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What changed in Falcon's Beyond Global, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Falcon's Beyond Global, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+508 added−412 removedSource: 10-K (2025-04-03) vs 10-K (2024-04-29)

Top changes in Falcon's Beyond Global, Inc.'s 2024 10-K

508 paragraphs added · 412 removed · 309 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

84 edited+59 added−63 removed44 unchanged
Biggest changeSubsequent to FCG’s deconsolidation on July 27, 2023 FCG segment income or loss is comprised of only of the Company’s equity method share of FCG’s income or loss: Year ended December 31, 2023 Year ended December 31, 2022 Revenues: Falcon’s Creative Group $ 14,514 $ 17,460 Destinations Operations 481 293 Falcon’s Beyond Brands 1,482 — Intersegment eliminations (279 ) (1,803 ) Unallocated corporate revenue 2,046 — Total revenue 18,244 15,950 Segment income (loss) from operations: Falcon’s Creative Group (10,577 ) 698 Destinations Operations (1,807 ) (1,195 ) PDP 1,192 3,229 Sierra Parima (5,614 ) (1,719 ) Falcon’s Beyond Brands (4,015 ) (3,699 ) Intersegment eliminations (2,341 ) (553 ) Total segment loss from operations (23,162 ) (3,239 ) Unallocated corporate overhead (42,342 ) (11,861 ) Depreciation and amortization expense (1,576 ) (737 ) Gain on deconsolidation of FCG 27,402 — Impairment of intangible assets (2,377 ) — Share of equity method investee’s Impairment of fixed assets (26,085 ) — Impairment of equity method investments (14,069 ) Interest expense (1,124 ) (1,113 ) Interest income 95 — Change in fair value of warrant liabilities (2,972 ) Change in fair value of earnout liabilities (345,413 ) Foreign exchange transaction gain (loss) 367 (478 ) Net loss before income taxes $ (431,255 ) $ (17,428 ) Income tax benefit 325 — Net loss $ (430,930 ) $ (17,428 ) 72 Total revenue for the year ended December 31, 2023, increased $2.2 million to $18.2 million compared to $16.0 million for the year ended December 31, 2022, primarily driven by an increase in revenue generated within the FCG and FBB segments, which was primarily due to new long-term contracts for design and project management services at higher contract values, continuation of design and project management projects with high contract values, and FBB’s digital media contract with Sierra Parima as discussed above.
Biggest changeSubsequent to FCG’s deconsolidation on July 27, 2023 FCG segment income or loss is comprised of the Company’s equity method share of FCG’s income or loss: Year ended December 31, 2024 December 31, 2023 Revenues: Falcon’s Creative Group $ 53,159 $ 22,547 Destinations Operations 495 481 Falcon’s Beyond Brands 1 1,482 Falcon’s Creative Group deconsolidation (53,159 ) (8,033 ) Intersegment eliminations — (279 ) Unallocated corporate revenue 6,249 2,046 Total revenue 6,745 18,244 Segment income (loss) from operations: Falcon’s Creative Group 1,207 (11,333 ) Destinations Operations (1,364 ) (1,807 ) PDP 2,981 1,192 Sierra Parima — (5,614 ) Falcon’s Beyond Brands (2,958 ) (4,015 ) Total segment loss from operations (134 ) (21,577 ) Intersegment eliminations — (2,341 ) Unallocated corporate overhead (11,233 ) (15,866 ) Elimination FCG segment (loss) income from operations (1,207 ) 8,901 Share of loss from FCG (6,389 ) (8,145 ) Transaction expense (7 ) (26,021 ) Credit loss expense (12 ) (455 ) Depreciation and amortization expense (6 ) (1,576 ) Gain on deconsolidation of FCG — 27,402 Impairment of intangible assets — (2,377 ) Share of equity method investee’s impairment of fixed assets — (26,084 ) Impairment of equity method investments — (14,069 ) Interest expense (1,898 ) (1,124 ) Interest income 12 95 Change in fair value of warrant liabilities (836 ) (2,972 ) Change in fair value of earnout liabilities 172,270 (345,413 ) Foreign exchange transaction (loss) gain (1,077 ) 367 Net income (loss) before taxes $ 149,483 $ (431,255 ) Income tax expense (benefit) (2 ) 325 Net income (loss) $ 149,481 $ (430,930 ) Total segment loss from operations decreased $21.5 million to $(0.1) million loss for the year ended December 31, 2024, compared to $(21.6) million loss for the year ended December 31, 2023, due to the following: • FCG segment loss for the year ended December 31, 2024, decreased $12.5 million to $1.2 million gain as compared to loss of $(11.3) million in the year ended December 31, 2023, primarily as a result of an increase in revenues and improved margins on new long-term contracts.
Foreign exchange transaction gain (loss) Our Foreign exchange transaction gain (loss) include our transactional gains and losses on the settlement or re-measurement of our non-functional currency denominated assets and liabilities.
Foreign exchange transaction (loss) gain Our Foreign exchange transaction (loss) gain include our transactional gains and losses on the settlement or re-measurement of our non-functional currency denominated assets and liabilities.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
Some of these limitations are (i) it does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) it does not reflect changes in, or cash requirements for, our working capital needs, (iii) it does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements, (v) it does not adjust for all non-cash income or expense items that are reflected in our statements of cash flows, and (vi) other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.
Some of these limitations are (i) it does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) it does not reflect changes in, or cash requirements for, our working capital needs, (iii) it does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements, (v) it does not adjust for all 64 non-cash income or expense items that are reflected in our statements of cash flows, and (vi) other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.
Our foreign subsidiaries and unconsolidated joint ventures are subject to tax in their local jurisdiction and we record a provision for income tax expense or benefit where applicable. 67 Results of Operations The following comparisons are historical results and are not indicative of future results, which could differ materially from the historical financial information presented.
Our foreign subsidiaries and unconsolidated joint ventures are subject to tax in their local jurisdiction and we record a provision for income tax expense or benefit where applicable. Results of Operations The following comparisons are historical results and are not indicative of future results, which could differ materially from the historical financial information presented.
See Deconsolidation of Falcon’s Creative Group LLC under Note 1 – Description of business and basis of presentation in the Company’s audited consolidated financial statements for further discussion. 66 Interest expense Our Interest expense consists primarily of the interest on our debt instruments and finance lease liabilities.
See Deconsolidation of Falcon’s Creative Group LLC under Note 1 – Description of business and basis of presentation in the Company’s audited consolidated financial statements for further discussion. Interest expense Our Interest expense consists primarily of the interest on our debt instruments and finance lease liabilities.
Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at the end of each reporting period. The liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the results of operations.
Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at the end of each reporting period. 70 The liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the results of operations.
Promised goods or services not meeting the criteria for being a distinct performance obligation are bundled into a single performance obligation with other goods or services that together meet the criteria for being distinct. The appropriate allocation of the transaction price and recognition of revenue is then applied for the bundled performance obligation.
Promised goods or services not meeting the criteria for being a distinct 69 performance obligation are bundled into a single performance obligation with other goods or services that together meet the criteria for being distinct. The appropriate allocation of the transaction price and recognition of revenue is then applied for the bundled performance obligation.
Interest expense related to debt instruments is generated by related party and third-party loans and lines of credit used primarily to fund working capital and operations. See Note 10 – Long-term debt and borrowing arrangements in the Company’s audited consolidated financial statements for a description of our indebtedness and “Liquidity and Capital Resources ” below.
Interest expense related to debt instruments is generated by related party and third-party loans and lines of credit used primarily to fund working capital and operations. See Note 9 – Long-term debt and borrowing arrangements in the Company’s audited consolidated financial statements for a description of our indebtedness and “Liquidity and Capital Resources ” below.
During 2022 and 2023, our parks and resorts, which operated within our unconsolidated joint ventures, generated revenue through the sales of hotel rooms, park admissions, food and beverage, merchandise, and ancillary services, and for fiscal 2023, the principal costs of parks and resorts were employee wages and benefits, advertising, maintenance, utilities, and insurance.
During 2023 and 2024, our parks and resorts, which operated within our unconsolidated joint ventures, generated revenue through the sales of hotel rooms, park admissions, food and beverage, merchandise, and ancillary services, and for fiscal 2023, the principal costs of parks and resorts were employee wages and benefits, advertising, maintenance, utilities, and insurance.
The liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the results of operations. 81 Earnout Liabilities At the closing of the Business Combination, pursuant to the Merger Agreement, certain holders were entitled to receive up to a total of 1,937,500 and 75,562,500 contingent Earnout Shares in the form of Class A Common Stock and Class B Common Stock of the Company, respectively.
The liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the results of operations. 58 Change in fair value of earnout liabilities At the Closing of the Business Combination, pursuant to the Merger Agreement, certain holders were entitled to receive up to a total of 1,937,500 and 75,562,500 contingent earnout shares in the form of Class A Common Stock and Class B Common Stock, respectively.
Pursuant to the Tax Receivable Agreement, among other things, the Company is required to pay to each TRA Holder 85% of certain tax benefits, if any, that it realizes (or in certain cases is deemed to realize) as a result of the increases in tax basis resulting from any exchange of new the Predecessor units for Class A Common Stock or cash in the future and certain other tax benefits arising from payments under the Tax Receivable Agreement.
Pursuant to the Tax Receivable Agreement, among other things, the Company is required to pay to each TRA Holder 85% of certain tax benefits, if any, that it realizes (or in certain cases is deemed to realize) as a result of the increases in tax basis resulting from any exchange of new Falcon’s Opco units for Class A Common Stock or cash in the future and certain other tax benefits arising from payments under the Tax Receivable Agreement.
Until we can generate sufficient revenue from our five reportable segments to cover operating expenses, working capital and capital expenditures, we expect funds raised from additional capital and debt raises to fund our cash needs.
Until we can generate sufficient revenue from our four reportable segments to cover operating expenses, working capital and capital expenditures, we expect funds raised from additional capital and debt raises to fund our cash needs.
The decrease was primarily attributable to the unrealized foreign exchange gain (loss) on U.S. denominated related party debt with a Spanish subsidiary as the U.S. dollar strengthened against the Euro during the year ended December 31, 2022 and weakened against the Euro during the year ended December 31, 2023.
The decrease was primarily attributable to the unrealized foreign exchange loss on U.S. denominated related party debt with a Spanish subsidiary as the U.S. dollar strengthened against the Euro during the year ended December 31, 2024 and weakened against the Euro during the year ended December 31, 2023.
The gain recognized on deconsolidation is the difference between the estimated fair value of the Company’s retained investment in FCG and the carrying value of FCG’s net assets.
Gain on deconsolidation of FCG Our gain on deconsolidation consists of the gain recognized on the deconsolidation of FCG. The gain recognized on deconsolidation is the difference between the estimated fair value of the Company’s retained investment in FCG and the carrying value of FCG’s net assets.
Income tax The Company is treated as a corporation for U.S. federal and state income tax purposes and is subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to its allocable share of taxable income generated by the Predecessor.
Income tax The Company is treated as a corporation for U.S. federal and state income tax purposes and is subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to its allocable share of taxable income generated by Falcon’s Opco.
We define Adjusted EBITDA as net income (loss), determined in accordance with US GAAP, for the period presented, before interest expense, net, income tax expense, depreciation and amortization, transaction expenses related to the business combination, credit loss expense, share of equity method investee’s impairment of fixed assets, impairment of equity method investments, change in fair value of warrant liabilities, change in fair value of earnout liabilities, intangible asset impairment loss, and gain on deconsolidation of FCG.
We define Adjusted EBITDA as net income (loss), determined in accordance with US GAAP, for the period presented, before net interest and expense, income tax expense, depreciation and amortization, transaction expenses related to the business combination, credit loss expense related to the closure of the Sierra Parima Katmandu Park, share of equity method investee’s impairment of fixed assets, impairment of equity method investments, change in fair value of warrant liabilities, change in fair value of earnout liabilities, intangible asset impairment loss, and gain on deconsolidation of FCG.
We believe that Adjusted EBITDA is useful to investors as it eliminates the non-cash depreciation and amortization expense that results from our capital investments and intangible assets recognized in any business combination and improves comparability by eliminating the interest expense associated with our debt facilities, which may not be comparable with other companies based on our structure.
FCG believes that Adjusted EBITDA is useful to investors as it eliminates the non-cash depreciation and amortization expense that results from FCG's capital investments and intangible assets recognized in any business combination and improves comparability by eliminating the interest expense associated with our debt facilities, which may not be comparable with other companies based on our structure.
Change in fair value of earnout liabilities At the closing of the Business Combination, pursuant to the Merger Agreement, certain holders were entitled to receive up to a total of 1,937,500 and 75,562,500 contingent Earnout Shares in the form of Class A Common Stock and Class B Common Stock, respectively.
Earnout Liabilities At the closing of the Business Combination, pursuant to the Merger Agreement, certain holders were entitled to receive up to a total of 1,937,500 and 75,562,500 contingent earnout shares in the form of Class A Common Stock and Class B Common Stock of the Company, respectively.
See “Factors that May Influence Future Results of Operations” above. We expect our capital expenditures and working capital requirements to increase materially in the near future. Our ability to generate cash in the future depends on our financial results which are subject to general economic, financial, competitive, legislative and regulatory factors that may be outside of our control.
We expect our capital expenditures and working capital requirements to increase materially in the near future. Our ability to generate cash in the future depends on our financial results which are subject to general economic, financial, competitive, legislative and regulatory factors that may be outside of our control.
The Predecessor is organized as a limited liability company taxed as a partnership. The consolidated financial statements of the Predecessor do not include a provision for federal or state income tax expense or benefit as our taxable income or loss is included in the tax returns of the Predecessor’s members.
Falcon’s Opco is organized as a limited liability company taxed as a partnership. The consolidated financial statements of Falcon’s Opco do not include a provision for federal or state income tax expense or benefit as our taxable income or loss is included in the tax returns of Falcon’s Opco’s members.
Our primary short-term cash requirements are to fund working capital, short-term debt, acquisitions, contractual obligations and other commitments. Our medium-term to long-term cash requirements are to service and repay debt and to invest in facilities, equipment, technologies, and research and development for growth initiatives.
Our primary short-term cash requirements are to fund working capital, short-term debt, acquisitions, contractual obligations and other commitments. Our medium-term to long-term cash requirements are to service and repay debt and to invest in facilities, equipment, technologies, location-based entertainment, media production and research and development for growth initiatives.
Any discussions related to results, operations, and accounting policies associated with FCG are referring to the periods prior to deconsolidation. The results of operations includes approximately seven months of activity related to FCG LLC prior to deconsolidation in the year ended December 31, 2023.
The results of operations for the year ended December 31, 2023, includes approximately seven months of activity related to FCG LLC prior to deconsolidation on July 27, 2023. Any discussions related to results, operations, and accounting policies associated with FCG are referring to the periods prior to deconsolidation.
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. 82 Section 107 of the JOBS Act allows emerging growth companies to take advantage of the extended transition period for complying with new or revised accounting standards.
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
As of December 31, 2023, we have unfunded commitments to Karnival of $2.4 million (HKD 18.7 million). 76 Transaction costs Pursuant to the Business Combination, the Company received net cash proceeds from the Business Combination totaling $1.0 million, net of $1.3 million FAST II transaction costs and $1.6 million of Predecessor transaction costs paid at Closing.
As of December 31, 2024, we have unfunded commitments to Karnival of $2.4 million (HKD 18.7 million). 67 Transaction costs Pursuant to the Business Combination during the year ended December 31, 2023, the Company received net cash proceeds from the Business Combination totaling $0.9 million, net of $1.3 million of FAST II transaction costs and $1.6 million of Falcon’s Opco transaction costs paid at Closing.
Therefore, the Company recognized a financing receivable discounted based on the contracted annual payments and recognized interest income beginning in the three months ended June 30, 2023. As of December 31, 2023 the Company recognized an expected credit loss reserve against all balances due from Sierra Parima, including receivables related to this ride media license.
Therefore, the Company recognized a financing receivable discounted based on the contracted annual payments and recognized interest income beginning in March 2023. As of December 31, 2023, the Company recognized an expected credit loss reserve against all balances due from Sierra Parima, including receivables related to this ride media license. See Credit loss expense in results of operations below .
The Company remeasures the fair value of the Warrants based on the quoted market price of the Warrants. Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at the end of each reporting period.
Accordingly, the Company classifies the Warrants as liabilities at their fair value and adjusts the Warrants to fair value at the end of each reporting period.
Commitments Partnership with Raging Power Limited Pursuant to the terms of our joint venture agreement with Raging Power, Falcon’s and Raging Power are each required to provide funding to Karnival in the form of non-interest-bearing advances, which will be repaid based on a percentage of gross revenues from the operation of the LBE at 11 SKIES.
Commitments Partnership with Raging Power Limited Pursuant to the terms of our joint venture agreement with Raging Power, Falcon’s and Raging Power are each required to provide funding to Karnival in the form of non-interest-bearing advances, which will be repaid based on a percentage of gross revenues from the operation of the themed virtual ocean adventure attraction we are developing at the new 11 SKIES complex adjacent to the Hong Kong Airport.
Cash Flows from Financing Activities Net cash provided by financing activities decreased $35.8 million to $15.1 million in the year ended December 31, 2023, compared to $50.9 million in the year ended December 31, 2022.
Cash Flows from Financing Activities Net cash provided by financing activities decreased to $12.9 million in the year ended December 31, 2024, compared to $15.1 million for the year ended December 31, 2023.
The carrying amounts of finance leases are discounted to approximate fair value. Warrant Liabilities The Company accounts for Warrants assumed in connection with the Business Combination in accordance with the guidance contained in ASC 815, Derivatives and Hedging, under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.
Warrant Liabilities The Company accounts for Warrants assumed in connection with the Business Combination in accordance with the guidance contained in ASC 815, Derivatives and Hedging, under which the Warrants do not meet the criteria for equity treatment and must be recorded as liabilities.
Under Section 107, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Any decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
Section 107 of the JOBS Act allows emerging growth companies to take advantage of the extended transition period for complying with new or revised accounting standards. Under Section 107, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
FAST II and Predecessor’s transaction costs related to the Business Combination of $6.4 million and $15.7 million, respectively, are not yet settled at December 31, 2023 and the Company expects to settle them over the next 24 months. These transaction costs are recorded in accrued expenses and long-term payables.
FAST II and Falcon’s Opco transaction costs related to the Business Combination of $6.3 million and $15.7 million, respectively, are not yet settled as of December 31, 2024 and the Company is actively negotiating to settle them over the next 24 months. These transaction costs are recorded in accrued expenses and long-term payables.
Accordingly, the joint venture agreement provides that we receive 16.6% to 20.6% of gross revenue of the LBE at 11 SKIES.
Accordingly, the joint venture agreement provides that we receive 16.6% to 20.6% of gross revenue of such location.
For the year ended December 31, 2023 revenue increased $1.5 million related to a digital media licensing contract with Sierra Parima and research and development costs decreased $1.4 million due to completed projects and less emphasis on developing new products while shifting to marketing projects.
For the year ended December 31, 2024 revenue decreased $1.5 million related to a digital media licensing contract with Sierra Parima. Research and development expenses decreased $1.0 million due to completed projects and less emphasis on developing new products while shifting to marketing projects. Selling, general and administrative expense decreased by a $1.5 million due to project timing.
Our principal sources of liquidity are funds from borrowings, equity contributions from our existing investors and cash on hand. As of December 31, 2023, our total indebtedness was approximately $29.6 million. We had approximately $0.7 million of unrestricted cash and $3.2 million available for borrowing under our lines of credit.
Our principal sources of liquidity are funds from borrowings, equity contributions from our existing investors, distributions from equity method investees and cash on hand. As of December 31, 2024, our total indebtedness was approximately $41.2 million. We had approximately $825 thousand of cash and $0.9 million available for borrowing under our lines of credit.
For over time contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable. 79 Accounting for long-term contracts requires significant judgment relative to estimating total costs, in particular, assumptions relative to the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed.
Accounting for long-term contracts requires significant judgment relative to estimating total costs, in particular, assumptions relative to the amount of time to complete the contract, including the assessment of the nature and complexity of the work to be performed.
The increase was primarily driven by legal fees, consulting fees, banking fees, printer and transfer agent fees, and excise tax on stock redemptions. These expenses represent costs incurred in excess of funds received in connection with the Business Combination completed in the fourth quarter of 2023.
The transaction expenses for the year ended December 31, 2023 mainly included legal fees, consulting fees, banking fees, printer and transfer agent fees, and excise tax on stock redemptions. These expenses represent costs incurred in excess of funds received in connection with the Business Combination completed in the fourth quarter of 2023.
