Southport Acquisition Corporation Reports Significant Financial Challenges, Net Loss of $1.5M in Q3 2024

As of September 30, 2024, Southport Acquisition Corporation reported significant financial challenges, including a net loss of $1,495,898 for the third quarter and a total net loss of $1,739,275 for the nine months ended September 30, 2024. This marks a stark contrast to the previous fiscal year, where the company recorded a net income of $1,184,465 for the same quarter and $2,831,194 for the nine months ended September 30, 2023. The decline in profitability is attributed to increased expenses and a substantial loss on the change in fair value of warrant liabilities, which amounted to $1,392,000 for the third quarter of 2024, compared to $325,000 in the same period of 2023.

Total assets decreased significantly from $46,881,358 as of December 31, 2023, to $13,544,096 by September 30, 2024. This decline was primarily driven by a reduction in cash and marketable securities held in the Trust Account, which fell from $44,709,805 to $12,895,117 during the same period. The company’s cash position also deteriorated, with cash on hand dropping to $517,975 from $2,171,553 at the end of 2023.

The company’s liabilities increased, with current liabilities rising to $2,299,092 due to an excise tax liability, up from $1,976,947 at the end of the previous year. Additionally, the warrant liability surged to $1,856,000 from $580,500, reflecting the volatility in the company’s financial instruments.

Strategically, Southport entered into a Merger Agreement with Angel Studios, Inc. on September 11, 2024, which will see Angel Studios become a wholly owned subsidiary of Southport. The merger is valued at $1.5 billion, contingent upon stockholder approvals and an extension of Southport's business combination deadline to September 30, 2025. This agreement is part of Southport's efforts to solidify its business operations following a series of stock redemptions, including the redemption of 18,849,935 shares for $197,694,657 in July 2023 and 2,986,952 shares for $32,214,591 in March 2024.

As of September 30, 2024, the company reported a working capital deficit of $3,166,087, raising concerns about its ability to continue as a going concern. Management has indicated that it may need to seek additional financing to complete its initial business combination or to address liquidity needs. The company has also acknowledged material weaknesses in its internal controls over financial reporting, which it is actively working to remediate.