Financial Overview - Southport Acquisition Corporation raised gross proceeds of $230 million from the IPO by selling 23,000,000 units at $10.00 per unit[16]. - Following the IPO, $234.6 million was placed in a trust account, invested in U.S. government securities, until the completion of a business combination or redemption of public shares[17]. - As of December 31, 2024, Southport Acquisition Corporation had not commenced any operations, with all activities related to its formation and IPO[30]. - As of December 31, 2024, the company had $494,974 in cash held outside the Trust Account and a working capital deficit of $3,862,447[74]. - The Trust Account held $429,151 in funds available to complete the initial business combination as of December 31, 2024[203]. Business Combination Plans - The company entered into a Merger Agreement with Angel Studios, valuing the transaction at $1.5 billion, plus any capital raised by Angel Studios prior to closing[29]. - The company plans to rename itself "Angel Studios, Inc." upon the closing of the merger with Angel Studios[29]. - The company aims to identify target businesses with a fair market value equal to at least 80% of the net assets held in the Trust Account[43]. - The company anticipates structuring the initial business combination to acquire 100% of the target's equity interests or assets[46]. - The company must complete its initial business combination by September 30, 2025, or face liquidation, potentially resulting in public stockholders receiving only $10.20 per share[86]. Redemption Rights and Stockholder Approval - The company intends to provide public stockholders with redemption rights upon completion of the initial business combination[50]. - The initial business combination will require stockholder approval if it involves issuing more than 20% of outstanding common stock[51]. - Public stockholders are restricted from seeking redemption rights for more than 15% of public shares without prior consent, aimed at preventing stockholders from blocking business combinations[55]. - If stockholder approval is sought for the initial business combination, stockholders holding over 15% of public shares may lose the ability to redeem shares in excess of that amount[110]. Risks and Challenges - The company has no operating history and no revenues, making it difficult to evaluate its ability to achieve its business objectives[71]. - The company may face intense competition from other entities seeking similar business combinations, which could limit its ability to acquire larger target businesses[65]. - The company is subject to risks from current global geopolitical conditions, which may adversely affect its search for a business combination[70]. - The ongoing geopolitical conflicts, including the Russia-Ukraine conflict and the war in the Middle East, have created global security concerns that could significantly impact regional and global economies[89]. - The company may face significant competition for business combination opportunities, which could hinder the completion of its initial business combination[111]. Financial and Operational Concerns - The company expects to incur significant costs in pursuit of acquisition plans, raising doubts about its ability to continue as a going concern[74]. - The company may depend on loans from its management team or sponsors to fund its search for a target business if funds outside the Trust Account are insufficient[87]. - The company identified a material weakness in its internal control over financial reporting, which may lead to material misstatements in financial statements[74]. - The company may face challenges in negotiating business combinations as potential targets are aware of the September 30, 2025 deadline[85]. - The company may incur substantial debt to complete the initial business combination, which could adversely affect leverage, liquidity, and financial condition[202]. Market and Regulatory Environment - The NYSE initiated delisting proceedings for the company's Class A common stock due to falling below the $40 million market capitalization requirement[23]. - Following the delisting from the NYSE, the company's securities began trading on the OTC Pink Marketplace, which may result in limited liquidity for holders of its securities[109]. - The SEC adopted new rules for SPACs on January 24, 2024, which include additional disclosures and may increase costs and time needed for business combinations[142][144]. - Changes in laws or regulations may materially affect the company's ability to negotiate and complete its initial business combination[141]. Management and Governance - The company's sponsor, officers, and directors hold approximately 99% of the issued and outstanding capital stock, which may influence the approval of the initial business combination[76]. - The company does not have a policy that prohibits its sponsor, officers, or directors from having financial interests in other investments, leading to potential conflicts[196]. - The company may face challenges in completing its initial business combination due to conflicts of interest among its officers and directors, who are involved in other business endeavors[179]. - The company may pursue acquisition opportunities outside of its management's areas of expertise, potentially impacting the evaluation and operation of such acquisitions[161]. Warrant and Shareholder Dynamics - The company has 23,200,000 warrants outstanding, consisting of 11,500,000 public warrants and 11,700,000 private placement warrants[156]. - The exercise price for warrants is $11.50 per share, and under cashless exercise, holders may receive fewer shares than if they exercised for cash[153]. - The company may issue additional shares of Class A common stock or preferred stock to complete the initial business combination, which could dilute existing stockholders' interests[175]. - The company may need to search for an alternate business combination if the cash required for redemptions exceeds the available cash[211]. Conclusion and Future Outlook - If the initial business combination is not completed, public stockholders may receive approximately $10.20 per share upon liquidation of the Trust Account[177]. - The company may face difficulties in obtaining and retaining key personnel if it completes its initial business combination with an early-stage or financially unstable business[167]. - The company may attempt to simultaneously complete business combinations with multiple prospective targets, which could hinder the ability to finalize the initial business combination[207].
Southport Acquisition (PORT) - 2024 Q4 - Annual Report