In addition to these critical policies, our significant accounting policies are included within Note 2 – Summary of significant accounting policies in our audited consolidated financial statements. 78 Revenue We recognize revenue in accordance with the provisions of FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”), which requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services.
Revenue We recognize revenue in accordance with the provisions of FASB ASC 606, Revenue from Contracts with Customers (“ASC 606”), which requires the recognition of revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services.
Change in fair value of earnout liability Loss due to change in fair value of earnout liability was $345.4 million for the year ended December 31, 2023, driven by the non-cash increase in the market value of the Company’s stock between closing of the Business Combination and December 31, 2023.
Loss due to change in fair value of earnout liability was $(345.4) million for the year ended December 31, 2023, driven by the increase in the market value of the Company’s stock between closing of the Business Combination and December 31, 2023. As of December 31, 2024, all EBITDA and revenue based earnout shares have been earned or forfeited.
Change in fair value of warrant liabilities Loss due to change in fair value of warrant liabilities increased to ($3.0) million for year ended December 31, 2023, compared to $0 million for the year ended December 31, 2022 driven by the non-cash increase in the market value of the Warrants between closing of the Business Combination and December 31, 2023.
Change in fair value of warrant liability Loss due to change in fair value of warrant liabilities increased $2.2 million to $(0.8) million for year ended December 31, 2024, compared to $(3.0) million for the year ended December 31, 2023 driven by the increase in the market value of the Warrants for the year ended December 31, 2024.
For more information about our Segment Reporting, see Note 16 – Segment information in the Company’s audited consolidated financial statements. 73 Non-GAAP Financial Measures We prepare our consolidated financial statements in accordance with US GAAP. In addition to disclosing financial results prepared in accordance with US GAAP, we disclose information regarding Adjusted EBITDA which is a non-GAAP measure.
Non-GAAP Financial Measures We prepare our consolidated financial statements in accordance with US GAAP. In addition to disclosing financial results prepared in accordance with US GAAP, we disclose information regarding Adjusted EBITDA which is a non-GAAP measure.
We believe that the accounting policies disclosed below include estimates and assumptions critical to our business and their application could have a material impact on our consolidated financial statements.
We believe that the accounting policies disclosed below include estimates and assumptions critical to our business and their application could have a material impact on our consolidated financial statements. In addition to these critical policies, our significant accounting policies are included within Note 2 – Summary of significant accounting policies in our audited consolidated financial statements.
The Earnout Shares were deposited into escrow at the Closing and are to be earned, released and delivered upon satisfaction of, or forfeited and canceled up on the failure of certain milestones. The Earnout Shares are classified as a liability and measured at fair value, with changes in fair value included in the results of operations.
The earnout shares were deposited into escrow at the Closing and are to be earned, released and delivered upon satisfaction of, or forfeited and canceled up on the failure of certain milestones.
The gain recognized on deconsolidation is the difference between the estimated fair value of the Company’s retained investment in FCG and the carrying value of FCG’s net assets.
Gain on deconsolidation of FCG The Company recognized a gain on deconsolidation of FCG of $27.4 million for the year ended December 31, 2023. The gain recognized on deconsolidation is the difference between the estimated fair value of the Company’s retained investment in FCG and the carrying value of FCG’s net assets.
There was no such loss during for the year ended December 31, 2022. 71 Foreign exchange transaction loss Foreign exchange transaction gain increased $0.9 million to a $0.4 million gain for the year ended December 31, 2023, compared to a ($0.5) million loss for the year ended December 31, 2022.
Foreign exchange transaction (loss) gain Foreign exchange transaction (loss) gain increased $1.5 million to a $(1.1) million loss for the year ended December 31, 2024, compared to a $0.4 million gain for the year ended December 31, 2023.
Contract liabilities are presented on the Company’s consolidated balance sheets and consist of billings in excess of revenues. Billings in excess of revenues represent milestone billing contracts where the billings of the contract exceed recognized revenues. Destinations Operations The principal sources of revenues for the Destinations Operations segment are resort and theme park management and incentive fees.
Contract liabilities are presented on the Company’s consolidated balance sheets and consist of billings in excess of revenues. Billings in excess of revenues represent milestone billing contracts where the billings of the contract exceed recognized revenues.
The following table summarizes our results of operations for the following periods: Year ended December 31, 2023 Year ended December 31, 2022 Revenue $ 18,244 $ 15,950 Expenses: Project design and build expense 10,151 11,344 Selling, general and administrative expense 28,064 18,439 Transaction expenses 26,021 — Credit loss expense 5,965 — Research and development 1,248 2,771 Intangible assets impairment expense 2,377 — Depreciation and amortization expense 1,576 737 Loss from operations (57,158 ) (17,341 ) Share of gain or (loss) from equity method investments (52,452 ) 1,513 Gain on deconsolidation of FCG 27,402 — Interest expense (1,124 ) (1,113 ) Interest income 95 — Loss on disposal of assets — (9 ) Change in fair value of warrant liabilities (2,972 ) — Change in fair value of earnout liabilities (345,413 ) — Foreign exchange transaction gain (loss) 367 (478 ) Net loss $ (431,255 ) $ (17,428 ) Income tax benefit 325 — Net loss $ (430,930 ) $ (17,428 ) 68 Revenue Year ended December 31, 2023 Year ended December 31, 2022 Services transferred over time: Design and project management services $ 10,555 $ 10,963 Media production services 1,773 392 Attraction hardware and turnkey sales 2,052 4,302 Other 2,533 293 Total revenue from services transferred over time 16,913 15,950 Services transferred at a point in time: Digital media licenses 1,331 — Total revenue from services transferred at a point in time 1,331 — Total revenue $ 18,244 $ 15,950 Revenue increased $2.2 million to $18.2 million for the year ended December 31, 2023, compared to $16.0 million for the year ended December 31, 2022.
See Deconsolidation of Falcon’s Creative Group LLC under Note 1 – Description of business and basis of presentation and Note 8 – Investments and advances to equity method investments in the Company’s audited consolidated financial statements. 59 The following table summarizes our results of operations for the following periods: Year ended December 31, 2024 December 31, 2023 Revenue $ 6,745 $ 18,244 Expenses: Project design and build expense — 10,151 Selling, general and administrative expense 22,408 28,064 Transaction expenses 7 26,021 Credit loss expense 12 5,965 Research and development 179 1,248 Intangible assets impairment expense — 2,377 Depreciation and amortization expense 6 1,576 Loss from operations (15,867 ) (57,158 ) Share of loss from equity method investments (3,121 ) (52,452 ) Gain on deconsolidation of FCG — 27,402 Interest expense (1,898 ) (1,124 ) Interest income 12 95 Change in fair value of warrant liabilities (836 ) (2,972 ) Change in fair value of earnout liabilities 172,270 (345,413 ) Foreign exchange transaction (loss) gain (1,077 ) 367 Net income (loss) before taxes $ 149,483 $ (431,255 ) Income tax (expense) benefit (2 ) 325 Net income (loss) $ 149,481 $ (430,930 ) Revenue Year ended December 31, 2024 December 31, 2023 Services transferred over time: Design and project management services $ — $ 10,555 Media production services — 1,773 Attraction hardware and turnkey sales — 2,052 Other 6,745 2,533 Total revenue from services transferred over time 6,745 16,913 Services transferred at a point in time: Digital media licenses — 1,331 Total revenue from services transferred at a point in time — 1,331 Total revenue $ 6,745 $ 18,244 Revenue decreased $11.5 million to $6.7 million for the year ended December 31, 2024, compared to $18.2 million for the year ended December 31, 2023.
Subsequent to December 31, 2023, Infinite Acquisitions loaned an additional $4.8 million to the Company pursuant to the revolving credit arrangement through April 26, 2024. The revolving credit arrangement is subject to an annual fixed interest rate of 2.75% and matures in December 2026.
During the year ended December 31, 2024, Infinite Acquisitions loaned an additional $12.5 million to the Company pursuant to the revolving credit arrangement. The revolving credit arrangement is subject to an annual fixed interest rate of 2.75% and matures in September 2034.
The following table sets forth reconciliations of net loss under US GAAP to Adjusted EBITDA for the following periods: Year ended December 31, 2023 Year ended December 31, 2022 Net loss $ (430,930 ) $ (17,428 ) Interest expense (1,124 ) (1,113 ) Interest income 95 — Income tax benefit 325 — Depreciation and amortization expense 1,576 737 EBITDA (430,058 ) (17,804 ) Transaction expenses 26,021 — Credit loss expense 5,965 — Share of equity method investee’s impairment of fixed assets 26,085 — Impairment of equity method investments 14,069 — Change in fair value of warrant liabilities 2,972 — Change in fair value of earnout liabilities 345,413 — Intangible asset impairment loss 2,377 — Gain on deconsolidation of FCG (27,402 ) — Adjusted EBITDA $ (34,559 ) $ (17,804 ) Net loss increased $(413.5) million to $(430.9) million for the year ended December 31, 2023, compared to $(17.4) million for the year ended December 31, 2022, primarily driven by a $(345.4) million change in fair value of earnout liabilities.
The following table sets forth reconciliations of net income (loss) under US GAAP to Adjusted EBITDA for the following periods: Year ended December 31, 2024 December 31, 2023 Net income (loss) $ 149,481 $ (430,930 ) Interest expense 1,898 1,124 Interest income (12 ) (95 ) Income tax expense (benefit) 2 (325 ) Depreciation and amortization expense 6 1,576 EBITDA 151,375 (428,650 ) Transaction expenses 7 26,021 Credit loss expense related to the closure of the Sierra Parima Katmandu Park 12 5,965 Share of equity method investee’s impairment of fixed assets — 26,084 Impairment of equity method investments — 14,069 Change in fair value of warrant liabilities 836 2,972 Change in fair value of earnout liabilities (172,270 ) 345,413 Intangible asset impairment loss — 2,377 Gain on deconsolidation of FCG — (27,402 ) Adjusted EBITDA $ (20,040 ) $ (33,151 ) Adjusted EBITDA increased by $13.2 million from $(33.2) million loss to $(20.0) million loss for the year ended December 31, 2024, primarily driven by a decrease of $9.3 million in the share of loss from equity method investments, a decrease in research and development expenses of $1.0 million, a net adjusted EBITDA decrease of $2.1 million as a result of the FCG deconsolidation and a $3.0 million increase in revenue.
For the year ended December 31, 2023, we have losses and negative cash flows from operating activities that raise substantial doubt about our ability to continue as a going concern.
Currently, we do not have sufficient cash from operations and unused capacity to meet the next twelve months of our operations. For the year ended December 31, 2024, we have operational losses, accumulated deficits, and negative cash flows from operating activities that raise substantial doubt about our ability to continue as a going concern.
The Company bears the risk of changes in estimates to complete on a fixed-price contract, which may cause profit levels to vary from period to period.
The Company bears the risk of changes in estimates to complete on a fixed-price contract, which may cause profit levels to vary from period to period. For over time contracts, the Company recognizes anticipated contract losses as soon as they become known and estimable.
Share of gain or (loss) from equity method investments Year ended December 31, 2023 2022 Change PDP $ (1,522 ) $ 3,229 (4,751 ) Sierra Parima (43,073 ) (1,719 ) (41,354 ) Karnival 288 3 285 FCG (8,145 ) — (8,145 ) Total Share of gain or (loss) from equity method investments $ (52,452 ) $ 1,513 (53,965 ) 70 Share of loss from equity method investments increased $53.9 million to ($52.4) million for the year ended December 31, 2023, compared to a $1.5 million gain for the year ended December 31, 2022.
Share of loss from equity method investments Year ended December 31, 2024 December 31, 2023 PDP $ 2,979 $ (1,522 ) Sierra Parima — (43,073 ) Karnival 289 288 FCG (6,389 ) (8,145 ) Total Share of loss from equity method investments $ (3,121 ) $ (52,452 ) Share of loss from equity method investments decreased $49.4 million to $(3.1) million loss for the year ended December 31, 2024, compared to a $(52.5) million loss for the year ended December 31, 2023.
Depreciation and amortization expense Our Depreciation and amortization expense is primarily attributed to the amortization of finite-lived intangible assets, comprising of RMC, trade names, customer relationships, developed technology and right-of-use assets for our finance lease. All trade names, customer relationships, developed technology and finance lease right-of-use assets have been deconsolidated with FCG as of July 27, 2023.
All trade names, customer relationships, developed technology and finance lease right-of-use assets have been deconsolidated with FCG as of July 27, 2023. We also incurred depreciation expenses for property and equipment utilized in the operation of our businesses.
Further, in April 2024, the Predecessor entered into term loan agreements with Katmandu Ventures and Universal Kat in the combined principal amount of approximately $8.5 million. Such term loans bear interest at a rate of 8.88% per annum, payable quarterly in arrears, and will mature on March 31, 2025.
The term loan with Katmandu Ventures and the term loan with Universal Kat both bear interest at a rate of 8.88% per annum, payable quarterly in arrears, with an original maturity of March 31, 2025.
Results of operating segments include costs directly attributable to the segment including project costs, payroll and payroll-related expenses and overhead directly related to the business segment operations. Unallocated corporate overhead costs include costs related to accounting, audit, and corporate legal expenses.
Reportable segment measures of profit and loss are earnings before interest, foreign exchange gains and losses, unallocated corporate expenses, impairments and depreciation and amortization expense. Results of operating segments include costs directly attributable to the segment including project costs, payroll and payroll-related expenses and overhead directly related to the business segment operations.
Income tax Income tax benefit increased by $0.3 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to the tax loss post-Merger. Segment Reporting The following table presents selected information about our segment’s results for the years ended December 31, 2023, and 2022.
Income tax Income tax (expense) benefit was less than $(0.1) million and $0.3 million for the years ended December 31, 2024 and 2023, respectively. 62 Segment Reporting The following table presents selected information about our segments' results.
We also incurred depreciation expenses for property and equipment utilized in the operation of our businesses. Share of gain or loss from equity method investments Our Share of gain or loss from equity method investments represents our proportional share of net earnings or losses of our unconsolidated joint ventures.
Share of loss from equity method investments Our Share of loss from equity method investments represents our proportional share of net earnings or losses of our unconsolidated joint ventures.
To the extent the Company takes advantage of such reduced disclosure obligations, it may also make comparison of the Company’s financial statements with other public companies difficult or impossible.
To the extent the Company takes advantage of 71 such reduced disclosure obligations, it may also make comparison of the Company’s financial statements with other public companies difficult or impossible. Item 7A. Quantitative And Qualitative Disclosures About Market Risk We are a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act.
As of December 31, 2023, we have $20.8 million of accrued expenses and other current liabilities, which include $17.6 million of audit and professional fees relating to the Business Combination, $2.2 million of excise tax payable on FAST II stock redemptions which is not payable until forthcoming treasury regulations are finalized, $0.6 million of accrued payroll and related expenses, and approximately $0.4 million of other accrued expenses and current liabilities.
As of December 31, 2024, we have $25.9 million of accrued expenses and other current liabilities, which include $20.7 million of transaction and other related professional fees, $2.2 million of excise tax payable on FAST II stock redemptions, $1.5 million of accrued payroll and related expenses, and approximately $1.5 million of other accrued expenses and current liabilities.
On April 16, 2024, QIC released the remaining $12.0 million of the $30.0 million investment to FCG LLC upon the establishment of the employee retention and attraction incentive program. These funds are to be used exclusively by the FCG segment to fund its operations and growth and cannot be used to satisfy the commitments of other segments.
These funds are to be used exclusively by the FCG segment to fund its operations and growth and cannot be used to satisfy the commitments of other segments.
See Note 8 – Investments and advances to unconsolidated joint ventures. There were no impairment losses recognized for investments in equity method investments during the year ended December 31, 2022. Gain on deconsolidation of FCG Our gain on deconsolidation consists of the gain recognized on the deconsolidation of FCG.
There were $0 and $14.1 million in impairment losses recognized for investments in equity method investments during the year ended December 31, 2024 and 2023, respectively, entirely related to impairment of the Company’s equity method investment in Sierra Parima. See Note 7 – Investments and advances to unconsolidated joint ventures.
Cash Flows The following table summarizes our cash flows for the period presented: For the year ended December 31, 2023 For the year ended December 31, 2022 Cash used in operating activities $ (23,422 ) $ (19,290 ) Cash used in investing activities 282 (26,261 ) Cash provided by financing activities 15,132 50,881 Cash Flows from Operating Activities Our cash flows from operating activities are primarily driven by the activities associated with our FCG segment, FBB segment beginning in 2022 and corporate overhead activities.
Cash Flows The following table summarizes our cash flows for the period presented: Year ended December 31, 2024 December 31, 2023 Cash used in operating activities $ (12,552 ) $ (23,422 ) Cash (used in) provided by investing activities (9 ) 282 Cash provided by financing activities 12,853 15,132 Cash Flows from Operating Activities Our cash flows used in operating activities are primarily driven by transaction, legal and professional fees associated with public company compliance costs and corporate overhead activities. 68 Cash used in operating activities for the year ended December 31, 2024, was $(12.6) million compared to $(23.4) million for the year ended December 31, 2023, representing a $10.8 million decrease in cash used in operating activities due to a reduction in legal and professional fees, and the deconsolidation of FCG.
To determine whether an impairment is other-than-temporary, we consider our ability and intent to hold the investment until the carrying amount is fully recovered. There were $14.1 million in impairment losses recognized for investments in equity method investments during the year ended December 31, 2023, entirely related to impairment of the Company’s equity method investment in Sierra Parima.
To determine whether an impairment is other-than-temporary, we consider our ability and intent to hold the investment until the carrying amount is fully recovered.
Additionally, there were increases in costs due to park operating costs during the year ended December 31, 2023. ● FBB segment loss from operations for the year ended December 31, 2023 increased $0.3 million to ($4.0) million compared to ($3.7) million for the year ended December 31, 2022.
As a result, there were no segment operations to report for Sierra Parima segment for the year ended December 31, 2024. • FBB segment loss from operations for the year ended December 31, 2024 decreased $1.0 million to $(3.0) million compared to $(4.0) million for the year ended December 31, 2023.
Approximately $5.4 million of the proceeds of the term loans was used to repay a portion of the Infinite Acquisitions revolving credit arrangement. See Note 22 – Subsequent events in the Company’s audited consolidated financial statements.
Approximately $5.4 million of the combined proceeds of the term loans from Katmandu Ventures and Universal Kat were used to repay a portion of the Infinite Acquisitions revolving credit arrangement.
For more information regarding our related party transactions, see Note 10 — Long-term debt and borrowing arrangements and Note 11 — Related party transactions included in the notes to the Company’s audited financial statements. Leases We no longer have lease liabilities on our consolidated balance sheet as of December 31, 2023.
As of April 3, 2025, we have accrued interest and the additional $0.5 million payment and we are in negotiations to amend the loans. For more information regarding our related party transactions, see Note 9 — Long-term debt and borrowing arrangements and Note 11 — Related party transactions in the Company’s audited financial statements.
The Company assessed impairment indicators and determined that there has been a significant decrease in the amount of expected ultimate revenue to be recognized from the ride media content asset. Development plans for future parks, where this asset would have been deployed, have been put on hold as the Company evaluates the funding required to develop these parks.
Development plans for future parks, where this asset would have been deployed, have been put on hold as the Company evaluates the funding required to develop these parks. These circumstances indicate that the fair value may be less than the unamortized cost of the asset.
Adjusted EBITDA loss increased $16.8 million to $(34.6) million for year ended December 31, 2023, compared to ($17.8) million for the year ended December 31, 2022 primarily driven by higher SG&A which was partially offset by higher gross margin. 74 Liquidity and Capital Resources Sources and Uses of Liquidity Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations.
As of December 31, 2024, the contracted pipeline for FCG was $36.4 million. Liquidity and Capital Resources Sources and Uses of Liquidity Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations.
The cash provided by financing activities in the year ended December 31, 2023 consisted primarily of (i) $18.4 million in proceeds from the $10.0 million related party revolving credit arrangement with Infinite Acquisitions, (ii) $3.3 million repayment of related party term loans with Infinite Acquisitions, (iii) $4.1 million repayment on the $10.0 million related party revolving credit arrangement with Infinite Acquisitions, (iv) $4.2 million proceeds from exercised Warrants.
The decrease in cash provided by financing activities for the year ended December 31, 2024, consisted primarily of $(3.8) million decrease in proceeds from exercised warrants, $(1.8) million decrease in equity contributions and; partially offset by $1.3 million increase net repayments on third party loans, $1.2 million increase in net proceeds from related party loans and $0.8 million increase in proceeds from RSUs issued by affiliates.
