8-K: Angel Studios Appoints Tanner LLC as New Auditor

Angel Studios, Inc. announced the appointment of Tanner LLC as its independent registered public accounting firm following its business combination, replacing BDO USA, P.C.

Summary

• Angel Studios, Inc. (formerly Southport Acquisition Corporation) consummated its previously announced business combination with Angel Studios Legacy, Inc. on September 10, 2025.
• Prior to the merger's effective time, the company changed its name from Southport Acquisition Corporation to Angel Studios, Inc.
• On September 15, 2025, the audit committee of the Board approved the appointment of Tanner LLC as the company's independent registered public accounting firm, effective for the year ended December 31, 2025.
• Tanner LLC previously served as the independent registered public accounting firm for Angel Legacy prior to the Business Combination.
• BDO USA, P.C., the former independent registered public accounting firm for Southport, was informed of its replacement by Tanner on September 10, 2025.
• BDO's prior audit reports on Southport included an explanatory paragraph expressing substantial doubt about Southport's ability to continue as a going concern, contingent on the successful completion of the Business Combination.
• BDO had identified material weaknesses in Southport's internal controls related to cash flow statement presentation, excise tax liabilities, and accrued liabilities, which continued to exist as of June 30, 2025.

Sentiment

Score: 7

Explanation: The resolution of the 'going concern' issue through the business combination is a significant positive. However, the persistence of material weaknesses in internal controls, even if inherited from the SPAC, tempers the overall positive sentiment.

Positives

• The successful consummation of the business combination resolved the 'going concern' issue previously noted by BDO for Southport Acquisition Corporation.
• Tanner LLC, the former auditor for Angel Legacy, has been appointed as the new independent registered public accounting firm for the combined entity, Angel Studios, Inc., effective for the year ended December 31, 2025.

Negatives

• BDO USA, P.C. identified material weaknesses in Southport's internal controls over financial reporting related to the presentation of the statement of cash flows, the recognition of excise tax liabilities, and the process for the presentation and recording of accrued liabilities, which continued to exist as of June 30, 2025.

Risks

• Material weaknesses in internal controls over financial reporting, specifically concerning the presentation of the statement of cash flows, the recognition of excise tax liabilities, and the process for the presentation and recording of accrued liabilities, which were identified by the previous auditor and persisted as of June 30, 2025.

Future Outlook

The newly appointed independent registered public accounting firm, Tanner LLC, will audit the company's consolidated financial statements for the year ended December 31, 2025.

Industry Context

This change in auditor is a standard procedural step following a business combination, where the acquiring entity often consolidates its accounting practices and auditor relationships. The resolution of the 'going concern' issue for the SPAC (Southport) through the merger is a common outcome in such transactions.

Corporate Governance

Stakeholder Impact

• Shareholders benefit from the successful completion of the business combination, which resolves the previous 'going concern' uncertainty for the former SPAC entity.
• Investors gain clarity on the company's financial oversight with the appointment of a new auditor for the combined entity.

Next Steps

• Tanner LLC will audit Angel Studios, Inc.'s consolidated financial statements for the year ended December 31, 2025.

Key Dates

Recommendation

The successful completion of the business combination and the resolution of the 'going concern' issue are positive developments, providing stability. However, the inherited material weaknesses in internal controls from the former SPAC entity warrant caution. While the auditor change is a procedural outcome of the merger, the underlying control issues suggest a 'hold' recommendation until further clarity on their remediation is provided in future filings.

Keywords

Angel Studios, Southport Acquisition Corporation, Tanner LLC, BDO USA, Business Combination, Merger, Auditor Change, SEC Filing, 8-K, Financial Reporting, Going Concern, Material Weakness