Angel Studios—the studio empowering everyday fans to greenlight development and distribution of movies and TV shows—today announced it has entered into a definitive agreement to become a publicly listed company through a business combination with Southport Acquisition Corporation (OTC: PORT) (“Southport”), a special purpose acquisition company. Upon the closing of the transaction, the combined company’s Class A common stock is expected to be listed on the NYSE or Nasdaq under the ticker symbol “AGSD”.
Angel Studios is led by co-founder and CEO Neal Harmon, who will continue to lead the combined company following the closing of the transaction.
In March 2023, Angel Studios released its first theatrical film, HIS ONLY SON, grossing approximately $13.5 million in the box office. Angel Studio’s following film, SOUND OF FREEDOM, grossed approximately $250.0 million in the box office and became one of the top 10 grossing films in the United States that year.
Audiences Crave Stories that Resonate
The problem that Angel Studios seeks to address is that a limited number of Hollywood studio decision-makers determine which films and television shows are made, and four out of five box office releases fail. Additionally, for every hit TV show, there are a hundred misses.
Angel Studios’ solution to this problem is to spread that decision-making power to the Angel Guild. This growing membership—rather than Hollywood executives—watch and select winning films and shows prior to release.
The Angel Guild has a strong track record of selecting winning content, with an average Rotten Tomatoes® wide release audience score of 95%, surpassing every other major distributor, including Paramount (84%), Disney (79%), HBO (75%), A24 (73%), and Netflix (61%).
Angel Guild members are the “secret sauce” behind the discovery of global hits like SOUND OF FREEDOM, HIS ONLY SON, CABRINI, Tuttle Twins, Dry Bar Comedy, and other hit movies and television shows. Angel Studios was one of the top 10 studios in the US domestic box office in 2023, surging past Amazon’s MGM and A24.
Angel Studios Overview
Angel Studios is a values-based distribution company for stories that amplify light to mainstream audiences. Through the Angel Guild, 375,000 members choose which film and television projects the studio will market and distribute. 104,000 Angel Guild members in 155 countries have invested nearly $80.0 million in projects distributed by the studio to date.
Defining & Determining Light
To determine whether or not a film or television show should be released, Angel Studios screens a short promotional version, or if available a full-length feature or episode, to a sample of members of the Angel Guild who vote on whether the project “amplifies light.”
The Angel Guild
The Angel Guild is a community of interested individuals who have invested in previous Angel Studios films or television shows, and individuals who pay a monthly or annual fee to Angel Studios to be a member of the Angel Guild. Upon watching a Torch, which is a concept video preview, Angel Guild members are asked for their feedback as to whether or not the Torch “amplifies light,” and their feedback is used to determine whether Angel Studios will move forward with production and/or distribution of the film or television show.
Angel Studios primarily generates revenue from these sources:
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Angel Guild revenue comes from monthly or annual membership fees. Currently there are two possible tiers for membership, Basic and Premium. Both memberships allow voting for every Angel Studios release, give early access for streaming, and help fund Angel Studios original films, increasing new content releases. The primary difference between the two memberships is that Premium includes two complimentary tickets to every Angel Studios theatrical release and a discount for all merchandise.
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Theatrical Distribution revenue comes from releasing Angel Studios original films with Angel Studios’ exhibitor partners. Every time a moviegoer purchases a ticket from the partner theaters, Angel Studios receives a percentage of the box office revenue. For most international theaters, the percentage of box office revenue is first paid to a distributor who then pays Angel Studios.
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Content Licensing from licensing Angel Studios’ films and television shows to other distributors such as Amazon, Apple, and Netflix. Angel Studios’ future plans include licensing the rights to its films and television shows for other experiences such as derivative shows, video games, theme parks and broadway-style plays.
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Merchandise revenue is generated from sales of merchandise related to Angel Studios films and series, as well as physical DVD sales. Angel Studios also offers direct online store for Angel Studios themed products, and wholesale products to retail partners.
Bitcoin Treasury Strategy: Seeking to Empower the Angel Guild for Generations
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Angel Studios has held 125 Bitcoin on the balance sheet since 2021 as a rainy day fund.
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Angel Studios plans on continuing to acquire and hold Bitcoin as a strategic treasury asset, and adjunct to its core film and television production and distribution business.
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The continued implementation of this Bitcoin reserve is intended to support Angel Studios’ mission-driven approach.
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Angel Studios Bitcoin Treasury is a for-profit “endowment for the arts” based on the Bitcoin standard that seeks to build a financial foundation to fund the world’s best filmmakers to produce stories that amplify light for generations to come.
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The Company is pleased to report that they have an agreement in principle with Off the Chain Capital, a leading Bitcoin asset management firm, for an investment of approximately $10 million to help back the Angel Studios treasury strategy. The pricing and certain other material terms of their investment remain subject to ongoing discussion.
Transaction Overview
The transaction values the combined company at a $1.6 billion pro forma enterprise value. Existing Angel Studios stockholders will roll 100% of their equity in Angel Studios into the combined company.
The transaction will be effected through a merger of Angel Studios with a wholly owned subsidiary of Southport, with the surviving company becoming a wholly owned subsidiary of Southport. At closing of the transaction, Southport will change its name to Angel Studios, and its stock ticker to “AGSD.”
The boards of directors of Angel Studios and Southport have approved the transaction, the consummation of which is subject to customary closing conditions, including the filing and effectiveness of an S-4 registration statement with the Securities and Exchange Commission (the “SEC”), approval by Angel Studios’ and Southport’s stockholders, and regulatory approvals. The transaction is not subject to a minimum cash condition. The transaction is expected to close in the first half of 2025.
Additional information, including a copy of the agreement and plan of merger and an investor presentation, will be provided in a Current Report on Form 8-K to be filed by Southport and Angel Studios, respectively, with the SEC and will be available at the SEC’s website at www.sec.gov/.