Contractual and Other Obligations Tax Receivable Agreement In connection with the Closing if the Business Combination, the Company entered into the Tax Receivable Agreement with the Predecessor, the TRA holder representative, certain members of the Predecessor (the “TRA Holders”) and other persons from time-to-time party thereto.
See the section of our Annual Report titled “ Risk Factors – We will require additional capital, which additional financing may result in restrictions on our operations or substantial dilution to our stockholders, to support the growth of our business, and this capital might not be available on acceptable terms, if at all .” Contractual and Other Obligations Tax Receivable Agreement In connection with the Closing of the Business Combination, the Company entered into the Tax Receivable Agreement with Falcon’s Opco, the TRA holder representative, certain members of Falcon’s Opco (the “TRA Holders”) and other persons from time-to-time party thereto.
Project design and build expense Project design and build expense decreased $1.1 million to $10.2 million for the seven-month period ended December 31, 2023, compared to $11.3 million for the year ended December 31, 2022, which represents 15.5% decrease as a percent of revenue driven primarily by an increase in sales with higher margin projects within FCG compared to the year ended December 31, 2022.
Project design and build expense Project design and build expense decreased $10.2 million to $0 for the year ended December 31, 2024, compared to $10.2 million for the seven-month period ended December 31, 2023 due to the deconsolidation of FCG.
Additionally, as of December 31, 2023, we have unfunded commitments to Karnival of $2.4 million (HKD 18.7 million), to be used for the purpose of constructing the VAquarium Entertainment Centers in China which need to be paid in 2024. On July 27, 2023, FCG received a closing payment from QIC of $17.5 million (net of $500,000 in reimbursements).
The transaction expenses are actively being negotiated, and actual settlement may vary from the amounts recorded. Additionally, as of December 31, 2024, we have unfunded commitments to Karnival of $2.4 million (HKD 18.7 million), to be used for the purpose of constructing the Vquarium Entertainment Centers in Hong Kong.
A portion of these reserved receivables was removed from the Company’s balance sheet with the deconsolidation of FCG. Research and Development Research and development expense decreased $1.6 million to $1.2 million for the year ended December 31, 2023, compared to $2.8 million for the year ended December 31, 2022.
Depreciation and amortization expense Depreciation and amortization expense decreased $1.6 million to less than $0.1 million for year ended December 31, 2024, compared to $1.6 million for the year ended December 31, 2023, due to the deconsolidation of FCG.
Transaction expenses were $26.0 million for the year ended December 31, 2023 which were particularly high for this period due to the Business Combination. Unallocated corporate overhead costs are presented as a reconciling item between total income (losses) from reportable segments and the Company’s consolidated financial results.
Unallocated corporate overhead costs include costs related to accounting, audit, and corporate legal expenses. Unallocated corporate overhead costs are presented as a reconciling item between total income (losses) from reportable segments and the Company’s consolidated financial results. For more information about our Segment Reporting, see Note 15 – Segment information in the Company’s audited consolidated financial statements.
Costs incurred in excess of the gross proceeds were recorded in profit or loss. 75 We anticipate managing our operations to ensure that our existing cash on hand and unused capacity on our existing lines of credit, provide us with liquidity to fund our operations for the next twelve months.
We anticipate managing our operations to ensure that our existing cash on hand and unused capacity on our existing lines of credit, along with distributions from equity method investees, additional debt and equity capital raises, and reviewing our portfolio of assets 66 to provide additional liquidity over the next twelve months to meet our short-term needs.
Full impairment of Investment in Sierra Parima As Sierra Parima recorded a fixed asset impairment under ASC 360, the Company further evaluated its remaining equity investment in Sierra Parima for impairment as of December 31, 2023, and determined that it was other-than-temporarily impaired.
The Company recognized its 50% share of PDP’s net income. • Sierra Parima: As of December 31, 2023, equity investment in Sierra Parima was deemed to be other-than-temporarily impaired and the fair value of the Company’s investment in Sierra Parima was determined to be $0.
Item 1. Business – Intellectual Property Research and Development ” for more information. Intangible asset impairment loss Our intangible asset impairment loss consists entirely of the impairment of the Ride Media Content (“RMC”) intangible asset owned by our FBB segment.
Item 1. Business – Intellectual Property Research and Development ” for more information.
This was offset by a $3.2 million increase in selling, general and administrative expense. ● Intersegment eliminations for the year ended December 31, 2023, increased $1.9 million to $(2.4) million compared to $(0.5) million for the year ended December 31, 2022, primarily driven by changes in contracts between FCG and the other segments.
Selling, general and administrative expense Selling, general and administrative expense decreased by $5.7 million to $22.4 million for the year ended December 31, 2024, compared to $28.1 million for the year ended December 31, 2023.
Negotiations regarding the terms of the costs yet to be settled are still ongoing and may change materially from these amounts accrued. All transaction costs incurred in connection with the Business Combination are recorded in profit or loss. Related Party Loans We have entered into various financing agreements with Infinite Acquisitions.
Negotiations regarding the terms of the costs yet to be settled are still ongoing and may change materially from these amounts accrued. 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 change in gain or loss from equity method investments was driven by: ● $41.4 million higher share of net loss from Sierra Parima in the year ended December 31, 2023 which sustained operating losses since opening in 2023. $23.4 million of the loss was related to impairment of long-lived assets by Sierra Parima.
The change in loss from equity method investments was driven by: • PDP: Share of net income from PDP increased by $4.5 million for the year ended December 31, 2024, compared to the corresponding period in 2023, primarily driven by a $8.9 million increase in PDP’s net income.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

67 edited+13 added−4 removed99 unchanged
Biggest changeFor example, while we believe the recent closure of Katmandu Park DR to visitors was in the best interest of the Sierra Parima joint venture with Meliá because the closure eliminates potential ongoing operational losses at the Katmandu Park DR, there may be unexpected consequences of the closure that negatively impact our business or that of our joint venture partner, whereby such unexpected consequences could be the basis for a dispute with our joint venture partner. 16 Further, even with an asset-efficient business model, our FBD business may still be subject to traditional risks associated with resort and theme park development, acquisition, expansion, repositioning and rebranding, including, among others: ● construction delays or cost overruns that may increase project costs; ● receipt of zoning and other required governmental permits and authorizations; ● increased costs due to competition for labor, including employees and subcontractors, skilled in emerging technology; ● strikes or other labor issues; ● restrictions or delays in transportation and import-export procedures; ● delays or cost inflation in the supply chain and third-party vendors required to develop the resorts and parks; ● development costs incurred for projects that are not pursued to completion; ● investment of substantial capital without, in the case of developed or repositioned resorts, immediate corresponding income; ● results that may not achieve our desired revenue or profit goals; ● acts of nature such as earthquakes, wildfires, hurricanes, volcanic eruptions, floods or fires that could adversely impact a resort; ● ability to raise capital, including construction or acquisition financing; and ● governmental restrictions on the nature or size of a project.
Biggest changeFurther, even with an asset-efficient business model, our FBD business may still be subject to traditional risks associated with resort and theme park development, acquisition, expansion, repositioning and rebranding, including, among others: • construction delays or cost overruns that may increase project costs; • receipt of zoning and other required governmental permits and authorizations; • increased costs due to competition for labor, including employees and subcontractors, skilled in emerging technology; • strikes or other labor issues; • restrictions or delays in transportation and import-export procedures; • delays or cost inflation in the supply chain and third-party vendors required to develop the resorts and parks; • development costs incurred for projects that are not pursued to completion; • investment of substantial capital without, in the case of developed or repositioned resorts, immediate corresponding income; • results that may not achieve our desired revenue or profit goals; • acts of nature such as earthquakes, wildfires, hurricanes, volcanic eruptions, floods or fires that could adversely impact a resort; • ability to raise capital, including construction or acquisition financing; and • governmental restrictions on the nature or size of a project. 17 In addition, in the future, certain of our construction timelines may be lengthened and/or require increased development costs due to competition for skilled construction labor and employees with relevant technical expertise, disruption in the supply chain for materials, increased costs for raw materials and supplies, labor relations and construction practices in foreign markets, rising inflation, the conflict between Russia and Ukraine and the Israel-Hamas war; and these circumstances could continue or worsen in the future.
We recognize the value of our intellectual property and vigorously defend our intellectual property rights. However, despite our efforts to protect our intellectual property, we may not be able to prevent third parties from developing similar technology or from infringing on our intellectual property rights. Any infringement could harm our business. See Item 1A.
We recognize the value of our intellectual property and vigorously defend our intellectual property rights. However, despite our efforts to protect our intellectual property, we may not be able to prevent third parties from developing similar technology or from infringing on our intellectual property rights. Any infringement of our intellectual property could harm our business. See Item 1A.
We evaluate long-lived assets and equity method investments for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable (meaning, in the case of its equity method investment, that such investment has suffered other-than-temporary declines in value under ASC 323, Investments: Equity Method Investments and Joint Ventures (ASC 323)).
We evaluate long-lived assets and equity method investments for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying value of such assets may not be recoverable (meaning, in the case of its equity method investment, that such investment has suffered other-than-temporary declines in value under ASC 323, Investments: Equity Method Investments and Joint Ventures).
Since our inception, we have funded our operations since inception primarily through financing transactions such as related party and third party loans and the Strategic Investment and have incurred recurring net losses and negative cash flows. We will require additional capital in order to fund currently anticipated expenditures and to meet our obligations as they come due.
Since our inception, we have funded our operations primarily through financing transactions such as related party and third-party loans and the Strategic Investment and have incurred recurring net losses and negative cash flows. We will require additional capital in order to fund currently anticipated expenditures and to meet our obligations as they come due.
In particular, the ongoing invasion of Ukraine by Russia and Israel-Hamas war have caused disruption in the global financial markets, which may reduce our ability to access capital and negatively affect our liquidity in the future.
In particular, the ongoing invasion of Ukraine by Russia and the Israel-Hamas war have caused disruption in the global financial markets, which may reduce our ability to access capital and negatively affect our liquidity in the future.
We believe that our continued growth will depend on many factors, including our ability to develop new sources of revenue, diversify monetization methods including by direct to consumer offerings, vertically-integrated retail and third party marketplaces, attract and retain creative contributors and business partners, increase customer engagement, continue developing innovative technologies, experiences and attractions in response to shifting demand in leisure and entertainment preferences, increase brand awareness and licensing, increase our hospitality expertise, expand into new markets, raise capital and continue to execute our legacy business.
We believe that our continued growth will depend on many factors, including our ability to develop new sources of revenue, diversify monetization methods including by direct to consumer offerings, vertically-integrated retail and third-party marketplaces, attract and retain creative contributors and business partners, increase customer engagement, continue developing innovative technologies, experiences and attractions in response to shifting demand in leisure and entertainment preferences, increase brand awareness and licensing, increase our expertise, expand into new markets, raise capital and continue to execute our legacy business.
When a quantitative assessment is performed, we use estimates and assumptions in estimating our reporting units’, our long-lived assets’ and our equity method investment’s fair values that we believe are reasonable and appropriate at that time; however assumptions and estimates are inherently subject to significant business, economic, competitive and other risks that could materially affect the calculated fair values and the resulting conclusions regarding impairments, which could materially affect our results of operations and financial position.
When a quantitative assessment is performed, we use estimates and assumptions in estimating our reporting units’, our long-lived assets’ and our equity method investment’s fair values that we believe are reasonable and appropriate at that time; however assumptions and estimates are inherently subject to significant business, economic, 15 competitive and other risks that could materially affect the calculated fair values and the resulting conclusions regarding impairments, which could materially affect our results of operations and financial position.
Marketing promotes the podcast through owned and earned channels. 8 FBD’s marking program is focused on supporting projects under development by establishing each program’s narratives and communication priorities. This involves key collaborations such as marketing strategic planning with joint venture and licensed IP partners to align on integrated marketing efforts.
Marketing promotes the podcast through owned and earned channels. FBD’s marking program is focused on supporting projects under development by establishing each program’s narratives and communication priorities. This involves key collaborations such as marketing strategic planning with joint venture and licensed IP partners to align on integrated marketing efforts.
Management’s Discussion and Analysis of Financial Condition and Results of Operation ” and Note 8 “Investments and advances to equity method investments” to our audited consolidated financial statements contained in Item 8 of this Annual Report. 14 The accounting estimates related to impairments are susceptible to change, including estimating fair value which requires considerable judgment.
Management’s Discussion and Analysis of Financial Condition and Results of Operation ” and Note 8 “Investments and advances to equity method investments” to our audited consolidated financial statements contained in Item 8 of this Annual Report. The accounting estimates related to impairments are susceptible to change, including estimating fair value which requires considerable judgment.
Our proprietary intellectual property includes The Hidden Realms of Katmandu, Cadim and the Monster Wave, Vquarium, ResQ, and Curiosity Playground. 7 We seek to enter into or have entered into third-party relationships with: ● Certain brands featured on PBS Kids. In February 2023, we entered into a license agreement to use certain brands featured on PBS Kids.
Our proprietary intellectual property includes The Hidden Realms of Katmandu, Cadim and the Monster Wave, Vquarium, ResQ, and Curiosity Playground. We seek to enter into or have entered into third-party relationships with: • Certain brands featured on PBS Kids. In February 2023, we entered into a license agreement to use certain brands featured on PBS Kids.
The Company’s fifty percent share of the impairment recognized by Sierra Parima and the additional impairment of $14.1 million recognized by the Company are included within Share of gain (loss) from equity method investments in the Consolidated Statements of Operations for the year ended December 31, 2023.
The Company’s fifty percent share of the impairment recognized by Sierra Parima and the additional impairment of $14.1 million recognized by the Company are included within Share of loss from equity method investments in the Consolidated Statements of Operations for the year ended December 31, 2023.
See the section entitled “ Risk Factors ,” including “ Risk Factors — Risks Related to Regulatory, Tax, Legal and Compliance Matters — United States or international environmental laws and regulations may cause us to incur substantial costs or subject us to potential liabilities. ” 11 At our hotels and theme park, Falcon’s, Meliá, our joint ventures, and third-party service providers collect, use and retain large volumes of guest data, including credit card numbers and other personally identifiable information, for business, marketing and other purposes.
See the section entitled “ Risk Factors ,” including “ Risk Factors — Risks Related to Regulatory, Tax, Legal and Compliance Matters — United States or international environmental laws and regulations may cause us to incur substantial costs or subject us to potential liabilities. ” 12 At our hotels and theme park, Falcon’s, Meliá, our joint ventures, and third-party service providers collect, use and retain large volumes of guest data, including credit card numbers and other personally identifiable information, for business, marketing and other purposes.
We seek to bring Xavier Riddle and the Secret Museum, Dinosaur Train, Odd Squad, and Wild Kratts into the physical realm through fun, interactive environments that seamless integration media with hands-on exploration. ● Hershey.
We seek to bring Xavier Riddle and the Secret Museum, Dinosaur Train, Odd Squad, and Wild Kratts into the physical realm through fun, interactive environments that seamless integration media with hands-on exploration. 8 • Hershey.
Qiddiya is planned to consist of 367 square kilometers of leisure and theme parks, sports arenas, academies for sports and the arts, concert and entertainment venues, racetracks and outdoor and adventure activities alongside nature and environment experiences.
Qiddiya is planned to consist 11 of 367 square kilometers of leisure and theme parks, sports arenas, academies for sports and the arts, concert and entertainment venues, racetracks and outdoor and adventure activities alongside nature and environment experiences.
Risk Factors You should carefully consider the following risk factors in addition to the other information included in this Annual Report, including matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements and Risk Factor Summary.” We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business, prospects, financial condition or operating results.
Ris k Factors You should carefully consider the following risk factors in addition to the other information included in this Annual Report, including matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements and Risk Factor Summary.” We may face additional risks and uncertainties that are not presently known to us, or that we currently deem immaterial, which may also impair our business, prospects, financial condition or operating results.
Further, Falcon’s Attractions Systems & Technologies launched in March 2024 as a commercial name for FBB to highlight the focus of rides and attractions sales. The launch was accompanied by an integrated marketing campaign, including a website, press announcement, e-newsletter, and posts on social media channels. On-going marketing efforts include industry-related engagement as well as owned and earned channels.
Further, Falcon’s Attractions launched in March 2024 as a commercial name for FBB to highlight the focus of rides and attractions sales. The launch was accompanied by an integrated marketing campaign, including a website, press announcement, e-newsletter, and posts on social media channels. On-going marketing efforts include industry-related engagement as well as owned and earned channels.
As of December 31, 2023, we hold 9 issued utility patents in the US and 1 issued utility patent in China, including patents for: CircuMotion Theater, a multi-dimensional, rotating platform that incorporates media content and special effects to create a fully immersive experience; Suspended Theater, which takes riders soaring across epic adventures delivering the unique sensation of flight in a new way; Falcon’s Vision, an augmented reality headset that is designed to be durable, functional, hygienic, and affordable for high-throughput LBEs; and ÄEONXP, a technology solution that gamifies a conventional attraction experience into a flexible and enduring ecosystem of narrative data, complete with consequential choice customizations, character progressions, worldbuilding, global high-score competitions, and an exciting infrastructure within which to cultivate organic social interaction and gaming communities.
As of December 31, 2024, we hold 10 issued utility patents in the US , and 1 issued utility patent in China, including patents for: CircuMotion Theater, a multi-dimensional, rotating platform that incorporates media content and special effects to create a fully immersive experience; Suspended Theater, which takes riders soaring across epic adventures delivering the unique sensation of flight in a new way; Falcon’s Vision, an augmented reality headset that is designed to be durable, functional, hygienic, and affordable for high-throughput LBEs; ÄEONXP, a technology solution that gamifies a conventional attraction experience into a flexible and enduring ecosystem of narrative data, complete with consequential choice customizations, character progressions, worldbuilding, global high-score competitions, and an exciting infrastructure within which to cultivate organic social interaction and gaming communities.
Further, we seek to utilize third party intellectual property for consumer products which we may sell at LBEs or through online marketplaces. Traditional brand development timelines can take many years or even decades to deploy across a broad range of vectors (e.g., physical theme parks, ride systems, media content and consumer merchandise).
Further, we seek to utilize third party intellectual property for consumer products which we may sell at LBEs or through online marketplaces. Traditional brand development timelines can take many years or even decades to deploy across a broad range of sectors (e.g., physical theme parks, ride systems, media content and consumer merchandise).
Each Company business has its own targeted marketing plan that varies by division and customer type. FCG’s marketing efforts are based largely on a business-to-business (“B2B”) approach. Given the 24-year history, FCG is generally well-known in the themed entertainment industry and therefore benefits from proven work history and customer referrals.
Each Company business has its own targeted marketing plan that varies by division and customer type. FCG’s marketing efforts are based largely on a business-to-business (“B2B”) approach. Given the 25-year history, FCG is generally well-known in the themed entertainment industry and therefore benefits from proven work history and customer referrals.
If we incur additional debt, the debt holders would have rights senior to holders of common stock to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay dividends to holders of our common stock. If we undertake discretionary financing by issuing equity securities, our stockholders may experience substantial dilution.
If we incur additional debt, the debt holders would have rights senior to holders of Common Stock to make claims on our assets, and the terms of any debt could restrict our operations, including our ability to pay future dividends to holders of our Common Stock. If we undertake financing by issuing equity securities, our stockholders may experience substantial dilution.
Furthermore, our franchise execution model (see “ Business — FBB: Falcon’s Beyond Brands ”) is dependent upon each of our divisions working together to deploy our intellectual property across a broad range of vectors nearly simultaneously (e.g., physical theme parks, media content and consumer merchandise).
Furthermore, our franchise execution model (see “ Business — FBB: Falcon’s Beyond Brands ”) is dependent upon each of our divisions working together to deploy our intellectual property across a broad range of sectors nearly simultaneously (e.g., physical theme parks, media content and consumer merchandise).
The goal of this strategy is to accelerate consumer engagement and return on investment through a digital-first approach, leveraging scale and awareness to drive high margin monetization. We are focused on animation, movies, music, licensing and merchandizing, gaming, streaming, and ride and technology sales.
The goal of this strategy is to accelerate consumer engagement and return on investment through a digital-first approach, leveraging scale and awareness to drive high margin monetization. We are focused on animation, movies, music, licensing and merchandising, gaming, streaming, and ride and technology sales.
Because our work for Qiddiya is not subject to a master services agreement, our and QIC’s rights and obligations and our time to complete a specific task may vary from agreement to agreement and the terms and conditions of each agreement is generally tailored to the specific project or services covered by the applicable agreement.
Because our work for QIC is not subject to a master services agreement, our and QIC’s rights and obligations and our time to complete a specific task may vary from agreement to agreement and the terms and conditions of each agreement is generally tailored to the specific project or services covered by the applicable agreement.
II in October 2023, which resulted in the Company becoming a public company with its securities traded on Nasdaq, and the Strategic Investment by QIC. However, recent growth rates may not be indicative of our future performance due to our limited operating history as a combined company and the rapid evolution of our business model.
II in October 2023, which resulted in the Company becoming a public company with its securities traded on Nasdaq, and the Strategic Investment by Qiddiya Investment Company (“QIC”). However, recent growth rates may not be indicative of our future performance due to our limited operating history as a combined company and the rapid evolution of our business model.
We generally evaluate our insurance policies on an annual basis, which may involve renegotiation of terms as necessary. The majority of our current insurance policies were renewed at the beginning of the second quarter of 2023.
We generally evaluate our insurance policies on an annual basis, which may involve renegotiation of terms as necessary. The majority of our current insurance policies were renewed at the beginning of the second quarter of 2024.
As a result of this analysis, Sierra Parima recorded a fixed asset impairment of $46.7 million. Based on the estimated sale or liquidation proceeds from Sierra Parima, and Sierra Parima’s outstanding debts remaining to be settled, the fair value of the Company’s investment in Sierra Parima was determined to be zero.
As a result of this analysis, Sierra Parima recorded a fixed asset impairment of $46.7 million as of December 31, 2023. Based on the estimated sale or liquidation proceeds from Sierra Parima, and Sierra Parima’s outstanding debts remaining to be settled, the fair value of the Company’s investment in Sierra Parima was determined to be zero.
We undertake proactive research on the experiential entertainment industry, focusing on strategies and technologies to facilitate the connection and interfacing between disparate proprietary, consumer, and commercial hardware and software systems to provide immersive interactive experiences in both the physical and virtual worlds.
We undertake proactive research on the experiential entertainment industry, focusing on strategies and technologies to facilitate the connection and interface between disparate proprietary, consumer, and 10 commercial hardware and software systems to provide immersive interactive experiences in both the physical and virtual worlds.
In Spain, as of December 31, 2023, there were an additional 361 full-time and partial-time employees that work all or a part of the operating season of the given property. All of the Spanish joint venture employees are subject to collective bargaining agreements governed by Estatuto de los Trabajadores (the “Workers’ Statute”) of Spain.
In Spain, as of December 31, 2024, there were an additional 225 full-time and partial-time employees that work all or a part of the operating season of the given property. All of the Spanish joint venture employees are subject to collective bargaining agreements governed by Estatuto de los Trabajadores (the “Workers’ Statute”) of Spain.
FCG has an established social media presence on channels including Facebook, Instagram, X, and YouTube, although the most successful channel given business-focused audience is its LinkedIn page, which has over 14,000 followers. FCG also produces a successful industry monthly podcast, Experience Imagination, that examines relevant topics in the themed entertainment industry to educate, inform and entertain listeners.
FCG has an established social media presence on channels including Facebook, Instagram, X, and YouTube, although the most successful channel given business-focused audience is its LinkedIn page, which has over 16,000 followers. FCG also produces a award-winning industry monthly 9 podcast, Experience Imagination, that examines relevant topics in the themed entertainment industry to educate, inform and entertain listeners.
While we believe the recent closure of Katmandu Park DR to visitors should help reduce our ongoing capital expenditures, particularly with respect to our Sierra Parima joint venture, we still own significant assets through our PDP joint venture, including a hotel in Tenerife, Spain and a hotel and theme park in Mallorca, Spain.
While we believe the closure of Katmandu Park DR to visitors should help reduce our ongoing capital expenditures, particularly with respect to our Sierra Parima joint venture, we still have assets through our PDP joint venture, including a hotel in Tenerife, Spain and a hotel and theme park in Mallorca, Spain.
Additionally, we feature some of our proprietary designs and technologies in Spheron Theater, which surrounds guests with edge blended, high definition video content, and SpectraVerse Game Bay, which uses our SpectraVerse intellectual property for small group play in an immersive atmosphere. Our patents protect our competitive advantage by preventing third parties from infringing our proprietary inventions without our permission.
Additionally, we feature some of our proprietary designs and technologies in Spheron Theater, which surrounds guests with edge blended, high - definition video content, and SpectraVerse Game Bay, which uses our SpectraVerse intellectual property for small group play in an immersive atmosphere. Our patents help us to protect our competitive advantage by preventing third parties from infringing our proprietary inventions.
We cannot predict the level of the premiums that we may be required to pay for subsequent insurance coverage, the level of any retention applicable thereto, the level of aggregate coverage available or the availability of coverage for specific risks. 13 Item 1A.
We cannot predict the level of the premiums that we may be required to pay for subsequent insurance coverage, the level of any retention applicable thereto, the level of aggregate coverage available or the availability of coverage for specific risks. It em 1A.
Our on-boarding policy requires each of our employees to enter into a confidentiality agreement which provides that all inventions and discoveries that are conceived or made by such employee during their employment which relate in any manner to Falcon’s current business or future business will be the sole property of Falcon’s.
Our on-boarding policy requires each of our employees to agree to enter into confidentiality undertakings and to agree that all inventions and discoveries that are conceived or made by such employee during their employment which relate in any manner to Falcon’s current business or future business are the sole property of Falcon’s.
As of April 26, 2024, we have 11 active agreements with QIC, each of which may be terminated at will by either FCG, after providing 14 days’ notice to QIC, upon a further notice of 42 days or QIC upon 14 days’ notice to FCG.
As of April 3, 2025, we have 9 active agreements with QIC, each of which may be terminated at will by either FCG, after providing 14 days’ notice to QIC, upon a further notice of 42 days or QIC upon 14 days’ notice to FCG.
As of December 31, 2023, we had 116 full-time employees, of which 102 were based at our Orlando headquarters and 14 were based in the Philippines. None of our U.S. or Philippines-based employees are covered by collective bargaining agreements. This does not include employees of our joint venture entities, which are discussed below.
As of December 31, 2024, we had 207 full-time employees, of which 174 were based at our Orlando headquarters and 33 were based in the Philippines. None of our U.S. or Philippines-based employees are covered by collective bargaining agreements. This does not include employees of our joint venture entities, which are discussed below.
FCG in particular tends to have customers that individually represent a significant amount of its consolidated revenues given that it is limited in the number of customers it can service for large master planning and design projects at any one time.
Customers and Concentration of Customer Risk Our business divisions have significant individual customer relationships. FCG in particular tends to have customers that individually represent a significant amount of its consolidated revenues given that it is limited in the number of customers it can service for large master planning and design projects at any one time.
Management has concluded, and the report of our auditors included in this Annual Report reflect, that there is substantial doubt about our ability to continue as a going concern within 12 months after the date of this filing.
Management has concluded, and the report of our auditors included in this Annual Report reflect, that there is substantial doubt about our ability to continue as a going concern.
These up-front and continued capital investments may not ever result in net income. 17 In addition to liquidity risks, these capital expenditures may result in declines in revenues while hotels and parks are in initial construction, while rooms, restaurants, rides or attractions are out of service for rebranding or maintenance, and while areas of our properties are closed due to capital improvement projects.
In addition to liquidity risks, these capital expenditures may result in declines in revenues while hotels and parks are in initial construction, while rooms, restaurants, rides or attractions are out of service for rebranding or maintenance, and while areas of our properties are closed due to capital improvement projects.
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. For the year ended December 31, 2023, we incurred a loss from operations of $57.0 million and negative cash flows from operating activities of $23.4 million.
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. For the year ended December 31, 2024, we incurred a loss from operations of $15.9 million and negative cash flows from operating activities of $12.6 million.
We have established a team to develop the full slate of software, hardware and systems that power our products, integrating product management, engineering, analytics, data science, and design.
We have established a team to develop various software, hardware and systems that help to power our products, integrating product management, engineering, analytics, data science, and design.
We may not be able to achieve similar results or accelerate growth at the same rate as we have organically or in connection with the completion of the Business Combination, and we may not achieve our expected results, all of which may have a material and adverse impact on our financial condition and results of operations.
We may not be able to achieve similar results or accelerate growth at the same rate as we have organically or in connection with the completion of the Business Combination, and we may not achieve our expected results, all of which may have a material and adverse impact on our financial condition and results of operations. 14 In addition, our growth and expansion have placed, and will continue to place, significant strain on our management and resources.
In 2023, Falcon’s was awarded the Top Workplaces Orlando regional award by Orlando Sentinel for the second year in a row.
In 2023, Falcon’s was awarded the Top Workplaces Orlando regional award by Orlando Sentinel for the second year in a row. We consider our employees relations to be good.
As a result, we incurred a loss from operations of $57.0 million for the year ended December 31, 2023, accumulated deficit attributable to common stockholders of $69.9 million as of December 31, 2023, and negative cash flows from operating activities of $23.4 million for the year ended December 31, 2023.
As a result, we incurred a loss from operations of $15.9 million for the year ended December 31, 2024, had an accumulated deficit attributable to common stockholders of $46.5 million as of December 31, 2024, and had negative cash flows from operating activities of $12.6 million for the year ended December 31, 2024.
For the year ended December 31, 2023, FCG’s largest customer, QIC, generated an aggregate of approximately 81% of FCG’s revenue. 10 QIC, a corporation wholly owned by Saudi Arabia’s Public Investment Fund, has engaged FCG to provide services for Qiddiya, a planned tourism destination and one of a series of large-scale projects to be constructed in Saudi Arabia.
QIC, a corporation wholly owned by Saudi Arabia’s Public Investment Fund, has engaged FCG to provide services for Qiddiya, a planned tourism destination and one of a series of large-scale projects to be constructed in Saudi Arabia.
Prior to the deployment of our asset-efficient strategy in our FBD business, we had previously engaged in expanding our physical operations through our equity method investments, and we are continuing to develop new product offerings and hire additional personnel.
Prior to the deployment of our asset-efficient strategy in our FBD business, we had engaged in expanding our physical operations through our equity method investments.
However, we do not currently have the liquidity to fund such amounts and the ability to do so in the future is contingent upon securing additional financing or capital raises. Additional financing may not be available on terms favorable to us, if at all, or the cost of additional financing may be exceedingly high.
The Company does not currently have sufficient cash or liquidity to pay liabilities that are owed or are maturing at this time and the ability to do so in the future is contingent upon securing additional financing or capital raises. 16 Additional financing may not be available on terms favorable to us, if at all, or the cost of additional financing may be exceedingly high.
We are proud to have worked with QIC, MOTIONGATE Dubai, Fosun International Limited, the IMG Group, Delaware North Companies, The Walt Disney Company, Universal Studios, and the National Geographic Society, to name a few.
We are proud to have worked with QIC, MOTIONGATE Dubai, Fosun International Limited, the IMG Group, Delaware North Companies, The Walt Disney Company, Universal Studios, and the National Geographic Society, to name a few. For the year ended December 31, 2024, FCG’s largest customer, QIC, generated an aggregate of approximately 99% of FCG’s revenue.
The foregoing 10 patents expire from 2027 to 2042.
The foregoing 10 patents expire between 2027 and 2042.
We consider our employees relations to be good. 12 Our Joint Ventures As of December 31, 2023, our two joint ventures with Meliá had approximately 297 year-round, full-time employees, of which 161 were based in Spain and 136 were based in the Dominican Republic.
Our Joint Ventures As of December 31, 2024, our two joint ventures with Meliá had approximately 179 year-round, full-time employees, of which 170 were based in Spain and 9 were based in the Dominican Republic.
The estimates that the Company makes with respect to its equity method investment are based upon assumptions that management believes are reasonable, and the impact of variations in these estimates or the underlying assumptions could be material. For more information about the impairment charge with respect to Sierra Parima, see “ Item 7.
The estimates that the Company makes with respect to its equity method investment are based upon assumptions that management believes are reasonable, and the impact of variations in these estimates or the underlying assumptions could be material. There are no other liquidity arrangements, guarantees or other financial commitments between the Company and Sierra Parima.
Our consolidated financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activities and the realization of assets and the settlement of liabilities in the ordinary course of business. 15 We will require additional capital, which additional financing may result in restrictions on our operations or substantial dilution to our stockholders, to support the growth of our business, and this capital might not be available on acceptable terms, if at all.
We will require additional capital, which additional financing may result in restrictions on our operations or substantial dilution to our stockholders, to support the growth of our business, and this capital might not be available on acceptable terms, if at all.
Insurance The Company We maintain insurance, excess coverage, or reinsurance for property and commercial general liability, personal and advertising injury, automobile liability, professional services liability, workers’ compensation, cybersecurity. and other coverage in amounts and on terms that our management believes are commercially reasonable and appropriate, based on our actual claims experience and expectations for future claims.
At the beginning of 2023, there was a pre-agreement announced for a 5.0% wage increase in 2023 and 3.3% in 2024 (applying only to the positions that are being remunerated with the collective bargain agreement). 13 Insurance The Company We maintain insurance, excess coverage, or reinsurance for property and commercial general liability, personal and advertising injury, automobile liability, professional services liability, workers’ compensation, cybersecurity. and other coverage in amounts and on terms that our management believes are commercially reasonable and appropriate, based on our actual claims experience and expectations for future claims.
We rely on the intellectual property laws of the United States and other relevant jurisdictions, as well as licensing agreements, confidentiality and non-disclosure agreements, and other contractual protections, to safeguard our intellectual property assets.
Risk Factors – “ 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 rely on the intellectual property laws of the United States and other relevant jurisdictions, as well as licensing agreements, confidentiality and non-disclosure agreements, and other contractual protections, to safeguard our intellectual property assets.
Despite our efforts to protect our intellectual property assets, our intellectual property could be deemed invalid or unenforceable or otherwise challenged and such efforts may be circumvented or otherwise unsuccessful.
Despite our efforts to protect our intellectual property assets, our intellectual property could be deemed invalid or unenforceable or otherwise challenged and therefore such efforts may be unsuccessful. See the section entitled “ Risk Factors ,” including “ Risk Factors — Risks Related to Our Intellectual Property ” for a description of the risks related to our intellectual property.
Our extensive work-for-hire history has provided a platform for our research and development, leading to our portfolio of award-winning proprietary technology and attraction systems, as well as patents covering some of these technologies and systems. 9 Much of our intellectual property has been developed and tested in-house at our Falcon’s X-Lab facility in Orlando, Florida — a versatile research facility and prototype laboratory, which is being relocated to our new headquarters, used as the central test lab to research and experiment with emerging technologies in innovative applications.
Much of our intellectual property has been developed and tested in-house at our Falcon’s X-Lab facility in Orlando, Florida — a versatile research facility and prototype laboratory. We have used our Falcon’s X-Lab facility as the central test lab to research and experiment with emerging technologies in innovative applications.
We cannot assure you that we will achieve any of the above, and our failure to do so may materially and adversely affect our business and results of operations.
We cannot assure you that we will have the personnel, expertise, or resources to achieve any of the above, or that our growth and expansion strategies, including our franchise execution model and our platform model, will be attractive to our customers, and our failure to sustain or increase our growth may materially and adversely affect our business and results of operations.
We rely on a combination of patents, trademarks, copyrights, and trade secrets to protect our intellectual property rights and our success relies in part on our ability to protect our intellectual property rights. Our patents and patent applications cover our attraction systems and experiential technologies, including our motion simulator theater with suspended seating, circular motion theater, and interactive theater system.
Our patents and patent applications cover our attraction systems and experiential technologies, including our motion simulator theater with suspended seating, circular motion theater, and interactive theater system.
The sales model for future LBE venues in development will rely on attraction ticket sales, retail, dining and merchandise revenue. FBB recently launched a new brand fictious name, Falcon’s Attraction Systems & Technologies, for the sales of rides, attractions and technologies. The sales strategy is focused on B2B marketing efforts including trade shows and direct marketing to drive sales.
FBB recently launched a new brand fictitious name, Falcon’s Attractions and created a new legal entity Falcon's Attractions, LLC, for the sales of rides, attractions and technologies. The sales strategy is focused on B2B marketing efforts including trade shows and direct marketing to drive sales. Additionally, the Company is currently accessing potential acquisition targets to support growth.
Substantial doubt exists about our ability to continue as a going concern within one year after the date that the financial statements are available to be issued.
Substantial doubt exists about our ability to continue as a going concern.
Intellectual Property Research and Development The Falcon’s Business has decades of experience in intellectual property creation and expansion and in developing award-winning themed experiences and entertainment content. Over the last 24 years, we have provided planning and design services and developed innovative technologies culminating in over $120 billion of location-based entertainment projects realized.
Over the last 25 years, we have provided planning and design services and developed innovative technologies culminating in over $120 billion of location-based entertainment projects realized. Our extensive research and development activities have led to our portfolio of award-winning proprietary technology and attraction systems, as well as patents covering some of these technologies and systems.
We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds. In addition, as of December 31, 2023, we have unfunded commitments to its unconsolidated joint venture Karnival of $2.4 million (HKD 18.7 million).
We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds. In addition, as of December 31, 2024, the Company has accrued material amounts of expenses in relation to its external advisors, accountants and legal costs in relation to the Business Combination and other things.
In addition, our growth and expansion have placed, and will continue to place, significant strain on our management and resources. This level of growth may not be sustainable or achievable in the future.
This level of growth may not be sustainable or achievable in the future.
Additionally, the Company is currently accessing potential acquisition targets to support growth. FBB expects to license media content to distributors, and to sell consumer products at our FBD locations, online direct-to-consumer channels, vertically integrated retail, and third-party marketplaces.
FBB expects to license media content to distributors, and to sell consumer products at our FBD locations, online direct-to-consumer channels, vertically integrated retail, and third-party marketplaces. Intellectual Property Research and Development The Falcon’s Business has decades of experience in intellectual property creation and expansion and in developing award-winning themed experiences and entertainment content.
Both FBD and FBB businesses are in the development stage, and our sales efforts for these businesses are growth focused. FBD has adjusted its development approach to support the growth of the business and the Company’s asset-efficient “Big Experience, Small Footprint” themed entertainment concept.
The Company maintains an ongoing relationship with most of its past customers in an effort to support the potential for future work for hire business. Both FBD and FBB businesses are in the development stage, and our sales efforts for these businesses are growth focused.
The new strategy emphasizes focus on building strategic relationships with commercial developers and brands that have existing high-traffic commercial properties with established infrastructure and real estate management capabilities. These partnerships will help develop a diverse range of entertainment experience destinations featuring both Company owned and third party licensed intellectual property.
FBD has adjusted its development approach to support the growth of the business and the Company’s asset-efficient “Big Experience, Small Footprint” themed entertainment concept. The new strategy emphasizes focus on building strategic relationships with commercial developers and brands that have existing high-traffic commercial properties with established infrastructure and real estate management capabilities.
Risk Factors – “ 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 also own registered domain names and have entered into, and will continue to enter into, both in-bound and out-bound licensing agreements of our intellectual property and the intellectual property of third parties.
We have also entered into, and will continue to enter into, both in-bound and out-bound licensing agreements of intellectual property rights.
Within the attractions systems and technologies markets, FBB competes with Triotech, Dynamic Entertainment, Simtec, Simworx, and DOF Robotics. Marketing The Company’s overarching marketing strategy focuses on Company brand development and reputation management to help drive the business, as well as growing brand awareness and loyalty.
This will allow Falcon’s to create seamless, large-scale projects with greater creative control and operational efficiency, offering a unique, turnkey experience that will set us apart in the industry. Marketing The Company’s overarching marketing strategy focuses on Company brand development and reputation management to help drive the business, as well as growing brand awareness and loyalty.
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The Company maintains an ongoing relationship with most of its past customers in an effort to support the potential for future work for hire business. Illustrating the importance of repeat business, 58% of first-time clients have contracted for additional services, and the scope of services contracted by returning clients averages 60 times the scope of the initial project.
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Within the attractions systems and technologies markets, FBB competes with Triotech, Simtec, Simworx, DOF Robotics, ETF, Intamin, Brogent and Sansei Technologies. Falcon’s is distinguishing itself from the wider industry by evolving into a next-generation experiential entertainment company that offers a fully integrated service, from master planning immersive experiences to designing, sourcing, and installing rides to content development and optimization.
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See the section entitled “ Risk Factors ,” including “ Risk Factors — Risks Related to Our Intellectual Property ” for a description of the risks related to our intellectual property. Customers and Concentration of Customer Risk Our business divisions have significant individual customer relationships.
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Unlike traditional companies that rely on multiple external partners, Falcon’s is planning to consolidate all of these capabilities on our platform, providing a comprehensive solution that has previously only been available to companies with vast in-house resources.
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These agreements are reached after negotiations between unions, industry representatives and public administrators. At the beginning of 2023, there was a pre-agreement announced for a 5.0% wage increase in 2023 and 3.3% in 2024 (applying only to the positions that are being remunerated with the collective bargain agreement).
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These partnerships will help develop a diverse range of entertainment experience destinations featuring both Company owned and third-party licensed intellectual property. The sales model for future LBE venues in development will rely on attraction ticket sales, retail, dining and merchandise revenue.
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In addition, in the future, certain of our construction timelines may be lengthened and/or require increased development costs due to competition for skilled construction labor and employees with relevant technical expertise, disruption in the supply chain for materials, increased costs for raw materials and supplies, rising inflation, the conflict between Russia and Ukraine and, more recently, the Israel-Hamas war; and these circumstances could continue or worsen in the future.
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We rely on a combination of patents, trademarks, copyrights, trade secrets, and registered domain names to protect our intellectual property rights and our success relies in part on our ability to protect our intellectual property rights and the intellectual property that we create for our clients.
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These agreements are reached after negotiations between unions, industry representatives and public administrators.
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We intend to offer our customers a fully-integrated service, from master planning immersive experiences to designing, sourcing, and installing rides to content development and optimization, all on our platform.
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The Company is not committed to provide any additional funding as of December 31, 2024. Any future capital fundings will be discretionary. For more information about the impairment charge with respect to Sierra Parima, see “ Item 7.
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Our consolidated financial statements have been prepared on a going concern basis, which contemplates the continuity of normal business activities and the realization of assets and the settlement of liabilities in the ordinary course of business.
Added
We are continuing to develop new product offerings and hire additional personnel, to expand using our franchise execution model within our FBB business, and to offer a fully integrated service on our platform in order to create seamless, large-scale projects with greater creative control and operational efficiency, offering a unique, turnkey experience to our customers.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Approximate Size Use Business Segment Higüey, la Altagracia, Dominican Republic 43,123 m 2 Owned Property for Katmandu Park* Falcon’s Beyond Destinations Arona, Tenerife (Spain) 21,260 m 2 Owned Property for Hotel Sol Tenerife* Falcon’s Beyond Destinations Calvià, Mallorca (Spain) 15,205 m 2 Owned Property Sol Katmandu Park and Resort* Falcon’s Beyond Destinations Calvià, Mallorca (Spain) 6,600 m 2 Leased Golf Course* Falcon’s Beyond Destinations Orlando, Florida (headquarters) 53,600 ft 2 Office Space Falcon’s Creative Group Orlando, Florida 16,000 ft 2 Leased Office Space Falcon’s Creative Group, Falcon’s Beyond Destinations, Falcon’s Beyond Brands Orlando, Florida 6,537 ft 2 Warehouse Falcon’s Creative Group Makati City, Manila (Philippines) 6,772 ft 2 Leased Office Space Falcon’s Creative Group * Owned through joint ventures
Biggest changeOur parks, hotels and other properties of the Company and its joint ventures are described under the section entitled “ Falcon’s Beyond Destinations .” The table below provides a brief description of other properties owned or leased by the Company and its joint ventures. 51 Location Approximate Size Use Business Segment Higüey, la Altagracia, Dominican Republic 43,123 m 2 Owned Property for Katmandu Park* Falcon’s Beyond Destinations Arona, Tenerife (Spain) 21,260 m 2 Owned Property for Hotel Sol Tenerife* Falcon’s Beyond Destinations Calvià, Mallorca (Spain) 15,205 m 2 Owned Property Sol Katmandu Park and Resort* Falcon’s Beyond Destinations Calvià, Mallorca (Spain) 6,600 m 2 Leased Golf Course* Falcon’s Beyond Destinations Orlando, Florida (headquarters) 53,600 ft 2 Office Space Falcon’s Creative Group Orlando, Florida 6,537 ft 2 Warehouse Falcon’s Creative Group Makati City, Manila (Philippines) 6,772 ft 2 Leased Office Space Falcon’s Creative Group * Owned through joint ventures Item 3.
Item 2. Properties Our corporate headquarters are located at 1768 Park Center Drive, Orlando, Florida, 32835, consisting of approximately 9.59 acres and a 53,600 square foot office building.
Item 2. Prope rties Our corporate headquarters are located at 1768 Park Center Drive, Orlando, Florida, 32835, consisting of approximately 9.59 acres and a 53,600 square foot office building.
Removed
Our parks, hotels and other properties of the Company and its joint ventures are described under the section entitled “ Falcon’s Beyond Destinations .” The table below provides a brief description of other properties owned or leased by the Company and its joint ventures.
Added
Legal Proceedings 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.
Added
On March 27, 2024, 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”).
Added
The Company has denied all liability in response to the Guggenheim Complaint. In addition, the Company has filed counterclaims against Guggenheim for fraudulent inducement, breach of contract, breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, negligence, fraudulent misrepresentation and negligent misrepresentation.
Added
Guggenheim has moved to dismiss the counterclaims, and the Company has opposed that motion. The case is in its early stages, discovery has commenced, and the Court has set a readiness for trial date for June 28, 2025.
Added
Solely as part of the Company’s accounting approach to transaction expenses related to the Business Combination, prior to the Company’s receipt of the Guggenheim Complaint, the Company accrued $11.1 million as of December 31, 2024 and 2023, with respect to the alleged amended engagement agreement with Guggenheim.
Added
The Company intends to vigorously defend itself against the claims alleged in the Guggenheim Complaint and contest the amounts Guggenheim asserts are owed. Item 4. Min e Safety Disclosures. Not applicable. 52

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 58 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 58 Item 6 [Reserved] 58 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 59 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 83 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 52 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 53 Item 6 [Reserved] 53 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 54
Removed
Financial Statements and Supplementary Data 83 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 84 Item 9A. Controls and Procedures 84 Item 9B. Other Information 86

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividends We have not paid any cash dividends on our shares of common stock to date. It is the present intention of the Board to retain all earnings, if any, for use in the Company’s business operations and, accordingly, the Board does not anticipate declaring any dividends in the foreseeable future.
Biggest changeIt is the present intention of the Board to retain all earnings, if any, for use in the Company’s business operations and, accordingly, the Board does not anticipate declaring any dividends in the foreseeable future. The payment of cash dividends in the future will be dependent upon our revenue and earnings, if any, capital requirements, and general financial condition.
Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities. Market Information Our Class A Common Stock and Warrants are currently listed on Nasdaq under the symbols “FBYD” and “FBYDW”, respectively. Trading of our Class A Common Stock and Warrants began on October 6, 2023.
Item 5. Ma rket for Common Equity, Related Stockh older Matters and Small Business Issuer Purchases of Equity Securities. Market Information Our Class A Common Stock and Warrants are currently listed on Nasdaq under the symbols “FBYD” and “FBYDW”, respectively. Trading of our Class A Common Stock and Warrants began on October 6, 2023.
Further, our ability to declare dividends may be limited by the terms of financing or other agreements entered into by us or our subsidiaries from time to time, including certain consent rights in connection with the Strategic Investment.
The payment of any cash dividends is within the discretion of the Board. Further, our ability to declare dividends may be limited by the terms of financing or other agreements entered into by us or our subsidiaries from time to time, including certain consent rights in connection with the Strategic Investment.
Holders As of April 23, 2024, there were 210 holders of record of our Class A Common Stock, four holders of record of our Class B Common Stock and one holder of record of our Warrants.
Holders As of April 1, 2025, there were 180 holders of record of our Class A Common Stock, 34 holders of record of our Class B Common Stock and one holder of record of our Warrants.
Recent Sales of Unregistered Securities All unregistered sales of equity securities during the covered period were disclosed on a Current Report on Form 8-K or a Quarterly Report on Form 10-Q.
Recent Sales of Unregistered Securities All unregistered sales of equity securities during the covered period were disclosed on a Current Report on Form 8-K or a Quarterly Report on Form 10-Q. Ite m 6. [Re served] 53 I tem 7. Management’s discussion and analysis of financial condition and results of operations.
Removed
The payment of cash dividends in the future will be dependent upon our revenue and earnings, if any, capital requirements, and general financial condition. The payment of any cash dividends is within the discretion of the Board.
Added
Dividends On September 30, 2024, the Board declared a Stock Dividend of 0.2 shares of Class A Common Stock per share of Class A Common Stock outstanding to stockholders of record as of December 10, 2024. The Stock Dividend was distributed on December 17, 2024. We have not paid any cash dividends on our shares of common stock to date.
Added
The following discussion and analysis of financial condition and results of operations of the Company is provided to supplement the audited consolidated financial statements and the accompanying notes of the Company as of and for the years ended December 31, 2024, and 2023, included elsewhere in this Annual Report.
Added
We intend for this discussion to provide the reader with information to assist in understanding the Company’s audited consolidated financial statements and the accompanying notes, the changes in those financial statements and the accompanying notes from period to period along with the primary factors that accounted for those changes.
Added
Certain information contained in this management’s discussion and analysis includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Please see “Cautionary Statement Regarding Forward-Looking Statements and Risk Factor Summary,” in this Annual Report.
Added
Overview of Business The Company operates at the intersection of three potential high-growth business opportunities: content, technology, and experiences. We create immersive entertainment experiences by designing theme parks, developing engaging content, and bringing brands to life through innovative storytelling and technology.
Added
We aim to engage, inspire, and entertain people through our creativity and innovation, and to connect people with brands, with each other, and with themselves through the combination of digital and physical experiences. At the core of our business is brand creation and optimization, facilitated by our multi-disciplinary creative teams.
Added
The Company has three business divisions, which are conducted through four and five operating segments as of December 31, 2024 and 2023, respectively.
Added
Our business divisions complement each other as we pursue our growth strategy: (i) the Company’s Falcon’s Creative Group division (“FCG”) creates master plans, designs attractions and experiential entertainment, and produces content, interactives and software; (ii) the Company’s Falcon’s Beyond Destinations division (“FBD”), consisting of Producciones de Parques, S.L., a joint venture between Falcon’s and Meliá Hotels International, S.A.
Added
(“Meliá”) (“PDP”), Sierra Parima S.A.S., a joint venture between Falcon’s and Meliá (“Sierra Parima”) (Sierra Parima’s Katmandu Park DR was closed to visitors on March 7, 2024), and Destinations Operations, develops a diverse range of entertainment experiences using both Falcon’s owned and third party licensed intellectual property, spanning location-based entertainment, dining, and retail; and (iii) the Company’s Falcon’s Beyond Brands division (“FBB”) endeavors to bring brands and intellectual property to life through animation, movies, licensing and merchandising, gaming, as well as ride and technology sales.
Added
We went public and listed our shares on Nasdaq on October 6, 2023, in connection with a Business Combination with FAST Acquisition Corp. II. Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”). All amounts are shown in thousands of U.S. dollars unless otherwise stated.
Added
The following reflects our results of operations for the years ended December 31, 2024 and 2023. Recent Developments Overview of FCG Since July 27, 2023, FCG has been deconsolidated and accounted for as an equity method investment in the Company’s consolidated financial statements. FCG generated a majority of the Company’s consolidated revenue and contract asset and liability balances.
Added
Any discussions related to results, operations, and accounting policies associated with FCG are referring to the periods prior to deconsolidation. After deconsolidation, as of July 27, 2023, FCG’s results of operations are included in the Company’s consolidated statements of operations and comprehensive income (loss) as a component of Share of loss from equity method investments.
Added
On July 27, 2023, pursuant to the Subscription Agreement (the “Subscription Agreement”) by and between FCG and QIC Delaware, Inc., a Delaware corporation and an affiliate of Qiddiya Investment Company (“QIC”), QIC agreed to invest $30.0 million in FCG (the “Strategic Investment”).
Added
On July 27, 2023, in connection with the Strategic Investment, FCG received a net closing payment from QIC of $17.5 million (net of $0.5 million in reimbursements).
Added
In addition, in March 2024, the Company established the Falcon’s Beyond Global, LLC Long-Term Incentive Plan, effective as of January 1, 2024 (the “Opco Incentive Plan”) to allow Falcon’s Opco to reward certain eligible employees of Falcon’s Opco and its subsidiaries, including FCG.
Added
As a result of establishing the Opco Incentive Plan, in April 2024, QIC released the remaining $12.0 million investment into FCG pursuant to the terms of the Subscription Agreement. These funds are to be used exclusively by FCG to fund its operations and growth and cannot be used to satisfy the commitments of other segments.
Added
Liquidity and Going Concern The Company has been engaged in expanding its operations through its equity method investments, developing new product offerings, raising capital and recruiting personnel. The Company has incurred a loss from operations, an accumulated deficit, and negative cash 54 flows from operating activities for the year ended December 31, 2024.
Added
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 consolidated financial statements.
Added
The Company’s development plans, and investments have been funded by a combination of debt and committed equity contributions from its stockholders, and the Company is reliant upon distributions from equity method investments, its stockholders and third parties for obtaining additional financing through debt or equity raises to fund its working capital needs, contractual commitments, and expansion plans.
Added
As of December 31, 2024, the Company has accrued material amounts of expenses in relation to its external advisors, accountants and legal costs in relation to the Business Combination. The Company has a working capital deficiency of $(31.3) million which excludes debt maturing in the next 12 months as of December 31, 2024.
Added
Additionally, the Company has $10.2 million in debt that is maturing in the next 12 months. The Company does not currently have sufficient cash or liquidity to pay liabilities that are owed or are maturing at this time and to fund ongoing operations.
Added
There can be no assurance that additional capital or financing raises, if completed, will provide the necessary funding for the next twelve months from the date of this Annual Report on Form 10-K.
Added
This Annual Report on Form 10-K 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.
Added
In April 2024, Falcon’s Opco entered into a term loan agreement with Katmandu Ventures, LLC (“Katmandu Ventures”), a greater than 10% shareholder of the Company, pursuant to which Katmandu Ventures made a loan to Falcon’s Opco in the principal amount of approximately $7.2 million, and a term loan agreement with Universal Kat Holdings, LLC (“Universal Kat”) pursuant to which Universal Kat has made a loan to Falcon’s Opco in the principal amount of approximately $1.3 million.
Added
Such term loans bear interest at a rate of 8.88% per annum, payable quarterly in arrears, with an original maturity of March 31, 2025. Approximately $5.4 million of the proceeds of the term loans was used to repay a portion of the outstanding loans under the Infinite Acquisitions revolving credit arrangement.
Added
On June 14, 2024, Universal Kat assigned its entire loan, and Katmandu Ventures assigned $6.3 million of its loan to FAST Sponsor II, LLC (“FAST II Sponsor”), in exchange for the sale of Class A shares of Falcon’s Opco held by FAST II Sponsor. Falcon’s Opco provided written consent of the assignment.
Added
This transfer was between FAST II Sponsor and Katmandu Ventures and Universal Kat, respectively. There were no additional changes to the loan agreement terms due to this reassignment.
Added
During 2024, Falcon's Opco entered into three loan amendments with Universal Kat and FAST II to amend the maturity date to February 28, 2025, increase the fixed interest rate after November 16, 2024 to 11.75%, and defer interest and principal payments within five business days after the earlier of Falcon's Opco receives: 1) cash proceeds of $10.0 million or more from a debt or equity transaction, or 2) a distribution of funds from PDP as a result of an asset sale transaction.
Added
If an asset sale transaction is not completed on or before January 31, 2025, the Company will pay $0.25 million, and if the asset sale is not completed on or before February 28, 2025, the Company will pay an additional $0.25 million.
Added
As of March 31, 2025, we have accrued interest and the additional $0.5 million payment and we are in negotiations to amend the loans. Prior to September 30, 2024, the Earnout Shares were classified as a liability and measured at fair value, with changes in fair value included in the consolidated statements of operations and comprehensive income (loss).
Added
On September 30, 2024, earnout participants agreed to forfeit all remaining earnout shares held in escrow, which were to be to be released and earned based on meeting earnings before interest, taxes, depreciation and amortization (“EBITDA”) and revenue targets.
Added
An aggregate of 437,500 shares of Class A common stock and 17,062,500 shares of Class B common stock and an equal number of Falcon’s Opco units were forfeited in connection with the earnout shares forfeiture. The forfeiture is treated as a modification of the original earnout agreement.
Added
The remaining earnout shares which are to be released and earned based on the Company’s stock price meet the requirements for equity classification after the modification. The Company adjusted the fair value of the earnout shares a final time on September 30, 2024, immediately prior to the modification.
Added
The total adjusted liability balance, including the amount associated with the forfeited earnout shares, was reclassified into equity on September 30, 2024. Prior to reclassification into equity, the fair value of the earnout liability was $250.1 million and $488.6 million as of September 30, 2024, and December 31, 2023, respectively.
Added
For the year ended December 31, 2024 and 2023, respectively, the Company recognized $172.3 million of income and $(345.4) million of loss related to the change in the fair value of earnout liabilities included in the consolidated statement of operations and comprehensive income (loss). After the reclassification to equity, the earnout shares do not require subsequent fair value measurement.
Added
See Note 16 – Fair value measurement in the Company’s audited consolidated financial statements for the activity related to the earnout liability during the year ended December 31, 2024. Factors that May Influence Future Results of Operations Our financial results of operations may not be comparable from period to period due to several factors.
Added
Key factors affecting the results of operations are summarized below. 55 Strategic Investment Our financial results are impacted by the Strategic Investment in FCG. As of July 27, 2023, the date the Company ceased to have a controlling financial interest, FCG was deconsolidated and accounted for as an equity method investment.
Added
Until the five-year anniversary of the Strategic Investment, (i) FCG may not make any distributions (except for tax distributions) to any of its members and (ii) FCG will reinvest all of its available cash to support the growth and capacity of FCG and its subsidiaries for any projects, products and purchase orders submitted by QIC to FCG and its subsidiaries.
Added
These limitations in the use of available cash restrict FCG’s ability to distribute cash to Falcon’s Opco and, in turn, Falcon’s Opco’s ability to distribute cash to the Company, which could have an adverse impact on the Company’s liquidity and ability to repay its outstanding loans.
Added
Equity Method Investments Our financial results are impacted by our 50% ownership of the equity interests in three of our unconsolidated joint ventures, PDP, Sierra Parima and Karnival. Additionally, starting from the deconsolidation of FCG on July 27, 2023, our financial results are impacted by our 75% ownership of FCG, as described further below.
Added
Prior to July 27, 2023, FCG’s results and balances were consolidated with the Company. Our four unconsolidated joint ventures are recognized as equity method investments.
Added
We have recognized $(3.1) million and $(52.4) million Share of loss from equity method investments, including our share of losses and impairments of the Sierra Parima joint venture of $(43.1) million in 2023, for the years ended December 31, 2024 and 2023, respectively. The Company has a 50% interest in Karnival, a joint venture established with Raging Power Limited.
Added
The purpose of the joint venture is to hold ownership interests in entities developing and operating amusement centers located in the People’s Republic of China. The first facility is under development in Hong Kong. For the year ended December 31, 2024, the Company's share of net income from Karnival remained consistent.
Added
The results of operations for Karnival are immaterial for the years ended December 31, 2024, and 2023. The carrying value of our investments and advances as of December 31, 2024, was comprised of approximately $25.0 million for FCG, $24.4 million for PDP, $7.1 million for Karnival and $0 million for Sierra Parima.
Added
The carrying value of our investments and advances as of December 31, 2023, was comprised of approximately $30.9 million for FCG, $22.9 million for PDP, $6.8 million for Karnival and $0 million for Sierra Parima.
Added
Timing of Current Projects and Future Geographic and Product Expansion Our financial results and liquidity needs vary from quarter-to-quarter or year-to-year depending on the timing of: • our signing of agreements with and related disbursement from our clients • FCG’s signing of agreements with and related disbursements from QIC • completion of our current projects • completion of Karnival’s Vquarium Entertainment Center • our contributions to our existing and new joint ventures • FBB’s strategic partnerships or alliances.
Added
Further, our success depends substantially on our ability to accurately predict and adapt to changing consumer tastes and preferences.
Added
Consumer tastes and preferences impact and will impact, among other items, revenues from affiliate fees, licensing fees and royalties, critical and commercial success of our planned animation, movies, and music offerings, theme park admissions, hotel room charges and merchandise, sales of licensed consumer products or sales of our other consumer products and services.
Added
Risks Associated with Future Results of Operations For additional information on the risks associated with future results of operations, please see Item 1A.
Added
Risk Factors of this Annual Report. 56 Components of Our Results of Operations Overall note regarding the deconsolidation of FCG The results of operations includes approximately seven months of activity related to FCG prior to deconsolidation during the year ended December 31, 2023.
Added
Prior to deconsolidation, FCG’s operations generated a majority of the Company’s consolidated revenue and contract asset and liability balances. Any discussions related to results, operations, and accounting policies associated with FCG refer to the periods prior to deconsolidation.
Added
After deconsolidation as of July 27, 2023, FCG’s results of operations are included in the Company’s consolidated statement of operations and comprehensive income (loss) as a component of Share of loss from equity method investments financial statements.
Added
See Deconsolidation of Falcon’s Creative Group LLC under Note 1 – Description of business and basis of presentation in the Company’s consolidated financial statements for further discussion. FCG’s separate consolidated financial statements included elsewhere in this Annual Report include FCG’s results for the full years ended December 31, 2024 and 2023, respectively.
Added
Revenue In our FCG segment, FCG generates revenue from master planning, attraction design, experiential entertainment, content production, interactives, and software. The Company’s retained investment in FCG is accounted for under the equity method and, subsequent to the deconsolidation of FCG on July 27, 2023, FCG revenue is no longer included in the results of operations.
Added
In our Destinations Operations segment, revenues may be generated through the management of resorts and theme parks and incentive fees. In our FBB segment, revenues were generated through the licensing of digital media for the year ended December 31, 2023.
Added
Project design and build expense Our Project design and build expenses primarily include project related direct wages, freelance labor, hardware, and software costs.
Added
Selling, general and administrative expense Our Selling, general and administrative expenses include payroll, payroll taxes and benefits for non-project related employee salaries, taxes, and benefits as well as technology infrastructure, marketing, occupancy, finance and accounting, legal, human resources, and corporate overhead expenses.
Added
Our Selling, general and administrative expenses include third-party accounting and legal costs related to the preparation of the Company becoming a public company upon the Closing of the Business Combination. Transaction expenses Transaction expenses are stated separately in the results of operations.
Added
Transaction expenses include professional services expenditures directly related to business combinations, other investments, and disposals of other assets and liabilities that qualify as a business. Credit loss expense Our credit loss expense includes expected credit loss reserve activity related to accounts receivable balances with our unconsolidated joint venture Sierra Parima.
Added
Research and development expense Much of our intellectual property has been developed and tested in-house. We have established a team to develop the full slate of software, hardware and systems that power our products, integrating product management, engineering, analytics, data science, and design.
Added
Research and development expenses primarily consist of internal labor involved in research and development activities primarily related to the development of new FBB products across a broad range of sectors (e.g., physical theme parks, ride systems, media content and consumer merchandise), as well as development of the new asset-efficient strategy in our FBD business.
Added
Research and development expenses are expensed in the period incurred. We expect expenses to increase in future periods as we continue to invest in research and development activities to achieve our operational and commercial goals. See “

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

150 edited+59 added−33 removed345 unchanged
Biggest changeFor instance, higher levels of indebtedness could: ● make it more difficult for us to satisfy our financial obligations; ● require us to dedicate a substantial portion of any cash flow from operations to service our indebtedness, which would reduce funds available for other business purposes, including capital expenditures and acquisitions; ● increase our vulnerability to adverse changes in general business, industry and economic conditions and to competitive pressures; ● limit our flexibility in planning for, or reacting to, changes in our business, competitive conditions or our industries; ● impair our ability to make investments or acquisitions, dispose of assets, pay cash dividends or redeem or repurchase shares; and/or ● limit our ability to refinance existing debt or to obtain additional financing required to fund working capital and other business needs, including capital requirements and acquisitions. 26 Our ability to service any future financial obligations will depend on our ability to generate significant cash flow from operations, which is partially subject to general economic, financial, competitive, legislative, regulatory and other factors beyond our control, and we cannot assure you that our business will generate cash flow from operations, or that we will be able to complete any necessary financings or refinancings, in amounts sufficient to enable us to fund our operations, engage in acquisitions, capital improvements or other development activities, pay our debts and other obligations and fund our other liquidity needs.
Biggest changeFor instance, higher levels of indebtedness could: • make it more difficult for us to satisfy our financial obligations; • require us to dedicate a substantial portion of any cash flow from operations to service our indebtedness, which would reduce funds available for other business purposes, including capital expenditures and acquisitions; • increase our vulnerability to adverse changes in general business, industry and economic conditions and to competitive pressures; • limit our flexibility in planning for, or reacting to, changes in our business, competitive conditions or our industries; • impair our ability to make investments or acquisitions, dispose of assets, pay cash dividends or redeem or repurchase shares; and/or • limit our ability to refinance existing debt or to obtain additional financing required to fund working capital and other business needs, including capital requirements and acquisitions.
Asserting a claim that a party illegally obtained and is using our trade secrets can be difficult, expensive, and time consuming, and the outcome is unpredictable. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.
Asserting a claim that a party illegally obtained and is using our trade secrets can be difficult, expensive, and time consuming, and the outcome is unpredictable. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights and our failure to obtain or maintain trade secret protection could adversely affect our competitive business position.
If any of such claims succeed or settle, we may be forced to pay damages or settlement payments on behalf of our customers, licensees, commercialization partners, or distributors and may be required to obtain licenses for such technology or products.
If any such claims succeed or settle, we may be forced to pay damages or settlement payments on behalf of our customers, licensees, commercialization partners, and/or distributors, and may be required to obtain licenses for such technology or products.
Risks inherent in operating in the Kingdom of Saudi Arabia include: ● complying with, and managing changes to, and developments in, Saudi Arabian laws and regulations, including price regulations and data privacy, changes in environmental regulations, forced divestment of assets, expropriation of property, cancellation or forced renegotiation of contract rights; ● protecting and defending intellectual property rights, as proceedings to enforce patent rights could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us, see “— Risks Related to our Intellectual Property — 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 ”; ● complying with the Saudi Arabian tax regime, including the possible imposition of new or increased withholding or other taxes or royalties on FCG’s earnings; ● the imposition of new, or changes to existing, transfer pricing regulations or the imposition of new restrictions on foreign trade or investment; ● complying with applicable anti-bribery, anti-corruption, economic sanctions, export control, anti-terrorism and anti-money laundering laws, see “— Risks Related to Regulatory, Tax, Legal and Compliance Matters — We could be exposed to liabilities under the FCPA and other anti-corruption laws and regulations, including non-U.S. laws, which could have a material adverse impact on us ”; ● adverse changes in economic and trade sanctions, export controls and national security measures resulting in business disruptions, including delays or denials of import or export licenses or blocked or rejected financial transactions; ● regional conflicts and escalating geopolitical tensions in the Middle East, including with Iran and armed groups supported by the Iranian government, and the potential future involvement of the Kingdom of Saudi Arabia in such conflicts; ● geopolitical instability and uncertainty in the Kingdom of Saudi Arabia, resulting from government or military regime change, civil unrest or terrorism, including the failure to negotiate a cease fire and withdrawal from Yemen; ● changes in the Kingdom of Saudi Arabia’s policy of pegging the Saudi Riyal (“SAR”) to the U.S. dollar; ● difficulties in managing and staffing international operations; and ● conducting business through a number of subsidiaries, joint operations and joint ventures and challenges implementing the Company’s policies and procedures in such entities.
Risks inherent in operating in the Kingdom of Saudi Arabia include: • complying with, and managing changes to, and developments in, Saudi Arabian laws and regulations, including price regulations and data privacy, changes in environmental regulations, forced divestment of assets, expropriation of property, cancellation or forced renegotiation of contract rights; 24 • protecting and defending intellectual property rights, as proceedings to enforce patent rights could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us, see “— Risks Related to our Intellectual Property — 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 ”; complying with the Saudi Arabian tax regime, including the possible imposition of new or increased withholding or other taxes or royalties on FCG’s earnings; • the imposition of new, or changes to existing, transfer pricing regulations or the imposition of new restrictions on foreign trade or investment; • complying with applicable anti-bribery, anti-corruption, economic sanctions, export control, anti-terrorism and anti-money laundering laws, see “— Risks Related to Regulatory, Tax, Legal and Compliance Matters — We could be exposed to liabilities under the FCPA and other anti-corruption laws and regulations, including non-U.S. laws, which could have a material adverse impact on us ”; • adverse changes in economic and trade sanctions, export controls and national security measures resulting in business disruptions, including delays or denials of import or export licenses or blocked or rejected financial transactions; • regional conflicts and escalating geopolitical tensions in the Middle East, including with Iran and armed groups supported by the Iranian government, and the potential future involvement of the Kingdom of Saudi Arabia in such conflicts; • geopolitical instability and uncertainty in the Kingdom of Saudi Arabia, resulting from government or military regime change, civil unrest or terrorism, including the failure to negotiate a cease fire and withdrawal from Yemen; • changes in the Kingdom of Saudi Arabia’s policy of pegging the Saudi Riyal (“SAR”) to the U.S. dollar; • difficulties in managing and staffing international operations; and • conducting business through a number of subsidiaries, joint operations and joint ventures and challenges implementing the Company’s policies and procedures in such entities.
Among other things, the Charter and Bylaws include provisions that: ● provide for a classified board of directors with staggered, three-year terms; ● permit the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquire; ● prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; 54 ● limit the liability of, and provide for the indemnification of, our directors and officers; ● permit the Board to amend the Bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; ● require a supermajority vote of stockholders to amend certain provisions of the Charter and a supermajority vote of stockholders in order to amend the Bylaws; ● limit our ability to engage in business combinations with certain interested stockholders without certain approvals; ● permit only the Board, the chief executive officer of the Company or the chairperson of the Board to call special stockholder meetings; provided, that for so long as the holders of Class B Common Stock beneficially own, directly or indirectly, a majority of the total voting power of stock entitled to vote generally in election of directors, special meetings of stockholders may also be called by or at the request of our stockholders holding shares of capital stock of the Company representing a majority of the total voting power of stock entitled to vote generally in election of directors; and ● mandate advance notice procedures with which stockholders must comply in order to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.
Among other things, the Charter and Bylaws include provisions that: • provide for a classified board of directors with staggered, three-year terms; • permit the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquire; • prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • limit the liability of, and provide for the indemnification of, our directors and officers; • permit the Board to amend the Bylaws, which may allow the Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the Bylaws to facilitate an unsolicited takeover attempt; • require a supermajority vote of stockholders to amend certain provisions of the Charter and a supermajority vote of stockholders in order to amend the Bylaws; • limit our ability to engage in business combinations with certain interested stockholders without certain approvals; • permit only the Board, the chief executive officer of the Company or the chairperson of the Board to call special stockholder meetings; provided, that for so long as the holders of Class B Common Stock beneficially own, directly or indirectly, a majority of the total voting power of stock entitled to vote generally in election of directors, special meetings of stockholders may also be called by or at the request of our stockholders holding shares of capital stock of the Company representing a majority of the total voting power of stock entitled to vote generally in election of directors; and • mandate advance notice procedures with which stockholders must comply in order to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.
In addition, acquisitions may expose us to operational challenges and risks, including: ● the ability to profitably manage acquired businesses or successfully integrate the acquired businesses’ operations, personnel, financial reporting, accounting and internal controls, technologies and products into the Company’s business; ● increased indebtedness and the expense of integrating acquired businesses, including significant administrative, operational, economic, geographic or cultural challenges in managing and integrating the expanded or combined operations; ● entry into jurisdictions or acquisition of products or technologies with which we have limited or no prior experience, and the potential of increased competition with new or existing competitors as a result of such acquisitions; ● diversion of management’s attention and the over-extension of our operating infrastructure and our management systems, information technology systems, and internal controls and procedures, which may be inadequate to support growth; ● the ability to fund our capital needs and any cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal difficulties; and ● the ability to retain or hire qualified personnel required for expanded operations.
In addition, acquisitions may expose us to operational challenges and risks, including: • the ability to profitably manage acquired businesses or successfully integrate the acquired businesses’ operations, personnel, financial reporting, accounting and internal controls, technologies and products into the Company’s business; • increased indebtedness and the expense of integrating acquired businesses, including significant administrative, operational, economic, geographic or cultural challenges in managing and integrating the expanded or combined operations; 23 • entry into jurisdictions or acquisition of products or technologies with which we have limited or no prior experience, and the potential of increased competition with new or existing competitors as a result of such acquisitions; • diversion of management’s attention and the over-extension of our operating infrastructure and our management systems, information technology systems, and internal controls and procedures, which may be inadequate to support growth; • the ability to fund our capital needs and any cash flow shortages that may occur if anticipated revenue is not realized or is delayed, whether by general economic or market conditions, or unforeseen internal difficulties; and • the ability to retain or hire qualified personnel required for expanded operations.
Moreover, the Tax Receivable Agreement provides that, in certain events, including among other things, a change of control or the Company’s exercise of early termination rights, the Company’s obligations, or its successor’s obligations, under the Tax Receivable Agreement to make payments thereunder would accelerate and become due and payable, based on certain assumptions, including an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement, and an assumption that, as of the effective date of the acceleration, any unitholder that has New Falcon’s Opco Units not yet exchanged shall be deemed to have exchanged such New Falcon’s Opco Units on such date, even if the Company does not receive (if at all) the corresponding tax benefits until a later date when the New Falcon’s Opco Units are actually exchanged.
Moreover, the Tax Receivable Agreement provides that, in certain events, including among other things, a change of control or the Company’s exercise of early termination rights, the Company’s obligations, or its successor’s obligations, under the Tax Receivable Agreement to make payments thereunder would accelerate and become due and payable, based on certain assumptions, including an assumption that the Company would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivable Agreement, and an assumption that, as of the effective date of the acceleration, any unitholder that has Falcon’s Opco Units not yet exchanged shall be deemed to have exchanged such Falcon’s Opco Units on such date, even if the Company does not receive (if at all) the corresponding tax benefits until a later date when the Falcon’s Opco Units are actually exchanged.
As a result of (i) potential differences in the amount of net taxable income allocable to the Company and to Falcon’s Opco’s other equityholders, (ii) the lower tax rates currently applicable to corporations as opposed to individuals, and (iii) the favorable tax benefits that the Company anticipates from any redemptions or exchanges of New Falcon’s Opco Units for Class A Common Stock or cash pursuant to the A&R Operating Agreement in the future, tax distributions payable to the Company may be in amounts that exceed its actual tax liabilities with respect to the relevant taxable year, including its obligations under the Tax Receivable Agreement.
As a result of (i) potential differences in the amount of net taxable income allocable to the Company and to Falcon’s Opco’s other equityholders, (ii) the lower tax rates currently applicable to corporations as opposed to individuals, and (iii) the favorable tax benefits that the Company anticipates from any redemptions or exchanges of Falcon’s Opco Units for Class A Common Stock or cash pursuant to the A&R Operating Agreement in the future, tax distributions payable to the Company may be in amounts that exceed its actual tax liabilities with respect to the relevant taxable year, including its obligations under the Tax Receivable Agreement.
In the event that the Pubco Board Right is not permissible under applicable law or the rules of the principal national securities exchange on which Falcon’s is listed, Falcon’s Opco is required to use reasonable best efforts to obtain all necessary approvals and satisfy other requirements under such laws and rules to provide the Pubco Board Right and, if despite using such reasonable best efforts, such laws or rules prohibit the provision of the Pubco Board Right, then Falcon’s Opco must reasonably cooperate with QIC to provide QIC with alternative rights that comply with such law and rules and that are as comparable to the Pubco Board Right as may be reasonably practicable.
In the event that the Pubco Board Right is not permissible under applicable law or the rules of the principal 22 national securities exchange on which Falcon’s is listed, Falcon’s Opco is required to use reasonable best efforts to obtain all necessary approvals and satisfy other requirements under such laws and rules to provide the Pubco Board Right and, if despite using such reasonable best efforts, such laws or rules prohibit the provision of the Pubco Board Right, then Falcon’s Opco must reasonably cooperate with QIC to provide QIC with alternative rights that comply with such law and rules and that are as comparable to the Pubco Board Right as may be reasonably practicable.
Under the Tax Receivable Agreement, the Company generally are required to make cash payments to the Company’s unitholders equal to 85% of the tax benefits, if any, that the Company actually realizes, or in certain circumstances is deemed to realize, as a result of (1) the increases in the tax basis of assets of Falcon’s Opco resulting from any future redemptions or exchanges of New Falcon’s Opco Units for Class A Common Stock or cash by the Company’s unitholders pursuant to the A&R Operating Agreement and (2) certain other tax benefits arising from payments under the Tax Receivable Agreement.
Under the Tax Receivable Agreement, the Company generally are required to make cash payments to the Company’s unitholders equal to 85% of the tax benefits, if any, that the Company actually realizes, or in certain circumstances is deemed to realize, as a result of (1) the increases in the tax basis of assets of Falcon’s Opco resulting from any future redemptions or exchanges of Falcon’s Opco Units for Class A Common Stock or cash by the Company’s unitholders pursuant to the A&R Operating Agreement and (2) certain other tax benefits arising from payments under the Tax Receivable Agreement.
We rely on the intellectual property laws of the United States and other relevant jurisdictions, as well as third-party policies and procedures governing internet/domain name registrations, licensing agreements, confidentiality and non-disclosure agreements, and other contractual protections to safeguard our intellectual property assets. However, even in territories like the United States, such legal frameworks may be insufficient to address modern realities.
We rely on the intellectual property laws of the United States and other relevant jurisdictions, as well as third-party policies and procedures governing domain name registrations, licensing agreements, confidentiality and non-disclosure agreements, and other contractual protections to safeguard our intellectual property assets. However, even in territories like the United States, such legal frameworks may be insufficient to address modern realities.
Additionally, an interference proceeding may be initiated by a third-party or the United States Patent and Trademark Office (“USPTO”) to determine who was the first to invent any invention covered by our U.S. patents and patent applications that have a filing date pre-dating March 16, 2013 (the date when U.S. patent law changed from a first-to-invent to a first-to-file system).
Additionally, an interference proceeding may be initiated by a third-party or the United States Patent and Trademark Office to determine who was the first to invent any invention covered by our U.S. patents and patent applications that have a filing date pre-dating March 16, 2013 (the date when U.S. patent law changed from a first-to-invent to a first-to-file system).
Our FCG division is frequently contracted by international customers to provide its master planning and design services in locations outside the United States. For example, we have contracted to provide full service master planning for five theme park projects, as well as the potential additional expansion work, for third-party clients in the Kingdom of Saudi Arabia.
Our FCG division is frequently contracted by international customers to provide its master planning and design services in locations outside the United States. For example, we have been contracted to provide full service master planning for five theme park projects, as well as the potential additional expansion work, for third-party clients in the Kingdom of Saudi Arabia.
Our FBD joint ventures with Meliá leverage Meliá’s operational expertise, management services, infrastructure, local knowledge and corporate priorities. As such, any damage to Meliá’s financial condition or change in its corporate priorities could negatively impact the Company. Our participation in the joint ventures with Meliá also exposes us to liability and reputational harm resulting from improper actions of Meliá.
Our FBD joint ventures with Meliá leverage Meliá’s operational expertise, management services, infrastructure, local knowledge and corporate priorities. As such, any damage to Meliá’s financial condition or change in its corporate priorities could negatively 27 impact the Company. Our participation in the joint ventures with Meliá also exposes us to liability and reputational harm resulting from improper actions of Meliá.
Insurance we obtain may not cover losses or damages associated with such attacks or events. Cyber-attacks could have a disruptive effect on our business. Implementing our strategies to pursue new initiatives that improve our operations and cost structure will result in a larger technological presence and corresponding exposure to cybersecurity risk.
Insurance we obtain may not cover losses or damages associated with such attacks or events. 34 Cyber-attacks could have a disruptive effect on our business. Implementing our strategies to pursue new initiatives that improve our operations and cost structure will result in a larger technological presence and corresponding exposure to cybersecurity risk.
Further, any failure of our joint venture partners to meet their obligations to us, the joint venture entity or to third parties, or any disputes with respect to the parties’ respective rights and obligations, could have a material adverse effect on the joint ventures or their properties and, in turn, could have a material adverse effect on our business, financial position, results of operations, cash flows and prospects.
Further, any failure of our joint venture partners to meet their obligations to us, the joint venture entity or to third parties, or any disputes with respect 28 to the parties’ respective rights and obligations, could have a material adverse effect on the joint ventures or their properties and, in turn, could have a material adverse effect on our business, financial position, results of operations, cash flows and prospects.
The foregoing technology systems and our usages thereof are vulnerable to damage and disruption from circumstances beyond our control, including fire, natural disasters, power outages, system and equipment failures, global or regional outages, viruses, software supplier chain dependency vulnerabilities, malicious attacks, security breaches, theft, and inadvertent release of information.
The foregoing technology systems and our usages thereof are vulnerable to damage and disruption from 33 circumstances beyond our control, including fire, natural disasters, power outages, system and equipment failures, global or regional outages, viruses, software supplier chain dependency vulnerabilities, malicious attacks, security breaches, theft, and inadvertent release of information.
In order to protect our proprietary technology, we rely in part on confidentiality and other agreements with our employees, independent contractors, and other third parties. Such agreements may not prevent, or provide an adequate remedy for, the unauthorized use or disclosure of our confidential information. Third parties may independently discover or reverse engineer our trade secrets and proprietary information.
In order to protect our proprietary technology, we rely in part on confidentiality undertakings and other agreements with our employees, independent contractors, and other third parties. Such agreements may not prevent, or provide an adequate remedy for, the unauthorized use or disclosure of our confidential information. Third parties may independently discover or reverse engineer our trade secrets and proprietary information.
Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could cause us to fail to meet our reporting obligations, result in a restatement of our financial statements for prior periods, undermine investor confidence in us, and adversely affect the trading price of our Class A Common Stock.
Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could cause us to fail to meet our reporting obligations, result in a restatement of our financial statements for prior periods, undermine investor confidence in us, 43 and adversely affect the trading price of our Class A Common Stock.
A “publicly traded partnership” is a partnership the interests of which are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. Under certain circumstances, exchanges or other transfers of New Falcon’s Opco Units could cause Falcon’s Opco to be treated as a publicly traded partnership. Applicable U.S.
A “publicly traded partnership” is a partnership the interests of which are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. Under certain circumstances, exchanges or other transfers of Falcon’s Opco Units could cause Falcon’s Opco to be treated as a publicly traded partnership. Applicable U.S.
The FCG A&R LLCA was amended on March 18, 2024 to provide QIC with additional consent rights over incentive bonuses. 19 Under the FCG A&R LLCA, for so long as QIC holds at least 25% of the preferred units in FCG LLC it subscribed for in connection with the Strategic Investment: ● QIC’s consent is required to approve certain of FCG LLC’s and its subsidiaries’ activities, including, but not limited to: ● the issuance of equity securities; ● the payment or declaration of dividends; ● the approval of a project that, individually or in the aggregate, would interfere with the QIC Priority Commitment (as defined below); ● entering into affiliate transactions; ● the granting of any exclusive license to material intellectual property or the abandonment or allowing the lapse of any material intellectual property; ● any amendment to the FCG A&R LLCA; ● changing in a material way FCG LLC’s or any of its subsidiaries’ business strategy, including entering into a new line of business or discontinuing any material line of business; ● effecting any investment, acquisition, joint venture, strategic partnership or similar arrangement, in each case, in which such transaction or series of related transactions has an aggregate transaction value in excess of $1.0 million over the course of any calendar year; ● changing materially the remuneration (including equity awards) of, or terminating (other than for cause), any executive or the head of any organizational division of FCG LLC or its subsidiaries; ● the purchase or redemption of any units or other equity securities of FCG LLC or its subsidiaries, except for units issued in connection with an employee equity incentive plan or in accordance with the redemption provisions of the FCG A&R LLCA; ● the sale of any division or other material assets of FCG LLC or its subsidiaries in excess of $1.0 million per transaction or series of related transactions; ● entering into any merger, consolidation, share exchange, restructuring, recapitalization, reorganization, or other business combination or Change of Control (as defined below) transaction (except a change of control transaction, liquidity event, sale of all or substantially all the assets or similar transaction involving the Company); ● granting any benefits (other than health and welfare benefits consistent with past practices), payments or equity-based compensation to any employee or other service provider that provides services primarily for the benefit of FCG LLC or its subsidiaries with the exception of the equity awards granted by Falcon’s Opco in the fourth quarter of 2023; ● the incurrence of any indebtedness for borrowed money in excess of $1.0 million; 20 ● the approval, amendment or deviation from or alteration of the budget and business plan of FCG LLC, in each case, unless approved by the board of FCG LLC (including the QIC Manager (as defined below)); ● the exercise of termination rights, entering into any amendment or statement of work, or granting of any consent or approval that would reasonably be expected to modify the scope of services provided or price under the Intercompany Services Agreement (as defined below); ● the commencement of or the agreement to commence an initial public offering provided, however, that this provision does not apply to Falcon’s Opco or prevent Falcon’s Opco or its affiliates (other than FCG LLC and its subsidiaries) from effectuating an initial public offering or a transaction with a special purpose acquisition company; ● the termination (other than for cause) or material change to the service relationship of any service provider in a manner that is, or could be reasonably expected to, interfere with or adversely affect the QIC Priority Commitment; ● the creation, or the authorization of the creation, of any class or series of units or other equity of FCG LLC (including by re-authorization, reclassification, alteration or amendment of any existing securities of FCG LLC or otherwise) that are senior or pari passu to the preferred units or that provide any unique governance rights relative to that of the common units, including any security or debt convertible into or exercisable for any equity security of FCG LLC; ● entering into any agreement under which any of FCG LLC or its subsidiaries agrees not to (x) compete in any material product or service line or territory or (y) assert any material intellectual property rights, including by entering into any covenant not to sue or any co-existence, settlement or similar agreement; ● (A) the commencement of a voluntary case under any applicable bankruptcy, insolvency or similar law; (B) consenting to the entry of any order for relief in an involuntary case under any such law; (C) consenting to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of any substantial part of its property or assets of FCG LLC; (D) making a general assignment for the benefit of creditors; or (E) winding down, dissolving or liquidating FCG LLC; ● increasing or decreasing the number of managers on the board of managers of FCG LLC; and ● the adoption or modification of any tax election or tax or accounting practice or policy that would have a material and disproportionate impact on QIC as compared to the Company. ● Falcon’s Opco shall not, and shall cause the Company not to, without QIC’s consent, issue any equity securities (or securities or debt convertible into or exercisable for equity securities) of Falcon’s Opco or the Company to any Restricted Person (as defined below) other than in a bona fide, broadly distributed underwritten offering, “at-the-market offering” or a “block trade”; establish or amend any equity incentive plan of Falcon’s Opco or the Company under which the service providers that provide services primarily for the benefit of FCG LLC and its subsidiaries participate; grant equity or equity based compensation with a vesting period of less than three years to any C-Suite level executive of Falcon’s Opco or the Company that provides services to FCG LLC or its subsidiaries; exercise termination rights, enter into any amendment or statement of work, or grant any consent or approval that would reasonably be expected to modify the scope of services provided or price under the Intercompany Services Agreement; or terminate (other than for cause) or make any material change to the service relationship of any service provider in a manner that is, or could be reasonably expected to, interfere with or adversely affect the QIC Priority Commitment.
Under the FCG A&R LLCA, for so long as QIC holds at least 25% of the preferred units in FCG LLC it subscribed for in connection with the Strategic Investment: • QIC’s consent is required to approve certain of FCG LLC’s and its subsidiaries’ activities, including, but not limited to: • the issuance of equity securities; • the payment or declaration of dividends; • the approval of a project that, individually or in the aggregate, would interfere with the QIC Priority Commitment (as defined below); • entering into affiliate transactions; • the granting of any exclusive license to material intellectual property or the abandonment or allowing the lapse of any material intellectual property; • any amendment to the FCG A&R LLCA; • changing in a material way FCG LLC’s or any of its subsidiaries’ business strategy, including entering into a new line of business or discontinuing any material line of business; • effecting any investment, acquisition, joint venture, strategic partnership or similar arrangement, in each case, in which such transaction or series of related transactions has an aggregate transaction value in excess of $1.0 million over the course of any calendar year; • changing materially the remuneration (including equity awards) of, or terminating (other than for cause), any executive or the head of any organizational division of FCG LLC or its subsidiaries; • the purchase or redemption of any units or other equity securities of FCG LLC or its subsidiaries, except for units issued in connection with an employee equity incentive plan or in accordance with the redemption provisions of the FCG A&R LLCA; • the sale of any division or other material assets of FCG LLC or its subsidiaries in excess of $1.0 million per transaction or series of related transactions; • entering into any merger, consolidation, share exchange, restructuring, recapitalization, reorganization, or other business combination or Change of Control (as defined below) transaction (except a change of control transaction, liquidity event, sale of all or substantially all the assets or similar transaction involving the Company); • granting any benefits (other than health and welfare benefits consistent with past practices), payments or equity-based compensation to any employee or other service provider that provides services primarily for the benefit of FCG LLC or its subsidiaries with the exception of the equity awards granted by Falcon’s Opco in the fourth quarter of 2023; • the incurrence of any indebtedness for borrowed money in excess of $1.0 million; 20 • the approval, amendment or deviation from or alteration of the budget and business plan of FCG LLC, in each case, unless approved by the board of FCG LLC (including the QIC Manager (as defined below)); • the exercise of termination rights, entering into any amendment or statement of work, or granting of any consent or approval that would reasonably be expected to modify the scope of services provided or price under the Intercompany Services Agreement (as defined below); • the commencement of or the agreement to commence an initial public offering provided, however, that this provision does not apply to Falcon’s Opco or prevent Falcon’s Opco or its affiliates (other than FCG LLC and its subsidiaries) from effectuating an initial public offering or a transaction with a special purpose acquisition company; • the termination (other than for cause) or material change to the service relationship of any service provider in a manner that is, or could be reasonably expected to, interfere with or adversely affect the QIC Priority Commitment; • the creation, or the authorization of the creation, of any class or series of units or other equity of FCG LLC (including by re-authorization, reclassification, alteration or amendment of any existing securities of FCG LLC or otherwise) that are senior or pari passu to the preferred units or that provide any unique governance rights relative to that of the common units, including any security or debt convertible into or exercisable for any equity security of FCG LLC; • entering into any agreement under which any of FCG LLC or its subsidiaries agrees not to (x) compete in any material product or service line or territory or (y) assert any material intellectual property rights, including by entering into any covenant not to sue or any co-existence, settlement or similar agreement; • (A) the commencement of a voluntary case under any applicable bankruptcy, insolvency or similar law; (B) consenting to the entry of any order for relief in an involuntary case under any such law; (C) consenting to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of any substantial part of its property or assets of FCG LLC; (D) making a general assignment for the benefit of creditors; or (E) winding down, dissolving or liquidating FCG LLC; • increasing or decreasing the number of managers on the board of managers of FCG LLC; and • the adoption or modification of any tax election or tax or accounting practice or policy that would have a material and disproportionate impact on QIC as compared to the Company. • Falcon’s Opco shall not, and shall cause the Company not to, without QIC’s consent, issue any equity securities (or securities or debt convertible into or exercisable for equity securities) of Falcon’s Opco or the Company to any Restricted Person (as defined below) other than in a bona fide, broadly distributed underwritten offering, “at-the-market offering” or a “block trade”; establish or amend any equity incentive plan of Falcon’s Opco or the Company under which the service providers that provide services primarily for the benefit of FCG LLC and its subsidiaries participate; grant equity or equity based compensation with a vesting period of less than three years to any C-Suite level executive of Falcon’s Opco or the Company that provides services to FCG LLC or its subsidiaries; exercise termination rights, enter into any amendment or statement of work, or grant any consent or approval that would reasonably be expected to modify the scope of services provided or price under the Intercompany Services Agreement; or terminate (other than for cause) or make any material change to the service relationship of any service provider in a manner that is, or could be reasonably expected to, interfere with or adversely affect the QIC Priority Commitment.
If FCG is unable to provide efficient services globally at scale, our ability to grow FCG’s operations may be harmed, and FCG may need to hire additional services personnel, which could negatively impact our business, financial condition, and results of operations. 18 FCG’s customers typically need training in the proper use of our technologies.
If FCG is unable to provide efficient services globally at scale, our ability to grow FCG’s operations may be harmed, and FCG may need to hire additional services personnel, which could negatively impact our business, financial condition, and results of operations. FCG’s customers typically need training in the proper use of our technologies.
Operating in the Kingdom of Saudi Arabia requires significant management attention and resources. The occurrence of any of these risks may be burdensome and could have a material adverse effect on our business, financial position, results of operations and reputation. 25 Damage to our reputation or brands may negatively impact our company.
Operating in the Kingdom of Saudi Arabia requires significant management attention and resources. The occurrence of any of these risks may be burdensome and could have a material adverse effect on our business, financial position, results of operations and reputation. Damage to our reputation or brands may negatively impact our company.
The business of owning and managing hotels and theme parks, particularly those located on coastal properties, is subject to a number of risks, hazards, adverse environmental conditions, labor disputes, changes in the regulatory environment and natural phenomena such as floods, hurricanes, wildfires, earthquakes and earth movements.
The business of owning and managing hotels and theme parks, particularly those located on coastal properties, is subject to a number of risks, hazards, adverse environmental conditions, labor disputes, changes in the regulatory environment and natural phenomena such as 35 floods, hurricanes, wildfires, earthquakes and earth movements.
To the extent the Company does not distribute such excess cash as dividends on its stock, it may take other actions with respect to such excess cash — for example, holding such excess cash or lending it (or a portion thereof) to Falcon’s Opco, which may result in shares of its stock increasing in value relative to the value of the New Falcon’s Opco Units.
To the extent the Company does not distribute such excess cash as dividends on its stock, it may take other actions with respect to such excess cash — for example, holding such excess cash or lending it (or a portion thereof) to Falcon’s Opco, which may result in shares of its stock increasing in value relative to the value of the Falcon’s Opco Units.
The new business lines that we pursue for FBB may not perform as well as expected, may not achieve profitability, may incur significant or unexpected time and expense, and may expose us to additional liability, which may result in financial or reputational harm to our or third party brands.
The new business lines that we pursue for FBB may not perform as well as expected, may not achieve profitability, may incur significant or unexpected time and expense, and may expose us to additional liability, which may result in 26 financial or reputational harm to our or third-party brands.
Under the terms of our joint venture agreements with Meliá and Raging Power, and any joint venture agreements we may enter with future joint venture partners, we may be required to contribute certain funds and assets to our joint venture entities, obtain or provide certain permits, licenses or other authorizations, provide certain fiscal indemnification to our joint venture entities and meet various other terms and conditions.
Under the terms of our joint venture agreements with Meliá and Raging Power, and any joint venture agreements we may enter with future joint venture partners, we may be required t1o contribute certain funds and assets to our joint venture entities, obtain or provide certain permits, licenses or other authorizations, provide certain fiscal indemnification to our joint venture entities and meet various other terms and conditions.
To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. 50 We have incurred, and will continue to incur, significant costs as a result of operating as a public company.
To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible. We have incurred, and will continue to incur, significant costs as a result of operating as a public company.
In addition, the cost of insurance against these types of events has increased in recent years. In addition, changes in applicable legislation and regulation on climate change could result in increased capital expenditures, such as a result of changes in building codes or requirements to improve the energy efficiency of the properties.
In addition, the cost of insurance against these types of events has increased in recent years. 32 In addition, changes in applicable legislation and regulation on climate change could result in increased capital expenditures, such as a result of changes in building codes or requirements to improve the energy efficiency of the properties.
In addition, the Inflation Reduction Act of 2022 enacted on August 16, 2022, among other provisions, imposes a 15% minimum tax on the adjusted financial statement income of certain large corporations, as well as a 1% excise tax on corporate stock repurchases by publicly traded companies.
In addition, the Inflation Reduction Act of 2022 enacted on August 16, 2022, among other provisions, imposes a 15% minimum tax on the adjusted financial statement income of certain large corporations, as well as a 1% excise tax on corporate stock repurchases by domestic publicly traded companies.
For example, most losses related to impacts of COVID-19 were not and will not be covered by insurance. 38 Exchange rate fluctuations could result in significant foreign currency gains and losses and may adversely affect our business and operating results and financial conditions.
For example, most losses related to impacts of COVID-19 were not and will not be covered by insurance. Exchange rate fluctuations could result in significant foreign currency gains and losses and may adversely affect our business and operating results and financial conditions.
As a result, changes in foreign exchange rates would affect the amounts we record for our assets, liabilities, revenues and expenses with respect to Karnival and such potential FCG international customers, and could have a negative effect on our financial results.
As a result, changes in foreign exchange rates would affect the amounts we record for our assets, liabilities, revenues and expenses with respect to Karnival, PDP, and such potential FCG international customers, and could have a negative effect on our financial results.
An accident or injury at any of our FBD resorts (including falls in or around the resorts’ facilities or sickness from food or beverages consumed at the resorts) or at resorts owned by our competitors could similarly adversely impact our brand and reputation, in turn adversely impact our results of operations.
An accident or injury at any of our FBD resorts (including falls in or around the resorts’ facilities or sickness from food or beverages consumed at the resorts) or at resorts owned by our competitors could similarly 25 adversely impact our brand and reputation, in turn adversely impact our results of operations.
However, cybersecurity threats are constantly evolving, and there can be no guarantee that a future cybersecurity event will not occur. 37 In addition, the implementation, maintenance, segregation and improvement of these systems requires significant management time, support and cost.
However, cybersecurity threats are constantly evolving, and there can be no guarantee that a future cybersecurity event will not occur. In addition, the implementation, maintenance, segregation and improvement of these systems requires significant management time, support and cost.
For products or services that utilize the intellectual property of strategic collaborators, brand partners or other suppliers, such suppliers may have an obligation to secure the licenses to such patents at their own cost, and if not, we would be responsible for the cost of such licenses.
For products or services that utilize the intellectual property of strategic collaborators, brand partners or other suppliers, such suppliers may have an obligation to secure the licenses to such patents at their own cost, and if not, we may be responsible for the cost of such licenses.
See “— United States or international environmental laws and regulations may cause us to incur substantial costs or subject us to potential liabilities. ” Our operations outside the United States may be adversely affected by the operation of laws in those jurisdictions.
See “— United States or international environmental laws and regulations may cause us to incur substantial costs or subject us to potential liabilities. ” 38 Our operations outside the United States may be adversely affected by the operation of laws in those jurisdictions.
Treasury regulations provide for certain safe harbors from treatment as a publicly traded partnership, and the Company and Falcon’s Opco intend to operate such that exchanges or other transfers of New Falcon’s Opco Units qualify for one or more such safe harbors.
Treasury regulations provide for certain safe harbors from treatment as a publicly traded partnership, and the Company and Falcon’s Opco intend to operate such that exchanges or other transfers of Falcon’s Opco Units qualify for one or more such safe harbors.
If Nasdaq delists our securities from trading on its exchange for failure to meet the listing standards, the Company and its stockholders could face significant material adverse consequences including: ● a limited availability of market quotations for our securities; ● a determination that our Class A Common Stock are a “penny stock,” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our Class A Common Stock; ● a limited amount of analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
If Nasdaq delists our securities from trading on its exchange for failure to meet the listing standards, the Company and its stockholders could face significant material adverse consequences including: • a limited availability of market quotations for our securities; • a determination that our Class A Common Stock is a “penny stock,” which will require brokers trading in our Class A Common Stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our Class A Common Stock; • a limited amount of analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
If we fail to obtain a required patent license or are unable to alter the design of the product to avoid infringing a third-party patent, we would be unable to continue to manufacture or sell such products or provide related services.
If we fail to obtain a required patent license or are unable to alter the design of the product to avoid infringing a third-party patent, we would be unable to continue to manufacture or sell such products or provide related services without infringing such patent.
Our acquisition strategy may not succeed if we are unable to remain attractive to target companies or expeditiously close transactions. Issuing securities to fund an acquisition would cause economic dilution to existing shareholders.
Our acquisition strategy may not succeed if we are unable to remain attractive to target companies or expeditiously close transactions. Issuing securities to fund an acquisition would cause dilution to existing shareholders.
The individuals who now constitute our senior management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies.
The individuals who constitute our senior management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies.
If we cannot obtain all necessary licenses on commercially reasonable terms, our customers, licensees, commercialization partners, or distributors may be forced to stop using or selling our products or technology.
If we cannot obtain all necessary licenses on commercially reasonable terms, our customers, licensees, commercialization partners and/or distributors may be forced to stop using or selling our products or technology.
The market price of Class A Common Stock and Warrants may fluctuate significantly, depending on many factors, some of which may be beyond our control, including: ● actual or anticipated fluctuations in our operating results due to factors related to our business; ● failure to meet or exceed financial estimates and projections of the investment community or that we to the public; ● the failure of securities analysts to cover, or maintain coverage of, the Class A Common Stock; ● issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general; ● operating and share price performance of other companies in the industry or related markets; 52 ● the timing and magnitude of investments in the growth of the business; ● success or failure of our business strategies; ● our ability to obtain financing as needed; ● announcements by us or our competitors of significant acquisitions, dispositions or strategic investments; ● additions or departures of key the Company or Falcon’s Opco management or other personnel; ● sales of substantial amounts of Class A Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; ● changes in capital structure, including future issuances of securities or the incurrence of debt; ● changes in accounting standards, policies, guidance, interpretations or principles; ● investor perception of the Company, Falcon’s Opco and our industry; ● overall market fluctuations; ● results from any material litigation or government investigation; ● changes in laws and regulations (including tax laws and regulations) affecting our business; ● changes in capital gains taxes and taxes on dividends affecting stockholders; and ● general economic conditions and other external factors.
The market price of our Class A Common Stock and Warrants has previously and in the future may continue to fluctuate significantly, depending on many factors, some of which may be beyond our control, including: • actual or anticipated fluctuations in our operating results due to factors related to our business; • failure to meet or exceed financial estimates and projections of the investment community or that we to the public; • the failure of securities analysts to cover, or maintain coverage of, the Class A Common Stock; • issuance of new or updated research or reports by securities analysts or changed recommendations for the industry in general; • operating and share price performance of other companies in the industry or related markets; • the timing and magnitude of investments in the growth of the business; • success or failure of our business strategies; • our ability to obtain financing as needed; • announcements by us or our competitors of significant acquisitions, dispositions or strategic investments; • additions or departures of key the Company or Falcon’s Opco management or other personnel; • sales of substantial amounts of Class A Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; 46 • changes in capital structure, including future issuances of securities or the incurrence of debt; • changes in accounting standards, policies, guidance, interpretations or principles; • investor perception of the Company, Falcon’s Opco and our industry; • overall market fluctuations; • results from any material litigation or government investigation; • changes in laws and regulations (including tax laws and regulations) affecting our business; • changes in capital gains taxes and taxes on dividends affecting stockholders; and • general economic conditions and other external factors.
If our trademarks are successfully challenged in any jurisdiction, we could be forced to rebrand our products in such jurisdiction(s), which could result in the loss of brand recognition and require us to devote significant resources to advertising and marketing new brands. Furthermore, trademark registration does not guarantee its validity or our right to use such trademark.
If our trademarks are successfully challenged in any jurisdiction, we could be forced to rebrand our products in such jurisdiction(s), which could result in the loss of brand recognition and require us to devote significant resources to advertising and marketing new brands. Furthermore, trademark registration does not guarantee our trademarks’ validity or our right to use such trademarks.
We may be unable to prevent the misappropriation, infringement or violation of our intellectual property rights, breach of any contractual obligations to us, or independent development of intellectual property that is similar to ours, any of which could reduce or eliminate any competitive advantage we have developed and can adversely affect our revenues or otherwise harm our business.
We may be unable to prevent the misappropriation, infringement or violation of our intellectual property rights, breach of any third party's contractual obligations to us, or independent development of intellectual property that is similar to ours, any of which could reduce or eliminate any competitive advantage we have developed and can adversely affect our revenues or otherwise harm our business.
The success of our business depends in part on our ability to maintain and enforce the intellectual property rights underlying our technology, entertainment content, and other intellectual property.
The success of our business depends in part on our ability to maintain and enforce the intellectual property rights in our technology, entertainment content, and other intellectual property.
Further, FBB’s ability to provide effective services and execute on its business strategy depends upon its ability to effectively deploy our and third party brands’ intellectual property across multiple media and experiential channels, such as animation, movies, music, licensing and merchandizing, gaming, streaming, and ride and technology sales.
Further, FBB’s ability to provide effective services and execute on its business strategy depends upon its ability to effectively deploy our and third-party brands’ intellectual property across multiple media and experiential channels, such as animation, movies, music, licensing and merchandising, gaming, streaming, and ride and technology sales.
These joint ventures and other international operations expose us to certain challenges and risks, many of which are outside of our control, and which could materially reduce our revenues or profits, materially increase our costs, result in significant liabilities or sanctions, significantly disrupt our businesses, or significantly damage our reputation.
These joint ventures and other direct and indirect international operations expose us to certain challenges and risks, many of which are outside of our control, and which could materially reduce our revenues or profits, materially increase our costs, result in significant liabilities or sanctions, significantly disrupt our businesses, or significantly damage our reputation.
Notwithstanding the foregoing, the Charter will provide that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
Notwithstanding the foregoing, the Charter provides that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Exchange Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
Because our work for Qiddiya is not subject to a master services agreement, our and QIC’s rights and obligations and our time to complete a specific task may vary from agreement to agreement and the terms and conditions of each agreement is generally tailored to the specific project or services covered by the applicable agreement.
Because our work for QIC is not subject to a master services agreement, our and QIC’s rights and obligations and our time to complete a specific task may vary from agreement to agreement and the terms and conditions of each agreement is generally tailored to the specific project or services covered by the applicable agreement.
In connection with the preparation and audit of the 2023 consolidated financial statements, we identified the following material weaknesses in the Company’s internal control over financial reporting: Risk Assessment – We did not design and implement an effective risk assessment based on the criteria established in the COSO framework.
In connection with the preparation and audit of the 2024 consolidated financial statements, we identified the following material weaknesses in the Company’s internal control over financial reporting: Risk Assessment – We did not design and implement an effective risk assessment based on the criteria established in the COSO framework.
Under the terms of the A&R Operating Agreement, Falcon’s Opco is obligated, subject to various limitations and restrictions, including with respect to any debt agreements, to make tax distributions to holders of New Falcon’s Opco Units following the Closing, including the Company.
Under the terms of the A&R Operating Agreement, Falcon’s Opco is obligated, subject to various limitations and restrictions, including with respect to any debt agreements, to make tax distributions 39 to holders of Falcon’s Opco Units following the Closing, including the Company.
The Company intends, as its sole manager, to cause Falcon’s Opco to make distributions to the holders of New Falcon’s Opco Units following the Closing in an amount sufficient to (i) fund all or part of such owners’ tax obligations in respect of taxable income allocated to such owners and (ii) cover the Company’s operating expenses, including payments under the Tax Receivable Agreement.
The Company intends, as its sole manager, to cause Falcon’s Opco to make distributions to the holders of Falcon’s Opco Units in an amount sufficient to (i) fund all or part of such owners’ tax obligations in respect of taxable income allocated to such owners and (ii) cover the Company’s operating expenses, including payments under the Tax Receivable Agreement.
The environment for travel and tourism, as well as demand for and consumption of leisure and entertainment products, can be significantly adversely affected as a result of a variety of factors beyond our control, including: health concerns (including those related to COVID-19 and potential future pandemics); adverse weather conditions arising from short-term weather patterns or long-term climate change, catastrophic events or natural disasters (such as excessive heat or rain, wildfires, hurricanes, typhoons, floods, tsunamis, earthquakes, volcano eruptions and oil spills); international, political or military developments (including the current war between Russia and Ukraine and the Israel-Hamas conflict); a decline in economic activity; rising inflation; and terrorist attacks.
The environment for travel and tourism, as well as demand for and consumption of leisure and entertainment products, can be significantly adversely affected as a result of a variety of factors beyond our control, including: health concerns (including those related to COVID-19 and potential future pandemics); adverse weather conditions arising from short-term weather patterns or long-term climate change, catastrophic events or natural disasters (such as excessive heat or rain, wildfires, hurricanes, typhoons, floods, tsunamis, earthquakes, volcano eruptions and oil spills); international, political or military developments (including the ongoing invasion of Ukraine by Russia and the Israel-Hamas war); a decline in economic activity; rising inflation; and terrorist attacks.
FBD’s joint venture operations in the EU and Hong Kong are subject to the laws of such jurisdictions rather than U.S. law. Additionally, FCG frequently provides services to customers located in countries across the world, including in the Kingdom of Saudi Arabia. Laws in some jurisdictions differ in significant respects from those in the United States.
FBD’s joint venture operations in the EU and China are subject to the laws of such jurisdictions rather than U.S. law. Additionally, FCG frequently provides services to customers located in countries across the world, including in the Kingdom of Saudi Arabia. Laws in some jurisdictions differ in significant respects from those in the United States.
As of the date of this Annual Report, Infinite Acquisitions holds approximately 44.8% of the voting power of the Common Stock and therefore has the ability to significantly influence the vote outcome of most matters submitted to stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets.
As of the date of this Annual Report, Infinite Acquisitions holds approximately 42% of the voting power of the Common Stock and therefore has the ability to significantly influence the vote outcome of most matters submitted to stockholders for approval, including the election of directors and any merger, consolidation or sale of all or substantially all of our assets.
Third parties may allege that our products or services infringe their patents and other intellectual property rights, which could result in the payment of royalties that may negatively affect our profits, subject us to costly and time-consuming litigation, or cause us to lose the ability to provide the related products or services.
Third parties may allege that our products or services infringe their patents and other intellectual property rights, which could result in the payment of royalties, damages, and other fees and fines that may negatively affect our profits, subject us to costly and time-consuming litigation, or cause us to lose the ability to provide the related products or services.
A “Restricted Person” is a person that (1)(x) is not a permitted transferee of QIC or the Company (i.e., an affiliate) and (y) directly or indirectly engages in a business that is competitive with any business of FCG LLC or its subsidiaries, (2) derives at least 10% of its revenue from, or is primarily identified with, (i) the manufacture, distribution or sale of tobacco, pork products or alcohol fit for human consumption and/or (ii) Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, Turkey, United Arab Emirates and Yemen, or (3) derives any of its revenue from, or is primarily identified with, the operation of gambling establishments (not including any person providing software and/or data services to any person engaged in the operation of gambling establishments), the manufacturing of gambling machines, the manufacturing, distribution or sale of weapons or armaments or the production or distribution of pornography; and ● each of Falcon’s Opco and FCG LLC shall, and shall cause their respective affiliates to prioritize any projects, products and purchase orders submitted by QIC to FCG LLC and its subsidiaries relative to (and ahead of) any commitments of the Company, FCG LLC or their affiliates to other persons (including affiliates of FCG LLC and the Company), including with respect to the allocation (i) by FCG LLC and its subsidiaries of supplies, labor, management and overall design and manufacturing capacity to QIC versus other persons and (ii) to FCG LLC and its subsidiaries of sufficient supplies, labor, management and other resources (the “QIC Priority Commitment”). 21 QIC, as the holder of the preferred units, has priority with respect to any distributions by FCG LLC, to the extent there is cash available.
A “Restricted Person” is a person that (1)(x) is not a permitted transferee of QIC or the Company (i.e., an affiliate) and (y) directly or indirectly engages in a business that is competitive with any business of FCG LLC or its subsidiaries, (2) derives at least 10% of its revenue from, or is primarily identified with, (i) the manufacture, distribution or sale of tobacco, pork products or alcohol fit for human consumption and/or (ii) Algeria, Bahrain, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, Turkey, United Arab Emirates and Yemen, or (3) derives any of its revenue from, or is primarily identified with, the operation of gambling establishments (not including any person providing software and/or data services to any person engaged in the operation of gambling establishments), the manufacturing of gambling machines, the manufacturing, distribution or sale of weapons or armaments or the production or distribution of pornography; and 21 • each of Falcon’s Opco and FCG LLC shall, and shall cause their respective affiliates to prioritize any projects, products and purchase orders submitted by QIC to FCG LLC and its subsidiaries relative to (and ahead of) any commitments of the Company, FCG LLC or their affiliates to other persons (including affiliates of FCG LLC and the Company), including with respect to the allocation (i) by FCG LLC and its subsidiaries of supplies, labor, management and overall design and manufacturing capacity to QIC versus other persons and (ii) to FCG LLC and its subsidiaries of sufficient supplies, labor, management and other resources (the “QIC Priority Commitment”).
The severe increase in cost inflation in products and services for domestic consumption such as energy, food and fuel significantly increased living costs for staff during 2022, with the consequence of creating pressure for wage increases to be demanded in the collective bargaining negotiations scheduled for the beginning of 2023.
The severe increase in cost inflation in products and services for domestic consumption such as energy, food and fuel significantly increased living costs for staff during 2022, with the consequence of creating pressure for wage increases to be demanded in the collective bargaining negotiations that occurred in the beginning of 2023.
Additionally, technological advances have enabled quick unauthorized copying and downloading of content into digital formats without any degradation of quality from the original content, which has facilitated the rapid creation, transmission, and sharing of high-quality unauthorized copies.
Additionally, technological advances have enabled quick unauthorized copying and downloading of content into digital formats without any degradation of quality from the original content, which has facilitated the rapid creation, 36 transmission, and sharing of high-quality unauthorized copies of copyrighted material.
We have entered into, and expect to continue to enter into, significant joint venture, strategic collaboration, teaming and other arrangements, including our FBD joint ventures with Meliá and Raging Power and our FBB collaborations with certain brands featured on PBS Kids, Hershey, and our letter of intent for an expected collaboration with Tanseisha.
We have entered into, and expect to continue to enter into, significant joint venture, strategic collaboration, teaming and other arrangements, including our FBD joint ventures with Meliá and Raging Power and our FBB collaborations with certain brands featured on PBS Kids, Hershey, our letter of intent for an expected collaboration with Tanseisha, and our non-binding letter of intent to operate OES.
We are exposed to currency translation risk in our Karnival joint venture, and we may be exposed to currency translation risk of our FCG international customers, who use home currencies that are different than our functional currency, the U.S. dollar.
We are exposed to currency translation risk in our Karnival and PDP joint ventures, and we may be exposed to currency translation risk of our FCG international customers, who use home currencies that are different than our functional currency, the U.S. dollar.
Magpuri, our Chief Executive Officer, has voting and investment control over approximately 24.3% of the shares of Common Stock, by virtue of his beneficial ownership of CilMar Ventures, LLC, Series A. As our Chief Executive Officer, Mr.
Magpuri, our Chief Executive Officer, has voting and investment control over approximately 25% of the shares of Common Stock, by virtue of his beneficial ownership of CilMar Ventures, LLC, Series A. As our Chief Executive Officer, Mr.
The implementation of these remediation measures is in the early stages and will require validation and testing of the design and operating effectiveness of our internal controls over a sustained period of financial reporting cycles and, as a result, the timing of when we will be able to fully remediate the material weaknesses is uncertain.
The implementation of these remediation measures is progressing and will require validation and testing of the design and operating effectiveness of our internal controls over a sustained period of financial reporting cycles and, as a result, the timing of when we will be able to fully remediate the material weaknesses is uncertain.
In addition, Katmandu Ventures, LLC holds approximately 24.3% of the voting power of the Common Stock, and together with Infinite Acquisitions can control the vote outcome of matters submitted to stockholders for approval.
In addition, Katmandu Ventures, LLC holds approximately 26% of the voting power of the Common Stock, and together with Infinite Acquisitions can control the vote outcome of matters submitted to stockholders for approval.
A number of aspects of the post-Closing structure depend on the classification of Falcon’s Opco as a partnership for U.S. federal income tax purposes, and the Company and Falcon’s Opco intend to operate such that Falcon’s Opco does not become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes.
A number of aspects of our corporate structure depend on the classification of Falcon’s Opco as a partnership for U.S. federal income tax purposes, and the Company and Falcon’s Opco intend to operate such that Falcon’s Opco does not become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes.
As of December 31, 2023, our FBD joint venture entities with Meliá directly and indirectly employed approximately 297 year-round, full-time employees worldwide at both their corporate offices and on-site at their resorts, restaurants and theme parks, and an additional 361 full-time and partial-time employees working all or part of the operating season in our joint venture properties in Spain.
As of December 31, 2024, our FBD joint venture entities with Meliá directly and indirectly employed approximately 179 year-round, full-time employees worldwide at both their corporate offices and on-site at their resorts, restaurants and theme parks, and an additional 225 full-time and partial-time employees working all or part of the operating season in our joint venture properties in Spain.
Further, all of the operations of our joint venture businesses are conducted outside of the United States and its territories, currently in the European Union (the “EU”) and Hong Kong.
Further, all of the operations of our joint venture businesses are conducted outside of the United States and its territories, currently in the European Union (the “EU”) and China.
For instance, we are a 50% shareholder in Karnival, which is developing LBE experiences in China, and we are a 50% shareholder in PDP, which owns and operates the Sol Katmandu Park & Resort in Mallorca, Spain, and the Sol Tenerife hotel in Tenerife, Spain.
For instance, we are a 50% shareholder in Karnival, which is developing LBE experiences in China, the first of which is in Hong Kong, and we are a 50% shareholder in PDP, which owns and operates the Sol Katmandu Park & Resort in Mallorca, Spain, and the Sol Tenerife hotel in Tenerife, Spain.
The actual amount and timing of any payments under the Tax Receivable Agreement will vary depending upon a number of factors, including the timing of redemptions or exchanges by the Company’s unitholders, the price of shares of Class A Common Stock at the time of any exchange or redemption, the extent to which such exchanges or redemptions are taxable, the amount of gain recognized by the Company’s unitholders, the amount and timing of the taxable income Falcon’s Opco generates in the future, and the tax rates and laws then applicable.
Payments under the Tax Receivable Agreement are not conditioned on the unitholders’ continued ownership of Falcon’s Opco Units, Class A Common Stock or Class B Common Stock. 40 The actual amount and timing of any payments under the Tax Receivable Agreement will vary depending upon a number of factors, including the timing of redemptions or exchanges by the Company’s unitholders, the price of shares of Class A Common Stock at the time of any exchange or redemption, the extent to which such exchanges or redemptions are taxable, the amount of gain recognized by the Company’s unitholders, the amount and timing of the taxable income Falcon’s Opco generates in the future, and the tax rates and laws then applicable.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on an Approved Exchange. 47 We have identified material weaknesses in our internal controls over financial reporting.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. We have identified material weaknesses in our internal controls over financial reporting.
As such, we have no independent means of generating revenue or cash flow, and our ability to pay taxes and operating expenses or declare and pay dividends in the future is dependent upon the financial results and cash flows of the Falcon’s Opco and its subsidiaries, and distributions the Company receives from the Falcon’s Opco.
As such, we have no independent means of generating revenue or cash flow, and our ability to pay taxes and operating expenses or declare and pay dividends in the future is dependent upon the financial results and cash flows of Falcon’s Opco and its subsidiaries, and our other equity method investments, and distributions we receive from Falcon’s Opco and our other equity method investments.
As of April 26, 2024, we have 11 active agreements with QIC, each of which may be terminated at will by either FCG, after providing 14 days’ notice to QIC, upon a further notice of 42 days or QIC upon 14 days’ notice to FCG.
As of April 3, 2025, we have 9 active agreements with QIC, each of which may be terminated at will by either FCG, after providing 14 days’ notice to QIC, upon a further notice of 42 days or QIC upon 14 days’ notice to FCG.
The timing, declaration, amount and payment of future dividends to stockholders falls within the discretion of the Board.
The timing, declaration, amount and payment of future cash or stock dividends to stockholders falls within the discretion of the Board.
The Board’s decisions regarding the amount and payment of future dividends will depend on many factors, including our financial condition, earnings, capital requirements of our business and covenants associated with debt obligations, as well as legal requirements including QIC’s consent rights under the FCG A&R LLCA, regulatory constraints, industry practice and other factors that the Board deems relevant.
The Board’s decisions regarding the amount and payment of future dividends will depend on many factors, including our financial condition, earnings, capital requirements of our business and covenants associated with debt obligations, as well as legal requirements, regulatory constraints, industry practice and other factors that the Board deems relevant.
To the extent that we need licenses to third-party patents in the future to manufacture, use, or sell our products or services, we would need to obtain such licenses to avoid infringement.
To the extent that any third party has patented any interventions that we need to use in the future to manufacture, use, or sell our products or services, we would need to obtain such licenses to avoid infringement.
Upon closing of the Business Combination, we became subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of Nasdaq and other applicable securities laws and regulations.
We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the listing requirements of Nasdaq and other applicable securities laws and regulations.
The loss of the services of one or more of our senior management or other key employees for any reason could adversely affect our business, financial condition, and operating results, and require significant amounts of time, training, and resources to recruit suitable replacements and integrate them within our business, and could affect our corporate culture. 33 Labor disputes may disrupt our operations and adversely affect the profitability of any of our businesses.
The loss of the services of one or more of our senior management or other key employees for any reason could adversely affect our business, financial condition, and operating results, and require significant 31 amounts of time, training, and resources to recruit suitable replacements and integrate them within our business, and could affect our corporate culture.
If our entertainment offerings and products, as well as our methods to make our offerings and products available to consumers, do not achieve sufficient consumer acceptance, our revenues may decline, decline further or fail to grow to the extent we anticipate when making investment decisions and as a result further adversely affect the profitability of one or more of our businesses.
If our entertainment offerings and products, as well as our methods to make our offerings and products available to consumers, do not achieve sufficient consumer acceptance, our revenues may decline, decline further or fail to grow to the extent we anticipate when making investment decisions and as a result further adversely affect the profitability of one or more of our businesses. 30 Increased costs of labor and employee health and welfare benefits may impact our results of operations.
Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. the Company may be the target of this type of litigation in the future.
The Company may be subject to securities class action litigation, which may harm its business and operating results. Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. The Company may be the target of this type of litigation in the future.

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