Financial Analysis

"5. Commitments and Contingencies Legal Proceedings The Company currently is, and from time to time might again become, involved in litigation arising in the normal course of business. Litigation is necessary to defend the Company. The results of any current or future complex litigation matters cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact because of defense and settlement costs, distraction of management and resources, and other factors. Additionally, these matters may change in the future as the litigation and factual discovery unfolds. Legal fees are expensed as incurred. Insurance recoveries associated with legal costs incurred are recorded when they are received. The Company assesses whether there is a reasonable possibility that a loss, or additional losses beyond those already accrued, may be incurred (Material Loss). If there is a reasonable possibility that a Material Loss may be incurred, the Company discloses an estimate or range of the amount of loss, either individually or in the aggregate, or discloses that an estimate of loss cannot be made. If a Material Loss occurs due to an unfavorable outcome in any legal matter, this may have an adverse effect on the consolidated financial position, results of operations, and liquidity of the Company. The Company records a provision for each liability when determined to be probable, and the amount of the loss may be reasonably estimated. These provisions are review …

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4. Debt Notes Payable The following table summarizes the Companys debt facilities as of March 31, 2026 and December 31, 2025 (in millions): March 31, 2026 December 31, 2025 Type of Facility or Arrangement Carrying Value Carrying Value Original Principal Amount Interest Rate Repayment Terms May 2024 P&A loans $ 2.0 $ 2.0 $ 3.0 10.0* % For detailed terms, see (1) May 2025 convertible note 5.7 5.5 5.0 15.0 For detailed terms, see (2) September 2025 note with warrants 40.0 40.0 40.0 13.5 For detailed terms, see (2) February 2026 note with warrants 20.0 20.0 13.5 For detailed terms, see (2) Revolving P&A loans (See Note 7, Related-Party Transactions ) 38.5 53.5 10.0 - 15.0* For detailed terms, see (3) Total 106.2 101.0 Less: discounts and issuance costs, net of amortization (3.9) (3.8) Total notes payable balance $ 102.3 $ 97.2 *The interest rates for these loans are calculated as simple interest, where the amount of interest is a fixed amount of the principal. (1) The maturity date is dependent on the timing of cash collections from theatrical sales, licensing revenue, merchandise sales and other revenue. The balance is expected to be fully paid within the next twelve months. (2) See the Notes with convertible features and/or warrants section below. (3) The March 31, 2026 balance was paid in full by April 2026. Notes with convertible features and/or warrants May 2025 convertible note with warrants In May 2025, the Company entered into a note and warrant purchase agreement …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

For the three months ended March 31, 2026 2025 Angel Guild $ 83,342,611 $ 34,697,518 Theatrical 17,975,005 7,728,206 Content licensing 10,164,010 2,596,504 Merchandise 3,132,872 943,844 Pay it Forward 154,602 535,261 Theatrical Pay it Forward 698,635 Other 335,966 240,672 Total Revenue $ 115,105,066 $ 47,440,640 …

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Recent Accounting Pronouncements Recently Issued Accounting Pronouncements Not Yet Adopted ASU 2025-12 In December 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-12, Codification Improvements, which addresses stakeholder suggestions through technical corrections, clarifications, and minor improvements across various Codification Topics, applying to all entities within affected guidance. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-12. ASU 2025-11 In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11. ASU 2024-03 In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which improves the disclosur …

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7 . Related-Party Transactions The Company has a marketing services contract with an entity owned by one or more of the Companys directors, officers, and stockholders. During the three months ended March 31, 2026 and 2025, the Company incurred expenses of $0.1 million and $0.1 million, respectively, to the related party for marketing services. In February 2024, the Company entered into a revolving P&A loan agreement with Angel P&A, LLC, a Delaware limited liability company (Angel P&A) that is 100.0% owned by one or more of the Companys directors, officers, and stockholders. Angel P&A was set up for the specific purpose of raising P&A funds for the Company to use for upcoming theatrical releases, in exchange for revenue participation rights of the films. The revenue participation rights allow Angel P&A the right to receive an amount not to exceed 115.0% (initial investment plus a 10.0% to 15.0% return) of their invested amount. Angel P&A has priority on the cash receipts to the Company of the particular film they invested in and shall be paid in full before any other claims, with the exception of money raised under Regulation A of Section 3(6) of the Securities Act, for P&A (if any) which would take first priority, from the film are paid. When Angel P&A receives the repayment on these notes, the interest portion is distributed to the institutional investors and the original investment can either remain at Angel P&A for additional P&A …

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6. Common Stock The Company has authorized Common Stock consisting of 700,000,000 shares, of which 500,000,000 shares have been designated as Class A Common Stock and 200,000,000 have been designated as Class B Common Stock. The Company has also authorized preferred stock consisting of 1,000,000 shares, par value $0.0001 per share. Each outstanding share of Class A Common Stock is entitled to one vote and each outstanding share of Class B Common Stock is entitled to ten votes. Warrant Offerings In May 2025, the Company entered into a note and warrant purchase agreement with an unaffiliated third party, providing for the private placement of a subordinated convertible promissory note with a principal balance of $5.0 million and warrant to purchase 163,322 shares of the Companys Class A Common Stock with an exercise price of $6.13 per share. In September 2025, Steve Sarowitz, who is the controlling person of this unaffiliated third party, became a member of the Companys board of directors. See Note 4, Debt for additional details. In September 2025, the Company entered into two notes and warrant purchase agreements with unaffiliated third parties, providing for the private placement of notes with a total principal balance of $40.0 million and warrants to purchase 1,462,682 shares of the Companys Class A Common Stock with an exercise price per share of $7.29 . As part of the initial draw, the lenders received warrants to purchase 585,072 shares of the Companys Class A Common Stoc …

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8 . Subsequent Events Subsequent events have been evaluated through April 30, 2026, which is the date the condensed consolidated financial statements were available to be issued. In April 2026, the Company entered into an underwriting agreement with an unaffiliated third party for the issuance and sale of 16,445,000 shares of its Class A Common Stock at a price to the public of $2.10 , for aggregate proceeds of $34.5 million. In April 2026, the Company repaid in full the outstanding balance of $38.5 million under its revolving P&A loan facility. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing