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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number 001-41833

Falcon’s Beyond Global, Inc.

(Exact name of registrant as specified in its charter)


Delaware		92-0261853
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1768 Park Center Drive
Orlando, FL		32835
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (407) 909-9350

Securities registered pursuant to Section 12(b) of the Act


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.0001 per share	FBYD	The Nasdaq Stock Market LLC
Warrants exchangeable for 0.25 shares of Class A common stock on October 6, 2028	FBYDW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 14, 2026, a total of 49,012,162 shares of the Registrant’s Class A common stock, par value $0.0001 per share, and 72,230,050 shares of the Registrant’s Class B common stock, par value $0.0001 per share, was issued and outstanding.

FALCON’S BEYOND GLOBAL, INC.

TABLE OF CONTENTS


		Page No.
PART I. FINANCIAL INFORMATION		1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025	2
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	4
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three Months Ended March 31, 2026 and 2025 (Unaudited)	5
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Disclosure Controls and Procedures	28
PART II. OTHER INFORMATION		29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	31
SIGNATURES		32

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains statements that the Company believes are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements relating to expectations for future financial performance, business strategies or expectations for our business. These statements are based on the beliefs and assumptions of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, it cannot provide assurance that it will achieve or realize these plans, intentions or expectations. These statements constitute projections, forecasts and forward-looking statements, and are not guarantees of future performance. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report, words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “target,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

You should not place undue reliance on these forward-looking statements. Should one or more of a number of known and unknown risks and uncertainties materialize, or should any of our assumptions prove incorrect, the Company’s actual results or performance may be materially different from those expressed or implied by these forward-looking statements. The following important factors, risks, and uncertainties could cause actual results to differ materially from those indicated by the forward-looking statements in this Quarterly Report:

•

We may not be able to sustain our growth, effectively manage our anticipated future growth, implement our business strategies or achieve the results we anticipate.

•

The impairments of our intangible assets and equity method investments in our joint ventures have materially and adversely impacted our business and results of operations and may do so again in the future.

•

Our current liquidity resources raise substantial doubt about our ability to continue as a going concern and holders of our securities could suffer a total loss of their investment.

•

We will require additional capital to support the growth of our business. This capital might not be available on acceptable terms, if at all, or if available may result in restrictions on our operations or substantial dilution to our stockholders.

•

Our FBD business is in transition, and the repositioning and rebranding of FBD projects will be subject to timing, budgeting and other risks which could have a material adverse effect on us.

•

Our growth plans in FCG and FBB may take longer than anticipated or may not be successful.

•

Our ability to execute on our strategy and business model is dependent on the quality of our services, and our failure to offer high quality services could have a material adverse effect on our sales and results of operations.

•

Anticipated synergies across our three business lines may not create the diversified revenue streams that we believe they will.

•

A significant portion of FCG’s and our revenue is derived from two large clients of FCG and any loss of, or decrease in services to, those clients could harm FCG’s and our results of operations.

•

The timing of recognition of revenue from our contracted pipeline is difficult to predict with certainty and in some cases may extend over a number of fiscal years.

•

Following the completion of the Strategic Investment (as defined below), the Company, Falcon’s Opco and FCG LLC are subject to contractual restrictions that may affect our ability to access the public markets and expand our business.

•

Our development of new sources of revenue depends on development activities that expose us to project cost and completion risks.

•

We operate in certain international regions that experience varying degrees of social, political, military, and economic instability. These conditions may include civil unrest, geopolitical tensions, armed conflicts, acts of terrorism, or other disruptions that could adversely affect our operations, supply chain, workforce, or the ability of customers and partners to conduct business with us. Any escalation of these risks in the countries where we operate could negatively impact our financial results, business continuity, and long term strategic objectives.

•

We are exposed to risks related to operating in the Kingdom of Saudi Arabia.

•

Changes in foreign trade policies and tariff structures, as well as the potential impacts of legal challenges related to such policies, could adversely affect our business, financial condition, and results of operations.

•

Our indebtedness and liabilities could limit the cash flow available for our operations, which may adversely affect our financial condition and future financial results. The principal, premium, if any, and interest payment obligations of such debt may restrict our future operations and impair our ability to invest in our businesses.

•

The growth of our business depends upon our ability to source projects with new and existing customers and take such projects to completion.

•

We may expand into new lines of business in our FBB and FBD divisions and may face risks associated with such expansion.

•

We have entered and expect to continue to enter into joint venture, strategic collaborations, teaming and other business arrangements, and these activities involve risks and uncertainties. A failure of any such relationship could have a material adverse effect on our business and results of operations.

•

If we are unable to hire, retain, train and motivate qualified personnel and senior management for our businesses and deploy our personnel and resources to meet customer demand around the world, our business could suffer.

•

We are dependent on the continued contributions of our senior management and other key employees, and the loss of any of whom could adversely affect our business, operating results, and financial condition.

•

Failures in, material damage to, or interruptions in our information technology systems, software or websites, and difficulties in updating our systems or software or implementing new systems or software could adversely affect our businesses or operations.

•

Protection of electronically stored data and other cybersecurity is costly, and if our data or systems are materially compromised in spite of this protection, we may incur additional costs, lost opportunities, damage to our reputation, disruption of services or theft of our assets.

•

Exchange rate fluctuations could result in significant foreign currency gains and losses and may adversely affect our business and operating results and financial condition.

•

Our insurance may not be adequate to cover potential losses, liabilities and damages, the cost of insurance may continue to increase materially and we may not be able to secure insurance to cover all of our risks, all of which could have a material adverse effect on us.

•

Theft of our intellectual property, including unauthorized exhibition of our content, may decrease our licensing, franchising and programming revenue which may adversely affect our business and profitability.

•

We are a holding company and our only material assets are our interests in Falcon’s Opco and our other equity method investments. Accordingly, we are generally dependent upon distributions from Falcon’s Opco and our other equity method investments to pay taxes, make payments under the Tax Receivable Agreement and pay dividends.

•

Under the Tax Receivable Agreement, the Company is required to make payments to the Company’s initial or current unitholders for certain tax benefits to which the Company may become entitled, and those payments may be substantial. Moreover, in certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits the Company realizes in respect of the tax attributes subject to the Tax Receivable Agreement.

•

If Falcon’s Opco were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, the Company and Falcon’s Opco might be subject to potentially significant tax inefficiencies, and the Company would not be able to recover payments previously made by it under the Tax Receivable Agreement even if the corresponding tax benefits were subsequently determined to have been unavailable due to such status.

•

Adverse litigation judgments or settlements resulting from legal proceedings in which we may be involved in the normal course of our business could adversely affect our financial condition or results of operations.

•

As a public reporting company, we are subject to rules and regulations established from time to time by the SEC and Public Company Accounting Oversight Board regarding our internal control over financial reporting. If we fail to establish and maintain effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results or report them in a timely manner.

•

We have identified material weaknesses in our internal controls over financial reporting. If we are unable to remediate these material weaknesses, if management identifies additional material weaknesses in the future or if we otherwise fail to maintain effective internal controls over financial reporting, we may not be able to accurately or timely report our financial position or results of operations, which may adversely affect our business and stock price or cause our access to the capital markets to be impaired.

•

There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

iii

•

Our Warrants may be delisted from Nasdaq.

•

The Demerau family controls over 45% of our voting power and is able to exert significant influence over stockholder decisions because of its share ownership.

•

Cecil D. Magpuri, our Chief Executive Officer, controls over twenty percent of our voting power and is able to exert significant influence over the direction of our business.

•

We may not be able to realize the anticipated benefits of the acquisition of Oceaneering Engineering Services (“OES”) and our efforts to integrate OES and grow Falcon’s Attractions may disrupt our other operations.

•

We may not be able to mitigate the risks related to legacy OES products and our ability to service such products and we may not be able to grow current and future potential customer relationships for OES products.

In addition, this Quarterly Report includes important information as to risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. See “Note 7 – Commitments and contingencies” within Item 1 of this Quarterly Report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” within Item 2 of this Quarterly Report. Additional important information as to these factors is included in our Annual Report on Form 10-K for the year ended December 31, 2025 (“Annual Report”) in the sections titled Item 1, “Business”, Item 1A, “Risk Factors,” Item 3, “Legal Proceedings,” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The forward-looking statements speak only as of the date of this Quarterly Report or, in the case of any document incorporated by reference, the date of that document. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our other filings with the Securities and Exchange Commission (“SEC”).

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

FALCON’S BEYOND GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars, except share and per share data)


	As of
	(UNAUDITED) March 31, 2026			December 31, 2025
Assets
Current assets:
Cash and cash equivalents ($525 and $532 restricted cash as of March 31, 2026 and December 31, 2025, respectively)	$	1,176		$	1,868
Accounts receivable ($3,247 and $2,533 related party as of March 31, 2026 and December 31, 2025, respectively)		5,456			3,714
Contract assets		1,535			3,264
Other current assets ($1,053 and $983 related party as of March 31, 2026 and December 31, 2025, respectively)		2,331			1,525
Total current assets		10,498			10,371
Investments and advances to equity method investments		46,621			50,717
Operating lease right-of-use assets		3,023			3,188
Property and equipment, net		957			1,022
Intangible assets, net		1,006			1,063
Other non-current assets		254			341
Total assets	$	62,359		$	66,702

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable ($117 and $215 related party as of March 31, 2026 and December 31, 2025, respectively)	$	7,616		$	8,453
Accrued expenses and other current liabilities ($228 and $501 related party as of March 31, 2026 and December 31, 2025, respectively)		5,957			16,429
Contract liabilities		96			19
Operating lease liability, current		481			460
Short-term debt ($736 and $1,386 related party as of March 31, 2026 and December 31, 2025, respectively)		736			1,386
Long-term debt, current		8,522			1,769
Total current liabilities		23,408			28,516
Operating lease liability, net of current portion		1,773			1,900
Long-term debt, net of current portion ($7,349 and $5,024 related party as of March 31, 2026 and December 31, 2025 respectively)		7,484			12,465
Total liabilities		32,665			42,881

Commitments and contingencies – Note 7

Stockholders’ equity
Series B preferred stock ($0.0001 par value, 8,000,000 shares authorized; 6,897,869 and 6,715,721 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively; Liquidation preference of $34.5 million and $33.6 million as of March 31, 2026 and December 31, 2025, respectively)		1			1
Class A common stock ($0.0001 par value, 500,000,000 shares authorized; 48,324,742 and 48,155,017 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively)		4			4
Class B common stock ($0.0001 par value, 150,000,000 shares authorized; 47,917,470 and 47,917,820 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively)		6			6
Additional paid-in capital		56,462			55,767
Accumulated deficit		(41,624	)		(44,239	)
Accumulated other comprehensive income (loss)		66			387
Total equity attributable to common stockholders		14,915			11,926
Non-controlling interest		14,779			11,895
Total equity		29,694			23,821
Total liabilities and equity	$	62,359		$	66,702

See accompanying notes to unaudited condensed consolidated financial statements.

FALCON’S BEYOND GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands of U.S. dollars, except share and per share data)


	Three months ended
	March 31, 2026			March 31, 2025
Revenue:
Services ($1,940 and $1,623 related party for the three months ended March 31, 2026 and 2025, respectively)	$	3,674		$	1,708
Product sales		1,702			—
Total revenue		5,376			1,708
Operating expenses:
Project design and build expense		945			106
Cost of product sales		1,129			—
Selling, general and administrative expense ($31 and $25 related party for the three months ended March 31, 2026 and 2025, respectively)		7,736			6,298
Transaction expense (credit)		(11,057	)		1,521
Research and development expense ($0 and $118 related party for the three months ended March 31, 2026 and 2025, respectively)		—			118
Depreciation and amortization expense		134			4
Total operating expenses		(1,113	)		8,047
Income (loss) from operations		6,489			(6,339	)
Share of gain (loss) from equity method investments		(216	)		(4,063	)
Interest expense ($(149) and $(569) related party for the three months ended March 31, 2026 and 2025, respectively)		(174	)		(1,332	)
Interest income		6			3
Change in fair value of warrant liabilities		—			2,886
Foreign exchange transaction gain (loss)		16			752
Net income (loss) before taxes	$	6,121		$	(8,093	)
Income tax (expense) benefit		—			1
Net income (loss)	$	6,121		$	(8,092	)
Net income (loss) attributable to noncontrolling interest		3,049			(4,477	)
Net income (loss) attributable to common stockholders		3,072			(3,615	)

Net income (loss) per share
Net income (loss) per share, basic		0.05			(0.10	)
Net income (loss) per share, diluted		0.05			(0.13	)
Weighted average shares outstanding, basic		49,210,697			37,322,177
Weighted average shares outstanding, diluted		49,210,697			37,509,127

Other Comprehensive income (loss):
Net income (loss)	$	6,121		$	(8,092	)
Foreign currency translation income (loss)		(640	)		85
Total comprehensive income (loss)	$	5,481		$	(8,007	)
Comprehensive income (loss) attributable to noncontrolling interest		2,730			(4,430	)
Total comprehensive income (loss) attributable to common stockholders	$	2,751		$	(3,577	)

See accompanying notes to unaudited condensed consolidated financial statements.

FALCON’S BEYOND GLOBAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands of U.S. dollars)


	Three months ended
	March 31, 2026			March 31, 2025
Cash flows from operating activities
Net income (loss)	$	6,121		$	(8,092	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		134			4
Foreign exchange transaction gain (loss)		(27	)		(752	)
Share of gain (loss) from equity method investments		216			4,063
Change in fair value of warrants		—			(2,886	)
Share based compensation expense		720			531
Distribution from equity method investment PDP		1,720			—
Changes in assets and liabilities:
Accounts receivable ($(714) and $(1,088) related party for the three months ended March 31, 2026 and 2025, respectively)		(1,745	)		1,098
Contract assets		1,728			(86	)
Deferred transaction costs		—			588
Other current assets		(537	)		172
Other non-current assets		88			13
Accounts payable ($(98) and $488 related party for the three months ended March 31, 2026 and 2025, respectively)		(838	)		(30	)
Accrued expenses and other current liabilities ($(273) and $76 related party for the three months ended March 31, 2026 and 2025, respectively)		(10,469	)		6,322
Contract liabilities		77			—
Operating lease assets and liabilities		60			—
Net cash provided by (used in) operating activities		(2,752	)		945
Cash flows from investing activities
Purchase of property and equipment		(12	)		(92	)
Proceeds from sale of equipment		—			2
Short-term advances to affiliate - related party		(70	)		—
Issuance of short-term loan		(200	)		—
Distribution from equity method investment Karnival		1,490			—
Net cash provided by (used) in investing activities		1,208			(90	)
Cash flows from financing activities
Repayment of debt ($(650) and $0 related party for the three months ended March 31, 2026 and 2025, respectively)		(1,149	)		(393	)
Proceeds from related party credit facilities		3,475			1,248
Repayment of related party credit facilities		(1,150	)		(1,257	)
Proceeds from RSUs issued to affiliates		348			198
Settlement of RSUs		(675	)		(397	)
Net cash provided by (used in) financing activities		849			(601	)
Net increase (decrease) in cash and cash equivalents		(695	)		254
Foreign exchange impact on cash		3			29
Cash and cash equivalents at beginning of year		1,868			825
Cash and cash equivalents at end of period	$	1,176		$	1,108
Supplemental disclosures:
Cash paid for interest	$	452		$	424
Non-cash activities:
Conversion of Class B Common Stock to Class A Common Stock		(38	)		18
Reclassification of warrants to equity		—			1,825

See accompanying notes to unaudited condensed consolidated financial statements.

FALCON’S BEYOND GLOBAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)

(in thousands of U.S. dollars, except unit and share data)


	Preferred Stock				Common Stock, Class A				Common Stock, Class B					Additional paid-in			Accumulated other comprehensive			Accumulated			Total equity (deficit) attributable to common			Non-controlling			Total equity
	Shares		Amount		Shares		Amount		Shares			Amount		capital			income (loss)			deficit			stockholders			Interest			(deficit)
December 31, 2024		—		—		36,106,345	$	3		44,815,937		$	5	$	37,808		$	(243	)	$	(46,538	)	$	(8,965	)	$	(11,132	)	$	(20,097	)
Conversion of Class B common stock to Class A common stock		—		—		1,750		—		(1,750	)		—		(18	)		—			—			(18	)		18			—
Reclassification of warrants to equity						—		—		—			—		815			—			—			815			1,010			1,825
RSU issuances		—		—		118,832		—		—			—		148			—			—			148			184			332
Net income (loss)		—		—		—		—		—			—		—			—			(3,615	)		(3,615	)		(4,477	)		(8,092	)
Foreign currency translation gain (loss)		—		—		—		—		—			—		—			38			—			38			47			85
March 31, 2025		—	$	—		36,226,927	$	3		44,814,187		$	5	$	38,753		$	(205	)	$	(50,153	)	$	(11,597	)	$	(14,350	)	$	(25,947	)


	Preferred Stock				Common Stock, Class A				Common Stock, Class B					Additional paid-in		Accumulated other comprehensive			Accumulated			Total equity attributable to common			Non-controlling			Total
	Shares		Amount		Shares		Amount		Shares			Amount		capital		income (loss)			deficit			stockholders			Interest			equity
December 31, 2025		6,715,721		1		48,155,017	$	4		47,917,820		$	6	$	55,767	$	387		$	(44,239	)	$	11,926		$	11,895		$	23,821
Conversion of Class B common stock to Class A common stock		—		—		350		—		(350	)		—		41		—			—			41			(41	)		—
Preferred stock dividend		182,148		—		—		—		—			—		457		—			(457	)		—			—			—
RSU issuances		—		—		169,375		—		—			—		197		—			—			197			195			392
Net income (loss)		—		—		—		—		—			—		—		—			3,072			3,072			3,049			6,121
Foreign currency translation gain (loss)		—		—		—		—		—			—		—		(321	)		—			(321	)		(319	)		(640	)
March 31, 2026		6,897,869	$	1		48,324,742	$	4		47,917,470		$	6	$	56,462	$	66		$	(41,624	)	$	14,915		$	14,779		$	29,694

See accompanying notes to unaudited condensed consolidated financial statements.

FALCON’S BEYOND GLOBAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(in thousands of U.S. dollars, unless otherwise stated)

Description of business and basis of presentation

Merger with FAST II

Falcon’s Beyond Global, Inc., a Delaware corporation (“Pubco”, “FBG”, or the “Company”), entered into an Amended and Restated Agreement and Plan of Merger, dated as of September 1, 2023 (the “Merger Agreement”), by and among Pubco, FAST Acquisition Corp. II, a Delaware corporation (“FAST II”), Falcon’s Beyond Global, LLC, a Delaware limited liability company (“Falcon’s Opco”), and Palm Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Pubco (“Merger Sub”).

On October 5, 2023 FAST II merged with and into Pubco (the “SPAC Merger”), with Pubco surviving as the sole owner of Merger Sub, followed by a contribution by Pubco of all of its cash (except for cash required to pay certain transaction expenses) to Merger Sub to effectuate the “UP-C” structure; and on October 6, 2023 Merger Sub merged with and into Falcon’s Opco (the “Acquisition Merger,” and collectively with the SPAC Merger, the “Business Combination”), with Falcon’s Opco as the surviving entity of such merger. Following the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), the direct interests in Falcon’s Opco were held by Pubco and certain holders of the limited liability company units of Falcon’s Opco outstanding as of immediately prior to the Business Combination.

The Company recognized a transaction credit of $11.1 million for the three months ended March 31, 2026 for the reversal of accrued transaction expenses related to the Business Combination. See "Note 7 – Commitments and contingencies" for additional discussion. The remaining transaction costs of $5.1 million are not yet settled as of March 31, 2026. Negotiations regarding the terms of the remaining costs yet to be settled are still ongoing and may change materially from the amounts accrued.

Nature of operations

The Company is a visionary entertainment and technology enterprise at the forefront of the global experience economy. We design, develop, engineer, deliver, and commercialize immersive physical and digital experiences for leading brands, developers, and destination operators worldwide, as well as for our own portfolio of entertainment and technology concepts. Our business is built on an integrated experience platform that brings together creative development, proprietary technologies, advanced engineering, intellectual property (“IP”), and operational execution to enable the repeatable creation, deployment, and scaling of entertainment experiences across multiple formats and locations globally. We operate through three complementary business divisions: Falcon’s Creative Group (“FCG”), Falcon’s Beyond Brands (“FBB”), and Falcon’s Beyond Destinations (“FBD”), each of which serves a distinct role within the Company’s operating model and participates in different stages of value creation within the experience economy. These divisions are conducted through five operating segments as of March 31, 2026. FCG provides creative and advisory services including destination strategy, master planning, experiential and attraction design, digital media, interactive software, IP development, and creative guardianship for entertainment and hospitality destinations. FBB, consisting of Falcon's Attractions and FBB-Other, encompasses a broad portfolio of intellectual property, proprietary technologies, and operating businesses that design, engineer, commercialize, and deploy entertainment systems, products, content, and experiences across physical and digital environments. FBD, consisting of Producciones de Parques, S.L., a joint venture between Falcon’s and Meliá Hotels International, S.A. (“Meliá”) (“PDP”), and Destinations Operations, develops, owns, operates, and expands entertainment venues, hospitality experiences, and branded destination concepts across a variety of location‑based formats, utilizing proprietary and third‑party intellectual property.

Basis of presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries for which it exercises control. Long-term investments in affiliated companies in which the Company exercises significant influence, but which it does not control, are accounted for using the equity method. The Company does not have any significant variable interest entities or special purpose entities whose financial results are not included in the unaudited condensed consolidated financial statements.

The financial statements of the Company’s operating foreign subsidiaries are measured using the local currency as the functional currency. Assets and liabilities are translated at exchange rates as of the balance sheet date. Revenues and expenses are translated at average monthly exchange rates prevailing during the period. Resulting translation adjustments are included in Accumulated other comprehensive income (loss).

The accompanying condensed consolidated financial statements of the Company are unaudited. In the opinion of management, all adjustments necessary for a fair statement of results of operations, cash flows, and financial position have been made. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Interim results are not necessarily indicative of results for a full year. The year-end consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles in the United States of America ("U.S. GAAP").

The unaudited condensed consolidated financial statements and notes are presented in accordance with the accrual basis of accounting in accordance with U.S. GAAP, with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not contain certain information included in the Company’s Annual Report on Form 10-K filed with the SEC on March 30, 2026.

Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report.

Principles of consolidation

The non-controlling interest represents the membership interest in Falcon’s Opco held by holders other than the Company.

The results of operations attributable to the non-controlling interest are included in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss), and the non-controlling interest is reported as a separate component of equity.

The Company consolidates the assets, liabilities, and operating results of Falcon’s Opco and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in the consolidation.

Liquidity

The Company has continued to invest in initiatives focused primarily on expanding its Falcon's Beyond Brands division, including product development, talent acquisition, and selective strategic investments. These activities have contributed to continued operating losses and negative cash flows from operations. Accordingly, the Company performed an evaluation of its ability to continue as a going concern through at least twelve months from the date of the issuance of these unaudited condensed consolidated financial statements under Accounting Standards Codification (“ASC”) 205-40, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern.

The Company’s development plans and associated working capital needs have been funded by a combination of debt and equity investments from its stockholders and the sale of non-core assets. The Company expects to continue utilizing a mix of these funding sources, including access to capital markets, additional financing arrangements, potential monetization of non-core investments, and expected distributions from PDP associated with the return of required withholding taxes from the sale of the Sol Tenerife Hotel in 2025 to support its ongoing growth strategy and working capital requirements. As of March 31, 2026, the Company has a working capital deficiency of $12.9 million, including short-term debt obligations of $9.3 million. The Company is actively evaluating refinancing and other alternatives with respect to these obligations.

Management’s assessment of the Company’s ability to meet its obligations over the next twelve months is based on current liquidity levels and assumes the continued execution of its operating plan and certain financing and capital initiatives. While management believes these assumptions are reasonable, the Company has incurred recurring operating losses and negative cash flows from operations. These conditions, together with the Company’s ongoing capital needs to support its growth initiatives and working capital requirements, raise substantial doubt about the Company’s ability to continue as a going concern. The Company continues to take active steps to strengthen its capital position and improve liquidity, including pursuing additional financing and evaluating strategic alternatives. While management believes these actions may enhance the Company’s financial flexibility, they do not change the conclusion that substantial doubt exists about the Company’s ability to continue as a going concern. There can be no assurance that additional capital or financing, if obtained, will provide sufficient funding for the next twelve months from the date of this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q does not reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.

Summary of significant accounting policies

Concentration of credit risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of Cash and cash equivalents, Accounts receivable and Contract assets. The Company places its Cash and cash equivalents with financial institutions of high credit quality. At times, such amounts exceed federally insured limits. Management believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of the respective financial institutions.

The Company provides credit to its customers located both inside and outside the United States in its normal course of business. Receivables are presented net of an allowance for credit losses based on the Company’s assessment of the collectability of customer accounts. The Company maintains an allowance that provides for an adequate reserve to cover estimated losses on receivables as well as contract assets. The Company determines the adequacy of the allowance by estimating the probability of loss based on the Company’s historical credit loss experience and taking into consideration current market conditions and supportable forecasts that affect the collectability of the reported amount. The Company regularly evaluates receivable and contract asset balances considering factors such as the customer’s creditworthiness, historical payment experience and the age of the outstanding balance. Changes to expected credit losses during the period are included in Credit loss expense in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss). After concluding that a reserved accounts receivable is no longer collectible, the Company reduces both the gross receivable and the allowance for credit losses. There was no allowance for credit losses as of both March 31, 2026 and December 31, 2025.

The Company had two customers with revenue greater than 10% of total revenue for the three months ended March 31, 2026. FBG had revenue from FCG of $1.9 million (36% of total revenue) and $1.6 million (95% of total revenue) for the three months ended March 31, 2026 and 2025, respectively. Accounts receivable balances from FCG totaled $3.1 million (57% of total accounts receivable) and $2.4 million (64% of total accounts receivable) as of March 31, 2026 and December 31, 2025, respectively. Revenue from the second customer totaled $2.8 million (52% of total revenue) and $0 for the three months ended March 31, 2026 and 2025, respectively. Accounts receivable balances from the second customer totaled $1.4 million (26% of total accounts receivable) and $0.8 million (22% of total accounts receivable) as of March 31, 2026 and December 31, 2025, respectively.

Reclassifications

Certain prior year amounts in these unaudited condensed consolidated financial statements have been reclassified to conform to the presentation for the three months ended March 31, 2026.

Recently issued accounting standards

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets," which introduces a practical expedient for estimating expected credit losses on current accounts receivable and contract assets. Under this expedient, entities may assume that conditions existing at the balance sheet date will persist for the remaining life of the asset, which simplifies the estimation process by eliminating the need to forecast future economic conditions for short-term assets. The Company adopted this ASU as of March 31, 2026 and elected to apply the practical expedient. The adoption of this ASU did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

In April 2026, the FASB issued ASU 2026‑01, "Initial Measurement of Paid‑in‑Kind Dividends on Equity‑Classified Preferred Stock." The amendments in this update standardize the initial measurement of paid‑in‑kind dividends on equity‑classified preferred stock and require such dividends to be initially measured based on the paid‑in‑kind dividend rate specified in the applicable preferred stock agreement. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years, with early adoption permitted. The Company early adopted this ASU on a prospective basis as of January 1, 2026. The adoption of this ASU did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

Recently issued accounting standards not yet adopted as of March 31, 2026

In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40)". The amendments in this ASU require a public business entity to provide disaggregated disclosures, in the notes to the financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. Relevant expense categories include, but are not limited to, employee compensation, selling expenses, intangible asset amortization, depreciation, and purchases of inventory. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Prospective application is required, but retrospective application may be applied. The Company is evaluating the impact of this ASU.

In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements." The amendments in this ASU clarify interim disclosure requirements and their applicability. This ASU results in a comprehensive list of interim disclosures that are required by U.S. GAAP. The ASU is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is evaluating the impact of this ASU.

In December 2025, the FASB issued ASU 2025-12, "Codification Improvements." The amendments in this ASU facilitate updates for a broad range of topics arising from technical corrections, unintended application of U.S. GAAP, clarifications, and other minor improvements. The ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company is evaluating the impact of this ASU.

Revenue

Disaggregated components of revenue consisted of:


	Three months ended
	March 31, 2026		March 31, 2025
Revenue transferred over time:
Shared services	$	1,936	$	1,622
Attraction services		1,738		86
		3,674		1,708
Revenue transferred at a point in time:
Product sales		1,702		—
	$	5,376	$	1,708

Accounts receivable consisted of:


	As of
	March 31, 2026		December 31, 2025
Related party	$	3,247	$	2,533
Third party		2,209		1,181
	$	5,456	$	3,714

Geographic information

Revenues based on the geographic location of the Company’s customer contracts consisted of:


	Three months ended
	March 31, 2026		March 31, 2025
USA	$	4,203	$	1,708
Asia		1,015		—
United Arab Emirates		116		—
Europe		42		—
	$	5,376	$	1,708

Investments and advances to equity method investments

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting. The Company’s joint ventures are as follows:

Falcon’s Creative Group

QIC Delaware, Inc., a Delaware corporation and an affiliate of QIC, holds 25% of FCG's equity interest in the form of preferred units (the "Strategic Investment"), and the Company, holds the remaining 75% of the equity interest in the form of common units. FCG's amended and restated limited liability company agreement (“LLCA”) includes QIC as a member and provides QIC with certain consent, priority and preemptive rights.

QIC is entitled to redeem its preferred units on the earlier of (a) the five-year anniversary of the Strategic Investment on July 27, 2028 or (b) any date on which a majority of key persons cease to be employed by FCG. The LLCA contains contractual provisions regarding the distribution of FCG’s income or loss. Pursuant to these provisions, QIC is entitled to a redemption amount of the initial $30.0 million investment plus a 9% annual compounding preferred return. QIC does not absorb losses from FCG that would cause its investment to drop below this redemption amount, and any losses not absorbed by QIC are fully allocated to the Company.

The Company and FCG are part of an intercompany service agreement (“Intercompany Services Agreement”) and a license agreement.

ii)

PDP

PDP is an unconsolidated joint venture with Meliá Hotels International, S.A. (“Meliá Group”) for the development and operation of hotel resorts and theme parks. The Company has 50% voting rights and shares 50% of profits and losses in this joint venture. PDP operates one hotel resort and theme park located in Mallorca, Spain. PDP operated a hotel located at Tenerife in the Canary Islands until the sale on May 30, 2025. In March 2026, the Company received a partial distribution from PDP of $1.7 million related to performance from the Mallorca property.

iii)

Karnival

The Company has a 50% interest in Karnival, an unconsolidated joint venture with Raging Power Limited, a subsidiary of New World Development Company Limited (“Raging Power”). The purpose of the joint venture was to hold ownership interests in entities developing and operating amusement centers located in the People’s Republic of China. The Company has concluded that Karnival is a VIE, because the Company does not have the power to direct the activities that most significantly impact the economic performance of Karnival, as such decisions are taken by the unanimous consent of the representatives of the joint venture partners. The Company, therefore, does not consolidate Karnival and accounts for the investment as an equity method investment. In October 2025, the Company and its joint venture partners agreed to terminate this project and windup the joint venture due to protracted delays in the underlying location development schedule. In March 2026, the Company received a partial distribution from Karnival in the amount of $1.5 million. Subsequent to March 31, 2026, the Company received a second partial distribution from Karnival in the amount of $1.9 million.

Investments and advances to equity method investments consisted of:


	As of
	March 31, 2026		December 31, 2025
FCG	$	18,026	$	17,844
PDP		25,836		28,648
Karnival		2,759		4,225
	$	46,621	$	50,717

Share of income (loss) from equity method investments consisted of:


	Three months ended
	March 31, 2026			March 31, 2025
FCG	$	182		$	(4,571	)
PDP		(422	)		474
Karnival		24			34
	$	(216	)	$	(4,063	)

Share of income (loss) from FCG consisted of:


	Three months ended
	March 31, 2026			March 31, 2025
Share of FCG net income (loss) (excluding gain on sale of land)	$	211		$	(2,977	)
Share of FCG net income (loss) from gain on sale of land		1,623			—
Preferred unit dividend accretion		(826	)		(768	)
Basis difference amortization		(826	)		(826	)
	$	182		$	(4,571	)

Summarized balance sheet information for the Company’s equity method investments consisted of:


	As of
	March 31, 2026						December 31, 2025
	FCG		PDP		Karnival		FCG		PDP		Karnival
Current assets	$	37,568	$	20,293	$	12,528	$	33,807	$	25,280	$	14,081
Non-current assets		23,178		49,709		2,765		23,824		51,111		2,785
Current liabilities		18,882		4,004		13,894		17,094		4,006		15,506
Non-current liabilities		5,744		4,093		—		6,252		4,614		—

The Company has certain related parties in common with its joint ventures, however, not all related parties of its joint ventures are related parties of the Company. Related party balances of FCG and PDP consisted of:


	As of
	March 31, 2026				December 31, 2025
	FCG		PDP		FCG		PDP
Assets	$	31,372	$	9	$	24,509	$	131
Liabilities		4,841		585		4,337		617

Assets comprise primarily of accounts receivable, contract assets and other current assets. Liabilities comprise primarily of accounts payable and accrued expenses and other current liabilities and contract liabilities.

Statements of operations for the Company’s equity method investments consisted of:


	Three months ended
	March 31, 2026							March 31, 2025
	FCG		PDP			Karnival		FCG			PDP		Karnival
Total revenues	$	13,025	$	9		$	—	$	6,271		$	7,222	$	—
Income (loss) from operations		2,016		(1,223	)		—		(2,824	)		1,589		—
Net income (loss) (excluding gain on sale of land)		211		(846	)		49		(2,977	)		948		68
Gain on sale of land		1,623		—			—		—			—		—

Related party activity for FCG and PDP consisted of:


	Three months ended
	March 31, 2026				March 31, 2025
	FCG		PDP		FCG		PDP
Total revenues	$	7,452	$	6	$	6,064	$	9
Total expenses		2,287		140		1,820		1,003

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of:


	As of
	March 31, 2026		December 31, 2025
Transaction and professional fees	$	4,384	$	14,472
Accrued payroll and related expenses		1,155		801
Accrued interest		228		501
Product sales related		29		223
Other		161		432
	$	5,957	$	16,429

Long-term debt and borrowing arrangements

Indebtedness consisted of:


	As of
	March 31, 2026						December 31, 2025
	Amount			Interest Rate			Amount			Interest Rate
$5.5 million revolving credit arrangement – related party	$	3,874			6.75	%	$	5,024			7.18	%
$15 million revolving credit arrangement – related party		3,475			6.75	%		—			—	%
$0.9 million term loan – related party		636			11.75	%		636			11.75	%
€7 million term loan		1,733			4.21	%		2,172			4.38	%
€1.5 million term loan		37			1.70	%		151			1.70	%
Deferred Loan Settlement - Note 7		6,887			—	%		6,887			—	%
$0.5 million demand note – related party		—			—	%		500			4.60	%
$0.25 million demand note – related party		100			4.60	%		250			4.60	%
		16,742						15,620
Less: Current portion of long-term debt and short-term debt		(9,258	)					(3,155	)
	$	7,484					$	12,465

The Company's debt is carried at amortized cost. Fair values are estimated based on quoted market prices for similar instruments. The Company considers its debt to be Level 2 in the fair value hierarchy.

The estimated fair value of the €7 million term loan, $5.5 million revolving credit arrangement, $15 million revolving credit arrangement and Deferred Loan Settlement as of March 31, 2026 was $1.6 million, $2.6 million, $2.6 million and $5.9 million, respectively. The estimated fair value of the €7 million term loan, $5.5 million revolving credit arrangement and Deferred Loan Settlement as of December 31, 2025 was $2.0 million, $3.3 million and $5.9 million, respectively.

As of March 31, 2026, the remaining commitment available under the Company’s related party revolving credit arrangements was as follows:


	Available Capacity
$5.5 million revolving credit arrangement (due September 30, 2034)	$	1,626
$15 million revolving credit arrangement (due September 30, 2030)		11,525
	$	13,151

$5.5 million revolving credit arrangement

The Company has a revolving credit arrangement with Infinite Acquisitions Partners LLC (“Infinite Acquisitions”) for $5.5 million. The arrangement matures on September 30, 2034 and has a variable interest rate of the three-month Secured Overnight Financing Rate on the first day of the applicable quarter plus 2.75%.

$15 million revolving credit arrangement

In November 2025, the Company entered into a revolving credit arrangement between Falcon's Attractions, LLC and Infinite Acquisitions Partners LLC (“Infinite Acquisitions”) for $15.0 million. The arrangement matures on September 30, 2030 and has a variable interest rate of the three-month Secured Overnight Financing Rate on the first day of the applicable quarter plus 2.75%.

€1.5 million term loan

In April 2020, the Company entered into a six-year €1.5 million Institute of Official Credit (ICO) term loan with a Spanish bank, with a fixed interest rate of 1.70% and maturity date in April 2026. The loan was interest only for the first twelve months, thereafter principal and interest are payable monthly in arrears. The outstanding principal and interest was paid off in full subsequent to March 31, 2026 upon maturity of the loan.

€7 million term loan

In March 2019, the Company entered into an eight-year €7 million term loan with a Spanish bank, with a variable interest rate at six-month Euribor plus 2.00%. The loan was interest only for the first eighteen months, thereafter principal and interest are payable monthly in arrears. The loan is collateralized by the Company’s investment in PDP and matures in April 2027.

$0.9 million term loan

Falcon's Opco has a one-year $0.9 million term loan with Katmandu Ventures, LLC (“Katmandu Ventures”). The loan bears a fixed interest rate at 11.75% per annum. Interest and principal payments were due May 16, 2025. As of March 31, 2026, the Company has accrued interest in interest expense included in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The Company is in negotiations to amend the loan.

$0.5 million demand note

In December 2025, the Company entered into a demand note with Katmandu Ventures for $0.5 million. The arrangement was due on demand. The outstanding principal and interest was paid off in full in February 2026.

$0.25 million demand note

In December 2025, the Company entered into a demand note with Cecil and Marty Magpuri for $0.25 million. The arrangement is due on demand and has a fixed interest rate of 4.6%. The outstanding principal and interest was paid off in full subsequent to March 31, 2026.

Commitments and contingencies

Litigation

The Company is named from time to time as a party to lawsuits and other types of legal proceedings and claims in the normal course of business. The Company accrues for contingencies when it believes that a loss is probable and that it can reasonably estimate the amount of any such loss in accordance with ASC 450, Contingencies ("ASC 450"). As previously disclosed, a lawsuit was filed against the Company by Guggenheim Securities, LLC (“Guggenheim”) in which Guggenheim alleges that the Company owes certain fees and expenses of $11.1 million for services allegedly performed by Guggenheim in connection with the Business Combination consummated on October 6, 2023 (the “Guggenheim Complaint”). The Company has denied all liability. The Company filed counterclaims against Guggenheim for fraud, breach of contract, breach of fiduciary duty, and equitable rescission. On March 31, 2026, the Supreme Court of the State of New York (the “Court”) heard oral arguments on each party’s motions for summary judgment. The Court denied the Company’s motion and granted Guggenheim’s motion in part; however, the Court allowed certain of the Company’s counterclaims to proceed. The Court denied Guggenheim’s motion for summary judgment on its claims and ordered that the matter would proceed to trial. The parties filed cross notices of appeal. In light of the order from the Court for the motions for summary judgment, management reevaluated its prior conclusion regarding the likelihood of loss associated with the Guggenheim matter. Based on the current procedural posture, including the Court’s findings and the viability of the Company’s counterclaims, management no longer believes that a loss related to Guggenheim’s claims is probable. Rather, the Company has concluded that the risk of loss is reasonably possible. Accordingly, during the three months ended March 31, 2026, the Company reversed the previously recorded accrual of $11.1 million associated with the alleged amended engagement agreement with Guggenheim. The reversal reflects management’s updated assessment that the recognition criteria for a loss contingency under ASC 450 are no longer met and as such, no accrual has been recorded as of March 31, 2026. Although the Company intends to vigorously defend itself against the claims alleged in the Guggenheim Complaint and contest the amounts Guggenheim asserts are owed, the ultimate outcome of this matter remains uncertain. Based on the current assessment that a loss is no longer probable, no estimate of possible loss or range of loss can be made at this time, and an adverse outcome could have a material effect on the Company’s financial condition, results of operations, or cash flows in a future period.

On July 29, 2025, the Company received a Summons to answer a Motion for Summary Judgment in Lieu of Complaint filed in the Supreme Court of the State of New York, New York County (the "Motion”) from FAST Sponsor II LLC (“FAST”) in which FAST alleges that the Company owed FAST payment for principal, interest, and penalties of $9.1 million for two separate loans relating to the Company’s deSPAC transaction that closed in October, 2023. On September 29, 2025, the Company opposed the Motion, and FAST filed its reply in support of the Motion on October 9, 2025. The Company and FAST entered into a Confidential Settlement Agreement and Release, dated as of November 26, 2025 pursuant to which the Company paid an upfront settlement payment of $2.5 million on December 1, 2025, and agreed to pay FAST a deferred settlement payment of $7.0 million on or before January 31, 2027 (the “Deferred Loan Settlement”). On February 20, 2026, the parties filed a Stipulation of Discontinuance and Order with the Supreme Court of the State of New York, New York County and on February 28, 2026, the action was discontinued without prejudice pursuant to the parties’ stipulation.

Indemnification

In the ordinary course of business, the Company enters into certain agreements that provide for indemnification by the Company of varying scope and terms to customers, vendors, directors, officers, employees, and other parties with respect to certain matters. Indemnification includes losses from breach of such agreements, services provided by the Company, or third-party intellectual property infringement claims. These indemnities may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments, in some circumstances, are not subject to a cap. As of March 31, 2026, and December 31, 2025, there were no known events or circumstances that have resulted in a material indemnification liability.

Commitments

The Company has a commitment with KIDS Licensing LLC (“KIDS”) to develop venues themed with KIDS’s licensed trademarks and intellectual property. The Company is required to pay a minimum royalty fee of $0.1 million per year through 2032.

Stock warrants

Prior to January 14, 2025, the warrants were classified as a liability and measured at fair value, with changes in fair value included in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The warrant agreement was amended effective January 14, 2025. The amendment provides for the mandatory exchange of the warrants for shares of Class A Common Stock at an exchange ratio of 0.25 shares of Class A Common Stock per warrant, on October 6, 2028. The warrants will not be exercisable and the holders of the warrants will have no further rights except to receive shares of Class A Common Stock on October 6, 2028.

The remaining warrants meet the requirements for equity classification after the amendment. The Company adjusted the fair value of the warrants a final time on January 14, 2025, immediately prior to the amendment effective date. The total adjusted liability balance was reclassified into equity on January 14, 2025. After the reclassification to equity, the warrants do not require subsequent fair value measurement.

As of both March 31, 2026 and December 31, 2025, there are 5,177,089 warrants outstanding which will be exchanged for 1,294,272 shares of Class A Common Stock on October 6, 2028.

Net income (loss) per share

The weighted average shares of common stock outstanding used to determine the Company’s net income (loss) per share reflects the following:


	Three months ended
(amounts in thousands, except number of shares and amount per share)	March 31, 2026			March 31, 2025
Numerator:
Net income (loss)	$	6,121		$	(8,092	)
Net income (loss) attributable to noncontrolling interests		2,404			(4,415	)
Series B Preferred Stock dividends		(911	)		—
Income allocated to participating Series B Preferred Stock		(337	)		—

Net income (loss) available to Class A common stockholders		2,469			(3,677	)
Adjustment for dilutive warrants		—			(1,325	)
Dilutive net income (loss) attributable to Class A common stockholders	$	2,469		$	(5,002	)
Denominator:
Weighted average Class A common stock outstanding - basic		49,210,697			37,322,177
Adjustment for dilutive warrants		—			186,950
Weighted average Class A common stock outstanding – diluted		49,210,697			37,509,127

Net income (loss) per Class A common share - basic:		0.05			(0.10	)
Net income (loss) per Class A common share – diluted:		0.05			(0.13	)

The following securities were not included in the computation because the effect would be anti-dilutive or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period:


	Three months ended
	March 31, 2026		March 31, 2025
Class A earnout shares		625,000		1,000,000
Class B earnout shares		24,375,000		39,000,000
RSUs		796,038		1,115,929
Class A shares subject to forfeiture under the deferred settlement agreement		360,000		—

375,000 of the unvested Class A earnout shares are subject to forfeiture under the deferred settlement agreement.

10.

Share-based compensation

The Company adopted a share-based compensation plan (the “Plan”) under which each vested Restricted Stock Unit represents the right to receive one Class A Common Share. Under the Plan, RSUs with service-based conditions may be granted to directors, officers, employees, and non-employees. RSUs were granted to employees of both the Company and FCG. However, FCG fully reimburses FBG for the compensation cost associated with these grants. As such, expenses related to the RSUs granted to employees of FCG do not represent a purchase of services or contribution to FCG.

The RSUs do not provide the grantee with an option to choose settlement in cash or stock. The holder of the RSU shall not be, nor have any of the rights or privileges of, a shareholder of the Company, including, without limitation, voting rights and rights to dividends, in respect to the RSUs and any shares underlying the RSUs and deliverable under the Plan unless and until such shares shall have been issued by the Company and held of record by such holder. The fair value of these RSUs is estimated based on the fair value of the Company’s common stock on the date of grant using the closing price on the day of grant. A summary of the Plan’s RSUs award activity is as follows:


	Restricted Stock Units
Nonvested at January 1, 2026		688,250
Granted		188,494
Forfeited		(500	)
Vested		(80,206	)
Nonvested shares outstanding at March 31, 2026		796,038

The RSUs under the Plan generally vest within one to five years following the date of grant.

Certain RSUs granted under the Plan on January 28, 2026 vest as follows: (1) 32.5% on the grant date; (2) 20% on November 1, 2026; (3) 22.5% on November 1, 2027; and (4) 25% on November 1, 2028. All other RSUs granted under the Plan on January 28, 2026 vest on the first anniversary of the grant date.

The Company recognized stock-based compensation expense of $0.7 million and $0.5 million for the three months ended March 31, 2026 and 2025, respectively, which is included within Selling, general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive income (loss). The $0.3 million and $0.2 million compensation cost for RSUs granted to FCG employees for the three months ended March 31, 2026 and 2025, respectively, are recognized as a reimbursement from FCG and do not impact the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss).

As of March 31, 2026 and December 31, 2025, stock-based compensation expense not yet recognized relating to nonvested awards was $6.0 million and $5.8 million, respectively, of which $2.1 million and $2.3 million relates to compensation cost for RSUs granted to FCG employees, respectively. Stock compensation expense recognized by FCG is reimbursed to FBG.

11.

Income taxes

The tax provisions for the three months ended March 31, 2026, and 2025 were computed using the estimated effective tax rates applicable to the taxable jurisdictions for the full year. The Company’s tax rate is subject to management’s quarterly review and revision, as necessary. The Company’s effective tax rate was 0% for both the three months ended March 31, 2026 and 2025. The Company paid no income taxes for both the three months ended March 31, 2026 and 2025.

The Company records a provision or benefit for income taxes on pre-tax income or loss based on its estimated effective tax rate for the year. Given the Company’s uncertainty regarding future taxable income, the Company maintains a full valuation allowance on its deferred tax assets.

12.

Tax receivable agreement

On October 6, 2023, the partners of Falcon’s Opco at the time of the Acquisition Merger (“Exchange TRA Holders”), along with the Company (collectively the “TRA Holders”) entered into a Tax Receivable Agreement (“TRA Agreement”) with Falcon’s Opco that provides for the payment by Falcon’s Opco to the TRA Holders of 85% of the amount of tax benefits, if any, that it realizes, or in some circumstances, is deemed to realize, as a result of (i) future redemptions funded by Falcon’s Opco or exchanges, or deemed exchanges in certain circumstances, of common units of Falcon’s Opco for the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”) or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement (the “TRA Payment”). On October 24, 2024, the Company and Exchange TRA Holders entered into an Amendment to the Tax Receivable Agreement to clarify the rights of a TRA Holder that transfers units but does not assign the transferee its rights under the TRA Agreement with respect to such transferred units.

13.

Segment information

The Company has five reportable operating segments, FCG, Destinations Operations, PDP, Falcon's Attractions and FBB-Other. The Company’s Chief Operating Decision Makers ("CODM") is its Executive Chairman and Chief Executive Officer, who reviews financial information for purposes of making operating decisions, assessing financial performance, and allocating resources. Operating segments are organized based on product lines and, for our location-based entertainment, by geography. The CODM assesses the segments' performance by using each segment's income (loss) from operations, these results are used predominantly in the budgeting and forecasting process. The CODM considers segment results when making decisions about the allocation of operating and capital resources. Segment income (loss) from operations include costs directly attributable to the segment including project design and build expenses, cost of product sales, selling, general and administrative expenses, research and development expenses, and the share of gain (loss) from equity method investments excluding impairments. Unallocated corporate expenses which include accounting, audit, and professional services fees that support external reporting activities, are presented as a reconciling item between total segment income (loss) from operations and the Company’s unaudited condensed consolidated financial statement results.

FCG provides creative and advisory services including destination strategy, master planning, experiential and attraction design, digital media, interactive software, IP development, and creative guardianship for entertainment and hospitality destinations. For the purpose of assessing financial performance and making resource allocation decisions, the CODM reviews full FCG results as if FCG was consolidated, instead of only the share of FCG's equity method gain. To reconcile total segment revenue to the Company's total consolidated revenue, FCG's segment revenue is eliminated. To reconcile Segment loss from operations to the Company's consolidated net income before taxes, FCG's Segment income from operations is eliminated and the Company's share of FCG's equity method loss is added.

PDP develops, owns and operates hotels, theme parks and retail, dining and entertainment venues. Destinations Operations provides development and management services for themed entertainment to PDP and develops, owns, operates, and expands entertainment venues, hospitality experiences, and branded destination concepts across a variety of location‑based formats, utilizing proprietary and third‑party intellectual property. The Company collectively refers to the Destinations Operations and PDP as Falcon’s Beyond Destinations.

Falcon's Attractions designs, engineers, manufactures, and sells proprietary and customized ride systems, attraction hardware, and related technologies for theme parks, location‑based entertainment venues, and destination developments worldwide. FBB-Other is utilized for the development and commercialization of Company owned and third-party intellectual property through consumer products and media.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.


	Three months ended March 31, 2026
	Falcon’s		Falcon's Beyond Destinations				Falcon's Beyond Brands
	Creative Group		Destinations Operations		PDP		Falcon's Attractions		Other		Segment Total
Revenue external customers:
Services	$	13,025	$	—	$	—	$	1,738	$	—	$	14,763
Product sales		—		—		—		1,702		—		1,702
Total revenue		13,025		—		—		3,440		—		16,465

Reconciliation of revenue
Revenue corporate unallocated												1,936
Revenue FCG

Falcon's Beyond Global, Inc. 10-Q