting growth business with a compelling unit-economics story, a specific set of structural liabilities that the market may be over-pricing or under-pricing, and a management team that has already survived one bet-the-company litigation.

12.1   The VidAngel / Disney Reorganization Plan — the deepest legacy overhang

Angel Studios' predecessor entity, VidAngel, was found in copyright infringement of 819 Disney, Lucasfilm, Twentieth Century Fox, and Warner Bros. titles in December 2016. A 2019 jury awarded plaintiffs $62.4 million ($61.4M in willful copyright infringement plus $1.0M in DMCA violations). In August 2020, the parties reached a settlement under which VidAngel's Reorganization Plan became effective. The settlement was structured to keep the company as a going concern — a critical concession — and to allow equity holders to retain their interests. But the terms carry forward into today's Angel Studios and constitute the single most severe hidden-liability exposure in the capital structure.

Table 12.1 — VidAngel / Disney Reorganization Plan terms carried into Angel Studios

Source: Form 10-Q for the quarter ended March 31, 2026, Note 5 (Commitments and Contingencies — Disney Litigation and the Preliminary Injunction), page 21; the underlying Reorganization Plan and Disney Settlement Agreement are attached to Angel Legacy's Form 1-U filed on September 15, 2020 (SEC EDGAR).

12.1a   Probability-weighted framework for the Disney contingent-note haircut

The $10-20 million haircut applied to the $62.5M face amount in the Section 7.5 SOTP bridge is derived, not asserted. The framework has three components: probability of a triggering event over a defined horizon, expected severity conditional on trigger, and discount for time value.

Table 12.1a — Institute probability-weighted haircut on the $62.5M Disney contingent note

Source: Institute calculation. Annual breach probability, severity assumption, and 60% recovery rate are Institute estimates; readers may substitute alternative values. Binomial-approximation formula used for the ≥4-in-5 calculation; underlying assumption is independence of individual breach events, which is a simplification.

The framework produces three defensible scenarios that map directly to the Section 7.5 SOTP bridge. The Institute Base case applies $10M — materially conservative relative to the pure P×S expected-value calculation ($0.5M) but appropriate given the deep-tail Harmon-equity-pledge risk. Any diligence reader should size the risk in their own model with their own inputs.

12.1b   Angel Studios theatrical release ledger — every title, box office, and slate role

The theatrical distribution business is the visible tip of the Guild flywheel. Every Angel theatrical release is (a) Guild-voted (members approved the greenlight), (b) Guild-funded (member dues underwrote the production and prints-and-advertising), and (c) Guild-marketed (Premium-tier members receive complimentary tickets which convert a member benefit into a marketing expense). The table below enumerates every Angel Studios theatrical release from the company's IPO era through Q1 2026. The slate is compact enough to walk in a single view — a discipline the Institute recommends for any Angel diligence exercise.

Table 12.2 — Angel Studios theatrical release ledger

On per-title production and marketing cost disclosure. Angel does not break out production cost or marketing cost by individual title in its aggregate 10-K financial statements — the P&L presents total cost of revenues ($124.9M FY25 per 10-K p 44) and total selling and marketing expense ($345M FY25) at consolidated level only. However, each Angel P&A Subsidiary is required to file its own periodic reports with the SEC pursuant to Rule 257(b) of Regulation A (10-K p 41). A practitioner researching a specific title's P&A commitment should search SEC EDGAR for the title's dedicated P&A Subsidiary Reg A filing (Form 1-K annual, Form 1-SA semi-annual). At aggregate level, Angel raised $13.2M from Reg A P&A offerings and received $84.0M from P&A loans for various films during FY2025 (10-K p 64).

Source: Angel-disclosed items directly cite the Form 10-K for the year ended December 31, 2025 (page 11 for the owned-IP list; page 12 for Sound of Freedom domestic box office of $185.0M; page 44 for the identification of King of Kings and David as 2025 theatrical-revenue drivers) and the Q1 2026 press release footnote 3 (Solo Mio at $25M+ domestic box office with 95% Popcornmeter score). External items reference TheNumbers.com box office data, which Angel itself cites as its distributor-data source in the 10-K at page 9. "TBD" indicates post-quarter release timing not yet disclosed. Values shown are approximate and rounded to the nearest million; a reader running due diligence should verify against current TheNumbers.com or Box Office Mojo data.

12.1c   Angel Studios YouTube and digital-content presence

Beyond the theatrical business, Angel Studios operates a substantial owned-YouTube and social-video presence that the Section 12.1b theatrical ledger does not capture. The 10-K discloses this distribution channel in two specific data points that a practitioner should size explicitly.

Table 12.3 — Angel Studios owned YouTube and digital-content distribution

Source: Form 10-K for the year ended December 31, 2025, pages 8, 9, 11, 17, 36, and 48.

The Dry Bar Comedy disclosure is a materially undervalued asset in most discussions of Angel Studios. 5 billion+ views across YouTube and social media positions Angel among the larger owned-audio-video-comedy operators in the world — comparable in raw reach to individual creator-economy platforms that trade at nine- and ten-figure valuations in Section 4.2's private-round precedent set. Angel does not disclose the P&L contribution of Dry Bar Comedy separately in the 10-K; the case treats it as embedded in the "Other" revenue line ($0.5M in Q1 2026) which materially understates its economic significance. A future 10-Q with segment-level disclosure would clarify.

12.1d   The Chosen revenue concentration collapse — three data points that tell the transition story

The Chosen's contribution to Angel's total revenue declined from a materially concentrated position to zero over three fiscal years. The specific data points are disclosed in the 10-K at page 48:

Table 12.4 — The Chosen revenue concentration decline

Source: Form 10-K for the year ended December 31, 2025, page 48 (Chosen Agreement historical revenue disclosure).

12.1d.i   Practitioner editorial — licensor concentration as a first-question diligence item

The Chosen concentration decline in Table 12.4 is a specific data point on one company, but it teaches a general practitioner discipline that applies to any post-SPAC media, streaming, or subscription-community business. The Institute editorial position is that licensor concentration and single-title concentration should be the first two questions asked in any diligence on a post-SPAC media issuer, before growth rate, before unit economics, and before capital structure. The logic is straightforward: any content-distribution business whose FY1 revenue included >10% dependence on a single third-party licensed franchise carries a going-concern risk that would ordinarily justify audit qualification if the license terminated without adequate transition planning. Angel's disclosure of 19.7% Chosen concentration in FY2023 (10-K p 48) was a going-concern warning that materialized when the license terminated in May 2024 — and the company successfully transitioned because it had already built the Guild flywheel to fund and distribute its own IP. Not every post-SPAC media issuer has such a transition plan in place.

The three specific questions to ask in diligence:

(1) Does the target's FY1 revenue disclose >10% concentration from any single licensor or content-provider? Every post-SPAC media 10-K should be searched for concentration disclosures at the customer, supplier, and licensor level. Under ASC 280 and Regulation S-K, a concentration exceeding 10% triggers specific disclosure requirements.

(2) Is the target's largest content franchise licensed-in or owned? For any licensed-in franchise, what are the license termination terms, dispute resolution mechanics, and renewal probability? These questions should be answered from the target's 10-K risk factors and license agreement exhibits.

(3) Does the target have a demonstrated ability to replace concentrated legacy revenue if the license terminates? Angel's ability to grow 178% while retiring the entire Chosen contribution is unusually strong. Most post-SPAC media issuers do not have this proof.

A practitioner reading this memo who applies these three questions to Buzzfeed, Chicken Soup for the Soul Entertainment, and Playboy Group (Section 4.3 comps) will find that at least two of the three failed at Question 3 — which is a material contributor to their 6%, 0%, and 13% respective post-SPAC value retention.

12.1e   FY2026 slate box-office scenarios — the flywheel test

Angel Studios' FY2026 theatrical slate is disclosed at 10-K page 12. The scheduled titles are enumerated in Section 12.1b of this memo. Because Angel does not publish forward-looking box-office guidance, and because the FY2026 slate represents the empirical test of the Guild flywheel operating on Angel-owned IP after the Chosen license loss, the Institute presents per-title box-office scenarios below to help a practitioner reader size the range of possible outcomes.

The scenarios are anchored against three Angel-produced reference points: (a) Sound of Freedom at $185M domestic (the upside outlier), (b) The King of Kings at ~$54M (the recent 2025 hit; 10-K p 44 driver of $47.6M theatrical revenue increase), and (c) the modest-release cohort (Bonhoeffer, Cabrini, Sight) in the $5-19M range. Angel receives approximately 50% of gross domestic box office as its exhibitor-split share.

Table 12.5 — FY2026 slate per-title box-office scenarios ($ in millions, gross domestic)

Source: Institute scenarios. FY2026 release dates from Form 10-K for the year ended December 31, 2025, page 12 (slate table). Solo Mio actual box office from Q1 2026 press release footnote 3 (April 30, 2026). Reference titles (Sound of Freedom $185M, King of Kings ~$54M) from Form 10-K pages 12 and 44 respectively. The Brink of War, Drummer Boy, and Hershey (referenced in the Q1 2026 press release but without confirmed 2026 release dates) are excluded from this table until Angel discloses release dates.

12.2   The Chosen license loss — the completed transition

The Chosen was Angel Studios' largest and most successful franchise through 2024. In May 2024, an arbitrator issued the Interim Arbitration Award terminating Angel's Chosen distribution license, effective as of May 28, 2024. Angel appealed. In June 2025, the arbitration panel upheld the termination. In July 2025, the parties signed a settlement and mutual release. Angel today does not distribute The Chosen. Every dollar of Q1 2026 revenue — $115.1 million — comes from titles that Angel controls itself: Sound of Freedom, Cabrini, Sight, Bonhoeffer, Solo Mio, and the growing 2026 slate.

The reason the Chosen loss matters as a legacy overhang, rather than as a resolved past event, is what it teaches the reader about the Guild flywheel. Angel's original 2022-2024 growth built the Guild base on the strength of Chosen distribution. The Guild had to prove it could compound without Chosen. Solo Mio's $25M domestic box office and the 106% Q1 25-to-Q1 26 Guild member growth are the empirical evidence that the flywheel operates on Angel's owned IP. But no Angel case can leave that question unaddressed: is the Guild still growing because of the momentum from the Chosen era, or is it growing because the values-based content model attracts and retains members regardless of any single title?

12.3   The Slingshot Litigation — the pending third overhang

On March 11, 2025, Angel Studios was served with a Complaint filed in Utah State Court, Fourth Judicial District. The Complaint (referred to in the filings as the Slingshot Litigation) alleged claims relating to the animated feature film DAVID. The subsequent resolution structure is instructive: on October 7, 2025, Angel entered into a Term Sheet with 2521 Entertainment, LLC to form a joint venture called Giant Slayer Media. That same day, an Asset Purchase Agreement was executed between Slingshot and Giant Slayer Media, under which Giant Slayer acquired substantially all of the Slingshot assets related to DAVID and associated works. Angel contributed $31.4 million cash to the JV; 2521 contributed $46.6 million cash; Angel was credited $2.3 million for a prior investment, giving Angel a 42% / 2521 a 58% equity split. Angel does not consolidate Giant Slayer — it accounts for the JV under the equity method.

The Slingshot Litigation is the most recent example of the kind of contingent, disclosure-heavy overhang that any diligence reader will need to inventory quarter by quarter. The specific claim was resolved through a joint-venture asset purchase (not through litigation). The pattern illustrates Angel management's operating preference for negotiated resolutions of contested-content claims rather than protracted litigation — consistent with the Chosen settlement pattern in July 2025 and, in a different way, the 2020 Disney Reorganization Plan itself.

12.4   The Institute editorial conclusion

Angel Studios at March 31, 2026 is one of the most interesting practitioner-case-study subjects in the Institute universe. It has:

— A subscription-community business (the Guild) that grew 106% year over year in paying members, generates 72% of consolidated revenue, and produced $73.6 million of prepaid customer float on the balance sheet. Under a defensible ARR-multiple valuation methodology, the Guild alone is worth more than the entire current implied enterprise value of the company.

— A $230 million net operating loss carryforward that is very likely already limited under §382 by the September 2025 SPAC reverse-recap, producing an actually-usable DTA of approximately $15 million on the Institute base case — not $56 million on the face-value calculation that a superficial read of the tax footnote would produce.

— A capital structure that combines negative stockholders' equity, effective borrowing costs of 14-31%, three separate insider-related-party structures (Angel P&A LLC, the Sarowitz convertible, and the Crane-tied acquisition pipeline), and 35.9 million potentially issuable shares beyond the current 186.4 million outstanding.

— Three legacy overhangs that a practitioner needs to actively monitor: the Harmon brothers' pledged equity under the Disney Reorganization Plan, the completed transition from Chosen-distributor to owned-IP producer, and the pattern of contested-content resolution through negotiated deals.

The Institute base-case valuation of approximately $2.68 per fully-diluted share reflects a 28% premium to the April 2026 registered offering print of $2.10. That premium is not the Institute urging any specific action — the Institute is a publisher, not an investment adviser. The premium is the Institute's structural view that a marketplace pricing Angel Studios primarily against the SPAC-emerged media failure set (Section 4.3, median 27% value retention) is under-weighting the subscription-community precedent set (Section 4.2, $571-$1,300 per paying member private-round valuations). The reader is invited to run the sensitivity themselves against their own assumptions in the companion Excel model.